BOISER vs AGUIRRE

458 SCRA 430; A.M. No. RTJ-04-1886; May 16, 2005

FACTS: Complainant Alfredo Boiser was the plaintiff in an ejectment case filed before the Municipal
Trial Court (MTC) of Himamaylan City, Negros Occidental, which rendered a decision in his favor,
ejecting defendant-appellant Salvador Julleza. The case was appealed to the RTC of Negros Occidental.
Julleza filed a motion to release bond on the ground that the MTC, in its decision, had already resolved
the writ of preliminary injunction without mentioning the applicant's liability. Respondent Judge
Aguirre granted the motion.

Complainant alleged in an administrative complaint that the issuance by respondent judge of the Order
is indicative of his ignorance of the law considering that the motion did not state that he was furnished
a copy of the motion thereby depriving him of his right to due process. He also averred that the motion
was a mere scrap of paper for failure to state the time and date of hearing. He further alleged that
respondent manifested gross ignorance when he resolved to grant the motion to release the injunction
bond considering that the same was meant to answer for damages that he may suffer due to defendant's
continued illegal possession of the land.

Respondent judge maintained that the filing of the administrative complaint against him is hasty and
uncalled for. He said there must have been a miscommunication between the complainant and his
counsel because had either of them exerted effort to find out the result of the appealed case, they would
have discovered that he affirmed in toto the decision of the lower court in favor of the complainant.
Complainant filed 6 a motion to withdraw complaint. The OCA recommended that respondent be fined
P21,000. The SC referred the case to CA Justice Monina Zenarosa for investigation, Justice Zenarosa
recommended that the complaint be dismissed.

ISSUE: Whether Respondent Judge is liable relative to the lack of notice of hearing and proof of
service of the questioned motion

HELD: YES. The Rules of Court requires that every motion must be set for hearing by the movant,
except those motions which the court may act upon without prejudicing the rights of the adverse party.
The notice of hearing must be addressed to all parties and must specify the time and date of the hearing,
with proof of service. No written motion set for hearing shall be acted upon by the court without proof
of service thereof (Sec. 4-6; Rule 15; 1997 Rules on Civil Procedure).

It appears that the Motion to Release Bond was defective as it did not have a proper notice of hearing.
The date and time of the hearing were not specified. Neither complainant nor his counsel was furnished
a copy thereof. These were never controverted by respondent judge.

A motion without notice of hearing is pro forma, a mere scrap of paper. It presents no question which
the court could decide. The court has no reason to consider it and the clerk has no right to receive it.
The rationale behind the rule is plain: unless the movant sets the time and place of hearing, the court
will be unable to determine whether the adverse party agrees or objects to the motion, and if he objects,
to hear him on his objection, since the rules themselves do not fix any period within which he may file
his reply or opposition. 14 The objective of the rule is to avoid a capricious change of mind in order to
provide due process to both parties and ensure impartiality in the trial.

Clearly, respondent judge had ignored a fundamental rule. He acted too precipitately in granting
defendant's motion despite the absence of the requirements as above prescribed. The SC found Judge
Aguirre guilty of gross ignorance of the law and imposed on him a fine of P5,000 to be deducted from
his retirement benefits.

[Other issues/doctrines: The SC reiterated that the rule that mere desistance on the part of the
complainant does not warrant the dismissal of an administrative complaint against any member of the
bench. The withdrawal of complaints cannot divest the Court of its jurisdiction nor strip it of its power
to determine the veracity of the charges made and to discipline, such as the results of its investigation
may warrant, an erring respondent. The court's interest in the affairs of the judiciary is a paramount
concern that must not know bounds.

Anent respondent's retirement on 01 November 2004, it has been settled that the Court is not ousted of
its jurisdiction over an administrative case by the mere fact that the respondent public official ceases to
hold office during the pendency of respondent's case.]

SARMIENTO vs ZARATAN

FACTS: Petitioner Gliceria Sarmiento filed an ejectment case against respondent Emerita Zaratan, in
the MeTC of Quezon City. The MeTC rendered a decision in favor of petitioner. MeTC ordered the
defendant to pay plaintiff monthly rentals and to vacate the premises. Respondent filed her notice of
appeal. Thereafter, the case was raffled to the RTC of Quezon City. The RTC directed respondent to
submit her memorandum in accordance with the provisions of Section 7(b) of Rule 40 of the Rules of
Court and petitioner to file a reply memorandum within 15 days from receipt.

Respondents counsel having received the notice on 19 May 2003, he had until 3 June 2003 within
which to file the requisite memorandum. But on 3 June 2003, he filed a Motion for Extension of Time
of five days due to his failure to finish the draft of the said Memorandum. He cited as reasons for the
delay of filing his illness for one week, lack of staff to do the work due to storm and flood compounded
by the grounding of the computers because the wirings got wet. But the motion remained unacted upon.

On 9 June 2003, respondent filed her Memorandum. On 19 June 2003, the RTC dismissed the appeal as
the memorandum was filed beyond the reglementary period. It was stressed that while the rules should
be liberally construed, the provisions on reglemenatry periods are strictly applied as they are "deemed
indispensable to the prevention of needless delays and necessary to the orderly and speedy discharge of
judicial business". On the basis of this order, petitioner filed a Motion for Immediate Execution while
respondent moved for reconsideration, both motions were denied.

The Motion for reconsideration was hinged on the "Motion for Extension of Time to File
Memorandum", an argument without merit. The TC did not take cognizance of defendant-appellant's
"Motion for Extension of Time to File Memorandum," and rightly so, because it did not contain a
notice of hearing as required by Sections 4 and 5, Rule 15 of the Rules of Court, an omission for which
it could offer no explanation. Moreover, parties and counsel should not assume that courts are bound to
grant the time they pray for. A motion that is not acted upon in due time is deemed denied. With regard
to the "Motion for Immediate Execution," the rule is explicit that the execution of a judgment in an
ejectment case, must be sought with the inferior court (not the appellate court) which rendered the
same. Later however, the RTC reconsidered it's decision on the Motion for Immediate Execution and
granted it.

Aggrieved, respondent filed a Petition for Certiorari in the Court of Appeals, which granted the petition
of respondent. The appellate court nullified and set aside Orders of the RTC and ordered the
reinstatement of respondents appeal. Consequently, respondents appeal memorandum was admitted
and the case remanded to the RTC for further proceedings. Hence, this appeal by petitioner.

ISSUE: Whether the lack of notice of hearing in the Motion for Extension of Time to file
Memorandum on Appeal is fatal, such that the filing of the motion is a worthless piece of paper.

HELD: In this case, the answer is NO. Petitioner avers that, because of the failure of respondent to
include a Notice of Hearing in her Motion for Extension of Time to file Memorandum on Appeal in the
RTC, the latters motion is a worthless piece of paper with no legal effect.

It is not disputed that respondent perfected her appeal on 4 April 2003 with the filing of her Notice of
Appeal and payment of the required docket fees. However, before the expiration of time to file the
Memorandum, she filed a Motion for Extension of Time seeking an additional period of five days
within which to file her Memorandum, which motion lacked the Notice of Hearing required by Section
4, Rule 15 of the 1997 Rules of Court which provides:

SEC. 4. Hearing of Motion. - Except for motions which the court may act upon without prejudicing the
rights of the adverse party, every written motion shall be set for hearing by the applicant.
Every written motion required to be heard and the notice of the hearing thereof shall be served in such
a manner as to ensure its receipt by the other party at least three (3) days before the date of hearing,
unless the court for good cause sets the hearing on shorter notice.

As may be gleaned above and as held time and again, the notice requirement in a motion is mandatory.
As a rule, a motion without a Notice of Hearing is considered pro forma and does not affect the
reglementary period for the appeal or the filing of the requisite pleading.

As a general rule, notice of motion is required where a party has a right to resist the relief sought by the
motion and principles of natural justice demand that his right be not affected without an opportunity to
be heard. The three-day notice required by law is intended not for the benefit of the movant but to
avoid surprises upon the adverse party and to give the latter time to study and meet the arguments of
the motion. Principles of natural justice demand that the right of a party should not be affected without
giving it an opportunity to be heard.

The test is the presence of the opportunity to be heard, as well as to have time to study the motion and
meaningfully oppose or controvert the grounds upon which it is based. Considering the circumstances
of the present case, we believe that procedural due process was substantially complied with.

There are, indeed, reasons which would warrant the suspension of the Rules: (a) the existence of
special or compelling circumstances, b) the merits of the case, (c) a cause not entirely attributable to the
fault or negligence of the party favored by the suspension of rules, (d) a lack of any showing that the
review sought is merely frivolous and dilatory, and (e) the other party will not be unjustly prejudiced
thereby. Elements or circumstances (c), (d) and (e) exist in the present case.

The suspension of the Rules is warranted in this case. The motion in question does not affect the
substantive rights of petitioner as it merely seeks to extend the period to file Memorandum. The
required extension was due to respondents counsels illness, lack of staff to do the work due to storm
and flood, compounded by the grounding of the computers. There is no claim likewise that said motion
was interposed to delay the appeal. As it appears, respondent sought extension prior to the expiration of
the time to do so and the memorandum was subsequently filed within the requested extended period.
Under the circumstances, substantial justice requires that we go into the merits of the case to resolve
the issue of who is entitled to the possession of the land in question.

Further, it has been held that a "motion for extension of time x x x is not a litigated motion where
notice to the adverse party is necessary to afford the latter an opportunity to resist the application, but
an ex parte motion made to the court in behalf of one or the other of the parties to the action, in the
absence and usually without the knowledge of the other party or parties." As a general rule, notice of
motion is required where a party has a right to resist the relief sought by the motion and principles of
natural justice demand that his rights be not affected without an opportunity to be heard. It has been
said that "ex parte motions are frequently permissible in procedural matters, and also in situations and
under circumstances of emergency; and an exception to a rule requiring notice is sometimes made
where notice or the resulting delay might tend to defeat the objective of the motion.
WHEREFORE, the instant petition is hereby DENIED for lack of merit. The Decision and the
Resolution of the Court of Appeals are hereby AFFIRMED. No costs. SO ORDERED.

HALIMAO vs VILLANUEVA

FACTS: Reynaldo Halimao wrote to the Chief Justice alleging that Attorneys Daniel Villanueva and
Inocencio Ferrer, Jr. (respondents) without lawful authority and armed with armalites and handguns,
forcibly entered the Oo Kian Tiok Compound in Cainta, Rizal, of which complainant was a care taker.
Complainant prayed that an investigation be conductied and respondetns disbarred. Affidavits of
alleged witnesses were attached to the complaint, including that of Danilo Hernandez, a security guard
of the compound who had filed a similar complaint against respondents.

In a resolution, the Court required respondents to comment. Repondents filed a comment claiming that
the complaint is a mere dubplication of that filed by Danilo Hernandez, having arisen from the same
incident and the same acts complained of, and that Hernande was the same person whose affidavit was
attached to this case. Respondent Ferrer claimed that he was nowhere near the compound when the
incident took place. He submitted affidavits attesting to the fact that he had spent the whole day in
Makati with his family.

Ferrer claimed that the two complaints were foled for the purpose of harassing him because he was the
principal lawyer of Atty. Daniel Villanueva in two cases before the Securities and Exchange
Commission. The cases involved the ownership and control of Filipinas Textile Mills (Filtex), which is
owned by Villanueva's family and whose premises are the Oo Kian Tiok compound.

The case was reffered to the IBP for investigation. The Board of Governors of the IBP dismissed the
case against respondents. It acted on the basis of the report and recommendation of Atty. Victor C.
Fernandez, Investigating Commissioner, who found that the complaint is barred by the decision in the
administrative case filed by Hernandez, which involved the same incident.

The Commissioner held that for res judicata to apply, absolute identity of parties is not required, it
being sufficient that there is identity of interests of the parties. Complainant filed a motion for
reconsideration which was forwarded to the court.

Respondents filed an Opposition to the motion for reconsideration. As a preliminary matter, they argue
that the motion for reconsideration is a mere scrap of paper, because it is not provided for in Rule 139-
B of the Rules of Court, and that what complainant should instead have done was to appeal to this
Court.

ISSUE: Whether the motion for reconsideration was a mere scrap of paper

HELD: NO.

Rule 139-B states in pertinent part: 12. Review and decision by the Board of Governors. (c) If the
respondent is exonerated by the Board or the disciplinary sanction imposed by it is less than suspension
or disbarment [such as admonition, reprimand, or fine] it shall issue a decision exonerating respondent
or imposing such sanction. The case shall be deemed terminated unless upon petition of the
complainant or other interested party filed with the Supreme Court within fifteen (15) days from notice
of the Board's resolution, the Supreme Court orders otherwise.

Although Rule 139-B, 12(c) makes no mention of a motion for reconsideration, nothing in its text or
in its history suggests that such motion is prohibited. It may therefore be filed within 15 days from
notice to a party. Indeed, the filing of such motion should be encouraged before resort is made to this
Court as a matter of exhaustion of administrative remedies, to afford the agency rendering the judgment
an opportunity to correct any error it may have committed through a misapprehension of facts or
misappreciation of the evidence.

Considering, however, that complainant's motion for reconsideration was filed after the IBP had
forwarded the records of this case to this Court, it would be more expedient to treat it as complainant's
petition for review within the contemplation of Rule 139-B, 12(c).

Now with regard to complainant's argument that it was error for the Investigating Commissioner to
dismiss the complaint against respondents because, by filing a motion to dismiss, respondents are
deemed to have admitted the allegations of the complaint against them, suffice it to say that the rule
that a motion to dismiss is to be considered as a hypothetical admission of the facts alleged in the
complaint applies more particularly to cases in which the ground for dismissal is the failure of the
complaint to state a cause of action. When it appears on the face of the complaint that the plaintiff is
not entitled to any relief under the facts alleged, the defendant may file a motion to dismiss
hypothetically admitting the facts alleged in the complaint. By filing such a motion, the defendant in
effect says that even assuming the facts to be as alleged by the plaintiff, the latter has failed to prove
that he has a right which the former has violated.

The rule does not unqualifiedly apply to a case where the defendant files a motion to dismiss based on
lack of jurisdiction of the court or tribunal over the person of the defendant or over the subject matter
or over the nature of the action; or on improper venue; or on lack of capacity to sue of the plaintiff or
on litis pendentia, res judicata, prescription, unenforceability, or on the allegation that the suit is
between members of the same family and no earnest efforts towards a compromise have been made. In
such cases, the hypothetical admission is limited to the facts alleged in the complaint which relate to
and are necessary for the resolution of these grounds as preliminary matters involving substantive or
procedural laws, but not to the other facts of the case.

On the other hand, when a motion to dismiss is based on payment, waiver, abandonment, release,
compromise, or other form of extinguishment, the motion to dismiss does not hypothetically, but
actually, admits the facts alleged in the complaint, i.e., the existence of the obligation or debt, only that
the plaintiff claims that the obligation has been satisfied. So that when a motion to dismiss on these
grounds is denied, what is left to be proven in the trial is no longer the existence of the debt but the fact
vel non of payment by the defendant.

Here, the Investigating Commissioner properly dismissed the complaint in this case on the ground of
res judicata. While the complainant (Danilo Hernandez) in Administrative Case No. 3835 is different
from the complainant in the present case, the fact is that they have an identity of interest, as the
Investigating Commissioner ruled.

TAN vs CA
295 SCRA 247; September 9, 1998

FACTS: Fernando Tan Kiat (private respondent) filed a complaint for recovery of property against
herein petitioners (the Tans) . He claimed that he owns the subject properties as he bought it in 1954
from Mr. Tan Keh but was unable to effect immediate transfer of title in his own favor in view of his
foreign nationality at the time of the sale. He alleged that, in 1958, Mr. Tan Keh executed a deed of sale
to Remigio Tan, his brother and father of petitioners, with the understanding that the subject properties
are to be held in trust by Remigio for the benefit of private respondent.

Another contract of lease was executed by Mr. Tan Keh and Remigio in favor of private respondent to
further safeguard the latter's interest on the subject properties, but private respondent never paid any
rental and no demand whatsoever for the payment thereof had been made on him. Remigio was killed
in 1968. At his wake, petitioners were reminded of private respondent's ownership of the subject
properties and they promised to transfer the subject properties to private respondent who by then had
already acquired Filipino citizenship by naturalization. Petitioners, however, never made good their
promise and had the properties transferred to their names.

Petitioners filed a motion to dismiss the complaint based on the following grounds: (1) the complaint
stated no cause of action; (2) the cause of action has long prescribed; (3) the cause of action has long
been barred by a prior judgment; and, (4) the claim has been waived, abandoned and/or extinguished by
laches and estoppel. Private respondents filed an Opposition to Motion To Dismiss with Memorandum,
and in turn petitioners filed the Memorandum of Authorities. The Trial Court granted the motion to
dismiss the complaint agreeing to the aforestated grounds.

On appeal to the Court of Appeals, the latter reversed the trial court's decision and remanded the case
for further proceedings. Thus this petition for review.

ISSUES: Whether the complaint stated a cause of action

HELD: NO. There is merit to the petition

The flaw in the conclusion of the CA that the complaint stated a cause of action is that, while
conveniently echoing the general rule that averments in the complaint are deemed hypothetically
admitted upon the filing of a motion to dismiss grounded on the failure to state a cause of action, it did
not take into account the equally established limitations to such rule, i.e., that a motion to dismiss does
not admit the truth of mere epithets of fraud; nor allegations of legal conclusions; nor an erroneous
statement of law; nor mere inferences or conclusions from facts not stated; nor mere conclusions of
law; nor allegations of fact that falsity of which is subject to judicial notice; nor matters of evidence;
nor surplusage and irrelevant matter; nor scandalous matter inserted merely to insult the opposing
party; nor to legally impossible facts; nor to facts which appear unfounded by a record incorporated in
the pleading, or by a document referred to; and nor to general averments contradicted by more specific
averments.

A more judicious resolution of a motion to dismiss, therefore, necessitates that the court be not
restricted to the consideration of the facts alleged in the complaint and inferences fairly deducible
therefrom. Courts may consider other facts within the range of judicial notice as well as relevant laws
and jurisprudence which the courts are bound to take into account, and they are also fairly entitled to
examine records/documents duly incorporated into the complaint by the pleader himself in ruling on
the demurrer to the complaint.

[SUMMARY OF OTHER ISSUES:

WHY PRIVATE RESPONDENT ISN'T THE OWNER:

The execution of a lease contract between Remigio Tan as lessor and private respondent as lessee over
the subject properties, the existence of which is established not only by a copy thereof attached to
petitioners' motion to dismiss but by private respondent's own admission reflected in paragraph 6 of the
complaint, already belies private respondent's claim of ownership. This is so because Article 1436 of
the Civil Code. Section 2, Rule 131 of the Rules of Court and settled jurisprudence consistently instruct
that a lessee is estopped or prevented from disputing the title of his landlord.

Private respondent alleged that he bought the subject properties from Alejandro Tan Keh in 1954 but
nonetheless failed to present any document evidencing the same, while Remigio Tan, as the other
buyer, had in his name TCTvNo. 53284 duly registered in the Registry of Deeds of Manila on October
13, 1958. RemigiovTan, beyond doubt, was the buyer entitled to the subject properties since the
prevailing rule is that in the double sale of real property, the buyer who is in possession of a Torrens
title and had the deed of sale registered must prevail.

Petitioners are in possession of TCT No. 117898 which evidences their ownership of the subject
properties. On the other hand, private respondent relies simply on the allegation that he is entitled to the
properties by virtue of a sale between him and Alejandro Tan Keh who is now dead. Obviously, private
respondent will rely on parol evidence which, under the circumstances obtaining, cannot be allowed
without violating the "Dead Man's Statute" found in Section 23, Rule 130 of the Rules of Court.

(GRANTING THERE WAS A CAUSE OF ACTION) WHETHER IT HAS PRESCRIBED: YES.

In this case, private respondent's occupation of the subject properties was never in the concept of an
owner since he was a mere lessee who, as herein before discussed, is estopped from denying the title of
Remigio Tan as ownerlessor. At best, private respondent's stay on the properties as lessee was by
"license or by mere tolerance" which, under Article 1119 of the Civil Code, "shall not be available for
the purposes of possession." It thus becomes evident that the filing of private respondent's complaint in
1993 thirty five (35) years after TCT No. 53284 in the name of Remigio Tan was registered and
eighteen (18) years after the issuance of TCT No. 117898 in the names of petitioners was way
beyond the ten (10)-year time limit within which reconveyance of property based on an implied trust
should be instituted. Private respondent's cause of action, assuming that it exists, has clearly prescribed.

(GRANTING THERE WAS A CAUSE OF ACTION) WHETHER THERE WAS WAIVER OF

CAUSE OF ACTION: YES, BY ESTOPPEL. Private respondent's possession of the subject properties
cannot be made the basis to deflect the effects of laches because he is a mere lessee who, to repeat,
cannot assert any adverse claim of ownership over the subject properties against the lessor-owner. His
mistake, if it is one, is that he tarried for thirty (30) years before formally laying claim to the subject
properties before the court. Considerable delay in asserting one's right before a court of justice is
strongly persuasive of the lack of merit of his claim, since it is human nature for a person to enforce his
right when the same is threatened or invaded. Thus, private respondent is estopped by laches from
questioning the ownership of the subject properties.]

ASIA PRODUCTION CO. vs PAO

FACTS: Lolita Lee Le Hua and Alberto Dy, private respondents, who claimed to be the owners of a
building constructed on a lot leased from Lucio San Andres and located in Valenzuela, Bulacan, offered
to sell the building to the petitioners for P170,000.00. Petitioners agreed because of private
respondents' assurance that they will also assign to the petitioners the contract of lease over the land.
The above agreement and promise were not reduced to writing. Private respondents undertook to
deliver to the petitioners the deed of conveyance over the building and the deed of assignment of the
contract of lease within 60 days from the date of payment of the downpayment. The balance was to be
paid in monthly installments. Petitioners paid the downpayment and issued eight (8) postdated checks
drawn against the Equitable Banking Corporation for the payment of the eight (8) monthly
installments.

Relying on the good faith of private respondents, petitioners constructed a weaving factory on the
leased lot. Unfortunately, private respondents, despite extensions granted, failed to comply with their
undertaking to execute the deed to sale and to assign the contract despite the fact that they were able to
encash the checks. Worse, the lot owner made it plain to petitioners that he was unwilling to give
consent to the assignment of the lease unless petitioners agreed to certain onerous terms, such as an
increase in rental, or the purchase of the land at a very unconscionable price.

Petitioners were thus compelled to request for a stop payment order of the remaining checks.
Succeeding negotiations to save the transaction proved futile by reason of the continued failure of
private respondents to execute the deed of sale of the building and the deed of assignment of the
contract of lease. Petitioners removed all their property, machinery and equipment from the building,
vacated the same and returned its possession to private respondents. Petitioners demanded from the
latter the return of their partial payment for the purchase price of the building. Private respondents
refused to return it.

Hence, petitioners, filed against private respondents a complaint for its recovery and for actual, moral
and exemplary damages and attorney's fees with the then Court of First Instance (now Regional Trial
Court) of Quezon City. Private respondent Lolita Lee Le Hua did not file an Answer; hence, she was
declared in default.

Private respondent Alberto Dy filed a motion to dismiss the complaint on the ground that the claim on
which the action is based an alleged purchase of a building which is not evidenced by any writing
cannot be proved by parol evidence since Article 1356 in relation to Article 1358 of the Civil Code
requires that it should be in writing. In their opposition to said motion, petitioners argue that their
complaint is essentially for collection of a sum of money; it does not seek to enforce the sale, but aims
to compel private respondents to refund a sum of money which was paid to them as purchase price in a
sale which did not materialize by reason of their bad faith. Furthermore, the execution of the document
was an undertaking of the private respondents, which they refused to comply with. Hence, they cannot
now be heard to complain against something which they themselves brought about.
Respondent Judge granted the motion to dismiss on the ground that the complaint is barred by the
Statute of Frauds, stating that the contract in this case is condemned by the Statutes of Fraud as it
involves not merely the sale of real property (the building), it also includes an alleged lease agreement
that must certainly be for more than one year (See Art. 1403, No. 2, subparagraph e, New Civil Code).
Plaintiffs cannot avoid the Statutes of Fraud by saying that this is merely an action for the collection of
a sum of money. To be entitled to the sum of P50,000.00, it is necessary to show that such contract was
executed and the same was violated but plaintiffs are prevented from proving this alleged agreement
by parol evidence.

Their motion for reconsideration having been denied, petitioners filed this petition alleging therein as
ground therefor grave abuse of discretion on the part of respondent Judge.

Private respondent Alberto Dy filed his Comment to the petition; Private respondent Lolita Lee Le Hua
was considered to have waived her right to file her comment to the petition. Petitioners were
subsequently required to file their Brief, which they complied with. Private respondents did not file
their Brief.

ISSUE: Whether an action for the refund of partial payments of the purchase price of a building
covered by an oral agreement to sell it with an oral promise to assign the contract of lease on the lot
where the building is constructed is barred by the Statute of Frauds

HELD: NO it is not. SC found merit in the petition.

Article 1403 of the Civil Code declares the following contracts, among others, as unenforceable, unless
they are ratified:

xxx xxx xxx

(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following
cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or
memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence,
therefore, of the agreement cannot be received without the writing, or a secondary evidence of its
contents:

(a) An agreement that by its terms is not to be performed within a year from the making thereof;

(b) A special promise to answer for the debt, default, or miscarriage of another;

(c) An agreement made in consideration of marriage, other than a mutual promise to marry;

(d) An agreement for the sale of goods, chattels or things in action, at a price not less than five
hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or
some of them, of such things in action, or pay at the time some part of the purchase money; but when a
sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of
the amount and kind of property sold, terms of sale, price, names of the purchasers and person on
whose account the sale is made, it is a sufficient memorandum;

(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or
of an interest therein;
(f) A representation to the credit of a third person.

It is well-settled in this jurisdiction that the Statute of Frauds is applicable only to executory contracts
not to contracts that are totally or partially performed. If a contract has been totally or partially
performed, the exclusion of parol evidence would promote fraud or bad faith, for it would enable the
defendant to keep the benefits already derived by him form the transaction in litigation, and, at the
same time, evade the obligations, responsibilities or liabilities assumed or contracted by him thereby.

There can be no dispute that the instant case is not for specific performance of the agreement to sell the
building and to assign the leasehold right. Petitioners merely seek to recover their partial payment for
the agreed purchase price of the building. The action is definitely not one for specific performance,
hence the Statute of Frauds does not apply. And even if it were for specific performance, partial
execution thereof by petitioners effectively bars the private respondents from invoking it.

Besides, even if the action were for specific performance, it was premature for the respondent Judge to
dismiss the complaint by reason of the Statute of Frauds despite the explicit allegations of partial
payment. For obvious reasons, it is not enough for a party to allege partial performance in order to hold
that there has been such performance and to render a decision declaring that the Statute of Frauds is
inapplicable. But neither is such party required to establish such partial performance by documentary
proof before he could have the opportunity to introduce oral testimony on the transaction.

SC thus ruled that an action by a withdrawing party to recover his partial payment of the consideration
of a contract, which is otherwise unenforceable under the Statute of Frauds, by reason of the failure of
the other contracting party to comply with his obligation, is not covered by the Statute of Frauds.

SUNVILLE TIMBER PRODUCTS, INC., vs. ABAD

FACT: The petitioner (Sunville Timber Products Inc) was granted a Timber License Agreement (TLA),
authorizing it to cut, remove and utilize timber within the concession area covering 29,500 hectares of
forest land in Zamboanga del Sur, for a period of ten years. Herein private respondents (Isidro
Gilbolingo and Robustiano Bugtai) filed a petition with the DENR for the cancellation of the TLA on
the ground of serious violations of its conditions and the provisions of forestry laws and regulations.
The same charges were subsequently made, also by private respondents, in a complaint for injunction
with damages against the petitioner with the Regional Trial Court of Pagadian City.

The petitioner moved to dismiss this case on three grounds, to wit: 1) the court had no jurisdiction over
the complaint; 2) the plaintiffs had not yet exhausted administrative remedies; and 3) the injunction
sought was expressly prohibited by section 1 of PD 605.

Judge Alfonso G. Abad denied the motion to dismiss and the subsequent motion for reconsideration.
The petitioner then elevated the matter to the respondent Court of Appeals, which sustained the trial
court in a decision. The CA held that the doctrine of exhaustion of administrative remedies was not
without exception and pointed to the several instances approved by this Court where it could be
dispensed with. The respondent court found that in the case before it, the applicable exception was the
urgent need for judicial intervention.

The reason for this urgent need is that the adverse effects of the logging operations of the defendant
have already covered a wider area than that feared to be adversely affected by the City Council of
Pagadian City. When the grant of logging concessions started, so was the denudation of forests. It is
common knowledge that heavy floods have occurred in areas/places adjoining logging concessions.
Thus, it is urgent that indiscriminate logging be stopped. Irreparable damage would ensue unless the
court intervenes. Reliance on the DENR may not be enough, judging from its inaction on the council's
request seven years back. Also, Section 1 of PD 605 was held invalid in the case of De Lara v. Cloribel
for an encroachment on the judicial power vested in the Supreme Court and the lower courts by Article
VIII, Section 1, of the Constitution.

The petitioner is now before the Court, contending that the doctrine of exhaustion of administrative
remedies was not correctly applied and that the declaration of the unconstitutionality of Section 1 of PD
605 was improper.

ISSUE: Whether the doctrine of exhaustion of administrative remedies was correctly applied

HELD: NO it as not. The SC sided with petitioner.

The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate
administrative authorities in the resolution of a controversy falling under their jurisdiction before the
same may be elevated to the courts of justice for review. Non-observance of the doctrine results in lack
of a cause of action, which is one of the grounds allowed in the Rules of Court for the dismissal of the
complaint. The deficiency is not jurisdictional. Failure to invoke it operates as a waiver of the objection
as a ground for a motion to dismiss and the court may then proceed with the case as if the doctrine had
been observed.

One of the reasons for the doctrine of exhaustion is the separation of powers, which enjoins upon the
Judiciary a becoming policy of non-interference with matters coming primarily (albeit not exclusively)
within the competence of the other departments. The theory is that the administrative authorities are in
a better position to resolve questions addressed to their particular expertise and that errors committed
by subordinates in their resolution may be rectified by their superiors if given a chance to do so.

A no less important consideration is that administrative decisions are usually questioned in the special
civil actions of certiorari, prohibition and mandamus, which are allowed only when there is no other
plain, speedy and adequate remedy available to the petitioner. It may be added that strict enforcement
of the rule could also relieve the courts of a considerable number of avoidable cases which otherwise
would burden their heavily loaded dockets.

As correctly suggested by he respondent court, however, there are a number of instances when the
doctrine may be dispensed with and judicial action validly resorted to immediately. Among these
exceptional cases are:

1) when the question raised is purely legal;

2) when the administrative body is in estoppel;
3) when the act complained of is patently illegal;
4) when there is urgent need for judicial intervention;
5) when the claim involved is small;
6) when irreparable damage will be suffered;
7) when there is no other plain, speedy and adequate remedy;
8) when strong public interest is involved;
9) when the subject of the controversy is private land; and
10) in quo warranto proceedings.

Private respondents submits that their complaint comes under the exceptions because forestry laws do
not require observance of the doctrine as a condition precedent to judicial action; the question they are
raising is purely legal; application of the doctrine will cause great and irreparable damage; and public
interest is involved.

HOWEVER, even if it be assumed that the forestry laws do not expressly require prior resort to
administrative remedies, the reasons for the doctrine above given, if nothing else, would suffice to still
require its observance. Even if such reasons were disregarded, there would still be the explicit language
of pertinent laws vesting in the DENR the power and function "to regulate the development,
disposition, extraction, exploration and use of the country's forests" and "to exercise exclusive
jurisdiction" in the "management and disposition of all lands of the public domain," and in the Forest
Management Bureau (formerly the Bureau of Forest Development) the responsibility for the
enforcement of the forestry laws aid regulations here claimed to have been violated. This
comprehensive conferment clearly implies at the very least that the DENR should be allowed to rule in
the first instance on any controversy coming under its express powers before the courts of justice may
intervene.

The argument that the questions raised in the petition are purely legal is also not acceptable. The
private respondents have charged that the petitioner has violated the terms and conditions of the TLA
and the provisions of forestry laws and regulations. The charge involves factual issues calling for the
presentation of supporting evidence.

As for the alleged urgent necessity for judicial action and the claimed adverse impact of the case on the
national interest, the record does not show that the petitioners have satisfactorily established these
extraordinary circumstances to justify deviation from the doctrine by exhaustion of administrative
remedies and immediate resort to the courts of justice. In fact, this particular submission must fall flat
against the petitioner's uncontested contention that it has since 1988 stopped its operations under the
TLA in compliance with the order of the DENR.

There in no question that Civil Case No. 2732 comes within the jurisdiction of the respondent court.
Nevertheless, as the wrong alleged in the complaint was supposedly committed as a result of the
unlawful logging activities of the petitioner, it will be necessary first to determine whether or not the
TLA and the forestry laws and regulations had indeed been violated. To repeat for emphasis,
determination of this question is the primary responsibility of the Forest Management Bureau of the
DENR. The application of the expertise of the administrative agency in the resolution of the issue
raised is a condition precedent for the eventual examination, if still necessary, of the same question by a
court of justice.

MUNICIPALITY OF BIAN, LAGUNA vs. COURT OF APPEALS

FACTS: Petitioner filed a case for unlawful detainer, with a prayer for a writ of preliminary
mandatory injunction, against private respondent Jesus M. Garcia in the Municipal Trial Court of
Bian, Laguna alleging that it was no longer amenable to the renewal of its 25-year lease contract with
private respondent over the premises involved because of its pressing need to use the same for national
and provincial offices therein. Private respondent filed his answer to the complaint contending that the
contract of lease for the original period of 25 years had not yet expired and, assuming that it had
expired, he has exercised his option to stay in the premises for another 25 years as expressly provided
in the said contract.

Private respondent filed this time a "Motion for Preliminary Hearing as if a Motion to Dismiss Has
Been Filed" on the ground that the complaint states no cause of action, reiterating their argument in
their answer. After some further exchanges consisting of petitioner's opposition to private respondent's
aforesaid motion for preliminary hearing, the latter's reply thereto, and the parties' respective position
papers, the municipal trial court rendered judgment ordering private respondent to vacate the premises.

Private respondent filed a "Manifestation/Motion" before said trial court praying that the issues raised
in the motion for preliminary hearing, apparently because it was in the nature of a motion to dismiss, be
first resolved instead of rendering judgment on the pleadings. Thereafter, when private respondent
received a copy of the decision of the trial court, he filed a notice of appeal to the Regional Trial Court
of Laguna.

Petitioner filed before said court a motion for execution pending appeal, which was granted. The
following day a writ of execution was issued directing the deputy sheriff or his duly authorized
representative to enforce the terms of the judgment.

Private respondent filed with the Court of Appeals a petition for certiorari, with a prayer for the
issuance of a writ of preliminary injunction, assailing the aforesaid order of execution pending appeal
on the ground that petitioner failed to furnish private respondent with a copy of the motion therefor
filed by it contrary to Section 6, Rule 15 of the Rules of Court, hence the invalidity of the lower court's
order which granted the writ of execution. Petitioner seasonably filed its comment and/or opposition to
said petition.

The CA rendered judgments etting aside the questioned order for being violative of the requirement in
Section 6, Rule 15 of the Rules of Court which provides that no motion shall be acted upon by the court
without proof of prior notice thereof to the adverse party. Aside from annulling the controversial order,
however, respondent court likewise annulled the judgment of the RTC. Respondent court granted the
second additional relief on the ground that the decision is contrary to the agreement of the parties
which should be considered the law between them.

Petitioner duly filed a motion for reconsideration of said judgment on the ground that the Court of
Appeals should have confined itself to the questioned order of the respondent regional trial court. As
earlier stated, respondent court denied said motion, hence, the instant petition wherein the petitioner
contends that the Court of Appeals overstepped the bounds of its authority in annulling the decision of
the municipal trial court even if said decision was not an issue raised by private respondent.

In his comment, private respondent refutes petitioner's contention and claims that the issue of the
merits of the judgment of the municipal trial court was sufficiently raised and controverted, hence,
respondent court was not in error when it passed judgment on the same. Moreover, private respondent
makes the riposte that it is a cherished rule in procedural law that a controversy should be settled in one
single proceeding in order to avoid multiplicity of suits.

ISSUE: Whether CA was correct in annulling the decision of the MTC along with annulling the motion
for execution

HELD: NO, CA was not correct . SC found merit with the instant petition.
The CA has no jurisdiction in a certiorari proceeding involving an incident in a case to rule on the
merits of the main case itself which was not on appeal before it. The validity of the order of the
regional trial court, authorizing the issuance of a writ of execution during the pendency of the appeal
therein was the sole issue raised in the petition for certiorari filed in respondent Court of Appeals. The
allegation that the decision of the municipal trial court was improvidently and irregularly issued was
raised by private respondent only as an additional or alternative argument to buttress his theory that the
issuance of a discretionary writ of execution was not in order, as can be gleaned from the text of said
petition itself.

Further, even assuming that the said issue was squarely raised and sufficiently controverted, the same
cannot be considered a proper subject of a special civil action for certiorari under Rule 65 which is
limited only to challenges against errors of jurisdiction. The jurisdiction of the municipal trial court
over the ejectment case filed by the petitioner against private respondent is not disputed. Thus,
assuming that the said lower court committed a mistake on the merits of the case, it was nonetheless in
the due exercise of its jurisdiction. The error, if any was committed by the trial court, was at most one
of judgment or procedure correctible by ordinary appeal.

Neither can it be said that the lower court committed a grave abuse of discretion or exceeded its
jurisdiction when it failed to conduct a preliminary hearing, as prayed for in private respondent's
"Motion for Preliminary Hearing as if a Motion to Dismiss Has Been Filed," before summarily
rendering judgment on the merits of the case.

Section 5, Rule of the Rules of Court pertinently provides: Any of the grounds for dismissal provides
for in this Rule, except improper venue, preliminary hearing may be had thereon as if a motion to
dismiss had been filed.

The aforequoted provision allows the grounds for a motion to dismiss to be set up as affirmative
defenses in the answer if no motion to dismiss has been filed. However, contrary to the claim of private
respondent, the preliminary hearing permitted under the said provision is not mandatory even when the
same is prayed for. It rests largely on the sound discretion of the trial court. The use of the word "may"
in said provision shows that such a hearing is not a matter of right demandable from the trial court.

Moreover, a preliminary hearing on an affirmative defense for failure to state a cause of action is not
necessary. It is a well-settled rule that in a motion to dismiss based on the ground that the
complaint fails to state a cause of action, the question submitted to the court for determination is
the sufficiency of the allegations in the complaint itself. Whether those allegations are true or not is
beside the point, for their truth is hypothetically admitted by the motion. The issue rather is: admitting
them to be true, may the court render a valid judgment in accordance with the prayer of the complaint?
Stated otherwise, the sufficiency of the cause of action must appear on the face of the complaint in
order to sustain a dismissal on this ground. No extraneous matter may be considered nor facts not
alleged, which would require evidence and therefore, must be raised as defenses and await the trial. In
other words, to determine sufficiency of the cause of action, only the facts alleged in the
complaint, and no other should be considered.

The respondent Judge departed from this rule in conducting a hearing and in receiving evidence in
support of private respondent's affirmative defense, that is, lack of cause of action.

If a judgment of a municipal trial court is sought to be reviewed, the remedy is an appeal to the regional
trial court, not the filing of a special civil action of certiorari.
NATIONAL POWER CORPORATION vs CA

FACTS: Petitioner FINE Chemicals (Phils.) Inc. (FINE) is a corporation registered with the Board of
Investments (BOI) and engaged in the manufacture of plastics for export. It filed an application for
direct power connection with herein co-petitioner National Power Corporation (NPC). NPC, acting on
the same, wrote a letter to herein private respondent Manila Electric Company (MERALCO), wherein
it stated that as per Memorandum of Understanding between NPC and BOI, the NPC is authorized to
connect directly to its system qualified industrial consumers. However, due to its policy not to compete
directly with its customers, NPC requests that it be informed whatever definite decision MERALCO is
contemplating on the requests of FINE and of Rizal Cement for such direct connection.

MERALCO advised NPC through letter that they are not in a position to grant the request since to
allow large consumers to tap directly to NPC will mean foregoing the share of the subsidy burden
which will ultimately be borne by the other remaining large consumers, and that it will also mean
costly duplication of facilities. MERALCO further stated (also in a letter), among others, that the direct
connection of industries under BOI-NPC memorandum of understanding presupposes the inability of
the utility/cooperatives to meet certain standard of financial and technical capability, both of which are
not true in the case of MERALCO.

NPC informed MERALCO through letter that in the absence of a clear- cut policy that will inhibit NPC
from acceding to the said request, NPC is now preparing and will put up the necessary facilities to
supply power to FINE; and that they are now negotiating the terms and conditions of the supply.

MERALCO, in a letter, registered its strong objection; reiterated its assurance that it is financially and
technically capable of serving the power requirements of FINE; and with the statement that a draft
executive order creating the Energy Regulatory Board has been prepared and may be issued
momentarily, urged NPC to hold off any further action towards serving applicant directly, lest it will
pre-empt that Board from implementing government prescription on this issue. But, NPC started to
supply the electric requirements of FINE by direct power supply connection.

Hence, MERALCO filed with the Regional Trial Court of Pasig, a petition for Prohibition, mandamus
and Damages with Preliminary Injunction against petitioners NPC and FINE.

FINE filed its opposition maintaining that the application for injunctive relief had become moot and
academic since, prior to the filing of the petition, the direct power service had already been
consummated and the requisite power lines and facilities of NPC had long been installed and fully
operational.

Accordingly, MERALCO amended its petition by incorporating therein an application for a writ of
preliminary mandatory injunction.

FINE moved to dismiss the amended petition on the ground of insufficiency of the allegations in the
petition to plead a cause of action. NPC adopted FINE's motion to dismiss.

Meanwhile, trial judge allowed reception of MERALCO's evidence in support of its application for a
writ of preliminary mandatory injunction, over FINE's objection. MERALCO was granted leave to file
its second amended petition so as to incorporate this time an allegation of grave and irreparable injury.

With the admission of MERALCO's second amended petition, FINE filed a manifestation adopting its
motion to dismiss as its motion to dismiss the second amended petition. On the other hand, MERALCO
filed its opposition thereto.

Respondent Judge denied the motion to dismiss saying that there is a cause of action. He further stated
that: Well settled rule is that when the motion to dismiss is anchored on lack of cause of action, the
facts alleged in the complaint are assumed and no other fact can be considered in resolving said motion.
After going carefully over the complaint, the Court believes, and so holds, that if not properly traversed
it can render a valid judgment thereon.

FINE, without filing a motion for reconsideration filed with the CA a Petition for Certiorari,
Prohibition and mandamus. NPC, on the other hand, filed a Petition for Leave to File Intervention to
Adopt Petition and Motion for Extension of Time to File Supplemental Petition.

The CA dismissed the petition for certiorari, prohibition and mandamus. Hence, the instant petition.

ISSUE: Whether MERALCO's petition in the lower court should be dismissed.

HELD: YES, it should be dismissed.

It is significant that this case is elevated to the Court of Appeals and now to this Court because of
the denial of petitioner's Motion to Dismiss the amended petition of MERALCO.
Unquestionably, it is but an incident to the main case and the ordinary procedure would have
been to file an answer, go to trial and if the decision is adverse, reiterate the issue on appeal.

But this general rule is subject to certain exceptions, among which are, if the court in denying the
motion to dismiss acts without or in excess of jurisdiction or with grave abuse of discretion. The
reason is, it would be unfair to require the defendant to undergo the ordeal and expense of trial under
such circumstances as the remedy of appeal would not be plain and adequate. More importantly,
petitioner's motion to dismiss is based on the ground that the complaint states no cause of action, so
that there is no need for a full blown trial.

(Yun lang talaga relevant to Motion to Dismiss, pero medyo walang sense yung case w/o the
substantial issues so here's the ratio:

MERALCO's claim in its petition for Prohibition and mandamus before the Regional Trial Court is
anchored on its standing as a holder of a franchise for the sale and distribution of electric power in
various areas of the country including Calamba, Laguna. MERALCO asserts that it has the right to be
heard on any application for direct power connection and to defeat such application by showing its
ability or willingness to match the rates of NPC. As earlier stated, it also expressed the fear that to
allow large consumers to tap directly to NPC will mean foregoing the share of the subsidy burden
which will ultimately be borne by the other consumers.

As consistently ruled by this Court pursuant to P.D. No. 380 as amended by P.D. No. 395, NPC is
statutorily empowered to directly service all the requirements of a BOI registered enterprise provided
that, first, any affected private franchise holder is afforded an opportunity to be heard on the application
therefor and second, from such a healing, it is established that said private franchise holder is incapable
or unwilling to match the reliability and rates of NPC for directly serving the latter/

While initially, MERALCO may have been deprived of the right to be heard in an administrative
proceeding, but in subsequent proceedings before the courts, it had been given ample opportunity to
show that it is capable and wining to match NPC rates but failed. On the contrary, in a hearing before
the trial court or the issuance of preliminary mandatory injunction, MERALCO thru its witness
admitted on cross examination that it cannot charge the same rate NPC is charging because MERALCO
has to make a profit on its investment.

In this Court, MERALCO never committed itself by categorically stating that it can match NPC rates.
Instead it confined itself to the statement that it is financially and technically capable of meeting FINE's
power requirements while in its Memorandum it avers that "At this point in time, it would be highly
improper to ask Meralco whether it can match the rate of NPC." Verily, the intent to evade the issue and
to avail of technicalities to annul the contract between FINE and NPC are clearly evident so that no
useful purpose will be served to remand this case to the trial court only to have the latter's decision
raised again to the Court of Appeals and then to this Court.

Ultimately the issue of exclusivity has already been laid to rest by this Court with the established
principle that the exclusive nature of any public franchise is not favored and that in all grants by the
government to private corporations, the interpretation of rights, privileges or franchises is taken against
the grantee.)