1

G.R. No. L-25547 November 27, 1967 On March 26, 1965 Serrano sold to the Silver Liners, Inc. (hereinafter referred to as the SLI) the line he was authorized to operate by virtue of the certificate of public convenience issued in PSC case 83104, and authorized the latter to file with the PSC the corresponding application for approval of the said sale. On April 5, 1965 Commissioner Medina issued an order in the following tenor: [t]he certificate of sale clearly mentions the units operated, by the judgment-debtor but does not mention that the franchise or certificates of public convenience for the operation of said units are also included in the sale. In view, however, of the manifestation of counsel for DM Transit and Muoz (Hi) Motors, Inc., to the effect that the certificate of public convenience was included in the notice of sale and that it was the intention of the Sheriff (who is now present in open Court), to sell also the franchise, the Commission believes that in fairness to all, the hearing of this case should be postponed until JUNE 15, 1965, at 9.00 a.m., to give all the parties sufficient and ample opportunity to present their evidence, pro and con, in support of their respective allegations, and for the Sheriff, if necessary, to make the corrections if any error has been committed. At the instance of the MHMI the sheriff of Quezon City "once more announced the foreclosure of the chattel mortgages dated October 24, 1961 and August 22, 1963," and the sale of, among others, "the certificate of public convenience issued in PSC Case No. 83104," to be held on June 14, 1965. In view of this development, Serrano and the SLI on June 9, 1965, filed the present complaint the pertinent and important portions of which read: 6. That the plaintiff, Juan M. Serrano, and the defendant, Muoz (HI) Motors, Inc., filed the corresponding application for the approval of the chattel mortgage of said certificate with the Public Service Commission. However, before the Public Service Commission could decide the application, the plaintiff, Juan, M. Serrano, filed a motion withdrawing the same on the ground that the mortgagee, Defendant Muoz (HI) Motors, Inc., had violated their agreement. Until now the Public Service Commission has not acted on the

JUAN M. SERRANO and SILVER LINERS, INC., PlaintiffsAppellants, vs. MUOZ (HI) MOTORS INC., DM TRANSIT CORPORATION, BENITO MACROHON, as Sheriff of Quezon City, and ENRIQUE MEDINA, as Public Service Commissioner,Defendants-Appellees. CASTRO, J.: The fundamental issue in this appeal is whether the Court of First Instance of Quezon City has jurisdiction over civil case 8835 before it. Disavowing jurisdiction, the court, in two separate orders on July 19 and September 21, 1965, dismissed the complaint against all the defendants. (Enrique Medina of the Public Service Commission, Muoz (Hi) Motors, Inc., DM Transit Corporation, and Benito Macrohon as Sheriff of Quezon City), with costs against the plaintiffs Juan M. Serrano and the Silver Liners, Inc. According to the allegations of the complaint, Juan M. Serrano was granted by the Public Service Commission (PSC) in case 83104 a certificate of public convenience to operate in Manila and Quezon City eight1 auto-trucks for passengers and freight. On August 22, 1963 Serrano mortgaged this certificate to Muoz (Hi) Motors, Inc. (hereinafter referred to as the MHMI), as additionalcollateral to secure an indebtedness on account of the purchase of four buses. The parties to this chattel mortgage thereafter applied to the PSC for approval thereof. At the instance of the MHMI, the sheriff of Quezon City foreclosed the chattel mortgage of October 24, 19612 and that of August 22, 1963, and, on October 31, 1964. executed a certificate of sale in favor of the MHMI as the highest bidder. On January 7, 1965 the MHMI sold some units and certificates of public convenience, among them, the certificate granted to Serrano in PSC case 83104, to the DM Transit Corporation (hereinafter referred to as the DMTC). Acting on the petition filed jointly by the MHMI and the DMTC on January 22, 1965, the PSC, thru Commissioner Medina, in an order issued March 4, 1965, provisionally approved the said sale, and authorized the DMTC to operate "under the provisional authority here granted." Serrano moved to have this order set aside.

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application for approval of the chattel mortgage of the certificate of public convenience. Neither has it acted on the motion of Juan M. Serrano to withdraw the application. xxx xxx xxx in Case No. 83104, and ordering the defendants, to pay jointly and severally, the plaintiffs the following: (a) Actual damages in the amount of P50,390.00 as of June 8, 1965 and daily thereafter at the rate of P560.00; (b) Moral damages to Juan M. Serrano in the amount of P10,000.00; (c) Exemplary damages in such amount as may be fixed by the Honorable Court; (d) Attorney's fees in the amount of P10,000.00; and the costs. It is further prayed that there be issued ex parte immediately a writ of preliminary injunction restraining the defendant, Sheriff of Quezon City and his deputies, from proceeding with the announced sale on June 14, 1965 of the chattels enumerated in Exhibit "E". Acting on the complaint and on an urgent motion subsequently filed by the plaintiffs for the issuance of an ex parte writ of preliminary injunction, the court directed the parties to maintain the status quo upon the filing by the plaintiffs of a P5,000 bond, and set the motion for hearing on June 26, 1965. The defendants opposed the motion. Commissioner Medina, on June 22, 1965, moved for the dismissal of the complaint against him on three grounds: that the CFI has no jurisdiction over not only the subject matter of the action but as well his person as Public Service Commissioner; that the complaint states no cause of action against him; and that "Article 32 of the Civil Code is not applicable to judicial orders." The rest of the defendants, on the following day, June 23, filed their answer, in which they alleged, among other things, that the certificate of public convenience issued in PSC case 83104 is included in the chattel mortgage of August 22, 1963; that the PSC had in fact approved the said mortgage; that the said certificate was actually included in the foreclosure sale conducted by the sheriff of Quezon City, although the latter, through inadvertence, failed to mention it in the certificate of sale of October 31, 1964;

11. That the issuance of the provisional approval, Exhibit "C", presupposes the existence of a sale and transfer of the certificate of public convenience issued in Case No. 83104 by the Sheriff of Quezon City to Muoz (HI) Motors, Inc., which is not a fact. Hence the defendant, Enrique Medina, is liable for damages for the issuance of the provisional approval, Exhibit "C", under Art. 32 of the Civil Code of the Philippines because the plaintiff, Juan M. Serrano, was deprived of his property without due process of law. xxx xxx xxx

14. That the announced sale on June 14, 1965 is at once illegal and violative of the rights of the plaintiffs. Unless immediately restrained by this Honorable Court with the issuance ex parte of a writ of preliminary injunction, the plaintiff will suffer great and irreparable injury in addition to what they, especially Juan M. Serrano, have already suffered by reason of the acts above complained of. 15. That as a consequence of the issuance of the provisional approval, Exhibit "C", on March 4, 1965 the plaintiffs have been unable to operate the eight (8) units attached to the certificate of public convenience issued in Case No. 83104 and the plaintiff, Juan M. Serrano, has been unable to substitute four (4) of said units as shown by the order of the Public Service Commission in Case No. 65-2654, a certified copy of which being attached as Exhibit "F". xxx xxx xxx

WHEREFORE, it is respectfully prayed that judgment be rendered in favor of the plaintiffs and against the defendants by restraining permanently the defendant, Sheriff of Quezon City and his deputies from again foreclosing the chattel mortgages of October 24, 1561 and August 22, 1963 and selling at public auction the chattels mortgaged, especially the certificate of public convenience issued

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and that the MHMI has requested the sheriff "to conduct another foreclosure sale in order to supplement and correct the first one." They further alleged that the complaint states no cause of action, and that the plaintiffs are in estoppel and guilty of laches. They accordingly prayed that the complaint be dismissed as against them, and that the sheriff of Quezon City be ordered to proceed with the foreclosure sale. The plaintiffs, on July 8, 1965, opposed the motion to dismiss filed by Commissioner Medina. By its order of July 19, 1965 the CFI dismissed the complaint as against Commissioner Medina. The plaintiffs moved to have this order set aside or clarified, because it did not specify any ground for the dismissal. Per its order of August 23, 1965 the CFI held in abeyance consideration of the plaintiffs' prayer for preliminary injunction, to afford the plaintiffs opportunity to file a motion for reconsideration of the order of July 19, and to give the rest of the defendants equal opportunity to file motions to dismiss, "so that the court can make a clear cut ruling on the question of jurisdiction over the instant case." On August 24, 1965 the MHMI and the DMTC moved to dismiss the complaint on the ground that the court has no jurisdiction over the subject- matter of the action. The plaintiffs thereafter filed their opposition. On September 21, 1965 the CFI dismissed the complaint for lack of jurisdiction over the subject-matter thereof; on the following October 16, it denied the plaintiffs' motion to set aside the order. Hence the present recourse. In Perez Cardenas vs. Camus, we held that jurisdiction over the subject-matter is determined by the allegations of the complaint, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein - a matter that can be resolved only after and as a result of the trial. Nor may the jurisdiction of the court be made to depend upon the defenses set up in the answer or upon the motion to dismiss, for, were we to be governed by such rule, the question of jurisdiction would depend almost entirely upon the defendant.
3

As can be gleaned from the portions of the complaint hereinbefore quoted, namely, paragraph 11 in relation to paragraph 15, and paragraph 6 in relation to paragraph 14, three distinct issues present themselves for resolution. 1. Paragraphs 11 and 15 squarely assail the PSC order of March 4, 1965. According to the appellants, this order "presupposes the existence of a sale and transfer of the certificate of public convenience issued in Case No. 83104 by the Sheriff of Quezon City to Muoz (Hi) Motors, Inc., which is not a fact", because the said certificate of public convenience was not mentioned in the sheriff's certificate of sale of October 31, 1964; the PSC order approving provisionally the sale by the MHMI in favor of the DMTC, of, among others, the said certificate, and authorizing the latter to operate the line covered thereby, thus deprived Serrano of his property "without due process of law", and prevented the appellants from operating the eight units attached to the said certificate and Serrano from substituting four of the said units. In sum, therefore, paragraphs 11 and 15 assail the PSC order on March 4, 1965 as erroneous because the MHMI could not have legally transferred the certificate of public convenience in question to the DMTC for the reason that the sheriff's certificate of sale of October 31, 1964 did not include the said certificate of public convenience among the properties sold to the MHMI in the foreclosure sale. It is our view that the resolution of this aspect of the case falls within the exclusive province of the PSC. Under section 20(g) of the Public Service Law, 4 the PSC is the body invested with the power and authority to approve a sale or transfer of a certificate of public convenience. And we emphasized in Garcia vs. Bonifacio, et al.,5 that [i]f as appellant represents, the certificate sold to him was later illegally transferred to Pea, who now holds the commission's approval and certificate, there is no better place than the commission itself to thresh out the respective rights of the parties, bearing in mind that said Commission is the only entity empowered to withdraw the certificate from Pena and to transfer it to herein plaintiff or grant him a new certificate.

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We have indeed sustained the power and authority of the PSC (a) to approve provisionally the transfer of a certificate of public convenience where the conditions laid down by section 20(g) are satisfied,6 and (b) to grant provisional authority to a vendee to operate a franchise pending determination of the legality of the sale.7 Entirely apart from the above considerations, we note from the order of March 4, 1965 that Serrano has filed an "urgent motion to set (it) aside". Orderly procedure demands that the PSC pass upon this phase of the controversy; from an adverse resolution thereon, the appellants may yet appeal to this Court.8 [t]he commission having jurisdiction to determine whether a corporation has the right to do or not to do a thing for which the commission's approval is sought, orderly procedure requires that the commission pass upon that phase of the controversy before the court adjudge it. The obvious reason for this is stated in St. Clair Borough v. Tomaqua & Pottsville Elec. Ry. Co., 259 Pa. 462, 103 A. 287, 289, 5 A.L.R. 20: "Otherwise different phases of the same case might be pending before the commission and the courts at one time, which would cause endless confusion."9 The order of the PSC did not deprive Serrano of his property10 "without due process of law". The order is provisional in nature, "may be modified or revoked by the Commission at any time",11 is "subject to whatever action that may be taken on the basic application" for the sale and transfer filed by the MHMI in favor of the DMTC, and is "valid only during the pendency of said application" but not beyond SIX (6) MONTHS from the date hereon (March 4, 1965)," which period, by the way, has already expired. Neither were the appellants deprived of their day in court. For, the PSC, in its order of April 5, 1965, clearly stated that "in fairness to all" and "to give all the parties sufficient and ample opportunity to present their evidence, pro and con, in support of their respective allegations", "the hearing of this case should be postponed until June 15, 1965, at 9:00 a.m." 2. The CFI likewise did not err in dismissing the complaint, even if it prayed for damages against Commissioner Medina, for failure to state a sufficient cause of action. Article 32 of the Civil Code, relied upon by the appellants in support of their claim for damages, provides in its last paragraph that the responsibility for damages "herein set forth is not demandable from a judge unless his act or omission constitutes a violation of the Penal Code or other penal statute." We do not now decide - as we believe we are not called upon to do so - whether article 32 of the Civil Code may be utilized as the legal basis of an action for damages against a PSC commissioner. But assuming that the said provision of law does authorize recovery of damages from a member of the PSC in proper cases, the dismissal must yet be sustained. Nowhere does the complaint allege that, in issuing the order of March 4, 1965, Commissioner Medina did so in violation of the Revised Penal Code or any other penal statute. It does not charge him with knowingly rendering an unjust judgment,12 or rendering an unjust judgment by reason of inexcusable negligence or ignorance,13 or knowingly rendering an unjust interlocutory order or decree,14 or transgressing any other penal law. 3. Finally, the CFI did not err in dismissing the complaint against the rest of the defendants. The complaint does not state a cause of action against them. Paragraph 6 thereof alleges that Serrano filed a motion with the PSC withdrawing the application filed by him and the MHMI for approval of the chattel mortgage over the certificate of public convenience in question, "on the ground that the mortgagee, Defendant Muoz (HI) Motors, Inc., had violated their agreement", and, on that basis, paragraph 14 asserts that "the announced sale on June 14, 1965 is at once illegal and violative of the rights of the plaintiffs", and that if the sheriff of Quezon City be not immediately restrained from proceeding with the intended foreclosure and sale of the said certificate, they "will suffer great and irreparable injury". These averments are altogether too imprecise and therefore cannot be dignified as constituting a legally sufficient statement of the "ultimate facts" required in the formulation of a cause of action; they are at best mere conclusions of law which, obviously, cannot take the place of "ultimate facts."15 ACCORDINGLY, the orders of July 19 and September 21, 1965, dismissing the complaint, are affirmed, at plaintiffs-appellants' cost.

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After arraignment and after private respondent had testified on direct examination, petitioner moved to dismiss the Information on the following grounds: (a) Respondent court has no jurisdiction over the offense charged; and (b) That no offense was committed since the check involved was payable in dollars, hence, the obligation created is null and void pursuant to Republic Act No. 529 (An Act to Assure Uniform Value of Philippine Coin and Currency). On July 19, 1988, respondent court issued its first questioned orders stating: Accused's motion to dismiss dated July 5, 1988, is denied for lack of merit.chanroblesvirtualawlibrary Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they are either drawn and issued in the Philippines though payable outside thereof, or made payable and dishonored in the Philippines though drawn and issued outside thereof, are within the coverage of said law. The law likewise applied to checks drawn against current accounts in foreign currency. Petitioner moved for reconsideration but his motion was subsequently denied by respondent court in its order dated September 6, 1988, and which reads: Accused's motion for reconsideration, dated August 9, 1988, which was opposed by the prosecution, is denied for lack of merit. The Bouncing Checks Law is applicable to checks drawn against current accounts in foreign currency (Proceedings of the Batasang Pambansa, February 7, 1979, p. 1376, cited in Makati RTC Judge (now Manila City Fiscal) Jesus F. Guerrero's The Ramifications of the Law on Bouncing Checks, p. 5). (Rollo, Annex "A", Decision, pp. 2022). A petition for certiorari seeking to declare the nullity of the aforequoted orders dated July 19, 1988 and September 6, 1988 was filed by the petitioner in the Court of Appeals wherein he contended:

G.R. No. 87416 April 8, 1991 CECILIO S. DE VILLA, Petitioner, vs. THE HONORABLE COURT OF APPEALS, PEOPLE OF THE PHILIPPINES, HONORABLE JOB B. MADAYAG, and ROBERTO Z. LORAYES, Respondents. PARAS, J.: This petition for review on certiorari seeks to reverse and set aside the decision * of the Court of Appeals promulgated on February 1, 1989 in CA-G.R. SP No. 16071 entitled "Cecilio S. de Villa vs. Judge Job B. Madayag, etc. and Roberto Z. Lorayes," dismissing the petition for certiorari filed therein. The factual backdrop of this case, as found by the Court of Appeals, is as follows: On October 5, 1987, petitioner Cecilio S. de Villa was charged before the Regional Trial Court of the National Capital Judicial Region (Makati, Branch 145) with violation of Batas Pambansa Bilang 22, allegedly committed as follows: That on or about the 3rd day of April 1987, in the municipality of Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, did, then and there willfully, unlawfully and feloniously make or draw and issue to ROBERTO Z. LORAYEZ, to apply on account or for value a Depositors Trust Company Check No. 3371 antedated March 31, 1987, payable to herein complainant in the total amount of U.S. $2,500.00 equivalent to P50,000.00, said accused well knowing that at the time of issue he had no sufficient funds in or credit with drawee bank for payment of such check in full upon its presentment which check when presented to the drawee bank within ninety (90) days from the date thereof was subsequently dishonored for the reason "INSUFFICIENT FUNDS" and despite receipt of notice of such dishonor said accused failed to pay said ROBERTO Z. LORAYEZ the amount of P50,000.00 of said check or to make arrangement for full payment of the same within five (5) banking days after receiving said notice.

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(a) That since the questioned check was drawn against the dollar account of petitioner with a foreign bank, respondent court has no jurisdiction over the same or with accounts outside the territorial jurisdiction of the Philippines and that Batas Pambansa Bilang 22 could have not contemplated extending its coverage over dollar accounts; (b) That assuming that the subject check was issued in connection with a private transaction between petitioner and private respondent, the payment could not be legally paid in dollars as it would violate Republic Act No. 529; and (c) That the obligation arising from the issuance of the questioned check is null and void and is not enforceable with the Philippines either in a civil or criminal suit. Upon such premises, petitioner concludes that the dishonor of the questioned check cannot be said to have violated the provisions of Batas Pambansa Bilang 22. (Rollo, Annex "A", Decision, p. 22). On February 1, 1989, the Court of Appeals rendered a decision, the decretal portion of which reads: WHEREFORE, the petition is hereby dismissed. Costs against petitioner. SO ORDERED. (Rollo, Annex "A", Decision, p. 5) A motion for reconsideration of the said decision was filed by the petitioner on February 7, 1989 (Rollo, Petition, p. 6) but the same was denied by the Court of Appeals in its resolution dated March 3, 1989 (Rollo, Annex "B", p. 26). Hence, this petition. In its resolution dated November 13, 1989, the Second Division of this Court gave due course to the petition and required the parties to submit simultaneously their respective memoranda (Rollo, Resolution, p. 81). The sole issue in this case is whether or not the Regional Trial Court of Makati has jurisdiction over the case in question. The petition is without merit. Jurisdiction is the power with which courts are invested for administering justice, that is, for hearing and deciding cases (Velunta vs. Philippine Constabulary, 157 SCRA 147 [1988]). Jurisdiction in general, is either over the nature of the action, over the subject matter, over the person of the defendant, or over the issues framed in the pleadings (Balais vs. Balais, 159 SCRA 37 [1988]). Jurisdiction over the subject matter is determined by the statute in force at the time of commencement of the action (De la Cruz vs. Moya, 160 SCRA 538 [1988]). The trial court's jurisdiction over the case, subject of this review, can not be questioned. Sections 10 and 15(a), Rule 110 of the Rules of Court specifically provide that: Sec. 10. Place of the commission of the offense. The complaint or information is sufficient if it can be understood therefrom that the offense was committed or some of the essential ingredients thereof occured at some place within the jurisdiction of the court, unless the particular place wherein it was committed constitutes an essential element of the offense or is necessary for identifying the offense charged. Sec. 15. Place where action is to be instituted. (a) Subject to existing laws, in all criminal prosecutions the action shall be instituted and tried in the court of the municipality or territory where the offense was committed or any of the essential ingredients thereof took place. In the case of People vs. Hon. Manzanilla (156 SCRA 279 [1987] cited in the case of Lim vs. Rodrigo, 167 SCRA 487 [1988]), the Supreme Court ruled "that jurisdiction or venue is determined by the allegations in the information."

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The information under consideration specifically alleged that the offense was committed in Makati, Metro Manila and therefore, the same is controlling and sufficient to vest jurisdiction upon the Regional Trial Court of Makati. The Court acquires jurisdiction over the case and over the person of the accused upon the filing of a complaint or information in court which initiates a criminal action (Republic vs. Sunga, 162 SCRA 191 [1988]). Moreover, it has been held in the case of Que v. People of the Philippines (154 SCRA 160 [1987] cited in the case of People vs. Grospe, 157 SCRA 154 [1988]) that "the determinative factor (in determining venue) is the place of the issuance of the check." On the matter of venue for violation of Batas Pambansa Bilang 22, the Ministry of Justice, citing the case of People vs. Yabut (76 SCRA 624 [1977], laid down the following guidelines in Memorandum Circular No. 4 dated December 15, 1981, the pertinent portion of which reads: (1) Venue of the offense lies at the place where the check was executed and delivered; (2) the place where the check was written, signed or dated does not necessarily fix the place where it was executed, as what is of decisive importance is the delivery thereof which is the final act essential to its consummation as an obligation; . . . (Res. No. 377, s. 1980, Filtex Mfg. Corp. vs. Manuel Chua, October 28, 1980)." (See The Law on Bouncing Checks Analyzed by Judge Jesus F. Guerrero, Philippine Law Gazette, Vol. 7. Nos. 11 & 12, October-December, 1983, p. 14). It is undisputed that the check in question was executed and delivered by the petitioner to herein private respondent at Makati, Metro Manila. However, petitioner argues that the check in question was drawn against the dollar account of petitioner with a foreign bank, and is therefore, not covered by the Bouncing Checks Law (B.P. Blg. 22). But it will be noted that the law does not distinguish the currency involved in the case. As the trial court correctly ruled in its order dated July 5, 1988: Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they are either drawn and issued in the Philippines though payable outside thereof . . . are within the coverage of said law. It is a cardinal principle in statutory construction that where the law does not distinguish courts should not distinguish. Parenthetically, the rule is that where the law does not make any exception, courts may not except something unless compelling reasons exist to justify it (Phil. British Assurance Co., Inc. vs. IAC, 150 SCRA 520 [1987]). More importantly, it is well established that courts may avail themselves of the actual proceedings of the legislative body to assist in determining the construction of a statute of doubtful meaning (Palanca vs. City of Manila, 41 Phil. 125 [1920]). Thus, where there is doubts as to what a provision of a statute means, the meaning put to the provision during the legislative deliberation or discussion on the bill may be adopted (Arenas vs. City of San Carlos, 82 SCRA 318 [1978]). The records of the Batasan, Vol. III, unmistakably show that the intention of the lawmakers is to apply the law to whatever currency may be the subject thereof. The discussion on the floor of the then Batasang Pambansa fully sustains this view, as follows: xxx xxx xxx THE SPEAKER. The Gentleman from Basilan is recognized. MR. TUPAY. Parliamentary inquiry, Mr. Speaker. THE SPEAKER. The Gentleman may proceed. MR. TUPAY. Mr. Speaker, it has been mentioned by one of the Gentlemen who interpellated that any check may be involved, like U.S. dollar checks, etc. We are talking about checks in our country. There are U.S. dollar checks, checks, in our currency, and many others. THE SPEAKER. The Sponsor may answer that inquiry.

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MR. MENDOZA. The bill refers to any check, Mr. Speaker, and this check may be a check in whatever currency. This would not even be limited to U.S. dollar checks.The check may be in French francs or Japanese yen or deutschunorhs. (sic.) If drawn, then this bill will apply. MR TUPAY. So it include U.S. dollar checks. MR. MENDOZA. Yes, Mr. Speaker. xxx xxx xxx (p. 1376, Records of the Batasan, Volume III; Emphasis supplied). PREMISES CONSIDERED, the petition is DISMISSED for lack of merit.

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Petitioners alleged that Ricardo, through misrepresentation, had the land transferred in his name without the consent and knowledge of his co-heirs. Petitioners also stated that prior to 1966, Ricardo had a house constructed on the land. However, when Ricardo and his wife Zosima separated, Ricardo left for Inasuyan, Kawayan, Biliran and the house was leased to third parties. Petitioners further alleged that the signature of Juanita in the Affidavit is highly questionable because on 15 May 1978 Juanita executed a written instrument stating that she would be leaving behind to her children the land which she had inherited from her parents. Dominador filed a motion to dismiss on the ground of lack of jurisdiction since the assessed value of the land was within the jurisdiction of the Municipal Trial Court of Tanauan, Leyte. In an Order dated 20 February 2006,5cralaw the RTC dismissed the case for lack of jurisdiction. The RTC explained that the assessed value of the land in the amount of P590.00 was less than the amount cognizable by the RTC to acquire jurisdiction over the case.6cralaw Petitioners filed a motion for reconsideration. Petitioners argued that the action was not merely for recovery of ownership and possession, partition and damages but also for annulment of deed of sale. Since actions to annul contracts are actions beyond pecuniary estimation, the case was well within the jurisdiction of the RTC. Dominador filed another motion to dismiss on the ground of prescription. In an Order dated 8 September 2006, the RTC reconsidered its previous stand and took cognizance of the case. Nonetheless, the RTC denied the motion for reconsideration and dismissed the case on the ground of prescription pursuant to Section 1, Rule 9 of the Rules of Court. The RTC ruled that the case was filed only in 2001 or more than 30 years since the Affidavit was executed in 1966. The RTC explained that while the right of an heir to his inheritance is imprescriptible, yet when one of the co-heirs appropriates the property as his own to the exclusion of all other heirs, then

G.R. No. 176858 : September 15, 2010 HEIRS OF JUANITA PADILLA, represented by CLAUDIO PADILLA, Petitioners, vs. DOMINADOR MAGDUA, Respondent. DECISION CARPIO, J.: The Case Before the Court is a petition for review on certiorari 1cralaw assailing the Orders dated 8 September 20062cralaw and 13 February 20073cralawof the Regional Trial Court (RTC) of Tacloban City, Branch 34, in Civil Case No. 2001-10161. The Facts Juanita Padilla (Juanita), the mother of petitioners, owned a piece of land located in San Roque, Tanauan, Leyte. After Juanita's death on 23 March 1989, petitioners, as legal heirs of Juanita, sought to have the land partitioned. Petitioners sent word to their eldest brother Ricardo Bahia (Ricardo) regarding their plans for the partition of the land. In a letter dated 5 June 1998 written by Ricardo addressed to them, petitioners were surprised to find out that Ricardo had declared the land for himself, prejudicing their rights as co-heirs. It was then discovered that Juanita had allegedly executed a notarized Affidavit of Transfer of Real Property4cralaw (Affidavit) in favor of Ricardo on 4 June 1966 making him the sole owner of the land. The records do not show that the land was registered under the Torrens system. On 26 October 2001, petitioners filed an action with the RTC of Tacloban City, Branch 34, for recovery of ownership, possession, partition and damages. Petitioners sought to declare void the sale of the land by Ricardo's daughters, Josephine Bahia and Virginia Bahia-Abas, to respondent Dominador Magdua (Dominador).nad The sale was made during the lifetime of Ricardo.

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prescription can set in. The RTC added that since prescription had set in to question the transfer of the land under the Affidavit, it would seem logical that no action could also be taken against the deed of sale executed by Ricardo's daughters in favor of Dominador. The dispositive portion of the order states:chanroblesvirtuallawlibrar WHEREFORE, premises considered, the order of the Court is reconsidered in so far as the pronouncement of the Court that it has no jurisdiction over the nature of the action. The dismissal of the action, however, is maintained not by reason of lack of jurisdiction but by reason of prescription. SO ORDERED.7cralaw Petitioners filed another motion for reconsideration which the RTC denied in an Order dated 13 February 2007 since petitioners raised no new issue. Hence, this petition. The Issue The main issue is whether the present action is already barred by prescription. The Court's Ruling Petitioners submit that the RTC erred in dismissing the complaint on the ground of prescription. Petitioners insist that the Affidavit executed in 1966 does not conform with the requirement of sufficient repudiation of co-ownership by Ricardo against his coheirs in accordance with Article 494 of the Civil Code. Petitioners assert that the Affidavit became part of public records only because it was kept by the Provincial Assessor's office for real property tax declaration purposes. However, such cannot be contemplated by law as a record or registration affecting real properties. Petitioners insist that the Affidavit is not an act of appropriation sufficient to be deemed as constructive notice to an adverse claim of ownership absent a clear showing that petitioners, as co-heirs, were notified or had knowledge of the Affidavit issued by their mother in Ricardo's favor. Respondent Dominador, on the other hand, maintains that Juanita, during her lifetime, never renounced her signature on the Affidavit or interposed objections to Ricardo's possession of the land, which was open, absolute and in the concept of an owner. Dominador contends that the alleged written instrument dated 15 May 1978 executed by Juanita years before she died was only made known lately and conveys the possibility of being fabricated. Dominador adds that the alleged 'highly questionable signature' of Juanita on the Affidavit was only made an issue after 35 years from the date of the transfer in 1966 until the filing of the case in 2001. As a buyer in good faith, Dominador invokes the defense of acquisitive prescription against petitioners. At the outset, only questions of law may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court. The factual findings of the lower courts are final and conclusive and may not be reviewed on appeal except under any of the following circumstances: (1) the conclusion is grounded on speculations, surmises or conjectures; (2) the inference is manifestly mistaken, absurd or impossible; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) there is no citation of specific evidence on which the factual findings are based; (7) the finding of absence of facts is contradicted by the presence of evidence on record; (8) the findings of the Court of Appeals are contrary to those of the trial court; (9) the Court of Appeals manifestly overlooked certain relevant and undisputed facts that, if properly considered, would justify a different conclusion; (10) the findings of the Court of Appeals are beyond the issues of the case; and (11) such findings are contrary to the admissions of both parties.8cralaw We find that the conclusion of the RTC in dismissing the case on the ground of prescription based solely on the Affidavit executed by Juanita in favor of Ricardo, the alleged seller of the property from whom Dominador asserts his ownership, is speculative. Thus, a review of the case is necessary.

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Here, the RTC granted the motion to dismiss filed by Dominador based on Section 1, Rule 9 of the Rules of Court which states:chanroblesvirtuallawlibrar Section 1. Defenses and objections not pleaded. - Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the case. (Emphasis supplied) The RTC explained that prescription had already set in since the Affidavit was executed on 31 May 1966 and petitioners filed the present case only on 26 October 2001, a lapse of more than 30 years. No action could be taken against the deed of sale made in favor of Dominador without assailing the Affidavit, and the action to question the Affidavit had already prescribed. After a perusal of the records, we find that the RTC incorrectly relied on the Affidavit alone in order to dismiss the case without considering petitioners' evidence. The facts show that the land was sold to Dominador by Ricardo's daughters, namely Josephine Bahia and Virginia Bahia-Abas, during the lifetime of Ricardo. However, the alleged deed of sale was not presented as evidence and neither was it shown that Ricardo's daughters had any authority from Ricardo to dispose of the land. No cogent evidence was ever presented that Ricardo gave his consent to, acquiesced in, or ratified the sale made by his daughters to Dominador. In its 8 September 2006 Order, the RTC hastily concluded that Ricardo's daughters had legal personality to sell the property:chanroblesvirtuallawlibrar On the allegation of the plaintiffs (petitioners) that Josephine Bahia and Virginia Bahia-Abas had no legal personality or right to [sell] the subject property is of no moment in this case. It should be Ricardo Bahia who has a cause of action against [his] daughters and not the herein plaintiffs. After all, Ricardo Bahia might have already consented to or ratified the alleged deed of sale.9cralaw Also, aside from the Affidavit, Dominador did not present any proof to show that Ricardo's possession of the land had been open, continuous and exclusive for more than 30 years in order to establish extraordinary acquisitive prescription.10cralaw Dominador merely assumed that Ricardo had been in possession of the land for 30 years based on the Affidavit submitted to the RTC. The petitioners, on the other hand, in their pleading filed with the RTC for recovery of ownership, possession, partition and damages, alleged that Ricardo left the land after he separated from his wife sometime after 1966 and moved to another place. The records do not mention, however, whether Ricardo had any intention to go back to the land or whether Ricardo's family ever lived there. Further, Dominador failed to show that Ricardo had the land declared in his name for taxation purposes from 1966 after the Affidavit was executed until 2001 when the case was filed. Although a tax declaration does not prove ownership, it is evidence of claim to possession of the land. Moreover, Ricardo and petitioners are co-heirs or co-owners of the land. Co-heirs or co-owners cannot acquire by acquisitive prescription the share of the other co-heirs or co-owners absent a clear repudiation of the co-ownership, as expressed in Article 494 of the Civil Code which states:chanroblesvirtuallawlibrar Art. 494. x x x No prescription shall run in favor of a co-owner or coheir against his co-owners or co-heirs as long as he expressly or impliedly recognizes the co-ownership. Since possession of co-owners is like that of a trustee, in order that a co-owner's possession may be deemed adverse to the cestui que trust or other co-owners, the following requisites must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust or other co-owners, (2) that such positive acts of repudiation have been made known to the cestui que trust or other co-owners, and (3) that the evidence thereon must be clear and convincing.11cralaw In the present case, all three requisites have been met. After Juanita's death in 1989, petitioners sought for the partition of their mother's land. The heirs, including Ricardo, were notified about the plan. Ricardo, through a letter dated 5 June 1998, notified

12
petitioners, as his co-heirs, that he adjudicated the land solely for himself. Accordingly, Ricardo's interest in the land had now become adverse to the claim of his co-heirs after repudiating their claim of entitlement to the land. In Generosa v. Prangan-Valera,12cralaw we held that in order that title may prescribe in favor of one of the coowners, it must be clearly shown that he had repudiated the claims of the others, and that they were apprised of his claim of adverse and exclusive ownership, before the prescriptive period begins to run. However, in the present case, the prescriptive period began to run only from 5 June 1998, the date petitioners received notice of Ricardo's repudiation of their claims to the land. Since petitioners filed an action for recovery of ownership and possession, partition and damages with the RTC on 26 October 2001, only a mere three years had lapsed. This three-year period falls short of the 10-year or 30-year acquisitive prescription period required by law in order to be entitled to claim legal ownership over the land. Thus, Dominador cannot invoke acquisitive prescription. Further, Dominador's argument that prescription began to commence in 1966, after the Affidavit was executed, is erroneous. Dominador merely relied on the Affidavit submitted to the RTC that Ricardo had been in possession of the land for more than 30 years. Dominador did not submit any other corroborative evidence to establish Ricardo's alleged possession since 1966. In Heirs of Maningding v. Court of Appeals,13cralaw we held that the evidence relative to the possession, as a fact, upon which the alleged prescription is based, must be clear, complete and conclusive in order to establish the prescription. Here, Dominador failed to present any other competent evidence to prove the alleged extraordinary acquisitive prescription of Ricardo over the land. Since the property is an unregistered land, Dominador bought the land at his own risk, being aware as buyer that no title had been issued over the land. As a consequence, Dominador is not afforded protection unless he can manifestly prove his legal entitlement to his claim. With regard to the issue of the jurisdiction of the RTC, we hold that the RTC did not err in taking cognizance of the case. Under Section 1 of Republic Act No. 7691 (RA 7691),14cralaw amending Batas Pambansa Blg. 129, the RTC shall exercise exclusive jurisdiction on the following actions:chanroblesvirtuallawlibrar Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980", is hereby amended to read as follows:chanroblesvirtuallawlibrar "Sec. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original jurisdiction. "(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; "(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty Thousand Pesos (P20,000.00) or, for civil actions in Metro Manila, where such value exceeds Fifty Thousand Pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; x x x On the other hand, Section 3 of RA 7691 expanded the jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts over all civil actions which involve title to or possession of real property, or any interest, outside Metro Manila where the assessed value does not exceed Twenty thousand pesos (P20,000.00).nad The provision states:chanroblesvirtuallawlibrar Section 3. Section 33 of the same law is hereby amended to read as follows:chanroblesvirtuallawlibrar "Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. - cralawMetropolitan Trial Courts, Municipal Trial Courts, and Municipal Trial Circuit Trial Courts shall exercise:chanroblesvirtuallawlibrar

13
xxx "(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed value of the property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and costs: Provided, That in cases of land not declared for taxation purposes, the value of such property shall be determined by the assessed value of the adjacent lots." In the present case, the records show that the assessed value of the land was P590.00 according to the Declaration of Property as of 23 March 2000 filed with the RTC. Based on the value alone, being way below P20,000.00, the MTC has jurisdiction over the case. However, petitioners argued that the action was not merely for recovery of ownership and possession, partition and damages but also for annulment of deed of sale. Since annulment of contracts are actions incapable of pecuniary estimation, the RTC has jurisdiction over the case.15cralaw Petitioners are correct. In Singson v. Isabela Sawmill, 16cralaw we held that:chanroblesvirtuallawlibrar 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, where the money claim is purely incidental to, or a consequence of, the principal relief sought, 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 by courts of first instance (now Regional Trial Courts).nad When petitioners filed the action with the RTC they sought to recover ownership and possession of the land by questioning (1) the due execution and authenticity of the Affidavit executed by Juanita in favor of Ricardo which caused Ricardo to be the sole owner of the land to the exclusion of petitioners who also claim to be legal heirs and entitled to the land, and (2) the validity of the deed of sale executed between Ricardo's daughters and Dominador. Since the principal action sought here is something other than the recovery of a sum of money, the action is incapable of pecuniary estimation and thus cognizable by the RTC. Wellentrenched is the rule that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether the party is entitled to all or some of the claims asserted.17cralaw In sum, we find that the Affidavit, as the principal evidence relied upon by the RTC to dismiss the case on the ground of prescription, insufficiently established Dominador's rightful claim of ownership to the land. Thus, we direct the RTC to try the case on the merits to determine who among the parties are legally entitled to the land. WHEREFORE, we GRANT the petition. We REVERSE AND SET ASIDE the Orders dated 8 September 2006 and 13 February 2007 of the Regional Trial Court of Tacloban City, Branch 34 in Civil Case No. 2001-10-161. SO ORDERED.

14
By June 29, 1998, through Promissory Note (PN) Nos. BD-98084,5 BD-98-086,6 BD-98-0937 and BD-98-097,8EBC partially released the total amount of P10,400,000.00 from the said credit line of P53,000,000.00.9 On March 12, 2001, EBC demanded YKS to pay its outstanding obligations, but the latter failed to heed the demand. On May 23, 2001, EBC filed before the Office of the Clerk of Court, of the Regional Trial Court (RTC) of Tacloban City, an extrajudicial petition for the sale of the mortgaged properties in order to satisfy the mortgage indebtedness in the amount of P10,400,000.00, exclusive of interests, penalties, and other charges, 10 docketed as EJF No. 1399. On May 31, 2001, Sheriff Leonardo G. Aguilar, issued a Notice of Extra-Judicial Sale,11 setting the auction sale of the subject properties in the morning of June 29, 2001. The PCIB Account On August 13, 1997, YKS obtained a dollar denominated loan from PCIB in the amount of US$2,500,000.00, evidenced by PN No. 095/97-344.12 However, while the loan was booked as a dollar denomination loan, it was actually converted to peso and was released to YKS in peso at the prevailing currency exchange rate of P26.00 to a dollar, more or less, or in the amount of P65,000,000.00, more or less.13 The credit line/loan accommodation with PCIB was secured by real estate mortgages over the properties of YKS in Tacloban City covered by TCT Nos. T-22457, T-22458, T-22459, T-22266, T23066, T-23145, T-26055, T-26056, T-22697, T-42170, and T16659.14 In one of the promissory notes executed by YKS, PN No. 366-00756-98,15 dated December 24, 1998, it appeared that the total obligation of YKS was P140,967,120.36. It also stated therein that the purpose of the loan was for "working capital" and that it would mature six years after date or on December 17, 2004. On the same day, December 24, 1998, PCIB credited the amount of P103,240,277.90 to YKS account as proceeds of the loan under

G.R. No. 168746

November 5, 2009

EQUITABLE PCI BANK, INC., Petitioner, vs. HON. SALVADOR Y. APURILLO in his capacity as Presiding Judge, Regional Trial Court of Tacloban City, Branch 8, and YKS REALTY DEVELOPMENT, INC., Respondents. DECISION PERALTA, J.: This is a petition for review on certiorari, under Rule 45 of the Rules of Court, seeking to annul and set aside the Decision1 dated June 27, 2005, of the Court of Appeals (CA) in CA-G.R. SP No. 85484, dismissing the petition. The factual and procedural antecedents are as follows: YKS Realty Development, Inc. was a client of Philippine Commercial International Bank (PCIB) and Equitable Banking Corporation (EBC), the predecessors of herein petitioner Equitable PCI Bank, Inc. In their commercial transactions, PCIB and EBC granted YKS a series of loans and credit facilities secured by real estate mortgages. The EBC Account Through its transactions with EBC, YKS was granted a series of credit lines by the former. The entire line was secured by a Real Estate Mortgage on two properties covered by Transfer Certificates of Title (TCT) Nos. T-22461 and T-22460 owned by YKS situated in Tacloban City. The credit line was initially in the amount ofP4,000,000.00,2 but as a result of several amendments to the real estate mortgage, the initial loan consideration of P4,000,000.00 ballooned to P53,000,000.00.3 YKS also alleged that EBC made its officers sign a blank surety agreement making it appear that the said corporate officers made themselves liable to the extent ofP85,000,000.00.4

15
"PN No. 756/98."16 At the same time, PCIB debited the amount of $2,633,680.55 from YKS account as payment of the loan principal and interest for the converted dollar denominated loan under PN No. 095/97-344.17 On January 23, 2001, PCIB sent YKS a letter18 demanding the latter to pay its total obligation, which the former pegged at P162,295,233.54, exclusive of interest, penalty, and other charges. PCIB also warned YKS that its failure to heed the demand would result in the filing of appropriate actions against it, including the foreclosure of the mortgaged properties. In a letter19 received by PCIBs counsel on May 8, 2001, YKS protested the principal amount of the loan and reiterated its previous request for a breakdown of the amount, but PCIB ignored the request. On May 23, 2001, petitioner filed a Petition for Sale20 before the Office of the Executive Judge, RTC, Tacloban City, praying that the mortgaged properties be sold thru extrajudicial foreclosure proceedings to the highest bidder, in the manner and form prescribed by law. On May 25, 2001, Sheriff Luis G. Copuaco issued a Sheriffs Notice of Extrajudicial Foreclosure Sale21 setting the public auction of the mortgaged properties in the morning of June 29, 2001 at the RTC, Branch 7, Bulwagan ng Katarungan, Tacloban City. Thus, on June 19, 2001, as a result of the filing of the two petitions for sale, YKS filed before the RTC a Complaint22 for Declaratory Relief, Annulment or Declaration of Nullity of Foreclosure, Application for Foreclosure, Notice of Foreclosure Sale, Documents, Interest, Etc., Release of Mortgages, Injunction, and Damages, later docketed as Civil Case No. 2001-06-93. YKS alleged therein, among other things, that the two petitions for sale are defective, since they do not specify the correct amount of the claims. The petitions also include amounts that were not covered by the real estate mortgages, among which are the quantified penalties which were not mentioned in the mortgages. YKS added that the promissory notes should not be allowed to be the bases for the enforcement of payment through extrajudicial foreclosure since their validity are sill in question. YKS pointed out that the EBC credit line that was extended to it was for the amount of P53,000,000.00, however, in its petition for sale, the availments for the said credit line was only P10,400,000.00. Accordingly, the entire property cannot be foreclosed to satisfy the indebtedness of onlyP10,400,000.00. YKS also insisted that PN No. 366-00756-98, which was the basis of PCIBs petition for sale is null and void and lacks consideration, or at the very least, is erroneously bloated. In addition, the said promissory note has not yet matured at the time the petition for sale was filed, considering that it would mature only on December 17, 2004; thus, the debt is not yet due and demandable. YKS claimed that its corporate officers were induced to sign blank surety agreements which were later on filled in by petitioner to reflect erroneous loan amounts. Moreover, the amounts appearing in the promissory notes are different from the one claimed by petitioner in its petition for sale. To buttress its application for temporary restraining order and writ of preliminary injunction, YKS posited that the continuance of the questioned acts of petitioner despite its claim that there were no valid obligations and no valid basis for extrajudicial foreclosure proceedings is a clear and wanton violation of its rights and would effectively render any favorable judgment of the court ineffectual if the same were not granted pending determination of the main action. Ultimately, YKS prayed, among other things, that judgment be rendered declaring the two petitions for sale and notices of extrajudicial sale void; declaring the promissory notes that were used as basis for the petition void and without valid consideration; ordering the release of the subject properties from their respective real estate mortgages; declaring that there is no legal default with respect to PN No. 366-00756-98 because the said promissory note was to mature only on December 17, 2004; declaring the banks act of making the properties liable beyond the individual assigned loan values void; directing the bank to specify the extent of its claims against each of the properties using the assigned value; ordering the bank to make an accounting, summary and computation of its actual releases and the payments made by it for the purpose of determining the true and correct principal amount

16
and the total of whatever obligations it may have with the bank; and that a temporary restraining order and subsequently a preliminary injunction be issued enjoining EBC and PCIB from committing or proceeding pendente lite with the posting of notices of sale, conduct foreclosure sales, execute certificate of sales and its subsequent registration with the register of deeds, execution of deeds of final sale, and disturbing the status quo ante litem. On June 25, 2001, the RTC heard YKS application for temporary restraining order. After hearing the respective arguments of the parties and weighing the pros and cons in issuing the same, the RTC issued a temporary restraining order on June 27, 2001. 23 In the meantime, the hearing for the application of the writ of preliminary injunction was set for July 13, 2001. On the said hearing date, the parties jointly manifested that they will just be submitting position papers together with the other necessary documents to abbreviate the proceedings. On December 3, 2001, after the parties have submitted their respective pleadings, the RTC issued a Resolution 24granting YKS application for a writ of preliminary injunction, the dispositive portion of which reads: WHEREFORE, premises considered, plaintiff[s] prayer for the issuance of a Writ of Preliminary Injunction is hereby given Due Course and Granted and the defendants, their agents, representatives or any persons or entities acting in their behalf are hereby directed to maintain the status quo ante litem and to cease and desist from posting or publishing any notice of sale with respect to properties subject of this case, conducting any foreclosure sale, executing any Certificate of Sale, registering the same with the Register of Deeds, executing any Deed of Final Sale and/or other consolidation document, paying any capital gains, documentary and other transfer taxes or any other act that shall disturb the status quo ante litem until further order of this Court. This Writ of Preliminary Injunction shall become effective and operative upon posting by the plaintiff of the necessary bond in the sum of P3,000,000.00. SO ORDERED.25 In granting the writ, the RTC ratiocinated that it was not equitable and just for petitioner to foreclose and sell the two properties that were mortgaged to EBC for its credit line availments of only P10,400,000.00 out of theP53,000,000.00. As for the PCIB loan, the RTC opined that the same was not yet due and demandable since it was stipulated on Promissory Note No. 36600756-98 that the obligation will be satisfied via a one time payment, single payment, on December 17, 2004. Petitioner filed a motion for reconsideration, but it was denied in the Resolution26 dated May 20, 2004. In denying the motion, the RTC noted that there are certain ambiguities in the PCIB promissory note that need to be resolved. In addition, the discrepancies between the promissory note, the credit memo, and the demand letter are too substantial for the RTC to ignore. Aggrieved, petitioner sought recourse before the CA via a petition for certiorari under Rule 65 of the Rules of Court, docketed as CAG.R. SP No. 85484,27 wherein it prayed for the nullification of the resolutions of the RTC granting the writ of preliminary injunction and denying its motion for reconsideration. Petitioner claimed that the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction when it granted the writ of preliminary injunction despite the absence of a clear and convincing right on the part of YKS and despite the absence of any showing of grave and irreparable injury.28 On June 27, 2005, the CA rendered a Decision29 denying the petition for lack of merit and ordered the RTC to proceed with the trial of the main case on its merits. The decretal portion of the Decision reads: WHEREFORE, premises considered, the petition for certiorari is DENIED for lack of merit. The court a quo is ordered to proceed with the trial on the merits of the main case. In the meantime, the preliminary injunction issued shall remain in force until the merits of the main case are resolved. SO ORDERED.30

17
Hence, the petition assigning the following errors: I. The honorable court of appeals committed a serious and reversible error when it upheld the finding of the trial court that private respondent is entitled to the writ of preliminary injunction.31 II. the honorable court of appeals erred in holding that private respondent has a right to be protected by the injuNctive writ by reason of the dispute in the amount of the principal obligation.32 Petitioner argues that since YKS is a delinquent debtor, it had all the right to foreclose the mortgaged properties. Petitioner contends that it had a choice between two remedies, i.e., foreclose the mortgage or to file an ordinary suit for collection. Since it opted to foreclose the mortgage, it was improper on the part of the RTC to enjoin such legitimate exercise of its option in order to satisfy the obligations owing to it. In light of the undisputed fact that YKS defaulted in paying its obligation, the bank was justified in foreclosing the property and such valid act cannot be enjoined by the RTC. Petitioner insists that YKS right to enjoin the foreclosure of the mortgages is not clear and convincing, as it will not be deprived of its absolute ownership over the mortgaged property since it may exercise its right of redemption within one year after its sale. Petitioner adds that YKS failed to show that it would suffer grave and irreparable injury if the foreclosure sale was not enjoined. Moreover, petitioner maintains that YKS has no right to be protected by the injunctive writ based on the discrepancies in the amount of the principal obligation. On its part, YKS contends that there was no grave abuse of discretion on the part of the CA in issuing the injunctive writ. The CA correctly affirmed the RTC because it saw that there was a need to maintain the status quo ante while the case is being tried and heard to prevent one party from unilaterally adjudicating the case in its favor without trial on the merits and to prevent the case and whatever decision thereon to be rendered moot and academic. YKS also maintains that the sampling of evidence adduced during the hearing and determination by the trial court of the propriety of issuing a writ of preliminary injunction would show that the issuance thereof was proper and was not attended by grave abuse of discretion. The petition is bereft of merit. The only issue that needs to be determined in the case at bar is whether or not the RTC acted with grave abuse of discretion in issuing the writ of preliminary injunction enjoining the foreclosure and public auction of YKS property during the proceedings and pending determination of the main cause of action for annulment of foreclosure in Civil Case No. 2001-06-93. Section 3, Rule 58 of the Rules of Court provides that: SEC. 3. Grounds for issuance of preliminary injunctions. A preliminary injunction may be granted when it is established: (a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual. As such, a writ of preliminary injunction may be issued only upon clear showing of an actual existing right to be protected during the pendency of the principal action. The twin requirements of a valid

18
injunction are the existence of a right and its actual or threatened violations. Thus, to be entitled to an injunctive writ, the right to be protected and the violation against that right must be shown.33 Moreover, the rule is well entrenched that the issuance of the writ of preliminary injunction as an ancillary or preventive remedy to secure the right of a party in a pending case rests upon the sound discretion of the trial court.34 However, if the court commits grave abuse of its discretion in the issuance of the writ of preliminary injunction, such that the act amounts to excess or lack of jurisdiction, the same may be nullified through a writ of certiorari or prohibition.35 Such grave abuse of discretion in the issuance of writs of preliminary injunction implies a capricious and whimsical exercise of judgment that is equivalent to lack of jurisdiction or whether the power is exercised in an arbitrary or despotic manner by reason of passion, prejudice or personal aversion amounting to an evasion of positive duty or to a virtual refusal to perform the duty enjoined, or to act at all in contemplation of law. For the extraordinary writ of certiorari to lie, there must be a capricious, arbitrary and whimsical exercise of power.36 A Petition for Certiorari, under Rule 65 of the Rules of Court, is intended for the correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction. Its principal office is only to keep the inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to lack or excess of jurisdiction.37 It may issue only when the following requirements are alleged in the petition and established: (1) the writ is directed against a tribunal, a board or any officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.38 Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the general power of a tribunal, board or officer is not authorized, and invalid with respect to the particular proceeding, because the conditions which alone authorize the exercise of the general power in respect of it are wanting. Without jurisdiction means lack or want of legal power, right or authority to hear and determine a cause or causes, considered either in general or with reference to a particular matter. It means lack of power to exercise authority.39 In the case at bar, this Court agrees with the conclusion of the CA that the RTC committed no grave abuse of discretion in granting YKS plea for injunctive relief. In the exercise of its discretion, the trial court found all the requisites for the issuance of an injunctive writ to be attendant. First, it was well established that YKS had a clear and unmistakable right over the mortgaged properties. Evidently, as owner of the subject properties that stand to be foreclosed, YKS is entitled to the possession and protection thereof when the threat to its foreclosure was apparent even before the respective rights of the parties are determined and the issues threshed out in the main action before the RTC are resolved.1avvphi1 Second, there clearly exists an urgent and paramount necessity to prevent serious injury on the part of YKS. As aptly concluded by the RTC in the Resolution denying petitioners motion for reconsideration: With regards to the first, it will be recalled that in 1997, plaintiff was granted a credit line of Php53,000,000.00. This line was secured by a Real Estate Mortgage on two properties owned by the plaintiff located in Tacloban City covered by TCT Nos. 22460 and 22461. Out of this credit line, plaintiff availed of Php10,400,000.00. The question that came to the mind of the Court is that, it is not righteous, just and equitable for the defendant to foreclose and sell the two properties for the availment of Php10,400,000.00 out of this line for Php53,000,000.00. Defendant contends otherwise and cited two Articles of the Civil Code, to wit: Article 2089 of the Civil Code is hereunder quoted: xxxx Article 2126 of the Civil Code is likewise hereunder quoted: xxxx With regards to Article 2089, the case at bench does not fall within the ambit of said Article. The same covers a situation wherein the mortgage debt or credit has passed on to several heirs and not all

19
the heirs/debtors have paid the entire mortgage debt or vice-versa. The same is not true in the case at bench. Neither the debt [n]or credit has been passed on to anyone. To go along with the stand of the defendant would, therefore, undoubtedly and inevitably result in unjust enrichment, which the Court cant allow. As regards Article 2126, this Court noted that there has been no transfer of possession of the mortgaged property. The mortgaged properties are, in fact, still in the possession of the plaintiff and this Article cannot [be] construed on such a manner as to cause what the law does not allow. As regards the second issue/point, this Court took a long hard look at the subject Promissory Note and what is in there, typewritten into the space indicating maturity is 12.17.2004. This Court likewise noted in the Disclosure Statement under the heading Mode of Payment, it is stated that "Single Payment on: 12.17.2004.["] It is, therefore, clear and there can be no mistake about the maturity date as well as the mode of payment. xxxx This Court also noted the variance in the amounts being demanded by the defendant from the plaintiff. The Promissory Note speaks of the sum of Php140,967,120.36. Its Credit Memo speaks of Php103,240,277.90. That is a discrepancy of Php37,726,842.36. The Demand Letter speaks of Php162,295,233.54. It shall mean a discrepancy of Php59,054,955.64. These discrepancies are too substantial for this Court to ignore. It is, therefore, clear that only after a trial on the merits can the true amount be determined and the foreclosure proceedings will have to wait until the presentation of the evidence on the merits.40 To be sure, to allow the foreclosure proceedings to continue even before determination of the issues that were brought to the RTC would place YKS in an oppressively unjust situation where it would be tied up in litigation for the recovery of its properties should the RTC later conclude that YKS is entitled to the reliefs prayed for in the main action. A writ of preliminary injunction is generally based solely on initial and incomplete evidence. The evidence submitted during the hearing on an application for a writ of preliminary injunction is not conclusive or complete for only a "sampling" is needed to give the trial court an idea of the justification for the preliminary injunction pending the decision of the case on the merits. As such, the findings of fact and opinion of a court when issuing the writ of preliminary injunction are interlocutory in nature and made even before the trial on the merits is commenced or terminated. There are vital facts that have yet to be presented during the trial which may not be obtained or presented during the hearing on the application for the injunctive writ. The trial court needs to conduct substantial proceedings in order to put the main controversy to rest.41 The sole object of a preliminary injunction is to maintain the status quo until the merits can be heard. A preliminary injunction is an order granted at any stage of an action prior to judgment of final order, requiring a party, court, agency, or person to refrain from a particular act or acts. It is a preservative remedy to ensure the protection of a partys substantive rights or interests pending the final judgment on the principal action. A plea for an injunctive writ lies upon the existence of a claimed emergency or extraordinary situation which should be avoided for, otherwise, the outcome of a litigation would be useless as far as the party applying for the writ is concerned.42 This Court finds no cogent reason to deviate from the factual findings and conclusion of law of the trial court and the appellate court. Evidently, there exists in the case at bar a pressing necessity for the issuance of an injunctive writ. After a careful scrutiny of the attendant circumstances, We find no reason for reversing the assailed decision of the CA and questioned resolutions of the RTC granting injunctive relief to YKS. WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 85484, dated June 27, 2005, is AFFIRMED. SO ORDERED.

20
Petitioner filed a motion to dismiss5 contending, among others, that the case is cognizable by the Housing and Land Use Regulatory Board (HLURB) and not the trial court because it is sued as a subdivision developer and the property involved is a subdivision lot. The trial court denied the motion to dismiss holding that it has jurisdiction over the subject matter. It added that petitioners allegation that the lot involved is a subdivision lot is not a ground to deprive the court of its jurisdiction. 6 Petitioners motion for reconsideration was denied.7 Hence, the instant petition. DECISION YNARES-SANTIAGO, J.: Assailed in this petition for certiorari under Rule 65 of the Revised Rules of Civil Procedure are the September 9, 20041 and October 15 20042 Orders of the Regional Trial Court of San Fernando City, Branch 48,3 which denied petitioners motion to dismiss and motion for reconsideration, respectively. The undisputed facts show that on April 29, 2004, private respondents filed a complaint4 for recovery of real property against petitioner Lacson Hermanas, Inc. They alleged that their predecessor-in-interest, Cenon Ignacio (Cenon), purchased from petitioner a 1,000 square meter portion of a parcel of land covered by Transfer Certificate of Title (TCT) No. 261974-R for P50,000.00 which was fully paid on September 24, 1989. Cenon thereafter took possession of the subject area and fenced the boundaries thereof for the construction of Seventh Day Adventist Chapel. On January 11, 1996, however, Cenon died. Sometime in 2002, private respondents demanded the delivery of the lots title and the segregation of the portion sold to Cenon but was informed by petitioner that the same lot has been sold to Rowena T. Coleman. Hence, the instant case to compel petitioner to execute the necessary deed of sale and to deliver the owners duplicate copy of title. At the outset, the instant petition for certiorari should have been filed with the Court of Appeals and not with this Court pursuant to the doctrine of hierarchy of courts. Disregard of this rule warrants the outright dismissal of the petition. While the Courts original jurisdiction to issue a writ of certiorari is concurrent with the Regional Trial Courts and the Court of Appeals in certain cases, we emphasized in Liga ng mga Barangay National v. Atienza, Jr.,8 that such concurrence does not allow an unrestricted freedom of choice of court forum, thus This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefore will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and also serves as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard of that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. It is a policy necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive The petition lacks merit.

G.R. No. 165973

June 29, 2005

LACSON HERMANAS, INC., herein represented by its President MR. ODILON L. LACSON, Petitioner, vs. HEIRS OF CENON IGNACIO, herein represented by their attyin-fact, AMALIA IGNACIO, REGIONAL TRIAL COURT, BRANCH 48, CITY OF SAN FERNANDO, presided by the HON. JUDGE SERAFIN B. DAVID,Respondents.

21
jurisdiction, and to prevent further over-crowding of the Courts docket.9 In the present case, petitioner adduced no special and important reason why direct recourse to this Court should be allowed. Thus, we reaffirm the judicial policy that this Court will not entertain a direct invocation of its jurisdiction unless the redress desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances justify the resort to the extraordinary remedy of writ of certiorari. Although the invocation of this Courts jurisdiction is available to petitioner on the ground that this case raises a pure question of law, specifically, the issue of jurisdiction,10 the proper recourse is not a petition for certiorari under Rule 65 but an appeal via a petition for review on certiorari in accordance with Rule 45 of the Revised Rules of Civil Procedure,11 which should have been filed within 15 days from notice of the denial of its motion for reconsideration12 on October 22, 2004. Even if we treat the instant petition as an appeal under Rule 45, the same will not prosper having been filed only on November 30, 2004, way beyond the 15 day reglementary period. Then too, even if we gloss over these procedural infirmities, the instant petition must fail for lack of merit. Section 1 of PD 134413 vests the National Housing Authority (now HLURB) with exclusive jurisdiction to hear and decide the following cases: (a) unsound real estate business practice; (b) claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker, or salesman; and (c) cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner, developer, dealer, broker or salesman. It is a settled rule that jurisdiction over the subject matter is determined by the allegations in the complaint and is not affected by the pleas or the theories set up by the defendant in an answer or a motion to dismiss. Otherwise, jurisdiction would become dependent upon the whims of the defendant. Here, the allegations in private respondents complaint clearly vest jurisdiction in the trial court. Nothing therein shows that the questioned property is a subdivision lot and sold by petitioner as a subdivision developer. It simply referred to petitioner as a corporation and the seller of a lot described as "portion of a parcel of land, particularly a 1,000 sq. m. area thereof covered by Transfer Certificate of Title No. 261974-R "14 Mere assertion by petitioner that it is a subdivision developer and the land involved is a subdivision lot, will not automatically strip the trial court of its jurisdiction and authorize the HLURB to take cognizance of the complaint. Indeed, it does not always follow that each sale made by petitioner is undertaken in its capacity as a subdivision developer, in the same manner that sales made in such capacity are not at all times intended for subdivision development. In Javellana v. Presiding Judge, RTC, Branch 30, Manila,15 the Court sustained the denial of a motion to dismiss, holding that jurisdiction lies with the regular courts and not with the HLURB because the averments in the complaint reveal that the transaction involved an installment sale of a lot and not a sale of a subdivision lot. It further held that even the allegation a subdivision lot in a subdivision project, is not sufficient to vest jurisdiction with the HLURB, thus A reading of the complaint does not show that the subject lot was a subdivision lot which would fall under the jurisdiction of the HLURB. The complaint clearly described the subject lot as Lot No. 44, Plan 15 with an area of 139.4 sq. meters situated in the District of Sampaloc covered by Transfer Certificate of Title No. 131305 of the Registry of Deeds of Manila. We note that such description was used when referring to the subject lot. What appears from the complaint was the fact that the subject lot was sold to petitioners in an ordinary sale of a lot on installment basis; that petitioners allegedly defaulted in the payment of their monthly installments for which reason respondent seeks to recover possession thereof. Thus, the trial court has jurisdiction over the case. [T]he use of the phrase "regular subdivision project" does not automatically make the instant case fall under the jurisdiction of the HLURB. In Sps. Kakilala vs. Faraon, notwithstanding the

22
allegations of petitioners in their complaint that the subject lot is "a subdivision lot" in a "subdivision project," we held that such allegations were not sufficient to vest the HLURB of jurisdiction over the case, thus: Jurisdiction is determined by the averments of the complaint and not by the defense contained in the answer. Hence, the jurisdictional issue involved here shall be determined on the basis of the allegations of petitioners complaint before the HLURB. Petitioners simply alleged therein that the subject lot is "a subdivision lot" in "a subdivision project." Under Section 2(d) and (e) of PD 957, "subdivision project" and "subdivision lot" are defined as follows: d) Subdivision project "Subdivision project" shall mean a tract or a parcel of land registered under Act No. 496 which is partitioned primarily for residential purposes into individual lots with or without improvements thereon, and offered to the public for sale, in cash or in installment terms. It shall include all residential, commercial, industrial and recreational areas as well as open spaces and other community and public areas in the project. e) Subdivision lot. "Subdivision lot" shall mean any of the lots, whether residential, commercial, industrial, or recreational, in a subdivision project. There is no allegation in the complaint that the lot purchased by petitioners is part of a tract of land partitioned primarily for residential purposes into individual lots and offered to the public for sale. There is likewise no allegation that the tract of land includes recreational areas and open spaces. Nor does the "Contract to Sell", which forms part of the complaint, describe the subject property as a subdivision lot. What the contract strongly suggests is that the property is simply a lot offered by respondents, as vendors, to the petitioners, as vendees, for sale on installment. As can be clearly gleaned from the same contract, respondents are not acting as subdivision owners, developers, brokers or salesmen, nor are they engaged in the real estate business. What is plain is that the parties are acting only as ordinary sellers and buyers of a specific lot, a portion of a big tract of land co-owned by the heirs of Mariano Faraon. Neither are there undertakings specified in the contract that respondents shall develop the land, like providing for the subdivision concrete roads and sidewalks, street lights, curbs and gutters, underground drainage system, independent water system, landscaping, developed park, and 24-hour security guard service. Even the rights and obligations of the sellers and buyers of a subdivision lot are not provided in the agreement. All these provisions are usually contained in a standard contract involving a sale of a subdivision lot.16 In the instant case, the parties never mentioned if the contract was embodied in a written instrument which may shed light on the nature of their transaction. At any rate, the allegations in private respondents complaint which determine the tribunal that may lawfully take cognizance of the case, clearly show that jurisdiction in the present controversy is lodged with the trial court and not with the HLURB. WHEREFORE, the petition is DENIED. The September 9, 2004 and October 15, 2004 Orders of the Regional Trial Court of San Fernando City, Branch 48, which denied petitioners motion to dismiss and motion for reconsideration, respectively, are AFFIRMED. SO ORDERED.

23
portion and removal of the house constructed thereon but Bertuldo refused and instead claimed ownership of the entire property. G.R. No. 140954. April 12, 2005 HEIRS OF BERTULDO HINOG: Bertuldo Hinog II, Bertuldo Hinog III, Bertuldo Hinog, Jr., Jocelyn Hinog, Bertoldo Hinog IV, Bertoldo Hinog V, Edgardo Hinog, Milagros H. Pabatao, Lilian H. King, Victoria H. Engracia, Terisita C. Hinog, Paz H. Besana, Roberto C. Hinog, Vicente C. Hinog, Roel C. Hinog, Marilyn C. Hinog, Bebot C. Hinog, lordes C. Hinog, Pablo Chiong, Arlene Lanasang (All respresented by Bertuldo Hinog III), Petitioners, vs. HON. ACHILLES MELICOR, in his capacity as Presiding Judge, RTC, Branch 4, 7th Judicial Region, Tagbiliran City, Bohol, and CUSTODIO BALANE, RUFO BALANE, HONORIO BALANE, and TOMAS BALANE,Respondents. DECISION AUSTRIA-MARTINEZ, J.: Before us is a petition for certiorari and prohibition under Rule 65 of the Rules of Court which assails the Orders dated March 22, 1999, August 13, 1999 and October 15, 1999 of the Regional Trial Court, Branch 4, of Tagbilaran City, Bohol in Civil Case No. 4923. The factual background of the case is as follows: On May 21, 1991, private respondents Custodio, Rufo, Tomas and Honorio, all surnamed Balane, filed a complaint for "Recovery of Ownership and Possession, Removal of Construction and Damages" against Bertuldo Hinog (Bertuldo for brevity). They alleged that: they own a 1,399- square meter parcel of land situated in Malayo Norte, Cortes, Bohol, designated as Lot No. 1714; sometime in March 1980, they allowed Bertuldo to use a portion of the said property for a period of ten years and construct thereon a small house of light materials at a nominal annual rental of P100.00 only, considering the close relations of the parties; after the expiration of the ten-year period, they demanded the return of the occupied On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for Bertuldo as his services were terminated by petitioner Bertuldo Hinog III. Atty. Veronico G. Petalcorin then entered his appearance as new counsel for Bertuldo.4 On September 22, 1998, Atty. Petalcorin filed a motion to expunge the complaint from the record and nullify all court proceedings on the ground that private respondents failed to specify in the complaint the amount of damages claimed so as to pay the correct docket fees; and that under Manchester Development Corporation vs. Court of Appeals,5 non-payment of the correct docket fee is jurisdictional.6 In an amended motion, filed on October 2, 1998, Atty. Petalcorin further alleged that the private respondents failed to pay the correct docket fee since the main subject matter of the case cannot be estimated as it is for recovery of ownership, possession and removal of construction.7 Private respondents opposed the motion to expunge on the following grounds: (a) said motion was filed more than seven years from the institution of the case; (b) Atty. Petalcorin has not
1

Accordingly, private respondents sought to oust Bertuldo from the premises of the subject property and restore upon themselves the ownership and possession thereof, as well as the payment of moral and exemplary damages, attorneys fees and litigation expenses "in amounts justified by the evidence." 2 On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the disputed property by virtue of a Deed of Absolute Sale dated July 2, 1980, executed by one Tomas Pahac with the knowledge and conformity of private respondents.3 After the pre-trial, trial on the merits ensued. On November 18, 1997, private respondents rested their case. Thereupon, Bertuldo started his direct examination. However, on June 24, 1998, Bertuldo died without completing his evidence.

24
complied with Section 16, Rule 3 of the Rules of Court which provides that the death of the original defendant requires a substitution of parties before a lawyer can have legal personality to represent a litigant and the motion to expunge does not mention of any specific party whom he is representing; (c) collectible fees due the court can be charged as lien on the judgment; and (d) considering the lapse of time, the motion is merely a dilatory scheme employed by petitioners.8 In their Rejoinder, petitioners manifested that the lapse of time does not vest the court with jurisdiction over the case due to failure to pay the correct docket fees. As to the contention that deficiency in payment of docket fees can be made as a lien on the judgment, petitioners argued that the payment of filing fees cannot be made dependent on the result of the action taken.9 On January 21, 1999, the trial court, while ordering the complaint to be expunged from the records and the nullification of all court proceedings taken for failure to pay the correct docket fees, nonetheless, held: The Court can acquire jurisdiction over this case only upon the payment of the exact prescribed docket/filing fees for the main cause of action, plus additional docket fee for the amount of damages being prayed for in the complaint, which amount should be specified so that the same can be considered in assessing the amount of the filing fees. Upon the complete payment of such fees, the Court may take appropriate action in the light of the ruling in the case of Manchester Development Corporation vs. Court of Appeals, supra.10 Accordingly, on January 28, 1999, upon payment of deficiency docket fee, private respondents filed a manifestation with prayer to reinstate the case.11 Petitioners opposed the reinstatement12 but on March 22, 1999, the trial court issued the first assailed Order reinstating the case.13 On May 24, 1999, petitioners, upon prior leave of court, 14 filed their supplemental pleading, appending therein a Deed of Sale dated November 15, 1982.15 Following the submission of private respondents opposition thereto,16the trial court, in its Order dated July 7, 1999, denied the supplemental pleading on the ground that the Deed of Absolute Sale is a new matter which was never mentioned in the original answer dated July 2, 1991, prepared by Bertuldos original counsel and which Bertuldo verified; and that such new document is deemed waived in the light of Section 1, Rule 917 of the Rules of Court. The trial court also noted that no formal substitution of the parties was made because of the failure of defendants counsel to give the names and addresses of the legal representatives of Bertuldo, so much so that the supposed heirs of Bertuldo are not specified in any pleading in the case. 18 On July 14, 1999, petitioners manifested that the trial court having expunged the complaint and nullified all court proceedings, there is no valid case and the complaint should not be admitted for failure to pay the correct docket fees; that there should be no case to be reinstated and no case to proceed as there is no complaint filed.19 After the submission of private respondents opposition20 and petitioners rejoinder,21 the trial court issued the second assailed Order on August 13, 1999, essentially denying petitioners manifestation/rejoinder. The trial court held that the issues raised in such manifestation/rejoinder are practically the same as those raised in the amended motion to expunge which had already been passed upon in the Order dated January 21, 1999. Moreover, the trial court observed that the Order dated March 22, 1999 which reinstated the case was not objected to by petitioners within the reglementary period or even thereafter via a motion for reconsideration despite receipt thereof on March 26, 1999.22 On August 25, 1999, petitioners filed a motion for reconsideration23 but the same was denied by the trial court in its third assailed Order dated October 15, 1999. The trial court held that the Manchester rule was relaxed in Sun Insurance Office, Ltd. vs. Asuncion.24 Noting that there has been no substitution of parties following the death of Bertuldo, the trial court directed Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of Court. The trial court also reiterated that the Order dated March 22, 1999 reinstating the case was not assailed by petitioners within the reglementary period, despite receipt thereof on March 26, 1999.25

25
On November 19, 1999, Atty. Petalcorin complied with the directive of the trial court to submit the names and addresses of the heirs of Bertuldo.26 On November 24, 1999, petitioners filed before us the present petition for certiorari and prohibition.27 They allege that the public respondent committed grave abuse of discretion in allowing the case to be reinstated after private respondents paid the docket fee deficiency since the trial court had earlier expunged the complaint from the record and nullified all proceedings of the case and such ruling was not contested by the private respondents. Moreover, they argue that the public respondent committed grave abuse of discretion in allowing the case to be filed and denying the manifestation with motion to dismiss, despite the defect in the complaint which prayed for damages without specifying the amounts, in violation of SC Circular No. 7, dated March 24, 1988. In their Comment, private respondents aver that no grave abuse of discretion was committed by the trial court in reinstating the complaint upon the payment of deficiency docket fees because petitioners did not object thereto within the reglementary period. Besides, Atty. Petalcorin possessed no legal personality to appear as counsel for the heirs of Bertuldo until he complies with Section 16, Rule 3 of the Rules of Court.28 At the outset, we note the procedural error committed by petitioners in directly filing the instant petition before this Court for it violates the established policy of strict observance of the judicial hierarchy of courts. Although the Supreme Court, Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court forum. 29 As we stated in People vs. Cuaresma:30 This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court with Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and also serves as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is [an] established policy. It is a policy necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Courts docket.31 The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court; and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of cases, which in some instances had to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues because this Court is not a trier of facts.32 Thus, this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances, such as cases of national interest and of serious implications, justify the availment of the extraordinary remedy of writ of certiorari, calling for the exercise of its primary jurisdiction. Exceptional and compelling circumstances were held present in the following cases: (a)Chavez vs. Romulo33 on citizens right to bear arms; (b) Government of the United States of America vs. Purganan34 on bail in extradition proceedings; (c) Commission on Elections vs. Quijano-Padilla35 on government contract involving modernization and computerization of voters registration list; (d) Buklod ng Kawaning EIIB vs. Zamora36 on status and existence of a public office; and (e) Fortich vs. Corona37 on the so-called "Win-Win Resolution" of the Office of the President which modified the approval of the conversion to agro-industrial area.

26
In this case, no special and important reason or exceptional and compelling circumstance analogous to any of the above cases has been adduced by the petitioners so as to justify direct recourse to this Court. The present petition should have been initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of the petition at bar. In any event, even if the Court disregards such procedural flaw, the petitioners contentions on the substantive aspect of the case fail to invite judgment in their favor. The unavailability of the writ of certiorari and prohibition in this case is borne out of the fact that petitioners principally assail the Order dated March 22, 1999 which they never sought reconsideration of, in due time, despite receipt thereof on March 26, 1999. Instead, petitioners went through the motion of filing a supplemental pleading and only when the latter was denied, or after more than three months have passed, did they raise the issue that the complaint should not have been reinstated in the first place because the trial court had no jurisdiction to do so, having already ruled that the complaint shall be expunged. After recognizing the jurisdiction of the trial court by seeking affirmative relief in their motion to serve supplemental pleading upon private respondents, petitioners are effectively barred by estoppel from challenging the trial courts jurisdiction.38 If a party invokes the jurisdiction of a court, he cannot thereafter challenge the courts jurisdiction in the same case.39 To rule otherwise would amount to speculating on the fortune of litigation, which is against the policy of the Court.40 Nevertheless, there is a need to correct the erroneous impression of the trial court as well as the private respondents that petitioners are barred from assailing the Order dated March 22, 1999 which reinstated the case because it was not objected to within the reglementary period or even thereafter via a motion for reconsideration despite receipt thereof on March 26, 1999. It must be clarified that the said order is but a resolution on an incidental matter which does not touch on the merits of the case or put an end to the proceedings.41 It is an interlocutory order since there leaves something else to be done by the trial court with respect to the merits of the case. 42 As such, it is not subject to a reglementary period. Reglementary period refers to the period set by the rules for appeal or further review of a final judgment or order, i.e., one that ends the litigation in the trial court. Moreover, the remedy against an interlocutory order is generally not to resort forthwith to certiorari, but to continue with the case in due course and, when an unfavorable verdict is handed down, to take an appeal in the manner authorized by law.43 Only when the court issued such order without or in excess of jurisdiction or with grave abuse of discretion and when the assailed interlocutory order is patently erroneous and the remedy of appeal would not afford adequate and expeditious relief will certiorari be considered an appropriate remedy to assail an interlocutory order.44 Such special circumstances are absolutely wanting in the present case. Time and again, the Court has held that the Manchester rule has been modified in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion45 which defined the following guidelines involving the payment of docket fees: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fees within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall

27
constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee. Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules prescribing such payment.46 Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the government, the Manchester rule does not apply.47 Under the peculiar circumstances of this case, the reinstatement of the complaint was just and proper considering that the cause of action of private respondents, being a real action, prescribes in thirty years,48 and private respondents did not really intend to evade the payment of the prescribed docket fee but simply contend that they could not be faulted for inadequate assessment because the clerk of court made no notice of demand or reassessment.49 They were in good faith and simply relied on the assessment of the clerk of court. Furthermore, the fact that private respondents prayed for payment of damages "in amounts justified by the evidence" does not call for the dismissal of the complaint for violation of SC Circular No. 7, dated March 24, 1988 which required that all complaints must specify the amount of damages sought not only in the body of the pleadings but also in the prayer in order to be accepted and admitted for filing. Sun Insurance effectively modified SC Circular No. 7 by providing that filing fees for damages and awards that cannot be estimated constitute liens on the awards finally granted by the trial court.50 Thus, while the docket fees were based only on the real property valuation, the trial court acquired jurisdiction over the action, and judgment awards which were left for determination by the court or as may be proven during trial would still be subject to additional filing fees which shall constitute a lien on the judgment. It would then be the responsibility of the Clerk of Court of the trial court or his duly authorized deputy to enforce said lien and assess and collect the additional fees.51 It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he did not raise the issue of lack of jurisdiction for nonpayment of correct docket fees. Instead, he based his defense on a claim of ownership and participated in the proceedings before the trial court. It was only in September 22, 1998 or more than seven years after filing the answer, and under the auspices of a new counsel, that the issue of jurisdiction was raised for the first time in the motion to expunge by Bertuldos heirs. After Bertuldo vigorously participated in all stages of the case before the trial court and even invoked the trial courts authority in order to ask for affirmative relief, petitioners, considering that they merely stepped into the shoes of their predecessor, are effectively barred by estoppel from challenging the trial courts jurisdiction. Although the issue of jurisdiction may be raised at any stage of the proceedings as the same is conferred by law, it is nonetheless settled that a party may be barred from raising it on ground of laches or estoppel.52 Moreover, no formal substitution of the parties was effected within thirty days from date of death of Bertuldo, as required by Section 16, Rule 353 of the Rules of Court. Needless to stress, the purpose behind the rule on substitution is the protection of the right of every party to due process. It is to ensure that the deceased party would continue to be properly represented in the suit through the duly appointed legal representative of his estate.54 Non-compliance with the rule on substitution would render the proceedings and judgment of the trial court infirm because the court acquires no jurisdiction over the persons of the legal representatives or of the heirs on whom the trial and the judgment would be binding.55 Thus, proper substitution of heirs must be effected for the trial court to acquire jurisdiction over their persons and to obviate any future claim by any heir that he was not apprised of the litigation against Bertuldo or that he did not authorize Atty. Petalcorin to represent him. The list of names and addresses of the heirs was submitted sixteen months after the death of Bertuldo and only when the trial court directed Atty. Petalcorin to comply with the provisions of Section

28
16, Rule 3 of the Rules of Court. Strictly speaking therefore, before said compliance, Atty. Petalcorin had no standing in the court a quowhen he filed his pleadings. Be that as it may, the matter has been duly corrected by the Order of the trial court dated October 15, 1999. To be sure, certiorari under Rule 6556 is a remedy narrow in scope and inflexible in character. It is not a general utility tool in the legal workshop.57 It offers only a limited form of review. Its principal function is to keep an inferior tribunal within its jurisdiction.58 It can be invoked only for an error of jurisdiction, that is, one where the act complained of was issued by the court, officer or a quasi-judicial body without or in excess of jurisdiction, or with grave abuse of discretion which is tantamount to lack or in excess of jurisdiction,59 not to be used for any other purpose,60 such as to cure errors in proceedings or to correct erroneous conclusions of law or fact.61 A contrary rule would lead to confusion, and seriously hamper the administration of justice. Petitioners utterly failed to show that the trial court gravely abused its discretion in issuing the assailed resolutions. On the contrary, it acted prudently, in accordance with law and jurisprudence. WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.

29
SANDOVAL-GUTIERREZ, J.: G.R. No. 168380 February 8, 2007 Before us are two consolidated Petitions for Review on Certiorari assailing the Decisions of the Court of Appeals in CA-G.R. SP No. 873281 and in CA-G.R. SP No. 85078.2 The common factual antecedents of these cases as shown by the records are: Manuel Baviera, petitioner in these cases, was the former head of the HR Service Delivery and Industrial Relations of Standard Chartered Bank-Philippines (SCB), one of herein respondents. SCB is a foreign banking corporation duly licensed to engage in banking, trust, and other fiduciary business in the Philippines. Pursuant to Resolution No. 1142 dated December 3, 1992 of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP), the conduct of SCBs business in this jurisdiction is subject to the following conditions: 1. At the end of a one-year period from the date the SCB starts its trust functions, at least 25% of its trust accounts must be for the account of non-residents of the Philippines and that actual foreign exchange had been remitted into the Philippines to fund such accounts or that the establishment of such accounts had reduced the indebtedness of residents (individuals or corporations or government agencies) of the Philippines to non-residents. At the end of the second year, the above ratio shall be 50%, which ratio must be observed continuously thereafter; 2. The trust operations of SCB shall be subject to all existing laws, rules and regulations applicable to trust services, particularly the creation of a Trust Committee; and 3. The bank shall inform the appropriate supervising and examining department of the BSP at the start of its operations. Apparently, SCB did not comply with the above conditions. Instead, as early as 1996, it acted as a stock broker, soliciting from local residents foreign securities called "GLOBAL THIRD PARTY MUTUAL

MANUEL V. BAVIERA, Petitioner, vs. ESPERANZA PAGLINAWAN, in her capacity as Department of Justice State Prosecutor; LEAH C. TANODRA-ARMAMENTO, In her capacity as Assistant Chief State Prosecutor and Chairwoman of Task Force on Business Scam; JOVENCITO R. ZUNO, in his capacity as Department of Justice Chief State Prosecutor; STANDARD CHARTERED BANK, PAUL SIMON MORRIS, AJAY KANWAL, SRIDHAR RAMAN, MARIVEL GONZALES, CHONA REYES, MARIA ELLEN VICTOR, and ZENAIDA IGLESIAS, Respondents. x-----------------------------x G.R. No. 170602 February 8, 2007

MANUEL V. BAVIERA, Petitioner, vs. STANDARD CHARTERED BANK, BRYAN K. SANDERSON, THE RIGHT HONORABLE LORD STEWARTBY, EVAN MERVYN DAVIES, MICHAEL BERNARD DENOMA, CHRISTOPHER AVEDIS KELJIK, RICHARD HENRY MEDDINGS, KAI NARGOLWALA, PETER ALEXANDER SANDS, RONNIE CHI CHUNG CHAN, SIR CK CHOW, BARRY CLARE, HO KWON PING, RUDOLPH HAROLD PETER ARKHAM, DAVID GEORGE MOIR, HIGH EDWARD NORTON, SIR RALPH HARRY ROBINS, ANTHONY WILLIAM PAUL STENHAM (Standard Chartered Bank Chairman, Deputy Chairman, and Members of the Board), SHERAZAM MAZARI (Group Regional Head for Consumer Banking), PAUL SIMON MORRIS, AJAY KANWAL, SRIDHAR RAMAN, MARIVEL GONZALES, CHONA REYES, ELLEN VICTOR, RAMONA H. BERNAD, DOMINGO CARBONELL, JR., and ZENAIDA IGLESIAS (Standard Chartered BankPhilippines Branch Heads/Officers), Respondents. DECISION

30
FUNDS" (GTPMF), denominated in US dollars. These securities were not registered with the Securities and Exchange Commission (SEC). These were then remitted outwardly to SCB-Hong Kong and SCBSingapore. SCBs counsel, Romulo Mabanta Buenaventura Sayoc and Delos Angeles Law Office, advised the bank to proceed with the selling of the foreign securities although unregistered with the SEC, under the guise of a "custodianship agreement;" and should it be questioned, it shall invoke Section 723 of the General Banking Act (Republic Act No.337).4 In sum, SCB was able to sell GTPMF securities worth around P6 billion to some 645 investors. However, SCBs operations did not remain unchallenged. On July 18, 1997, the Investment Capital Association of the Philippines (ICAP) filed with the SEC a complaint alleging that SCB violated the Revised Securities Act,5particularly the provision prohibiting the selling of securities without prior registration with the SEC; and that its actions are potentially damaging to the local mutual fund industry. In its answer, SCB denied offering and selling securities, contending that it has been performing a "purely informational function" without solicitations for any of its investment outlets abroad; that it has a trust license and the services it renders under the "Custodianship Agreement" for offshore investments are authorized by Section 726 of the General Banking Act; that its clients were the ones who took the initiative to invest in securities; and it has been acting merely as an agent or "passive order taker" for them. On September 2, 1997, the SEC issued a Cease and Desist Order against SCB, holding that its services violated Sections 4(a)7 and 198 of the Revised Securities Act. Meantime, the SEC indorsed ICAPs complaint and its supporting documents to the BSP. On October 31, 1997, the SEC informed the Secretary of Finance that it withdrew GTPMF securities from the market and that it will not sell the same without the necessary clearances from the regulatory authorities. Meanwhile, on August 17, 1998, the BSP directed SCB not to include investments in global mutual funds issued abroad in its trust investments portfolio without prior registration with the SEC. On August 31, 1998, SCB sent a letter to the BSP confirming that it will withdraw third-party fund products which could be directly purchased by investors. However, notwithstanding its commitment and the BSP directive, SCB continued to offer and sell GTPMF securities in this country. This prompted petitioner to enter into an Investment Trust Agreement with SCB wherein he purchased US$8,000.00 worth of securities upon the banks promise of 40% return on his investment and a guarantee that his money is safe. After six (6) months, however, petitioner learned that the value of his investment went down to US$7,000.00. He tried to withdraw his investment but was persuaded by Antonette de los Reyes of SCB to hold on to it for another six (6) months in view of the possibility that the market would pick up. Meanwhile, on November 27, 2000, the BSP found that SCB failed to comply with its directive of August 17, 1998. Consequently, it was fined in the amount of P30,000.00. The trend in the securities market, however, was bearish and the worth of petitioners investment went down further to only US$3,000.00. On October 26, 2001, petitioner learned from Marivel Gonzales, head of the SCB Legal and Compliance Department, that the latter had been prohibited by the BSP to sell GPTMF securities. Petitioner then filed with the BSP a letter-complaint demanding compensation for his lost investment. But SCB denied his demand on the ground that his investment is "regular." On July 15, 2003, petitioner filed with the Department of Justice (DOJ), represented herein by its prosecutors, public respondents, a complaint charging the above-named officers and members of the SCB Board of Directors and other SCB officials, private respondents, with syndicated estafa, docketed as I.S. No. 2003-1059.

31
For their part, private respondents filed the following as countercharges against petitioner: (1) blackmail and extortion, docketed as I.S. No. 2003-1059-A; and blackmail and perjury, docketed as I.S. No. 2003-1278. On September 29, 2003, petitioner also filed a complaint for perjury against private respondents Paul Simon Morris and Marivel Gonzales, docketed as I.S. No. 2003-1278-A. On December 4, 2003, the SEC issued a Cease and Desist Order against SCB restraining it from further offering, soliciting, or otherwise selling its securities to the public until these have been registered with the SEC. Subsequently, the SEC settlement.1awphi1.net and SCB reached an amicable certiorari, docketed as CA-G.R. SP No. 85078. He alleged that the DOJ acted with grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing his complaint for syndicated estafa. He also filed with the Court of Appeals a separate petition for certiorari assailing the DOJ Resolution dismissing I.S. No. 2004-229 for violation of the Securities Regulation Code. This petition was docketed as CA-G.R. SP No. 87328. Petitioner claimed that the DOJ acted with grave abuse of discretion tantamount to lack or excess of jurisdiction in holding that the complaint should have been filed with the SEC. On January 7, 2005, the Court of Appeals promulgated its Decision dismissing the petition.1avvphi1.net It sustained the ruling of the DOJ that the case should have been filed initially with the SEC. Petitioner filed a motion for reconsideration but it was denied in a Resolution dated May 27, 2005. Meanwhile, on February 21, 2005, the Court of Appeals rendered its Decision in CA-G.R. SP No. 85078 (involving petitioners charges and respondents counter charges) dismissing the petition on the ground that the purpose of a petition for certiorari is not to evaluate and weigh the parties evidence but to determine whether the assailed Resolution of the DOJ was issued with grave abuse of discretion tantamount to lack of jurisdiction. Again, petitioner moved for a reconsideration but it was denied in a Resolution of November 22, 2005. Hence, the instant petitions for review on certiorari. For our resolution is the fundamental issue of whether the Court of Appeals erred in concluding that the DOJ did not commit grave abuse of discretion in dismissing petitioners complaint in I.S. 2004229 for violation of Securities Regulation Code and his complaint in I.S. No. 2003-1059 for syndicated estafa. G.R. No 168380 Petitioners motions to dismiss his complaints were denied by the DOJ. Thus, he filed with the Court of Appeals a petition for Re: I.S. No. 2004-229

On January 20, 2004, the SEC lifted its Cease and Desist Order and approved the P7 million settlement offered by SCB. Thereupon, SCB made a commitment not to offer or sell securities without prior compliance with the requirements of the SEC. On February 7, 2004, petitioner filed with the DOJ a complaint for violation of Section 8.19 of the Securities Regulation Code against private respondents, docketed as I.S. No. 2004-229. On February 23, 2004, the DOJ rendered its Joint Resolution10 dismissing petitioners complaint for syndicated estafa in I.S. No. 2003-1059; private respondents complaint for blackmail and extortion in I.S. No. 2003-1059-A; private respondents complaint for blackmail and perjury in I.S. No. 2003-1278; and petitioners complaint for perjury against private respondents Morris and Gonzales in I.S. No. 2003-1278-A. Meanwhile, in a Resolution11 dated April 4, 2004, the DOJ dismissed petitioners complaint in I.S. No. 2004-229 (violation of Securities Regulation Code), holding that it should have been filed with the SEC.

32
For violation of the Securities Regulation Code Section 53.1 of the Securities Regulation Code provides: SEC. 53. Investigations, Injunctions and Prosecution of Offenses. 53. 1. The Commission may, in its discretion, make such investigation as it deems necessary to determine whether any person has violated or is about to violate any provision of this Code, any rule, regulation or order thereunder, or any rule of an Exchange, registered securities association, clearing agency, other self-regulatory organization, and may require or permit any person to file with it a statement in writing, under oath or otherwise, as the Commission shall determine, as to all facts and circumstances concerning the matter to be investigated. The Commission may publish information concerning any such violations and to investigate any fact, condition, practice or matter which it may deem necessary or proper to aid in the enforcement of the provisions of this Code, in the prescribing of rules and regulations thereunder, or in securing information to serve as a basis for recommending further legislation concerning the matters to which this Code relates: Provided, however, That any person requested or subpoenaed to produce documents or testify in any investigation shall simultaneously be notified in writing of the purpose of such investigation: Provided, further, That all criminal complaints for violations of this Code and the implementing rules and regulations enforced or administered by the Commission shall be referred to the Department of Justice for preliminary investigation and prosecution before the proper court: Provided, furthermore, That in instances where the law allows independent civil or criminal proceedings of violations arising from the act, the Commission shall take appropriate action to implement the same: Provided, finally; That the investigation, prosecution, and trial of such cases shall be given priority. The Court of Appeals held that under the above provision, a criminal complaint for violation of any law or rule administered by the SEC must first be filed with the latter. If the Commission finds that there is probable cause, then it should refer the case to the DOJ. Since petitioner failed to comply with the foregoing procedural requirement, the DOJ did not gravely abuse its discretion in dismissing his complaint in I.S. No. 2004-229. A criminal charge for violation of the Securities Regulation Code is a specialized dispute. Hence, it must first be referred to an administrative agency of special competence, i.e., the SEC. Under the doctrine of primary jurisdiction, courts will not determine a controversy involving a question within the jurisdiction of the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the specialized knowledge and expertise of said administrative tribunal to determine technical and intricate matters of fact.12 The Securities Regulation Code is a special law. Its enforcement is particularly vested in the SEC. Hence, all complaints for any violation of the Code and its implementing rules and regulations should be filed with the SEC. Where the complaint is criminal in nature, the SEC shall indorse the complaint to the DOJ for preliminary investigation and prosecution as provided in Section 53.1 earlier quoted. We thus agree with the Court of Appeals that petitioner committed a fatal procedural lapse when he filed his criminal complaint directly with the DOJ. Verily, no grave abuse of discretion can be ascribed to the DOJ in dismissing petitioners complaint. G.R. No. 170602 Re: I.S. No. 2003-1059 for Syndicated Estafa Section 5, Rule 110 of the 2000 Rules of Criminal Procedure, as amended, provides that all criminal actions, commenced by either a complaint or an information, shall be prosecuted under the direction and control of a public prosecutor. This mandate is founded on the theory that a crime is a breach of the security and peace of the people at large, an outrage against the very sovereignty of the State. It follows that a representative of the State shall direct and control the prosecution of the offense.13 This representative of the State is the public prosecutor, whom this Court described in the old case of Suarez v. Platon,14 as: [T]he representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all; and whose interest, therefore, in a criminal prosecution is not that it shall win a case,

33
but that justice shall be done. As such, he is in a peculiar and very definite sense a servant of the law, the twofold aim of which is that guilt shall not escape or innocence suffers. Concomitant with his authority and power to control the prosecution of criminal offenses, the public prosecutor is vested with the discretionary power to determine whether a prima facie case exists or not.15 This is done through a preliminary investigation designed to secure the respondent from hasty, malicious and oppressive prosecution. A preliminary investigation is essentially an inquiry to determine whether (a) a crime has been committed; and (b) whether there is probable cause that the accused is guilty thereof.16 In Pontejos v. Office of the Ombudsman,17probable cause is defined as such facts and circumstances that would 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. It is the public prosecutor who determines during the preliminary investigation whether probable cause exists. Thus, the decision whether or not to dismiss the criminal complaint against the accused depends on the sound discretion of the prosecutor. Given this latitude and authority granted by law to the investigating prosecutor, the rule in this jurisdiction is that courts will not interfere with the conduct of preliminary investigations or reinvestigations or in the determination of what constitutes sufficient probable cause for the filing of the corresponding information against an offender.18 Courts are not empowered to substitute their own judgment for that of the executive branch.19 Differently stated, as the matter of whether to prosecute or not is purely discretionary on his part, courts cannot compel a public prosecutor to file the corresponding information, upon a complaint, where he finds the evidence before him insufficient to warrant the filing of an action in court. In sum, the prosecutors findings on the existence of probable cause are not subject to review by the courts, unless these are patently shown to have been made with grave abuse of discretion.20 Grave abuse of discretion is such capricious and whimsical exercise of judgment on the part of the public officer concerned which is equivalent to an excess or lack of jurisdiction. The abuse of discretion must be as patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility.21 In determining whether the DOJ committed grave abuse of discretion, it is expedient to know if the findings of factof herein public prosecutors were reached in an arbitrary or despotic manner. The Court of Appeals held that petitioners evidence is insufficient to establish probable cause for syndicatedestafa. There is no showing from the record that private respondents herein did induce petitioner by false representations to invest in the GTPMF securities. Nor did they act as a syndicate to misappropriate his money for their own benefit. Rather, they invested it in accordance with his written instructions. That he lost his investment is not their fault since it was highly speculative. Records show that public respondents examined petitioners evidence with care, well aware of their duty to prevent material damage to his constitutional right to liberty and fair play. In Suarez previously cited, this Court made it clear that a public prosecutors duty is two-fold. On one hand, he is bound by his oath of office to prosecute persons where the complainants evidence is ample and sufficient to show prima facie guilt of a crime. Yet, on the other hand, he is likewise duty-bound to protect innocent persons from groundless, false, or malicious prosecution.22 Hence, we hold that the Court of Appeals was correct in dismissing the petition for review against private respondents and in concluding that the DOJ did not act with grave abuse of discretion tantamount to lack or excess of jurisdiction. On petitioners complaint for violation of the Securities Regulation Code, suffice it to state that, as aptly declared by the Court of Appeals, he should have filed it with the SEC, not the DOJ. Again, there is no indication here that in dismissing petitioners complaint, the DOJ acted capriciously or arbitrarily.

34
WHEREFORE, we DENY the petitions and AFFIRM the assailed Decisions of the Court of Appeals in CA-G.R. SP No. 87328 and in CA-G.R. SP No. 85078. Costs against petitioner. SO ORDERED.

35
Not satisfied, petitioner appealed to the Court of Appeals (CA).14 On October 27, 1999, the CA15 affirmed the RTC in toto. G.R. No. 150664 September 3, 2009 Petitioner then filed in the Supreme Court a motion for extension of time to file a petition for review on certiorari. His motion was denied in a minute resolution16 because of procedural lapses17 on his part. Petitioners motion for reconsideration met the same fate.18 Consequently, the CA19 and the Supreme Court20 entered judgment on their rulings. Thus, the RTC decision dismissing petitioners complaint and holding him personally liable for P70,000 to respondent spouses Samaco and respondent Mercader became final and executory. On July 12, 2001, respondent Mercader filed a motion for execution21 of the RTC decision. Petitioner opposed 22the motion, contending that he should not be made personally liable for the amount awarded by the RTC. The RTC judgment should be considered as a claim against the estate of Tereso Fernandez. Thus, the writ of execution should be referred to the court where the estate of Tereso Fernandez was being settled.1avvphi1 On August 30, 2001, the RTC granted respondent Mercaders motion for execution.23 According to the RTC, there was no impediment to the execution of its decision because it had already become final and executory. Moreover, considering that the decision sought to be executed "(did) not involve money claims,"24 the writ of execution could not be directed against the estate of Tereso Fernandez. Petitioners motion for reconsideration25 went unheeded.26 Refusing to give up, petitioner filed this petition for certiorari27 in this Court. He reiterates his position that he should not be made personally liable to pay the P70,000 awarded by the RTC in favor of respondent spouses Samaco and respondent Mercader. At the outset, we note that petitioner filed his petition for certiorari directly in this Court. This is a violation of the doctrine of hierarchy of courts. He should have filed his petition in the CA before seeking

VICENTE DACANAY, in his capacity as administrator of the Testate Estate of TERESO D. FERNANDEZ,Petitioner, vs. HON. RAPHAEL YRASTORZA, SR., in his official capacity as Presiding Judge, Regional Trial Court of Cebu, Branch 14, LUISSA ANNABELLA TORRANO SAMACO, assisted by her husband RAUL SAMACO, ROBERTA I. KERSAW, assisted by her husband BRYAN KERSAW and JOHNSON MERCADER,Respondents. RESOLUTION CORONA, J.: On July 14, 1992, petitioner Vicente Dacanay, as administrator of the testate estate of Tereso D. Fernandez, filed in the Regional Trial Court (RTC) of Cebu City a case for recovery of real property against respondent spouses Luissa and Raul Samaco and Roberta and Bryan Kersaw.1 On December 22, 1992, respondent spouses Samaco filed their answer with counterclaim.2 On May 12, 1993, petitioner amended his complaint to implead respondent Johnson Mercader.3 On August 3, 1993, respondent Mercader filed his answer with counterclaim.4 Respondent spouses Kersaw were declared in default5 as they did not file an answer despite service of summons by publication.6 On May 15, 1994, petitioner filed his second amended complaint7 which the court granted. On March 30, 1994, respondent spouses Samaco filed their answer with counterclaim,8 while respondent Mercader filed his on May 30, 1994.9 On December 12, 1995, the RTC dismissed10 petitioners complaint for lack of merit. Petitioner was likewise ordered to pay P70,000 to respondent spouses Samaco and respondent Mercader by way of attorneys fees,11litigation expenses12 and moral damages.13

36
relief from this Court.28Thus, this petition can be dismissed outright for being procedurally infirm. Moreover, the petition lacks merit. The RTC decision sought to be executed has long attained finality. Hence, petitioner can no longer question it. Once a judgment attains finality, it becomes immutable and unalterable. A final and executory judgment may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land. 29 This is the doctrine of finality of judgment. It is grounded on fundamental considerations of public policy and sound practice that, at the risk of occasional errors, the judgments or orders of courts must become final at some definite time fixed by law. 30 Otherwise, there will be no end to litigations, thus negating the main role of courts of justice to assist in the enforcement of the rule of law and the maintenance of peace and order by settling justiciable controversies with finality.31 The book of entries of judgment of the CA states that its decision in CA-G.R. CV No. 52731 on October 27, 1999 (which affirmed the RTC decision dismissing petitioners complaint and awarding P70,000 to respondent spouses Samaco and respondent Mercader) became final on June 22, 2000.32 On the other hand, the book of entries of judgment of the Supreme Court states that its resolution in G.R. No. 143713 on August 9, 2000 (which denied petitioners motion for extension of time to file petition for review on certiorari) became final on February 14, 2001.33 Thus, respondent Mercader properly moved for the execution of the RTC decision on July 12, 2001. For the same reason, there was no legal impediment to the RTCs issuance of a writ of execution of its final and executory decision on August 30, 2001. WHEREFORE, the petition is hereby DISMISSED. Costs against petitioner. SO ORDERED.

37
7659 as construed in People v. Simon, 7 the penalty imposable for the offense charged should not exceed prision correccional or six (6) years and under R.A. No. 7691 it is the Metropolitan Trial Court which has jurisdiction over the case. In its Order
8

[G.R. No. 126623. December 12, 1997] ERNESTO MORALES y DELA CRUZ, Petitioner, v. COURT OF APPEALS, HON. ALFREDO J. GUSTILO, as Presiding Judge of RTC, Pasay City, Branch 116 and PEOPLE OF THE PHILIPPINES, Respondents. DECISION DAVIDE, JR., J.: The key issue in this case is whether, in light of R.A. No. 76591 as interpreted in People v. Simon,2 and R.A. No. 7691,3 Regional Trial Courts have jurisdiction over violations of R.A. No. 6425, otherwise known as the Dangerous Drugs Act of 1972, as amended, when the imposable penalty is not more than six (6) years. The petitioner was charged with the violation of Section 15 in relation to Section 20 of R.A. No. 6425, as amended by R.A. No. 7659, in an information filed before the Regional Trial Court (RTC) of Pasay City on 13 March 1996. The accusatory portion of the said information reads as follows: That on or about the 11th day of March 1996, in Pasay, Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, Ernesto Morales y De la Cruz, without authority of law, did then and there wilfully, unlawfully and feloniously sell and deliver to another 0.4587 grams of Metamphetamine Hydrochloride (shabu), a regulated drug. CONTRARY TO LAW. 4chanroblesvirtuallawlibrary The case was docketed as Criminal Case No. 96-8443 and raffled to Branch 116 of the said court. Upon his arraignment, the petitioner entered a plea of not guilty. 5 Subsequently, on 30 April 1996, the petitioner filed a Motion to Dismiss 6 on the ground that the RTC had no jurisdiction to try the case considering that pursuant to Section 20 of R.A. No.

of 9 May 1996, the RTC denied the motion. It held:

It is true that under the aforementioned provision, cases punishable with penalties of not more than six (6) years are within the exclusive jurisdiction of the Metropolitan Trial Courts. However, the exceptions are cases falling within the exclusive original jurisdiction of the Regional Trial Court Under Section 39 of Republic Act No. 6425, the Dangerous Drugs Act of 1972, the Court of First Instance now the Regional Trial Court and the Juvenile and Domestic Relations Court, which no longer exist, shall have concurrent original jurisdiction over all cases involving offenses punishable under this Act. It is therefore clear that this case, which is a violation of Republic Act No. 6425, although punishable by a penalty of less than six (6) years, falls within the jurisdiction of the Regional Trial Court. His motion for the reconsideration9 of the order having been denied,10 the petitioner filed with respondent Court of Appeals a petition for certiorari under Rule 65 of the Rules of Court.11 The case was docketed as CA-G.R. SP No. 40670. In its Comment12 in CA-G.R. SP No. 40670, the Office of the Solicitor General (OSG) agreed with the petitioner that the RTC had no jurisdiction to try the criminal case. It, however, asserted that the Court of Appeals had no jurisdiction over the special civil action for certiorari, as the same involved only the question of jurisdiction of an inferior court, hence, cognizable by the Supreme Court alone pursuant to Section 9 of Batas Pambansa Bilang 129, in connection with Section 5(2)(c), Article VIII of the 1987 Constitution and Section 17 of Republic Act No. 5440. The OSG then recommended that the case be elevated to the Supreme Court for disposition, or that the Court of Appeals grant the petition and set aside the challenged order of the RTC should it rule that it had jurisdiction over petition.

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In its Resolution 13 of 8 August 1996, the Court of Appeals dismissed the petition for certiorari for lack of jurisdiction over the action. Explaining its ruling, it declared: In his Comment to the petition, the Solicitor General, inter alia, contended that this Court has no jurisdiction over the petition for it properly falls within the exclusive jurisdiction of the Supreme Court. We fully agree. Section 5, Article VIII of the Constitution provides: Sec. 5. The Supreme Court shall have the following powers; x x x (2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may provide, final judgments and orders of lower courts in: x x x (c) All cases in which the jurisdiction of any lower court is in issue. x xx Section 17 of R.A. 5446 otherwise known as the Judiciary Act of 1948 says that the Supreme Court has exclusive jurisdiction to review, revise, reverse, modify or affirm on certiorari final judgments and decrees of inferior courts in all cases in which the jurisdiction of any inferior court is on issue. It is hereby stressed that the issue in the petition at bench is purely a question of jurisdiction which is resolvable on the basis of the records. After the denial 14 on 13 September 1996 of his motion for reconsideration, 15 the petitioner came to this Court via this petition for review under Rule 45 of the Rules of Court raising the following issues: I. WHETHER OR NOT THE COURT OF APPEALS HAS JURISDICTION TO ENTERTAIN A PETITION FOR CERTIORARI UNDER RULE 65 OF THE RULES OF COURT WHERE THE ISSUE IS THE JURISDICTION OF RESPONDENT RTC JUDGE TO TRY THE ALLEGED VIOLATION OF R.A. 6425; AND II. WHETHER OR NOT RESPONDENT RTC JUDGE/COURT HAS JURISDICTION TO TRY ALLEGED VIOLATION OF SECTION 15, IN RELATION TO SECTION 20, ART. III OF R.A. 6425, AS AMENDED, INVOLVING ONLY 0.4587 GRAMS OF SHABU. As to the first, the petitioner insists that respondent Court of Appeals has concurrent original jurisdiction with this Court over petitions for certiorari under Rule 65 of the Rules of Court involving decisions or orders of Regional Trial Courts pursuant to Section 9(1)16 of B.P. Blg. 129 in relation to Section 5(1)17 of Article VIII of the Constitution. He cites De Jesus v. Court of Appeals 18 wherein this Court held that the original jurisdiction of the Court of Appeals under Section 9 of B.P. Blg. 129 is concurrent with that of the Supreme Court, and with that of Regional Trial Courts for writs enforceable within their respective regions. The petitioner further maintains that Section 5(2)(c) of Article VIII of the Constitution and Section 17 of the Judiciary Act of 1948, as amended by R.A. No. 5440, relied upon by the Court Appeals are not applicable inasmuch as they relate to the appellate jurisdiction of this Court and not to an original action under Rule 65 of the Rules of Court. As regards the second issue, the petitioner asserts that the RTC below has no jurisdiction over the offense charged considering that only 0.4587 grams of methamphetamine hydrochloride (shabu) is involved. In light of Section 20 of R.A. No. 7659, 19 as interpreted in People v. Simon 20 and further explained in People v. Santos 21 and Ordoez v. Vinarao, 22 the imposable penalty therefor would not exceed prision correccional, whose maximum period is six (6) years. Hence, under R.A. No. 7691 exclusive original jurisdiction therein is vested in Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts. In its Comment on the petition, the OSG submits that all violations of R.A. No. 6425, as further amended by R.A. No. 7659, which are punishable by imprisonment not exceeding six years now fall under the jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts. Since on the basis of the quantity of the regulated drug involved in this case the penalty imposable does not exceed prision correccional, it is the Metropolitan Trial Court of Pasay City which has jurisdiction over the case. It disagreed with the opinion of the RTC that violations of R.A. No. 6425, as amended, still fall within the jurisdiction of the

39
RTC because the latters jurisdiction thereon mandated by Section 39 of R.A. No. 6425 has been preserved by the exception provided for in the opening sentence of Section 32 of B.P. Blg. 129, as amended by Section 2 of R.A. No. 7691. It submits that Section 39 of R.A. No. 6425 was repealed by Section 6 of R.A. No. 7691, which provides: SEC. 6. All laws, decrees, and orders inconsistent with the provisions of this Act shall be considered amended or modified accordingly. In support of its submission, it cites this Courts resolution in Gulhoran v. Escao, Jr. 23chanroblesvirtuallawlibrary The OSG further contends that respondent Court of Appeals was correct in dismissing the petition for certiorari for lack of jurisdiction in view of Section 9(3) of B.P. Blg. 129; Sec. 5(2)(c) of Article VIII of the Constitution; and Section 17 of the Judiciary Act of 1948, as amended by R.A. No. 5440. Nevertheless, it prays that this petition be given due course and that Criminal Case No. 96-8443 be remanded to the proper metropolitan trial court for further proceedings. We resolved to give due course to this petition. The Court of Appeals erred in holding that it had no jurisdiction over petitioners special civil action for certiorari under Rule 65 of the Rules of Court. Under Section 9(1) of B.P. Blg. 129, the Court of Appeals has concurrent original jurisdiction with the Supreme Court pursuant to Section 5(1) of Article VIII of the Constitution and Section 17(1) of the Judiciary Act of 1948, and with the Regional Trial Court pursuant to Section 21(1) of B.P. Blg. 129 to issue writs of certiorari, mandamus, prohibition, habeas corpus, and quo warranto.24 These areoriginal actions, not modes of appeals. Since what the petitioner filed in CA-G.R. SP No. 40670 was a special civil action for certiorari under Rule 65, the original jurisdiction of the Court of Appeals thereon is beyond doubt. This error of the Court of Appeals was due to its misapplication of Section 5(2)(c) of Article VIII of the Constitution and of that portion of Section 17 of the Judiciary Act of 1948 vesting upon the Supreme Court exclusive jurisdiction to review, revise, reverse, modify, or affirm on certiorari as the law or rules of court may provide, final judgments and decrees of inferior courts in all cases in which the jurisdiction of any inferior court is in issue. It forgot that this constitutional and statutory provisions pertain to the appellate -not original -- jurisdiction of the Supreme Court, as correctly maintained by the petitioner. An appellate jurisdiction refers to a process which is but a continuation of the original suit, not a commencement of a new action, such as that of a special civil action forcertiorari. The general rule is that a denial of a motion to dismiss or to quash in criminal cases is interlocutory and cannot be the subject of an appeal or of a special civil action for certiorari. Nevertheless, this Court has allowed a special civil action for certiorari where a lower court has acted without or in excess of jurisdiction or with grave abuse of discretion in denying a motion to dismiss or to quash.25 The petitioner believed that the RTC below did so; hence, the special civil action for certiorari before the Court of Appeals appeared to be the proper remedy. The next most logical step then is for us to simply set aside the challenged resolutions and to direct the Court of Appeals to resolve on the merits the petition in CA-G.R. SP No. 40670. But, that would further delay the case. Considering the special importance of the lone legal issue raised, which can be resolved on the basis of the pleadings heretofore filed, and the fact that this Court has concurrent jurisdiction over petitioners special action in CA-G.R. SP No. 40670, we deem it more practical and in the greater interest of justice not to remand the case to the Court of Appeals but, instead, to take direct cognizance thereof and resolve it once and for all.26 We now address the second issue. Applying by analogy the ruling in People v. Simon,27 People v. De Lara,28 People v. Santos,29 and Ordoez v. Vinarao,30 the imposable penalty in this case which involves 0.4587 grams of shabu should not exceed prision correccional. We say by analogy because these cases involved marijuana, not methamphetamine hydrochloride (shabu). In Section 20 of R.A. No. 6425, as amended by Section 17 of R.A. No. 7659, the maximum quantities of marijuana and

40
methamphetamine hydrochloride for purposes of imposing the maximum penalties are not the same. For the latter, if the quantity involved is 200 grams or more, the penalty of reclusion perpetua to death and a fine ranging from P500,000 to P10 million shall be imposed. Accordingly, if the quantity involved is below 200 grams, the imposable penalties should be as follows: a) reclusion temporal -- if the quantity involved is from 134 to 199 grams; b) prision mayor -- if the quantity involved is from 66 to 133 grams; c) prision correccional -- if the quantity involved is 65 grams or below. Clearly, the penalty which may be imposed for the offense charged in Criminal Case No. 96-8443 would at most be only prision correccional whose duration is from six (6) months and one (1) day to six (6) years. Does it follow then that, as the petitioner insists, the RTC has no jurisdiction thereon in view of the amendment of Section 32 of B.P. Blg. 129 by R.A. No. 7691, which vested upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts exclusive original jurisdiction over all offenses punishable with imprisonment not exceeding six (6) years irrespective of the amount of fine and regardless of other imposable accessory or other penalties? This section 32 as thus amended now reads: SEC. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Criminal Cases. -Except in cases falling within the exclusive original jurisdiction of Regional Trial Court and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: (2) Exclusive original jurisdiction over all offenses punishable with imprisonment not exceeding six (6) years irrespective of the amount of fine, and regardless of other imposable accessory or other penalties, including the civil liability arising from such offender or predicated thereon, irrespective of kind, nature, value or amount thereof: Provided, however, That in offenses involving damage to property through criminal negligence, they shall have exclusive original jurisdiction thereof. The exception in the opening sentence is of special significance which we cannot disregard. By virtue thereof, the exclusive original jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts in criminal cases does not cover those cases which by provision of law fall within the exclusive original jurisdiction of Regional Trial Courts and of the Sandiganbayan regardless of the prescribed penalty. Otherwise put, even if such cases are punishable by imprisonment not exceeding six years (i.e., prision correccional, arresto mayor, or arresto menor), jurisdiction thereon is retained by the Regional Trial Courts or the Sandiganbayan, as the case may be. The aforementioned exception refers not only to Section 20 of B.P. Blg. 129 providing for the jurisdiction of Regional Trial Courts in criminal cases,31 but also to other laws which specifically lodge in Regional Trial Courts exclusive jurisdiction over specific criminal cases, e.g., (a) Article 360 of the Revised Penal Code, as amended by R.A. Nos. 1289 and 4363 on written defamation or libel; (b) Decree on Intellectual Property (P. D. No. 49, as amended), which vests upon Courts of First Instance exclusive jurisdiction over the cases therein mentioned regardless of the imposable penalty; and (c) more appropriately for the case at bar, Section 39 of R.A. No. 6425, as amended by P.D. No. 44, which vests on Courts of First Instance, Circuit Criminal Courts, and the Juvenile and Domestic Relations Courts concurrent exclusive original jurisdiction over all cases involving violations of said Act. Jurisdiction is, of course, conferred by the Constitution or by Congress. Outside the cases enumerated in Section 5(2) of Article VIII of the Constitution, Congress has the plenary power to define, prescribe and apportion the jurisdiction of various courts.32 Accordingly, Congress may, by law, provide that a certain class of cases should be exclusively heard and determined by one court. Such would be a special law and must be construed as an exception to the general law on jurisdiction of courts, namely, the Judiciary Act of 1948 as amended, or the Judiciary Reorganization Act of 1980. In short, the special law prevails over the general law.

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R.A. No. 7691 can by no means be considered another special law on jurisdiction but merely an amendatory law intended to amend specific sections of the Judiciary Reorganization Act of 1980. Hence, it does not have the effect of repealing or modifying Article 360 of the Revised Penal Code; Section 57 of the Decree on Intellectual Property; and Section 39 of R.A. No. 6425, as amended by P.D. No. 44. In a manner of speaking, R.A. No. 7691 was absorbed by the mother law, the Judiciary Reorganization Act of 1980. That Congress indeed did not intend to repeal these special laws vesting exclusive jurisdiction in the Regional Trial Courts over certain cases is clearly evident from the exception provided for in the opening sentence of Section 32 of B.P. Blg. 129, as amended by R.A. No. 7691. These special laws are not, therefore, covered by the repealing clause (Section 6) of R.A. No. 7691. Neither can it be successfully argued that Section 39 of R.A. No. 6425, as amended by P.D. No. 44, is no longer operative because Section 44 of B.P. Blg. 129 abolished the Courts of First Instance, Circuit Criminal Courts, and Juvenile and Domestic Relations Courts. While, indeed, Section 44 provides that these courts were to be deemed automatically abolished upon the declaration by the President that the reorganization provided in B.P. Blg. 129 had been completed, this Court should not lose sight of the fact that the Regional Trial Courts merely replaced the Courts of First Instance as clearly borne out by the last two sentences of Section 44, to wit: Upon such declaration, the said courts shall be deemed automatically abolished and the incumbents thereof shall cease to hold office. The cases pending in the old Courts shall be transferred to the appropriate Courts constituted pursuant to this Act, together with the pertinent functions, records, equipment, property and necessary personnel. In short, there was a change in name only -- from Courts of First Instance to Regional Trial Courts. The Interim Rules and Guidelines Relative to the Implementation of B.P. Blg. 129 promulgated by this Court on 11 January 1983 also provides that the reference to the courts of first instance in the Rules of Court shall be deemed changed to the regional trial courts. Consequently, it is not accurate to state that the abolition of the Courts of First Instance carried with it the abolition of their exclusive original jurisdiction in drug cases vested by Section 39 of R.A. No. 6425, as amended by P. D. No. 44. If that were so, then so must it be with respect to Article 360 of the Revised Penal Code and Section 57 of the Decree on Intellectual Property. On the contrary, in the resolution of 19 June 1996 in Caro v. Court of Appeals 33 and in the resolution of 26 February 1997 in Villalon v. Baldado, 34 this Court expressly ruled that Regional Trial Courts have the exclusive original jurisdiction over libel cases pursuant to Article 360 of the Revised Penal Code. In Administrative Order No. 104-96 this Court mandates that: LIBEL CASES SHALL BE TRIED BY THE REGIONAL TRIAL COURTS HAVING JURISDICTION OVER THEM TO THE EXCLUSION OF THE METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS AND MUNICIPAL CIRCUIT TRIAL COURT. It likewise provides that jurisdiction over cases involving violations of intellectual property rights are confined exclusively to the Regional Trial Courts. The same Administrative Order recognizes that violations of R.A. No. 6425, as amended, regardless of the quantity involved, are to be tried and decided by the Regional Trial Courts therein designated as special courts. As to the latter, this Court in its Resolution of 1 April 1997 in A.M. No. 96-11-421-RTC 35 resolved as follows: to AMEND Administrative Order No. 104-96, dated October 21, 1996, with respect only to the violation of the Dangerous Drugs Act of 1972, as amended, if the imposable penalty is reclusion perpetuato death. Thus, if the imposable penalty is below reclusion perpetua the drug related cases will be raffled among the regular courts as ordinary criminal cases. Thereafter in Circular No. 31-97 dated 15 May 1997, the Court Administrator directed Judges of special courts for Kidnapping, Robbery, Carnapping, Dangerous Drugs and other Heinous Crimes to comply with the aforesaid amendment to Administrative Order No. 104-96. To avoid any further confusion or misunderstanding,

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we hereby declare that the term regular courts found in the above amendment refers exclusively to the Regional Trial Courts and was not intended to include Metropolitan Trial Courts, Municipal Trial Courts, Municipal Circuit Trial Courts. In view of the foregoing, this Court hereby abandons the resolution in Gulhoran v. Escao 36 where, through its Second Division, we ruled, in effect, that Section 39 of R.A. No. 6425, as amended, was repealed by virtue of the repealing clause of R.A. No. 7691. The RTC then did not commit any error in denying petitioners motion to dismiss Civil Case No. 96-8443. WHEREFORE, the petition is GRANTED, but only insofar as the issue of jurisdiction of respondent Court of Appeals in CA-G.R. SP No. 40670 is concerned. The Resolution of 8 August and 13 September 1996 of the Court of Appeals are SET ASIDE, while the challenged orders in Criminal Case No. 96-8443 of the Regional Trial Court of Pasay City, Branch 116, are AFFIRMED. The trial court is hereby DIRECTED to proceed with the trial of Criminal Case No. 96-8443 with all reasonable dispatch. No pronouncements as to costs. SO ORDERED.

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consequence, the latter filed a complaint charging that petitioner had illegally terminated his employment.2 G.R. No. 130866. September 16, 1998 ST. MARTIN FUNERAL HOME, Petitioner, vs. NATIONAL LABOR RELATIONS MARTINEZ, COMMISSION and BIENVENIDO ARICAYOS, Respondents. DECISION REGALADO, J.: The present petition for certiorari stemmed from a complaint for illegal dismissal filed by herein private respondent before the National Labor Relations Commission (NLRC), Regional Arbitration Branch No. III, in San Fernando, Pampanga. Private respondent alleges that he started working as Operations Manager of petitioner St. Martin Funeral Home on February 6, 1995. However, there was no contract of employment executed between him and petitioner nor was his name included in the semi-monthly payroll. On January 22, 1996, he was dismissed from his employment for allegedly misappropriating P38,000.00 which was intended for payment by petitioner of its value added tax (VAT) to the Bureau of Internal Revenue (BIR).1 Petitioner on the other hand claims that private respondent was not its employee but only the uncle of Amelita Malabed, the owner of petitioner St. Martins Funeral Home. Sometime in 1995, private respondent, who was formerly working as an overseas contract worker, asked for financial assistance from the mother of Amelita. Since then, as an indication of gratitude, private respondent voluntarily helped the mother of Amelita in overseeing the business. In January 1996, the mother of Amelita passed away, so the latter she took over the management of the business. She then discovered that there were arrears in the payment of taxes and other government fees, although the records purported to show that the same were already paid. Amelita then made some changes in the business operation and private respondent and his wife were no longer allowed to participate in the management thereof. As a Based on the position papers of the parties, the labor arbiter rendered a decision in favor of petitioner on October 25, 1996 declaring that no employer-employee relationship existed between the parties and, therefore, his office had no jurisdiction over the case.3 Not satisfied with the said decision, private respondent appealed to the NLRC contending that the labor arbiter erred (1) in not giving credence to the evidence submitted by him; (2) in holding that he worked as a volunteer and not as an employee of St. Martin Funeral Home from February 6, 1995 to January 23, 1996, or a period of about one year; and (3) in ruling that there was no employeremployee relationship between him and petitioner.4 On June 13, 1997, the NLRC rendered a resolution setting aside the questioned decision and remanding the case to the labor arbiter for immediate appropriate proceedings.5 Petitioner then filed a motion for reconsideration which was denied by the NLRC in its resolution dated August 18, 1997 for lack of merit,6 hence the present petition alleging that the NLRC committed grave abuse of discretion.7 Before proceeding further into the merits of the case at bar, the Court feels that it is now exigent and opportune to reexamine the functional validity and systemic practicability of the mode of judicial review it has long adopted and still follows with respect to decisions of the NLRC. The increasing number of labor disputes that find their way to this Court and the legislative changes introduced over the years into the provisions of Presidential Decree (P.D.) No. 442 (The Labor Code of the Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization Act of 1980) now stridently call for and warrant a reassessment of that procedural aspect. We prefatorily delve into the legal history of the NLRC. It was first established in the Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions were expressly declared to be appealable to the Secretary of Labor and, ultimately, to the President of the Philippines.

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On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the same to take effect six months after its promulgation.8 Created and regulated therein is the present NLRC which was attached to the Department of Labor and Employment for program and policy coordination only.9 Initially, Article 302 (now, Article 223) thereof also granted an aggrieved party the remedy of appeal from the decision of the NLRC to the Secretary of Labor, but P.D. No. 1391 subsequently amended said provision and abolished such appeals. No appellate review has since then been provided for. Thus, to repeat, under the present state of the law, there is no provision for appeals from the decision of the NLRC.10 The present Section 223, as last amended by Section 12 of R.A. No. 6715, instead merely provides that the Commission shall decide all cases within twenty days from receipt of the answer of the appellee, and that such decision shall be final and executory after ten calendar days from receipt thereof by the parties. When the issue was raised in an early case on the argument that this Court has no jurisdiction to review the decisions of the NLRC, and formerly of the Secretary of Labor, since there is no legal provision for appellate review thereof, the Court nevertheless rejected that thesis. It held that there is an underlying power of the courts to scrutinize the acts of such agencies on questions of law and jurisdiction even though no right of review is given by statute; that the purpose of judicial review is to keep the administrative agency within its jurisdiction and protect the substantial rights of the parties; and that it is that part of the checks and balances which restricts the separation of powers and forestalls arbitrary and unjust adjudications.11 Pursuant to such ruling, and as sanctioned by subsequent decisions of this Court, the remedy of the aggrieved party is to timely file a motion for reconsideration as a precondition for any further or subsequent remedy,12 and then seasonably avail of the special civil action of certiorari under Rule 65,13 for which said Rule has now fixed the reglementary period of sixty days from notice of the decision. Curiously, although the 10-day period for finality of the decision of the NLRC may already have lapsed as contemplated in Section 223 of the Labor Code, it has been held that this Court may still take cognizance of the petition for certiorari on jurisdictional and due process considerations if filed within the reglementary period under Rule 65.14 Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129 originally provided as follows: SEC. 9. Jurisdiction. - The Intermediate Appellate Court shall exercise: (1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction; (2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards, or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. The Intermediate Appellate Court shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings. These provisions shall not apply to decisions and interlocutory orders issued under the Labor Code of the Philippines and by the Central Board of Assessment Appeals.15 Subsequently, and as it presently reads, this provision was amended by R.A. No. 7902 effective March 18, 1995, to wit: SEC. 9. Jurisdiction. - The Court of Appeals shall exercise:

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(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction; (2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings. Trials or hearings in the Court of Appeals must be continuous and must be completed within, three (3) months, unless extended by the Chief Justice. It will readily be observed that, aside from the change in the name of the lower appellate court,16 the following amendments of the original provisions of Section 9 of B.P. No. 129 were effected by R.A. No. 7902, viz.: 1. The last paragraph which excluded its application to the Labor Code of the Philippines and the Central Board of Assessment Appeals was deleted and replaced by a new paragraph granting the Court of Appeals limited powers to conduct trials and hearings in cases within its jurisdiction. 2. The reference to the Labor Code in that last paragraph was transposed to paragraph (3) of the section, such that the original exclusionary clause therein now provides except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. (Italics supplied) 3. Contrarily, however, specifically added to and included among the quasi-judicial agencies over which the Court of Appeals shall have exclusive appellate jurisdiction are the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission. This, then, brings us to a somewhat perplexing impass, both in point of purpose and terminology. As earlier explained, our mode of judicial review over decisions of the NLRC has for some time now been understood to be by a petition for certiorari under Rule 65 of the Rules of Court. This is, of course, a special original action limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction and, in almost all cases that have been brought to us, grave abuse of discretion amounting to lack of jurisdiction. It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants exclusive appellate jurisdiction to the Court of Appeals over all final adjudications of the Regional Trial Courts and the quasi-judicial agencies generally or specifically referred to therein except, among others, those falling within the appellate jurisdiction of the Supreme Court in accordance with x x x the Labor Code of the Philippines under Presidential Decree No. 442, as amended, x x x. This would necessarily contradict what has been ruled and said all along that appeal does not lie from decisions of the NLRC.17 Yet, under such excepting clause literally construed, the appeal from the NLRC cannot be brought to the Court of Appeals, but to this Court by necessary implication. The same exceptive clause further confuses the situation by declaring that the Court of Appeals has no appellate jurisdiction over decisions falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of B.P. No. 129, and those specified cases in Section 17 of the

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Judiciary Act of 1948. These cases can, of course, be properly excluded from the exclusive appellate jurisdiction of the Court of Appeals. However, because of the aforementioned amendment by transposition, also supposedly excluded are cases falling within the appellate jurisdiction of the Supreme Court in accordance with the Labor Code. This is illogical and impracticable, and Congress could not have intended that procedural gaffe, since there are no cases in the Labor Code the decisions, resolutions, orders or awards wherein are within the appellate jurisdiction of the Supreme Court or of any other court for that matter. A review of the legislative records on the antecedents of R.A. No. 7902 persuades us that there may have been an oversight in the course of the deliberations on the said Act or an imprecision in the terminology used therein. In fine, Congress did intend to provide for judicial review of the adjudications of the NLRC in labor cases by the Supreme Court, but there was an inaccuracy in the term used for the intended mode of review. This conclusion which we have reluctantly but prudently arrived at has been drawn from the considerations extant in the records of Congress, more particularly on Senate Bill No. 1495 and the Reference Committee Report on S. No. 1495/H. No. 10452.18 In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his sponsorship speech19 from which we reproduce the following excerpts: The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129, reorganized the Court of Appeals and at the same time expanded its jurisdiction and powers. Among others, its appellate jurisdiction was expanded to cover not only final judgment of Regional Trial Courts, but also all final judgment(s), decisions, resolutions, orders or awards of quasi-judicial agencies, instrumentalities, boards and commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of BP Blg. 129 and of subparagraph 1 of the third paragraph and subparagraph 4 of Section 17 of the Judiciary Act of 1948. Mr. President, the purpose of the law is to ease the workload of the Supreme Court by the transfer of some of its burden of review of factual issues to the Court of Appeals. However, whatever benefits that can be derived from the expansion of the appellate jurisdiction of the Court of Appeals was cut short by the last paragraph of Section 9 of Batas Pambansa Blg. 129 which excludes from its coverage the decisions and interlocutory orders issued under the Labor Code of the Philippines and by the Central Board of Assessment Appeals. Among the highest number of cases that are brought up to the Supreme Court are labor cases. Hence, Senate Bill No. 1495 seeks to eliminate the exceptions enumerated in Section 9 and, additionally, extends the coverage of appellate review of the Court of Appeals in the decision(s) of the Securities and Exchange Commission, the Social Security Commission, and the Employees Compensation Commission to reduce the number of cases elevated to the Supreme Court. (Emphases and corrections ours) xxx Senate Bill No. 1495 authored by our distinguished Colleague from Laguna provides the ideal situation of drastically reducing the workload of the Supreme Court without depriving the litigants of the privilege of review by an appellate tribunal. In closing, allow me to quote the observations of former Chief Justice Teehankee in 1986 in the Annual Report of the Supreme Court: x x x Amendatory legislation is suggested so as to relieve the Supreme Court of the burden of reviewing these cases which present no important issues involved beyond the particular fact and the parties involved, so that the Supreme Court may wholly devote its time to cases of public interest in the discharge of its mandated task as the guardian of the Constitution and the guarantor of the peoples basic rights and additional task expressly vested on it now to determine whether or not there has been a grave abuse of discretion amounting to lack of jurisdiction on the part of any branch or instrumentality of the Government.

47
We used to have 500,000 cases pending all over the land, Mr. President. It has been cut down to 300,000 cases some five years ago. I understand we are now back to 400,000 cases. Unless we distribute the work of the appellate courts, we shall continue to mount and add to the number of cases pending. In view of the foregoing, Mr. President, and by virtue of all the reasons we have submitted, the Committee on Justice and Human Rights requests the support and collegial approval of our Chamber. xxx Surprisingly, however, in a subsequent session, the following Committee Amendment was introduced by the said sponsor and the following proceedings transpired:20 Senator Roco. On page 2, line 5, after the line Supreme Court in accordance with the Constitution, add the phrase THE LABOR CODE OF THE PHILIPPINES UNDER P.D. 442, AS AMENDED. So that it becomes clear, Mr. President, that issues arising from the Labor Code will still be appealable to the Supreme Court. The President. Is there any objection? (Silence) Hearing none, the amendment is approved. Senator Roco. On the same page, we move that lines 25 to 30 be deleted. This was also discussed with our Colleagues in the House of Representatives and as we understand it, as approved in the House, this was also deleted, Mr. President. The President. Is there any objection? (Silence) Hearing none, the amendment is approved. Senator Roco. There are no further Committee amendments, Mr. President. Senator Romulo. Mr. President, I move that we close the period of Committee amendments. The President. Is there any objection? (Silence) Hearing none, the amendment is approved. (Italics supplied) Thereafter, since there were no individual amendments, Senate Bill No. 1495 was passed on second reading and being a certified bill, its unanimous approval on third reading followed.21; Record of the Senate, Vol. V, No. 63, pp. 180-181.21 The Conference Committee Report on Senate Bill No. 1495 and House Bill No. 10452, having theretofore been approved by the House of Representatives, the same was likewise approved by the Senate on February 20, 1995,22 inclusive of the dubious formulation on appeals to the Supreme Court earlier discussed. The Court is, therefore, of the considered opinion that ever since appeals from the NLRC to the Supreme Court were eliminated, the legislative intendment was that the special civil action of certiorari was and still is the proper vehicle for judicial review of decisions of the NLRC. The use of the word appeal in relation thereto and in the instances we have noted could have been alapsus plumae because appeals by certiorari and the original action for certiorari are both modes of judicial review addressed to the appellate courts. The important distinction between them, however, and with which the Court is particularly concerned here is that the special civil action of certiorari is within the concurrent original jurisdiction of this Court and the Court of Appeals;23whereas to indulge in the assumption that appeals by certiorari to the Supreme Court are allowed would not subserve, but would subvert, the intention of Congress as expressed in the sponsorship speech on Senate Bill No. 1495. Incidentally, it was noted by the sponsor therein that some quarters were of the opinion that recourse from the NLRC to the Court of Appeals as an initial step in the process of judicial review would be circuitous and would prolong the proceedings. On the contrary, as he commendably and realistically emphasized, that procedure would be advantageous to the aggrieved party on this reasoning: On the other hand, Mr. President, to allow these cases to be appealed to the Court of Appeals would give litigants the advantage to have all the evidence on record be reexamined and reweighed after which the findings of facts and conclusions of said bodies are correspondingly affirmed, modified or reversed. Under such guarantee, the Supreme Court can then apply strictly the axiom that factual findings of the Court of

48
Appeals are final and may not be reversed on appeal to the Supreme Court. A perusal of the records will reveal appeals which are factual in nature and may, therefore, be dismissed outright by minute resolutions.24 While we do not wish to intrude into the Congressional sphere on the matter of the wisdom of a law, on this score we add the further observations that there is a growing number of labor cases being elevated to this Court which, not being a trier of fact, has at times been constrained to remand the case to the NLRC for resolution of unclear or ambiguous factual findings; that the Court of Appeals is procedurally equipped for that purpose, aside from the increased number of its component divisions; and that there is undeniably an imperative need for expeditious action on labor cases as a major aspect of constitutional protection to labor. Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to petitions for certiorari under Rule 65. Consequently, all such petitions should henceforth be initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired. Apropos to this directive that resort to the higher courts should be made in accordance with their hierarchical order, this pronouncement in Santiago vs. Vasquez, et al.25 should be taken into account: One final observation. We discern in the proceedings in this case a propensity on the part of petitioner, and, for that matter, the same may be said of a number of litigants who initiate recourses before us, to disregard the hierarchy of courts in our judicial system by seeking relief directly from this Court despite the fact that the same is available in the lower courts in the exercise of their original or concurrent jurisdiction, or is even mandated by law to be sought therein. This practice must be stopped, not only because of the imposition upon the precious time of this Court but also because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of our primary jurisdiction. WHEREFORE, under the foregoing premises, the instant petition for certiorari is hereby REMANDED, and all pertinent records thereof ordered to be FORWARDED, to the Court of Appeals for appropriate action and disposition consistent with the views and ruling herein set forth, without pronouncement as to costs. FELIXBERTO CUBERO, NERISSA C. NATIVIDAD, JUDY U. LIM, MANUEL R. LAHOZ, SOTERO DIOLA and BELLE CORPORATION, Petitioners, - versus LAGUNA WEST MULTI-PURPOSE COOPERATIVE, INC., and ATTY. ABRAHAM BERMUDEZ, in his capacity as Registrar of Deeds, Tanauan City, Batangas Respondents. G.R. No. 166833 Present: QUISUMBING, J., Chairperson, CARPIO, CARPIO MORALES, TINGA, and VELASCO, JR., JJ.

Promulgated: November 30, 2006

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION

CARPIO MORALES, J.: The present petition raises the issue of jurisdiction over the subject matter.

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Individual petitioners Felixberto Cubero, Nerrisa[1] C. Natividad, Judy U. Lim, Manuel R. Lahoz and Sotero Diola are the registered owners of various parcels of land covered by twelve (12) Transfer Certificates of Title (TCTs).[2]The properties cover a total land area of about 78,178 square meters located in Barangay Suplang, Tanauan, Batangas. In August 2003, each of the individual petitioners entered into a Joint Venture Development Agreement with co-petitioner Belle Corporation to develop the properties as part of an agricultural farm lot subdivision project known as 'Plantation Hills at Tagaytay Greenlands Phase I (the Project) for eventual sale to the public. [3]chanroblesvirtuallawlibrary With the development of the Project in full swing in mid-2004, respondent Laguna West Multi-Purpose Cooperative, Inc. (Laguna West Cooperative) filed 9 ex-parte petitions[4] with the Regional Trial Court (RTC) of Tanauan City, for inscription of an adverse claim, the annotation of which the Registrar of Deeds allegedly failed to carry over to the TCTs of individual petitioners under the Property Registration Decree[5]. In its petitions before the RTC, respondent Laguna West Cooperative claimed that as early as April 1996 it entered into separate Joint Venture Agreements (JVAs) with the herein individual petitioners' predecessors-in-interest Zacarias P. Narvaez, Filizardo[6] N. Contreras, Eladio Contreras, Anacleto P. Narvaez, Victor P. Ortilla, Rafael Maranan, Felipe Maranan, Elino B. Mangubat, Joaquin N. Olaes and Salvador Alberto;[7] and that it registered the JVAs in August 2000 on the previous owners' titles by way of an Adverse Claim under Entry No. 199352 and/or 168016. Laguna West Cooperative added that the petitions were filed to rectify the omission or error and to protect its vested, subsisting and valid rights under the JVAs. Accompanying the petitions were Pendens[8] addressed to the Register of Batangas.[9]chanroblesvirtuallawlibrary Notices of Lis Deeds, Tanauan,

Getting wind of the petitions filed by Laguna West Cooperative, petitioners also filed a Complaint[10] with the RTC of Tanauan, for 'Annulment of Joint Venture Agreements with prayer for the issuance of a TRO and/or writs of Preliminary Injunction and Preliminary Mandatory Injunction and for Damages' against herein respondents Laguna West Cooperative and Atty. Abraham Bermudez[11] in the latter's capacity as Registrar of Deeds of Tanauan. In their Complaint, petitioners asserted that the April 1996 JVAs between Laguna West Cooperative and individual petitioners' predecessors-in-interest are void ab initio since they were executed within the 10-year prohibitory period under Republic Act No. 6657 (COMPREHENSIVE AGRARIAN REFORM LAW OF 1988),[12]the titles covering the properties having emanated from emancipation patents granted in November 1988 pursuant to Presidential Decree No. 27. Petitioners alleged too in their complaint that the JVAs fall under management contracts prohibited under Republic Act No. 6657. Invoking Article 1409[13] of the Civil Code, petitioners urged the RTC to declare the JVAs inexistent and void for being contrary to law and public policy. By Order of September 15, 2004, the RTC dismissed petitioners' complaint, finding

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. . . that [as] the JVAs cover or involve land grants under the Presidential Decree No. 27 and allied agrarian reform laws, the Department of Agrarian Reform, through its adjudication board (DARAB), has primary jurisdiction to determine the validity or invalidity thereof.[14] controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program (CARP).[20]Its jurisdiction encompasses cases involving the 'rights and obligations of persons, whether natural or juridical, engaged in the management, cultivation and use of all agricultural lands' covered by Republic Act No. 6657 and other agrarian laws.[21] The RTC amplified its dismissal of petitioners' complaint in this wise: There is no question that the instant case does not involve agrarian dispute and that the parties have no tenurial relationship. The Court dismissed the complaint not because the subject of the questioned JVAs is an agricultural land as erroneously assumed by the plaintiffs.The complaint was dismissed because it involves controversy or issue in the implementation of R.A. 6657 ' that is ' whether or not the agricultural land beneficiaries has reneged its (sic) obligation by entering in the joint venture agreements and whether the terms thereof are violative of Sections 27 and 73 of the said Act including the restrictions annotated on the emancipation patents certificates[.] [22] (Underscoring supplied)

For lack of merit, the RTC denied petitioners' motion for reconsideration, hence, the present petition for review on certiorari which raises a pure question of law. The petition fails. It is axiomatic that what determines the nature of an action, as well as which court has jurisdiction over it, are the allegations in the complaint and the character of the relief sought.[15]In the determination of jurisdiction, the status or relationship of the parties, as well as the nature of the question that is the subject of their controversy, is also considered.[16]chanroblesvirtuallawlibrary The Department of Agrarian Reform (DAR) is vested with primary jurisdiction to determine and adjudicate agrarian reform matters, with exclusive original jurisdiction over all matters involving the implementation of agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources. [17]Original jurisdiction means jurisdiction to take cognizance of a cause at its inception, try it and pass judgment upon the law and facts, while exclusive jurisdiction precludes the idea of co-existence and refers to jurisdiction possessed to the exclusion of others. [18]chanroblesvirtuallawlibrary The DARAB has been created to assume the adjudicative powers and functions of the DAR.[19]Thus, the DARAB has been vested with jurisdiction to try and decide all agrarian disputes, cases,

The finding of the RTC that petitioners' complaint does not involve an agrarian dispute is a narrow and restrictive view of the nature of an agrarian dispute.In the recent case of Islanders CARP-Farmers Beneficiaries Multi-Purpose Cooperative Development, Inc. v. Lapanday Agricultural and Development Corp.,[23] this Court elucidated on the scope of an agrarian dispute, viz: The Department of Agrarian Reform Adjudication Board (DARAB) has jurisdiction to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Law (CARL).Included in the definition of

51
agrarian disputes are those arising from othertenurial arrangements beyond the traditional landowner-tenant or lessor-lessee relationship.Expressly, these arrangements are recognized by Republic Act No. 6657 as essential parts of agrarian reform.Thus, the DARAB has jurisdiction over disputes arising from the instant Joint Production Agreement entered into by the present parties.[24] (Emphasis and underscoring supplied).

In that case, the petitioner filed with the RTC a complaint for declaration of nullity of a Joint Production Agreement.Upon motion, the case was dismissed for lack of jurisdiction.The Court of Appeals affirmed the dismissal.The petitioner elevated the matter to this Court, contending that there being no tenancy or leasehold relationship between the parties, the case does not constitute an agrarian dispute cognizable by the DARAB. In denying the petition in Islanders, this Court held that while the relationship between the parties was not one of tenancy or agricultural leasehold, the controversy nonetheless fell within the sphere of agrarian disputes, citing, among other authorities, Department of Agrarian Reform v. Cuenca,[25] which held: cralawAll controversies on the implementation of the Comprehensive Agrarian Reform Program (CARP) fall under the jurisdiction of the Department of Agrarian Reform (DAR), even thoughthey raise questions that are

52
also legal or constitutional in nature.All doubts should be resolved in favor of the DAR, since the law has granted it special and original authority to hear and adjudicate agrarian matters.[26] The JVAs subject of the petition for annulment of petitioners precisely involve the development and utilization of the subject agricultural lands. As successors-in-interest of the beneficiaries of the agricultural lands, individual petitioners seek to nullify the JVAs.Since the controversy involves the rights and obligations of persons engaged in the management, cultivation and use of an agricultural land covered by CARP, the case falls squarely within the jurisdictional ambit of the DAR.[27]chanroblesvirtuallawlibrary It bears emphasis that a resolution of the instant case principally entails a determination of the alleged commission of prohibited acts under Sections 27 and 73[28] of Republic Act No. 6645.In cases where allegations of violation or circumvention of land reform laws have been raised, this Court has declined to address them, it stating that petitioners must first plead their case with the DARAB. [29]There is no reason why this Court should now hold otherwise.

WHEREFORE, the petition is hereby DENIED. SO ORDERED.

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The Facts DEPARTMENT OF AGRARIAN REFORM, Petitioner, v. ROBERTO J. CUENCA and Hon. ALFONSO B. COMBONG JR., in His Capacity as the Presiding Judge of the Regional Trial Court, Branch 63, La Carlota City, Respondents. DECISION PANGANIBAN, J.: All controversies on the implementation of the Comprehensive Agrarian Reform Program (CARP) fall under the jurisdiction of the Department of Agrarian Reform (DAR), even though they raise questions that are also legal or constitutional in nature.All doubts should be resolved in favor of the DAR, since the law has granted it special and original authority to hear and adjudicate agrarian matters. The Case Before us is a Petition for Review[1 under Rule 45 of the Rules of Court, assailing the March 15, 2002 Decision[2 and the June 18, 2002 Resolution[3 of the Court of Appeals in CA-GR SP No. 58536.In the challenged Decision, the CA disposed as follows: As previously stated, the principal issue raised in the court below involves a pure question of law.Thus, it being clear that the court a quo has jurisdiction over the nature and subject matter of the case below, it did not commit grave abuse of discretion when it issued the assailed order denying petitioners motion to dismiss and granting private respondents application for the issuance of a writ of preliminary injunction. WHEREFORE, premises considered, the petition is denied due course and is accordingly DISMISSED.[4 The assailed Resolution, on the other hand, denied petitioners Motion for Reconsideration. The CA narrated the facts as follows: Private respondent Roberto J. Cuenca is the registered owner of a parcel of land designated as Lot No. 816-A and covered by TCT No. 1084, containing an area of 81.6117 hectares, situated in Brgy. Haguimit, La Carlota City and devoted principally to the planting of sugar cane. On 21 September 1999, Noe Fortunado, Municipal Agrarian Reform Officer (MARO) of La Carlota City issued and sent a NOTICE OF COVERAGE to private respondent Cuenca placing the abovedescribed landholding under the compulsory coverage of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Program (CARP).The NOTICE OF COVERAGE also stated that the Land Bank of the Philippines (LBP) will determine the value of the subject land pursuant to Executive Order No. 405 dated 14 June 1990. On 29 September 1999, private respondent Cuenca filed with the Regional Trial Court, Branch 63, La Carlota City, a complaint against Noe Fortunado and Land Bank of the Philippines for Annulment of Notice of Coverage and Declaration of Unconstitutionality of E.O. No. 405, Series of 1990, With Preliminary Injunction and Restraining Order.The case was docketed as Civil Case No. 713. In his complaint, Cuenca alleged, inter alia, that the implementation of CARP in his landholding is no longer with authority of law considering that, if at all, the implementation should have commenced and should have been completed between June 1988 to June 1992, as provided in the Comprehensive Agrarian Reform Law (CARL); that the placing of the subject landholding under CARP is without the imprimatur of the Presidential Agrarian Reform Council (PARC) and the Provincial Agrarian Reform Coordinating Committee (PARCOM) as required by R.A. 7905; that Executive Order No. 405 dated 14 June 1990 amends, modifies and/or repeals CARL and, therefore, it is unconstitutional considering that on 14 June 1990, then President Corazon Aquino no longer had law-making powers; that the NOTICE OF COVERAGE is a gross violation of PD 399 dated 28 February 1974.

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Private respondent Cuenca prayed that the Notice of Coverage be declared null and void ab initio and Executive Order No. 405 dated 14 June 1990 be declared unconstitutional. On 05 October 1999, MARO Noe Fortunado filed a motion to dismiss the complaint on the ground that the court a quo has no jurisdiction over the nature and subject matter of the action, pursuant to R.A. 6657. On 12 January 2000, the respondent Judge issued a Temporary Restraining Order directing MARO and LBP to cease and desist from implementing the Notice of Coverage.In the same order, the respondent Judge set the hearing on the application for the issuance of a writ of preliminary injunction on January 17 and 18, 2000. On 14 January 2000, MARO Fortunado filed a Motion for Reconsideration of the order granting the TRO contending inter alia that the DAR, through the MARO, in the course of implementing the Notice of Coverage under CARP cannot be enjoined through a Temporary Restraining Order in the light of Sections 55 and 68 of R.A. 6657. In an order dated 16 February 2000, the respondent Judge denied MARO Noe Fortunados motion to dismiss and issued a Writ of Preliminary Injunction directing Fortunado and all persons acting in his behalf to cease and desist from implementing the Notice of Coverage, and the LBP from proceeding with the determination of the value of the subject land. The Department of Agrarian Reform (DAR) [thereafter filed before the CA] a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, assailing the writ of preliminary injunction issued by respondent Judge on the ground of grave abuse of discretion amounting to lack of jurisdiction. It is the submission of the petitioner that the assailed order is in direct defiance of Republic Act 6657, particularly Section 55 and 68 thereof, which read: SECTION 55. NO RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS No court in the Philippines shall have jurisdiction to issue any restraining order or writ of preliminary injunction against the PARC or any of its duly authorized or designated agencies in any case, dispute or controversy arising from, necessary to, or in connection with the application, implementation, or enforcement or interpretation of this Act and other pertinent laws on agrarian reform. SECTION 68 IMMUNITY OF GOVERNMENT AGENCIES FROM COURTS INTERFERENCE No injunction, Restraining Order, prohibition or mandamus shall be issued by the lower court against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR), and the Department of Justice (DOJ) in the implementation of their program. Petitioner contends that by virtue of the above provisions, all lower courts, such as the court presided over by respondent Judge, are barred if not prohibited by law to issue orders of injunctions against the Department of Agrarian Reform in the full implementation of the Notice of Coverage which is the initial step of acquiring lands under R.A. 6657. Petitioner also contends that the nature and subject matter of the case below is purely agrarian in character over which the court a quo has no jurisdiction and that therefore, it had no authority to issue the assailed injunction order.[5 Ruling of the Court of Appeals Stressing that the issue was not simply the improper issuance of the Notice of Coverage, but was mainly the constitutionality of Executive Order No. 405, the CA ruled that the Regional Trial Court (RTC) had jurisdiction over the case.Consonant with that authority, the court a quo also had the power to issue writs and processes to enforce or protect the rights of the parties. The appellate court likewise held that petitioners reliance on Sections 55 and 68 of RA 6657 had been misplaced, because the case was not about a purely agrarian matter.It opined that the prohibition in certain statutes against such writs pertained only to

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injunctions against administrative acts, to controversies involving facts, or to the exercise of discretion in technical cases.But on issues involving pure questions of law, courts were not prevented from exercising their power to restrain or prohibit administrative acts. Hence, this Petition.[6 Issues Two Basic Rules In its Memorandum, petitioner raises the following issues: 1.The Honorable Court of Appeals committed serious error by not taking into cognizance that the issues raised in the complaint filed by the private respondent, which seeks to exclude his land from the coverage of the CARP, is an agrarian reform matter and within the jurisdiction of the DAR, not with the trial court. 2.The Honorable Court of Appeals, with due respect, gravely abused its discretion by sustaining the writ of injunction issued by the trial court, which is a violation of Sections 55 and 68 of Republic Act No. 6657.[7 The Courts Ruling The Petition has merit. First Issue: Jurisdiction In its bare essentials, petitioners argument is that private respondent, in his Complaint for Annulment of the Notice of Coverage, is asking for the exclusion of his landholding from the coverage of the Comprehensive Agrarian Reform Program (CARP).According to the DAR, the issue involves the implementation of agrarian reform, a matter over which the DAR has original and exclusive jurisdiction, pursuant to Section 50 of the Comprehensive Agrarian Reform Law (RA 6657). On the other hand, private respondent maintains that his Complaint assails mainly the constitutionality of EO 405.He contends that Two basic rules have guided this Court in determining jurisdiction in these cases.First, jurisdiction is conferred by law.[8 Andsecond, the nature of the action and the issue of jurisdiction are shaped by the material averments of the complaint and the character of the relief sought.[9 The defenses resorted to in the answer or motion to dismiss are disregarded; otherwise, the question of jurisdiction would depend entirely upon the whim of the defendant.[10 Grant of Jurisdiction Ever since agrarian reform legislations began, litigants have invariably sought the aid of the courts.Courts of Agrarian Relations (CARs) were organized under RA 1267[11 [f]or the enforcement of all laws and regulations governing the relation of capital and labor on all agricultural lands under any system of cultivation. The jurisdiction of these courts was spelled out in Section 7 of the said law as follows: Sec. 7.Jurisdiction of the Court. - The Court shall have original and exclusive jurisdiction over the entire Philippines, to consider, investigate, decide, and settle all questions, matters, controversies or disputes involving all those relationships established by law which determine the varying rights of persons in the cultivation and use of agricultural land where one of the parties works the land, and shall have concurrent jurisdiction with the Court of First Instance over employer and farm employee or labor under Republic Act Numbered six hundred two and over landlord and tenant involving violations of the Usury Law (Act No. 2655, as amended) and of inflicting the penalties provided therefor. since the Complaint raises a purely legal issue, it thus falls within the jurisdiction of the RTC.We do not agree. Conflicts involving jurisdiction over agrarian disputes are as tortuous as the history of Philippine agrarian reform laws.The changing jurisdictional landscape is matched only by the tumultuous struggle for, and resistance to, the breaking up and distribution of large landholdings.

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All the powers and prerogatives inherent in or belonging to the then Courts of First Instance[12 (now the RTCs) were granted to the CARs.The latter were further vested by the Agricultural Land Reform Code (RA 3844) with original and exclusive jurisdiction over the following matters: (1)All cases or actions involving matters, controversies, disputes, or money claims arising from agrarian relations: x x x (2)All cases or actions involving violations of Chapters I and II of this Code and Republic Act Number eight hundred and nine; and (3)Expropriations to be instituted by the Land Authority: x x x.[13 Presidential Decree (PD) No. 946 thereafter reorganized the CARs, streamlined their operations, and expanded their jurisdiction as follows: Sec. 12.Jurisdiction over Subject Matter. - The Courts of Agrarian Relations shall have original and exclusive jurisdiction over: a)Cases involving the rights and obligations of persons in the cultivation and use of agricultural land except those cognizable by the National Labor Relations Commission; x x x ; b)Questions involving rights granted and obligations imposed by laws, Presidential Decrees, Orders, Instructions, Rules and Regulations issued and promulgated in relation to the agrarian reform program; Provided, however, That matters involving the administrative implementation of the transfer of the land to the tenant-farmer under Presidential Decree No. 27 and amendatory and related decrees, orders, instructions, rules and regulations, shall be exclusively cognizable by the Secretary of Agrarian Reform, namely: (1)classification and identification of landholdings; (2)x x x; (3)parcellary mapping; (4)x x x; x x xx x xx x x m)Cases involving expropriation of all kinds of land in furtherance of the agrarian reform program; x x xx x xx x x p)Ejectment proceedings instituted by the Department of Agrarian Reform and the Land Bank involving lands under their administration and disposition, except urban properties belonging to the Land Bank; q)Cases involving violations of the penal provisions of Republic Act Numbered eleven hundred and ninety-nine, as amended, Republic Act Numbered thirty eight hundred and forty-four, as amended, Presidential Decrees and laws relating to agrarian reform; Provided, however, That violations of the said penal provisions committed by any Judge shall be tried by the courts of general jurisdiction; and r)Violations of Presidential Decrees Nos. 815 and 816. The CARs were abolished, however, pursuant to Section 44[14 of Batas Pambansa Blg. 129[15 (approved August 14, 1981), which had fully been implemented on February 14, 1983. Jurisdiction over cases theretofore given to the CARs was vested in the RTCs.[16 Then came Executive Order No. 229.[17 Under Section 17 thereof, the DAR shall exercise quasi-judicial powers to determine and adjudicate agrarian reform matters, and shall have exclusive jurisdiction over all matters involving implementation of agrarian reform, except those falling under the exclusive original jurisdiction of the DENR and the Department of Agriculture [DA]. The DAR shall also have the powers to punish for contempt and to issue subpoena, subpoena duces tecum and writs to enforce its orders or decisions. In Quismundo v. CA,[18 this provision was deemed to have repealed Section 12 (a) and (b) of Presidential Decree No. 946, which vested the then Courts of Agrarian Relations with original exclusive jurisdiction over cases and questions involving rights

57
granted and obligations imposed by presidential promulgated in relation to the agrarian reform program. issuances The foregoing provision was as broad as those theretofore vested in the Regional Trial Court by Presidential Decree No. 946,as the Court ruled in Vda. de Tangub v. CA,[19 which we quote: x x x. The intention evidently was to transfer original jurisdiction to the Department of Agrarian Reform, a proposition stressed by the rules formulated and promulgated by the Department for the implementation of the executive orders just quoted. The rules included the creation of the Agrarian Reform Adjudication Board designed to exercise the adjudicatory functions of the Department, and the allocation to it of x x x [O]riginal and exclusive jurisdiction over the subject matter vested upon it by law, and all cases, disputes, controversies and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Executive Order No. 229, Executive Order No. 129-A, Republic Act No. 3844, as amended by Republic Act No. 6289, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations. The implementing rules also declare that (s)pecifically, such jurisdiction shall extend over but not be limited to x x x (that theretofore vested in the Regional Trial Courts, i.e.) (c)ases involving the rights and obligations of persons engaged in the cultivation and use of agricultural land covered by the Comprehensive Agrarian Reform Program (CARP) and other agrarian laws x x x.[20 In the same case, the Court also held that the jurisdictional competence of the DAR had further been clarified by RA 6657 thus: x x x. The Act [RA 6657] makes references to and explicitly recognizes the effectivity and applicability of Presidential Decree No. 229.More particularly, the Act echoes the provisions of Section 17 of Presidential Decree No. 229, supra, investing the Department of Agrarian Reform with original jurisdiction, generally, over all cases involving agrarian laws, although, as shall shortly be pointed out, it restores to the Regional Trial Court, limited jurisdiction over two groups of cases.Section 50 reads as follows: SEC. 50.Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian

Under Section 4 of Executive Order No. 129-A, the DAR was also made responsible for implementing the Comprehensive Agrarian Reform Program.In accordance with Section 5 of the same EO, it possessed the following powers and functions: (b)Implement all agrarian laws, and for this purpose, punish for contempt and issue subpoena, subpoena duces tecum, writs of execution of its decisions, and other legal processes to ensure successful and expeditious program implementation; the decisions of the Department may in proper cases, be appealed to the Regional Trial Courts but shall be immediately executory notwithstanding such appeal; x x xx x xx x x (h)Provide free legal services to agrarian reform beneficiaries and resolve agrarian conflicts and land-tenure related problems as may be provided for by law; x x xx x xx x x (l)Have exclusive authority to approve or disapprove conversion of agricultural lands for residential, commercial, industrial, and other land uses as may be provided x x x." The above grant of jurisdiction to the DAR covers these areas: (a)adjudication of all matters involving implementation of agrarian reform; (b)resolution of agrarian conflicts and land tenure related problems; and (c)approval or disapproval of the conversion, restructuring or readjustment of agricultural lands into residential, commercial, industrial, and other non-agricultural uses.

58
reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture [DA] and the Department of Environment and Natural Resources [DENR]. x x xx x xx x x It shall have the power to summon witnesses, administer oaths, take testimony, require submission of reports, compel the production of books and documents and answers to interrogatories and issue subpoena and subpoena duces tecum and to enforce its writs through sheriffs or other duly deputized officers. It shall likewise have the power to punish direct and indirect contempt in the same manner and subject to the same penalties as provided in the Rules of Court.[21 Nonetheless, we have held that the RTCs have not been completely divested of jurisdiction over agrarian reform matters. Section 56 of RA 6657 confers special jurisdiction on Special Agrarian Courts, which are actually RTCs designated as such by the Supreme Court. [22 Under Section 57 of the same law, these Special Agrarian Courts have original and exclusive jurisdiction over the following matters: 1)all petitions for the determination of just compensation to landowners, and 2)the prosecution of all criminal offenses under x x x [the] Act. The above delineation of jurisdiction remains in place to this date.Administrative Circular No. 29-2002[23 of this Court stresses the distinction between the quasi-judicial powers of the DAR under Sections 50 and 55 of RA 6657 and the jurisdiction of the Special Agrarian Courts referred to by Sections 56 and 57 of the same law. Allegations of the Complaint A careful perusal of respondents Complaint[24 shows that the principal averments and reliefs prayed for refer -- not to the pure question of law spawned by the alleged unconstitutionality of EO 405 -- but to the annulment of the DARs Notice of Coverage. Clearly, the main thrust of the allegations is the propriety of the Notice of Coverage, as may be gleaned from the following averments, among others: 6. This implementation of CARP in the landholding of the [respondent] is contrary to law and, therefore, violates [respondents] constitutional right not to be deprived of his property without due process of law.The coverage of [respondents] landholding under CARP is NO longer with authority of law.If at all, the implementation of CARP in the landholding of [respondent] should have commenced and [been] completed between June 1988 to June 1992 as provided for in CARL, to wit: x x x; 7.Moreover, the placing of [respondents] landholding under CARP as of 21 September 1999 is without the imprimatur of the Presidential Agrarian Reform Council (PARC) and the Provincial Agrarian Reform Coordinating Committee (PARCOM) as mandated and required by law pursuant to R.A. 7905 x x x; x x xx x xx x x 9.Under the provisions of CARL, it is the PARC and/or the DAR, and not x x x Land Bank, which is authorized to preliminarily determine the value of the lands as compensation therefor, thus x x x; x x xx x xx x x 12. That the aforementioned NOTICE OF COVERAGE with intendment and purpose of acquiring [respondents] aforementioned land is a gross violation of law (PD 399 dated 28 February 1974 which is still effective up to now) inasmuch as [respondents] land is traversed by and a road frontage as admitted by the DARs technician and defendant FORTUNADO (MARO) x x x; 13.That as reflected in said Pre-Ocular Inspection Report, copy of which is hereto attached as annex D forming part hereof, [respondents] land is above eighteen percent (18%) slope and therefore, automatically exempted and excluded from the operation of Rep. Act 6657, x x x.[25 (Italics supplied)

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In contrast, the 14-page Complaint touches on the alleged unconstitutionality of EO 405 by merely making these two allegations: 10.Executive Order No. 405 dated 14 June 1990 (issued by the then President Corazon Aquino) is unconstitutional for it plainly amends, modifies and/or repeals CARL.On 14 June 1990, then President Corazon Aquino had no longer law-making powers as the Philippine Congress was by then already organized, existing and operational pursuant to the 1987 Constitution.A copy of the said Executive Order is hereto attached as Annex B forming part hereof. 11.Our constitutional system of separation of powers renders the said Executive Order No. 405 unconstitutional and all valuations made, and to be made, by the defendant Land Bank pursuant thereto are null and void and without force and effect.Indispensably and ineludibly, all related rules, regulations, orders and other issuances issued or promulgated pursuant to said Executive Order No. 405 are also null and void ab initio and without force and effect. [26 We stress that the main subject matter raised by private respondent before the trial court was not the issue of compensation (the subject matter of EO 405[27).Note that no amount had yet been determined nor proposed by the DAR.Hence, there was no occasion to invoke the courts function of determining just compensation.[28 To be sure, the issuance of the Notice of Coverage[29 constitutes the first necessary step towards the acquisition of private land under the CARP.Plainly then, the propriety of the Notice relates to the implementation of the CARP, which is under the quasi-judicial jurisdiction of the DAR.Thus, the DAR could not be ousted from its authority by the simple expediency of appending an allegedly constitutional or legal dimension to an issue that is clearly agrarian. In view of the foregoing, there is no need to address the other points pleaded by respondent in relation to the jurisdictional issue.We need only to point that in case of doubt, the jurisprudential trend is for courts to refrain from resolving a controversy involving matters that demand the special competence of administrative agencies, even if the question[s] involved [are] also judicial in character,[30 as in this case. Second Issue: Preliminary Injunction Having declared the RTCs to be without jurisdiction over the instant case, it follows that the RTC of La Carlota City (Branch 63) was devoid of authority to issue the assailed Writ of Preliminary Injunction.That Writ must perforce be stricken down as a nullity.Such nullity is particularly true in the light of the express prohibitory provisions of the CARP and this Courts Administrative Circular Nos. 29-2002 and 38-2002.These Circulars enjoin all trial judges to strictly observe Section 68 of RA 6657, which reads: Section 68.Immunity of Government Agencies from Undue Interference. No injunction, restraining order, prohibition or mandamus shall be issued by the lower courts against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR) and the Department of Justice (DOJ) in their implementation of the program. WHEREFORE, the Petition is hereby GRANTED, and the challenged Decision and Resolution REVERSED AND SET ASIDE.Accordingly, the February 16, 2000 Order of the Regional Trial Court of La Carlota City (Branch 63) is ANNULLED and a new one entered, DISMISSING the Complaint in Civil Case 713. The Writ of Preliminary Injunction issued therein is also expresslyVOIDED.No costs. SO ORDERED.

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the same amount, undertaking to pay said amount one year thenceforth or until January 11, 1979. THIRD DIVISION G.R. No. 155009. April 12, 2005 SIMEON M. VALDEZ, Petitioner, vs. CHINA CORPORATION, Respondent. DECISION GARCIA, J.: Assailed and sought to be set aside in this petition for review on certiorari under Rule 45 of the Rules of Court are the following issuances of the Court of Appeals in CA-G.R. CV No. 24946, to wit: 1. Decision dated February 28, 2002 [1], affirming an earlier decision of the Regional Trial Court at in an action for sum of money thereat commenced by the herein respondent against petitioner and Creative Texwood Corporation; and 2. Resolution dated August 23, 2002, denying petitioner's motion for reconsideration. The factual milieu: On January 11, 1978, respondent China Banking Corporation (Chinabank), represented by its senior vice-president Gilbert Dee, and Creative Texwood Corporation (CREATIVE), represented by its president, herein petitioner Simeon M. Valdez, executed aCredit Agreement whereunder Chinabank agreed to grant CREATIVE a credit facility in the amount of US$1,000,000.00 to finance the latter's importation of raw materials, spare parts and supplies for its manufacturing projects. Simultaneously with the execution of the aforementioned Credit Agreement, and in order to assure payment of the credit facility thereunder granted, CREATIVE, again represented by petitioner as its President, executed in favor of Chinabank a Promissory Note for BANKING On the same date - January 11, 1978 ' CREATIVE, as principal and petitioner, as surety, further executed in favor of Chinabank aSurety Agreement whereunder petitioner Valdez bound himself unto Chinabank the prompt payment on maturity date of the aforesaid promissory note. The next day, January 12, 1978, pursuant to said credit agreement, Chinabank drew and issued a check for US$1,000,000.00 with CREATIVE as payee. Subsequently, CREATIVE indorsed the check back to Chinabank for payment, which the latter did. On December 15, 1986, following the failure of both CREATIVE and petitioner to comply with their obligations despite repeated demands, Chinabank filed against both a complaint for a sum of money before the Regional Trial Court at , thereat docketed asCivil Case No. 86-38740 which was raffled to Branch 35 thereof. In his separate answer, petitioner, after the usual denial of the material allegations of the complaint, interposed the defense that the subject Credit Agreement is fictitious and simulated; that he signed said agreement and Promissory Note in his official capacity as president of CREATIVE and not in his personal capacity; and that the Surety Agreement attached to the complaint is not the one executed and signed by him because what he signed was a proforma document with blank spaces still unfilled. On July 31, 1987, the trial court dismissed the complaint for failure of plaintiff Chinabank to prosecute for an unreasonable length of time. However, upon Chinabank's motion for reconsideration, the trial court reinstated the complaint, and, on Chinabank's further motion, declared defendant CREATIVE as in default and allowed Chinabank to adduce ex parte its evidence against the former. Pretrial was thereafter set between plaintiff Chinabank and defendantpetitioner. On May 20, 1988, the trial court, upon Chinabank's motion, declared petitioner as in default for his and his counsel's failure to appear at the scheduled pre-trial. However, upon petitioner's

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motion, the trial court set aside its default order and set the case anew for pre-trial. With no amicable settlement having been reached by the parties, trial ensued. Eventually, in a decision dated November 20, 1989, the trial court rendered judgment for plaintiff Chinabank and against defendants CREATIVE and petitioner, thus: WHEREFORE, judgment is rendered: (1) ordering defendants Creative Texwood Corporation and Simeon M. Valdez, jointly and severally, to pay to the plaintiff the principal amount of P18,069,674.38, the interest thereon at the rate of ' per annum computed from December 15, 1986, the date the complaint was filed, until full payment of the principal obligation, another 1 - '% per month computed also from the same date until full payment of the principal obligation, as penalty, and the amount of P3,613,934.00 for attorney's fees; and (2) ordering defendant Creative Texwood Corporation to pay the plaintiff the amount equivalent to 3% per annum also computed from December 15, 1986, on the amount of the drawdown, as arrangement fee. SO ORDERED. (Petition, Annex 'F; Rollo, pp. 66-69) In its decision, the trial court, finding no reason to doubt the authenticity and due execution of the surety agreement, held that petitioner's liability to Chinabank arose from his execution of the same agreement where he warranted unto Chinabank the prompt payment at maturity date of the promissory note. The trial court also debunked petitioner's protestation in his memorandum that his liability under the same surety agreement was extinguished pursuant to Article 2079 [2] of the Civil Code when Chinabank granted CREATIVE an extension of time for the payment of the loan. Partly says the trial court in its decision: We do not agree. Defendant Valdez admits in his memorandum that after his co-defendant corporation failed to pay its loan on due date, a demand letter dated July 16, 1979 was sent by the plaintiff to defendant corporation to pay its overdue obligation. This first demand letter was followed by two more demand letters dated November 26, 1979 and May 20, 1981, respectively, both addressed to the said defendant corporation. The mere fact that plaintiff neglected to sue immediately and initiated this court action only on December 15, 1986, does not relieve and discharge defendant Valdez from his liability under the Surety Agreement, because such delay in filing the action does not necessarily imply any change in the efficacy of the contract or liability of the principal debtor. (See Bank of P.I. vs. Albadejo, 53 Phil. 141; Paras, Civil Code, Vol. V, 1982 Ed., pp. 806 & 810). (Rollo, p. 68) From the aforementioned decision of the trial court, both Chinabank and petitioner went to the Court of Appeals in CA-G.R. CV No. 24946. For failure of Chinabank to file its brief within the reglementary period, the appellate court declared its appeal abandoned and accordingly dismissed the same. Chinabank's motion for reconsideration proved unavailing From the appellate court's dismissal of its appeal, Chinabank went to this Court in G.R. No. 97066 via a petition for review on certiorari under Rule 45 of the Rules of Court. In a Resolution dated March 4, 1991, [3] this Court dismissed Chinabank's petition. Attempt at a reconsideration similarly proved futile, as in fact an Entry of Judgment [4] was rendered declaring the dismissal of Chinabank's petition final and executory. Meanwhile, with petitioner Valdez having filed his Brief on time, the Court of Appeals proceeded to resolve his appeal. And, in a decision dated February 28, 2002, [5] the appellate court dismissed petitioner's appeal and affirmed the appealed decision of the trial court, thus: WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit the appealed decision of the Regional Trial Court, Branch 35, , is AFFIRMED. SO ORDERED. His motion for reconsideration having been denied by the same court in its Resolution of August 23,

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2003, [6] petitioner Simeon Valdez is now with us via the present recourse, it being his submissions that: I. THE COURT OF APPEALS ERRED IN ACTING ON PETITIONER'S APPEAL THEN ALREADY MOOT AND ACADEMIC DUE TO THE DISMISSAL OF THE BANK'S APPEAL AND THE ADOPTION OF THE 1997 RULES OF CIVIL PROCEDURE. II. THE COURT OF APPEALS ERRED IN RENDERING THE QUESTIONED DECISION AND RESOLUTION WHICH ARE ALREADY UNENFORCEABLE BY EXECUTION DUE TO PRESCRIPTION. III. THE COURT OF APPEALS ERRED IN SETTING ASIDE PETITIONER'S FAILURE TO ASSIGN LACK OF CONSIDERATION AS AN ERROR CONSIDERING THE RESULTING UNJUST ENRICHMENT. IV. THERE WAS AN ERROR IN MAKING PETITIONER LIABLE AS THERE WAS NO SHOWING THAT THE BANK GOT HIS CONSENT IN THE EXTENSION OF THE ONE-YEAR LOAN PERIOD. V. THE QUESTIONED DECISION AND RESOLUTION OF THE COURT OF APPEALS ARE AGAINST THE RULE OF FINALITY OF JUDGMENT AND PUBLIC POLICY. We DENY. It is petitioner's thesis that the decision of the trial court which he and respondent Chinabank appealed to the Court of Appeals in CA G.R. CV No. 24946 was vacated when Chinabank's similar appeal therefrom was dismissed with finality. Petitioner's argument lacks legal moorings. Under Section 9 (3) of Batas Pambansa Blg. 129, as amended, the Court of Appeals has exclusive appellate jurisdiction over final judgments or decisions of regional trial courts. Here, there is no issue at all that petitioner had perfected his appeal from the decision of the trial court. The well-settled rule is that jurisdiction, once acquired, continues until the case is finally terminated. [7] Since petitioner invoked the authority of the Court of Appeals when he filed his appellant's brief in that court, that same court can resolve petitioner's appeal regardless of the dismissal of that of his adversary's . Petitioner claims failure on the part of respondent Chinabank to establish that the credit agreement between it and CREATIVE is supported by a consideration. According to petitioner, a credit line was created under the said Credit Agreement which 'fixed the loan limit that may be availed of by [Creative] to cover a series of transactions encountered in importation of its raw materials, spare parts and supplies' , while Chinabank's complaint before the trial court did not contain any 'allegation on any drawdown from the subject credit line by [Creative]. Upon this premise, petitioner argues that Chinabank is practically with no cause of action at all. To petitioner, Chinabank has to present evidence of importation by CREATIVE, like shipping documents, which is necessary to establish drawdowns on the US$1,000,000.00 credit facility. Unfortunately, so petitioner adds, respondent Chinabank did not present any such document. We are not persuaded. As aptly noted by the appellate court, it is already too late in the day for petitioner to raise an issue on the alleged

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deficiency of allegations in Chinabank's complaint to bolster his theory of lack of alleged consideration for the parties' credit agreement. Under Rule 9, Section 1, of the Rules of Court, defenses which were not raised in the answer are deemed waived. Petitioner never pleaded in his answer the defense he presently invokes, namely, the alleged lack of consideration for the subject credit agreement. His newly minted defense of lack of consideration must therefore be struck down, the time for interposing the same having been already passe. In any event, absence of consideration is the least persuasive argument petitioner could proffer, if at all he could, colliding as it does with the very allegations in his answer, particularly paragraphs 9 and 14 thereof, to wit: 9. That while answering defendant did affix his signature to Annex `C [surety agreement] as co-obligor, he did so merely to accommodate his co-defendant corporation who actually received the proceeds thereof and if ever the codefendant corporation has been unable to pay its obligation to the plaintiff the same was due to the acts and/or omissions of co-defendant corporation. 14. Defendants have already made a substantial payment on the said account but which plaintiff in bad faith did not properly applied and credited to defendants' account. (Emphasis supplied). With his foregoing admissions, we are simply at a loss to understand how petitioner could now turn his back from his answer and insist on his preposterous claim of lack of consideration. Petitioner additionally posits that 'there was no showing as to when the principal got a drawdown or drawdowns for US$875,468.72', and that '[T]he US$1,000,000.00 was definitely not the loan under litigation, but there must have been another drawdown or other drawdowns. The drawdown or drawdowns cannot be presumed to have been made within the period guaranteed by the petitioner. To petitioner's mind, the inconsistency between the amount demanded by Chinabank in its complaint, which is US$875,468.72, and the amount of the promissory note, which is for US$1,000,000.00, is an indication that Chinabank had granted CREATIVE an extension of the loan. Prescinding therefrom, petitioner insists that he could not be liable to Chinabank because he did not consent to the extension for the repayment of the original loan of US$1,000,000.00. Petitioner's argument cannot hold water. As it is, petitioner is attempting to create a new issue of fact at this late stage of the proceedings. A perusal of his answer fails to yield any indication of his intent to craft an issue based on the inconsistency between the amount appearing in the promissory note and that demanded by Chinabank. To allow petitioner to pursue such a defense would undermine basic considerations of due process. Points of law, theories, issues and arguments not brought to the attention of the trial court will not be and ought not to be considered by a reviewing court, as these cannot be raised for the first time on appeal. It would be unfair to the adverse party who would have no opportunity to present further evidence material to the new theory not ventilated before the trial court. [8] The Court is the neutral administrator of justice, not the corrector of unsound business judgments. Having freely assumed the obligations of a surety, petitioner cannot now evade those obligations by raising factual issues not proper in this Court. Under Rule 45 of the Rules of Court, this Court's main preoccupation is to resolve questions of law not issues of facts. WHEREFORE, the petition is DENIED, and the assailed decision and resolution of the Court of Appeals AFFIRMED. Costs against petitioner. SO ORDERED.

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liable for actual damages, moral damages, exemplary damages, litigation expenses and attorneys fees, and costs of the suit. Petitioners filed a Motion to Dismiss,[8] which was denied by the trial court in an Order[9] dated December 4, 2000. It held that it has jurisdiction over the case because the allegations in the Complaint made a claim for damages, and not an agrarian dispute which should be referred to the Department of Agrarian Reform Adjudication Board (DARAB); and that the Complaint was properly filed because the Certification of Non-forum Shopping was signed by respondents attorney-in-fact. Petitioners simultaneously filed an Answer[10] to the complaint and a Motion for Reconsideration[11] of the December 4, 2000 Order. However, the court a quo denied the motion for lack of merit in an Order[12] dated September 10, 2001. On January 9, 2002, the trial court issued an Order[13] dismissing the case due to respondents failure to prosecute. With the denial[14] of her Motion for Reconsideration,[15] respondent interposed an appeal to the Court of Appeals which rendered the assailed Decision dated August 28, 2007, the dispositive portion of which states:chanroblesvirtuallawlibrary

ZENAIDA POLANCO, CARLOS DE JESUS, AVELINO DE JESUS, BABY DE JESUS, LUZ DE JESUS, and DEMETRIO SANTOS, Petitioners, vs. CARMEN CRUZ, represented by her attorney-in-fact, VIRGILIO CRUZ, Respondent.

DECISION YNARES-SANTIAGO, J.: chanroblesvirtuallawlibrary

This Petition for Review on Certiorari[1] assails the August 28, 2007 Decision[2] of the Court of Appeals in CA-G.R. CV No. 75079, setting aside the Order[3] of Branch 17 of the Regional Trial Court of Malolos in Civil Case No. 542-M-2000, which dismissed respondents Complaint[4] for failure to prosecute. Also assailed is the March 28, 2008 Resolution[5] denying petitioners Motion for Reconsideration. [6] chanroblesvirtuallawlibrary

The facts are as follows: chanroblesvirtuallawlibrary Respondent Carmen Cruz, through her attorney-in-fact, Virgilio Cruz, filed a complaint for damages[7] against petitioners for allegedly destroying her palay crops. While admitting that petitioners own the agricultural land she tilled, respondent claimed she was a lawful tenant thereof and had been in actual possession when petitioners maliciously filled so with soil and palay husk on July 1 and 2, 2000. Respondent prayed that petitioners be held

WHEREFORE, the appeal is hereby GRANTED. Accordingly, the Order, dated January 9, 2002, of the RTC [Branch 17, Malolos] is hereby REVERSED and SET ASIDE. Plaintiff-appellants Complaint is hereby REINSTATED and the case is hereby REMANDED to the RTC [Branch 17, Malolos] for further proceedings. chanroblesvirtuallawlibrary

SO ORDERED.[16] chanroblesvirtuallawlibrary

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The Court of Appeals ruled that the trial court erred in finding that the parties failed to take necessary action regarding the case because the records plainly show that petitioners filed an Answer to the complaint, while respondent filed an Opposition to the Motion for Reconsideration with Manifestation Re: Answer of Defendants. [17] chanroblesvirtuallawlibrary 2002 AND MAY 8, 2002 ISSUED BY THE RTCBULACAN IN CIVIL CASE No. 542-M-00, IS CONTRARY TO LAW AND PREVAILING JURISPRUDENCE. chanroblesvirtuallawlibrary

With regard to the order of the trial court dismissing the complaint on the ground of failure to prosecute, the appellate court held that the previous acts of respondent do not manifest lack of interest to prosecute the case; that since filing the Complaint, respondent filed an Opposition to petitioners Motion to Dismiss, an Answer to petitioners counterclaim, and a Comment to petitioners Motion for Reconsideration; that respondent did not ignore petitioners Motion to Dismiss nor did she repeatedly fail to appear before the court; that no substantial prejudice would be caused to petitioners and that strict application of the rule on dismissal is unjustified considering the absence of pattern or scheme to delay the disposition of the case on the part of respondent; and that justice would be better served if the case is remanded to the trial court for further proceedings and final disposition. chanroblesvirtuallawlibrary

Petitioners allege that respondent failed to comply with the mandate of the 1997 Rules of Civil Procedure to promptly move for the setting of the case for pre-trial; that heavy pressures of work does not justify the failure to move for the setting of the case for pre-trial; that the allegations in the Complaint which pertain to respondents status as a tenant of Elena C. De Jesus amount to forum shopping that would extremely prejudice them. Petitioners thus pray for the nullification of the Decision and Resolution of the Court of Appeals and the affirmation of the dismissal of the Complaint by the trial court. chanroblesvirtuallawlibrary

The petition lacks merit. chanroblesvirtuallawlibrary

On March 28, 2008, the Court of Appeals denied petitioners Motion for Reconsideration; hence, this petition based on the following ground: chanroblesvirtuallawlibrary

The Court of Appeals correctly noted that petitioners raised the matter of respondents alleged forum shopping for the first time only in their Motion for Reconsideration. Issues not previously ventilated cannot be raised for the first time on appeal, [18] much less when first raised in the motion for reconsideration of a decision of the appellate court. chanroblesvirtuallawlibrary

WHETHER OR NOT THE DECISION OF THE HONORABLE COURT OF APPEALS IN C.A.-G.R. CV No. 75079, NULLIFYING AND/OR REVERSING AND/OR SETTING ASIDE THE ORDERS DATED JANUARY 9,

At any rate, this Court does not find respondents allegations in her complaint in Civil Case No. 542-M-00 to be constitutive of the elements of forum-shopping. Respondent merely described herself as a tenant of petitioners and mentioned that there was an

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unlawful detainer case[19] involving the parcel of land which is also involved in the instant civil case for damages. chanroblesvirtuallawlibrary cause may result to the dismissal of the complaint for failure to prosecute his action for an unreasonable length of time or failure to comply with the rules of procedure. chanroblesvirtuallawlibrary

There is forum-shopping when as a result of an adverse decision in one forum, or in anticipation thereof, a party seeks a favorable opinion in another forum through means other than appeal or certiorari. Forum-shopping exists when two or more actions involve the same transactions, essential facts, and circumstances; and raise identical causes of action, subject matter, and issues. Still another test of forum-shopping is when the elements of litis pendencia are present or where a final judgment in one case will amount to res judicata in another whether in the two or more pending cases, there is an identity of (a) parties (or at least such parties as represent the same interests in both actions), (b) rights or causes of action, and (c) reliefs sought. [20] chanroblesvirtuallawlibrary

It must be stressed that even if the plaintiff fails to promptly move for pre-trial without any justifiable cause for such delay, the extreme sanction of dismissal of the complaint might not be warranted if no substantial prejudice would be caused to the defendant, and there are special and compelling reasons which would make the strict application of the rule clearly unjustified. [22] chanroblesvirtuallawlibrary

Although there is an identity of some of the parties in the instant case for damages and the unlawful detainer case, there is, however, no identity of reliefs prayed for. The former is for recovery of damages allegedly caused by petitioners acts on respondents palay crops; while the latter case involved possessory and tenancy rights of respondent. As such, respondent did not violate the rule on forum-shopping. chanroblesvirtuallawlibrary

Section 1, Rule 18 of the 1997 Rules of Civil Procedure imposes upon the plaintiff the duty to promptly moveex parte to have the case set for pre-trial after the last pleading has been served and filed. Moreover, Section 3, Rule 17[21] provides that failure on the part of the plaintiff to comply with said duty without any justifiable

In the instant case, the Court of Appeals correctly held that the dismissal of respondents complaint is too severe a sanction for her failure to file a motion to set the case for pre-trial. It must be pointed out that respondent prosecuted her action with utmost diligence and with reasonable dispatch since filing the complaint she filed an opposition to petitioners motion to dismiss the complaint; a comment to petitioners motion for reconsideration of the December 4, 2000 Order of the trial court; and an Answer to Counterclaim of petitioners. When the trial court issued an order dismissing the case, respondent filed without delay a motion for reconsideration; and upon its denial, she immediately filed a Notice of Appeal.[23] Moreover, contrary to petitioners claim that respondent was silent for one year since she filed her Answer to Counterclaim until the trial courts dismissal order,[24] records show that between said period, both parties and the trial court were threshing out petitioners motion for reconsideration of the December 4, 2000 Order.chanroblesvirtuallawlibrary

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While heavy pressures of work was not considered a persuasive reason to justify the failure to set the case for pre-trial in Olave v. Mistas,[25] however, unlike the respondents in the said case, herein respondent never failed to comply with the Rules of Court or any order of the trial court at any other time. Failing to file a motion to set the case for pre-trial was her first and only technical lapse during the entire proceedings.Neither has she manifested an evident pattern or a scheme to delay the disposition of the case nor a wanton failure to observe the mandatory requirement of the rules. Accordingly, the ends of justice and fairness would best be served if the parties are given the full opportunity to litigate their claims and the real issues involved in the case are threshed out in a full-blown trial. Besides, petitioners would not be prejudiced should the case proceed as they are not stripped of any affirmative defenses nor deprived of due process of law. chanroblesvirtuallawlibrary further implement the pre-trial guidelines laid down in Administrative Circular No. 3-99[28]dated January 15, 1999. A.M. No. 03-1-09-SC states that: Within five (5) days from date of filing of the reply,[29] the plaintiff must promptly move ex parte that the case be set for pre-trial conference.[30] If the plaintiff fails to file said motion within the given period, the Branch COC shall issue a notice of pre-trial. As such, the clerk of court of Branch 17 of the Regional Trial Court of Malolos should issue a notice of pre-trial to the parties and set the case for pre-trial. chanroblesvirtuallawlibrary

This is not to say that adherence to the Rules could be dispensed with. However, exigencies and situations might occasionally demand flexibility in their application.[26] Indeed, on several occasions, the Court relaxed the rigid application of the rules of procedure to afford the parties opportunity to fully ventilate the merits of their cases. This is in line with the time-honored principle that cases should be decided only after giving all parties the chance to argue their causes and defenses. Technicality and procedural imperfection should thus not serve as basis of decisions. [27] chanroblesvirtuallawlibrary

WHEREFORE, the Petition for Review on Certiorari is DENIED. The August 28, 2007 Decision of the Court of Appeals in CA-G.R. CV No. 75079, setting aside the Order of Branch 17 of the Regional Trial Court of Malolos dismissing Civil Case No. 542-M-2000 for respondents failure to prosecute, and its March 28, 2008 Resolution denying petitioners Motion for Reconsideration are AFFIRMED. The clerk of court of Branch 17 of the Regional Trial Court of Malolos is DIRECTED to issue a notice of pre-trial to the parties. chanroblesvirtuallawlibrary SO ORDERED.

Finally, A.M. No. 03-1-09-SC or the new Guidelines To Be Observed By Trial Court Judges And Clerks Of Court In The Conduct Of PreTrial And Use Of Deposition-Discovery Measures, which took effect on August 16, 2004, aims to abbreviate court proceedings, ensure prompt disposition of cases and decongest court dockets, and to

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this Court (G.R. No. 89555) which was originally assigned to the Third Division, but was later consolidated with G.R. No. 89095. G.R. Nos. 89095 & 89555 November 6, 1989 SIXTO P. CRISOSTOMO, petitioner, vs. SECURITIES AND EXCHANGE COMMISSION, SPOUSES SHOJI YAMADA and MICHIYO YAMADA and SPOUSES TOMOTADA ENATSU and EDITA ENATSU, respondents. Salma Pir T. Rasul, Rosalinda L. Santos and A.E. Dacanay for petitioner. Gonzales, Batiller Law Offices for respondents. Quisumbing, Torres and Evangelista for Spouses Tomotada and Edita Enatsu. Lino M. Patajo for Spouses Shoji and Michiyo Yamada. At first blush, the petitions sound like a patriotic defense of the Constitution, but, at bottom they are only an artful scheme to defraud a group of foreign investors who had been persuaded by the officers of UDMC to invest P57 million to save the corporation (its assets as well as those of the Crisostomo's) from imminent foreclosure by the Development Bank of the Philippines (DBP) to which UDMC was indebted in the sum of P55 million. It is the kind of operation that sullies our collective image as a people and sets back our government's heroic efforts to attract foreign investments to our country. The antecedent facts, culled from the decision of the Court of Appeals, are as follows: Sixto Crisostomo, Felipe Crisostomo (deceased), Veronica Palanca, Juanito Crisostomo, Carlos Crisostomo, Ricardo Alfonso, Regino Crisostomo and Ernesto Crisostomo (known as the Crisostomo group) were the original stockholders of the United Doctors Medical Center (UDMC) which was organized in 1968 with an authorized capital stock of P1,000,000 (later increased to P15,000,000 in 1972). They owned approximately 40% of UDMC's outstanding capital stock, while the 60% majority belonged to the members of the United Medical Staff Association (UMSA), numbering approximately 150 doctors and medical personnel of UDMC. Despite their minority status, the Crisostomo group has managed UDMC from its inception, with Juanito Crisostomo as president, Ricardo Alfonso, Sr. as chairman of the board, Carlos Crisostomo as corporate secretary and Sixto Crisostomo as director and legal counsel. In 1988, UDMC defaulted in paying its loan obligation of approximately P55 million to the DBP. In the last quarter of 1987, UDMC's assets (principally its hospital) and those of the Crisostomos which had

GRIO-AQUINO, J.: In his petition for certiorari, 1 the petitioner seeks to annul and set aside the en banc resolution dated February 14, 1989 of the Securities and Exchange Commission in SEC EB Case No. 191 and the concurring opinions thereto (Annexes F, G, and H, pp. 39-62, Rollo), as well as its orders dated June 27, 1989 and July 21, 1989 (Annexes M and 0, pp. 83-86, Rollo) directing the corporate secretary of the United Doctors Medical Center, Inc. (hereafter "UDMC") to call a special meeting of the stockholders to elect the officers and directors in the implementation of the SEC's aforementioned en banc resolution of February 14, 1989, which the Court of Appeals affirmed in its decision dated June 8, 1989 in CAG.R. SP No. 17435, entitled "Sixto Crisostomo, petitioner vs. Securities and Exchange Commission, Spouses Dr. Shoji Yamada and Michiyo Yamada, and Spouses Dr. Tomotada Enatsu and Edita Enatsu, respondents." On August 1, 1989, the Court of Appeals denied Crisostomo's motion for reconsideration of its decision. On August 24, 1989, he filed a petition for review of said decision in

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been given as collateral to the DBP, faced foreclosure by the Asset Privatization' rust (APT), which had taken over UDMC's loan obligation to the DBP. To stave off the threatened foreclosure, UDMC, through its principal officers, Ricardo Alfonso and Juanito Crisostomo, persuaded the Yamadas and Enatsu (Shoji Yamada and Tomotada Enatsu are Japanese doctors) to invest fresh capital in UDMC. The wife of Tomotada Enatsu, Edita Enatsu, is a Filipina. They invested approximately P57 million in UDMC. The investment was effected by means of: (1) a Stock Purchase Agreement; and (2) an Amended Memorandum of Agreement whereby the group subscribed to 82.09% of the outstanding shares of UDMC. Both transactions were duly authorized by the board of directors and stockholders of UDMC. They were submitted to, scrutinized by, and, finally, approved by the Board of Investments, the Central Bank of the Philippines, and the Securities and Exchange Commission. The elaborate governmental approval process was done openly and with full knowledge of all concerned, including Sixto Crisostomo, the corporate legal counsel. Upon the completion of the governmental approval process, shares of stock, duly signed by UDMC's authorized officers, were issued to the Yamadas and Enatsus. This capital infusion not only saved the assets of the UDMC (especially the hospital) from foreclosure but also freed the Crisostomos from their individual and solidary liabilities as sureties for the DBP loan. As it had been agreed in the Amended Memorandum of Agreement between UDMC and the Japanese group that upon the latter's acquisition of the controlling interest in UDMC, the corporation would be reorganized, a special stockholders' meeting and board of directors' meeting were scheduled to be held on August 20, 1988. However, on the eve of the meetings, i.e., on August 19, 1988, Sixto Crisostomo, supposedly acting for himself, filed SEC Case No. 3420 against Juanito Crisostomo, Ricardo Alfonso, Shoji Yamada, Michiyo Yamada, Tomotada Enatsu and Edita Enatsu, praying, among other things, (1) to stop the holding of the stockholder's and board of directors' meetings; (2) to disqualify the Japanese investors from holding a controlling interest in UDMC and from being elected directors or officers of UDMC; and (3) to annul the Memorandum of Agreement and Stock Purchase Agreement because they allegedly did not express the true agreement of the parties (pp. 194203, Rollo). Two weeks later, on September 2, 1988, Crisostomo filed Civil Case No. 88-1823 in the Regional Trial Court of Makati, Metro Manila, where he also sought a preliminary injunction and the Identical reliefs prayed for by him in SEC Case No. 3420 (pp. 317335, Rollo). It was dismissed by the trial court for lack of jurisdiction and is pending appeal in the Court of Appeals where it is docketed as CA-G.R. No. 20285-CV. On September 13, 1988, the hearing officer, Antonio Esteves, granted the application for a writ of preliminary injunction enjoining the respondents ... from holding the special meeting of the stockholders and of the Board of Directors of United Doctors Medical Center, [Inc.] (UDMC) scheduled on August 20, 1988 or any subsequent meetings; from adopting resolutions to elect new directors and appoint new officers; from approving resolutions directly or indirectly affecting the operations, organizational structure,

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and financial condition of the corporation, ... and from disbursing funds of the said corporation except those ordinary day-to-day expenses pending the final termination of this case. (p. 30, Rollo.) The private respondents' motion for reconsideration of this order was denied by the hearing officer on November 16, 1988. In the same order, he created a management committee to administer UDMC (pp. 32-35, Rollo). The respondents appealed by certiorari to the SEC en banc. On February 14,1989, Commissioner Jose C. Laureta, with whom Commissioners Rosario N. Lopez and Gonzalo T. Santos separately concurred, set aside the preliminary injunction issued by Esteves and the management committee which he created. The dispositive part of the decision reads: Wherefore, premises considered, the instant petition for certiorari is GRANTED and the Commission en banc ORDERS: 1. That the questioned orders of the hearing officer in SEC Case No. 3420 of September 13, 1988 and November 16, 1988, be immediately vacated; 2. That a special stockholders' meeting of UDMC be held for the purpose of allowing the stockholders of record of the corporation to elect a new board of directors, which special meeting is hereby directed to be scheduled within 10 days from receipt of a copy of this resolution by the incumbent corporate secretary or acting corporate secretary of UDMC, and to this end, that such officer be, as he hereby is, directed: (a) to issue a call for such special meeting and serve notice thereof on all stockholders of record of the corporation, in accordance with section 6 of article VII of UDMC's by-laws; and (b) to submit to the Commission, through the Commission Secretary, a written report of his compliance with this particular order of the Commission, not later than 5 days prior to the scheduled date of the proposed UDMC special stockholders' meeting; 3. That upon the election of a new board of directors of UDMC, that such board be, as it hereby is, enjoined to meet as promptly as possible for the purpose of electing a new set of officers of the corporation in order to ensure its proper management; 4. That the hearing officer be, as he hereby is, directed to continue with the proceedings of SEC Case No. 3420, and to do so with all deliberate speed, for the purpose of resolving the alleged violation of certain rights of Sixto Crisostomo, as a stockholder of UDMC particularly, his right to inspect the corporate books and records of UDMC, his preemptive right to subscribe to the P60 million increase in the authorized capital of UDMC, and his appraisal rights; and 5. That the board of directors and officers of UDMC be, as they hereby are, ordered to submit to the Commission, through the Chairman, a written report as to its plans as regards its nursing school, such report

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to be submitted at least one month prior to the commencement of the school year 1989-1990. SO ORDERED. (pp. 49-50, Rollo.) Sixto Crisostomo sought a review of the SEC's en banc resolution in the Court of Appeals (CA-G.R. SP No. 17435). On June 8, 1989, the Court of Appeals dismissed his petition and lifted the temporary restraining order that it had issued against the SEC's resolution (Annex K, pp. 65-81, Rollo). Petitioner filed a motion for reconsideration (pp. 418-434, Rollo). The Court of Appeals required the private respondents to comment but it denied the petitioner's motion to reinstate the writ of preliminary injunction (Annex L, p. 82, Rollo), On motion of the private respondents (Annex K, p. 413, Rollo), the SEC en banc issued an order on June 27, 1989 directing the secretary of UDMC to call a special stockholders' meeting to elect a new board of directors and officers of the corporation (Annex F). Petitioner asked the SEC to recall that order on account of his pending motion for reconsideration in the Court of Appeals. The motion was opposed by the private respondents. On July 21, 1989, the SEC denied petitioner's motion (p. 86, Rollo). Whereupon, he filed this petition for certiorari and prohibition with a prayer for preliminary injunction alleging that the SEC en banc abused its discretion: 1. in setting aside Esteves' orders 2. in allowing the Japanese group to have control of UDMC for it will result in culpable violation of Section 7, Article XII of the 1987 Constitution which provides that no private lands shall be transferred or conveyed except to individuals or corporations qualified to acquire or hold land of the public domain, meaning corporations at least sixty per centum of whose capital is owned by Filipino citizens (Sec. 2, Article XII, 1987 Constitution); and 3. in allowing the Japanese investors to own more than 40% of the capital stock of UDMC (which operates a nursing and midwifery school) in violation of Section 4 (2) Article XIV of the 1987 Constitution which provides that educational institutions ... shall be owned solely by citizens of the Philippines or corporations or associations at least sixty per centum of the capital of which is owned by such citizens. The public and private respondents, in their comments on the petition, asked that the petition be dismissed and that the petitioner be cited for contempt for forum-shopping. We find no merit in the petition. The first allegation that the SEC en banc erred in reversing the orders of the hearing officer, Esteves, is the same ground raised by the petitioner in CA-G.R. No. SP 17435. The issue is frivolous for the authority of the SEC en banc to review, revise, reverse, or affirm orders of its hearing officers is too elementary to warrant any debate. Equally unmeritorious are the second and third grounds of the petition that the P57 million investment of the Japanese group in UDMC violates the constitutional provisions restricting the transfer or conveyance of private lands (Art. XIII, Sec. 7, 1987 Constitution) and the ownership of educational institutions (Art. XVI, Sec. 14[a], 1987 Constitution), to citizens of the Philippines or corporations at least 60% of the capital of which is owned by Filipino citizens. While 82% of UDMC's capital stock is indeed subscribed by the Japanese group, only 30% (equivalent to 171,721 shares or P17,172.00) is owned by the Japanese citizens, namely, the Yamada spouses and Tomotada Enatsu. 52% is owned by Edita Enatsu, who is a Filipino. Accordingly, in its application for approval/registration of the foreign equity investments of these investors, UDMC declared that 70% of its capital stock is owned by Filipino citizens, including Edita Enatsu. That application was approved by the Central Bank on August 3, 1988 (p. 249, Rollo,). The investments in UDMC of Doctors Yamada and Enatsu do not violate the Constitutional prohibition against foreigners practising a profession in the Philippines (Section 14, Article XII, 1987 Constitution) for they do not practice their profession (medicine) in the Philippines, neither have they applied for a license to do so.

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They only own shares of stock in a corporation that operates a hospital. No law limits the sale of hospital shares of stock to doctors only. The ownership of such shares does not amount to engaging (illegally,) in the practice of medicine, or, nursing. If it were otherwise, the petitioner's stockholding in UDMC would also be illegal. The SEC's orders dated June 27, 1989 and July 21, 1989 (directing the secretary of UDMC to call a stockholders' meeting, etc.) are not premature, despite the petitioner's then pending motion for reconsideration of the decision of the Court of Appeals. The lifting by the Court of Appeals of its writ of preliminary injunction in CAG.R. SP No. 17435 cleared the way for the implementation by the SEC's en banc resolution in SEC EB Case No. 191. The SEC need not wait for the Court of Appeals to resolve the petitioner's motion for reconsideration for a judgment decreeing the dissolution of a preliminary injunction is immediately executory. It "shall not be stayed after its rendition and before an appeal is taken or during the pendency of an appeal." (Sec. 4, Rule 39, Rules of Court; Marcelo Steel Corp. vs. Court of Appeals, 54 SCRA 89 [1973]; Aguilar vs. Tan, 31 SCRA 205 [1970]; Sitia Teco vs. Ventura, 1 Phil. 497 [1902]; Watson & Co., Ltd. vs. M. Enriquez, I Phil. 480 [1902]). We now address the public and private respondents' separate motions to dismiss the petition and to cite Crisostomo and his counsel for contempt of court for forum-shopping. The records show that Crisostomo had two actions pending in the Court of Appeals (CA-G.R. No. SP 17435 and CA-G.R. No. 20285 CV) when he filed the petition for certiorari (G.R. No. 89095) in this Court on July 27, 1989. The case docketed as CA-G.R. No. 20285-CV, is his appeal from the decision of the Regional Trial Court of Makati, dismissing his complaint for annulment of the Memorandum of Agreement and the Stock Purchase Agreement between UDMC and the Japanese investors. CA-G.R. No. SP 17435 is his petition for certiorari to review the SEC's en banc resolution upholding those transactions and ordering the holding of a stockholders meeting to elect the directors of the UDMC, and of a board of directors meeting to elect the officers. Notwithstanding the pendency of those two cases in the Court of Appeals, Crisostomo filed this petition for certiorari 1 and prohibition on July 27, 1989 where he raises the same issues that he raised in the Court of Appeals. The prayer of his petition in CA-G.R. No. SP 17435 reads thus: 3) After hearing rendered: on the merits, judgment be

a) Annulling and setting aside the questioned rulings of the respondent COMMISSION 2 for having been issued with grave abuse of discretion tantamount to lack or excess of jurisdiction; and b) Making permanent the preliminary injunction issued in this case against the respondents. (p. 241, Rollo.) In his petition for certiorari (G.R. No. 89095), he also prays that 1. Upon the filing of this petition, a temporary restraining order issue enjoining respondents, their representatives or agents from implementing or executing the SEC opinions (Annexes "F", "G" and "H") and its June 27 and July 21,1989 orders (Annexes "M" and "O") until further orders from the Honorable Court. xxx xxx xxx 3. After notice, this petition be given due course and a writ of preliminary injunction be issued for the same purpose and effect upon such terms and conditions the Honorable Court may impose; and thereafter, judgment be rendered granting the writ prayed for and annulling and setting aside the said opinions rendered by the SEC in their stead, affirming the orders of the Hearing Officer (Annexes "A" and "B"). (pp. 27-28, Rollo.)

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Additionally, in his petition for review (G.R. No. 89555) he prays this Court to giant "all the reliefs" prayed for by him in CA-G.R. SP No. 17435. Here is a clear case of forum-shopping. There is forum-shopping whenever as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. The principle applies not only with respect to suits filed in the courts but also in connection with litigations commenced in the courts while an administrative proceeding is pending, as in this case, in order to defeat administrative processes and in anticipation of an unfavorable administrative ruling and a favorable court ruling. This is specially so, as in this case, where the court in which the second suit was brought, has no jurisdiction. (Villanueva vs. Adre, G.R. No. 8063, April 27, 1989.) (p. 303, Rollo) Forum-shopping is prohibited by the Interim Rules of Court for it trifles with the courts and abuses their processes (E. Razon, Inc. vs. Phil. Port Authority, 101 SCRA 450). Section 17 of the Interim Rules of Courts provides: 17. Petitions for writs of certiorari, etc., No petition for certiorari, mandamus, prohibition, habeas corpus or quo warranto may be filed in the Intermediate Appellate Court if another similar petition has been filed or is still pending in the Supreme Court. Nor may such petition be filed in the Supreme Court if a similar petition has been filed or is still pending in the Intermediate Appellate Court, unless it be to review the action taken by the Intermediate Appellate Court on the petition filed with it. A violation of this rule shall constitute contempt of court and shall be a cause for the summary dismissal of both petitions, without prejudice to the taking of appropriate action against the counsel or party concerned. (Interim Rules of Court.) Forum-shopping makes the petitioner subject to disciplinary action and renders his petitions in this Court and in the Court of Appeals dismissible (E. Razon, Inc. vs. Philippine Port Authority, et al., G.R. No. 75197, Resolution dated July 31, 1986; Buan vs. Lopez, Jr., 145 SCRA 34, 38-39; Collado vs. Hernando, L-43886, May 30, 1988). For this reason, if not for their lack of merit, the petitions should be, as they are hereby, dismissed. WHEREFORE, these petitions are dismissed for lack of merit. The temporary restraining order which this Court issued on August 7, 1989 in G.R. No. 89095 is hereby lifted. The Court of Appeals is ordered to immediately dismiss CA-G.R. CV No. 20285. The petitioner and his counsel are censured for engaging in forumshopping. The petitioner is further ordered to pay double costs in this instance. SO ORDERED.

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"THE LOWER COURT ERRED IN AMENDING THE FIRST DECISION INCREASING THE PENALTY AFTER THE SAME HAD ALREADY BECOME FINAL AND EXECUTORY."2 The Court of Appeals, in a decision, dated 18 August 2000, dismissed petitioner's appeal on the ground that petitioner raised a pure question of law. Citing Article VIII, Section 5(2)(e), of the Constitution, the appellate court explained that jurisdiction over the case was vested exclusively in the Supreme Court and that, in accordance with Rule 122, Section 3(e), of the Rules of Criminal Procedure, the appeal should have been brought up by way of a petition for review on certiorari with this Court and not by merely filing a notice of appeal before the trial court. Petitioner filed a motion for reconsideration which, on 18 May 2001, was denied by the appellate court. The petition for review on certiorari before this Court raised the following issues: "I. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING SECTION 2, RULE 50 ON DISMISSAL OF IMPROPER APPEAL TO THE COURT OF APPEALS AS THE SAID SECTION REFERS TO AN APPEAL UNDER RULE 41 IN ORDINARY CIVIL ACTION BUT NOT TO AN APPEAL IN CRIMINAL CASES WHICH IS GOVERNED BY RULE 122 OF THE REVISED RULES ON CRIMINAL PROCEDURE. "II. THE COURT OF APPEALS ERRED IN HOLDING THAT THE SUPREME COURT HAS EXCLUSIVE APPELLATE JURISDICTION ON PURE QUESTIONS OF LAW. "III. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BECAUSE THE APPEAL RAISED PURE QUESTIONS OF LAW, IT IS WITHOUT JURISDICTION TO RESOLVE THE ISSUE RAISED IN THE APPEAL. "IV. THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE APPEAL OUTRIGHT INSTEAD OF DECLARING THE AMENDED DECISION VOID FOR UTTER WANT OF JURISDICTION.1wphi1.nt

G.R. No. 148194 April 12, 2002 WILLY TAN y vs. PEOPLE OF THE PHILIPPINES, respondents. VITUG, J.:

CHUA, petitioner,

On 12 December 1996, petitioner Willy Tan was found guilty of bigamy by the Regional Trial Court, Branch 75, of San Mateo, Rizal. He was sentenced to suffer a prison term of prision correccional in its medium period ranging from two (2) years, four (4) months, and one (1) day, to four (4) years and two (2) months. On 23 December 1996, petitioner applied for probation. On 8 January 1997, the application was granted by the trial court but the release order was withheld in view of the filing by the prosecution, on 21 January 1997, of a motion for modification of the penalty. The prosecution pointed out that the penalty for bigamy under Article 349 of the Revised Penal Code was prision mayor and the impassable penalty, absent any mitigating nor aggravating circumstance, should be the medium period of prision mayor, or from eight (8) years and one (1) day to ten (10) years. Thus, the prosecution argued, petitioner was not eligible for probation. The trial court denied the motion of the prosecution for having been filed out of time since the decision sought to be modified had already attained finality. Indeed, petitioner had meanwhile applied for probation. Upon motion of the prosecution, however, the trial court reconsidered its order and rendered an amended decision, promulgated on 10 July 1998, concluding thusly: "WHEREFORE, premises considered, judgment is hereby rendered finding accused Willy Tan GUILTY beyond reasonable doubt of the crime of Bigamy and applying the Indeterminate Sentence Law, is hereby sentenced to suffer a minimum prison term of prision [correccional] TWO (2) YEARS, FOUR (4) MONTHS AND ONE (1) DAY to a maximum prison term of EIGHT (8) YEARS AND ONE (1) DAY."1 On 13 July 1998, petitioner filed a notice of appeal with the trial court and elevated the case to the Court of Appeals, contending that -

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"V. THE COURT OF APPEALS ERRED IN HOLDING THAT RULE 65 IS THE PROPER REMEDY TO RAISE THE ISSUE OF JURISDICTION AND IF SO IN NOT TREATING THE APPEAL AS A SPECIAL CIVIL ACTION FOR CERTIORARI."3 In all criminal prosecutions, the accused shall have the right to appeal in the manner prescribed by law.4 While this right is statutory, once it is granted by law, however, its suppression would be a violation of due process, itself a right guaranteed by the Constitution.5 Section 3(a), Rule 122 of the Rules of Criminal Procedure states: "Section 3. How appeal is taken. (a) The appeal to the Regional Trial Court, or to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its original jurisdiction, shall be taken by filing a notice of appeal with the court which rendered the judgment or final order appealed from and by serving a copy thereof upon the adverse party. (Emphasis supplied). The above rule is plain and unambiguous the remedy of ordinary appeal by notice of appeal, although not necessarily preclusive of other remedies provided for by the rules, is open and available to petitioner. The notice of appeal was timely filed by petitioner on 13 July 1998, three days after the questioned decision was promulgated.6 It was a remedy that the law allowed him to avail himself of, and it threw the whole case effectively open for review on both questions of law and of fact whether or not raised by the parties. Neither the Constitution nor the Rules of Criminal Procedure exclusively vests in the Supreme Court the power to hear cases on appeal in which only an error of law is involved.7 Indeed, the Court of Appeals, under Rule 42 and 44 of the Rules of Civil Procedure, is authorized to determine "errors of fact, of law, or both." 8 These rules are expressly adopted to apply to appeals in criminal cases,9 and they do not thereby divest the Supreme Court of itsultimate jurisdiction over such questions. Anent the argument that petitioner should have filed a petition for certiorari under Rule 65, it might be pointed out that this remedy can only be resorted to when there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law.10 Appeal, being a remedy still available to petitioner, a petition for certiorari would have been premature. In fine, petitioner had taken an appropriate legal step in filing a notice of appeal with the trial court. Ordinarily, the Court should have the case remanded to the Court of Appeals for further proceedings. The clear impingement upon petitioner's basic right against double jeopardy,11 however, should here warrant the exercise of the prerogative by this Court to relax the stringent application of the rules on the matter. When the trial court increased the penalty on petitioner for his crime of bigamy after it had already pronounced judgment and on which basis he then, in fact, applied for probation, the previous verdict could only be deemed to have lapsed into finality. Section 7, Rule 120, of the Rules on Criminal Procedure that states "Sec. 7. Modification of judgment. A judgment of conviction may, upon motion of the accused, be modified or set aside before it becomes final or before appeal is perfected. Except where the death penalty is imposed, a judgment becomes final after the lapse of the period for perfecting an appeal, or when the sentence has been partially or totally satisfied or served, or when the accused has waived in writing his right to appeal, or has applied for probation"implements a substantive provision of the Probation Law which enunciates that the mere filing of an application for probation forecloses the right to appeal. "SEC. 4. Grant of Probation. Subject to the provisions of this Decree, the trial court may, after it shall have convicted and sentenced a defendant, and upon application by said defendant within the period for perfecting an appeal, suspend the execution of the sentence and place the

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defendant on probation for such period and upon such terms and conditions as it may deem best: Provided, That no application for probation shall be entertained or granted if the defendant has perfected the appeal from the judgment or conviction. "Probation may be granted whether the sentence imposes a term of imprisonment or a fine only. An application for probation shall be filed with the trial court. The filing of the application shall be deemed a waiver of the right to appeal. "An order granting or denying probation shall not be appealable. (As amended by PD 1257, and by PD 1990, Oct. 5, 1985.)"12 Such a waiver amounts to a voluntary compliance with the decision and writes finis to the jurisdiction of the trial court over the judgment.13 There is no principle better settled, or of more universal application, than that no court can reverse or annul, reconsider or amend, its own final decree or judgment.14 Any attempt by the court to thereafter alter, amend or modify the same, except in respect to correct clerical errors, would be unwarranted. WHEREFORE, the petition is given due course. The assailed amendatory judgment of the trial court is SET ASIDEand its decision of 12 December 1996 is REINSTATED. No costs. G.R. No. 139368 November 21, 2002] December 21, 1998 by petitioner against respondents for payment of back salaries and allowances amounting to P301,018; and (b) the order of said court denying on July 15, 1999, his motion for reconsideration. The factual background of the instant petition, as culled from the records of the case, is as follows: For the alleged bungled investigation of the Eileen Sarmenta and Allan Gomez rape-slay, a complaint for grave misconduct was filed with the National Police Commission under the Department of Interior and Local Government against petitioner, then Police Chief Inspector of the Calauan Police Station. The Chief of the Philippine National Police (PNP) found petitioner guilty and ordered his summary dismissal from the service, in a decision2 dated July 12, 1995. Petitioner appealed his dismissal to the National Appellate Board of the National Police Commission (NAPOLCOM). On May 15, 1997, the NAPOLCOM reversed the decision of the PNP Chief: WHEREFORE, premises considered, we find respondent appellant, Chief Inspector ROBIN M. CANO administratively culpable for Simple Misconduct and hereby orders (sic) his suspension for a period of three (3) months. Considering, however, that said respondent had been under suspension since August 7, 1995, pursuant to Special Order No. 1690 dated August 8, 1995, the penalty imposed is considered deemed served. RespondentAppellant is strongly warned to be more prudent and responsible in the exercise of his duties as a member of the PNP.3 The NAPOLCOM decision having been allowed by both parties to become final and executory, petitioner was restored to full duty status effective May 15, 1997. He also received all benefits and emoluments pertaining to his post pursuant to PNP Special Order No. 1341. With the modification of his penalty to three (3) months suspension, petitioner filed a claim for payment of back salaries and other allowances corresponding to the period he was allegedly unjustly discharged from service until he was restored to full duty status, or from August 7, 1995 to May 15, 1997. However, this claim, computed by the PNP Regional Police Comptrollership and Finance Division to be Three Hundred One Thousand Eighteen Pesos (P301,018.00), was denied by respondent Police Director Edgar C. Galvante of the PNP Directorate for Personnel and Records

ROBIN M. CANO, petitioner, vs. THE CHIEF, PHILIPPINE NATIONAL POLICE, EDGAR C. GALVANTE, as Police Director for Personnel and Records Management, PNP, and the DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT, respondents. RESOLUTION QUISUMBING, J.: This petition for review on certiorari assails (a) the order1 dated May 17, 1999 of the Regional Trial Court of Quezon City, Branch 224, in Civil Case No. Q-98-36370, dismissing the complaint filed on

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Management (DPRM) on the strength of a Memorandum/Opinion from the PNP Legal Service. Petitioner forthwith asked for a reconsideration of the denial but the same was rejected. On account of said denial, petitioner filed on December 23, 1998 a complaint4 before the Regional Trial Court of Quezon City for the recovery of his back salaries and other allowances for the said period. The court a quo dismissed the complaint in an order dated May 17, 1999. Said the trial court: The Court is prone to agree with the stand and position of the defendants that plaintiff's claim should not be granted because plaintiff has not shown any clear and legal right which would entitle him to back salaries, allowances and other benefits and besides, plaintiff has failed to exhaust administrative remedies no[t] discounting the fact that his claim against defendants is actually a suit against the state. xxx This complaint is actually a suit against the government because the ultimate liability for payment of back salaries, etc. will fall on the government. This being so, this case should be dismissed because the government cannot be sued without its consent. Accordingly, therefore, the Court has to dismiss this case without costs against the plaintiff. IT IS SO ORDERED.5 On May 31, 1999, petitioner moved for the reconsideration of the trial court's decision, but his motion was denied in an order dated July 15, 1999. Accordingly, petitioner filed the instant appeal via petition for review on certiorari, raising only one issue: Whether or not the petitioner is entitled to his claim for back salaries and allowances under the terms of the decision of the NAPOLCOM Appellate Board.6 Mainly involved in this controversy is petitioner's entitlement to back salaries and other allowances upon the reduction of his penalty of dismissal to mere suspension for three months. But secondarily, it should be asked whether petitioner failed to exhaust the administrative remedies available to him so as to render the filing of the complaint with the trial court premature? At the outset, we note that the principal issue raised before us is a mixed question of fact and law. There is a question of fact when doubt or difference arises as to the truth or falsehood of the alleged facts,7 and there is a question of law where the doubt or difference arises as to what the law is on a certain state of facts. 8 Here, petitioner seeks to recover back salaries and allowances allegedly due him from August 7, 1995, when he was unjustly discharged from the service, to May 15, 1997, when he was restored to full duty status. The determination of petitioner's entitlement to said back salaries and allowances is a mixed question as it involves the determination of his duty status for the period of his claim and the resolution of whether the petitioner was acquitted by the NAPOLCOM Appellate Board in its decision finding him liable only for simple misconduct, not gross misconduct. Under Section 1 of Rule 45 of the Rules of Court, an appeal by certiorari to this Court should raise only questions of law which must be distinctly set forth in the petition. It is elementary that a review is not a matter of right, but of sound judicial discretion, and will be granted only when there are special and important reasons therefor.9 As the error raised herein includes one of fact and law, and not a proper subject for a petition for review on certiorari, we are constrained to decline exercise of our equity jurisdiction in this case. At any rate, petitioner also failed without justifiable cause to observe due regard for the hierarchy of courts. Even on this reason alone, we are constrained to deny the petition. The policy of this Court respecting the hierarchy of courts and, consequently, prohibiting the filing of a petition in this Court in view of the concurrent jurisdiction with the lower courts has been consistently observed in the absence of any compelling reason for departing from such policy.10 Pursuant to Section 2, Rule 41 of the Rules of Court,11 petitioner should have taken his appeal to the Court of Appeals.

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Having ruled for the denial of the petition, we need not tarry on the other issues that may have been raised in the petition. WHEREFORE, the instant petition is DENIED. The order of the Regional Trial Court, Branch 224, Quezon City, in Civil Case No. Q98-36370 is AFFIRMED. No pronouncement as to costs. SO ORDERED.

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Construction Contract5 with petitioner for the demolition of the ancestral house and the construction of a new four-bedroom residential house. The parties agreed that respondent would pay P500,000.00 to the petitioner, who obliged himself to furnish all the necessary materials and labor for the completion of the project. Petitioner likewise undertook to finish all interior portions of the house on or before March 31, 1998, or more than two weeks before Sallys wedding. On April 18, 1998, however, the house remained unfinished. The wedding ceremony was thus held at the Club Victorina and respondents relatives were forced to stay in a hotel. Her mother lived with her children, transferring from one place to another. On July 27, 1998, respondent filed a Complaint6 for breach of contract and damages against petitioner before the Regional Trial Court of Pasig City. She alleged, among others, that petitioner started the project without securing the necessary permit from the City Engineers Office of Lipa City. Respondent likewise alleged that, all in all, she gave petitioner P550,000.00 (which is P50,000.00 more than the contract price). However, and despite knowledge that the construction of the house was intended for the forthcoming marriage of respondents sister, petitioner unjustly and fraudulently abandoned the project leaving it substantially unfinished and incomplete. Several demands were made, but petitioner obstinately refused to make good his contractual obligations. Worse, petitioners workmanship on the incomplete residential house was substandard. Respondent prayed for the return of the P50,000.00 overpayment. She also prayed for an award of P100,000.00 for the purpose of repairing what had been poorly constructed and at least P200,000.00 to complete the project. In his Answer with Counterclaim,7 petitioner asserted that it was respondent who undertook to secure the necessary government permits.8 With regard to the alleged overpayment, petitioner claimed that the amount ofP50,000.00 was in payment for the additional works which respondent requested while the construction was still on going. In fact, the estimated cost for the additional works amounted to P133,960.00, over and above theP500,000.00 contract price.

G.R. No. 165679

October 5, 2009 DUEAS, Petitioner,

ENGR. APOLINARIO vs. ALICE GUCE-AFRICA, Respondent. DECISION DEL CASTILLO, J.:

Time and again, we have held that in a petition for review on certiorari filed under Rule 45 of the Rules of Court, we cannot review or pass upon factual matters, save under exceptional circumstances, none of which obtains in the present case. Petitioner endeavors in vain to convince us that the trial court and the Court of Appeals erred in finding him negligent in the construction of respondents house and holding him liable for breach of contract. This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court seeking to reverse and set aside the April 29, 2004 Decision2 of the Court Appeals in CA-G.R. CV No. 70757, which affirmed the December 21, 2000 Decision3 of the Regional Trial Court, Branch 157, Pasig City, in an action for breach of contract with damages4 filed by respondent against petitioner. THE FACTS For respondent and her family, April 18, 1998 was supposed to be a special occasion and a time for family reunion. It was the wedding date of her sister Sally Guce, and respondents other siblings from the United States of America, as well as her mother, were expected to return to the country. The wedding ceremony was set to be held at the familys ancestral house at San Vicente, Banay-banay, Lipa City, where respondents relatives planned to stay while in the Philippines. Respondent found the occasion an opportune time to renovate their ancestral house. Thus, in January 1998 she entered into a

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Petitioner likewise alleged that the delay in the construction of the house was due to circumstances beyond his control, namely: heavy rains, observance of Holy Week, and celebration of barangay fiesta. Ultimately, he was not able to complete the project because on May 27, 1998, respondent went to his house and told him to stop the work. He maintained that he cannot be held liable for the amounts claimed by the respondent in her complaint considering that he had faithfully complied with the terms and conditions of the Construction Contract. On February 19, 1999, pre-trial conference was conducted. Thereafter, trial ensued. Respondent testified on the material points alleged in her complaint. She also presented the testimony of her brother Romeo Guce, who declared on the witness stand that petitioner confided to him that he had to stop the construction because he could no longer pay his workers. He also testified that petitioner asked for additional amount of about P20,000.00 to finish the house. He relayed this to the respondent who refused to release any additional amount because of petitioners unsatisfactory and substandard work. But later on, respondent acceded and gave petitioner P20,000.00. To establish the status of the project and determine the amount necessary for the repair and completion of the house, respondent presented Romeo Dela Cruz, a licensed realtor and a graduate of an engineering course at the Technological Institute of the Philippines. Dela Cruz testified that he conducted an ocular inspection on the construction site in November 1998 and found that only about 60% of the project had been accomplished. Some parts of the project, according to the witness, were even poorly done. He likewise testified that in order to repair the poorly constructed portion of the house, respondent would need to spend about P100,000.00 and anotherP200,000.00 to complete it. Petitioner also took the witness stand and testified on matters relative to the defenses he raised in his answer. On December 21, 2000, the RTC rendered a Decision 9 in favor of the respondent and against the petitioner. The RTC gave more credence to respondents version of the facts, finding thatClearly, Dueas [herein petitioner] failed to tender performance in accordance with the terms and conditions of the construction contract he executed with Africa [herein respondent]. He failed to construct a four-bedroom residential house suitable and ready for occupancy on a stipulated date. Dueas was fully aware that Africa needed the new house for a long scheduled family event precisely a completion date was included and specified in the transaction. Despite knowledge and receipt of payment from Africa, Dueas failed to deliver what was incumbent upon him under the undertaking. He unjustifiably incurred delay in the construction of the new building and wrongfully deprived Africa and her family of the use and enjoyment of the subject property. Bad weather, observance of the Holy Week and barangay fiesta are insufficient excuses. As a building contractor Dueas should have provided for such contingencies. Mere inconvenience or unexpected impediments will not relieve a party of his obligation. Granting that he was not yet fully paid for the additional work by Africa, provisions or arrangements should have been made to ensure completion of the project within the agreed period. Moreover, Dueas negligently abandoned the unfinished structure shortly after a confrontation with Africa and family. Rain water sipped[sic] into the house because Dueas failed to secure the roofing and wall flushing. The house remained [un]habitable because fixtures and devises were yet to be installed. Dueas failed to exercise the required diligence as a contractor and is guilty of negligence and delay. He must be made responsible for the foreseen effect of the exposure of the new structure to the elements. Significantly, the poor construction performance manifested in the structure after Dueas in bad faith abandoned it. Indeed, the newly constructed edifice needs significant repairs if only to make it habitable for its occupants.10 Consequently, the fallo of the RTC decision reads:

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WHEREFORE, judgment is hereby rendered in favor of plaintiff Alice G. Africa and against defendant Apolinario Dueas who is hereby directed to pay plaintiff: - P100,000.00 for the necessary repair of the structure; - 200,000.00 for the completion of the construction; - 50,000.00 as and for attorneys fees; - and costs of suit. Plaintiffs claim for moral, nominal and exemplary damages are hereby denied for lack of sufficient basis. SO ORDERED.11 Both parties were unsatisfied. They thus brought the matter to the Court of Appeals assailing the Decision of the RTC. The appellate court, however, found no cogent reason to depart from the trial courts conclusion. Thus, on April 29, 2004, it rendered the herein assailed Decision12 affirming with modification the RTCs ruling, viz: WHEREFORE, in view of the foregoing, the Decision of the Regional Trial Court of Pasig City, Branch 157, dated 21 December 2000, is hereby AFFIRMED WITH MODIFICATION that the award of attorneys fees is hereby DELETED. SO ORDERED.13 ISSUES Feeling aggrieved but still undeterred, petitioner interposes the present recourse anchored on the following grounds: I. THE COSTS OF ACTUAL DAMAGES AWARDED ARE BASED ON MERE SPECULATIONS AND CONJECTURES.14 II. THE RULINGS THAT DUEAS ABANDONED THE WORK AND INCURRED DELAY ARE CONTRARY TO THE EVIDENCE.15 III. Petitioner contends that he neither abandoned the project nor violated the contract. He maintains that continuous rains caused the delay in the construction of the house and that he was not able to finish the project because respondent ordered him to stop the work. In fact, there was no reason for him to stop the project because he still had available workers and materials at that time, as well as collectibles from the respondent. Petitioner likewise contends that the Court of Appeals erred in upholding the trial courts finding that he was guilty of negligence. The contentions lack merit. Petitioner endeavors to convince us to determine, yet again, the weight, credence, and probative value of the evidence presented. This cannot be done in this petition for review on certiorari under Rule 45 of the Rules of Court where only questions of law may be raised by the parties and passed upon by us. In Fong v. Velayo,17 we defined a question of law as distinguished from a question of fact, viz: A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the questioned posed is one of fact. Thus, the test of whether a question is one of law or of fact is not the appellation For purposes of clarity, we shall tackle simultaneously the second and third arguments raised by the petitioner. Instant petition not available to determine whether petitioner violated the contract or abandoned the construction of the house THE DAMAGES CAUSED BY RAIN WATER WERE NOT DUE TO APOLINARIO DUEAS FAULT OR NEGLIGENCE.16 OUR RULING

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given to such question by the party raising the same; rather, it is whether the appellate court can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a question of law; otherwise, it is a question of fact. It has already been held that the determination of the existence of a breach of contract is a factual matter not usually reviewable in a petition filed under Rule 45.18 We will not review, much less reverse, the factual findings of the Court of Appeals especially where, as in this case, such findings coincide with those of the trial court, since we are not a trier of facts.19 The established rule is that the factual findings of the Court of Appeals affirming those of the RTC are conclusive and binding on us. We are not wont to review them, save under exceptional circumstances as: (1) when the inference made is manifestly mistaken, absurd or impossible; (2) when there is grave abuse of discretion; (3) when the findings are grounded entirely on speculations, surmises or conjectures; (4) when the judgment of the Court of Appeals is based on misapprehension of facts; (5) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (6) when the findings of fact are conclusions without citation of specific evidence on which they are based; (7) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion; and (8) when the findings of fact of the Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on record.20 Except with respect to the first ground advanced by the petitioner which will be discussed later, none of the above exceptions obtain in this case. Hence, we find no cogent reason to disturb the findings of the RTC and affirmed by the Court of Appeals that petitioner was negligent in the construction of respondents house and thus liable for breach of contract. Respondent not entitled to actual damages for want of evidentiary proof Petitioner further argues that the appellate court erred in affirming the RTCs award of actual damages for want of evidentiary foundation. He maintains that actual damages must be proved with reasonable degree of certainty. In the case at bench, petitioner argues that the trial and the appellate courts awarded the amounts of P100,000.00 and P200,000.00 as actual damages based merely on the testimonies of respondent and her witness. We agree. Article 2199 of the Civil Code provides that "one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved." In Ong v. Court of Appeals,21 we held that "(a)ctual damages are such compensation or damages for an injury that will put the injured party in the position in which he had been before he was injured. They pertain to such injuries or losses that are actually sustained and susceptible of measurement." To be recoverable, actual damages must not only be capable of proof, but must actually be proved with reasonable degree of certainty. We cannot simply rely on speculation, conjecture or guesswork in determining the amount of damages. Thus, it was held that before actual damages can be awarded, there must be competent proof of the actual amount of loss, and credence can be given only to claims which are duly supported by receipts.22 Here, as correctly pointed out by petitioner, respondent did not present documentary proof to support the claimed necessary expenses for the repair and completion of the house. In awarding the amounts of P100,000.00 andP200,000.00, the RTC and the Court of Appeals merely relied on the testimonies of the respondent and her witness. Thus: As to the award of P100,000.00 as cost of repair and P200,000.00 as the amount necessary to complete the house, the Court finds the same to be in the nature of actual damages. It is settled that actual damages must be supported by best evidence available x x x. In the case at bar, the Court finds that the testimony of the plaintiff-appellant in this regard is supported by the testimony of Romeo dela Cruz, a realtor, who inspected the structure after it remained unfinished. Said testimonies are sufficient to establish the claim. x x x Respondent entitled to temperate damages in lieu of actual damages

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Nonetheless, in the absence of competent proof on the amount of actual damages suffered, a party is entitled to temperate damages. Articles 2216, 2224 and 2225 of the Civil Code provide: Art. 2216. No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary damages may be adjudicated. The assessment of such damages, except liquidated ones, is left to the discretion of the court, according to the circumstances of each case. Art. 2224. Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount can not, from the nature of the case, be proved with certainty. Art. 2225. Temperate damages must be reasonable under the circumstances. Temperate or moderate damages may be recovered when some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty. 23 The amount thereof is usually left to the discretion of the courts but the same should be reasonable, bearing in mind that temperate damages should be more than nominal but less than compensatory. 24 There is no doubt that respondent sustained damages due to the breach committed by the petitioner. The transfer of the venue of the wedding, the repair of the substandard work, and the completion of the house necessarily entailed expenses. However, as earlier discussed, respondent failed to present competent proof of the exact amount of such pecuniary loss. To our mind, and in view of the circumstances obtaining in this case, an award of temperate damages equivalent to 20% of the original contract price of P500,000.00, or P100,000.00 (which, incidentally, is equivalent to 1/3 of the total amount claimed as actual damages), is just and reasonable. WHEREFORE, the instant petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated April 29, 2004 in CA-G.R. CV No. 70757 is AFFIRMED with modification that the award of actual damages is deleted and, in lieu thereof, petitioner is ordered to pay respondent of P100,000.00. SO ORDERED. temperate damages in the amount

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G.R. No. L-63557 October 28, 1983 LINGNER & FISHER GMBH, petitioner, vs. INTERMEDIATE APPELLATE COURT, HON. RICARDO L. PRONOVE JR. and PHILIPPINE CHEMICAL LABORATORIES, INC., respondents. Romulo, Mabanta, Buenaventura & Sayoc & De los Reyes Law Office for petitioner. Bueno, Bilog and Villa Law Office for respondent. RESOLUTION (c) After termination of the AGREEMENT, PHILCHEM will be entitled, for five years, to 10% royalty on sales of PRODUCTS in the Philippines (hereinafter to be referred to as the ROYALTY CLAUSE). (d) "All legal settlements within the compass of this AGREEMENT shall fall under the jurisdiction of Philippine courts." It appears that, subsequently, the DMW interests were acquired by LINGNER & FISHER GMBH LINGNER for brevity). On other hand, LINGNER was a subsidiary of BEECHAM GROUP LTD. which, through BEECHAM PRODUCTS INTERNATIONAL (BEECHAM, for brevity), had opened an office in this country at Unit A, Padilla Building, Emerald Avenue, Pasig, Metro Manila, under the supervision or managership of one named TANNER. LINGNER and BEECHAM can be deemed to constitute a single personality. Subsequent reference to LINGNER will include reference to DMW and BEECHAM. The AGREEMENT was automatically renewed once, or up to February 28, 1973, and finally terminated on August 31, 1977. The events relative to the termination were as follows: Before February 28, 1973, the parties agreed to extend the AGREEMENT up to February 28, 1975. If it is not terminated by prior notice six months before February 28, 1975, as it was not, it would be extended for a further two years up to February 28, 1977. By letter dated February 25, 1977, through the law firm of Ozaeta Romulo, De Leon, Mabanta, Buenaventura, Sayoc and De los Angeles (the Law Firm, for brevity) PHILCHEM was advised that LINGNER was interested in continuing business relationship with PHILCHEM and will be interested in negotiating a new contract and that, prior to the signing of a new contract, LINGNER was proposing that the old contract be extended by mutual agreement for a period of six (6) calendar months beginning March 1, 1977 to expire automatically on August 31, 1977 if no contract is entered into. The proposal was accepted by PHILCHEM, and no new contract having been signed by August 31, 1977, the AGREEMENT terminated on that date,

MELENCIO-HERRERA, J.: The factual background of this case may be stated as follows: DEUTCHE MILCHWERKE DR. A. SAUER (DMW for brevity) was a firm in West Germany manufacturing PRODUCTS (probably chemicals) under the trademarks FISSAN, etc. Private respondent Philippine Chemical Laboratories, Inc. (PHILCHEM, for brevity) is a local company which apparently also manufactures and sells chemicals. On February 28, 1963, DMW and PHILCHEM executed a so-called Agency AGREEMENT the basic provision of which was that PHILCHEM would be the exclusive importer of the PRODUCTS into the Philippines. The benefit to PHILCHEM would be the profits realized from re-sale in this country of imported PRODUCTS. Other relevant provisions, generally stated, were that: (a) The term of the AGREEMENT was five years renewable automatically for five years each time unless one party gives due notice of termination to the other. (b) PHILCHEM could manufacture the PRODUCTS locally with raw materials from sources other than LINGNER, but in such case DMW will have to be paid 5% of 80% of PHILCHEM's wholesale prices.

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On July 20, 1979, PHILCHEM presented a claim to LINGNER for P1,055,000.00 under the ROYALTY CLAUSE. The claim was discussed between PHILCHEM and TANNER of BEECHAM with the intervention of the Law Firm. No settlement having been arrived at, PHILCHEM, on August 6, 1980, filed a complaint against BEECHAM alone in Civil Case No. 38086 of the then Court of First Instance of Rizal. The summons issued could not be served on BEECHAM, the Sheriff having reported that BEECHAM was neither a company registered in the Philippines, nor resident at the given address of Unit A, Padilla Building, Emerald Avenue, Pasig, Metro Manila. PHILCHEM then filed an amended complaint, this time making LINGNER and BEECHAM as the defendants, and pleading that summons could be served on the Law Firm as an agent of the defendants. The Law Firm submitted a special appearance in the case on behalf of LINGNER, and, also on behalf of LINGNER, moved for dismissal on the grounds (a) that LINGNER was not a foreign corporation doing business in the Philippines and hence could not be sued locally, and, (b) that LINGNER could not be served with summons through the Law Firm. It will thus be noted that two issues were being raised. The first was whether or not LINGNER was doing business in the Philippines; and the second was whether or not LINGNER could be validly summoned through the Law Firm as its agent. The Trial Court denied the Motion to Dismiss, assuming that LINGNER could be sued in this jurisdiction, and holding that LINGNER can be served with summons through the Law Firm. LINGNER went on certiorari to the Intermediate Appellate Court where it reiterated the plea that summons could not be validly served on it through the Law Firm; and it also requested that a hearing be held, conformably to the provisions of Section 9(3) of Batas Pambansa Blg. 129, on the question of whether or not LINGNER was doing business in this country. The Appellate Court held that summons served through the Law Firm was valid on the strength of Johnlo Trading Co. vs. Flores (88 Phil. 741 [1951]); and it further ruled that receiving evidence on whether or not LINGNER was doing business in the Philippines could not be justified under the cited Batas Pambansa Blg. 129. Considering the Comment, Reply, Rejoinder and Surrejoinder submitted by the parties, we resolved to give due course, without requiring the submittal of memoranda. The Appellate Court acted correctly in denying the request for an evidentiary hearing. Evidence necessary in regards to factual issues raised in cases falling within the Appellate Court's original and appellate jurisdiction contemplates "incidental" facts which were not touched upon, or fully heard by the trial or respondent Court. The law could not have intended that the Appellate Court would hold an original and full trial of a main factual issue in a case, which properly pertains to Trial Courts. It is our view that evidence as to whether LINGNER was doing business in the Philippines, even before the Trial Court, is no longer necessary in view of the fact that PHILCHEM and LINGNER were contractees in the AGREEMENT and the claim of PHILCHEM is based on the ROYALTY CLAUSE of that AGREEMENT. Whether LINGNER is or is not doing business in the Philippines will not matter because the parties had expressly stipulated in the AGREEMENT that all controversies based on the AGREEMENT "shall fall under the jurisdiction of Philippine courts". In other words, there was a covenant on venue to the effect that LINGNER can be sued by PHILCHEM before Philippine Courts in regards to a controversy related to the AGREEMENT. A case should not be dismissed simply because an original summons was wrongfully served. It should be difficult to conceive, for example, that when a defendant personally appears before a Court complaining that he had not been validly summoned, that the case filed against him should be dismissed. An alias summons can be actually served on said defendant. For the expeditious determination of this controversy, therefore, in view of the insufficiency of evidence that LINGNER is doing business in the Philippines, which is a sine qua non requirement under the provision of Section 14, Rule 14 1 of the Rules before service of process can be effected upon a foreign corporation and jurisdiction over the same may be acquired, it is best that alias summons on LINGNER be issued, in this case under the provisions of Section 17, Rule 14, 2 in relation to Rule 4 of the Rules of Court, which recognizes the principle that venue can be agreed upon by

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the parties. If a local plaintiff and a foreign corporation have agreed on Philippine venue, summons by publication can be made on the foreign corporation under the principle of liberal construction of the rules to promote just determination of actions. ACCORDINGLY, the judgment under review of the Intermediate Appellate Court (Third Special Cases Division) is hereby upheld insofar as it sustained the Orders, dated August 24, 1981 and December 18, 1981, of the then Court of First Instance of Rizal, Branch XI, Pasig, denying petitioner's Motion to Dismiss and the subsequent Motion for Reconsideration, albeit on grounds different from those relied upon by the Intermediate Appellate Court. The now Regional Trial Court, to which the case below has been assigned, is hereby directed to allow private respondent Philippine Chemical Laboratories, Inc., to apply for the issuance of alias summons on petitioner Lingner and Fischer GMBH by publication under the provisions of Section 17, Rule 14 in relation to Rule 4 of the Rules of Court, and after issues have been joined, to proceed to trial and judgment accordingly. No pronouncement as to costs. G.R. No. 104796 March 6, 1998 SPOUSES ROSALINA S. DE LEON and ALEJANDRO L. DE LEON, petitioners, vs. THE COURT OF APPEALS, GLICERIO MA. ELAYDA II, FEDERICO ELAYDA and DANILO ELAYDA,respondents. held the fees should be based on the value of the property, but the Court of Appeals reversed and held that the flat rate should be charged. Hence this petition for review on certiorari. The facts are as follows: On August 8, 1991, private respondents filed in the Regional Trial Court of Quezon City a complaint for annulment or rescission of a contract of sale of two (2) parcels of land against petitioners, praying for the following reliefs: 1. Ordering the nullification or rescission of the Contract of Conditional Sale (Supplementary Agreement) for having violated the rights of plaintiffs (private respondents) guaranteed to them under Article 886 of the Civil Code and/or violation of the terms and conditions of the said contract. 2. Declaring void ab initio the Deed of Absolute Sale for being absolutely simulated; and 3. Ordering defendants (petitioners) to pay plaintiffs (private respondents) attorney's fees in the amount of P100,000.00. Other reliefs and remedies as are just and equitable in the premises are also prayed for. 1 Upon the filing of the complaint, the clerk of court required private respondents to pay docket and legal fees in the total amount of P610.00, broken down as follows: P450.00 Docket fee for the Judicial Development Fund under Official Receipt No. 1877773 150.00 Docket fee for the General Fund under Official Receipt No. 6834215

MENDOZA, J.: The question for decision is whether in assessing the docket fees to be paid for the filing of an action for annulment or rescission of a contract of sale, the value of the real property, subject matter of the contract, should be used as basis, or whether the action should be considered as one which is not capable of pecuniary estimation and therefore the fee charged should be a flat rate of P400.00 as provided in Rule 141, 7(b)(1) of the Rules of Court. The trial court

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10.00 for the Legal Research Fund under Official Receipt No. 6834450. 2 On September 26, 1991, petitioners moved for the dismissal of the complaint on the ground that the trial court did not acquire jurisdiction over the case by reason of private respondents' nonpayment of the correct amount of docket fees. Petitioners contended that in addition to the fees already paid based on the claim for P100,000.00 for attorney's fees, private respondents should have paid docket fees in the amount of P21,640.00, based on the alleged value of the two (2) parcels of land subject matter of the contract of sale sought to be annulled. 3 On September 30, 1991, private respondents filed opposition to the motion to dismiss, arguing that outright dismissal of their complaint was not warranted on the basis of the alleged nonpayment of the correct amount of docket fees, considering that the amount paid by them was that assessed by the clerk of court. 4 On October 9, 1991, petitioners filed a reply to which private respondents filed, on October 17, 1991, a rejoinder. On October 21, 1991, the trial court 5 denied petitioners' motion to dismiss but required private respondents to pay the amount of docket fees based on the estimated value of the parcels of land in litigation as stated in the complaint. Private respondents filed a motion for reconsideration but their motion was denied by the trial court. They therefore, brought the matter to the Court of Appeals which, on February 26, 1992, rendered a decision 6annulling the orders of the trial court. The appellate court held that an action for rescission or annulment of contract is not susceptible of pecuniary estimation and, therefore, the docket fees should not be based on the value of the real property, subject matter of the contract sought to be annulled or rescinded. Petitioners moved for reconsideration, but their motion was denied in a resolution dated March 25, 1992 of the appellate court. Hence, the petition for review on certiorari. Rule 141 of the Rules of Court provides: Sec. 7. Clerks of Regional Trial Courts. (a) For filing an action or a permissive counter-claim or money claim against an estate not based on judgment, or for filing with leave of court a third-party, fourth-party, etc. complaint, or a complaint in intervention, and for all clerical services in the same, if the total-sum claimed, exclusive of interest, or the stated value of the property in litigation, is: 1. Not more than P20,000.00 P120.00 2. More than P20,000.00 but less than P40,000.00 150.00 3. P40,000.00 or more but less than P60,000.00 200.00 4. P60,000.00 or more but less than P80,000.00 250.00 5. P80,000.00 or more but less than P100,000.00 400.00 6. P100,000.00 or more but less than P150,000.00 600.00 7. For each P1,000.00 in excess of P150,000.00 5.00 (b) For filing: 1. Actions where the value of the subject matter cannot be estimated P400.00 2. Special civil foreclosure mortgage which paragraph above 400.00 actions shall be except judicial of governed by (a)

3. All other actions not involving property 400.00 In a real action, the assessed value of the property, or if there is none, the estimated value thereof shall be alleged

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by the claimant and shall be the basis in computing the fees. (emphasis added) Petitioners argue that an action for annulment or rescission of a contract of sale of real property is a real action and, therefore, the amount of the docket fees to be paid by private respondent should be based either on the assessed value of the property, subject matter of the action, or its estimated value as alleged in the complaint, pursuant to the last paragraph of 7(b) of Rule 141, as amended by the Resolution of the Court dated September 12, 1990. Since private respondents alleged that the land, in which they claimed an interest as heirs, had been sold for P4,378,000.00 to petitioners, this amount should be considered the estimated value of the land for the purpose of determining the docket fees. On the other hand, private respondents counter that an action for annulment or rescission of a contract of sale of real property is incapable of pecuniary estimation and, so, the docket fees should be the fixed amount of P400.00 in Rule 141, 7(b)(1). In support of their argument, they cite the cases of Lapitan v. Scandia, Inc. 7 and Bautista v.Lim. 8 In Lapitan this Court, in an opinion by Justice J.B.L. Reyes, held: 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). Actions for specific performance of contracts have been expressly pronounced to be exclusively cognizable by courts of first instance: De Jesus vs. Judge Garcia, L-26816, February 28, 1967; Manufacturer's Distributors, Inc. vs. Yu Siu Liong, L-21285, April 29, 1966. And no cogent reason appears, and none is here advanced by the parties, why an action for rescission (or resolution) should be differently treated, a "rescission" being counterpart, so to speak, of "specific performance". In both cases, the court would certainly have to undertake an investigation into facts that would justify one act or the other. No award for damages may be had in an action for rescission without first conducting an inquiry into matters which would justify the setting aside of a contract, in the same manner that courts of first instance would have to make findings of fact and law in actions not capable of pecuniary estimation expressly held to be so by this Court, arising from issues like those raised in Arroz v. Alojado, et al., L-22153, March 31, 1967 (legality or illegality of the conveyance sought for and the determination of the validity of the money deposit made); De Ursua v.Pelayo, L-13285, April 18, 1950 (validity of a judgment); Bunayog v. Tunas, L-12707, December 23, 1959 (validity of mortgage); Baito v. Sarmiento, L-13105, August 25, 1960 (the relations of the parties, the right to support created by the relation, etc., in actions for support); De Rivera, et al. v. Halili, L-15159, September 30, 1963 (the validity or nullity of documents upon which claims are predicated). Issues of the same nature may be raised by a party against whom an action for rescission has been brought, or by the plaintiff himself. It is, therefore, difficult to see why a prayer for damages in an action for rescission should be taken as the basis for concluding such action as one capable of pecuniary estimation a prayer which must be included in the main action if plaintiff is to be compensated for what he may have suffered as a result of

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the breach committed by defendant, and not later on precluded from recovering damages by the rule against splitting a cause of action and discouraging multiplicity of suits. Conformably with this discussion of actions "where the value of the case cannot be estimated," the Court inBautista v. Lim, held that an action for rescission of contract is one which cannot be estimated and therefore the docket fee for its filing should be the flat amount of P200.00 as then fixed in the former Rule 141, 141, 5(10). Said this Court: We hold that Judge Dalisay did not err in considering Civil Case No. V-144 as basically one for rescission or annulment of contract which is not susceptible of pecuniary estimation (1 Moran's Comments on the Rules of Court, 1970 Ed, p. 55; Lapitan vs. Scandia, Inc., L-24668, July 31, 1968, 24 SCRA 479, 781-483). Consequently, the fee for docketing it is P200, an amount already paid by plaintiff, now respondent Matilda Lim. (She should pay also the two pesos legal research fund fee, if she has not paid it, as required in Section 4 of Republic Act No. 3870, the charter of the U.P. Law Center). Thus, although eventually the result may be the recovery of land, it is the nature of the action as one for rescission of contract which is controlling. The Court of Appeals correctly applied these cases to the present one. As it said: We would like to add the observations that since the action of petitioners [private respondents] against private respondents [petitioners] is solely for annulment or rescission which is not susceptible of pecuniary estimation, the action should not be confused and equated with the "value of the property" subject of the transaction; that by the very nature of the case, the allegations, and specific prayer in the complaint, sans any prayer for recovery of money and/or value of the transaction, or for actual or compensatory damages, the assessment and collection of the legal fees should not be intertwined with the merits of the case and/or what may be its end result; and that to sustain private respondents' [petitioners'] position on what the respondent court may decide after all, then the assessment should be deferred and finally assessed only after the court had finally decided the case, which cannot be done because the rules require that filing fees should be based on what is alleged and prayed for in the face of the complaint and paid upon the filing of the complaint. WHEREFORE, the decision of the Court of Appeals is AFFIRMED. SO ORDERED.

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executed on June 6, 1990. By virtue of this deed, private respondents divided the property among themselves to the exclusion of petitioners who are also entitled to the said lot as heirs of the late spouses Casimero Tautho and Cesaria Tautho. Petitioners claimed that the document was false and perjurious as the private respondents were not the only heirs and that no oral partition of the property whatsoever had been made between the heirs. The complaint prayed that the document be declared null and void and an order be issued to partition the land among all the heirs. 1 On November 24, 1994, private respondents filed a Motion to Dismiss 2 the complaint on the ground of lack of jurisdiction over the nature of the case as the total assessed value of the subject land is P5,000.00 which under section 33 (3) 3 of Batas Pambansa Blg. 129, as amended by R.A. No. 7691, 4 falls within the exclusive jurisdiction of the Municipal Circuit Trial Curt of Liloan, Compostela. 5 Petitioners filed an Opposition to the Motion to Dismiss 6 saying that the Regional Trial Court has jurisdiction over the case since the action is one which is incapable of pecuniary estimation within the contemplation of Section 19(1) of B.P. 129, as amended. 7 On January 12, 1995, the respondent judge issued an Order granting the Motion to Dismiss. 8 A Motion for Reconsideration of said order was filed by petitioners on January 30, 1995 alleging that the same is contrary to law because their action is not one for recovery of title to or possession of the land but an action to annul a document or declare it null and void, 9 hence, one incapable of pecuniary estimation falling within the jurisdiction of the Regional Trial Court. Private respondents did not oppose the motion for reconsideration. On February 13, 1995, the respondent judge issued another Order denying the motion for reconsideration. 10 Hence, this petition wherein the sole issue raised is whether or not the Regional Trial Court has jurisdiction to entertain Civil Case No. MAN-2275. We find merit in the petition.

G.R. No. 119347 March 17, 1999 EULALIA RUSSELL, PUPERTO TAUTHO, FRANCISCO TAUTHO, SUSANA T. REALES, APITACIO TAUTHO, DANILO TAUTHO, JUDITHA PROS, GREGORIO TAUTHO, DEODITA T. JUDILLA, AGRIPINO TAUTHO, FELIX TAUTHO, WILLIAM TAUTHO, AND MARILYN PERALES, petitioners, vs. HONORABLE AUGUSTINE A. VESTlL, ADRIANO TAGALOG, MARCELO TAUTHO, JUANITA MENDOZA, DOMINGO BANTILAN, RAUL BATALUNA AND ARTEMIO CABATINGAN, respondent.

KAPUNAN, J.: Before us is a Petition for Certiorari to set aside the Order dated January 12, 1995 issued by respondent Judge Augustine A. Vestil of the Regional Trial Court of Mandaue City, Branch 56, dismissing the complaint filed by petitioners on ground of lack of jurisdiction, as well as his Order dated February 13, 1995 denying petitioners' Motion for Reconsideration of the order of dismissal. The facts of the case are as follows: On September 28, 1994, petitioners filed a complaint against private respondents, denominated "DECLARATION OF NULLITY AND PARTITION," with the Regional Trial Court of Mandaue City, Branch 56, docketed as Civil Case No. MAN-2275. The complaint, in substance, alleged that petitioners are co-owners of that parcel of land, Lot 6149 situated in Liloan, Cebu and containing an area of 56,977.40 square meters, more or less. The land was previously owned by the spouses Casimero Tautho and Cesaria Tautho. Upon the death of said spouses, the property was inherited by their legal heirs, herein petitioners and private respondents. Since then, the lot had remained undivided until petitioners discovered a public document denominated "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF A PREVIOUS ORAL AGREEMENT OF PARTITION,"

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Petitioners maintain the view that the complaint filed before the Regional Trial Court is for the annulment of a document denominated as "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION," which is clearly one incapable of pecuniary estimation, thus, cognizable by the Regional Trial Court. Private respondents, on the other hand, insists that the action is one for re-partition and since the assessed value of the property as stated in the complaint is P5,000.00, then, the case falls within the jurisdiction of the Municipal Circuit Trial Court of Liloan, Compostela, Cebu. For better appreciation of the facts, the pertinent portions of the complaint are reproduced hereunder: xxx xxx xxx 3. That the plaintiffs and the defendants are the legal heirs of spouses Casimero Tautho and Cesaria N. Tautho who died long time ago; 4. That in life the spouses became the owners in fee simple of a certain parcel of land, which is more particularly described as follows: A parcel of land containing 56,97740 square meters, more or less, located at Cotcot, Liloan, Cebu. designated as Lot 6149 per Technical Description and Certification issued by the Office of the Land Management copy of which are hereto attached as Annexes "A" and "A-1" and are made part hereof: total assessed value is P5,000.00; 5. That the passed to the children of the spouses (who are all deceased except for defendant Marcelo Tautho), namely: Zacarias, Epifania, Vicenta, Felecisimo, Maria, Lorencia and Marcelo, and which in turn passed to the plaintiffs and defendants upon their death they being their descendants and legal heirs; 6. That the subject parcel of land has for year been undivided by and among the legal heirs of said previous owners; 7. That, very recently, plaintiffs discovered a public document, which is a declaration of heirs and deed of confirmation of a previous oral agreement of partition, affecting the land executed by and among the defendants whereby defendants divided the property among themselves to the exclusion of plaintiffs who are entitled thereto; attached hereto as Annex "B" and is made part hereof is xerox copy of said document; 8. That the instrument (Annex "B") is false and perjurious and is a complete nullity because the defendants are not the only heirs of Casimero Tautho; plaintiffs are also heirs and descendants of said deceased; moreover, there has been no oral partition of the property; 9. That pursuant to said document (Annex "B"), defendants had procured tax declarations of the land for their supposed "shares" to the great damage and prejudice of plaintiffs; 10. That the property in controversy should be divided into seven (7) equal parts since Casimero Tautho and Cesaria N. Tautho had seven children; 11. That the parties had failed to settle the controversy amicably at the barangay level; attached hereto as Annex "C" is Certification to file Action; 12. That by reason of the foregoing unjust and illegal act of defendants, plaintiffs were forced to bring instant action and contract the services of the

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undersigned counsel with whom they bind themselves to pay P30,000.00 as attorney's fees. WHEREFORE, it is most respectfully prayed of this Honorable Court to declare null and void the document (Annex "B") of declaration of heirs and confirmation and to order the partition of the land into seven (7) equal parts; each part shall respectively go to the seven (7) children of Casimero Tautho and considering six (6) of them died already the same shall go to their children or descendants, and to order the defendants to pay plaintiffs attorney's fees in the amount of P30,000.00. Plaintiffs further pray for such other reliefs and remedies just and equitable under the premises. 11 We agree with petitioners. The complaint filed before the Regional Trial Court is doubtless one incapable of pecuniary estimation and therefore within the jurisdiction of said court. In Singsong vs. Isabela Sawmill,
12

Examples of actions incapable of pecuniary estimation are those for specific performance, support, or foreclosure of mortgage or annulment of judgment; 14 also actions questioning the validity of a mortgage, 15 annulling a deed of sale or conveyance and to recover the price paid 16 and for rescession, which is a counterpart of specific performance. 17 While actions under Sec. 33(3) of B.P. 129 are also incapable of pecuniary estimation, the law specifically mandates that they are cognizable by the MTC, METC, or MCTC where the assessed value of the real property involved does exceed P20,000.00 in Metro Manila, or P50,000.00, if located elsewhere. If the value exceeds P20,000.00 or P50,000.00 as the case may be, it is the Regional Trial Courts which have jurisdiction under Sec. 19(2). 18 However, the subject matter of the complaint in this case is annulment of a document denominated as "DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION." The main purpose of petitioners in filing the complaint is to declare null and void the document in which private respondents declared themselves as the only heirs of the late spouses Casimero Tautho and Cesaria Tautho and divided his property among themselves to the exclusion of petitioners who also claim to be legal heirs and entitled to the property. While the complaint also prays for the partition of the property, this is just incidental to the main action, which is the declaration of nullity of the document above-described. It is axiomatic that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein. 19 WHEREFORE, premises considered, the petition is hereby GRANTED. The Order dismissing Civil Case No. MAN-2275, as well as the Order denying the motion for reconsideration of said Order, is SET ASIDE. The Regional Trial Court, Branch 56, Mandaue City is ORDERED to proceed with dispatch in resolving Civil Case No. MAN-2275. No costs. SO ORDERED.

we had the occasion to rule that:

[I]n 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 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, where the money claim is purely incidental to, or a consequence of, the principal relief sought, this Court has considered such where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance (now Regional Trial Courts). 13

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While the case was pending before the RTC, plaintiff Generoso Sebe died so his wife and children substituted him.10 Parenthetically, with defendant Veronico Sevillas death in 2006, his heirs substituted him as respondents in this case.11 On August 8, 2006 the RTC dismissed the case for lack of jurisdiction over the subject matter considering that the ultimate relief that the Sebes sought was the reconveyance of title and possession over two lots that had a total assessed value of less than P20,000.00. Under the law,12 said the RTC, it has jurisdiction over such actions when the assessed value of the property exceeds P20,000.00,13 otherwise, jurisdiction shall be with the first level courts.14 The RTC concluded that the Sebes should have filed their action with the Municipal Trial Court (MTC) of Dipolog City. On August 22, 2006 the Sebes filed a motion for reconsideration.15 They pointed out that the RTC mistakenly classified their action as one involving title to or possession of real property when, in fact, it was a case for the annulment of the documents and titles that defendant Sevilla got. Since such an action for annulment was incapable of pecuniary estimation, it squarely fell within the jurisdiction of the RTC as provided in Section 19 of Batas Pambansa 129, as amended. To illustrate their point, the Sebes drew parallelisms between their case and the cases of De Rivera v. Halili16 and Copioso v. Copioso.17 The De Rivera involved the possession of a fishpond. The Supreme Court there said that, since it also had to resolve the issue of the validity of the contracts of lease on which the opposing parties based their rights of possession, the case had been transformed from a mere detainer suit to one that was incapable of pecuniary estimation. Under Republic Act 296 or the Judiciary Act of 1948, as amended, civil actions, which were incapable of pecuniary estimation, came under the original jurisdiction of the Court of First Instance (now the RTC).18 The Sebes pointed out that, like De Rivera, the subject of their case was "incapable of pecuniary estimation" since they asked the court, not only to resolve the dispute over possession of the lots, but also to rule on the validity of the affidavits of quitclaim, the deeds of confirmation of sale, and the titles over the properties.19 Thus, the RTC should try the case.

G.R. No. 174497

October 12, 2009

HEIRS OF GENEROSO SEBE AURELIA CENSERO SEBE and LYDIA SEBE, Petitioners, vs. HEIRS OF VERONICO SEVILLA and TECHNOLOGY AND LIVELIHOOD RESOURCE CENTER, Respondents. DECISION ABAD, J.: This case concerns the jurisdiction of Municipal Trial Courts over actions involving real properties with assessed values of less than P20,000.00. The Facts and the Case In this petition for review on certiorari1 petitioners seek to reverse the Order2 dated August 8, 2006, of the Regional Trial Court (RTC) of Dipolog City, Branch 9, in Civil Case 5435, for annulment of documents, reconveyance and recovery of possession with damages. The trial court dismissed the complaint for lack of jurisdiction over an action where the assessed value of the properties is less than P20,000.00. Petitioners asked for reconsideration3 but the court denied it.4 On August 10, 1999 plaintiff spouses Generoso and Aurelia Sebe and their daughter, Lydia Sebe, (the Sebes) filed with the RTC of Dipolog City5 a complaint against defendants Veronico Sevilla and Technology and Livelihood Resources Center for Annulment of Document, Reconveyance and Recovery of Possession of two lots, which had a total assessed value of P9,910.00, plus damages.6 On November 25, 1999 they amended their complaint7 to address a deed of confirmation of sale that surfaced in defendant Sevillas Answer8 to the complaint. The Sebes claimed that they owned the subject lots but, through fraud, defendant Sevilla got them to sign documents conveying the lots to him. In his Answer9 Sevilla insisted that he bought the lots from the Sebes in a regular manner.

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The Copioso, on the other hand, involves the reconveyance of land the assessed value of which was allegedlyP3,770.00. The Supreme Court ruled that the case comprehended more than just the title to, possession of, or any interest in the real property. It sought the annulment of contracts, reconveyance or specific performance, and a claim for damages. In other words, there had been a joinder of causes of action, some of which were incapable of pecuniary estimation. Consequently, the case properly fell within the jurisdiction of the RTC. Here, petitioners argued that their case had the same causes of actions and reliefs as those involved in Copioso. Thus, the RTC had jurisdiction over their case. On August 31, 2006 the RTC denied the Sebess motion for reconsideration, pointing out that the Copioso ruling had already been overturned by Spouses Huguete v. Spouses Embudo.20 Before the Huguete, cancellation of titles, declaration of deeds of sale as null and void and partition were actions incapable of pecuniary estimation. Now, however, the jurisdiction over actions of this nature, said the RTC, depended on the valuation of the properties. In this case, the MTC had jurisdiction because the assessed value of the lots did not exceedP20,000.00. The Issue The issue in this case is whether or not the Sebess action involving the two lots valued at less than P20,000.00 falls within the jurisdiction of the RTC. The Courts Ruling Whether a court has jurisdiction over the subject matter of a particular action is determined by the plaintiffs allegations in the complaint and the principal relief he seeks in the light of the law that apportions the jurisdiction of courts.21 The gist of the Sebess complaint is that they had been the owner for over 40 years of two unregistered lots22 in Dampalan, San Jose, Dipolog City, covered by Tax Declaration 012-239, with a total assessed value ofP9,910.00.23 On June 3, 1991 defendant Sevilla caused the Sebes to sign documents entitled affidavits of quitclaim.24 Being illiterate, they relied on Sevillas explanation that what they signed were "deeds of real estate mortgage" covering a loan that they got from him.25 And, although the documents which turned out to be deeds conveying ownership over the two lots to Sevilla for P10,000.0026 were notarized, the Sebes did not appear before any notary public.27 Using the affidavits of quitclaim, defendant Sevilla applied for28 and obtained free patent titles covering the two lots on September 23, 1991.29 Subsequently, he mortgaged the lots to defendant Technology and Livelihood Resource Center for P869,555.00.30 On December 24, 1991 the Sebes signed deeds of confirmation of sale covering the two lots.31 Upon closer examination, however, their signatures had apparently been forged.32 The Sebes were perplexed with the reason for making them sign such documents to confirm the sale of the lots when defendant Sevilla already got titles to them as early as September.33 At any rate, in 1992, defendant Sevilla declared the lots for tax purposes under his name.34 Then, using force and intimidation, he seized possession of the lots from their tenants35 and harvested that planting seasons yield36 of coconut and palay worth P20,000.00.37 Despite demands by the Sebes, defendant Sevilla refused to return the lots, forcing them to hire a lawyer38 and incur expenses of litigation.39 Further the Sebes suffered loss of earnings over the years.40 They were also entitled to moral41 and exemplary damages.42 They thus asked the RTC a) to declare void the affidavits of quitclaim and the deeds of confirmation of sale in the case; b) to declare the Sebes as lawful owners of the two lots; c) to restore possession to them; and d) to order defendant Sevilla to pay them P140,000.00 in lost produce from June 3, 1991 to the date of the filing of the complaint, P30,000.00 in moral damages, P100,000.00 in attorneys fee, P30,000.00 in litigation expenses, and such amount of exemplary damages as the RTC might fix.43 Based on the above allegations and prayers of the Sebess complaint, the law that applies to the action is Batas Pambansa 129, as amended. If this case were decided under the original text of Batas Pambansa 129 or even under its predecessor, Republic Act 296, determination of the nature of the case as a real action would have ended the controversy. Both real actions and actions incapable of pecuniary estimation fell within the exclusive original jurisdiction of the RTC.

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But, with the amendment of Batas Pambansa 129 by Republic Act 7601, the distinction between these two kinds of actions has become pivotal. The amendment expanded the exclusive original jurisdiction of the first level courts to include real actions involving property with an assessed value of less than P20,000.00.44 The power of the RTC under Section 19 of Batas Pambansa 129,45 as amended,46 to hear actions involving title to, or possession of, real property or any interest in it now covers only real properties with assessed value in excess of P20,000.00. But the RTC retained the exclusive power to hear actions the subject matter of which is not capable of pecuniary estimation. Thus SEC. 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise exclusive original jurisdiction: (1) In all civil actions in which the subject of the litigations is incapable of pecuniary estimation. (2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; x x x. Section 33, on the other hand provides that, if the assessed value of the real property outside Metro Manila involved in the suit is P20,000.00 and below, as in this case, jurisdiction over the action lies in the first level courts. Thus SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases -Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise: xxxx (3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed value of the property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00) x x x. But was the Sebess action one involving title to, or possession of, real property or any interest in it or one the subject of which is incapable of pecuniary estimation? The Sebes claim that their action is, first, for the declaration of nullity of the documents of conveyance that defendant Sevilla tricked them into signing and, second, for the reconveyance of the certificate of title for the two lots that Sevilla succeeded in getting. The subject of their action is, they conclude, incapable of pecuniary estimation.1avvphi1 An action "involving title to real property" means that the plaintiffs cause of action is based on a claim that he owns such property or that he has the legal rights to have exclusive control, possession, enjoyment, or disposition of the same.47 Title is the "legal link between (1) a person who owns property and (2) the property itself."48 "Title" is different from a "certificate of title" which is the document of ownership under the Torrens system of registration issued by the government through the Register of Deeds.49 While title is the claim, right or interest in real property, a certificate of title is the evidence of such claim. Another way of looking at it is that, while "title" gives the owner the right to demand or be issued a "certificate of title," the holder of a certificate of title does not necessarily possess valid title to the real property. The issuance of a certificate of title does not give the owner any better title than what he actually has in law. 50 Thus, a plaintiffs action for cancellation or nullification of a certificate of title may only be a necessary consequence of the defendants lack of title to real property. Further, although the certificate of title may have been lost, burned, or destroyed and later on reconstituted, title subsists and remains unaffected unless it is transferred or conveyed to another or subjected to a lien or encumbrance.51

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Nestled between what distinguishes a "title" from a "certificate of title" is the present controversy between the Sebes and defendant Sevilla. Which of them has valid title to the two lots and would thus be legally entitled to the certificates of title covering them? The Sebes claim ownership because according to them, they never transferred ownership of the same to anyone. Such title, they insist, has remained with them untouched throughout the years, excepting only that in 1991 they constituted a real estate mortgage over it in defendant Sevillas favor. The Sebes alleged that defendant Sevilla violated their right of ownership by tricking them into signing documents of absolute sale, rather than just a real estate mortgage to secure the loan that they got from him. Assuming that the Sebes can prove that they have title to or a rightful claim of ownership over the two lots, they would then be entitled, first, to secure evidence of ownership or certificates of title covering the same and, second, to possess and enjoy them. The court, in this situation, may in the exercise of its equity jurisdiction and without ordering the cancellation of the Torrens titles issued to defendant Sevilla, direct the latter to reconvey the two lots and their corresponding Torrens titles to them as true owners.52 The present action is, therefore, not about the declaration of the nullity of the documents or the reconveyance to the Sebes of the certificates of title covering the two lots. These would merely follow after the trial court shall have first resolved the issue of which between the contending parties is the lawful owner of such lots, the one also entitled to their possession. Based on the pleadings, the ultimate issue is whether or not defendant Sevilla defrauded the Sebes of their property by making them sign documents of conveyance rather than just a deed of real mortgage to secure their debt to him. The action is, therefore, about ascertaining which of these parties is the lawful owner of the subject lots, jurisdiction over which is determined by the assessed value of such lots. Here, the total assessed value of the two lots subject of the suit is P9,910.00. Clearly, this amount does not exceed the jurisdictional threshold value of P20,000.00 fixed by law. The other damages that the Sebes claim are merely incidental to their main action and, therefore, are excluded in the computation of the jurisdictional amount. WHEREFORE, premises considered, the petition is DISMISSED. The Order dated August 8, 2006, of the Regional Trial Court of Dipolog City, Branch 9, in Civil Case 5435, is AFFIRMED.

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Corporation the said lot pursuant to a Deed of Absolute Sale which was executed by and between the former and the latter on October 7, 1996. "The first [C]omplaint for eminent domain, docketed as Civil Case No. 3648 and entitled 'Brgy. Masili, Calamba, Laguna v. Emelita A. Reblara, Eugenia Almazan & Devorah E. Bardillon,' was filed before the Municipal Trial Court of Calamba, Laguna ('MTC') on February 23, 1998, following the failure of Barangay Masili to reach an agreement with herein petitioner on the purchase offer of TWO HUNDRED THOUSAND PESOS (P200,000.00). The expropriation of Lot 4381-D was being pursued in view of providing Barangay Masili a multi-purpose hall for the use and benefit of its constituents. "On March 5, 1999, the MTC issued an order dismissing Civil Case No. 3648 'for lack of interest' for failure of the [respondent] and its counsel to appear at the pre-trial. The MTC, in its Order dated May 3, 1999, denied [respondent's] [M]otion for [R]econsideration thereof. "The second [C]omplaint for eminent domain, docketed as Civil Case No. 2845-99-C and entitled 'Brgy. Masili, Calamba, Laguna v. Devorah E. Bardillon' was filed before Branch 37 of the Regional Trial Court of Calamba, Laguna ('RTC') on October 18, 1999. This [C]omplaint also sought the expropriation of the said Lot 4381-D for the erection of a multi-purpose hall of Barangay Masili, but petitioner, by way of a Motion to Dismiss, opposed this [C]omplaint by alleging in the main that it violated Section 19(f) of Rule 16 in that [respondent's] cause of action is barred by prior judgment, pursuant to the doctrine of res judicata. "On January 21, 2000, [the] Judge issued an order denying petitioner's Motion to Dismiss, holding that the MTC which ordered the dismissal of Civil Case No. 3648 has no jurisdiction over the said expropriation proceeding. "With the subsequent approval of Municipal Ordinance No. 2000-261 on July 10, 2000, and the submission thereof in compliance with [the] Judge's Order dated June 9, 2000

G.R. No. 146886

April 30, 2003

DEVORAH E. BARDILLON, petitioner, vs. BARANGAY MASILI OF CALAMBA, LAGUNA, respondent. PANGANIBAN, J.: An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls within the jurisdiction of regional trial courts, regardless of the value of the subject property. The Case Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to set aside the January 10, 2001 Decision and the February 5, 2001 Resolution of the Court of Appeals2 (CA) in CA-GR SP No. 61088. The dispositive part of the Decision reads: "WHEREFORE, premises considered, the present [P]etition for [C]ertiorari is hereby DENIED DUE COURSE and accordingly DISMISSED, for lack of merit."3 The assailed Resolution4 denied Reconsideration. The Facts The factual antecedents are summarized by the CA as follows: "At the root of this present [P]etition is the controversy surrounding the two (2) [C]omplaints for eminent domain which were filed by herein respondent for the purpose of expropriating a ONE HUNDRED FORTY FOUR (144) square meter-parcel of land, otherwise known as Lot 4381-D situated in Barangay Masili, Calamba, Laguna and owned by herein petitioner under Transfer Certificate of Title No. 383605 of the Registry of Deeds of Calamba, Laguna. Petitioner acquired from Makiling Consolidated Credit petitioner's Motion for

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requiring herein respondent to produce the authority for the expropriation through the Municipal Council of Calamba, Laguna, the assailed Order dated August 4, 2000 was issued in favor of Barangay Masili x x x and, on August 16, 2000, the corresponding order for the issuance of the [W]rit of [P]ossession over Lot 4381-D."5 Ruling of the Court of Appeals In dismissing the Petition, the CA held that the Regional Trial Court (RTC) of Calamba, Laguna (Branch 37)6 did not commit grave abuse of discretion in issuing the assailed Orders. It ruled that the second Complaint for eminent domain (Civil Case No. 2845-99-C) was not barred by res judicata. The reason is that the Municipal Trial Court (MTC), which dismissed the first Complaint for eminent domain (Civil Case No. 3648), had no jurisdiction over the action. Hence, this Petition.7 The Issues In her Memorandum, petitioner raises the following issues for our consideration: "A. Whether or not, the Honorable Respondent Court committed grave abuse of discretion amounting to lack of jurisdiction when it denied and dismissed petitioner's appeal; "B. Whether or not, the Honorable Respondent Court committed grave abuse of discretion when it did not pass upon and consider the pending Motion for Reconsideration which was not resolved by the Regional Trial Court before issuing the questioned Orders of 4 and 16 August 2000; "C. Whether or not, the Honorable Respondent Court committed grave abuse of discretion in taking the total amount of the assessed value of the land and building to confer jurisdiction to the court a quo; "D. Whether or not, the Honorable Respondent Court committed grave abuse of discretion in ignoring the fact that there is an existing multi-purpose hall erected in the land owned by Eugenia Almazan which should be subject of expropriation; and "E. Whether or not, the Honorable Respondent Court committed grave abuse of discretion in failing to consider the issue of forum shopping committed by Respondent Masili."8 Simply put, the issues are as follows: (1) whether the MTC had jurisdiction over the expropriation case; (2) whether the dismissal of that case before the MTC constituted res judicata; (3) whether the CA erred when it ignored the issue of entry upon the premises; and (4) whether respondent is guilty of forum shopping. The Court's Ruling The Petition has no merit. First Jurisdiction Over Expropriation Issue:

Petitioner claims that, since the value of the land is only P11,448, the MTC had jurisdiction over the case.9 On the other hand, the of the property was jurisdiction over the amount involved was cognizable by MTCs. appellate court held that the assessed value P28,960.10 Thus, the MTC did not have expropriation proceedings, because the beyond the P20,000 jurisdictional amount

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 property for public use.11 As such, it is incapable of pecuniary estimation and should be filed with the regional trial courts.12 This was explained by the Court in Barangay San Roque v. Heirs of Francisco Pastor:13

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"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. In the main, the subject of an expropriation suit is the government's 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,' 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.' The 1997 amendments to the Rules of Court were not intended to change these jurisprudential precedents.14 To reiterate, an expropriation suit is within the jurisdiction of the RTC regardless of the value of the land, because the subject of the action is the government's exercise of eminent domain a matter that is incapable of pecuniary estimation. Second Res Judicata Issue: Res judicata literally means a matter adjudged, judicially acted upon or decided, or settled by judgment.15 It provides that a final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies; and constitutes an absolute bar to subsequent actions involving the same claim, demand or cause of action.16 The following are the requisites of res judicata: (1) the former judgment must be final; (2) the court that rendered it had jurisdiction over the subject matter and the parties; (3) it is a judgment on the merits; and (4) there is between the first and the second actions an identity of parties, subject matter and cause of action.17 Since the MTC had no jurisdiction over expropriation proceedings, the doctrine of res judicata finds no application even if the Order of dismissal may have been an adjudication on the merits. Third Legality of Entry Into Premises Issue:

Petitioner argues that the CA erred when it ignored the RTC's Writ of Possession over her property, issued despite the pending Motion for Reconsideration of the ruling dismissing the Complaint. We are not persuaded. The requirements for the issuance of a writ of possession in an expropriation case are expressly and specifically governed by Section 2 of Rule 67 of the 1997 Rules of Civil Procedure.18 On the part of local government units, expropriation is also governed by Section 19 of the Local Government Code.19 Accordingly, in expropriation proceedings, the requisites for authorizing immediate entry are as follows: (1) the filing of a complaint for expropriation sufficient in form and substance; and (2) the deposit of the amount equivalent to 15 percent of the fair market value of the property to be expropriated based on its current tax declaration.20 In the instant case, the issuance of the Writ of Possession in favor of respondent after it had filed the Complaint for expropriation and deposited the amount required was proper, because it had complied with the foregoing requisites.

Petitioner claims that the MTC's dismissal of the first Complaint for eminent domain was with prejudice, since there was no indication to the contrary in the Order of dismissal. She contends that the filing of the second Complaint before the RTC should therefore be dismissed on account of res judicata.

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The issue of the necessity of the expropriation is a matter properly addressed to the RTC in the course of the expropriation proceedings. If petitioner objects to the necessity of the takeover of her property, she should say so in her Answer to the Complaint.21 The RTC has the power to inquire into the legality of the exercise of the right of eminent domain and to determine whether there is a genuine necessity for it.22 Fourth Forum Shopping Issue:

Petitioner claims that respondent is guilty of forum shopping, because it scouted for another forum after obtaining an unfavorable Decision from the MTC. The test for determining the presence of forum shopping is whether the elements of litis pendentia are present in two or more pending cases, such that a final judgment in one case will amount to res judicata in another.23 Be it noted that the earlier case lodged with the MTC had already been dismissed when the Complaint was filed before the RTC. Even granting arguendo that both cases were still pending, a final judgment in the MTC case will not constitute res judicata in the RTC, since the former had no jurisdiction over the expropriation case. WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner.

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The factual and procedural antecedents of this case are as follows: On 1 March 2002, private respondent Fokker Santos filed a complaint for quasi-delict and damages against Jimmy T. Pinion, the driver of a truck involved in a traffic accident, and against petitioner Artemio Iniego, as owner of the said truck and employer of Pinion. The complaint stemmed from a vehicular accident that happened on 11 December 1999, when a freight truck allegedly being driven by Pinion hit private respondents jitney which private respondent was driving at the time of the accident. On 24 August 2002, private respondent filed a Motion to Declare defendant in Default allegedly for failure of the latter to file his answer within the final extended period. On 28 August 2002, petitioner filed a Motion to Admit and a Motion to Dismiss the complaint on the ground, among other things, that the RTC has no jurisdiction over the cause of action of the case. On 21 October 2002, public respondent Judge Guillermo G. Purganan, acting as presiding judge of the RTC, Branch 42, Manila, issued the assailed Omnibus Order denying the Motion to Dismiss of the petitioner and the Motion to Declare Defendant in Default of the private respondent. Pertinent portions of the Omnibus Order and the dispositive portion thereof read: In his opposition to the motion to declare him in default and his Motion to Admit defendant IEGO alleged that he never received the Order dated 12 August 2002. But believing in good faith, without being presumptuous, that his 3rd Motion for additional Time to file or any appropriate [pleading] would be granted, he filed the aforesaid Motion received by the Court on 23 August 2002. The explanation of defendant IEGO has merit. The order dated 12 August 2002 was sent to a wrong address, thus defendant IEGO did not receive it. Since it was not received, he was not aware that the court would grant no further extension. The Motion to Admit Motion to Dismiss has to be granted and the Motion to declare Defendant IEGO [in default] has to be DENIED. xxxx

G. R. No. 166876

March 24, 2006

ARTEMIO INIEGO,1Petitioner, vs. The HONORABLE JUDGE GUILLERMO G. PURGANAN, in his official capacity as Presiding Judge of the Regional Trial Court, Branch 42, City of Manila, and FOKKER C. SANTOS, Respondents. DECISION CHICO-NAZARIO, J.: For this Court to grant this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner has to persuade us on two engaging questions of law. First, he has to convince us that actions for damages based on quasi-delict are actions that are capable of pecuniary estimation, and therefore would fall under the jurisdiction of the municipal courts if the claim does not exceed the jurisdictional amount of P400,000.00 in Metro Manila. Second, he has to convince us that the moral and exemplary damages claimed by the private respondent should be excluded from the computation of the above-mentioned jurisdictional amount because they arose from a cause of action other than the negligent act of the defendant. Petitioner urges us to reverse the 28 October 2004 Decision and 26 January 2005 Resolution of the Court of Appeals, Eighth Division, in CA-G.R. SP No. 76206 denying due course to the petition for certiorari filed by petitioner under Rule 65, elevating the 21 October 2002 Omnibus Order and the 21 January 2003 Order of the Regional Trial Court (RTC), Branch 42, City of Manila. The dispositive portion of the 28 October 2004 Decision of the Court of Appeals reads: WHEREFORE, the petition is DENIED DUE COURSE and DISMISSED for lack of merit.2

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The plaintiff opines that this court has exclusive jurisdiction because the cause of action is the claim for damages, which exceeds P400,000.00. The complaint prays for actual damages in the amount of P40,000.00, moral damages in the amount of P300,000.00, and exemplary damages in the amount of P150,000.00. Excluding attorneys fees in the amount of P50,000.00, the total amount of damages being claimed is P490,000.00. Proceeding on the assumption that the cause of action is the claim of (sic) for damages in the total amount ofP490,000.00, this court has jurisdiction. But is the main cause of action the claim for damages? This court is of the view that the main cause of action is not the claim for damages but quasi-delict. Damages are being claimed only as a result of the alleged fault or negligence of both defendants under Article 2176 of the Civil Code in the case of defendant Pinion and under Article 2180 also of the Civil Code in the case of defendant Iniego. But since fault or negligence (quasidelicts) could not be the subject of pecuniary estimation, this court has exclusive jurisdiction. xxxx WHEREFORE, in view of all the foregoing, the motion to declare defendant Iniego in default and the said defendants motion to dismiss are denied.3 On 7 November 2002, petitioner filed a Motion for Reconsideration of the Omnibus Order of 21 October 2002. On 21 January 2003, public respondent issued an Order denying petitioners motion for reconsideration. Pertinent portions of the 21 January 2003 Order are reproduced hereunder: What this court referred to in its Order sought to be reconsidered as not capable of pecuniary estimation is the CAUSE OF ACTION, which is quasi-delict and NOT the amount of damage prayed for. xxxx WHEREFORE, in view of reconsideration is DENIED.4 the foregoing, the motion for

Petitioner elevated the 21 October 2002 and 21 January 2003 Orders of the RTC to the Court of Appeals on petition for certiorari under Rule 65 of the Rules of Court. On 28 October 2004, the Court of Appeals promulgated the assailed Decision, the dispositive portion thereof reads: WHEREFORE, the petition is DENIED DUE COURSE and dismissed for lack of merit.5 On 22 November 2004, petitioner moved for reconsideration, which was denied by the Court of Appeals on 26 January 2005. Hence, this present petition. Petitioner claims that actions for damages based on quasi-delict are actions that are capable of pecuniary estimation; hence, the jurisdiction in such cases falls upon either the municipal courts (the Municipal Trial Courts, Metropolitan Trial Courts, Municipal Trial Courts In Cities, And Municipal Circuit Trial Courts), or the Regional Trial Courts, depending on the value of the damages claimed. Petitioner argues further that should this Court find actions for damages capable of pecuniary estimation, then the total amount of damages claimed by the private respondent must exceed P400,000.00 in order that it may fall under the jurisdiction of the RTC. Petitioner asserts, however, that the moral and exemplary damages claimed by private respondent be excluded from the computation of the total amount of damages for jurisdictional purposes because the said moral and exemplary damages arose, not from the quasi-delict, but from the petitioners refusal to pay the actual damages. I Actions for damages based on quasi-delicts are primarily and effectively actions for the recovery of a sum of money for the damages suffered because of the defendants alleged tortious acts, and are therefore capable of pecuniary estimation.

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In a recent case,6 we did affirm the jurisdiction of a Municipal Circuit Trial Court in actions for damages based on quasi-delict, although the ground used to challenge said jurisdiction was an alleged forum shopping, and not the applicability of Section 19(1) of Batas Pambansa Blg. 129. According to respondent Judge, what he referred to in his assailed Order as not capable of pecuniary estimation is the cause of action, which is a quasi-delict, and not the amount of damage prayed for.7 From this, respondent Judge concluded that since fault or negligence in quasi-delicts cannot be the subject of pecuniary estimation, the RTC has jurisdiction. The Court of Appeals affirmed respondent Judge in this respect.8 Respondent Judges observation is erroneous. It is crystal clear from B.P. Blg. 129, as amended by Republic Act No. 7691, that what must be determined to be capable or incapable of pecuniary estimation is not the cause of action, but the subject matter of the action.9 A cause of action is "the delict or wrongful act or omission committed by the defendant in violation of the primary rights of the plaintiff."10 On the other hand, the "subject matter of the action" is "the physical facts, the thing 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."11 The case of Lapitan v. Scandia, Inc., et al., 12 has guided this Court time and again in determining whether the subject matter of the action is capable of pecuniary estimation. In Lapitan, the Court spoke through the eminent Mr. Justice Jose B.L. Reyes: 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 [now Regional Trial Courts] 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, where the money claim is purely incidental to, or a consequence of, the principal relief sought like 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 [now Regional Trial Courts]. x x x.13 (Emphasis supplied.) Actions for damages based on quasi-delicts are primarily and effectively actions for the recovery of a sum of money for the damages suffered because of the defendants alleged tortious acts. The damages claimed in such actions represent the monetary equivalent of the injury caused to the plaintiff by the defendant, which are thus sought to be recovered by the plaintiff. This money claim is the principal relief sought, and is not merely incidental thereto or a consequence thereof. It bears to point out that the complaint filed by private respondent before the RTC actually bears the caption "for DAMAGES." Fault or negligence, which the Court of Appeals claims is not capable of pecuniary estimation, is not actionable by itself. For such fault or negligence to be actionable, there must be a resulting damage to a third person. The relief available to the offended party in such cases is for the reparation, restitution, or payment of such damage, without which any alleged offended party has no cause of action or relief. The fault or negligence of the defendant, therefore, is inextricably intertwined with the claim for damages, and there can be no action based on quasi-delict without a claim for damages. We therefore rule that the subject matter of actions for damages based on quasi-delict is capable of pecuniary estimation. II The amount of damages claimed is within the jurisdiction of the RTC, since it is the claim for all kinds of damages that is the basis of determining the jurisdiction of courts, whether the claims for damages arise from the same or from different causes of action. Despite our concurrence in petitioners claim that actions for damages based on quasi-delict are actions that are capable of pecuniary estimation, we find that the total amount of damages claimed by the private respondent nevertheless still exceeds the

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jurisdictional limit of P400,000.00 jurisdiction of the RTC. and remains under the Hence, whether or not the different claims for damages are based on a single cause of action or different causes of action, it is the total amount thereof which shall govern. Jurisdiction in the case at bar remains with the RTC, considering that the total amount claimed, inclusive of the moral and exemplary damages claimed, is P490,000.00. In sum, actions for damages based on quasi-delicts are actions that are capable of pecuniary estimation. As such, they fall within the jurisdiction of either the RTC or the municipal courts, depending on the amount of damages claimed. In this case, the amount of damages claimed is within the jurisdiction of the RTC, since it is the claim for all kinds of damages that is the basis of determining the jurisdiction of courts, whether the claims for damages arise from the same or from different causes of action. WHEREFORE, the petition for review on certiorari is hereby DENIED for lack of merit. The Decision and Resolution of the Court of Appeals dated 28 October 2004 and 26 January 2005, respectively, are AFFIRMED insofar as they held that the Regional Trial Court has jurisdiction. No costs. SO ORDERED.

Petitioner argues that in actions for damages based on quasi-delict, claims for damages arising from a different cause of action (i.e., other than the fault or negligence of the defendant) should not be included in the computation of the jurisdictional amount. According to petitioner, the moral and exemplary damages claimed by the respondents in the case at bar are not direct and proximate consequences of the alleged negligent act. Petitioner points out that the complaint itself stated that such moral and exemplary damages arose from the alleged refusal of defendants to honor the demand for damages, and therefore there is no reasonable cause and effect between the fault or negligence of the defendant and the claim for moral and exemplary damages. 14 If the claims for moral and exemplary damages are not included in the computation for purposes of determining jurisdiction, only the claim for actual damages in the amount of P40,000.00 will be considered, and the MeTC will have jurisdiction. We cannot give credence to petitioners arguments. The distinction he made between damages arising directly from injuries in a quasidelict and those arising from a refusal to admit liability for a quasidelict is more apparent than real, as the damages sought by respondent originate from the same cause of action: the quasidelict. The fault or negligence of the employee and the juris tantum presumption of negligence of his employer in his selection and supervision are the seeds of the damages claimed, without distinction. Even assuming, for the sake of argument, that the claims for moral and exemplary damages arose from a cause of action other than the quasi-delict, their inclusion in the computation of damages for jurisdictional purposes is still proper. All claims for damages should be considered in determining the jurisdiction of the court regardless of whether they arose from a single cause of action or several causes of action. Rule 2, Section 5, of the Rules of Court allows a party to assert as many causes of action as he may have against the opposing party. Subsection (d) of said section provides that where the claims in all such joined causes of action are principally for recovery of money, the aggregate amount claimed shall be the test of jurisdiction.15

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states no cause of action and that petitioner's demand had already been paid. 5 On February 17, 1995, private respondents filed another pleading entitled "motion to dismiss" invoking, this time, lack of jurisdiction, lack of cause of action, estoppel, laches and prescription. In support of their argument of lack of jurisdiction, private respondents contend that a special proceedings case for appointment of administratrix of an estate cannot be incorporated in the ordinary action for reconveyance. In her opposition to the motions, petitioner asserts among others, that the allegation seeking appointment as administratrix is only an incidental matter which is not even prayed for in the complaint. Replying to the opposition, private respondents argued that since petitioner's husband resided in Quezon City at the time of his death, the appointment of the estate administratrix should be filed in the RTC of that place in accordance with Section 1 Rule 73 of the Rules of Court. Accordingly, it is their argument that the RTC of Batangas has no jurisdiction over the case. In a Resolution dated June 14, 1995, the RTC of Batangas thru respondent Judge Teh "dismissed without prejudice" the complaint for lack of jurisdiction "on the ground that the rules governing an ordinary civil action and a special proceeding are different." Accordingly, the lower court found it unnecessary to discuss the other grounds raised in the motion to dismiss. 6 Upon denial of petitioner's motion for reconsideration, he filed this petition under Rule 45 on pure questions of law. The Court thereafter gave due course to the petition. The issue is whether or not in an action for reconveyance, an allegation seeking appointment as administratrix of an estate, would oust the RTC of its jurisdiction over the whole case? We rule in the negative. First, Section 19 of B.P. 129 as amended by RA 7691 provides: Jurisdiction in Civil Cases. Regional Trial Courts shall exercise exclusive original jurisdiction: (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;

G.R. No. 122646 March 14, 1997 ADELIA C. MENDOZA, for herself and Administratix of the Intestate Estate of the late NORBERTO B. MENDOZA, petitioners, vs. HON. ANGELITO C. TEH, Presiding Judge, Branch 87, RTC, Rosario, Batangas, SPS. HERMINIO & CLARITA TAYAG @ SPS. GEORGE T. TIGLAO & CLARIZZA T. TIGLAO and/or @ TEOFILO M. ESGUERRA, LEONOR M. ESGUERRA. LETICIA M. ESGUERRA, JOEL M. ESGUERRA, RICARDO M. ESGUERRA, VOLTAIRE E. TAYAG, BENITO I. TAYAG, MERLIE MALIG, ALBERTO T. TAYAG, ROSEMARIE T. TAYAG, LETICIA E. LULU and the REGISTER OF DEED for the Province of Batangas, respondents.

FRANCISCO, J.: On October 28, 1994, petitioner "for herself and as administratrix of the intestate estate" of her deceased husband Norberto Mendoza filed before the Regional Trial Court (RTC) of Batangas a complaint for "reconveyance of title (involving parcels of lot in Batangas) and damages with petition for preliminary injunction" docketed as Civil Case No. R94-009. 1 Paragraphs 2 and 3 of said complaint states: 2. That Adelia C. Mendoza likewise represents her coplaintiff, the Intestate Estate of the late Norberto B. Mendoza in her capacity as the surviving wife of the deceased Norberto B. Mendoza who died on December 29, 1993; 3. That Adelia C. Mendoza should be appointed by this Honorable Court as the judicial administratrix of her co-plaintiff for purposes of this case; 2 Private respondents filed on January 21, 1995 3 their "answer with motion to dismiss" 4 alleging among others that the complaint

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(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of property involved exceeds Twenty thousand pesos (P20,000.00). . . xxx xxx xxx (4) In all matters of probate, both testate and intestat . . . . Likewise, Section 33 of the same law provides that: Metropolitan Trial Court shall exercise: (1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and intestate . . . (emphasis ours). The above law is clear. An action for reconveyance, which involves title to property worth millions of pesos, such as the lots subject of this case, is cognizable by the RTC. Likewise falling within its jurisdiction are actions "incapable of pecuniary estimation," such as the appointment of an administratrix for an estate. Even the Rules on venue of estate proceedings (Section 1 of Rule 73 7) impliedly recognizes the jurisdiction of the RTC over petitions for granting of letters of administration. On the other hand, probate proceedings for the settlement of estate are within the ambit of either the RTC or MTC depending on the net worth of the estate. By arguing that the allegation seeking such appointment as administratrix ousted the RTC of its jurisdiction, both public and private respondents confuse jurisdiction with venue. Section 2 of Rule 4 as revised by Circular 13-95 8 provides that actions involving title to property shall be tried in the province where the property is located, in this case, Batangas. The mere fact that petitioner's deceased husband resides in Quezon City at the time of his death affects only the venue but not the jurisdiction of the Court. 9 Second, the cases cited 10 by private respondents are not at point as they involve settlement of estate where the probate court was asked to resolve questions of ownership of certain properties.In the present suit, no settlement of estate is involved, but merely an allegation seeking appointment as estate administratrix which does not necessarily involve settlement of estate that would have invited the exercise of the limited jurisdiction of a probate court. The above allegation is not even a jurisdictional fact which must be stated in an action for reconveyance. The Court therefore, should have at least, proceeded with the reconveyance suit rather than dismiss the entire case. Third, jurisprudential rulings that a probate court cannot generally decide questions of ownership or title to property 11 is not applicable in this case, because: there is no settlement of estate involved and the RTC of Batangas was not acting as a probate court. It should be clarified that whether a particular matter should be resolved by the RTC in the exercise of its general jurisdiction or its limited probate jurisdiction, is not a jurisdictional issue but a mere question of procedure. 12 Moreover, the instant action for reconveyance does not even invoke the limited jurisdiction of a probate court. 13 Considering that the RTC has jurisdiction, whether it be on the reconveyance suit or as to the appointment of an administratrix, it was improper for respondent judge to dismiss the whole complaint for alleged lack of jurisdiction. Finally, judges should not dismiss with precipitate haste, complaints or petitions filed before them, just so they can comply with their administrative duty to dispose cases within 90 days at the expense of their judicial responsibility. WHEREFORE, the Resolutions dated June 14, 1995 and November 14, 1995 of the RTC of Batangas are REVERSED and SET ASIDE. The trial court is ordered to immediately proceed with the disposition of the case in accordance with this Decision. SO ORDERED.

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which dismissed petitioners prayer for the issuance of writs of certiorari and prohibition in CA-G.R. SP No. 56418 entitled The Bases Conversion Development Authority, et al. v. Hon. Helen Bautista-Ricafort, Presiding Judge, RTC Paraaque, Branch 260, and Elpidio Uy, doing business under the name and style of Edison Development and Construction. The Facts On March 13, 1992, Republic Act No. 7227, 6 otherwise known as "The Bases Conversion and Development Act of 1992," created the BCDA to "accelerate the sound and balanced conversion into alternative productive uses of the Clark and Subic military reservations and their extension (John Hay Station, Wallace Air Station, ODonnell Transmitter Station, San Miguel Naval Communications Station and Capas Relay Station)," 7 and "to raise funds by the sale of portions of Metro Manila military camps." 8 Pursuant to this Act, then President Ramos issued Executive Order (EO) No. 40, 9 series of 1992, specifying, among others, the portions of Metro Manila military camps to be utilized to generate capital for the BCDA. For Fort Bonifacio, 96 hectares was set aside for the subject Heritage Park Project (the Project). To carry out the Project and other fund generating projects pursuant to RA 7227 and EO 40, the BCDA entered into a Memorandum of Agreement (MOA) with the Public Estates Authority (PEA), designating the latter as Project Manager. Thereafter, on September 9, 1994, the BCDA, PEA, and the Philippine National Bank (PNB) executed a Pool Formation Trust Agreement (PFTA), creating an asset pool to generate funds for the development of the Project. 10 On November 20, 1996, after the requisite public bidding, the PEA entered into a Landscaping and Construction Agreement 11 (LCA) with respondent Elpidio Uy, doing business under the name and style of Edison Development and Construction. Subsequent to the LCA, the same parties forged on August 5, 1997 a negotiated Construction Agreement. On December 3, 1996, respondent received the requisite Notice to Proceed 12 from PEA, and duly mobilized within 14 days from notice and commenced the landscaping and construction of the Project. The LCA stipulated that respondent shall fulfill his contractual obligation within a period of

G.R. No. 144062 November 2, 2006 THE BASES CONVERSION AND DEVELOPMENT AUTHORITY, ROGELIO L. SINGSON, in his personal capacity and as Chairman-President of Bases Conversion Development Authority, ROLANDO A. CASTRO, EMERITA S. DIAZ, RAUL M. RODRIGUEZ, NOEMI B. CHENG, RAMON P. ERENETA, JR., ANTHONY W. WOO, ROBERTO ESPIRITU, ROBERTO SANDOVAL, PATROCINIO R. SIMPLICIANO, REYNALDO O. DOMINGO, LUISITO C. CABILI, FELICIANO SIBAYAN, JOEY S. CARIAGA, RUPERTO R. DE GUZMAN, and LORENZO Y. VILLALON, Petitioners, vs. ELPIDIO UY, doing business under the name and style of EDISON DEVELOPMENT and CONSTRUCTION,Respondent. DECISION VELASCO, JR., J.: Republic Act No. 7227 prohibits courts from issuing preliminary injunctive writs or restraining orders against any project of the Bases Conversion Development Authority (BCDA), such as the Heritage Park Project, in order not to hamper or disrupt the implementation of the projects for "conversion into alternative productive uses" 1 of the military reservations and their extension which are considered by law to be "urgent and necessary" 2 or to frustrate "the effort to promote the economic and social development of Central Luzon in particular and the country in general." 3 The issue to be addressed in this petition is whether RA 7227 likewise forbids trial courts from rendering judgments granting permanent injunctions against BCDA projects. The Case Petitioners, through a Joint Petition for Review on Certiorari with Prayer for the Issuance of a Writ of Preliminary Injunction and/or a Temporary Restraining Order 4 under Rule 45 of the Rules of Court, assail the July 31, 2000 Decision 5 of the Court of Appeals (CA)

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450 calendar days from its start, reckoned 14 days from respondents receipt of the notice to proceed. 13 Specifically, the scope of respondent Uys work in the LCA was to construct three (3) vertical structures, the Terrasoleum structures, and the landscaping. Aside from respondent, two other contractors were engaged in the ProjectMakati Development Corporation (MDC) undertook the horizontal site development and Romago Electric, Inc. (REI) which was contracted to do the electrification of the Project. The parties presented diametrically opposing versions on its progress. Nonetheless, it is undisputed that there were delays in the construction and landscaping under the LCA, and for which several extensions were granted to respondent Uy by PEA. On the one hand, respondent asserted that the delays were justified and not attributable to him, as portions of the Project were delivered piecemeal and could not be worked on immediately pending the completion of work by the other contractors. On the other hand, petitioners maintained that respondent Uy was in delay with work "slippage" beyond tolerable levels and that respondent had already pulled out his equipment and machineries, and stopped working sometime in October 1999. On November 29, 1999, respondent Uy received from PEA a Letter of Termination 14 of the LCA. This prompted respondent to file Civil Case No. 99-0425 for Injunction and Damages with the Paraaque Regional Trial Court (RTC) Branch 260 against PEA, petitioner BCDA, and private petitioners. On December 14, 1999, Paraaque RTC Executive Judge Helen Bautista-Ricafort issued a 72hour Temporary Restraining Order (TRO), enjoining petitioners from excluding respondent from his contractual obligations under the LCA. 15 Subsequently, the case was raffled to the same Judge in the said trial court, who, on December 17, 1999, after the preliminary hearing of the case, extended the TRO for 17 days. 16 On December 27, 1999, petitioners who were not joined by PEA forthwith filed their Joint Petition for Certiorari and Prohibition 17 before the CA. Alleging facts falling under the exceptions on filing a motion for reconsideration, said petition raised the sole issue of lack of jurisdiction of the RTC to hear an injunction case against the BCDA and the propriety of the issuance of the TRO in view of the proscription under Section 21 of RA 7227. Petitioners argued that the said proviso not only prohibits lower courts from issuing a TRO or writ of injunction against BCDA projects but also clearly vests exclusive jurisdiction in this Court for injunctive relief and issuance of a TRO. Moreover, petitioners maintained that PD 1818 and the recent RA No. 8975 (both laws prohibit courts from issuing TRO and preliminary injunctions in cases involving infrastructure projects of the government) were equally applicable. Meanwhile, on December 28, 1999, the Paraaque RTC issued an Order suspending proceedings until the final resolution of the certiorari case before the appellate court. The Ruling of the Court of Appeals On July 31, 2000, the CA rendered a Decision 18 dismissing petitioners Joint Petition for Certiorari and Prohibition. The CA reasoned that the assailed TRO had become functus officio, thus, it was moot and academic. Nonetheless, it held that the RTC did not commit grave abuse of discretion in issuing the assailed TRO and that prohibition was not a proper remedy. It ratiocinated that if petitioners want to stop the proceedings in the RTC for alleged manifest bias of the sitting judge, they should have filed a motion for inhibition before the trial court. In short, the CA ruled that the RTC was the proper venue to hear the injunction casethereby ruling that the RTC had jurisdiction to hear the injunctive case and to issue the TRO. The Issues Without filing a motion for reconsideration, on August 7, 2000, petitioners came before this Court filing their Joint Petition for Review on Certiorari under Rule 45 on pure questions of law, raising the same sole issue of jurisdiction of the RTC to hear an injunctive case and to issue a TRO against the BCDA. Furthermore, petitioners consideration: raise the following issues for our

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I UNDER R.A. NO. 7227, THE IMPLEMENTATION OF PROJECTS FOR THE CONVERSION OF MILITARY BASES INTO PRODUCTIVE USES SHALL NOT BE RESTRAINED OR ENJOINED EXCEPT BY AN ORDER OF THE SUPREME COURT, HENCE, THE LOWER COURT HAS NO JURISDICTION TO HEAR AND DECIDE CIVIL CASE NO. 99-0425. II IN DISMISSING THE JOINT PETITION FOR CERTIORARI AND PROHIBITION IN CA-G.R. SP NO. 56418 QUESTIONING SQUARELY THE LOWER COURTS JURISDICTION OVER CIVIL CASE NO. 99-0425, THE APPELLATE COURT WENT BEYOND THE ISSUES RAISED IN THE PLEADINGS AND TOOK UP MATTERS EXTRANEOUS TO THE CASE. III IF THE RESPONDENT HAS ANY CLAIM HE WANTS TO PURSUE BEFORE THE LOWER COURTS, THE RELIEF AVAILABLE TO THE RESPONDENT IS LIMITED TO A CASE FOR DAMAGES, NOT INJUNCTION, AGAINST THE PETITIONERS TO ENFORCE SUCH CLAIM. 19 The Courts Ruling The instant case arose from the termination by the PEA of the LCA which respondent Uy is contesting through an injunction case. As we see it, the core issue for our resolution is whether the trial court has jurisdiction to provisionally enjoin petitioners from terminating the LCA and to hear an injunction case against petitioners. On the other hand, respondent Uy aside from countering the issues presented by petitioners, also raised several procedural issues for the disallowance of the instant petition. Preliminary Issues: Procedural Issues At the outset, we tackle the three (3) procedural issues raised by respondent Uy in his September 6, 2000 Comment 20 to bolster his position that the petition should be dismissed. Respondent contends that the petition ought to be dismissed outright as petitioners did not file a motion for reconsideration from the assailed CA Decision, an alleged pre-requisite before this Court can entertain petitions under Rule 45. Respondent citesYbaez v. Court of Appeals, 21 Tan v. Court of Appeals, 22 Villarama v. NLRC, 23 Mactan Cebu International Airport Authority v. Court of Appeals, 24 and Sunshine Transportation, Inc. v. NLRC 25 as authorities. Moreover, respondent Uy maintains that the verification and certification of non-forum shopping was defective as only one of the petitioners affixed his signature, (Ramon P. Ereneta) and such sole signatory cannot represent petitioner BCDA as no Board Resolution was presented conferring such authority. Lastly, said respondent asserts that there is no proper joinder of parties considering that the major issue raised by petitioner BCDA is its invocation of RA 7227. Motion for reconsideration not required in Rule 45 as condition precedent We find the aforesaid arguments of respondent Uy tenuous and untenable. Rule 45 does not require the prior filing of a motion for reconsideration for this Court to take cognizance of appeals through petitions for review on certiorari. This can be gleaned from Sections 1 and 2 of Rule 45 which pertinently provides: SECTION 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth. SEC. 2. Time for filing; extension. The petition shall be filed within fifteen (15) days from notice of the judgment or final order or resolution appealed from, or of the denial of the petitioners motion for new trial or reconsideration filed in due time after notice of the judgment (emphasis supplied). On motion duly filed and served, with full payment of the docket and other lawful fees and the deposit for costs before the expiration of the reglementary period, the Supreme Court may[,] for justifiable reasons[,] grant an extension of thirty (30) days only within which to file the petition.

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The foregoing provisos clearly do not require the filing of a motion for reconsideration as a condition precedent unlike certiorari under Rule 65. Moreover, as aptly noted by petitioners, the cases 26 cited by respondent Uy are not applicable in the instant case as they pertain to certiorari under Rule 65an original action for certiorari, which requires a motion for reconsideration as a condition precedent. It must be noted that while both Rules 45 and 65 are petitions for certiorari, the former is a petition for review while the latter is an original special civil action for certiorari. Signature of a principal party sufficient for verification and certification Anent the assailed verification and certification of non-forum shopping, it is shown that it substantially complied with the requirements of the Rules. Dismissal of appeals that is purely on technical grounds is frowned upon. 27While only petitioner Ramon P. Ereneta signed the verification and certification of non-forum shopping such is not fatal to the instant petition. In Calo, 28 we agreed with petitioners that the signature of only one petitioner in the verification and certification of non-forum shopping satisfies the requirement under Section 2, Rule 42 of the Revised Rules on Civil Procedure. 29 In Calo, we relied on Condo Suite Club Travel, Inc., v. NLRC 30where we ruled that the certification of non-forum shopping may be signed not only by the petitioners but also any of the principal parties. In the instant case, Mr. Ramon P. Erenta, a member of the Investment Committee of the Heritage Park Management Corporation, is a principal party in the instant case having been impleaded in Civil Case No. 99-0425 pending in the RTC. More so, in Calo, we also cited Cavile, et al. v. Heirs of Clarita Cavile, et. al. 31where we held that there was substantial compliance with the Rules when only petitioner Thomas George Cavile, Sr. signed in behalf of all the other petitioners of the certificate of non-forum shopping as the petitioners, being relatives and co-owners of the properties in dispute, shared a common interest in them, had a common defense in the complaint for partition, and filed the petition as a collective, raising only one argument to defend their rights over the properties in question. We reasoned that there was sufficient basis for Cavile, Sr., to speak for and in behalf of his co-petitioners, stating that they had not filed any action or claim involving the same issues in another court or tribunal, nor was there other pending action or claim in another court or tribunal involving the same issues. In the same vein, this is also true in the instant case where petitioners have filed their petition as a collective, sharing a common interest and having a common single defense. Anent the lack of a BCDA Board Resolution authorizing Ramon P. Ereneta, such defect has been substantially complied with by the subsequent filing of a Letter of Authority 32 to represent and sign pleadings for and on behalf of BCDA in the instant case. In Jaro v. Court of Appeals, we had occasion to cite "ample jurisprudence holding that the subsequent and substantial compliance of an appellant may call for the relaxation of the rules of procedure." 33 At any rate, this petty technicality deserves scant consideration where the question at issue is one purely of law and there is no need to delve into the veracity of the allegations in the petition. As we have held time and again, imperfections of form and technicalities of procedure are to be disregarded, except where substantial rights would otherwise be prejudiced. There is proper joinder of parties As regards the issue of non-joinder of parties, we find respondents argument tenuous and quite drawn out. Respondent maintains that petitioners have no legal personality to pursue this appeal on the strenuous interpretation that the BCDA and other petitioners cannot invoke Sec. 21 of RA 7227 as only the Office of the Solicitor General (OSG) can invoke such defense. Verily, having impleaded petitioners in the civil case he filed before the trial court, respondent Uy cannot anymore question the locus standi of petitioners. Moreover, the invocation of Sec. 21 of RA 7227 was already made in the trial court during the December 17, 1999 hearing and it was duly raised before the CA on certiorari under Rule 65. This is a common defense invoked by petitioners at the outset. Moreover, it is not only the OSG who has the right and privilege to invoke provisions of the law pertaining to Government Owned and Controlled Corporations (GOCC). In fact, it is the Office of the Government Corporate Counsel (OGCC) who appears for GOCC and not the OSG. 34 Main Issue:

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Trial court has jurisdiction to hear the injunctive case The three (3) issues presented by petitioners can be easily condensed to the core issue of whether the Paraaque RTC has jurisdiction over Civil Case No. 99-0425 entitled Elpidio Uy v. Public Estates Authority, et al., to permanently restrain the rescission of the LCA entered into by respondent Uy and the PEA. Petitioners contend that the Paraaque RTC has no power to issue the 20-day TRO or a writ of preliminary injunction under Section 21 of RA 7227 and has no jurisdiction to try and decide respondent Uys action for injunction to prevent the termination of the November 20, 1996 LCA which was awarded to him. Indeed, this is a novel issue on the matter of proscribing trial courts from rendering judgments granting permanent injunctions against certain activities relating to government contracts and projects. Much reliance was placed by petitioners on laws which limit and prohibit issuance of TROs and writs of preliminary injunction, viz: 1. Section 21, RA 7227: Injunction and Restraining Order. The implementation of the projects for the conversion into alternative productive uses of the military reservations are urgent and necessary and shall not be restrained or enjoined except by an order issued by the Supreme Court of the Philippines. 2. Section 1, PD 1818: No court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction, or preliminary mandatory injunction in any case, dispute or controversy involving an infrastructure project, or a mining, fishery, forest or other natural resource development project of the government, or any public utility operated by the government, including among others[,] public utilities for the transport of goods or commodities, stevedoring and arrastre contracts, to prohibit any person or persons, entity or governmental official from proceeding with, or continuing the execution or implementation of any such project, or the operation of such public utility, or pursuing any lawful activity necessary for such execution, implementation or operation. 3. Section 3, RA 8975: Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Mandatory Injunctions. No court, except the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the government, or any of its subdivisions, officials or any person or entity, whether public or private acting under the government direction, to restrain, prohibit or compel the following acts: (a) Acquisition, clearance and development of the right-of-way and/or site or location of any national government project; (b) Bidding or awarding of contract/project of the national government as defined under Section 2 hereof; (c) Commencement[,] prosecution, execution, implementation, [or] operation of any such contract or project; (d) Termination or rescission of any such contract/project; and (e) The undertaking or authorization of any other lawful activity necessary for such contract/project. This prohibition shall apply in all cases, disputes or controversies instituted by a private party, including but not limited to cases filed by bidders or those claiming to have rights through such bidders involving such contract/project. This prohibition shall not apply when the matter is of extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise. The applicant shall file a bond, in an amount to be fixed by the court, which bond shall accrue in favor of the government if the court should finally decide that the applicant was not entitled to the relief sought. If after due hearing the court finds that the award of the contract is null and void, the court may, if appropriate under the circumstances, award the contract to the qualified and winning bidder or order a rebidding of the same, without prejudice to any liability that the guilty party may incur under existing laws. Prohibition covers only TRO and preliminary injunction

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A perusal of these aforequoted provisions readily reveals that all courts, except this Court, are proscribed from issuing TROs and writs of preliminary injunction against the implementation or execution of specified government projects. Thus, the ambit of the prohibition covers only temporary or preliminary restraining orders or writs but NOT decisions on the merits granting permanent injunctions. Considering that these laws trench on judicial power, they should be strictly construed. Therefore, while courts below this Court are prohibited by these laws from issuing temporary or preliminary restraining orders pending the adjudication of the case, said statutes however do not explicitly proscribe the issuance of a permanent injunction granted by a court of law arising from an adjudication of a case on the merits. Thus, petitioners claim that Judge Ricafort has no jurisdiction over the complaint for injunction plus damages with a prayer for temporary restraining order and writ of preliminary injunction does not hold water. RTC has jurisdiction over action for injunction Firmly established is the doctrine that "jurisdiction over the subject matter is conferred by law." 35 Section 19 of BP 129 shows that a Regional Trial Court has jurisdiction over all civil cases in which the subject of litigation is incapable of pecuniary estimation. 36 Jurisprudence has recognized complaints for injunction with a prayer for temporary restraining order or writ of preliminary injunction. We explained at length this specie of cases in Manila Banking Corporation v. Court of Appeals. 37 In the factual setting at bar, the Court rules that the Paraaque RTC has jurisdiction over the complaint of respondent Uy it being a case in which the subject of litigation for permanent injunction against the termination of his contract, is incapable of pecuniary estimation. The prayer of respondent Uy in Civil Case No. 99-0425 to permanently enjoin petitioners from rescinding the LCA, is not forbidden under RA 7227, PD 1818, and RA 8975. Said prohibitive laws cover only temporary or preliminary restraining orders or injunctions to prevent unjustified stoppage of the implementation of government projects; but not permanent injunctions. Thus, the Paraaque RTC has jurisdiction to hear respondent Uys action and even grant his supplication for a permanent injunction. While the issuance of the assailed TRO by Judge Helen Ricafort evidently constitutes a blatant violation of Section 21 of RA 7227 and hence void, the same has likewise been rendered moot for beingfunctus officio, the 20-day validity period of the TRO having lapsed on January 3, 2000. WHEREFORE, the instant petition is DISMISSED and the July 31, 2000 Decision of the Court of Appeals is herebyAFFIRMED IN TOTO. The Regional Trial Court, Paraaque City, Branch 260 is directed to hear without delay Civil Case No. 99-0425 for Injunction and Damages, but is prohibited from issuing TROs and writs of preliminary injunction. No costs. G.R. No. 175952 April 30, 2008

SOCIAL SECURITY SYSTEM, petitioner, vs. ATLANTIC GULF AND PACIFIC COMPANY OF MANILA, INC. and SEMIRARA COAL CORPORATION, respondents. DECISION TINGA, J.: In this Petition for Review on Certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure, petitioner Republic of the Philippines represented by the Social Security System (SSS) assails the Decision2 dated 31 August 2006 of the Eleventh Division of the Court of Appeals and its Resolution3 dated 19 December 2006 denying petitioners Motion for Reconsideration. Following are the antecedents culled from the decision of the Court of Appeals:

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On 13 February 2004, Atlantic Gulf and Pacific Company of Manila, Inc. (AG & P) and Semirara Coal Corporation (SEMIRARA) (collectively referred to as private respondents) filed a complaint for specific performance and damages against SSS before the Regional Trial Court of Batangas City, Branch 3, docketed as Civil Case No. 7441. The complaint alleged that: xxx 3. Sometime in 2000, plaintiff informed the SSS in writing of its premiums and loan amortization delinquencies covering the period from January 2000 to May 2000 amounting to P7.3 Million. AG&P proposed to pay its said arrears by end of 2000, but requested for the condonation of all penalties; 4. In turn, the defendant suggested two (2) options to AG&P, either to pay by installment or through "dacion en pago"; 5. AG&P chose to settle its obligation with the SSS under the second option, that is through dacion en pago of its 5,999 sq. m. property situated in Baguio City covered by TCT No. 3941 with an appraised value of about P80.0 Million. SSS proposes to carve-out from the said property an area sufficient to cover plaintiffs delinquencies. AG&P, however, is not amenable to subdivide its Baguio property; 6. AG&P then made another proposal to SSS. This time, offering as payment a portion of its 58,153 square meter-lot, situated in F.S. Sebastian, Sto. Nio, San Pascual, Batangas. In addition, SSS informed AG&P of its decision to include other companies within the umbrella of DMCI group with arrearages with the SSS. In the process of elimination of the companies belonging to the DMCI group with possible outstanding obligation with the SSS, it was only SEMIRARA which was left with outstanding delinquencies with the SSS. Thus, SEMIRARAs inclusion in the proposed settlement through dacion en pago; 7. AG&P was, thereafter, directed by the defendant to submit certain documents, such as Transfer Certificate of Title, Tax Declaration covering the subject lot, and the proposed subdivision plan, immediately complied; which requirements AG&P

8. On April 4, 2001, SSS, in its Resolution No. 270, finally approved AG&Ps proposal to settle its and SEMIRARAs delinquencies through dacion en pago, which as of March 31, 2001 amounted to P29,261,902.45. Approval of AG&Ps proposal was communicated to it by Ms. Aurora E.L. Ortega, Vice-President, NCR-Group of the SSS in a letter dated April 23, 2001. ; 9. As a result of the approval of the dacion en pago, posting of contributions and loan amortization to individual member accounts, both for AG&P and SEMIRARA employees, was effected immediately thereafter. Thus, the benefits of the member-employees of both companies were restored; 10. From the time of the approval of AG&Ps proposal up to the present, AG&P is (sic) religiously remitting the premium contributions and loan amortization of its memberemployees to the defendant; 11. To effect the property transfer, a Deed of Assignment has to be executed between the plaintiffs and the defendant. Because of SSS failure to come up with the required Deed of Assignment to effect said transfer, AG&P prepared the draft and submitted it to the Office of the VicePresident NCR thru SSS Baclaran Branch in July 2001. Unfortunately, the defendant failed to take any action on said Deed of Assignment causing AG&P to re-submit it to the same office of the Vice-President NCR in December 2001. From its original submission of the Deed of Assignment in July 2001 to its re-submission in December 2001, and SSS returning of the revised draft in February 28, 2003 AG&P was consistent in its regular follow ups with SSS as to the status of its submitted Deed of Assignment; 12. On February 28, 2003, or more than a year after the approval of AG&Ps proposal, defendant sent the revised copy of the Deed of Assignment to AG&P. However, the amount of the plaintiffs obligation appearing in the approved Deed of Assignment has

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ballooned from P29,261,902.45 to P40,846,610.64 allegedly because of the additional interests and penalty charges assessed on plaintiffs outstanding obligation from April 2001, the date of approval of the proposal, up to January 2003; 13. AG&P demanded for the waiver and deletion of the additional interests on the ground that delay in the approval of the deed and the subsequent delay in conveyance of the property in defendants name was solely attributable to the defendant; hence, to charge plaintiffs with additional interests and penalties amounting to more thanP10,000,000.00, would be unreasonable.; 14. AG&P and SEMIRARA maintain their willingness to settle their alleged obligation of P29,261,902.45 to SSS. Defendant, however, refused to accept the payment through dacion en pago, unless plaintiffs also pay the additional interests and penalties being charged; xxx Instead of filing an answer, SSS moved for the dismissal of the complaint for lack of jurisdiction and non-exhaustion of administrative remedies. In an order dated 28 July 2004, the trial court granted SSSs motion and dismissed private respondents complaint. The pertinent portions of the assailed order are as follows: Clearly, the motion is triggered on the issue of the courts jurisdiction over the subject matter and the nature of the instant complaint. The length and breadth of the complaint as perused, boils down to the questions of premium and loan amortization delinquencies of the plaintiff, the option taken for the payment of the same in favor of the defendant and the disagreement between the parties as to the amount of the unpaid contributions and salary loan repayments. In other words, said questions are directly related to the collection of contributions due the defendant. Republic Act No. 1161 as amended by R.A. No. 8282, specifically provides that any dispute arising under the said Act shall be cognizable by the Commission and any case filed with respect thereto shall be heard by the Commission. Hence, a procedural process mandated by a special law. Observingly, the running dispute between plaintiffs and defendant originated from the disagreement as to the amount of unpaid contributions and the amount of the penalties imposed appurtenant thereto. The alleged dacion en pago is crystal clear manifestation of offering a special form of payment which to the mind of the court will produce effect only upon acceptance by the offeree and the observance and compliance of the required formalities by the parties. No matter in what form it may be, still the court believes that the subject matter is the payment of contributions and the corresponding penalties which are within the ambit of Sec. 5 (a) of R.A. No. 1161, as amended by R.A. No. 8282. WHEREFORE, the Court having no jurisdiction over the subject matter of the instant complaint, the motion is granted and this case is hereby ordered DISMISSED. SO ORDERED.4 Private respondents moved for the reconsideration of the order but the same was denied in an Order dated 15 September 2004. Consequently, private respondents filed an appeal before the Court of Appeals alleging that the trial court erred in its pronouncement that it had no jurisdiction over the subject matter of the complaint and in granting the motion to dismiss. The Court of Appeals reversed and set aside the trial courts challenged order, granted private respondents appeal and ordered the trial court to proceed with the civil case with dispatch. From the averments in their complaint, the appellate court observed that private respondents are seeking to implement the Deed of Assignment which they had drafted and submitted to SSS sometime in July 2001, pursuant to SSSs letter addressed to AG& P dated 23 April 2001 approving AG&P and SEMIRARAS delinquencies through dacion en pago, which as of 31 March 2001, amounted to P29,261,902.45. The appellate court thus held that the subject of the complaint is no longer the payment of the

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premium and loan amortization delinquencies, as well as the penalties appurtenant thereto, but the enforcement of the dacion en pago pursuant to SSS Resolution No. 270. The action then is one for specific performance which case law holds is an action incapable of pecuniary estimation falling under the jurisdiction of the Regional Trial Court.5 SSS filed a motion for reconsideration of the appellate courts decision but the same was denied in a Resolution dated 19 December 2006. Now before the Court, SSS insists on the Social Security Commissions (the Commission) jurisdiction over the complaint pursuant to Section 5 (a) of Republic Act (R.A.) No. 8282. SSS maintains the Commissions jurisdiction over all disputes arising from the provisions of R.A. No. 1161, amended by R.A. No. 8282 to the exclusion of trial courts.6 The main issue in this case pertains to which body has jurisdiction to entertain a controversy arising from the non-implementation of a dacion en pago agreed upon by the parties as a means of settlement of private respondents liabilities. At the outset, it is well to restate the rule that what determines the nature of the action as well as the tribunal or body which has jurisdiction over the case are the allegations in the complaint.7 The pertinent provision of law detailing the jurisdiction of the Commission is Section 5(a) of R.A. No. 1161, as amended by R.A. No. 8282, otherwise known as the Social Security Act of 1997, to wit: SEC. 5. Settlement of Disputes. (a) Any dispute arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any other matter related thereto, shall be cognizable by the Commission, and any case filed with respect thereto shall be heard by the Commission, or any of its members, or by hearing officers duly authorized by the Commission and decided within the mandatory period of twenty (20) days after the submission of the evidence. The filing, determination and settlement of disputes shall be governed by the rules and regulations promulgated by the Commission. The law clearly vests upon the Commission jurisdiction over "disputes arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any matter related thereto..." Dispute is defined as "a conflict or controversy."8 From the allegations of respondents complaint, it readily appears that there is no longer any dispute with respect to respondents accountability to the SSS. Respondents had, in fact, admitted their delinquency and offered to settle them by way of dacion en pago subsequently approved by the SSS in Resolution No. 270-s. 2001. SSS stated in said resolution that "the dacion en pago proposal of AG&P Co. of Manila and Semirara Coals Corporation to pay their liabilities in the total amount of P30,652,710.71 as of 31 March 2001 by offering their 5.8 ha. property located in San Pascual, Batangas, be, as it is hereby, approved.."9 This statement unequivocally evinces its consent to the dacion en pago. In Vda. de Jayme v. Court of Appeals,10 the Court ruled significantly as follows: Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation. It is a special mode of payment where the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt. The undertaking really partakes in one sense of the nature of sale, that is the creditor is really buying the thing or property of the debtor, payment for which is to be charged against the debtors debt. As such, the essential elements of a contract of sale, namely, consent, object certain, and cause or consideration must be present. In its modern concept, what actually takes place in dacion en pago is an objective novation of the obligation where the thing offered as an accepted equivalent of the performance of an obligation is considered as the object of the contract of sale, while the debt is considered as the purchase price. In any case, common consent is an essential prerequisite, be it sale or novation, to have the effect of totally extinguishing the debt or obligation.11

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The controversy, instead, lies in the non-implementation of the approved and agreed dacion en pago on the part of the SSS. As such, respondents filed a suit to obtain its enforcement which is, doubtless, a suit for specific performance and one incapable of pecuniary estimation beyond the competence of the Commission.12 Pertinently, the Court ruled in Singson v. Isabela Sawmill,13 as follows: 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 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, where the money claim is purely incidental to, or a consequence of, the principal relief sought, 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 (now Regional Trial Courts).14 In fine, the Court finds the decision of the Court of Appeals in accord with law and jurisprudence. WHEREFORE, the petition is DENIED. The Decision dated 31 August 2006 of the Court of Appeals Eleventh Division in CA-G.R. CV No. 83775 AFFIRMED. Let the case be remanded to the trial court for further proceedings. SO ORDERED.

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considering that the assessed value of the property was lower than P20,000.00. [G.R. No. 149243. October 28, 2002] LOLITA B. COPIOSO, Petitioner, v. LAURO, DOLORES, RAFAEL, ESTEBAN, and CORAZON, all surnamed COPIOSO, and COURT OF APPEALS, respondents. DECISION BELLOSILLO, J.: This petition for review assails the Decision1 of the Court of Appeals in CA G.R. SP No. 62090 which dismissed petitioner's petition for certiorari as well as its Resolution denying reconsideration thereof. On 4 July 2000 respondents Lauro, Dolores, Rafael, Esteban and Corazon, all surnamed Copioso, filed a complaint 2 for reconveyance of two (2) parcels of coconut land situated in Banilad, Nagcarlan, Laguna, against Lolita B. Copioso, spouses Bernabe and Imelda Doria, and the estate of deceased Antonio Copioso, as well as vendees Dolores Reduca, Mercedes Reduca, Rosario Pascua, Elvira Bombasi and Federico Casabar. Respondents alleged that they together with their deceased brother Antonio Copioso were co-owners of the subject property having inherited the same from their parents, and that through fraud and machination Antonio had the property transferred to his name and that of spouses Bernabe and Imelda Doria who subsequently sold the same to third parties. They thus prayed for the reconveyance of the property by virtue of their being co-owners thereof. When respondents claimed in a manifestation with motion for bill of particulars that the assessed value of the subject property was P3,770.00, petitioner Lolita Copioso and spouses Bernabe and Imelda Doria separately moved to dismiss the complaint on the ground that it was the Municipal Trial Court (MTC) and not the Regional Trial Court (RTC) that had jurisdiction over the case The trial court in its twin orders of 5 and 12 September 2000 denied the motions to dismiss holding that since the subject matter of the action was beyond pecuniary estimation it was properly within its jurisdiction.[3 Lolita Copioso's Motion for Reconsideration was denied,4 hence, she filed with the Court of Appeals a petition for certiorari and prohibition praying for the annulment of the twin orders of the trial court which denied the motions to dismiss and at the same time maintaining her position that the RTC had no jurisdiction over the case because the assessed value of the property was below P20,000.00. The appellate court denied the petition thus affirming the jurisdiction of the RTC over the complaint for reconveyance. Motion for reconsideration thereon was similarly denied by the appellate court, hence this petition. Petitioner Lolita Copioso anchors her argument on Sec. 33, par. (3), of B.P. Blg. 129 otherwise known as The Judiciary Reorganization Act of 1980 as amended by Sec. 3 of RA 7691 which provides Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise: x x x x (3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed value of the property or interest therein does not exceed twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses and costs: Provided, that in cases of land not declared for taxation purposes, the value of such property shall be determined by the assessed value of the adjacent lots. Petitioner argues that the complaint for reconveyance cannot be resolved unless the trial court delves upon the issues of "title, possession and interests" of each of the stakeholders over the subject parcels of land. She asserts that the allegations and relief prayed for in the complaint coupled with the assessed value of the

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disputed property place the action within the exclusive jurisdiction of the MTC and not the RTC. In turn, private respondents anchor their position on Sec. 19, par. (1), of the same law which provides Sec. 19. Jurisdiction in civil cases. The Regional Trial Courts shall exercise exclusive original jurisdiction: In all civil actions in which the subject of the litigation is incapable of pecuniary estimation: x x x Simply, they claim that the instant complaint for reconveyance is a case of joinder of causes of action which include the annulment of sale and other instruments of false conveyance incapable of pecuniary estimation thus within the legal competence of the RTC. The law on jurisdiction of trial courts over civil cases is neither ambiguous nor confusing. Sec. 33, par. (3), in relation to Sec. 19 par. (2) of B.P. 129 as amended by RA 7691, deals with civil cases capable of pecuniary estimation. On the other hand, Sec. 33, par. (3), in relation to Sec. 19, par. (1), applies to cases incapable of pecuniary estimation. Sec. 33, par. (3), in relation to Sec. 19, par. (2), of B.P. 129, as amended by RA 7691, provides that in civil cases involving sum of money or title to, possession of, or any interest in real property, jurisdiction is determined on the basis of the amount of the claim or the assessed value of the real property involved, such that where the sum of money or the assessed value of the real property does not exceed P20,000.00, or P50,000.00 in Metro Manila, jurisdiction lies with the MTC; and where it exceeds that amount, jurisdiction is vested with the RTC. Indeed, the present dispute pertains to the title, possession and interest of each of the contending parties over the contested property the assessed value of which falls within the jurisdictional range of the MTC. Nonetheless, the nature of the action filed, the allegations set forth, and the reliefs prayed for, forestall its cognizance by the MTC. As can be readily gleaned from the records, the complaint was for "Reconveyance and/or Recovery of Common Properties Illegally Disposed, with Annulment of Sales and other Instruments of False Conveyance, with Damages, and Restraining Order." Private respondents alleged therein that they were co-owners of the property along with their deceased brother Antonio Copioso; and that in or about 1998, with fraud and machination, Antonio together with the spouses Bernabe and Imelda Doria made it appear in a public document entitled Pagpapatunay ng Kusang Loob na Pagbabahagi that they were the co-owners of the subject property and had divided the same equally between themselves to the exclusion of private respondents. Subsequently, they sold the subdivided lots to the other defendants namely Dolores Reduca, Mercedes Reduca, Rosario Pascua, Elvira Bombasi and Federico Casabar. Private respondents also sought payment of moral damages, exemplary damages, litigation expenses, attorney's fees plus appearance fees amounting to more or less P286,500.00. They likewise applied for a TRO pending the issuance of a writ of preliminary injunction restraining the defendants from further alienating the common properties. They also prayed of the trial court to order the cancellation, annulment and/or rescission of the four (4) deeds of absolute sale made in favor of the buyers, and to order Lolita B. Copioso and the estate of Antonio Copioso to return the price that the buyer-defendants had paid to them for the land sold. Clearly, this is a case of joinder of causes of action which comprehends more than the issue of title to, possession of, or any interest in the real property under contention but includes an action to annul contracts, reconveyance or specific performance, and a claim for damages, which are incapable of pecuniary estimation and thus properly within the jurisdiction of the RTC. As correctly opined by the appellate court, if the only issue involved herein is naked possession or bare ownership, then petitioner Lolita Copioso would not be amiss in her assertion that the instant complaint for reconveyance, considering the assessed value of the disputed property, falls within the exclusive jurisdiction of the MTC. But as herein before stated, the issue of title, ownership and/or possession thereof is intertwined with the issue of annulment of

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sale and reconveyance hence within the ambit of the jurisdiction of the RTC. The assessed value of the parcels of land thus becomes merely an incidental matter to be dealt with by the court, when necessary, in the resolution of the case but is not determinative of its jurisdiction. WHEREFORE, the petition is DENIED. The 16 May 2001 Decision of the Court of Appeals in CA-G.R. SP No. 62090 as well as its 30 July 2001 Resolution denying reconsideration thereof is AFFIRMED. Costs against petitioner. SO ORDERED.

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to dismiss was filed by private respondent, and on November 17, 1972, the petition was dismissed on the ground that the claim of private respondent in his complaint, being less than P10,000.00, is within the exclusive jurisdiction of the city court. Petitioner thus filed the present petition and argues among others that: (a) as determined from the allegations of the complaint, the action is for specific performance of contract; and (b) actions in which the subject of litigation is not capable of pecuniary estimation such as complaints for specific performance of contract are exclusively cognizable by the Court of First Instance. Hence, the decisive question to be resolved in this present petition is whether or not the City Court of Manila, Branch II, has jurisdiction over the complaint. The action involved in this case is one for specific performance and not for a sum of money and wherefore incapable of pecuniary estimation because what private respondent seeks is the performance of petitioner's obligation under a written contract to make a refund but under certain specific conditions still to be proven or established. In a case for the recovery of a sum of money, as the collection of a debt, the claim is considered capable of pecuniary estimation (Lapitan vs. Scandia Inc., 24 SCRA 479) because the obligation to pay the debt is not conditioned upon any specific fact or matter. But when a party to a contract has agreed to refund to the other party a sum of money upon compliance by the latter of certain conditions and only upon compliance therewith may what is legally due him under the written contract be demanded, the action is one not capable of pecuniary estimation. The payment of a sum of money is only incidental which can only be ordered after a determination of certain acts the performance of which being the more basic issue to be inquired into. Although private respondent's complaint in the court a quo is designated as one for a sum of money and damages, an analysis of all the factual allegations of the complaint patently shows that what private respondent seeks is the performance of petitioner's obligation under the written contract to make the refund of the rate of P10.00 per square meter or in the total amount of P4,820.00, but only after proof of having himself fulfilled the conditions that will give rise to petitioner's obligation, a matter clearly incapable of pecuniary estimation.

G.R. No. L-36098 January 21, 1983 ORTIGAS & COMPANY, LIMITED PARTNERSHIP, Petitioner, vs. JUDGE JOSE B. HERRERA, Respondent. RESOLUTION

PER CURIAM: G.R. No. L-36098 (Ortigas & Company, Limited Partnership vs. Judge Jose B. Herrera, City Court of Manila, Branch II, and Emiliano Samson). On August 14, 1969, petitioner and private respondent entered into an agreement thereby for and in consideration of P55,430.00, the former agreed to sell to the latter a parcel of land with a special condition that should private respondent as purchaser complete the construction including the painting of his residential house on said lot within two (2) years from August 14, 1969, petitioner, as owner, has agreed to refund to private respondent the amount of P10.00 per square meter. When the aforesaid special condition was fulfilled, private respondent, on May 17, 1971 accordingly notified in writing the petitioner of the same and requested for his refund amounting to P4,820.00. Upon failure of petitioner to pay his obligation, private respondent on May 6, 1972 filed a complaint for sum of money and damages with the City Court of Manila, Branch II, against petitioner docketed as Civil Case No. 211673. A motion to dismiss was filed by petitioner on grounds of lack of jurisdiction, failure of the complaint to state a cause of action and improper avenue. City Court Judge Jose B. Herrera in his order dated June 27, 1972 held in abeyance the resolution on the motion until after the trial of the case on the merits. A reconsideration of the said order having been denied, petitioner on October 12, 1972 filed with the Court of First Instance of Manila Branch XXVII, a special civil action for certiorari and prohibition with preliminary injunction docketed as Civil Case No. 88510. A motion

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In view of the foregoing, the Court RESOLVED to reverse the order appealed from and the complaint filed with the City Court of Manila, Branch II, docketed as Civil Case No. 211673 is hereby ordered dismissed for lack of jurisdiction.

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Private respondents had allegedly been prevented from entering, possessing and using subject property. It was further alleged in the Complaint that petitioners' Transfer Certificate of Title over their alleged property was spurious. Private respondents then prayed that they be declared the sole and absolute owners of the subject property; that petitioners be ordered to surrender possession of subject property to them; that petitioners and Wood Crest and/or its members be ordered to pay actual and moral damages, and attorney's fees. Petitioners, for their part, filed a Motion to Dismiss 3 said complaint on the ground that the MeTC had no jurisdiction over the subject matter of the action, as the subject of litigation was incapable of pecuniary estimation. The MeTC then issued an Order4 dated July 4, 2002 denying the motion to dismiss, ruling that, under Batas Pambansa (B.P.) Blg. 129, as amended, the MeTC had exclusive original jurisdiction over actions involving title to or possession of real property of small value. Petitioners' Motion for Reconsideration of said Order dated July 4, 2002 was denied. Petitioners assailed the aforementioned Order by filing a petition for certiorari with the Regional Trial Court (RTC) of Quezon City, Branch 87. However, in its Decision5 dated March 10, 2003, the RTC dismissed the petition, finding no grave abuse of discretion on the part of the MeTC Presiding Judge. The RTC sustained the MeTC ruling, stating that, in accordance with Section 33(3) of Republic Act (R.A.) No. 7691, amending B.P. Blg. 129, the MeTC had jurisdiction over the complaint for Accion Reivindicatoria, as it involves recovery of ownership and possession of real property located in Quezon City, with an assessed value not exceeding P50,000.00. A Motion for Reconsideration6 of the Decision was filed by petitioners, but was denied in an Order7 dated July 3, 2003.

G.R. No. 164560

July 22, 2009

ANA DE GUIA SAN PEDRO and ALEJO DOPEO, Petitioners, vs. HON. FATIMA G. ASDALA, in her capacity as the Presiding Judge of the Regional Trial Court of Quezon City, Branch 87; HON. MANUEL TARO, in his capacity as the Presiding Judge of the Metropolitan Trial Court of Quezon City, Branch 42; and the HEIRS OF SPOUSES APOLONIO V. DIONISIO and VALERIANA DIONISIO (namely, ALLAN GEORGE R. DIONISIO and ELEANOR R. DIONISIO, herein represented by ALLAN GEORGE R. DIONISIO), Respondents. DECISION DEL CASTILLO, J.: This resolves the petition for certiorari under Rule 65 of the Rules of Court, praying that the Resolutions1 of the Court of Appeals (CA) dated September 15, 2003 and June 1, 2004, respectively, in CAG.R. SP No. 78978, be reversed and set aside. The antecedent facts are as follows. Sometime in July 2001, private respondents, heirs of spouses Apolonio and Valeriana Dionisio, filed with the Metropolitan Trial Court (MeTC) of Quezon City, Branch 42, a Complaint2 against herein petitioners and Wood Crest Residents Association, Inc., for Accion Reivindicatoria, Quieting of Title and Damages, with Prayer for Preliminary Mandatory Injunction. Private respondents alleged that subject property located in Batasan Hills, Quezon City, with an assessed value of P32,100.00, was titled in the name of spouses Apolonio and Valeriana Dionisio; but petitioners, with malice and evident bad faith, claimed that they were the owners of a parcel of land that encompasses and covers subject property.

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Petitioners then filed with the Court of Appeals another petition for certiorari, insisting that both the MeTC and RTC acted with grave abuse of discretion amounting to lack or excess of jurisdiction by not ordering the dismissal of the complaint for Accion Reivindicatoria, for lack of jurisdiction over the same. In the assailed CA Resolution dated September 15, 2003, the CA dismissed the petition outright, holding that certiorari was not available to petitioners as they should have availed themselves of the remedy of appeal. Petitioners' motion for reconsideration of the resolution of dismissal was denied per Resolution8 dated June 1, 2004. Thus, petitioners filed the instant petition and, in support thereof, they allege that: THE HONORABLE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN (SIC) EXCESS OF JURISDICTION IN DENYING THE PETITION FOR CERTIORARI AND FOR FAILURE TO RESOLVE THE ISSUE RAISED IN THE CERTIORARI REGARDING THE JURISDICTION OF THE METROPOLITAN TRIAL COURT TO TAKE COGNIZANCE OF A CASE OF ACCION REINVINDICATORIA. THE HONORABLE PUBLIC RESPONDENT FATIMA GONZALESASDALA, AS PRESIDING JUDGE OF RTC BRANCH 87, QUEZON CITY, ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF (SIC) JURISDICTION IN DISMISSING THE PETITION FOR CERTIORARI AND IN RESOLVING THAT A CASE OF ACCION REINVINDICATORIA IS WITHIN THE JURISDICTION OF THE METROPOLITAN TRIAL COURT. THE HONORABLE PUBLIC RESPONDENT MANUEL TARO AS PRESIDING JUDGE MeTC, BRANCH 42, QUEZON CITY, ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN (SIC) EXCESS OF JURISDICTION IN SO TAKING COGNIZANCE OF THE COMPLAINT FOR ACCION REINVINDICATORIA IN CIVIL CASE NO. 27434 ENTITLED, "HEIRS OF SPS. APOLONIO V. DIONISIO AND VALERIANA DIONISIO, ETC. VS. ANA DE GUIA SAN PEDRO, ET. AL."9 The present Petition for Certiorari is doomed and should not have been entertained from the very beginning. The settled rule is that appeals from judgments or final orders or resolutions of the CA should be by a verified petition for review on certiorari, as provided for under Rule 45 of the Revised Rules of Civil Procedure. Thus, inPasiona, Jr. v. Court of Appeals,10 the Court expounded as follows: The aggrieved party is proscribed from assailing a decision or final order of the CA via Rule 65, because such recourse is proper only if the party has no plain, speedy and adequate remedy in the course of law. In this case, petitioner had an adequate remedy, namely, a petition for review on certiorari under Rule 45 of the Rules of Court. A petition for review on certiorari, not a special civil action for certiorari was, therefore, the correct remedy. xxxx Settled is the rule that where appeal is available to the aggrieved party, the special civil action for certiorari will not be entertained remedies of appeal and certiorari are mutually exclusive, not alternative or successive. Hence, certiorari is not and cannot be a substitute for a lost appeal, especially if one's own negligence or error in one's choice of remedy occasioned such loss or lapse. One of the requisites of certiorari is that there be no available appeal or any plain, speedy and adequate remedy. Where an appeal was available, as in this case, certiorari will not prosper, even if the ground therefor is grave abuse of discretion. Petitioner's resort to this Court by Petition for Certiorari was a fatal procedural error, and the instant petition must, therefore, fail.11 For the very same reason given above, the CA, therefore, acted properly when it dismissed the petition for certiorari outright, on

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the ground that petitioners should have resorted to the remedy of appeal instead ofcertiorari. Verily, the present Petition for Certiorari should not have been given due course at all. Moreover, since the period for petitioners to file a petition for review on certiorari had lapsed by the time the instant petition was filed, the assailed CA Resolutions have attained finality.1avvphi1 Nevertheless, just to put the matter to rest, the Court reiterates the ruling in Heirs of Valeriano S. Concha, Sr. v. Spouses Lumocso, 12 to wit: In a number of cases, we have held that actions for reconveyance of or for cancellation of title to or to quiet title over real property are actions that fall under the classification of cases that involve "title to, or possession of, real property, or any interest therein." xxxx x x x Thus, under the old law, there was no substantial effect on jurisdiction whether a case is one, the subject matter of which was incapable of pecuniary estimation, under Section 19(1) of B.P. 129, or one involving title to property under Section 19(2). The distinction between the two classes became crucial with the amendment introduced by R.A. No. 7691 in 1994, which expanded the exclusive original jurisdiction of the first level courts to include "all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed value of the property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and costs." Thus, under the present law, original jurisdiction over cases the subject matter of which involves "title to, possession of, real property or any interest therein" under Section 19(2) of B.P. 129 is divided between the first and second level courts, with the assessed value of the real property involved as the benchmark. This amendment was introduced to "unclog the overloaded dockets of the RTCs which would result in the speedier administration of justice."13 Clearly, the RTC and the CA ruled correctly that the MeTC had jurisdiction over private respondents' complaint forAccion Reivindicatoria. IN VIEW OF THE FOREGOING, the petition is DISMISSED for utter lack of merit. The Resolutions of the Court of Appeals in CAG.R. SP No. 78978, dated September 15, 2003 and June 1, 2004, are AFFIRMED. SO ORDERED.

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estimation and, therefore, is cognizable by the Regional Trial Court, as provided by Section 19(1) of B.P. 129, as amended.8 G.R. No. 149554 July 1, 2003 YOLANDA and B. The trial court dismissed the complaint for lack of jurisdiction. Petitioners filed a Motion for Reconsideration, 9 which was denied on July 26, 2001. Hence, this petition for review based on the following errors: I YNARES-SANTIAGO, J.: This is a petition for review assailing the Orders dated June 27, 20011 and July 26, 20012 of the Regional Trial Court of Cebu City, Branch 7, in Civil Case No. CEB-24925. On March 2, 2000, petitioner spouses Jorge and Yolanda Huguete instituted against respondent spouses Teofredo Amarillo Embudo and Marites Huguete-Embudo a complaint for "Annulment of TCT No. 99694, Tax Declaration No. 46493, and Deed of Sale, Partition, Damages and Attorneys Fees," docketed as Civil Case No. CEB24925 of the Regional Trial Court of Cebu City, Branch 7. Petitioners alleged that their son-in-law, respondent Teofredo, sold to them a 50-square meter portion of his 150-square meter parcel of land, known as Lot No. 1920-F-2, situated in San Isidro, Talisay, Cebu, for a consideration of P15,000.00; that Teofredo acquired the lot from Ma. Lourdes Villaber-Padillo by virtue of a deed of sale,3 after which Transfer Certificate of Title No. 99694 was issued solely in his name; that despite demands, Teofredo refused to partition the lot between them. On March 15, 2001, respondents filed a Motion to Dismiss 4 the complaint on the ground of lack of jurisdiction over the subject matter of the case, arguing that the total assessed value of the subject land was only P15,000.00 which falls within the exclusive jurisdiction of the Municipal Trial Court, pursuant to Section 33(3)5 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7691.6 Petitioners filed an Opposition to the Motion to Dismiss7 alleging that the subject matter of the action is incapable of pecuniary THE HONORABLE COURT ERRED IN HOLDING THAT IT HAS NO JURISDICTION OVER THE CASE PURSUANT TO SECTION 33 (3) OF BATAS PAMBANSA BILANG 129 IN UTTER DISREGARD OF SECTION 19 (1) OF THE SAME LAW AS WELL AS SETTLED JURISPRUDENCE ENUNCIATED IN RUSSEL VS. VESTIL, 304 SCRA 738 (MARCH 17, 1999) WHICH, WITH DUE RESPECT, WAS TAKEN OUT OF CONTEXT. II THE HONORABLE COURT COMMITTED AN ERROR IN NOT HOLDING THAT RESPONDENTS WHO SEEK AFFIRMATIVE RELIEF AND THEREBY INVOKE THE AUTHORITY OF THE COURT IN THEIR COUNTERCLAIM ARE ESTOPPED TO DENY THE JURISDICTION OF THE HONORABLE COURT.10 The petition lacks merit. Petitioners maintain that the complaint filed before the Regional Trial Court is for the annulment of deed of sale and partition, and is thus incapable of pecuniary estimation. Respondents, on the other hand, insist that the action is one for annulment of title and since the assessed value of the property as stated in the complaint is P15,000.00, it falls within the exclusive jurisdiction of the Municipal Trial Court. The pertinent portions of the complaint alleged: 4. Sometime in the year 1995, Teofredo A. Embudo, the sonin-law of plaintiffs offered them portion of Lot No. 1920-F-2,

SPOUSES JORGE J. HUGUETE and HUGUETE, petitioners, vs. SPOUSES TEOFEDO AMARILLO EMBUDO HUGUETE-EMBUDO, respondents.

MARITES

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situated in San Isidro, Talisay, Cebu, which defendants bought on installment basis from Ma. Lourdes VillaberPadillo. Desirous to live near their daughter and grandchildren, they accepted defendants offer. Immediately, plaintiffs paid defendants the sum of FIFTEEN THOUSAND PESOS (P15,000.00) as full consideration and payment of the purchase of 50-square meter lot at a price of THREE HUNDRED PESOS (P300.00) per square meter; 5. Happily, plaintiffs built their house on the portion they bought from defendants which is adjacent to defendants house. Plaintiffs were issued Tax Declaration No. 53170 for the house, copy is hereto attached to form part hereof and marked as Annex "A"; 6. Notwithstanding repeated demands for the execution of the Deed of Sale, defendants with insidious machination led plaintiffs to believe that the necessary document of conveyance could not as yet be executed for the reason that they have not yet paid in full their obligation to Ma. Lourdes Villaber-Padillo, the original owner of the lot in question, when in truth and in fact, as plaintiffs came to know later, that the aforesaid defendants were already in possession of a Deed of Sale over the entire lot in litigation in which it appeared that they are the sole buyers of the lot, thusly consolidating their ownership of the entire lot to the exclusion of the plaintiffs. A copy of the Deed of Sale is hereto attached to form part hereof and marked as Annex "B." 7. As a way to further their fraudulent design, defendants secured the issuance of Transfer Certificate of Title No. T99694 solely in their names on the basis of the Deed of Sale aforementioned (Annex "A" hereof), without the knowledge of the plaintiffs. A copy of the aforesaid Transfer Certificate of Title is hereto attached as an integral part hereof and marked as Annex "C." 8. Since considerable time had already elapsed that defendants had given plaintiffs a run-around, plaintiffs then demanded for the partition of the lot, segregating a portion in which their residential house stands, and despite such demand defendants, without qualm of conscience refused and still refuse to partition the lot; xxx PRAYER WHEREFORE, premises considered, this Honorable Court is most respectfully prayed to render judgment in favor of plaintiffs and against defendants, ordering 1. Defendants to partition, divide and segregate a portion on which the house of plaintiffs is situated, with an area of Fifty (50) Square Meters; 2. That the Deed of Sale dated December 28, 1995 entered into by and between defendants and the previous owner of the lot in question be annulled and cancelled; 3. The Register of Deeds of the Province of Cebu to annul/cancel Transfer Certificate of Title No. 99694 in the name of the defendants and in lieu thereof directing him to issue Transfer Certificate of Title in favor of plaintiffs for the 50-square meter lot and another Transfer Certificate of Title in favor of defendants for the remaining 100-square meter lot; 4. The Municipal Assessor of Talisay, Cebu to cancel Tax Declaration No. 46493 in the name of the defendants and directing him to issue Tax Declaration in the name of the defendants for the 50-square meter lot and another Tax Declaration in the name of the plaintiffs for the remaining 100-square meter lot; xxx xxx xxx.11 xxx xxx;

In Caiza v. Court of Appeals,12 it was held that what determines the nature of an action as well as which court has jurisdiction over it are the allegations of the complaint and the character of the relief sought. Moreover, in Singsong v. Isabela Sawmill,13 we ruled that:

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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 the 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, where the money claim is purely incidental to, or a consequence of, the principal relief sought, 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 (now Regional Trial Courts). The reliance of the petitioners on the case of Russell v. Vestil 14 is misplaced. In the said case, petitioners sought the annulment of the document entitled, "Declaration of Heirs and Deed of Confirmation of Previous Oral Partition," whereby respondents declared themselves as the only heirs of the late Spouses Casimero and Cesaria Tautho to the exclusion of petitioners. Petitioners brought the action in order for them to be recognized as heirs in the partition of the property of the deceased. It was held that the action to annul the said deed was incapable of pecuniary estimation and the consequent annulment of title and partition of the property was merely incidental to the main action. Indeed, it was also ruled in said case: While actions under Section. 33(3) of B.P. 129 are also incapable of pecuniary estimation, the law specifically mandates that they are cognizable by the MTC, METC, or MCTC where the assessed value of the real property involved does not exceed P20,000.00 in Metro Manila, or P50,000.00, if located elsewhere. x x x.15 In the case at bar, the principal purpose of petitioners in filing the complaint was to secure title to the 50-square meter portion of the property which they purchased from respondents. Petitioners cause of action is based on their right as purchaser of the 50-square meter portion of the land from respondents. They pray that they be declared owners of the property sold. Thus, their complaint involved title to real property or any interest therein. The alleged value of the land which they purchased was P15,000.00, which was within the jurisdiction of Municipal Trial Court. The annulment of the deed of sale between Ma. Lourdes Villaber-Padillo and respondents, as well as of TCT No. 99694, were prayed for in the complaint because they were necessary before the lot may be partitioned and the 50-square meter portion subject thereof may be conveyed to petitioners. Petitioners argument that the present action is one incapable of pecuniary estimation considering that it is for annulment of deed of sale and partition is not well-taken. As stated above, the nature of an action is not determined by what is stated in the caption of the complaint but by the allegations of the complaint and the reliefs prayed for. Where, as in this case, the ultimate objective of the plaintiffs is to obtain title to real property, it should be filed in the proper court having jurisdiction over the assessed value of the property subject thereof. WHEREFORE, in view of the foregoing, the instant petition for review is DENIED. The Order dated June 27, 2001 of the Regional Trial Court of Cebu City, Branch 7, dismissing Civil Case No. CEB24925, and its Order dated July 26, 2001 denying petitioners Motion for Reconsideration, are AFFIRMED. SO ORDERED.

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amount heretofore Plaintiff; G.R. No. 108817 May 10, 1994 ESPERANZA P. SUMULONG, represented by MARIO P. SUMULONG, petitioner, vs. HON. COURT OF APPEALS and INLAND TRAILWAYS, INC., respondents. Tanjuatco, Corpus, Tanjuatco, Tagle-Chua, Cruz & Aquino, for petitioner. Melencio S. Sta. Maria for private respondent. advanced by Defendant to

3. Ordering Defendant to pay to Plaintiff the sum of P5,000.00 as and for attorney's fees; and 4. To pay the costs.
5

The MTC sustained the theory of plaintiff Esperanza P. Sumulong (hereinafter Sumulong) that the defendant (hereinafter INLAND) entered the premises "by stealth and strategy, since it has no sublease when it entered the premises and remained because it misrepresented itself as owned by Jopson and also because it asked to negotiate for a new lease." 6 The MTC disregarded the defense of INLAND that the proper action should have been for unlawful detainer. 7 On appeal to the RTC by INLAND (Civil Case No. 91-58122), the MTC decision was reversed. The RTC held that the MTC's ruling "betrays a misapplication and/or misinterpretation of the law and jurisprudence on Forcible Entry," 8 and that although Sumulong had constructive possession of the subject premises, she was, nevertheless, not in prior physical and actual possession thereof. The latter kind of possession is an essential element in forcible entry; accordingly, her action for forcible entry should fail. It concluded: Under the facts as established and the evidence adduced before the Court a quo, in relation to the applicable law and jurisprudence, the complaint for Forcible Entry as instituted cannot be sustained. Plaintiff's assertion of its right to the possession of the subject properties may nevertheless be ventilated by way of another action, not for Forcible Entry. 9 Hence, it ordered the dismissal of Civil Case No. 132844-CV. Sumulong filed a petition for review with the respondent Court of Appeals which was docketed as CA-G.R. SP No. 27987. 10 Sumulong contended therein that the RTC seriously erred in holding that she

DAVIDE, JR., J.: This is a petition for review on certiorari to set aside the decision 1 of the Court of Appeals of 28 January 1993 in CA-G.R. SP No. 27987 2 affirming the decision of Branch 51 of the Regional Trial Court (RTC) of Manila of 23 April 1992 in Civil Case No. 9158122. 3 The RTC judgment had reversed the decision of Branch 9 of the Metropolitan Trial Court (MTC) of Manila of 3 June 1991 4 in Civil Case No. 132844-CV, a complaint denominated as one for forcible entry and entitled "Esperanza P. Sumulong vs. Inland Trailways, Inc. The dispositive portion of the MTC decision reads: WHEREFORE, judgment is hereby rendered: 1. Ordering Defendant and anyone acting in its behalf to vacate the premises located at M. Earnshaw Street, Sampaloc, Manila, covered by Transfer Certificate of Title Nos. 102994 and 102995; 2. To pay to Plaintiff reasonable compensation for the use of the premises at the rate of P70,000.00 a month starting from June, 1989 until it finally vacates the premises, deducting therefrom any and all

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had failed to establish prior physical possession of the subject premises despite overwhelming evidence to the contrary and in disregarding long established law and jurisprudence when it ordered the dismissal of the complaint for forcible entry. 11 In its challenged Decision of 28 January 1993, the Court of Appeals affirmed the RTC decision on the ground that Sumulong failed to specifically aver in her complaint facts which would clearly show that her cause of action is for forcible entry. It held: Those pertinent allegations in the complaint as well as Mario Sumulong's testimony are facts, intimate and intertwined, proving that private respondent's entry, possession and occupation of the premises were upon the broad knowledge and acquiescence, if not express upon the implied permission of petitioner. And thus, the private respondent, is admittedly in the actual possession of the premises in question. All doubts should be resolved in his [sic] favor, it being the rule of law that the present possessor is to be preferred should a question arise regarding the fact of possession (Art. 539, NCC). We, therefore, find and so hold that petitioner failed to specifically aver in her complaint facts which would clearly show that her cause of action should be for forcible entry, well supporting the findings of the RTC that the petitioner has not shown that she has been deprived of the possession of the premises by force, intimidation, stealth, threat or strategy. On this basis, the complaint for forcible entry cannot be sustained on the ground of lack of cause of action and which should be dismissed on that ground (sec. 1-[g], Rule 16, Revised Rules of Court). To use the words in [S]arona vs. Villegas [22 SCRA 1257] the failure of a plaintiff to specifically aver in the complaint facts which would definitely show that plaintiff's action is for forcible entry that defendant's entry into the land is illegal "is not to be lightly treated." The reason and philosophy behind this rule, apart from the fact that there is distinct difference between the cause of action for forcible entry, on the one hand, and unlawful detainer, on the other hand, is that whatever may be the character of one's prior possession, if he has in his favor priority of time, he has the security that entitles him to stay on the property until he is lawfully ejected by a person having a better right to such possession. 12 In the instant petition filed on 23 March 1993, Sumulong avers that the Court of Appeals gravely erred in holding that she has no cause of action for forcible entry against INLAND and asserts that she was the prior physical possessor of the premises in question and that INLAND's intrusion, occupation, and possession of the subject premises were effected through stealth and strategy. 13 She argues that the prior possession for purposes of the action for forcible entry is not to be reckoned from June 1989 when INLAND first entered the premises, as held by the RTC and the Court of Appeals, but from November 1989, when she "successfully regained actual physical possession of the subject premises" from INLAND which "failed to resist the physical take-over and re-entry." 14 She further contends that the claim of INLAND that it had entered the property in June 1989 by virtue of an oral sublease contract between it and Jopson Management and Development Corp. (hereinafter Jopson), which was, allegedly, part of the consideration for the purchase by INLAND of the adjoining Jopson Supermarket, is untenable because the Deed of Sale executed by Jopson makes no stipulation regarding the sublease, and even grantingarguendo that such sublease was made, it was void because the lessee-sublessor (Jopson) had no more authority to sublease it since the contract of lease in its favor had been cancelled and terminated in view of its abandonment of the premises. Moreover, pursuant to Section VIII of the Lease Contract, Jopson's right to sublease refers only to the improvements it had introduced on the leased lots and not to the latter. In its comment to the petition, INLAND maintains that the complaint in Civil Case No. 132844-CV shows that Sumulong has no cause of action for forcible entry, that Jopson did not abandon the leased premises, that Sumulong had no prior physical possession of the premises, and that INLAND did not employ stealth and strategy to gain possession thereof.

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After the filing of the reply to the comment, this Court resolved to give due course to the petition and to require the parties to submit their memoranda, 15 which they subsequently did. The chief issues for our resolution are (1) whether the complaint in Civil Case No. 132844-CV before the MTC fails to state a cause of action for forcible entry; and (2) assuming that it does not, whether it, in fact, contains sufficient allegations for unlawful detainer for which judgment may be rendered accordingly. Settled is the rule that the lack of a cause of action, which is a ground for a motion to dismiss under Section 1(g), Rule 16 of the Rules of Court, must appear on the face of the complaint, i.e., it must be determined from the allegations of the complaint and from none other. A complaint should not be dismissed for insufficiency unless it appears clearly from the face of the complaint that the plaintiff is not entitled to any relief under any state of facts which could be proved within the facts alleged therein. Stated otherwise, though the allegations in the complaint are ambiguous, indefinite or uncertain but, nevertheless, a cause of action can, in any manner, be made out therefrom, and the plaintiff would be entitled to recover in any aspect of the facts or any combination of the facts alleged, if they were to be proved, then the motion to dismiss should be denied. 16 When a defendant perceives that the complaint states no cause of action, the better procedure would be to file a motion to dismiss. If, however, none is filed, that defense may be pleaded as an affirmative defense in accordance with Section 5, Rule 16 of the Rules of Court. And, pursuant to Section 2 of Rule 9, even if it is not so pleaded, that defense is not deemed waived; it may be pleaded in a later pleading, if one is permitted, by motion for judgment on the pleadings, or at the trial on the merits. In the last instance, however, the motion shall be disposed of in the light of any evidence which may have been received. Accordingly, the issues thus defined can only be properly resolved by an examination and evaluation of the allegations in the complaint in Civil Case No. 132844-CV of the MTC of Manila, whose subject matter involves two adjoining lots owned by Sumulong located along M. Earnshaw Street, Sampaloc, Manila, and covered by Transfer Certificates of Title Nos. 102994 and 102995. The pertinent paragraphs of the complaint read: 4. On November 27, 1975, plaintiff, represented by her then attorney-in-fact, Juan Sumulong III, entered into a Contract of Lease with Jopson Management and Development Corporation (hereinafter "Jopson"), covering the premises set forth in TCT Nos. 102994 and 102995, thru its President, Mr. Hernan Jopson. The properties subject of the said Contract of Lease (which are also the properties subject of this complaint) adjoin the Jopson Supermarket owned and operated by Jopson, and were utilized by Jopson as parking lot and warehouse of goods/products sold in the supermarket. A copy of said Contract of Lease is hereto attached, marked as Annex "B", and made an integral part hereof; 5. Pertinently, Section III of the Contract of Lease provides: . . . If LESSEE shall at any time fail or neglect to perform or comply with any of the covenants, conditions or restrictions, stipulated, or if LESSEE shall become bankrupt or insolvent, or the LESSEE abandons the property or refuses to pay the rent for six (6) months, then, in any such cases, this lease contract shall become automatically terminated and cancelled, and premises subject of this lease shall be vacated peacefully by LESSEE for LESSOR to hold and enjoy henceforth. . . . Upon cancellation of this contract, LESSEE hereby grants to LESSOR the right to enter and take possession of the premises. . . . (Emphasis supplied).' Likewise, paragraph two (2), Sec. VII of the Contract of Lease provides: VII. ENTRY AND INSPECTION OF PROPERTY. xxx xxx xxx

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In case the premises shall be deserted or vacated before the expiration of this lease, the LESSOR shall have the right to enter the same, as agent of the LESSEE, without being liable for any prosecution of damages therefor, and the LESSOR shall have the option to re-let the same, as the agent of the LESSEE, and received the rent therefor to be applied in payment of the rentals and damages due hereunder, holding the LESSEE liable for any deficiency. 6. Sometime in 1988, Jopson Supermarket (adjoining the leased premises) was beset with a strike by its laborers. Consequently, it ceased operations for about two (2) years; 7. Thereafter, in 1989, plaintiff's representative were informed through the print media, of the sale of Jopson's business (supermarket) to Inland Supermarket; 8. Thus, upon her arrival from the United States in the second quarter of 1989, plaintiff instructed her representatives to inspect the leased premises adjoining Jopson Supermarket, pursuant to Section VII of the lease contract. True indeed, plaintiff discovered, after a series of inspections done by plaintiff's representatives, that Jopson had vacated and deserted the leased premises covered under the Contract of Lease (Annex "B"). Even worse, plaintiff discovered that Jopson tolerated the illegal entry of defendant Inland Trailways into the property, without any valid agreement; 9. Accordingly, pursuant to Section III of the Contract of Lease, the plaintiff's lease contract with Jopson was rendered automatically terminated and canceled. In November 1989, by virtue of Sections II and VII of the Contract of Lease, plaintiff through her attorney-in-fact, Mario P. Sumulong, took possession of the subject properties. Defendant Inland which was then occupying the subject properties, offered no resistance to the take over, since defendant Inland Trailways could not present any valid agreement granting it the right of possession over the subject properties. (It is noteworthy that alleged sublease procured by defendant Inland Trailways from Jopson was executed only on April 2, 1990.) 10. A couple of days later, defendant Inland Trailways misrepresented to plaintiff that Mr. Hernan Jopson is also the owner of Inland Supermarket, and that Jopson Supermarket had resumed operations under the name of Inland Supermarket. Because of defendant Inland Trailways' misrepresentation, plaintiff was misled into accepting a check payment from defendant Inland Trailways. . . . 11. However, in December 1989, upon verification by plaintiff's representatives, plaintiff discovered that Jopson does not have any interest in Inland Supermarket, or in Inland Trailways and that Jopson and Inland Supermarket/Inland Trailways have a totally different set of directors and stockholders. When confronted by plaintiff's representative, defendant's representatives admitted such fact, and further admitted that defendant Inland Trailways has no sub-lease agreement with Jopson. Worse, neither defendant Inland Trailways nor Inland Supermarket has any written contract with plaintiff; 12. Consequently, but still in December 1989, upon discovering the misrepresentation, plaintiff notified Jopson of the termination and cancellation of their lease contract, and took possession of the subject properties. Again, defendant Inland Trailways offered no resistance for lack of a valid agreement granting it the right of possession over the subject properties; 13. Thereafter, during the take over by the plaintiff, defendant Inland Trailways, through its representatives Riza Moises and Evelyn Castro, persuaded plaintiff's representative Mario P. Sumulong, to grant defendant Inland Trailways the

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temporary use of the subject properties, pending negotiations for the lease of the premises. Anticipating in good faith that a lease contract would be finalized, plaintiff agreed to let defendant Inland Trailways occupy the subject properties. Negotiations were then held from February 1 to March 1, 1990; 14. However, due to defendant's insistence on an unreasonably low amount of the lease rental, plaintiff decided not to lease her properties to defendant Inland Trailways. This was made known to the defendant in a letter dated March 14, 1990 by plaintiff's son, Mario P. Sumulong. A copy of said letter is hereto attached, marked as Annex "D", and made an integral part hereof; 15. At the same time, to fully protect her interest, on March 14, 1990, plaintiff, thru her son Mario P. Sumulong, formally notified Jopson of the termination of the Contract of Lease due to abandonment of the leased premises. A copy of said letter is hereto attached, marked as Annex "E", and made an integral part hereof; 16. Likewise, on April 25, 1990, plaintiff thru counsel, confirmed of such termination. A copy of said letter is hereto attached, marked as Annex "F," and made an integral part hereof; 17. However, on April 25, 1990, without plaintiff's knowledge, defendant Inland Trailways, through strategy and stealth, procured a sub-lease agreement from Jopson, despite the fact that plaintiff's lease contract with Jopson had earlier been terminated and cancelled. . . . It is significant that the monthly rental of ELEVEN THOUSAND (P11,000.00) PESOS for the sub-lease of the subject properties as contained in the sub-lease agreement, is grossly disproportionate to the prevailing rental rates of real properties in the area, and therefore show that the sub-lease agreement is a mere sham or ploy designed to enable defendant Inland Trailways to gain entry and possession of the subject properties without any valid lease contract with the plaintiff, and after plaintiff decided not to lease the subject properties to the defendant. Furthermore, it bears to emphasize that the sub-lease agreement was entered into only after Jopson had been served with the notice of termination of its lease contract with plaintiff, and only after defendant Inland Trailways was informed by plaintiff that she is not leasing her premises to defendant; 18. This alarming development compelled plaintiff, through her representatives, to take over the physical possession of the leased premises on April 4, 1990. However, on the night of April 4, 1990, defendant Inland Trailways again misrepresented to plaintiff that it was ready to finalize the appropriate lease contract with plaintiff. Such misrepresentation misled plaintiff into allowing defendant Inland Trailways once more to enter the subject properties; 19. However, after defendant Inland Trailways took possession of the subject properties, it maliciously refused to execute and enter into a lease contract with plaintiff, and failed to deliver the agreed monetary consideration for the temporary use of subject premises, or to peacefully return possession of the same; 20. Through such stealth and strategy, defendant Inland Trailways illegally deprived plaintiff of the possession of the subject properties to plaintiff's great damage and prejudice; 21. Except those times when plaintiff took over the subject properties for a while, defendant Inland Trailways has remained in illegal possession of the said premises, since June 1989, and, up to the present, still retains such possession thereof;

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22. Despite repeated demands, defendant Inland Trailways refuses to vacate the subject properties' premises and to turn over the peaceful possession thereof to plaintiff, having repeatedly threatened to use "goons", the military, judges and senators to repel any attempt of plaintiff to peacefully enforce her right. A copy of counsel's latest demand letter to defendant dated April 25, 1990 is hereto attached, marked as Annex "H", and made an integral part hereof; 23. The reasonable rental value of said premises based on an estimated fair market value of P6,500.00 per square meter is EIGHTY THOUSAND PESOS (P80,000.00) a month; 17 Forcible entry and unlawful detainer are two distinct causes of action defined in Section 1, Rule 70 of the Rules of Court. In forcible entry, one is deprived of physical possession of any land or building by means of force, intimidation, threat, strategy, or stealth. In unlawful detainer, one unlawfully withholds possession thereof after the expiration or termination of his right to hold possession under any contract, express or implied. In forcible entry, the possession is illegal from the beginning and the only issue is who has the prior possession de facto. In unlawful detainer, possession was originally lawful but became unlawful by the expiration or termination of the right to possess and the issue of rightful possession is the one decisive, for in such action, the defendant is the party in actual possession and the plaintiff's cause of action is the termination of the defendant's right to continue in possession. 18 Accordingly, in forcible entry, the plaintiff must allege in the complaint and prove that he was in prior physical possession of the property in litigation until he was deprived thereof by the defendant, but in unlawful detainer, the plaintiff need not have prior physical possession of the property, 19 or, elsewise stated, prior physical possession is not an indispensable requirement in an unlawful detainer case. 20 The aforequoted allegations in the complaint of Sumulong indubitably show that she anchors her claim of prior physical possession on her peaceful take-over of the leased premises in November 1989 from INLAND who had been in possession thereof since June 1989 allegedly by virtue of an oral sublease contract. She overlooks, however, that as her allegations show, she allowed INLAND to re-occupy the premises in December 1989 when it misrepresented to her that Jopson was also its (INLAND's) owner. When it was ascertained that Jopson was not, she again re-took possession of the premises, only, thereafter, to allow again INLAND to temporarily re-occupy the premises because of its representation that it will negotiate with her a contract of lease in its favor. Such negotiations were undertaken from 1 February 1990 to 1 March 1990. However, since the parties could not agree on the rate of rentals, and INLAND procured through "strategy and stealth" a sublease agreement from Jopson on 2 April 1990, Sumulong re-took the physical possession of the leased premises on 4 April 1990. However, on the night of the said date, INLAND misrepresented to her that it was ready to finalize the appropriate lease contract and because of that misrepresentation, INLAND was again able to reoccupy the premises. It is clear then that since Sumulong's first retaking of possession in November 1989, INLAND was permitted to re-occupy the premises thrice. The words strategy and stealth, as means of forcible entry, are used by Sumulong in paragraphs 17 and 20 of her complaint. They refer, however, to the procurement by INLAND of the sublease agreement on 2 April 1990 and its misrepresentation that it was ready to finalize the appropriate lease contract. Assuming them to be true, those acts hardly constitute either strategy or stealth as a means of forcible entry. "Strategy" in this regard could only mean machination or artifice and considering that the parties tangled for weeks to reach an agreement on the terms and conditions of a contract of lease, no such machination or artifice could be said to have been employed by INLAND. "Stealth," on the other hand, is defined as any secret, sly, or clandestine act to avoid discovery and to gain entrance into or remain within residence of another without permission. 21 The allegations then in paragraphs 17 and 20 of the complaint that INLAND employed "strategy" and "stealth" are conclusions which are not supported by the material operative facts averred in the complaint. On the contrary, they are negated by paragraph 21 which reads:

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21. Except those times when plaintiff took over the subject properties for a while, defendant Inland Trailways has remained in illegal possession of the said premises, since June 1989, and, up to the present, still retains such possession thereof." (Emphasis supplied). This paragraph and Sumulong's allegations of strategy and stealth on 4 April 1990 also refute her argument that for purposes of determining prior physical possession, her retaking of the property in November 1989 should be the basis in determining her cause of action for forcible entry. It must be stated, however, that whatever illegality may have tainted INLAND's entry in June 1989 was removed by Sumulong's acceptance of rentals from INLAND after her November 1989 take-over, even if such acceptance was thru the latter's misrepresentation that Jopson is also its owner. INLAND's succeeding acts of re-occupying the premises twice thereafter were tolerated by Sumulong for the reasons earlier adverted to. We thus agree with the RTC and the Court of Appeals that the complaint fails to show a cause of action for forcible entry. Neither was Sumulong able to prove it by her evidence, which on the contrary, established that she allowed INLAND to re-occupy the premises, not because of the claim of the latter of an oral sublease agreement and then of a written sublease agreement, but because of the allegation that Jopson is the owner of INLAND; that INLAND would negotiate for a formal lease contract; and that INLAND was ready to finalize the lease contract. Also, from the allegations in the complaint, the nullity of the sublease agreement which INLAND allegedly obtained from Jopson on 2 April 1990 is beyond question. Jopson had no right to sublease the property since the contract of lease in its favor had already been automatically cancelled pursuant to Section III thereof and Jopson was properly notified of such automatic cancellation first in December 1989 and then on 14 March 1990. Neither party proved that Jopson protested the cancellation of the contract of lease. A sublessee can invoke no right superior to that of his sublessor. 22 Consequently, as correctly held by the MTC, "the written sublease was only resorted to by Defendant [INLAND] when the parties could not agree as to the terms of a new lease," 23 which, however, the MTC erroneously considered as the act which constituted "stealth and strategy." 24 Notwithstanding the foregoing, the complaint should not have been dismissed merely for its failure to state a cause of action for forcible entry, for although Sumulong has designated or denominated it in the caption as one forforcible entry, her allegations in the body thereof sufficiently establish a cause of action for unlawful detainer. Well-settled is the rule that what determines the nature of the action as well as the court which has jurisdiction over the case are the allegations in the complaint. 25 The cause of action in a complaint is not what the designation of the complaint states, but what the allegations in the body of the complaint define or describe. The designation or caption is not controlling, more than the allegations in the complaint themselves are, for it is not even an indispensable part of the complaint. 26 It is equally settled that in an action for unlawful detainer, an allegation that the defendant is unlawfully withholding possession from the plaintiff is deemed sufficient, 27 and a complaint for unlawful detainer is sufficient if it alleges that the withholding of possession or the refusal to vacate is unlawful without necessarily employing the terminology of the law. 28 It is easily discernible from the allegations in the complaint that the re-occupation by INLAND of the premises in question in December 1989 after it was discovered that INLAND was not owned by Jopson was by virtue of Sumulong's tolerance because INLAND promised to negotiate for a contract of lease and consequently, its continuance in possession was conditioned on the execution of a lease contract. Possession by tolerance is lawful. 29 However, a person who occupies the land of another at the latter's tolerance or permission without any contract between them is necessarily bound by an implied promise that he will vacate upon demand, failing which a summary action for ejectment is the proper remedy against him. 30 So here, as alleged in the complaint, when the negotiations for a lease contract fell through and Sumulong made "repeated demands" 31 for INLAND to vacate the Sumulong property but "defendant Inland Trailways refuse[d] to vacate the subject properties' premises and to turn over the peaceful possession thereof to plaintiff," 32 INLAND's possession became unlawful. Such repeated demands for INLAND to vacate the

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property are sufficient compliance with the jurisdictional requirement of demand in an unlawful detainer case. In Hautea vs. Magallon, 33 we held that an allegation in an original complaint for illegal detainer that in spite of demands made by the plaintiff the defendants had refused to restore the land is considered sufficient compliance with the jurisdictional requirement of previous demand. Accordingly, we rule that the allegations in the complaint in Civil Case No. 132844-CV adequately and sufficiently establish a cause of action for unlawful detainer and that the prayer therein is equally appropriate for an action for unlawful detainer. The evidence summarized in the MTC's decision preponderantly supports that cause of action. A judgment then for unlawful detainer could be validly rendered in Civil Case No. 132844-CV and the dispositive portion of the MTC's decision therein is consistent with that for unlawful detainer, except that the fixed reasonable compensation for the use of the premises should only commence to run from December 1989 and not from June 1989. WHEREFORE, the instant petition is GRANTED. The challenged decision of the Court of Appeals of 28 January 1993 in CA-G.R. SP No. 27987 and the decision of Branch 51 of the Regional Trial Court of Manila of 23 April 1992 in Civil Case No. 91-58122 are SET ASIDE while the decision of Branch 9 of the Metropolitan Trial Court of Manila of 3 June 1991 in Civil Case No. 132844-CV is REINSTATED, subject to the modification indicated above. No pronouncement as to costs. SO ORDERED.

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In a Memorandum of Agreement9 dated 17 March 2005, respondents Tan and Obiedo granted petitioner until 31 December 2005 to settle its indebtedness, and condoned the interests, penalties and surcharges accruing thereon from 1 October 2004 to 31 December 2005 which amounted to P74,678,647.00. The Memorandum of Agreement required, in turn, that petitioner execute simultaneously with the said Memorandum, "by way of dacion en pago," Deeds of Absolute Sale in favor of respondents Tan and Obiedo, covering the same parcels of land subject of the mortgages. The Deeds of Absolute Sale would be uniformly dated 2 January 2006, and state that petitioner sold to respondents Tan and Obiedo the parcels of land for the following purchase prices: TCT No. DECISION CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision 1 dated 22 November 2006 of the Court of Appeals in CA-G.R. SP No. 94800. The Court of Appeals, in its assailed Decision, affirmed the Order2 dated 24 March 2006 of the Regional Trial Court (RTC), Branch 22, of Naga City, in Civil Case No. RTC-2006-0030, ordering petitioner Ruby Shelter Builders and Realty Development Corporation to pay additional docket/filing fees, computed based on Section 7(a) of Rule 141 of the Rules of Court, as amended. The present Petition arose from the following facts: Petitioner obtained a loan in the total amount of P95,700,620.00 from respondents Romeo Y. Tan (Tan) and Roberto L. Obiedo (Obiedo), secured by real estate mortgages over five parcels of land, all located in Triangulo, Naga City, covered by Transfer Certificates of Title (TCTs) No. 38376,4 No. 29918,5 No. 38374,6 No. 39232,7 and No. 39225,8 issued by the Registry of Deeds for Naga City, in the name of petitioner. When petitioner was unable to pay the loan when it became due and demandable, respondents Tan and Obiedo agreed to an extension of the same.
3

G.R. No. 175914

February 10, 2009

RUBY SHELTER BUILDERS AND REALTY DEVELOPMENT CORPORATION, Petitioner, vs. HON. PABLO C. FORMARAN III, Presiding Judge of Regional Trial Court Branch 21, Naga City, as Pairing Judge for Regional Trial Court Branch 22, Formerly Presided By HON. NOVELITA VILLEGAS-LLAGUNO (Retired 01 May 2006), ROMEO Y. TAN, ROBERTO L. OBIEDO and ATTY. TOMAS A. REYES, Respondents.

Purchase Price P 9,340,000.00 P 28,000,000.00 P 12,000,000.00 P 1,600,000.00 P 1,600,000.00

38376 29918 38374 39232 39225

Petitioner could choose to pay off its indebtedness with individual or all five parcels of land; or it could redeem said properties by paying respondents Tan and Obiedo the following prices for the same, inclusive of interest and penalties: TCT No. 38376 29918 38374 39232 39225 Redemption Price P 25,328,939.00 P 35,660,800.00 P 28,477,600.00 P 6,233,381.00 P 6,233,381.00

In the event that petitioner is able to redeem any of the aforementioned parcels of land, the Deed of Absolute Sale covering the

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said property shall be nullified and have no force and effect; and respondents Tan and Obiedo shall then return the owners duplicate of the corresponding TCT to petitioner and also execute a Deed of Discharge of Mortgage. However, if petitioner is unable to redeem the parcels of land within the period agreed upon, respondents Tan and Obiedo could already present the Deeds of Absolute Sale covering the same to the Office of the Register of Deeds for Naga City so respondents Tan and Obiedo could acquire TCTs to the said properties in their names. The Memorandum of Agreement further provided that should petitioner contest, judicially or otherwise, any act, transaction, or event related to or necessarily connected with the said Memorandum and the Deeds of Absolute Sale involving the five parcels of land, it would pay respondents Tan and Obiedo P10,000,000.00 as liquidated damages inclusive of costs and attorneys fees. Petitioner would likewise pay respondents Tan and Obiedo the condoned interests, surcharges and penalties.10 Finally, should a contest arise from the Memorandum of Agreement, Mr. Ruben Sia (Sia), President of petitioner corporation, personally assumes, jointly and severally with petitioner, the latters monetary obligation to respondent Tan and Obiedo. Respondent Atty. Tomas A. Reyes (Reyes) was the Notary Public who notarized the Memorandum of Agreement dated 17 March 2005 between respondent Tan and Obiedo, on one hand, and petitioner, on the other. Pursuant to the Memorandum of Agreement, petitioner, represented by Mr. Sia, executed separate Deeds of Absolute Sale,11 over the five parcels of land, in favor of respondents Tan and Obiedo. On the blank spaces provided for in the said Deeds, somebody wrote the 3rd of January 2006 as the date of their execution. The Deeds were again notarized by respondent Atty. Reyes also on 3 January 2006. Without payment having been made by petitioner on 31 December 2005, respondents Tan and Obiedo presented the Deeds of Absolute Sale dated 3 January 2006 before the Register of Deeds of Naga City on 8 March 2006, as a result of which, they were able to secure TCTs over the five parcels of land in their names. On 16 March 2006, petitioner filed before the RTC a Complaint12 against respondents Tan, Obiedo, and Atty. Reyes, for declaration of nullity of deeds of sales and damages, with prayer for the issuance of a writ of preliminary injunction and/or temporary restraining order (TRO). The Complaint was docketed as Civil Case No. 2006-0030. On the basis of the facts already recounted above, petitioner raised two causes of action in its Complaint. As for the first cause of action, petitioner alleged that as early as 27 December 2005, its President already wrote a letter informing respondents Tan and Obiedo of the intention of petitioner to pay its loan and requesting a meeting to compute the final amount due. The parties held meetings on 3 and 4 January 2006 but they failed to arrive at a mutually acceptable computation of the final amount of loan payable. Respondents Tan and Obiedo then refused the request of petitioner for further dialogues. Unbeknownst to petitioner, despite the ongoing meetings, respondents Tan and Obiedo, in evident bad faith, already had the pre-executed Deeds of Absolute Sale notarized on 3 January 2006 by respondent Atty. Reyes. Atty. Reyes, in connivance with respondents Tan and Obiedo, falsely made it appear in the Deeds of Absolute Sale that Mr. Sia had personally acknowledged/ratified the said Deeds before Atty. Reyes. Asserting that the Deeds of Absolute Sale over the five parcels of land were executed merely as security for the payment of its loan to respondents Tan and Obiedo; that the Deeds of Absolute Sale, executed in accordance with the Memorandum of Agreement, constituted pactum commisorium and as such, were null and void; and that the acknowledgment in the Deeds of Absolute Sale were falsified, petitioner averred: 13. That by reason of the fraudulent actions by the [herein respondents], [herein petitioner] is prejudiced and is now in danger of being deprived, physically and legally, of the mortgaged properties without benefit of legal processes such as the remedy of foreclosure and its attendant procedures, solemnities and remedies available to a mortgagor, while [petitioner] is desirous and willing to pay its obligation and have the mortgaged properties released.13

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In support of its second cause of action, petitioner narrated in its Complaint that on 18 January 2006, respondents Tan and Obiedo forcibly took over, with the use of armed men, possession of the five parcels of land subject of the falsified Deeds of Absolute Sale and fenced the said properties with barbed wire. Beginning 3 March 2006, respondents Tan and Obiedo started demolishing some of the commercial spaces standing on the parcels of land in question which were being rented out by petitioner. Respondents Tan and Obiedo were also about to tear down a principal improvement on the properties consisting of a steel-and-concrete structure housing a motor vehicle terminal operated by petitioner. The actions of respondents Tan and Obiedo were to the damage and prejudice of petitioner and its tenants/lessees. Petitioner, alone, claimed to have suffered at least P300,000.00 in actual damages by reason of the physical invasion by respondents Tan and Obiedo and their armed goons of the five parcels of land. Ultimately, petitioners prayer in its Complaint reads: WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court that upon the filing of this complaint, a 72hour temporary restraining order be forthwith issued ex parte: (a) Restraining [herein respondents] Tan and Obiedo, their agents, privies or representatives, from committing act/s tending to alienate the mortgaged properties from the [herein petitioner] pending the resolution of the case, including but not limited to the acts complained of in paragraph "14", above; (b) Restraining the Register of Deeds of Naga City from entertaining moves by the [respondents] to have [petitioners] certificates of title to the mortgaged properties cancelled and changed/registered in [respondents] Tans and Obiedos names, and/or released to them; (c) After notice and hearing, that a writ of preliminary injunction be issued imposing the same restraints indicated in the next preceding two paragraphs of this prayer; and (d) After trial, judgment be rendered: 1. Making the injunction permanent; 2. Declaring the provision in the Memorandum of Agreement requiring the [petitioner] to execute deed of sales (sic) in favor of the [respondents Tan and Obiedo] as dacion en pago in the event of nonpayment of the debt as pactum commissorium; 3. Annulling the Deed[s] of Sale for TCT Nos. 29918, 38374, 38376, 39225 and 39232, all dated January 3, 2006, the same being in contravention of law; 4. Ordering the [respondents] jointly and solidarily to pay the [petitioner] actual damages of at leastP300,000.00; attorneys fees in the amount of P100,000.00 plus P1,000.00 per court attendance of counsel as appearance fee; litigation expenses in the amount of at least P10,000.00 and exemplary damages in the amount of P300,000.00, plus the costs. [Petitioner] further prays for such other reliefs as may be proper, just and equitable under the premises.14 Upon filing its Complaint with the RTC on 16 March 2006, petitioner paid the sum of P13,644.25 for docket and other legal fees, as assessed by the Office of the Clerk of Court. The Clerk of Court initially considered Civil Case No. 2006-0030 as an action incapable of pecuniary estimation and computed the docket and other legal fees due thereon according to Section 7(b)(1), Rule 141 of the Rules of Court. Only respondent Tan filed an Answer15 to the Complaint of petitioner. Respondent Tan did admit that meetings were held with Mr. Sia, as the representative of petitioner, to thresh out Mr. Sias charge that the computation by respondents Tan and Obiedo of the interests, surcharges and penalties accruing on the loan of petitioner was replete with errors and uncertainties. However, Mr. Sia failed to back up his accusation of errors and uncertainties and to present his own final computation of the amount due. Disappointed and exasperated, respondents Tan and Obiedo informed Mr. Sia that they had already asked respondent Atty.

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Reyes to come over to notarize the Deeds of Absolute Sale. Respondent Atty. Reyes asked Mr. Sia whether it was his signature appearing above his printed name on the Deeds of Absolute Sale, to which Mr. Sia replied yes. On 4 January 2006, Mr. Sia still failed to establish his claim of errors and uncertainties in the computation of the total amount which petitioner must pay respondent Tan and Obiedo. Mr. Sia, instead, sought a nine-month extension for paying the loan obligation of petitioner and the reduction of the interest rate thereon to only one percent (1%) per month. Respondents Tan and Obiedo rejected both demands. Respondent Tan maintained that the Deeds of Absolute Sale were not executed merely as securities for the loan of petitioner. The Deeds of Absolute Sale over the five parcels of land were the consideration for the payment of the total indebtedness of petitioner to respondents Tan and Obiedo, and the condonation of the 15-month interest which already accrued on the loan, while providing petitioner with the golden opportunity to still redeem all or even portions of the properties covered by said Deeds. Unfortunately, petitioner failed to exercise its right to redeem any of the said properties. Belying that they forcibly took possession of the five parcels of land, respondent Tan alleged that it was Mr. Sia who, with the aid of armed men, on board a Sports Utility Vehicle and a truck, rammed into the personnel of respondents Tan and Obiedo causing melee and disturbance. Moreover, by the execution of the Deeds of Absolute Sale, the properties subject thereof were, ipso jure, delivered to respondents Tan and Obiedo. The demolition of the existing structures on the properties was nothing but an exercise of dominion by respondents Tan and Obiedo. Respondent Tan, thus, sought not just the dismissal of the Complaint of petitioner, but also the grant of his counterclaim. The prayer in his Answer is faithfully reproduced below: Wherefore, premises considered, it is most respectfully prayed that, after due hearing, judgment be rendered dismissing the complaint, and on the counterclaim, [herein petitioner] and Ruben Sia, be ordered to indemnify, jointly and severally [herein respondents Tan and Obiedo] the amounts of not less than P10,000,000.00 as liquidated damages and the further sum of not less than P500,000.00 as attorneys fees. In the alternative, and should it become necessary, it is hereby prayed that [petitioner] be ordered to pay herein [respondents Tan and Obiedo] the entire principal loan of P95,700,620.00, plus interests, surcharges and penalties computed from March 17, 2005 until the entire sum is fully paid, including the amount of P74,678,647.00 foregone interest covering the period from October 1, 2004 to December 31, 2005 or for a total of fifteen (15) months, plus incidental expenses as may be proved in court, in the event that Annexes "G" to "L" be nullified. Other relief and remedies as are just and equitable under the premises are hereby prayed for.16 Thereafter, respondent Tan filed before the RTC an Omnibus Motion in which he contended that Civil Case No. 2006-0030 involved real properties, the docket fees for which should be computed in accordance with Section 7(a), not Section 7(b)(1), of Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC which took effect on 16 August 2004. Since petitioner did not pay the appropriate docket fees for Civil Case No. 2006-0030, the RTC did not acquire jurisdiction over the said case. Hence, respondent Tan asked the RTC to issue an order requiring petitioner to pay the correct and accurate docket fees pursuant to Section 7(a), Rule 141 of the Rules of Court, as amended; and should petitioner fail to do so, to deny and dismiss the prayer of petitioner for the annulment of the Deeds of Absolute Sale for having been executed in contravention of the law or of the Memorandum of Agreement as pactum commisorium. As required by the RTC, the parties submitted their Position Papers on the matter. On 24 March 2006, the RTC issued an Order17 granting respondent Tans Omnibus Motion. In holding that both petitioner and respondent Tan must pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended, the RTC reasoned: It must be noted that under paragraph (b) 2. of the said Section 7, it is provided that QUIETING OF TITLE which is an action classified as beyond pecuniary estimation "shall be governed by paragraph (a)". Hence, the filing fee in an action for Declaration of Nullity of Deed which is also classified as beyond pecuniary estimation, must be computed based on the provision of Section 7(A) herein-above, in part, quoted.

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Since [herein respondent], Romeo Tan in his Answer has a counterclaim against the plaintiff, the former must likewise pay the necessary filling (sic) fees as provided for under Section 7 (A) of Amended Administrative Circular No. 35-2004 issued by the Supreme Court.18 Consequently, the RTC decreed on the matter of docket/filing fees: WHEREFORE, premises considered, the [herein petitioner] is hereby ordered to pay additional filing fee and the [herein respondent], Romeo Tan is also ordered to pay docket and filing fees on his counterclaim, both computed based on Section 7(a) of the Supreme Court Amended Administrative Circular No. 35-2004 within fifteen (15) days from receipt of this Order to the Clerk of Court, Regional Trial Court, Naga City and for the latter to compute and to collect the said fees accordingly.19 Petitioner moved20 for the partial reconsideration of the 24 March 2006 Order of the RTC, arguing that Civil Case No. 2006-0030 was principally for the annulment of the Deeds of Absolute Sale and, as such, incapable of pecuniary estimation. Petitioner submitted that the RTC erred in applying Section 7(a), Rule 141 of the Rules of Court, as amended, to petitioners first cause of action in its Complaint in Civil Case No. 2006-0030. In its Order21 dated 29 March 2006, the RTC refused to reconsider its 24 March 2006 Order, based on the following ratiocination: Analyzing, the action herein pertains to real property, for as admitted by the [herein petitioner], "the deeds of sale in question pertain to real property" x x x. The Deeds of Sale subject of the instant case have already been transferred in the name of the [herein respondents Tan and Obiedo]. Compared with Quieting of Title, the latter action is brought when there is cloud on the title to real property or any interest therein or to prevent a cloud from being cast upon title to the real property (Art. 476, Civil Code of the Philippines) and the plaintiff must have legal or equitable title to or interest in the real property which is the subject matter of the action (Art. 447, ibid.), and yet plaintiff in QUIETING OF TITLE is required to pay the fees in accordance with paragraph (a) of Section 7 of the said Amended Administrative Circular No. 35-2004, hence, with more reason that the [petitioner] who no longer has title to the real properties subject of the instant case must be required to pay the required fees in accordance with Section 7(a) of the Amended Administrative Circular No. 35-2004 afore-mentioned. Furthermore, while [petitioner] claims that the action for declaration of nullity of deed of sale and memorandum of agreement is one incapable of pecuniary estimation, however, as argued by the [respondent Tan], the issue as to how much filing and docket fees should be paid was never raised as an issue in the case of Russell vs. Vestil, 304 SCRA 738. xxxx WHEREFORE, the Motion for Partial Reconsideration is hereby DENIED.22 In a letter dated 19 April 2006, the RTC Clerk of Court computed, upon the request of counsel for the petitioner, the additional docket fees petitioner must pay for in Civil Case No. 2006-0030 as directed in the afore-mentioned RTC Orders. Per the computation of the RTC Clerk of Court, after excluding the amount petitioner previously paid on 16 March 2006, petitioner must still pay the amount of P720,392.60 as docket fees.23 Petitioner, however, had not yet conceded, and it filed a Petition for Certiorari with the Court of Appeals; the petition was docketed as CA-G.R. SP No. 94800. According to petitioner, the RTC24 acted with grave abuse of discretion, amounting to lack or excess of jurisdiction, when it issued its Orders dated 24 March 2006 and 29 March 2006 mandating that the docket/filing fees for Civil Case No. 2006-0030, an action for annulment of deeds of sale, be assessed under Section 7(a), Rule 141 of the Rules of Court, as amended. If the Orders would not be revoked, corrected, or rectified, petitioner would suffer grave injustice and irreparable damage. On 22 November 2006, the Court of Appeals promulgated its Decision wherein it held that:

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Clearly, the petitioners complaint involves not only the annulment of the deeds of sale, but also the recovery of the real properties identified in the said documents. In other words, the objectives of the petitioner in filing the complaint were to cancel the deeds of sale and ultimately, to recover possession of the same. It is therefore a real action. Consequently, the additional docket fees that must be paid cannot be assessed in accordance with Section 7(b). As a real action, Section 7(a) must be applied in the assessment and payment of the proper docket fee. Resultantly, there is no grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the court a quo. By grave abuse of discretion is meant capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, and mere abuse of discretion is not enough it must be grave. The abuse must be grave and patent, and it must be shown that the discretion was exercised arbitrarily and despotically.1avvphi1 Such a situation does not exist in this particular case. The evidence is insufficient to prove that the court a quo acted despotically in rendering the assailed orders. It acted properly and in accordance with law. Hence, error cannot be attributed to it.25 Hence, the fallo of the Decision of the appellate court reads: WHEREFORE, the petition for certiorari is DENIED. The assailed Orders of the court a quo are AFFIRMED.26 Without seeking reconsideration of the foregoing Decision with the Court of Appeals, petitioner filed its Petition for Review on Certiorari before this Court, with a lone assignment of error, to wit: 18. The herein petitioner most respectfully submits that the Court of Appeals committed a grave and serious reversible error in affirming the assailed Orders of the Regional Trial Court which are clearly contrary to the pronouncement of this Honorable Court in the case of Spouses De Leon v. Court of Appeals, G.R. No. 104796, March 6, 1998, not to mention the fact that if the said judgment is allowed to stand and not rectified, the same would result in grave injustice and irreparable damage to herein petitioner in view of the prohibitive amount assessed as a consequence of said Orders.27 In Manchester Development Corporation v. Court of Appeals,28 the Court explicitly pronounced that "[t]he court acquires jurisdiction over any case only upon the payment of the prescribed docket fee." Hence, the payment of docket fees is not only mandatory, but also jurisdictional. In Sun Insurance Office, Ltd. (SIOL) v. Asuncion, 29 the Court laid down guidelines for the implementation of its previous pronouncement in Manchester under particular circumstances, to wit: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2. The same rule applies to permissive counterclaims, thirdparty claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

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In the Petition at bar, the RTC found, and the Court of Appeals affirmed, that petitioner did not pay the correct amount of docket fees for Civil Case No. 2006-0030. According to both the trial and appellate courts, petitioner should pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended. Consistent with the liberal tenor of Sun Insurance, the RTC, instead of dismissing outright petitioners Complaint in Civil Case No. 20060030, granted petitioner time to pay the additional docket fees. Despite the seeming munificence of the RTC, petitioner refused to pay the additional docket fees assessed against it, believing that it had already paid the correct amount before, pursuant to Section 7(b)(1), Rule 141 of the Rules of Court, as amended. Relevant to the present controversy are the following provisions under Rule 141 of the Rules of Court, as amended by A.M. No. 04-204-SC30 and Supreme Court Amended Administrative Circular No. 35-200431 : SEC. 7. Clerks of Regional Trial Courts. (a) For filing an action or a permissive OR COMPULSORY counterclaim, CROSS-CLAIM, or money claim against an estate not based on judgment, or for filing a third-party, fourth-party, etc. complaint, or a complaint-in-intervention, if the total sum claimed, INCLUSIVE OF INTERESTS, PENALTIES, SURCHARGES, DAMAGES OF WHATEVER KIND, AND ATTORNEYS FEES, LITIGATIO NEXPENSES AND COSTS and/or in cases involving property, the FAIR MARKET value of the REAL property in litigation STATED IN THE CURRENT TAX DECLARATION OR CURRENT ZONAL VALUATION OF THE BUREAU OF INTERNAL REVENUE, WHICHEVER IS HIGHER, OR IF THERE IS NONE, THE STATED VALUE OF THE PROPERTY IN LITIGATION OR THE VALUE OF THE PERSONAL PROPERTY IN LITIGATION OR THE VALUE OF THE PERSONAL PROPERTY IN LITIGATION AS ALLEGED BY THE CLAIMANT, is: [Table of fees omitted.] If the action involves both a money claim and relief pertaining to property, then THE fees will be charged on both the amounts claimed and value of property based on the formula prescribed in this paragraph a. (b) For filing: 1. Actions where the value of the subject matter cannot be estimated 2. Special civil actions, except judicial foreclosure of mortgage, EXPROPRIATION PROCEEDINGS, PARTITION AND QUIETING OF TITLE which will 3. All other actions not involving property [Table of fees omitted.] The docket fees under Section 7(a), Rule 141, in cases involving real property depend on the fair market value of the same: the higher the value of the real property, the higher the docket fees due. In contrast, Section 7(b)(1), Rule 141 imposes a fixed or flat rate of docket fees on actions incapable of pecuniary estimation. In order to resolve the issue of whether petitioner paid the correct amount of docket fees, it is necessary to determine the true nature of its Complaint. The dictum adhered to in this jurisdiction is that the nature of an action is determined by the allegations in the body of the pleading or Complaint itself, rather than by its title or heading.32However, the Court finds it necessary, in ascertaining the true nature of Civil Case No. 2006-0030, to take into account significant facts and circumstances beyond the Complaint of petitioner, facts and circumstances which petitioner failed to state in its Complaint but were disclosed in the preliminary proceedings before the court a quo. Petitioner persistently avers that its Complaint in Civil Case No. 2006-0030 is primarily for the annulment of the Deeds of Absolute Sale. Based on the allegations and reliefs in the Complaint alone, one would get the impression that the titles to the subject real properties still rest with petitioner; and that the interest of respondents Tan and Obiedo in the same lies only in the Deeds of Absolute Sale sought to be annulled. What petitioner failed to mention in its Complaint was that respondents Tan and Obiedo already had the Memorandum of

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Agreement, which clearly provided for the execution of the Deeds of Absolute Sale, registered on the TCTs over the five parcels of land, then still in the name of petitioner. After respondents Tan and Obiedo had the Deeds of Absolute Sale notarized on 3 January 2006 and presented the same to Register of Deeds for Naga City on 8 March 2006, they were already issued TCTs over the real properties in question, in their own names. Respondents Tan and Obiedo have also acquired possession of the said properties, enabling them, by petitioners own admission, to demolish the improvements thereon. It is, thus, suspect that petitioner kept mum about the aforementioned facts and circumstances when they had already taken place before it filed its Complaint before the RTC on 16 March 2006. Petitioner never expressed surprise when such facts and circumstances were established before the RTC, nor moved to amend its Complaint accordingly.1avvphi1.zw+ Even though the Memorandum of Agreement was supposed to have long been registered on its TCTs over the five parcels of land, petitioner did not pray for the removal of the same as a cloud on its title. In the same vein, although petitioner alleged that respondents Tan and Obiedo forcibly took physical possession of the subject real properties, petitioner did not seek the restoration of such possession to itself. And despite learning that respondents Tan and Obiedo already secured TCTs over the subject properties in their names, petitioner did not ask for the cancellation of said titles. The only logical and reasonable explanation is that petitioner is reluctant to bring to the attention of the Court certain facts and circumstances, keeping its Complaint safely worded, so as to institute only an action for annulment of Deeds of Absolute Sale. Petitioner deliberately avoided raising issues on the title and possession of the real properties that may lead the Court to classify its case as a real action. No matter how fastidiously petitioner attempts to conceal them, the allegations and reliefs it sought in its Complaint in Civil Case No. 2006-0030 appears to be ultimately a real action, involving as they do the recovery by petitioner of its title to and possession of the five parcels of land from respondents Tan and Obiedo. A real action is one in which the plaintiff seeks the recovery of real property; or, as indicated in what is now Section 1, Rule 4 of the Rules of Court, a real action is an action affecting title to or recovery of possession of real property.33 Section 7, Rule 141 of the Rules of Court, prior to its amendment by A.M. No. 04-2-04-SC, had a specific paragraph governing the assessment of the docket fees for real action, to wit: In a real action, the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees. It was in accordance with the afore-quoted provision that the Court, in Gochan v. Gochan,34 held that although the caption of the complaint filed by therein respondents Mercedes Gochan, et al. with the RTC was denominated as one for "specific performance and damages," the relief sought was the conveyance or transfer of real property, or ultimately, the execution of deeds of conveyance in their favor of the real properties enumerated in the provisional memorandum of agreement. Under these circumstances, the case before the RTC was actually a real action, affecting as it did title to or possession of real property. Consequently, the basis for determining the correct docket fees shall be the assessed value of the property, or the estimated value thereof as alleged in the complaint. But since Mercedes Gochan failed to allege in their complaint the value of the real properties, the Court found that the RTC did not acquire jurisdiction over the same for non-payment of the correct docket fees. Likewise, in Siapno v. Manalo,35 the Court disregarded the title/denomination of therein plaintiff Manalos amended petition as one for Mandamus with Revocation of Title and Damages; and adjudged the same to be a real action, the filing fees for which should have been computed based on the assessed value of the subject property or, if there was none, the estimated value thereof. The Court expounded in Siapno that: In his amended petition, respondent Manalo prayed that NTAs sale of the property in dispute to Standford East Realty Corporation and the title issued to the latter on the basis thereof, be declared null and void. In a very real sense, albeit the amended petition is styled as one for "Mandamus with Revocation of Title and Damages," it is, at bottom, a suit to recover from Standford the realty in question

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and to vest in respondent the ownership and possession thereof. In short, the amended petition is in reality an action in res or a real action. Our pronouncement in Fortune Motors (Phils.), Inc. vs. Court of Appeals is instructive. There, we said: A prayer for annulment or rescission of contract does not operate to efface the true objectives and nature of the action which is to recover real property. (Inton, et al., v. Quintan, 81 Phil. 97, 1948) An action for the annulment or rescission of a sale of real property is a real action. Its prime objective is to recover said real property. (Gavieres v. Sanchez, 94 Phil. 760, 1954) An action to annul a real estate mortgage foreclosure sale is no different from an action to annul a private sale of real property. (Muoz v. Llamas, 87 Phil. 737, 1950). While it is true that petitioner does not directly seek the recovery of title or possession of the property in question, his action for annulment of sale and his claim for damages are closely intertwined with the issue of ownership of the building which, under the law, is considered immovable property, the recovery of which is petitioner's primary objective. The prevalent doctrine is that an action for the annulment or rescission of a sale of real property does not operate to efface the fundamental and prime objective and nature of the case, which is to recover said real property. It is a real action. Unfortunately, and evidently to evade payment of the correct amount of filing fee, respondent Manalo never alleged in the body of his amended petition, much less in the prayer portion thereof, the assessed value of the subject res, or, if there is none, the estimated value thereof, to serve as basis for the receiving clerk in computing and arriving at the proper amount of filing fee due thereon, as required under Section 7 of this Courts en banc resolution of 04 September 1990 (Re: Proposed Amendments to Rule 141 on Legal Fees). Even the amended petition, therefore, should have been expunged from the records. In fine, we rule and so hold that the trial court never acquired jurisdiction over its Civil Case No. Q-95-24791.36 It was in Serrano v. Delica,37 however, that the Court dealt with a complaint that bore the most similarity to the one at bar. Therein respondent Delica averred that undue influence, coercion, and intimidation were exerted upon him by therein petitioners Serrano, et al. to effect transfer of his properties. Thus, Delica filed a complaint before the RTC against Serrano, et al., praying that the special power of attorney, the affidavit, the new titles issued in the names of Serrano, et al., and the contracts of sale of the disputed properties be cancelled; that Serrano, et al. be ordered to pay Delica, jointly and severally, actual, moral and exemplary damages in the amount of P200,000.00, as well as attorneys fee of P200,000.00 and costs of litigation; that a TRO and a writ of preliminary injunction be issued ordering Serrano, et al. to immediately restore him to his possession of the parcels of land in question; and that after trial, the writ of injunction be made permanent. The Court dismissed Delicas complaint for the following reasons: A careful examination of respondents complaint is that it is a real action. In Paderanga vs. Buissan, we held that "in a real action, the plaintiff seeks the recovery of real property, or, as stated in Section 2(a), Rule 4 of the Revised Rules of Court, a real action is one affecting title to real property or for the recovery of possession of, or for partition or condemnation of, or foreclosure of a mortgage on a real property." Obviously, respondents complaint is a real action involving not only the recovery of real properties, but likewise the cancellation of the titles thereto. Considering that respondents complaint is a real action, the Rule requires that "the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees." We note, however, that neither the "assessed value" nor the "estimated value" of the questioned parcels of land were alleged by respondent in both his original and amended complaint. What he stated in his amended complaint is that the disputed realties have

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a "BIR zonal valuation" of P1,200.00 per square meter. However, the alleged "BIR zonal valuation" is not the kind of valuation required by the Rule. It is the assessed value of the realty. Having utterly failed to comply with the requirement of the Rule that he shall allege in his complaint the assessed value of his real properties in controversy, the correct docket fee cannot be computed. As such, his complaint should not have been accepted by the trial court. We thus rule that it has not acquired jurisdiction over the present case for failure of herein respondent to pay the required docket fee. On this ground alone, respondents complaint is vulnerable to dismissal.38 Brushing aside the significance of Serrano, petitioner argues that said decision, rendered by the Third Division of the Court, and not by the Court en banc, cannot modify or reverse the doctrine laid down in Spouses De Leon v. Court of Appeals. 39 Petitioner relies heavily on the declaration of this Court in Spouses De Leon that an action for annulment or rescission of a contract of sale of real property is incapable of pecuniary estimation. The Court, however, does not perceive a contradiction between Serrano and the Spouses De Leon. The Court calls attention to the following statement in Spouses De Leon: "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." Necessarily, the determination must be done on a case-to-case basis, depending on the facts and circumstances of each. What petitioner conveniently ignores is that in Spouses De Leon, the action therein that private respondents instituted before the RTC was "solely for annulment or rescission" of the contract of sale over a real property.40 There appeared to be no transfer of title or possession to the adverse party. Their complaint simply prayed for: 1. Ordering the nullification or rescission of the Contract of Conditional Sale (Supplementary Agreement) for having violated the rights of plaintiffs (private respondents) guaranteed to them under Article 886 of the Civil Code and/or violation of the terms and conditions of the said contract. 2. Declaring void ab initio the Deed of Absolute Sale for being absolutely simulated; and 3. Ordering defendants (petitioners) to pay plaintiffs (private respondents) attorney's fees in the amount ofP100,000.00.41 As this Court has previously discussed herein, the nature of Civil Case No. 2006-0030 instituted by petitioner before the RTC is closer to that of Serrano, rather than of Spouses De Leon, hence, calling for the application of the ruling of the Court in the former, rather than in the latter. It is also important to note that, with the amendments introduced by A.M. No. 04-2-04-SC, which became effective on 16 August 2004, the paragraph in Section 7, Rule 141 of the Rules of Court, pertaining specifically to the basis for computation of docket fees for real actions was deleted. Instead, Section 7(1) of Rule 141, as amended, provides that "in cases involving real property, the FAIR MARKET value of the REAL property in litigation STATED IN THE CURRENT TAX DECLARATION OR CURRENT ZONAL VALUATION OF THE BUREAU OF INTERNAL REVENUE, WHICH IS HIGHER, OR IF THERE IS NONE, THE STATED VALUE OF THE PROPERTY IN LITIGATION x x x" shall be the basis for the computation of the docket fees. Would such an amendment have an impact on Gochan, Siapno, and Serrano? The Court rules in the negative. A real action indisputably involves real property. The docket fees for a real action would still be determined in accordance with the value of the real property involved therein; the only difference is in what constitutes the acceptable value. In computing the docket fees for cases involving real properties, the courts, instead of relying on the assessed or estimated value, would now be using the fair market value of the real properties (as stated in the Tax Declaration or the Zonal Valuation of the Bureau of Internal Revenue, whichever is higher) or, in the absence thereof, the stated value of the same. In sum, the Court finds that the true nature of the action instituted by petitioner against respondents is the recovery of title to and possession of real property. It is a real action necessarily involving real property, the docket fees for which must be computed in accordance with Section 7(1), Rule 141 of the Rules of Court, as

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amended. The Court of Appeals, therefore, did not commit any error in affirming the RTC Orders requiring petitioner to pay additional docket fees for its Complaint in Civil Case No. 20060030. The Court does not give much credence to the allegation of petitioner that if the judgment of the Court of Appeals is allowed to stand and not rectified, it would result in grave injustice and irreparable injury to petitioner in view of the prohibitive amount assessed against it. It is a sweeping assertion which lacks evidentiary support. Undeniably, before the Court can conclude that the amount of docket fees is indeed prohibitive for a party, it would have to look into the financial capacity of said party. It baffles this Court that herein petitioner, having the capacity to enter into multi-million transactions, now stalls at paying P720,392.60 additional docket fees so it could champion before the courts its rights over the disputed real properties. Moreover, even though the Court exempts individuals, as indigent or pauper litigants, from paying docket fees, it has never extended such an exemption to a corporate entity. WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED. The Decision, dated 22 November 2006, of the Court of Appeals in CA-G.R. SP No. 94800, which affirmed the Orders dated 24 March 2006 and 29 March 2006 of the RTC, Branch 22, of Naga City, in Civil Case No. RTC-2006-0030, ordering petitioner Ruby Shelter Builders and Realty Development Corporation to pay additional docket/filing fees, computed based on Section 7(a), Rule 141 of the Rules of Court, as amended, is hereby AFFIRMED. Costs against the petitioner. SO ORDERED.

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Agrarian Reform (DAR) issued a Notice of Land Valuation and Acquisition dated October 21, 1996 declaring that out of the total area indicated in the title, 138.4018 hectares was subject to immediate acquisition at a valuation of P8,736,270.40 based on the assessment of petitioner Land Bank of the Philippines (LBP). Respondents having found the valuation unacceptable, the matter was referred by the provincial agrarian reform officer of Sorsogon to the DAR Adjudication Board (DARAB) for the conduct of summary administrative proceedings to determine just compensation.3 By Decision of November 21, 1997,4 the DARAB sustained LBPs valuation upon respondents failure to present any evidence to warrant an increase thereof. Meanwhile, upon the DARs application, accompanied with LBPs certification of deposit of payment, the Register of Deeds of Sorsogon partially cancelled TCT No. T-22934 corresponding to the 138.4018-hectare covered area (hereafter the property) and issued TCT No. T-47571 in the name of the Republic of the Philippines (the Republic). The Republic thereupon subdivided the property into 85 lots for distribution to qualified farmer-beneficiaries under Republic Act No. 6657 (RA 6657) or the Comprehensive Agrarian Reform Law of 1988.5 On February 23, 1998, respondents lodged with Branch 52 of the Sorsogon RTC (acting as a Special Agrarian Court) a complaint for determination of just compensation against Ernesto Garilao, in his capacity as then DAR Secretary, and LBP. Respondents contended that LBPs valuation was not the full and fair equivalent of the property at the time of its taking, the same having been offered in 1989 at P120,000 per hectare.6 LBP countered that the property was acquired by the DAR for CARP coverage in 1993 by compulsory acquisition and not by respondents voluntary offer to sell; and that it determined the valuation thereof in accordance with RA 6657 and pertinent DAR regulations.7 The DAR Secretary argued that LBPs valuation was properly based on DAR issuances.8

G.R. No. 175644

October 2, 2009

LAND BANK OF THE PHILIPPINES, Petitioner, vs. JOSE MARIE M. RUFINO, NILO M. RESURRECCION, ARNEL M. ATANACIO and SUZETTE G. MATEO,Respondents, x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 175702 DEPARTMENT OF AGRARIAN REFORM, represented by OICSECRETARY NASSER C. PANGANDAMAN,Petitioner, vs. JOSE MARIE M. RUFINO, NILO M. RESURRECCION, ARNEL M. ATANACIO and SUZETTE G. MATEO,Respondents. DECISION CARPIO MORALES, J.: Challenged in these consolidated Petitions for Review is the December 15, 2005 Decision of the Court of Appeals 1in CA-G.R. CV No. 69640 affirming with modification that of Branch 52 of the Regional Trial Court (RTC) of Sorsogon in Civil Case No. 986438 setting the valuation of respondents 138.4018-hectare land taken under the Comprehensive Agrarian Reform Program (CARP) at P29,926,000, exclusive of the value of secondary crops thereon. Respondents Jose Marie M. Rufino (Rufino), Nilo M. Resurreccion (Resureccion), Arnel M. Atanacio (Atanacio), and Suzette G. Mateo (Suzette) are the registered owners in equal share of a parcel of agricultural land situated in Barangay San Benon, Irosin, Sorsogon, with an area of 239.7113 hectares covered by Transfer Certificate of Title (TCT) No. T-22934.2 By respondents claim, in 1989, they voluntarily offered the aforesaid property to the government for CARP coverage at P120,000 per hectare. Acting thereon, petitioner Department of

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The trial court appointed the parties respective nominated commissioners to appraise the property. Commissioner Jesus S. Empleo, LBPs nominee, appraised the property based on, among other things, the applicable DAR issuances, average gross production, and prevailing selling prices of the crops planted thereon which included coconut, abaca, coffee, and rice. He arrived at a valuation of P13,449,579.08.9 Commissioner Amando Chua of Cuervo Appraisers, Inc., respondents nominee, used the market data approach which relies primarily on sales and listings of comparable lots in the neighborhood. Excluding the secondary crops planted thereon, he valued the property at P29,925,725.10 At the witness stand, Eugenio Mateo, Sr. (Mateo), attorney-in-fact of respondents Rufino, Resurreccion, and Atanacio, declared that Commissioner Chua erroneously considered the secondary crops as merely enhancing the demand for the property without them significantly increasing its value; and that the coffee intercropping on the property which yielded an estimated profit of P3,000,000, spread over a 12-year period, should be considered in the determination of just compensation.11 By Decision of July 4, 2000,12 the trial court found the market data approach to be more realistic and consistent with law and jurisprudence on the full and fair equivalent of the property. Applying the average rate of P216,226 per hectare, it arrived at a valuation of the 138.4018-hectare property at P29,926,000, to which it addedP8,000,000 representing 50% of the value of trees, plants, and other improvements thereon, bringing the total toP37,926,000. It disposed thus: WHEREFORE, premises considered, judgment is hereby rendered to wit: a) Fixing the Just Compensation of the entire 138.4018 hectares for acquisition covered by TCT No. T-22934 in the total amount of THIRTY SEVEN MILLION NINE HUNDRED TWENTY-SIX THOUSAND (Php37,926,000.00) Pesos Philippine Currency, less the amount previously deposited in trust with the Land Bank which was already received by the plaintiffs. b) The Land Bank of the Philippines is hereby ordered to pay the landowners-plaintiffs the afore-cited amount less the amount previously paid to them in the manner provided by law. c) Without pronouncement as to costs. LBP filed a Motion for Reconsideration, while the DAR filed a Notice of Appeal. By Order dated August 21, 2000, the trial court denied the motion of LBP,13 prompting it to also file a Notice of Appeal.14 By consolidated Decision of December 15, 2005,15 the Court of Appeals sustained the trial courts valuation ofP29,926,000 as just compensation. The appellate court found that, among other things, it would be specious to rely on the DARs computation in ostensible compliance with its own issuances; that Commissioner Empleo failed to consider available sales data of comparable properties in the locality; and that the value of secondary crops should be excluded as the same is inconclusive in view of conflicting evidence. Petitioners and respondents filed their respective Motions for Reconsideration which were denied by the appellate court by Resolution of November 28, 2006.16 Hence, petitioners LBP and DAR separately sought recourse to this Court through the present Petitions for Review, which were consolidated in the interest of uniformity of rulings on related cases. In G.R. No. 175644, LBP maintains that its valuation of the property at P13,449,579.08 was based on the factors mentioned in RA 6657 and formula prescribed by the DAR; that its determination should be given weight as it has the expertise to do the same; and that the taking of private property for agrarian reform is not a traditional exercise of the power of eminent domain as it also involves the exercise of police power, hence, part of the loss is not compensable.17

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In G.R. No. 175702, the DAR avers that the valuation sustained by the appellate court was determined in contravention of the criteria set by RA 6657 and relevant jurisprudence.18 Respondents, for their part, posit in their consolidated Comment19 that factual findings of the trial court, when affirmed by the appellate court, are conclusive; and that the just compensation due them should be equivalent to the market value of the property. In determining the just compensation due owners of lands taken for CARP coverage, the RTC, acting as a Special Agrarian Court, should take into account the factors enumerated in Section 17 of RA 6657, as amended, to wit: Sec. 17. Determination of Just Compensation. In determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by government assessors shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property as well as the non-payment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation. (Emphasis supplied) The DAR, being the government agency primarily charged with the implementation of the CARP, issued Administrative Order No. 6, Series of 1992 (DAR AO 6-92), as amended by DAR Administrative Order No. 11, Series of 1994 (DAR AO 11-94), translating the factors mentioned in Section 17 of RA 6657 into a basic formula, presented as follows: LV = (CNI x 0.6) + ( CS x 0.3) + (MV x 0.1) Where: LV = Land Value CNI = Capitalized Net Income CS = Comparable Sales MV = Market Value per Tax Declaration The above formula shall be used if all the three factors are present, relevant, and applicable. A.1. When the CS factor is not present and CNI and MV are applicable, the formula shall be: LV = (CNI x 0.9) + (MV x 0.1) A.2. When the CNI factor is not present, and CS and MV are applicable, the formula shall be: LV = (CS x 0.9) + (MV x 0.1) A.3. When both the CS and CNI are not present and only MV is applicable, the formula shall be: LV = MV x 2 The threshold issue then is whether the appellate court correctly upheld the valuation by the trial court of the property on the basis of the market data approach, in disregard of the formula prescribed by DAR AO 6-92, as amended. The petitions are partly meritorious. While the determination of just compensation is essentially a judicial function which is vested in the RTC acting as a Special Agrarian Court, the Court, in LBP v. Banal,20 LBP v. Celada,21 and LBP v. Lim,22 nonetheless disregarded the RTCs determination thereof when, as in the present case, the judge did not fully consider the factors specifically identified by law and implementing rules. In LBP v. Banal,23 the Court ruled that the factors laid down in Section 17 of RA 6657 and the formula stated in DAR AO 6-92, as amended, must be adhered to by the RTC in fixing the valuation of lands subjected to agrarian reform: In determining just compensation, the RTC is required to consider several factors enumerated in Section 17 of R.A. 6657, as amended, thus:

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xxxx These factors have been translated into a basic formula in [DAO 692], as amended by [DAO 11-94], issued pursuant to the DAR's rule-making power to carry out the object and purposes of R.A. 6657, as amended. xxxx While the determination of just compensation involves the exercise of judicial discretion, however, such discretion must be discharged within the bounds of the law. Here, the RTC wantonly disregarded R.A. 6657, as amended, and its implementing rules and regulations. ([DAO 6-92], as amended by [DAO 11-94]). xxxx WHEREFORE, . . . The trial judge is directed to observe strictly the procedures specified above in determining the proper valuation of the subject property. (Underscoring supplied) And in LBP v. Celada, the Court was emphatic that the RTC is not at liberty to disregard the DAR valuation formula which filled in the details of Section 17 of RA 6657, it being elementary that rules and regulations issued by administrative bodies to interpret the law they are entrusted to enforce have the force of law. In fixing the just compensation in the present case, the trial court, adopting the market data approach on which Commissioner Chua relied,25 merely put premium on the location of the property and the crops planted thereon which are not among the factors enumerated in Section 17 of RA 6657. And the trial court did not apply the formula provided in DAR AO 6-92, as amended. This is a clear departure from the settled doctrine regarding the mandatory nature of Section 17 of RA 6657 and the DAR issuances implementing it. Not only did Commissioner Chua not consider Section 17 of RA 6657 and DAR AO 6-92, as amended, in his appraisal of the property. His conclusion that the market data approach conformed
24

with statutory basis.1avvphi1

and

regulatory

requirements

is

bereft

of

Resolving in the negative the issue of whether the RTC can resort to any other means of determining just compensation, aside from Section 17 of RA 6657 and DAR AO 6-92, as amended, this Court, in LBP v. Lim,26 held that Section 17 of RA 6657 and DAR AO 6-92, as amended, are mandatory and not mere guides that the RTC may disregard. Petitioners maintain that the correct valuation of the property is P13,449,579.08 as computed by Commissioner Empleo. The pertinent provisions of Item II of DAR AO 6-92, as amended by DAR AO 11-94, read: A. There shall be one basic formula for the valuation of lands covered by [Voluntary Offer to Sell] or [Compulsory Acquisition] regardless of the date of offer or coverage of the claim: LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) Where: LV = Land Value CNI = Capitalized Net Income CS = Comparable Sales MV = Market Value per Tax Declaration The above formula shall be used if all the three factors are present, relevant and applicable. A.1. When the CS factor is not present and CNI and MV are applicable, the formula shall be: LV = (CNI x 0.9) + (MV x 0.1) xxxx

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A.5 For purposes of this Administrative Order, the date of receipt of claimfolder by LBP from DAR shall mean the date when the claimfolder is determined by the LBP to be complete with all the required documents and valuation inputs duly verified and validated, and is ready for final computation/processing. A.6 The basic formula in the grossing-up of valuation inputs such as . . . Market Value per Tax Declaration (MV) shall be: Valuation Input Regional Consumer = Price Index (RCPI) Adjustment Factor SP (AGP x SP) CN = CO I .12 Where: CNI AGP = Capitalized Net Income = Latest available 12-month's gross production immediately preceding the date of offer in case of VOS or date of notice of coverage in case of CA. = The average of the latest available 12month's selling prices prior to the date of receipt of the claimfolder by LBP for processing, such prices to be secured from the Department of Agriculture (DA) and other appropriate regulatory bodies or, in their absence, from the Bureau of Agricultural Statistics. If possible, SP data shall be gathered from the barangay or municipality where the property is located. In the absence thereof, SP may be secured within the province or region. = Cost of Operations Whenever the cost of operations could not be obtained or verified, an assumed net income rate (NIR) of 20% shall be used. Landholdings planted to coconut which are productive at the time of offer/coverage shall continue to use the 70% NIR. DAR and LBP shall continue to conduct joint industry studies to establish the applicable NIR for each crop covered under CARP. = Capitalization Rate

Grossed-up x Valuation input

The RCPI Adjustment Factor shall refer to the ratio of RCPI for the month issued by the National Statistics Office as of the date when the claimfolder (CF) was received by LBP from DAR for processing or, in its absence, the most recent available RCPI for the month issued prior to the date of receipt of CF from DAR and the RCPI for the month as of the date/effectivity/registration of the valuation input. Expressed in equation form: RCPI for the Month as of the Date of Receipt of Claimfolder by LBP from DAR or the Most recent RCPI for the Month Issued Prior to the Date of = Receipt of CF RCPI for the Month Issued as of the Date/Effectivity/Registration of the Valuation Input xxxx B. Capitalized Net Income (CNI) This shall refer to the difference between the gross sales (AGP x SP) and total cost of operations (CO) capitalized at 12%. Expressed in equation form:

CO

RCPI Adjustme nt Factor

.12

D. In the computation of Market Value per Tax Declaration (MV), the most recent Tax Declaration (TD) and Schedule of Unit Market Value (SMV) issued prior to receipt of claimfolder by LBP shall be considered. The Unit Market Value (UMV) shall be grossed up from

152
the date of its effectivity up to the date of receipt of claimfolder by LBP from DAR for processing, in accordance with item II.A.A.6. (Emphasis and italics supplied) In thus computing Capitalized Net Income (CNI), the Average Gross Production (AGP) of the latest available 12 months immediately preceding the date of offer in case of voluntary offer to sell or date of notice of coverage in case of compulsory acquisition, and the average Selling Price (SP) of the latest available 12 months prior to the date of receipt of the claimfolder by LBP for processing, should be used. While these dates-bases of computation are not clearly indicated in the records (as the mode of acquisition is in fact disputed), the date of offer (assuming the acquisition was by voluntary offer to sell) would have to be sometime in 1989, the alleged time of voluntary offer to sell; whereas the date of notice of coverage (assuming the acquisition was compulsory) would be sometime prior to October 21, 1996, which is the date of the Notice of Land Valuation and Acquisition, because under DAR Administrative Order No. 9, series of 1990,27 as amended by DAR Administrative Order No. 1, series of 1993, the notice of coverage precedes the Notice of Land Valuation and Acquisition. And the claimfolder would have been received by LBP in or before 1997, the year the property was distributed to agrarian reform beneficiaries,28 because land distribution is the last step in the procedure prescribed by the above-said DAR administrative orders. Hence, the data for the AGP should pertain to a period in 1989 (in case of voluntary offer to sell) or prior to October, 1996 (in case of compulsory acquisition), while the data for the SP should pertain to 1997 or earlier. Commissioner Empleo, however, instead used available data within the 12-month period prior to his ocular inspection in October 1998 for the AGP,29 and the average selling price for the period January 1998 to December 1998 for the SP,30 contrary to DAR AO 6-92, as amended. Furthermore, the Regional Consumer Price Index (RCPI) Adjustment Factor, which is used in computing the market value of the property, is the ratio of the RCPI for the month when the claimfolder was received by LBP, to the RCPI for the month of the registration of the most recent Tax Declaration and Schedule of Unit Market Value31issued prior to receipt of claimfolder by LBP. Consistent with the previous discussion, the applicable RCPIs should therefore be dated 1997 or earlier.1avvphi1 Again, Commissioner Empleo instead used RCPI data for January 1999 in computing the RCPI Adjustment Factor,32 contrary to DAR AO 6-92, as amended. Parenthetically, Commissioner Empleo testified33 that his computations were based on DAR Administrative Order No. 5, series of 1998.34 This Administrative Order took effect only on May 11, 1998, however, hence, the applicable valuation rules in this case remain to be those prescribed by DAR AO 6-92, as amended by DAR AO 11-94. But even if the 1998 valuation rules were applied, the data for the AGP would still pertain to a period prior to October 1996, the revised reference date being the date of the field investigation which precedes the Notice of Land Valuation and Acquisition; while the data for the SP and the RCPIs would still pertain to 1997 or earlier, there being no substantial revisions in their reference dates. Finally, as reflected earlier, Commissioner Empleo did not consider in his computation the secondary crops planted on the property (coffee, pili, cashew, etc.), contrary to DAR AO 6-92, as amended, which provides that the "[t]otal income shall be computed from the combination of crops actually produced on the covered land whether seasonal or permanent."35 In fine, the valuation asserted by petitioners does not lie. While the Court is minded to write finis to this protracted litigation by itself computing the just compensation due respondents, the evidence on record is not sufficient for the purpose. The Court is thus constrained to remand the case for determination of the valuation of the property by the trial court, which is mandated to consider the factors provided under Section 17 of RA 6657, as amended, and as translated into the formula prescribed in DAR AO 6-92, as amended by DAR AO 11-94.

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The trial court may, motu proprio or at the instance of any of the parties, again appoint one or more commissioners to ascertain facts relevant to the dispute and file a written report thereof. The amount determined by the trial court would then be the basis of interest income on the cash and bond deposits due respondents from the time of the taking of the property up to the time of actual payment of just compensation.36 WHEREFORE, the challenged Decision of the Court of Appeals is REVERSED and SET ASIDE. Civil Case No. 98-6438 is REMANDED to Branch 52 of the Sorsogon RTC which is directed to determine with dispatch the just compensation due respondents strictly in accordance with the procedures specified above. SO ORDERED.

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The complaint prayed that petitioner and the DAR be ordered to compute the just compensation for the property in accordance with the guidelines laid down in Section 17 of Republic Act (R.A.) No. 66578 or the Comprehensive Agrarian Reform Law of 1988. In their respective Answers, petitioner and the DAR claimed that the property was acquired by the government under its OLT program and their valuation thereof constituted just compensation, having been made pursuant to the guidelines set by E.O. No. 228 and P.D. No. 27. By Decision9 of May 19, 2003, the SAC, after noting the report contained in a Compliance10 submitted on February 29, 2000 of the Commissioners11 appointed to receive and evaluate evidence on the amount of compensation to be paid to respondent, fixed the just compensation at P2,564,403.5812 (inclusive of theP903,637.03 earlier withdrawn). In arriving at the just compensation, the SAC adopted a higher valuation (P93,657.00/hectare) which the DAR had applied to a similar landholding belonging to one Pablo Estacion adjacent to respondents. Thus the SAC disposed: WHEREFORE, premises considered, judgment is hereby rendered ordering defendant Land Bank of the Philippines to pay plaintiff the total amount of P1,660,766.55. No pronouncement as to costs. SO ORDERED.13 Both petitioner and the DAR filed motions for reconsideration of the SAC Decision but the same were denied,14prompting petitioner to appeal to the Court of Appeals15 via petition for review16 pursuant to Section 6017 of R.A. No. 6657 vis a vis Rule 42 of the Revised Rules of Court. Assailing the SACs decision fixing the amount of just compensation for respondents properties at P2,564,403.58 as a violation of P.D. No. 27 and E.O. No. 228, petitioner insisted that the SAC erred in using P300.00 as the government support price (GSP) in 1992,

G.R. No. 180803

October 23, 2009

LAND BANK OF THE PHILIPPINES, Petitioner, vs. J. L. JOCSON AND SONS, Respondent. DECISION CARPIO MORALES, J.: Subject of the present controversy is a 27.3808-hectare portion (the property) of two (2) parcels of tenanted rice land located at Barangay Magallon Cadre, Moises Padilla, Negros Occidental, covered by Transfer Certificates of Title (TCT) Nos. T-72323 and T72324 registered in the name of J. L. Jocson and Sons1 (respondent). The property was placed under the coverage of the governments Operation Land Transfer2 (OLT) pursuant to Presidential Decree (P.D.) No. 273 and awarded to the tenant-beneficiaries by the Department of Agrarian Reform (DAR), which valued the compensation therefor in the total amount of P250,563.80 following the formula prescribed in P.D. No. 27 and Executive Order (E.O.) No. 228.4 The valuation was later increased to P903,637.03 after computing the 6% annual interest increment5 due on the property per DAR Administrative Order No. 13, series of 1994, which amount respondent withdrew in 1997, without prejudice to the outcome of the case it had filed hereunder to fix just compensation. Finding the DARs offer of compensation for the property to be grossly inadequate, respondent filed a complaint6on July 18, 1997 before the Regional Trial Court of Bacolod City, Br. 46, sitting as a Special Agrarian Court (SAC), against the Land Bank (petitioner),7 the DAR, and the tenant-beneficiaries, for "Determination and Fixing of Just Compensation for the Acquisition of Land and Payment of Rentals."

155
instead of P35.00 as provided under E.O. No. 228, considering that respondents property was acquired under OLT pursuant to P.D. No. 27. The appellate court dismissed petitioners petition for review for lack of jurisdiction. It held that aside from the fact that the SACs factual findings were not controverted, the main issue - whether P.D. No. 27 and E.O. No. 228, as claimed by petitioner, or R.A. No. 6657, as claimed by respondent, should govern in determining the value of the property - involved pure questions of law and, as such, cognizable only by this Court.18 Its Motion for Reconsideration having been denied, 19 the present petition for review was filed, petitioner arguing that "the allegations in petitioner LBPs Petition for Review filed with the Court of Appeals raise mixed questions of fact and law, . . . [hence,] cognizable by the Court of Appeals."20 The petition is partly impressed with merit. Gabatin v. Land Bank of the Philippines21 reiterated the settled rule that a petition for review under Rule 42 of the Revised Rules of Court, and not an ordinary appeal under Rule 41, is the appropriate mode of appeal from decisions of RTCs acting as SACs. In Gabatin, the Court sustained the appellate courts assumption of jurisdiction over an appeal from the SAC even if its dismissal had been sought on the ground that the issues presented before the appellate court were purely legal in nature. Also apropos is this Courts ruling in Land Bank of the Philippines v. De Leon:22 Third, far from being in conflict, Section 61 of RA 6657 can easily be harmonized with Section 60. The reference to the Rules of Court means that the specific rules for petitions for review in the Rules of Court and other relevant procedures in appeals filed before the Court of Appeals shall be followed in appealed decisions of Special Agrarian Courts. Considering that RA 6657 cannot and does not provide the details on how the petition for review shall be conducted, a suppletory application of the pertinent provisions of the Rules of Court is necessary. In fact, Section 61 uses the word "review" to designate the mode by which the appeal is to be effected. The reference therefore by Section 61 to the Rules of Court only means that the procedure under Rule 42 for petitions for review is to be followed for appeals in agrarian cases. (Underlining supplied.) Clearly, jurisdiction over appeals from decisions of the SAC resides in the Court of Appeals via a Rule 42 petition for review, which may raise either questions of fact, or of law, or mixed questions of fact and law.23 AT ALL EVENTS, this Court resolves to exercise its mandate as a court of justice and equity,24 taking into account that more than a decade has passed since the case was filed before the SAC, and thus disposes of the lonesubstantive issue raised whether the SAC erred in using P300.00 as the GSP in 1992. Petitioner maintains that the SAC erred in adopting such GSP rate in determining just compensation for rice and corn lands; and that the factual question brought before the appellate court for resolution is: "What is the GSP that must be used in valuing subject property? Is it THIRTY FIVE PESOS (Php 35.00), as mandated under P.D. No. 27/E.O. No. 228? Or THREE HUNDRED PESOS (Php 300.00), the alleged GSP for 1992?"25 What petitioner essentially assails is the SACs application of R.A. No. 6657 in the valuation of properties acquired under P.D. No. 27s OLT. Citing National Power Corp. v. Gutierrez,26 petitioner argues that the determination of just compensation should be based on the value of the land at the time it was taken by the government, and since it is not disputed that respondents property falls under the coverage of OLT, then P.D. No. 27 should apply vis a vis Section 2 of E.O. No. 228 which laid down the formula for determining the value of remaining unvalued rice and corn lands subject to P.D. No. 27, to wit: SECTION 2. Henceforth, the valuation of rice and corn lands covered by P.D. No. 27 shall be based on the average gross production determined by the Barangay Committee on Land Production in accordance with Department Memorandum Circular No. 26, Series of 1973, and related issuances and regulations of the Department of Agrarian Reform. The average gross production per hectare shall be multiplied by two and a half (2.5), the product of

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which shall be multiplied by Thirty Five Pesos (P35.00), the government support price for one cavan of 50 kilos of palay on October 21, 1972, or Thirty One Pesos (P31.00), the government support price for one cavan of 50 kilos of corn on October 21, 1972, and the amount arrived at shall be the value of the rice and corn land, as the case may be, for the purpose of determining its cost to the farmer and compensation to the landowner. Petitioners interpretation is flawed. In the recent case of Land Bank of the Philippines v. Chico,27 the Court declared in no uncertain terms that R.A. No. 6657 is the relevant law for determining just compensation after noting several decided cases28 where the Court found it more equitable to determine just compensation based on the value of the property at the time of payment. This was a clear departure from the Courts earlier stance inGabatin v. Land Bank of the Philippines29 where it declared that the reckoning period for the determination of just compensation is the time when the land was taken applying P.D. No. 27 and E.O. No. 228. P.D. No. 27/E.O. No. 228 vis a vis R.A. No. 6657 was applied to cases involving lands placed under the coverage of P.D. No. 27/E.O. No. 228 where payment of just compensation had not been completed. When in the interim R.A. No. 6657 was passed before the full payment of just compensation, as in the case at bar, the provisions of R.A. No. 6657 on just compensation control.301avvphi1 Discussing the retroactive application of the provisions of R.A. No. 6657 for lands yet to be paid by the government although expropriated under P.D. No. 27, this Court in Land Bank of the Philippines v. Estanislao31ratiocinated: Petitioner, citing Gabatin v. Land Bank of the Philippines, contends that the taking of the subject lots was deemed effected on October 21, 1972, when respondents were, under P.D. No. 27 deprived of ownership over the subject lands in favor of qualified beneficiaries. Petitioner further contends that the fixing of the value of the land under E.O. 228, using the government support price of P35 for one cavan of 50 kilos of palay as of October 21, 1972, was in keeping with the settled rule that just compensation should be based on the value of the property at the time of taking. The petition is bereft of merit. This Court held in Land Bank of the Philippines v. Natividad that seizure of landholdings or properties covered by P.D. No. 27 did not take place on October 21, 1972, but upon the payment of just compensation. Taking into account the passage in 1988 of R.A. No. 6657 pending the settlement of just compensation, this Court concluded that it is R.A. No. 6657 which is the applicable law, with P.D. No. 27 and E.O. 228 having only suppletory effect. Land Bank's contention that the property was acquired for purposes of agrarian reform on October 21, 1972, the time of the effectivity of PD 27, ergo just compensation should be based on the value of the property as of that time and not at the time of possession in 1993, is likewise erroneous. In Office of the President, Malacaang, Manila v. Court of Appeals, we ruled that the seizure of the landholding did not take place on the date of effectivity of PD 27 but would take effect on the payment of just compensation. Under the factual circumstances of this case, the agrarian reform process is still incomplete as the just compensation to be paid private respondents has yet to be settled. Considering the passage of Republic Act No. 6657 (RA 6657) before the completion of this process, the just compensation should be determined and the process concluded under the said law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228 having only suppletory effect, conformably with our ruling in Paris v. Alfeche. xxxx It would certainly be inequitable to determine just compensation based on the guideline provided by PD 27 and EO 228 considering the DAR's failure to determine the just compensation for a considerable length of time. That just compensation should be determined in accordance with RA 6657, and not PD 27 or EO 228, is especially imperative considering that just compensation should be the full and fair equivalent of the property taken from its

157
owner by the expropriator, the equivalent being real, substantial, full and ample. In this case, the trial court arrived at the just compensation due private respondents for their property, taking into account its nature as irrigated land, location along the highway, market value, assessor's value and the volume and value of its produce. This Court is convinced that the trial court correctly determined the amount of just compensation due private respondents in accordance with, and guided by, RA 6657 and existing jurisprudence." (Emphasis and italics supplied; citations omitted) The SACs adoption of P300.00 as GSP for one cavan of 50 kilos of palay for 1992 is thus in order, petitioner not having adduced any evidence that a different or contrary figure should apply for that period. The determination of just compensation in eminent domain cases is a judicial function, and the Court does not find the SAC to have acted capriciously or arbitrarily in setting the price at P93,657.00 per hectare as the said amount does not appear to be grossly exorbitant or otherwise unjustified. For the Court notes that the SAC properly took into account various factors such as the nature of the land, when it is irrigated, the average harvests per hectare (expressed as AGP based on three normal crop years) at 117.73 cavans per hectare, and the higher valuation applied by the DAR to a similar adjacent landholding belonging to Estacion. Petitioner itself admits that a higher land valuation formula was applied to Estacions property because it had been acquired under R.A. No. 6657.32 WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 79663 are SET ASIDE. The May 19, 2003 Decision of the Bacolod City RTC, Br. 46, sitting as a SAC in Special Carp Case No. 97-9886, is REINSTATED.

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same Code authorized respondent to enter into lease contracts over the said market stalls,5 and incorporated a standard contract of lease for the stall holders at the municipal public market. G.R. No. 182065 October 27, 2009 Only a month later, on 18 September 1998, the Sangguniang Bayan of Maasin approved Resolution No. 68, series of 1998,6 moving to have the meeting dated 11 August 1998 declared inoperative as a public hearing, because majority of the persons affected by the imposition of the goodwill fee failed to agree to the said measure. However, Resolution No. 68, series of 1998, of the Sangguniang Bayan of Maasin was vetoed by respondent on 30 September 1998.7 After Municipal Ordinance No. 98-01 was approved on 17 August 1998, another purported public hearing was held on 22 January 1999.8 On 9 June 1999, respondent wrote a letter to petitioners informing them that they were occupying stalls in the newly renovated municipal public market without any lease contract, as a consequence of which, the stalls were considered vacant and open for qualified and interested applicants.9 This prompted petitioners, together with other similarly situated stall holders at the municipal public market, 10 to file before the RTC on 25 June 1999 a Petition for Prohibition/Mandamus, with Prayer for Issuance of Temporary Restraining Order and/or Writ of Preliminary Injunction,11 against respondent. The Petition was docketed as Civil Case No. 25843. Petitioners alleged that they were bona fide occupants of the stalls at the municipal public market, who had been religiously paying the monthly rentals for the stalls they occupied. Petitioners argued that public hearing was mandatory in the imposition of goodwill fees. Section 186 of the Local Government Code of 1991 provides that an ordinance levying taxes, fees, or charges shall not be enacted without any prior hearing conducted for the purpose. Municipal Ordinance No. 98-01, imposing goodwill fees, is invalid on the ground that the conferences held on 11 August 1998 and 22 January 1999 could not be considered public

EVELYN ONGSUCO and ANTONIA SALAYA, Petitioners, vs. HON. MARIANO M. MALONES, both in his private and official capacity as Mayor of the Municipality of Maasin, Iloilo, Respondent. DECISION CHICO-NAZARIO, J.: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision1 dated 28 November 2006, rendered by the Court of Appeals in CA-G.R. SP No. 86182, which affirmed the Decision2 dated 15 July 2003, of the Regional Trial Court (RTC), Branch 39, of Iloilo City, in Civil Case No. 25843, dismissing the special civil action for Mandamus/Prohibition with Prayer for Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction, filed by petitioners Evelyn Ongsuco and Antonia Salaya against respondent Mayor Mariano Malones of the Municipality of Maasin, Iloilo. Petitioners are stall holders at the Maasin Public Market, which had just been newly renovated. In a letter3 dated 6 August 1998, the Office of the Municipal Mayor informed petitioners of a meeting scheduled on 11 August 1998 concerning the municipal public market. Revenue measures were discussed during the said meeting, including the increase in the rentals for the market stalls and the imposition of "goodwill fees" in the amount of P20,000.00,4payable every month. On 17 August 1998, the Sangguniang Bayan of Maasin approved Municipal Ordinance No. 98-01, entitled "The Municipal Revised Revenue Code." The Code contained a provision for increased rentals for the stalls and the imposition of goodwill fees in the amount of P20,000.00 and P15,000.00 for stalls located on the first and second floors of the municipal public market, respectively. The

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hearings. According to Article 277(b)(3) of the Implementing Rules and Regulations of the Local Government Code: (3) The notice or notices shall specify the date or dates and venue of the public hearing or hearings. The initial public hearing shall be held not earlier than ten (10) days from the sending out of the notice or notices, or the last day of publication, or date of posting thereof, whichever is later. (Emphasis ours.) The letter from the Office of the Municipal Mayor was sent to stall holders on 6 August 1998, informing the latter of the meeting to be held, as was in fact held, on 11 August 1998, only five days after notice.12 Hence, petitioners prayed that respondent be enjoined from imposing the goodwill fees pending the determination of the reasonableness thereof, and from barring petitioners from occupying the stalls at the municipal public market and continuing with the operation of their businesses. Respondent, in answer, maintained that Municipal Ordinance No. 98-01 is valid. He reasoned that Municipal Ordinance No. 98-01 imposed goodwill fees to raise income to pay for the loan obtained by the Municipality of Maasin for the renovation of its public market. Said ordinance is not per se a tax or revenue measure, but involves the operation and management of an economic enterprise of the Municipality of Maasin as a local government unit; thus, there was no mandatory requirement to hold a public hearing for the enactment thereof. And, even granting that a public hearing was required, respondent insisted that public hearings take place on 11 August 1998 and 22 January 1999. Respondent further averred that petitioners were illegally occupying the market stalls, and the only way petitioners could legitimize their occupancy of said market stalls would be to execute lease contracts with the Municipality of Maasin. While respondent admitted that petitioners had been paying rentals for their market stalls in the amount ofP45.00 per month prior to the renovation of the municipal public market, respondent asserted that no rentals were paid or collected from petitioners ever since the renovation began. Respondent sought from the RTC an award for moral damages in the amount of not less than P500,000.00, for the social humiliation and hurt feelings he suffered by reason of the unjustified filing by petitioners of Civil Case No. 25843; and an order for petitioners to vacate the renovated market stalls and pay reasonable rentals from the date they began to occupy said stalls until they vacate the same. 13 The RTC subsequently rendered a Decision14 on 15 July 2003 dismissing the Petition in Civil Case No. 25843. The RTC found that petitioners could not avail themselves of the remedy of mandamus or prohibition. It reasoned that mandamus would not lie in this case where petitioners failed to show a clear legal right to the use of the market stalls without paying the goodwill fees imposed by the municipal government. Prohibition likewise would not apply to the present case where respondents acts, sought to be enjoined, did not involve the exercise of judicial or quasi-judicial functions. The RTC also dismissed the Petition in Civil Case No. 25843 on the ground of non-exhaustion of administrative remedies. Petitioners failure to question the legality of Municipal Ordinance No. 98-01 before the Secretary of Justice, as provided under Section 187 of the Local Government Code,15 rendered the Petition raising the very same issue before the RTC premature. The dispositive part of the RTC Decision dated 15 July 2003 reads: WHEREFORE, in view of all the foregoing, and finding the petition without merit, the same is, as it is hereby ordered, dismissed. 16 On 12 August 2003, petitioners and their co-plaintiffs filed a Motion for Reconsideration.17 The RTC denied petitioners Motion for Reconsideration in a Resolution dated 18 June 2004.18 While Civil Case No. 25843 was pending, respondent filed before the 12th Municipal Circuit Trial Court (MCTC) of Cabatuan-Maasin, Iloilo City a case in behalf of the Municipality of Maasin against petitioner Evelyn Ongsuco, entitled Municipality of Maasin v. Ongsuco, a Complaint for Unlawful Detainer with Damages,

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docketed as MCTC Civil Case No. 257. On 18 June 2002, the MCTC decided in favor of the Municipality of Maasin and ordered petitioner Ongsuco to vacate the market stalls she occupied, Stall No. 1-03 and Stall No. 1-04, and to pay monthly rentals in the amount of P350.00 for each stall from October 2001 until she vacates the said market stalls.19 On appeal, Branch 36 of the RTC of Maasin, Iloilo City, promulgated a Decision, dated 29 April 2003, in a case docketed as Civil Case No. 02-27229 affirming the decision of the MCTC. A Writ of Execution was issued by the MCTC on 8 December 2003.20 Petitioners, in their appeal before the Court of Appeals, docketed as CA-G.R. SP No. 86182, challenged the dismissal of their Petition for Prohibition/Mandamus docketed as Civil Case No. 25843 by the RTC. Petitioners explained that they did appeal the enactment of Municipal Ordinance No. 98-01 before the Department of Justice, but their appeal was not acted upon because of their failure to attach a copy of said municipal ordinance. Petitioners claimed that one of their fellow stall holders, Ritchelle Mondejar, wrote a letter to the Officer-in-Charge (OIC), Municipal Treasurer of Maasin, requesting a copy of Municipal Ordinance No. 98-01, but received no reply.21 In its Decision dated 28 November 2006 in CA-G.R. SP No. 86182, the Court of Appeals again ruled in respondents favor. The Court of Appeals declared that the "goodwill fee" was a form of revenue measure, which the Municipality of Maasin was empowered to impose under Section 186 of the Local Government Code. Petitioners failed to establish any grave abuse of discretion committed by respondent in enforcing goodwill fees. The Court of Appeals additionally held that even if respondent acted in grave abuse of discretion, petitioners resort to a petition for prohibition was improper, since respondents acts in question herein did not involve the exercise of judicial, quasi-judicial, or ministerial functions, as required under Section 2, Rule 65 of the Rules of Court. Also, the filing by petitioners of the Petition for Prohibition/Mandamus before the RTC was premature, as they failed to exhaust administrative remedies prior thereto. The appellate court did not give any weight to petitioners assertion that they filed an appeal challenging the legality of Municipal Ordinance No. 98-01 before the Secretary of Justice, as no proof was presented to support the same. In the end, the Court of Appeals decreed: WHEREFORE, in view of the foregoing, this Court finds the instant appeal bereft of merit. The assailed decision dated July 15, 2003 as well as the subsequent resolution dated 18 June 2004 are hereby AFFIRMED and the instant appeal is hereby DISMISSED. 22 Petitioners filed a Motion for Reconsideration23 of the foregoing Decision, but it was denied by the Court of Appeals in a Resolution24 dated 8 February 2008. Hence, the present Petition, where petitioners raise the following issues: I WHETHER OR NOT THE PETITIONERS HAVE EXHAUSTED ADMINISTRATIVE REMEDIES BEFORE FILING THE INSTANT CASE IN COURT; II WHETHER OR NOT EXHAUSTION OF ADMINISTRATIVE REMEDIES IS APPLICABLE IN THIS CASE; AND III WHETHER OR NOT THE APPELLEE MARIANO MALONES WHO WAS THEN THE MUNICIPAL MAYOR OF MAASIN, ILOILO HAS COMMITTED GRAVE ABUSE OF DISCRETION.25 After a close scrutiny of the circumstances that gave rise to this case, the Court determines that there is no need for petitioners to exhaust administrative remedies before resorting to the courts. The findings of both the RTC and the Court of Appeals that petitioners Petition for Prohibition/Mandamus in Civil Case No.

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25843 was premature is anchored on Section 187 of the Local Government Code, which reads: Section 187. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hearings. The procedure for approval of local tax ordinances and revenue measures shall be in accordance with the provisions of this Code: Provided, That public hearings shall be conducted for the purpose prior to the enactment thereof: Provided, further, That any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal: Provided, however, That such appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment of the tax, fee, or charge levied therein: Provided, finally, That within thirty (30) days after receipt of the decision or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent jurisdiction. (Emphasis ours.) It is true that the general rule is that before a party is allowed to seek the intervention of the court, he or she should have availed himself or herself of all the means of administrative processes afforded him or her. Hence, if resort to a remedy within the administrative machinery can still be made by giving the administrative officer concerned every opportunity to decide on a matter that comes within his or her jurisdiction, then such remedy should be exhausted first before the courts judicial power can be sought. The premature invocation of the intervention of the court is fatal to ones cause of action. The doctrine of exhaustion of administrative remedies is based on practical and legal reasons. The availment of administrative remedy entails lesser expenses and provides for a speedier disposition of controversies. Furthermore, the courts of justice, for reasons of comity and convenience, will shy away from a dispute until the system of administrative redress has been completed and complied with, so as to give the administrative agency concerned every opportunity to correct its error and dispose of the case. However, there are several exceptions to this rule. 26 The rule on the exhaustion of administrative remedies is intended to preclude a court from arrogating unto itself the authority to resolve a controversy, the jurisdiction over which is initially lodged with an administrative body of special competence. Thus, a case where the issue raised is a purely legal question, well within the competence; and the jurisdiction of the court and not the administrative agency, would clearly constitute an exception.27Resolving questions of law, which involve the interpretation and application of laws, constitutes essentially an exercise of judicial power that is exclusively allocated to the Supreme Court and such lower courts the Legislature may establish. 28 In this case, the parties are not disputing any factual matter on which they still need to present evidence. The sole issue petitioners raised before the RTC in Civil Case No. 25843 was whether Municipal Ordinance No. 98-01 was valid and enforceable despite the absence, prior to its enactment, of a public hearing held in accordance with Article 276 of the Implementing Rules and Regulations of the Local Government Code. This is undoubtedly a pure question of law, within the competence and jurisdiction of the RTC to resolve. Paragraph 2(a) of Section 5, Article VIII of the Constitution, expressly establishes the appellate jurisdiction of this Court, and impliedly recognizes the original jurisdiction of lower courts over cases involving the constitutionality or validity of an ordinance: Section 5. The Supreme Court shall have the following powers: xxxx (2) Review, revise, reverse, modify or affirm on appeal or certiorari, as the law or the Rules of Court may provide, final judgments and orders of lower courts in: (a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Emphases ours.)

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In J.M. Tuason and Co., Inc. v. Court of Appeals, 29 Ynot v. Intermediate Appellate Court,30 and Commissioner of Internal Revenue v. Santos,31 the Court has affirmed the jurisdiction of the RTC to resolve questions of constitutionality and validity of laws (deemed to include local ordinances) in the first instance, without deciding questions which pertain to legislative policy. Although not raised in the Petition at bar, the Court is compelled to discuss another procedural issue, specifically, the declaration by the RTC, and affirmed by the Court of Appeals, that petitioners availed themselves of the wrong remedy in filing a Petition for Prohibition/Mandamus before the RTC. Sections 2 and 3, Rule 65 of the Rules of the Rules of Court lay down under what circumstances petitions for prohibition and mandamus may be filed, to wit: SEC. 2. Petition for prohibition. When the proceedings of any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice may require. SEC. 3. Petition for mandamus. When any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent, immediately or at some other time to be specified by the court, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent. (Emphases ours.) In a petition for prohibition against any tribunal, corporation, board, or person -- whether exercising judicial, quasi-judicial, or ministerial functions -- who has acted without or in excess of jurisdiction or with grave abuse of discretion, the petitioner prays that judgment be rendered, commanding the respondent to desist from further proceeding in the action or matter specified in the petition.32 On the other hand, the remedy of mandamus lies to compel performance of a ministerial duty.33 The petitioner for such a writ should have a well-defined, clear and certain legal right to the performance of the act, and it must be the clear and imperative duty of respondent to do the act required to be done.34 In this case, petitioners primary intention is to prevent respondent from implementing Municipal Ordinance No. 98-01, i.e., by collecting the goodwill fees from petitioners and barring them from occupying the stalls at the municipal public market. Obviously, the writ petitioners seek is more in the nature of prohibition (commanding desistance), rather than mandamus (compelling performance). For a writ of prohibition, the requisites are: (1) the impugned act must be that of a "tribunal, corporation, board, officer, or person, whether exercising judicial, quasi-judicial or ministerial functions"; and (2) there is no plain, speedy, and adequate remedy in the ordinary course of law."35 The exercise of judicial function consists of the power to determine what the law is and what the legal rights of the parties are, and then to adjudicate upon the rights of the parties. The term quasijudicial function applies to the action and discretion of public administrative officers or bodies that are required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official action and to exercise discretion of a judicial nature. In implementing Municipal Ordinance No. 98-01, respondent is not called upon to adjudicate the rights of contending parties or to exercise, in any manner, discretion of a judicial nature.

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A ministerial function is one that an officer or tribunal performs in the context of a given set of facts, in a prescribed manner and without regard for the exercise of his or its own judgment, upon the propriety or impropriety of the act done.36 The Court holds that respondent herein is performing a ministerial function. It bears to emphasize that Municipal Ordinance No. 98-01 enjoys the presumption of validity, unless declared otherwise. Respondent has the duty to carry out the provisions of the ordinance under Section 444 of the Local Government Code: Section 444. The Chief Executive: Powers, Duties, Functions and Compensation. (a) The Municipal mayor, as the chief executive of the municipal government, shall exercise such powers and perform such duties and functions as provided by this Code and other laws. (b) For efficient, effective and economical governance the purpose of which is the general welfare of the municipality and its inhabitants pursuant to Section 16 of this Code, the Municipal mayor shall: xxxx (2) Enforce all laws and ordinances relative to the governance of the municipality and the exercise of its corporate powers provided for under Section 22 of this Code, implement all approved policies, programs, projects, services and activities of the municipality x x x. xxxx (3) Initiate and maximize the generation of resources and revenues, and apply the same to the implementation of development plans, program objectives sand priorities as provided for under Section 18 of this Code, particularly those resources and revenues programmed for agro-industrial development and country-wide growth and progress, and relative thereto, shall: xxxx (iii) Ensure that all taxes and other revenues of the municipality are collected, and that municipal funds are applied in accordance with law or ordinance to the payment of expenses and settlement of obligations of the municipality; x x x. (Emphasis ours.) Municipal Ordinance No. 98-01 imposes increased rentals and goodwill fees on stall holders at the renovated municipal public market, leaving respondent, or the municipal treasurer acting as his alter ego, no discretion on whether or not to collect the said rentals and fees from the stall holders, or whether or to collect the same in the amounts fixed by the ordinance. The Court further notes that respondent already deemed petitioners stalls at the municipal public market vacated. Without such stalls, petitioners would be unable to conduct their businesses, thus, depriving them of their means of livelihood. It is imperative on petitioners part to have the implementation of Municipal Ordinance No. 98-01 by respondent stopped the soonest. As this Court has established in its previous discussion, there is no more need for petitioners to exhaust administrative remedies, considering that the fundamental issue between them and respondent is one of law, over which the courts have competence and jurisdiction. There is no other plain, speedy, and adequate remedy for petitioners in the ordinary course of law, except to seek from the courts the issuance of a writ of prohibition commanding respondent to desist from continuing to implement what is allegedly an invalid ordinance.1 a vv p h i 1 This brings the Court to the substantive issue in this Petition on the validity of Municipal Ordinance N. 98-01. Respondent maintains that the imposition of goodwill fees upon stall holders at the municipal public market is not a revenue measure that requires a prior public hearing. Rentals and other consideration for occupancy of the stalls at the municipal public market are not matters of taxation. Respondents argument is specious. Article 219 of the Local Government Code provides that a local government unit exercising its power to impose taxes, fees and

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charges should comply with the requirements set in Rule XXX, entitled "Local Government Taxation": Article 219. Power to Create Sources of Revenue.Consistent with the basic policy of local autonomy, each LGU shall exercise its power to create its own sources of revenue and to levy taxes, fees, or charges, subject to the provisions of this Rule. Such taxes, fees, or charges shall accrue exclusively to the LGU. (Emphasis ours.) Article 221(g) of the Local Government Code of 1991 defines "charges" as: Article 221. Definition of Terms. xxxx (g) Charges refer to pecuniary liability, as rents or fees against persons or property. (Emphasis ours.) Evidently, the revenues of a local government unit do not consist of taxes alone, but also other fees and charges. And rentals and goodwill fees, imposed by Municipal Ordinance No. 98-01 for the occupancy of the stalls at the municipal public market, fall under the definition of charges. For the valid enactment of ordinances imposing charges, certain legal requisites must be met. Section 186 of the Local Government Code identifies such requisites as follows: Section 186. Power to Levy Other Taxes, Fees or Charges.Local government units may exercise the power to levy taxes, fees or charges on any base or subject not otherwise specifically enumerated herein or taxed under the provisions of the National Internal Revenue Code, as amended, or other applicable laws: Provided, That the taxes, fees or charges shall not be unjust, excessive, oppressive, confiscatory or contrary to declared national policy: Provided, further, That the ordinance levying such taxes, fees or charges shall not be enacted without any prior public hearing conducted for the purpose. (Emphasis ours.) xxxx (2) In addition to the requirement for publication or posting, the sanggunian concerned shall cause the sending of written notices of the proposed ordinance, enclosing a copy thereof, to the interested or affected parties operating or doing business within the territorial jurisdiction of the LGU concerned. (3) The notice or notices shall specify the date or dates and venue of the public hearing or hearings. The initial public hearing shall be held not earlier than ten (10) days from the sending out of the notice or notices, or the last day of publication, or date of posting thereof, whichever is later; xxxx (c) No tax ordinance or revenue measure shall be enacted or approved in the absence of a public hearing duly conducted in the manner provided under this Article. (Emphases ours.) It is categorical, therefore, that a public hearing be held prior to the enactment of an ordinance levying taxes, fees, or charges; and that such public hearing be conducted as provided under Section 277 of the Implementing Rules and Regulations of the Local Government Code. There is no dispute herein that the notices sent to petitioners and other stall holders at the municipal public market were sent out on Section 277 of the Implementing Rules and Regulations of the Local Government Code establishes in detail the procedure for the enactment of such an ordinance, relevant provisions of which are reproduced below: Section 277. Publication of Tax Ordinance and Revenue Measures. x x x. xxxx (b) The conduct of public hearings shall be governed by the following procedure:

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6 August 1998, informing them of the supposed "public hearing" to be held on 11 August 1998. Even assuming that petitioners received their notice also on 6 August 1998, the "public hearing" was already scheduled, and actually conducted, only five days later, on 11 August 1998. This contravenes Article 277(b)(3) of the Implementing Rules and Regulations of the Local Government Code which requires that the public hearing be held no less than ten days from the time the notices were sent out, posted, or published. When the Sangguniang Bayan of Maasin sought to correct this procedural defect through Resolution No. 68, series of 1998, dated 18 September 1998, respondent vetoed the said resolution. Although the Sangguniang Bayan may have had the power to override respondents veto,37 it no longer did so. The defect in the enactment of Municipal Ordinance No. 98 was not cured when another public hearing was held on 22 January 1999, after the questioned ordinance was passed by the Sangguniang Bayan and approved by respondent on 17 August 1998. Section 186 of the Local Government Code prescribes that the public hearing be held prior to the enactment by a local government unit of an ordinance levying taxes, fees, and charges. Since no public hearing had been duly conducted prior to the enactment of Municipal Ordinance No. 98-01, said ordinance is void and cannot be given any effect. Consequently, a void and ineffective ordinance could not have conferred upon respondent the jurisdiction to order petitioners stalls at the municipal public market vacant. IN VIEW OF THE FOREGOING, the instant Petition is GRANTED. The assailed Decision dated 28 November 2006 of the Court of Appeals in CA-G.R. SP No. 86182 is REVERSED and SET ASIDE. Municipal Ordinance No. 98-01 is DECLARED void and ineffective, and a writ of prohibition is ISSUED commanding the Mayor of the Municipality of Maasin, Iloilo, to permanently desist from enforcing the said ordinance. Petitioners are also DECLARED as lawful occupants of the market stalls they occupied at the time they filed the Petition for Mandamus/Prohibition docketed as Civil Case No. 25843. In the event that they were deprived of possession of the said market stalls, petitioners are entitled to recover possession of these stalls. SO ORDERED.

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1. The sum of P73,867.42 plus interest and other charges commencing from January 1, 1988 until fully paid; 2. Such sum which shall not be less than P2,000.00 or 25% of the amount of delinquency whichever is greater, as and for attorney's fees. 3. Costs against the defendant. 4. SO ORDERED.
1

G.R. No. 90503 September 27, 1990 NESTOR SANDOVAL, petitioner, vs. HON. DOROTEO CAEBA, Presiding Judge, RTC, Manila, Branch 20, DEPUTY SHERIFF OF MANILA (RTC, Manila, Branch 20), and ESTATE DEVELOPERS & INVESTORS CORPORATION, respondents. Arnold V. Guerrero & Associates for petitioner. Lino M. Patajo for private respondent.

On September 28, 1988 the trial court issued an order directing the issuance of a writ of execution to enforce its decision that had become final and executory. On September 30, 1988 petitioner filed a motion to vacate judgment and to dismiss the complaint on the ground that the lower court has no jurisdiction over the subject matter and that its decision is null and void. A motion for reconsideration of the writ of execution was also filed by petitioner. An opposition to both motions was filed by private respondent to which a reply was filed by petitioner. On February 17, 1989 the trial court denied the motion to vacate the judgment on the ground that it is now beyond the jurisdiction of the Court to do so. It directed the issuance of a writ of execution anew. Hence the herein petition wherein it is alleged that the trial court committed a grave abuse of discretion as follows: 5.1. The respondent Judge gravely abused his discretion and acted without jurisdiction in taking cognizance of the complaint before him notwithstanding that exclusive and original jurisdiction over the subject-matter thereof is vested with the Housing and Land Use Regulatory Board (HLURB) pursuant to PD 957.

GANCAYCO, J.: The issue in this petition is whether or not the ordinary courts have jurisdiction over the collection of unpaid installments regarding a subdivision lot. On August 20, 1987 private respondent filed a complaint in the Regional Trial Court (RTC) of Manila for the collection of unpaid installments regarding a subdivision lot, pursuant to a promissory note, plus interest. On January 29, 1988 the trial court rendered a decision. It appears that petitioner was declared in default so much so that after receiving the evidence of private respondent, the trial court rendered its decision on January 19,1988, the dispositive portion of which reads as follows: WHEREFORE, on the allegations and the prayer of the complaint and the evidence adduced in support therefor, judgment is hereby rendered, ordering the defendant to pay plaintiff the following:

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5.2. The respondent Judge gravely abused his discretion and acted without jurisdiction in refusing to vacate his judgment rendered without jurisdiction and in issuing a writ of execution to implement his abovesaid void judgment. 2 The petition is impressed with merit. Under Section 1 of Presidential Decree No. 957 the National Housing Authority (NHA) was given the exclusive jurisdiction to hear and decide certain cases as follows: SEC.1. In the exercise of its function to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall haveexclusive jurisdiction to hear and decide cases of the following nature: A. Unsound real estate business practices: B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman;and C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner, developer, dealer, broker or salesman. (Emphasis supplied.) The language of this section, particularly, the second portion thereof, leaves no room for doubt that exclusive jurisdiction over the case between the petitioner and private respondent is vested not on the RTC but on the NHA. The NHA was re-named Human Settlements Regulatory Commission and thereafter it was renamed as the Housing and Land Use Regulatory Board (HLURB). 3 Undeniably the sum of money sought to be collected by private respondent from petitioner represented unpaid installments of a subdivision lot which the petitioner purchased. Petitioner alleges that he suspended payments thereof because of the failure of the developer to develop the subdivision pursuant to their agreement. In Antipolo Realty Corporation vs. National Housing Authority, 4 the suit which was filed with the NHA, likewise involved non-payment of installments over a subdivision lot, wherein this Court held that the NHA has exclusive authority to hear and decide the case. In Solid Homes, Inc. vs. Teresita Payawal, 5 this Court ruled that upon the issuance of Presidential Decree No. 957, the trial court may no longer assume jurisdiction over the cases enumerated in Section 1 of Presidential Decree No. 397. We even stated therein that the Housing and Land Use Regulatory Board has the authority to award damages in the exercise of this exclusive power conferred upon it by Presidential Decree No. 1344. In Estate Developers and Investors Corporation vs. Antonio Sarte and Erlinda Sarte, G.R. No. 93646, which is a case substantially similar to the instant case, in a resolution of August 13, 1990 this Court upheld the exclusive jurisdiction of the HLURB over the collection suit. Considering that the trial court has no jurisdiction under the circumstances obtaining in this case, the decision it rendered is null and void ab initio. It is as if no decision was rendered by the trial court at all. When as in this case the attention of the trial court is drawn to its lack of competence and authority to act on the case, certainly the trial court has a duty to vacate the judgment by declaring the same to be null and void ab initio. This is as it should be. Inasmuch as the questioned judgment is null and void, it is, as above observed, as if no decision had been rendered by the trial court. It cannot become final and exucutory, much less can it be enforced by a writ of execution. The trial court, rather than reiterating the issuance of a writ of execution in this case, which it did, should have recalled and cancelled the writ of execution of the judgment.

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WHEREFORE, the petition is GRANTED. The questioned decision of the trial court dated January 29, 1988 is hereby declared null and void for lack of jurisdiction. No pronouncement as to costs. SO ORDERED.

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petitioners the lots subject thereof, and after the latter shall have paid the purchase price and interest, to execute in favor of the petitioners the corresponding deeds of transfer of title, free from any lien or encumbrance except those expressly provided for in the Contract to Sell. The Contracts to Sell are herein described: Petitioners-Buyers Lot subject Date of execution of of contract to sell contract to sell 1) Spouses Julian a) Lot No. 9, and Teresita No. 3, covered Cuizon TCT No. T-66231 25 January 1979 1 b) Lot No. No. 1. 2 24 April 1979 3 11, Block by

G.R. Nos. 102193-97 May 10, 1994 MS. EMILY YU FAJARDO, SPOUSES SALVADOR and ENGRACIA GIANAN, RENE and BEVERLY RODELAS, SPOUSES JULIAN and TERESITA CUIZON, MS. TERESITA RIVERA and RICARDO VILLANUEVA, petitioners, vs. HON. ODILON I. BAUTISTA, in his capacity as the Presiding Judge of the Regional Trial Court, Branch 37, Calamba, Laguna, SPOUSES ISABELO and PURITA JAREO, RUBEN HABACON, and CESAR S. REYES, in his capacity as the Register of Deeds, Calamba, Laguna, respondents. Encanto, Mabugat & Associates for petitioners. Narciso M. Habacon for respondents Ruben Habacon and Cesar S. Reyes.

Block

2) Teresita Rivera Lot No. 12, BLock 5 December 1985 4 and Ricardo No. 3, covered by Villanueva TCT No. 7-62229 3) Spouses Rene and Lot No. 14, Block 17 December 1985 5 Beverly Rodelas No. 3, covered by TCT No. T-66231 4) Spouses Salvador Lot No. 9, Block 17 March 1988 6 and Engracia No. 2, covered by Gianan TCT No. T-66273 On the other hand, private respondent Fernando Realty and Development Corporation (hereinafter FERNANDO) as SELLER, and petitioner Emily Yu Fajardo as BUYER signed on 22 February 1985 a CONTRACT TO SELL 7under which for the considerations therein stated, FERNANDO agreed to sell to Fajardo Lot No. 10, Block No. 3, also located at the Calamba Central Compound Subdivision, 8 and upon full payment of the agreed price and interest thereon, to execute a deed of absolute sale in favor of Fajardo. It appears, however, that on 18 October 1986, the JAREOS sold the aforesaid lots subject of the different contracts to sell to private

DAVIDE, JR., J.: This is a special civil action for certiorari which seeks to annul the 4 September 1991 Order of the respondent Judge dismissing the complaints of the petitioners for lack of jurisdiction, and the 20 September 1991 Order denying the petitioners' motion for reconsideration. The respondent Judge had ruled that jurisdiction over the cases pertained to the Housing and Land Use Regulatory Board (HLRB) and not the Regional Trial Court. The petitioners asseverate that the RTC has jurisdiction over the cases. The pleadings of the parties disclose the following facts: Private respondents Isabelo Jareo and Purita Jareo (hereinafter JAREOS) are the owners and developers of a subdivision known as the Calamba Central Compound. On various dates, they as SELLERS, and the petitioners as BUYERS signed separate contracts, each designated as a CONTRACT TO SELL, under which, for the considerations therein stated, they bound themselves to sell to the

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respondent Ruben Habacon (hereinafter HABACON) under separate documents denominated as "Kasulatan ng Bilihan." 9 On 18 February 1991, HABACON caused the cancellation of the certificates of title covering the said lots and the issuance of new ones in his name. 10 When the petitioners learned of these, they filed on 21 June 1991 separate complaints with the court a quo for annulment of the sales in favor of HABACON and of the new certificates of title issued to him, for reinstatement of the certificates of title cancelled by those issued to HABACON, and for accounting and damages. They prayed in their complaints for a judgment (a) declaring the "Kasulatan na Bilihan" executed in favor of HABACON as an equitable mortgage; (b) annulling the new certificates of title issued to HABACON and reinstating those previously cancelled by the new certificates of title; (c) ordering HABACON and the JAREOS to determine the unpaid balance of the purchase price under the Contracts to Sell, to accept payments thereof, and to execute the deeds of absolute sale in favor of the petitioners; and (e) ordering the defendants to pay actual and exemplary damages and attorney's fees specified therein, as well as the costs. The complaints were docketed as Civil Cases Nos. 1683-91C, 11 1684-91-C, 12 1685-91-C, 13 1686-91-C, 14and 1688-91C, 15 and were assigned to Branch 37 of the Regional Trial Court of Calamba. On 9 August 1991, HABACON filed a motion to dismiss the complaints on the ground that the plaintiffs (petitioners herein) have no legal capacity to sue because they were not parties to the "BILIHAN." 16 In its Order of 12 August 1991, 17 the trial court, through the respondent Judge, directed the plaintiffs to show cause why their complaints should not be dismissed for lack of jurisdiction pursuant to P.D. No. 957 (Subdivision and Condominium Buyers' Protective Decree), as amended by P.D. No. 1344, and the doctrine laid down by this Court in Solid Homes, Inc. vs. Payawal. 18 In their compliance 19 with the show cause order, the petitioners maintained that it is the trial court, and not the HLRB, which has jurisdiction over the complaint. They contend that Solid Homes, Inc. vs. Payawal is inapplicable because in their cases: (1) the title of the developers, the JAREOS, had already passed to a third person, HABACON; (2) their action is for the annulment of the title of a third person; (3) HABACON is not a developer; and (4) Section 19(1) of B.P. Blg. 129 vests upon the Regional Trial Court the jurisdiction to hear and decide all civil actions which involve title to or possession of any real property or any interest therein, except actions for unlawful detainer and forcible entry. In its Order of 4 September 1991, 20 the trial court dismissed the aforesaid civil cases for lack of jurisdiction. It held: The Court does not agree with the plaintiffs. PD No. 957 as amended by P.D. No. 1344 gives the National Housing Authority now the Human Settlement Regulatory Commission (HSRC) 21 inclusive [sic] jurisdiction to hear and, decide cases of "unsound real estate business practices" (Sec. 1(a), P.D. 1344). This authority is broad enough to include all kinds of real estate transactions involving subdivision lot or condominium, wherein either the subdivision lot or condominium buyer, project owner, developer, dealer, broker or salesman is involved. The petitioners filed a motion for the reconsideration of the order, but the trial court denied this in its Order of 20 September 1991. 22 It ruled that while HABACON may not be the developer, the JAREOS are, and by selling the same lots to HABACON after they were previously sold to different parties, the JAREOS may have committed an "unsound business practice." Moreover, it ruled that Section 19(2) of B.P. Blg. 129, being a general law, should yield to P.D. No. 957, as amended by P.D. No. 1344, which is a special law. On 24 December 1991, the petitioners filed the instant special civil action for certiorari to annul the 4 September 1991 and 20 September 1991 Orders of the trial court on the ground that the judge acted with grave abuse of discretion amounting to lack of jurisdiction in dismissing their complaints and that they have no other plain, speedy, and adequate remedy in the ordinary course of law. The petitioners maintain that the trial court has jurisdiction over their complaints.

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In the Resolution of 18 November 1991, 23 we required the respondents to comment on the petition. Private respondent HABACON filed his comment and opposition on 27 August 1992 24 while public respondent Cesar S. Reyes filed his comment on 24 August 1993. 25 Both respondents rely on our pronouncement in Solid Homes, Inc. vs. Payawal and echo the ruling of the trial court in the questioned orders. The copy of the resolution sent to the JAREOS was returned unserved and in the Resolution of 21 July 1993, we considered it as served on them. 26As required, the petitioners filed a reply to the comment. 27 On 8 November 1993, we resolved to give due course to the petition and required the parties to submit their memoranda, which the petitioners complied with on 29 December 1993 28 and the private respondents, on 28 March 1994. 29 The core issue in this case is whether the trial court gravely abused its discretion in dismissing, for lack of jurisdiction, the complaints filed by the petitioners. Before resolving this issue, a procedural matter must first be considered. Generally, an order of dismissal, whether right or wrong, is a final order, and hence a proper subject of appeal, not certiorari. 30 The remedies of appeal and certiorari are mutually exclusive and not alternative or successive. 31 Accordingly, although the special civil action of certiorari is not proper when an ordinary appeal is available, it may be granted where it is shown that the appeal would be inadequate, slow, insufficient, and will not promptly relieve a party from the injurious effects of the order complained of, or where appeal is inadequate and ineffectual. 32 Nevertheless, certiorari cannot be a substitute for the lost or lapsed remedy of appeal, 33 where such loss is occasioned by the petitioner's own neglect or error in the choice of remedies. 34 The petitioners admit that they received a copy of the trial court's order dismissing their complaints on 4 October 1991. 35 The instant petition was filed on 24 October 1991 or beyond the 15-day period to appeal from the order. The petitioners have not even attempted to explain why they were unable to appeal from the challenged order within the reglementary period. This civil action then was resorted to as a substitute for the lost or lapsed remedy of appeal, and since none of the exceptions to the rigid rule barring substitution of remedies was alleged to exist in this petition, or even indicated by the pleadings, this petition must be dismissed. Even if we were to accept this petition in the broader interest of justice, it must still fail for the trial court correctly ruled that it has no jurisdiction over the subject matter in Civil Cases Nos. 1683-91C, 1684-91-C, 1685-91-C, 1686- 91-C, and 1688-91-C. Jurisdiction thereon was originally vested in the National Housing Authority (NHA) under P.D. No. 957, as amended by P.D. No. 1344. Under E.O. No. 648 of 7 February 1981, this jurisdiction was transferred to the Human Settlements Regulatory Commission (HSRC) which, pursuant to E.O. No. 90 of 17 December 1986, was renamed as the Housing and Land Use Regulatory Board. We agree with the trial court that the complaints do involve unsound real estate business practices on the part of the owners and developers of the subdivision who entered into Contracts to Sell with the petitioners. By virtue of Section 1 of P.D. No. 1344 and our decision in Solid Homes, Inc. vs. Payawal, the NHA, now HLRB, has the exclusive jurisdiction to hear and decide the matter. In addition to involving unsound real estate business practices, the complaints also involve specific performance of the contractual and statutory obligations of the owners or developers of the subdivision. The claims for annulment of the "Kasulatan ng Bilihan" in favor of HABACON and the certificates of title issued to him and for damages are merely incidental. Section 1 of P.D. No. 1344, promulgated on 2 April 1978, provides as follows: Sec. 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall haveexclusive jurisdiction to hear and decide cases of the following nature: A. Unsound real estate business practices; B. Claims involving refund and any other claims filed by

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subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or condominium units against the owner, developer, dealer, broker or salesman. (Italics supplied) Conformably with this section, we had earlier upheld the jurisdiction of the NHA to determine the rights of the parties under a contract to sell a subdivision lot in Antipolo Reality Corp. vs. National Housing Authority 36 and struck down the exercise of jurisdiction by the Regional Trial Court over a case instituted by a lot buyer for delivery of title against the subdivision owner in Solid Homes, Inc. vs. Payawal. We also sustained the jurisdiction of the HLRB over complaints for (a) the refund of reservation fees for the purchase of a subdivision lot, 37 (b) specific performance filed by a lot buyer against the seller of a subdivision lot, 38 (c) annulment of the mortgage constituted by the project owner without the buyer's consent, the mortgage foreclosure sale, and the condominium certificate of title issued to the highest bidder at the said foreclosure sale, 39 and (d) collection of the balance of the unpaid purchase price of a subdivision lot filed by the developer of a subdivision against the lot buyer. 40 In CT Torres Enterprises, Inc. vs. Hibionada, 41 we further declared that incidental claims for damages may be resolved by the HLRB. Thus: It is clear from Section 1(c) of the above quoted PD No. 1344 that the complaint for specific performance with damages filed by Diongon with the Regional Trial Court of Negros Occidental comes under the jurisdiction of the Housing and Land Use Regulatory Board. Diongon is a buyer of a subdivision lot seeking specific performance of the seller's obligation to deliver to him the corresponding certificate of title. The argument that only courts of justice can adjudicate claims resoluble under the provisions of the Civil Code is out of step with the fast-changing times. There are hundreds of administrative bodies now performing this function by virtue of a valid authorization from the legislature. This quasi-judicial function, as it is called, is exercised by them as an incident of the principal power entrusted to them of regulating certain activities falling under their particular expertise. In the Solid Homes case for example the Court affirmed the competence of the Housing and Land use Regulatory Board to award damages although this is an essentially judicial power exercisable ordinarily only by the courts of justice. This departure from the traditional allocation of governmental powers is justified by expediency, or the need of the government to respond swiftly and competently to the pressing problems of the modern world. Accordingly, the trial court committed no grave abuse of discretion in dismissing the complaints of the petitioners. WHEREFORE, the due course Resolution of 8 November 1993 is RECALLED and, for lack of merit, the instant petition is DISMISSED with costs against the petitioners. SO ORDERED.

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No examinee shall attend any review class, briefing, conference or the like conducted by, or shall receive any hand-out, review material, or any tip from any school, college or university, or any review center or the like or any reviewer, lecturer, instructor official or employee of any of the aforementioned or similars institutions during the three days immediately proceeding every examination day including examination day. Any examinee violating this instruction shall be subject to the sanctions prescribed by Sec. 8, Art. III of the Rules and Regulations of the Commission. 1 On October 16, 1986, herein petitioners, all reviewees preparing to take the licensure examinations in accountancy schedule on October 25 and November 2 of the same year, filed on their own behalf of all others similarly situated like them, with the Regional Trial Court of Manila, Branch XXXII, a complaint for injuction with a prayer with the issuance of a writ of a preliminary injunction against respondent PRC to restrain the latter from enforcing the above-mentioned resolution and to declare the same unconstitution. Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground that the lower court had no jurisdiction to review and to enjoin the enforcement of its resolution. In an Order of October 21, 1987, the lower court declared that it had jurisdiction to try the case and enjoined the respondent commission from enforcing and giving effect to Resolution No. 105 which it found to be unconstitutional. Not satisfied therewith, respondent PRC, on November 10, 1986, filed with the Court of Appeals a petition for the nullification of the above Order of the lower court. Said petiton was granted in the Decision of the Court of Appeals promulagated on January 13, 1987, to wit: WHEREFORE, finding the petition meritorious the same is hereby GRANTED and the other dated October 21, 1986 issued by respondent court is declared null and void. The respondent court is

G.R. No. 77372 April 29, 1988 LUPO L. LUPANGCO, RAYMOND S. MANGKAL, NORMAN A. MESINA, ALEXANDER R. REGUYAL, JOCELYN P. CATAPANG, ENRICO V. REGALADO, JEROME O. ARCEGA, ERNESTOC. BLAS, JR., ELPEDIO M. ALMAZAN, KARL CAESAR R. RIMANDO, petitioner, vs. COURT OF APPEALS and PROFESSIONAL REGULATION COMMISSION, respondent. Balgos & Perez Law Offices for petitioners. The Solicitor General for respondents.

GANCAYCO, J.: Is the Regional Trial Court of the same category as the Professional Regulation Commission so that it cannot pass upon the validity of the administrative acts of the latter? Can this Commission lawfully prohibit the examiness from attending review classes, receiving handout materials, tips, or the like three (3) days before the date of the examination? Theses are the issues presented to the court by this petition for certiorari to review the decision of the Court of Appeals promulagated on January 13, 1987, in CA-G.R. SP No. 10598, * declaring null and void the other dated Ocober 21, 1986 issued by the Regional Trial Court of Manila, Branch 32 in Civil Case No. 86-37950 entitled " Lupo L. Lupangco, et al. vs. Professional Regulation Commission." The records shows the following undisputed facts: On or about October 6, 1986, herein respondent Professional Regulation Commission (PRC) issued Resolution No. 105 as parts of its "Additional Instructions to Examiness," to all those applying for admission to take the licensure examinations in accountancy. The resolution embodied the following pertinent provisions:

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further directed to dismiss with prejudice Civil Case No. 86-37950 for want of jurisdiction over the subject matter thereof. No cost in this instance. SO ORDERED. Hence, this petition. The Court of Appeals, in deciding that the Regional Trial Court of Manila had no jurisdiction to entertain the case and to enjoin the enforcement of the Resolution No. 105, stated as its basis its conclusion that the Professional Regulation Commission and the Regional Trial Court are co-equal bodies. Thus it held That the petitioner Professional Regulatory Commission is at least a co-equal body with the Regional Trial Court is beyond question, and co-equal bodies have no power to control each other or interfere with each other's acts. 3 To strenghten its position, the Court of Appeals relied heavily on National Electrification Administration vs. Mendoza, 4 which cites Pineda vs. Lantin 5 and Philippine Pacific Fishing, Inc. vs. Luna, 6 where this Court held that a Court of First Instance cannot interfere with the orders of the Securities and Exchange Commission, the two being co-equal bodies. After a close scrutiny of the facts and the record of this case, We rule in favor of the petitioner. The cases cited by respondent court are not in point. It is glaringly apparent that the reason why this Court ruled that the Court of First Instance could not interfere with the orders of the Securities and Exchange Commission was that this was so provided for by the law. In Pineda vs. Lantin, We explained that whenever a party is aggrieved by or disagree with an order or ruling of the Securities and Exchange Commission, he cannot seek relief from courts of general jurisdiction since under the Rules of Court and Commonwealth Act No. 83, as amended by Republic Act No. 635, creating and setting forth the powers and functions of the old
2

Securities and Exchange Commission, his remedy is to go the Supreme Court on a petition for review. Likewise, in Philippine Pacific Fishing Co., Inc. vs. Luna, it was stressed that if an order of the Securities and Exchange Commission is erroneous, the appropriate remedy take is first, within the Commission itself, then, to the Supreme Court as mandated in Presidential Decree No. 902A, the law creating the new Securities and Exchange Commission. Nowhere in the said cases was it held that a Court of First Instance has no jurisdiction over all other government agencies. On the contrary, the ruling was specifically limited to the Securities and Exchange Commission. The respondent court erred when it place the Securities and Exchange Commission and the Professional Regulation Commsision in the same category. As alraedy mentioned, with respect to the Securities and Exchange Commission, the laws cited explicitly provide with the procedure that need be taken when one is aggrieved by its order or ruling. Upon the other hand, there is no law providing for the next course of action for a party who wants to question a ruling or order of the Professional Regulation Commission. Unlike Commonwealth Act No. 83 and Presidential Decree No. 902-A, there is no provision in Presidential Decree No. 223, creating the Professional Regulation Commission, that orders or resolutions of the Commission are appealable either to the Court of Appeals or to theSupreme Court. Consequently, Civil Case No. 86-37950, which was filed in order to enjoin the enforcement of a resolution of the respondent Professional Regulation Commission alleged to be unconstitutional, should fall within the general jurisdiction of the Court of First Instance, now the Regional Trial Court. 7 What is clear from Presidential Decree No. 223 is that the Professional Regulation Commission is attached to the Office of the President for general direction and coordination. 8 Well settled in our jurisprudence is the view that even acts of the Office of the President may be reviewed by the Court of First Instance (now the Regional Trial Court). In Medalla vs. Sayo, 9 this rule was thoroughly propounded on, to wit: In so far as jurisdiction of the Court below to review by certiorari decisions and/or resolutions of the Civil Service Commission and of the residential Executive

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Asssistant is concerned, there should be no question but that the power of judicial review should be upheld. The following rulings buttress this conclusion: The objection to a judicial review of a Presidential act arises from a failure to recognize the most important principle in our system of government, i.e., the separation of powers into three coequal departments, the executives, the legislative and the judicial, each supreme within its own assigned powers and duties. When a presidential act is challenged before the courts of justice, it is not to be implied therefrom that the Executive is being made subject and subordinate to the courts. The legality of his acts are under judicial review, not because the Executive is inferior to the courts, but because the law is above the Chief Executive himself, and the courts seek only to interpret, apply or implement it (the law). A judicial review of the President's decision on a case of an employee decided by the Civil Service Board of Appeals should be viewed in this light and the bringing of the case to the Courts should be governed by the same principles as govern the jucucial review of all administrative acts of all administrative officers. 10 Republic vs. Presiding Judge, CFI of Lanao del Norte, Br. II, 11 is another case in point. Here, "the Executive Office"' of the Department of Education and Culture issued Memorandum Order No. 93 under the authority of then Secretary of Education Juan Manuel. As in this case, a complaint for injunction was filed with the Court of First Instance of Lanao del Norte because, allegedly, the enforcement of the circular would impair some contracts already entered into by public school teachers. It was the contention of petitioner therein that "the Court of First Instance is not empowered to amend, reverse and modify what is otherwise the clear and explicit provision of the memorandum circular issued by the Executive Office which has the force and effect of law." In resolving the issue, We held: ... We definitely state that respondent Court lawfully acquired jurisdiction in Civil Case No. II-240 (8) because the plaintiff therein asked the lower court for relief, in the form of injunction, in defense of a legal right (freedom to enter into contracts) . . . . . Hence there is a clear infringement of private respondent's constitutional right to enter into agreements not contrary to law, which might run the risk of being violated by the threatened implementation of Executive Office Memorandum Circular No. 93, dated February 5, 1968, which prohibits, with certain exceptions, cashiers and disbursing officers from honoring special powers of attorney executed by the payee employees. The respondent Court is not only right but duty bound to take cognizance of cases of this nature wherein a constitutional and statutory right is allegedly infringed by the administrative action of a government office. Courts of first Instance have original jurisdiction over all civil actions in which the subject of the litigation is not capable of pecuniary estimation (Sec. 44, Republic Act 296, as amended). 12 (Emphasis supplied.) In San Miguel Corporation vs. Avelino, 13 We ruled that a judge of the Court of First Instance has the authority to decide on the validity of a city tax ordinance even after its validity had been contested before the Secretary of Justice and an opinion thereon had been rendered. In view of the foregoing, We find no cogent reason why Resolution No. 105, issued by the respondent Professional Regulation Commission, should be exempted from the general jurisdiction of the Regional Trial Court.

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Respondent PRC, on the other hand, contends that under Section 9, paragraph 3 of B.P. Blg. 129, it is the Court of Appeals which has jurisdiction over the case. The said law provides: SEC. 9. Jurisdiction. The Intermediate Appellate Court shall exercise: xxx xxx xxx (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. The contention is devoid of merit. In order to invoke the exclusive appellate jurisdiction of the Court of Appeals as provided for in Section 9, paragraph 3 of B.P. Blg. 129, there has to be a final order or ruling which resulted from proceedings wherein the administrative body involved exercised its quasi-judicial functions. In Black's Law Dictionary, quasijudicial is defined as a term applied to the action, discretion, etc., of public administrative officers or bodies required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action, and to exercise discretion of a judicial nature. To expound thereon, quasijudicial adjudication would mean a determination of rights, privileges and duties resulting in a decision or order which applies to a specific situation . 14 This does not cover rules and regulations of general applicability issued by the administrative body to implement its purely administrative policies and functions like Resolution No. 105 which was adopted by the respondent PRC as a measure to preserve the integrity of licensure examinations. The above rule was adhered to in Filipinas Engineering and Machine Shop vs. Ferrer. 15 In this case, the issue presented was whether or not the Court of First Instance had jurisdiction over a case involving an order of the Commission on Elections awarding a contract to a private party which originated from an invitation to bid. The said issue came about because under the laws then in force, final awards, judgments, decisions or orders of the Commission on Elections fall within the exclusive jurisdiction of the Supreme Court by way of certiorari. Hence, it has been consistently held that "it is the Supreme Court, not the Court of First Instance, which has exclusive jurisdiction to review on certiorari final decisions, orders, or rulings of the Commission on Elections relative to the conduct of elections and the enforcement of election laws." 16 As to whether or not the Court of First Instance had jurisdiction in saidcase, We said: We are however, far from convinced that an order of the COMELEC awarding a contract to a private party, as a result of its choice among various proposals submitted in response to its invitation to bid comes within the purview of a "final order" which is exclusively and directly appealable to this court on certiorari. What is contemplated by the term "final orders, rulings and decisions, of the COMELEC reviewable by certiorari by the Supreme Court as provided by law are those rendered in actions or proceedings before the COMELEC and taken cognizance of by the said body in the exercise of its adjudicatory or quasi-judicial powers. (Emphasis supplied.) xxx xxx xxx We agree with petitioner's contention that the order of the Commission granting the award to a bidder is not an order rendered in a legal controversy before it wherein the parties filed their respective pleadings and presented evidence after which the questioned order was issued; and that this order of the commission was issued pursuant to its authority to enter into contracts in relation to election purposes. In short, the COMELEC resolution awarding

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the contract in favor of Acme was not issued pursuant to its quasi-judicial functions but merely as an incident of its inherent administrative functions over the conduct of elections, and hence, the said resolution may not be deemed as a "final order reviewable by certiorari by the Supreme Court. Being non-judicial in character, no contempt order may be imposed by the COMELEC from said order, and no direct and exclusive appeal by certiorari to this Tribunal lie from such order. Any question arising from said order may be well taken in an ordinary civil action before the trial courts. (Emphasis supplied.) 17 One other case that should be mentioned in this regard is Salud vs. Central Bank of the Philippines. 18 Here, petitioner Central Bank, like respondent in this case, argued that under Section 9, paragraph 3 of B.P. Blg. 129, orders of the Monetary Board are appealable only to the Intermediate Appellate Court. Thus: The Central Bank and its Liquidator also postulate, for the very first time, that the Monetary Board is among the "quasi-judicial ... boards" whose judgments are within the exclusive appellate jurisdiction of the IAC; hence, it is only said Court, "to the exclusion of the Regional Trial Courts," that may review the Monetary Board's resolutions. 19 Anent the posture of the Central Bank, We made the following pronouncement: The contention is utterly devoid of merit. The IAC has no appellate jurisdiction over resolution or orders of the Monetary Board. No law prescribes any mode of appeal from the Monetary Board to the IAC. 20 In view of the foregoing, We hold that the Regional Trial Court has jurisdiction to entertain Civil Case No. 86-37950 and enjoin the respondent PRC from enforcing its resolution. Although We have finally settled the issue of jurisdiction, We find it imperative to decide once and for all the validity of Resolution No. 105 so as to provide the much awaited relief to those who are and will be affected by it. Of course, We realize that the questioned resolution was adopted for a commendable purpose which is "to preserve the integrity and purity of the licensure examinations." However, its good aim cannot be a cloak to conceal its constitutional infirmities. On its face, it can be readily seen that it is unreasonable in that an examinee cannot even attend any review class, briefing, conference or the like, or receive any hand-out, review material, or any tip from any school, collge or university, or any review center or the like or any reviewer, lecturer, instructor, official or employee of any of the aforementioned or similar institutions . ... 21 The unreasonableness is more obvious in that one who is caught committing the prohibited acts even without any ill motives will be barred from taking future examinations conducted by the respondent PRC. Furthermore, it is inconceivable how the Commission can manage to have a watchful eye on each and every examinee during the three days before the examination period. It is an aixiom in administrative law that administrative authorities should not act arbitrarily and capriciously in the issuance of rules and regulations. To be valid, such rules and regulations must be reasonable and fairly adapted to the end in view. If shown to bear no reasonable relation to the purposes for which they are authorized to be issued, then they must be held to be invalid. 22 Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on the examinees' right to liberty guaranteed by the Constitution. Respondent PRC has no authority to dictate on the reviewees as to how they should prepare themselves for the licensure examinations. They cannot be restrained from taking all the lawful steps needed to assure the fulfillment of their ambition to become public accountants. They have every right to make use of their faculties in attaining success in their endeavors. They should be allowed to enjoy their freedom to acquire useful knowledge that will promote their personal growth. As defined in a decision of the United States Supreme Court: The term "liberty" means more than mere freedom from physical restraint or the bounds of a prison. It

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means freedom to go where one may choose and to act in such a manner not inconsistent with the equal rights of others, as his judgment may dictate for the promotion of his happiness, to pursue such callings and vocations as may be most suitable to develop his capacities, and giv to them their highest enjoyment. 23 Another evident objection to Resolution No. 105 is that it violates the academic freedom of the schools concerned. Respondent PRC cannot interfere with the conduct of review that review schools and centers believe would best enable their enrolees to meet the standards required before becoming a full fledged public accountant. Unless the means or methods of instruction are clearly found to be inefficient, impractical, or riddled with corruption, review schools and centers may not be stopped from helping out their students. At this juncture, We call attention to Our pronouncement in Garcia vs. The Faculty Admission Committee, Loyola School of Theology, 24 regarding academic freedom to wit: ... It would follow then that the school or college itself is possessed of such a right. It 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. This constitutional provision is not to be construed in a niggardly manner or in a grudging fashion. Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the alleged leakages in the licensure examinations will be eradicated or at least minimized. Making the examinees suffer by depriving them of legitimate means of review or preparation on those last three precious days-when they should be refreshing themselves with all that they have learned in the review classes and preparing their mental and psychological make-up for the examination day itself-would be like uprooting the tree to get ride of a rotten branch. What is needed to be done by the respondent is to find out the source of such leakages and stop it right there. If corrupt officials or personnel should be terminated from their loss, then so be it. Fixers or swindlers should be flushed out. Strict guidelines to be observed by examiners should be set up and if violations are committed, then licenses should be suspended or revoked. These are all within the powers of the respondent commission as provided for in Presidential Decree No. 223. But by all means the right and freedom of the examinees to avail of all legitimate means to prepare for the examinations should not be curtailed. In the light of the above, We hereby REVERSE and SET ASIDE, the decision of the Court of Appeals in CA-G.R. SP No. 10591 and another judgment is hereby rendered declaring Resolution No. 105 null and void and of no force and effect for being unconstitutional. This decision is immediately executory. No costs. SO ORDERED.

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3. Compulsory Retirement G.R. No. 172013 October 2, 2009 Subject to the grooming standards provisions of this Agreement, compulsory retirement shall be fifty-five (55) for females and sixty (60) for males. x x x. In a letter dated July 22, 2003, 4 petitioners and several female cabin crews manifested that the aforementioned CBA provision on compulsory retirement is discriminatory, and demanded for an equal treatment with their male counterparts. This demand was reiterated in a letter5 by petitioners' counsel addressed to respondent demanding the removal of gender discrimination provisions in the coming re-negotiations of the PAL-FASAP CBA. On July 12, 2004, Robert D. Anduiza, President of FASAP submitted their 2004-2005 CBA proposals6 and manifested their willingness to commence the collective bargaining negotiations between the management and the association, at the soonest possible time. On July 29, 2004, petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the Issuance of Temporary Restraining Order and Writ of Preliminary Injunction 7 with the Regional Trial Court (RTC) of Makati City, Branch 147, docketed as Civil Case No. 04-886, against respondent for the invalidity of Section 144, Part A of the PAL-FASAP CBA. The RTC set a hearing on petitioners' application for a TRO and, thereafter, required the parties to submit their respective memoranda. On August 9, 2004, the RTC issued an Order8 upholding its jurisdiction over the present case. The RTC reasoned that: In the instant case, the thrust of the Petition is Sec. 144 of the subject CBA which is allegedly discriminatory as it discriminates against female flight attendants, in violation of the Constitution, the Labor Code, and the CEDAW. The allegations in the Petition do not make out a labor dispute arising from employer-employee relationship as none is shown to exist. This case is not directed specifically against respondent arising from any act of the latter, nor does it involve a claim against the respondent. Rather, this case seeks a declaration of the nullity of the questioned provision of the CBA, which is within the Court's competence, with the

PATRICIA HALAGUEA, MA. ANGELITA L. PULIDO, MA. TERESITA P. SANTIAGO, MARIANNE V. KATINDIG, BERNADETTE A. CABALQUINTO, LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE, CYNTHIA A. STEHMEIER, ROSE ANNA G. VICTA, NOEMI R. CRESENCIO, and other flight attendants of PHILIPPINE AIRLINES, Petitioners, vs. PHILIPPINE AIRLINES INCORPORATED, Respondent. DECISION PERALTA, J.: Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul and set aside the Decision1 and the Resolution2 of the Court of Appeals (CA) in CAG.R. SP. No. 86813. Petitioners were employed as female flight attendants of respondent Philippine Airlines (PAL) on different dates prior to November 22, 1996. They are members of the Flight Attendants and Stewards Association of the Philippines (FASAP), a labor organization certified as the sole and exclusive certified as the sole and exclusive bargaining representative of the flight attendants, flight stewards and pursers of respondent. On July 11, 2001, respondent and FASAP entered into a Collective Bargaining Agreement3 incorporating the terms and conditions of their agreement for the years 2000 to 2005, hereinafter referred to as PAL-FASAP CBA. Section 144, Part A of the PAL-FASAP CBA, provides that: A. For the Cabin Attendants hired before 22 November 1996: xxxx

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allegations in the Petition constituting the bases for such relief sought. The RTC issued a TRO on August 10, 2004,9 enjoining the respondent for implementing Section 144, Part A of the PAL-FASAP CBA. The respondent filed an omnibus motion10 seeking reconsideration of the order overruling its objection to the jurisdiction of the RTC the lifting of the TRO. It further prayed that the (1) petitioners' application for the issuance of a writ of preliminary injunction be denied; and (2) the petition be dismissed or the proceedings in this case be suspended. On September 27, 2004, the RTC issued an Order11 directing the issuance of a writ of preliminary injunction enjoining the respondent or any of its agents and representatives from further implementing Sec. 144, Part A of the PAL-FASAP CBA pending the resolution of the case. Aggrieved, respondent, on October 8, 2004, filed a Petition for Certiorari and Prohibition with Prayer for a Temporary Restraining Order and Writ of Preliminary Injunction12 with the Court of Appeals (CA) praying that the order of the RTC, which denied its objection to its jurisdiction, be annuled and set aside for having been issued without and/or with grave abuse of discretion amounting to lack of jurisdiction. The CA rendered a Decision, dated August 31, 2005, granting the respondent's petition, and ruled that: WHEREFORE, the respondent court is by us declared to have NO JURISDICTION OVER THE CASE BELOW and, consequently, all the proceedings, orders and processes it has so far issued therein are ANNULED and SET ASIDE. Respondent court is ordered to DISMISS its Civil Case No. 04-886. SO ORDERED. Petitioner filed a motion for reconsideration,13 which was denied by the CA in its Resolution dated March 7, 2006. Hence, the instant petition assigning the following error: THE COURT OF APPEALS' CONCLUSION THAT THE SUBJECT MATTER IS A LABOR DISPUTE OR GRIEVANCE IS CONTRARY TO LAW AND JURISPRUDENCE. The main issue in this case is whether the RTC has jurisdiction over the petitioners' action challenging the legality or constitutionality of the provisions on the compulsory retirement age contained in the CBA between respondent PAL and FASAP. Petitioners submit that the RTC has jurisdiction in all civil actions in which the subject of the litigation is incapable of pecuniary estimation and in all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising judicial or quasijudicial functions. The RTC has the power to adjudicate all controversies except those expressly witheld from the plenary powers of the court. Accordingly, it has the power to decide issues of constitutionality or legality of the provisions of Section 144, Part A of the PAL-FASAP CBA. As the issue involved is constitutional in character, the labor arbiter or the National Labor Relations Commission (NLRC) has no jurisdiction over the case and, thus, the petitioners pray that judgment be rendered on the merits declaring Section 144, Part A of the PAL-FASAP CBA null and void. Respondent, on the other hand, alleges that the labor tribunals have jurisdiction over the present case, as the controversy partakes of a labor dispute. The dispute concerns the terms and conditions of petitioners' employment in PAL, specifically their retirement age. The RTC has no jurisdiction over the subject matter of petitioners' petition for declaratory relief because the Voluntary Arbitrator or panel of Voluntary Arbitrators have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the CBA. Regular courts have no power to set and fix the terms and conditions of employment. Finally, respondent alleged that petitioners' prayer before this Court to resolve their petition for declaratory relief on the merits is procedurally improper and baseless. The petition is meritorious.

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Jurisdiction of the court is determined on the basis of the material allegations of the complaint and the character of the relief prayed for irrespective of whether plaintiff is entitled to such relief.14 In the case at bar, the allegations in the petition for declaratory relief plainly show that petitioners' cause of action is the annulment of Section 144, Part A of the PAL-FASAP CBA. The pertinent portion of the petition recites: CAUSE OF ACTION 24. Petitioners have the constitutional right to fundamental equality with men under Section 14, Article II, 1987 of the Constitution and, within the specific context of this case, with the male cabin attendants of Philippine Airlines. 26. Petitioners have the statutory right to equal work and employment opportunities with men under Article 3, Presidential Decree No. 442, The Labor Code and, within the specific context of this case, with the male cabin attendants of Philippine Airlines. 27. It is unlawful, even criminal, for an employer to discriminate against women employees with respect to terms and conditions of employment solely on account of their sex under Article 135 of the Labor Code as amended by Republic Act No. 6725 or the Act Strengthening Prohibition on Discrimination Against Women. 28. This discrimination against Petitioners is likewise against the Convention on the Elimination of All Forms of Discrimination Against Women (hereafter, "CEDAW"), a multilateral convention that the Philippines ratified in 1981. The Government and its agents, including our courts, not only must condemn all forms of discrimination against women, but must also implement measures towards its elimination. 29. This case is a matter of public interest not only because of Philippine Airlines' violation of the Constitution and existing laws, but also because it highlights the fact that twenty-three years after the Philippine Senate ratified the CEDAW, discrimination against women continues. 31. Section 114, Part A of the PAL-FASAP 2000-20005 CBA on compulsory retirement from service is invidiously discriminatory against and manifestly prejudicial to Petitioners because, they are compelled to retire at a lower age (fifty-five (55) relative to their male counterparts (sixty (60). 33. There is no reasonable, much less lawful, basis for Philippine Airlines to distinguish, differentiate or classify cabin attendants on the basis of sex and thereby arbitrarily set a lower compulsory retirement age of 55 for Petitioners for the sole reason that they are women. 37. For being patently unconstitutional and unlawful, Section 114, Part A of the PAL-FASAP 2000-2005 CBA must be declared invalid and stricken down to the extent that it discriminates against petitioner. 38. Accordingly, consistent with the constitutional and statutory guarantee of equality between men and women, Petitioners should be adjudged and declared entitled, like their male counterparts, to work until they are sixty (60) years old. PRAYER WHEREFORE, it is most respectfully prayed that the Honorable Court: c. after trial on the merits: (I) declare Section 114, Part A of the PAL-FASAP 2000-2005 CBA INVALID, NULL and VOID to the extent that it discriminates against Petitioners; x x x x From the petitioners' allegations and relief prayed for in its petition, it is clear that the issue raised is whether Section 144, Part A of the PAL-FASAP CBA is unlawful and unconstitutional. Here, the

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petitioners' primary relief in Civil Case No. 04-886 is the annulment of Section 144, Part A of the PAL-FASAP CBA, which allegedly discriminates against them for being female flight attendants. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to Section 19 (1) of Batas Pambansa Blg. 129, as amended.15 Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals. The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the application of the Constitution, labor statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination Against Women,16 and the power to apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts, a court of general jurisdiction. In Georg Grotjahn GMBH & Co. v. Isnani,17 this Court held that not every dispute between an employer and employee involves matters that only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement. Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the employer-employee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court.18 Here, the employeremployee relationship between the parties is merely incidental and the cause of action ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW. Thus, where the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the labor arbiter and the NLRC. In such situations, resolution of the dispute requires expertise, not in labor management relations nor in wage structures and other terms and conditions of employment, but rather in the application of the general civil law. Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed to labor arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears.19 If We divest the regular courts of jurisdiction over the case, then which tribunal or forum shall determine the constitutionality or legality of the assailed CBA provision? This Court holds that the grievance machinery and voluntary arbitrators do not have the power to determine and settle the issues at hand. They have no jurisdiction and competence to decide constitutional issues relative to the questioned compulsory retirement age. Their exercise of jurisdiction is futile, as it is like vesting power to someone who cannot wield it. In Gonzales v. Climax Mining Ltd.,20 this Court affirmed the jurisdiction of courts over questions on constitutionality of contracts, as the same involves the exercise of judicial power. The Court said: Whether the case involves void or voidable contracts is still a judicial question. It may, in some instances, involve questions of fact especially with regard to the determination of the circumstances of the execution of the contracts. But the resolution of the validity or voidness of the contracts remains a legal or judicial question as it requires the exercise of judicial function. It requires the ascertainment of what laws are applicable to the dispute, the interpretation and application of those laws, and the rendering of a judgment based thereon. Clearly, the dispute is not a mining conflict. It is essentially judicial. The complaint was not merely for the determination of rights under the mining contracts since the very validity of those contracts is put in issue. In Saura v. Saura, Jr.,21 this Court emphasized the primacy of the regular court's judicial power enshrined in the Constitution that is true that the trend is towards vesting administrative bodies like the SEC with the power to adjudicate matters coming under their particular specialization, to insure a more knowledgeable solution of the problems submitted to them. This would also relieve the regular courts of a substantial number of cases that would otherwise swell their already clogged dockets. But as expedient as this policy may be, it should not deprive the courts of

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justice of their power to decide ordinary cases in accordance with the general laws that do not require any particular expertise or training to interpret and apply. Otherwise, the creeping take-over by the administrative agencies of the judicial power vested in the courts would render the judiciary virtually impotent in the discharge of the duties assigned to it by the Constitution. To be sure, in Rivera v. Espiritu,22 after Philippine Airlines (PAL) and PAL Employees Association (PALEA) entered into an agreement, which includes the provision to suspend the PAL-PALEA CBA for 10 years, several employees questioned its validity via a petition for certiorari directly to the Supreme Court. They said that the suspension was unconstitutional and contrary to public policy. Petitioners submit that the suspension was inordinately long, way beyond the maximum statutory life of 5 years for a CBA provided for in Article 253-A of the Labor Code. By agreeing to a 10-year suspension, PALEA, in effect, abdicated the workers' constitutional right to bargain for another CBA at the mandated time. In that case, this Court denied the petition for certiorari, ruling that there is available to petitioners a plain, speedy, and adequate remedy in the ordinary course of law. The Court said that while the petition was denominated as one for certiorari and prohibition, its object was actually the nullification of the PAL-PALEA agreement. As such, petitioners' proper remedy is an ordinary civil action for annulment of contract, an action which properly falls under the jurisdiction of the regional trial courts. The change in the terms and conditions of employment, should Section 144 of the CBA be held invalid, is but a necessary and unavoidable consequence of the principal relief sought, i.e., nullification of the alleged discriminatory provision in the CBA. Thus, it does not necessarily follow that a resolution of controversy that would bring about a change in the terms and conditions of employment is a labor dispute, cognizable by labor tribunals. It is unfair to preclude petitioners from invoking the trial court's jurisdiction merely because it may eventually result into a change of the terms and conditions of employment. Along that line, the trial court is not asked to set and fix the terms and conditions of employment, but is called upon to determine whether CBA is consistent with the laws. Although the CBA provides for a procedure for the adjustment of grievances, such referral to the grievance machinery and thereafter to voluntary arbitration would be inappropriate to the petitioners, because the union and the management have unanimously agreed to the terms of the CBA and their interest is unified. In Pantranco North Express, Inc., v. NLRC,23 this Court held that: x x x Hence, only disputes involving the union and the company shall be referred to the grievance machinery or voluntary arbitrators. In the instant case, both the union and the company are united or have come to an agreement regarding the dismissal of private respondents. No grievance between them exists which could be brought to a grievance machinery. The problem or dispute in the present case is between the union and the company on the one hand and some union and non-union members who were dismissed, on the other hand. The dispute has to be settled before an impartial body. The grievance machinery with members designated by the union and the company cannot be expected to be impartial against the dismissed employees. Due process demands that the dismissed workers grievances be ventilated before an impartial body. x x x . Applying the same rationale to the case at bar, it cannot be said that the "dispute" is between the union and petitioner company because both have previously agreed upon the provision on "compulsory retirement" as embodied in the CBA. Also, it was only private respondent on his own who questioned the compulsory retirement. x x x. In the same vein, the dispute in the case at bar is not between FASAP and respondent PAL, who have both previously agreed upon the provision on the compulsory retirement of female flight attendants as embodied in the CBA. The dispute is between respondent PAL and several female flight attendants who questioned the provision on compulsory retirement of female flight attendants. Thus, applying the principle in the aforementioned case cited, referral to the grievance machinery and voluntary arbitration would not serve the interest of the petitioners.

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Besides, a referral of the case to the grievance machinery and to the voluntary arbitrator under the CBA would be futile because respondent already implemented Section 114, Part A of PAL-FASAP CBA when several of its female flight attendants reached the compulsory retirement age of 55. Further, FASAP, in a letter dated July 12, 2004, addressed to PAL, submitted its association's bargaining proposal for the remaining period of 2004-2005 of the PAL-FASAP CBA, which includes the renegotiation of the subject Section 144. However, FASAP's attempt to change the questioned provision was shallow and superficial, to say the least, because it exerted no further efforts to pursue its proposal. When petitioners in their individual capacities questioned the legality of the compulsory retirement in the CBA before the trial court, there was no showing that FASAP, as their representative, endeavored to adjust, settle or negotiate with PAL for the removal of the difference in compulsory age retirement between its female and male flight attendants, particularly those employed before November 22, 1996. Without FASAP's active participation on behalf of its female flight attendants, the utilization of the grievance machinery or voluntary arbitration would be pointless. The trial court in this case is not asked to interpret Section 144, Part A of the PAL-FASAP CBA. Interpretation, as defined in Black's Law Dictionary, is the art of or process of discovering and ascertaining the meaning of a statute, will, contract, or other written document.24 The provision regarding the compulsory retirement of flight attendants is not ambiguous and does not require interpretation. Neither is there any question regarding the implementation of the subject CBA provision, because the manner of implementing the same is clear in itself. The only controversy lies in its intrinsic validity. Although it is a rule that a contract freely entered between the parties should be respected, since a contract is the law between the parties, said rule is not absolute. In Pakistan International Airlines Corporation v. Ople,25 this Court held that: The principle of party autonomy in contracts is not, however, an absolute principle. The rule in Article 1306, of our Civil Code is that the contracting parties may establish such stipulations as they may deem convenient, "provided they are not contrary to law, morals, good customs, public order or public policy." Thus, counterbalancing the principle of autonomy of contracting parties is the equally general rule that provisions of applicable law, especially provisions relating to matters affected with public policy, are deemed written into the contract. Put a little differently, the governing principle is that parties may not contract away applicable provisions of law especially peremptory provisions dealing with matters heavily impressed with public interest. The law relating to labor and employment is clearly such an area and parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. Moreover, the relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good.x x x 26 The supremacy of the law over contracts is explained by the fact that labor contracts are not ordinary contracts; these are imbued with public interest and therefore are subject to the police power of the state.27 It should not be taken to mean that retirement provisions agreed upon in the CBA are absolutely beyond the ambit of judicial review and nullification. A CBA, as a labor contract, is not merely contractual in nature but impressed with public interest. If the retirement provisions in the CBA run contrary to law, public morals, or public policy, such provisions may very well be voided.28 Finally, the issue in the petition for certiorari brought before the CA by the respondent was the alleged exercise of grave abuse of discretion of the RTC in taking cognizance of the case for declaratory relief. When the CA annuled and set aside the RTC's order, petitioners sought relief before this Court through the instant petition for review under Rule 45. A perusal of the petition before Us, petitioners pray for the declaration of the alleged discriminatory provision in the CBA against its female flight attendants. This Court is not persuaded. The rule is settled that pure questions of fact may not be the proper subject of an appeal by certiorari under Rule 45 of the Revised Rules of Court. This mode of appeal is generally limited only to questions of law which must be distinctly set forth in the petition. The Supreme Court is not a trier of facts.29

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The question as to whether said Section 114, Part A of the PALFASAP CBA is discriminatory or not is a question of fact. This would require the presentation and reception of evidence by the parties in order for the trial court to ascertain the facts of the case and whether said provision violates the Constitution, statutes and treaties. A full-blown trial is necessary, which jurisdiction to hear the same is properly lodged with the the RTC. Therefore, a remand of this case to the RTC for the proper determination of the merits of the petition for declaratory relief is just and proper.1avvphi1 WHEREFORE, the petition is PARTLY GRANTED. The Decision and Resolution of the Court of Appeals, dated August 31, 2005 and March 7, 2006, respectively, in CA-G.R. SP. No. 86813 are REVERSED and SET ASIDE. The Regional Trial Court of Makati City, Branch 147 is DIRECTED to continue the proceedings in Civil Case No. 04-886 with deliberate dispatch. SO ORDERED.

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Respondent alleged that, sometime during the second week of May 2000, petitioner, by means of force, intimidation, strategy and threats, and with the help of his men, destroyed the perimeter fence built by respondent. The fence was made of concrete posts and barbed wire. Respondent averred that petitioner effectively disrupted respondents peaceful possession and occupation of the property by clearing the land of plants, bushes and trees and demolishing the house owned by the spouses Matilla. The continuous intrusion of petitioner caused serious fear and anxiety to the occupants of the properties.4 Respondent attached to the complaint Tax Declaration Nos. 01600618 and 016-00619 and a copy of Official Receipt No. 5342125 dated May 30, 2000 of the payment of real property tax from 1998 until 2000.5 In addition, respondent later submitted a Certification issued by Barangay Captain Marcelo Balba stating that respondent was the declared owner of Lot Nos. 6916 and 6917 based on Relocation Survey Plan No. REI-041011-001184, and a Certification dated June 6, 1997 issued by the Municipal Assessor of Laurel, Batangas stating that their records showed that respondent was the true and lawful owner of the properties covered by Tax Declaration Nos. 016-006618 and 016-00619, and that real property tax had been paid from previous years until 1997. Respondents counsels also executed a Joint Affidavit 6 stating that they prepared affidavits for the caretakers and neighbors to sign, but the latter refused to sign for fear of their lives. In his Answer, petitioner averred that the real owners and possessors of the property were the family of Ernesto Malabanan, as evidenced by Transfer Certificate of Title (TCT) No. T-31929 of the Register of Deeds of Tanauan, Batangas. He pointed out that Relocation Survey Plan No. REI-041011-001184 had already been cancelled by the Bureau of Lands on October 8, 1999; and that, on April 13, 2000, the Bureau of Lands approved a Consolidation and Subdivision Plan, which determined the metes and bounds of the properties of the Malabanans. Petitioner alleged that the Office of the Building Official approved the application of the Malabanans for the construction of a fence on a portion of their property; and petitioner, acting in accordance with the instructions of the Malabanans, caused the clearing of the property.7 Petitioner submitted in evidence a copy of TCT No. T-31929;8 Relocation Survey Plan No. REI-041011-001184 with a "cancelled"

G.R. No. 158877

June 16, 2009

JOVEN DE GRANO, represented by Venus P. de Grano, Ernesto H. Malabanan, and Simplicia D. Malabanan, Petitioner, vs. GREGORIO LACABA, Respondent. DECISION NACHURA, J.: Assailed in this petition for review on certiorari is the Decision 1 of the Court of Appeals (CA) in CA-G.R. SP No. 67852 dated October 16, 2002 and Resolution dated June 18, 2003. This decision reversed the uniform decisions of the municipal and regional trial courts dismissing a forcible entry case filed by respondent Gregorio Lacaba. The antecedents of the petition are as follows: Respondent Gregorio Lacaba2 claims that he is the owner of two adjacent parcels of land, located in Barangay Niugan, Laurel, Batangas and identified as Cadastral Lot Nos. 6916 and 6917 in Survey No. REI-041011-001184. Lot No. 6916 has an area of 5,743 square meters, while Lot No. 6917 has an area of 804 square meters. Each parcel of land is covered by a separate tax declaration in the name of respondent. On May 30, 2000, respondent filed a complaint for forcible entry with prayer for a temporary restraining order and/or preliminary injunction against petitioner Joven de Grano. According to respondent, he has been in physical possession of the two parcels of land for more than 30 years and has been paying real property taxes thereon. In 1978, respondent purportedly designated as caretakers the spouses Ely and Anita Mojica (spouses Mojica), who occupied the property until the present, and allowed three other spouses, including the spouses Silvestre and Amor Matilla (spouses Matilla), to build their respective houses on the property and conduct fruit vending and carinderia business.3

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marking;9 Order of cancellation of Relocation Survey Plan No. REI041011-001184;10 Consolidation and Subdivision Plan No. Pcs-04015296;11 Sinumpaang Salaysay12 of Nepumuceno Noveno, also a caretaker of the Malabanan family; and uniformly worded affidavits13 of the occupants of the property, stating that they were not connected with respondent, and that they were occupying the property upon the permission of Ernesto Malabanan. On August 11, 2000, the Municipal Circuit Trial Court (MCTC) dismissed the complaint for lack of cause of action.14 The court a quo found that respondents claim, that he was in actual possession of the property through the possession of his caretakers and the other spouses he allowed to occupy the property, was belied by his own statement and that of Mr. Nepomuceno Noveno, a resident of the barangay where the property is located, who testified for petitioner.15 On November 13, 2000, the Regional Trial Court (RTC) affirmed the MCTC Decision.16 Respondents counsel received a copy of the decision on November 21, 2000. On December 14, 2000, respondent filed a motion for reconsideration. In an Order dated March 28, 2001, the RTC denied the motion for reconsideration, thus: Finding no cogent reason to modify the decision of the Court dated November 13, 2000, defendants Motion for Reconsideration is hereby DENIED for lack of merit.17 Respondents counsel received a copy of the Resolution on April 18, 2001. On October 23, 2001, upon manifestation of petitioner that it was not he who filed the motion for reconsideration, the RTC modified the dispositive portion of its March 28, 2001 Order, changing "defendant" to "plaintiff."18Respondent received a copy of this resolution on November 12, 2001. Alleging that the October 23, 2001 RTC Resolution was the resolution denying his motion for reconsideration, respondent filed a motion for extension of time to file a petition for review with the CA on November 27, 2001. The CA granted the motion subject to its timeliness. Finally on December 12, 2001, respondent filed a Petition for Review with the CA. On January 8, 2002, petitioner filed a Manifestation with Motion to Dismiss Instant Petition and to Cite Petitioner (herein respondent) and Petitioners Counsel for Contempt.19 Petitioner alleged therein that respondent deliberately concealed the fact that the petition was filed out of time by not attaching the March 28, 2001 RTC Order which denied respondents motion for reconsideration. On October 16, 2002, the CA rendered a Decision with the following dispositive portion: WHEREFORE, the decision dated November 13, 2000, as well as the Order dated October 23, 2001 denying the motion for reconsideration of said decision, is hereby REVERSED and SET ASIDE. The respondent and all persons acting under his authority and/or in his behalf is hereby ordered to vacate the subject premises and to cease and desist from occupying the subject parcel of land, as well as from exercising any and all acts of possession and dominion over the same. SO ORDERED.20 The CA dismissed the issue of the timeliness of the filing of respondents motion for reconsideration before the RTC on the ground that such issue was raised for the first time before the appellate court. It, likewise, ignored the issue of the belated filing of the petition for review with the CA, ratiocinating that petitioner was barred by estoppel from questioning the timeliness of the petition, and that dismissing the case would not serve the ends of justice.21 On the merits, the CA concluded that respondent had been in prior, actual, open, peaceful, uninterrupted and adverse possession of the subject properties for more than 40 years based on the fact that he was paying taxes thereon. The CA did not give credence to the written manifestations of petitioners witnesses whose statements were drafted in identical form. Instead, the CA gave weight to the statement of respondents counsels that they failed

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to secure affidavits from the caretakers and the neighbors because the latter feared for their lives.221avvphi1 Petitioner filed a motion for reconsideration. Thereafter, he filed a Manifestation with Request for Judicial Notice of the verification survey conducted by the DENR on February 15, 2002, which shows that the subject property was part of the parcel of land registered in the name of the Malabanan family. On June 18, 2003, the CA issued a Resolution denying petitioners Motion for Reconsideration. In the same Resolution, the CA noted that Verification Plan No. VS-04-000534 was approved long after it had already rendered its decision.23 Disgruntled, petitioner filed this petition for review, raising the following issues: I. WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN TAKING COGNIZANCE AND/OR GIVING DUE COURSE TO THE PETITION FOR REVIEW FILED BEFORE IT BY RESPONDENT LACABA. II. WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT HEREIN RESPONDENT LACABA IS ENTITLED TO THE RELIEF BEING SOUGHT IN THE COMPLAINT FILED BEFORE THE MCTC. III. WHETHER OR NOT THE COURT OF APPEALS PATENTLY ERRED IN NOT FINDING THAT HEREIN PETITIONER DE GRANO IS NOT THE REAL PARTY IN INTEREST.24 The petition is meritorious. The CA erred in taking cognizance of the petition for review that was filed way beyond the reglementary period. Rules of procedure may be relaxed in the interest of substantial justice and in order to give a litigant the fullest opportunity to establish the merits of his complaint. However, concomitant to a liberal application of the rules of procedure should be an effort on the part of the party invoking liberality to explain its failure to comply with the rules25 and prove the existence of exceptionally meritorious circumstances warranting such liberality.26 Respondent proffered no explanation for the delay as, in fact, he did not acknowledge that he filed his petition for review with the CA beyond the prescriptive period. In his motion for extension of time to file the petition for review with the CA, respondent alleged that it was the October 28, 2001 RTC Order that denied his motion for reconsideration. As a stratagem or out of plain ignorance, he counted the reglementary period from the date of his receipt of the said order. But, as the CA was well aware, the reglementary period should have been counted from the receipt of the March 28, 2001 Order. Respondent might have been confused with the rule that, when a judgment is amended, the date of the amendment should be considered the date of the decision in the computation of the period for perfecting the appeal. For all intents and purposes, the lower court rendered a new judgment from which the time to appeal must be reckoned.27 However, this rule presupposes that the amendment consists of a material alteration of such substance and proportion that would, in effect, give rise to an entirely new judgment.28 But when the amendment merely consists of the correction of a clerical error, no new judgment arises. In such case, the period for filing the appeal should still be counted from the receipt of the original judgment. In this case, there was no material alteration of the judgment. The amendment merely consisted of changing the word "defendant" with "plaintiff" in the dispositive portion, and it is obvious that it was "plaintiff" (herein respondent) who filed the motion for reconsideration. Hence, the prescriptive period for filing the petition for review with the CA should be counted from the date respondent received a copy of the first judgment denying his motion for reconsideration, which was on April 18, 2001. Respondent had until May 3, 2001 to file a petition for review, but he filed a motion for extension to file the petition only on November 27, 2001, or almost seven months later. In one case, the Court declared that a delay of almost seven months is far from reasonable.29 Despite respondents failure to acknowledge his error, the CA, finding the petition to be meritorious, chose to excuse the belated filing of the petition to serve the ends of justice. This Court,

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however, finds otherwise, and holds that the MCTC, as affirmed by the RTC, was correct in dismissing the complaint. For a forcible entry suit to prosper, the complainant must allege and prove that he was in prior physical possession of the property and that he was deprived of such possession by means of force, intimidation, threat, strategy, or stealth.30 A party who can prove prior possession can recover such possession even against the owner himself. Whatever may be the character of his possession, if he has in his favor prior possession in time, he has the security that entitles him to remain in the property until a person with a better right lawfully ejects him.31 A party having the burden of proof must establish his case by a preponderance of evidence. In doing so, he must rely on the strength of his own evidence, not on the weakness of the defendants.32 To prove prior possession, respondent presented his tax declarations, tax receipt and a certification from the municipal assessor attesting that he has paid real property tax from previous years. He, likewise, testified that he appointed the spouses Mojica as his caretakers, and allowed three other spouses to build their houses on the property. Respondents counsels also explained that they were not able to secure the affidavits of the occupants of the property and the neighbors because they feared for their lives. Respondents evidence fails to make out a prima facie case of forcible entry as it does not satisfactorily establish that respondent has been in physical possession of the subject property prior to petitioners occupation thereof. For one, we cannot tack respondents possession of the property on his alleged tenants actual possession absent any proof that said tenants acknowledge that respondent is the owner and that they have occupied the property as respondents tenants. For all we know, these tenants could have been in adverse possession of the property. We cannot simply rely on respondents self-serving testimony that he designated the spouses Mojica as his caretakers and allowed the other families to occupy the property.lawphil Tax declarations and realty tax payments are not conclusive proof of possession.33 They are merely good indicia of possession in the concept of owner based on the presumption that no one in his right mind would be paying taxes for a property that is not in his actual or constructive possession.34 It bears emphasizing that the word "possession," as used in forcible entry and unlawful detainer cases, means nothing more than physical possession, not legal possession in the sense contemplated in civil law.35 When the law speaks of possession, the reference is to prior physical possession or possession de facto, as contra-distinguished from possession de jure.36 Only prior physical possession, not title, is the issue.37 Issues as to the right of possession or ownership are not involved in the action; evidence thereon is not admissible, except only for the purpose of determining the issue of possession.38 More importantly, no substantial injustice would be caused the respondent if we uphold the finality of the RTC judgment, considering that he still has another remedy to recover his alleged right to possess the property. Since respondent anchors his right to possess the property on his alleged ownership of the same, he may file the appropriate action to recover such ownership. With the foregoing disquisition, we find no necessity to discuss the issue of whether petitioner is the real party in interest. WHEREFORE, premises considered, the petition is GRANTED. The Court of Appeals Decision dated October 16, 2002 and Resolution dated June 18, 2003 are REVERSED and SET ASIDE. SO ORDERED.

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Valentin Cabrera (Valentin), Manuel Cabrera (Manuel), and Rebecca Leslie Cabras (Cabras), Peregrinas adopted daughter, occupied the lots with the knowledge and consent of respondents. Respondents alleged that Valentin, Manuel, and Cabras (collectively, petitioners) were occupying portions of the lots without paying any rentals, but with an agreement that they would vacate the premises and demolish their houses at their expense should respondents need the property. In 2001, respondents personally notified petitioners that they would repossess the property. Respondents asked petitioners to vacate the premises and remove the houses they built on the lots. However, despite repeated demands, petitioners refused to vacate the premises. The matter was referred to the Lupong Tagapamayapa of Barangay Inayawan, Cebu for possible amicable settlement but petitioners still refused to vacate the premises. Thus, respondents filed an action for ejectment against petitioners, docketed as Civil Case No. R-45280. Petitioners assailed the Project of Partition as incredible because its first page was missing and it lacked the signatures of the parties who executed it. Petitioners asserted the validity of the "Kasabutan nga Hinigala." Cabras alleged that as owner of Lot No. 3635 upon Peregrinas death, she could not be ejected from the premises. Valentin and Manuel alleged that they could not be ejected because they built their houses with Peregrinas knowledge and consent. The Rulings of the MTCC and RTC In its Decision4 dated 4 April 2002, the Municipal Trial Court in Cities, Branch 7, Cebu City (MTCC) ruled in favor of respondents, as follows: WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants, ordering the latter to vacate the premises in question and to demolish whatever improvements introduced thereon and surrender complete control and possession thereof to the plaintiffs, and to jointly and severally pay the latter: 1) the amount of P15,000.00 for and as attorneys fees;

G.R. No. 164213

April 21, 2009

VALENTIN CABRERA, MANUEL CABRERA, and REBECCA LESLIE CABRAS, Petitioners, vs. ELIZABETH GETARUELA, EULOGIO ABABON, LEONIDA LIGAN, MARIETTO ABABON, GLORIA PANAL, LEONORA OCARIZA, SOTERO ABABON, JR., and JOSEPH ABABON, Respondents. DECISION CARPIO, J.: The Case Before the Court is a petition for review 1 assailing the 22 January 2004 Decision2 and 3 May 2004 Resolution3 of the Court of Appeals in CA-G.R. SP No. 80062. The Antecedent Facts Lot Nos. 3635-CC and 3635-Y, located in Inayawan, Pardo, Cebu City were covered by Tax Declaration Nos. GR2K-12-078-02409 and GR2K-12-078-02431 in the name of Arcadio Jaca (Arcadio). The heirs of Arcadio executed a notarized document known as "Kasabutan nga Hinigala" dated 25 July 1951 which stipulated that all the inherited properties of Arcadio, including Lot No. 3635, would go to Peregrina Jaca Cabrera (Peregrina). However, in a Repartition Project approved on 21 November 1956 by Judge Jose M. Mendoza of the Court of First Instance of Cebu City, Branch 6 in Special Proceedings No. 211-V, Lot Nos. 3635-CC and 3635-Y were given to Urbana Jaca Ababon (Urbana), mother of Elizabeth Getaruela, Eulogio Ababon, Leonida Ligan, Marietto Ababon, Gloria Panal, Leonora Ocariza, Sotero Ababon, Jr., and Joseph Ababon (respondents). Upon Urbanas death in 1997, respondents inherited the lots.

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2) litigation expenses in the sum of P5,000.00; and cost of suit. SO ORDERED.5 The MTCC ruled that the "Kasabutan nga Hinigala" was superseded by the court-approved Repartition Project. The MTCC noted that in the Repartition Project, Lot Nos. 3635-CC and 3635-Y were given to Urbana, respondents predecessor-in-interest. The MTCC ruled that while the lots were still in Urbanas name, respondents were not barred from judicially ejecting petitioners from the premises. Petitioners appealed from the MTCCs Decision. In its 19 May 2003 Decision, the Regional Trial Court of Cebu City, Branch 7 (RTC) reversed the MTCCs Decision. The RTC ruled that the Project of Partition showed that Lot No. 3635-Y was co-owned by Urbana (251 sq. m.), Peregrina (863 sq. m.), and Andres Jaca (251 sq. m.). The RTC ruled that as Peregrinas heir, Cabras became a co-owner of Lot No. 3635-Y and she could not be ejected from the property. The RTC ruled that Valentin and Manuel could not likewise be ejected from the property as they were allowed by Cabras to occupy the lot. The RTC ruled that the Project of Partition also showed that Urbanas total share of 1,499 sq. m., covering 1,248 sq. m. of Lot No. 3635-CC and 251 sq. m. of Lot No. 3635-Y, was sold to one Josefina Asas (Asas). As such, respondents had no cause of action against petitioners. The dispositive portion of the RTCs Decision reads: Wherefore, the judgment in the Decision dated April 4, 2002, of the Municipal Trial Court in Cities, Branch 7, Cebu City, in Civil Case No. R-45280, is REVERSED, and another one is entered DISMISSING the case against defendants-appellants. Plaintiffs-appellees are directed to compensate defendantsappellants attorneys fees in the amount ofP15,000.00, and litigation expenses in the amount of P5,000.00, as well as to pay the costs.
6

SO ORDERED.7 Respondents filed a motion for reconsideration. In its 29 July 2003 Order, the RTC partially granted respondents motion. The RTC ruled that it erred in finding that Urbana sold her share to Asas. The RTC ruled that the Project of Partition showed that it was Panfilo Jaca who sold his share to Asas. The RTC modified its 19 May 2003 Decision as follows: Wherefore, the judgment in the Decision dated April 4, 2002, of the Municipal Trial Court in Cities, Branch 7, Cebu City, in Civil Case No. R-45280, is MODIFIED, as follows: 1) Dismissing the complaint as regards Lot 3655-Y; and 2) Ordering defendants-appellants to vacate Lot No. 3655CC, demolish whatever improvements they may have introduced thereon and surrender complete control and possession thereof to plaintiffs-appellees. No pronouncement as to costs. SO ORDERED.8 Petitioners moved for reconsideration of the RTCs 29 July 2003 Order, assailing the Project of Partition. In its 3 September 2003 Order,9 the RTC denied petitioners motion. The RTC ruled that petitioners failed to present any evidence supporting the purported falsity of the Project of Partition. The RTC upheld the jurisdiction of the MTCC and further ruled that respondents action was an ejectment case. Petitioners filed a petition for review before the Court of Appeals. The Ruling of the Court of Appeals In its 22 January 2004 Decision, the Court of Appeals affirmed the 29 July 2003 and 3 September 2003 Orders of the RTC. The Court of Appeals held that the jurisdiction of the court is determined by the allegations in the complaint. The Court of

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Appeals held that a complaint for unlawful detainer is sufficient if it alleges that the withholding of possession or the refusal to vacate is unlawful. The Court of Appeals ruled that prior physical possession is indispensable only in actions for forcible entry but not in unlawful detainer. The Court of Appeals further ruled that occupation of the premises must be tolerated by the owners right from the start of the possession of the property sought to be recovered. The Court of Appeals found that in this case, petitioners were occupying the lots without rentals upon agreement with respondents that they would relinquish possession once respondents need the property. However, petitioners refused to vacate the premises despite demands by respondents. The Court of Appeals ruled that the allegations were sufficient to confer jurisdiction upon the MTCC where the ejectment suit was instituted and tried. The Court of Appeals noted that petitioners challenged respondents claim of ownership of the property. The Court of Appeals ruled that the only issue involved in an ejectment case is possession de facto. However, when the issue of possession could not be resolved without resolving the issue of ownership, the court may receive evidence upon the question of title to the property but solely for the purpose of determining the issue of possession. Hence, the MTCC acted correctly when it received evidence on the issue of ownership. The Court of Appeals further noted that the RTC upheld the MTCCs finding that the Project of Partition superseded the"Kasabutan nga Hinigala." The Court of Appeals sustained the RTC in refusing to admit documents submitted by petitioners which they failed to present before the MTCC. The Court of Appeals stressed that the MTCCs finding on the issue of ownership was merely provisional. Thus, petitioners were not legally barred from filing the proper action to settle the question of title. The dispositive portion of the Decision of the Court of Appeals reads: WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE and accordingly DISMISSED. The assailed Orders dated July 29, 2003 and September 3, 2003 of the court a quo are hereby both AFFIRMED. No pronouncement as to costs. SO ORDERED.10 Petitioners filed a motion for reconsideration. In its 3 May 2004 Resolution, the Court of Appeals denied the motion. The Court of Appeals ruled that a complaint for unlawful detainer must be filed within one year from demand and not from the start of possession as claimed by petitioners. The Court of Appeals reiterated that in cases of forcible entry and unlawful detainer, the issue is pure physical or de facto possession and pronouncements made on the question of ownership are provisional in nature. The Court of Appeals further ruled that all cases of forcible entry and unlawful detainer shall be filed before the proper Municipal Trial Court, there being no jurisdictional amount involved, even with respect to damages or unpaid rentals sought. Hence, the petition before this Court. The Issues Petitioners raise the following issues in their Memorandum:11 1. Whether the MTCC had jurisdiction to entertain the ejectment case considering the absence of a contract, written or oral, entered into by respondents and petitioners as lessors and lessees, respectively; 2. Whether tolerance as a ground for ejectment is tenable in this case; and 3. Whether the Project the "Kasabutan nga Hinigala." The Ruling of this Court The petition has no merit. of Partition superseded

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Petitioners insist that the MTCC had no jurisdiction to entertain respondents complaint because there was no contract, oral or written, between the parties. Petitioners allege that the proper action should have been one for recovery of possession and not for unlawful detainer. We do not agree. It is settled that a complaint sufficiently alleges a cause of action for unlawful detainer if it recites the following: (1) initially, possession of property by the defendant was by contract with or by tolerance of the plaintiff; (2) eventually, such possession became illegal upon notice by plaintiff to defendant of the termination of the latters right of possession; (3) thereafter, the defendant remained in possession of the property and deprived the plaintiff of the enjoyment thereof; and (4) within one year from the last demand on defendant to vacate the property, the plaintiff instituted the complaint for ejectment.12 In this case, the complaint alleged that petitioners were occupying the property, with agreement that should respondents need the property, petitioners would relinquish possession of the lots and demolish their houses at their expense. Respondents personally notified petitioners to vacate the premises and to demolish their houses but petitioners refused to vacate the lots. The complaint established that petitioners possession was by tolerance of respondents, and their possession became illegal when they refused to vacate the premises upon demand by respondents. Here, the possession became illegal not from the time petitioners started occupying the property but from the time demand was made for them to vacate the premises. In short, the complaint sufficiently established a case for unlawful detainer. Contrary to petitioners contention, the issue in this case is not the ownership of the lots. It should be stressed that the allegations in the complaint and the character of the relief sought determine the nature of the action and the court with jurisdiction over it.13 The defenses set up in an answer are not determinative of jurisdiction.14 The jurisdiction of the court cannot be made to depend on the exclusive characterization of the case by one of the parties.15 Thus: In an unlawful detainer case, the sole issue for resolution is physical or material possession of the property involved, independent of any claim of ownership by any of the parties. However, where the issue of ownership is raised, the courts may pass upon the issue of ownership in order to determine who has the right to possess the property. We stress, however, that this adjudication is only an initial determination of ownership for the purpose of settling the issue of possession, the issue of ownership being inseparably linked thereto. The lower courts adjudication of ownership in the ejectment case is merely provisional and would not bar or prejudice an action between the same parties involving title to the property. It is, therefore, not conclusive as to the issue of ownership x x x.16 The MTCC, the RTC, and the Court of Appeals all held that the Repartition Project superseded the "Kasabutan nga Hinigala." We sustain their factual finding as this Court gives substantial weight to the factual finding of the trial court, particularly if this factual finding is sustained by appellate courts. However, we also reiterate that this resolution on the issue of ownership is only provisional for the purpose of settling the issue of possession. WHEREFORE, we DENY the petition. We AFFIRM the 22 January 2004 Decision and 3 May 2004 Resolution of the Court of Appeals in CA-G.R. SP No. 80062. SO ORDERED.

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2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the defendant to the property, the declaration of ownership and delivery of possession thereof to plaintiffs but also asks for the payment of actual moral, exemplary damages and attorney's fees arising therefrom in the amounts specified therein. 4 However, in the present case, the prayer is for the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question, to attach such property of defendants that maybe sufficient to satisfy any judgment that maybe rendered, and after hearing, to order defendants to execute a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff, ordering defendants jointly and severally to pay plaintiff actual, compensatory and exemplary damages as well as 25% of said amounts as maybe proved during the trial as attorney's fees and declaring the tender of payment of the purchase price of plaintiff valid and producing the effect of payment and to make the injunction permanent. The amount of damages sought is not specified in the prayer although the body of the complaint alleges the total amount of over P78 Million as damages suffered by plaintiff. 5 3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of the action in the Magaspi case. The complaint was considered as primarily an action for recovery of ownership and possession of a parcel of land. The damages stated were treated as merely to the main cause of action. Thus, the docket fee of only P60.00 and P10.00 for the sheriff's fee were paid. 6 In the present case there can be no such honest difference of opinion. As maybe gleaned from the allegations of the complaint as well as the designation thereof, it is both an action for damages and specific performance. The docket fee paid upon filing of complaint in the amount only of P410.00 by considering the action to be merely one for specific performance where the amount involved is not capable of pecuniary estimation is obviously erroneous. Although the total amount of damages sought is not stated in the prayer of the complaint yet it is spelled out in the body of the complaint totalling in the amount of P78,750,000.00 which should be the basis of assessment of the filing fee.

G.R. No. 75919 May 7, 1987 MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners, vs. COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, ANDREW LUISON, GRACE LUISON and JOSE DE MAISIP, respondents. Tanjuatco, Oreta and Tanjuatco for petitioners. Pecabar Law Offices for private respondents. RESOLUTION

GANCAYCO, J.: Acting on the motion for reconsideration of the resolution of the Second Division of January 28,1987 and another motion to refer the case to and to be heard in oral argument by the Court En Banc filed by petitioners, the motion to refer the case to the Court en banc is granted but the motion to set the case for oral argument is denied. Petitioners in support of their contention that the filing fee must be assessed on the basis of the amended complaint cite the case of Magaspi vs. Ramolete. 1 They contend that the Court of Appeals erred in that the filing fee should be levied by considering the amount of damages sought in the original complaint. The environmental facts of said case differ from the present in that 1. The Magaspi case was an action for recovery of ownership and possession of a parcel of land with damages. 2While the present case is an action for torts and damages and specific performance with prayer for temporary restraining order, etc. 3

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4. When this under-re assessment of the filing fee in this case was brought to the attention of this Court together with similar other cases an investigation was immediately ordered by the Court. Meanwhile plaintiff through another counsel with leave of court filed an amended complaint on September 12, 1985 for the inclusion of Philips Wire and Cable Corporation as co-plaintiff and by emanating any mention of the amount of damages in the body of the complaint. The prayer in the original complaint was maintained. After this Court issued an order on October 15, 1985 ordering the re- assessment of the docket fee in the present case and other cases that were investigated, on November 12, 1985 the trial court directed plaintiffs to rectify the amended complaint by stating the amounts which they are asking for. It was only then that plaintiffs specified the amount of damages in the body of the complaint in the reduced amount of P10,000,000.00. 7 Still no amount of damages were specified in the prayer. Said amended complaint was admitted. On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount of P3,104.00 as filing fee covering the damages alleged in the original complaint as it did not consider the damages to be merely an or incidental to the action for recovery of ownership and possession of real property. 8 An amended complaint was filed by plaintiff with leave of court to include the government of the Republic as defendant and reducing the amount of damages, and attorney's fees prayed for to P100,000.00. Said amended complaint was also admitted. 9 In the Magaspi case, the action was considered not only one for recovery of ownership but also for damages, so that the filing fee for the damages should be the basis of assessment. Although the payment of the docketing fee of P60.00 was found to be insufficient, nevertheless, it was held that since the payment was the result of an "honest difference of opinion as to the correct amount to be paid as docket fee" the court "had acquired jurisdiction over the case and the proceedings thereafter had were proper and regular." 10 Hence, as the amended complaint superseded the original complaint, the allegations of damages in the amended complaint should be the basis of the computation of the filing fee. 11 In the present case no such honest difference of opinion was possible as the allegations of the complaint, the designation and the prayer show clearly that it is an action for damages and specific performance. The docketing fee should be assessed by considering the amount of damages as alleged in the original complaint. As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court . 12 Thus, in the present case the trial court did not acquire jurisdiction over the case by the payment of only P410.00 as docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. 13 For an legal purposes there is no such original complaint that was duly filed which could be amended. Consequently, the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court are null and void. The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of the docket fee should be the amount of damages sought in the original complaint and not in the amended complaint. The Court cannot close this case without making the observation that it frowns at the practice of counsel who filed the original complaint in this case of omitting any specification of the amount of damages in the prayer although the amount of over P78 million is alleged in the body of the complaint. This is clearly intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the docket clerk in the assessment of the filing fee. This fraudulent practice was compounded when, even as this Court had taken cognizance of the anomaly and ordered an investigation, petitioner through another counsel filed an amended complaint, deleting all mention of the amount of damages being asked for in the body of the complaint. It was only when in obedience to the order of this Court of October 18, 1985, the trial court directed that the amount of damages be specified in the amended complaint, that petitioners' counsel wrote the damages sought in the much reduced amount of P10,000,000.00 in the body of the complaint but not in the prayer thereof. The design to avoid payment of the required docket fee is obvious.

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The Court serves warning that it will take drastic action upon a repetition of this unethical practice. To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any pleading that fails to comply with this requirement shall not bib accepted nor admitted, or shall otherwise be expunged from the record. The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the Magaspi case 14 in so far as it is inconsistent with this pronouncement is overturned and reversed. WHEREFORE, the motion for reconsideration is denied for lack of merit. SO ORDERED. G.R. Nos. 79937-38 February 13, 1989 SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners, vs. HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court, Quezon City and MANUEL CHUA UY PO TIONG, respondents. Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners. Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices for private respondent. Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a case when the correct and proper docket fee has not been paid. On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with the Regional Trial Court of Makati, Metro Manila for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong. Private respondent as declared in default for failure to file the required answer within the reglementary period. On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial Court of Quezon City for the refund of premiums and the issuance of a writ of preliminary attachment which was docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and thereafter including E.B. Philipps and D.J. Warby as additional defendants. The complaint sought, among others, the payment of actual, compensatory, moral, exemplary and liquidated damages, attorney's fees, expenses of litigation and costs of the suit. Although the prayer in the complaint did not quantify the amount of damages sought said amount may be inferred from the body of the complaint to be about Fifty Million Pesos (P50,000,000.00). Only the amount of P210.00 was paid by private respondent as docket fee which prompted petitioners' counsel to raise his objection. Said objection was disregarded by respondent Judge Jose P. Castro who was then presiding over said case. Upon the order of this Court, the records of said case together with twenty-two other cases assigned to different branches of the Regional Trial Court of Quezon City which were under investigation for under-assessment of docket fees were transmitted to this Court. The Court thereafter returned the said records to the trial court with the directive that they be re-raffled to the other judges in Quezon City, to the exclusion of Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch 104, a sala which was then vacant. On October 15, 1985, the Court en banc issued a Resolution Administrative Case No. 85-10-8752-RTC directing the judges said cases to reassess the docket fees and that in case deficiency, to order its payment. The Resolution also requires in in of all

GANCAYCO, J.:

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clerks of court to issue certificates of re-assessment of docket fees. All litigants were likewise required to specify in their pleadings the amount sought to be recovered in their complaints. On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily assigned, issuedan order to the Clerk of Court instructing him to issue a certificate of assessment of the docket fee paid by private respondent and, in case of deficiency, to include the same in said certificate. On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August 30,1984, an amended complaint was filed by private respondent including the two additional defendants aforestated. Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in the case to comment on the Clerk of Court's letter-report signifying her difficulty in complying with the Resolution of this Court of October 15, 1985 since the pleadings filed by private respondent did not indicate the exact amount sought to be recovered. On January 23, 1986, private respondent filed a "Compliance" and a "Re-Amended Complaint" stating therein a claim of "not less than Pl0,000,000. 00 as actual compensatory damages" in the prayer. In the body of the said second amended complaint however, private respondent alleges actual and compensatory damages and attorney's fees in the total amount of about P44,601,623.70. On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint and stating therein that the same constituted proper compliance with the Resolution of this Court and that a copy thereof should be furnished the Clerk of Court for the reassessment of the docket fees. The reassessment by the Clerk of Court based on private respondent's claim of "not less than P10,000,000.00 as actual and compensatory damages" amounted to P39,786.00 as docket fee. This was subsequently paid by private respondent. Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judie Asuncion dated January 24, 1986. On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On October 16, 1986, or some seven months after filing the supplemental complaint, the private respondent paid the additional docket fee of P80,396.00. 1 On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows: WHEREFORE, judgment is hereby rendered: 1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks annulment of the order (a) denying petitioners' motion complaint, as amended, and to dismiss the

(b) granting the writ of preliminary attachment, but giving due course to the portion thereof questioning the reassessment of the docketing fee, and requiring the Honorable respondent Court to reassess the docketing fee to be paid by private respondent on the basis of the amount of P25,401,707.00. 2 Hence, the instant petition. During the pendency of this petition and in conformity with the said judgment of respondent court, private respondent paid the additional docket fee of P62,432.90 on April 28, 1988. 3 The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did not acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of the correct and proper docket fee. Petitioners allege that while it may be true that private respondent had paid the amount of P182,824.90 as docket fee as herein-above related, and considering that the total amount sought to be recovered in the amended and supplemental complaint is P64,601,623.70 the docket fee that should be paid by private respondent is P257,810.49, more or less. Not having paid

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the same, petitioners contend that the complaint should be dismissed and all incidents arising therefrom should be annulled. In support of their theory, petitioners cite the latest ruling of the Court in Manchester Development Corporation vs. CA, 4 as follows: The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the Magaspi Case in so far as it is inconsistent with this pronouncement is overturned and reversed. On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to Civil Case No. Q41177 for at the time said civil case was filed in court there was no such Manchester ruling as yet. Further, private respondent avers that what is applicable is the ruling of this Court in Magaspi v. Ramolete, 5 wherein this Court held that the trial court acquired jurisdiction over the case even if the docket fee paid was insufficient. The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retrospective in that sense and to that extent. 6 In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of the docket fee is an indispensable step for the perfection of an appeal. In a forcible entry and detainer case before the justice of the peace court of Manaoag, Pangasinan, after notice of a judgment dismissing the case, the plaintiff filed a notice of appeal with said court but he deposited only P8.00 for the docket fee, instead of P16.00 as required, within the reglementary period of appeal of five (5) days after receiving notice of judgment. Plaintiff deposited the additional P8.00 to complete the amount of the docket fee only fourteen (14) days later. On the basis of these facts, this court held that the Court of First Instance did notacquire jurisdiction to hear and determine the appeal as the appeal was not thereby perfected. In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a Filipino citizen by sending it through registered mail to the Office of the Solicitor General in 1953 but the required filing fee was paid only in 1956, barely 5V2 months prior to the filing of the petition for citizenship. This Court ruled that the declaration was not filed in accordance with the legal requirement that such declaration should be filed at least one year before the filing of the petition for citizenship. Citing Lazaro, this Court concluded that the filing of petitioner's declaration of intention on October 23, 1953 produced no legal effect until the required filing fee was paid on May 23, 1956. In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It was an original petition for quo warranto contesting the right to office of proclaimed candidates which was mailed, addressed to the clerk of the Court of First Instance, within the one-week period after the proclamation as provided therefor by law. 10However, the required docket fees were paid only after the expiration of said period. Consequently, this Court held that the date of such payment must be deemed to be the real date of filing of aforesaid petition and not the date when it was mailed. Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be paid before a court will act on a petition or complaint. However, we also held that said rule is not applicable when petitioner seeks the probate of several wills of the same decedent as he is not required to file a separate action for each will but instead he may have other wills probated in the same special proceeding then pending before the same court. Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only upon payment of the docket fee regardless of the actual date of its filing in court. Said case involved a complaint for recovery of ownership and possession of a parcel of land with damages filed in the Court of First Instance of Cebu. Upon the payment of P60.00 for the docket fee and P10.00 for the sheriffs fee, the complaint was docketed as Civil Case No. R-11882. The prayer of the complaint sought that the Transfer Certificate of Title issued in the name of the defendant be declared as null and void. It was also prayed that plaintiff be declared as owner thereof to whom the proper title should be

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issued, and that defendant be made to pay monthly rentals of P3,500.00 from June 2, 1948 up to the time the property is delivered to plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of P250,000.00, the costs of the action and exemplary damages in the amount of P500,000.00. The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to which an opposition was filed by the plaintiff alleging that the action was for the recovery of a parcel of land so the docket fee must be based on its assessed value and that the amount of P60.00 was the correct docketing fee. The trial court ordered the plaintiff to pay P3,104.00 as filing fee. The plaintiff then filed a motion to admit the amended complaint to include the Republic as the defendant. In the prayer of the amended complaint the exemplary damages earlier sought was eliminated. The amended prayer merely sought moral damages as the court may determine, attorney's fees of P100,000.00 and the costs of the action. The defendant filed an opposition to the amended complaint. The opposition notwithstanding, the amended complaint was admitted by the trial court. The trial court reiterated its order for the payment of the additional docket fee which plaintiff assailed and then challenged before this Court. Plaintiff alleged that he paid the total docket fee in the amount of P60.00 and that if he has to pay the additional fee it must be based on the amended complaint. The question posed, therefore, was whether or not the plaintiff may be considered to have filed the case even if the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that the case was deemed filed only upon the payment of the correct amount for the docket fee regardless of the actual date of the filing of the complaint; that there was an honest difference of opinion as to the correct amount to be paid as docket fee in that as the action appears to be one for the recovery of property the docket fee of P60.00 was correct; and that as the action is also one, for damages, We upheld the assessment of the additional docket fee based on the damages alleged in the amended complaint as against the assessment of the trial court which was based on the damages alleged in the original complaint. However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an action for torts and damages and specific performance with a prayer for the issuance of a temporary restraining order, etc. The prayer in said case is for the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question, the attachment of such property of defendants that may be sufficient to satisfy any judgment that may be rendered, and, after hearing, the issuance of an order requiring defendants to execute a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff. It was also prayed that the defendants be made to pay the plaintiff jointly and severally, actual, compensatory and exemplary damages as well as 25% of said amounts as may be proved during the trial for attorney's fees. The plaintiff also asked the trial court to declare the tender of payment of the purchase price of plaintiff valid and sufficient for purposes of payment, and to make the injunction permanent. The amount of damages sought is not specified in the prayer although the body of the complaint alleges the total amount of over P78 Millon allegedly suffered by plaintiff. Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee based on the nature of the action for specific performance where the amount involved is not capable of pecuniary estimation. However, it was obvious from the allegations of the complaint as well as its designation that the action was one for damages and specific performance. Thus, this court held the plaintiff must be assessed the correct docket fee computed against the amount of damages of about P78 Million, although the same was not spelled out in the prayer of the complaint. Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on September 12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of the amount of damages in the body of the complaint. The prayer in the original complaint was maintained. On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and other cases that were investigated.

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On November 12, 1985, the trial court directed the plaintiff to rectify the amended complaint by stating the amounts which they were asking for. This plaintiff did as instructed. In the body of the complaint the amount of damages alleged was reduced to P10,000,000.00 but still no amount of damages was specified in the prayer. Said amended complaint was admitted. Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court," this Court held that the trial court did not acquire jurisdiction over the case by payment of only P410.00 for the docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. For all legal purposes there was no such original complaint duly filed which could be amended. Consequently, the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court were declared null and void. 13 The present case, as above discussed, is among the several cases of under-assessment of docket fee which were investigated by this Court together with Manchester. The facts and circumstances of this case are similar toManchester. In the body of the original complaint, the total amount of damages sought amounted to about P50 Million. In the prayer, the amount of damages asked for was not stated. The action was for the refund of the premium and the issuance of the writ of preliminary attachment with damages. The amount of only P210.00 was paid for the docket fee. On January 23, 1986, private respondent filed an amended complaint wherein in the prayer it is asked that he be awarded no less than P10,000,000.00 as actual and exemplary damages but in the body of the complaint the amount of his pecuniary claim is approximately P44,601,623.70. Said amended complaint was admitted and the private respondent was reassessed the additional docket fee of P39,786.00 based on his prayer of not less than P10,000,000.00 in damages, which he paid. On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On October 16, 1986, private respondent paid an additional docket fee of P80,396.00. After the promulgation of the decision of the respondent court on August 31, 1987 wherein private respondent was ordered to be reassessed for additional docket fee, and during the pendency of this petition, and after the promulgation of Manchester, on April 28, 1988, private respondent paid an additional docket fee of P62,132.92. Although private respondent appears to have paid a total amount of P182,824.90 for the docket fee considering the total amount of his claim in the amended and supplemental complaint amounting to about P64,601,620.70, petitioner insists that private respondent must pay a docket fee of P257,810.49. The principle in Manchester could very well be applied in the present case. The pattern and the intent to defraud the government of the docket fee due it is obvious not only in the filing of the original complaint but also in the filing of the second amended complaint. However, in Manchester, petitioner did not pay any additional docket fee until] the case was decided by this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government, this Court held that the court a quo did not acquire jurisdiction over the case and that the amended complaint could not have been admitted inasmuch as the original complaint was null and void. In the present case, a more liberal interpretation of the rules is called for considering that, unlike Manchester, private respondent demonstrated his willingness to abide by the rules by paying the additional docket fees as required. The promulgation of the decision in Manchester must have had that sobering influence on private respondent who thus paid the additional docket fee as ordered by the respondent court. It triggered his change of stance by manifesting his willingness to pay such additional docket fee as may be ordered. Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the total amount of the claim. This is a matter which the clerk of court of the lower court and/or his duly authorized docket clerk or clerk in-charge should determine and, thereafter, if any amount is found due, he must require the private respondent to pay the same. Thus, the Court rules as follows:

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1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee. WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is hereby instructed to reassess and determine the additional filing fee that should be paid by private respondent considering the total amount of the claim sought in the original complaint and the supplemental complaint as may be gleaned from the allegations and the prayer thereof and to require private respondent to pay the deficiency, if any, without pronouncement as to costs. SO ORDERED.

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owner had allowed the defendants to occupy portions of the land by mere tolerance; (3) having himself need to use the property, Pineda had made demands on the defendants to vacate the property and pay reasonable rentals therefor, but these demands had been refused; and (4) the last demand had been made more than a year prior to the commencement of suit. The complaints prayed for the same reliefs, to wit: 1) that plaintiff be declared owner of the areas occupied by the defendants; 2) that defendants and their "privies and allies" be ordered to vacate and deliver the portions of the land usurped by them; 3) that each defendant be ordered to pay: 1 ) P 2,000 as monthly rents from February, 1987; NARVASA, J.: In the Regional Trial Court at Tagum, Davao del Norte,
1

G.R. Nos. 88075-77 December 20, 1989 MAXIMO TACAY, PONCIANO PANES and ANTONIA NOEL, petitioners, vs. REGIONAL TRIAL COURT OF TAGUM Davao del Norte, Branches 1 and 2, Presided by Hon. Marcial Fernandez and Hon. Jesus Matas, respectively, PATSITA GAMUTAN, Clerk of Court, and GODOFREDO PINEDA, respondents. Eduardo C. De Vera for petitioners. RESOLUTION

2 ) Actual damages, as proven; three

2

(3) actions for recovery of possession (acciones publicianas ) were separately instituted by Godofredo Pineda against three (3) defendants, docketed as follows: 1) vs. Antonia Noel Civil Case No. 2209 2) vs. Ponciano Panes Civil Case No. 2210 3) vs. Maximo Tacay Civil Case No. 2211. Civil Cases Numbered 2209 and 2211 were raffled to Branch I of the Trial Court, presided over by Judge Marcial Hernandez. Civil No. 2210 was assigned to Branch 2, presided over by Judge Jesus Matas. The complaints 3 all alleged the same essential facts (1) Pineda was the owner of a parcel of land measuring 790 square meters, his ownership being evidenced by TCT No. T-46560; (2) the previous

3 ) Moral and nominal damages as the Honorable Court may fix ; 4) P30,000.00, "as representation fees of appearance;" 4 and 4) that he (Pineda) be granted such "further relief and remedies ... just and equitable in the premises. The prayer of each complaint contained a handwritten notation (evidently made by plaintiff's counsel) reading, "P5,000.00 as and for," immediately above the typewritten words, "Actual damages, as proven," the intention apparently being to make the entire phrase read, " P5,000.00 as and for actual damages as proven. 5 attorney's P5,000.00 fees, and per day of

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Motions to dismiss were filed in behalf of each of the defendants by common counsel . 6 Every motion alleged that the Trial Court had not acquired jurisdiction of the case . . . for the reason that the ... complaint violates the mandatory and clear provision of Circular No. 7 of the ... Supreme Court dated March 24,1988, by failing to specify all the amounts of damages which plaintiff is claiming from defendant;" and . . . for ... failure (of the complaint) to even allege the basic requirement as to the assessed value of the subject lot in dispute. Judge Matas denied the motion to dismiss filed in Civil Case No. 2210 but ordered the expunction of the "allegations in paragraph 11 of the ... complaint regarding moral as well as nominal damages . 7 On motion of defendant Panes, Judge Matas later ordered the striking out, too, of the "handwritten amount of 'P5,000. 00 as and for.' including the typewritten words 'actual damages as proven' ... in sub-paragraph b of paragraph 4 in the conclusion and prayer of the complaint ..." 8 The motions to dismiss submitted in Civil Cases Numbered 2211 and 2209 were also denied in separate orders promulgated by Judge Marcial Fernandez. 9 His Order in Case No. 2209 dated March 15, 1989 (a) declared that since the "action at bar is for Reivindicatoria, Damages and Attorney's fees ... (d)efinitely this Court has the exclusive jurisdiction," (b) that the claims for actual, moral and nominal damages "are only one aspect of the cause of action," and (c) because of absence of specification of the amounts claimed as moral, nominal and actual damages, they should be "expunged from the records." Ascribing grave abuse of discretion to both Judges Matas and Fernandez in the rendition of the Orders above described, the defendants in all three (3) actions have filed with this Court a "Joint Petition" for certiorari, prohibition and mandamus, with prayer for temporary restraining order and/or writ of preliminary prohibitory injunction," praying essentially that said orders be annulled and respondent judges directed to dismiss all the complaints "without prejudice to private respondent Pineda's re-filing a similar complaint that complies with Circular No. 7." The joint petition (a) re-asserted the proposition that because the complaints had failed to state the amounts being claimed as actual, moral and nominal damages, the Trial Courts a quo had not acquired jurisdiction over the three (3) actions in question-indeed, the respondent Clerk of Court should not have accepted the complaints which initiated said suits, and (b) it was not proper merely to expunge the claims for damages and allow "the so-called cause of action for "reivindicatoria" remain for trial" by itself. 10 The joint petition should be, as it is hereby, dismissed. It should be dismissed for failure to comply with this Court's Circular No. 1-88 (effective January 1, 1989). The copies of the challenged Orders thereto attached 11 were not certified by the proper Clerk of Court or his duly authorized representative. Certification was made by the petitioners' counsel, which is not allowed. The petition should be dismissed, too, for another equally important reason. It fails to demonstrate any grave abuse of discretion on the part of the respondent Judges in rendering the Orders complained of or, for that matter, the existence of any proper cause for the issuance of the writ of mandamus. On the contrary, the orders appear to have correctly applied the law to the admitted facts. It is true that the complaints do not state the amounts being claimed as actual, moral and nominal damages. It is also true, however, that the actions are not basically for the recovery of sums of money. They are principally for recovery of possession of real property, in the nature of an accion publiciana. Determinative of the court's jurisdiction in this type of actions is the nature thereof, not the amount of the damages allegedly arising from or connected with the issue of title or possession, and regardless of the value of the property. Quite obviously, an action for recovery of possession of real property (such as an accion plenaria de possesion) or the title thereof, 12 or for partition or condemnation of, or the foreclosure of a mortgage on, said real property 13 - in other words, a real action-may be commenced and prosecuted without an accompanying claim for actual, moral, nominal or exemplary

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damages; and such an action would fall within the exclusive, original jurisdiction of the Regional Trial Court. Batas Pambansa Bilang 129 provides that Regional Trial Courts shall exercise exclusive original jurisdiction inter alia over "all civil actions which involve the title to, or possession of, real property, or any interest therein, except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts." 14 The rule applies regardless of the value of the real property involved, whether it be worth more than P20,000.00 or not, infra. The rule also applies even where the complaint involving realty also prays for an award of damages; the amount of those damages would be immaterial to the question of the Court's jurisdiction. The rule is unlike that in other cases e.g., actions simply for recovery of money or of personal property, 15 or actions in admiralty and maritime jurisdiction 16 in which the amount claimed, 17 or the value of the personal property, is determinative of jurisdiction; i.e., the value of the personal property or the amount claimed should exceed twenty thousand pesos (P20,000.00) in order to be cognizable by the Regional Trial Court. Circular No. 7 of this Court, dated March 24, 1988, cannot thus be invoked, as the petitioner does, as authority for the dismissal of the actions at bar. That circular, avowedly inspired by the doctrine laid down in Manchester Development Corporation v. Court of appeals, 149 SCRA 562 (May 7, 1987), has but limited application to said actions, as shall presently be discussed. Moreover, the rules therein laid down have since been clarified and amplified by the Court's subsequent decision in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, et al., G.R. Nos. 79937-38, February 13, 1989. Circular No. 7 was aimed at the practice of certain parties who omit from the prayer of their complaints "any specification of the amount of damages," the omission being "clearly intended for no other purposes than to evade the payment of the correct filing fees if not to mislead the docket clerk, in the assessment of the filing fee." The following rules were therefore set down: 1. All complaints, petitions, answers, and similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case. 2. Any pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise be expunged from the record. 3. The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amount sought in the amended pleading. The clarificatory and additional rules laid down in Sun Insurance Office, Ltd. v. Asuncion, supra, read as follows: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but (also) the payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified, the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

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As will be noted, the requirement in Circular No. 7 that complaints, petitions, answers, and similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, has not been altered. What has been revised is the rule that subsequent "amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amount sought in the amended pleading," the trial court now being authorized to allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. Moreover, a new rule has been added, governing awards of claims not specified in the pleading - i.e., damages arising after the filing of the complaint or similar pleading-as to which the additional filing fee therefor shall constitute a lien on the judgment. Now, under the Rules of Court, docket or filing fees are assessed on the basis of the "sum claimed," on the one hand, or the "value of the property in litigation or the value of the estate," on the other. 18 There are, in other words, as already above intimated, actions or proceedings involving real property, in which the value of the property is immaterial to the court's jurisdiction, account thereof being taken merely for assessment of the legal fees; and there are actions or proceedings, involving personal property or the recovery of money and/or damages, in which the value of the property or the amount of the demand is decisive of the trial court's competence (aside from being the basis for fixing the corresponding docket fees). 19 Where the action is purely for the recovery of money or damages, the docket fees are assessed on the basis of the aggregate amount claimed, exclusive only of interests and costs. In this case, the complaint or similar pleading should, according to Circular No. 7 of this Court, "specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case." Two situations may arise. One is where the complaint or similar pleading sets out a claim purely for money or damages and there is no precise statement of the amounts being claimed. In this event the rule is that the pleading will "not be accepted nor admitted, or shall otherwise be expunged from the record." In other words, the complaint or pleading may be dismissed, or the claims as to which the amounts are unspecified may be expunged, although as aforestated the Court may, on motion, permit amendment of the complaint and payment of the fees provided the claim has not in the meantime become time-barred. The other is where the pleading does specify the amount of every claim, but the fees paid are insufficient; and here again, the rule now is that the court may allow a reasonable time for the payment of the prescribed fees, or the balance thereof, and upon such payment, the defect is cured and the court may properly take cognizance of the action, unless in the meantime prescription has set in and consequently barred the right of action. Where the action involves real property and a related claim for damages as well, the legal fees shall be assessed on the basis of both (a) the value of the property and (b) the total amount of related damages sought. The Court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by the payment of the requisite fees, or, if the fees are not paid at the time of the filing of the pleading, as of the time of full payment of the fees within such reasonable time as the court may grant, unless, of course, prescription has set in the meantime. But whereas in the case at bar-the fees prescribed for an action involving real property have been paid, but the amounts of certain of the related damages (actual, moral and nominal) being demanded are unspecified, the action may not be dismissed. The Court undeniably has jurisdiction over the action involving the real property, acquiring it upon the filing of the complaint or similar pleading and payment of the prescribed fee. And it is not divested of that authority by the circumstance that it may not have acquired jurisdiction over the accompanying claims for damages because of lack of specification thereof. What should be done is simply to expunge those claims for damages as to which no amounts are stated, which is what the respondent Courts did, or allow, on motion, a reasonable time for the amendment of the complaints so as to allege the precise amount of each item of damages and accept payment of the requisite fees therefor within the relevant prescriptive period. WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.

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By Decision of April 5, 2006, Branch 22 of the Malolos RTC ruled in favor of respondent, disposing as follows: G.R. No. 181842 February 5, 2010 WHEREFORE, IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the plaintiff and against the defendants ordering the latter, jointly and severally: 1. To pay the plaintiff the amount of P212,322.60 as unrealized income before the filing of the case (Sept. 2002 to Feb. 2003); 2. To pay the plaintiff the amount of P2,013,753.03 as unrealized (income) after the filing of the case up to present (March 2003 to March 2006); 3. To pay the plaintiff the would be unrealized income for the ensuing idle months of said building amounting to P7,126,494.30 (covering April 2006 until expiration of the contract of lease); 4. To pay plaintiff the amount of P200,000.00 as moral damages; 5. To pay plaintiff the amount of P100,000.00 as exemplary damages; 6. To pay plaintiff the amount of P100,000.00 as attorneys fees and 7. To pay plaintiff as litigation expenses. SO ORDERED.4 (emphasis and underscoring supplied) On appeal, Metrobank challenged, in the main, the trial courts award of "unrealized income for the ensuing idle months" despite respondents failure to pay docket fees thereon to thus render the complaint dismissible for lack of jurisdiction. By Decision5 of November 23, 2007, the appellate court affirmed that of the trial court6 and denied, by Resolution of February 21,

METROPOLITAN BANK AND TRUST CO. and SOLIDBANK CORPORATION, Petitioners, vs. BERNARDITA H. PEREZ, represented by her Attorney-in-Fact PATRIA H. PEREZ, Respondent. DECISION CARPIO MORALES, J.: On September 17, 1997, petitioner Solidbank Corporation (Solidbank) forged a lease contract with Bernardita H. Perez (respondent), represented by her attorney-in-fact Patria H. Perez1, over two parcels of land located in Sta. Maria, Bulacan for a period of 15 years commencing on January 1, 1998. Solidbank was to, as it did, construct a one-storey building specifically suited for bank premises. Solidbank was later acquired by its co-petitioner Metropolitan Bank and Trust Company (Metrobank), the latter as the surviving entity. On September 24, 2002, Metrobank sent a notice of termination of the lease contract effective September 30, 2002.2 Respondent, objecting to the termination, filed a complaint for breach of contract and damages against herein petitioners Solidbank and Metrobank before the Regional Trial Court (RTC) of Malolos, Bulacan praying that, inter alia, herein petitioners be ordered to pay her "the would be unrealized income for the ensuing idle months of the said building."3 Metrobank asserted in its Answer with Counterclaim, however, that the lease contract did not prohibit pre-termination by the parties. After respondent rested her case, Metrobank was, by Order of January 12, 2006, declared to have waived its right to present evidence after its counsel incurred several unexcused absences.

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2008, a reconsideration thereof. Hence, the present petition for review on certiorari. In her Comment, respondent admitted that the filing fees she paid did not cover her prayer for unrealized income for the ensuing idle months, for "at the time of filing and payment[,] the period that the building would be idle could not yet be determined."7 In sustaining respondents justification for additional docket fees, the appellate court held: nonpayment of demonstrates a willingness to abide by the rules prescribing such payment. Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the government, the Manchester rule does not apply.11 (emphasis and underscoring supplied) Metrobank takes exception to the application of Sun Insurance Office to the present case because, by its claim, respondent deliberately concealed the insufficient payment of docket fees. Metrobanks position fails. The ensuing months in which the leased premises would be rendered vacant could not be determined at the time of the filing of the complaint. It bears recalling that the building constructed on respondents leased premises was specifically constructed to house a bank, hence, the idle period before another occupant with like business may opt to lease would be difficult to project. On Metrobanks raising the issue of lack of jurisdiction over the complaint for respondents failure to pay the correct docket fees, apropos is the ruling in National Steel Corporation v. Court of Appeals: 12 Although the payment of the proper docket fees is a jurisdictional requirement, the trial court may allow the plaintiff in an action to pay the same within a reasonable time before the expiration of the applicable prescriptive or reglementary period. If the plaintiff fails to comply with this requirement, the defendant should timely raise the issue of jurisdiction or else he would be considered in estoppel. In the latter case, the balance between the appropriate docket fees and the amount actually paid by the plaintiff will be considered a lien on any award he may obtain in his favor.13 (emphasis and underscoring supplied)1avvph!1 Metrobank raised the issue of jurisdiction only before the appellate court after it and its co-petitioner participated in the proceedings before the trial court. While lack of jurisdiction may be raised at any time, a party may be held in estoppel if, as in the present case, it has actively taken part in the proceedings being questioned. The foregoing disposition notwithstanding, respondent is liable for the balance between the actual fees paid and the correct payable

For one, plaintiff-appellee Perez could not have been certain at the time she filed the Complaint that defendant-appellant Metrobank would no longer return to the Leased Property. It would have been speculative therefore on the part of plaintiff-appellee Perez to allege in her Complaint any unrealized income for the remaining period of theLease Contract considering that the possibility of defendant-appellant Metrobank reconsidering its decision to terminate the said Lease Contract and returning to the Leased Property at some future time was not definitively foreclosed when the Complaint was filed. In light of her predicament, plaintiffappellee Perez was thus justified in just making a general prayer for the court a quo to award unrealized income for the "ensuing idle months" of the Leased Property.8 (italics in the original; underscoring supplied) The petition is partly meritorious. In Manchester Development Corporation v. Court of Appeals,9 the Court held that a pleading which does not specify in the prayer the amount sought shall not be admitted or shall be expunged, and that a court acquires jurisdiction only upon payment of the prescribed docket fee. This rule was relaxed in Sun Insurance Office, Ltd. v. Asuncion10 which was echoed in the 2005 case of Heirs of Bertuldo Hinog v. Melico, the pertinent portion of the decision in the latter case reads: Plainly, while the payment of prescribed docket fee is a jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period, more so when the party involved

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filing fees to include an assessment on the award of unrealized income, following Section 2 of Rule 141 which provides: SEC. 2. Fees in lien. Where the court in its final judgment awards a claim not alleged, or a relief different from, or more than that claimed in the pleading, the party concerned shall pay the additional fees which shall constitute a lien on the judgment in satisfaction of said lien. The clerk of court shall assess and collect the corresponding fee (underscoring supplied), and jurisprudence, viz: The exception contemplated as to claims not specified or to claims although specified are left for determination of the court is limited only to any damages that may arise after the filing of the complaint or similar pleading for then it will not be possible for the claimant to specify nor speculate as to the amount thereof.14 (emphasis and underscoring supplied) A word on the grant of moral and exemplary damages and attorneys fees. The Court notes that respondents witness-attorney-in-fact testified only on the existence of the lease agreement and unrealized income due to pre-termination. Since an award of moral damages is predicated on a categorical showing from the claimant that emotional and mental sufferings were actually experienced, absent any evidence thereon in the present case,15 the award must be disallowed. And so too must the award of attorneys fees, absent an indication in the trial courts Decision of the factual basis thereof, the award having been merely stated in the dispositive portion.16 Parenthetically, while respondent prayed in her complaint for the award of attorneys fees and testified during the trial that: Q: Now, in connection with the filing of this case and hiring your lawyer, do you have agreement with your counsel with respect to attorneys fees? A: P100,000.00 acceptance fees. Q: What about appearance fees? A: I forgot already, sir.,17 there is no showing that she submitted any documentary evidence in support thereof. WHEREFORE, the petition is in part GRANTED. The November 23, 2007 Decision of the Court of Appeals isMODIFIED. The Clerk of Court of the Regional Trial Court of Malolos, Bulacan is ordered to reassess, determine and collect additional fees that should be paid by respondent within fifteen (15) days, in accordance with the foregoing discussion of the Court, provided the applicable prescriptive or reglementary period has not yet expired, which additional fees shall constitute a lien on the judgment in satisfaction of said lien. The award of moral and exemplary damages and attorneys fees is DELETED. In all other respects, the appellate courts Decision is AFFIRMED. SO ORDERED.