[G.R. No. 143377.

February 20, 2001]

SHIPSIDE
INCORPORATED, petitioner, vs. THE HON. COURT OF APPEALS
[Special Former Twelfth Division], HON. REGIONAL TRIAL COURT,
BRANCH 26 (San Fernando City, La Union) & The REPUBLIC OF THE
PHILIPPINES, respondents.
DECISION
MELO, J.:
Before the Court is a petition for certiorari filed by Shipside
Incorporated under Rule 65 of the 1997 Rules on Civil Procedure against
the resolutions of the Court of Appeals promulgated on November 4, 1999
and May 23, 2000, which respectively, dismissed a petition
for certiorari and prohibition and thereafter denied a motion for
reconsideration.
The antecedent facts are undisputed:
On October 29, 1958, Original Certificate of Title No. 0-381 was issued
in favor of Rafael Galvez, over four parcels of land Lot 1 with 6,571 square
meters; Lot 2, with 16,777 square meters; Lot 3 with 1,583 square meters;
and Lot 4, with 508 square meters.
On April 11, 1960, Lots No. 1 and 4 were conveyed by Rafael Galvez in
favor of Filipina Mamaril, Cleopatra Llana, Regina Bustos, and Erlinda
Balatbat in a deed of sale which was inscribed as Entry No. 9115 OCT No.
0-381 on August 10, 1960. Consequently, Transfer Certificate No. T-4304
was issued in favor of the buyers covering Lots No. 1 and 4.
Lot No. 1 is described as:
A parcel of land (Lot 1, Plan PSU-159621, L. R. Case No. N-361; L. R. C.
Record No. N-14012, situated in the Barrio of Poro, Municipality of San
Fernando, Province of La Union, bounded on the NE, by the Foreshore; on
the SE, by Public Land and property of the Benguet Consolidated Mining
Company; on the SW, by properties of Rafael Galvez (US Military
Reservation Camp Wallace) and Policarpio Munar; and on the NW, by an old
Barrio Road.Beginning at a point marked 1 on plan, being S. 74 deg. 11W. ,
2670. 36 from B. L. L. M. 1, San Fernando, thence
S. 66 deg. 19E., 134.95 m. to point 2; S. 14 deg. 57W., 11.79 m. to point 3;
S. 12 deg. 45W., 27.00 m. to point 4; S. 12 deg. 45W, 6.90 m. to point 5;

N. 69 deg., 32W., 106.00 m. to point 6; N. 52 deg., 21W., 36. 85 m. to point

7;
N. 21 deg. 31E., 42. 01 m. to the point of beginning; containing an area of
SIX THOUSAND FIVE HUNDRED AND SEVENTY-ONE (6,571) SQUARE
METERS, more or less. All points referred to are indicated on the plan; and
marked on the ground; bearings true, date of survey, February 421, 1957.
Lot No. 4 has the following technical description:
A parcel of land (Lot 4, Plan PSU-159621, L. R. Case No. N-361 L. R. C.
Record No. N-14012), situated in the Barrio of Poro, Municipality of San
Fernando, La Union. Bounded on the SE by the property of the Benguet
Consolidated Mining Company; on the S. by property of Pelagia Carino; and
on the NW by the property of Rafael Galvez (US Military Reservation, Camp
Wallace). Beginning at a point marked 1 on plan, being S. deg. 24W. 2591.
69 m. from B. L. L. M. 1, San Fernando, thence S. 12 deg. 45W., 73. 03 m.
to point 2; N. 79 deg. 59W., 13.92 m. to point 3; N. 23 deg. 26E. , 75.00 m.
to the point of beginning; containing an area of FIVE HUNDED AND EIGHT
(508) SQUARE METERS, more or less. All points referred to are indicated in
the plan and marked on the ground; bearings true, date of survey,
February 4-21, 1957.
On August 16, 1960, Mamaril, et al. sold Lots No. 1 and 4 to Lepanto
Consolidated Mining Company. The deed of sale covering the aforesaid
property was inscribed as Entry No. 9173 on TCT No. T-4304. Subsequently,
Transfer Certificate No. T-4314 was issued in the name of Lepanto
Consolidated Mining Company as owner of Lots No. 1 and 4.
On February 1, 1963, unknown to Lepanto Consolidated Mining
Company, the Court of First Instance of La Union, Second Judicial District,
issued an Order in Land Registration Case No. N-361 (LRC Record No. N14012) entitled Rafael Galvez, Applicant, Eliza Bustos, et al., Parties-InInterest; Republic of the Philippines, Movant declaring OCT No. 0-381 of the
Registry of Deeds for the Province of La Union issued in the name of Rafael
Galvez, null and void, and ordered the cancellation thereof.
The Order pertinently provided:
Accordingly, with the foregoing, and without prejudice on the rights of
incidental parties concerned herein to institute their respective appropriate
actions compatible with whatever cause they may have, it is hereby
declared and this court so holds that both proceedings in Land Registration
Case No. N-361 and Original Certificate No. 0-381 of the Registry of Deeds

for the province of La Union issued in virtue thereof and registered in the
name of Rafael Galvez, are null and void; the Register of Deeds for the
Province of La Union is hereby ordered to cancel the said original certificate
and / or such other certificates of title issued subsequent thereto having
reference to the same parcels of land; without pronouncement as to costs.
On October 28, 1963, Lepanto Consolidated Mining Company sold to
herein petitioner Lots No. 1 and 4, with the deed being entered in TCT NO.
4314 as entry No. 12381. Transfer Certificate of Title No. T-5710 was thus
issued in favor of the petitioner which starting since then exercised
proprietary rights over Lots No. 1 and 4.
In the meantime, Rafael Galvez filed his motion for reconsideration
against the order issued by the trial court declaring OCT No. 0-381 null and
void. The motion was denied on January 25, 1965. On appeal, the Court of
Appeals ruled in favor of the Republic of the Philippines in a Resolution
promulgated on August 14, 1973 in CA-G. R. No. 36061-R.
Thereafter, the Court of Appeals issued an Entry of Judgment,
certifying that its decision dated August 14, 1973 became final and
executory on October 23, 1973.
On April 22, 1974, the trial court in L. R. C. Case No. N-361 issued a
writ of execution of the judgment which was served on the Register of
Deeds, San Fernando, La Union on April 29, 1974.
Twenty four long years thereafter, on January 14, 1999, the Office of
the Solicitor General received a letter dated January 11, 1999 from
Mr. Victor G.Floresca, Vice-President, John Hay Poro Point Development
Corporation, stating that the aforementioned orders and decision of the
trial court in L. R. C. No. N-361 have not been executed by the Register of
Deeds, San Fernando, La Union despite receipt of the writ of execution.
On April 21, 1999, the Office of the Solicitor General filed a complaint
for revival of judgment and cancellation of titles before the Regional Trial
Court of the First Judicial Region (Branch 26, San Fernando, La Union)
docketed therein as Civil Case No. 6346 entitled, Republic of the
Philippines, Plaintiff, versus Heirs of Rafael Galvez, represented by Teresita
Tan, Reynaldo Mamaril, Elisa Bustos, Erlinda Balatbat, Regina Bustos,
Shipside Incorporated and the Register of Deeds of La Union, Defendants.
The evidence shows that the impleaded defendants (except the
Register of Deeds of the province of La Union) are the successors-ininterest of Rafael Galvez (not Reynaldo Galvez as alleged by the Solicitor
General) over the property covered by OCT No. 0-381, namely: (a) Shipside
Inc. which is presently the registered owner in fee simple of Lots No. 1 and

4 covered by TCT No. T-5710, with a total area of 7,079 square meters; (b)
Elisa Bustos, Jesusito Galvez, and Teresita Tan who are the registered
owners of Lot No. 2 of OCT No. 0-381;and (c) Elisa Bustos, Filipina Mamaril,
Regina Bustos and Erlinda Balatbat who are the registered owners of Lot
No. 3 of OCT No. 0-381, now covered by TCT No. T-4916, with an area of
1,583 square meters.
In its complaint in Civil Case No. 6346, the Solicitor General argued
that since the trial court in LRC Case No. 361 had ruled and declared OCT
No. 0-381 to be null and void, which ruling was subsequently affirmed by
the Court of Appeals, the defendants-successors-in-interest of Rafael
Galvez have no valid title over the property covered by OCT No. 0-381, and
the subsequent Torrens titles issued in their names should be consequently
cancelled.
On July 22, 1999, petitioner Shipside, Inc. filed its Motion to Dismiss,
based on the following grounds: (1) the complaint stated no cause of
action because only final and executory judgments may be subject of an
action for revival of judgment; (2) the plaintiff is not the real party-ininterest because the real property covered by the Torrens titles sought to
be cancelled, allegedly part of Camp Wallace (Wallace Air Station), were
under the ownership and administration of the Bases Conversion
Development Authority (BCDA) under Republic Act No. 7227; (3) plaintiffs
cause of action is barred by prescription; (4) twenty-five years having
lapsed since the issuance of the writ of execution, no action for revival of
judgment may be instituted because under Paragraph 3 of Article 1144 of
the Civil Code, such action may be brought only within ten (10) years from
the time the judgment had been rendered.
An opposition to the motion to dismiss was filed by the Solicitor
General on August 23, 1999, alleging among others, that: (1) the real
party-in-interest is the Republic of the Philippines;and (2) prescription does
not run against the State.
On August 31, 1999, the trial court denied petitioners motion to
dismiss and on October 14, 1999, its motion for reconsideration was
likewise turned down.
On October 21, 1999, petitioner instituted a petition for certiorari and
prohibition with the Court of Appeals, docketed therein as CA-G.R. SP No.
55535, on the ground that the orders of the trial court denying its motion
to dismiss and its subsequent motion for reconsideration were issued in
excess of jurisdiction.
On November 4, 1999, the Court of Appeals dismissed the petition in
CA-G.R. SP No. 55535 on the ground that the verification and certification

in the petition, under the signature of Lorenzo Balbin, Jr., was made without
authority, there being no proof therein that Balbin was authorized to
institute the petition for and in behalf and of petitioner.
On May 23, 2000, the Court of Appeals denied petitioners motion for
reconsideration on the grounds that: (1) a complaint filed on behalf of a
corporation can be made only if authorized by its Board of Directors, and in
the absence thereof, the petition cannot prosper and be granted due
course;and (2) petitioner was unable to show that it had substantially
complied with the rule requiring proof of authority to institute an action or
proceeding.
Hence, the instant petition.
In support of its petition, Shipside, Inc. asseverates that:
1. The Honorable Court of Appeals gravely abused its discretion
in dismissing the petition when it made a conclusive legal
presumption that Mr. Balbin had no authority to sign the
petition despite the clarity of laws, jurisprudence and
Secretarys certificate to the contrary;
2. The Honorable Court of Appeals abused its discretion when it
dismissed the petition, in effect affirming the grave abuse of
discretion committed by the lower court when it refused to
dismiss the 1999 Complaint for Revival of a 1973 judgment, in
violation of clear laws and jurisprudence.
Petitioner likewise adopted the arguments it raised in the petition and
comment/reply it filed with the Court of Appeals, attached to its petition as
Exhibit L and N, respectively.
In his Comment, the Solicitor General moved for the dismissal of the
instant petition based on the following considerations: (1) Lorenzo Balbin,
who signed for and in behalf of petitioner in the verification and
certification of non-forum shopping portion of the petition, failed to show
proof of his authorization to institute the petition for certiorari and
prohibition with the Court of Appeals, thus the latter court acted correctly
in dismissing the same; (2) the real party-in-interest in the case at bar
being the Republic of the Philippines, its claims are imprescriptible.
In order to preserve the rights of herein parties, the Court issued a
temporary restraining order on June 26, 2000 enjoining the trial court from
conducting further proceedings in Civil Case No. 6346.

The issues posited in this case are: (1) whether or not an authorization
from petitioners Board of Directors is still required in order for its resident
manager to institute or commence a legal action for and in behalf of the
corporation; and (2) whether or not the Republic of the Philippines can
maintain the action for revival of judgment herein.
We find for petitioner.
Anent the first issue:
The Court of Appeals dismissed the petition for certiorari on the
ground that Lorenzo Balbin, the resident manager for petitioner, who was
the signatory in the verification and certification on non-forum shopping,
failed to show proof that he was authorized by petitioners board of
directors to file such a petition.
A corporation, such as petitioner, has no power except those expressly
conferred on it by the Corporation Code and those that are implied or
incidental to its existence. In turn, a corporation exercises said powers
through its board of directors and / or its duly authorized officers and
agents. Thus, it has been observed that the power of a corporation to sue
and be sued in any court is lodged with the board of directors that
exercises its corporate powers (Premium Marble Resources, Inc. v. CA, 264
SCRA 11 [1996]). In turn, physical acts of the corporation, like the signing
of documents, can be performed only by natural persons duly authorized
for the purpose by corporate by-laws or by a specific act of the board of
directors.
It is undisputed that on October 21, 1999, the time petitioners
Resident Manager Balbin filed the petition, there was no proof attached
thereto that Balbin was authorized to sign the verification and non-forum
shopping certification therein, as a consequence of which the petition was
dismissed by the Court of Appeals. However, subsequent to such dismissal,
petitioner filed a motion for reconsideration, attaching to said motion a
certificate issued by its board secretary stating that on October 11, 1999,
or ten days prior to the filing of the petition, Balbin had been authorized by
petitioners board of directors to file said petition.
The Court has consistently held that the requirement regarding
verification of a pleading is formal, not jurisdictional (Uy v. LandBank, G.R.
No. 136100, July 24, 2000). Such requirement is simply a condition
affecting the form of the pleading, non-compliance with which does not
necessarily render the pleading fatally defective. Verification is simply
intended to secure an assurance that the allegations in the pleading are
true and correct and not the product of the imagination or a matter of
speculation, and that the pleading is filed in good faith. The court may

order the correction of the pleading if verification is lacking or act on the

pleading although it is not verified, if the attending circumstances are such
that strict compliance with the rules may be dispensed with in order that
the ends of justice may thereby be served.
On the other hand, the lack of certification against forum shopping is
generally not curable by the submission thereof after the filing of the
petition.Section 5, Rule 45 of the 1997 Rules of Civil Procedure provides
that the failure of the petitioner to submit the required documents that
should accompany the petition, including the certification against forum
shopping, shall be sufficient ground for the dismissal thereof. The same
rule applies to certifications against forum shopping signed by a person on
behalf of a corporation which are unaccompanied by proof that said
signatory is authorized to file a petition on behalf of the corporation.
In certain exceptional circumstances, however, the Court has allowed
the belated filing of the certification. In Loyola v. Court of Appeals, et.
al. (245 SCRA 477 [1995]), the Court considered the filing of the
certification one day after the filing of an election protest as substantial
compliance with the requirement. In Roadway Express, Inc. v. Court of
Appeals, et. al. (264 SCRA 696 [1996]), the Court allowed the filing of the
certification 14 days before the dismissal of the petition. In Uy v.
LandBank, supra, the Court had dismissed Uys petition for lack of
verification and certification against non-forum shopping. However, it
subsequently reinstated the petition after Uy submitted a motion to admit
certification and non-forum shopping certification. In all these cases, there
were special circumstances or compelling reasons that justified the
relaxation of the rule requiring verification and certification on non-forum
shopping.
In the instant case, the merits of petitioners case should be
considered special circumstances or compelling reasons that justify
tempering the requirement in regard to the certificate of non-forum
shopping. Moreover, inLoyola, Roadway, and Uy, the Court excused noncompliance with the requirement as to the certificate of non-forum
shopping. With more reason should we allow the instant petition since
petitioner herein did submit a certification on non-forum shopping, failing
only to show proof that the signatory was authorized to do so. That
petitioner subsequently submitted a secretarys certificate attesting that
Balbin was authorized to file an action on behalf of petitioner likewise
mitigates this oversight.
It must also be kept in mind that while the requirement of the
certificate of non-forum shopping is mandatory, nonetheless the
requirements must not be interpreted too literally and thus defeat the
objective of preventing the undesirable practice of forum-shopping

(Bernardo v. NLRC, 255 SCRA 108 [1996]). Lastly, technical rules of

procedure should be used to promote, not frustrate justice. While the swift
unclogging of court dockets is a laudable objective, the granting of
substantial justice is an even more urgent ideal.
Now to the second issue:
The action instituted by the Solicitor General in the trial court is one
for revival of judgment which is governed by Article 1144(3) of the Civil
Code and Section 6, Rule 39 of the 1997 Rules on Civil Procedure. Article
1144(3) provides that an action upon a judgment must be brought within
10 years from the time the right of action accrues." On the other hand,
Section 6, Rule 39 provides that a final and executory judgment or order
may be executed onmotion within five (5) years from the date of its entry,
but that after the lapse of such time, and before it is barred by the statute
of limitations, a judgment may be enforced by action. Taking these two
provisions into consideration, it is plain that an action for revival of
judgment must be brought within ten years from the time said judgment
becomes final.
From the records of this case, it is clear that the judgment sought to
be revived became final on October 23, 1973. On the other hand, the
action for revival of judgment was instituted only in 1999, or more than
twenty-five (25) years after the judgment had become final. Hence, the
action is barred by extinctive prescription considering that such an action
can be instituted only within ten (10) years from the time the cause of
action accrues.
The Solicitor General, nonetheless, argues that the States cause of
action in the cancellation of the land title issued to petitioners predecessorin-interest is imprescriptible because it is included in Camp Wallace, which
belongs to the government.
The argument is misleading.
While it is true that prescription does not run against the State, the
same may not be invoked by the government in this case since it is no
longer interested in the subject matter. While Camp Wallace may have
belonged to the government at the time Rafael Galvezs title was ordered
cancelled in Land Registration Case No. N-361, the same no longer holds
true today.
Republic Act No. 7227, otherwise known as the Bases Conversion and
Development Act of 1992, created the Bases Conversion and Development
Authority. Section 4 pertinently provides:

Section 4. Purposes of the Conversion Authority. The Conversion Authority

shall have the following purposes:
(a) To own, hold and/or administer the military reservations of
John Hay Air Station, Wallace Air Station, ODonnell Transmitter
Station, San Miguel Naval Communications Station, Mt. Sta.
Rita Station (Hermosa, Bataan) and those portions of Metro
Manila military camps which may be transferred to it by the
President;
Section 2 of Proclamation No. 216, issued on July 27, 1993, also
provides:
Section 2. Transfer of Wallace Air Station Areas to the Bases Conversion
and Development Authority. All areas covered by the Wallace Air Station as
embraced and defined by the 1947 Military Bases Agreement between the
Philippines and the United States of America, as amended, excluding those
covered by Presidential Proclamations and some 25-hectare area for the
radar and communication station of the Philippine Air Force, are hereby
transferred to the Bases Conversion Development Authority
With the transfer of Camp Wallace to the BCDA, the government no
longer has a right or interest to protect. Consequently, the Republic is not a
real party in interest and it may not institute the instant action. Nor may it
raise the defense of imprescriptibility, the same being applicable only in
cases where the government is a party in interest. Under Section 2 of Rule
3 of the 1997 Rules of Civil Procedure, every action must be prosecuted or
defended in the name of the real party in interest. To qualify a person to be
a real party in interest in whose name an action must be prosecuted, he
must appear to be the present real owner of the right sought to enforced
(Pioneer Insurance v. CA, 175 SCRA 668 [1989]). A real party in interest is
the party who stands to be benefited or injured by the judgment in the suit,
or the party entitled to the avails of the suit.And by real interest is meant a
present substantial interest, as distinguished from a mere expectancy, or a
future, contingent, subordinate or consequential interest (Ibonilla v.
Province of Cebu, 210 SCRA 526 [1992]). Being the owner of the areas
covered by Camp Wallace, it is the Bases Conversion and Development
Authority, not the Government, which stands to be benefited if the land
covered by TCT No. T-5710 issued in the name of petitioner is cancelled.
Nonetheless, it has been posited that the transfer of military
reservations and their extensions to the BCDA is basically for the purpose
of accelerating the sound and balanced conversion of these military
reservations into alternative productive uses and to enhance the benefits
to be derived from such property as a measure of promoting the economic
and social development, particularly of Central Luzon and, in general, the

countrys goal for enhancement (Section 2, Republic Act No. 7227). It is

contended that the transfer of these military reservations to the
Conversion Authority does not amount to an abdication on the part of the
Republic of its interests, but simply a recognition of the need to create a
body corporate which will act as its agent for the realization of its
program. It is consequently asserted that the Republic remains to be the
real party in interest and the Conversion Authority merely its agent.
We, however, must not lose sight of the fact that the BCDA is an entity
invested with a personality separate and distinct from the
government. Section 3 of Republic Act No. 7227 reads:
Section 3. Creation of the Bases Conversion and Development Authority.
There is hereby created a body corporate to be known as the Conversion
Authority which shall have the attribute of perpetual succession and shall
be vested with the powers of a corporation.
It may not be amiss to state at this point that the functions of
government have been classified into governmental or constituent and
proprietary or ministrant. While public benefit and public welfare,
particularly, the promotion of the economic and social development of
Central Luzon, may be attributable to the operation of the BCDA, yet it is
certain that the functions performed by the BCDA are basically proprietary
in nature. The promotion of economic and social development of Central
Luzon, in particular, and the countrys goal for enhancement, in general, do
not make the BCDA equivalent to the Government. Other corporations
have been created by government to act as its agents for the realization of
its programs, the SSS, GSIS, NAWASA and the NIA, to count a few, and yet,
the Court has ruled that these entities, although performing functions
aimed at promoting public interest and public welfare, are not governmentfunction corporations invested with governmental attributes. It may thus
be said that the BCDA is not a mere agency of the Government but a
corporate body performing proprietary functions.
Moreover, Section 5 of Republic Act No. 7227 provides:
Section 5. Powers of the Conversion Authority. To carry out its objectives
under this Act, the Conversion Authority is hereby vested with the following
powers:
(a) To succeed in its corporate name, to sue and be sued in such
corporate name and to adopt, alter and use a corporate seal
which shall be judicially noticed;
Having the capacity to sue or be sued, it should thus be the BCDA
which may file an action to cancel petitioners title, not the Republic, the

former being the real party in interest. One having no right or interest to
protect cannot invoke the jurisdiction of the court as a party plaintiff in an
action (Ralla v. Ralla, 199 SCRA 495 [1991]). A suit may be dismissed if the
plaintiff or the defendant is not a real party in interest. If the suit is not
brought in the name of the real party in interest, a motion to dismiss may
be filed, as was done by petitioner in this case, on the ground that the
complaint states no cause of action (Tanpingco v. IAC, 207 SCRA 652
[1992]).
However, E. B. Marcha Transport Co. , Inc. v. IAC (147 SCRA 276
[1987]) is cited as authority that the Republic is the proper party to sue for
the recovery of possession of property which at the time of the institution
of the suit was no longer held by the national government but by the
Philippine Ports Authority. In E. B. Marcha, the Court ruled:
It can be said that in suing for the recovery of the rentals, the Republic of
the Philippines, acted as principal of the Philippine Ports Authority, directly
exercising the commission it had earlier conferred on the latter as its
agent. We may presume that, by doing so, the Republic of the Philippines
did not intend to retain the said rentals for its own use, considering that by
its voluntary act it had transferred the land in question to the Philippine
Ports Authority effective July 11, 1974. The Republic of the Philippines had
simply sought to assist, not supplant, the Philippine Ports Authority, whose
title to the disputed property it continues to recognize. We may expect
then that the said rentals, once collected by the Republic of the Philippines,
shall be turned over by it to the Philippine Ports Authority conformably to
the purposes of P. D. No. 857.
E. B. Marcha is, however, not on all fours with the case at bar. In the
former, the Court considered the Republic a proper party to sue since the
claims of the Republic and the Philippine Ports Authority against the
petitioner therein were the same. To dismiss the complaint in E. B.
Marcha would have brought needless delay in the settlement of the matter
since the PPA would have to refile the case on the same claim already
litigated upon. Such is not the case here since to allow the government to
sue herein enables it to raise the issue of imprescriptibility, a claim which
is not available to the BCDA. The rule that prescription does not run against
the State does not apply to corporations or artificial bodies created by the
State for special purposes, it being said that when the title of the Republic
has been divested, its grantees, although artificial bodies of its own
creation, are in the same category as ordinary persons (Kingston v. LeHigh
Valley Coal Co., 241 Pa 469). By raising the claim of imprescriptibility, a
claim which cannot be raised by the BCDA, the Government not only
assists the BCDA, as it did in E. B. Marcha, it even supplants the latter, a
course of action proscribed by said case.

Moreover, to recognize the Government as a proper party to sue in

this case would set a bad precedent as it would allow the Republic to
prosecute, on behalf of government-owned or controlled corporations,
causes of action which have already prescribed, on the pretext that the
Government is the real party in interest against whom prescription does
not run, said corporations having been created merely as agents for the
realization of government programs.
Parenthetically, petitioner was not a party to the original suit for
cancellation of title commenced by the Republic twenty-seven years for
which it is now being made to answer, nay, being made to suffer financial
losses.
It should also be noted that petitioner is unquestionably a buyer in
good faith and for value, having acquired the property in 1963, or 5 years
after the issuance of the original certificate of title, as a third transferee. If
only not to do violence and to give some measure of respect to the Torrens
System, petitioner must be afforded some measure of protection.
One more point.
Since the portion in dispute now forms part of the property owned and
administered by the Bases Conversion and Development Authority, it is
alienable and registerable real property.
We find it unnecessary to rule on the other matters raised by the
herein parties.
WHEREFORE, the petition is hereby granted and the orders dated
August 31, 1999 and October 4, 1999 of the Regional Trial Court of the First
National Judicial Region (Branch 26, San Fernando, La Union) in Civil Case
No. 6346 entitled Republic of the Philippines, Plaintiff, versus Heirs of
Rafael Galvez, et. al., Defendants as well as the resolutions promulgated
on November 4, 1999 and May 23, 2000 by the Court of Appeals (Twelfth
Division) in CA-G. R. SP No. 55535 entitled Shipside, Inc., Petitioner versus
Hon. Alfredo Cajigal, as Judge, RTC, San Fernando, La Union, Branch 26,
and the Republic of the Philippines, Respondents are hereby reversed and
set aside. The complaint in Civil Case No. 6346, Regional Trial Court,
Branch 26, San Fernando City, La Union entitled Republic of the Philippines,
Plaintiff, versus Heirs of Rafael Galvez, et al." is ordered dismissed, without
prejudice to the filing of an appropriate action by the Bases Development
and Conversion Authority.
SO ORDERED.

[G.R. No. 153660. June 10, 2003]

PRUDENCIO BANTOLINO, NESTOR ROMERO, NILO ESPINA, EDDIE
LADICA, ARMAN QUELING, ROLANDO NIETO, RICARDO
BARTOLOME, ELUVER GARCIA, EDUARDO GARCIA and
NELSON
MANALASTAS, petitioners, vs.
COCA-COLA
BOTTLERS PHILS., INC., respondent.
DECISION
BELLOSILLO, J.:

Services and Interim Services being bona fideindependent contractors,

were the real employers of the complainants.[3]As regards the corporate
officers, respondent insisted that they could not be faulted and be held
liable for damages as they only acted in their official capacities while
performing their respective duties.
On 29 May 1998 Labor Arbiter Jose De Vera rendered a decision
ordering respondent company to reinstate complainants to their former
positions with all the rights, privileges and benefits due regular employees,
and to pay their full back wages which, with the exception of Prudencio
Bantolino whose back wages must be computed upon proof of his dismissal
as of 31 May 1998, already amounted to an aggregate of P1,810,244.00. [4]

This is a Petition for Review on Certiorari under Rule 45 of the Rules of

Court assailing the Decision of the Court of Appeals [1] dated 21 December
2001 which affirmed with modification the decision of the National Labor
Relations Commission promulgated 30 March 2001.[2]

In finding for the complainants, the Labor Arbiter ruled that in contrast
with the negative declarations of respondent companys witnesses who, as
district sales supervisors of respondent company denied knowing the
complainants personally, the testimonies of the complainants were more
credible as they sufficiently supplied every detail of their employment,
specifically identifying who their salesmen/drivers were, their places of
assignment, aside from their dates of engagement and dismissal.

On 15 February 1995 sixty-two (62) employees of respondent CocaCola Bottlers, Inc., and its officers, Lipercon Services, Inc., Peoples
Specialist Services, Inc., and Interim Services, Inc., filed a complaint
against respondents for unfair labor practice through illegal dismissal,
violation of their security of tenure and the perpetuation of the Cabo
System. They thus prayed for reinstatement with full back wages, and the
declaration of their regular employment status.

On appeal, the NLRC sustained the finding of the Labor Arbiter that
there was indeed an employer-employee relationship between the
complainants and respondent company when it affirmed in toto the latters
decision.

For failure to prosecute as they failed to either attend the scheduled

mandatory conferences or submit their respective affidavits, the claims of
fifty-two (52) complainant-employees were dismissed. Thereafter, Labor
Arbiter Jose De Vera conducted clarificatory hearings to elicit information
from the ten (10) remaining complainants (petitioners herein) relative to
their alleged employment with respondent firm.

In a resolution dated 17 July 2001 the NLRC subsequently denied for

lack of merit respondents motion for consideration.

In substance, the complainants averred that in the performance of

their duties as route helpers, bottle segregators, and others, they were
employees of respondent Coca-Cola Bottlers, Inc. They further maintained
that when respondent company replaced them and prevented them from
entering the company premises, they were deemed to have been illegally
dismissed.

Respondent Coca-Cola Bottlers appealed to the Court of Appeals

which, although affirming the finding of the NLRC that an employeremployee relationship existed between the contending parties,
nonetheless agreed with respondent that the affidavits of some of the
complainants, namely, Prudencio Bantolino, Nestor Romero, Nilo Espina,
Ricardo Bartolome, Eluver Garcia, Eduardo Garcia and Nelson Manalastas,
should not have been given probative value for their failure to affirm the
contents thereof and to undergo cross-examination. As a consequence, the
appellate court dismissed their complaints for lack of sufficient evidence. In
the same Decision however, complainants Eddie Ladica, Arman Queling
and Rolando Nieto were declared regular employees since they were the
only ones subjected to cross-examination. [5] Thus -

In lieu of a position paper, respondent company filed a motion to

dismiss complaint for lack of jurisdiction and cause of action, there being
no employer-employee relationship between complainants and Coca-Cola
Bottlers, Inc., and that respondents Lipercon Services, Peoples Specialist

x x x (T)he labor arbiter conducted clarificatory hearings to ferret out the

truth between the opposing claims of the parties thereto. He did not
submit the case based on position papers and their accompanying
documentary evidence as a full-blown trial was imperative to establish the

parties claims. As their allegations were poles apart, it was necessary to

give them ample opportunity to rebut each others statements through
cross-examination. In fact, private respondents Ladica, Quelling and Nieto
were subjected to rigid cross-examination by petitioners counsel. However,
the testimonies of private respondents Romero, Espina, and Bantolino were
not subjected to cross-examination, as should have been the case, and no
explanation was offered by them or by the labor arbiter as to why this was
dispensed with. Since they were represented by counsel, the latter should
have taken steps so as not to squander their testimonies. But nothing was
done by their counsel to that effect.[6]
Petitioners now pray for relief from the adverse Decision of the Court
of Appeals; that, instead, the favorable judgment of the NLRC be
reinstated.
In essence, petitioners argue that the Court of Appeals should not
have given weight to respondents claim of failure to cross-examine them.
They insist that, unlike regular courts, labor cases are decided based
merely on the parties position papers and affidavits in support of their
allegations and subsequent pleadings that may be filed thereto. As such,
according to petitioners, the Rules of Court should not be strictly applied in
this case specifically by putting them on the witness stand to be crossexamined because the NLRC has its own rules of procedure which were
applied by the Labor Arbiter in coming up with a decision in their favor.
In its disavowal of liability, respondent commented that since the
other alleged affiants were not presented in court to affirm their
statements, much less to be cross-examined, their affidavits should, as the
Court of Appeals rightly held, be stricken off the records for being selfserving, hearsay and inadmissible in evidence. With respect to Nestor
Romero, respondent points out that he should not have been impleaded in
the instant petition since he already voluntarily executed aCompromise
Agreement, Waiver and Quitclaim in consideration of P450,000.00. Finally,
respondent argues that the instant petition should be dismissed in view of
the failure of petitioners [7] to sign the petition as well as the verification
and certification of non-forum shopping, in clear violation of the principle
laid down in Loquias v. Office of the Ombudsman.[8]
The crux of the controversy revolves around the propriety of giving
evidentiary value to the affidavits despite the failure of the affiants to
affirm their contents and undergo the test of cross-examination.
The petition is impressed with merit. The issue confronting the Court
is not without precedent in jurisprudence. The oft-cited case of Rabago v.
NLRC[9] squarely grapples a similar challenge involving the propriety of the
use of affidavits without the presentation of affiants for cross-examination.

In that case, we held that the argument that the affidavit is hearsay
because the affiants were not presented for cross-examination is not
persuasive because the rules of evidence are not strictly observed in
proceedings before administrative bodies like the NLRC where decisions
may be reached on the basis of position papers only.
In Rase v. NLRC,[10] this Court likewise sidelined a similar challenge
when it ruled that it was not necessary for the affiants to appear and
testify and be cross-examined by counsel for the adverse party. To require
otherwise would be to negate the rationale and purpose of the summary
nature of the proceedings mandated by the Rules and to make mandatory
the application of the technical rules of evidence.
Southern Cotabato Dev. and Construction Co. v. NLRC [11] succinctly
states that under Art. 221 of the Labor Code, the rules of evidence
prevailing in courts of law do not control proceedings before the Labor
Arbiter and the NLRC. Further, it notes that the Labor Arbiter and the NLRC
are authorized to adopt reasonable means to ascertain the facts in each
case speedily and objectively and without regard to technicalities of law
and procedure, all in the interest of due process. We find no compelling
reason to deviate therefrom.
To reiterate, administrative bodies like the NLRC are not bound by the
technical niceties of law and procedure and the rules obtaining in courts of
law. Indeed, the Revised Rules of Court and prevailing jurisprudence may
be given only stringent application, i.e., by analogy or in a suppletory
character and effect. The submission by respondent, citing People v.
Sorrel,[12] that an affidavit not testified to in a trial, is mere hearsay
evidence and has no real evidentiary value, cannot find relevance in the
present case considering that a criminal prosecution requires a quantum of
evidence different from that of an administrative proceeding. Under the
Rules of the Commission, the Labor Arbiter is given the discretion to
determine the necessity of a formal trial or hearing. Hence, trial-type
hearings are not even required as the cases may be decided based on
verified position papers, with supporting documents and their affidavits.
As to whether petitioner Nestor Romero should be properly impleaded
in the instant case, we only need to follow the doctrinal guidance set
by Periquet v. NLRC[13] which outlines the parameters for valid compromise
agreements, waivers and quitclaims Not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be disowned
simply because of a change of mind. It is only where there is clear proof
that the waiver was wangled from an unsuspecting or gullible person, or

the terms of settlement are unconscionable on its face, that the law will
step in to annul the questionable transaction. But where it is shown that
the person making the waiver did so voluntarily, with full understanding of
what he was doing, and the consideration for the quitclaim is credible and
reasonable, the transaction must be recognized as a valid and binding
undertaking.
In closely examining the subject agreements, we find that on their
face
the Compromise
Agreement[14] and Release,
Waiver
and
[15]
Quitclaim
are devoid of any palpable inequity as the terms of settlement
therein are fair and just. Neither can we glean from the records any
attempt by the parties to renege on their contractual agreements, or to
disavow or disown their due execution. Consequently, the same must be
recognized as valid and binding transactions and, accordingly, the instant
case should be dismissed and finally terminated insofar as concerns
petitioner Nestor Romero.
We cannot likewise accommodate respondents contention that the
failure of all the petitioners to sign the petition as well as the Verification
and Certification of Non-Forum Shopping in contravention of Sec. 5, Rule 7,
of the Rules of Court will cause the dismissal of the present appeal. While
the Loquias case requires the strict observance of the Rules, it however
provides an escape hatch for the transgressor to avoid the harsh
consequences of non-observance. Thus x x x x We find that substantial compliance will not suffice in a matter
involving strict observance of the rules. The attestation contained in the
certification on non-forum shopping requires personal knowledge by the
party who executed the same. Petitioners must show reasonable cause for
failure to personally sign the certification. Utter disregard of the rules
cannot justly be rationalized by harking on the policy of liberal
construction (underscoring supplied).
In their Ex Parte Motion to Litigate as Pauper Litigants, petitioners
made a request for a fifteen (15)-day extension, i.e., from 24 April 2002 to
8 May 2002, within which to file their petition for review in view of the
absence of a counsel to represent them. [16] The records also reveal that it
was only on 10 July 2002 that Atty. Arnold Cacho, through the UST Legal
Aid Clinic, made his formal entry of appearance as counsel for herein
petitioners. Clearly, at the time the instant petition was filed on 7 May
2002 petitioners were not yet represented by counsel. Surely, petitioners
who are non-lawyers could not be faulted for the procedural lapse since
they could not be expected to be conversant with the nuances of the law,
much less knowledgeable with the esoteric technicalities of procedure. For
this reason alone, the procedural infirmity in the filing of the present
petition may be overlooked and should not be taken against petitioners.

WHEREFORE, the petition is GRANTED. The Decision of the Court of

Appeals is REVERSED and SET ASIDE and the decision of the NLRC dated
30 March 2001 which affirmed in toto the decision of the Labor Arbiter
dated 29 May 1998 ordering respondent Coca-Cola Bottlers Phils., Inc., to
reinstate Prudencio Bantolino, Nilo Espina, Eddie Ladica, Arman Queling,
Rolando Nieto, Ricardo Bartolome, Eluver Garcia, Eduardo Garcia and
Nelson Manalastas to their former positions as regular employees, and to
pay them their full back wages, with the exception of Prudencio Bantolino
whose back wages are yet to be computed upon proof of his dismissal, is
REINSTATED, with the MODIFICATION that herein petition is DENIED insofar
as it concerns Nestor Romero who entered into a valid and
binding Compromise Agreement and Release, Waiver and Quitclaim with
respondent company.
SO ORDERED.

A.M. No. CA-13-51-J

July 2, 2013

RE: LETTER COMPLAINT OF MERLITA B. FABIANA AGAINST

PRESIDING JUSTICE ANDRES B. REYES, JR., ASSOCIATE JUSTICES
ISAIAS P. DICDICAN AND STEPHEN C. CRUZ; CARAG JAMORA
SOMERA AND VILLAREAL LAW OFFICES AND ITS LAWYERS ATTYS.
ELPIDIO C. JAMORA, JR. AND BEATRIZ O. GERONILLA-VILLEGAS,
LAWYERS FOR MAGSAYSAY MARITIME CORPORATION AND VISAYAN
SURETY AND INSURANCE CORPORATION.
DECISION
BERSAMIN, J.:
This administrative matter stems from the claim for death benefits by the
heirs of the late Marlon Fabiana (heirs of Fabiana) against manning agent
Magsaysay Maritime Corporation and its principal Air Sea Holiday GMBHStable Organizations Italia.
Complainant Merlita B. Fabiana, Marlons surviving spouse, hereby accuses
Court of Appeals (CA) Presiding Justice Andres B. Reyes, Jr., Associate
Justice Isaias P. Dicdican and Associate Justice Stephen C. Cruz, as the
former Members of the CAs First Division, of having openly defied the
resolution promulgated by the Court on January 13, 2010 in G.R. No.

189726 entitled Heirs of the Late Marlon A. Fabiana, [herein represented by

Merlita B. Fabiana] v. Magsaysay Maritime Corp., et al., whereby the Court
had allegedly "fixed with finality complainants claims for death benefits
and other monetary claims, including damages and attorneys fees,
against the Maritime Company arising from the death of her husband."1

WHEREFORE, foregoing premises considered, the appeal is MODIFIED in

the sense that the award of moral and exemplary damages are reduced
to P50,000.00 each while the other awards are AFFIRMED.

The relevant antecedents follow.

The parties then separately brought their respective petitions for certiorari
to the CA, specifically:

On December 19, 2007, the Labor Arbiter granted the following claims to
the heirs of Fabiana, to wit:
WHEREFORE, considering all the foregoing premises, respondents are
liable to pay the following to the complainants:
US $82,500.00 death benefits to complainant Merlita B. Fabiana;
US $16,500.00 to complainant Jomari Paul B. Fabiana;

SO ORDERED.

(a)
C.A.-G.R. SP No. 109382 entitled Heirs of the late Marlon A. Fabiana, herein
represented by Merlita B. Fabiana v. National Labor Relations Commission,
Magsaysay Maritime Corporation and Air Sea Holiday GMBH-Stab[i]le
Organizations Italia (Hotel), assailing the jurisdiction of the NLRC in
entertaining the appeal of Magsaysay Maritime Corporation and its
principal, and seeking the reinstatement of the moral and exemplary
damages as awarded by the Labor Arbiter (first petition);4 and

Salary differentials from July 17, 2006 to April 23, 2007 computed at US
$1,038 deducting the US $424.00 monthly salaries already paid by the
respondents;

(b)

The difference of 1,500.00 Euro contributed by fellow Filipino seafarer and

US $1,000 remitted by respondents computed at the rate of exchange at
the time of payment;

C.A.-G.R. SP No. 109699 entitled Magsaysay Maritime Corporation, Eduardo

Manese, Prudential Guarantee (Surety), and Air Sea Holiday GMBH-Stable
Organizations, Italia v. Heirs of the late Marlon Fabiana, and National Labor
Relations Commission challenging the propriety of the monetary awards
granted to the heirs of Fabiana (second petition).5

Sick benefits from April 23, 2007 to May 11, 2007 computed at US
$1,038.00 monthly salary rate;
US $331.00 guaranteed overtime pay;
P7,574.00 actual damages;
P100,000.00 for moral damages;
P1,000,000.00 exemplary damages;
Ten percent (10%) attorneys fees computed on the total awards. 2
On December 10, 2008, the National Labor Relations Commission (NLRC)
rendered its decision,3 disposing:

In the second petition, the petitioners averred that the late Marlon Fabiana
had died from a non-work related disease after his employment contract
had terminated.
On August 20, 2009, when the heirs of Fabiana filed their comment vis-vis the second petition, they sought the consolidation of the two petitions.
Their request for consolidation was not acted upon, however, but was soon
mooted a month later by the First Division of the CA promulgating its
decision on the first petition (C.A.-G.R. No. 109382) on September 29,
2009,6 to wit:
WHEREFORE, premises considered, the petition is partly GRANTED.
Accordingly, the challenged Decision is AFFIRMED but MODIFIED insofar as
interest at the rate of six percent per annum (6% p.a.) is imposed on all the
monetary awards, reckoned from the Labor Arbiters judgment on 19
December 2007, except moral and exemplary damages to which the same
rate of interest is imposed, but reckoned from the time the aforementioned
decision was promulgated on 10 December 2008 by the NLRC Sixth

Division. An additional interest of twelve percent per annum (12% p.a.) is

applied on the total amount ultimately awarded upon finality of the
decision until fully paid.
The petitioners motion for preliminary mandatory injunction is deemed
resolved by this decision.
IT IS SO ORDERED.
Magsaysay Maritime Corporation filed on October 25, 2009 a motion for
clarification in C.A.-G.R. No. 109382 instead of a motion for
reconsideration.7 In response, the CA issued its clarification on November
26, 2009 by stating that the "affirmance with modification" was but the
"consequence of the certiorari petition being merely partially granted."8
On their part, the heirs of Fabiana filed a motion for reconsideration in C.A.G.R. No. 109382, which the CA denied. Hence, on November 23, 2009, they
appealed to the Court by petition for review on certiorari (G.R. No.
189726). However, the Court, through the Third Division, 9 denied the
petition for review on certiorari through the resolution of January 13,
2010,10 quoted as follows:
Acting on the petition for review on certiorari assailing the Decision dated
29 September 2009 of the Court of Appeals in CA-G.R. SP No. 109382, the
Court resolves to DENY the petition for failure to sufficiently show that the
appellate court committed any reversible error in the challenged decision
as to warrant the exercise by this Court of its discretionary appellate
jurisdiction.
A careful consideration of the petition indicates a failure of the petitioners
to show any cogent reason why the actions of the Labor Arbiter, the
National Labor Relations Commission and the Court of Appeals which have
passed upon the same issue should be reversed. Petitioners failed to show
that their factual findings are not based on substantial evidence or that
their decisions are contrary to applicable law and jurisprudence.
SO ORDERED.
In the meanwhile, on October 16, 2009, the heirs of Fabiana moved to
dismiss the second petition (C.A.-G.R. SP. No. 109699) on the ground that
the intervening promulgation on September 29, 2009 by the First Division
of the decision on the first petition (C.A.-G.R. No. 109382) had rendered the
second petition moot and academic.11

On June 4, 2010, however, the First Division of the CA, then comprised by
Presiding Justice Reyes, Jr., Associate Justice Dicdican (ponente) and
Associate Justice Cruz, denied the motion to dismiss filed in C.A.-G.R. SP.
No. 109699,12 holding thusly:
This has reference to the motion filed by the private respondents, through
their counsel, to dismiss the petition in the case at bench on the ground
that it has been rendered moot and academic by the decision promulgated
on September 29, 2009 by this Court in CA-G.R. SP No. 109382.
After a judicious scrutiny of the whole matter, we find the said motion to
dismiss to be wanting in merit. It is not true that the petition in this case
has been rendered moot and academic by the decision promulgated by
this Court on September 29, 2009 in CA-G.R. SP No. 109382. The said
decision rendered by this Court passed upon two limited issues only,
namely, the NLRCs jurisdiction to allow the petitioners appeal thereto
despite flaws in their verification and non-forum shopping papers and the
propriety of the reduction by the NLRC of the amount of damages awarded
to the private respondents. A reading of the said decision will unmistakably
bear this out. However, in the case at bench, the petitioners have assailed
omnibously the NLRCs awards in favor of the private respondents for
death benefits, sickness allowance, salary differentials and other monetary
claims. We have to pass upon the propriety of all these monetary awards.
WHEREFORE, in view of the foregoing premises, we hereby DENY the
aforementioned motion to dismiss filed in this case.
We hereby give the parties a fresh period of fifteen (15) days from notice
hereof within which to file memoranda in support of their respective sides
of the case.
SO ORDERED.
The second petition (C.A.-G.R. SP. No. 109699) was ultimately resolved on
September 16, 2011 by the Sixth Division of the CA, composed of
Associate Justice Amelita G. Tolentino, Associate Justice Normandie B.
Pizarro (ponente) and Associate Justice Rodil V. Zalameda, dismissing the
petition upon not finding the NLRC to have gravely abused its discretion.
As earlier adverted to, the complainant accuses Presiding Justice Reyes, Jr.,
Associate Justice Dicdican and Associate Justice Cruz with thereby willfully
disobeying the resolution of January 13, 2010 promulgated by the Court.
The complaint lacks merit.

In administrative proceedings, the burden of substantiating the charges

falls on the complainant who must prove her allegations in the complaint
by substantial evidence.13 Here, the allegation of willful disobedience
against respondent CA Justices was unsubstantiated and baseless. The
issues raised in the first petition (C.A.-G.R. No. 109382) were limited to the
NLRCs jurisdiction over the appeal by Magsaysay Maritime Corporation
and its principal, and to the reduction of the amounts awarded as moral
and exemplary damages. In contrast, the second petition (C.A.-G.R. SP. No.
109699) concerned only the propriety of awarding monetary benefits.
Under the circumstances, the promulgation by the Court of the resolution
of January 13, 2010 in G.R. No. 189726 did not divest the respondents as
members of the First Division of the CA of the jurisdiction to entertain and
pass upon the second petition (C.A.-G.R. SP. No. 109699), something that
they sought to explain through their resolution promulgated on June 4,
2010. The explanation, whether correct or not, was issued in the exercise
of judicial discretion. It is not for us to say now in a resolution of this
administrative complaint whether the explanation was appropriate or not,
nor for the complainant to herself hold them in error. The recourse open to
the heirs of Fabiana, including the complainant, was to move for the
correction of the resolution, if they disagreed with it, and, should their
motion be denied, to assail the denial in this Court through the remedy
warranted under the law.

Simple reflection will make this proposition amply clear, and demonstrate
that any contrary postulation can have only intolerable legal implications.
Allowing a party who feels aggrieved by a judicial order or decision not yet
final and executory to mount an administrative, civil or criminal
prosecution for unjust judgment against the issuing judge would, at a
minimum and as an indispensable first step, confer the prosecutor
(Ombudsman) with an incongruous function pertaining, not to him, but to
the courts: the determination of whether the questioned disposition is
erroneous in its findings of fact or conclusions of law, or both. If he does
proceed despite that impediment, whatever determination he makes could
well set off a proliferation of administrative or criminal litigation, a
possibility hereafter more fully explored.

The complainants initiation of her complaint would take respondent

Justices to task for their regular performance of their office. Yet, as the
surviving spouse of the late-lamented Marlon, she was understandably
desirous of the most favorable and quickest outcome for the claim for
death benefits because his intervening demise had rendered her and her
family bereft of his support. Regardless of how commendable were her
motives for initiating this administrative complaint, however, she could not
substitute a proper judicial remedy not taken with an improper
administrative denunciation of the Justices she has hereby charged. That is
impermissible. If she felt aggrieved at all, she should have resorted to the
available proper judicial remedy, and exhausted it, instead of resorting to
the unworthy disciplinary charge.

Moreover, in Re: Verified Complaint of Engr. Oscar L. Ongjoco, Chairman of

the Board/CEO of FH-Gymn Multi-Purpose and Transport Service
Cooperative, against Hon. Juan Q. Enriquez, Jr., Hon. Ramon M. Bato, Jr. and
Hon. Florito S. Macalino, Associate Justices, Court of Appeals, 16 the Court
ruminates:

Truly, disciplinary proceedings and criminal actions brought against any

Judge or Justice in relation to the performance of official functions are
neither complementary to nor suppletory of appropriate judicial remedies,
nor a substitute for such remedies.14 The Court has fittingly explained why
in In Re: Joaquin T. Borromeo,15 to wit:
Given the nature of the judicial function, the power vested by the
Constitution in the Supreme Court and the lower courts established by law,
the question submits to only one answer: the administrative or criminal
remedies are neither alternative nor cumulative to judicial review where
such review is available, and must wait on the result thereof.

Such actions are impermissible and cannot prosper. It is not, as already

pointed out, within the power of public prosecutors, or the Ombudsman or
his deputies, directly or vicariously, to review judgments or final orders or
resolutions of the Courts of the land. The power of reviewby appeal or
special civil actionis not only lodged exclusively in the Courts themselves
but must be exercised in accordance with a well-defined and long
established hierarchy, and long standing processes and procedures. No
other review is allowed; otherwise litigation would be interminable, and
vexatiously repetitive.

In this regard, we reiterate that a judges failure to correctly interpret the

law or to properly appreciate the evidence presented does not necessarily
incur administrative liability, for to hold him administratively accountable
for every erroneous ruling or decision he renders, assuming he has erred,
will be nothing short of harassment and will make his position doubly
unbearable. His judicial office will then be rendered untenable, because no
one called upon to try the facts or to interpret the law in the process of
administering justice can be infallible in his judgment. Administrative
sanction and criminal liability should be visited on him only when the error
is so gross, deliberate and malicious, or is committed with evident bad
faith, or only in clear cases of violations by him of the standards and norms
of propriety and good behavior prescribed by law and the rules of
procedure, or fixed and defined by pertinent jurisprudence.1wphi1
To be clear, although we do not shirk from the responsibility of imposing
discipline on the erring Judges or Justices and employees of the Judiciary,

we shall not hesitate to shield them from baseless charges that only serve
to disrupt rather than promote the orderly administration of justice. 17
Even as we dismiss the administrative charge, we deem it necessary to
observe further, in the exercise of our administrative supervision over the
CA, that the matter addressed here was really simple and avoidable if only
the CA had promptly implemented its current procedure for the
consolidation of petitions or proceedings relating to or arising from the
same controversies. Section 3(a), Rule III of the 2009 Internal Rules of the
Court of Appeals has forthrightly mandated the consolidation of related
cases assigned to different Justices, viz:
Section 3. Consolidation of Cases. When related cases are assigned to
different justices, they shall be consolidated and assigned to one Justice.
(a) Upon motion of a party with notice to the other party/ies, or at the
instance of the Justice to whom any or the related cases is assigned, upon
notice to the parties, consolidation shall ensue when the cases involve the
same parties and/or related questions of fact and/or law. (Emphases
supplied)
xxxx
A perusal of the two petitions showed that they involved the same parties
and the same facts. Even their issues of law, albeit not entirely identical,
were closely related to one another. It could not also be denied that they
assailed the same decision of the NLRC. For these reasons alone, the
request for consolidation by the heirs of Fabiana should have been granted,
and the two petitions consolidated in the same Division of the CA.
The consolidation of two or more actions is authorized where the cases
arise from the same act, event or transaction, involve the same or like
issues, and depend largely or substantially on the same evidence, provided
that the court has jurisdiction and that consolidation will not give one party
an undue advantage or that consolidation will not prejudice the substantial
rights of any of the parties.18 As to parties, their substantial identity will
suffice. Substantial identity of parties exists when there is a community of
interest or privity of interest between a party in the first case and a party
in the second, even if the latter has not been impleaded in the first
case.19 As to issues, what is required is mere identity of issues where the
parties, although not identical, present conflicting claims. 20 The justification
for consolidation is to prevent a judge from deciding identical issues
presented in the case assigned to him in a manner that will prejudice
another judge from deciding a similar case before him.

We are perplexed why the CA did not act on and grant the request for
consolidation filed on August 20, 2009 by the heirs of Fabiana. In fact, the
consolidation should have been required as a matter of course even
without any of the parties seeking the consolidation of the petitions,
considering that the two cases rested on the same set of facts, and
involved claims arising from the death of the late Marlon Fabiana.
It is true that under the Rules of Court,21 the consolidation of cases for trial
is permissive and a matter of judicial discretion. 22 This is because trials
held in the first instance require the attendance of the parties, their
respective counsel and their witnesses, a task that surely entails an
expense that can multiply if there are several proceedings upon the same
issues involving the same parties. At the trial stage, the avoidance of
unnecessary expenses and undue vexation to the parties is the primary
objective of consolidation of cases.23 But the permissiveness of
consolidation does not carry over to the appellate stage where the primary
objective is less the avoidance of unnecessary expenses and undue
vexation than it is the ideal realization of the dual function of all appellate
adjudications. The dual function is expounded thuswise:
An appellate court serves a dual function. The first is the review for
correctness function, whereby the case is reviewed on appeal to assure
that substantial justice has been done. The second is the institutional
function, which refers to the progressive development of the law for
general application in the judicial system.
Differently stated, the review for correctness function is concerned with the
justice of the particular case while the institutional function is concerned
with the articulation and application of constitutional principles, the
authoritative interpretation of statutes, and the formulation of policy within
the proper sphere of the judicial function.
The duality also relates to the dual function of all adjudication in the
common law system. The first pertains to the doctrine of res judicata,
which decides the case and settles the controversy; the second is the
doctrine of stare decisis, which pertains to the precedential value of the
case which assists in deciding future similar cases by the application of the
rule or principle derived from the earlier case.
With each level of the appellate structure, the review for correctness
function diminishes and the institutional function, which concerns itself
with uniformity of judicial administration and the progressive development
of the law, increases.24
In the appellate stage, therefore, the rigid policy is to make the
consolidation of all cases and proceedings resting on the same set of facts,

or involving identical claims or interests or parties mandatory. Such

consolidation should be made regardless of whether or not the parties or
any of them requests it. A mandatory policy eliminates conflicting results
concerning similar or like issues between the same parties or interests
even as it enhances the administration of justice.
In this connection, the Court reminds all attorneys appearing as counsel for
the initiating parties of their direct responsibility to give prompt notice of
any related cases pending in the courts, and to move for the consolidation
of such related cases in the proper courts. This responsibility proceeds
from their express undertakings in the certifications against forumshopping that accompany their initiatory pleadings pursuant to Section 5
of Rule 7 and related rules in the Rules of Court, to the effect that they
have not theretofore commenced any actions or filed any claims involving
the same issues in any court, tribunal or quasi-judicial agency and, to the
best of their knowledge, no such other actions or claims are pending
therein; that if there were such other pending actions or claims, to render
complete statements of the present status thereof; and if they should
thereafter learn that the same or similar actions or claims have been filed
or are pending, they shall report that fact within five days therefrom to the
courts wherein the said complaints or initiatory pleadings have been filed.
WHEREFORE, the Court DISMISSES the administrative complaint against
Presiding Justice Andres B. Reyes, Jr., Associate Justice Isaias P. Dicdican

and Associate Justice Stephen C. Cruz of the Court of Appeals for its lack of
merit.
The Court of Appeals is DIRECTED to forthwith adopt measures that will
ensure the strict observance of Section 3, Rule III of the 2009 Internal Rules
of the Court of Appeals, including the revision of the rule itself to make the
consolidation of cases and proceedings concerning similar or like issues or
involving the same parties or interests mandatory and not dependent on
the initiative of the parties or of any of them.
All attorneys of the parties in cases brought to the third level courts either
on appeal or interlocutory review (like certiorari) are REQUIRED to promptly
notify the reviewing courts of the pendency of any other cases and
proceedings involving the same parties and issues pending in the same or
other courts.
Let this decision be FURNISHED to the Court of Appeals, Sandiganbayan,
Court of Tax Appeals and the Office of the Court Administrator for their
guidance; and to the Integrated Bar of the Philippines for dissemination to
all its chapters.
SO ORDERED.