Assignment No.

6
Case Digests in SCARP AND SPECPRO
Submitted by Christopher G. Halnin
To Atty. Christian Kit Villasis

1. Philippine Coconut Authority vs. Primex Coco Products

G.R. No. 163088
July 20, 2006
FACTS:
Executive Order (E.O.) No. 826 was issued by the President of the Philippines. Section 1
thereof reads:
Section 1. Prohibition. Except as herein provided, no government agency or instrumentality
shall hereafter authorize, approve, or grant any permit or license for the establishment or
operations of new desiccated coconut processing plants, including the importation of
machinery or equipment for the purpose. In the event of a need to establish a new plant, or
expand the capacity, relocate or upgrade the efficiencies of any existing desiccated plant,
the Philippine Coconut Authority may, upon proper determination of such need and
evaluation of the condition relating to:
a.
b.
c.
d.

the existing market demand;

the production capacity prevailing in the country or locality;
the level and flow of raw materials; and
other circumstances which may affect the growth or viability of the industry
concerned.

may authorize or grant the application for the establishment or expansion of capacity,
relocation or upgrading of efficiencies of such desiccated coconut processing plant, subject to
the approval of the President.
The PCA adopted Resolution No. 058-87 authorizing the establishment and operation of
additional PCA plants in view of the increasing demand for desiccated coconuts in the world
market. The opening of new plants was made subject to implementing guidelines and
approval of the President.
Primex is a domestic corporation engaged in the manufacture of desiccated coconut. It filed
an application for registration with the PCA as a new exporter/trader/manufacturer of DCN
and paid the sum of P600.00 as registration fee. However, PCA did not immediately issue the
corresponding certificate of registration. This prompted Primex to file a petition for
mandamus against the PCA and its then Administrator Charles Avila before the Regional
Trial Court (RTC) of Lucena City, Branch 59.
The court rendered judgment in favor of Primex and ordered the PCA to act on the
application. Consequently, the PCA Governing Board adopted Resolution No. 044-92
approving the application for registration of Primex subject to its compliance with the
necessary requirements and pertinent regulations of the PCA and the final approval of the
President of the Philippines.
Seven PCA processing companies belonging to the Association of Philippine Coconut
Desiccators (APCD) filed with the RTC a petition for prohibition with a plea for injunctive
relief to enjoin the PCA from processing and issuing a license to Primex. The court issued a
writ of preliminary injunction against the PCA. The latter complied and refrained from
processing and issuing a license to Primex.
The PCA Governing Board issued Resolution No. 018-93 entitled Policy Declaration
Deregulating the Establishment of New Coconut Processing Plants. It is provided therein
that, henceforth, PCA shall no longer require any coconut oil mill, coconut oil refinery,
coconut desiccator, coconut product processor/factory, coconut fiber plant or any similar
2

coconut processing plant to apply with PCA and the latter shall no longer issue any form of
license or permit as a condition prior to establishment or operation of such mills or plants. It
stated further that PCA shall limit itself only to simply registering the aforementioned
coconut product processors for the purpose of monitoring their volumes of production,
administration of quality standards with the corresponding service fees/charges.The PCA
issued Certificate of Registration No. 014254 to Primex. In the meantime, the APCD filed a
petition for certiorari and mandamus against the PCA in this Court to nullify Resolution No.
018-93.
While the case was pending in this court, the PCA renewed the registration of Primex as a
coconut product processor every year. The Court rendered a decision declaring PCA Board
Resolution No. 018-93 and all certificates of registration issued under it null and void for
having been issued in excess of the power of PCA. The Court ruled that the PCA cannot
renounce its power to regulate that which has been set up by the very law creating it.
The PCA wrote Primex and informed the latter that Memorandum Circular No. 01, Series of
1999 and the issuance of provisional certificate of registration in its favor are equitable
interim measures to enable the parties affected by the Supreme Court Decision to comply
with subsisting PCA rules and regulations governing the establishment and operation of DCN
plants, and that said measures were adopted after the consultation meetings conducted by
PCA with the desiccators and after the submission of their position papers. On its second
query, the PCA replied that the records of its registration office do not show that Primex has
been issued any valid certificate of registration for 1990, nor any renewal thereof despite the
alleged official receipt purportedly representing the registration fee. Primex was issued a
certificate of registration only on March 25, 1993 or after the promulgation of the nullified
PCA Resolution No. 018-93. The PCA requested Primex to furnish it with authenticated
copies of the certificate of registration for year 1990 and the purported renewals thereof as
mentioned in its letter for reconsideration.

Primex wrote the PCA insisting that Certificate of Registration No. 014254 was not issued to
it by virtue Resolution No. 018-93, which was nullified by the Supreme Court, but by virtue
of the RTC decision in Civil Case No. 91-39 and PCA Resolution No. 044-92.
Primex was prompted to file a petition for mandamus against the PCA and its Administrator
Eduardo Escueta before the RTC of Quezon City. Primex alleged, inter alia, that it has
established beyond doubt that there was a final and executory decision issued by the RTC of
Lucena City, Branch 69 ordering the PCA to take action on its application for registration and
that the said application has been approved by the PCA Governing Board on per Resolution
No. 044-92.There is also no doubt that the certificate of registration was issued not by virtue
of Resolution No. 018-93 which was declared null and void by the Supreme Court but by
virtue of Resolution No. 044-92. PCA had absolutely no reason to issue only a provisional
certificate of registration valid only for six (6) months since it (Primex) has been operating as
DCN since September 28, 1990. As a result of the issuance of only a provisional certificate
of registration, it would suffer damages in its domestic and export business of at least P5
million per month.
The RTC rendered a Decision in favor of the petitioner and ordered the PCA to issue
to Primex a regular certificate of registration not only for the calendar year 1999 but also
annually thereafter upon its compliance with all the legal requirements for registration. The
CA affirmed the ruling of the court a quo that Primex was able to establish its legal right to a
permit as exporter/trader/manufacturer of desiccated coconut by virtue of PCA Resolution
No. 044-92.
ISSUE:
Whether or not the issuance of a registration by the PCA a discretionary or ministerial act?
HELD:
The petition is meritorious.Section 3, Rule 65 of the 1997 Rules of Civil Procedure reads:

SEC. 3. Petition for mandamus. When any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which the law specifically enjoins as a duty
resulting from an office, trust, or station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with certainty and
praying that judgment be rendered commanding the respondent, immediately or at some
other time to be specified by the court, to do the act required to be done to protect the
rights of the petitioner, and to pay the damages sustained by the petitioner by reason of
the wrongful acts of the respondent.
Mandamus lies to compel the performance, when refused, of a ministerial duty, but not to
compel the performance of a discretionary duty.A purely ministerial act or duty is one which
an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience
to the mandate of a legal authority, without regard to or the exercise of his own judgment
upon the propriety or impropriety of the act done. The duty is ministerial only when the
discharge of the same requires neither the exercise of official discretion or judgment.When
an official is required and authorized to do a prescribed act upon a prescribed contingency,
his functions are ministerial only, and mandamus may be issued to control his action upon the
happening of the contingency.
For a writ of mandamus to be issued, it is essential that petitioner should have a clear legal
right to the thing demanded and it must be the imperative duty of the respondent to perform
the act required. The writ neither confers powers nor imposes duties. It is simply a command
to exercise a power already possessed and to perform a duty already imposed. Mandamus
applies as a remedy only where petitioners right is founded clearly in law and not when it is
doubtful. The writ will not be granted where its issuance would be unavailing, nugatory, or
useless.
If the law imposes a duty upon a public officer and gives him the right to decide how or when
the duty shall be performed, such duty is discretionary and not ministerial.
5

Petitioner is not mandated to approve an original application for a certificate of registration

or a renewal thereof on an annual basis merely based on the allegations contained in the
application and the payment of the registration fees therefor. The PCA is tasked to first
inquire into and ascertain, after an investigation, whether the applicant has complied with
the a priori procedural and substantive conditions to the approval of said application as
provided in E.O. No. 826; Administrative Order No. 003, Series of 1981; and Administrative
Order No. 002, Series of 1991.
Moreover, when the RTC rendered judgment on January 18, 2000, the period for which the
renewal certificate was sought had already expired. Case law is that mandamus will not be
issued to compel the renewal of a license for a period which has expired. If the right sought
to be enforced by writ of mandamus is or has become a mere abstract right, enforcement of
which will be of no substantial or practical benefit to the plaintiff, the writ will not issue
though the applicant would otherwise be entitled to it.To warrant the issuance of a writ of
mandamus, it must appear that the writ will be effectual as a remedy, it should be denied
where it would be useless by reason of events occurring subsequent to commencement
proceedings.
Mandamus is never granted to compel the performance of an act until there has been an
actual, as distinguished from an anticipated, refusal to act.This is true even if there is a strong
presumption that the persons whom it is sought to coerce by the writ will refuse to perform
their duty when the proper time arrives. Its function is to compel the performance of a
present existing duty as to which there is default. It is not granted to take effect prospectively,
and it contemplates the performance of an act which is incumbent on respondent when the
application for a writ is made.

2. Nilo Paloma vs. Danilo Mora

G.R. No. 157783
September 23, 2005
6

FACTS:
Petitioner Nilo Paloma was appointed General Manager of the Palompon, Leyte Water
District by it Board of Directors in 1993. His services were subsequently terminated by virtue
of Resolution No.8-95, which was passed by respondents as Chairman and members of the
Board of the Palompon, Leyte Water District.
Petitioner filed a petition for mandamus with prayer for preliminary injunction with damages
before the RTC to contest his dismissal with the prayer to be restored to the position of
General Manager. Petition argued that his dismissal was a "capricious and arbitrary act on the
part of the Board of Directors, constituting a travesty of justice and a fatal denial of his
constitutional right to due process for the grounds relied upon therein to terminate him were
never made a subject of a complaint nor was he notified and made to explain the acts he was
said to be guilty of."
The trial court DISMISSED the petitioner for being a premature cause of action. MR was
denied.
Petitioner also filed a Complaint with the CSC against respondents for alleged Violation of
Civil Service Law and Rules and for Illegal Dismissal, but it was also dismissed.
Upon appeal, the Court of Appeals affirmed the assailed orders of the RTC and CSC. MR
was denied. Hence, the instant petition.
ISSUE:
Whether or not Mandamus will lie to compel the Board of Directors of the Palompon, Leyte
Water District to reinstate the General Manager thereof?
HELD:
The Court held in the negative. Mandamus does not lie to compel the Board of Directors of
the Palompon, Leyte Water District to reinstate petitioner because the Board has the
discretionary power to remove him under Section 23of P.D. No. 198, as amended by P.D. No.
7

768. It lies to compel the performance, when refused, of a MINISTERIAL DUTY , but NOT
to compel the performance of a DISCRETIONARY DUTY. It will not issue to control or
review the exercise of discretion of a public officer where the law imposes upon said public
officer the right and duty to exercise his judgment in reference to any matter in which he is
required to act. It is his judgment that is to be exercised and not that of the court.
3. Rufina Chua vs. Court of Appeals
G.R. No. 140842
April 12, 2007
FACTS:
Petitioner filed an information for estafa against respondent Chiok. The trial court
promulgated its decision convicting respondent of estafa. The prosecution filed a motion for
cancellation of bail on the ground that Chiok might flee or commit another crime. The court
then issued an Omnibus Order canceling respondents bail, denying his motion for
reconsideration of the judgment and ordering him to appear before the court. Chiok filed with
the CA a petition for certiorari with application for Temporary Restraining Order (TRO) and
a writ of preliminary injunction assailing the Omnibus Order canceling his bail. The trial
court issued a warrant for Chioks arrest. The CA issued a TRO enjoining the lower court
from implementing the Omnibus Order. It then issued a writ of preliminary injunction
enjoining the arrest of Chiok. The CA reasoned that the offense of estafa is a non-capital
offense and the probability respondent will flee is merely conjectural; hence, he should not be
deprived of his liberty. Petitioner thus filed a motion for certiorari.
ISSUE:
Whether or not the CA acted with grave abuse of discretion amounting to lack or in excess of
jurisdiction when it issued the writ of preliminary injunction?
HELD:
The petition is meritorious. Respondents remedy against the trial courts Omnibus Order is
by filing a motion for review with the CA in the same regular appeal proceedings and not in a

special civil action or special proceeding as it contravenes the rule against multiplicity of
suits. Further, it has not been shown that respondent has a clear existing right to be protected,
which is a requirement for the issuance of a writ of preliminary injunction. He has no right to
bail based on the penalty of his conviction and his failure to appear during the proceedings. If
the judgment is for conviction and the failure of the accused to appear was without justifiable
cause, he shall lose the remedies available in these Rules against the judgment and the court
shall order his arrest. Clearly, the Court of Appeals acted with grave abuse of discretion in
granting the writ of preliminary injunction.
4. JG Summit Holdings vs. Court of Appeals
G.R. No. 124293
November 20, 2000
FACTS:
The National Investment and Development Corporation (NIDC), a government corporation,
entered into a Joint Venture Agreement (JVA) with Kawasaki Heavy Industries, Ltd. for the
construction, operation and management of the Subic National Shipyard, Inc., later became
the Philippine Shipyard and Engineering Corporation (PHILSECO). Under the JVA, NIDC
and Kawasaki would maintain a shareholding proportion of 60%-40% and that the parties
have the right of first refusal in case of a sale.
Through a series of transfers, NIDCs rights, title and interest in PHILSECO eventually went
to the National Government. In the interest of national economy, it was decided that
PHILSECO should be privatized by selling 87.67% of its total outstanding capital stock to
private entities. After negotiations, it was agreed that Kawasakis right of first refusal under
the JVA be exchanged for the right to top by five percent the highest bid for said shares.
Kawasaki that Philyards Holdings, Inc. (PHI), in which it was a stockholder, would exercise
this right in its stead.
During bidding, Kawasaki/PHI Consortium is the losing bidder. Even so, because of the right
to top by 5% percent the highest bid, it was able to top JG Summits bid. JG Summit
9

protested, contending that PHILSECO, as a shipyard is a public utility and, hence, must
observe the 60%-40% Filipino-foreign capitalization. By buying 87.67% of PHILSECOs
capital stock at bidding, Kawasaki/PHI in effect now owns more than 40% of the stock. Not
obtaining a favorable decision petitioner pushed for the elevation of decision to the Court en
Banc.
ISSUE:
Whether or not there was grave abuse of discretion in awarding the bid contract?
HELD:
No. Grave abuse of discretion implies a capricious, arbitrary and whimsical exercise of
power. The abuse of discretion must be so patent and gross as to amount to an evasion of
positive duty or to a virtual refusal to perform a duty enjoined by law, as to act at all in
contemplation of law, where the power is exercised in an arbitrary and despotic manner by
reason of passion or hostility.
The facts in this case do not indicate any such grave abuse of discretion on the part of public
respondents when they awarded the CISS contract to Respondent SGS. In the Invitation to
Prequalify and Bid, the CISS Committee made an express reservation of the right of the
Government to "reject any or all bids or any part thereof or waive any defects contained
thereon and accept an offer most advantageous to the Government." It is a well-settled rule
that where such reservation is made in an Invitation to Bid, the highest or lowest bidder, as
the case may be, is not entitled to an award as a matter of right. Petition denied.
5. Ma. Jeanette C. Tecson vs. COMELEC
G.R. No. 161434
March 3, 2004
FACTS:
Victorino X. Fornier, petitioner initiated a petition before the COMELEC to disqualify FPJ
and to deny due course or to cancel his certificate of candidacy upon the thesis that FPJ made

10

a material misrepresentation in his certificate of candidacy by claiming to be a natural-born

Filipino citizen when in truth, according to Fornier, his parents were foreigners; his mother,
Bessie Kelley Poe, was an American, and his father, Allan Poe, was a Spanish national, being
the son of Lorenzo Pou, a Spanish subject. Granting, petitioner asseverated, that Allan F. Poe
was a Filipino citizen, he could not have transmitted his Filipino citizenship to FPJ, the latter
being an illegitimate child of an alien mother. Petitioner based the allegation of the
illegitimate birth of respondent on two assertions - first, Allan F. Poe contracted a prior
marriage to a certain Paulita Gomez before his marriage to Bessie Kelley and, second, even if
no such prior marriage had existed, Allan F. Poe, married Bessie Kelly only a year after the
birth of respondent.
Petitioners also questioned the jurisdiction of the COMELEC in taking cognizance of and
deciding the citizenship issue affecting Fernando Poe Jr. They asserted that under Section
4(7), Article VII of the 1987 Constitution, only the Supreme Court had original and exclusive
jurisdiction to resolve the basic issue of the case.
ISSUE:
Whether or not the Supreme Court has the power to review COMELEC en banc decisions?
HELD:
The Court held in the affirmative. SC has the power to review the COMELECs decision to
deny Forniers petition to disqualify the candidacy of FPJ for alleged misrepresentation of
material fact. Decisions of COMELEC on disqualification cases may be reviewed by the SC
in action for certiorari under Rule 65. SC can also determine Whether or not there has been
grave abuse of discretion by any branch of the government.
COMELEC has jurisdiction, petitions of Tecson and Velez are dismissed. SCs jurisdiction
as the judge of all contests relating to the election, returns and qualifications relates to the
President or Vice-President not the candidates. The SC en banc shall be sole judge of all
contests relating to the election, returns and qualifications of the President and Vice
President. Election contests consist of either, election protest which only a registered
11

candidate who would have received second or third highest number of votes could file; and a
quo warranto which is an action against a person who usurps, intrudes into, or unlawfully
holds or exercises a public office. Two distinct remedies but both have one objective in view
to dislodge winning candidate from office.
But jurisdiction of Supreme Court, does not include cases questioning the qualifications of a
candidate for the presidency or vice-presidency before the elections are held.
FPJ is a natural born citizen. He is therefore a qualified candidate. The 1935 Constitution,
during which regime respondent FPJ was born, confers citizenship to all persons whose
fathers are Filipino citizens regardless of whether such children are legitimate or illegitimate.

6. Fortuno vs. Palma

G.R. No. 70203
December 18, 1987

FACTS:
Petitioner Salvio B. Fortuno and respondent Joel David S. Abante were candidates for the
position of director to represent District V of the Camarines Sur II Electric Cooperative, Inc.
(CASURECO II) at the elections of February 9, 1985. On January 30, 1985, Abante filed
with the National Electrification Administration (NEA) a petition to disqualify Fortuno as
candidate alleging that he is not a resident of the area coverage of District V as required by
the By-laws of the corporation. The NEA directed the CASURECO Board of Directors to
take appropriate action on the petition in accordance with the By-laws and Election Code.
The Board indorsed the petition to the District Election Committee (DEC) which is the body
charged with the duty of deciding all election matters, including protests, quarries, referrals,
postponements and nullification.

12

The DEC directed Fortuno to submit his comment thereto within 48 hours which was duly
complied with. After a hearing on February 9, 1985, the DEC denied Abante's petition to
disqualify Fortuno finding that he is a resident of the area coverage of District V.
On February 9, 1985, the election was held as a result of which Fortuno obtained 1,429 votes
while Abante received 637 votes. Accordingly, the DEC proclaimed Fortuno as the duly
elected director for District V.

On February 10, 1985, a quo warranto petition with prayer for preliminary injunction and
temporary restraining order was filed by Abante in the Regional Trial Court of Naga City
docketed as No. RTC-05-607 entitled "Joel David S. Abante vs. Salvio B. Fortuno, and
CASURECO II." On the day of the hearing of the preliminary injunction the issue of
jurisdiction of the trial court over the case was raised by said defendants. On March 13, 1985,
an order was issued by the trial court upholding its jurisdiction over the subject matter. A
motion for reconsideration of said order was filed by defendants but this was denied in an
order of March 16, 1985.

On March 18, 1985, the trial court issued an order resetting the hearing for preliminary
injunction on March 25, 1985 to enable defendants to elevate the matter to the appellate court
and issued the restraining order enjoining Fortuno from assuming or otherwise performing
the functions of a member of the Board of Directors of CASURECO II until further orders of
the Court and the respondent CASURECO II to observe and implement the said restraining
order.

Hence, the herein petition for certiorari and prohibition with prayer for preliminary
injunction or temporary restraining order filed on March 18, 1985 with this Court wherein
13

petitioners seek to set aside said orders of March 16 and 18, both of 1985 of the trial court
and that a restraining order be issued against the trial court taking further action on the case
until further orders.

On March 19, 1985, a supplemental petition was filed by petitioners informing the Court of
the restraining order the respondent court issued on March 18, 1985 which in effect restrains
the continuance in the performance of the duties of Fortuno as an incumbent member of the
Board of Directors who was elected in 1981 whose term of office will end on March 30,
1985 and that assuming that he was not a resident of the area of coverage he represents he
cannot be arbitrarily suspended or removed from office so that petitioners pray for a
restraining order against the enforcement of said order and for the respondent Judge from
taking further proceedings in the case.

On March 25, 1985, without giving due course to the petition the respondents were required
to comment thereon.

The comment thereon having been filed by the respondents, on October 9, 1985 the Court
gave due course to the petition and required the parties to submit their simultaneous
memoranda. Only petitioners submitted their memoranda. The case is now submitted for
deliberation.

ISSUE:
Whether or not the Regional Trial Court (RTC) has jurisdiction over quo warranto
proceedings involving the qualification for membership of the Board of Directors of an
electric cooperative.
14

HELD:
The Court held in the affirmative. Under Section 1, Rule 66 of the Rules of Court a quo
warranto proceeding maybe instituted to determine the right to the use or exercise of a
franchise or office and to oust the holder from its enjoyment, if his claim is not wellfounded, or if he has forfeited his right to enjoy the privilege. Where the dispute is on the
eligibility to perform the duties by the person sought to be ousted or disqualified a quo
warranto is the proper action.
Under Section 6, Rule 66 of the Rules of Court it is provided:
SEC. 6. When an individual may commence such an action. A person
claiming to be entitled to a public office or position usurped or unlawfully
held or exercised by another may bring an action therefore in his own name.

In this connection this Court held that an office in a private corporation is an office of public
character in such a sense and to such an extent as to render the remedy available to a person
having an interest which is injuriously affected. The action may also be brought by a public
utility whose rights are invaded by another.

The Supreme Court has concurrent jurisdiction over quo warranto proceedings with the
Regional Trial Court in the province in which the defendant or one of the defendants reside,
or when defendant is a corporation, in the province in which it is domiciled or has a place of
business; but when the Solicitor General of the Philippines commences the action, it may be
brought in a Court of First Instance in the City of Manila or the Supreme Court.

15

From the foregoing provision of the rules and rulings of this Court, the conclusion is
inescapable that the quo warranto proceeding filed in the RTC of Naga City questioning the
qualification of petitioner Fortuno is within the jurisdiction of said Court. Nowhere in the law
can We find any provision that excepts the electric cooperatives from its coverage.

True it is that the NEA has supervision and control over the directors of CASURECO II and
that under its election code respondent Abante has the remedy of appeal to the NEA within
72 hours which he did not avail of. Be that as it may, it does not deprive said respondent of
the right to avail of the right to file the quo warranto suit when it is shown that the DEC
committed a grave abuse of discretion or otherwise acted without jurisdiction or in excess of
its jurisdiction in the resolution of the qualification of Fortuno.

The ruling of this Court in Lions Club International that the "courts will not interfere with
the internal affairs of an unincorporated association" cannot apply to the present case as
CASURECO II is clearly a duly organized private corporation in the Philippines.
Nevertheless, in said case this Court held that its proceedings (Lions Clubs International) are
nevertheless subject to judicial review "where law and justice so requires, and ..." where
there is fraud, oppression, bad faith, or where the action complained of is capricious,
arbitrary or unjust discriminatory.

By the same token the case of Bataan Electric Cooperative is predicated on different
environmental facts. In said case, what is questioned is the qualification of the voters who
voted for the member of the board of directors and not of the one voted for and further the
elections sought to be prevented had already been held, so that the petition was considered
moot and academic.

16

WHEREFORE, the petition is DISMISSED without pronouncement as to costs.

SO ORDERED.

7. Macario E. Caesar vs. Filomeno Garrido

G.R. No. L-30705
March 25, 1929
FACTS :
A general election for an office in Mun. ofCabalia, Leyte was held on June 5, 1928. The
result of the election proclaimed that FilomenoGarrido was proclaimed elected for the public
office with a plurality of 27 votes over Macario E. Caesar. Trial court reversed the result of
the board of canvassers and found that Macario Caesar won over Garrido by a plurality of 71
votes. Judicial declaration was accordingly made ordering Macario Caesar had been elected
to the office and judgment was given against the Garrido for costs and expenses, including
the fees of the commissioners. Hence, Garrido appealed.
The contest was instituted by a motion to dismiss with the statement that Garrido was a duly
qualified elector in the municipality of Cabalian and was a registered candidate who had
received votes for the office of municipal president in the election mentioned. Upon the filing
of this motion, Garrido moved to dismiss on the ground that it was not alleged in the
Macario motion that the contestant was, at the time of the election, eligible to the office for
which he was a candidate. This motion to dismiss was overruled by the trial court on the two
grounds that the allegation that the protestant was a duly qualified elector and registered
candidate should be taken as implying that he was eligible to the office, and that, at any rate,
the ineligibility of a candidate is not proper matter of exception or defense in a contest over
an election. To this ruling the contesteeexcepted, and error is here assigned thereto.
ISSUE :
Whether or not the question as to the eligibility of a candidate for office should be involved
in a proceeding of contest?
17

HELD :
The Court held in the negative. The ineligibility of the mover of an election contest,
supposing him to have been a duly registered candidate, is not available as a defense in the
contest proceeding. The reason is that the contest raises merely a question as to the number of
votes received by the opposing candidates.
Eligibility is a matter wholly apart from the question of the number of votes received by a
candidate, and its solution depends upon considerations quite different from those involved in
a contest.
As long as the law remained in this state, it was a rule that the eligibility of a candidate could
not be considered in an election contest (Topacio vs. Paredes, 23 Phil., 238). The law
concerning the removal of ineligible officials has, however, been charged; and it is now
provided that when a person, alleged to be ineligible, is elected to a provincial or municipal
office, his right thereto is to be tried, upon the relation of any elector of the province or
municipality concerned, in a special proceeding in the nature of an action of quo warranto;
and this proceeding must be instituted within the two weeks after the proclamation of the
election of the person whose right to office is questioned (Election Law, sec. 408, as
amended by Act No. 3387). The law now stands, the question of eligibility may be tried in a
judicial proceeding. But the proceeding in which it maybe tried is not a contest; and the
defense based on the alleged ineligibility of the contestant is completely incongruous with
the issue of an election protest.
Moreover, it is to be observed that the proceeding in the nature of quo warranto to try the
question of the eligibility of a candidate is to be instituted within the two weeks after the
proclamation of the person whose right to office is challenged. In the proceeding now before
us the contestant has never been proclaimed at all and will not be proclaimed, in the sense of
the law, until the decision of this court is published. The issue of ineligibility which is
attempted to be raised in the answer is premature.

18

Another reason readily suggests itself why the ineligibility of the contestant is not available
as a defense in this contest. This consists in the fact that, if the person who has received a
majority of plurality of votes in any election is found to be ineligible, the result is that the
office is declared vacant and a new election has to be held to fill the vacancy. In the case
before us, if we should accept the defense of the ineligibility of the contestant and adopt the
course of dismissing the contest for that reason, the result would be that the contestee would
be in office though he in fact received fewer votes than the contestant. Thus, the eligibility of
the contestant must be made the subject of a separate proceeding at the proper juncture.
Judgment appealed by contesteeGarrido must be AFFIRMED, and it is so ordered, with
costs against the appellant.

8. Manila Electric Co.vs.Pineda

G.R. No. L-59791
February 13, 1992

FACTS:
On October 29, 1974, a complaint for eminent domain was filed by petitioner MERALCO
against forty-two (42) defendants with the Court of First Instance (now Regional Trial Court)
of Rizal, Branch XXII, Pasig, Metro Manila.

The complaint alleges that for the purpose of constructing a 230 KV Transmission line from
Barrio Malaya to Tower No. 220 at Pililla, Rizal, petitioner needs portions of the land of the
private respondents consisting of an aggregate area of 237,321 square meters. Despite
petitioner's offers to pay compensation and attempts to negotiate with the respondents', the
parties failed to reach an agreement.
19

On January 7, 1975, respondents Gil de Guzman and Teresa Bautista filed a motion for
contempt of court alleging, among other things that petitioner's corporate existence had
expired in 1969 and therefore it no longer exists under Philippine Laws.But despite the
opposition of the private respondents, the court issued an Order dated January 13, 1975
authorizing the petitioner to take or enter upon the possession of the property sought to be
expropriated.

On July 13, 1976, private respondents filed a motion for withdrawal of deposit claiming that
they are entitled to be paid at forty pesos (P40.00) per square meter or an approximate sum of
P272,000.00 and prayed that they be allowed to withdraw the sum of P71,771.50 from
petitioner's deposit-account with the Philippine National Bank, Pasig Branch. However,
respondents motion was denied in an order dated September 3, 1976.

Pursuant to a government policy, the petitioners on October 30, 1979 sold to the National
Power Corporation (Napocor) the power plants and transmission lines, including the
transmission lines traversing private respondents' property.

On February 11, 1980, respondent court issued an Order appointing the members of the
Board of Commissioners to make an appraisal of the properties.

On June 5, 1980, petitioner filed a motion to dismiss the complaint on the ground that it has
lost all its interests over the transmission lines and properties under expropriation because of
their sale to the Napocor. In view of this motion, the work of the Commissioners was
suspended. On June 9, 1981, private respondents filed another motion for payment. But
20

despite the opposition of the petitioner, the respondent court issued the first of the questioned
Orders dated December 4, 1981 granting the motion for payment of private respondents, On
December 15, 1981, private respondents filed an Omnibus Motion praying that they be
allowed to withdraw an additional sum of P90,125.50 from petitioner's deposit-account with
the Philippine National Bank which the court ruled; Acting on the Omnibus Motion dated
December 15, 1981 filed by Atty. Gil de Guzman, counsel for TeofiloArayon, Sr., Lucito
Santiago, Teresita Bautista and for himself, and it appearing that there is deposited in the
bank in trust for them the amount of P90,125.50 to guarantee just compensation of
P272,000.00, thereby leaving a balance of P161,475.00 still payable to them, the same is
hereby GRANTED.

Private respondents filed another motion dated January 8, 1982 praying that petitioner be
ordered to pay the sum of P169, 200.00.

In response to private respondents' motion for payment dated January 8, 1982, petitioner filed
an opposition alleging that private respondents are not entitled to payment of just
compensation at this stage of the proceeding because there is still no appraisal and valuation
of the property.

On March 26, 1982, petitioner filed a petition for preliminary injunction with this Court
seeking to enjoin respondent judge and all persons acting under him from enforcing the
Order dated March 22, 1982.

This Court issued a temporary restraining order addressed to respondent judge. A motion to
lift the restraining order was filed by the respondents. Despite a series of oppositions and

21

motions to lift the said order, this Court reiterated its stand and noted that the restraining
order is still effective.

The petitioner strongly maintains that the respondent court's act of determining and ordering
the payment of just compensation to private respondents without formal presentation of
evidence by the parties on the reasonable value of the property constitutes a flagrant violation
of petitioner's constitutional right to due process. It stressed that respondent court ignored the
procedure laid down by the law in determining just compensation because it formulated an
opinion of its own as to the value of the land in question without allowing the Board of
Commissioners to hold hearings for the reception of evidence.

Furthermore, petitioner argues that the respondent judge gravely abused his discretion in
granting the motion for execution pending appeal and consequently denying the petitioner's
motion to dismiss. Respondent judge should have ordered that Napocor be impleaded in
substitution of petitioner or could have at least impleaded both the Napocor and the petitioner
as party plaintiffs.

ISSUE:
Whether or not not the respondent court can dispense with the assistance of a Board of
Commissioners in evaluating just compensation in an expropriation proceeding?

HELD:
The applicable laws in the case at bar are Sections 5 and 8 of Rule 67 of the Revised Rules of
Court. In the case of Municipality of Bian v. Hon. Jose Mar Garcia Garcia (G.R. No. 69260,
22

December 22, 1989, 180 SCRA 576, 583-584) In a procedure for eminent domain There are
two (2) stages in every action of expropriation.

The first is concerned with the determination of the authority of the plaintiff to exercise the
power of eminent domain and the propriety of its exercise in the context of the facts involved
in the suit
It ends with an order, if not of dismissal of the action, declaring that the plaintiff has
a lawful right to take the property sought for the public use or purpose described in
the complaint, upon the payment of just compensation to be determined as of the date
of the filing of the complaint". An order of dismissal, if this be ordained, would be a
final one, of course, since it finally disposes of the action and leaves nothing more to
be done by the Court on the merits.

The second phase of the eminent domain action is concerned with the determination by the
Court of "the just compensation for the property sought to be taken.
This is done by the Court with the assistance of not more than three (3)
commissioners. The order fixing the just compensation on the basis of the evidence
before, and findings of, the commissioners would be final, too. It would finally
dispose of the second stage of the suit, and leave nothing more to be done by the
Court regarding the issue.

In an expropriation case such as this one where the principal issue is the determination of just
compensation, a trial before the Commissioners is INDISPENSABLE to allow the parties to
present evidence on the issue of just compensation. Contrary to the submission of private
respondents, the appointment of at least three (3) competent persons as commissioners to

23

ascertain just compensation for the property sought to be taken is a MANDATORY

requirement in expropriation cases.

While it is true that the findings of commissioners may be disregarded and the court may
substitute its own estimate of the value, the latter may only do so for valid reasons, i.e., where
the Commissioners have applied illegal principles to the evidence submitted to them or
where they have disregarded a clear preponderance of evidence, or where the amount
allowed is either grossly inadequate or excessive (Manila Railroad Company v. Velasquez,
32 Phil. 286). Thus, trial with the aid of the commissioners is a substantial right that
may not be done away with capriciously or for no reason at all. Moreover, in such
instances, where the report of the commissioners may be disregarded, the trial court may
make its own estimate of value from competent evidence that may be gathered from the
record. The aforesaid joint venture agreement relied upon by the respondent judge, in the
absence of any other proof of valuation of said properties, is incompetent to determine just
compensation.

9. Visayan Refining Co. vs.Hon. Manuel Camus

G.R. No. L-15870
December 3, 1919

FACTS:
Sometime in September 1919, the Governor-General directed the Attorney-General to cause
condemnation proceedings to be begun for the purpose of expropriating a tract of land of an
area of about 1,100,463 square meters, commonly known as the site of Camp Tomas Claudio.
Said land is located in the municipality of Paraaque, Province of Rizal, and lies along the
water front of Manila Bay. It is stated in communication of the Governor-General that the
24

property in question is desired by the Government of the Philippine Islands for military and
aviation purposes.

In conformity with the instructions of the Governor-General, condemnation proceedings were

begun by the Attorney-General by filing a complaint in the name of the Government of the
Philippine Islands in the Court of First Instance of the Province of Rizal. Numerous persons
are named in the complaint as defendants because of their supposed ownership of portions of
the property intended to be expropriated. In the list of persons thus impleaded appear the
names of the three petitioners herein, namely, the Visayan Refining Co., Dean C. Worcester,
and Fred A. Leas, who are severally owners of different portions of the property in question.

In the communication of the Governor-General, the Attorney-General was directed

immediately upon filing the complaint to ask the court to give the Government the possession
of the land to be expropriated, after the necessary deposit should be made as provided by
law.An order was accordingly made by the Honorable Judge Manuel Camus, of the Court of
First Instance of the Province of Rizal, fixing the value of the property provisionally at
P600,000 and ordering that the plaintiff be placed in possession, it being made to appear that
a certificate of deposit for the amount stated had been delivered to the provincial treasurer.

During the proceedings, the three respondents, Visayan Refining Co., et. al., interposed a
demurrer, questioning the validity of the proceedings on the ground that there is no Act of the
Philippine Legislature authorizing the exercise of the power of eminent domain to acquire
land for military or aviation purposes. They also alleged that, to the effect that the deposit in
court of the sum of P600,000.00, had been made without authority of law.

ISSUE:
25

Whether or not an expropriation proceeding cannot be maintained by the Philippine

Government in the absence of a statute authorizing the exercise of the power of eminent
domain for public use?

HELD:
The Court held in the negative. The contentions of the petitioners, in whatever way they may
be understood or expressed, are not well founded. The Courtis of the opinion that in this
jurisdiction at least expropriation proceedings may be maintained upon the exclusive
initiative of the Governor-General, without the aid of any special legislative authority other
than that already on the statute books. Furthermore, if the Government complies with the
requirements of law relative to the making of a deposit in court, provisional possession of the
property may be at once given to it, just as is permitted in the case of any other person or
entity authorized by law to exercise the power eminent domain. Special legislative authority
for the buying of a piece of land by the Government is no more necessary than for buying a
paper of pain; and in the case of a forced taking of property against the will of the owner, all
that can be required of the government is that should be able to comply with the conditions
laid down by law as and when those conditions arise.

The contention that the authority to maintain such a proceeding cannot be delegated by the
Legislature to the Chief Executive, in the Courts opinion is wholly erroneous and apparently
has its basis in a misconception of fundamentals. It is recognized by all writers that the power
of eminent domain is inseparable from sovereignty being essential to the existence of the
State and inherent in government even in its most primitive forms. Philosophers and legists
may differ as to the grounds upon which the exercise of this high power is to be justified, but
no one can question its existence. No law, therefore, is ever necessary to confer this right
upon sovereignty or upon any government exercising sovereign or quasi-sovereign powers.

26

At any rate the conclusion is irresistible that where the Legislature has expressly conferred
the authority to maintain expropriation proceedings upon the Chief Executive, the right of the
latter to proceed therein is clear. As is said by the author of the article from which we have
already quoted, "Once authority is given to exercise the power of eminent domain, the matter
ceases to be wholly legislative. The executive authorities may then decide whether the power
will be invoked and to what extent."

The power of eminent domain, with respect to the conditions under which the property is
taken, must of course be exercised in subjection to all the restraints imposed by constitutional
or organic law. The two provisions by which the exercise of this power is chiefly limited in
this jurisdiction are found in the third section of the Jones Act, already mentioned, which
among other things declares (1) that no law shall be enacted which shall deprive any person
of property without due process of law and (2) that private property shall not be taken for
public use without just compensation. The latter of these provisions is directly aimed at the
taking of property under the exercise of the power of eminent domain; and as this
requirement, in connection with the statutes enacted to make sure the payment of
compensation, usually affords all the protection that the owner of property can claim, it
results that the due process clause is rarely invoked by the owner in expropriation
proceedings.

The writ prayer for in the petition before us, therefore, cannot be issued. The application is
accordingly denied, with costs against the petitioners.

10. Republic vs. Gingoyon

G.R. No. 166429
December 19, 2005

27

FACTS:
The Ninoy Aquino International Airport Passenger Terminal III (NAIA 3) was conceived,
designed and constructed to serve as the country's show window to the world. Despite the
apparent completion of the terminal complex way back it has not yet been operated.
The case was raffled to the Pasay City RTC, presided by respondent judge Hon. Henrick F.
Gingoyon (Hon. Gingoyon). Rep. Act No. 8974 applies in this case, particularly insofar as it
requires the immediate payment by the Government of at least the proffered value of the
NAIA 3 facilities to PIATCO and provides certain valuation standards or methods for the
determination of just compensation. RTC erroneously applied the provisions of Rule 67 of
the Rules of Court, instead of Rep. Act No. 8974, in ascertaining compliance with the
requisites for the issuance of the writ of possession. The Government filed a Motion for
Inhibition of Hon. Gingoyon. The RTC denied these motions in an Omnibus Order.
Hence, this Petition for Certiorari and Prohibition for the nullification of the RTC orders and
for the inhibition of Hon. Gingoyon from taking further action on the expropriation case.
ISSUE:
Whether or not expropriation can be conducted by mere deposit of the assessed value of the
property?

HELD:
The Court held in the negative.In expropriation proceedings, entitlement of writ of
possession is issued only after direct payment of just compensation is given to property
owner on the basis of fairness. The same principle applied in the 2004 Jurisprudence
Resolution and the latest expropriation law (RA No. 8974).

11. Bank of America, NT and SAvs.American Realty Corp.

28

G.R. No. 133876

December 29, 1999

FACTS:
Petitioner Bank of America NT & SA (BANTSA) is an international banking and financing
institution duly licensed to do business in the Philippines, organized and existing under and
by virtue of the laws of the State of California, United States of America while private
respondent American Realty Corporation (ARC) is a domestic corporation.
Bank of America International Limited (BAIL), on the other hand, is a limited liability
company organized and existing under the laws of England.
As borne by the records, BANTSA and BAIL on several occasions granted three major multimillion United States (US) Dollar loans to the following corporate borrowers: (1) Liberian
Transport Navigation, S.A.; (2) El Challenger S.A. and (3) EshleyCompaniaNaviera S.A.
(hereinafter collectively referred to as "borrowers"), all of which are existing under and by
virtue of the laws of the Republic of Panama and are foreign affiliates of private respondent.
Due to the default in the payment of the loan amortizations, BANTSA and the corporate
borrowers signed and entered into restructuring agreements. As additional security for the
restructured loans, private respondent ARC as third party mortgagor executed two real estate
mortgages, 4 dated 17 February 1983 and 20 July 1984, over its parcels of land including
improvements thereon, located at Barrio Sto. Cristo, San Jose Del Monte, Bulacan.
Eventually, the corporate borrowers defaulted in the payment of the restructured loans
prompting petitioner BANTSA to file civil actions 5 before foreign courts for the collection
of the principal loan.

29

On 16 December 1992, petitioner BANTSA filed before the Office of the Provincial Sheriff
of Bulacan, Philippines an application for extrajudicial foreclosure 6 of real estate mortgage.
On 22 January 1993, after due publication and notice, the mortgaged real properties were
sold at public auction in an extrajudicial foreclosure sale, with Integrated Credit and
Corporation Services Co (ICCS) as the highest bidder for the sum of Twenty four Million
Pesos (P24,000.000.00).
On 12 February 1993, private respondent filed before the Pasig Regional Trial Court, Branch
159, an action for damages against the petitioner, for the latter's act of foreclosing
extrajudicially the real estate mortgages despite the pendency of civil suits before foreign
courts for the collection of the principal loan which was granted by the courts.
ISSUE:
Whether or not a mortgage creditor may institute against the mortgage debtor either a
personal action for debt or a real action to foreclose the mortgage an election of one remedy
operates as a waiver of the other?
HELD:
In our jurisdiction, the remedies available to the mortgage creditor are deemed alternative
and not cumulative. Notably, an election of one remedy operates as a waiver of the other.
For this purpose, a remedy is deemed chosen upon the filing of the suit for collection or upon
the filing of the complaint in an action for foreclosure of mortgage, pursuant to the provision
of Rule 68 of the of the 1997 Rules of Civil Procedure. As to extrajudicial foreclosure, such
remedy is deemed elected by the mortgage creditor upon filing of the petition not with any
court of justice but with the Office of the Sheriff of the province where the sale is to be made,
in accordance with the provisions of Act No. 3135, as amended by Act No. 4118.
Thus, in Cerna vs. Court of Appeals, 22 we agreed with the petitioner in said case, that the
filing of a collection suit barred the foreclosure of the mortgage:

30

A mortgagee who files a suit for collection abandons the remedy of foreclosure of
the chattel mortgage constituted over the personal property as security for the debt
or value of the promissory note when he seeks to recover in the said collection suit.
. . . When the mortgagee elects to file a suit for collection, not foreclosure, thereby
abandoning the chattel mortgage as basis for relief, he clearly manifests his lack of
desire and interest to go after the mortgaged property as security for the promissory
note . . . .
Contrary to petitioner's arguments, we therefore reiterate the rule, for clarity and emphasis,
that the mere act of filing of an ordinary action for collection operates as a waiver of the
mortgage-creditor's remedy to foreclose the mortgage. By the mere filing of the ordinary
action for collection against the principal debtors, the petitioner in the present case is
deemed to have elected a remedy, as a result of which a waiver of the other necessarily
must arise. Corollarily, no final judgment in the collection suit is required for the rule on
waiver to apply.

12. Danao vs. Court of Appeals

G.R. No. L-48276
September 30, 1987

FACTS:
In 1963, spouses Pedro Danao and Concepcion S. Damao was granted a commercial credit
line of P20,000.00 with the Peoples Bank and Trust Company. The parties executed a
Commercial Credit Agreement and Mortgage wherein a parcel of land in Baguio together
with the buildings and improvements thereon was given as a security. The obligation was
fully paid in 1968.
It appears that in 1963, Antonio Co Kit and Pedro Danao signed a promissory note with the
bank agreeing to pay the note, jointly and severally, within 179 days after date. The check for
the proceeds of the note was issued in the name of Antonio Co Kit alone. The note was
31

renewed by Antonio Co Kit and Pedro Danao which they promised to pay the amount, jointly
and severally.The bank demanded payment from Antonio Co Kit and Pedro Danao for the
balance of the promissory note. When no payment was received, the bank filed a complaint
in the City Court of Baguio against Antonio Co Kit and Pedro Danao, for collection of sum
of money. The City Court dismissed the complaint for lack of interest on the part of the
plaintiff.
The branch manager of the bank wrote a letter to Pedro Danao, informing the latter that they
had filed a petition for foreclosure to the City Sheriff of Baguio City, stating therein that the
parcel used as a security for Spouses Danaos credit line will be sold at public auction.
Notice of public auction sale was published in a weekly newspaper published and edited in
the City of Baguio and which is of wide circulation in the City, province of Benguet and in
the Philippines, for three consecutive weeks, once a week. Copies of the notice were also
posted in three public and conspicuous places in Baguio for the information of the public. In
the published notice of public auction sale, it is stated that in the petition for foreclosure it is
alleged that Mortgagors spouses PEDRO DANAO and CONCEPCION DANAO, . . ., . . .
failed to pay the . . . loan when it fell due thereby violating the terms and conditions of the
real estate mortgage above mentioned.
In March 1971, counsel for the Peoples Bank, Baguio Branch, wrote a letter, informing the
Bank of the full payment of the obligations of Antonio Co Kit and Pedro Danao. The branch
manager of the Peoples Bank executed a cancellation of the real estate mortgage, stating
therein that the mortgagors had fully paid the obligation or indebtedness secured by the
mortgage.
In 1972, Pedro Danao and Concepcion S. Danao filed a complaint for damages against the
Bank of Philippine Islands, as successor to the Peoples Bank and Trust Company, in the
Court of First Instance of Manila. The complaint alleged, inter alia, that both the petition for
foreclosure and the notice of public auction sale published in the Baguio Midland Courier
have neither legal nor factual bases, because (1) while the credit line was availed of from
32

time to time in different amounts by promissory notes, the credits and loans obtained were
duly paid in 1968 and since then no further loans were availed of under the credit line
secured by mortgage of the plaintiffs properties; (2) the plaintiffs alleged indebtedness
mentioned in the defendants petition for foreclosure and in the consequent notice of public
auction sale was the balance due on a clean loan granted by the defendant to Antonio Co
Kit, although admittedly the promissory note was co-signed by plaintiff Pedro Danao, and
the same was a distinct and separate transaction from the plaintiffs credit line, and was not
covered nor secured by the plaintiffs properties mortgaged to the defendant.
The complaint further alleged that the publication of the notice of public auction sale in the
Baguio Midland Courier was malicious and/or with deliberate intent, or was due to gross
negligence, causing the plaintiffs, who are respected members of the community of Baguio
City, untold mental and moral anguish, serious anxiety, besmirched reputation and social
humiliation; that as a result of his social humiliation, anxiety, mental and moral anguish,
plaintiff Pedro Danao suffered serious heart attack and was hospitalized and confined in bed
for a period of one year, causing him to incur hospitalization and medical expenses, and
resulting in the loss of his income from his medical practice. The plaintiffs ask for actual or
compensatory, moral and exemplary damages, as well as attorneys fees.
The Peoples Bank filed a counterclaim and the issues were joined. The Court of First
Instance of Manila rendered judgment in favor of the plaintiffs and against the defendant
ordering the latter to pay the former actual and compensatory damages, moral damages, and
exemplary damages. The court dismissed the counterclaim.
From this decision only the Bank of the Philippine Islands (BPI) as successor of Peoples
Bank and Trust Company appealed. Respondent Court or Appeals affirmed the trial courts
decision with some modifications. Both parties moved for reconsideration. The motion for
reconsideration filed by Pedro and Concepcion Danao, as plaintiff-appellees was denied by
the respondent Court while the motion for reconsideration filed by BPIs, as defendantappellant was also denied.

33

Hence, these petitions filed by both parties which were consolidated. During the pendency of
the case, Pedro Danao died as was substituted by his heirs.
The Danaos contended that the real estate mortgage executed by them in favor of defendant
did not secure the solidary obligation of Dr. Danao upon the promissory note signed by him
jointly and severally with Antonio C. Kit and therefore, defendants act in foreclosing said
mortgagee extra-judicially was unwarranted.
ISSUE:
Whether the bank could validly exercise both the actions it availed?
HELD:
No. The bank, in opting to file a civil action in the Baguio City Court for the collection of the
unpaid balance plus interest has abandoned its mortgage lien on the property in question.The
rule is now settled that a mortgage creditor may elect to waive his security and bring, instead,
an ordinary action to recover the indebtedness with the right to execute a judgment thereon
on all the properties of the debtor, including the subject matter of the mortgage . . ., subject to
the qualification that if he fails in the remedy by him elected, he cannot pursue further the
remedy he has waived.
Anent real properties in particular, the Court has laid down the rule that a mortgage creditor
may institute against the mortgage debtor either a personal action for debt or a real action to
foreclose the mortgage. In other words, he may pursue either of the two remedies, but not
both.
For non-payment of a note secured by mortgage, the creditor has a single cause of action
against the debtor. This single cause of action consists in the recovery of the credit with
execution of the security. In other words, the creditor in his action may make two demands,
the payment of the debt and the foreclosure of the mortgage. But both demands arise from
the same cause, the non-payment of the debt, and, for that reason, they constitute a single
cause of action. Though the debt and the mortgage constitute separate agreements, the latter
34

is subsidiary to the former, and both refer to one and the same obligation. Consequently there
exists only once cause of action for a single breach of that obligation.
Plaintiff, then, by applying the rule above stated cannot split up his single cause of action by
filing a complaint for payment of the debt, and thereafter another complaint for foreclosure
of the mortgage. If he does so, the filing of the first complaint will bar the subsequent
complaint. By allowing the creditor to file two separate complaints simultaneously or
successively, one to recover his credit and another to foreclose his mortgage, we will, in
effect, be authorizing him plural redress for a single breach of contract at much cost to the
courts and with so much vexation and oppression to the debtor.
A rule that would authorize the plaintiff to bring a personal action against the debtor and
simultaneously or successively another action against the mortgaged property, would result
not only in multiplicity of suits so offensive to justice and obnoxious to law and equity but
also in subjecting the defendant to the vexation of being sued in the place of his residence or
of the residence of the plaintiff, and then again in the place where the property lies.
Evidently, the prior recourse of the creditor bank in filing a civil action against the Danao
spouses and subsequently resorting to the complaint of foreclosure proceedings, are not only
a demonstration of the prohibited splitting up of a cause of action but also of the resulting
vexation and oppression to the debtor.

Both the lower court and the Court of Appeals found that the Peoples Bank (succeeded by
the BPI) acted unlawfully and without justification in extrajudicially foreclosing the disputed
mortgage and hence the Danao spouses are entitled to damages.

13. GSIS vs. CFI OF Iloilo Branch III

G.R. No. 45322

35

July 5, 1989
FACTS:
In 1957, a real estate loan payable in monthly installments within a period of ten (10) years
with 7% interest per annum, was granted to the spouses Ramon and NelitaBacaling by the
petitioner, GSIS for the development of the Bacaling-Moreno subdivision. To secure the
repayment of the loan, the Bacalings executed in favor of the GSIS a real estate mortgage on
four (4) lots owned by them.
Out of the approved loan of P600,000, only P240,000 had been released to them by the GSIS
as of November 11, 1957.
The Bacalings failed to finish the subdivision project and pay the amortizations on the loan
so the GSIS, filed in the Court of First Instance of Iloilo a complaint for judicial foreclosure
of the mortgage During the pendency of the case, Ramon Bacaling passed away.
The court ordered the widow, for herself and as administratrix of the estate of Ramon
Bacaling, to pay the GSIS. Mrs. Bacaling failed to pay the judgment debt within 90 days
after receipt of the decision of the court. Consequently, the mortgaged lots were sold at
public auction where the GSIS was the highest bidder at the sale.
The GSIS filed a motion for confirmation of the sale of the property to it and asked for a
deficiency judgment against the mortgagor, its bid being inadequate to cover the judgment
debt which had swelled.
Respondent Maria Teresa Integrated Development Corporation (MTIDC), as alleged assignee
of the mortgagors "right of redemption," filed a "Motion to Exercise the Right of
Redemption" The motion was granted by the trial court. A China Banking Corporation check
in the amount of P1,100,000 was delivered by MTIDC to the GSIS as payment of the
redemption price. However, the check was dishonored by the drawee bank because it was
drawn against a closed account.
36

On motion of the GSIS, the court issued an order declaring null and void the redemption of
the property by respondent MTIDC.
Thereafter, written proposals were sent by said respondent to the GSIS for the redemption of
the foreclosed property, but the GSIS required cash payment of the redemption price.
In 1975, respondent NelitaBacaling filed a motion to re-open the case so she could prove the
inadequacy of the price of the sale of the mortgaged property but this was opposed by the
GSIS filed The respondent court denied Nelitas motion, confirmed the sale of the mortgaged
property, and rendered a deficiency judgment in favor of GSIS.
In 1975, fourteen (14) years after the foreclosure sale and almost three (3) years after the
court had annulled its redemption of the foreclosed property, respondent MTIDC filed a
motion for reconsideration of the courts order and sought the restoration of its right of
redemption. The court, over the strong opposition of the GSIS, reconsidered its order and
granted MTIDC a period of one year after the finality of its order to redeem the Bacaling
properties.
The GSIS sought a reconsideration of that order on the ground that the court may not extend
the period for the redemption of the property. The court modified its order by giving MTIDC
one (1) year from January 19, 1976 within which to redeem the Bacaling property, instead of
one year from the finality of the January 19, 1976 order. Petitioner received a copy of this
last order on February 12, 1976.
On March 1, 1976, the GSIS appealed by certiorari to the Supreme Court raising purely legal
questions
In her Comment on the petition for review, NelitaVda. de Bacaling asked for the dismissal of
GSIS petition on the grounds that: (1) the appeal has become moot and academic because
the one-year redemption period fixed by the trial court had expired without the properties

37

being redeemed; and (2) the questioned order is also pending appeal in the Court of Appeals
hence, the case should be remanded to that Court.
The Court denied the motion to remand this appeal to the Court of Appeals.
ISSUE:
Whether or not a trial court may grant or fix another period for the redemption of the
foreclosed property by the assignee of the mortgagors equity of redemption?
HELD:
The Court held in the negative. The Court found merit in the appeal. Sections 2 and 3, Rule
68 of the Rules of Court provide:
"SEC. 2. Judgment on foreclosure for payment or sale. If upon the trial in such action the
court shall find the facts set forth in the complaint to be true, it shall ascertain the amount due
to the plaintiff upon the mortgage debt or obligation, including interest and costs, and shall
render judgment for the sum so found due and order that the same be paid into court within a
period of not less than ninety (90) days from the date of the service of such order, and that in
default of such payment the property be sold to realize the mortgage debt and costs."
"SEC. 3. Sale of mortgaged property; effect. When the defendant, after being directed to
do so as provided in the last preceding section, fails to pay the principal, interest, and costs at
the time directed in the order, the court shall order the property to be sold in the manner and
under the regulations that govern sales of real estate under execution. Such sale shall not
affect the rights of persons holding prior encumbrances upon the property or a part thereof,
and when confirmed by an order of the court, it shall operate to divest the rights of all the
parties to the action and to vest their rights in the purchaser, subject to such rights of
redemption as may be allowed by law."
There is no right of redemption from a judicial foreclosure sale after the confirmation of the
sale, except those granted by banks or banking institutions as provided by the General
38

Banking Act. This has been the consistent interpretation of Rule 68 in a long line of decisions
of this Court.
The Court has already held that in mortgage foreclosures the rights of the mortgagee and
persons holding under him are cut off by the sale, when duly confirmed, and with them the
equity of redemption. The reason for that holding is that the right of redemption being purely
statutory, and there being no statute conferring that right, it does not exist.
When the foreclosure sale is validly confirmed by the court title vests upon the purchaser in
the foreclosure sale, and the confirmation retroacts to the date of the sale. Only foreclosure of
mortgages to banking institutions and those made extrajudicially are subject to legal
redemption, by express provision of statute, and the present case does not come under
exceptions.
Where the foreclosure is judicially affected, however, no equivalent right of redemption
exists. The law (Sec. 3, Rule 68, Rules of Court) declares that a judicial foreclosure sale,
when confirmed by an order of the court, . . . shall operate to divest the rights of all the
parties to the action and to vest their rights in the purchaser, subject to such rights of
redemption as may be allowed by law. Such rights exceptionally allowed by law (i.e., even
after confirmation by an order of the court) are those granted by the charter of the Philippine
National Bank (Acts No. 2747 and 2938), and the General Banking Act (R.A. 337).
These laws confer on the mortgagor, his successors in interest or any judgment creditor of the
mortgagor, the right to redeem the property sold on the foreclosure after confirmation by
the court of the foreclosure sale which right may be exercised within a period of one (1)
year, counted from the date of registration of the certificate of sale in the Registry of
Property.
But, to repeat, no such right of redemption exists in case of judicial foreclosure of a mortgage
if the mortgagee is not the PNB or a bank or banking institution. In such a case, the
foreclosure sale, when confirmed by an order of the court, . . . shall operate to divest the
39

rights of all the parties to the action and to vest their rights in the purchaser. There then
exists only what is known as the equity of redemption. This is simply the right of the
defendant mortgagor to extinguish the mortgage and retain ownership of the property by
paying the secured debt within the 90-day period after the judgment becomes final, in
accordance with Rule 68, or even after the foreclosure sale but prior to its confirmation.

Since the GSIS is not a bank or banking institution, its mortgage is covered by the general
rule that there is no right of redemption after the judicial foreclosure sale has been confirmed.
Hence, Judge NumerianoEstenzo exceeded his jurisdiction and acted with grave abuse of
discretion in granting the respondent, MTIDC, another one-year period to redeem the
Bacaling properties over the opposition of petitioner GSIS as mortgagee-purchaser thereof at
the public sale.

14. Reyes vs. Tolentino

G.R. No. L-29142
November 29, 1971
FACTS:
A suit was filed before the CFI of Rizal (Quezon City) for plaintiff-appellant Arsenio Reyes
to be declared the absolute owner of a parcel of registered land, which he purchased in an
extrajudicial foreclosure sale, conducted by defendant sheriff Benito Macrohon, and to
declare as null and void the redemption of the said land by the defendants-appellees Enrique
R. Tolentino and Leonora P. Tolentino, who were the mortgagors in the extrajudicially
foreclosed mortgage.
In 1957, defendants Enrique R. Tolentino and Leonora P. Tolentino, spouses, obtained a loan
from the GSIS in whose favor they executed a real estate mortgage over a parcel of land and
all its improvements, situated in Quezon City, with a special power to sell the same in case of
non-payment. The defendants failed to pay some of the loan amortizations on their due dates,
40

thus making the whole indebtedness due and payable. Because of their failure to pay the
whole obligation, the GSIS extrajudicially foreclosed the mortgage in accordance with the
provisions of Act No. 3135, as amended.
Defendant Benito Macrohon, as Sheriff of Rizal, sold the property mortgaged at a public
auction to plaintiff Arsenio Reyes as the highest bidder. Defendant Macrohon issued the
corresponding certificate of sale containing a condition that the period of redemption would
expire one (1) year from and after the date of registration thereof. On the same day, plaintiff
protested against such condition embodied in the certificate of sale.
In May 1964, the sheriffs certificate of sale was registered with the office of the Register of
Deeds of Quezon City; and defendants Enrique R. Tolentino and Leonora P. Tolentino paid to
the defendant Sheriff the redemption price of the property foreclosed.
Plaintiff initiated this action because of the refusal of the defendants to vacate the property
foreclosed and to pay to the plaintiff monthly rental therefor from the time the period for
them to redeem expired up to the time they actually vacate the premises.
According to appellant Reyes, the redemption is invalid for having been made beyond the
one-year period, as provided for in Section 6 of Act No. 3135, as amended by Act No. 4118,
to wit:
"Section 6. In all cases in which the extrajudicial sale is made under the special power
hereinbefore referred to, the debtor, his successors-in-interest, or any judicial creditor or
judgment creditor of said debtor, or any person having a lien on the property subsequent to
the mortgage or deed of trust under which the property is sold, may redeem the same at any
time within the term of one year from and after the date of sale; and such redemption shall be
governed be the provisions of sections 464 to 466, inclusive, of the Code of Civil Procedure,
(now Sections 29 to 31, Rule 39 of the Revised Rules of Court) in so far as these are not
inconsistent with the provisions of this Act."

41

The trial court however, held that since the sale was registered on 14 May 1964, the
commencement date of the redemption period, the redemption on 4 March 1965 was timely
made and valid.
Hence, this direct appeal on points of law. Appellant contended that the redemption period in
an extrajudicial foreclosure should be reckoned from the date of the auction sale, and not
from the date of the registration of the sale in the office of the Register of Deeds.
ISSUE:
Whether or not the date of public auction or the date of registration of the sale isthe period of
redemption?
HELD:
The period of redemption of registered land sold at an extrajudicial foreclosure sale under
Act 3135, as amended, should be counted from the date of registration of the certificate of
sale in the office of the register of deeds concerned and not from the date of the public
auction.
The Rule that the reckoning date for redemption is from the date of the auction sale, not from
the registration of the sale has been abandoned as early as 1959, and the reasons therefor
were set forth, amplified and developed in subsequent decisions of the Court. The rule is now
that the reckoning date for redemption is from registration of the sale, not the date of the
auction sale.
The argument of appellant that registration of the auction sale is not necessary as between
immediate parties is rejected because such argument overlooks that the rule laid down is
precisely for the person entitled to exercise the right of redemption, who necessarily is the
owner of the property sold and not any third party.

42

Even if the mortgage contract is a voluntary transaction and the sale was known to the
principal, the extrajudicial foreclosure of the mortgage, including the right of redemption by
the owner-mortgagor, is governed, not by the general law or the Civil Code, but by a special
law, Act 3135, as amended, in conjunction with the Land Registration Act and the pertinent
provisions of the Rules of Court, that provide for registration as a mandatory requirement.

15. The Government of P.I. vs. De Las Cajigas

G.R. No. 33913 (55 Phil 667)
February 20, 1931
FACTS:
This action was brought by the Government of the Philippine Islands for the purpose of
foreclosing a mortgage on real property located in the City of Manila, which mortgage was
executed, with the approval of the court, by Candelario de las Cajigas, in his capacity as
administrator of the estate of his deceased wife, Dolores G. Azaola de Cajigas, for the
purpose of securing the repayment of P15,000 advanced in the form of a loan by the
Philippine Postal Savings Bank.
During trial, Candelario de las Cajigas did not appear to make any defense, and the
Philippine Trust Company admitted the material allegations of the complaint.
Judgment was entered directing that the amount of the mortgage debt should be paid into
court within the period of 90 days, as prescribed by law, in default of which it was ordered
that the mortgaged property should be sold for the satisfaction of the debt.
The debt was not paid, and after a delay of some two years resulting from the indulgence of
the creditor, the property was exposed to sale and was purchased by Jose Catot. The
confirmation of this sale was opposed by Candelario de las Cajigas, but the sale was,
nevertheless confirmed, and Cajigas appealed.

43

Jose Rodriguez Serra was at first named as a defendant, in the character of administrator of
the testate estate of his wife, Encarnacion Serra, who held a subordinate lien on the personal
interest of Candelario de las Cajigas; but this lien having been satisfied by Jose de las
Cajigas, son of the defendant Candelario de las Cajigas, the court granted a motion asking
that the estate of Encarnacion Serra be excluded as a defendant.
In the same motion it was requested that Jose de las Cajigas, as successor to the right of
Encarnacion Serra, should be included as a defendant but notwithstanding the granting of
said motion by the court no answer was required from Jose de las Cajigas, and he was
thereafter ignored.
In the course of the proceedings the Philippine Trust Company was admitted as a defendant,
and answer was interposed by the bank in the character of successor to Candelario de las
Cajigas, administrator, upon it being made to appear that the latter had been removed from
the office of administrator by the court having charge of the administration and that the
Philippine Trust Company had been appointed as successor to the office of said
administrator.
Appellant insisted that the heirs of Dolores G. Azaola de Cajigas should have been
impleaded.
It was also contended that appellant Candelario de las Cajigas was not notified of the motion
which was presented by the plaintiff in order to procure the execution of the judgment of
foreclosure. It was insisted that the sale could not be effected without notification to the
debtor party of the motion for the execution of the judgment.
It was also contended that the sale was invalid because, in the published advertisement
announcing the sale, the indebtedness constituting a lien upon the property was overstated by
about P5,000.
ISSUES:
44

1) Whether the foreclosure proceeding was conducted against all of the indispensable
parties.
2) Could the sale be effected without notification to the debtor party of the motion for the
execution of the judgment?
HELD:
Yes. It was only after the foreclosure had reached the stage when the sale was about to be
confirmed that Candelario de las Cajigas appeared and opposed the confirmation on the
grounds hereinafter mentioned.
It is not entirely clear that the appellant Candelario de las Cajigas really has any interest in
the subject matter of the lawsuit which would entitle him to maintain this appeal; because he
has been supplanted as administrator, and the personal interest which he had in the property
has been alienated by him.
But ignoring this point, and assuming that he has an interest in the property subject to this
foreclosure which would entitle him to be heard, the Court was of the opinion that none of
the technical grounds upon which he seeks to defeat the proceeding are well taken.
It will be noted, however, that the property in question is covered by a Torrens title, and the
mortgage was executed by the administrator, with the approval of the court, after the death of
Dolores G. Azaola de Cajigas, the original owner.
Under section 89 of the Land Registration Act (No. 496) real estate registered under the
Torrens system passes upon the death of the owner to the executor or administrator of the
deceased, whether such owner dies testate or intestate.
There can be, therefore, no question as to the validity of the mortgage, and inasmuch as the
legal title was vested in the administrator when the mortgage was executed, such
administrator was the only indispensable party defendant in the foreclosure proceeding. The
interest of the heirs of the original owner was derivative and contingent, and for the purposes

45

of foreclosure they were represented by the administrator who was the true party in interest;
and even supposing that the heirs might have been proper parties in interest within the
meaning of section 255 of the Code of Civil Procedure, a valid foreclosure could be effected
although they were not impleaded.
The effect of the failure to make a subordinate lienholder a party to a foreclosure proceeding
is, not that the foreclosure is void as between the parties to the proceeding, but that the
foreclosure is ineffective as against such subordinate lienholder, with the consequence that
there remains in him an unforeclosed equity of redemption.
The same reasoning holds with respect to Jose de las Cajigas in his character as transferee of
the subordinate lien originally vested in Encarnacion Serra. The failure to implead him
formally as a party, in lieu of the administrator of Encarnacion Serra, when the transfer was
made known to the court, did not invalidate the foreclosure, but at most might have left in
him a right of redemption, upon the existence of which right it is not necessary here to pass
an opinion. While the subordinate lienholder is a proper party defendant in order to make a
decree of foreclosure completely binding on all interests, he is not an absolutely
indispensable party in the foreclosure proceeding.
The judgment of foreclosure had become final, and the motion asking for execution was a
motion which in its very nature was grantable as of course; and the failure to give notice of
the motion is no ground for nullifying the sale.
The debt was advertised in the amount fixed by the court in its judgment as the amount of the
mortgage debt, with interest. This amount had, however, been reduced by payments made by
the judgment debtor to the amount, approximately, which was bid for the property at the sale.
The error in stating the amount of the debt in the notice of sale does not affect the validity of
the mortgage. A mortgage debtor has a right to satisfy the indebtedness or any part of it, at
any time, and it would be dangerous doctrine to make the efficacy of the foreclosure sale
depend upon the precise correctness of the statement of the amount of the mortgage debt.
46

Under the provisions relating to the foreclosure of mortgages contained in the present Code
of Civil Procedure, no upset price is fixed, and every person desirous of purchasing at a
foreclosure sale knows that the property will be sold for the highest amount which is bid for
it at the sale, regardless of the amount of the indebtedness fixed in the judgment. No person
having a bona fide desire to purchase the mortgaged property would be in the least concerned
over the amount of the indebtedness.
The error in the overstatement of the indebtedness could not materially affect the rights of
anybody concerned in the sale.

All of appellants contentions have no substantial merit. The Court held that the sale was
valid and that the trial court committed no error in confirming it.

16. Industrial Finance Corp. vs. Apostol

G.R. No. L-35453
September 15, 1989

FACTS:
Spouses Joaquin Padilla and Socorro Padilla bought on credit three units of Isuzu trucks from
the Industrial Transport and Equipment, Inc. They executed a promissory note for P159,600,
the balance of the purchase price, securing payment thereof by a chattel mortgage of said
trucks and, as additional collateral, a real estate mortgage on their property covered by
Transfer Certificate of Title No. T-133625 in favor of the seller. Subsequently, petitioner
indorsed the note and assigned the real estate mortgage to petitioner Industrial Finance

47

Corporation (IFC), which assignment was duly registered in the Registry of Deeds of Quezon
City and annotated on the title of the mortgaged realty.

In view of the failure of the Padillas to pay several installments on the note, the assignee IFC
sued Joaquin Padilla in the Court of First Instance of Rizal (Quezon City) for the recovery of
the unpaid balance on the note including attorney's fees. In due time, a decision was
rendered in favor of plaintiff (IFC) and against defendant (Joaquin Padilla) to pay plaintiff.

On appeal to the Court of Appeals, the trial court was sustained except for the modification
that the attorney's fees were reduced to 12 % of the balance. As no appeal was brought by
either of the parties, the appellate court decision became final and executory.

Meanwhile, private respondents Juan Delmendo and Honorata Delmendo filed a complaint
against petitioner IFC, as principal party, and the Padilla spouses, as formal parties, in
respondent Court of First Instance (Civil Case No. Q-15942). The Delmendos alleged that
they were the transferees of the real property covered by Transfer Certificate of Title No. T133625 of the Quezon City Register of Deeds which was mortgaged earlier by the Padillas to
the Industrial Transport and Equipment, Inc. to secure the payment of a promissory note in
the sum of P 159,600 and then assigned to petitioner IFC. The Delmendos prayed for the
cancellation of the mortgage lien annotated on Transfer Certificate of Title No. T-133625 and
the delivery to them by petitioner of the owner's copy of said title with damages and
attorney's fees, considering that petitioner IFC had waived its rights over the mortgage when
it instituted a personal action against the Padillas in Civil Case No. Q-14417 for collection of
a sum of money.

48

Petitioner IFC moved for the dismissal of the complaint, contending that it had not waived its
right over the mortgage lien.

The Delmendos filed a motion for summary judgment which respondent trial court granted.

Upon denial of its motion for reconsideration, petitioner IFC came to this Court raising the
issue of whether, by filing a personal action for the recovery of a debt secured by a real
estate mortgage, petitioner is deemed to have abandoned, ipso jure, its mortgage lien on the
property in question.

ISSUE:
Whether or not filing a personal action for the recovery of a debt secured by a real estate
mortgage proper.

HELD:
The Court held in the affirmative. The above question is certainly far from novel. In a host
of decided cases, the most recent of which is Danao v. Court of Appeals, this Court has
resolved this issue in the affirmative In Manila Trading and Supply Co. v. Co Kim and So
Tek, we declared:
The rule is now settled that a mortgage creditor may elect to waive his
security and bring, instead, an ordinary action to recover the
indebtedness with the right to execute a judgment thereon on all the
properties of the debtor, including the subject- matter of the mortgage,

49

subject to the qualification that if he fails in the remedy by him elected, he

cannot pursue further the remedy he has waived.
The case of Bachrach Motor Co., Inc. v. Icarangal and Oriental Commercial Co., Inc., which
similarly involves a promissory note secured by a real estate mortgage, gives us an extensive
discussion on the rule, to wit:
For non-payment of a note secured by mortgage, the creditor has a single
cause of action against the debtor. This single cause of action consists in the
recovery of the credit with execution of the security. In other words, the
creditor in his action may make two demands, the payment of the debt and the
foreclosure of his mortgage. But both demands arise from the same cause, the
non-payment of the debt, and, for that reason, they constitute a single cause of
action. Though the debt and the mortgage constitute separate agreements, the
latter is subsidiary to the former, and both refer to one and the same
obligation. Consequently, there exists only one cause of action for a single
breach of that obligation. Plaintiff, then, by applying the rule above stated,
cannot split up his single cause of action by filing a complaint for foreclosure
of the mortgage. If he does so, the filing of the first complaint will bar the
subsequent complaint. By allowing the creditor to file two separate complaints
simultaneously or successively, one to recover his credit and another to
foreclose his mortgage, we will, in effect, be authorizing him plural redress for
a single breach of contract at so much cost to the courts and with so much
vexation and oppression to the debtor.

We hold, therefore, that, in the absence of express statutory provisions, a

mortgage creditor may institute against the mortgage debtor either a
personal action for debt or a real action to foreclose the mortgage. In other
words, he may pursue either of the two remedies, but not both. By such
election, his cause of action can by no means be impaired, for each of the two
50

remedies is complete in itself. Thus, an election to bring a personal action will

leave open to him all the properties of the debtor for attachment and
execution, even including the mortgaged property itself. And, if he waives
such personal action and pursues his remedy against the mortgaged property,
an unsatisfied judgment thereon would still give him the right to sue for a
deficiency judgment, in which case, all the properties of the defendant, other
than the mortgaged property, are again open to him for the satisfaction of the
deficiency. In either case, his remedy is complete, his cause of action
undiminished, and any advantages attendant to the pursuit of one or the other
remedy are purely accidental and are all under his right of election.

The end result is the discharge of the real estate mortgage and the Delmendos, having
purchased the mortgaged property, automatically step into the shoes of the original
mortgagors with every right to have the title delivered to them free from said encumbrance.

WHEREFORE, finding no error in the summary judgment under appeal, the same is hereby
affirmed in toto. Considering the length of time that this case has been pending, this decision
is declared immediately executory.

17. The Government of P.I. vs.Torralba Viuda de Santos

G.R. No. L-41573
August 3, 1935

FACTS:
Margarita TorralbaViuda de Santos is assigned to be personally and as administratrix of the
estate of the deceased Epifanio de los Santos y Cristobal.
51

She was ordered by the lower court to pay the plaintiff with interest at 9% per annum,
coputed semi-annulaly, until fully paid, plus the amounts of taxes and insurance premiums.
In support of her appeal, the plaintiff govt of PI alleged that the lower court erred in holding
defendant liable as administratrix of the deceased.
ISSUE:
Whether or not the court a quo erred in holding defendant TorralbaViuda de Santos is liable
for any deficiency remaining unsatisfied after applying the proceeds of the sale of the
mortgaged properties to the amount of the judgment?
HELD:
The Court held in the negative. Sec 260 of the Code of Civil Procedure states that Upon the
sale of any real property, under a decree for a sale to satisfy a mortgage or other incumbrance
thereon, if there be a balance due to the complainant after applying the proceeds of the sale,
the court, upon motion, shall give a decree against the defendant for any such balance for
which, by the record of the case, he may be personally liable to the plaintiff, upon which
execution may issue immediately if the balance is all due at the time of the rendition of the
decree; otherwise the plaintiff shall be entitled to execution at such time as the balance
remaining would have become due by the terms of the original contract, which time shall be
stated in the decree. Therefore, court is permitted to do so.

18. Sps. Tirona vs. Alejo

G.R. No. 129313
October 10, 2001
FACTS:

52

Petitioners filed a suit for ejectment against private respondent Nuez in the MeTC of
Valenzuela, Branch 81 for unlawfully occupying fishponds claimed to be owned by the
former. Nuez admitted that petitioners owned the fishponds, but averred that the MeTC had
no jurisdiction over the case as petitioners did not allege prior physical possession in their
complaint. The court rendered a judgment in favor of petitioners. Petitioners then filed a suit
for ejectment against private respondent Ignacio with the MeTC of Valenzuela, Branch 82 for
the same allegations and the same relief as with the Nuez case. The MeTC dismissed the
case. In the appeal, the RTC ruled against petitioners holding that the two cases did not fall
within the jurisdiction of the lower court as they did not allege prior physical possession of
the property as required in complaints for forcible entry and provided for in Section 1 of Rule
70 of the Rules of Court.
ISSUE:
Whether or not the failure to allege prior physical possession in a case for forcible entry is
fatal to the jurisdiction of the inferior court?
HELD:
The Court held in the affirmative. The action of petitioners was one for forcible entry and not
for unlawful detainer. In the former, for the inferior court to acquire jurisdiction, the plaintiff
must allege his prior physical possession of the property and was thus deprived of it by any
of the means provided for in Section 1, Rule 70 of the Rules of Court. The complaints only
alleged unlawful deprivation of the property by respondents but petitioners failed to allege
prior physical possession. The deficiency did not allow the MeTC to acquire jurisdiction.
Neither will an amendment complaint be allowed, as submitted by petitioners, where the
court had no jurisdiction over the original complaint nor where the purpose of the
amendment is to confer jurisdiction upon the court.

The petition is denied.

53

19. Heirs of Demetrio Melchor vs. MELCHOR

G.R. No. 150633
November 12, 2003
FACTS:
Petitioners, who are the heirs of DEMETRIO MELCHOR, claim to be the owners, by way of
succession, of the subject property allegedly in possession of respondent JULIO MELCHOR.
The subject property is a portion of the twenty hectares of land registered in the name of
PEDRO MELCHOR, evidenced by Original Certificate of Title. The said property was
purchased by the late DEMETRIO MELCHOR from PEDRO MELCHOR, the deceased
father of herein respondent JULIO MELCHOR. Since February 14, 1947 up to the present,
petitioners further allege that respondent has been occupying the subject property and has
been harvesting crops thereon and using it for grassing cows and carabaos. A demand letter
was allegedly sent by the petitioners to the respondent, demanding him to vacate and
surrender the said property, but the latter refused. The disagreement reached the barangay
authorities, which case was not amicably settled, resulting in the issuance of a certification to
file action.
Petitioners filed against respondent a complaint for ejectment before the MTC of Cauayan.
For his part, the defendant (now respondent) principally raised the matter of ownership by
alleging affirmative/special defenses, among others, that the parcel of land in possession of
the defendant is registered in the name of the deceased mother of the defendant, as per
Transfer of Certificate of Title No. T-274828 of the Registry of Deeds for Isabela, and that
the same property is now owned by the defendant having inherited the same from their late
mother. MTC said that ejectment is not the proper remedy.
ISSUE:
Whether or not CA committed a grave error when it ruled that the Second Amended
Complaint does not allege a sufficient cause of action for unlawful detainer?

54

HELD:
No. Even if petitioners may be correct in saying that prior physical possession by the plaintiff
need not be alleged in an action for unlawful detainer, the absence of such possession does
not ipso facto make their Complaint sufficient to confer jurisdiction on the MTC. In
ejectment cases, the jurisdiction of the court is determined by the allegations of the
complaint. The test for determining the sufficiency of those allegations is whether, admitting
the facts alleged, the court can render a valid judgment in accordance with the prayer of the
plaintiff.
As correctly held by the appellate court, forcible entry must be ruled out as there was no
allegation that the petitioners were denied possession of the subject property through any of
the means stated in Section 1, Rule 70 of ROC.
Neither was unlawful detainer satisfactorily alleged. In determining the sufficiency of a
complaint therefor, it is not necessary to employ the terminology of the law. Not averred in
this case, however, were certain essential facts such as how entry was effected, or how and
when dispossession started. Petitioners merely alleged their ownership of the land, which had
supposedly been possessed by respondent since 1947. There was no allegation showing that
his possession of it was initially legal -- by virtue of a contract, express or implied -- and that
it became illegal after the expiration of his right to possess.

Neither did the Complaint claim as a fact any overt act on the part of petitioners showing that
they had permitted or tolerated respondents occupancy of the subject property. It is a settled
rule that in order to justify an action for unlawful detainer, the owners permission or
tolerance must be present at the beginning of the possession. Since the Complaint did not
satisfy the jurisdictional requirements of a valid cause for forcible entry or unlawful detainer,
the appellate court was correct in holding that the MTC had no jurisdiction to hear the case.

55

20. Ross Rica Sales Center, Inc. vs. Sps. Ong

G.R. No. 132197
August 16, 2005
FACTS:
Petitioners filed a complaint for ejectment against Spouses Ong before the MTC of Mandaue
City. In the complaint, petitioners alleged the fact of their ownership of three (3) parcels of
land covered by TCT Nos. 36466, 36467 and 36468. They likewise acknowledged
respondent Elizabeth Ongs ownership of the lots previous to theirs. On Januqry 26, 1995,
Atty. Joseph M. Baduel, representing Mandaue Prime Estate Realty, wrote SPOUSES ONG
informing them of its intent to use the lots and asking them to vacate within thirty (30) days
from receipt of the letter. But SPOUSES ONG allegedly refused to vacate, thereby
unlawfully withholding possession of said lots.
Petitioners had acquired the lands from Mandaue Prime Estate Realty through a sale made on
23 March 1995. In turn, it appears that Mandaue Prime Estate Realty had acquired the
properties from the SPOUSES ONG through a Deed of Absolute Sale dated 14 July 1994.
However, this latter deed of sale and the transfers of title consequential thereto were
subsequently sought to be annulled by SPOUSES ONG in a complaint filed on 13 February
1995 before the Mandaue RTC against Mandaue Prime Estate Realty. Per record, this case is
still pending resolution.
The MTC ordered Spouses Ong to vacate the premises in question and to peacefully turn
over possession thereof to petitioners. RTC affirmed the entirety of the decision of the MTC.
On appeal, CA ruled that MTC had no jurisdiction over sai case as there was no contract
between the parties, express or implied, as would qualify the same as one for unlawful
detainer. Thus, the assailed Orders of the MTC and RTC were sset aside. Hence, this petition
for review under Rule 45 of the Rules of Court.
ISSUE:

56

Whether or not the complaint satisfies the jurisdictional requirements for a case of unlawful
detainer properly cognizable by the MTC?
HELD:
The Court held in the affirmative. MTC and RTC has jurisdiction over the case of unlawful
detainer. The presence of a contract is not a requisite for unlawful detainer case.

The allegation in the complaint that there was unlawful withholding of possession is
sufficient to make out a case for unlawful detainer. It is equally settled that in an action for
unlawful detainer, an allegation that the defendant is unlawfully withholding possession from
the plaintiff is deemed sufficient, without necessarily employing the terminology of the law.
Hence, the phrase "unlawful withholding" has been held to imply possession on the part of
defendant, which was legal in the beginning, having no other source than a contract, express
or implied, and which later expired as a right and is being withheld by defendant. In the
subject complaint, RRSC & JKI alleged that they are the registered owners of the lots
covered by TCT Nos. 36466, 36467 and 36468. By their implied tolerance, they have
allowed SPOUSES ONG, the former owners of the properties, to remain therein.
Nonetheless, they eventually sent a letter to SPOUSES ONG asking that the latter vacate the
said lots. SPOUSES ONG refused, thereby depriving RRSC & JKI of possession of the lots.
Clearly, the complaint establishes the basic elements of an unlawful detainer case, certainly
sufficient for the purpose of vesting jurisdiction over it in the MTC.

57