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SUBJECT MATTER JURISDICTION

HASEGAWA v. KITAMURA [G.R. NO. 149177 : November 23, 2007]

Before the Court is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court assailing the April 18, 2001 Decision1 of the Court of
Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001
Resolution2 denying the motion for reconsideration thereof.
On March 30, 1999, petitioner Nippon Engineering Consultants Co.,
Ltd. (Nippon), a Japanese consultancy firm providing technical and
management support in the infrastructure projects of foreign
governments,3 entered into an Independent Contractor Agreement
(ICA) with respondent Minoru Kitamura, a Japanese national
permanently residing in the Philippines.4 The agreement provides that
respondent was to extend professional services to Nippon for a year
starting on April 1, 1999.5 Nippon then assigned respondent to work as
the project manager of the Southern Tagalog Access Road (STAR)
Project in the Philippines, following the company's consultancy
contract with the Philippine Government.6
When the STAR Project was near completion, the Department of
Public Works and Highways (DPWH) engaged the consultancy
services of Nippon, on January 28, 2000, this time for the detailed
engineering and construction supervision of the Bongabon-Baler Road
Improvement (BBRI) Project.7 Respondent was named as the project
manager in the contract's Appendix 3.1.8
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's
general manager for its International Division, informed respondent
that the company had no more intention of automatically renewing his
ICA. His services would be engaged by the company only up to the

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substantial completion of the STAR Project on March 31, 2000, just in

time for the ICA's expiry.9
Threatened with impending unemployment, respondent, through his
lawyer, requested a negotiation conference and demanded that he be
assigned to the BBRI project. Nippon insisted that respondent's
contract was for a fixed term that had already expired, and refused to
negotiate for the renewal of the ICA.10
As he was not able to generate a positive response from the
petitioners, respondent consequently initiated on June 1, 2000 Civil
Case No. 00-0264 for specific performance and damages with the
Regional Trial Court of Lipa City.11
For their part, petitioners, contending that the ICA had been perfected
in Japan and executed by and between Japanese nationals, moved to
dismiss the complaint for lack of jurisdiction. They asserted that the
claim for improper pre-termination of respondent's ICA could only be
heard and ventilated in the proper courts of Japan following the
principles of lex loci celebrationis and lex contractus.12
In the meantime, on June 20, 2000, the DPWH approved Nippon's
request for the replacement of Kitamura by a certain Y. Kotake as
project manager of the BBRI Project.13
On June 29, 2000, the RTC, invoking our ruling in Insular Government
v. Frank14 that matters connected with the performance of contracts
are regulated by the law prevailing at the place of performance,15
denied the motion to dismiss.16 The trial court subsequently denied
petitioners' motion for reconsideration,17 prompting them to file with the
appellate court, on August 14, 2000, their first Petition for Certiorari
under Rule 65 [docketed as CA-G.R. SP No. 60205].18 On August 23,
2000, the CA resolved to dismiss the petition on procedural grounds'for
lack of statement of material dates and for insufficient verification and

certification against forum shopping.19 An Entry of Judgment was later

issued by the appellate court on September 20, 2000.20
Aggrieved by this development, petitioners filed with the CA, on
September 19, 2000, still within the reglementary period, a second
Petition for Certiorari under Rule 65 already stating therein the material
dates and attaching thereto the proper verification and certification.
This second petition, which substantially raised the same issues as
those in the first, was docketed as CA-G.R. SP No. 60827.21
Ruling on the merits of the second petition, the appellate court
rendered the assailed April 18, 2001 Decision22 finding no grave abuse
of discretion in the trial court's denial of the motion to dismiss. The CA
ruled, among others, that the principle of lex loci celebrationis was not
applicable to the case, because nowhere in the pleadings was the
validity of the written agreement put in issue. The CA thus declared
that the trial court was correct in applying instead the principle of lex
loci solutionis.23
Petitioners' motion for reconsideration was subsequently denied by the
CA in the assailed July 25, 2001 Resolution.24
Remaining steadfast in their stance despite the series of denials,
petitioners instituted the instant Petition for Review on Certiorari25
imputing the following errors to the appellate court:

The pivotal question that this Court is called upon to resolve is whether
the subject matter jurisdiction of Philippine courts in civil cases for
specific performance and damages involving contracts executed
outside the country by foreign nationals may be assailed on the
principles of lex loci celebrationis, lex contractus, the "state of the most
significant relationship rule," or forum non conveniens.
However, before ruling on this issue, we must first dispose of the
procedural matters raised by the respondent.
Kitamura contends that the finality of the appellate court's decision in
CA-G.R. SP No. 60205 has already barred the filing of the second
petition docketed as CA-G.R. SP No. 60827 (fundamentally raising the
same issues as those in the first one) and the instant Petition for
Review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on
account of the petition's defective certification of non-forum shopping, it
was a dismissal without prejudice.27 The same holds true in the CA's
dismissal of the said case due to defects in the formal requirement of
verification28 and in the other requirement in Rule 46 of the Rules of
Court on the statement of the material dates.29 The dismissal being
without prejudice, petitioners can re-file the petition, or file a second
petition attaching thereto the appropriate verification and certification
as they, in fact did and stating therein the material dates, within the
prescribed period30 in Section 4, Rule 65 of the said Rules.31

A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN

FINDING THAT THE TRIAL COURT VALIDLY EXERCISED
JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE
THE FACT THAT THE CONTRACT SUBJECT MATTER OF THE
PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN
TWO JAPANESE NATIONALS, WRITTEN WHOLLY IN THE
JAPANESE LANGUAGE AND EXECUTED IN TOKYO, JAPAN.

The dismissal of a case without prejudice signifies the absence of a

decision on the merits and leaves the parties free to litigate the matter
in a subsequent action as though the dismissed action had not been
commenced. In other words, the termination of a case not on the
merits does not bar another action involving the same parties, on the
same subject matter and theory.32

B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN

OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO THE
PRINCIPLE OF LEX LOCI SOLUTIONIS IN THE LIGHT OF RECENT
DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS.26

Necessarily, because the said dismissal is without prejudice and has

no res judicataeffect, and even if petitioners still indicated in the
verification and certification of the second certiorari petition that the
first had already been dismissed on procedural grounds,33 petitioners

are no longer required by the Rules to indicate in their certification of

non-forum shopping in the instant Petition for Review of the second
certiorari petition, the status of the aforesaid first petition before the
CA. In any case, an omission in the certificate of non-forum shopping
about any event that will not constitute res judicata and litis pendentia,
as in the present case, is not a fatal defect. It will not warrant the
dismissal and nullification of the entire proceedings, considering that
the evils sought to be prevented by the said certificate are no longer
present.34
The Court also finds no merit in respondent's contention that petitioner
Hasegawa is only authorized to verify and certify, on behalf of Nippon,
the certiorari petition filed with the CA and not the instant petition. True,
the Authorization35 dated September 4, 2000, which is attached to the
second certiorari petition and which is also attached to the instant
Petition for Review, is limited in scope its wordings indicate that
Hasegawa is given the authority to sign for and act on behalf of the
company only in the petition filed with the appellate court, and that
authority cannot extend to the instant Petition for Review .36 In a
plethora of cases, however, this Court has liberally applied the Rules or
even suspended its application whenever a satisfactory explanation
and a subsequent fulfillment of the requirements have been made.37
Given that petitioners herein sufficiently explained their misgivings on
this point and appended to their Reply38 an updated Authorization39 for
Hasegawa to act on behalf of the company in the instant petition, the
Court finds the same as sufficient compliance with the Rules.
However, the Court cannot extend the same liberal treatment to the
defect in the verification and certification. As respondent pointed out,
and to which we agree, Hasegawa is truly not authorized to act on
behalf of Nippon in this case. The aforesaid September 4, 2000
Authorization and even the subsequent August 17, 2001 Authorization
were issued only by Nippon's president and chief executive officer, not
by the company's board of directors. In not a few cases, we have ruled
that corporate powers are exercised by the board of directors; thus, no
person, not even its officers, can bind the corporation, in the absence
of authority from the board.40 Considering that Hasegawa verified and
certified the petition only on his behalf and not on behalf of the other
petitioner, the petition has to be denied pursuant to Loquias v. Office of

the Ombudsman.41 Substantial compliance will not suffice in a matter

that demands strict observance of the Rules.42 While technical rules of
procedure are designed not to frustrate the ends of justice,
nonetheless, they are intended to effect the proper and orderly
disposition of cases and effectively prevent the clogging of court
dockets.43
Further, the Court has observed that petitioners incorrectly filed a Rule
65 petition to question the trial court's denial of their motion to dismiss.
It is a well-established rule that an order denying a motion to dismiss is
interlocutory, and cannot be the subject of the extraordinary Petition for
Certiorari or mandamus. The appropriate recourse is to file an answer
and to interpose as defenses the objections raised in the motion, to
proceed to trial, and, in case of an adverse decision, to elevate the
entire case by appeal in due course.44 While there are recognized
exceptions to this rule,45 petitioners' case does not fall among them.
This brings us to the discussion of the substantive issue of the case.
Asserting that the RTC of Lipa City is an inconvenient forum,
petitioners question its jurisdiction to hear and resolve the civil case for
specific performance and damages filed by the respondent. The ICA
subject of the litigation was entered into and perfected in Tokyo, Japan,
by Japanese nationals, and written wholly in the Japanese language.
Thus, petitioners posit that local courts have no substantial relationship
to the parties46 following the [state of the] most significant relationship
rule in Private International Law.47
The Court notes that petitioners adopted an additional but different
theory when they elevated the case to the appellate court. In the
Motion to Dismiss48 filed with the trial court, petitioners never
contended that the RTC is an inconvenient forum. They merely argued
that the applicable law which will determine the validity or invalidity of
respondent's claim is that of Japan, following the principles of lex loci
celebrationis and lex contractus.49 While not abandoning this stance in
their petition before the appellate court, petitioners on certiorari
significantly invoked the defense of forum non conveniens.50 On
Petition for Review before this Court, petitioners dropped their other

arguments, maintained the forum non conveniens defense, and

introduced their new argument that the applicable principle is the [state
of the] most significant relationship rule.51
Be that as it may, this Court is not inclined to deny this petition merely
on the basis of the change in theory, as explained in Philippine Ports
Authority v. City of Iloilo.52 We only pointed out petitioners' inconstancy
in their arguments to emphasize their incorrect assertion of conflict of
laws principles.
To elucidate, in the judicial resolution of conflicts problems, three
consecutive phases are involved: jurisdiction, choice of law, and
recognition and enforcement of judgments. Corresponding to these
phases are the following questions: (1) Where can or should litigation
be initiated? (2) Which law will the court apply? and (3) Where can the
resulting judgment be enforced?53
Analytically, jurisdiction and choice of law are two distinct concepts.54
Jurisdiction considers whether it is fair to cause a defendant to travel to
this state; choice of law asks the further question whether the
application of a substantive law which will determine the merits of the
case is fair to both parties. The power to exercise jurisdiction does not
automatically give a state constitutional authority to apply forum law.
While jurisdiction and the choice of the lex fori will often coincide, the
"minimum contacts" for one do not always provide the necessary
"significant contacts" for the other.55 The question of whether the law of
a state can be applied to a transaction is different from the question of
whether the courts of that state have jurisdiction to enter a judgment.56
In this case, only the first phase is at issue
jurisdiction.rbl rl l lbrr
Jurisdiction, however, has various aspects. For a court to validly
exercise its power to adjudicate a controversy, it must have jurisdiction
over the plaintiff or the petitioner, over the defendant or the
respondent, over the subject matter, over the issues of the case and, in
cases involving property, over the res or the thing which is the subject

of the litigation.57 In assailing the trial court's jurisdiction herein,

petitioners are actually referring to subject matter jurisdiction.
Jurisdiction over the subject matter in a judicial proceeding is conferred
by the sovereign authority which establishes and organizes the court. It
is given only by law and in the manner prescribed by law.58 It is further
determined by the allegations of the complaint irrespective of whether
the plaintiff is entitled to all or some of the claims asserted therein.59 To
succeed in its motion for the dismissal of an action for lack of
jurisdiction over the subject matter of the claim,60 the movant must
show that the court or tribunal cannot act on the matter submitted to it
because no law grants it the power to adjudicate the claims.61
In the instant case, petitioners, in their motion to dismiss, do not claim
that the trial court is not properly vested by law with jurisdiction to hear
the subject controversy for, indeed, Civil Case No. 00-0264 for specific
performance and damages is one not capable of pecuniary estimation
and is properly cognizable by the RTC of Lipa City.62 What they rather
raise as grounds to question subject matter jurisdiction are the
principles of lex loci celebrationis and lex contractus, and the "state of
the most significant relationship rule."
The Court finds the invocation of these grounds unsound.
Lex loci celebrationis relates to the "law of the place of the
ceremony"63 or the law of the place where a contract is made.64 The
doctrine of lex contractus or lex loci contractus means the "law of the
place where a contract is executed or to be performed."65 It controls
the nature, construction, and validity of the contract66 and it may
pertain to the law voluntarily agreed upon by the parties or the law
intended by them either expressly or implicitly.67 Under the "state of the
most significant relationship rule," to ascertain what state law to apply
to a dispute, the court should determine which state has the most
substantial connection to the occurrence and the parties. In a case
involving a contract, the court should consider where the contract was
made, was negotiated, was to be performed, and the domicile, place of
business, or place of incorporation of the parties.68 This rule takes into

account several contacts and evaluates them according to their relative

importance with respect to the particular issue to be resolved.69
Since these three principles in conflict of laws make reference to the
law applicable to a dispute, they are rules proper for the second phase,
the choice of law.70 They determine which state's law is to be applied in
resolving the substantive issues of a conflicts problem.71 Necessarily,
as the only issue in this case is that of jurisdiction, choice-of-law rules
are not only inapplicable but also not yet called for.
Further, petitioners' premature invocation of choice-of-law rules is
exposed by the fact that they have not yet pointed out any conflict
between the laws of Japan and ours. Before determining which law
should apply, first there should exist a conflict of laws situation
requiring the application of the conflict of laws rules.72 Also, when the
law of a foreign country is invoked to provide the proper rules for the
solution of a case, the existence of such law must be pleaded and
proved.73
It should be noted that when a conflicts case, one involving a foreign
element, is brought before a court or administrative agency, there are
three alternatives open to the latter in disposing of it: (1) dismiss the
case, either because of lack of jurisdiction or refusal to assume
jurisdiction over the case; (2) assume jurisdiction over the case and
apply the internal law of the forum; or (3) assume jurisdiction over the
case and take into account or apply the law of some other State or
States.74 The court's power to hear cases and controversies is derived
from the Constitution and the laws. While it may choose to recognize
laws of foreign nations, the court is not limited by foreign sovereign law
short of treaties or other formal agreements, even in matters regarding
rights provided by foreign sovereigns.75
Neither can the other ground raised, forum non conveniens,76 be used
to deprive the trial court of its jurisdiction herein. First, it is not a proper
basis for a motion to dismiss because Section 1, Rule 16 of the Rules
of Court does not include it as a ground.77 Second, whether a suit
should be entertained or dismissed on the basis of the said doctrine
depends largely upon the facts of the particular case and is addressed

to the sound discretion of the trial court.78 In this case, the RTC
decided to assume jurisdiction. Third, the propriety of dismissing a
case based on this principle requires a factual determination; hence,
this conflicts principle is more properly considered a matter of defense.
79

Accordingly, since the RTC is vested by law with the power to entertain
and hear the civil case filed by respondent and the grounds raised by
petitioners to assail that jurisdiction are inappropriate, the trial and
appellate courts correctly denied the petitioners' motion to dismiss.
WHEREFORE, premises considered, the Petition for Review on
Certiorari is DENIED.
SO ORDERED.

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FIGUEROA v. PEOPLE [G.R. NO. 147406 : July 14, 2008]
When is a litigant estopped by laches from assailing the jurisdiction of
a tribunal? This is the paramount issue raised in this Petition for
Review of the February 28, 2001 Decision2 of the Court of Appeals
(CA) in CA-G.R. CR No. 22697.
Pertinent are the following antecedent facts and proceedings:
On July 8, 1994, an information3 for reckless imprudence resulting in
homicide was filed against the petitioner before the Regional Trial
Court (RTC) of Bulacan, Branch 18.4 The case was docketed as
Criminal Case No. 2235-M-94.5 Trial on the merits ensued and on
August 19, 1998, the trial court convicted the petitioner as charged.6 In
his appeal before the CA, the petitioner questioned, among others, for
the first time, the trial court's jurisdiction.7
The appellate court, however, in the challenged decision, considered
the petitioner to have actively participated in the trial and to have

belatedly attacked the jurisdiction of the RTC; thus, he was already

estopped by laches from asserting the trial court's lack of jurisdiction.
Finding no other ground to reverse the trial court's decision, the CA
affirmed the petitioner's conviction but modified the penalty imposed
and the damages awarded.8
Dissatisfied, the petitioner filed the instant Petition for Review on
Certiorari raising the following issues for our resolution:
A. Does the fact that the petitioner failed to raise the issue of
jurisdiction during the trial of this case, which was initiated and filed by
the public prosecutor before the wrong court, constitute laches in
relation to the doctrine laid down in Tijam v. Sibonghanoy,
notwithstanding the fact that said issue was immediately raised in
petitioner's appeal to the Honorable Court of Appeals? Conversely,
does the active participation of the petitioner in the trial of his case,
which is initiated and filed not by him but by the public prosecutor,
amount to estoppel?cralawred
b. Does the admission of the petitioner that it is difficult to immediately
stop a bus while it is running at 40 kilometers per hour for the purpose
of avoiding a person who unexpectedly crossed the road, constitute
enough incriminating evidence to warrant his conviction for the crime
charged?cralawred
c. Is the Honorable Court of Appeals justified in considering the place
of accident as falling within Item 4 of Section 35 (b) of the Land
Transportation and Traffic Code, and subsequently ruling that the
speed limit thereto is only 20 kilometers per hour, when no evidence
whatsoever to that effect was ever presented by the prosecution during
the trial of this case?cralawred
d. Is the Honorable Court of Appeals justified in convicting the
petitioner for homicide through reckless imprudence (the legally correct
designation is "reckless imprudence resulting to homicide") with
violation of the Land Transportation and Traffic Code when the
prosecution did not prove this during the trial and, more importantly,

the information filed against the petitioner does not contain an

allegation to that effect?cralawred
e. Does the uncontroverted testimony of the defense witness Leonardo
Hernal that the victim unexpectedly crossed the road resulting in him
getting hit by the bus driven by the petitioner not enough evidence to
acquit him of the crime charged?9
Applied uniformly is the familiar rule that the jurisdiction of the court to
hear and decide a case is conferred by the law in force at the time of
the institution of the action, unless such statute provides for a
retroactive application thereof.10 In this case, at the time the criminal
information for reckless imprudence resulting in homicide with violation
of the Automobile Law (now Land Transportation and Traffic Code) was
filed, Section 32(2) of Batas Pambansa (B.P.) Blg. 12911 had already
been amended by Republic Act No. 7691.12 The said provision thus
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 Courts
and the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts shall exercise:
xxx
(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 offenses 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.
As the imposable penalty for the crime charged herein is prision
correccional in its medium and maximum periods or imprisonment for 2
years, 4 months and 1 day to 6 years,13 jurisdiction to hear and try the

same is conferred on the Municipal Trial Courts (MTCs). Clearly,

therefore, the RTC of Bulacan does not have jurisdiction over Criminal
Case No. 2235-M-94.
While both the appellate court and the Solicitor General acknowledge
this fact, they nevertheless are of the position that the principle of
estoppel by laches has already precluded the petitioner from
questioning the jurisdiction of the RTC the trial went on for 4 years with
the petitioner actively participating therein and without him ever raising
the jurisdictional infirmity. The petitioner, for his part, counters that the
lack of jurisdiction of a court over the subject matter may be raised at
any time even for the first time on appeal. As undue delay is further
absent herein, the principle of laches will not be applicable.
To settle once and for all this problem of jurisdiction vis - -vis estoppel
by laches, which continuously confounds the bench and the bar, we
shall analyze the various Court decisions on the matter.
As early as 1901, this Court has declared that unless jurisdiction has
been conferred by some legislative act, no court or tribunal can act on
a matter submitted to it.14 We went on to state in U.S. v. De La Santa15
that:
It has been frequently held that a lack of jurisdiction over the subjectmatter is fatal, and subject to objection at any stage of the
proceedings, either in the court below or on appeal (Ency. of Pl. & Pr.,
vol. 12, p. 189, and large array of cases there cited), and indeed,
where the subject-matter is not within the jurisdiction, the court may
dismiss the proceeding ex mero motu. (4 Ill., 133; 190 Ind., 79;
Chipman v. Waterbury, 59 Conn., 496.)

4. The operation of the principle of estoppel on the question of

jurisdiction seemingly depends upon whether the lower court actually
had jurisdiction or not. If it had no jurisdiction, but the case was tried
and decided upon the theory that it had jurisdiction, the parties are not
barred, on appeal, from assailing such jurisdiction, for the same "must
exist as a matter of law, and may not be conferred by consent of the
parties or by estoppel" (5 C.J.S., 861-863). However, if the lower court
had jurisdiction, and the case was heard and decided upon a given
theory, such, for instance, as that the court had no jurisdiction, the
party who induced it to adopt such theory will not be permitted, on
appeal, to assume an inconsistent position that the lower court had
jurisdiction. Here, the principle of estoppel applies. The rule that
jurisdiction is conferred by law, and does not depend upon the will of
the parties, has no bearing thereon. Thus, Corpus Juris Secundum
says:
Where accused has secured a decision that the indictment is void, or
has been granted an instruction based on its defective character
directing the jury to acquit, he is estopped, when subsequently
indicted, to assert that the former indictment was valid. In such case,
there may be a new prosecution whether the indictment in the former
prosecution was good or bad. Similarly, where, after the jury was
impaneled and sworn, the court on accused's motion quashed the
information on the erroneous assumption that the court had no
jurisdiction, accused cannot successfully plead former jeopardy to a
new information. x x x (22 C.J.S., sec. 252, pp. 388-389; italics ours.)
Where accused procured a prior conviction to be set aside on the
ground that the court was without jurisdiction, he is estopped
subsequently to assert, in support of a defense of previous jeopardy,
that such court had jurisdiction." (22 C.J.S. p. 378.)18

Jurisdiction over the subject-matter in a judicial proceeding is conferred

by the sovereign authority which organizes the court; it is given only by
law and in the manner prescribed by law and an objection based on
the lack of such jurisdiction can not be waived by the parties. x x x16

But in Pindagan Agricultural Co., Inc. v. Dans,19 the Court, in not

sustaining the plea of lack of jurisdiction by the plaintiff-appellee
therein, made the following observations:

Later, in People v. Casiano,17 the Court explained:

It is surprising why it is only now, after the decision has been rendered,
that the plaintiff-appellee presents the question of this Court's

jurisdiction over the case. Republic Act No. 2613 was enacted on
August 1, 1959. This case was argued on January 29, 1960.
Notwithstanding this fact, the jurisdiction of this Court was never
impugned until the adverse decision of this Court was handed down.
The conduct of counsel leads us to believe that they must have always
been of the belief that notwithstanding said enactment of Republic Act
2613 this Court has jurisdiction of the case, such conduct being born
out of a conviction that the actual real value of the properties in
question actually exceeds the jurisdictional amount of this Court (over
P200,000). Our minute resolution in G.R. No. L-10096, Hyson Tan, et
al. v. Filipinas Compaa de Seguros, et al., of March 23, 1956, a
parallel case, is applicable to the conduct of plaintiff-appellee in this
case, thus:
x x x that an appellant who files his brief and submits his case to the
Court of Appeals for decision, without questioning the latter's
jurisdiction until decision is rendered therein, should be considered as
having voluntarily waived so much of his claim as would exceed the
jurisdiction of said Appellate Court; for the reason that a contrary rule
would encourage the undesirable practice of appellants submitting
their cases for decision to the Court of Appeals in expectation of
favorable judgment, but with intent of attacking its jurisdiction should
the decision be unfavorable: x x x20
Then came our ruling in Tijam v. Sibonghanoy21 that a party may be
barred by laches from invoking lack of jurisdiction at a late hour for the
purpose of annulling everything done in the case with the active
participation of said party invoking the plea. We expounded, thus:
A party may be estopped or barred from raising a question in different
ways and for different reasons. Thus, we speak of estoppel in pais, of
estoppel by deed or by record, and of estoppel by laches.
Laches, in a general sense, is failure or neglect, for an unreasonable
and unexplained length of time, to do that which, by exercising due
diligence, could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a

presumption that the party entitled to assert it either has abandoned it

or declined to assert it.
The doctrine of laches or of "stale demands" is based upon grounds of
public policy which requires, for the peace of society, the
discouragement of stale claims and, unlike the statute of limitations, is
not a mere question of time but is principally a question of the inequity
or unfairness of permitting a right or claim to be enforced or asserted.
It has been held that a party cannot invoke the jurisdiction of a court to
secure affirmative relief against his opponent and, after obtaining or
failing to obtain such relief, repudiate or question that same jurisdiction
(Dean v. Dean, 136 Or. 694, 86 A.L.R. 79). In the case just cited, by
way of explaining the rule, it was further said that the question whether
the court had jurisdiction either of the subject matter of the action or of
the parties was not important in such cases because the party is
barred from such conduct not because the judgment or order of the
court is valid and conclusive as an adjudication, but for the reason that
such a practice cannot be tolerated obviously for reasons of public
policy.
Furthermore, it has also been held that after voluntarily submitting a
cause and encountering an adverse decision on the merits, it is too
late for the loser to question the jurisdiction or power of the court
(Pease v. Rathbun-Jones etc., 243 U.S. 273, 61 L. Ed. 715, 37 S.Ct.
283; St. Louis etc. v. McBride, 141 U.S. 127, 35 L. Ed. 659). And in
Littleton v. Burgess, 16 Wyo. 58, the Court said that it is not right for a
party who has affirmed and invoked the jurisdiction of a court in a
particular matter to secure an affirmative relief, to afterwards deny that
same jurisdiction to escape a penalty.
Upon this same principle is what We said in the three cases mentioned
in the resolution of the Court of Appeals of May 20, 1963 (supra) to the
effect that we frown upon the "undesirable practice" of a party
submitting his case for decision and then accepting the judgment, only
if favorable, and attacking it for lack of jurisdiction, when adverse as
well as in Pindagan etc. v. Dans et al., G.R. L-14591, September 26,
1962; Montelibano et al. v. Bacolod-Murcia Milling Co., Inc., G.R.

L-15092; Young Men Labor Union etc. v. The Court of Industrial

Relations et al., G.R. L-20307, Feb. 26, 1965, and Mejia v. Lucas, 100
Phil. p. 277.
The facts of this case show that from the time the Surety became a
quasi-party on July 31, 1948, it could have raised the question of the
lack of jurisdiction of the Court of First Instance of Cebu to take
cognizance of the present action by reason of the sum of money
involved which, according to the law then in force, was within the
original exclusive jurisdiction of inferior courts. It failed to do so.
Instead, at several stages of the proceedings in the court a quo, as
well as in the Court of Appeals, it invoked the jurisdiction of said courts
to obtain affirmative relief and submitted its case for a final adjudication
on the merits. It was only after an adverse decision was rendered by
the Court of Appeals that it finally woke up to raise the question of
jurisdiction. Were we to sanction such conduct on its part, We would in
effect be declaring as useless all the proceedings had in the present
case since it was commenced on July 19, 1948 and compel the
judgment creditors to go up their Calvary once more. The inequity and
unfairness of this is not only patent but revolting.22
For quite a time since we made this pronouncement in Sibonghanoy,
courts and tribunals, in resolving issues that involve the belated
invocation of lack of jurisdiction, have applied the principle of estoppel
by laches. Thus, in Calimlim v. Ramirez,23 we pointed out that
Sibonghanoy was developing into a general rule rather than the
exception:
A rule that had been settled by unquestioned acceptance and upheld
in decisions so numerous to cite is that the jurisdiction of a court over
the subject-matter of the action is a matter of law and may not be
conferred by consent or agreement of the parties. The lack of
jurisdiction of a court may be raised at any stage of the proceedings,
even on appeal. This doctrine has been qualified by recent
pronouncements which stemmed principally from the ruling in the cited
case of Sibonghanoy. It is to be regretted, however, that the holding in
said case had been applied to situations which were obviously not
contemplated therein. The exceptional circumstance involved in
Sibonghanoy which justified the departure from the accepted concept

of non-waivability of objection to jurisdiction has been ignored and,

instead a blanket doctrine had been repeatedly upheld that rendered
the supposed ruling in Sibonghanoy not as the exception, but rather
the general rule, virtually overthrowing altogether the time-honored
principle that the issue of jurisdiction is not lost by waiver or by
estoppel.
In Sibonghanoy, the defense of lack of jurisdiction of the court that
rendered the questioned ruling was held to be barred by estoppel by
laches. It was ruled that the lack of jurisdiction having been raised for
the first time in a motion to dismiss filed almost fifteen (15) years after
the questioned ruling had been rendered, such a plea may no longer
be raised for being barred by laches. As defined in said case, laches is
"failure or neglect, for an unreasonable and unexplained length of time,
to do that which, by exercising due diligence, could or should have
been done earlier; it is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to
assert has abandoned it or declined to assert it.24
In Calimlim, despite the fact that the one who benefited from the plea
of lack of jurisdiction was the one who invoked the court's jurisdiction,
and who later obtained an adverse judgment therein, we refused to
apply the ruling in Sibonghanoy. The Court accorded supremacy to the
time-honored principle that the issue of jurisdiction is not lost by waiver
or by estoppel.
Yet, in subsequent cases decided after Calimlim, which by sheer
volume are too plentiful to mention, the Sibonghanoy doctrine, as
foretold in Calimlim, became the rule rather than the exception. As
such, in Soliven v. Fastforms Philippines, Inc.,25 the Court ruled:
While it is true that jurisdiction may be raised at any time, "this rule
presupposes that estoppel has not supervened." In the instant case,
respondent actively participated in all stages of the proceedings before
the trial court and invoked its authority by asking for an affirmative
relief. Clearly, respondent is estopped from challenging the trial court's
jurisdiction, especially when an adverse judgment has been rendered.

In PNOC Shipping and Transport Corporation v. Court of Appeals, we

held:
Moreover, we note that petitioner did not question at all the jurisdiction
of the lower court x x x in its answers to both the amended complaint
and the second amended complaint. It did so only in its motion for
reconsideration of the decision of the lower court after it had received
an adverse decision. As this Court held in Pantranco North Express,
Inc. v. Court of Appeals (G.R. No. 105180, July 5, 1993, 224 SCRA
477, 491), participation in all stages of the case before the trial court,
that included invoking its authority in asking for affirmative relief,
effectively barred petitioner by estoppel from challenging the court's
jurisdiction. Notably, from the time it filed its answer to the second
amended complaint on April 16, 1985, petitioner did not question the
lower court's jurisdiction. It was only on December 29, 1989 when it
filed its motion for reconsideration of the lower court's decision that
petitioner raised the question of the lower court's lack of jurisdiction.
Petitioner thus foreclosed its right to raise the issue of jurisdiction by its
own inaction. (italics ours)
Similarly, in the subsequent case of Sta. Lucia Realty and
Development, Inc. v. Cabrigas, we ruled:
In the case at bar, it was found by the trial court in its 30 September
1996 decision in LCR Case No. Q-60161(93) that private respondents
(who filed the petition for reconstitution of titles) failed to comply with
both sections 12 and 13 of RA 26 and therefore, it had no jurisdiction
over the subject matter of the case. However, private respondents
never questioned the trial court's jurisdiction over its petition for
reconstitution throughout the duration of LCR Case No. Q-60161(93).
On the contrary, private respondents actively participated in the
reconstitution proceedings by filing pleadings and presenting its
evidence. They invoked the trial court's jurisdiction in order to obtain
affirmative relief - the reconstitution of their titles. Private respondents
have thus foreclosed their right to raise the issue of jurisdiction by their
own actions.

The Court has constantly upheld the doctrine that while jurisdiction
may be assailed at any stage, a litigant's participation in all stages of
the case before the trial court, including the invocation of its authority in
asking for affirmative relief, bars such party from challenging the
court's jurisdiction (PNOC Shipping and Transport Corporation v. Court
of Appeals, 297 SCRA 402 [1998]). A party cannot invoke the
jurisdiction of a court to secure affirmative relief against his opponent
and after obtaining or failing to obtain such relief, repudiate or question
that same jurisdiction (Asset Privatization Trust v. Court of Appeals,
300 SCRA 579 [1998]; Province of Bulacan v. Court of Appeals, 299
SCRA 442 [1998]). The Court frowns upon the undesirable practice of
a party participating in the proceedings and submitting his case for
decision and then accepting judgment, only if favorable, and attacking
it for lack of jurisdiction, when adverse (Producers Bank of the
Philippines v. NLRC, 298 SCRA 517 [1998], citing Ilocos Sur Electric
Cooperative, Inc. v. NLRC, 241 SCRA 36 [1995]). (italics ours)26
Noteworthy, however, is that, in the 2005 case of Metromedia Times
Corporation v. Pastorin,27 where the issue of lack of jurisdiction was
raised only in the National Labor Relations Commission (NLRC) on
appeal, we stated, after examining the doctrines of jurisdiction vis - vis estoppel, that the ruling in Sibonghanoy stands as an exception,
rather than the general rule. Metromedia, thus, was not estopped from
assailing the jurisdiction of the labor arbiter before the NLRC on
appeal.28 chanrobles virtual law library
Later, in Francel Realty Corporation v. Sycip,29 the Court clarified that:
Petitioner argues that the CA's affirmation of the trial court's dismissal
of its case was erroneous, considering that a full-blown trial had
already been conducted. In effect, it contends that lack of jurisdiction
could no longer be used as a ground for dismissal after trial had
ensued and ended.
The above argument is anchored on estoppel by laches, which has
been used quite successfully in a number of cases to thwart dismissals
based on lack of jurisdiction. Tijam v. Sibonghanoy, in which this
doctrine was espoused, held that a party may be barred from

questioning a court's jurisdiction after being invoked to secure

affirmative relief against its opponent. In fine, laches prevents the issue
of lack of jurisdiction from being raised for the first time on appeal by a
litigant whose purpose is to annul everything done in a trial in which it
has actively participated.
Laches is defined as the "failure or neglect for an unreasonable and
unexplained length of time, to do that which, by exercising due
diligence, could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned it
or declined to assert it."
The ruling in Sibonghanoy on the matter of jurisdiction is, however, the
exception rather than the rule.chanrobles virtual law library Estoppel by
laches may be invoked to bar the issue of lack of jurisdiction only in
cases in which the factual milieu is analogous to that in the cited case.
In such controversies, laches should be clearly present; that is, lack of
jurisdiction must have been raised so belatedly as to warrant the
presumption that the party entitled to assert it had abandoned or
declined to assert it. That Sibonghanoy applies only to exceptional
circumstances is clarified in Calimlim v. Ramirez, which we quote:
A rule that had been settled by unquestioned acceptance and upheld
in decisions so numerous to cite is that the jurisdiction of a court over
the subject-matter of the action is a matter of law and may not be
conferred by consent or agreement of the parties. The lack of
jurisdiction of a court may be raised at any stage of the proceedings,
even on appeal. This doctrine has been qualified by recent
pronouncements which stemmed principally from the ruling in the cited
case of Sibonghanoy. It is to be regretted, however, that the holding in
said case had been applied to situations which were obviously not
contemplated therein. The exceptional circumstance involved in
Sibonghanoy which justified the departure from the accepted concept
of non-waivability of objection to jurisdiction has been ignored and,
instead a blanket doctrine had been repeatedly upheld that rendered
the supposed ruling in Sibonghanoy not as the exception, but rather
the general rule, virtually overthrowing altogether the time-honored

principle that the issue of jurisdiction is not lost by waiver or by

estoppel.
Indeed, the general rule remains: a court's lack of jurisdiction may be
raised at any stage of the proceedings, even on appeal. The reason is
that jurisdiction is conferred by law, and lack of it affects the very
authority of the court to take cognizance of and to render judgment on
the action. Moreover, jurisdiction is determined by the averments of the
complaint, not by the defenses contained in the answer.30
Also, in Mangaliag v. Catubig-Pastoral,31 even if the pleader of lack of
jurisdiction actively took part in the trial proceedings by presenting a
witness to seek exoneration, the Court, reiterating the doctrine in
Calimlim, said:
Private respondent argues that the defense of lack of jurisdiction may
be waived by estoppel through active participation in the trial. Such,
however, is not the general rule but an exception, best characterized
by the peculiar circumstances in Tijam v. Sibonghanoy. In
Sibonghanoy, the party invoking lack of jurisdiction did so only after
fifteen years and at a stage when the proceedings had already been
elevated to the CA. Sibonghanoy is an exceptional case because of
the presence of laches, which was defined therein as failure or neglect
for an unreasonable and unexplained length of time to do that which,
by exercising due diligence, could or should have been done earlier; it
is the negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert has
abandoned it or declined to assert it.32
And in the more recent Regalado v. Go,33 the Court again emphasized
that laches should be clearly present for the Sibonghanoy doctrine to
be applicable, thus:
Laches is defined as the "failure or neglect for an unreasonable and
unexplained length of time, to do that which, by exercising due
diligence, could or should have been done earlier, it is negligence or
omission to assert a right within a reasonable length of time,

warranting a presumption that the party entitled to assert it either has

abandoned it or declined to assert it."
The ruling in People v. Regalario that was based on the landmark
doctrine enunciated in Tijam v. Sibonghanoy on the matter of
jurisdiction by estoppel is the exception rather than the rule. Estoppel
by laches may be invoked to bar the issue of lack of jurisdiction only in
cases in which the factual milieu is analogous to that in the cited case.
In such controversies, laches should have been clearly present; that is,
lack of jurisdiction must have been raised so belatedly as to warrant
the presumption that the party entitled to assert it had abandoned or
declined to assert it.
In Sibonghanoy, the defense of lack of jurisdiction was raised for the
first time in a motion to dismiss filed by the Surety almost 15 years
after the questioned ruling had been rendered. At several stages of the
proceedings, in the court a quo as well as in the Court of Appeals, the
Surety invoked the jurisdiction of the said courts to obtain affirmative
relief and submitted its case for final adjudication on the merits. It was
only when the adverse decision was rendered by the Court of Appeals
that it finally woke up to raise the question of jurisdiction.
Clearly, the factual settings attendant in Sibonghanoy are not present
in the case at bar. Petitioner Atty. Regalado, after the receipt of the
Court of Appeals resolution finding her guilty of contempt, promptly
filed a Motion for Reconsideration assailing the said court's jurisdiction
based on procedural infirmity in initiating the action. Her compliance
with the appellate court's directive to show cause why she should not
be cited for contempt and filing a single piece of pleading to that effect
could not be considered as an active participation in the judicial
proceedings so as to take the case within the milieu of Sibonghanoy.
Rather, it is the natural fear to disobey the mandate of the court that
could lead to dire consequences that impelled her to comply.34
The Court, thus, wavered on when to apply the exceptional
circumstance in Sibonghanoy and on when to apply the general rule
enunciated as early as in De La Santa and expounded at length in
Calimlim. The general rule should, however, be, as it has always been,

that the issue of jurisdiction may be raised at any stage of the

proceedings, even on appeal, and is not lost by waiver or by estoppel.
Estoppel by laches, to bar a litigant from asserting the court's absence
or lack of jurisdiction, only supervenes in exceptional cases similar to
the factual milieu of Tijam v. Sibonghanoy. Indeed, the fact that a
person attempts to invoke unauthorized jurisdiction of a court does not
estop him from thereafter challenging its jurisdiction over the subject
matter, since such jurisdiction must arise by law and not by mere
consent of the parties. This is especially true where the person seeking
to invoke unauthorized jurisdiction of the court does not thereby secure
any advantage or the adverse party does not suffer any harm.35
Applying the said doctrine to the instant case, the petitioner is in no
way estopped by laches in assailing the jurisdiction of the RTC,
considering that he raised the lack thereof in his appeal before the
appellate court. At that time, no considerable period had yet elapsed
for laches to attach. True, delay alone, though unreasonable, will not
sustain the defense of "estoppel by laches" unless it further appears
that the party, knowing his rights, has not sought to enforce them until
the condition of the party pleading laches has in good faith become so
changed that he cannot be restored to his former state, if the rights be
then enforced, due to loss of evidence, change of title, intervention of
equities, and other causes.36 In applying the principle of estoppel by
laches in the exceptional case of Sibonghanoy, the Court therein
considered the patent and revolting inequity and unfairness of having
the judgment creditors go up their Calvary once more after more or
less 15 years.37 The same, however, does not obtain in the instant
case.
We note at this point that estoppel, being in the nature of a forfeiture, is
not favored by law. It is to be applied rarely only from necessity, and
only in extraordinary circumstances. The doctrine must be applied with
great care and the equity must be strong in its favor.38 When
misapplied, the doctrine of estoppel may be a most effective weapon
for the accomplishment of injustice.39 Moreover, a judgment rendered
without jurisdiction over the subject matter is void.40 Hence, the
Revised Rules of Court provides for remedies in attacking judgments
rendered by courts or tribunals that have no jurisdiction over the
concerned cases. No laches will even attach when the judgment is null

and void for want of jurisdiction.41 As we have stated in Heirs of Julian

Dela Cruz and Leonora Talaro v. Heirs of Alberto Cruz,42

RUBY SHELTER v. HON. PABLO C. FORMARAN [G.R. NO.

175914 : February 10, 2009]

It is axiomatic that the jurisdiction of a tribunal, including a quasijudicial officer or government agency, over the nature and subject
matter of a petition or complaint is determined by the material
allegations therein and the character of the relief prayed for,
irrespective of whether the petitioner or complainant is entitled to any
or all such reliefs. Jurisdiction over the nature and subject matter of an
action is conferred by the Constitution and the law, and not by the
consent or waiver of the parties where the court otherwise would have
no jurisdiction over the nature or subject matter of the action. Nor can it
be acquired through, or waived by, any act or omission of the parties.
Moreover, estoppel does not apply to confer jurisdiction to a tribunal
that has none over the cause of action. x x x

Before this Court is a Petition for Review on Certiorari under Rule 45 of

the Rules of Court seeking the reversal of the Decision1 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.

Indeed, the jurisdiction of the court or tribunal is not affected by the

defenses or theories set up by the defendant or respondent in his
answer or motion to dismiss. Jurisdiction should be determined by
considering not only the status or the relationship of the parties but
also the nature of the issues or questions that is the subject of the
controversy. x x x x The proceedings before a court or tribunal without
jurisdiction, including its decision, are null and void, hence, susceptible
to direct and collateral attacks.43
With the above considerations, we find it unnecessary to resolve the
other issues raised in the petition.
WHEREFORE, premises considered, the Petition for Review on
Certiorari is GRANTED. Criminal Case No. 2235-M-94 is hereby
DISMISSED without prejudice.
SO ORDERED.

The present Petition arose from the following facts:

Petitioner obtained a loan3 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.
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:

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

TCT No.
Purchase Price
38376
29918
38374
39232

39225
P 1,600,000.00
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:

P 25,328,939.00
P 35,660,800.00
P 28,477,600.00
P 6,233,381.00

TCT No.
Redemption Price
38376
29918
38374
39232

39225
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 said
property shall be nullified and have no force and effect; and
respondents Tan and Obiedo shall then return the owner's 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 attorney's 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 latter's
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
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, petitioner's 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 72-hour
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 [petitioner's] certificates of title to
the mortgaged properties cancelled and changed/registered in
[respondents] Tan's and Obiedo's 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; andcralawlibrary
(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 least P300,000.00; attorney's 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. Sia's 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. 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 attorney's 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

computed based on the provision of Section 7(A) herein-above, in part,

quoted.

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.

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

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 Tan's 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

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:

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 petitioner's 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 v.
Vestil, 304 SCRA 738.
x x x
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 CAG.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:
Clearly, the petitioner's 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.rbl rl l lbrr
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, 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.
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
petitioner's Complaint in Civil Case No. 2006-0030, 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. 04-2-04-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 ATTORNEY'S 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.32
However, 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 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 petitioner's own admission, to
demolish the improvements thereon.
It is, thus, suspect that petitioner kept mum about the afore-mentioned
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.rbl rl l lbrr
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 Manalo's 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 NTA's 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 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. v. 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 Court's 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 attorney's 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 Delica's complaint for the following
reasons:
A careful examination of respondent's complaint is that it is a real
action. In Paderanga v. 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, respondent's complaint is a real action involving not only
the recovery of real properties, but likewise the cancellation of the titles
thereto.
Considering that respondent's 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 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, respondent's
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; andcralawlibrary
3. Ordering defendants (petitioners) to pay plaintiffs (private
respondents) attorney's fees in the amount of P100,000.00.41
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 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. 2006-0030.
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.

!
CHAVEZ v. COURT OF APPEALS [G.R. No. 125813 February 6,
2007]
An Information for Libel dated 26 June 1995 was filed before the
Regional Trial Court (RTC) of Manila against private respondents
Rafael Baskinas and Ricardo Manapat, with petitioner Francisco
Chavez as the complainant. The Information reads in part:
"That on or about March 1995, in the City of Manila, Philippines, the
said accused [Baskinas and Manapat] conspiring and confederating
with others whose true names, real identities and present whereabouts
are still unknown and helping one another, with malicious intent of
impeaching the honesty, virtue, character and reputation of one
FRANCISCO I. CHAVEZ, former Solicitor General of the Philippines,
and with the evident purpose of injuring and exposing him to public

ridicule, hatred and contempt, did then and there willfully, unlawfully
and maliciously cause to be published in "Smart File," a magazine of
general circulation in Manila, and in their respective capacity as Editorin-Chief and Author-Reporter, the following, to wit:
xxxx
with which published articles, the said accused meant and intended to
convey, as in fact they did mean and convey false and malicious
imputations of a defect, vice and crime, which insinuations and
imputations as the accused well knew are entirely false and untrue and
without the foundation in fact whatsoever, and tend to impeach,
besmirch and destroy the good name, character and reputation of said
FRANCISCO I. CHAVEZ, as in fact, he was exposed to dishonor,
discredit, public hatred, contempt and ridicule.
CONTRARY TO LAW.1
Private respondents moved to quash the Information, as well as the
corresponding warrants of arrest subsequently issued. However, these
motions were denied by the RTC of Manila, Branch 16, in an Order
dated 31 August 1995.2 Private respondents then filed a Petition for
Certiorari with the Court of Appeals, assailing the 31 August 1995
Order. The petition was granted in a Decision dated 21 December
1995, hence the present petition.
The crux of the matter revolves around whether the above-quoted
Information is sufficient to sustain a charge for libel, considering the
following requirement imposed by Article 360 of the Revised Penal
Code, as amended by Rep. Act No. 4363:
Article 360. Persons responsible.Any person who shall publish,
exhibit or cause the publication or exhibition of any defamation in
writing or by similar means, shall be responsible for the same.
The author or editor of a book or pamphlet, or the editor or business
manager of a daily newspaper, magazine or serial publication, shall be

responsible for the defamations contained therein to the same extent

as if he were the author thereof.
The criminal action and civil action for damages in cases of written
defamations, as provided for in this chapter shall be filed
simultaneously or separately with the court of first instance of the
province or city where the libelous article is printed and first
published or where any of the offended parties actually resides at the
time of the commission of the offense: Provided, however, That where
one of the offended parties is a public officer whose office is in the City
of Manila at the time of the commission of the offense, the action shall
be filed in the Court of First Instance of the City of Manila or of the city
or province where the libelous article is printed and first published, and
in case such public officer does not hold office in the City of Manila, the
action shall be filed in the Court of First Instance of the province or city
where he held office at the time of the commission of the offense or
where the libelous article is printed and first published and in case one
of the offended parties is a private individual, the action shall be filed in
the Court of First Instance of the province or city where he actually
resides at the time of the commission of the offense or where the
libelous matter is printed and first published x x x. (Emphasis supplied.)
Referring to the fact that the Information against private respondents
states that the libelous matter was "caused to be published in Smart
File, a magazine of general circulation in Manila," the Court of Appeals
deemed the cases of Agbayani v. Sayo3 and Soriano v. IAC4 as
controlling. Based on the doctrines pronounced in said cases, the
appellate court held that the Information failed to allege where the
written defamation was "printed and first published," an allegation sine
qua non "if the circumstances as to where the libel was printed and
first published is used as the basis of the venue of the publication."5 It
was observed that "venue of libel cases where the complainant is a
private person is either in any of only two places, namely: (1) where
the subject article was printed and first published; and (2) where
complainant of the commission actually resides at the time of the
commission of the offense." The Information, it was noted, did not
indicate that the libelous articles were printed or first published in
Manila, or that petitioner resided in Manila at the time of the publication
of the articles.

The Court of Appeals further observed that even during the preliminary
investigation, private respondents had already interposed that Smart
File was actually printed and first published in the City of Makati, and
that the address of the publisher Animal Farms Publication as indicated
in the editorial page of the publication itself was a post office box with
the Makati Central Post Office. Even as this observation was disputed
by petitioner, who insisted the place of private respondents printing
and publishing business was actually in Manila, the Court of Appeals
noted that he should have been alerted enough by private
respondents' adverse insistence and that a due investigation would
have inevitably revealed that private respondents had transferred from
their previous Manila address to Makati by the time the subject articles
were published.6
Before this Court, petitioner attacks the reliance placed on Agbayani
and Soriano, primarily by pointing out that in both cases, the
complainants were public officers, and not private officials. Petitioner
submits that the 1965 amendments to Article 360 of the Revised Penal
Code which imposed the present venue requisites were introduced in
order to preclude the harassment of members of the press through
libel suits filed in remote and distant places by public officers.
Petitioner also assails the conclusion of the Court of Appeals that the
place of printing and first publication of Smart File was in Makati,
saying that this was derived out of hearsay evidence.
Does the subject information sufficiently vest jurisdiction in the Manila
trial courts to hear the libel charge, in consonance with Article 360 of
the Revised Penal Code? Jurisprudence applying the provision has
established that it does not.
Agbayani supplies a comprehensive restatement of the rules of venue
in actions for criminal libel, following the amendment by Rep. Act No.
4363 of the Revised Penal Code:
Article 360 in its original form provided that the venue of the criminal
and civil actions for written defamations is the province wherein the
libel was published, displayed or exhibited, regardless of the place
where the same was written, printed or composed. Article 360

originally did not specify the public officers and the courts that may
conduct the preliminary investigation of complaints for libel.
Before article 360 was amended, the rule was that a criminal action for
libel may be instituted in any jurisdiction where the libelous article was
published or circulated, irrespective of where it was written or printed
(People v. Borja, 43 Phil. 618). Under that rule, the criminal action is
transitory and the injured party has a choice of venue.
Experience had shown that under that old rule the offended party could
harass the accused in a libel case by laying the venue of the criminal
action in a remote or distant place.
Thus, in connection with an article published in the Daily Mirror and the
Philippine Free Press, Pio Pedrosa, Manuel V. Villareal and Joaquin
Roces were charged with libel in the justice of the peace court of San
Fabian, Pangasinan (Amansec v. De Guzman, 93 Phil. 933).
To forestall such harassment, Republic Act No. 4363 was enacted. It
lays down specific rules as to the venue of the criminal action so as to
prevent the offended party in written defamation cases from
inconveniencing the accused by means of out-of-town libel suits,
meaning complaints filed in remote municipal courts (Explanatory Note
for the bill which became Republic Act No. 4363, Congressional
Record of May 20, 1965, pp. 424-5; Time, Inc. v. Reyes, L-28882, May
31, 1971, 39 SCRA 303, 311).
The rules on venue in article 360 may be restated thus:
1. Whether the offended party is a public official or a private
person, the criminal action may be filed in the Court of First
Instance of the province or city where the libelous article is
printed and first published.
2. If the offended party is a private individual, the criminal action may
also be filed in the Court of First Instance of the province where he
actually resided at the time of the commission of the offense.

3. If the offended party is a public officer whose office is in Manila at

the time of the commission of the offense, the action may be filed in
the Court of First Instance of Manila.
4. If the offended party is a public officer holding office outside of
Manila, the action may be filed in the Court of First Instance of the
province or city where he held office at the time of the commission of
the offense.7 (Emphasis supplied.)
The rules, as restated in Agbayani, do not lay a distinction that only
those actions for criminal libel lodged by public officers need be filed in
the place of printing and first publication. In fact, the rule is quite clear
that such place of printing and first publication stands as one of only
two venues where a private person may file the complaint for libel, the
other venue being the place of residence of the offended party at the
time the offense was committed. The very language itself of Article
360, as amended, does not support petitioner's thesis that where the
complainant is a private person, a more liberal interpretation of the
phrase "printed and first published" is warranted than when a public
officer is the offended party. To wit:
Article 360. Persons responsible.x x x The criminal and civil action
for damages in cases of written defamations as provided for in this
chapter, shall be filed simultaneously or separately with the Court of
First Instance of the province or city where the libelous article is printed
and first published or where any of the offended parties actually
resides at the time of the commission of the offense. x x x
Where the law does not distinguish, we should not distinguish.8
Petitioner faults the Court of Appeals for relying on Agbayani and
Soriano, two cases wherein the complainant was a public officer. Yet
the Court has since had the opportunity to reiterate the Agbayani
doctrine even in cases where the complainants were private persons.
Most telling of the recent precedents is Agustin v. Pamintuan,9 which
involved a criminal action for libel filed by a private person, the acting
general manager of the Baguio Country Club, with the RTC of Baguio
City. The relevant portion of the Information is quoted below:

That on or about the 17th day of March 2000, in the City of Baguio,
Philippines, and within the jurisdiction of this Honorable Court, the said
accused, with deliberate intent and malicious intent and evil motive of
attacking, injuring and impeaching the character, honesty, integrity,
virtue and reputation of one Anthony De Leon the acting general
manager of the Baguio Country Club, and as a private citizen of good
standing and reputation in the community and with malicious intent of
exposing the (sic) Anthony De Leon to public hatred, contempt,
ridicule, discredit and dishonor, without any justifiable motive, did then
and there willfully, maliciously and criminally prepare or cause to
prepare, write in his column "Cocktails" and publish in the Philippine
Daily Inquirer, a newspaper of general circulation in the City of
Baguio and in the entire Philippines x x x.10 (Emphasis supplied.)
The phrase "the Philippine Daily Inquirer, a newspaper of general
circulation in the City of Baguio and in the entire Philippines" bears
obvious similarity to the reference in the Information in this case to the
publication involved as "Smart File, a magazine of general circulation
in Manila," and both private complainants in Agustin and the case at
bar were private citizens at the time of the filing of the complaint. Yet
the Court in Agustin ruled that the failure to allege that Baguio was the
venue of printing and first publication, or that the complainant therein
was a resident of Baguio, constituted a substantial defect that could
not even be cured by mere amendment. The rules on venue as laid
down in Agbayani were restated in Agustin,11 retaining no distinction as
to venue whether the offended party is a public official or a private
person. In fact, the Court considered the phrase "a newspaper of
general circulation in the city of Baguio" as so utterly incapable of
establishing Baguio as venue that the bulk of the discussion instead
centered on whether the allegation that the complainant was the acting
general manager of the Baguio Country Club sufficiently established
that he was a resident of Baguio City. On that point, the Court ruled
that it did not.
In Macasaet v. People,12 the complainant was again a private person.13
The Information for libel against a gossip columnist and the editors of
the tabloid which published the column was filed with the RTC of
Quezon City, but it failed to state at all where the tabloid was printed
and first published, or where the complainant resided. Even as

evidence was presented during trial that complainant was a resident of

Quezon City, the Court ultimately held that the allegations contained in
the Information "[were] utterly insufficient to vest jurisdiction on the
RTC of Quezon City."14 Again, the rules laid down in Agbayani were
cited as controlling.15 The Court further held that the evidence
establishing the complainant's place of residence as Quezon City
could not cure the defect of the Information, noting that "it is settled
that jurisdiction of a court over a criminal case is determined by the
allegations of the complaint or information."16
Macasaet resolutely stated that since the place of printing and first
publication or the place of residence at the time are "matters deal[ing]
with the fundamental issue of the court's jurisdiction, Article 360 of the
Revised Penal Code, as amended, mandates that either one of these
statements must be alleged in the information itself and the absence of
both from the very face of the information renders the latter fatally
defective."17 We affirm that proposition, which is fatal to this petition.
There is no question that the Information fails to allege that the City of
Manila was the place where the offending articles were printed and first
published, or that petitioner was a resident of Manila at the time the
articles were published.
Petitioner does submit that there is no need to employ the clause
"printed and first published" in indicating where the crime of libel was
committed, as the term "publish" is "generic and within the general
context of the term 'print' in so far as the latter term is utilized to refer to
the physical act of producing the publication."18 Certainly, that
argument flies in the face of our holding in Agustin, which involved a
similarly worded Information, and which stands as a precedent we
have no inclination to disturb. Still, a perusal of the Information in this
case reveals that the word "published" is utilized in the precise context
of noting that the defendants "cause[d] to be published in 'Smart File',
a magazine of general circulation in Manila." The Information states
that the libelous articles were published in Smart File, and not that they
were published in Manila. The place "Manila" is in turn employed to
situate where Smart File was in general circulation, and not where the
libel was published or first printed. The fact that Smart File was in
general circulation in Manila does not necessarily establish that it was
published and first printed in Manila, in the same way that while

leading national dailies such as the Philippine Daily Inquirer or the

Philippine Star are in general circulation in Cebu, it does not mean that
these newspapers are published and first printed in Cebu.
Indeed, if we hold that the Information at hand sufficiently vests
jurisdiction in Manila courts since the publication is in general
circulation in Manila, there would be no impediment to the filing of the
libel action in other locations where Smart File is in general circulation.
Using the example of the Inquirer or the Star, the granting of this
petition would allow a resident of Aparri to file a criminal case for libel
against a reporter or editor in Jolo, simply because these newspapers
are in general circulation in Jolo. Such a consequence is precisely
what Rep. Act No. 4363 sought to avoid.
Our ruling in Banal III v. Panganiban19 might tend to support
petitioner's argument that the phrase "printed and first published" need
not be necessarily employed in the Information. The Information in that
case filed by private persons before the Makati City RTC read that the
libelous matter was found in a newspaper column "of the Philippine
Daily Inquirer which is published in English in the City of Makati, Metro
Manila, Philippines and of general circulation in the Philippines and
abroad x x x x."20 The Court did observe that this information was
"sufficient in form"21 as it clearly stated "that the newspaper is
published in Makati City but circulated throughout the country, which
allegation accordingly vests jurisdiction over the offense charged in the
RTC of Makati City."22 Yet even notwithstanding the fact that the
information in Banal III did not use the phrase "printed and first
published," it still categorically stated, at the very least, that the libelous
matter was "published in English in the City of Makati." In contrast,
what the Information at bar categorically states is that the libelous
matter was "published in Smart File," not "published in Manila."23 The
fact that the present Information further alleges that Smart File was "of
general circulation in Manila" does not necessarily mean that the
magazine was printed and first published in Manila. In any event, as
the language in the present information hews closer to that in Agustin
rather than Banal III, we find the former as the appropriate precedent
to apply in this case.

For us to grant the present petition, it would be necessary to abandon

the Agbayani rule providing that a private person must file the
complaint for libel either in the place of printing and first publication, or
at the complainant's place of residence. We would also have to
abandon the subsequent cases that reiterate this rule in Agbayani,
such as Soriano, Agustin, and Macasaet. There is no convincing
reason to resort to such a radical action. These limitations imposed on
libel actions filed by private persons are hardly onerous,
especially as they still allow such persons to file the civil or criminal
complaint in their respective places of residence, in which situation
there is no need to embark on a quest to determine with precision
where the libelous matter was printed and first published.1awphi1.net
If this disquisition impresses an unduly formalistic reading of the
Information at hand, it should be reiterated that the flaws in the
Information strike at the very heart of the jurisdiction of the Manila
RTC. It is settled that jurisdiction of a court over a criminal case is
determined by the allegations of the complaint or information,24 and the
offense must have been committed or any one of its essential
ingredients took place within the territorial jurisdiction of the court.25
Article 360 states, in as unequivocal a manner as possible, that the
criminal and civil action for libel shall be filed with the court of the
province or city "where the libelous article is printed and first published,
or where any of the offended parties actually resides at the time of the
commission of the offense." If the Information for libel does not
establish with particularity any of these two venue requirements, the
trial court would have no jurisdiction to hear the criminal case.
Another point bears to be added. We are unable to share petitioner's
insistence that since the protection of members of the mass media
from frivolous libel suits filed by public officers in far-flung
places appears to have been a motivating force behind the
amendments to Article 360, a more liberal interpretation of the
provision should obtain if the complainant is a private person. Without
the venue requirements under Article 360, a private person induced by
a motive to harass could, similarly as a public officer, coerce a
journalist to defend against a libel suit filed in the most remote of

places. While Rep. Act No. 4363 does attribute value to the right to
comment on the performance of public officials of their duties, it
actually extends its protection to the right of any person to free
expression, by assuring a reasonable venue requirement even if the
subject of comment is not a public officer. Libel stands as an exception
to one of the most cherished constitutional rights, that of free
expression. While libel laws ensure a modicum of responsibility in
one's own speech or expression, a prescribed legal standard that
conveniences the easy proliferation of libel suits fosters an atmosphere
that inhibits the right to speak freely. When such a prescribed standard
is submitted for affirmation before this Court, as is done in this petition,
it must receive the highest possible scrutiny, as it may interfere with the
most basic of democratic rights.
Finally, we decline to resolve the other issues raised in the petition, as
the Information by itself is defective on its face, for the reasons we
have stated, that there is no need to evaluate whether Smart File was
actually printed and first published in Manila or Makati City. The plain
fact is that the Information failed to make the sufficient allegation in that
regard, and even any ascertainment that the articles were printed and
first published in Manila does not cure the jurisdictional defect of the
Information.
WHEREFORE, the petition is DENIED.
SO ORDERED.

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SPRINGFIELD v. REGIONAL TRIAL COURT JUDGE [G.R. NO.

142628 : February 6, 2007
Before the Court is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court. The principal issue presented for resolution is
whether the Regional Trial Court (RTC) has jurisdiction to annul final
judgment of the Department of Agrarian Reform Adjudication Board
(DARAB).
The antecedent facts:
Petra Capistrano Piit previously owned Lot No. 2291 located in
Cagayan de Oro City which measured 123,408 square meters under
Transfer Certificate of Title No. T-62623. Springfield Development
Corporation, Inc. (Springfield) bought Lot No. 2291-C with an area of
68,732 square meters, and Lot No. 2291-D with an area of 49,778
square meters.1 Springfield developed these properties into a
subdivision project called Mega Heights Subdivision.2
On May 4, 1990, the Department of Agrarian Reform (DAR), through
its Municipal Agrarian Reform Officer, issued a Notice of Coverage,3
placing the property under the coverage of Republic Act (R.A.) No.
6657 or the Comprehensive Agrarian Reform Law of 1988. There
being an opposition from the heirs of Petra Piit, the case was docketed
as DARAB Case No. X-305. On August 27, 1991, DARAB Provincial
Adjudicator Abeto A. Salcedo, Jr. rendered a decision declaring the
nature of the property as residential and not suitable for agriculture.4
The Regional Director filed a notice of appeal, which the Provincial
Adjudicator disallowed for being pro forma and frivolous.5 The decision
became final and executory6 and Springfield proceeded to develop the
property.7
The DAR Regional Director then filed a petition for relief from judgment
of the DARAB Decision, docketed as DARAB Case No. 0555. In its
Decision dated October 5, 1995, the DARAB granted the petition and
gave due course to the Notice of Coverage. It also directed the
Municipal Agrarian Reform Office to proceed with the documentation,

acquisition, and distribution of the property to the true and lawful

beneficiaries.8
The DARAB also issued an Order dated May 22, 1997, ordering the
heirs of Piit and Springfield to pay the farmer-beneficiaries the amount
of Twelve Million, Three Hundred Forty Thousand, Eight Hundred
Pesos (P12,340,800.00), corresponding to the value of the property
since the property has already been developed into a subdivision.
On June 13, 1997, Springfield and the heirs of Piit (petitioners) filed
with the RTC of Cagayan de Oro City, Branch 40, a petition for
annulment of the DARAB Decision dated October 5, 1995 and all its
subsequent proceedings. Petitioners contend that the DARAB decision
was rendered without affording petitioners any notice and hearing.9
On motion filed by the farmer-beneficiaries, the RTC issued an Order
dated June 25, 1997, dismissing the case for lack of jurisdiction.10
On July 2, 1997, petitioners filed with the Court of Appeals (CA) a
special civil action for certiorari, mandamus, and prohibition with prayer
for the issuance of writ of preliminary injunction and/or temporary
restraining order, docketed as CA-G.R. SP No. 44563.11 Petitioners
alleged that the RTC committed grave abuse of discretion when it ruled
that the annulment of judgment filed before it is actually an action for
certiorari in a different color. According to petitioners, what it sought
before the RTC is an annulment of the DARAB Decision and not
certiorari, as the DARAB Decision is void ab initio for having been
rendered without due process of law.12
In the assailed Decision13 dated July 16, 1998, the CA dismissed the
petition for lack of merit, ruling that the RTC does not have jurisdiction
to annul the DARAB Decision because it is a co-equal body.14
However, on January 12, 1999, the CA ordered the elevation of the
DARAB records before it, declaring that it "overlooked the fact that
petitioners likewise applied for a writ of prohibition against the
enforcement of the DARAB decision which they claim to be patently
void."15 Forwarded to the CA were the records of the original case filed

with the DARAB-Region X, and it appearing that the petition for relief
from judgment and its pertinent records were forwarded to the DARAB
Central Office, the CA issued another Resolution on December 20,
1999,16 requiring the DARAB Central Office to forward the records of
the case. But after receipt of the records, the CA simply denied
petitioners' motion for reconsideration per Resolution17 dated February
23, 2000 without specifically resolving the issues raised concerning the
prayer for a writ of prohibition.
Hence, the present petition on the following grounds:
I
THE COURT OF APPEALS COMMITTED A CLEAR ERROR OF LAW
IN APPLYING THE PRINCIPLE OF JUDICIAL STABILITY TO JUSTIFY
ITS CONCLUSION DIVESTING THE REGIONAL TRIAL COURT OF
ITS JURISDICTION VESTED BY LAW OVER CASES WHERE THE
EXCLUSIVE JURISDICTION WAS NOT EXPRESSLY GRANTED TO
ANY OTHER COURTS [SIC] OR TRIBUNAL, IN EFFECT,
MODIFYING THE APPLICABLE LAW ON THE MATTER.
II
T H E C O U RT O F A P P E A L S I R R E G U L A R LY D I S M I S S E D
PETITIONERS' MOTION FOR RECONSIDERATION AFTER IT HAD
RESOLVED TO ENTERTAIN PETITIONERS' PETITION FOR
PROHIBITION AND TO REVIEW THE DARAB PROCEEDINGS,
THEREBY DEPARTING FROM THE USUAL COURSE OF JUDICIAL
PROCEEDINGS.
III
THE HONORABLE SUPREME COURT, BEING THE HIGHEST
TEMPLE OF RIGHTS, AND TO AVOID SERIOUS MISCARRIAGE OF
JUSTICE AND NEEDLESS DELAYS, IS MOST RESPECTFULLY
URGED TO TAKE COGNIZANCE OF THE PETITION FILED IN CAG.R. SP No. 44563 IN THE EXERCISE OF ITS CONCURRENT

JURISDICTION, AS IF THE PETITION WAS ORIGINALLY LODGED

BEFORE IT.18
Petitioners argue that under Batas Pambansa (B.P.) Blg. 129, there is
no provision that vests with the CA jurisdiction over actions for
annulment of DARAB judgments. Petitioners, however, contend that
the RTC may take cognizance of the annulment case since Section 19
of B.P. Blg. 129 vests the RTC with general jurisdiction and an action
for annulment is covered under such general jurisdiction. According to
petitioners, "this is but a logical consequence of the fact that no other
courts were expressly given the jurisdiction over such actions."19
Petitioners further argue that the CA was in error when it summarily
ignored their application for a writ of prohibition, as it was necessary to
restrain the DARAB from enforcing its void decision; and even if the
DARAB decision was valid, the writ of prohibition could have enjoined
the execution of the DARAB decision since there have been changes
which will make the execution unjust and inequitable.
In their Joint-Comments, the farmer-beneficiaries and the DARAB
(respondents) refute petitioners' allegation that they were not afforded
due process in the DARAB proceedings, stating that petitioners were
impleaded as a party thereto, and in fact, they attended some of the
hearings although their counsel was absent. Respondents also adopt
the CA's ruling that the RTC is not vested with any jurisdiction to annul
the DARAB decision.
As stated at the outset, the main issue in this case is whether the RTC
has jurisdiction to annul a final judgment of the DARAB.
Note must be made that the petition for annulment of the DARAB
decision was filed with the RTC on June 13, 1997, before the advent of
the 1997 Rules of Civil Procedure, which took effect on July 1, 1997.
Thus, the applicable law is B.P. Blg. 129 or the Judiciary
Reorganization Act of 1980, enacted on August 10, 1981.
It is also worthy of note that before the effectivity of B.P. Blg. 129, a
court of first instance has the authority to annul a final and executory
judgment rendered by another court of first instance or by another

branch of the same court. This was the Court's ruling in Dulap v. Court
of Appeals.20 Yet, in subsequent cases,21 the Court held that the better
policy, as a matter of comity or courteous interaction between courts of
first instance and the branches thereof, is for the annulment cases to
be tried by the same court or branch which heard the main action.
The foregoing doctrines were modified in Ngo Bun Tiong v. Sayo,22
where the Court expressed that pursuant to the policy of judicial
stability, the doctrine of non-interference between concurrent and
coordinate courts should be regarded as highly important in the
administration of justice whereby the judgment of a court of competent
jurisdiction may not be opened, modified or vacated by any court of
concurrent jurisdiction.
With the introduction of B.P. Blg. 129,23 the rule on annulment of
judgments was specifically provided in Section 9(2), which vested in
the then Intermediate Appellate Court (now the CA) the exclusive
original jurisdiction over actions for annulment of judgments of RTCs.
Sec. 9(3) of B.P. Blg. 129 also vested the CA with "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 sub-paragraph (1) of the
third paragraph and subparagraph (4) of the fourth paragraph of
Section 17 of the Judiciary Act of 1948." As provided in paragraph 16
of the Interim Rules and Guidelines implementing B.P. Blg. 129, the
quasi-judicial bodies whose decisions are exclusively appealable to the
CA are those, which under the law, R.A. No. 5434,24 or its enabling
acts, are specifically appealable to the CA.
Significantly, B.P. Blg. 129 does not specifically provide for any power
of the RTC to annul judgments of quasi-judicial bodies. However, in BF
Northwest Homeowners Association, Inc. v. Intermediate Appellate
Court,25 the Court ruled that the RTCs have jurisdiction over actions for
annulment of the decisions of the National Water Resources Council,
which is a quasi-judicial body ranked with inferior courts, pursuant to its
original jurisdiction to issue writs of certiorari, prohibition, and
mandamus, under Sec. 21(1) of B.P. Blg. 129, in relation to acts or

omissions of an inferior court. This led to the conclusion that despite

the absence of any provision in B.P. Blg. 129, the RTC had the power
to entertain petitions for annulment of judgments of inferior courts and
administrative or quasi-judicial bodies of equal ranking. This is also
in harmony with the "pre-B.P. Blg. 129" rulings of the Court recognizing
the power of a trial court (court of first instance) to annul final
judgments.26 Hence, while it is true, as petitioners contend, that the
RTC had the authority to annul final judgments, such authority
pertained only to final judgments rendered by inferior courts and
quasi-judicial bodies of equal ranking with such inferior courts.
The foregoing statements beg the next question, i.e., whether the
DARAB is a quasi-judicial body with the rank of an inferior court
such that the RTC may take cognizance of an action for the
annulments of its judgments. The answer is no.
The DARAB is a quasi-judicial body created by Executive Order Nos.
229 and 129-A. R.A. No. 6657 delineated its adjudicatory powers and
functions. The DARAB Revised Rules of Procedure adopted on
December 26, 198827 specifically provides for the manner of judicial
review of its decisions, orders, rulings, or awards. Rule XIV, Section 1
states:
SECTION 1. Certiorari to the Court of Appeals. Any decision, order,
award or ruling by the Board or its Adjudicators on any agrarian dispute
or on any matter pertaining to the application, implementation,
enforcement or interpretation of agrarian reform laws or rules and
regulations promulgated thereunder, may be brought within fifteen (15)
days from receipt of a copy thereof, to the Court of Appeals by
certiorari, except as provided in the next succeeding section.
Notwithstanding an appeal to the Court of Appeals the decision of the
Board or Adjudicator appealed from, shall be immediately executory.
Further, the prevailing 1997 Rules of Civil Procedure, as amended,
expressly provides for an appeal from the DARAB decisions to the CA.
28

The rule is that where legislation provides for an appeal from decisions
of certain administrative bodies to the CA, it means that such bodies
are co-equal with the RTC, in terms of rank and stature, and logically,
beyond the control of the latter.29
Given that DARAB decisions are appealable to the CA, the inevitable
conclusion is that the DARAB is a co-equal body with the RTC and
its decisions are beyond the RTC's control. The CA was therefore
correct in sustaining the RTC's dismissal of the petition for annulment
of the DARAB Decision dated October 5, 1995, as the RTC does not
have any jurisdiction to entertain the same.
This brings to fore the issue of whether the petition for annulment of
the DARAB judgment could be brought to the CA. As previously noted,
Section 9(2) of B.P. Blg. 129 vested in the CA the exclusive original
jurisdiction over actions for annulment of judgments, but only those
rendered by the RTCs. It does not expressly give the CA the power to
annul judgments of quasi-judicial bodies. Thus, in Elcee Farms, Inc. v.
Semillano,30 the Court affirmed the ruling of the CA that it has no
jurisdiction to entertain a petition for annulment of a final and executory
judgment of the NLRC, citing Section 9 of B.P. Blg. 129, as amended,
which only vests in the CA "exclusive jurisdiction over actions for
annulment of judgments of Regional Trial Courts." This was reiterated
in Galang v. Court of Appeals,31 where the Court ruled that that the CA
is without jurisdiction to entertain a petition for annulment of judgment
of a final decision of the Securities and Exchange Commission.
Recent rulings on similar cases involving annulments of judgments of
quasi-judicial bodies are also quite instructive on this matter.
In Cole v. Court of Appeals,32 involving an annulment of the judgment
of the HLURB Arbiter and the Office of the President (OP), filed with
the CA, the Court stated that, "(U)nder Rule 47 of the Rules of Court,
the remedy of annulment of judgment is confined to decisions of the
Regional Trial Court on the ground of extrinsic fraud and lack of
jurisdiction x x x." The Court further ruled, viz.:

Although the grounds set forth in the petition for annulment of

judgment are fraud and lack of jurisdiction, said petition cannot prosper
for the simple reason that the decision sought to be annulled was
not rendered by the Regional Trial Court but by an administrative
agency (HLU Arbiter and Office of the President), hence, not
within the jurisdiction of the Court of Appeals. There is no such
remedy as annulment of judgment of the HLURB or the Office of
the President. Assuming arguendo that the annulment petition can be
treated as a Petition for Review under Rule 43 of the 1997 Rules of
Civil Procedure, the same should have been dismissed by the Court of
Appeals, because no error of judgment was imputed to the HLURB
and the Office of the President. Fraud and lack of jurisdiction are
beyond the province of petitions under Rule 43 of the Rules of Court,
as it covers only errors of judgment. A petition for annulment of
judgment is an initiatory remedy, hence no error of judgment can be
the subject thereof. Besides, the Arbiter and the Office of the President
indisputably have jurisdiction over the cases brought before them in
line with our ruling in Francisco Sycip, Jr. v. Court of Appeals,
promulgated on March 17, 2000, where the aggrieved townhouse
buyers may seek protection from the HLURB under Presidential
Decree No. 957, otherwise known as "Subdivision and Condominium
Buyers' Protective Decree."33 (Emphasis supplied)cralawlibrary
In Macalalag v. Ombudsman,34 the Court ruled that Rule 47 of the
1997 Rules of Civil Procedure on annulment of judgments or final
orders and resolutions covers "annulment by the Court of Appeals of
judgments or final orders and resolutions in civil actions of Regional
Trial Courts for which the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies could no longer be
availed of through no fault of the petitioner." Thus, the Court concluded
that judgments or final orders and resolutions of the Ombudsman in
administrative cases cannot be annulled by the CA, more so, since
The Ombudsman Act specifically deals with the remedy of an
aggrieved party from orders, directives and decisions of the
Ombudsman in administrative disciplinary cases only, and the right to
appeal is not to be considered granted to parties aggrieved by orders
and decisions of the Ombudsman in criminal or non-administrative
cases.

While these cases involve annulments of judgments under the 1997

Rules of Civil Procedure, as amended, still, they still find application in
the present case, as the provisions of B.P. Blg. 129 and the 1997
Rules of Civil Procedure, as amended, on annulment of judgments are
identical.
Consequently, the silence of B.P. Blg. 129 on the jurisdiction of the CA
to annul judgments or final orders and resolutions of quasi-judicial
bodies like the DARAB indicates its lack of such authority.
Further, petitioners are also asking the Court to take cognizance of
their prayer for the issuance of a writ of prohibition, which they claim
was not acted upon by the CA, citing the Court's action in Fortich v.
Corona35 where the Court took cognizance of the petition previously
filed with the CA due to compelling reasons. The Court is not
persuaded to do so.
Fortich involved a 144-hectare land located at San Vicente, Sumilao,
Bukidnon, owned by the Norberto Quisumbing, Sr. Management and
Development Corporation (NQSRMDC), which was leased as a
pineapple plantation to Del Monte Philippines, Inc. for a period of 10
years. During the existence of the lease, the DAR placed the entire
144-hectare property under compulsory acquisition and assessed the
land value at P2.38 million. When the NQSRMDC/BAIDA (Bukidnon
Agro-Industrial Development Association) filed an application for
conversion due to the passage of Resolution No. 6 by the Provincial
Development Council of Bukidnon and Ordinance No. 24 by the
Sangguniang Bayan of Sumilao, Bukidnon, reclassifying the area from
agricultural to industrial/institutional, the same was disapproved by the
DAR Secretary and instead, the property was placed under the
compulsory coverage of Comprehensive Agrarian Reform Program for
distribution to all qualified beneficiaries. This prompted Governor
Carlos O. Fortich of Bukidnon to file an appeal with the OP, while
NQSRMDC filed with the CA a petition for certiorari, and prohibition
with preliminary injunction.
The OP then issued a Decision dated March 29, 1996 reversing the
DAR Secretary's decision and approving the application for

conversion. Executive Secretary Ruben D. Torres denied the DAR's

motion for reconsideration for having been filed beyond the
reglementary period of 15 days, and it was also declared that the OP
Decision dated March 29, 1996 had already become final and
executory.
Because of this, the farmer-beneficiaries staged a hunger strike on
October 9, 1997, protesting the OP's decision. In order to resolve the
strike, the OP issued a so-called "Win/Win" resolution on November 7,
1997, modifying the decision in that NQSRMDC's application for
conversion is approved only with respect to the approximately 44hectare portion of the land adjacent to the highway, as recommended
by the Department of Agriculture, while the remaining approximately
100 hectares traversed by an irrigation canal and found to be suitable
for agriculture shall be distributed to qualified farmerbeneficiaries.rbl rl l lbrr
A petition for certiorari and prohibition under Rule 65 of the Revised
Rules of Court36 was then filed with the Court, which was contested by
the Office of the Solicitor General on the ground that the proper
remedy should have been to file a Petition for Review directly with the
CA in accordance with Rule 43 of the Revised Rules of Court.
In resolving the issue, the Court recognized the rule that the Supreme
Court, CA and RTC have original concurrent jurisdiction to issue a writ
of certiorari, prohibition, and mandamus . However, due to compelling
reasons and in the interest of speedy justice, the Court resolved to
take primary jurisdiction over the petition in the interest of speedy
justice, after which the Court nullified the act of the OP in re-opening
the case and substantially modifying its March 29, 1996 Decision
which had already become final and executory, as it was in gross
disregard of the rules and basic legal precept that accord finality to
administrative determinations.
It must be stressed at this point that the Court, as a rule, 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, prohibition, or mandamus calling for the exercise of its
primary jurisdiction.37 The Court finds no compelling circumstances in
this case to warrant a relaxation of the foregoing rule. The Fortich case
is not analogous with the present case such that the Court is not
bound to abandon all rules, take primary jurisdiction, and resolve the
merits of petitioners' application for a writ of prohibition.
In the present case, the assailed DARAB Decision dated October 5,
1995 granting the petition for relief from judgment and giving due
course to the Notice of Coverage was made pursuant to a petition for
relief from judgment filed by the DAR, albeit petitioners are contesting
the validity of the proceedings held thereon. On the other hand, in
Fortich, the OP's "Win/Win" resolution dated November 7, 1997 was
made motu proprio, as a result of the hunger strike staged by the
farmer-beneficiaries.
Further, the OP's "Win/Win" Resolution dated November 7, 1997 in the
Fortich case is a patently void judgment since it was evident that there
was already an existing final and executory OP Decision dated March
29, 1996. In this case, the assailed DARAB Decision dated October 5,
1995 appears to be regular on its face, and for its alleged nullity to be
resolved, the Court must delve into the records of the case in order to
determine the validity of petitioners' argument of lack of due process,
absent notice and hearing.
Moreover, the principle of hierarchy of courts applies generally to
cases involving factual questions. As it is not a trier of facts, the Court
cannot entertain cases involving factual issues.38 The question of
whether the DARAB Decision dated October 5, 1995 is null and void
and enforceable against petitioners for having been rendered without
affording petitioners due process is a factual question which requires a
review of the records of this case for it to be judiciously resolved.
The Court notes that the CA, indeed, failed to resolve petitioners'
prayer for the issuance of the writ of prohibition, which, significantly,
focuses on the alleged nullity of the DARAB Decision dated October 5,
1995. On this score, the CA found that the application for the issuance

of the writ of prohibition was actually a collateral attack on the validity

of the DARAB decision. But, a final and executory judgment may be
set aside in three ways;39 and a collateral attack, whereby in an action
to obtain a different relief, an attack on the judgment is nevertheless
made as an incident thereof,40 is one of these. This tenet is based
upon a court's inherent authority to expunge void acts from its records.
41 Despite recognizing the need to resolve petitioners' application for
the writ of prohibition in its Resolution dated January 12, 1999, the CA
nonetheless summarily denied petitioners' motion for reconsideration
in its Resolution dated February 23, 2000,42 leaving the matter hanging
and unresolved.
At first, the Court considered resolving the merits of petitioners' motion
for reconsideration concerning their application for a writ of prohibition
against enforcing the DARAB Decision dated October 5, 1995. Thus, in
a Resolution dated June 5, 2006, the Court directed the CA to transmit
the records of DARAB Case No. 0555, which was previously required
by the CA to be forwarded to it per Resolution dated December 20,
1999.43 However, as of even date, the CA has not complied with the
Court's Resolution. Withal, upon re-examination of the issues involved
in this case, the Court deems it more judicious to remand this case to
the CA for immediate resolution of petitioners' motion for
reconsideration, re: their application for the writ of prohibition.
Moreover, the radical conflict in the findings of the Provincial
Adjudicator and the DARAB as regards the nature of the subject
property necessitates a review of the present case. In this regard, the
CA is in a better position to fully adjudicate the case for it can delve
into the records to determine the probative value of the evidence
supporting the findings of the Provincial Adjudicator and of the DARAB.
In addition, the CA is empowered by its internal rules to require parties
to submit additional documents, as it may find necessary to promote
the ends of substantial justice, and further order the transmittal of the
proper records for it to fully adjudicate the case. After all, it is an
avowed policy of the courts that cases should be determined on the
merits, after full opportunity to all parties for ventilation of their causes
and defenses, rather than on technicality or some procedural
imperfections. In that way, the ends of justice would be served better.44

WHEREFORE, the petition is PARTLY GRANTED. This case is

REMANDED to the Court of Appeals which is DIRECTED to resolve
petitioners' prayer for the issuance of the writ of prohibition in their
Motion for Reconsideration.
Upon finality of this Decision, let the records be remanded forthwith to
the Court of Appeals.
No pronouncement as to costs.
SO ORDERED.

!
STA. ANA v. CARPO [G.R. NO. 164340: November 28, 2008]
Before this Court is a Petition for Review on Certiorari1 under Rule 45
of the Rules of Civil Procedure seeking the reversal of the Court of
Appeals (CA) Decision2 dated March 5, 2004 which reversed and set
aside the Decision3 of the Department of Agrarian Reform Adjudication
Board (DARAB) dated June 24, 1998 and reinstated the Decision4 of
the Provincial Agrarian Reform Adjudicator (PARAD) of Laguna dated
October 12, 1993.
The Facts
Respondent Leon Carpo5 (Leon) and his brother Francisco G. Carpo
are the registered co-owners of a parcel of land designated as Lot No.
2175 of the Santa Rosa Estate Subdivision, situated at Sta. Rosa,
Laguna, covered by Transfer Certificate of Title (TCT) No. T-172726 of
the Register of Deeds of Laguna, with an area of 91,337 square
meters, more or less. A portion thereof, consisting of 3.5 hectares,
pertained to Leon and his wife, respondent Aurora Carpo. It was
devoted to rice and corn production (subject land) and was tenanted
by one Domingo Pastolero (Domingo), husband of Adoracion Pastolero
(Adoracion).7 When Domingo passed away, Adoracion together with

her son Elpidio Pastolero, assumed the tenancy rights of Domingo

over the subject land.
However, on December 29, 1983, Adoracion, by executing a notarized
Pinanumpaang Salaysay8 with the conformity of Leon, and for a
consideration of P72,500.00, transferred her rights in favor of petitioner
Otilia Sta. Ana9 (petitioner) who, together with her husband, Marciano
de la Cruz (Marciano), became the new tenants of the subject land.
At the outset, the parties had a harmonious tenancy relationship.10
Unfortunately, circumstances transpired which abraded the
relationship. The Department of Agrarian Reform (DAR) mediated in
order to amicably settle the controversy, but no settlement was
reached by the parties. Thus, the instant case.
In their Complaint for Ejectment due to Non-Payment of Lease
Rentals11 dated December 1, 1989, respondents alleged that it was
their agreement with petitioner and Marciano to increase the existing
rentals from 36 cavans to 45 cavans, and that, if respondents wanted
to repossess the property, they only had to pay the petitioner the
amount of P72,500.00, the same amount paid by the latter to
Adoracion. Respondents further averred that despite repeated
demands, petitioner refused to pay the actual rentals from July 1985 to
September 1989, in violation of Presidential Decree (P.D.) No. 817;
and that the subject land had been declared, upon the
recommendation of the Human Settlements Committee, suitable for
commercial and industrial purposes, per Zoning Ordinance of 1981 of
the Municipality of Sta. Rosa, Laguna. Respondents prayed that
petitioner be ejected from the subject land and be directed to pay
P75,016.00 as unpaid rentals.
In their Answer12 dated January 26, 1990, petitioner and Marciano
denied that there was an agreement to increase the existing rental
which was already fixed at 36 cavans of palay, once or twice a year
depending on the availability of irrigation water; that neither was there
an agreement as to the future surrender of the land in favor of the
respondents; that they did not refuse to pay the rentals because they
even sent verbal and written notices to the respondents, advising them

to accept the same; and that in view of the latter's failure to respond,
petitioner and Marciano were compelled to sell the harvest and to
deposit the proceeds thereof in Savings Account No. 9166 with the
Universal Savings Bank at Sta. Rosa, Laguna under the names of
Leon and Marciano. As their special affirmative defense, petitioner and
Marciano claimed that Marciano is a farmer-beneficiary of the subject
land pursuant to P.D. 27. Petitioner and Marciano prayed for the
outright dismissal of the complaint and for the declaration of Marciano
as full owner of the subject land.
Thereafter, trial on the merits ensued.
The PARAD's Ruling
On October 12, 1993, the PARAD ruled that petitioner and Marciano
deliberately defaulted in the payment of the rentals due the
respondents. The PARAD found that the deposit made with Republic
Planters Bank was actually in the names of petitioner and Marciano,
hence, personal to them. The PARAD also found that it was only
during the hearing that petitioner and Marciano deposited the amount
of P40,000.00 with the Universal Savings Bank for the unpaid rentals.
As such the PARAD considered the deposits as late payments and as
implied admission that indeed petitioner and Marciano did not pay the
past rentals when they fell due. The PARAD further held and disposed
thus:
The intent of the defendant to subject the said area under PD 27
should pass the criteria set. Foremost is the determination of the
aggregate riceland of plaintiff. He must have more than seven (7)
hectares of land principally devoted to the planting of palay. Area over
seven (7) hectares shall be the one to be covered by PD 27 on
Operation Land Transfer (OLT). In the case at bar, defendants failed to
prove that plaintiff has more than the required riceland. In fact the
subject 3.5 hectares are jointly owned by two. Hence, coverage for
OLT is remote.
Defendant claimed that plaintiff is covered by LOI 474, and therefore,
he is zero retention of area. In reference to said law, wherein it

provides landowner with other agricultural land of more than 7

hectares, or have other industrial lands from where he and his family
derived resources, then, the owner cannot retain any riceland.
However, this is not applicable in the instant case, as the defendant
failed to prove that plaintiff has other source of income from where they
will derive their sustenance.
WHEREFORE, in view of the foregoing, Judgment is hereby rendered:
a) Ordering the ejectment of defendant from the subject landholding for
non-payment of lease rentals;
b) Ordering the defendant Marciano de la Cruz to surrender the
possession and cultivation of the subject land to herein plaintiffs;
c) Ordering the defendant to pay as actual damage the amount of
P75,016.00 corresponding to the unpaid rentals from July 18, 1985 up
to September 16, 1989[; and]
d) [D]eclaring the subject land not covered by Presidential Decree No.
27, Republic Act [No.] 6657, and Executive Order No. 228.
SO ORDERED.
Petitioner and Marciano sought relief from the DARAB.13
The DARAB's Ruling

pay lease rentals and/or share can be ascertained when there is a

determination of will not to do a certain act.
Considering the circumstances obtaining in this case, it cannot be
concluded that the defendants-appellants deliberately failed or refused
to pay their lease rentals. It was not the fault of defendants-appellants
herein that the rentals did not reach the plaintiffs-appellees because
the latter choose to lend a deaf ear to the notices sent to them. Clearly,
therefore plaintiffs-appellees failed to show by substantial evidence
that the defendants-appellants deliberately failed or refused to pay
their lease rentals. It has been held that the mere failure of a tenant to
pay the landowner's share does not necessarily give the latter the right
to eject the former when there is lack of deliberate intent on the part of
the tenant to pay (Roxas y Cia v. Cabatuando, 1 SCRA 1106).
Thus:
WHEREFORE, finding the appeal interposed by the defendantsappellants to be meritorious, the Decision appealed from is hereby
SET ASIDE and another judgment issued as follows:
1. Enjoining plaintiffs-appellees to respect the peaceful possession and
cultivation of the land in suit by the defendants-appellants;
andcralawlibrary
2. Directing the MARO of Sta. Rosa, Laguna to assist the parties in the
proper accounting of lease rentals to be paid by the defendantsappellants to the plaintiffs-appellees.

On June 24, 1998, the DARAB held:

No costs.

It is a fundamental rule in this jurisdiction that for non-payment of lease

rentals to warrant the dispossession and ejectment of a tenant, the
same must be made in a willful and deliberate manner (Cabero v.
Caturna, et al., CA-G.R. 05886-R, March 10, 1977). For a valid ouster
or ejectment of a farmer-tenant, the willful and deliberate intent not to

SO ORDERED.
Aggrieved, respondents appealed to the CA. On April 16, 2003,
Marciano passed away.14
The CA's Ruling

On March 5, 2004, the CA affirmed the factual findings of the PARAD

that petitioner and Marciano failed to pay the rentals and that there
was no valid tender of payment. The CA added that this failure to pay
was tainted with bad faith and deliberate intent. Thus, petitioner and
Marciano did not legally comply with their duties as tenants. Moreover,
the CA held that the subject land was not covered by P.D. 27, Republic
Act (R.A.) No. 6657 and Executive Order (E.O.) No. 228, since the
same had become a residential, commercial and industrial land, to wit:
In the case at bar, We opted to give more weight to the petitioners
contention that the "subject landholding is for residential, commercial,
and industrial purposes as declared by zoning ordinance of 1981 of the
town of Sta. Rosa, Laguna upon recommendation of the Human
Settlement Committee xxx." The vicinity map of the subject landholding
shows that it is almost beside Nissan Motors Technopa[r]k and
surrounded by the South Expressway and several companies such as
the Coca-Cola Bottlers Philippines, Inc. and Toyota Motors Philippines
along the Pulong Santa Cruz, National Road. The vicinity map shows
therefore that the subject landholding is a residential, commercial, and
industrial area exempted from the coverage of P.D. No. 27, Republic
Act. No. 6657 and Executive Order No. 228.
The CA ruled in favor of the respondents in this wise:
WHEREFORE, premises considered and pursuant to applicable law
and jurisprudence on the matter, the present Petition is hereby
GRANTED. Accordingly, the decision of the Department of Agrarian
Reform Adjudication Board-Central Office, Elliptical Road, Diliman,
Quezon City (promulgated on June 24, 1998) is hereby REVERSED
and SET ASIDE and a new one entered - REINSTATING the decision
of the Department of Agrarian Reform Adjudication Board-Region IV,
Office of the Provincial Adjudicator, Sta. Cruz, Laguna (dated October
12, 1993). No pronouncement as to costs.
SO ORDERED.

Petitioner filed a Motion for Reconsideration 15 assailing the

aforementioned Decision which the CA, however, denied in its
Resolution16 dated June 28, 2004.
Hence, this Petition based on the following grounds:
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
ARROGATING UPON ITSELF WHAT IS OTHERWISE DAR'S POWER
TO DETERMINE WHETHER THE SUBJECT AGRICULTURAL LAND
HAS BECOME RESIDENTIAL/INDUSTRIAL/COMMERCIAL.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
WHEN IT EQUATED "LAND RECLASSIFICATION" WITH "LAND
CONVERSION" FOR PURPOSES OF DETERMINING THE
PROPRIETY OF EJECTMENT OF AN AGRICULTURAL LESSEE.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
WHEN IT FAILED TO NOTE THAT AN EJECTMENT SUIT BASED ON
A C L A I M O F N O N - PAY M E N T O F L E A S E R E N TA L I S
DIAMETRICALLY ANTITHETICAL TO THE CLAIM THAT THE
SUBJECT LAND IS NO LONGER AGRICULTURAL BUT "A
RESIDENTIAL, COMMERCIAL AND INDUSTRIAL AREA EXEMPTED
FROM THE COVERAGE OF P.D. NO. 27, REPUBLIC ACT NO. 6657
AND EXECUTIVE ORDER NO. 228.
THE DECISION DATED MARCH 5, 2004 - -INSOFAR AS IT
ADOPTED THE FINDING OF DARAB-REGION IV, OFFICE OF THE
PROVINCIAL ADJUDICATOR, STA. CRUZ, LAGUNA INSTEAD OF
THAT OF THE DARAB-CENTRAL - -IS VIOLATIVE OF SEC. 14, ART.
VIII OF THE 1987 CONSTITUTION FOR HAVING DECIDED
WITHOUT EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE
FACTS AND THE LAW ON WHICH SAID DECISION IS BASED.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
RESORTING TO SURMISES AND CONJECTURES WHEN IT RULED
THAT THE FAILURE OF THE HEREIN PETITIONER AND HER
DECEASED HUSBAND TO DELIVER THE LEASE RENTALS TO
HEREIN RESPONDENTS, WAS DONE SO IN BAD FAITH AND WITH

DELIBERATE INTENT TO DEPRIVE THE LAND OWNERS

THEREOF.
Petitioner asseverates that there is no evidence to support
respondents' claim that the failure to pay the lease rentals was tainted
with malevolence, as the records are replete with acts indicative of
good faith on the part of the petitioner and Marciano and bad faith on
the part of respondents.
Moreover, petitioner claimed that the power to determine whether or
not the subject land is non-agricultural, hence, exempt from the
coverage of the Comprehensive Agrarian Reform Law (CARL), lies
with the DAR, and not with the courts; that mere reclassification by way
of a zoning ordinance does not warrant the dispossession of a tenant
but conversion does, and entitles the tenant to payment of disturbance
compensation; the legal concepts of reclassification and conversion
are separate and distinct from each other; that respondents' complaint
before the PARAD alleged and established the fact that the subject
land is a riceland, therefore, agricultural; that the CA failed to explain
why it upheld the findings of the PARAD on the issue of non-payment
of lease rentals; and that though the issue of non-payment of lease
rentals is a question of fact, due to the conflict of the factual findings of
the PARAD and CA with those of the DARAB, petitioner asks that this
Court review the evidence on record, and pursuant to the CA decision
in Cabero v. Caturna, et al.,17 rule on whether petitioner willfully and
deliberately refused to pay lease rentals as to warrant her
dispossession from the subject land.18
On the other hand, respondents aver that petitioner and her family are
wealthy, as they own numerous properties in Sta. Rosa, Laguna
including a luxurious house;19 that, as such, petitioner cannot be
considered as a landless tenant deserving the protection of agrarian
reform laws; that the DARAB negated the highest degree of respect
the factual findings of the PARAD deserved; that petitioner's claims
that Marciano repeatedly made verbal and written notices20 for Leon to
accept their lease rentals were fraudulent designs to disguise the
deliberate intent of petitioner not to pay the lease rentals; that when
Leon went to petitioner's residence, petitioner did not pay the
P10,000.00 due as lease rentals; that during the hearing before the

PARAD, when respondents' counsel requested that they be furnished

a bank certificate as to the existence of said bank deposits in Republic
Planters Bank as of April 20, 1987 and October 1, 1987, petitioner
herself commented, "Nagdeposito ho talaga kami sa pangalan namin";
21 that the statement of petitioner is an admission that bank deposits, if
any, were made, not in the name of Leon as contained in the written
notices, but rather in the names of petitioner and Marciano; that such
certificate was not introduced in evidence and that upon inquiry, said
deposits do not actually exist; that per recent inquiry, the bank deposit
in Universal Savings Bank only contains P1,020.19 due to previous
withdrawals made by Marciano; that the foregoing circumstances
indicate a pattern of fraudulent misrepresentations by the petitioner to
mislead the DARAB into believing that petitioner and Marciano did not
deliberately refuse to pay the lease rentals; that from July 18, 1985 up
to the present, petitioner failed to pay the lease rentals showing again,
the deliberate refusal to pay; that this default on the part of the
petitioner has been recurring for several years already, thus depriving
the respondents as landowners of their share of the subject land in
violation of the principle of social justice; that as raised in respondents
Omnibus Supplemental Motion for Reconsideration22 before the
DARAB and as found by the CA based on its vicinity map,23 the subject
land is of a residential, commercial and industrial character, exempted
from agrarian reform coverage; and that the DARAB erred in not
finding the sale of the tenancy rights of Adoracion to petitioner and
Marciano for P72,500.00 violative of P.D. 27 even if the same was with
Leon's consent. The sale, respondents contend was therefore, null and
void ab initio, not susceptible of any ratification.24
Our Ruling
Before we resolve this case on the merits, a procedural issue must be
disposed of.
Respondents strongly argue that the instant Petition was filed out of
time because, while petitioner originally claimed to have received her
copy of the CA Resolution25 dated June 28, 2004, denying her Motion
for Reconsideration,26 on July 12, 2004, petitioner eventually admitted,
after respondents showed proof to the contrary, that she actually
received the said Resolution on July 7, 2004.27 Thus, petitioner had

only up to July 22, 2004 to appeal the CA's ruling to this Court. In this
case, petitioner filed her Motion28 for Extension of Time to File Petition
for Review on Certiorari (Motion) on July 23, 2004. As such, there was
no more period to extend. Further, the instant Petition was filed on
August 27, 2004, or three (3) days beyond the thirty-day extended
period. Hence, respondents submit that the CA decision had already
become final and executory.29

the periods set by law. In those rare cases where we did not stringently
apply the procedural rules, there always existed a clear need to
prevent the commission of a grave injustice. Our judicial system and
the courts have always tried to maintain a healthy balance between the
strict enforcement of procedural laws and the guarantee that every
litigant be given the full opportunity for the just and proper disposition
of his cause.

Petitioner alleges that on July 15, 2004, she met with her counsel to
engage the latter's legal services. During said meeting, counsel asked
petitioner about the date of receipt of the assailed CA Resolution.
Petitioner replied that she received her copy on July 12, 2004. On July
20, 2004, counsel filed an Entry of Appearance with the CA.30 On July
23, 2004, petitioner through counsel filed the Motion for Extension of
Time to File Petition for Review. On August 11, 2004, petitioner
received a copy of respondents' Opposition to the Motion. Thereafter,
upon verification, petitioner admitted that she received the copy of the
CA Resolution on July 7, 2004. Thus, her Motion was admittedly filed
one day late. Petitioner begs the indulgence of this Court for her
oversight and mistake, attributing the same to her lack of education
and old age.

In this case, petitioner was one day late in filing her Motion for
Extension. To deny the Petition on this ground alone is too harsh a
penalty for a day's delay, taking into consideration the time, resources
and effort spent by petitioner and even by the respondents, in order to
pursue this case all the way to this Court. Thus, we dispense with the
apparent procedural defect and resolve this case on the merits. The
ends of justice are better served when cases are determined on the
merits with all parties given full opportunity to ventilate their causes
and defenses rather than on technicality or some procedural
imperfections.33

Rules of procedure are merely tools designed to facilitate the

attainment of justice. If the application of the Rules would tend to
frustrate rather than to promote justice, it is always within our power to
suspend the rules or except a particular case from their operation. Law
and jurisprudence grant to courts the prerogative to relax compliance
with the procedural rules, even the most mandatory in character,
mindful of the duty to reconcile the need to put an end to litigation
speedily and the parties' right to an opportunity to be heard.31
Our recent ruling in Tanenglian v. Lorenzo32 is instructive:
We have not been oblivious to or unmindful of the extraordinary
situations that merit liberal application of the Rules, allowing us,
depending on the circumstances, to set aside technical infirmities and
give due course to the appeal. In cases where we dispense with the
technicalities, we do not mean to undermine the force and effectivity of

The Petition is impressed with merit.

In sum, there are two (2) ultimate issues that require resolution in this
case:
1) Whether the CA erred in ruling that the subject land had already
become residential, commercial and/or industrial, thus, excluded from
the coverage of our laws on agrarian reform; andcralawlibrary
2) Whether the petitioner, as an agricultural tenant, failed to pay her
lease rentals when the same fell due as to warrant her dispossession
of the subject land.
On the first issue, we rule in the affirmative.
To recapitulate, the instant case sprang from a Complaint for Ejectment
based on Non-Payment of lease rentals. Though an allegation was
made by the respondents that the land had been declared, upon the

recommendation of the Human Settlements Committee, suitable for

commercial and industrial purposes, per Zoning Ordinance of 1981 of
the Municipality of Sta. Rosa, no argument was advanced by
respondents to support such allegation, in the same way that no prayer
for the ejectment of the tenants was raised based on that allegation.
The PARAD held that petitioner should be ejected for non-payment of
lease rentals. It also ruled that the subject land is not covered by P.D.
No. 27, R.A. No. 6657, and E.O. No. 228, not on the basis of the
allegation in the complaint, but on the respondents' right of retention.
On appeal, the DARAB concentrated on the issue of petitioner's failure
to pay lease rentals. When the DARAB ruled that petitioner and
Marciano did not deliberately fail to pay said rentals, respondents
raised a new issue in their Omnibus Motion that the transaction
between Adoracion and petitioner was void in violation of P.D. No. 27,
despite the conformity of Leon. This issue was not resolved by the
DARAB.
Finally, when the case reached the CA, the appellate court affirmed the
findings of the PARAD that petitioner and Marciano deliberately and in
bad faith did not pay the lease rentals. The CA, however, also held that
the subject land had already become a residential, commercial and
industrial area based on the vicinity map showing that the land was
surrounded by commercial and industrial establishments.
Without doubt, the PARAD acted without jurisdiction when it held that
the subject land was no longer covered by our agrarian laws because
of the retention rights of the respondents. The CA likewise acted
without jurisdiction when it ruled that the land had become nonagricultural based on a zoning ordinance of 1981 on the strength of a
mere vicinity map. These rulings violated the doctrine of primary
jurisdiction.
The doctrine of primary jurisdiction precludes the courts from resolving
a controversy over which jurisdiction has initially been lodged in an
administrative body of special competence. For agrarian reform cases,
jurisdiction is vested in the Department of Agrarian Reform (DAR);
more specifically, in the Department of Agrarian Reform Adjudication

Board (DARAB). Executive Order 229 vested the DAR with (1) quasijudicial powers to determine and adjudicate agrarian reform matters;
and (2) jurisdiction over all matters involving the implementation of
agrarian reform, except those falling under the exclusive original
jurisdiction of the Department of Agriculture and the Department of
Environment and Natural Resources.34
In Department of Agrarian Reform v. Abdulwahid,35 we held:
As held by this Court in Centeno v. Centeno [343 SCRA 153], "the
DAR is vested with the primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have the exclusive jurisdiction over
all matters involving the implementation of the agrarian reform
program." The DARAB has primary, original and appellate jurisdiction
"to determine and adjudicate all agrarian disputes, cases,
controversies, and matters or incidents involving the implementation of
the Comprehensive Agrarian Reform Program under R.A. No. 6657,
E.O. Nos. 229, 228 and 129-A, R.A. No. 3844 as amended by R.A. No.
6389, P.D. No. 27 and other agrarian laws and their implementing rules
and regulations."
Under Section 3 (d) of R.A. No. 6657 (CARP Law), "agrarian dispute"
is defined to include "(d) . . . any controversy relating to tenurial
arrangements, whether leasehold, tenancy, stewardship or otherwise
over lands devoted to agriculture, including disputes concerning
farmworkers associations or representation of persons in negotiating,
fixing, maintaining, changing or seeking to arrange terms or conditions
of such tenurial arrangements. It includes any controversy relating to
compensation of lands acquired under this Act and other terms and
conditions of transfer of ownership from landowners to farmworkers,
tenants and other agrarian reform beneficiaries, whether the disputants
stand in the proximate relation of farm operator and beneficiary,
landowner and tenant, or lessor and lessee."
Simply put, agrarian disputes, as defined by law and settled in
jurisprudence, are within the primary and exclusive original jurisdiction
of the PARAD and the DARAB, while issues of retention and non-

coverage of a land under agrarian reform, among others, are within the
domain of the DAR Secretary.

3.7 Application for exemption pursuant to Department of Justice (DOJ)

Opinion No. 44 (1990);

Thus, Section 3, Rule II of the 2003 DARAB Rules of Procedure

provides:

3.8 Exclusion from CARP coverage of agricultural land used for

livestock, swine, and poultry raising;

SECTION 3. Agrarian Law Implementation Cases. The Adjudicator or

the Board shall have no jurisdiction over matters involving the
administrative implementation of RA No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL) of 1988 and other
agrarian laws as enunciated by pertinent rules and administrative
orders, which shall be under the exclusive prerogative of and
cognizable by the Office of the Secretary of the DAR in accordance
with his issuances, to wit:

3.9 Cases of exemption/exclusion of fish pond and prawn farms from

the coverage of CARP pursuant to RA 7881;

3.1 Classification and identification of landholdings for coverage under

the agrarian reform program and the initial issuance of CLOAs and
EPs, including protests or oppositions thereto and petitions for lifting of
such coverage;
3.2 Classification, identification, inclusion, exclusion, qualification, or
disqualification of potential/actual farmer-beneficiaries;
3.3 Subdivision surveys of land under CARP;
3.4 Recall, or cancellation of provisional lease rentals, Certificates of
Land Transfers (CLTs) and CARP Beneficiary Certificates (CBCs) in
cases outside the purview of Presidential Decree (PD) No. 816,
including the issuance, recall, or cancellation of EPs or CLOAs not yet
registered with the Register of Deeds;
3.5 Exercise of the right of retention by the landowner;
3.6 Application for exemption from coverage under Section 10 of RA
6657;

3.10 Issuance of Certificate of Exemption for land subject of Voluntary

Offer to Sell (VOS) and Compulsory Acquisition (CA) found unsuitable
for agricultural purposes;
3.11 Application for conversion of agricultural land to residential,
commercial, industrial, or other non-agricultural uses and purposes
including protests or oppositions thereto;
3.12 Determination of the rights of agrarian reform beneficiaries to
homelots;
3.13 Disposition of excess area of the tenants/farmer-beneficiary's
landholdings;
3.14 Increase in area of tillage of a tenant/farmer-beneficiary;
3.15 Conflict of claims in landed estates administered by DAR and its
predecessors; or
3.16 Such other agrarian cases, disputes, matters or concerns referred
to it by the Secretary of the DAR.
Verily, there is an established tenancy relationship between petitioner
and respondents in this case. An action for Ejectment for Non-Payment
of lease rentals is clearly an agrarian dispute, cognizable at the initial
stage by

the PARAD and thereafter by the DARAB.36 But issues with respect to
the retention rights of the respondents as landowners and the
exclusion/exemption of the subject land from the coverage of agrarian
reform are issues not cognizable by the PARAD and the DARAB, but
by the DAR Secretary because, as aforementioned, the same are
Agrarian Law Implementation (ALI) Cases.
It has not escaped our notice that, as this case progressed and
reached a higher level in the hierarchy of tribunals, the respondents
would, invariably, proffer an additional theory or defense, in order to
effect petitioner's eviction from the land. As a consequence, the simple
issue of ejectment based on non-payment of rentals has been
muddled.
Proof necessary for the resolution of the issue of the land being
covered by, or excluded/exempted from, P.D. No. 27, R.A. No. 6657,
and other pertinent agrarian laws, as well as of the issue of the right of
retention of the respondents, was not offered in evidence. Worse, the
PARAD resolved the issue of retention even if it was not raised by the
respondents at that level, and even if the PARAD had no jurisdiction
over the same.
Likewise, the CA ruled that the land had ceased being agricultural on
the basis of a mere vicinity map, in open disregard of the Doctrine of
Primary Jurisdiction, since the issue was within the province of the
Secretary of DAR.
We take this opportunity to remind the PARAD and the CA that "courts
of justice have no power to decide a question not in issue." A judgment
that goes beyond the issues, and purports to adjudicate something on
which the parties were not heard, is extra-judicial, irregular and invalid.
This norm applies not only to courts of justice, but also to quasi-judicial
bodies such as the PARAD. Accordingly, premature and irregular were
the PARAD ruling on the retention rights of the respondents, and the
CA decision on the non-agricultural character of the land subject of this
controversy - - these issues not having passed the scrutiny of the DAR
Secretary - - are premature and irregular.37

Thus, we cannot allow ourselves to fall into the same error as that
committed by the PARAD and the CA, and resolve the issue of the
non-agricultural nature of the subject land by receiving, at this stage,
pieces of evidence and evaluating the same, without the respondents
having first introduced them in the proper forum. The Office of the DAR
Secretary is in a better position to resolve the issues on retention and
exclusion/exemption from agrarian reform coverage, being the agency
lodged with such authority inasmuch it possesses the necessary
expertise on the matter.38
Likewise, we refrain from entertaining the issue raised by respondents
that petitioner and her family are not landless tenants and are
therefore not deserving of any protection under our laws on agrarian
reform, because fairness and due process dictate that issues not
raised in the proceedings below should not be raised for the first time
on appeal.39
On the second issue, we rule in the negative.
Under Section 37 of Republic Act No. 3844,40 as amended, coupled
with the fact that the respondents are the complainants themselves,
the burden of proof to show the existence of a lawful cause for the
ejectment of the petitioner as an agricultural lessee rests upon the
respondents as agricultural lessors.41 This proceeds from the principle
that a tenancy relationship, once established, entitles the tenant to
security of tenure. Petitioner can only be ejected from the agricultural
landholding on grounds provided by law.42 Section 36 of the same law
pertinently provides:
Sec. 36. Possession of Landholding; Exceptions. Notwithstanding
any agreement as to the period or future surrender, of the land, an
agricultural lessee shall continue in the enjoyment and possession of
his landholding except when his dispossession has been authorized by
the Court in a judgment that is final and executory if after due hearing it
is shown that:
xxx

(6) The agricultural lessee does not pay the lease rental when it falls
due: Provided, That if the non-payment of the rental shall be due to
crop failure to the extent of seventy-five per centum as a result of a
fortuitous event, the non-payment shall not be a ground for
dispossession, although the obligation to pay the rental due that
particular crop is not thereby extinguished;
xxx
Respondents failed to discharge such burden. The agricultural tenant's
failure to pay the lease rentals must be willful and deliberate in order to
warrant his dispossession of the land that he tills.
Petitioner's counsel opines that there appears to be no decision by this
Court on the matter; he thus submits that we should use the CA
decision in Cabero v. Caturna. This is not correct. In an En Banc
Decision by this Court in Roxas y Cia v. Cabatuando, et al.,43 we held
that under our law and jurisprudence, mere failure of a tenant to pay
the landholder's share does not necessarily give the latter the right to
eject the former when there is lack of deliberate intent on the part of
the tenant to pay. This ruling has not been overturned.
The term "deliberate" is characterized by or results from slow, careful,
thorough calculation and consideration of effects and consequences.44
The term "willful," on the other hand, is defined as one governed by will
without yielding to reason or without regard to reason.45
We agree with the findings of the DARAB that it was not the fault of
petitioner that the lease rentals did not reach the respondents because
the latter chose to ignore the notices sent to them. To note, as early as
November 10, 1986, Marciano executed an Affidavit46 stating that Leon
refused to receive the respective lease rentals consisting of 37 cavans
for November 1985 and July 1986. For 1987, Marciano wrote Leon two
letters47 informing him of the availability of the lease rentals for April
and October of the same year. On April 27, 1988, Marciano sought
DAR intervention and mediation with respect to the execution of a
leasehold contract and the fixing of the leasehold rentals.48 Meetings

were set but respondents failed to attend.49 The dispute was referred
to the barangay but the parties failed to amicably settle.50
These factual circumstances negate the PARAD findings of Marciano's
and petitioner's deliberate and willful intent not to pay lease rentals.
Good faith was clearly demonstrated by Marciano and petitioner when,
because respondents refused to accept the proffered payment, they
even went to the point of seeking government intervention in order to
address their problems with respondents. Absent such deliberate and
willful refusal to pay lease rentals, petitioner's ejectment from the
subject land is not justified.
WHEREFORE, the instant Petition is GRANTED. The assailed
Decision of the Court of Appeals in CA-G.R. SP No. 60640 is hereby
REVERSED and SET ASIDE. The Decision of the Department of
Agrarian Reform Adjudication Board (DARAB) dated June 24, 1998 in
DARAB Case No. 2203 is REINSTATED without prejudice to the rights
of respondent-spouses Leon and Aurora Carpo to seek recourse from
the Office of the Department of Agrarian Reform (DAR) Secretary on
the other issues they raised. No costs.
SO ORDERED.