The petition alleged that, on February 20, 2000, GOODLAND executed a Third Party Real

Estate Mortgage on the property in favor of AUB to secure the P202 million credit
accommodation extended by the latter to Radiomarine Network (Smartnet) Inc.
Republic of the Philippines (Radiomarine).
Supreme Court
Manila
When Radiomarine defaulted in the payment of its obligation, AUB instituted extrajudicial
foreclosure proceedings against the real estate mortgage. At the public auction sale held on
SECOND DIVISION
December 4, 2006, AUB was declared the highest bidder. On the same date, a Certificate of
Sale was issued in its name and registered with the Registry of Deeds of Makati City.
ASIA UNITED BANK, G.R. No. 188051
Petitioner,
With the expiration of the redemption period, AUB proceeded to execute an
Present:
Affidavit of Consolidation of Ownership, through its First Vice-President, Florante del
Mundo. AUB thereafter secured a Certificate Authorizing Registration from the Bureau of
CARPIO MORALES, J.,*
Internal Revenue to facilitate the transfer of the title.
NACHURA,**
- versus - Acting Chairperson,
PERALTA,
On December 8, 2006, TCT No. 192674 (114645) was cancelled and, in lieu
PEREZ,*** and
thereof, TCT No. 223120 was issued in the name of AUB.
MENDOZA, JJ.
GOODLAND, through its counsel, Atty. Antonio Bautista (Atty. Bautista), opposed
the petition, denying that it executed the real estate mortgage. GOODLAND further averred
Promulgated:
that the signature of the notary public appearing on the deed was a forgery, and that no
GOODLAND COMPANY, INC.,
technical description of the property supposedly mortgaged was indicated therein.
Respondent. November 22, 2010
Concluding that AUBs title was derived from the foreclosure of a fake mortgage,
GOODLAND prayed for the petitions denial.[6]
x------------------------------------------------------------------------------------x

On March 1, 2007, the RTC issued the writ of possession sought by AUB. It
DECISION
ratiocinated that, as the purchaser of the property at the foreclosure sale and as the new
title holder thereof, AUBs right of possession and enjoyment of the same had become
NACHURA, J.:
absolute.[7]

GOODLAND, through its counsel on record, Atty. Bautista, filed a motion for
Petitioner assails the February 16, 2009 Decision[1] and the May 18, 2009
reconsideration[8] and a supplemental motion for reconsideration,[9] but both were denied
Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 103304, annulling the August
in the Order[10] dated April 25, 2007, which was received by Atty. Bautista on June 15, 2007.
23, 2007[3] and February 15, 2008[4] Orders of the Regional Trial Court (RTC) of Makati City, [11]
Branch 150, which in turn denied due course to respondent Goodland Company, Inc.s
(GOODLAND) notice of appeal for invalid substitution of counsel.
Relentless, GOODLAND sought recourse with the CA by initially filing a Notice of
The antecedents:
Appeal[12] with the RTC, through a certain Atty. Lito Mondragon (Atty. Mondragon) of the
Mondragon & Montoya Law Offices. On August 23, 2007, the RTC issued an
Order[13] denying due course to GOODLANDs notice of appeal for being legally inutile due to
An Ex-Parte Application/Petition for the Issuance of Writ of Possession[5] was filed by Asia
Atty. Mondragons failure to properly effect the substitution of former counsel on record,
United Bank (AUB) over a 5,801-square- meter lot located in Makati City and covered by
Atty. Bautista. GOODLAND moved for reconsideration, but the same was denied in the
Transfer Certificate of Title (TCT) No. 223120 of the Registry of Deeds of Makati in AUBs
Order dated February 15, 2008.[14]
name. The property was previously registered in the name of GOODLAND under TCT No.
GOODLAND elevated the incident to the CA by way of a special
192674 (114645).
civil acton for certiorari. In its February 16, 2009 Decision, the CA granted the petition and
directed the RTC to give due course to the notice of appeal, thus:
 WHEREFORE, the petition is hereby GRANTED. The
assailed Orders dated August 23, 2007 and February 15, 2008 of the
Regional Trial Court, Branch 150, Makati City are ANNULLED and SET
ASIDE. The trial court is DIRECTED to give due course to petitioners
Notice of Appeal.
SO ORDERED.[15]
Aggrieved, AUB moved for reconsideration, but the CA denied the motion in its
Resolution dated May 18, 2009. Hence, the present petition for review on certiorari,
[16]
praying for the reinstatement of the RTC Order.
The petition is meritorious.
Under Rule 138, Section 26 of the Rules of Court, for a substitution of attorney to be
effectual, the following essential requisites must concur: (1) there must be a written
application for substitution; (2) it must be filed with the written consent of the client; (3) it
must be with the written consent of the attorney substituted; and (4) in case the consent of
the attorney to be substituted cannot be obtained, there must at least be proof of notice
that the motion for substitution was served on him in the manner prescribed by the Rules
of Court. [17]
The courts a quo were uniform and correct in finding that Atty. Mondragon failed
to observe the prescribed procedure and, thus, no valid substitution of counsel was
actualized. However, they took divergent postures as to the repercussion of such non-
compliance, thereby igniting the herein controversy.
The RTC strictly imposed the rule on substitution of counsel and held that the
notice of appeal filed by Atty. Mondragon was a mere scrap of paper.
However, relying on our pronouncement in Land Bank of the Philippines v.
Pamintuan Development Co.,[18] the CA brushed aside the procedural lapse and took a
liberal stance on considerations of substantial justice, viz.:
It is a far better and more prudent course of action for the
court to excuse a technical lapse and afford the parties a review of the
case on appeal to attain the ends of justice rather than dispose of the
case on technicality and cause a grave injustice to the parties, giving a
false impression of speedy disposal of cases while actually resulting in
more delay, if not a miscarriage of justice. Thus, substantial justice
would be better served by giving due course to petitioners notice of
appeal.[19]
AUB argues that the liberality applied by the Court in Land Bank is incompatible
with the herein controversy, and that Pioneer Insurance and Surety Corporation v. De Dios
Transportation Co., Inc.,[20] which espouses the same view adopted by the RTC, is more
appropriate.
GOODLAND, on the other hand, insists that the CA committed no reversible error
in ordering that the notice of appeal be allowed in order not to frustrate the ends of
substantial justice.
We agree with AUB. A revisit of our pronouncements in Land Bank and Pioneer is
in order.
In Land Bank, we held that the Department of Agrarian Reform Adjudication
Board gravely abused its discretion when it denied due course to the Notice of Appeal and
Notice of Entry of Appearance filed by petitioners new counsel for failure to effect a valid
substitution of the former counsel on record.
We clarified that the new counsel never intended to replace the counsel of record
because, although not so specified in the notice, they entered their appearance as
collaborating counsel. Absent a formal notice of substitution, all lawyers who appear before
the court or file pleadings in behalf of a client are considered counsel of the latter. We
pursued a liberal application of the rule in order not to frustrate the just, speedy, and
inexpensive determination of the controversy.
In Pioneer, we adopted a strict posture and declared the notice of withdrawal of
appeal filed by appellants new counsel as a mere scrap of paper for his failure to file
beforehand a motion for the substitution of the counsel on record.
Provoking such deportment was the absence of a special power of attorney authorizing the
withdrawal of the appeal in addition to the lack of a proper substitution of counsel. More
importantly, we found that the withdrawal of the appeal was calculated to frustrate the
satisfaction of the judgment debt rendered against appellant, thereby necessitating a rigid
application of the rules in order to deter appellant from benefiting from its own deleterious
manipulation thereof.
The emerging trend of jurisprudence is more inclined to the liberal and flexible
application of the Rules of Court. However, we have not been remiss in reminding the
bench and the bar that zealous compliance with the rules is still the general course of
action. Rules of procedure are in place to ensure the orderly, just, and speedy dispensation
of cases;[21] to this end, inflexibility or liberality must be weighed. The relaxation or
suspension of procedural rules or the exemption of a case from their operation is
warranted only by compelling reasons or when the purpose of justice requires it. [22]
As early as 1998, in Hon. Fortich v. Hon. Corona,[23] we expounded on these guiding
principles:
Procedural rules, we must stress, should be treated with
utmost respect and due regard since they are designed to facilitate the
adjudication of cases to remedy the worsening problem of delay in the
resolution of rival claims and in the administration of justice. The
requirement is in pursuance to the bill of rights inscribed in the
Constitution which guarantees that all persons shall have a right to the
speedy disposition of their cases before all judicial, quasi-judicial
and administrative bodies. The adjudicatory bodies and the parties to a
case are thus enjoined to abide strictly by the rules. While it is true that
a litigation is not a game of technicalities, it is equally true that every
case must be prosecuted in accordance with the prescribed procedure
to ensure an orderly and speedy administration of justice. There have
been some instances wherein this Court allowed a relaxation in the
application of the rules, but this flexibility was never intended to forge a
bastion for erring litigants to violate the rules with impunity. A liberal
interpretation and application of the rules of procedure can be resorted
to only in proper cases and under justifiable causes and circumstances.
In Sebastian v. Hon. Morales,[24] we straightened out the misconception that the
enforcement of procedural rules should never be permitted if it would prejudice the
substantive rights of litigants:
Under Rule 1, Section 6 of the 1997 Rules of Civil Procedure, liberal
construction of the rules is the controlling principle to effect substantial
justice. Thus, litigations should, as much as possible, be decided on
their merits and not on technicalities. This does not mean, however,
that procedural rules are to be ignored or disdained at will to suit the
convenience of a party. Procedural law has its own rationale in the
orderly administration of justice, namely, to ensure the effective
enforcement of substantive rights by providing for a system that
obviates arbitrariness, caprice, despotism, or whimsicality in the
settlement of disputes. Hence, it is a mistake to suppose that
substantive law and procedural law are contradictory to each other, or
as often suggested, that enforcement of procedural rules should never
be permitted if it would result in prejudice to the substantive rights of
the litigants.
x x x. Hence, rules of procedure must be faithfully followed
except only when for persuasive reasons, they may be relaxed to relieve
a litigant of an injustice not commensurate with his failure to comply
with the prescribed procedure. x x x.
Indeed, the primordial policy is a faithful observance of the Rules of Court, and
their relaxation or suspension should only be for persuasive reasons and only in meritorious
cases, to relieve a litigant of an injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure prescribed. [25] Further, a bare
invocation of the interest of substantial justice will not suffice to override a stringent
implementation of the rules.[26]
A reading of the CAs Decision readily shows that the leniency it granted
GOODLAND was merely anchored on substantial justice. The CA overlooked GOODLANDs
failure to advance meritorious reasons to support its plea for the relaxation of Rule 138,
Section 26. The fact that GOODLAND stands to lose a valuable property is inadequate to
dispense with the exacting imposition of a rather basic rule.
More importantly, the CA failed to realize that the ultimate consequences that
will come about should GOODLANDs appeal proceed would in fact contravene substantial
justice. The CA and, eventually, this Court will just re-litigate an otherwise non-litigious
matter and thereby compound the delay GOODLAND attempts to perpetrate in order to
prevent AUB from rightfully taking possession of the property.
It is a time-honored legal precept that after the consolidation of titles in the buyer's name,
for failure of the mortgagor to redeem, entitlement to a writ of possession becomes a
matter of right.[27] As the confirmed owner, the purchasers right to possession becomes
absolute.[28] There is even no need for him to post a bond, [29] and it is the ministerial duty of
the courts to issue the same upon proper application and proof of title. [30] To accentuate
the writs ministerial character, the Court has consistently disallowed injunction to prohibit
its issuance despite a pending action for annulment of mortgage or the foreclosure itself. [31]
The nature of an ex parte petition for issuance of the possessory writ under Act
No. 3135 has been described as a non-litigious proceeding and summary in nature. [32] As
an ex parte proceeding, it is brought for the benefit of one party only, and without notice to
or consent by any person adversely interested.[33]
Subsequent proceedings in the appellate courts would merely involve a
reiteration of the foregoing settled doctrines. The issue involved in the assailed RTC
issuances is conclusively determined by the above cited legal dictum, and it would be
unnecessarily vexatious and unjust to allow the present controversy to undergo protracted
litigation.
 AUBs right of possession is founded on its right of ownership over the property
which it purchased at the auction sale. Upon expiration of the redemption period and
consolidation of the title to the property, its possessory rights over the same became
absolute. We quote with approval the pronouncement of the RTC, viz.:

As the purchaser of the property in the foreclosure sale to which new

title has already been issued, petitioners right over the property has
become absolute, vesting upon it the right of possession and enjoyment
of the property which this Court must aid in effecting its delivery. Under
the circumstances, and following established doctrine, the issuance of a
writ of possession is a ministerial function whereby the court exercises
neither discretion nor judgment x x x. Said writ of possession must be
enforced without delay x x x.[34]

The law does not require that a petition for a writ of possession be granted only
after documentary and testimonial evidence shall have been offered to and admitted by the
court.[35] As long as a verified petition states the facts sufficient to entitle petitioner to the
relief requested, the court shall issue the writ prayed for.[36]

Given the foregoing, we are bound to deny a liberal application of the rules on
substitution of counsel and resolve definitively that GOODLANDs notice of appeal merits a
denial, for the failure of Atty. Mondragon to effect a valid substitution of the counsel on
record. Substantial justice would be better served if the notice of appeal is disallowed. In
the same way that the appellant in Pioneer was not permitted to profit from its own
manipulation of the rules on substitution of counsel, so too can GOODLAND be not
tolerated to foster vexatious delay by allowing its notice of appeal to carry on.

WHEREFORE, premises considered, the petition is GRANTED. The February 16, 2009
Decision and the May 18, 2009 Resolution of the Court of Appeals are
hereby ANNULLED and SET ASIDE; and the August 23, 2007 and February 15, 2008 Orders
of the Regional Trial Court of Makati City, Branch 150, are REINSTATED.

SO ORDERED.

G.R. No. 191618 November 23, 2010

ATTY. ROMULO B. MACALINTAL, Petitioner,
vs.
PRESIDENTIAL ELECTORAL TRIBUNAL, Respondent.
DECISION
NACHURA, J.:
Confronting us is an undesignated petition 1 filed by Atty. Romulo B. Macalintal (Atty.
Macalintal), that questions the constitution of the Presidential Electoral Tribunal (PET) as an
illegal and unauthorized progeny of Section 4,2Article VII of the Constitution:
The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the
election, returns, and qualifications of the President or Vice-President, and may promulgate
its rules for the purpose.
While petitioner concedes that the Supreme Court is "authorized to promulgate its rules for
the purpose," he chafes at the creation of a purportedly "separate tribunal" complemented
by a budget allocation, a seal, a set of personnel and confidential employees, to effect the
constitutional mandate. Petitioners averment is supposedly supported by the provisions of
the 2005 Rules of the Presidential Electoral Tribunal (2005 PET Rules), 3specifically:
(1) Rule 3 which provides for membership of the PET wherein the Chief Justice
and the Associate Justices are designated as "Chairman and Members,"
respectively;
(2) Rule 8(e) which authorizes the Chairman of the PET to appoint employees and
confidential employees of every member thereof;
other courts established by law to any agency performing quasi-judicial or administrative
functions.
The Office of the Solicitor General (OSG), as directed in our Resolution dated April 6, 2010,
filed a Comment5thereon. At the outset, the OSG points out that the petition filed by Atty.
Macalintal is unspecified and without statutory basis; "the liberal approach in its
preparation x x x is a violation of the well known rules of practice and pleading in this
jurisdiction."
In all, the OSG crystallizes the following issues for resolution of the Court:
I
WHETHER x x x PETITIONER HAS LOCUS STANDI TO FILE THE INSTANT PETITION.
II
WHETHER x x x THE CREATION OF THE PRESIDENTIAL ELECTORAL TRIBUNAL IS
UNCONSTITUTIONAL FOR BEING A VIOLATION OF PARAGRAPH 7, SECTION 4 OF ARTICLE VII
OF THE 1987 CONSTITUTION.
III
WHETHER x x x THE DESIGNATION OF MEMBERS OF THE SUPREME COURT AS MEMBERS OF
THE PRESIDENTIAL ELECTORAL TRIBUNAL IS UNCONSTITUTIONAL FOR BEING A VIOLATION
OF SECTION 12, ARTICLE VIII OF THE 1987 CONSTITUTION. 6
In his Reply,7 petitioner maintains that:

(3) Rule 9 which provides for a separate "Administrative Staff of the Tribunal"
1. He has legal standing to file the petition given his averment of transcendental
with the appointment of a Clerk and a Deputy Clerk of the Tribunal who, at the
importance of the issues raised therein;
discretion of the PET, may designate the Clerk of Court (en banc) as the Clerk of
the Tribunal; and
2. The creation of the PET, a separate tribunal from the Supreme Court, violates
Section 4, Article VII of the Constitution; and
(4) Rule 11 which provides for a "seal" separate and distinct from the Supreme
Court seal.
3. The PET, being a separate tribunal, exercises quasi-judicial functions contrary to
Section 12, Article VIII of the Constitution.
Grudgingly, petitioner throws us a bone by acknowledging that the invoked constitutional
provision does allow the "appointment of additional personnel."
We winnow the meanderings of petitioner into the singular issue of whether the
4 constitution of the PET, composed of the Members of this Court, is unconstitutional, and
Further, petitioner highlights our decision in Buac v. COMELEC which peripherally declared
violates Section 4, Article VII and Section 12, Article VIII of the Constitution.
that "contests involving the President and the Vice-President fall within the exclusive
original jurisdiction of the PET, x x x in the exercise of quasi-judicial power." On this point,
petitioner reiterates that the constitution of the PET, with the designation of the Members But first, we dispose of the procedural issue of whether petitioner has standing to file the
of the Court as Chairman and Members thereof, contravenes Section 12, Article VIII of the present petition.
Constitution, which prohibits the designation of Members of the Supreme Court and of
The issue of locus standi is derived from the following requisites of a judicial inquiry:
1. There must be an actual case or controversy;
2. The question of constitutionality must be raised by the proper party;
3. The constitutional question must be raised at the earliest possible opportunity;
and
4. The decision of the constitutional question must be necessary to the
determination of the case itself.8
On more than one occasion we have characterized a proper party as one who has sustained
or is in immediate danger of sustaining an injury as a result of the act complained of. 9 The
dust has long settled on the test laid down in Baker v. Carr: 10 "whether the party has alleged
such a personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court so largely
depends for illumination of difficult questions." 11 Until and unless such actual or threatened
injury is established, the complainant is not clothed with legal personality to raise the
constitutional question.
12
Our pronouncements in David v. Macapagal-Arroyo illuminate:
The difficulty of determining locus standi arises in public suits. Here, the plaintiff who
asserts a "public right" in assailing an allegedly illegal official action, does so as a
representative of the general public. He may be a person who is affected no differently from
any other person. He could be suing as a "stranger," or in the category of a "citizen," or
"taxpayer." In either case, he has to adequately show that he is entitled to seek judicial
protection. In other words, he has to make out a sufficient interest in the vindication of the
public order and the securing of relief as a" citizen" or "taxpayer."
xxxx
However, to prevent just about any person from seeking judicial interference in any official
policy or act with which he disagreed with, and thus hinders the activities of governmental
agencies engaged in public service, the United States Supreme Court laid down the more
stringent "direct injury" test in Ex Parte Levitt, later reaffirmed in Tileston v. Ullman. The
same Court ruled that for a private individual to invoke the judicial power to determine the
validity of an executive or legislative action, he must show that he has sustained a direct
injury as a result of that action, and it is not sufficient that he has a general interest
common to all members of the public.
This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera, it held that
the person who impugns the validity of a statute must have "a personal and substantial
interest in the case such that he has sustained, or will sustain direct injury as a result." The
Vera doctrine was upheld in a litany of cases, such as, Custodio v. President of the Senate,
Manila Race Horse Trainers Association v. De la Fuente, Pascual v. Secretary of Public Works
and Anti-Chinese League of the Philippines v. Felix.
However, being a mere procedural technicality, the requirement of locus standi may be
waived by the Court in the exercise of its discretion. This was done in the 1949 Emergency
Powers Cases, Araneta v. Dinglasan, where the "transcendental importance" of the cases
prompted the Court to act liberally. Such liberality was neither a rarity nor accidental. In
Aquino v. Comelec, this Court resolved to pass upon the issues raised due to the "far-
reaching implications" of the petition notwithstanding its categorical statement that
petitioner therein had no personality to file the suit. Indeed, there is a chain of cases where
this liberal policy has been observed, allowing ordinary citizens, members of Congress, and
civic organizations to prosecute actions involving the constitutionality or validity of laws,
regulations and rulings.
xxxx
By way of summary, the following rules may be culled from the cases decided by this Court.
Taxpayers, voters, concerned citizens, and legislators may be accorded standing to sue,
provided that the following requirements are met:
(1) cases involve constitutional issues;
(2) for taxpayers, there must be a claim of illegal disbursement of public funds or
that the tax measure is unconstitutional;
(3) for voters, there must be a showing of obvious interest in the validity of the
election law in question;
(4) for concerned citizens, there must be a showing that the issues raised are of
transcendental importance which must be settled early; and
(5) for legislators, there must be a claim that the official action complained of
infringes upon their prerogatives as legislators.
Contrary to the well-settled actual and direct injury test, petitioner has simply alleged a
generalized interest in the outcome of this case, and succeeds only in muddling the issues.
Paragraph 2 of the petition reads:
2. x x x Since the creation and continued operation of the PET involves the use of public
funds and the issue raised herein is of transcendental importance, it is petitioners humble
submission that, as a citizen, a taxpayer and a member of the BAR, he has the legal standing
to file this petition.
But even if his submission is valid, petitioners standing is still imperiled by the white
elephant in the petition, i.e., his appearance as counsel for former President Gloria
Macapagal-Arroyo (Macapagal-Arroyo) in the election protest filed by 2004 presidential
candidate Fernando Poe, Jr. before the Presidential Electoral Tribunal, 13because judicial
inquiry, as mentioned above, requires that the constitutional question be raised at the
earliest possible opportunity.14 Such appearance as counsel before the Tribunal, to our
mind, would have been the first opportunity to challenge the constitutionality of the
Tribunals constitution.
Although there are recognized exceptions to this requisite, we find none in this instance.
Petitioner is unmistakably estopped from assailing the jurisdiction of the PET before which
tribunal he had ubiquitously appeared and had acknowledged its jurisdiction in 2004. His
failure to raise a seasonable constitutional challenge at that time, coupled with his
unconditional acceptance of the Tribunals authority over the case he was defending,
translates to the clear absence of an indispensable requisite for the proper invocation of
this Courts power of judicial review. Even on this score alone, the petition ought to be
dismissed outright.
Prior to petitioners appearance as counsel for then protestee Macapagal-Arroyo, we had
occasion to affirm the grant of original jurisdiction to this Court as a Presidential Electoral
Tribunal in the auspicious case of Tecson v. Commission on Elections. 15 Thus -
Petitioners Tecson, et al., in G.R. No. 161434, and Velez, in G.R. No. 161634, invoke the
provisions of Article VII, Section 4, paragraph 7, of the 1987 Constitution in assailing the
jurisdiction of the COMELEC when it took cognizance of SPA No. 04-003 and in urging the
Supreme Court to instead take on the petitions they directly instituted before it. The
Constitutional provision cited reads:
"The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the
election, returns, and qualifications of the President or Vice-President, and may promulgate
its rules for the purpose."
The provision is an innovation of the 1987 Constitution. The omission in the 1935 and the
1973 Constitution to designate any tribunal to be the sole judge of presidential and vice-
presidential contests, has constrained this Court to declare, in Lopez vs. Roxas, as "not
(being) justiciable" controversies or disputes involving contests on the elections, returns
and qualifications of the President or Vice-President. The constitutional lapse prompted
Congress, on 21 June 1957, to enact Republic Act No. 1793, "An Act Constituting an
Independent Presidential Electoral Tribunal to Try, Hear and Decide Protests Contesting the
Election of the President-Elect and the Vice-President-Elect of the Philippines and Providing
for the Manner of Hearing the Same." Republic Act 1793 designated the Chief Justice and
the Associate Justices of the Supreme Court to be the members of the tribunal. Although
the subsequent adoption of the parliamentary form of government under the 1973
Constitution might have implicitly affected Republic Act No. 1793, the statutory set-up,
nonetheless, would now be deemed revived under the present Section 4, paragraph 7, of
the 1987 Constitution.
Former Chief Justice Reynato S. Puno, in his separate opinion, was even more categorical:
The Court is unanimous on the issue of jurisdiction. It has no jurisdiction on the Tecson and
Valdez petitions. Petitioners cannot invoke Article VII, Section 4, par. 7 of the Constitution
which provides:
"The Supreme Court, sitting en banc shall be the sole judge of all contests relating to the
election, returns and qualifications of the President or Vice President and may promulgate
its rules for the purpose."
The word "contest" in the provision means that the jurisdiction of this Court can only be
invoked after the election and proclamation of a President or Vice President. There can be
no "contest" before a winner is proclaimed.16
Similarly, in her separate opinion, Justice Alicia Austria-Martinez declared:
G.R. Nos. 161434 and 161634 invoke the Courts exclusive jurisdiction under the last
paragraph of Section 4, Article VII of the 1987 Constitution. I agree with the majority
opinion that these petitions should be dismissed outright for prematurity. The Court has no
jurisdiction at this point of time to entertain said petitions.
The Supreme Court, as a Presidential Electoral Tribunal (PET), the Senate Electoral Tribunal
(SET) and House of Representatives Electoral Tribunal (HRET) are electoral tribunals, each
specifically and exclusively clothed with jurisdiction by the Constitution to act respectively
as "sole judge of all contests relating to the election, returns, and qualifications" of the
President and Vice-President, Senators, and Representatives. In a litany of cases, this Court
has long recognized that these electoral tribunals exercise jurisdiction over election
contests only after a candidate has already been proclaimed winner in an election. Rules 14
and 15 of the Rules of the Presidential Electoral Tribunal provide that, for President or Vice-
President, election protest or quo warranto may be filed after the proclamation of the
winner.17
Petitioner, a prominent election lawyer who has filed several cases before this Court
involving constitutional and election law issues, including, among others, the
constitutionality of certain provisions of Republic Act (R.A.) No. 9189 (The Overseas
Absentee Voting Act of 2003),18 cannot claim ignorance of: (1) the invocation of our
jurisdiction under Section 4, Article VII of the Constitution; and (2) the unanimous holding
thereon. Unquestionably, the overarching framework affirmed in Tecson v. Commission on
Elections19 is that the Supreme Court has original jurisdiction to decide presidential and
vice-presidential election protests while concurrently acting as an independent Electoral
Tribunal.
Despite the foregoing, petitioner is adamant on his contention that the provision, as
worded, does not authorize the constitution of the PET. And although he concedes that the
Supreme Court may promulgate its rules for this purpose, petitioner is insistent that the
constitution of the PET is unconstitutional. However, petitioner avers that it allows the
Court to appoint additional personnel for the purpose, notwithstanding the silence of the
constitutional provision.
Petitioners pastiche arguments are all hurled at the Court, hopeful that at least one might
possibly stick. But these arguments fail to elucidate on the scope of the rules the Supreme
Court is allowed to promulgate. Apparently, petitioners concept of this adjunct of judicial
power is very restrictive. Fortunately, thanks in no part to petitioners opinion, we are
guided by well-settled principles of constitutional construction.
Verba legis dictates that wherever possible, the words used in the Constitution must be
given their ordinary meaning except where technical terms are employed, in which case the
significance thus attached to them prevails. This Court, speaking through former Chief
Justice Enrique Fernando, in J.M. Tuason & Co., Inc. v. Land Tenure
Administration20 instructs:
As the Constitution is not primarily a lawyers document, it being essential for the rule of
law to obtain that it should ever be present in the peoples consciousness, its language as
much as possible should be understood in the sense they have in common use. What it says
according to the text of the provision to be construed compels acceptance and negates the
power of the courts to alter it, based on the postulate that the framers and the people
mean what they say. Thus these are cases where the need for construction is reduced to a
minimum.
However, where there is ambiguity or doubt, the words of the Constitution should be
interpreted in accordance with the intent of its framers or ratio legis et anima. A doubtful
provision must be examined in light of the history of the times, and the condition and
circumstances surrounding the framing of the Constitution. 21 In following this guideline,
courts should bear in mind the object sought to be accomplished in adopting a doubtful
constitutional provision, and the evils sought to be prevented or remedied. 22 Consequently,
the intent of the framers and the people ratifying the constitution, and not the panderings
of self-indulgent men, should be given effect.
Last, ut magis valeat quam pereat the Constitution is to be interpreted as a whole. We
intoned thus in the landmark case of Civil Liberties Union v. Executive Secretary: 23
It is a well-established rule in constitutional construction that no one provision of the
Constitution is to be separated from all the others, to be considered alone, but that all the
provisions bearing upon a particular subject are to be brought into view and to be so
interpreted as to effectuate the great purposes of the instrument. Sections bearing on a
particular subject should be considered and interpreted together as to effectuate the whole
purpose of the Constitution and one section is not to be allowed to defeat another, if by
any reasonable construction, the two can be made to stand together.
In other words, the court must harmonize them, if practicable, and must lean in favor of a
construction which will render every word operative, rather than one which may make the
words idle and nugatory.
24
We had earlier expounded on this rule of construction in Chiongbian v. De Leon, et al.,
wit:
[T]he members of the Constitutional Convention could not have dedicated a provision of
our Constitution merely for the benefit of one person without considering that it could also
affect others. When they adopted subsection 2, they permitted, if not willed, that said
provision should function to the full extent of its substance and its terms, not by itself
alone, but in conjunction with all other provisions of that great document.
On its face, the contentious constitutional provision does not specify the establishment of
the PET. But neither does it preclude, much less prohibit, otherwise. It entertains divergent
interpretations which, though unacceptable to petitioner, do not include his restrictive view
one which really does not offer a solution.
Section 4, Article VII of the Constitution, the provision under scrutiny, should be read with
other related provisions of the Constitution such as the parallel provisions on the Electoral
Tribunals of the Senate and the House of Representatives.
Before we resort to the records of the Constitutional Commission, we discuss the
framework of judicial power mapped out in the Constitution. Contrary to petitioners
assertion, the Supreme Courts constitutional mandate to act as sole judge of election
contests involving our countrys highest public officials, and its rule-making authority in
connection therewith, is not restricted; it includes all necessary powers implicit in the
exercise thereof.
We recall the unprecedented and trailblazing case of Marcos v. Manglapus: 25
The 1987 Constitution has fully restored the separation of powers of the three great
branches of government. To recall the words of Justice Laurel in Angara v. Electoral
Commission, "the Constitution has blocked but with deft strokes and in bold lines,
allotment of power to the executive, the legislative and the judicial departments of the
government." Thus, the 1987 Constitution explicitly provides that "[t]he legislative power
shall be vested in the Congress of the Philippines" [Art. VI, Sec. 1], "[t]he executive power
shall be vested in the President of the Philippines" [Art. VII, Sec. 1], and "[t]he judicial
power shall be vested in one Supreme Court and in such lower courts as may be established
by law" [Art. VIII, Sec. 1]. These provisions not only establish a separation of powers by
actual division but also confer plenary legislative, executive and judicial powers subject only
to limitations provided in the Constitution. For as the Supreme Court in Ocampo v. Cabangis
pointed out "a grant of the legislative power means a grant of all legislative power; and a
grant of the judicial power means a grant of all the judicial power which may be exercised
under the government."
The Court could not have been more explicit then on the plenary grant and exercise of
judicial power. Plainly, the abstraction of the Supreme Court acting as a Presidential
Electoral Tribunal from the unequivocal grant of jurisdiction in the last paragraph of Section
4, Article VII of the Constitution is sound and tenable.
to The mirabile dictu of the grant of jurisdiction to this Court, albeit found in the Article on the
executive branch of government, and the constitution of the PET, is evident in the
discussions of the Constitutional Commission. On the exercise of this Courts judicial power
as sole judge of presidential and vice-presidential election contests, and to promulgate its
rules for this purpose, we find the proceedings in the Constitutional Commission most
instructive:
MR. DAVIDE. On line 25, after the words "Vice-President," I propose to add AND MAY
PROMULGATE ITS RULES FOR THE PURPOSE. This refers to the Supreme Court sitting en
banc. This is also to confer on the Supreme Court exclusive authority to enact the necessary
rules while acting as sole judge of all contests relating to the election, returns and
qualifications of the President or Vice-President.
MR. REGALADO. My personal position is that the rule-making power of the Supreme Court
with respect to its internal procedure is already implicit under the Article on the Judiciary;
considering, however, that according to the Commissioner, the purpose of this is to indicate
the sole power of the Supreme Court without intervention by the legislature in the
promulgation of its rules on this particular point, I think I will personally recommend its
acceptance to the Committee.26
xxxx
MR. NOLLEDO. x x x.
With respect to Sections 10 and 11 on page 8, I understand that the Committee has also
created an Electoral Tribunal in the Senate and a Commission on Appointments which may
cover membership from both Houses. But my question is: It seems to me that the
committee report does not indicate which body should promulgate the rules that shall
govern the Electoral Tribunal and the Commission on Appointments. Who shall then
promulgate the rules of these bodies?
MR. DAVIDE. The Electoral Tribunal itself will establish and promulgate its rules because it is
a body distinct and independent already from the House, and so with the Commission on
Appointments also. It will have the authority to promulgate its own rules. 27
On another point of discussion relative to the grant of judicial power, but equally cogent,
we listen to former Chief Justice Roberto Concepcion:
MR. SUAREZ. Thank you.
Would the Commissioner not consider that violative of the doctrine of separation of
powers?
MR. CONCEPCION. I think Commissioner Bernas explained that this is a contest between
two parties. This is a judicial power.
MR. SUAREZ. We know, but practically the Committee is giving to the judiciary the right to
declare who will be the President of our country, which to me is a political action.
MR. CONCEPCION. There are legal rights which are enforceable under the law, and these
are essentially justiciable questions.
MR. SUAREZ. If the election contest proved to be long, burdensome and tedious, practically
all the time of the Supreme Court sitting en banc would be occupied with it considering
that they will be going over millions and millions of ballots or election returns, Madam
President.28
Echoing the same sentiment and affirming the grant of judicial power to the Supreme
Court, Justice Florenz D. Regalado29 and Fr. Joaquin Bernas30 both opined:
MR. VILLACORTA. Thank you very much, Madam President.
I am not sure whether Commissioner Suarez has expressed his point. On page 2, the fourth
paragraph of Section 4 provides:
The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the
election, returns and qualifications of the President or Vice-President.
May I seek clarification as to whether or not the matter of determining the outcome of the
contests relating to the election returns and qualifications of the President or Vice-
President is purely a political matter and, therefore, should not be left entirely to the
judiciary. Will the above-quoted provision not impinge on the doctrine of separation of
powers between the executive and the judicial departments of the government?
MR. REGALADO. No, I really do not feel that would be a problem. This is a new provision
incidentally. It was not in the 1935 Constitution nor in the 1973 Constitution.
MR. VILLACORTA. That is right.
MR. REGALADO. We feel that it will not be an intrusion into the separation of powers
guaranteed to the judiciary because this is strictly an adversarial and judicial proceeding.
MR. VILLACORTA. May I know the rationale of the Committee because this supersedes
Republic Act 7950 which provides for the Presidential Electoral Tribunal?
FR. BERNAS. Precisely, this is necessary. Election contests are, by their nature, judicial.
Therefore, they are cognizable only by courts. If, for instance, we did not have a
constitutional provision on an electoral tribunal for the Senate or an electoral tribunal for
the House, normally, as composed, that cannot be given jurisdiction over contests.
So, the background of this is really the case of Roxas v. Lopez. The Gentleman will
remember that in that election, Lopez was declared winner. He filed a protest before the
Supreme Court because there was a republic act which created the Supreme Court as the
Presidential Electoral Tribunal. The question in this case was whether new powers could be
given the Supreme Court by law. In effect, the conflict was actually whether there was an
attempt to create two Supreme Courts and the answer of the Supreme Court was: "No, this President Recto. Neither does the American constitution contain a provision over the
did not involve the creation of two Supreme Courts, but precisely we are giving new subject.
jurisdiction to the Supreme Court, as it is allowed by the Constitution. Congress may
allocate various jurisdictions." Delegate Saguin. But then, who will decide these protests?

Before the passage of that republic act, in case there was any contest between two
presidential candidates or two vice-presidential candidates, no one had jurisdiction over it.
So, it became necessary to create a Presidential Electoral Tribunal. What we have done is to
constitutionalize what was statutory but it is not an infringement on the separation of
powers because the power being given to the Supreme Court is a judicial power. 31
Unmistakable from the foregoing is that the exercise of our power to judge presidential and
vice-presidential election contests, as well as the rule-making power adjunct thereto, is
plenary; it is not as restrictive as petitioner would interpret it. In fact, former Chief Justice
Hilario G. Davide, Jr., who proposed the insertion of the phrase, intended the Supreme
Court to exercise exclusive authority to promulgate its rules of procedure for that purpose.
To this, Justice Regalado forthwith assented and then emphasized that the sole power
ought to be without intervention by the legislative department. Evidently, even the
legislature cannot limit the judicial power to resolve presidential and vice-presidential
election contests and our rule-making power connected thereto.
To foreclose all arguments of petitioner, we reiterate that the establishment of the PET
simply constitutionalized what was statutory before the 1987 Constitution. The experiential
context of the PET in our country cannot be denied.32
Consequently, we find it imperative to trace the historical antecedents of the PET.
President Recto. I suppose that the National Assembly will decide on that. 33
To fill the void in the 1935 Constitution, the National Assembly enacted R.A. No. 1793,
establishing an independent PET to try, hear, and decide protests contesting the election of
President and Vice-President. The Chief Justice and the Associate Justices of the Supreme
Court were tasked to sit as its Chairman and Members, respectively. Its composition was
extended to retired Supreme Court Justices and incumbent Court of Appeals Justices who
may be appointed as substitutes for ill, absent, or temporarily incapacitated regular
members.
The eleven-member tribunal was empowered to promulgate rules for the conduct of its
proceedings. It was mandated to sit en banc in deciding presidential and vice-presidential
contests and authorized to exercise powers similar to those conferred upon courts of
justice, including the issuance of subpoena, taking of depositions, arrest of witnesses to
compel their appearance, production of documents and other evidence, and the power to
punish contemptuous acts and bearings. The tribunal was assigned a Clerk, subordinate
officers, and employees necessary for the efficient performance of its functions.
R.A. No. 1793 was implicitly repealed and superseded by the 1973 Constitution which
replaced the bicameral legislature under the 1935 Constitution with the unicameral body of
a parliamentary government.

Article VII, Section 4, paragraph 7 of the 1987 Constitution is an innovation. The precursors With the 1973 Constitution, a PET was rendered irrelevant, considering that the President
of the present Constitution did not contain similar provisions and instead vested upon the was not directly chosen by the people but elected from among the members of the
legislature all phases of presidential and vice-presidential elections from the canvassing of National Assembly, while the position of Vice-President was constitutionally non-existent.
election returns, to the proclamation of the president-elect and the vice-president elect,
and even the determination, by ordinary legislation, of whether such proclamations may be
In 1981, several modifications were introduced to the parliamentary system. Executive
contested. Unless the legislature enacted a law creating an institution that would hear
power was restored to the President who was elected directly by the people. An Executive
election contests in the Presidential and Vice-Presidential race, a defeated candidate had no
Committee was formed to assist the President in the performance of his functions and
legal right to demand a recount of the votes cast for the office involved or to challenge the
duties. Eventually, the Executive Committee was abolished and the Office of Vice-President
ineligibility of the proclaimed candidate. Effectively, presidential and vice-presidential
was installed anew.
contests were non-justiciable in the then prevailing milieu.

The omission in the 1935 Constitution was intentional. It was mainly influenced by the
absence of a similar provision in its pattern, the Federal Constitution of the United States.
Rather, the creation of such tribunal was left to the determination of the National
Assembly. The journal of the 1935 Constitutional Convention is crystal clear on this point:
Delegate Saguin. For an information. It seems that this Constitution does not contain any
provision with respect to the entity or body which will look into the protests for the
positions of the President and Vice-President.
These changes prompted the National Assembly to revive the PET by enacting, on
December 3, 1985, Batas Pambansa Bilang (B.P. Blg.) 884, entitled "An Act Constituting an
Independent Presidential Electoral Tribunal to Try, Hear and Decide Election Contests in the
Office of the President and Vice-President of the Philippines, Appropriating Funds Therefor
and For Other Purposes." This tribunal was composed of nine members, three of whom
were the Chief Justice of the Supreme Court and two Associate Justices designated by him,
while the six were divided equally between representatives of the majority and minority
parties in the Batasang Pambansa.
Aside from the license to wield powers akin to those of a court of justice, the PET was
permitted to recommend the prosecution of persons, whether public officers or private
individuals, who in its opinion had participated in any irregularity connected with the
canvassing and/or accomplishing of election returns.
The independence of the tribunal was highlighted by a provision allocating a specific budget
from the national treasury or Special Activities Fund for its operational expenses. It was
empowered to appoint its own clerk in accordance with its rules. However, the subordinate
officers were strictly employees of the judiciary or other officers of the government who
were merely designated to the tribunal.
After the historic People Power Revolution that ended the martial law era and installed
Corazon Aquino as President, civil liberties were restored and a new constitution was
formed.
With R.A. No. 1793 as framework, the 1986 Constitutional Commission transformed the
then statutory PET into a constitutional institution, albeit without its traditional
nomenclature:
FR. BERNAS. x x x.
x x x. So it became necessary to create a Presidential Electoral Tribunal. What we have done
is to constitutionalize what was statutory but it is not an infringement on the separation of
powers because the power being given to the Supreme Court is a judicial power. 34
Clearly, petitioners bete noire of the PET and the exercise of its power are unwarranted.
His arguments that: (1) the Chief Justice and Associate Justices are referred to as
"Chairman" and "Members," respectively; (2) the PET uses a different seal; (3) the
Chairman is authorized to appoint personnel; and (4) additional compensation is allocated
to the "Members," in order to bolster his claim of infirmity in the establishment of the PET,
are too superficial to merit further attention by the Court.
Be that as it may, we hasten to clarify the structure of the PET as a legitimate progeny of
Section 4, Article VII of the Constitution, composed of members of the Supreme Court,
sitting en banc. The following exchange in the 1986 Constitutional Commission should
provide enlightenment:
MR. SUAREZ. Thank you. Let me proceed to line 23, page 2, wherein it is provided, and I
quote:
The Supreme Court, sitting en banc[,] shall be the sole judge of all contests relating to the
election, returns and qualifications of the President or Vice-President.
Are we not giving enormous work to the Supreme Court especially when it is directed to sit
en banc as the sole judge of all presidential and vice-presidential election contests?
MR. SUMULONG. That question will be referred to Commissioner Concepcion.
MR. CONCEPCION. This function was discharged by the Supreme Court twice and the
Supreme Court was able to dispose of each case in a period of one year as provided by law.
Of course, that was probably during the late 1960s and early 1970s. I do not know how the
present Supreme Court would react to such circumstances, but there is also the question of
who else would hear the election protests.
MR. SUAREZ. We are asking this question because between lines 23 to 25, there are no
rules provided for the hearings and there is not time limit or duration for the election
contest to be decided by the Supreme Court. Also, we will have to consider the historical
background that when R.A. 1793, which organized the Presidential Electoral Tribunal, was
promulgated on June 21, 1957, at least three famous election contests were presented and
two of them ended up in withdrawal by the protestants out of sheer frustration because of
the delay in the resolution of the cases. I am referring to the electoral protest that was
lodged by former President Carlos P. Garcia against our "kabalen" former President
Diosdado Macapagal in 1961 and the vice-presidential election contest filed by the late
Senator Gerardo Roxas against Vice-President Fernando Lopez in 1965.
MR. CONCEPCION. I cannot answer for what the protestants had in mind. But when that
protest of Senator Roxas was withdrawn, the results were already available. Senator Roxas
did not want to have a decision adverse to him. The votes were being counted already, and
he did not get what he expected so rather than have a decision adverse to his protest, he
withdrew the case.
xxxx
MR. SUAREZ. I see. So the Commission would not have any objection to vesting in the
Supreme Court this matter of resolving presidential and vice-presidential contests?
MR. CONCEPCION. Personally, I would not have any objection.
MR. SUAREZ. Thank you.
Would the Commissioner not consider that violative of the doctrine of separation of
powers?
MR. CONCEPCION. I think Commissioner Bernas explained that this is a contest between
two parties. This is a judicial power.
MR. SUAREZ. We know, but practically the Committee is giving to the judiciary the right to
declare who will be the President of our country, which to me is a political action.
MR. CONCEPCION. There are legal rights which are enforceable under the law, and these
are essentially justiciable questions.
MR. SUAREZ. If the election contest proved to be long, burdensome and tedious, practically
all the time of the Supreme Court sitting en banc would be occupied with it considering
that they will be going over millions and millions of ballots or election returns, Madam
President.
MR. CONCEPCION. The time consumed or to be consumed in this contest for President is
dependent upon they key number of teams of revisors. I have no experience insofar as
contests in other offices are concerned.
MR. SUAREZ. Although there is a requirement here that the Supreme Court is mandated to
sit en banc?
MR. CONCEPCION. Yes.
MR. SUAREZ. I see.
MR. CONCEPCION. The steps involved in this contest are: First, the ballot boxes are opened
before teams of three, generally, a representative each of the court, of the protestant and
of the "protestee." It is all a questions of how many teams are organized. Of course, that
can be expensive, but it would be expensive whatever court one would choose. There were
times that the Supreme Court, with sometimes 50 teams at the same time working, would
classify the objections, the kind of problems, and the court would only go over the objected
votes on which the parties could not agree. So it is not as awesome as it would appear
insofar as the Court is concerned. What is awesome is the cost of the revision of the ballots
because each party would have to appoint one representative for every team, and that may
take quite a big amount.
MR. SUAREZ. If we draw from the Commissioners experience which he is sharing with us,
what would be the reasonable period for the election contest to be decided?
MR. CONCEPCION. Insofar as the Supreme Court is concerned, the Supreme Court always
manages to dispose of the case in one year.
MR. SUAREZ. In one year. Thank you for the clarification. 35
Obvious from the foregoing is the intent to bestow independence to the Supreme Court as
the PET, to undertake the Herculean task of deciding election protests involving presidential
and vice-presidential candidates in accordance with the process outlined by former Chief
Justice Roberto Concepcion. It was made in response to the concern aired by delegate Jose
E. Suarez that the additional duty may prove too burdensome for the Supreme Court. This
explicit grant of independence and of the plenary powers needed to discharge this burden
justifies the budget allocation of the PET.
The conferment of additional jurisdiction to the Supreme Court, with the duty
characterized as an "awesome" task, includes the means necessary to carry it into effect
under the doctrine of necessary implication. 36 We cannot overemphasize that the
abstraction of the PET from the explicit grant of power to the Supreme Court, given our
abundant experience, is not unwarranted.
A plain reading of Article VII, Section 4, paragraph 7, readily reveals a grant of authority to
the Supreme Court sitting en banc. In the same vein, although the method by which the
Supreme Court exercises this authority is not specified in the provision, the grant of power
does not contain any limitation on the Supreme Courts exercise thereof. The Supreme
Courts method of deciding presidential and vice-presidential election contests, through the
PET, is actually a derivative of the exercise of the prerogative conferred by the aforequoted
constitutional provision. Thus, the subsequent directive in the provision for the Supreme
Court to "promulgate its rules for the purpose."
The conferment of full authority to the Supreme Court, as a PET, is equivalent to the full
authority conferred upon the electoral tribunals of the Senate and the House of
Representatives, i.e., the Senate Electoral Tribunal (SET) and the House of Representatives
Electoral Tribunal (HRET),37 which we have affirmed on numerous occasions. 38
Particularly cogent are the discussions of the Constitutional Commission on the parallel
provisions of the SET and the HRET. The discussions point to the inevitable conclusion that
the different electoral tribunals, with the Supreme Court functioning as the PET, are
constitutional bodies, independent of the three departments of government Executive,
Legislative, and Judiciary but not separate therefrom.
MR. MAAMBONG. x x x.
My questions will be very basic so we can go as fast as we can. In the case of the electoral
tribunal, either of the House or of the Senate, is it correct to say that these tribunals are
constitutional creations? I will distinguish these with the case of the Tanodbayan and the
Sandiganbayan which are created by mandate of the Constitution but they are not
constitutional creations. Is that a good distinction?
xxxx
MR. MAAMBONG. Could we, therefore, say that either the Senate Electoral Tribunal or the
House Electoral Tribunal is a constitutional body?
MR. AZCUNA. It is, Madam President.
MR. MAAMBONG. If it is a constitutional body, is it then subject to constitutional
restrictions?
MR. AZCUNA. It would be subject to constitutional restrictions intended for that body.
MR. MAAMBONG. I see. But I want to find out if the ruling in the case of Vera v. Avelino, 77
Phil. 192, will still be applicable to the present bodies we are creating since it ruled that the
electoral tribunals are not separate departments of the government. Would that ruling still
be valid?
MR. AZCUNA. Yes, they are not separate departments because the separate departments
are the legislative, the executive and the judiciary; but they are constitutional bodies. 39
The view taken by Justices Adolfo S. Azcuna 40 and Regalado E. Maambong41 is schooled by
our holding in Lopez v. Roxas, et al.:42
Section 1 of Republic Act No. 1793, which provides that:
"There shall be an independent Presidential Electoral Tribunal x x x which shall be the sole
judge of all contests relating to the election, returns, and qualifications of the president-
elect and the vice-president-elect of the Philippines."
has the effect of giving said defeated candidate the legal right to contest judicially the
election of the President-elect of Vice-President-elect and to demand a recount of the votes
case for the office involved in the litigation, as well as to secure a judgment declaring that
he is the one elected president or vice-president, as the case may be, and that, as such, he
is entitled to assume the duties attached to said office. And by providing, further, that the
Presidential Electoral Tribunal "shall be composed of the Chief Justice and the other ten
Members of the Supreme Court," said legislation has conferred upon such Court an
additional original jurisdiction of an exclusive character.
Republic Act No. 1793 has not created a new or separate court. It has merely conferred
upon the Supreme Court the functions of a Presidential Electoral Tribunal. The result of the
enactment may be likened to the fact that courts of first instance perform the functions of
such ordinary courts of first instance, those of court of land registration, those of probate
courts, and those of courts of juvenile and domestic relations. It is, also, comparable to the
situation obtaining when the municipal court of a provincial capital exercises its authority,
pursuant to law, over a limited number of cases which were previously within the exclusive
jurisdiction of courts of first instance.
In all of these instances, the court (court of first instance or municipal court) is only one,
although the functions may be distinct and, even, separate. Thus the powers of a court of
first instance, in the exercise of its jurisdiction over ordinary civil cases, are broader than, as
well as distinct and separate from, those of the same court acting as a court of land
registration or a probate court, or as a court of juvenile and domestic relations. So too, the
authority of the municipal court of a provincial capital, when acting as such municipal
court, is, territorially more limited than that of the same court when hearing the
aforementioned cases which are primary within the jurisdiction of courts of first instance.
In other words, there is only one court, although it may perform the functions pertaining to
several types of courts, each having some characteristics different from those of the others.
Indeed, the Supreme Court, the Court of Appeals and courts of first instance, are vested
with original jurisdiction, as well as with appellate jurisdiction, in consequence of which
they are both trial courts and, appellate courts, without detracting from the fact that there
is only one Supreme Court, one Court of Appeals, and one court of first instance, clothed
with authority to discharge said dual functions. A court of first instance, when performing
the functions of a probate court or a court of land registration, or a court of juvenile and
domestic relations, although with powers less broad than those of a court of first instance,
hearing ordinary actions, is not inferior to the latter, for one cannot be inferior to itself. So
too, the Presidential Electoral Tribunal is not inferior to the Supreme Court, since it is the
same Court although the functions peculiar to said Tribunal are more limited in scope than
those of the Supreme Court in the exercise of its ordinary functions. Hence, the enactment
of Republic Act No. 1793, does not entail an assumption by Congress of the power of
appointment vested by the Constitution in the President. It merely connotes the imposition
of additional duties upon the Members of the Supreme Court.
By the same token, the PET is not a separate and distinct entity from the Supreme Court,
albeit it has functions peculiar only to the Tribunal. It is obvious that the PET was
constituted in implementation of Section 4, Article VII of the Constitution, and it faithfully
complies not unlawfully defies the constitutional directive. The adoption of a separate
seal, as well as the change in the nomenclature of the Chief Justice and the Associate
Justices into Chairman and Members of the Tribunal, respectively, was designed simply to
highlight the singularity and exclusivity of the Tribunals functions as a special electoral
court.
As regards petitioners claim that the PET exercises quasi-judicial functions in contravention
of Section 12, Article VIII of the Constitution, we point out that the issue in Buac v.
COMELEC43 involved the characterization of the enforcement and administration of a law
relative to the conduct of a plebiscite which falls under the jurisdiction of the Commission
on Elections. However, petitioner latches on to the enumeration in Buac which declared, in
an obiter, that "contests involving the President and the Vice-President fall within the
exclusive original jurisdiction of the PET, also in the exercise of quasi-judicial power."
The issue raised by petitioner is more imagined than real. Section 12, Article VIII of the
Constitution reads:
SEC. 12. The Members of the Supreme Court and of other courts established by law shall
not be designated to any agency performing quasi-judicial or administrative functions.
The traditional grant of judicial power is found in Section 1, Article VIII of the Constitution
which provides that the power "shall be vested in one Supreme Court and in such lower
courts as may be established by law." Consistent with our presidential system of
government, the function of "dealing with the settlement of disputes, controversies or
conflicts involving rights, duties or prerogatives that are legally demandable and
enforceable" 44 is apportioned to courts of justice. With the advent of the 1987
Constitution, judicial power was expanded to include "the duty of the courts of justice to
settle actual controversies involving rights which are legally demandable and enforceable,
and to determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government."45 The power was expanded, but it remained absolute.
The set up embodied in the Constitution and statutes characterizes the resolution of Supreme Court. McCulloch v. State of Maryland 49 proclaimed that "[a] power without the
electoral contests as essentially an exercise of judicial power.1avvphi1 means to use it, is a nullity." The vehicle for the exercise of this power, as intended by the
Constitution and specifically mentioned by the Constitutional Commissioners during the
At the barangay and municipal levels, original and exclusive jurisdiction over election discussions on the grant of power to this Court, is the PET. Thus, a microscopic view, like the
contests is vested in the municipal or metropolitan trial courts and the regional trial courts, petitioners, should not constrict an absolute and constitutional grant of judicial power.
respectively.
One final note. Although this Court has no control over contrary people and naysayers, we
At the higher levels city, provincial, and regional, as well as congressional and senatorial reiterate a word of caution against the filing of baseless petitions which only clog the
exclusive and original jurisdiction is lodged in the COMELEC and in the House of Courts docket. The petition in the instant case belongs to that classification.
Representatives and Senate Electoral Tribunals, which are not, strictly and literally speaking,
courts of law. Although not courts of law, they are, nonetheless, empowered to resolve WHEREFORE, the petition is DISMISSED. Costs against petitioner.
election contests which involve, in essence, an exercise of judicial power, because of the
explicit constitutional empowerment found in Section 2(2), Article IX-C (for the COMELEC) SO ORDERED.
and Section 17, Article VI (for the Senate and House Electoral Tribunals) of the Constitution.
Besides, when the COMELEC, the HRET, and the SET decide election contests, their
decisions are still subject to judicial review via a petition for certiorari filed by the proper
party if there is a showing that the decision was rendered with grave abuse of discretion
tantamount to lack or excess of jurisdiction.46

It is also beyond cavil that when the Supreme Court, as PET, resolves a presidential or vice-
presidential election contest, it performs what is essentially a judicial power. In the
landmark case of Angara v. Electoral Commission,47 Justice Jose P. Laurel enucleated that "it
would be inconceivable if the Constitution had not provided for a mechanism by which to
direct the course of government along constitutional channels." In fact, Angara pointed out
that "[t]he Constitution is a definition of the powers of government." And yet, at that time,
the 1935 Constitution did not contain the expanded definition of judicial power found in
Article VIII, Section 1, paragraph 2 of the present Constitution.

With the explicit provision, the present Constitution has allocated to the Supreme Court, in
conjunction with latters exercise of judicial power inherent in all courts, 48 the task of
deciding presidential and vice-presidential election contests, with full authority in the
exercise thereof. The power wielded by PET is a derivative of the plenary judicial power
allocated to courts of law, expressly provided in the Constitution. On the whole, the
Constitution draws a thin, but, nevertheless, distinct line between the PET and the Supreme
Court.

If the logic of petitioner is to be followed, all Members of the Court, sitting in the Senate
and House Electoral Tribunals would violate the constitutional proscription found in Section
12, Article VIII. Surely, the petitioner will be among the first to acknowledge that this is not
so. The Constitution which, in Section 17, Article VI, explicitly provides that three Supreme
Court Justices shall sit in the Senate and House Electoral Tribunals, respectively, effectively
exempts the Justices-Members thereof from the prohibition in Section 12, Article VIII. In
the same vein, it is the Constitution itself, in Section 4, Article VII, which exempts the
Members of the Court, constituting the PET, from the same prohibition.

We have previously declared that the PET is not simply an agency to which Members of the
Court were designated. Once again, the PET, as intended by the framers of the Constitution,
is to be an institution independent, but not separate, from the judicial department, i.e., the
 THIRD DIVISION
On January 21, 1998, respondent filed a motion to transfer the case to Branch 9,
RTC, Cebu City. Administrative Order No. 113-95 [8] (A.O. No. 113-95) designated the said
ANDREA TAN, CLARITA G.R. No.148420 branch as the special court in Region VII to handle violations of intellectual property rights.
LLAMAS, VICTOR ESPINA
and LUISA ESPINA, On March 2, 1998, petitioners filed a motion to quash[9] the information on the
Petitioners, ground that the RTC had no jurisdiction over the offense charged against them. The
Present: penalty[10] provided by the RPC for the crime was within the jurisdiction of the Municipal
PANGANIBAN, J., Chairman Trial Court in Cities (MTCC).
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
CARPIO MORALES and
On March 6, 1998, respondent filed an opposition to the motion to quash,
GARCIA, JJ. [11]
explaining that BP 129 had already transferred the exclusive jurisdiction to try and
decide violations of intellectual property rights from the MTC and MTCC to the RTC and
BAUSCH & LOMB, INC.
that the Supreme Court had also issued Administrative Order No. 104-96 (A.O. No. 104-96)
Respondent. Promulgated: [12]
deleting and withdrawing the designation of several branches of the MTC and MTCC as
special intellectual property courts.
December 15, 2005
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
On December 22, 1998, the court a quo denied respondents motion to transfer
DECISION

the case and granted petitioners motion to quash. It ruled:

CORONA, J.:
Assailed in this petition for review [1] are the decision[2] and resolution[3] of the
Court of Appeals which set aside the December 22, 1998 order [4] of Judge Genis Balbuena
of Branch 21, Regional Trial Court (RTC), Cebu City and ordered the transfer of Criminal
Case No. CBU-45890 to Branch 9, RTC, Cebu City.
The antecedents follow.
Accused [wa]s charged for violation of Art. 189 of Revised Penal Code
the penalty for which is prision correccional in its minimum period or a
fine ranging from P500.00 to P2,000.00, or both. Hence, within the
jurisdiction of the metropolitan and municipal trial courts (Sec. 32(2),
B.P. Blg. 129, as amended).
Administrative Orders Nos. 113-95 and 104-96, cited by plaintiff,
cannot prevail over the express provisions of Batas Pambansa Blg. 129,
as amended, jurisdiction of courts being a matter of substantive law.

On April 8, 1997, an information[5] for violation of paragraph 1, Article 189 [6] of
the Revised Penal Code (RPC) was filed before Branch 21, RTC, Cebu City against petitioners
Andrea Tan, Clarita Llamas, Victor Espina and Luisa Espina of Best Buy Mart, Inc. The
information read:
That on or about June 27, 1996 and sometime prior or
subsequent thereto, in the City of Cebu, Philippines, and within the
jurisdiction of this Honorable Court, abovementioned accused, conspiring
and mutually helping each other, did then and there willfully, unlawfully
and feloniously distribute and sell counterfeit RAY BAN sunglasses
bearing the appearance and trademark of RAY BAN in the aforesaid store
wherein they have direct control, supervision and management thereby
inducing the public to believe that these goods offered by them are those
of RAY BAN to the damage and prejudice of BAUSCH AND LOMB, INC., the
exclusive owner and user of trademark RAY BAN on sunglasses.[7]
If this Court has no jurisdiction over the case, the same is true with
Branch 9 of the same court, Therefore, the motion to transfer the case
to the latter should fail.
WHEREFORE, premises considered, the motion to transfer is denied,
while the motion to quash is granted. The case is thus dismissed.
SO ORDERED.[13]
Respondent received the order on January 21, 1999 but filed neither an appeal
nor a motion for reconsideration. Rather, it filed a petition for certiorari [14] in the Court of
Appeals on March 23, 1999 or one (1) day beyond the period allowed in Section 4, Rule
65[15] of the Rules of Court.

Respondents procedural lapses notwithstanding, the appellate court gave due
course to the petition and set aside the trial court order:
WHEREFORE, the petition is GIVEN DUE
COURSE and GRANTED. The assailed Order of December 22, 1998
is VACATED and another is entered ordering the transfer of Crim. Case
No. CBU-45890 to Branch 9 of the Regional Trial Court of Cebu City,
and directing the public respondent to accordingly transmit the
records thereof.
SO ORDERED.[16]
Hence, the present petition for review, centered on the following issues:
I. THE COURT OF APPEALS SERIOUSLY ERRED IN NOT DISMISSING
THE PETITION OF RESPONDENT THAT IS FRAUGHT WITH FATAL
INFIRMITIES.
II. THE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE
CORRECT RULING OF THE TRIAL COURT THAT THE REGIONAL TRIAL
COURT HAS NO JURISDICTION OVER THE OFFENSE OF UNFAIR
COMPETITION UNDER ARTICLE 189 OF THE REVISED PENAL CODE. [17]
There is no merit in the petition.
As to the first assigned error, petitioners contend that the Court of Appeals erred
in giving due course to the petition for certiorari because respondent failed to appeal or file
a motion for reconsideration of the trial courts order granting the motion to quash. Worse,
respondent filed the petition in the appellate court one day after the reglementary period
expired.
Needless to state, the acceptance of a petition for certiorari as well as the grant of due
course thereto is, in general, addressed to the sound discretion of the court. [18]
Besides, the provisions of the Rules of Court, which are technical rules, may be
relaxed in certain exceptional situations.[19] Where a rigid application of the rule that
certiorari cannot be a substitute for appeal will result in a manifest failure or miscarriage of
justice, it is within our power to suspend the rules or exempt a particular case from its
operation.[20]
Under certain special circumstances,[21] a petition for certiorari may be given due
course notwithstanding that no motion for reconsideration was filed in the lower court. The
exception applies in this case since the order of the trial court was, as will be discussed
later, a patent nullity.
Likewise, the one-day delay in the filing of the petition may be excused on the
basis of equity to afford respondent the chance to prove the merits of the complaint.
In Yao v. Court of Appeals,[22] we held:
In the interest of substantial justice, procedural rules of the
most mandatory character in terms of compliance may be relaxed. In
other words, if strict adherence to the letter of the law would result in
absurdity and manifest injustice or where the merit of a partys cause
is apparent and outweighs consideration of non-compliance with
certain formal requirements, procedural rules should definitely be
liberally construed. A party-litigant is to be given the fullest
opportunity to establish the merits of his complaint or defense rather
than for him to lose life, liberty, honor or property on mere
technicalities.
Hence, the only relevant issue left for our resolution is whether or not the
jurisdiction over the crime allegedly committed by petitioners is vested on the RTC.
Section 5 (5) of the 1987 Constitution empowers the Supreme Court to promulgate rules
concerning pleading, practice and procedure in all courts. The limitations to this rule-
making power are the following: the rules must (a) provide a simplified and inexpensive
procedure for the speedy disposition of cases; (b) be uniform for all courts of the same
grade and (c) not diminish, increase or modify substantive rights. [23] As long as these limits
are met, the argument used by petitioners that the Supreme Court, through A.O. Nos. 113-
95 and 104-96, transgressed on Congress sole power to legislate, cannot be sustained.
A.O. No. 113-95 designated special intellectual property courts to promote the efficient
administration of justice and to ensure the speedy disposition of intellectual property
cases.
A.O. No. 104-96,[24] on the other hand, was issued pursuant to Section 23 of BP
[25]
129 which transferred the jurisdiction over such crimes from the MTC and MTCC to the
RTC and which furthermore gave the Supreme Court the authority to designate certain
branches of the RTC to exclusively handle special cases in the interest of the speedy and
efficient administration of justice. Accordingly, the RTC was vested with the exclusive and
original jurisdiction to try and decide intellectual property cases.
The transfer of jurisdiction from the MTC and MTCC to the RTC did not in any way affect the
substantive rights of petitioners. The administrative orders did not change the definition or
scope of the crime of unfair competition with which petitioners were charged.
Both administrative orders therefore have the force and effect of law, having been validly
issued by the Supreme Court in the exercise of its constitutional rule-making power. The
trial court, being a subordinate court, should have followed the mandate of the later A.O.
104-96 which vested jurisdiction over the instant case on the RTC. Thus, the appellate court
correctly found that the court a quo committed grave abuse of discretion.
 Furthermore, the order of the trial court was a patent nullity. In resolving the
pending incidents of the motion to transfer and motion to quash, the trial court
should not have allowed petitioners to collaterally attack the validity of A.O. Nos.
113-95 and 104-96. We have ruled time and again that the constitutionality or
validity of laws, orders, or such other rules with the force of law cannot be
attacked collaterally. There is a legal presumption of validity of these laws and
rules. Unless a law or rule is annulled in a direct proceeding, the legal
presumption of its validity stands.[26] The trial courts order was consequently null
and void.

The transfer of this case to Branch 9, RTC, Cebu City, however, is no longer possible. A.M.
No. 03-03-03-SC[27] consolidated the intellectual property courts and commercial SEC courts
in one RTC branch in a particular locality to streamline the court structure and to promote
expediency. The RTC branch so designated will try and decide cases involving violations of
intellectual property rights, and cases formerly cognizable by the Securities and Exchange
Commission. It is now called a special commercial court. In Region VII, the designated
special commercial court is Branch 11, RTC, Cebu City. The transfer of this case to that court
is therefore warranted.

WHEREFORE, the Court of Appeals decision dated October 20, 2000 is

hereby AFFIRMED with the MODIFICATION that Criminal Case No. CBU-45890 shall be
transferred to Branch 11, RTC, Cebu City. Let the records of the case be transmitted thereto
and the case tried and decided with dispatch.

Costs against petitioners.

SO ORDERED.
 Republic of the Philippines On December 6, 2005, the Court issued A.M. No. 05-10-20-SC, In re: Exemption of
Supreme Court
the National Power Corporation from the Payment of Filing/Docket Fees, on the basis of
Manila
Section 13, Republic Act No. 6395 (An Act Revising the Charter of the National Power
EN BANC
Corporation). It reads:
IN RE: EXEMPTION OF A.M. NO. 05-10-20-SC
THE NATIONAL POWER The Court Resolved, upon the recommendation of the Office
CORPORATION FROM PAYMENT OF Present: of the Court Administrator, to DECLARE that the National Power
FILING/ DOCKET FEES Corporation (NPC) is still exempt from the payment of filing fees,
PUNO, CJ., appeals bond, and supersedeas bonds.
CARPIO,
CORONA,
CARPIO MORALES, On October 27, 2009, however, the Court issued A.M. No. 05-10-20-SC stating
VELASCO, JR.,
NACHURA, that:
LEONARDO-DE CASTRO, The Court Resolved, upon recommendation of the Committee
BRION, on the Revision of the Rules of Court, to DENY the request of the
PERALTA, National Power Corporation (NPC) for exemption from the payment of
BERSAMIN, filing fees pursuant to Section 10 of Republic Act No. 6395, as amended
DEL CASTILLO, by Section 13 of Presidential Decree No. 938. The request appears to
ABAD, run counter to Section 5(5), Article VIII of the Constitution, in the rule-
VILLARAMA, JR., making power of the Supreme Court over the rules on pleading,
PEREZ, and practice and procedure in all courts, which includes the sole power to
MENDOZA, JJ. fix the filing fees of cases in courts.

Promulgated:
Hence, the subject letter of NPC for clarification as to its exemption from the
March 10, 2010
payment of filing fees and court fees.

Section 22 of Rule 141 reads:

RESOLUTION

MENDOZA, J.:
The National Power Corporation (NPC) seeks clarification from the Court on
whether or not it is exempt from the payment of filing fees, appeal bonds and supersedeas
Sec. 22. Government exempt. The Republic of the Philippines,
its agencies and instrumentalities are exempt from paying the legal fees
provided in this rule. Local government units and government-owned or
controlled corporations with or without independent charters
are not exempt from paying such fees. (emphasis supplied)

bonds. Section 70 of Republic Act No. 9136 (Electric Power Industry Reform Act of 2001), on

privatization of NPC assets, expressly states that the NPC shall remain as a national

government-owned and controlled corporation.

 laws on pleading, practice, and
Thus, NPC is not exempt from payment of filing fees. procedure are hereby repealed
as statutes, and are declared
Rules of Court, subject to the
The non-exemption of NPC is further fortified by the promulgation on February power of the Supreme Court to
alter and modify the same. The
11, 2010 of A.M. No. 08-2-01-0, In re: Petition for Recognition of the Exemption of the Congress shall have the power
to repeal, alter or supplement
Government Service Insurance System (GSIS) from Payment of Legal Fees. In said case, the the rules concerning pleading,
practice and procedure, and the
Court, citing Echegaray v. Secretary of Justice,[1] stressed that the 1987 Constitution took admission to the practice of law
in the Philippines.
away the power of Congress to repeal, alter or supplement rules concerning pleading,
xxxxxxxxx
practice, and procedure; and that the power to promulgate these rules is no longer shared
[T]he 1973 Constitution reiterated the power of
by the Court with Congress and the Executive, thus: this Court to promulgate rules concerning pleading,
practice, and procedure in all courts, x x x which,
Since the payment of legal fees is a vital component of the rules however, may be repealed, altered or
promulgated by this Court concerning pleading, practice and procedure, supplemented by the Batasang Pambansa x x
it cannot be validly annulled, changed or modified by Congress. As one x.More completely, Section 5(2) [sic] 5 of its Article
of the safeguards of this Courts institutional independence, the power X provided:
to promulgate rules of pleading, practice and procedure is now the
Courts exclusive domain. That power is no longer shared by this Court xxxxxxxxx
with Congress, much less the Executive.
Sec. 5. The Supreme
Speaking for the Court, then Associate Justice (now Chief Justice) Court shall have the following
Reynato S. Puno traced the history of the rule-making power of this powers.
Court and highlighted its evolution and development in Echegaray v.
Secretary of Justice: xxxxxxxxx

Under the 1935 Constitution, the power of this (5) Promulgate rules
Court to promulgate rules concerning pleading, concerning pleading, practice,
practice and procedure was granted but it appeared and procedure in all courts, the
to be co-existent with legislative power for it was admission to the practice of law,
subject to the power of Congress to repeal, alter or and the integration of the Bar,
supplement. Thus, its Section 13, Article VIII which, however, may be
provides: repealed, altered, or
supplemented by the Batasang
Sec.13. The Supreme Court shall Pambansa. Such rules shall
have the power to promulgate provide a simplified and
rules concerning pleading, inexpensive procedure for the
practice and procedure in all speedy disposition of case, shall
courts, and the admission to the be uniform for all courts of the
practice of law. Said rules shall same grade, and shall not
be uniform for all courts of the diminish, increase, or modify
same grade and shall not substantive rights.
diminish, increase, or modify
substantive rights. The existing
 xxxxxxxxx The separation of powers among the three co-equal
branches of our government has erected an impregnable
The 1987 Constitution molded an wall that keeps the power to promulgate rules of pleading,
even stronger and more independent practice and procedure within the sole province of this
judiciary. Among others, it enhanced the rule Court. The other branches trespass upon this prerogative if
making power of this Court. Its Section 5(5), Article they enact laws or issue orders that effectively repeal, alter
VIII provides: or modify any of the procedural rules promulgated by this
Court. Viewed from this perspective, the claim of a
xxxxxxxxx legislative grant of exemption from the payment of legal fees
under Section 39 of RA 8291 necessarily fails.
Section 5. The Supreme Court
shall have the following powers.

xxxxxxxxx With the foregoing categorical pronouncement of the Court, it is clear that NPC

(5) Promulgate rules can no longer invoke Republic Act No. 6395 (NPC Charter), as amended by Presidential
concerning the protection and
enforcement of constitutional Decree No. 938, as its basis for exemption from the payment of legal fees.
rights, pleading, practice, and
procedure in all courts, the
admission to the practice of law, WHEREFORE, it is hereby CLARIFIED that the National Power Corporation is not
the Integrated Bar, and legal
assistance to the exempt from the payment of legal fees.
underprivileged. Such rules shall
provide a simplified and
SO ORDERED.
inexpensive procedure for the
speedy disposition of cases,
shall be uniform for all courts of
the same grade, and shall not
diminish, increase, or modify
substantive rights. Rules of
procedure of special courts and
quasi-judicial bodies shall
remain effective unless
disapproved by the Supreme
Court.

The rule making power of this Court was expanded. This

Court for the first time was given the power to promulgate
rules concerning the protection and enforcement of
constitutional rights. The Court was also granted for the first
time the power to disapprove rules of procedure of special
courts and quasi-judicial bodies. But most importantly, the
1987 Constitution took away the power of Congress to
repeal, alter, or supplement rules concerning pleading,
practice and procedure. In fine, the power to promulgate
rules of pleading, practice and procedure is no longer shared
by this Court with Congress, more so with the Executive.
G.R. No. 168747 October 19, 2007
VICTORIA REGNER, Petitioner, vs. CYNTHIA R. LOGARTA, TERESA R. TORMIS and CEBU
COUNTRY CLUB, Inc., Respondents.
DECISION
CHICO-NAZARIO, J.:
This Petition for Review on Certiorari seeks to reverse the Decision 1 dated 6 May 2005 of
the Court of Appeals in CA-G.R. CV No. 71028 entitled, "Victoria Regner v. Cynthia Logarta,
Teresa R. Tormis and Cebu Country Club, Inc.," which affirmed the Order dated 9 November
2000 of the Regional Trial Court (RTC) of Cebu, granting herein respondents motion to
dismiss Civil Case No. CEB 23927. The Order dated 9 November 2000 of the RTC dismissed
herein petitioners complaint for declaration of nullity of a deed of donation, for failure to
serve summons on Cynthia Logarta, an indispensable party therein.
Civil Case No. CEB. 23927 arose from the following factual antecedents:
Luis Regner (Luis) had three daughters with his first wife, Anicita C. Regner, namely, Cynthia
Logarta (Cynthia) and Teresa Tormis (Teresa), the respondents herein, and Melinda Regner-
Borja (Melinda).
Herein petitioner Victoria Regner (Victoria) is the second wife of Luis.
During the lifetime of Luis, he acquired several properties, among which is a share at Cebu
Country Club Inc., evidenced by Proprietary Ownership Certificate No. 0272. On 15 May
1998, Luis executed a Deed2 of Donation in favor of respondents Cynthia and Teresa
covering Proprietary Ownership Certificate No. 0272 of the Cebu Country Club, Inc.
Luis passed away on 11 February 1999.
On 15 June 1999, Victoria filed a Complaint 3 for Declaration of Nullity of the Deed of
Donation with Prayer for Issuance of a Writ of Preliminary Injunction and Temporary
Restraining Order against Cynthia and Teresa with the RTC, docketed as Civil Case No. CEB.
23927. Victoria alleged in her complaint that: on 17 March 1997, Luis made a written
declaration wherein he stated that due to his illness and forgetfulness, he would not sign
any document without the knowledge of his lawyer, Atty. Francis Zosa; on 15 May 1998,
when Luis was already very ill and no longer of sound and disposing mind, Cynthia and
Teresa , conspiring and confederating with each other, fraudulently made or caused to be
fraudulently made a Deed of Donation whereby they made it appear that Luis donated to
them Proprietary Ownership Certificate No. 0272; since Luis no longer had the ability to
write or affix his signature, Melinda, acting under the influence of her sisters, Cynthia and
Teresa, fraudulently manipulated the hand of Luis so that he could affix his thumbmark on
the assailed Deed of Donation; on 8 February 1998, or three days before the death of Luis,
and when he was already in comatose condition at the Cebu Doctors Hospital, Melinda,
Teresa, and Cynthia caused the preparation of an affidavit to the effect that Luis affirmed
the Deed of Donation he allegedly executed earlier by lifting his hand to affix his
thumbmark on the said affidavit.
Sheriff Melchor A. Solon served the summonses on Cynthia and Teresa at the Borja Family
Clinic in Tagbilaran City wherein Melinda worked as a doctor, but Melinda refused to
receive the summonses for her sisters and informed the sheriff that their lawyer, Atty.
Francis Zosa, would be the one to receive the same.
Upon her arrival in the Philippines, on 1 June 2000, Teresa was personally served the
summons at Room 304, Regency Crest Condominium, Banilad, Cebu City. She filed her
Answer4 with counterclaim with the RTC on 6 June 2000.
Subsequently, on 12 September 2002, Teresa filed a motion to dismiss Civil Case No. CEB
23927 because of petitioners failure to prosecute her action for an unreasonable length of
time.
Petitioner opposed5 the motion and filed her own motion to set the case for pre-trial, to
which Teresa filed her rejoinder on the ground that their sister, Cynthia, an indispensable
party, had not yet been served a summons. Thus, Teresa prayed for the dismissal of
petitioners complaint, as the case would not proceed without Cynthias presence.
On 9 November 2000, the RTC issued an Order 6 granting respondent Teresas motion to
dismiss, pertinent portions of which read:
Considering that the donees in the Deed of Donation are Cynthia R. Logarta and Teresa R.
Tormis, they are therefore an (sic) indispensable party (sic). In the case of Quisumbing vs.
Court of Appeals, 189 SCRA 325, indispensable parties are those with such an interest in
the controversy that a final decree would necessarily affect their rights so that the court
could not proceed without their presence
Wherefore, in view of the foregoing, the instant case is hereby dismissed without prejudice.
A motion for reconsideration was filed by petitioner, but the same was denied in an Order
dated 14 February 2001.
Aggrieved, petitioner appealed to the Court of Appeals. On 6 May 2005, the Court of
Appeals rendered a Decision denying the appeal and affirming in toto the order of dismissal
of the complaint by the RTC and the denial of the motion for reconsideration thereof. The
Court of Appeals ratiocinated that petitioners failure to move for an extraterritorial service
of summons constitutes failure to prosecute for an unreasonable length of time, thus:
[T]he plaintiff-appellant [Victoria Regner] should have moved for the extraterritorial service
of summons for both defendants-appellees Teresa R. Tormis and Cynthia R. Logarta as they
were not residing and were not found in the Philippines when plaintiff-appellant [Victoria
Regner] filed this case below. Although defendant-appellant Teresa Tormis was personally
served with summons on June 1, 2000 when she came to the Philippines but the same was
only effected after a long wait or after the lapse of almost one year from the date the
complaint was filed on June 15, 1999. To allow this practice would be to make the
continuation of like proceedings before the courts dependent on when the defendants
would be personally served with summons by the time they would come to the Philippines,
which would only unnecessarily delay the proceedings and clog the court dockets as well.
The afore-cited rule was precisely crafted to meet situations similar to the present case to
avoid unnecessary delays.
It has to be emphasized that it is incumbent upon the plaintiff [Victoria Regner] to move
with leave of court for the extraterritorial service of summons. Taking into account the
considerable time that had elapsed from the filing of the complaint on June 15, 1999 until
defendant-appellee Teresa R. Tormis, through counsel, filed a motion to dismiss on
September 12, 2000, or approximately fifteen (15) months, without any act on the part of
plaintiff-appellant [Victoria Regner] to move for extraterritorial service of summons upon
the person of defendant-appellee Cynthia Logarta renders plaintiff-appellants [Victoria
Regner] complaint dismissible for failure to prosecute her action for unreasonable length of
time under Section 3, Rule 17, Revised Rules of Court, x x x. 7
Hence, this appeal via petition8 for review on certiorari filed by petitioner raising the
following assignment of errors:
THE COURT OF APPEALS ERRED IN HOLDING THAT THE DELAY IN SERVING SUMMONS ON
ONE OF THE DEFENDANTS CONSTITUTES A FAILURE TO PROSECUTE NOTWITHSTANDING
THAT THE REST OF THE CO-DEFENDANTS WERE DULY SERVED WITH SUMMONSES
THE COURT OF APPEALS ERRED IN NOT CONSIDERING THAT THE ANSWER FILED BY ONE
INDIVIDUAL DEFENDANT REDOUNDS TO THE BENEFIT OF THE OTHER DEFENDANT WHO
HAS NOT BEEN SERVED WITH SUMMONS, THE NATURE OF ACTION BEING ADMITTEDLY
COMMON AMONG ALL DEFENDANTS.9
From the foregoing, this Court identifies the issues to be resolved in this petition as: (1)
Whether a co-donee is an indispensable party in an action to declare the nullity of the deed
of donation, and (2) whether delay in the service of summons upon one of the defendants
constitutes failure to prosecute that would warrant dismissal of the complaint.
A Court must acquire jurisdiction over the persons of indispensable parties before it can
validly pronounce judgments personal to the parties. Courts acquire jurisdiction over a
party plaintiff upon the filing of the complaint. On the other hand, jurisdiction over the
person of a party defendant is assured upon the service of summons in the manner
required by law or otherwise by his voluntary appearance. As a rule, if a defendant has not
been summoned, the court acquires no jurisdiction over his person, and a personal
judgment rendered against such defendant is null and void. 10 A decision that is null and void
for want of jurisdiction on the part of the trial court is not a decision in the contemplation
of law and, hence, it can never become final and executory. 11
Rule 3, Section 7 of the Rules of Court, defines indispensable parties as parties-in-interest
without whom there can be no final determination of an action. As such, they must be
joined either as plaintiffs or as defendants. The general rule with reference to the making of
parties in a civil action requires, of course, the joinder of all necessary parties where
possible, and the joinder of all indispensable parties under any and all conditions, their
presence being a sine qua non for the exercise of judicial power. 12 It is precisely "when an
indispensable party is not before the court [that] the action should be dismissed." 13 The
absence of an indispensable party renders all subsequent actions of the court null and void
for want of authority to act, not only as to the absent parties but even as to those
present.14
As we ruled in Alberto v. Mananghala15 :
In an action for recovery of property against a person who purchased it from another who
in turn acquired it from others by the same means or by donation or otherwise, the
predecessors of defendants are indispensable parties if the transfers, if not voided, may
bind plaintiff. (Garcia vs. Reyes, 17 Phil. 127.) In the latter case, this Court held:
In order to bring this suit duly to a close, it is imperative to determine the only question
raised in connection with the pending appeal, to wit, whether all the persons who
intervened in the matter of the transfers and donation herein referred to, are or are not
necessary parties to this suit, since it is asked in the complaint that the said transfers and
donation be declared null and void an indispensable declaration for the purpose, in a
proper case, of concluding the plaintiff to be the sole owner of the house in dispute.
If such a declaration of annulment can directly affect the persons who made and who were
concerned in the said transfers, nothing could be more proper and just than to hear them
in the litigation, as parties interested in maintaining the validity of those transactions, and
therefore, whatever be the nature of the judgment rendered, Francisco Reyes, Dolores
Carvajal, Alfredo Chicote, Vicente Miranda, and Rafael Sierra, besides the said minors, must
be included in the case as defendants." (Garcia vs. Reyes, 17 Phil., 130-131.)
It takes no great degree of legal sophistication to realize that Cynthia and Teresa are
indispensable parties to Civil Case No. CEB 23927. Cynthia and Teresa allegedly derived
their rights to the subject property by way of donation from their father Luis. The central
thrust of the petitioners complaint in Civil Case No. CEB 23927 was that Luis could not have
donated Proprietary Ownership Certificate No. 0272 to his daughters Cynthia and Teresa, as
Luis was already very ill and no longer of sound and disposing mind at the time of donation
on 15 May 1997. Accordingly, the prayer in petitioners complaint was for the trial court to
declare null and void the Deed of Donation and to restrain the Cebu Country Club, Inc. from
transferring title and ownership of Proprietary Ownership Certificate No. 0272 to Cynthia
and Teresa.
Thus, based on the Deed of Donation, Teresa and Cynthia are co-owners of Proprietary
Membership Certificate No. 0272 of Cebu Country Club, Inc. The country club membership
certificate is undivided and it is impossible to pinpoint which specific portion of the
property belongs to either Teresa or Cynthia. Indeed, both Teresa and Cynthia are
indispensable parties in Civil Case No. CEB 23927.
An indispensable party has been defined as follows:
An indispensable party is a party who has such an interest in the controversy or subject No. CEB 23927 without whom the lower court is barred from making a final adjudication as
matter that a final adjudication cannot be made, in his absence, without injuring or to the validity of the entire donation. Without the presence of indispensable parties to a
affecting that interest, a party who has not only an interest in the subject matter of the suit or proceeding, a judgment therein cannot attain finality. 19
controversy, but also has an interest of such nature that a final decree cannot be made
without affecting his interest or leaving the controversy in such a condition that its final Being an indispensable party in Civil Case No. CEB 23927, the trial court must also acquire
determination may be wholly inconsistent with equity and good conscience. It has also jurisdiction over Cynthias person through the proper service of summons.
been considered that an indispensable party is a person in whose absence there cannot be
a determination between the parties already before the court which is effective, complete,
Based on the foregoing disquisitions, the issue of whether the answer filed by Teresa should
or equitable. Further, an indispensable party is one who must be included in an action
benefit Cynthia who was not served summons need not be discussed.
before it may properly go forward.

As to determine whether Cynthia was properly served a summons, it will be helpful to

A person is not an indispensable party, however, if his interest in the controversy or subject
determine first the nature of the action filed against Cynthia and Teresa by petitioner
matter is separable from the interest of the other parties, so that it will not necessarily be
Victoria, whether it is an action in personam, in rem or quasi in rem. This is because the
directly or injuriously affected by a decree which does complete justice between them.
rules on service of summons embodied in Rule 14 apply according to whether an action is
Also, a person is not an indispensable party if his presence would merely permit complete
one or the other of these actions.
relief between him and those already parties to the action, or if he has no interest in the
subject matter of the action. It is not a sufficient reason to declare a person to be an
indispensable party that his presence will avoid multiple litigation. 16 In a personal action, the plaintiff seeks the recovery of personal property, the enforcement
of a contract or the recovery of damages. 20 In contrast, in a real action, the plaintiff seeks
the recovery of real property; or, as indicated in Section 2(a), Rule 4 of the then Rules of
In Servicewide Specialists, Incorporated v. Court of Appeals, 17 this Court held that no final
Court, a real action is an action affecting title to real property or for the recovery of
determination of a case could be made if an indispensable party is not legally present
possession, or for partition or condemnation of, or foreclosure of mortgage on, real
therein:
property. An action in personam is an action against a person on the basis of his personal
liability, while an action in rem is an action against the thing itself, instead of against the
An indispensable party is one whose interest will be affected by the courts action in the person.21
litigation, and without whom no final determination of the case can be had. The partys
interest in the subject matter of the suit and in the relief sought are so inextricably
In an action in personam, personal service of summons or, if this is not possible and he
intertwined with the other parties that his legal presence as a party to the proceeding is an
cannot be personally served, substituted service, as provided in Section 7, Rule 14 of the
absolute necessity. In his absence there cannot be a resolution of the dispute of the parties
Rules of Court,22 is essential for the acquisition by the court of jurisdiction over the person
before the court which is effective, complete, or equitable.
of a defendant who does not voluntarily submit himself to the authority of the court. 23 If
defendant cannot be served a summons because he is temporarily abroad, but is otherwise
The rationale for treating all the co-owners of a property as indispensable parties in a suit a Philippine resident, service of summons may, by leave of court, be made by
involving the co-owned property is explained in Arcelona v. Court of Appeals 18 : publication.24 Otherwise stated, a resident defendant in an action in personam, who cannot
be personally served a summons, may be summoned either by means of substituted
As held by the Supreme Court, were the courts to permit an action in ejectment to be service in accordance with Section 7, Rule 14 of the Rules of Court, or by publication as
maintained by a person having merely an undivided interest in any given tract of land, a provided in Sections 15 and 16 of the same Rule.
judgment in favor of the defendants would not be conclusive as against the other co-
owners not parties to the suit, and thus the defendant in possession of the property might In all of these cases, it should be noted, defendant must be a resident of the Philippines;
be harassed by as many succeeding actions of ejectment, as there might be co-owners of otherwise an action in personam cannot be brought because jurisdiction over his person is
the title asserted against him. The purpose of this provision was to prevent multiplicity of essential to make a binding decision.
suits by requiring the person asserting a right against the defendant to include with him,
either as co-plaintiffs or as co-defendants, all persons standing in the same position, so that
On the other hand, if the action is in rem or quasi in rem, jurisdiction over the person of the
the whole matter in dispute may be determined once and for all in one litigation.
defendant is not essential for giving the court jurisdiction so long as the court acquires
jurisdiction over the res. If the defendant is a nonresident and he is not found in the
Applying the foregoing definitions and principles to the present case, this Court finds that country, summons may be served extraterritorially in accordance with Section 15, Rule 14
any decision in Civil Case No. CEB 23927 cannot bind Cynthia, and the Court cannot nullify of the Rules of Court, which provides:
the donation of the property she now co-owns with Teresa, even if limited only to the
portion belonging to Teresa, to whom summons was properly served, since ownership of
the property is still pro indiviso. Obviously, Cynthia is an indispensable party in Civil Case
Section 15. Extraterritorial service. - When the defendant does not reside and is not found
in the Philippines, and the action affects the personal status of the plaintiff or relates to, or
the subject of which is, property within the Philippines, in which the defendant has or
claims a lien or interest, actual or contingent, or in which the relief demanded consists,
wholly or in part, in excluding the defendant from any interest therein, or the property of
the defendant has been attached within the Philippines, service may, by leave of court, be
effected out of the Philippines by personal service as under Section 6; or by publication in a
newspaper of general circulation in such places and for such time as the court may order, in
which case a copy of the summons and order of the court shall be sent by registered mail to
the last known address of the defendant, or in any other manner the court may deem
sufficient. Any order granting such leave shall specify a reasonable time, which shall not be
less than sixty (60) days after notice, within which the defendant must answer.
As stated above, there are only four instances wherein a defendant who is a non-resident
and is not found in the country may be served a summons by extraterritorial service, to wit:
(1) when the action affects the personal status of the plaintiff; (2) when the action relates
to, or the subject of which is property within the Philippines, on which the defendant claims
a lien or an interest, actual or contingent; (3) when the relief demanded in such action
consists, wholly or in part, in excluding the defendant from any interest in property located
in the Philippines; and (4) when the defendant non-residents property has been attached
within the Philippines. In these instances, service of summons may be effected by (a)
personal service out of the country, with leave of court; (b) publication, also with leave of
court; or (c) any other manner the court may deem sufficient. 25
In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is that it
has jurisdiction over the res, i.e., the personal status of the plaintiff who is domiciled in the
Philippines or the property litigated or attached. Service of summons in the manner
provided in Section 15, Rule 14 of the Rules of Court is not for the purpose of vesting the
court with jurisdiction, but for complying with the requirements of fair play or due process,
so that the defendant will be informed of the pendency of the action against him; and the
possibility that property in the Philippines belonging to him, or in which he has an interest,
might be subjected to a judgment in favor of the plaintiff and he can thereby take steps to
protect his interest if he is so minded.26
In petitioners Complaint in Civil Case No. CEB No. 23427, she alleged that Cynthia is
residing at 462 West Vine No. 201, Glendale, California, 912041, U.S.A.; while Teresa is
residing at 2408 South Hacienda Boulevard, Hacienda Heights, California, but they usually
visit here in the Philippines and can be served summonses and other processes at the Borja
Family Clinic, Bohol. Pertinent portions of the Complaint read:
2. Defendant Cynthia R. Logarta is a Filipino, of legal age, married to Ramon
Logarta, resident (sic) 463 West Vine No.201, Glendale, California, 912041, USA.
She however usually visits in the Philippines and can be served with summons
and other processes of this Honorable Court at Borja Family Clinic, Tagbilaran,
Bohol;
3. Defendant Teresa R. Tormis is likewise a Filipino, of legal age, married to
Antonio Tormis, and a resident of 2408 South Hacienda Heights, California,
19745, U.S.A. She however usually visits in the Philippines and can be served with
summons and other processes of this Honorable Court at Borja Family Clinic,
Tagbilaran, Bohol.27
Petitioner prayed for a declaration of nullity of the deed of donation, to restrain Cebu
Country Club, Inc. from transferring title and ownership of Proprietary Ownership
Certificate No. 0272 to Cynthia and Teresa, and for moral and exemplary damages. Civil
Case No. CEB 23927 is evidently an action against Cynthia and Teresa on the basis of their
personal liability for the alleged fraudulent transfer of the subject Country Club
membership from Luis to their name. In this sense, petitioner questions the participation
and shares of Cynthia and Teresa in the transferred Country Club membership. Moreover,
the membership certificate from the Cebu Country Club, Inc. is a personal property. Thus,
the action instituted by petitioner before the RTC is in personam.
Being an action in personam, the general rule requires the personal service of summons on
Cynthia within the Philippines, but this is not possible in the present case because Cynthia
is a non-resident and is not found within the Philippines.
As Cynthia is a nonresident who is not found in the Philippines, service of summons on her
must be in accordance with Section 15, Rule 14 of the Rules of Court. Such service, to be
effective outside the Philippines, must be made either (1) by personal service; (2) by
publication in a newspaper of general circulation in such places and for such time as the
court may order, in which case a copy of the summons and order of the court should be
sent by registered mail to the last known address of the defendant; or (3) in any other
manner which the court may deem sufficient. The third mode, like the first two, must be
made outside the Philippines, such as through the Philippine Embassy in the foreign
country where Cynthia resides.
Since in the case at bar, the service of summons upon Cynthia was not done by any of the
authorized modes, the trial court was correct in dismissing petitioners complaint.
Section 3, Rule 17 of the 1997 Rules of Civil Procedure, states
SEC. 3. Dismissal due to fault of plaintiff. If, for no justifiable cause, the plaintiff fails to
appear on the date of the presentation of his evidence in chief on the complaint, or to
prosecute his action for an unreasonable length of time, or to comply with these Rules or
any order of the court, the complaint may be dismissed upon motion of the defendant or
upon the court's own motion, without prejudice to the right of the defendant to prosecute
his counterclaim in the same or in a separate action. This dismissal shall have the effect of
an adjudication upon the merits, unless otherwise declared by the court.
As can be gleaned from the rule, there are three instances when the complaint may be
dismissed due to the plaintiff's fault: (1) if he fails to appear during a scheduled trial,
especially on the date for the presentation of his evidence in chief; (2) if he fails to
prosecute his action for an unreasonable length of time; and (3) if he fails to comply with
the rules or any order of the court.28
Considering the circumstances of the case, it can be concluded that the petitioner failed to
prosecute the case for an unreasonable length of time. There is failure to prosecute when
the plaintiff, being present, is not ready or is unwilling to proceed with the scheduled trial
or when postponements in the past were due to the plaintiff's own making, intended to be
dilatory or caused substantial prejudice on the part of the defendant. 29
While a court can dismiss a case on the ground of failure to prosecute, the true test for the
exercise of such power is whether, under the prevailing circumstances, the plaintiff is
culpable for want of due diligence in failing to proceed with reasonable promptitude. 30 As
to what constitutes an "unreasonable length of time," within the purview of the above-
quoted provision, the Court has ruled that it "depends upon the circumstances of each
particular case," and that "the sound discretion of the court" in the determination of said
question "will not be disturbed, in the absence of patent abuse"; and that "the burden of
showing abuse of judicial discretion is upon the appellant since every presumption is in
favor of the correctness of the court's action." 31 Likewise, the concept of promptness is a
relative term and must not unnecessarily be an inflexible one. It connotes an action without
hesitation and loss of time. As to what constitutes the term is addressed to the
consideration of the trial court, bearing in mind that while actions must be disposed of with
dispatch, the essential ingredient is the administration of justice and not mere speed. 32
It is well to quote the doctrine laid in Padua v. Ericta, 33 as accentuated in the subsequent
case Marahay v. Melicor34 :
Courts should not brook undue delays in the ventilation and determination of causes. It
should be their constant effort to assure that litigations are prosecuted and resolved with
dispatch. Postponements of trials and hearings should not be allowed except on
meritorious grounds; and the grant or refusal thereof rests entirely in the sound discretion
of the Judge. It goes without saying, however, that discretion must be reasonably and
wisely exercised, in the light of the attendant circumstances. Some reasonable deferment
of the proceedings may be allowed or tolerated to the end that cases may be adjudged only
after full and free presentation of evidence by all the parties, especially where the
deferment would cause no substantial prejudice to any part. The desideratum of a speedy
disposition of cases should not, if at all possible, result in the precipitate loss of a partys
right to present evidence and either in plaintiff's being non-suited or the defendant's being
pronounced liable under an ex parte judgment.
"[T]rial courts have x x x the duty to dispose of controversies after trial on the merits
whenever possible. It is deemed an abuse of discretion for them, on their own motion, to
enter a dismissal which is not warranted by the circumstances of the case (Municipality of
Dingras v. Bonoan, 85 Phil. 458-59 [1950]). While it is true that the dismissal of an action on
grounds specified under Section 3, Rule 17 of the Revised Rules of Court is addressed to
their discretion (Flores v. Phil. Alien Property Administrator, 107 Phil. 778 [1960];
Montelibano v. Benares, 103 Phil. 110 [1958]; Adorable v. Bonifacio, 105 Phil. 1269 [1959];
Inter-Island Gas Service, Inc. v. De la Gerna, L-17631, October 19, 1966, 18 SCRA 390), such
discretion must be exercised soundly with a view to the circumstances surrounding each
particular case (Vernus-Sanciangco v. Sanciangco, L-12619, April 28, 1962, 4 SCRA 1209). If
facts obtain that serve as mitigating circumstances for the delay, the same should be
considered and dismissal denied or set aside (Rudd v. Rogerson, 15 ALR 2d 672; Cervi v.
Greenwood, 147 Colo. 190, 362 P.2d 1050 [1961]), especially where the suit appears to be
meritorious and the plaintiff was not culpably negligent and no injury results to defendant
(27 C.J.S. 235-36; 15 ALR 3rd 680)." (Abinales vs. Court of First Instance of Zamboanga City,
Br. I, 70 SCRA 590, 595).
"It is true that the allowance or denial of petitions for postponement and the setting aside
of orders previously issued, rest principally upon the sound discretion of the judge to whom
they are addressed, but always predicated on the consideration that more than the mere
convenience of the courts or of the parties of the case, the ends of justice and fairness
would be served thereby (Camara Vda. de Zubiri v. Zubiri, et al., L-16745, December 17,
1966). When no substantial rights are affected and the intention to delay is not manifest,
the corresponding motion to transfer the hearing having been filed accordingly, it is sound
judicial discretion to allow them (Rexwell Corp. v. Canlas, L-16746, December 30, 1961)." x x
x.
This Court recalls that the complaint herein was filed on 15 June 1999. The summonses for
Cynthia and Teresa were served on their sister Melinda at the Borja Family Clinic in
Tagbilaran City, but the latter refused to receive the same. It was only on 1 June 2000 that
summons was served on Teresa at Room 304, Regency Crest Condominium, Banilad, Cebu
City, when she was in the Philippines for a visit. However, the summons for Cynthia was
never served upon her.1wphi1
Although Section 1, Rule 14 of the Rules, imposes upon the clerk of court the duty to serve
summons, this does not relieve the petitioner of her own duty as the plaintiff in a civil case
to prosecute the case diligently. If the clerk had been negligent, it was petitioners duty to
call the courts attention to that fact. It must be noted that it was not even petitioner who
called the courts attention that summons had not been served on Cynthia, but Teresa. This
despite the fact that petitioner was aware, as early as 15 June 1999, when she filed her
complaint, that the summonses could not be served on Teresa and Cynthia, as she admitted
therein that Teresa and Cynthia were residing abroad. Petitioner as plaintiff should have
asked that Cynthia and Teresa be summoned by publication at the earliest possible time.
She cannot idly sit by and wait till this is done. She cannot afterwards wash her hands and
say that the delay was not her fault. She cannot simply "fold [her] hands" and say that it is
the duty of the clerk of court to have the summonses served on Cynthia and Teresa for the
prompt disposition of her case. If there were no means of summoning any of the
defendants, petitioner should have so informed the court within a reasonable period of
time, so that the case could be disposed of one way or another and the administration of
justice would not suffer delay. The non-performance of that duty by petitioner as plaintiff is
an express ground for dismissing an action. For, indeed, this duty imposed upon her was
precisely to spur on the slothful.
For failure to diligently pursue the complaint, petitioner trifled with the right of the
respondents to speedy trial. It also sorely tried the patience of the court and wasted its
precious time and attention. To allow petitioner to wait until such time that summonses
were served on respondents would frustrate the protection against unreasonable delay in
the prosecution of cases and violate the constitutional mandate of speedy dispensation of
justice which would in time erode the peoples confidence in the judiciary. We take a dim
view of petitioners complacent attitude. Ex nihilo nihil fit. 35
Likewise, petitioners counsel inexplicably failed to diligently pursue the service of
summonses on respondents. These were acts of negligence, laxity and truancy which the
court could have very easily avoided or timely remedied. Petitioner and her counsel could
not avail themselves of this Courts sympathy, considering their apparent complacency, if
not delinquency, in the conduct of their litigation.

Considering the foregoing, we sustain the dismissal by the trial court of the petitioners
complaint for failure to prosecute for a period of more than one year (from the time of
filing thereof on 15 June 1997 until Teresas filing of a motion to dismiss).

WHEREFORE, premises considered, the instant petition is DENIED for lack of merit and the
assailed Decision dated 6 May 2005 of the Court of Appeals in CA-G.R. CV No. 71028 is
hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

G.R. No. 172242 August 14, 2007

PERKIN ELMER SINGAPORE PTE LTD., Petitioner,
vs.
DAKILA TRADING CORPORATION, Respondent.
DECISION
CHICO-NAZARIO, J.:
The case before this Court is a Petition for Review 1 on Certiorari under Rule 45 of the 1997
Revised Rules of Civil Procedure seeking to annul and set aside the Decision, 2 dated 4 April
2006, of the Court of Appeals in CA-G.R. SP No. 78981, which affirmed the Orders, dated 4
November 20023 and 20 June 2003,4 of the Mandaluyong City Regional Trial Court (RTC),
Branch 212, in Civil Case No. MC99-605, which, in turn, denied the Motion to Dismiss and
subsequent Motion for Reconsideration of herein petitioner Perkin Elmer Singapore Pte Ltd.
Petitioner is a corporation duly organized and existing under the laws of Singapore. It is not
considered as a foreign corporation "doing business" in the Philippines. Herein respondent
Dakila Trading Corporation is a corporation organized and existing under Philippine laws,
and engaged in the business of selling and leasing out laboratory instrumentation and
process control instrumentation, and trading of laboratory chemicals and supplies.
The antecedents of the present case are as follows:
Respondent entered into a Distribution Agreement 5 on 1 June 1990 with Perkin-Elmer
Instruments Asia Pte Ltd. (PEIA), a corporation duly organized and existing under the laws of
Singapore and engaged in the business of manufacturing, producing, selling or distributing
various laboratory/analytical instruments. By virtue of the said agreement, PEIA appointed
the respondent as the sole distributor of its products in the Philippines. The respondent
was likewise granted the right to purchase and sell the products of PEIA subject to the
terms and conditions set forth in the Distribution Agreement. PEIA, on the other hand, shall
give respondent a commission for the sale of its products in the Philippines.
Under the same Distribution Agreement, respondent shall order the products of PEIA,
which it shall sell in the Philippines, either from PEIA itself or from Perkin-Elmer
Instruments (Philippines) Corporation (PEIP), an affiliate of PEIA. PEIP is a corporation duly
organized and existing under Philippine laws, and involved in the business of wholesale
trading of all kinds of scientific, biotechnological, and analytical instruments and appliances.
PEIA allegedly owned 99% of the shares of PEIP.
On 2 August 1997, however, PEIA unilaterally terminated the Distribution Agreement,
prompting respondent to file before the RTC of Mandaluyong City, Branch 212, a
Complaint6 for Collection of Sum of Money and Damages with Prayer for Issuance of a Writ
of Attachment against PEIA and PEIP, docketed as Civil Case No. MC99-605.
The RTC issued an Order,7 dated 26 March 1999, denying respondents prayer for the
issuance of a writ of attachment. The respondent moved for the reconsideration of the said
Order but it was denied in another Order, dated 11 January 2000. 8
Respondent then filed Ex-Parte Motions for Issuance of Summons and for Leave of Court to
Deputize Respondents General Manager, Richard A. Tee, to Serve Summons Outside of the
Philippines,9 which the RTC granted in its Order, dated 27 April 2000. 10 Thus, an Alias
Summons, dated 4 September 2000, was issued by the RTC to PEIA. But the said Alias
Summons was served on 28 September 2000 and received by Perkinelmer Asia, a
Singaporean based sole proprietorship, owned by the petitioner and, allegedly, a separate
and distinct entity from PEIA.
PEIP moved to dismiss11 the Complaint filed by respondent on the ground that it states no
cause of action. Perkinelmer Asia, on the other hand, through its counsel, sent letters,
dated 12 October 200012 and 15 November 2000,13 to the respondent and to the RTC,
respectively, to inform them of the wrongful service of summons upon Perkinelmer Asia.
Accordingly, respondent filed an Ex-Parte Motion to Admit Amended Complaint, together
with the Amended Complaint claiming that PEIA had become a sole proprietorship 14 owned
by the petitioner, and subsequently changed its name to Perkinelmer Asia. Being a sole
proprietorship of the petitioner, a change in PEIAs name and juridical status did not detract
from the fact that all its due and outstanding obligations to third parties were assumed by
the petitioner. Hence, in its Amended Complaint 15 respondent sought to change the name
of PEIA to that of the petitioner. In an Order, dated 24 July 2001, 16 the RTC admitted the
Amended Complaint filed by the respondent. Respondent then filed another Motion 17 for
the Issuance of Summons and for Leave of Court to Deputize Respondents General
Manager, Richard A. Tee, to Serve Summons Outside the Philippines. In another Order,
dated 4 March 2002,18 the RTC deputized respondents General Manager to serve summons
on petitioner in Singapore. The RTC thus issued summons 19 to the petitioner. Acting on the
said Order, respondents General Manager went to Singapore and served summons on the
petitioner.
Meanwhile, in an Order, dated 10 October 2001, the RTC denied the Motion to Dismiss filed
by PEIP, compelling the latter to file its Answer to the Amended Complaint.
Petitioner subsequently filed with the RTC a Special Appearance and Motion to
Dismiss20 respondents Amended Complaint on 30 May 2002 based on the following
grounds: (1) the RTC did not acquire jurisdiction over the person of the petitioner; (2) the
respondent failed to state a cause of action against the petitioner because it is not the real
party-in-interest; (3) even assuming arguendo that the respondent correctly filed the case
against the petitioner, the Distribution Agreement which was the basis of its claim grants
PEIA the right to terminate the contract at any time; and (4) the venue was improperly laid.
The RTC in its Order, dated 4 November 2002, denied petitioners Motion to Dismiss,
ratiocinating as follows:
Prescinding from the above arguments of both parties, the [RTC] is inclined to DENY the
Motion to Dismiss.
A careful scrutiny on (sic) the allegation in the (Amended) Complaint would show that
[herein respondent] alleges ownership by the [herein petitioner] of shares of stocks in the
[PEIP]. Such allegation of ownership of shares of stocks by the [petitioner] would reveal that
there is an allegation of personal property in the Philippines. Shares of stocks represent
personal property of the shareholder. Thus, it follows that even though the Amended
Complaint is primarily for damages, it does relate to a property of the [petitioner], to which
the latter has a claim interest (sic), or an actual or contingent lien, which will make it fall
under one of the requisite (sic) for extraterritorial service under Section 15, Rule 14, of the
Rules of Court. Thus, it could be gainfully said that the summons had been validly served for
[RTC] to acquire jurisdiction over the [petitioner].
The [petitioner] hinges its dismissal on the failure of the [respondent] to state a cause of
action. The [RTC] would like to emphasize that in a Motion to Dismiss, it hypothetically
admits the truth of the facts alleged in a complaint.
When the ground for dismissal is that the complaint states no cause of action, such fact can
be determined only from the facts alleged in the complaint x x x and from no other x x x
and the Court cannot consider other matters aliunde x x x. This implies that the issue must
be passed upon on the basis of the allegations and declare them to be false, otherwise it
would be a procedural error and a denial of due process to the [respondent] x x x.
The three (3) essential elements of a cause of action are the following:
a) The plaintiffs legal rights;
b) A correlative obligation of the defendant;
c) The omission of the defendant in violation of the legal rights.
A cursory reading of the Amended Complaint would reveal that all of the essential
elements of a cause of action are attendant in the Amended Complaint.
As for the contention that venue was improperly laid, x x x, the [RTC] in its ultimate desire
that the ends of justice could be served in its fullest, cannot rule that venue was improperly
laid.
xxxx
The stipulation as to the venue of a prospective action does not preclude the filing of the
suit in the residence of the [respondent] under Section 2, Rule 4, Rules of Court, especially
where the venue stipulation was imposed by the [petitioner] for its own benefits.
xxxx
The [RTC] further believes that it is imperative that in order to ferret out the truth, a full-
blown trial is necessary for parties to be able to prove or disprove their allegations. 21
Petitioner moved for the reconsideration of the aforesaid Order but, it was denied by the
RTC in its Order, dated 20 June 2003.
Consequently, petitioner filed a Petition for Certiorari under Rule 65 of the 1997 Revised
Rules of Civil Procedure with application for temporary restraining order and/or preliminary
injunction before the Court of Appeals alleging that the RTC committed grave abuse of
discretion amounting to lack or excess of jurisdiction in refusing to dismiss the Amended
Complaint. The Court of Appeals never issued any temporary restraining order or writ of
injunction. On 4 April 2006, the Court of Appeals rendered a Decision affirming the RTC
Orders of 4 November 2002 and 20 June 2003.
This brings us to the present Petition before this Court wherein petitioner raised the
following issues.
I.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT
RULING THAT THE SERVICE OF SUMMONS ON PETITIONER WAS DEFECTIVE AND THAT THE
TRIAL COURT THUS FAILED TO ACQUIRE JURISDICTION OVER THE PERSON OF THE
PETITIONER.
II.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RULING
THAT THE "SOLE ISSUE" IN THE PETITION FOR CERTIORARI FILED BEFORE IT IS THE
QUESTION OF WHETHER THE TRIAL COURT ACQUIRED JURISDICTION OVER THE PERSON OF
THE PETITIONER THROUGH THE EXTRATERRITORIAL SERVICE OF SUMMONS.
A.
WHETHER OR NOT THE COURT OF APPEALS SHOULD HAVE GRANTED THE
PETITION FOR CERTIORARI AND REVERSED THE RTC ORDERS ON THE GROUND
THAT THE AMENDED COMPLAINT FAILED TO STATE A CAUSE OF ACTION AGAINST
PETITIONER.
1. BASED ON THE ALLEGATIONS IN THE EX-PARTE MOTION TO ADMIT
AMENDED COMPLAINT, AMENDED COMPLAINT, AND ALL DOCUMENTS
ATTACHED AND/OR RELATED THERETO, PETITIONER IS NOT THE REAL
PARTY-IN-INTEREST DEFENDANT IN THE CASE BELOW.
2. ASSUMING ARGUENDO THAT RESPONDENT DAKILA FILED THIS CASE
AGAINST THE CORRECT [PARTY], INASMUCH AS THE DISTRIBUTION
AGREEMENT DATED 1 JUNE 1990 GRANTS [PEIA] THE RIGHT TO
TERMINATE THE CONTRACT AT ANY TIME, RESPONDENT DAKILA FAILS
TO STATE A CAUSE OF ACTION IN THE CASE BELOW.
B.
 WHETHER OR NOT THE COURT OF APPEALS SHOULD HAVE GRANTED THE
PETITION FOR CERTIORARI AND REVERSED THE RTC ORDERS ON THE GROUND OF
IMPROPER VENUE.
III.
WHETHER OR NOT PETITIONER IS ENTITLED TO A TEMPORARY RESTRAINING ORDER
AND/OR WRIT OF INJUNCTION.
The foregoing issues raised by petitioner essentially requires this Court to make a
determination of the (1) proper service of summons and acquisition of jurisdiction by the
RTC over the person of the petitioner; (2) existence of a cause of action against petitioner in
respondents Amended Complaint; and (3) proper venue for respondents civil case against
petitioner.
Petitioner contends that Civil Case No. MC99-605 involves an action for collection of sum of
money and damages arising from the alleged breach of the Distribution Agreement. The
action is one in personam, or an action against a person based on his personal liability; and
for the court a quo to acquire jurisdiction over the person of the petitioner, personal
service of summons, and not extraterritorial service of summons, must be made within the
state even if the petitioner is a non-resident. Petitioner avers that extraterritorial service of
summons stated under Section 15, Rule 14 of the 1997 Revised Rules of Civil Procedure, is
only proper in in rem and quasi in rem cases; thus, resort to an extraterritorial service of
summons in the case at bar was erroneous. Petitioner asseverates that the allegations in
the respondents Amended Complaint that the petitioner has personal properties within
the Philippines does not make the present case one that relates to, or the subject of which
is, property within the Philippines warranting the extraterritorial service of summons under
Section 15, Rule 14 of the 1997 Revised Rules of Civil Procedure. Petitioner states that for
an action to be considered as one that relates to, or the subject of which is, property within
the Philippines, the main subject matter of the action must be the property within the
Philippines itself, and such was not the situation in this case. Likewise, the prayer in
respondents Amended Complaint for the issuance of a writ of attachment over the
personal property of PEIP, which is 99% owned by petitioner (as the supposed successor of
PEIA), did not convert the action from one in personam to one that is quasi in rem. Also, the
petitioner points out that since the respondents prayer for the issuance of a writ of
attachment was denied by the RTC in its Order, dated 26 March 1999, then the nature of
Civil Case No. MC99-605 remains in personam, contrary to the ruling of the Court of
Appeals that by the attachment of the petitioners interest in PEIP the action in personam
was converted to an action quasi in rem. Resultantly, the extraterritorial service of
summons on the petitioner was not validly effected, and did not give the RTC jurisdiction
over the petitioner.
Petitioner further argues that the appellate court should have granted its Petition for
Certiorari on the ground that the RTC committed grave abuse of discretion amounting to
lack or excess of jurisdiction in refusing to dismiss respondents Amended Complaint for
failure to state a cause of action against petitioner which was not the real party-in-interest
in Civil Case No. MC99-605. Petitioner claims that it had never used the name PEIA as its
corporate name, and neither did it change its name from that of PEIA. Petitioner stresses
that PEIA is an entirely different corporate entity that is not connected in whatever manner
to the petitioner. Even assuming arguendo that petitioner is the real party-in-interest in Civil
Case No. MC99-605 or that petitioner and PEIA are one and the same entity, petitioner still
avows that the respondent failed to state a cause of action against it because the
Distribution Agreement expressly grants PEIA the right to terminate the said contract at any
time.
Lastly, it is the contention of the petitioner that the appellate court should have granted its
Petition for Certiorari because the RTC committed grave abuse of discretion amounting to
lack or excess of jurisdiction in refusing to dismiss Civil Case No. MC99-605 for having been
filed in an improper venue. Petitioner asserts that in the Distribution Agreement entered
into between the respondent and PEIA, both had mutually agreed to the exclusive
jurisdiction of the courts of Singapore or of the Philippines as elected by PEIA. Absent any
waiver by PEIA of its right to choose the venue of the dispute, the Complaint filed by the
respondent before the RTC in the Philippines should have been dismissed on the ground of
improper venue.
The Petition is meritorious.
Jurisdiction is the power with which courts are invested for administering justice; that is, for
hearing and deciding cases. In order for the court to have authority to dispose of the case
on the merits, it must acquire jurisdiction over the subject matter and the parties. 22
Jurisdiction of the court over the subject matter is conferred only by the Constitution or by
law. It is determinable on the basis of allegations in the complaint. 23
Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint, while
jurisdiction over the defendants in a civil case is acquired either through the service of
summons upon them in the manner required by law or through their voluntary appearance
in court and their submission to its authority. If the defendants have not been summoned,
unless they voluntarily appear in court, the court acquires no jurisdiction over their persons
and a judgment rendered against them is null and void. To be bound by a decision, a party
should first be subjected to the courts jurisdiction. 24
Thus, one of the modes of acquiring jurisdiction over the person of the defendant or
respondent in a civil case is through service of summons. It is intended to give notice to the
defendant or respondent that a civil action has been commenced against him. The
defendant or respondent is thus put on guard as to the demands of the plaintiff or the
petitioner.25
The proper service of summons differs depending on the nature of the civil case instituted
by the plaintiff or petitioner: whether it is in personam, in rem, or quasi in rem. Actions in
personam, are those actions brought against a person on the basis of his personal liability;
actions in rem are actions against the thing itself instead of against the person; and actions
are quasi in rem, where an individual is named as defendant and the purpose of the
proceeding is to subject his or her interest in a property to the obligation or loan burdening
the property.26
Under Section 15, Rule 14 of the 1997 Revised Rules of Civil Procedure, there are only four
instances wherein a defendant who is a non-resident and is not found in the country may
be served with summons by extraterritorial service, to wit: (1) when the action affects the
personal status of the plaintiff; (2) when the action relates to, or the subject of which is
property, within the Philippines, in which the defendant claims a lien or an interest, actual
or contingent; (3) when the relief demanded in such action consists, wholly or in part, in
excluding the defendant from any interest in property located in the Philippines; and (4)
when the defendant non-residents property has been attached within the Philippines. In
these instances, service of summons may be effected by (a) personal service out of the
country, with leave of court; (b) publication, also with leave of court; or (c) any other
manner the court may deem sufficient.27
Undoubtedly, extraterritorial service of summons applies only where the action is in rem or
quasi in rem, but not if an action is in personam.
When the case instituted is an action in rem or quasi in rem, Philippine courts already have
jurisdiction to hear and decide the case because, in actions in rem and quasi in rem,
jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on
the court, provided that the court acquires jurisdiction over the res. 28Thus, in such instance,
extraterritorial service of summons can be made upon the defendant. The said
extraterritorial service of summons is not for the purpose of vesting the court with
jurisdiction, but for complying with the requirements of fair play or due process, so that the
defendant will be informed of the pendency of the action against him and the possibility
that property in the Philippines belonging to him or in which he has an interest may be
subjected to a judgment in favor of the plaintiff, and he can thereby take steps to protect
his interest if he is so minded.29 On the other hand, when the defendant or respondent
does not reside and is not found in the Philippines, 30 and the action involved is in
personam, Philippine courts cannot try any case against him because of the impossibility of
acquiring jurisdiction over his person unless he voluntarily appears in court. 31
In the case at bar, this Court sustains the contention of the petitioner that there can never
be a valid extraterritorial service of summons upon it, because the case before the court a
quo involving collection of a sum of money and damages is, indeed, an action in personam,
as it deals with the personal liability of the petitioner to the respondent by reason of the
alleged unilateral termination by the former of the Distribution Agreement. Even the Court
of Appeals, in its Decision dated 4 April 2004, upheld the nature of the instant case as an
action in personam. In the said Decision the appellate court ruled that:
In the instant petition, [respondents] cause of action in Civil Case No. MC99-605 is
anchored on the claim that petitioner unilaterally terminated the Distribution Agreement.
Thus, [respondent] prays in its [C]omplaint that "Upon the filing of the Complaint, issue an
Order fixing the amount of the bond and issue a writ of attachment requiring the sheriff to
attach the properties of [Perkin-Elmer Philippines], which are not exempt from execution,
and as much as may be sufficient to satisfy [respondents] demands."
The action instituted by [respondent] affects the parties alone, not the whole world. Hence,
it is an action in personam, i.e., any judgment therein is binding only upon the parties
properly impleaded.
xxxx
The objective sought in [respondents] [C]omplaint was to establish a claim against
petitioner for its alleged unilateral termination of [D]istribution [A]greement. Hence, to
repeat, Civil Case No. MC99-605 is an action in personam because it is an action against
persons, namely, herein petitioner, on the basis of its personal liability. As such, personal
service of summons upon the [petitioner] is essential in order for the court to acquire of
(sic) jurisdiction over [its person].32 (Emphasis supplied.)
Thus, being an action in personam, personal service of summons within the Philippines is
necessary in order for the RTC to validly acquire jurisdiction over the person of the
petitioner, and this is not possible in the present case because the petitioner is a non-
resident and is not found within the Philippines. Respondents allegation in its Amended
Complaint that petitioner had personal property within the Philippines in the form of
shares of stock in PEIP did not make Civil Case No. MC99-605 fall under any of the four
instances mentioned in Section 15, Rule 14 of the Rules of Court, as to convert the action in
personam to an action in rem or quasi in rem and, subsequently, make the extraterritorial
service of summons upon the petitioner valid.
It is incorrect for the RTC to have ruled that the allegations made by the respondent in its
Amended Complaint, which is primarily for collection of a sum of money and damages, that
the petitioner owns shares of stock within the Philippines to which the petitioner claims
interest, or an actual or contingent lien, would make the case fall under one of the
aforesaid instances wherein extraterritorial service of summons under Section 15, Rule 14
of the 1997 Revised Rules of Civil Procedure, would be valid. The RTC in arriving at such
conclusions relied on the second instance, mentioned under Section 15, Rule 14 of the
1997 Revised Rules of Civil Procedure (i.e., when the action relates to, or the subject of
which is property, within the Philippines, in which the defendant claims a lien or interest,
actual or contingent), where extraterritorial service of summons can be properly made.
However, the aforesaid second instance has no application in the case before this Court.
Primarily, the Amended Complaint filed by the respondent against the petitioner was for
the collection of sum of money and damages. The said case was neither related nor
connected to any property of the petitioner to which it claims a lien or interest. The action
for collection of a sum of money and damages was purely based on the personal liability of
the petitioner towards the respondent. The petitioner is correct in saying that "mere
allegations of personal property within the Philippines does not necessarily make the action
as one that relates to or the subject of which is, property within the Philippines as to
warrant the extraterritorial service of summons. For the action to be considered one that
relates to, or the subject of which, is the property within the Philippines, the main subject
matter of the action must be the property itself of the petitioner in the Philippines." By
analogy, an action involving title to or possession of real or personal property -- such as the
foreclosure of real estate or chattel mortgage where the mortgagor does not reside or is
not found in the Philippines -- can be considered as an action which relates to, or the
subject of which is, property within the Philippines, in which the defendant claims a lien or
interest, actual or contingent; and in such instance, judgment will be limited to the res. 33
Moreover, the allegations made by the respondent that the petitioner has property within
the Philippines were in support of its application for the issuance of a writ of attachment,
which was denied by the RTC. Hence, it is clear from the foregoing that the Complaint filed
by the respondent against the petitioner does not really relate to, or the subject of which is,
property within the Philippines of the petitioner.
This Court also finds error in the Decision of the Court of Appeals. It is provided for in the
said Decision, thus:
However, let it be emphasized that in the [C]omplaint filed before the trial court,
[respondent] prayed that "Upon the filing of the Complaint, issue an Order fixing the
amount of the bond and issue a writ of attachment requiring the sheriff to attach the
properties of [Perkin-Elmer Philippines], which are not exempt from execution, and as
much as may be sufficient to satisfy [respondents] demands.
In other words, although the [C]omplaint before the trial court does not involve the
personal status of the [respondent], nevertheless, the case involves property within the
Philippines in which the [petitioner] has or claim an interest, or which the [respondent] has
attached, which is one of the instances where extraterritorial service of summons is proper.
xxxx
Hence, it is submitted that one of the instances when exterritorial service of summons
under Section 15, Rule 14 of the Rules of Court is proper may be considered to have been
met. This is because the [C]omplaint for collection of sum of money which is an action in
personam was converted into an action quasi in rem by the attachment of [petitioners]
interest in [Perkin-Elmer Philippines].34 (Emphasis supplied.)
Respondents allegation in its Amended Complaint that petitioner had personal property
within the Philippines in the form of shares of stock in PEIP does not convert Civil Case No.
MC99-605 from an action in personam to one quasi in rem, so as to qualify said case under
the fourth instance mentioned in Section 15, Rule 14 of the 1997 Revised Rules of Civil
Procedure (i.e., when the non-resident defendants property has been attached within the
Philippines), wherein extraterritorial service of summons upon the petitioner would have
been valid. It is worthy to note that what is required under the aforesaid provision of the
Revised Rules of Civil Procedure is not a mere allegation of the existence of personal
property belonging to the non-resident defendant within the Philippines but, more
precisely, that the non-resident defendants personal property located within the
Philippines must have been actually attached. This Court in the case of Venturanza v. Court
of Appeals35 ruled that when the attachment was void from the beginning, the action in
personam which required personal service of summons was never converted into an action
in rem where service by publication would have been valid. Hence, the appellate court
erred in declaring that the present case, which is an action in personam, was converted to
an action quasi in rem because of respondents allegations in its Amended Complaint that
petitioner had personal property within the Philippines.
Glaringly, respondents prayer in its Amended Complaint for the issuance of a writ of
attachment over petitioners purported shares of stock in PEIP located within the
Philippines was denied by the court a quo in its Order dated 26 March 1999. Respondents
Motion for Reconsideration of the said Order was likewise denied by the RTC in its
subsequent Order, dated 11 January 2000. Evidently, petitioners alleged personal property
within the Philippines, in the form of shares of stock in PEIP, had not been attached; hence,
Civil Case No. MC99-605, for collection of sum of money and damages, remains an action in
personam. As a result, the extraterritorial service of summons was not validly effected by
the RTC against the petitioner, and the RTC thus failed to acquire jurisdiction over the
person of the petitioner. The RTC is therefore bereft of any authority to act upon the
Complaint filed before it by the respondent insofar as the petitioner is concerned.
If there was no valid summons served upon petitioner, could RTC have acquired jurisdiction
over the person of the petitioner by the latters voluntary appearance? As a rule, even if the
service of summons upon the defendant or respondent in a civil case is defective, the court
can still acquire jurisdiction over his person when he voluntary appears in court or submits
himself to its authority. Nonetheless, voluntary appearance, as a mode of acquiring
jurisdiction over the person of the defendant, is likewise inapplicable in this case.
It is settled that a party who makes a special appearance in court for the purpose of
challenging the jurisdiction of said court, based on the invalidity of the service of summons,
cannot be considered to have voluntarily submitted himself to the jurisdiction of the
court.36 In the present case, petitioner has been consistent in all its pleadings in assailing
the service of summons upon it and the jurisdiction of the RTC over its person. Thus, the
petitioner cannot be declared in estoppel when it filed an Answer ad cautelam with
compulsory counterclaim before the RTC while the instant Petition was still pending before
this Court. The petitioner was in a situation wherein it had no other choice but to file an
Answer; otherwise, the RTC would have already declared that petitioner had waived its
right to file responsive pleadings.37 Neither can the compulsory counterclaim contained in
petitioners Answer ad cautelam be considered as voluntary appearance of petitioner
before the RTC. Petitioner seeks to recover damages and attorneys fees as a consequence
of the unfounded suit filed by respondent against it. Thus, petitioners compulsory
counterclaim is only consistent with its position that the respondent wrongfully filed a case
against it and the RTC erroneously exercised jurisdiction over its person.
Distinction must be made in Civil Case No. MC99-605 as to the jurisdiction of the RTC over
respondents complaint and over petitioners counterclaim -- while it may have no
jurisdiction over the former, it may exercise jurisdiction over the latter. The compulsory
counterclaim attached to petitioners Answer ad cautelam can be treated as a separate
action, wherein petitioner is the plaintiff while respondent is the defendant. 38 Petitioner
could have instituted a separate action for the very same claims but, for the sake of
expediency and to avoid multiplicity of suits, it chose to demand the same in Civil Case No.
MC99-605.39 Jurisdiction of the RTC over the subject matter and the parties in the
counterclaim must thus be determined separately and independently from the jurisdiction
of the same court in the same case over the subject matter and the parties in respondents
complaint.
Moreover, even though the petitioner raised other grounds in its Motion to Dismiss aside
from lack of jurisdiction over its person, the same is not tantamount to its voluntary
appearance or submission to the authority of the court a quo. While in De Midgely v.
Ferandos,40 it was held that, in a Motion to Dismiss, the allegation of grounds other than
lack of jurisdiction over the person of the defendant, including a prayer "for such other
reliefs as" may be deemed "appropriate and proper" amounted to voluntary appearance,
such ruling must be deemed superseded by the declaration of this Court in La Naval Drug
Corporation v. Court of Appeals41 that estoppel by jurisdiction must be unequivocal and
intentional. It would be absurd to hold that petitioner unequivocally and intentionally
submitted itself to the jurisdiction of the court by seeking other reliefs to which it might be
entitled when the only relief that it could properly ask from the trial court is the dismissal
of the complaint against it. 42 Thus, the allegation of grounds other than lack of jurisdiction
with a prayer "for such other reliefs" as may be deemed "appropriate and proper" cannot
be considered as unequivocal and intentional estoppel. Most telling is Section 20, Rule 14
of the Rules of Court, which expressly provides:
SEC. 20. Voluntary appearance. - The defendants voluntary appearance in the action shall
be equivalent to service of summons. The inclusion in a motion to dismiss of other grounds
aside from lack of jurisdiction over the person of the defendant shall not be deemed a
voluntary appearance.43 (Emphasis supplied.)
In sum, this Court finds that the petitioner did not submit itself voluntarily to the authority
of the court a quo; and in the absence of valid service of summons, the RTC utterly failed to
acquire jurisdiction over the person of the petitioner.
Anent the existence of a cause of action against petitioner and the proper venue of the
case, this Court upholds the findings of the RTC on these issues.
Dismissal of a Complaint for failure to state a cause of action is provided for by the Rules of
Court.44 When a Motion to Dismiss is grounded on the failure to state a cause of action, a
ruling thereon should be based only on the facts alleged in the complaint. The court must
pass upon this issue based solely on such allegations, assuming them to be true. For it to do
otherwise would be a procedural error and a denial of plaintiffs right to due
process.45 While, truly, there are well-recognized exceptions 46 to the rule that the
allegations are hypothetically admitted as true and inquiry is confined to the face of the
complaint,47 none of the exceptions apply in this case. Hence, the general rule applies. The
defense of the petitioner that it is not the real party-in-interest is evidentiary in nature
which must be proven in trial. The appellate court, then, cannot be faulted for not granting
petitioners Motion to Dismiss on the ground of failure to state a cause of action.
In the same way, the appellate court did not err in denying petitioners Motion to Dismiss
Civil Case No. MC99-605 on the ground of improper venue. In arriving at such conclusion,
this Court quotes with approval the following ratiocination of the RTC:
As for the contention that venue was improperly laid, x x x, the [trial court] in its ultimate
desire that the ends of justice could be served in its fullest, cannot rule that venue was
improperly laid.
xxxx
The stipulation as to the venue of a prospective action does not preclude the filing of the
suit in the residence of the [respondent] under Section 2, Rule 4, Rules of Court, especially
where the venue stipulation was imposed by the [petitioner] for its own
benefits.48 (Emphasis supplied.)
Despite the venue stipulation found in the Distribution Agreement stipulating that the
exclusive jurisdiction over disputes arising from the same shall lie in the courts of Singapore
or of the Territory (referring to the Philippines), whichever is elected by PEIA (or petitioner,
as PEIAs alleged successor), the RTC of the Philippines cannot be considered as an
improper venue. Truly, the venue stipulation used the word "exclusive," however, a closer
look on the Distribution Agreement would reveal that the venue stipulation was really in
the alternative i.e., courts of Singapore or of the Territory, meaning, the Philippines; thus,
the court a quo is not an improper venue for the present case.
Nonetheless, it bears to emphasize that despite our findings that based on the allegations
in respondents Complaint in Civil Case No. MC99-605, respondent appears to have a cause
of action against the petitioner and that the RTC is the proper venue for the said case, Civil
Case No. MC99-605 is still dismissible, for the RTC never acquired jurisdiction over the
person of the petitioner. The extraterritorial service of summons upon the petitioner
produces no effect because it can only be done if the action is in rem or quasi in rem. The
case for collection of sum of money and damages filed by the respondent against the
petitioner being an action in personam, then personal service of summons upon the
petitioner within the Philippines is essential for the RTC to validly acquire jurisdiction over
the person of the petitioner. Having failed to do so, the RTC can never subject petitioner to
its jurisdiction. The mere allegation made by the respondent that the petitioner had shares
of stock within the Philippines was not enough to convert the action from one in personam
to one that was quasi in rem, for petitioners purported personal property was never
attached; thus, the extraterritorial service of summons upon the petitioner remains invalid.
In light of the foregoing findings, this Court concludes that the RTC has no power to hear
and decide the case against the petitioner, because the extraterritorial service of summons
was not validly effected upon the petitioner and the RTC never acquired jurisdiction over its
person.
Finally, as regards the petitioners counterclaim, which is purely for damages and attorneys
fees by reason of the unfounded suit filed by the respondent against it, it has long been
settled that the same truly falls under the classification of compulsory counterclaim and it
must be pleaded in the same action, otherwise, it is barred. 49 In the case at bar, this Court
orders the dismissal of the Complaint filed by the respondent against the petitioner
because the court a quo failed to acquire jurisdiction over the person of the latter. Since the
Complaint of the respondent was dismissed, what will happen then to the counterclaim of
the petitioner? Does the dismissal of the complaint carry with it the dismissal of the
counterclaim?
In the cases of Metal Engineering Resources Corp. v. Court of Appeals, 50 International
Container Terminal Services, Inc. v. Court of Appeals, 51 and BA Finance Corporation v.
Co.,52 the Court ruled that if the court does not have jurisdiction to entertain the main
action of the case and dismisses the same, then the compulsory counterclaim, being
ancillary to the principal controversy, must likewise be dismissed since no jurisdiction
remained for any grant of relief under the counterclaim. 53 If we follow the aforesaid
pronouncement of the Court in the cases mentioned above, the counterclaim of the herein
petitioner being compulsory in nature must also be dismissed together with the Complaint.
However, in the case of Pinga vs. Heirs of German Santiago, 54 the Court explicitly expressed
that:
Similarly, Justice Feria notes that "the present rule reaffirms the right of the defendant to
move for the dismissal of the complaint and to prosecute his counterclaim, as stated in the
separate opinion [of Justice Regalado in BA Finance]. Retired Court of Appeals Justice
Hererra pronounces that the amendment to Section 3, Rule 17 [of the 1997 Revised Rules
of Civil Procedure] settles that "nagging question "whether the dismissal of the complaint
carries with it the dismissal of the counterclaim, and opines that by reason of the
amendments, the rulings in Metals Engineering, International Container, and BA Finance
"may be deemed abandoned." x x x.
x x x, when the Court promulgated the 1997 Rules of Civil Procedure, including the
amended Rule 17, those previous jural doctrines that were inconsistent with the new rules
incorporated in the 1997 Rules of Civil Procedure were implicitly abandoned insofar as
incidents arising after the effectivity of the new procedural rules on 1 July 1997. BA Finance,
or even the doctrine that a counterclaim may be necessarily dismissed along with the
complaint, clearly conflicts with the 1997 Rules of Civil Procedure. The abandonment of BA
Finance as doctrine extends as far back as 1997, when the Court adopted the new Rules of
Civil Procedure. If, since then, abandonment has not been affirmed in jurisprudence, it is
only because no proper case has arisen that would warrant express confirmation of the
new rule. That opportunity is here and now, and we thus rule that the dismissal of a
complaint due to fault of the plaintiff is without prejudice to the right of the defendant to
prosecute any pending counterclaims of whatever nature in the same or separate action.
We confirm that BA Finance and all previous rulings of the Court that are inconsistent with
this present holding are now abandoned.55 [Emphasis supplied].
It is true that the aforesaid declaration of the Court refers to instances covered by Section
3, Rule 17 of the 1997 Revised Rules of Civil Procedure 56 on dismissal of the complaint due
to the fault of the plaintiff. Nonetheless, it does not also preclude the application of the
same to the instant case just because the dismissal of respondents Complaint was upon
the instance of the petitioner who correctly argued lack of jurisdiction over its person.
Also in the case of Pinga v. Heirs of German Santiago, the Court discussed the situation
wherein the very filing of the complaint by the plaintiff against the defendant caused the
violation of the latters rights. As to whether the dismissal of such a complaint should also
include the dismissal of the counterclaim, the Court acknowledged that said matter is still
debatable, viz:
Whatever the nature of the counterclaim, it bears the same integral characteristics as a
complaint; namely a cause (or causes) of action constituting an act or omission by which a
party violates the right of another. The main difference lies in that the cause of action in the
counterclaim is maintained by the defendant against the plaintiff, while the converse holds
true with the complaint. Yet, as with a complaint, a counterclaim without a cause of action
cannot survive.
x x x if the dismissal of the complaint somehow eliminates the cause(s) of the counterclaim,
then the counterclaim cannot survive. Yet that hardly is the case, especially as a general
rule. More often than not, the allegations that form the counterclaim are rooted in an act
or omission of the plaintiff other than the plaintiffs very act of filing the complaint.
Moreover, such acts or omissions imputed to the plaintiff are often claimed to have
occurred prior to the filing of the complaint itself. The only apparent exception to this
circumstance is if it is alleged in the counterclaim that the very act of the plaintiff in filing
the complaint precisely causes the violation of the defendants rights. Yet even in such an
instance, it remains debatable whether the dismissal or withdrawal of the complaint is
sufficient to obviate the pending cause of action maintained by the defendant against the
plaintiff.571awphi1
Based on the aforequoted ruling of the Court, if the dismissal of the complaint somehow
eliminates the cause of the counterclaim, then the counterclaim cannot survive. Conversely,
if the counterclaim itself states sufficient cause of action then it should stand independently
of and survive the dismissal of the complaint. Now, having been directly confronted with
the problem of whether the compulsory counterclaim by reason of the unfounded suit may
prosper even if the main complaint had been dismissed, we rule in the affirmative.
It bears to emphasize that petitioners counterclaim against respondent is for damages and
attorneys fees arising from the unfounded suit. While respondents Complaint against
petitioner is already dismissed, petitioner may have very well already incurred damages
and litigation expenses such as attorneys fees since it was forced to engage legal
representation in the Philippines to protect its rights and to assert lack of jurisdiction of the
courts over its person by virtue of the improper service of summons upon it. Hence, the
cause of action of petitioners counterclaim is not eliminated by the mere dismissal of
respondents complaint.
It may also do well to remember that it is this Court which mandated that claims for
damages and attorneys fees based on unfounded suit constitute compulsory counterclaim
which must be pleaded in the same action or, otherwise, it shall be barred. It will then be
iniquitous and the height of injustice to require the petitioner to make the counterclaim in
the present action, under threat of losing his right to claim the same ever again in any other
court, yet make his right totally dependent on the fate of the respondents complaint.
If indeed the Court dismisses petitioners counterclaim solely on the basis of the dismissal
of respondents Complaint, then what remedy is left for the petitioner? It can be said that
he can still file a separate action to recover the damages and attorneys fees based on the
unfounded suit for he cannot be barred from doing so since he did file the compulsory
counterclaim in the present action, only that it was dismissed when respondents
Complaint was dismissed. However, this reasoning is highly flawed and irrational
considering that petitioner, already burdened by the damages and attorneys fees it may
have incurred in the present case, must again incur more damages and attorneys fees in
pursuing a separate action, when, in the first place, it should not have been involved in any
case at all.
Since petitioners counterclaim is compulsory in nature and its cause of action survives that
of the dismissal of respondents complaint, then it should be resolved based on its own
merits and evidentiary support.

WHEREFORE, premises considered, the instant Petition is hereby GRANTED. The Decision of
the Court of Appeals, dated 4 April 2006, in CA-G.R. SP No. 78981, affirming the Orders,
dated 4 November 2002 and 20 June 2003, of the Regional Trial Court of Mandaluyong City,
Branch 212, in Civil Case No. MC99-605, is hereby REVERSED AND SET ASIDE. Respondents
Amended Complaint in Civil Case No. MC99-605 as against the petitioner is hereby ordered
DISMISSED, and all the proceedings against petitioner in the court a quo by virtue thereof
are hereby DECLARED NULL AND VOID. The Regional Trial Court of Mandaluyong City,
Branch 212, is DIRECTED to proceed without further delay with the resolution of
respondents Complaint in Civil Case No. MC99-605 as to defendant PEIP, as well as
petitioners counterclaim. No costs.

SO ORDERED.

SECOND DIVISION
MA. TERESA CHAVES BIACO, G.R. No. 161417
Petitioner,
Present:

QUISUMBING, J.,
 Chairperson,
- versus - CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
PHILIPPINE COUNTRYSIDE RURAL
BANK,
Respondent. Promulgated:
February 8, 2007
x----------------------------------------------------------------------------x
DECISION
TINGA, J.:
Petitioner, Ma. Teresa Chaves Biaco, seeks a review of the Decision [1] of the Court
of Appeals in CA-G.R. No. 67489 dated August 27, 2003, which denied her petition for
annulment of judgment, and the Resolution[2] dated December 15, 2003 which denied her
motion for reconsideration
. judge ordered as follows:
The facts as succinctly stated by the Court of Appeals are as follows:
Ernesto Biaco is the husband of petitioner Ma. Teresa Chaves
Biaco. While employed in the Philippine Countryside Rural Bank (PCRB)
as branch manager, Ernesto obtained several loans from the respondent
bank as evidenced by the following promissory notes:
Feb. 17, 1998 P 65,000.00
Mar. 18, 1998 30,000.00
May 6, 1998 60,000.00
May 20, 1998 350,000.00
July 30, 1998 155,000.00
Sept. 8, 1998 40,000.00
Sept. 8, 1998 120,000.00
As security for the payment of the said loans, Ernesto
executed a real estate mortgage in favor of the bank covering the parcel
of land described in Original Certificate of Title (OCT) No. P-14423. The
real estate mortgages bore the signatures of the spouses Biaco.
When Ernesto failed to settle the above-mentioned loans on
its due date, respondent bank through counsel sent him a written
demand on September 28, 1999. The amount due as of September 30,
1999 had already reached ONE MILLION EIGHTY THOUSAND SIX
HUNDRED SEVENTY SIX AND FIFTY CENTAVOS (P1,080,676.50).
The written demand, however, proved futile.
On February 22, 2000, respondent bank filed a complaint for
foreclosure of mortgage against the spouses Ernesto and Teresa Biaco
before the RTC of Misamis Oriental. Summons was served to the
spouses Biaco through Ernesto at his office (Export and Industry Bank)
located at Jofelmor Bldg., Mortola Street, Cagayan de Oro City.
Ernesto received the summons but for unknown reasons, he
failed to file an answer. Hence, the spouses Biaco were declared in
default upon motion of the respondent bank. The respondent bank was
allowed to present its evidence ex parte before the Branch Clerk of
Court who was then appointed by the court as Commissioner.
Arturo Toring, the branch manager of the respondent bank,
testified that the spouses Biaco had been obtaining loans from the bank
since 1996 to 1998. The loans for the years 1996-1997 had already been
paid by the spouses Biaco, leaving behind a balance of P1,260,304.33
representing the 1998 loans. The amount being claimed is inclusive of
interests, penalties and service charges as agreed upon by the parties.
The appraisal value of the land subject of the mortgage is
only P150,000.00 as reported by the Assessors Office.
Based on the report of the Commissioner, the respondent
WHEREFORE, judgment is hereby rendered ordering
defendants spouses ERNESTO R. BIACO and MA. THERESA
[CHAVES] BIACO to pay plaintiff bank within a period of not
less than ninety (90) days nor more than one hundred (100)
days from receipt of this decision the loan of ONE MILLION
TWO HUNDRED SIXTY THOUSAND THREE HUNDRED FOUR
PESOS and THIRTY THREE CENTAVOS (P1,260,304.33) plus
litigation expenses in the amount of SEVEN THOUSAND SIX
HUNDRED FORTY PESOS (P7,640.00) and attorneys fees in the
amount of TWO HUNDRED FIFTY TWO THOUSAND THIRTY
PESOS and FORTY THREE CENTAVOS (P252,030.43) and cost of
this suit.
In case of non-payment within the period, the
Sheriff of this Court is ordered to sell at public auction the
mortgaged Lot, a parcel of registered land (Lot 35802, Cad.
237 {Lot No. 12388-B, Csd-10-002342-D}), located at Gasi,
Laguindingan, Misamis Oriental and covered by TCT No. P-
14423 to satisfy the mortgage debt, and the surplus if there
be any should be delivered to the defendants spouses
ERNESTO and MA. THERESA [CHAVES] BIACO. In the event
however[,] that the proceeds of the auction sale of the
mortgage[d] property is not enough to pay the outstanding
obligation, the defendants are ordered to pay any deficiency
of the judgment as their personal liability.
SO ORDERED.
 On July 12, 2000, the sheriff personally served the above-
mentioned judgment to Ernesto Biaco at his office at Export and
Industry Bank. The spouses Biaco did not appeal from the adverse
decision of the trial court. On October 13, 2000, the respondent bank
filed an ex parte motion for execution to direct the sheriff to sell the
mortgaged lot at public auction. The respondent bank alleged that the
order of the court requiring the spouses Biaco to pay within a period of
90 days had passed, thus making it necessary to sell the mortgaged lot
at public auction, as previously mentioned in the order of the court. The
motion for execution was granted by the trial court per Order
dated October 20, 2000.
On October 31, 2000, the sheriff served a copy of the writ of
execution to the spouses Biaco at their residence in #92
9th Street, Nazareth, Cagayan de Oro City. The writ of execution was
personally received by Ernesto. By virtue of the writ of execution issued
by the trial court, the mortgaged property was sold at public auction in
favor of the respondent bank in the amount of ONE HUNDRED FIFTY
THOUSAND PESOS (P150,000.00).
The amount of the property sold at public auction being
insufficient to cover the full amount of the obligation, the respondent
bank filed an ex parte motion for judgment praying for the issuance of a
writ of execution against the other properties of the spouses Biaco for
the full settlement of the remaining obligation. Granting the motion,
the court ordered that a writ of execution be issued against the spouses
Biaco to enforce and satisfy the judgment of the court for the balance
of ONE MILLION THREE HUNDRED SIXTY NINE THOUSAND NINE
HUNDRED SEVENTY FOUR PESOS AND SEVENTY CENTAVOS
(P1,369,974.70).
The sheriff executed two (2) notices of levy against properties
registered under the name of petitioner Ma. Teresa Chaves Biaco.
However, the notices of levy were denied registration because Ma.
Teresa had already sold the two (2) properties to her daughters on April
11, 2001.[3]
Petitioner sought the annulment of the Regional Trial Court decision contending
that extrinsic fraud prevented her from participating in the judicial foreclosure
proceedings. According to her, she came to know about the judgment in the case only after
the lapse of more than six (6) months after its finality. She claimed that extrinsic fraud was
perpetrated against her because the bank failed to verify the authenticity of her signature
on the real estate mortgage and did not inquire into the reason for the absence of her
signature on the promissory notes. She moreover asserted that the trial court failed to
acquire jurisdiction because summons were served on her through her husband without
any explanation as to why personal service could not be made.
The Court of Appeals considered the two circumstances that kept petitioner in
the dark about the judicial foreclosure proceedings: (1) the failure of the sheriff to
personally serve summons on petitioner; and (2) petitioners husbands concealment of his
knowledge of the foreclosure proceedings. On the validity of the service of summons, the
appellate court ruled that judicial foreclosure proceedings are actions quasi in rem. As such,
jurisdiction over the person of the defendant is not essential as long as the court acquires
jurisdiction over the res. Noting that the spouses Biaco were not opposing parties in the
case, the Court of Appeals further ruled that the fraud committed by one against the other
cannot be considered extrinsic fraud.
Her motion for reconsideration having been denied, petitioner filed the instant
Petition for Review,[4] asserting that even if the action is quasi in rem, personal service of
summons is essential in order to afford her due process. The substituted service made by
the sheriff at her husbands office cannot be deemed proper service absent any explanation
that efforts had been made to personally serve summons upon her but that such efforts
failed. Petitioner contends that extrinsic fraud was perpetrated not so much by her
husband, who did not inform her of the judicial foreclosure proceedings, but by the sheriff
who allegedly connived with her husband to just leave a copy of the summons intended for
her at the latters office.
Petitioner further argues that the deficiency judgment is a personal judgment which should
be deemed void for lack of jurisdiction over her person.
Respondent PCRB filed its Comment, [5] essentially reiterating the appellate courts
ruling. Respondent avers that service of summons upon the defendant is not necessary in
actions quasi in rem it being sufficient that the court acquire jurisdiction over the res. As
regards the alleged conspiracy between petitioners husband and the sheriff, respondent
counters that this is a new argument which cannot be raised for the first time in the instant
petition.
We required the parties to file their respective memoranda in the
Resolution[6] dated August 18, 2004. Accordingly, petitioner filed her
Memorandum[7] dated October 10, 2004, while respondent filed its Memorandum for
Respondent[8] dated September 9, 2004.
Annulment of judgment is a recourse equitable in character, allowed only in
exceptional cases as where there is no available or other adequate remedy. Jurisprudence
and Sec. 2, Rule 47 of the 1997 Rules of Civil Procedure (Rules of Court) provide that
judgments may be annulled only on grounds of extrinsic fraud and lack of jurisdiction or
denial of due process.[9]
Petitioner asserts that extrinsic fraud consisted in her husbands concealment of the loans
which he obtained from respondent PCRB; the filing of the complaint for judicial
foreclosure of mortgage; service of summons; rendition of judgment by default; and all
other proceedings which took place until the writ of garnishment was served. [10]
Extrinsic fraud exists when there is a fraudulent act committed by the prevailing
party outside of the trial of the case, whereby the defeated party was prevented from
presenting fully his side of the case by fraud or deception practiced on him by
the prevailing party.[11] Extrinsic fraud is present where the unsuccessful party had been
prevented from exhibiting fully his case, by fraud or deception practiced on him by
his opponent, as by keeping him away from court, a false promise of a compromise; or
where the defendant never had knowledge of the suit, being kept in ignorance by the acts
of the plaintiff; or where an attorney fraudulently or without authority assumes to
represent a party and connives at his defeat; or where the attorney regularly employed
corruptly sells out his clients interest to the other side. The overriding consideration is that
the fraudulent scheme of the prevailing litigant prevented a party from having his day in
court.[12]
With these considerations, the appellate court acted well in ruling that there was
no fraud perpetrated by respondent bank upon petitioner, noting that the spouses Biaco
were co-defendants in the case and shared the same interest. Whatever fact or
circumstance concealed by the husband from the wife cannot be attributed to respondent
bank.
Moreover, petitioners allegation that her signature on the promissory notes was
forged does not evince extrinsic fraud. It is well-settled that the use of forged instruments
during trial is not extrinsic fraud because such evidence does not preclude the participation
of any party in the proceedings. [13]
The question of whether the trial court has jurisdiction depends on the nature of
the action, i.e., whether the action is in personam, in rem, or quasi in rem. The rules on
service of summons under Rule 14 of the Rules of Court likewise apply according to the
nature of the action.
An action in personam is an action against a person on the basis of his personal liability. An
action in rem is an action against the thing itself instead of against the person. An
action quasi in rem is one wherein an individual is named as defendant and the purpose of
the proceeding is to subject his interest therein to the obligation or lien burdening the
property.[14]
In an action in personam, jurisdiction over the person of the defendant is necessary for the
court to validly try and decide the case. In a proceeding in rem or quasi in rem, jurisdiction
over the person of the defendant is not a prerequisite to confer jurisdiction on the court
provided that the court acquires jurisdiction over the res. Jurisdiction over the res is
acquired either (1) by the seizure of the property under legal process, whereby it is brought
into actual custody of the law; or (2) as a result of the institution of legal proceedings, in
which the power of the court is recognized and made effective. [15]
Nonetheless, summons must be served upon the defendant not for the purpose of vesting
the court with jurisdiction but merely for satisfying the due process requirements. [16]
A resident defendant who does not voluntarily appear in court, such as petitioner
in this case, must be personally served with summons as provided under Sec. 6, Rule 14 of
the Rules of Court. If she cannot be personally served with summons within a reasonable
time, substituted service may be effected (1) by leaving copies of the summons at the
defendants residence with some person of suitable age and discretion then residing
therein, or (2) by leaving the copies at defendants office or regular place of business with
some competent person in charge thereof in accordance with Sec. 7, Rule 14 of the Rules of
Court.
In this case, the judicial foreclosure proceeding instituted by respondent PCRB
undoubtedly vested the trial court with jurisdiction over the res. A judicial foreclosure
proceeding is an action quasi in rem. As such, jurisdiction over the person of petitioner is
not required, it being sufficient that the trial court is vested with jurisdiction over the
subject matter.
There is a dimension to this case though that needs to be delved into. Petitioner
avers that she was not personally served summons. Instead, summons was served to her
through her husband at his office without any explanation as to why the particular
surrogate service was resorted to. The Sheriffs Return of Service dated March 21,
2000 states:
xxxx
That on March 16, 2000, the undersigned served the copies of
Summons, complaint and its annexes to the defendants Sps. Ernesto R.
& Ma. Teresa Ch. Biaco thru Ernesto R. Biaco[,] defendant of the
above-entitled case at his office EXPORT & INDUSTRY
BANK, Jofelmore Bldg.[,] Mortola St., Cagayan de Oro City and he
acknowledged receipt thereof as evidenced with his signature
appearing on the original copy of the Summons.[17] [Emphasis supplied]
Without ruling on petitioners allegation that her husband and the sheriff
connived to prevent summons from being served upon her personally, we can see that
petitioner was denied due process and was not able to participate in the judicial
foreclosure proceedings as a consequence. The violation of petitioners constitutional right
to due process arising from want of valid service of summons on her warrants the
annulment of the judgment of the trial court
.
There is more, the trial court granted respondent PCRBs ex-parte motion for
deficiency judgment and ordered the issuance of a writ of execution against the spouses
Biaco to satisfy the remaining balance of the award. In short, the trial court went beyond its
jurisdiction over the res and rendered a personal judgment against the spouses Biaco. This
cannot be countenanced.
In Sahagun v. Court of Appeals,[18] suit was brought against a non-resident
defendant, Abelardo Sahagun, and a writ of attachment was issued and subsequently levied
on a house and lot registered in his name. Claiming ownership of the house, his wife,
Carmelita Sahagun, filed a motion to intervene. For failure of plaintiff to serve summons
extraterritorially upon Abelardo, the complaint was dismissed without prejudice.
Subsequently, plaintiff filed a motion for leave to serve summons by publication
upon Abelardo. The trial court granted the motion. Plaintiff later filed an amended
complaint against Abelardo, this time impleading Carmelita and Rallye as additional
defendants. Summons was served on Abelardo through publication in the Manila Evening
Post. Abelardo failed to file an answer and was declared in default. Carmelita went on
certiorari to the Court of Appeals assailing as grave abuse of discretion the declaration of
default of Abelardo. The Court of Appeals dismissed the petition and denied
reconsideration.
 In her petition with this Court, Carmelita raised the issue of whether the trial
court acquired jurisdiction over her husband, a non-resident defendant, by the publication
of summons in a newspaper of general circulation in the Philippines. The Court sustained
the correctness of extrajudicial service of summons by publication in such newspaper.

The Court explained, citing El Banco Espaol-Filipino v. Palanca,[19] that foreclosure

and attachment proceedings are both actions quasi in rem. As such, jurisdiction over the
person of the (non-resident) defendant is not essential. Service of summons on a non-
resident defendant who is not found in the country is required, not for purposes of
physically acquiring jurisdiction over his person but simply in pursuance of the
requirements of fair play, so that he may be informed of the pendency of the action against
him and the possibility that property belonging to him or in which he has an interest may
be subjected to a judgment in favor of a resident, and that he may thereby be accorded an
opportunity to defend in the action, should he be so minded.
Significantly, the Court went on to rule, citing De Midgely v. Ferandos, et. al.
[20]
and Perkins v. Dizon, et al.[21] that in a proceeding in rem or quasi in rem, the only relief
that may be granted by the court against a defendant over whose person it has not
acquired jurisdiction either by valid service of summons or by voluntary submission to its
jurisdiction, is limited to the res.

Similarly, in this case, while the trial court acquired jurisdiction over the res, its
jurisdiction is limited to a rendition of judgment on the res. It cannot extend its jurisdiction
beyond the res and issue a judgment enforcing petitioners personal liability. In doing so
without first having acquired jurisdiction over the person of petitioner, as it did, the trial
court violated her constitutional right to due process, warranting the annulment of the
judgment rendered in the case.

WHEREFORE, the instant petition is GRANTED. The Decision dated August 27,
2003 and the Resolution dated December 15, 2003 of the Court of Appeals in CA-G.R. SP
No. 67489 are SET ASIDE. The Judgment dated July 11, 2000 and Order dated February 9,
2001 of the Regional Trial Court of Cagayan de Oro City, Branch 20, are likewise SET ASIDE.
SO ORDERED.

Republic of the Philippines

Supreme Court
Manila
 Due process dictates that jurisdiction over the person of a defendant can only be
acquired by the courts after a strict compliance with the rules on the proper service of
summons.

THIRD DIVISION Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court, with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction,
seeking to annul the Decision[1] dated June 29, 2005 and the Resolution[2]dated March 14,
2006 of the Court of Appeals (CA) nullifying and vacating the Decision [3] dated December 3,
CONSTANTINO A. G.R. No. 171916 2002 and Order[4]dated April 4, 2003 of the Regional Trial Court (RTC), Branch 12, Malolos,
Bulacan.
PASCUAL, substituted by his heirs, represented
byZENAIDA PASCUAL,

Petitioner, The facts, as found in the records, are the following:

Present:
Petitioner filed a Complaint for Specific Performance with Prayer for Issuance of
Preliminary Mandatory Injunction with Damages before the RTC of Malolos, Bulacan
against respondent. The process server, in his Return of Service [5] dated May 21, 2002,
reported, among others that:
CORONA, J., Chairperson,

-versus- CHICO-NAZARIO,

VELASCO, JR., The undersigned Process Server of this Honorable Court went
at defendant's given address at No. 4 Manikling
NACHURA, and
St., Talayan Village, Quezon City on May 20, 2002 to serve the summons
PERALTA, JJ. and copy of the Complaint together with the annexes thereto in
connection with the above-entitled case.

LOURDES S. PASCUAL,
At the time of the service of the said summons, the defendant
Respondent. Promulgated: was not at her home and only her maid was there who refused to
receive the said summons [in spite] of the insistence of the
undersigned.

December 4, 2009

The undersigned, upon his request with the Brgy. Clerk at the
said place, was given a certification that he really exerted effort to effect
the service of the said summons but failed due to the above reason.
DECISION (Annex A).

PERALTA, J.:
 The following day, May 21, 2002, the undersigned went back
at defendant's residence to have her receive the subject summons but
again the above defendant was not at her house.
WHEREFORE, the original summons and copy of the complaint
is hereby returned to the Honorable Court NOT SERVED.
Malolos, Bulacan, May 21, 2002.
Thereafter, an alias summons was issued by the RTC and, on May 29, 2002, the following
report was submitted:
The undersigned, on May 29, 2002, made a 3 rd attempt to
serve the alias summons issued by the Hon. Court relative with the
above-entitled case at the given address of the defendant.
The undersigned, accompanied by the barangay officials of
the said place, proceeded at defendant's residence but the undersigned
was not permitted to go inside her house and was given information by
her maid that the defendant was not there.
The defendant's car was parked inside her house and
inquiries/verification made on her neighbors revealed that the
defendant was inside her house at the time of service of said summons
and probably did not want to show-up when her maid informed her of
undersigned's presence.
WHEREFORE, the undersigned court process server
respectfully returned the alias summons dated May 29, 2002 issued by
the Hon. Court UNSERVED for its information and guidance.
Malolos, Bulacan, May 30, 2002.[6]
Subsequently, on August 14, 2002, the process server returned with the following
report,[7] stating that a substituted service was effected:
This is to certify that on the 14 th day of August, 2002, I
personally went at Dr. Lourdes Pascual's residence at #4 Manikling
Street, Talayan Village, Quezon City, to serve the copy of the Summons
dated August 12, 2002, together with a copy of the Complaint and its
annexes thereto.
Defendant Dr. Lourdes Pascual was out during the time of
service of the said summons and only her housemaid was present. The
undersigned left a copy of the same to the latter who is at the age of
reason but refused to sign the same.
WHEREFORE, the undersigned respectfully return the service
of summons duly served for information and guidance of the Honorable
Court.
Malolos, Bulacan, August 14, 2002.
For failure of the respondent to file a responsive pleading, petitioner,
on September 17, 2002, filed a Motion to Declare Defendant in Default [8] to which the
petitioner filed an Opposition/Comment to Plaintiff's Motion to Declare Defendant in
Default[9] dated October 1, 2002, claiming that she was not able to receive any summons
and copy of the complaint. The RTC, in its Order [10] dated October 30, 2002, declared
respondent in default and allowed petitioner to file his evidence ex-parte.
Respondent filed a Motion for Reconsideration [11] dated November 18,
2002 seeking to set aside the above-mentioned Order dated October 30, 2002. However,
the said motion was denied by the RTC in its Order[12] dated November 27, 2002.
Consequently, on December 3, 2002, the RTC, in its Decision, [13] found in favor of
the petitioner. The dispositive portion of the said Decision reads:
WHEREFORE, in light of all the foregoing, judgment is hereby
rendered in favor of the plaintiff, Constantino A. Pascual, and against
Lourdes S. Pascual, ordering the latter as follows:
 a. to CEASE AND DESIST from further intervening with the
corporate and internal affairs of Rosemoor Mining Corporation,
consisting of acts and omissions prejudicial and detrimental to the
interest of the said corporation resulting to irreparable injury to herein
plaintiff;
b. to pay plaintiff the sum of One Hundred Thousand
Pesos (P100,000.00), for and by way of moral damages;
c. to pay the sum of Thirty Thousand Pesos (P30,000.00) for
and by way of Attorney's fees; and
d. to pay the costs of this suit.
SO ORDERED.
Respondent then filed a Motion to Set Aside Order of Default [14] dated December
13, 2002, with the argument of non-service of summons upon her. This was denied by the
RTC in its Order[15] dated April 4, 2003; and on the same day, a Certificate of Finality and
Entry of Judgment was issued. Eventually, respondent, on April 28, 2003, filed a Motion for
Reconsideration[16] of the Order dated April 4, 2003, which was denied by the RTC in its
Order[17] dated June 23, 2003. Finally, on June 26, 2003, a Writ of Execution was issued to
enforce the Decision dated December 3, 2002 of the RTC.
Aggrieved, respondent filed with the CA a Petition for Certiorari and Prohibition under Rule
65 of the Rules of Court which was granted by the same Court in its Decision [18] dated June
29, 2005, the dispositive portion of which reads:
WHEREFORE, the petition is GIVEN DUE COURSE and
GRANTED. The said Decision, as well as the Orders and the processes on
which this is premised, are NULLIFIED and VACATED. SO ORDERED.
Petitioner comes now to this Court through a Petition for Review
on Certiorari under Rule 45 of the Rules of Court, with Prayer for Temporary Restraining
Order and Writ of Preliminary Injunction, on the following grounds:
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THERE
WAS AN INVALID SERVICE OF SUMMONS UPON THE RESPONDENT AND,
HENCE, THE COURT (REGIONAL TRIAL COURT) DID NOT ACQUIRE
JURISDICTION OVER THE RESPONDENT.
II
THE HONORABLE COURT OF APPEALS ERRED IN GIVING DUE COURSE
TO THE PETITION WHEN FROM THE UNDISPUTED FACTS, THE
RESPONDENT'S FAILURE TO INTERPOSE AN APPEAL OR TO FILE A
MOTION FOR RECONSIDERATION OR A PETITION FOR RELIEF FROM
JUDGMENT CLEARLY BARS THE INSTITUTION OF THE SPECIAL CIVIL
ACTION FOR CERTIORARI UNDER RULE 65, 1997 RULES OF CIVIL
PROCEDURE.
Petitioner insists that there was a valid substituted service of summons and that
there should be a presumption of regularity in the performance of official functions. He also
avers that certiorari, which was filed by the respondent with the CA, does not lie when the
remedy of appeal has been lost.
In her Comment with Motion to Cite for Contempt [19] dated August 29, 2006,
respondent raises the following issues:
1. SHOULD THE PETITION BE DISMISSED FOR HAVING BEEN FILED IN
VIOLATION REPUBLIC ACT NO. 6713 IN RELATION TO ART. 5 OF THE
CIVIL CODE?
2. ARE THE PETITIONER AND HIS COUNSEL PUNISHABLE FOR
CONTEMPT OF COURT FOR KNOWINGLY MISLEADING THIS HONORABLE
COURT?
3. WAS THE ALLEGED SERVICE OF SUMMONS ON THE ILLITERATE MAID
EFFECTIVE TO CONFER JURISDICTION OVER THE DEFENDANT BEFORE
THE RTC OF MALOLOS, BULACAN?
4. ASSUMING FOR THE SAKE OF ARGUMENT THAT THE SERVICE OF
SUMMONS WAS VALID, WAS THE ORDER DECLARING THE DEFENDANT
IN DEFAULT RENDERED WITH GRAVE ABUSE OF DISCRETION?
 5. WAS THE ORDER DENYING THE MOTION TO LIFT AND SET ASIDE THE
ORDER OF DEFAULT RENDERED WITH GRAVE ABUSE OF DISCRETION?
6. IS THE PETITIONER GUILTY OF FORUM SHOPPING?
7. WILL THIS HONORABLE COURT ALLOW THE NULL AND
VOID DECEMBER 3, 2002 DECISION OF THE RTC TO BECOME FINAL AND
EXECUTORY AND OBLITERATE THE CRIMINAL ACT OF FALSIFICATION,
THEREBY REWARDING THE AUTHOR OF THE CRIMINAL OFFENSE?
In addressing the above issues, the respondent argues that the CA decision
became final by operation of law because the present petition is null and void for being a
violation of the provisions of Republic Act No. 6712, in relation to Article 5 of the Civil Code,
the counsel for petitioner having filed a Motion for Extension of Time to File Petition for
Review and, thereafter, the Petition for Review itself. She also claims that there was no
proper service of summons as the maid who was purportedly served a copy thereof was
illiterate and has denied being served in a sworn statement executed before a notary public
and, thus, the RTC never acquired jurisdiction over her person. According to her, assuming
that the summons were indeed served, the RTC was guilty of grave abuse of discretion for
declaring her in default and for refusing to lift the order of default because it deprived her
of her right to present evidence in support of her defense. She further disputes the
argument of the petitioner that the Decision dated December 3, 2002 became final
because it did not become the subject of appeal by stating that the said principle can only
be applied to valid judgments that were rendered in accordance with law and not to void
judgments rendered without jurisdiction or in excess thereof. In addition, she avers that
petitioner made a deliberate and malicious concealment of the fact that at the time he filed
the case for specific performance, as well as during the time it was being heard, he was
already being investigated in administrative proceedings before the National Bureau of
Investigation, the Department of Justice and the Municipal Trial Court of Malolos, Bulacan,
Branch 2, involving the same subject matter, issues and parties; hence, he violated the law
against forum shopping. Lastly, respondent points out that the CA Decision dated June 29,
2005 is a permanent injunction against the implementation of the contested Orders and
Decisions of the RTC; therefore, there is an urgent necessity to enforce the said judgment.
On June 30, 2008, this Court granted[20] the substitution of the respondent by his
heirs as represented by his wife Zenaida Pascual, after the Manifestation [21] dated June 12,
2008 was filed informing this Court of the demise of the same respondent.
After a careful study of the records of this case, this Court finds the petition bereft
of any merit.
Clearly, the main, if not the only issue that needs to be resolved is whether or not
there was a proper and valid substituted service of summons, the resolution of which, will
determine whether jurisdiction was indeed acquired by the trial court over the person of
the petitioner.
In a case where the action is in personam and the defendant is in the Philippines,
the service of summons may be done by personal or substituted service as laid out in
Sections 6 and 7 of Rule 14 of the Revised Rules of Court. The provisions state:
Section 6. Service in person on defendant. - Whenever
practicable, the summons shall be served by handing a copy thereof to
the defendant in person, or, if he refuses to receive and sign for it, by
tendering it to him.
Section 7. Substituted service. - If, for justifiable causes, the
defendant cannot be served within a reasonable time as provided in the
preceding section, service may be effected (a) by leaving copies of the
summons at the defendant's residence with some person of suitable
age and discretion then residing therein, or (b) by leaving the copies at
defendants office or regular place of business with some competent
person in charge thereof.
A plain and simple reading of the above provisions indicates that personal service
of summons should and always be the first option, and it is only when the said summons
cannot be served within a reasonable time can the process server resort to substituted
service.
This Court gave an in-depth discussion as to the nature and requisites of substituted service
in Manotoc v. Court of Appeals, et al.
We can break down this section into the following
requirements to effect a valid substituted service:
(1) Impossibility of Prompt Personal Service
The party relying on substituted service or the sheriff must
show that defendant cannot be served promptly or there is
impossibility of prompt service.[23] Section 8, Rule 14 provides that the
plaintiff or the sheriff is given a reasonable time to serve the summons
to the defendant in person, but no specific time frame is mentioned.
Reasonable time is defined as so much time as is necessary under the
circumstances for a reasonably prudent and diligent man to do,
conveniently, what the contract or duty requires that should be done,
having a regard for the rights and possibility of loss, if any, to the other
party.[24] Under the Rules, the service of summons has no set period.
However, when the court, clerk of court, or the plaintiff asks the sheriff
to make the return of the summons and the latter submits the return of
summons, then the validity of the summons lapses. The plaintiff may
then ask for an alias summons if the service of summons has failed.
[25]
What then is a reasonable time for the sheriff to effect a personal
service in order to demonstrate impossibility of prompt service? To the
plaintiff, reasonable time means no more than seven (7) days since an
expeditious processing of a complaint is what a plaintiff wants. To the
sheriff, reasonable time means 15 to 30 days because at the end of the
month, it is a practice for the branch clerk of court to require the sheriff
to submit a return of the summons assigned to the sheriff for service.
The Sheriffs Return provides data to the Clerk of Court, which the clerk
uses in the Monthly Report of Cases to be submitted to the Office of the
Court Administrator within the first ten (10) days of the succeeding
month. Thus, one month from the issuance of summons can be
considered reasonable time with regard to personal service on the
defendant.
Sheriffs are asked to discharge their duties on
the service of summons with due care, utmost diligence, and
reasonable promptness and speed so as not to prejudice the
expeditious dispensation of justice. Thus, they are enjoined to try their
best efforts to accomplish personal service on defendant. On the other
hand, since the defendant is expected to try to avoid and
evade service of summons, the sheriff must be resourceful, persevering,
canny, and diligent in serving the process on the defendant. For
substituted service of summons to be available, there must be several
attempts by the sheriff to personally serve the summons within a
reasonable period [of one month] which eventually resulted in failure
to prove impossibility of prompt service. Several attempts means at
least three (3) tries, preferably on at least two different dates. In
addition, the sheriff must cite why such efforts were unsuccessful. It is
only then that impossibility of service can be confirmed or accepted.
(2) Specific Details in the Return
The sheriff must describe in the Return of Summons the
facts and circumstances surrounding the attempted personal service.
[26]
The efforts made to find the defendant and the reasons behind the
failure must be clearly narrated in detail in the Return. The date and
time of the attempts on personal service, the inquiries made to locate
the defendant, the name/s of the occupants of the alleged residence or
house of defendant and all other acts done, though futile, to serve the
summons on defendant must be specified in the Return to justify
substituted service. The form on Sheriffs Return of Summons on
Substituted Service prescribed in the Handbook for Sheriffs published
by the Philippine Judicial Academy requires a narration of the efforts
made to find the defendant personally and the fact of failure.
[27]
Supreme Court Administrative Circular No. 5 dated November 9,
1989 requires that impossibility of prompt service should be shown by
stating the efforts made to find the defendant personally and the failure
of such efforts, which should be made in the proof of service.
(3) A Person of Suitable Age and Discretion
If the substituted service will be effected at defendants
house or residence, it should be left with a person of suitable age and
discretion then residing therein. [28] A person of suitable age and
discretion is one who has attained the age of full legal capacity (18
years old) and is considered to have enough discernment to understand
the importance of a summons. Discretion is defined as the ability to
make decisions which represent a responsible choice and for which an
understanding of what is lawful, right or wise may be presupposed.
[29]
Thus, to be of sufficient discretion, such person must know how to
read and understand English to comprehend the import of the
summons, and fully realize the need to deliver the summons and
complaint to the defendant at the earliest possible time for the person
to take appropriate action. Thus, the person must have the relation of
confidence to the defendant, ensuring that the latter would receive or
at least be notified of the receipt of the summons. The sheriff must
therefore determine if the person found in the alleged dwelling or
residence of defendant is of legal age, what the recipients relationship
with the defendant is, and whether said person comprehends the
significance of the receipt of the summons and his duty to immediately
deliver it to the defendant or at least notify the defendant of said
receipt of summons. These matters must be clearly and specifically
described in the Return of Summons.
 (4) A Competent Person in Charge

If the substituted service will be done at defendants office or

regular place of business, then it should be served on a competent xxxx
person in charge of the place. Thus, the person on whom the
substituted service will be made must be the one managing the office
or business of defendant, such as the president or manager; and such Similarly, in the Return of Service dated May 30, 2002, pertinent details were
individual must have sufficient knowledge to understand the obligation wanting, as it reads:
of the defendant in the summons, its importance, and the prejudicial
effects arising from inaction on the summons. Again, these details must
be contained in the Return. xxxx

Petitioner contends that there was a valid substituted service of summons as

shown in not one, but three Officer's Return. He points out that the absence in the officer's
return of a statement about the impossibility of personal service does not conclusively
prove that the service was invalid. He adds that proof of prior attempts to serve personally
can be deduced from the other returns when there are several in a series of officer's
returns all tending to establish the impossibility of personal service upon the respondent.
However, the said argument of the petitioner is merely a plain deduction that veers away
from the well-established requisite that the officer must show that the defendant cannot
be served promptly, or that there was an impossibility of prompt service. A cursory reading
of the three Officer's Returns does not show any compliance with the said requisite. The
Return of Service dated May 21, 2002 inadequately states that:
xxxx
The undersigned accompanied by the barangay officials of the
said place proceeded at defendant's residence but the undersigned was
not permitted to go inside her house and was given information by her
maid that the defendant was not there.
The defendant's car was parked inside her house and
inquiries/verification made on her neighbors revealed that the
defendant was inside her house at the time of service of said summons
and probably did not want to show-up when her maid informed her of
undersigned's presence.

xxxx
At the time of service of the said summons, the defendant
was not at her home and only her maid was there who refused to Lastly, the Return of Service dated August 14, 2002 was no different. It reads:
receive the said summons [in spite] of the insistence of the
undersigned.
xxxx

Defendant Dr. Lourdes Pascual was out during the time of

The undersigned, upon his request with the Brgy. Clerk at the
service of the said summons and only her housemaid was present. The
said place, was given a certification that he really exerted effort to effect
undersigned left a copy of the same to the latter who is at the age of
the service of the said summons but failed due to the above reason.
reason but refused to sign the same.
(Annex A).

The following day, May 21, 2002, the undersigned went back
at defendant's residence to have her receive the subject summons but
again the above defendant was not at her house. xxxx

The above Return of Summons does not show or indicate the actual exertion or
any positive steps taken by the officer or process server in serving the summons personally
to the defendant. As in Jose v. Boyon,[30] this Court ruled that:

The Return of Summons shows no effort was actually exerted
and no positive step taken by either the process server or petitioners to
locate and serve the summons personally on respondents. At best, the
Return merely states the alleged whereabouts of respondents without
indicating that such information was verified from a person who had
knowledge thereof. Certainly, without specifying the details of the
attendant circumstances or of the efforts exerted to serve the
summons, a general statement that such efforts were made will not
suffice for purposes of complying with the rules of
substituted service of summons.
The necessity of stating in the process server's Return or Proof
of Service the material facts and circumstances sustaining the validity of
substituted service was explained by this Court in Hamilton v. Levy,
[31]
from which we quote:
x x x The pertinent facts and
circumstances attendant to the service of summons
must be stated in the proof of service or Officer's
Return; otherwise, any substituted service made in
lieu of personal service cannot be upheld. This is
necessary because substituted service is in
derogation of the usual method of service. It is a
method extraordinary in character and, hence, may
be used only as prescribed and in the circumstances
authorized by statute. Here, no such explanation
was made. Failure to faithfully, strictly, and fully
comply with the requirements of substituted
service renders said service ineffective.[32]
Petitioner further states that the presumption of regularity in the performance of
official functions must be applied to the present case. He expounds on the fact that as
between the process server's return of substituted service, which carries with it the
presumption of regularity and the respondent's self-serving assertion that she only came to
know of the case against her when she received a copy of the petitioner's motion to declare
her in default, the process server's return is undoubtedly more deserving of credit. The said
argument, however, is only meritorious, provided that there was a strict compliance with
the procedure for serving a summons. In the absence of even the barest compliance with
the procedure for a substituted service of summons outlined in the Rules of Court, the
presumption of regularity in the performance of public functions does not apply. [33]
Applying the above disquisitions, the jurisdiction over the person of the
respondent was never vested with the RTC, because the manner of substituted service by
the process server was apparently invalid and ineffective. As such, there was a violation of
due process. Jurisdiction over the defendant is acquired either upon a
valid service of summons or the defendants voluntary appearance in court. When the
defendant does not voluntarily submit to the courts jurisdiction or when there is no
valid service of summons, any judgment of the court which has no jurisdiction over the
person of the defendant is null and void.[34]
Petitioner also raises the issue of the impropriety of the remedy resorted to by
the respondent which is the filing of a Petition for Certiorari under Rule 65 of the Rules of
Court, claiming that the said remedy is inappropriate because there are still other plain,
speedy and adequate remedies available, such as an ordinary appeal, the Decision of the
RTC having attained its finality. The question, however, is whether the said Decision has
indeed attained finality. The importance of the doctrine of the finality of judgment has
always been emphasized by this Court. In Pasiona, Jr. v. Court of Appeals,[35] this Court has
expounded on the said doctrine, thus:
The Court re-emphasizes the doctrine of finality of judgment.
In Alcantara v. Ponce,[36] the Court, citing its much earlier ruling in Arnedo
v. Llorente,[37] stressed the importance of said doctrine, to wit:
It is true that it is the purpose and
intention of the law that courts should decide all
questions submitted to them "as truth and justice
require," and that it is greatly to be desired that all
judgments should be so decided; but controlling
and irresistible reasons of public policy and of
sound practice in the courts demand that at the risk
of occasional error, judgments of courts
determining controversies submitted to them
should become final at some definite time fixed by
law, or by a rule of practice recognized by law, so as
to be thereafter beyond the control even of the
court which rendered them for the purpose of
correcting errors of fact or of law, into which, in the
opinion of the court it may have fallen. The very
purpose for which the courts are organized is to put
an end to controversy, to decide the questions
submitted to the litigants, and to determine the
respective rights of the parties. With the full
 knowledge that courts are not infallible, the litigants
submit their respective claims for judgment, and
they have a right at some time or other to have final
judgment on which they can rely as a final
disposition of the issue submitted, and to know that
there is an end to the litigation.[38]
The said doctrine, however, is applicable only when the judgment or decision is
valid. In the present case, as earlier pronounced, and as ruled by the CA, the judgment in
question is void, the RTC not having acquired jurisdiction over the person of the
respondent. It is a well-entrenched principle that a void judgment can never become
final. As ruled by this Court in Metropolitan Bank & Trust Company v. Alejo:[43]
In Leonor v. Court of Appeals[44] and Arcelona v. Court of
Appeals,[45] we held thus:

A void judgment for want of jurisdiction

Then, in Juani v. Alarcon,[39] it was held, thus:
This doctrine of finality of judgment is
grounded on fundamental considerations of public
policy and sound practice. In fact, nothing is more
settled in law than that once a judgment attains
finality it thereby becomes immutable and
unalterable. It may no longer be modified in any
respect, even if the modification is meant to correct
what is perceived to be an erroneous conclusion of
fact or law, and regardless of whether the
modification is attempted to be made by the court
rendering it or by the highest court of the land. [40]
is no judgment at all. It cannot be the source of any
right nor the creator of any obligation. All acts
performed pursuant to it and all claims emanating
from it have no legal effect. Hence, it can never
become final and any writ of execution based on it
is void: x x x it may be said to be a lawless thing
which can be treated as an outlaw and slain at sight,
or ignored wherever and whenever it exhibits its
head.
Thus, from the above discussion, the Decision of the RTC, not having
attained its finality due to its being void, the Petition for Certiorari under Rule 65, filed by
the respondent with the CA, was proper.
WHEREFORE, the Petition dated May 3, 2006 is hereby DENIED and the Decision
dated June 29, 2005 of the Court of Appeals in CA-G.R. SP No. 77789 is
hereby AFFIRMED in toto. SO ORDERED.

Again, in Dinglasan v. Court of Appeals,[41] the Court declared that:

After the judgment or final resolution is entered in

the entries of judgment, the case shall be laid to
rest. x x x

xxxx

The finality of decision is a jurisdictional

event which cannot be made to depend on the
convenience of the party. To rule otherwise would
completely negate the purpose of the rule on
completeness of service, which is to place the date
of receipt of pleadings, judgment and processes
beyond the power of the party being served to
determine at his pleasure.[42]
 Republic of the Philippines
SERENO, J.:
Supreme Court
This Rule 45 Petition requires this Court to address the issue of the proper scope
Manila of the delegated jurisdiction of municipal trial courts in land registration cases. Petitioner
Republic of the Philippines (Republic) assails the Decision of the Court of Appeals (CA) [1] in
CA-G.R. CV No. 70349, which affirmed the Decision of the Municipal Trial Court (MTC) of
San Juan, Batangas[2] in LRC Case No. N-98-20, LRA Record No. 68329, granting respondent
Bantigue Point Development Corporations (Corporation) application for original registration
SECOND DIVISION of a parcel of land. Since only questions of law have been raised, petitioner need not have
filed a Motion for Reconsideration of the assailed CA Decision before filing this Petition for
Review.
REPUBLIC OF THE PHILIPPINES, G. R. No. 162322
The Facts
Petitioner,
On 17 July 1997, respondent Bantigue Point Development Corporation filed with
Present: the Regional Trial Court (RTC) of Rosario, Batangas an application for original registration of
title over a parcel of land with an assessed value of 4,330, 1,920 and 8,670, or a total
assessed value of 14,920 for the entire property, more particularly described as Lot 8060
of Cad 453-D, San Juan Cadastre, with an area of more or less 10,732 square meters,
located at Barangay Barualte, San Juan, Batangas. [3]
- versus - CARPIO, J., Chairperson,
On 18 July 1997, the RTC issued an Order setting the case for initial hearing on 22
BRION,
October 1997.[4] On 7 August 1997, it issued a second Order setting the initial hearing on 4
November 1997.[5]
PEREZ,
Petitioner Republic filed its Opposition to the application for registration on 8
BANTIGUE POINT DEVELOPMENT CORPORATION, SERENO, and January 1998 while the records were still with the RTC. [6]

Respondent. REYES, JJ. On 31 March 1998, the RTC Clerk of Court transmitted motu proprio the records
of the case to the MTC of San Juan, because the assessed value of the property was
allegedly less than 100,000.[7]

Promulgated: Thereafter, the MTC entered an Order of General Default[8] and commenced with
the reception of evidence.[9] Among the documents presented by respondent in support of
its application are Tax Declarations, [10] a Deed of Absolute Sale in its favor, [11]and a
Certification from the Department of Environment and Natural Resources (DENR)
March 14, 2012 Community Environment and Natural Resources Office (CENRO) of Batangas City that the
lot in question is within the alienable and disposable zone. [12] Thereafter, it awarded the
land to respondent Corporation.[13]

Acting on an appeal filed by the Republic, [14] the CA ruled that since the former
had actively participated in the proceedings before the lower court, but failed to raise the
DECISION jurisdictional challenge therein, petitioner is thereby estopped from questioning the
jurisdiction of the lower court on appeal. [15] The CA further found that respondent
Corporation had sufficiently established the latters registrable title over the subject
property after having proven open, continuous, exclusive and notorious possession and
occupation of the subject land by itself and its predecessors-in-interest even before the
outbreak of World War II.[16]
Dissatisfied with the CAs ruling, petitioner Republic filed this instant Rule 45 Petition and
raised the following arguments in support of its appeal:
I.
THE REPUBLIC CANNOT BE ESTOPPED FROM QUESTIONING THE
JURISDICTION OF THE MUNICIPAL TRIAL COURT OVER THE APPLICATION
FOR ORIGINAL REGISTRATION OF LAND TITLE EVEN FOR THE FIRST TIME
ON APPEAL
II.
THE MUNICIPAL TRIAL COURT FAILED TO ACQUIRE JURISDICTION OVER
THE APPLICATION FOR ORIGINAL REGISTRATION OF LAND TITLE. [17]
The Courts Ruling
We uphold the jurisdiction of the MTC, but remand the case to the court a
quo for further proceedings in order to determine if the property in question forms part of
the alienable and disposable land of the public domain.
I The Municipal Trial Court properly acquired jurisdiction over the case.
The Republic is not estopped from raising the issue of jurisdiction in
this case.
At the outset, we rule that petitioner Republic is not estopped from questioning
the jurisdiction of the lower court, even if the former raised the jurisdictional question only
on appeal. The rule is settled that lack of jurisdiction over the subject matter may be raised
at any stage of the proceedings. [18] Jurisdiction over the subject matter is conferred only by
the Constitution or the law.[19] It cannot be acquired through a waiver or enlarged by the
omission of the parties or conferred by the acquiescence of the court. [20]Consequently,
questions of jurisdiction may be cognizable even if raised for the first time on appeal. [21]
The ruling of the Court of Appeals that a party may be estopped from raising such
[jurisdictional] question if he has actively taken part in the very proceeding which he
questions, belatedly objecting to the courts jurisdiction in the event that the judgment or
order subsequently rendered is adverse to him[22] is based on the doctrine of estoppel by
laches. We are aware of that doctrine first enunciated by this Court in Tijam v.
Sibonghanoy.[23] In Tijam, the party-litigant actively participated in the proceedings before
the lower court and filed pleadings therein. Only 15 years thereafter, and after receiving an
adverse Decision on the merits from the appellate court, did the party-litigant question the
lower courts jurisdiction. Considering the unique facts in that case, we held that estoppel
by laches had already precluded the party-litigant from raising the question of lack of
jurisdiction on appeal. In Figueroa v. People,[24] we cautioned that Tijam must be construed
as an exception to the general rule and applied only in the most exceptional cases whose
factual milieu is similar to that in the latter case.
The facts are starkly different in this case, making the exceptional rule
in Tijam inapplicable. Here, petitioner Republic filed its Opposition to the application for
registration when the records were still with the RTC. [25] At that point, petitioner could not
have questioned the delegated jurisdiction of the MTC, simply because the case was not yet
with that court. When the records were transferred to the MTC, petitioner neither filed
pleadings nor requested affirmative relief from that court. On appeal, petitioner
immediately raised the jurisdictional question in its Brief. [26] Clearly, the exceptional
doctrine of estoppel by laches is inapplicable to the instant appeal.
Laches has been defined as the failure or neglect, for an unreasonable and unexplained
length of time, to do that which, by exercising due diligence, could or should have been
done earlier; it is negligence or omission to assert a right within a reasonable time,
warranting the presumption that the party entitled to assert it either has abandoned or
declined to assert it.[27] In this case, petitioner Republic has not displayed such
unreasonable failure or neglect that would lead us to conclude that it has abandoned or
declined to assert its right to question the lower court's jurisdiction.
II
In assailing the jurisdiction of the lower courts, petitioner Republic raised two
points of contention: (a) the period for setting the date and hour of the initial hearing; and
(b) the value of the land to be registered.
First, petitioner argued that the lower court failed to acquire jurisdiction over the
application, because the RTC set the date and hour of the initial hearing beyond the 90-day
period provided under the Property Registration Decree. [28]

We disagree.
The Property Registration Decree provides:
Sec. 23. Notice of initial hearing, publication, etc. - The court
shall, within five days from filing of the application, issue an order setting
the date and hour of the initial hearing which shall not be earlier than
forty-five days nor later than ninety days from the date of the order. x x x.
In this case, the application for original registration was filed on 17 July 1997.
[29]
On 18 July 1997, or a day after the filing of the application, the RTC immediately issued
an Order setting the case for initial hearing on 22 October 1997, which was 96 days from
the Order.[30] While the date set by the RTC was beyond the 90-day period provided for in
Section 23, this fact did not affect the jurisdiction of the trial court. In Republic v. Manna
Properties, Inc.,[31] petitioner Republic therein contended that there was failure to comply
with the jurisdictional requirements for original registration, because there were 125 days
between the Order setting the date of the initial hearing and the initial hearing itself. We
ruled that the lapse of time between the issuance of the Order setting the date of initial
hearing and the date of the initial hearing itself was not fatal to the application. Thus, we
held:
x x x [A] party to an action has no control over the
Administrator or the Clerk of Court acting as a land court; he has no
right to meddle unduly with the business of such official in the
performance of his duties. A party cannot intervene in matters within
the exclusive power of the trial court. No fault is attributable to such
party if the trial court errs on matters within its sole power. It is unfair
to punish an applicant for an act or omission over which the applicant
has neither responsibility nor control, especially if the applicant has
complied with all the requirements of the law. [32]
Indeed, it would be the height of injustice to penalize respondent Corporation by
dismissing its application for registration on account of events beyond its control.
Moreover, since the RTC issued a second Order on 7 August 1997 setting the initial hearing
on 4 November 1997,[33] within the 90-day period provided by law, petitioner Republic
argued that the jurisdictional defect was still not cured, as the second Order was issued
more than five days from the filing of the application, again contrary to the prescribed
period under the Property Registration Decree.[34]
Petitioner is incorrect.
The RTCs failure to issue the Order setting the date and hour of the initial hearing
within five days from the filing of the application for registration, as provided in the
Property Registration Decree, did not affect the courts its jurisdiction. Observance of the
five-day period was merely directory, and failure to issue the Order within that period did
not deprive the RTC of its jurisdiction over the case. To rule that compliance with the five-
day period is mandatory would make jurisdiction over the subject matter dependent upon
the trial court. Jurisdiction over the subject matter is conferred only by the Constitution or
the law.[35] It cannot be contingent upon the action or inaction of the court.
This does not mean that courts may disregard the statutory periods with
impunity. We cannot assume that the law deliberately meant the provision to become
meaningless and to be treated as a dead letter. [36] However, the records of this case do not
show such blatant disregard for the law. In fact, the RTC immediately set the case for initial
hearing a day after the filing of the application for registration, [37] except that it had to issue
a second Order because the initial hearing had been set beyond the 90-day period provided
by law.
Second, petitioner contended[38] that since the selling price of the property based
on the Deed of Sale annexed to respondents application for original registration
was 160,000,[39] the MTC did not have jurisdiction over the case. Under Section 34 of the
Judiciary Reorganization Act, as amended,[40] the MTCs delegated jurisdiction to try
cadastral and land registration cases is limited to lands, the value of which should not
exceed 100,000.
We are not persuaded.
The delegated jurisdiction of the MTC over cadastral and land registration cases is
indeed set forth in the Judiciary Reorganization Act, which provides:
Sec. 34. Delegated Jurisdiction in Cadastral and Land
Registration Cases. - Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts may be assigned by the Supreme
Court to hear and determine cadastral or land registration cases
covering lots where there is no controversy or opposition, or contested
lots where the value of which does not exceed One hundred thousand
pesos (100,000.00), such value to be ascertained by the affidavit of
 the claimant or by agreement of the respective claimants if there are
more than one, or from the corresponding tax declaration of the real
property. Their decision in these cases shall be appealable in the same
manner as decisions of the Regional Trial Courts. (As amended by R.A.
No. 7691) (Emphasis supplied.)
Thus, the MTC has delegated jurisdiction in cadastral and land registration cases
in two instances: first, where there is no controversy or opposition; or, second, over
contested lots, the value of which does not exceed 100,000.
The case at bar does not fall under the first instance, because petitioner opposed
respondent Corporations application for registration on 8 January 1998. [41]
However, the MTC had jurisdiction under the second instance, because the value
of the lot in this case does not exceed 100,000.
Contrary to petitioners contention, the value of the land should not be
determined with reference to its selling price. Rather, Section 34 of the Judiciary
Reorganization Act provides that the value of the property sought to be registered may be
ascertained in three ways: first, by the affidavit of the claimant; second, by agreement of
the respective claimants, if there are more than one; or, third, from the corresponding tax
declaration of the real property.[42]
In this case, the value of the property cannot be determined using the first
method, because the records are bereft of any affidavit executed by respondent as to the
value of the property. Likewise, valuation cannot be done through the second method,
because this method finds application only where there are multiple claimants who agree
on and make a joint submission as to the value of the property. Here, only respondent
Bantigue Point Development Corporation claims the property.
The value of the property must therefore be ascertained with reference to the
corresponding Tax Declarations submitted by respondent Corporation together with its
application for registration. From the records, we find that the assessed value of the
property is 4,330, 1,920 and 8,670, or a total assessed value of 14,920 for the entire
property.[43] Based on these Tax Declarations, it is evident that the total value of the land in
question does not exceed 100,000. Clearly, the MTC may exercise its delegated jurisdiction
under the Judiciary Reorganization Act, as amended.
III
A certification from the CENRO is not sufficient proof that the
property in question is alienable and disposable land of the public
domain.
Even as we affirm the propriety of the MTCs exercise of its delegated jurisdiction,
we find that the lower court erred in granting respondent Corporations application for
original registration in the absence of sufficient proof that the property in question was
alienable and disposable land of the public domain.
The Regalian doctrine dictates that all lands of the public domain belong to the
State.[44] The applicant for land registration has the burden of overcoming the presumption
of State ownership by establishing through incontrovertible evidence that the land sought
to be registered is alienable or disposable based on a positive act of the government.
[45]
We held in Republic v. T.A.N. Properties, Inc. that a CENRO certification is insufficient to
prove the alienable and disposable character of the land sought to be registered. [46] The
applicant must also show sufficient proof that the DENR Secretary has approved the land
classification and released the land in question as alienable and disposable. [47]
Thus, the present rule is that an application for original registration must be
accompanied by (1) a CENRO or PENRO[48]Certification; and (2) a copy of the original
classification approved by the DENR Secretary and certified as a true copy by the legal
custodian of the official records.[49]
Here, respondent Corporation only presented a CENRO certification in support of
its application.[50] Clearly, this falls short of the requirements for original registration.
We therefore remand this case to the court a quo for reception of further
evidence to prove that the property in question forms part of the alienable and disposable
land of the public domain. If respondent Bantigue Point Development Corporation presents
a certified true copy of the original classification approved by the DENR Secretary, the
application for original registration should be granted. If it fails to present sufficient proof
that the land in question is alienable and disposable based on a positive act of the
government, the application should be denied.
WHEREFORE, premises considered, the instant Petition for Review is DENIED. Let
this case be REMANDED to the Municipal Trial Court of San Juan, Batangas, for reception of
evidence to prove that the property sought to be registered is alienable and disposable land
of the public domain. SO ORDERED.
Republic of the Philippines
 SUPREME COURT
Manila

THIRD DIVISION The Reyes family, represented by Mr. Lino Reyes, owned the lot located at No. 1332 Lacson
Street (formerly Gov. Forbes Street), Sampaloc, Manila. Petitioner Lourdes Dela Cruz was
one of their lessees, and she religiously paid rent over a portion of the lot for well over 40
LOURDES DELA CRUZ, G.R. No. 139442 years. Sometime in 1989, a fire struck the premises and destroyed, among others,
Petitioner, petitioners dwelling. After the fire, petitioner and some tenants returned to the said lot and
Present: rebuilt their respective houses; simultaneously, the Reyes family made several verbal
demands on the remaining lessees, including petitioner, to vacate the lot but the latter did
QUISUMBING, J., Chairperson, not comply. On February 21, 1994, petitioner was served a written demand to vacate said
- versus - CARPIO, lot but refused to leave. Despite the setback, the Reyes family did not initiate court
CARPIO MORALES, proceedings against any of the lessees.
TINGA, and
VELASCO, JR., JJ. On November 26, 1996, the disputed lot was sold by the Reyeses to respondent Melba Tan
Te by virtue of the November 26, 1996 Deed of Absolute Sale. Respondent bought the lot in
HON. COURT OF APPEALS Promulgated: question for residential purposes. Despite the sale, petitioner Dela Cruz did not give up the
and MELBA TAN TE, lot.
Respondents. December 6, 2006
On January 14, 1997, petitioner was sent a written demand to relinquish the premises
DECISION which she ignored, prompting respondent Tan Te to initiate conciliation proceedings at the
barangay level. While respondent attempted to settle the dispute by offering financial
assistance, petitioner countered by asking PhP 500,000.00 for her house. Respondent
rejected the counter offer which she considered unconscionable. As a result, a certificate to
VELASCO, JR., J.: file action was issued to Tan Te.
For unto every one that hath shall be given, and he shall have
abundance: but from him that hath not shall be taken away On September 8, 1997, respondent Tan Te filed an ejectment complaint with
even that which he hath. damages before the Manila MeTC, entitled Melba Tan Te v. Lourdes Dela Cruz and docketed
as Civil Case No. 156730-CV. The complaint averred that: (1) the previous owners, the
Holy Bible, Matthew 25:29 Reyeses were in possession and control of the contested lot; (2) on November 26, 1996, the
lot was sold to Tan Te; (3) prior to the sale, Dela Cruz forcibly entered the property with
strategy and/or stealth; (4) the petitioner unlawfully deprived the respondent of physical
possession of the property and continues to do so; and, (5) the respondent sent several
written demands to petitioner to vacate the premises but refused to do so.
The Case
On October 24, 1997, petitioner filed her answer and alleged that: (1) the MeTC
had no jurisdiction over the case because it falls within the jurisdiction of the RTC as more
than one year had elapsed from petitioners forcible entry; (2) she was a rent-paying tenant
protected by PD 20;[2] (3) her lease constituted a legal encumbrance upon the property; and
This petition for review seeks to nullify the April 30, 1999 Decision and the July 16, 1999 (4) the lot was subject of expropriation.
Resolution of the Court of Appeals in CA-G.R. SP No. 49097, which reversed the Decision of
the Manila Regional Trial Court (RTC), Branch 35, in Civil Case No. 98-89174, and reinstated
the Decision of the Manila Metropolitan Trial Court (MeTC), Branch 20, which ordered
petitioner Dela Cruz to vacate the subject lot in favor of respondent Tan Te. [1] The Ruling of the Manila MeTC

The Facts On April 3, 1998, the MeTC decided as follows:


WHEREFORE, judgment is hereby rendered in favor of the
plaintiff as follows:
1. Ordering the defendant and all persons claiming right under
her to vacate the premises situated at 1332 Lacson
Street (formerly Gov. Forbes Street), Sampaloc, Manila and
peacefully return possession thereof to plaintiff;
2. Ordering the defendant to pay the plaintiff the amount of
P360.00 a month from December 1996 to November 1997;
P432.00 a month from December 1997 to November 1998, plus
20% for each subsequent year until the premises shall have
been vacated and turned over to the plaintiff;
3. Ordering the defendant to pay the plaintiff the amount of
P10,000.00 as attorneys fees; and, the costs of the suit.
SO ORDERED.[3]
The Ruling of the Regional Trial Court
Unconvinced, petitioner Dela Cruz appealed the Decision of the MeTC in the
Manila RTC and the appeal was docketed as Civil Case No. 98-89174. On September 1,
1998, the RTC rendered its judgment setting aside the April 3, 1998 Decision of the Manila
MeTC and dismissed respondent Tan Tes Complaint on the ground that it was the RTC and
not the MeTC which had jurisdiction over the subject matter of the case. The RTC believed
that since Tan Tes predecessor-in-interest learned of petitioners intrusion into the lot as
early as February 21, 1994, the ejectment suit should have been filed within the one-year
prescriptive period which expired on February 21, 1995. Since the Reyes did not file the
ejectment suit and respondent Tan Te filed the action only on September 8, 1997, then the
suit had become an accion publiciana cognizable by the RTC.
The Ruling of the Court of Appeals
Disappointed at the turn of events, respondent Tan Te appealed the adverse
Decision to the Court of Appeals (CA) which was docketed as CA-G.R. SP No. 49097. This
time, the CA rendered a Decision in favor of respondent Tan Te reversing the Manila RTC
September 1, 1998 Decision and reinstated the Manila MeTC April 3, 1998 Decision.
Petitioner tried to have the CA reconsider its Decision but was rebutted in its July
16, 1999 Resolution.
Unyielding to the CA Decision and the denial of her request for reconsideration,
petitioner Dela Cruz now seeks legal remedy through the instant Petition for Review on
Certiorari before the Court.
The Issues
Petitioner Dela Cruz claims two (2) reversible errors on the part of the appellate
court, to wit:
A
THE HON. COURT OF APPEALS, WITH DUE RESPECT, WENT
BEYOND THE ISSUES OF THE CASE AND CONTRARY TO THOSE
OF THE TRIAL COURT.
B
THE HON. COURT OF APPEALS, WITH DUE RESPECT, ERRED IN
REVERSING THE DECISION OF THE RTC AND IN EFFECT,
REINSTATING THE DECISION OF THE [MeTC] WHICH IS
CONTRADICTED BY THE EVIDENCE ON RECORD. [4]
The Courts Ruling
Discussion on Rule 45
Before we dwell on the principal issues, a few procedural matters must first be resolved.
Petitioner Dela Cruz asks the Court to review the findings of facts of the CA, a
course of action proscribed by Section 1, Rule 45.Firm is the rule that findings of fact of the
CA are final and conclusive and cannot be reviewed on appeal to this Court provided they
are supported by evidence on record or substantial evidence. Fortunately for petitioner, we
will be liberal with her petition considering that the CAs factual findings contradict those of
the RTC, and there was an asseveration that the court a quo went beyond the issues of the
case. Indeed, these grounds were considered exceptions to the factual issue bar rule.
Secondly, the petition unnecessarily impleaded the CA in violation of Section 4,
Rule 45. We will let this breach pass only because there is a need to entertain the petition
due to the conflicting rulings between the lower courts; however, a repetition may result to
sanctions.
The actual threshold issue is which court, the Manila RTC or the Manila MeTC,
has jurisdiction over the Tan Te ejectment suit.Once the jurisdictional issue is settled, the
heart of the dispute is whether or not respondent is entitled to the ejectment of petitioner
Dela Cruz from the premises.
However, the petition is bereft of merit.
On the Issue of Jurisdiction
Jurisdiction is the power or capacity given by the law to a court or tribunal to
entertain, hear and determine certain controversies. [5] Jurisdiction over the subject matter
is conferred by law.
Section 33 of Chapter III -- on Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts of B. P. No. 129 [6] provides:
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal
Trial Courts and Municipal Circuit Trial Courts in civil
cases.Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts shall exercise:
xxxx
(2) Exclusive original jurisdiction over cases of forcible entry and
unlawful detainer: Provided, That when, in such cases, the
defendant raises the question of ownership in his pleadings and
the question of possession cannot be resolved without deciding
the issue of ownership, the issue of ownership shall be resolved
only to determine the issue of possession.
Thus exclusive, original jurisdiction over ejectment proceedings (accion
interdictal) is lodged with the first level courts. This is clarified in Section 1, Rule 70 of the
1997 Rules of Civil Procedure that embraces an action for forcible entry ( detentacion),
where one is deprived of physical possession of any land or building by means of force,
intimidation, threat, strategy, or stealth. In actions for forcible entry, three (3) requisites
have to be met for the municipal trial court to acquire jurisdiction. First, the plaintiffs must
allege their prior physical possession of the property. Second, they must also assert that
they were deprived of possession either by force, intimidation, threat, strategy, or
stealth. Third, the action must be filed within one (1) year from the time the owners or legal
possessors learned of their deprivation of physical possession of the land or building.
The other kind of ejectment proceeding is unlawful detainer (desahucio), where
one unlawfully withholds possession of the subject property after the expiration or
termination of the right to possess. Here, the issue of rightful possession is the one
decisive; for in such action, the defendant is the party in actual possession and the plaintiffs
cause of action is the termination of the defendants right to continue in possession. [7] The
essential requisites of unlawful detainer are: (1) the fact of lease by virtue of a contract
express or implied; (2) the expiration or termination of the possessors right to hold
possession; (3) withholding by the lessee of the possession of the land or building after
expiration or termination of the right to possession; (4) letter of demand upon lessee to pay
the rental or comply with the terms of the lease and vacate the premises; and (5) the action
must be filed within one (1) year from date of last demand received by the defendant.
A person who wants to recover physical possession of his real property will prefer
an ejectment suit because it is governed by the Rule on Summary Procedure which allows
immediate execution of the judgment under Section 19, Rule 70 unless the defendant
perfects an appeal in the RTC and complies with the requirements to stay execution; all of
which are nevertheless beneficial to the interests of the lot owner or the holder of the right
of possession.
On the other hand, Section 19, of Chapter II of B.P. No. 129 on Regional Trial
Courts provides:
Section 19. Jurisdiction in civil cases.Regional Trial Courts shall
exercise exclusive original jurisdiction:
xxxx
(2) In all civil actions which involve the title to, or possession of,
real property, or any interest therein, except actions for forcible
entry into and unlawful detainer of lands or buildings, original
jurisdiction over which is conferred upon Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts.
Two (2) kinds of action to recover possession of real property which fall under the
jurisdiction of the RTC are: (1) the plenary action for the recovery of the real right of
possession (accion publiciana) when the dispossession has lasted for more than one year or
when the action was filed more than one (1) year from date of the last demand received by
the lessee or defendant; and (2) an action for the recovery of ownership (accion
reivindicatoria) which includes the recovery of possession.
These actions are governed by the regular rules of procedure and adjudication
takes a longer period than the summary ejectment suit.
To determine whether a complaint for recovery of possession falls under the
jurisdiction of the MeTC (first level court) or the RTC (second level court), we are compelled
to go over the allegations of the complaint. The general rule is that what determines the
nature of the action and the court that has jurisdiction over the case are the allegations in
the complaint. These cannot be made to depend upon the defenses set up in the answer or
pleadings filed by the defendant.[8]
This general rule however admits exceptions. In Ignacio v. CFI of Bulacan, it was
held that while the allegations in the complaint make out a case for forcible entry, where
tenancy is averred by way of defense and is proved to be the real issue, the case should be
dismissed for lack of jurisdiction as the case should properly be filed with the then Court of
Agrarian Relations.[9]
The cause of action in a complaint is not what the designation of the complaint
states, but what the allegations in the body of the complaint define and describe. The
designation or caption is not controlling, more than the allegations in the complaint
themselves are, for it is not even an indispensable part of the complaint. [10]
Let us refer to the allegations of the complaint filed in the Manila MeTC in Civil
Case No. 98-89174, which we quote verbatim:
3. That plaintiff is the absolute and registered owner of a parcel
of land located at No. 1332, Lacson Street, Sampaloc, Manila
now being occupied by defendant;
4. That plaintiff purchased the above-said parcel of land
together with its improvements from the legal heirs of the late
EMERLINDA DIMAYUGA REYES on November 26, 1996, under
and by virtue of a Deed of Absolute Sale x x x;
5. That pursuant to the said deed of sale, the title to the land
and all its improvements was transferred in plaintiffs name as
evidenced by Transfer Certificate of Title No. 233273 issued by
the Register of Deeds of Manila on April 22, 1997 x x x;
6. That prior to said sale, the previous owners, represented by
Mr. Lino Reyes, husband of the said deceased Emerlinda D.
Reyes and the administrator of her estate, was in possession
and control of the property subject of this complaint;
7. That also prior to said sale, defendant, without the
knowledge and consent of Mr. Lino Reyes, surreptitiously and
by means of stealth and strategy entered, used and occupied
the said premises thus depriving the former of rightful
possession thereof;
8. That on February 21, 1994, Mr. Lino Reyes, through Atty.
Alejo Sedico, his lawyer, furnished the defendants a letter
formally demanding that defendant vacate the premises x x x;
9. That, however, defendant failed and refused to vacate
despite just and legal demand by Mr. Lino Reyes;
10. That after the sale to plaintiff of said premises, plaintiff has
several times demanded of defendants to vacate the premises,
the last demand having been made on them personally and in
writing on January 14, 1997 x x x;
11. That defendant failed and refused and still fails and refuses
to vacate the premises without legal cause or justifiable reason
whatsoever;[11]
The answer of petitioner averred:
4. The Court has no jurisdiction over the case, having been filed
by plaintiff more than the reglementary one year period to
commence forcible entry case, which is reckoned from the date
of the alleged unlawful entry of defendant by the use of stealth
and strategy into the premises;
5. For more than four decades now, defendant has been and
still is a rent-paying tenant of the subject land occupied by their
residential house, dating back to the original owner-lessor, the
Dimayuga family. Her lease with no definite duration,
commenced with a rent at P60.00 per month until it was
gradually increased in the ensuing years. As of November 1996,
it stood at P300.00 a month;
6. In this circumstances [sic], defendant enjoys the protective
mantle of P.D. 20 and the subsequent rental control status
against dispossession. She cannot be ejected other than for
causes prescribed under B.P. Blg. 25. Further, in case of sale of
the land, she has the right of first refusal under the express
provision of P.D. 1571;
 7. Throughout the years of her tenancy, defendant has been
updated in her rental payment until the collector of the original
owner-lessor no longer came around as she has done
theretofore;
7.1. As a result, she was compelled to file a petition
for consignation of rent before the Metropolitan
Trial Court of Manila;
8. A bona fide tenant within the ambit if [sic] P.D. 20 and the
subsequent rental control status, including B.P. Blg. 25, under its
terms, cannot be ousted on a plea of expiration of her monthly
lease;
9. Her lease constitutes a legal encumbrance upon the property
of the lessor/owner and binds the latters successor-in-interest
who is under obligation to respect it;
10. The land at bench is the subject of a pending expropriation
proceedings;
11. Plaintiff being a married woman cannot sue or be sued
without being joined by her husband; [12]
Undeniably, the aforequoted allegations of the complaint are vague and iffy in revealing the
nature of the action for ejectment.
The allegations in the complaint show that prior to the sale by Lino Reyes, representing the
estate of his wife Emerlinda Reyes, he was in possession and control of the subject lot but
were deprived of said possession when petitioner, by means of stealth and strategy,
entered and occupied the same lot. These circumstances imply that he had prior physical
possession of the subject lot and can make up a forcible entry complaint.
On the other hand, the allegation that petitioner Dela Cruz was served several
demands to leave the premises but refused to do so would seem to indicate an action for
unlawful detainer since a written demand is not necessary in an action for forcible entry. It
is a fact that the MeTC complaint was filed on September 8, 1997 within one (1) year from
the date of the last written demand upon petitioner Dela Cruz on January 14, 1997.
As previously discussed, the settled rule is jurisdiction is based on the allegations in the
initiatory pleading and the defenses in the answer are deemed irrelevant and immaterial in
its determination. However, we relax the rule and consider the complaint at bar as an
exception in view of the special and unique circumstances present. First, as in Ignacio v. CFI
of Bulacan,[13] the defense of lack of jurisdiction was raised in the answer wherein there was
an admission that petitioner Dela Cruz was a lessee of the former owners of the lot, the
Reyeses, prior to the sale to respondent Tan Te. The fact that petitioner was a tenant of the
predecessors-in-interest of respondent Tan Te is material to the determination of
jurisdiction. Since this is a judicial admission against the interest of petitioner, such
admission can be considered in determining jurisdiction. Second, the ejectment suit was
filed with the Manila MeTC on September 8, 1997 or more than nine (9) years ago. To
dismiss the complaint would be a serious blow to the effective dispensation of justice as the
parties will start anew and incur additional legal expenses after having litigated for a long
time.Equitable justice dictates that allegations in the answer should be considered to aid in
arriving at the real nature of the action. Lastly, Section 6, Rule 1 of the Rules of Court clearly
empowers the Court to construe Rule 70 and other pertinent procedural issuances in a
liberal manner to promote just, speedy, and inexpensive disposition of every action and
proceeding.
Based on the complaint and the answer, it is apparent that the Tan Te ejectment
complaint is after all a complaint for unlawful detainer. It was admitted that petitioner Dela
Cruz was a lessee of the Reyeses for around four (4) decades. Thus, initially petitioner as
lessee is the legal possessor of the subject lot by virtue of a contract of lease. When fire
destroyed her house, the Reyeses considered the lease terminated; but petitioner Dela
Cruz persisted in returning to the lot and occupied it by strategy and stealth without the
consent of the owners. The Reyeses however tolerated the continued occupancy of the lot
by petitioner. Thus, when the lot was sold to respondent Tan Te, the rights of the Reyeses,
with respect to the lot, were transferred to their subrogee, respondent Tan Te, who for a
time also tolerated the stay of petitioner until she decided to eject the latter by sending
several demands, the last being the January 14, 1997 letter of demand. Since the action
was filed with the MeTC on September 8, 1997, the action was instituted well within the
one (1) year period reckoned from January 14, 1997. Hence, the nature of the complaint is
one of unlawful detainer and the Manila MeTC had jurisdiction over the complaint.
Thus, an ejectment complaint based on possession by tolerance of the owner,
like the Tan Te complaint, is a specie of unlawful detainer cases.
As early as 1913, case law introduced the concept of possession by tolerance in
ejectment cases as follows:
It is true that the landlord might, upon the failure of the tenant
to pay the stipulated rents, consider the contract broken and
demand immediate possession of the rented property, thus
converting a legal possession into illegal possession. Upon the
other hand, however, the landlord might conclude to give the
tenant credit for the payment of the rents and allow him to
continue indefinitely in the possession of the property. In other
words, the landlord might choose to give the tenant credit from
month to month or from year to year for the payment of their
rent, relying upon his honesty of his financial ability to pay the
same. During such period the tenant would not be in illegal
possession of the property and the landlord could not maintain
an action of desahucio until after he had taken steps to convert
the legal possession into illegal possession. A mere failure to
pay the rent in accordance with the contract would justify the
landlord, after the legal notice, in bringing an action of
desahucio. The landlord might, however, elect to recognize the
contract as still in force and sue for the sums due under it. It
would seem to be clear that the landlord might sue for the
rents due and [unpaid, without electing to terminate the
 contract of tenancy;] [w]hether he can declare the contract of
tenancy broken and sue in an action desahucio for the
possession of the property and in a separate actions for the
rents due and damages, etc.[14]
The concept of possession by tolerance in unlawful detainer cases was further
refined and applied in pertinent cases submitted for decision by 1966. The rule was
articulated as follows:
Where despite the lessees failure to pay rent after the first
demand, the lessor did not choose to bring an action in court
but suffered the lessee to continue occupying the land for
nearly two years, after which the lessor made a second
demand, the one-year period for bringing the detainer case in
the justice of the peace court should be counted not from the
day the lessee refused the first demand for payment of rent but
from the time the second demand for rents and surrender of
possession was not complied with.[15]
In Calubayan v. Pascual, a case usually cited in subsequent decisions on
ejectment, the concept of possession by tolerance was further elucidated as follows:
In allowing several years to pass without requiring the occupant
to vacate the premises nor filing an action to eject
him, plaintiffs have acquiesced to defendants possession and
use of the premises. It has been held that a person who
occupies the land of another at the latters tolerance or
permission, without any contract between them, is necessarily
bound by an implied promise that he will vacate upon
demand, failing which a summary action for ejectment is the
proper remedy against them. The status of the defendant is
analogous to that of a lessee or tenant whose term of lease has
expired but whose occupancy continued by tolerance of the
owner. In such a case, the unlawful deprivation or withholding
of possession is to be counted from the date of the demand to
vacate.[16] (Emphasis supplied.)
From the foregoing jurisprudence, it is unequivocal that petitioners possession
after she intruded into the lot after the firewas by tolerance or leniency of the Reyeses and
hence, the action is properly an unlawful detainer case falling under the jurisdiction of the
Manila MeTC.
Even if we concede that it is the RTC and not the MeTC that has jurisdiction over
the Tan Te complaint, following the reasoning that neither respondent nor her predecessor-
in-interest filed an ejectment suit within one (1) year from February 21, 1994 when the
Reyeses knew of the unlawful entry of petitioner, and hence, the complaint is transformed
into an accion publiciana, the Court deems it fair and just to suspend its rules in order to
render efficient, effective, and expeditious justice considering the nine (9) year pendency of
the ejectment suit. More importantly, if there was uncertainty on the issue of jurisdiction
that arose from the averments of the complaint, the same cannot be attributed to
respondent Tan Te but to her counsel who could have been confused as to the actual
nature of the ejectment suit. The lawyers apparent imprecise language used in the
preparation of the complaint without any participation on the part of Tan Te is sufficient
special or compelling reason for the grant of relief.
The case of Barnes v. Padilla[17] elucidates the rationale behind the exercise by this Court of
the power to relax, or even suspend, the application of the rules of procedure:
Let it be emphasized that the rules of procedure should be
viewed as mere tools designed to facilitate the attainment of
justice. Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote
substantial justice, must always be eschewed. Even the Rules of
Court reflect this principle. The power to suspend or even
disregard rules can be so pervasive and compelling as to alter
even that which this Court itself has already declared to be final
x x x.
The emerging trend in the rulings of this Court is to afford every
party litigant the amplest opportunity for the proper and just
determination of his cause, free from the constraints of
technicalities. Time and again, this Court has consistently held
that rules must not be applied rigidly so as not to override
substantial justice.[18]
Moreover, Section 8, Rule 40 authorizes the RTCin case of affirmance of an order
of the municipal trial court dismissing a case without trial on the merits and the ground of
dismissal is lack of jurisdiction over the subject matterto try the case on the merits as if the
case was originally filed with it if the RTC has jurisdiction over the case. In the same vein,
this Court, in the exercise of its rule-making power, can suspend its rules with respect to
this particular case (pro hac vice), even if initially, the MeTC did not have jurisdiction over
the ejectment suit, and decide to assume jurisdiction over it in order to promptly resolve
the dispute.
The issue of jurisdiction settled, we now scrutinize the main issue.
At the heart of every ejectment suit is the issue of who is entitled to physical
possession of the lot or possession de facto.

We rule in favor of respondent Tan Te for the following reasons:
1. Petitioner admitted in her Answer that she was a rent-paying tenant of the Reyeses,
predecessors-in-interest of respondent Tan Te. As such, she recognized the ownership of
the lot by respondent, which includes the right of possession.
It readily appears that this issue was not presented before the Court of Appeals in
CA-G.R. SP No. 49097 despite the fact that the respondents petition was filed on
September 25, 1998, six months after the ordinance was passed. Thus, this issue is
proscribed as are all issues raised for the first time before the Court are proscribed.
Even granting for the sake of argument that we entertain the issue, we rule that
the intended expropriation of respondents lot (TCT No. 233273) by the city government
of Manila will not affect the resolution of this petition. For one thing, the issue can be
raised by petitioner in the appropriate legal proceeding. Secondly, the intended
expropriation might not even be implemented since it is clear from the ordinance that the
City Mayor will still locate available funds for project, meaning the said expense is not a
regular item in the budget.

2. After the fire raged over the structures on the subject lot in late 1989 the contracts of
lease expired, as a result of which Lino Reyes demanded that all occupants, including
petitioner, vacate the lot but the latter refused to abandon the premises. During the
duration of the lease, petitioners possession was legal but it became unlawful after the fire
when the lease contracts were deemed terminated and demands were made for the
tenants to return possession of the lot.
WHEREFORE, this petition is DENIED for lack of merit. The April 30, 1999 Decision
of the Court of Appeals reinstating the April 3, 1998 MeTC Decision in Civil Case No.
156730-CV and the July 16, 1999 Resolution in CA-G.R. SP No. 49097 are
hereby AFFIRMED IN TOTO. No costs. SO ORDERED.

3. Petitioners possession is one by the Reyeses tolerance and generosity and later by
respondent Tan Tes.

Petitioner fully knows that her stay in the subject lot is at the leniency and
magnanimity of Mr. Lino Reyes and later of respondent Tan Te; and her acquiescence to
such use of the lot carries with it an implicit and assumed commitment that she would
leave the premises the moment it is needed by the owner. When respondent Tan Te made a
last, written demand on January 14, 1997and petitioner breached her promise to leave
upon demand, she lost her right to the physical possession of the lot. Thus, respondent Tan
Te should now be allowed to occupy her lot for residential purposes, a dream that will
finally be realized after nine (9) years of litigation. Republic of the Philippines

Petitioner raises the ancillary issue that on March 15, 1998, the Manila City Supreme Court
Council passed and approved Ordinance No. 7951:
Manila
[a]uthorizing the Manila City Mayor to acquire either by
negotiation or expropriation certain parcels of land covered by
Transfer Certificates of Title Nos. 233273, 175106 and 140471,
containing an area of One Thousand Four Hundred Twenty Five SECOND DIVISION
(1,425) square meters, located at Maria Clara and Governor
Forbes Streets, Sta. Cruz, Manila, for low cost housing and
award to actual bonafide residents thereat and further CELIA S. VDA. DE HERRERA,Petitioner, G.R. No. 170251
authorizing the City Mayor to avail for that purpose any
available funds of the city and other existing funding facilities Present:
from other government agencies x x x.[19]
 The COSLAP, in a Resolution [3] dated December 6, 1999, ruled that respondents
CARPIO, J., Chairperson, have a rightful claim over the subject property.Consequently, a motion for reconsideration
and/or reopening of the proceedings was filed by Alfredo. The COSLAP, in an Order[4]dated
- versus - NACHURA, August 21, 2002, denied the motion and reiterated its Order dated December 6, 1999.
Aggrieved, petitioner Celia S. Vda. de Herrera, as the surviving spouse of Alfredo, filed a
PERALTA, petition for certiorari with the CA.[5] The CA, Twelfth Division, in its Decision dated April 28,
2005, dismissed the petition and affirmed the resolution of the COSLAP. The CA ruled that
ABAD, and the COSLAP has exclusive jurisdiction over the present case and, even assuming that the
COSLAP has no jurisdiction over the land dispute of the parties herein, petitioner is already
MENDOZA, JJ. estopped from raising the issue of jurisdiction because Alfredo failed to raise the issue of
lack of jurisdiction before the COSLAP and he actively participated in the proceedings
EMELITA BERNARDO, EVELYN BERNARDO as Guardian of Promulgated: before the said body. Petitioner filed a motion for reconsideration, which was denied by the
CA in a Resolution dated October 17, 2005.
Erlyn, Crislyn and Crisanto Bernardo,*
June 1, 2011
Hence, petitioner elevated the case to this Court via Petition for Review on Certiorari under
Respondents.
Rule 45 of the Rules of Court, with the following issues:
I
DECISION
WHETHER OR NOT COSLAP HAD JURISDICTION TO DECIDE
THE QUESTION OF OWNERSHIP.

II
PERALTA, J.:
WHETHER OR NOT THE ISSUANCE OF A TORRENS TITLE IN
This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to THE NAME OF THE PETITIONER'S HUSBAND IN 2002
reverse and set aside the Decision [1] and Resolution[2] of the Court of Appeals (CA) in CA- RENDERED THE INSTANT CONTROVERSY ON THE ISSUE OF
G.R. SP No. 73674. OWNERSHIP OVER THE SUBJECT PROPERTY MOOT AND
ACADEMIC.[6]

Petitioner averred that the COSLAP has no adjudicatory powers to settle and
The antecedents are as follows:
decide the question of ownership over the subject land. Further, the present case cannot
be classified as explosive in nature as the parties never resorted to violence in resolving the
Respondents heirs of Crisanto S. Bernardo, represented by Emelita Bernardo, filed
controversy. Petitioner submits that it is the Regional Trial Court which has jurisdiction over
a complaint before the Commission on the Settlement of Land Problems (COSLAP) against
controversies relative to ownership of the subject property.
Alfredo Herrera (Alfredo) for interference, disturbance, unlawful claim, harassment and
trespassing over a portion of a parcel of land situated at Barangay Dalig, Cardona, Rizal,
Respondents, on the other hand, alleged that the COSLAP has jurisdiction over the present
with an area of 7,993 square meters. The complaint was docketed as COSLAP Case No. 99-
case. Further, respondents argued that petitioner is estopped from questioning the
221.
jurisdiction of the COSLAP by reason of laches due to Alfredo's active participation in the
actual proceedings before the COSLAP. Respondents said that Alfredo's filing of the Motion
Respondents claimed that said parcel of land was originally owned by their
for Reconsideration and/or Reopening of the proceedings before the COSLAP is indicative of
predecessor-in-interest, Crisanto Bernardo, and was later on acquired by Crisanto S.
his conformity with the questioned resolution of the COSLAP.
Bernardo. The parcel of land was later on covered by Tax Declaration No. CD-006-0828
under the name of the respondents.
The main issue for our resolution is whether the COSLAP has jurisdiction to
Petitioner, on the other hand, alleged that the portion of the subject property decide the question of ownership between the parties.
consisting of about 700 square meters was bought by Diosdado Herrera, Alfredo's father,
from a certain Domingo Villaran. Upon the death of Diosdado Herrera, Alfredo inherited
the 700-square-meter lot.

The petition is meritorious.
The COSLAP was created by virtue of Executive Order (E.O.) No. 561, issued on
September 21, 1979 by then President Ferdinand E. Marcos. It is an administrative body
established as a means of providing a mechanism for the expeditious settlement of land
problems among small settlers, landowners and members of the cultural minorities to avoid
social unrest.
Section 3 of E.O. No. 561 specifically enumerates the instances when the COSLAP
can exercise its adjudicatory functions:
Section 3. Powers and Functions. - The Commission shall have
the following powers and functions:
xxxx
2. Refer and follow up for immediate
action by the agency having appropriate jurisdiction
any land problem or dispute referred to the
Commission: Provided, That the Commission may, in
the following cases, assume jurisdiction and
resolve land problems or disputes which are
critical and explosive in nature considering, for
instance, the large number of the parties involved,
the presence or emergence of social tension or
unrest, or other similar critical situations requiring
immediate action:
(a) Between occupants/squatters
and pasture lease agreement holders or
timber concessionaires;
(b) Between occupants/squatters
and government reservation grantees;
(c) Between occupants/squatters
and public land claimants or applicants;
(d) Petitions for classification,
release and/or subdivision of lands of the
public domain; and
(e) Other similar land problems of
grave urgency and magnitude.[7]
Administrative agencies, like the COSLAP, are tribunals of limited jurisdiction that
can only wield powers which are specifically granted to it by its enabling statute. [8] Under
Section 3 of E.O. No. 561, the COSLAP has two options in acting on a land dispute or
problem lodged before it, to wit: (a) refer the matter to the agency having appropriate
jurisdiction for settlement/resolution; or (b) assume jurisdiction if the matter is one of
those enumerated in paragraph 2 (a) to (e) of the law, if such case is critical and explosive in
nature, taking into account the large number of parties involved, the presence or
emergence of social unrest, or other similar critical situations requiring immediate action.
In resolving whether to assume jurisdiction over a case or to refer the same to the
particular agency concerned, the COSLAP has to consider the nature or classification of the
land involved, the parties to the case, the nature of the questions raised, and the need for
immediate and urgent action thereon to prevent injuries to persons and damage or
destruction to property. The law does not vest jurisdiction on the COSLAP over any land
dispute or problem.[9]
In the instant case, the COSLAP has no jurisdiction over the subject matter of
respondents' complaint. The present case does not fall under any of the cases enumerated
under Section 3, paragraph 2 (a) to (e) of E.O. No. 561. The dispute between the parties is
not critical and explosive in nature, nor does it involve a large number of parties, nor is
there a presence or emergence of social tension or unrest. It can also hardly be
characterized as involving a critical situation that requires immediate action.
It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer
or government agency, over the nature and subject matter of a petition or complaint is
determined by the material allegations therein and the character of the relief prayed for,
irrespective of whether the petitioner or complainant is entitled to any or all such reliefs. [10]
Respondents' cause of action before the COSLAP pertains to their claim of
ownership over the subject property, which is an action involving title to or possession of
real property, or any interest therein, [11] the jurisdiction of which is vested with the Regional
Trial Courts or the Municipal Trial Courts depending on the assessed value of the subject
property.[12]
The case of Banaga v. Commission on the Settlement of Land Problems, [13] applied
by the CA and invoked by the respondents, is inapplicable to the present
case. Banaga involved parties with conflicting free patent applications over a parcel of
public land and pending with the Bureau of Lands. Because of the Bureau of Land's inaction
within a considerable period of time on the claims and protests of the parties and to
conduct an investigation, the COSLAP assumed jurisdiction and resolved the conflicting
claims of the parties. The Court held that since the dispute involved a parcel of public land
on a free patent issue, the COSLAP had jurisdiction over that case. In the present case,
there is no showing that the parties have conflicting free patent applications over the
subject parcel of land that would justify the exercise of the COSLAP's jurisdiction.
Since the COSLAP has no jurisdiction over the action, all the proceedings therein,
including the decision rendered, are null and void. [14] A judgment issued by a quasi-judicial
body without jurisdiction is void. It cannot be the source of any right or create any
obligation.[15] All acts performed pursuant to it and all claims emanating from it have no
legal effect.[16] Having no legal effect, the situation is the same as it would be as if there was
no judgment at all. It leaves the parties in the position they were before the proceedings. [17]
Respondents allegation that petitioner is estopped from questioning the
jurisdiction of the COSLAP by reason of laches does not hold water. Petitioner is not
estopped from raising the jurisdictional issue, because it may be raised at any stage of the
proceedings, even on appeal, and is not lost by waiver or by estoppel. [18] The fact that a
person attempts to invoke unauthorized jurisdiction of a court does not estop him from
thereafter challenging its jurisdiction over the subject matter, since such jurisdiction must
arise by law and not by mere consent of the parties.[19]
In Regalado v. Go,[20] the Court held that laches should be clearly present for
the Sibonghanoy[21] doctrine to apply, thus:
Laches is defined as the "failure or neglect for an
unreasonable and unexplained length of time, to do that which, by
exercising due diligence, could or should have been done earlier, it is
negligence or omission to assert a right within a reasonable length of
time, warranting a presumption that the party entitled to assert it
either has abandoned it or declined to assert it.
The ruling in People v. Regalario that was based on the
landmark doctrine enunciated in Tijam v. Sibonghanoy on the matter of
jurisdiction by estoppel is the exception rather than the rule. Estoppel
by laches may be invoked to bar the issue of lack of jurisdiction only in
cases in which the factual milieu is analogous to that in the cited case.
In such controversies, laches should have been clearly present; that is,
lack of jurisdiction must have been raised so belatedly as to warrant the
presumption that the party entitled to assert it had abandoned or
declined to assert it.
In Sibonghanoy, the defense of lack of jurisdiction was raised
for the first time in a motion to dismiss filed by the Surety almost 15
years after the questioned ruling had been rendered. At several stages
of the proceedings, in the court a quo as well as in the Court of Appeals,
the Surety invoked the jurisdiction of the said courts to obtain
affirmative relief and submitted its case for final adjudication on the
merits. It was only when the adverse decision was rendered by the
Court of Appeals that it finally woke up to raise the question of
jurisdiction.[22]
The factual settings attendant in Sibonghanoy are not present in the case at bar
that would justify the application of estoppel by laches against the petitioner. Here,
petitioner assailed the jurisdiction of the COSLAP when she appealed the case to the CA
and at that time, no considerable period had yet elapsed for laches to attach. Therefore,
petitioner is not estopped from assailing the jurisdiction of the COSLAP. Additionally, no
laches will even attach because the judgment is null and void for want of jurisdiction. [23]
Anent the issuance of OCT No. M-10991 in favor of petitioners husband Alfredo
Herrerra in 2002, respondents alleged that there was fraud, misrepresentation and bad
faith in the issuance thereof. Thus, respondents are now questioning the legality of OCT No.
M-10991, an issue which this Court cannot pass upon in this present petition. It is a rule
that the validity of a Torrens title cannot be assailed collaterally. [24] Section 48 of
Presidential Decree No. 1529 provides that:
Certificate not Subject to Collateral Attack. A certificate of title shall
not be subject to collateral attack. It cannot be altered, modified, or
canceled, except in a direct proceeding in accordance with law.
The issue of the validity of the Title was brought only during the proceedings
before this Court as said title was issued in the name of petitioner's husband only during
the pendency of the appeal before the CA. The issue on the validity of title, i.e., whether or
not it was fraudulently issued, can only be raised in an action expressly instituted for that
purpose[25] and the present appeal before us, is simply not the direct proceeding
contemplated by law.
WHEREFORE, the petition is GRANTED. The Decision and the Resolution of the
Court of Appeals, dated April 28, 2005 and October 17, 2005, respectively, in CA-G.R. SP No.
73674 are REVERSED and SET ASIDE. The Decision and Order of the Commission on the
Settlement of Land Problems, dated December 6, 1999 and August 21, 2002, respectively,
in COSLAP Case No. 99-221, are declared NULL and VOID for having been issued without
jurisdiction. SO ORDERED.
Republic of the Philippines
Supreme Court
Baguio City
FIRST DIVISION
ADDITION HILLS MANDALUYONG CIVIC & G.R. No. 175039
SOCIAL ORGANIZATION, INC.,
 Petitioner, Present: City with an area of 6,148 square meters, more or less, covered by
Transfer Certificate of Title (TCT) No. 12768, issued by the Register of
Deeds for Mandaluyong City.
VELASCO, JR.,*

- versus -
MEGAWORLD PROPERTIES & HOLDINGS,
INC., WILFREDO I. IMPERIAL, in his
capacity as Director, NCR, and HOUSING
AND LAND USE REGULATORY BOARD,
DEPARTMENT OF NATURAL RESOURCES,
Respondents.
LEONARDO-DE CASTRO,
Sometime in 1994, [private respondent] MEGAWORLD conceptualized
Acting Chairperson, the construction of a residential condominium complex on the said
parcel of land called the Wack-Wack Heights Condominium consisting
BERSAMIN,
of a cluster of six (6) four-storey buildings and one (1) seventeen (17)
DEL CASTILLO, and storey tower.
VILLARAMA, JR., JJ.
[Private respondent] MEGAWORLD thereafter secured the necessary
clearances, licenses and permits for the condominium project,
including: (1) a CLV, issued on October 25, 1994, and a Development
Permit, issued on November 11, 1994, both by the [public respondent]
HLURB; (2) an ECC, issued on March 15, 1995, by the Department of
Environment and Natural Resources (DENR); (3) a Building Permit,
Promulgated:
issued on February 3, 1995, by the Office of the Building Official of
Mandaluyong City; and (4) a Barangay Clearance dated September 29,
1994, from the office of the Barangay Chairman of Addition Hills.

April 18, 2012

DECISION
LEONARDO-DE CASTRO, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure of the Decision[1] dated May 16, 2006 as well as the Resolution [2] dated October
5, 2006 of the Court of Appeals in CA-G.R. CV No. 63439, entitled ADDITION HILLS
MANDALUYONG CIVIC & SOCIAL ORGANIZATION INC. vs. MEGAWORLD PROPERTIES &
HOLDINGS, INC., WILFREDO I. IMPERIAL in his capacity as Director, NCR, and HOUSING AND
LAND USE REGULATORY BOARD, DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES. In effect, the appellate courts issuances reversed and set aside the
Decision[3] dated September 10, 1998 rendered by the Regional Trial Court (RTC) of Pasig
City, Branch 158 in Civil Case No. 65171.
Thereafter, construction of the condominium project began, but on
June 30, 1995, the plaintiff-appellee AHMCSO filed a complaint before
the Regional Trial Court of Pasig City, Branch 158, docketed as Civil Case
No. 65171, for yo (sic) annul the Building Permit, CLV, ECC and
Development Permit granted to MEGAWORLD; to prohibit the issuance
to MEGAWORLD of Certificate of Registration and License to Sell
Condominium Units; and to permanently enjoin local and national
building officials from issuing licenses and permits to MEGAWORLD.
On July 20, 1995, [private respondent] MEGAWORLD filed a Motion to
Dismiss the case for lack of cause of action and that jurisdiction over
the case was with the [public respondent] HLURB and not with the
regular courts.

The facts of this case, as narrated in the assailed May 16, 2006 Decision of the On July 24, 1994, the RTC denied the motion to dismiss filed by [private
Court of Appeals, are as follows:
respondent] MEGAWORLD.
[Private respondent] MEGAWORLD was the registered owner of a parcel
On August 3, 1995, [private respondent] MEGAWORLD filed its Answer.
of land located along Lee Street, Barangay Addition Hills, Mandaluyong
 On November 15, 1995, pre-trial was commenced.
Thereafter, trial on the merits ensued. [4]
The trial court rendered a Decision dated September 10, 1998 in favor of petitioner, the
dispositive portion of which reads:
WHEREFORE, in view of the foregoing, the Certificate of
Locational Viability, the Development Permit and the Certificate of
Registration and License to Sell Condominium Units, all issued by
defendant Wilfredo I. Imperial, National Capital Region Director of the
Housing and Land Use Regulatory Boad (HLURB-NCR) are all declared
void and of no effect. The same goes for the Building Permit issued by
defendant Francisco Mapalo of Mandaluyong City. In turn, defendant
Megaworld Properties and Holdings Inc. is directed to rectify its Wack
Wack Heights Project for it to conform to the requirements of an R-2
zone of Mandaluyong City and of the Metro Manila Zoning Ordinance
81-01.
Costs against these defendants.[5]
Private respondent appealed to the Court of Appeals which issued the assailed
May 16, 2006 Decision which reversed and set aside the aforementioned trial court ruling,
the dispositive portion of which reads:
WHEREFORE, premises considered, the September 10, 1998
Decision of the Regional Trial Court of Pasig City, Branch 158, rendered
in Civil Case No. 65171 is hereby REVERSED and SET ASIDE and a new
one entered DISMISSING the complaint.[6]
As can be expected, petitioner moved for reconsideration; however, the Court of
Appeals denied the motion in its assailed October 5, 2006 Resolution.
Hence, the petitioner filed the instant petition and submitted the following issues
for consideration:
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT FOUND
THAT PETITIONER FAILED TO EXHAUST ADMINISTRATIVE REMEDIES
BEFORE SEEKING JUDICIAL INTERVENTION FROM THE COURTS.
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT FOUND
THAT THE CASE FILED BEFORE AND DECIDED BY THE REGIONAL TRIAL
COURT OF PASIG, BRANCH 158, DOES NOT FALL UNDER ANY ONE OF
THE EXCEPTIONS TO THE RULE ON EXHAUSTION OF ADMINISTRATIVE
REMEDIES.
WHETHER OR NOT THE COURT OF APPEALS (The Court) ERRED WHEN IT
FOUND THAT PETITIONER FAILED TO EXHAUST ADMINISTRATIVE
REMEDIES BEFORE SEEKING JUDICIAL INTERVENTION FROM THE
COURTS.
WHETHER OR NOT THE COURT OF APPEALS (The Court) ERRED WHEN IT
CONCLUDED THAT THE HLURB HAD JURISDICTION OVER ACTIONS TO
ANNUL CERTIFICATES OF LOCATIONAL VIABILITY AND DEVELOPMENT
PERMITS.[7]
On the other hand, private respondent put forth the following issues in its
Memorandum[8]:
I
WHETHER OR NOT THE PETITION FOR REVIEW IS FATALLY DEFECTIVE
FOR BEING IMPROPERLY VERIFIED.
II
WHETHER OR NOT THE COURT OF APPEALS CORRECTLY ANNULLED AND
SET ASIDE THE TRIAL COURTS DECISION AND DISMISSED THE
COMPLAINT FOR PETITIONERS FAILURE TO EXHAUST ADMINISTRATIVE
REMEDIES.
III
WHETHER OR NOT THE DECISION OF THE TRIAL COURT IS CONTRARY
TO LAW AND THE FACTS.
 A. WHETHER OR NOT THE TRIAL COURT ERRED IN HOLDING
THAT THE CLV WAS IMPROPERLY AND IRREGULARLY ISSUED.
1. WHETHER OR NOT THE TRIAL COURT
ERRED IN HOLDING THAT HLURB HAS NO POWER
TO GRANT AN EXCEPTION OR VARIANCE TO
REQUIREMENTS OF METRO MANILA COMMISSION
ORDINANCE NO. 81-01.
2. WHETHER OR NOT THE TRIAL COURT
ERRED IN HOLDING THAT THE PROJECT DID NOT
MEET THE REQUIREMENTS OF SECTION 3(B),
ARTICLE VII OF METRO MANILA COMMISSION
ORDINANCE NO. 81-01 TO QUALIFY FOR AN
EXCEPTION OR DEVIATION.
B. WHETHER OR NOT THE TRIAL COURT ERRED IN HOLDING
THAT THE DEVELOPMENT PERMIT WAS IMPROPERLY AND
IRREGULARLY ISSUED.
C. WHETHER OR NOT THE TRIAL COURT ERRED IN HOLDING
THAT THE PROJECT DEPRIVES THE ADJACENT PROPERTIES OF
AIR.[9]
We find the petition to be without merit.
At the outset, the parties in their various pleadings discuss issues, although
ostensibly legal, actually require the Court to make findings of fact. It is long settled, by law
and jurisprudence, that the Court is not a trier of facts. [10] Therefore, the only relevant issue
to be resolved in this case is whether or not the remedy sought by the petitioner in the trial
court is in violation of the legal principle of the exhaustion of administrative remedies.
We have consistently declared that the doctrine of exhaustion of administrative
remedies is a cornerstone of our judicial system. The thrust of the rule is that courts must
allow administrative agencies to carry out their functions and discharge their
responsibilities within the specialized areas of their respective competence. The rationale
for this doctrine is obvious. It entails lesser expenses and provides for the speedier
resolution of controversies. Comity and convenience also impel courts of justice to shy
away from a dispute until the system of administrative redress has been completed. [11]
In the case of Republic v. Lacap,[12] we expounded on the doctrine of exhaustion
of administrative remedies and the related doctrine of primary jurisdiction in this wise:
The general rule is that before a party may seek the
intervention of the court, he should first avail of all the means afforded
him by administrative processes. The issues which administrative
agencies are authorized to decide should not be summarily taken from
them and submitted to a court without first giving such administrative
agency the opportunity to dispose of the same after due deliberation.
Corollary to the doctrine of exhaustion of administrative remedies
is the doctrine of primary jurisdiction; that is, courts cannot or will not
determine a controversy involving a question which is within the
jurisdiction of the administrative tribunal prior to the resolution of that
question by the administrative tribunal, where the question demands
the exercise of sound administrative discretion requiring the special
knowledge, experience and services of the administrative tribunal to
determine technical and intricate matters of fact.[13]
It is true that the foregoing doctrine admits of exceptions, such that in Lacap, we also held:
Nonetheless, the doctrine of exhaustion of administrative
remedies and the corollary doctrine of primary jurisdiction, which are
based on sound public policy and practical considerations, are not
inflexible rules. There are many accepted exceptions, such as: (a) where
there is estoppel on the part of the party invoking the doctrine; (b)
where the challenged administrative act is patently illegal, amounting to
lack of jurisdiction; (c) where there is unreasonable delay or official
inaction that will irretrievably prejudice the complainant; (d) where the
amount involved is relatively small so as to make the rule impractical
and oppressive; (e) where the question involved is purely legal and will
ultimately have to be decided by the courts of justice; (f) where judicial
intervention is urgent; (g) when its application may cause great and
irreparable damage; (h) where the controverted acts violate due
process; (i) when the issue of non-exhaustion of administrative
remedies has been rendered moot; (j) when there is no other plain,
speedy and adequate remedy; (k) when strong public interest is
involved; and, (l) in quo warranto proceedings. x x x.[14]
Upon careful consideration of the parties contentions, we find that none of the
aforementioned exceptions exist in the case at bar.
What is apparent, however, is that petitioner unjustifiably failed to exhaust the
administrative remedies available with the Housing and Land Use Regulatory Board
(HLURB) before seeking recourse with the trial court. Under the rules of the HLURB which
were then in effect, particularly Sections 4 and 6 of HLURB Resolution No. R-391, Series of
1987 (Adopting the 1987 Rules of Procedure of the Housing and Land Use Regulatory
Board),[15] a complaint to annul any permit issued by the HLURB may be filed before the
Housing and Land Use Arbiter (HLA). Therefore, petitioners action to annul the Certificate
of Locational Viability (CLV) and the Development Permit issued by the HLURB on October
25, 1994 and November 11, 1994, respectively, in favor of private respondent for its Wack-
Wack Heights Condominium Project should have been properly filed before the HLURB
instead of the trial court.
We quote with approval the Court of Appeals discussion of this matter:
In the case at bar, plaintiff-appellee AHMCSO failed to exhaust
the available administrative remedies before seeking judicial
intervention via a petition for annulment. The power to act as appellate
body over decisions and actions of local and regional planning and
zoning bodies and deputized official of the board was retained by the
HLURB and remained unaffected by the devolution under the Local
Government Code.
Under Section 5 of Executive Order No. 648, series of 1981,
the Human Settlement Regulatory Commission (HSRC) later renamed as
Housing and Land Use Regulatory Board (HLURB), pursuant to Section
1(c) of Executive Order No. 90, series of 1986, has the power to:
f) Act as the appellate body on decisions
and actions of local and regional planning and
zoning bodies of the deputized officials of the
Commission, on matters arising from the
performance of these functions.
In fact, Section 4 of E.O. No. 71 affirms the power of the
HLURB to review actions of local government units on the issuance of
permits
Sec. 4. If in the course of evaluation of
application for registration and licensing of projects
within its jurisdiction, HLURB finds that a local
government unit has overlooked or mistakenly
applied a certain law, rule or standard in issuing a
development permit, it shall suspend action with a
corresponding advice to the local government
concerned, so as to afford it an opportunity to take
appropriate action thereon. Such return and advice
must likewise be effected within a period of thirty
(30) days from receipt by HLURB of the application.
Moreover, Section 18 and 19 of HSRC Administrative Order
No. 20 provides:
Section 18. Oppossition to
Application. Opposition to application shall be
considered as a complaint, the resolution of which
shall be a prerequisite to any action on the
application. Complaints and other legal processes
shall be governed by the Rules of Procedure of the
Commission, and shall have the effect of suspending
the application.
Section 19. Complaints/Opposition Filed After
the Issuance of Locational Clearance. Temporary
issuance of locational permit or land transaction
approval shall be acted upon by the Office that
issued the same. Such complaint shall not
automatically suspend the locational clearance,
temporary use permit, development permit or land
transaction approval unless an order issued by the
commission to that effect.
The appropriate provisions of the Rules of
Procedure governing hearings before the
Commission shall be applied in the resolution of
said complaint as well as any motion for
reconsideration that may be filed thereto, provided
that if the complaint is directed against the
certificate of zoning compliance issued by the
deputized zoning administrator, the same shall be
 acted upon the Commissioner in Charge for
adjudication.

Under the rules of the HLURB then prevailing at the time this case
was filed, a complaint to annul any permit issued by the HLURB may
be filed before the Housing and Land Use Arbiter (HLA). The decision
of the HLA may be brought to the Board of Commissioners by Petition
for Certiorari and the decision of the Board of Commissioners [is]
appealable to the Office of the President.[16](Citations omitted;
emphases supplied.)

It does not escape the attention of the Court that in its Reply, petitioner admitted
that it had a pending complaint with the HLURB involving private respondents the
Development Permit, the Certificate of Registration and License to Sell Condominium Units,
aside from complaints with the Building Official of the Municipality (now City) of
Mandaluyong and the MMDA, when it instituted its action with the trial court. As discussed
earlier, a litigant cannot go around the authority of the concerned administrative agency
and directly seek redress from the courts. Thus, when the law provides for a remedy against
a certain action of an administrative board, body, or officer, relief to the courts can be made
only after exhausting all remedies provided therein. It is settled that the non-observance of
the doctrine of exhaustion of administrative remedies results in lack of cause of action,
which is one of the grounds in the Rules of Court justifying the dismissal of the complaint.
[17]

view of the foregoing discussion, we find it unnecessary to resolve the other

issues raised by the parties.

To conclude, it is our view that the Court of Appeals committed no reversible

error in setting aside the trial court decision and dismissing said complaint.

WHEREFORE, premises considered, the petition is hereby DENIED. The assailed SAMAR II ELECTRIC COOPERATIVE, INC. (SAMELCO II) AND ITS G.R. No. 173840
Decision dated May 16, 2006 and the Resolution dated October 5, 2006 of the Court of BOARD OF DIRECTORS, composed of DEBORAH T. MARCO
Appeals in CA-G.R. CV No. 63439 are AFFIRMED. (Immediate Past President), ATTY. MEDINO L. ACUBA, ENGR.
MANUEL C. OREJOLA, ALFONSO F. QUILAPIO, RAUL DE GUZMAN
and PONCIANO R. ROSALES (General Manager and Ex
SO ORDERED. Officio Director),
Present:

Petitioners,

VELASCO, J., Chairperson

- versus
PERALTA,

ABAD,
 ANANIAS D. SELUDO, JR., MENDOZA, and
Respondent. PERLAS-BERNABE,
Promulgated:
April 25, 2012
DECISION
PERALTA, J.:
Assailed in the present petition for review on certiorari under Rule 45 of the Rules
of Court are the Decision [1] and Resolution[2]dated January 26, 2006 and July 12, 2006,
respectively, of the Court of Appeals (CA) in CA-G.R. CEB SP No. 01175. The CA Decision
dismissed petitioners' petition for certiorari and affirmed the Orders of the Regional Trial
Court (RTC) of Calbiga, Samar, Branch 33, dated May 6, 2005 and September 15, 2005,
while the CA Resolution denied petitioners' Motion for Reconsideration.
Herein petitioner Samar II Electric Cooperative, Inc. (SAMELCO II) was organized under the
provisions of Presidential Decree (P.D.) No. 269, otherwise known as the National
Electrification Administration Decree, as amended by P.D. No. 1645. The individual
petitioners are members of SAMELCO II's Board of Directors. Respondent was also a
member of the SAMELCO II Board of Directors having been elected thereto in 2002 and
whose term of office expired in May 2005.
The antecedent facts, as summarized by the CA, are as follows:
As members of the Board of Directors (BOD) of the petitioner
Samar II Electric Cooperative, Inc. (SAMELCO II), an electric cooperative
providing electric service to all members-consumers in all municipalities
within the Second Congressional District of the Province of Samar,
individual petitioners passed Resolution No. 5 [Series] of 2005 on
January 22, 2005.
The said resolution disallowed the private respondent to attend
succeeding meetings of the BOD effective February 2005 until the end
of his term as director. The same resolution also disqualified him for one
(1) term to run as a candidate for director in the upcoming district
elections.
Convinced that his rights as a director of petitioner SAMELCO II had
been curtailed by the subject board resolution, private respondent filed
an Urgent Petition for Prohibition against petitioner SAMELCO II,
impleading individual petitioners as directors thereof, in the Regional
Trial Court (RTC) in Calbiga, Samar. The case was docketed as Special
Civil Case No. C-2005-1085 and was raffled to Branch 33 of the said
court x x x.
In his petition, private respondent prayed for the nullification of
Resolution No. 5, [Series] of 2005, contending that it was issued without
any legal and factual bases. He likewise prayed that a temporary
restraining order (TRO) and/or a writ of preliminary injunction be issued
to enjoin the individual petitioners from enforcing the assailed board
resolution.
Granting private respondent's prayer for a TRO, the public respondent
issued one, effective for seventy-two (72) hours which effectivity was
later on extended for another seventeen (17) days.
In their answer to the petition for prohibition, individual petitioners
raised the affirmative defense of lack of jurisdiction of the RTC over the
subject matter of the case. Individual petitioners assert that, since the
matter involved an electric cooperative, SAMELCO II, primary
jurisdiction is vested on the National Electrification Administration
(NEA).
In her assailed Order dated May 6, 2005, [the RTC judge] sustained the
jurisdiction of the court over the petition for prohibition and barred the
petitioners and/or their representatives from enforcing Resolution No. 5
[Series] of 2005.
x x x[3]
Petitioners filed a motion for reconsideration, but the same was denied by the
RTC in its September 15, 2005 Order.
Petitioners then elevated the case to the CA via a special civil action
for certiorari, imputing grave abuse of discretion on the part of the RTC in issuing its
assailed Orders.
On January 26, 2006, the CA rendered its Decision dismissing petitioners' petition
for certiorari and affirming the assailed Orders of the RTC.
Petitioners filed a motion for reconsideration, but it was denied by the CA in its
July 12, 2006 Resolution.
 In their third assigned error, petitioners assert that respondent is precluded from
filing a petition for prohibition considering that, under the applicable laws, it has an
adequate remedy in the ordinary course of law.
Hence, the instant petition with the following assigned errors:
(1) The Court finds the petition meritorious. As the assigned errors are interrelated, the Court
IN ITS INTERPRETATION AND APPLICATION OF THE DOCTRINE OF will discuss them jointly.
PRIMARY JURISDICTION, THE HONORABLE COURT OF APPEALS
Section 10, Chapter II of P.D. No. 269, as amended by Section 5 of P.D. No. 1645, provides:
COMMITTED LEGAL ERRORS IN LIMITING THE DOCTRINE TO CERTAIN
MATTERS IN CONTROVERSIES INVOLVING SPECIALIZED DISPUTES AND
IN UPHOLDING THE JURISDICTION OF THE TRIAL COURT OVER THE Section 5. Section 10, Chapter II of Presidential Decree No.
URGENT PETITION FOR PROHIBITION FILED BY RESPONDENT SELUDO 269 is hereby amended to read as follows:
ON THE GROUND THAT THE ISSUES RAISED THEREIN DO NOT REQUIRE
THE TECHNICAL EXPERTISE OF THE NEA Section 10. Enforcement Powers and Remedies. In the
exercise of its power of supervision and control over electric
cooperatives and other borrower, supervised or controlled entities, the
(2)
NEA is empowered to issue orders, rules and regulations and motu
THE HONORABLE COURT OF APPEALS, IN SUSTAINING THE
proprio or upon petition of third parties, to conduct investigations,
JURISDICTION OF THE TRIAL COURT, COMMITTED AN ERROR OF LAW BY
referenda and other similar actions in all matters affecting said electric
HOLDING THAT A PERUSAL OF THE LAW CREATING THE NEA DISCLOSES
cooperatives and other borrower, or supervised or controlled entities.
THAT THE NEA WAS NOT GRANTED THE POWER TO HEAR AND DECIDE
If the electric cooperative concerned or other similar entity
CASES INVOLVING THE VALIDITY OF BOARD RESOLUTIONS UNSEATING
fails after due notice to comply with NEA orders, rules and regulations
ANY MEMBER OF THE BOARD OF DIRECTORS AND THAT NEITHER WAS
and/or decisions, or with any of the terms of the Loan Agreement, the
IT GRANTED JURISDICTION OVER PETITIONS FOR CERTIORARI,
NEA Board of Administrators may avail of any or all of the following
PROHIBITION OR MANDAMUS.
remedies:

(3) x x x x.
THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW
WHEN IT SUSTAINED THE JURISDICTION OF [THE] TRIAL COURT OVER (e) Take preventive and/or disciplinary measures
THE PETITION FOR PROHIBITION DESPITE THE EXISTENCE OF APPEAL OR including suspension and/or removal and
OTHER PLAIN, SPEEDY AND ADEQUATE REMEDY AVAILABLE TO THEREIN replacement of any or all of the members of the
PETITIONER SELUDO.[4] Board of Directors, officers or employees of the
Cooperative, other borrower institutions or
supervised or controlled entities as the NEA Board
In their first assigned error, petitioners contend that the CA erred in interpreting of Administrators may deem fit and necessary and
the doctrine of primary jurisdiction in a very limited sense. Petitioners aver that in a to take any other remedial measures as the law or
number of cases, this Court applied the doctrine of primary jurisdiction even in cases where the Loan Agreement may provide.
the issues involved do not require the technical expertise of administrative bodies.
x x x x (Emphasis supplied.)
Petitioners also argue, in their second assignment of error, that it is wrong for the
CA to rule that there is nothing under the law creating the National Electrification
Administration (NEA), which grants the said administrative body the power to ascertain the In addition, Subsection (a), Section 24, Chapter III of P.D. No. 269, as amended by
validity of board resolutions unseating any member of the Board of Directors of an electric Section 7 of P.D. No. 1645, states:
cooperative. Citing the provisions of P.D. Nos. 269 and 1645, petitioners aver that the NEA is
empowered to determine the validity of resolutions passed by electric cooperatives.
 Section 7. Subsection (a), Section 24, Chapter III of
Presidential Decree No. 269 is hereby amended to read as follows:
Section 24. Board of Directors. (a) The
Management of a Cooperative shall be vested in its
Board, subject to the supervision and control of
NEA which shall have the right to be represented
and to participate in all Board meetings and
deliberations and to approve all policies and
resolutions.
The composition, qualifications, the
manner of elections and filling of vacancies, the
procedures for holding meetings and other similar
provisions shall be defined in the by-laws of the
Cooperative subject to NEA policies, rules and
regulations.
x x x. (Emphasis supplied.)
A comparison of the original provisions of Sections 10 and 24 of P.D. No. 269 and
the amendatory provisions under Sections 5 and 7 of P.D. No. 1645 would readily show that
the intention of the framers of the amendatory law is to broaden the powers of the NEA.
A clear proof of such expanded powers is that, unlike P.D. No. 269, P.D. No. 1645
expressly provides for the authority of the NEA to exercise supervision and control over
electric cooperatives. In administrative law, supervision means overseeing or the power or
authority of an officer to see that subordinate officers perform their duties. [5] If the latter
fail or neglect to fulfill them, the former may take such action or step as prescribed by law
to make them perform their duties.[6] Control, on the other hand, means the power of an
officer to alter or modify or nullify or set aside what a subordinate officer had done in the
performance of his duties and to substitute the judgment of the former for that of the
latter.[7] Section 38 (1), Chapter 7, Book 4 of Executive Order No. 292, otherwise known as
the Administrative Code of 1987 provides, thus:
Supervision and control shall include the authority to act directly
whenever a specific function is entrusted by law or regulation to a
subordinate; direct the performance of duty; restrain the commission
of acts; review, approve, reverse or modify acts and decisions of
subordinate officials or units; determine priorities in the execution of
plans and programs; and prescribe standards, guidelines, plans and
programs x x x. (Emphasis supplied.)
The Court, therefore, finds it erroneous on the part of the CA to rule that the
doctrine of primary jurisdiction does not apply in the present case. It is true that the RTC
has jurisdiction over the petition for prohibition filed by respondent. [8] However, the basic
issue in the present case is not whether the RTC has jurisdiction over the petition for
prohibition filed by respondent; rather, the issue is who between the RTC and the NEA has
primary jurisdiction over the question of the validity of the Board Resolution issued by
SAMELCO II. A careful reading of the above-quoted provisions of P.D. No. 1645 clearly show
that, pursuant to its power of supervision and control, the NEA is granted the authority to
conduct investigations and other similar actions as well as to issue orders, rules and
regulations with respect to all matters affecting electric cooperatives. Certainly, the matter
as to the validity of the resolution issued by the Board of Directors of SAMELCO II, which
practically removed respondent from his position as a member of the Board of Directors
and further disqualified him to run as such in the ensuing election, is a matter which affects
the said electric cooperative and, thus, comes within the ambit of the powers of the NEA as
expressed in Sections 5 and 7 of P.D. No. 1645.
In this regard, the Court agrees with petitioners' argument that to sustain the
petition for prohibition filed by respondent with the RTC would constitute an unnecessary
intrusion into the NEA's power of supervision and control over electric cooperatives.
Based on the foregoing discussions, the necessary conclusion that can be arrived
at is that, while the RTC has jurisdiction over the petition for prohibition filed by
respondent, the NEA, in the exercise of its power of supervision and control, has primary
jurisdiction to determine the issue of the validity of the subject resolution.
It may not be amiss to reiterate the prevailing rule that the doctrine of primary
jurisdiction applies where a claim is originally cognizable in the courts and comes into play
whenever enforcement of the claim requires the resolution of issues which, under a
regulatory scheme, has been placed within the special competence of an administrative
agency.[9] In such a case, the court in which the claim is sought to be enforced may suspend
the judicial process pending referral of such issues to the administrative body for its view or,
if the parties would not be unfairly disadvantaged, dismiss the case without prejudice. [10]
Corollary to the doctrine of primary jurisdiction is the principle of exhaustion of
administrative remedies. The Court, in a long line of cases, [11] has held that before a party is
allowed to seek the intervention of the courts, it is a pre-condition that he avail himself of
all administrative processes afforded him. Hence, if a remedy within the administrative
machinery can be resorted to by giving the administrative officer every opportunity to
decide on a matter that comes within his jurisdiction, then such remedy must be exhausted
first before the courts power of judicial review can be sought. [12] The premature resort to
the court is fatal to ones cause of action. [13] Accordingly, absent any finding of waiver
or estoppel, the case may be dismissed for lack of cause of action. [14]
The doctrine of exhaustion of administrative remedies is based on practical and legal
reasons.[15] The availment of administrative remedy entails lesser expenses and provides for
a speedier disposition of controversies.[16] Furthermore, the courts of justice, for reasons of
comity and convenience, will shy away from a dispute until the system of administrative
redress has been completed and complied with, so as to give the administrative agency
concerned every opportunity to correct its error and dispose of the case. [17]

True, the doctrines of primary jurisdiction and exhaustion of administrative

remedies are subject to certain exceptions, to wit: (a) where there is estoppel on the part of
the party invoking the doctrine; (b) where the challenged administrative act is patently
illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official
inaction that will irretrievably prejudice the complainant; (d) where the amount involved is
relatively so small as to make the rule impractical and oppressive; (e) where the question
involved is purely legal and will ultimately have to be decided by the courts of justice; (f)
where judicial intervention is urgent; (g) where the application of the doctrine may cause
great and irreparable damage; (h) where the controverted acts violate due process; (i)
where the issue of non-exhaustion of administrative remedies has been rendered moot; (j)
where there is no other plain, speedy and adequate remedy; (k) where strong public
interest is involved; and (l) in quo warranto proceedings.[18]

Respondent, however, failed to show that the instant case falls under any of the
above-enumerated exceptions. While respondent alleged in his Urgent Petition for
Prohibition that the subject resolution was issued with grave abuse of discretion and in
violation of his right to due process, mere allegation of arbitrariness will not suffice to vest
in the trial court the power that has been specifically granted by law to special government
agencies.[19] Moreover, the issues raised in the petition for prohibition, particularly the issue
of whether or not there are valid grounds to disallow respondent from attending
SAMELCO's Board meetings and to disqualify him from running for re-election as a director
of the said Board, are not purely legal questions. Instead, they involve a determination of
factual matters which fall within the competence of the NEA to ascertain.
Finally, the Court agrees with petitioners' contention that the availability of an
administrative remedy via a complaint filed before the NEA precludes respondent from
filing a petition for prohibition before the court. It is settled that one of the requisites for a
writ of prohibition to issue is that there is no plain, speedy and adequate remedy in the
ordinary course of law.[20] In order that prohibition will lie, the petitioner must first exhaust
all administrative remedies.[21] Thus, respondent's failure to file a complaint before the NEA
prevents him from filing a petition for prohibition before the RTC.
FIRST DIVISION
WHEREFORE, the instant petition is GRANTED. The questioned Decision and
Resolution of the Court of Appeals dated January 26, 2006 and July 12, 2006, respectively,
as well as the Orders of the Regional Trial Court of Calbiga, Samar, Branch 33, dated May 6,
2005 and September 15, 2005, are REVERSED and SET ASIDE. A new judgment is [G.R. No. 151908. August 12, 2003]
entered DISMISSING the Urgent Petition for Prohibition (Special Civil Action No. C-2005-
1085) filed by respondent Ananias D. Seludo, Jr. SO ORDERED.

SMART COMMUNICATIONS, INC. (SMART) and PILIPINO TELEPHONE CORPORATION

(PILTEL), petitioners, vs. NATIONAL TELECOMMUNICATIONS COMMISSION
(NTC), respondent.

[G.R. No. 152063. August 12, 2003]

GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS CO., INC.
(ISLACOM), petitioners, vs. COURT OF APPEALS (The Former 6th Division) and the
NATIONAL TELECOMMUNICATIONS COMMISSION, respondents.
DECISION
YNARES-SANTIAGO, J.:
Pursuant to its rule-making and regulatory powers, the National Telecommunications
Commission (NTC) issued on June 16, 2000 Memorandum Circular No. 13-6-2000,
promulgating rules and regulations on the billing of telecommunications services. Among
its pertinent provisions are the following:
(1) The billing statements shall be received by the subscriber of the telephone service not
later than 30 days from the end of each billing cycle. In case the statement is received
beyond this period, the subscriber shall have a specified grace period within which to pay
the bill and the public telecommunications entity (PTEs) shall not be allowed to disconnect
the service within the grace period.
(2) There shall be no charge for calls that are diverted to a voice mailbox, voice prompt,
recorded message or similar facility excluding the customers own equipment.
(3) PTEs shall verify the identification and address of each purchaser of prepaid SIM
cards. Prepaid call cards and SIM cards shall be valid for at least 2 years from the date of
first use. Holders of prepaid SIM cards shall be given 45 days from the date the prepaid SIM
card is fully consumed but not beyond 2 years and 45 days from date of first use to
replenish the SIM card, otherwise the SIM card shall be rendered invalid. The validity of an
invalid SIM card, however, shall be installed upon request of the customer at no additional
charge except the presentation of a valid prepaid call card.
(4) Subscribers shall be updated of the remaining value of their cards before the start of
every call using the cards.
(5) The unit of billing for the cellular mobile telephone service whether postpaid or prepaid
shall be reduced from 1 minute per pulse to 6 seconds per pulse. The authorized rates per
minute shall thus be divided by 10.[1]
The Memorandum Circular provided that it shall take effect 15 days after its
publication in a newspaper of general circulation and three certified true copies thereof
furnished the UP Law Center. It was published in the newspaper, The Philippine Star, on
June 22, 2000.[2]Meanwhile, the provisions of the Memorandum Circular pertaining to the
sale and use of prepaid cards and the unit of billing for cellular mobile telephone service
took effect 90 days from the effectivity of the Memorandum Circular.
On August 30, 2000, the NTC issued a Memorandum to all cellular mobile telephone
service (CMTS) operators which contained measures to minimize if not totally eliminate the
incidence of stealing of cellular phone units. The Memorandum directed CMTS operators
to:
a. strictly comply with Section B(1) of MC 13-6-2000 requiring the presentation
and verification of the identity and addresses of prepaid SIM card
customers;
b. require all your respective prepaid SIM cards dealers to comply with Section
B(1) of MC 13-6-2000;
c. deny acceptance to your respective networks prepaid and/or postpaid
customers using stolen cellphone units or cellphone units registered to
somebody other than the applicant when properly informed of all
information relative to the stolen cellphone units;
d. share all necessary information of stolen cellphone units to all other CMTS
operators in order to prevent the use of stolen cellphone units; and
e. require all your existing prepaid SIM card customers to register and present
valid identification cards.[3]
This was followed by another Memorandum dated October 6, 2000 addressed to all
public telecommunications entities, which reads:
This is to remind you that the validity of all prepaid cards sold on 07 October 2000
and beyond shall be valid for at least two (2) years from date of first use pursuant to
MC 13-6-2000.
In addition, all CMTS operators are reminded that all SIM packs used by subscribers
of prepaid cards sold on 07 October 2000 and beyond shall be valid for at least two
(2) years from date of first use. Also, the billing unit shall be on a six (6) seconds
pulse effective 07 October 2000.
For strict compliance.[4]
On October 20, 2000, petitioners Isla Communications Co., Inc. and Pilipino
Telephone Corporation filed against the National Telecommunications Commission,
Commissioner Joseph A. Santiago, Deputy Commissioner Aurelio M. Umali and Deputy
Commissioner Nestor C. Dacanay, an action for declaration of nullity of NTC Memorandum
Circular No. 13-6-2000 (the Billing Circular) and the NTC Memorandum dated October 6,
2000, with prayer for the issuance of a writ of preliminary injunction and temporary
restraining order. The complaint was docketed as Civil Case No. Q-00-42221 at the Regional
Trial Court of Quezon City, Branch 77.[5]
 Petitioners Islacom and Piltel alleged, inter alia, that the NTC has no jurisdiction to
regulate the sale of consumer goods such as the prepaid call cards since such jurisdiction
belongs to the Department of Trade and Industry under the Consumer Act of the
Philippines; that the Billing Circular is oppressive, confiscatory and violative of the
constitutional prohibition against deprivation of property without due process of law; that
the Circular will result in the impairment of the viability of the prepaid cellular service by
unduly prolonging the validity and expiration of the prepaid SIM and call cards; and that the
requirements of identification of prepaid card buyers and call balance announcement are
unreasonable. Hence, they prayed that the Billing Circular be declared null and void ab
initio.
Soon thereafter, petitioners Globe Telecom, Inc and Smart Communications, Inc. filed
a joint Motion for Leave to Intervene and to Admit Complaint-in-Intervention. [6] This was
granted by the trial court.
On October 27, 2000, the trial court issued a temporary restraining order enjoining
the NTC from implementing Memorandum Circular No. 13-6-2000 and the Memorandum
dated October 6, 2000.[7]
In the meantime, respondent NTC and its co-defendants filed a motion to dismiss the
case on the ground of petitioners failure to exhaust administrative remedies.
Subsequently, after hearing petitioners application for preliminary injunction as well
as respondents motion to dismiss, the trial court issued on November 20, 2000 an Order,
the dispositive portion of which reads:
WHEREFORE, premises considered, the defendants motion to dismiss is hereby denied for
lack of merit. The plaintiffs application for the issuance of a writ of preliminary injunction is
hereby granted. Accordingly, the defendants are hereby enjoined from implementing NTC
Memorandum Circular 13-6-2000 and the NTC Memorandum, dated October 6, 2000,
pending the issuance and finality of the decision in this case. The plaintiffs and intervenors
are, however, required to file a bond in the sum of FIVE HUNDRED THOUSAND PESOS
(P500,000.00), Philippine currency.
SO ORDERED.[8]
Defendants filed a motion for reconsideration, which was denied in an Order dated
February 1, 2001.[9]
Respondent NTC thus filed a special civil action for certiorari and prohibition with the
Court of Appeals, which was docketed as CA-G.R. SP. No. 64274. On October 9, 2001, a
decision was rendered, the decretal portion of which reads:
WHEREFORE, premises considered, the instant petition for certiorari and prohibition is
GRANTED, in that, the order of the court a quo denying the petitioners motion to dismiss as
well as the order of the court a quo granting the private respondents prayer for a writ of
preliminary injunction, and the writ of preliminary injunction issued thereby, are hereby
ANNULLED and SET ASIDE. The private respondents complaint and complaint-in-
intervention below are hereby DISMISSED, without prejudice to the referral of the private
respondents grievances and disputes on the assailed issuances of the NTC with the said
agency.
SO ORDERED.[10]
Petitioners motions for reconsideration were denied in a Resolution dated January
10, 2002 for lack of merit.[11]
Hence, the instant petition for review filed by Smart and Piltel, which was docketed as
G.R. No. 151908, anchored on the following grounds:
A.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE
NATIONAL TELECOMMUNICATIONS COMMISSION (NTC) AND NOT THE REGULAR
COURTS HAS JURISDICTION OVER THE CASE.
B.
THE HONORABLE COURT OF APPEALS ALSO GRAVELY ERRED IN HOLDING THAT
THE PRIVATE RESPONDENTS FAILED TO EXHAUST AN AVAILABLE
ADMINISTRATIVE REMEDY.
C.
THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE
BILLING CIRCULAR ISSUED BY THE RESPONDENT NTC IS UNCONSTITUTIONAL
AND CONTRARY TO LAW AND PUBLIC POLICY.
D.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE PRIVATE
RESPONDENTS FAILED TO SHOW THEIR CLEAR POSITIVE RIGHT TO WARRANT
THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION.[12]
Likewise, Globe and Islacom filed a petition for review, docketed as G.R. No. 152063,
assigning the following errors:
1. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE
DOCTRINES OF PRIMARY JURISDICTION AND EXHAUSTION OF
ADMINISTRATIVE REMEDIES DO NOT APPLY SINCE THE INSTANT CASE IS FOR
LEGAL NULLIFICATION (BECAUSE OF LEGAL INFIRMITIES AND VIOLATIONS
OF LAW) OF A PURELY ADMINISTRATIVE REGULATION PROMULGATED BY
AN AGENCY IN THE EXERCISE OF ITS RULE MAKING POWERS AND INVOLVES
ONLY QUESTIONS OF LAW.
2. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE
DOCTRINE ON EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT
APPLY WHEN THE QUESTIONS RAISED ARE PURELY LEGAL QUESTIONS.
3. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE
DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT
APPLY WHERE THE ADMINISTRATIVE ACTION IS COMPLETE AND EFFECTIVE,
 WHEN THERE IS NO OTHER REMEDY, AND THE PETITIONER STANDS TO
SUFFER GRAVE AND IRREPARABLE INJURY.
4. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE
PETITIONERS IN FACT EXHAUSTED ALL ADMINISTRATIVE REMEDIES
AVAILABLE TO THEM.
5. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED IN ISSUING ITS
QUESTIONED RULINGS IN THIS CASE BECAUSE GLOBE AND ISLA HAVE A
CLEAR RIGHT TO AN INJUNCTION.[13]
The two petitions were consolidated in a Resolution dated February 17, 2003. [14]
On March 24, 2003, the petitions were given due course and the parties were
required to submit their respective memoranda.[15]
We find merit in the petitions.
Administrative agencies possess quasi-legislative or rule-making powers and quasi-
judicial or administrative adjudicatory powers.Quasi-legislative or rule-making power is the
power to make rules and regulations which results in delegated legislation that is within the
confines of the granting statute and the doctrine of non-delegability and separability of
powers.[16]
The rules and regulations that administrative agencies promulgate, which are the
product of a delegated legislative power to create new and additional legal provisions that
have the effect of law, should be within the scope of the statutory authority granted by the
legislature to the administrative agency. It is required that the regulation be germane to the
objects and purposes of the law, and be not in contradiction to, but in conformity with, the
standards prescribed by law. [17] They must conform to and be consistent with the provisions
of the enabling statute in order for such rule or regulation to be valid. Constitutional and
statutory provisions control with respect to what rules and regulations may be promulgated
by an administrative body, as well as with respect to what fields are subject to regulation by
it. It may not make rules and regulations which are inconsistent with the provisions of the
Constitution or a statute, particularly the statute it is administering or which created it, or
which are in derogation of, or defeat, the purpose of a statute. In case of conflict between a
statute and an administrative order, the former must prevail.[18]
Not to be confused with the quasi-legislative or rule-making power of an
administrative agency is its quasi-judicial or administrative adjudicatory power. This is the
power to hear and determine questions of fact to which the legislative policy is to apply
and to decide in accordance with the standards laid down by the law itself in enforcing and
administering the same law. The administrative body exercises its quasi-judicial power
when it performs in a judicial manner an act which is essentially of an executive or
administrative nature, where the power to act in such manner is incidental to or reasonably
necessary for the performance of the executive or administrative duty entrusted to it. In
carrying out their quasi-judicial functions, the administrative officers or bodies are required
to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and
draw conclusions from them as basis for their official action and exercise of discretion in a
judicial nature.[19]
In questioning the validity or constitutionality of a rule or regulation issued by an
administrative agency, a party need not exhaust administrative remedies before going to
court. This principle applies only where the act of the administrative agency concerned was
performed pursuant to its quasi-judicial function, and not when the assailed act pertained
to its rule-making or quasi-legislative power. In Association of Philippine Coconut
Dessicators v. Philippine Coconut Authority,[20] it was held:
The rule of requiring exhaustion of administrative remedies before a party may seek judicial
review, so strenuously urged by the Solicitor General on behalf of respondent, has
obviously no application here. The resolution in question was issued by the PCA in the
exercise of its rule- making or legislative power. However, only judicial review of decisions
of administrative agencies made in the exercise of their quasi-judicial function is subject to
the exhaustion doctrine.
Even assuming arguendo that the principle of exhaustion of administrative remedies
apply in this case, the records reveal that petitioners sufficiently complied with this
requirement. Even during the drafting and deliberation stages leading to the issuance of
Memorandum Circular No. 13-6-2000, petitioners were able to register their protests to the
proposed billing guidelines. They submitted their respective position papers setting forth
their objections and submitting proposed schemes for the billing circular. [21] After the same
was issued, petitioners wrote successive letters dated July 3, 2000 [22] and July 5, 2000,
[23]
asking for the suspension and reconsideration of the so-called Billing Circular. These
letters were not acted upon until October 6, 2000, when respondent NTC issued the second
assailed Memorandum implementing certain provisions of the Billing Circular. This was
taken by petitioners as a clear denial of the requests contained in their previous letters,
thus prompting them to seek judicial relief.
In like manner, the doctrine of primary jurisdiction applies only where the
administrative agency exercises its quasi-judicial or adjudicatory function. Thus, in cases
involving specialized disputes, the practice has been to refer the same to an administrative
agency of special competence pursuant to the doctrine of primary jurisdiction. The courts
will not determine a controversy involving a question which is within the jurisdiction of the
administrative tribunal prior to the resolution of that question by the administrative
tribunal, where the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience and services of the administrative tribunal to
determine technical and intricate matters of fact, and a uniformity of ruling is essential to
comply with the premises of the regulatory statute administered. The objective of the
doctrine of primary jurisdiction is to guide a court in determining whether it should refrain
from exercising its jurisdiction until after an administrative agency has determined some
question or some aspect of some question arising in the proceeding before the court. It
applies where the claim is originally cognizable in the courts and comes into play whenever
enforcement of the claim requires the resolution of issues which, under a regulatory
scheme, has been placed within the special competence of an administrative body; in such
case, the judicial process is suspended pending referral of such issues to the administrative
body for its view.[24]
However, where what is assailed is the validity or constitutionality of a rule or
regulation issued by the administrative agency in the performance of its quasi-legislative
function, the regular courts have jurisdiction to pass upon the same. The determination of
whether a specific rule or set of rules issued by an administrative agency contravenes the Q-00-42221 is REINSTATED. This case is REMANDED to the court a quo for continuation
law or the constitution is within the jurisdiction of the regular courts. Indeed, the of the proceedings.
Constitution vests the power of judicial review or the power to declare a law, treaty,
international or executive agreement, presidential decree, order, instruction, ordinance, or SO ORDERED.
regulation in the courts, including the regional trial courts. [25] This is within the scope of
judicial power, which includes the authority of the courts to determine in an appropriate
action the validity of the acts of the political departments. [26] Judicial power includes the
duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government. [27]

In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-6-2000
and its Memorandum dated October 6, 2000 was pursuant to its quasi-legislative or rule-
making power. As such, petitioners were justified in invoking the judicial power of the
Regional Trial Court to assail the constitutionality and validity of the said
issuances. In Drilon v. Lim,[28] it was held:

We stress at the outset that the lower court had jurisdiction to consider the
constitutionality of Section 187, this authority being embraced in the general definition of
the judicial power to determine what are the valid and binding laws by the criterion of their
conformity to the fundamental law. Specifically, B.P. 129 vests in the regional trial courts
jurisdiction over all civil cases in which the subject of the litigation is incapable of pecuniary
estimation, even as the accused in a criminal action has the right to question in his defense
the constitutionality of a law he is charged with violating and of the proceedings taken
against him, particularly as they contravene the Bill of Rights. Moreover, Article X, Section
5(2), of the Constitution vests in the Supreme Court appellate jurisdiction over final
judgments and orders of lower courts in all cases in which the constitutionality or validity of
any treaty, international or executive agreement, law, presidential decree, proclamation,
order, instruction, ordinance, or regulation is in question.[29]

In their complaint before the Regional Trial Court, petitioners averred that the
Circular contravened Civil Code provisions on sales and violated the constitutional
prohibition against the deprivation of property without due process of law. These are
within the competence of the trial judge. Contrary to the finding of the Court of Appeals,
the issues raised in the complaint do not entail highly technical matters. Rather, what is
required of the judge who will resolve this issue is a basic familiarity with the workings of
the cellular telephone service, including prepaid SIM and call cards and this is judicially
known to be within the knowledge of a good percentage of our population and expertise in
fundamental principles of civil law and the Constitution.

Hence, the Regional Trial Court has jurisdiction to hear and decide Civil Case No. Q-
00-42221. The Court of Appeals erred in setting aside the orders of the trial court and in
dismissing the case.
SAN FERNANDO RURAL G.R. No. 168088
WHEREFORE, in view of the foregoing, the consolidated petitions are GRANTED. The BANK, INC.,
decision of the Court of Appeals in CA-G.R. SP No. 64274 dated October 9, 2001 and its Petitioner, Present:
Resolution dated January 10, 2002 are REVERSED and SET ASIDE. The Order dated YNARES-SANTIAGO, J.,
November 20, 2000 of the Regional Trial Court of Quezon City, Branch 77, in Civil Case No. Chairperson,
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR.,
CHICO-NAZARIO, and
PAMPANGA OMNIBUS NACHURA, JJ.
DEVELOPMENT
CORPORATION and Promulgated:
DOMINIC G. AQUINO,
Respondents. April 3, 2007
DECISION
CALLEJO, SR., J.:
Before the Court is a Petition for Review under Rule 45 of the Rules of Court,
assailing the Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 75787 as well as the
Resolution[2] which denied the motion for reconsideration thereof. The appellate court set
aside the Order[3] of the Regional Trial Court (RTC), San Fernando, Pampanga, Branch 44, in
LRC No. 890, which in turn had granted the petition of San Fernando Rural Bank, Inc.
(petitioner) for the issuance of a writ of possession.
The Antecedents
Pampanga Omnibus Development Corporation (respondent PODC) was the
registered owner of a parcel of land in San Fernando, Pampanga (now San Fernando City).
The 61,579-square-meter lot was covered by Transfer Certificate of Title (TCT) No. 275745-
R.
Respondent PODC secured two loans from petitioner and Masantol Rural Bank,
Inc. (MRBI) at an annual interest of 24%:P750,000.00 on April 20, 1989, to mature on April
15, 1990;[4] and another P750,000.00 on May 3, 1989, payable on April 28, 1990.[5] The
loans were evidenced by separate promissory notes executed by Federico R. Mendoza and
Anastacio E. de Vera. To secure payment of the loans, respondent PODC executed a real
estate mortgage over the subject lot in favor of the creditor banks. [6]The contract provided
that in case of failure or refusal of the mortgagor to pay the obligation secured thereby, the
real estate mortgage may be extrajudicially foreclosed in accordance with Act No. 3135, as
amended.[7]
Eliza M. Garbes (PODC President and daughter of Federico Mendoza), together
with her husband Aristedes Garbes, secured a P950,000.00 loan from petitioner on March
27, 1992. The loan was to mature after 180 days or on September 23, 1992.
[8]
Mendozasigned as co-borrower in the promissory note executed by the spouses. The
spouses also executed a chattel mortgage over their personal property as security for the
payment of their loan account.[9]
Upon respondent PODCs failure to pay its loan to petitioner, the latter filed a
petition for extrajudicial foreclosure of real estate mortgage and
at the auction on April 23, 2001, petitioner emerged as the winning bidder
for P1,245,982.05. The Ex-Officio Sheriff executed a Certificate of Sale [10] on May 9,
2001 which stated that the period of redemption of the property shall expire one (1) year
after registration in the Register of Deeds. The certificate was annotated at the dorsal
portion of TCT No. 275745-R on June 7, 2001.Petitioner did not file a petition for a writ of
possession during the redemption period.
On May 11, 2002, petitioner, through Eliza Garbes (with the authority of
petitioners board of directors),[11] executed a notarized deed of assignment [12] in favor of
respondent Dominic G. Aquino over its right to redeem the property. On May 29, 2002,
respondent Aquino offered to redeem the property for P1,588,094.28, but petitioner
rejected the offer and demanded the payment of P16,805,414.71 (including the loan of the
spouses Garbes)[13] as redemption money. Respondent Aquino rejected the demand of
petitioner.
On May 30, 2002, respondent Aquino remitted Cashiers Check No.
0000202756[14] for P1,588,094.28 to the Ex-OfficioSheriff as redemption money for the
property for which he was issued Receipt No. 15582906 dated May 31, 2002.[15]
In a letter[16] dated June 4, 2002, the Ex-Officio Sheriff informed petitioner that the
property had been redeemed by respondent Aquino for P1,588,094.28. She requested
petitioner for the computation of the correct redemption price before the lapse of the
reglementary period to redeem the property. Petitioner then submitted a statement of
account indicating that the redemption price was P9,052,309.23, and including the loan of
the spouses Garbes (P7,753,105.48), a total of P16,805,414.71.[17] Thereafter, the Ex-
Officio Sheriff computed the redemption price (based on the General Banking Act [R.A. No.
8791], and The Rural Bank Act of 1992 R.A. No. 7353) to be P5,194,742.50.[18] When
respondent Aquino was apprised of this, he remitted on June 7, 2002 a cashiers check
for P3,606,648.52, representing the difference between the redemption price computed by
the Ex-Officio Sheriff (P5,194,742.50) and the amount he had earlier paid
(P1,588,094.28). The Ex-Officio Sheriff issued Official Receipt No. 15582907 to respondent
Aquino, and on June 7, 2002, a Certificate of Redemption. [19] The certificate reads in part:
WHEREAS, before the expiration of the one (1) year period to redeem,
by virtue of the Deed of Assignment executed by the President of the
Pampanga Omnibus Devt. Corp., Mr. DOMINIC G. AQUINO redeemed
the said property in the total amount of FIVE MILLION ONE HUNDRED
NINETY-FOUR THOUSAND SEVEN HUNDRED FORTY-TWO and 50/100
(P5,194,742.50) paid under Official Receipts Nos. 15582906 and
15582907 dated May 31, 2002 and June 7, 2002, respectively, and have
issued this CERTIFICATE OF REDEMPTION under the guarantees
prescribed by law.
City of San Fernando (P), June 7, 2002.[20]
 On the same day, petitioners representative Elvin Reyes went to the office of
the Ex-Officio Sheriff and inquired how the amount of P5,194,742.50 was arrived at. The Ex-
Officio Sheriff explained to him that she had accepted the redemption price in accordance
with the provisions of
R.A. Nos. 8791 and 7353. She further explained that she had furnished petitioner with a
copy of the Certificate of Redemption she had earlier executed; however, Reyes refused to
receive a copy of the Certificate of Redemption.[21]
On June 10, 2002, petitioner, through its president Rogelio D. Reyes, executed an
Affidavit of Consolidation[22] over the property. It was alleged therein that respondent PODC
or any other person/entity with the right of redemption did not exercise their right to
repurchase within one year from June 7, 2001. The affidavit was filed with the Office of the
Register of Deeds on the same day. The penultimate paragraph reads:
That the aforesaid Mortgagors nor any other persons or entity entitled
with the right of redemption did not exercise their right of repurchase
and a period of more than one (1) year from June 7, 2001 has already
elapsed and by reason thereof, the San Fernando Rural Bank, Inc. do
hereby request the Registry of Deeds of the province of Pampanga,
after the payment of the lawful fees of this office to cancel Transfer
Certificate of Title No. 275745-R and to issue a new Certificate of Title in
favor of the San Fernando Rural Bank, Inc.[23]
The affidavit was entered in the Registry Book in the Office of the Register of
Deeds as Entry No. 784. However, no new title was issued in favor of petitioner.
In a letter[24] dated June 10, 2002, the Ex-Officio Sheriff informed petitioner that
respondent Aquino had redeemed the property and requested petitioner, through its
president, to turn over the owners duplicate of TCT No. 275745-R before the redemption
price of P5,194,742.50 would be remitted. She appended to the letter a copy of the
Certificate of Redemption she had executed in favor of respondent Aquino. However,
petitioner refused to do so.
Meanwhile, the Ex-Officio Sheriff fell ill and failed to report for work up to June
14, 2002. She then wrote petitioner, reiterating her request for the delivery of TCT No.
275745-R. She, however, failed to file the Certificate of Redemption with the Register of
Deeds.[25]
When respondent Aquino learned that petitioner had filed an Affidavit of
Consolidation, he sent a letter [26] dated June 14, 2002 to the Register of Deeds, informing
the latter that he was the assignee under the Deed of Assignment executed by respondent
PODC, and that as shown by the appended Certificate of Redemption he had redeemed the
property on June 7, 2002. He also insisted that he had redeemed the property within the
period therefor, and requested the Register of Deeds not to register the Affidavit of
Consolidation and to cancel TCT No. 275745-R.[27]
On June 17, 2002, respondent Aquino filed the Certificate of Redemption
executed by the Ex-Officio Sheriff with the Office of the Register of Deeds. The Register of
Deeds entered the Certificate of Redemption in the Primary Entry Book of Entries under
Entry No. 1205.[28] On even date, the Register of Deeds entered the deed of assignment
executed by respondent PODC in favor of Aquino in the Primary Book of Entries as Entry
No. 1208.
Meanwhile, the Registrar of Deeds was in a quandary; he was not certain
whether it was proper for him to issue a new title to petitioner. In a letter [29] dated June 18,
2002, he requested the Administrator of the Land Registration Authority (LRA), by way
of consulta, to issue an opinion on whether a new title should be issued to petitioner, or
the Certificate of Redemption in favor of respondent Aquino should be annotated at the
dorsal portion of TCT No. 275745-R.
On October 15, 2002, petitioner filed a Petition for a Writ of Possession in the RTC
of Pampanga. Petitioner alleged that it had purchased the property at public auction as
evidenced by the Certificate of Sale appended thereto; the Certificate of Sale was
annotated at the dorsal portion of TCT No. 275745-R on June 7, 2001; as far as he was
concerned, the right of respondent PODC to redeem the property had already expired; and
under Act No. 3135, as amended, it is entitled to the possession of the property during or
even after the redemption period. It prayed that the corresponding writ of possession over
the property be issued in its favor upon the filing of the requisite bond in an amount
equivalent to the market value of the property or in an amount as the court may direct.
[30]
Petitioner appended to its petition a certified true copy of the Certificate of Sale
executed by the Ex-Officio Sheriff in its favor over the property. The case was docketed as
LRC No. 890.
The court set the hearing of the petition at 8:30 a.m. on November 28, 2002 and
sent the corresponding notices to respondent PODC. [31]
During the hearing, respondent PODC opposed the petition on the following
grounds: petitioner deliberately concealed the fact that the property had been redeemed
on June 7, 2002; respondent Aquino had paid P5,194,742.00 as redemption money based
on the computation of petitioner; the Ex-Officio Sheriff had executed a Certificate of
Redemption in favor of respondent Aquino on June 7, 2002, a copy of which petitioner
refused to receive; respondent Aquino, as assignee, had offered to redeem the property on
May 29, 2002 and tendered the amount of P1,588,094.28, but petitioner insisted that the
redemption price was P16,805,414.71, including the loan account of the spouses Garbes;
that since respondent Aquino had redeemed the property from the Ex-OfficioSheriff on
June 7, 2002 within the one-year period after paying the total amount of P5,194,742.50, it
was respondent Aquino, and not petitioner, who is entitled to a writ of possession; [32] and
that besides, he was already in possession of the property. [33] It insisted that petitioner filed
its petition to preempt the resolution of the LRA on the consulta of the Register of
Deeds. The oppositor prayed that the petition be denied and that it be granted such other
relief and remedies just and equitable under the premises.
In its Reply, petitioner averred that since respondent Aquino had offered an
amount short of the redemption price of P16,805,414.71, under Section 47 of R.A. No.
8791 there was no valid redemption of the property. The loan of the spouses Garbes was
intended for respondent PODC as borrower. Petitioner alleged that it would have been
foolhardy for it to grant a P950,000.00 loan to the spouses without any security. Hence,
unless the entire loan account of respondent PODC and the spouses Garbes
(P16,805,414.71) was paid, the mortgage persisted. [34] It further posited that, since
respondent PODC had already assigned its right to redeem the property, the oppositor had
no more right or interest over the property; it was thus not the proper party as oppositor.
By way of rejoinder, respondent PODC averred that the Certificate of Redemption
executed by the Ex-Officio Sheriff is presumed valid and legal; the RTC, acting as a Land
Registration Court, had no jurisdiction to pass upon the validity of the Certificate of
Redemption;[35] upon the execution of the Deed of Assignment in favor of respondent
Aquino and the payment of redemption money, the latter had taken actual possession of
the property; based on the Certificate of Redemption, he had developed the property and
introduced a lot of improvements; and since a third party was in possession of the property,
possession could no longer be given to petitioner via a writ of possession. Respondent
PODC maintained that petitioner was not entitled to a writ of possession until the title was
consolidated in its name.
On December 12, 2002, the LRA resolved the consulta of the Register of Deeds as
follows:
While it is clear from the records that an agent of the assignee tried to
redeem the property within the one (1) year period of redemption and,
in fact, the Certificate of Redemption was executed by the Clerk of
Court and Ex-Officio Sheriff of the Regional Trial Court of San Fernando
City, Pampanga on the last day of the redemption period, the same was
not registered before the Registry of Deeds within the one (1) year
period of redemption. Borne by the records is the receipt before the
registry of the Certificate of Redemption and other related documents
on June 17, 2002 for annotation. Hence, the same was not registered
within the aforesaid one (1) year redemption period.
Considering that the document first presented and entered in the
Primary Entry Book of the registry is the Affidavit of Consolidation in
favor of the creditors, the mortgagee bank and not the Certificate of
Redemption in favor of the assignee of the debtor-mortgagor, although
admittedly, the latter instrument was executed on the last day of the
redemption period but not, in fact, registered within the same period,
under the premises, the consolidating mortgagee is possessed with a
superior right than the redemptioner. Under the law, the first in
registration is the first in law.[36]
The dispositive portion of the Resolution of the LRA Administrator reads:
WHEREFORE, premises considered, this Authority is of the opinion and
so holds that the Affidavit of Consolidation is superior over the
Certificate of Redemption, hence, registrable on TCT No. 275745-R.
SO ORDERED.[37]
Respondents filed a motion for reconsideration of the Resolution of the LRA Administrator.
On December 20, 2002, the court in LRC No. 890 issued an Order granting the
petition and ordered the issuance of a writ of possession, on a bond equivalent to the
market value of the property. It ruled that petitioner, as purchaser at the foreclosure sale,
was entitled to a writ of possession. The question of the validity of the redemption made by
respondent Aquino, to whom respondent PODC had assigned its right to redeem the
property, as well as the registrability of the Affidavit of Consolidation executed by
petitioner, through its president, and the validity of the Certificate of Redemption executed
by the clerk of court and Ex-OfficioSheriff of the RTC cannot be raised as a justification for
opposing the petition. It declared that the proceedings for the issuance of a writ of
possession were ex-parte and it was the courts ministerial duty to issue the writ.
Furthermore, the court held that petitioners right to the possession of the
foreclosed property is bolstered by the fact that no third party was actually holding the
property adverse to respondent PODC. Respondent Aquino, as assignee of respondent
PODCs right to redeem could not be considered a party holding the property adversely to
respondent PODC. Neither was there any pending civil case involving the rights of third
parties. Consequently, it was the ministerial duty of the RTC to issue a writ of possession in
favor of petitioner, as the winning bidder in the public auction.
The court declared that the purpose of the law in requiring the filing of a bond is
to answer for the reasonable rental for a period of twelve months for the use of the
property during the period of redemption. Since the period of redemption had already
expired, a bond was no longer necessary. Nevertheless, the court granted petitioners prayer
to put up a bond in the amount equivalent to the market value of the property. The court
ruled that petitioner was entitled to the possession of the property, together with
improvements existing thereon, as a mere incident of its right of ownership. [38]
Respondents filed a motion for reconsideration of the order, contending that
petitioner was entitled to a writ of possession after the lapse of the period for redemption
only if a Torrens title had been issued in its favor. Since the one-year redemption period had
lapsed without petitioner having been issued any Torrens title, the court erred when it
granted the petition for a writ of possession. It also pointed out that petitioner had failed to
present any title under its name.
For its part, petitioner stated in its Opposition to respondents motion for
reconsideration, that it was not necessary that a buyer in a public auction be issued a title
in its name before it could be entitled to a writ of possession upon the expiration of the
redemption period. The title is merely an evidence of ownership; it is the Certificate of Sale
that vests ownership in the buyer over the property sold. It insisted that the purchaser was
entitled to the possession of the property even after the lapse of the redemption period. [39]
On February 18, 2003, the court issued an Order denying the motion for
reconsideration of respondents. The court ruled that petitioner, as purchaser at public
auction, acquired the right to possess the property, and the right of the mortgagor from the
time it purchased the property and not from the issuance of the title over the property in
its name.[40]
On March 6, 2003, respondents filed a Petition for Certiorari with the CA,
assailing the orders of the RTC as follows:
I. Public respondent committed grave abuse of discretion amounting to
lack or excess of jurisdiction when it granted private respondents
prayer for an issuance of writ of possession in its favor when
serious issues affecting private respondents right to possess the
subject lot is still pending determination by the Land Registration
Authority.
II. Public respondent committed grave abuse of discretion amounting to
lack or excess of jurisdiction when it allowed private respondent
to post a redemption bond beyond the redemption period. [41]
They averred that the RTC should have denied the petition for a writ of
possession pending the resolution of the consulta by the LRA. They asserted that the issues
before the RTC were substantial, namely: (a) whether respondent Aquino, as the assignee
of the right of respondent PODC to redeem the property, had the right to do so; (b)
whether he had redeemed the property as evidenced by the Certificate of Redemption
executed by the Ex-Officio Sheriff; and (c) the redemption price. They insisted that the
obligation of the RTC to issue the writ of possession ceased to be ministerial.
Respondents maintained that they had the right to redeem the property. Since
there were grave doubts about the parties contentions as to who had the right to possess
the property, the RTC should have dismissed the petition for a writ of possession pending
determination of the substantial issues by the LRA. The trial court should have relied on the
rulings of this Court in Rivero de Ortega v. Natividad,[42] Barican v. Intermediate Appellate
Court,[43] and Sulit v. Court of Appeals.[44] Respondents asserted that petitioner was not
entitled to a writ of possession because contrary to Section 7 of Act No. 3135, it posted a
bond beyond the period for redemption. The case was docketed as CA-G.R. SP No. 75787.
In its Comment on the petition, petitioner insisted on its right to a writ of
possession and that the trial court acted in accordance with law and the facts of the
case. Moreover, it averred that the RTC, sitting as a land registration court, had jurisdiction
over the petition for a writ of possession; thus, the remedy of respondents was to appeal
the assailed order and not to file a petition for certiorari in the CA.
The CA failed to resolve the plea of respondents for a temporary restraining
order. Petitioner filed a motion for execution of the December 20, 2002 Order of the trial
court in LRC No. 890. The RTC granted the motion and issued a writ of possession on May
14, 2003.[45] The Sheriff implemented the writ and placed petitioner in possession of the
property.
On September 4, 2003, petitioner filed a Complaint[46] against respondents and
the Ex-Officio Sheriff in the RTC of Pampanga, for the nullification of the Deed of
Assignment executed by PODC in favor of Aquino and of the Certificate of Redemption
executed by the Ex-Officio Sheriff, and for damages with a plea for injunctive
relief. Petitioner filed an Amended/Supplemental Complaint and prayed that judgment be
rendered in its favor, thus:
WHEREFORE, it is prayed that a judgment be rendered in favor of the
plaintiff and against the defendants:
a) Annulling the Deed of Assignment dated May 11, 2002 executed by
and between defendants PODC and AQUINO.
b) Declaring the Certificate of Redemption dated June 7, 2001 issued by
the defendant Clerk of Court and Ex-Officio Sheriff as null and void ab
initio.
c) Ordering the defendants, jointly and severally, to pay the plaintiff the
amount of:

A. P100,000.00 as and for moral damages.
B. P100,000.00 as and for exemplary damages.
C. P50,000.00 as and for attorneys fees plus the
costs of suit.
OTHER RELIEF and remedies just equitable are also prayed for. [47]
The case was docketed as Civil Case No. 12785.
Meanwhile, the LRA Administrator issued a Resolution recalling the Resolution
dated December 12, 2002 and declared that the Certificate of Redemption executed by
the Ex-Officio Sheriff was superior to the Affidavit of Consolidation filed by petitioner.Based
on the June 14, 2002 letter of the Ex-Officio Sheriff and the Certificate of Redemption,
respondent Aquino, who was the assignee of respondent PODC, had redeemed the
property on June 7, 2002. Petitioner was already aware as early as June 7, 2002 of the
redemption of the property by respondent Aquino; hence, the date of registration of the
Certificate of Redemption on June 17, 2002 was of no legal consequence.
Accordingly, on September 10, 2003, respondents filed (in LRC No. 890) a Joint
Motion to quash the writ of possession issued by the trial court and for the issuance of a
new TCT. They averred that the LRA Administrator finally resolved that the Certificate of
Redemption issued by the Ex-Officio Sheriff was superior to the Affidavit of Consolidation of
petitioner. On the basis of the LRA Order, the Register of Deeds issued TCT No. 544978-A
over the property in the name of respondent Aquino as the registered owner.
The court denied the joint motion on November 10, 2003, holding that
respondent Aquino, as the registered owner of the subject property, should initiate the
appropriate action in the proper court in order to exclude petitioner or any other person
from the physical possession of his property. [48] The court ruled that after placing petitioner
in possession of the property, the court had lost jurisdiction over the case.
On November 27, 2003, respondents filed before the CA their Joint Notice of
Appeal[49] from the November 10, 2003 Order of the RTC in LRC No. 890. The appeal was
docketed as CA-G.R. CV No. 81607.
On November 28, 2003, petitioner filed a Manifestation, [50] stating that under
Section 47 of R.A. No. 8791, the period to exercise the right to redeem shall be until but not
after the registration of the Certificate of Foreclosure Sale with the Register of Deeds which
is in no case shall be more than three (3) months after the foreclosure, whichever is earlier.
[51]
The Certificate of Foreclosure Sale was registered on June 7, 2001 and since respondent
PODC had assigned/transferred the right to redeem the property to respondent Aquino
only on May 11, 2002, the redemption period had already lapsed.
On December 18, 2003, the CA rendered judgment in CA-G.R. SP No. 75787 granting the
petition of respondents and setting aside the assailed orders of the trial court. The fallo of
the decision reads:
WHEREFORE, the petition is GRANTED and the orders dated December
20, 200[2] and February 18, 2003 of respondent judge are VACATED and
SET ASIDE.
SO ORDERED.[52]
The appellate court ruled that the December 20, 2002 Order of the RTC granting
the petition for a writ of possession was interlocutory and not final; hence, it may be
questioned only via petition for certiorari under Rule 65 of the Rules of Court, not by
appeal. The CA cited the ruling of this Court in City of Manila v. Serrano.[53]
The CA further held that the RTC committed grave abuse of discretion amounting
to excess or lack of jurisdiction when it granted the application of petitioner for a writ of
possession. Respondent Aquino, as successor-in-interest of respondent PODC, had
redeemed the property on June 7, 2002 in accordance with Section 6 of Act No. 3135, as
amended, and in relation to Section 27(a), Rule 39 of the Rules of Court. Thus, although the
Certificate of Redemption was not registered before the Register of Deeds, he was entitled
to the possession thereof; the registration of the Certificate of Redemption in the Office of
the Register of Deeds is merely required to bind third persons. According to the CA,
petitioner may not refuse the redemption by respondent Aquino because the right of
petitioner over the property was merely inchoate until after the redemption period had
lapsed without the right being exercised by those allowed by law.
Petitioner moved for the reconsideration of its decision on the ground that, under
Section 47 of R.A. No. 8791, respondent PODC had only up to the registration of the
Certificate of Foreclosure Sale (June 7, 2001) but not more than three (3) months from the
public auction, whichever is earlier, within which to redeem the property; respondent
PODC, on the other hand, assigned its right to redeem the property on May 11, 2002, long
after the redemption period had expired; hence, respondent PODC had no more right to
assign it to respondent Aquino. Consequently, the latter had no right to redeem the
property, and the Certificate of Redemption executed by the Ex-Officio Sheriff was null and
void. Moreover, respondent Aquino failed to pay the correct amount of the redemption
price. Petitioner claimed that it acted in good faith when it had its Affidavit of Consolidation
registered in the Register of Deeds. In sum, petitioner ascribes error on the part of the CA in
nullifying the order of the RTC.
However, the CA denied the motion of petitioner on the ground that by invoking
Section 47 of R.A. No. 8791, it thereby changed its theory on appeal which, as held by this
Court in Dalumpines v. Court of Appeals,[54] is prohibited.[55]
 Petitioner SFRBI then filed a petition for review on certiorari with this Court for
the reversal of the Decision and Resolution of the CA, and raised the following issues:
I 10, 2003.
Whether or not the Court of Appeals seriously erred when it sanctioned
the Respondents resort to Certiorari under Rule 65 of the Revised Rules
of Court, questioning a final order and not an interlocutory order of the
RTC.
II
Whether or not the respondents are guilty of forum shopping by taking
both the remedy of appeal and certiorari on the same issues and
substantially the same set of facts.
III
Whether or not the Court of Appeals committed serious error when it
ruled on a matter that was not and could not have been submitted for
its adjudication.
IV
Whether or not the Honorable Court is precluded from reviewing the
factual findings of the Court of Appeals.
V in Rivero and Barican was erroneous because the right of third parties holding the property
Whether or not the petitioner SAFER Bank, as well as the Honorable
Court, is precluded from applying the governing law, under which the
redemption period had clearly expired.[56]
On the first issue, petitioner avers that the December 20, 2002 Order of the RTC
granting the writ of possession in its favor was final; hence, the remedy of respondents
herein, as oppositors below, was to appeal to the CA and not to file a special civil action
for certiorari. In fact, petitioner asserts, the writ of possession issued by the RTC had
already been implemented when respondents filed their petition in the CA on December
Petitioner also claims that the assailed order of the RTC was in accordance with
the law and the Rules of Court; even if it is merely an error of judgment and not a
jurisdictional error, resort to a petition for certiorari was inappropriate. Respondents were,
thus, proscribed from filing a petition for certiorari in the CA since the appeal was an
adequate and speedy remedy in the ordinary course of law and, indeed, they appealed the
November 10, 2003 Order of the RTC in LRC No. 890 to the CA in CA-G.R. CV No. 81607. It
had also posted a bond in the RTC to answer for any damages. The ruling of this Court
in City of Manila v. Serrano[57] is, therefore, not applicable.
Petitioner further avers that the CA erred in applying Act No. 3135, as amended,
instead of Section 47 of R.A. No. 8791, the General Banking Act of 2000. Respondent PODC
had the right to redeem the property not later than June 7, 2001. Undisputably, respondent
PODC failed to redeem the property before the registration of the Certificate of Sale; hence,
when respondent PODC executed the deed of assignment on May 11, 2002 in favor of
respondent Aquino, it had no more right to redeem the property.
Thus, it could not have assigned the right to redeem the property to respondent
Aquino. The latter redeemed the property only on June 7, 2002, long after the Certificate of
Sale was registered on June 7, 2001. Since there was no valid redemption of the property
by respondent Aquino, petitioner claimed that it was entitled to the writ of possession of
the property. It further insisted that the RTC, acting as a Land Registration Court, had
limited jurisdiction; it had no jurisdiction to resolve the issues on the validity of the deed of
assignment and the legality of respondent Aquinos redemption of the property, as well as
its ownership. Only the RTC in the exercise of its general jurisdiction in Civil Case No. 12765
(where petitioner assailed the deed of assignment and the Certificate of Redemption
executed by the Ex-Officio Sheriff) was vested with jurisdiction to resolve these issues. In
resolving these issues, the CA thereby preempted the RTC in Civil Case No. 12765 and
deprived it of due process. In any event, according to petitioner, the pronouncement of the
CA on the validity of the Deed of Assignment and Certificate of Redemption was merely
an obiter dictum.
Petitioner posits that the CAs reliance on the rulings of this Court
adverse to respondent PODC was not involved. Neither was the pendency of the consulta of
the Register of Deeds in the LRA a bar to the issuance of a writ of possession in its favor by
the RTC acting as a land registration court.It was the ministerial duty of the RTC to issue a
writ of possession over the property to petitioner as purchaser at the foreclosure sale
during and after the redemption period.
Petitioner further maintains that respondents filed their petition for certiorari in
the CA and delineated the issues to be resolved. It did not change its theory in the CA when
it filed its motion for reconsideration of the CA decision. Citing the ruling in Rivera v. Court
of Appeals,[58] petitioner avers that a theory of the case is that which refers to the facts on
which the cause of action is based. The facts are those alleged in the complaint and
satisfactorily proven at the trial. It insists that it did not change the set of facts that it
submitted and presented to the CA. It was not estopped from citing Section 47 of R.A. No.
8791. It had posited in the RTC that respondents failed to redeem the property before the
expiration of the redemption period. Besides, as held by this Court in Lianga Lumber
Company v. Lianga Timber Co., Inc.,[59] a party may change his theory on appeal when the
factual basis thereof would not require presentation of any further evidence by the adverse
party to enable it to properly meet the issue raised in the new theory. The failure of a party
to invoke an applicable law in a given case does not create a vested right, and an erroneous
interpretation does not give rise to estoppel. Even if petitioner did not invoke R.A. No.
8791, it behooved the CA to apply the law before it, prescinding from the theory advocated
by the parties. Neither may respondents invoke estoppel. They were aware of the
provisions of the law as well as the facts and circumstances warranting the application
thereof.
Petitioner also imputes forum shopping to respondents because the latter raised
the issue of possession in both CA-G.R. SP No. 75787 and CA-G.R. CV No. 81607. Petitioner
also accuses respondents of using the decision in CA-G.R. SP No. 75787 to support their
contention in CA-G.R. CV No. 81607. It further contends that the writ of possession issued
by the RTC was void.
For their part, respondents aver that the RTC committed grave abuse of its
discretion in issuing the December 20, 2002 andFebruary 18, 2003 Orders. Hence, the
decision of the CA was in accord with the law and the Rules of Court. They assert that given
the circumstances obtaining in this case, their petition for certiorari was proper. Although
they had the right to appeal the orders of the RTC, the same was not a speedy and
adequate remedy. They insist that they were not guilty of forum shopping because the only
issue in CA-G.R. CV No. 81607 was the validity of the Order of the RTC dated November 10,
2003, which denied their motion to quash the writ of possession. On the other hand,
challenged in CA-G.R. SP No. 75787 was the Order of the RTC granting the petition for a writ
of possession. Since the Ex-OfficioSheriff declared in the Certificate of Redemption that
respondent Aquino redeemed the property within the one-year period, petitioner was
estopped from relying on Section 47 of R.A. No. 8791. Respondents point out that in the
RTC and the CA, petitioner had insisted that respondent Aquino had one (1) year from June
7, 2001 within which to redeem the property as provided in Act No. 3135, as amended;
thus, petitioner was proscribed from changing the theory it pursued in the RTC and the
CA. Moreover, under Section 71 of R.A. No. 8791, redemption by entities of property
mortgaged is governed by R.A. No. 7353, under which the period of redemption is one year
from the registration of the Certificate of Sale.
The Ruling of the Court
The petition is meritorious.
The CA erred in holding that the Order of the RTC granting the petition for a writ
of possession was merely interlocutory.Interlocutory orders are those that determine
incidental matters and which do not touch on the merits of the case or put an end to the
proceedings. A petition for certiorari under Rule 65 of the Rules of Court is the proper
remedy to question an improvident interlocutory order. [60] On the other hand, a final order
is one that disposes of the whole matter or terminates the particular proceedings or action
leaving nothing to be done but to enforce by execution what has been determined. It is one
that finally disposes of the pending action so that nothing more can be done with it in the
lower court.[61] The remedy to question a final order is appeal under Rule 41 of the Rules of
Court.
We agree with petitioners contention that the December 20, 2002 Order of the
RTC granting the petition for a writ of possession is final. The remedy of respondents was to
appeal to the CA by filing their notice of appeal within the period therefor. [62] Indeed, when
the RTC denied on November 10, 2003 the motion of respondents to quash the writ the
court had earlier issued, respondents appealed to the CA under Rule 41 of the Rules of
Court. The appeal was docketed as CA-G.R. CV No. 81607.Respondents did not file a
supplemental petition in CA-G.R. SP No. 75787.
The reliance of the CA in City of Manila v. Serrano [63] is misplaced. In that case, the
trial court issued the writ of possession in connection with a complaint for expropriation
under Rule 67 of the Rules of Court. Such a writ is interlocutory in nature. [64] On the other
hand, an order granting a writ of possession under Act No. 3135, as amended, is of a
different species. The latter order is final, hence, appealable. [65] Even if the trial court erred
in granting a petition for a writ of possession, such an error is merely an error of judgment
correctible by ordinary appeal and not by a petition for a writ of certiorari.[66] Such writ
cannot be legally used for any other purpose.
Certiorari is a remedy narrow in its scope and inflexible in character. It is not a
general utility tool in the legal workshop. [67]Certiorari will issue only to correct errors of
jurisdiction and not to correct errors of judgment. An error of judgment is one which the
court may commit in the exercise of its jurisdiction, and which error is reviewable only by
an appeal. Error of jurisdiction is one where the act complained of was issued by the court
without or in excess of jurisdiction and which error is correctible only by the extraordinary
writ of certiorari. As long as the court acts within its jurisdiction, any alleged errors
committed in the exercise of its discretion will amount to nothing more than mere errors of
judgment, correctible by an appeal if the aggrieved party raised factual and legal issues; or
a petition for review under Rule 45 of the Rules of Court if only questions of law are
involved.[68]
A cert writ may be issued if the court or quasi-judicial body issues an order with
grave abuse of discretion amounting to excess or lack of jurisdiction. Grave abuse of
discretion implies such capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction or, in other words, where the power is exercised in an arbitrary manner
by reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to
amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined
or to act at all in contemplation of law. [69] Mere abuse of discretion is not
enough. Moreover, a party is entitled to a writ of certiorari only if there is no appeal nor
any plain, speedy or adequate relief in the ordinary course of law.
The raison detre for the rule is that when a court exercises its jurisdiction, an error after, the registration of the certificate of foreclosure sale with the
committed while so engaged does not deprive it of the jurisdiction being exercised when applicable Register of Deeds which in no case shall be more than three
the error was committed. If it did, every error committed by a court would deprive it of its (3) months after foreclosure, whichever is earlier. Owners of property
jurisdiction and every erroneous judgment would be a void judgment. In such a situation,
that has been sold in a foreclosure sale prior to the effectivity of this Act
the administration of justice would not survive. Hence, where the issue or question
involved affects the wisdom or legal soundness of the decision not the jurisdiction of the shall retain their redemption rights until their expiration.
court to render said decision the same is beyond the province of a special civil action
for certiorari.

Under Section 8, Act No. 3135, as amended, the debtor-mortgagor may file a
motion to set aside a writ of execution:
Section 8. Setting aside of sale and writ of possession. The debtor may,
in the proceedings in which possession was requested, but not later
than thirty days after the purchaser was given possession, petition that
the sale be set aside and the writ of possession cancelled, specifying the
damages suffered by him, because the mortgage was not violated or
the sale was not made in accordance with the provisions hereof, and
the court shall take cognizance of this petition in accordance with the
summary procedure provided for in section one hundred and twelve of
Act Numbered Four hundred and ninety-six; and if it finds the complaint
of the debtor justified, it shall dispose in his favor of all or part of the
bond furnished by the person who obtained possession. Either of the
parties may appeal from the order of the judge in accordance with
section fourteen of Act Numbered Four hundred and ninety-six; but the
order of possession shall continue in effect during the pendency of the
appeal.
The ministerial duty of the RTC to issue a writ of possession does not become
discretionary simply because the Register of Deeds had elevated in consulta to the LRA the
question of whether the Torrens title should be issued in favor of petitioner whose Affidavit
of Consolidation was registered in the Office of the Register of Deeds, or in favor of
respondent Aquino who claimed to have redeemed the property on June 7, 2002 as
gleaned from the Certificate of Redemption of the Ex-Officio Sheriff but registered only on
June 17, 2002. Respondent Aquino claimed to have redeemed the property with the
correct redemption price and within the one year period of redemption. The LRA himself
admitted that the issue of whether respondent Aquino had remitted the correct
redemption price is a matter that should be resolved by the regular courts. [72] The LRA was
vested with jurisdiction to resolve only the registrability of the Affidavit of Consolidation
executed by petitioner and the Certificate of Redemption executed by the Ex-Officio Sheriff.
We need not rule on the issue of whether respondent Aquino had lawfully
redeemed the property as provided in Section 47 of R.A. No. 8791. This issue shall be
passed upon by the RTC in Civil Case No. 12785 after the parties present their testimonial
and documentary evidence.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision of the
Court of Appeals is SET ASIDE AND REVERSED. SO ORDERED.

The purchaser may appeal the order to the CA if his petition is denied by the RTC. However,
during the pendency of the appeal, the purchaser must be placed in possession of the
property, such possession being predicated on the right of ownership. [70]

The threshold issue between petitioner and respondents in the RTC was the
correct amount of redemption money under Section 47 of R.A. No. 8791. Respondent
Aquino had the right to file an action against petitioner in the RTC in the exercise of its
general jurisdiction to enforce redemption within the redemption period to preserve its
right to redeem the foreclosed property.[71] It bears stressing that the controversy between
the parties relates to the precise amount of redemption: petitioner contended that, under G.R. No. 167988 February 6, 2007
the real estate mortgage executed by respondent PODC in its favor, the loan account of the
spouses Garbes was secured by the property covered by said deed; on the other hand, MA. CONCEPCION L. REGALADO, Petitioner,
respondents averred that only the loan account of respondent PODC was secured by the vs.
mortgage of its property. Indeed, the parties could have raised the issue of the redemption ANTONIO S. GO, Respondent.
period under the second paragraph of Section 47 of R.A. No. 8791. The provision reads:
DECISION
Notwithstanding Act 3135, juridical persons whose property is being
sold pursuant to an extrajudicial foreclosure, shall have the right to
CHICO-NAZARIO, J.:
redeem the property in accordance with this provision until, but not
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, of the
Resolution1 dated 30 August 2004 of the Court of Appeals, finding petitioner Ma.
Concepcion L. Regalado (Atty. Regalado) guilty of indirect contempt. Likewise assailed in this
petition is the Resolution2 denying her Motion for Reconsideration. The dispositive portion
of the Resolution reads:
WHEREFORE, Atty. Ma. Concepcion Regalado of De Borja Medialdea Bello Guevarra and
Gerodias Law Offices is declared GUILTY of INDIRECT CONTEMPT and is ordered to pay a
fine of Five Thousand Pesos (P5,000), with a STERN WARNING that a repetition of the same
or similar acts in the future will be dealt with more severely. The imposed fine should be
paid to this Court upon finality hereof.
Let a copy of this resolution be furnished the Bar Confidant (sic), the Integrated Bar of the
Philippines and the Court Administrator for investigation and possible administrative
sanction.3
The present controversy stemmed from the complaint of illegal dismissal filed before the
Labor Arbiter by herein respondent Antonio S. Go against Eurotech Hair Systems, Inc.
(EHSI), and its President Lutz Kunack and General Manager Jose E. Barin.
In a Decision4 dated 29 December 2000, the Labor Arbiter ruled that respondent Go was
illegally dismissed from employment, the decretal portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. Declaring [EHSI, Kunack and Barin] guilty of illegal dismissal;
2. Considering that reinstatement would not be feasible because of strained
relations, [EHSI, Kunack and Barin] are ordered to pay [herein respondent Go]
backwages in the amount of Php900,000.00 (Php60,000 x 15 months), separation
pay of Php180,000.00 (one month pay for every year of service = Php60,000 x 3
years);
3. Ordering [EHSI, Kunack and Barin] to pay [respondent Go] Php500,000.00 as
moral damages;
4. Ordering [EHSI, Kunack and Barin] to pay [respondent Go] Php300,000 as
exemplary damages;
5. Ordering the payment of ten percent (10%) of the total monetary award as
attorneys fees in the sum of Php188,000.00.
All other claims are hereby dismissed for lack of merit.
On appeal to the National Labor Relations Commission (NLRC), EHSI, Kunack and Barin
employed the legal services of De Borja Medialdea Bello Guevarra and Gerodias Law Offices
where herein petitioner Atty. Regalado worked as an associate.5
On 11 June 2001, the NLRC rendered a Decision 6 reversing the Labor Arbiters decision and
declaring that respondent Gos separation from employment was legal for it was attended
by a just cause and was validly effected by EHSI, Kunack and Barin. The dispositive part of
the decision reads:
WHEREFORE, the appealed decision is set aside. The complaint below is dismissed for being
without merit.
For lack of patent or palpable error, the Motion for Reconsideration interposed by
respondent Go was denied by the NLRC in an Order 7 dated 20 December 2001.
Aggrieved, respondent Go elevated the adverse decision to the Court of Appeals which was
docketed as CA-G.R. SP No. 69909 entitled, Antonio S. Go v. National Labor Relations
Commission, Eurotech Hair Systems, Inc., Lutz Kunack and Jose Barin.
On 9 July 2003, the Court of Appeals promulgated a Decision 8 setting aside the ruling of the
NLRC and reinstating the decision of the Labor Arbiter adjudging EHSI, Kunack and Barin
guilty of illegal dismissal. The appellate court thus ordered EHSI, Kunack and Barin to pay
respondent Go full backwages, separation pay, moral and exemplary damages. The fallo of
the decision reads:
WHEREFORE, the petition for certiorari is GRANTED. The assailed decision of the NLRC
promulgated on July 30, 2001 and its Order dated December 20, 2001 are SET ASIDE while
the decision of Labor Arbiter Waldo Emerson R. Gan dated December 29, 2000 declaring
the dismissal of [herein respondent Go] as illegal is hereby REINSTATED with the
modification that [EHSI] is hereby Ordered to pay [respondent Go]:
1. His full backwages from the time of his illegal dismissal until the finality of this
decision;
2. Separation pay equal to one month pay for every year of service;
3. Moral damages in the amount of P50,000.00; and
4. Exemplary damages in the amount of P20,000.00
The award of attorneys fees is DELETED.
EHSI, Kunack and Barin were able to receive a copy of the decision through registered mail
on 17 July 2003 while respondent Go received his copy on 21 July 2003. 9
On 16 July 2003, after the promulgation of the Court of Appeals decision but prior to the
receipt of the parties of their respective copies, the parties decided to settle the case and
signed a Release Waiver and Quitclaim10 with the approval of the Labor Arbiter. In view of
the amicable settlement, the Labor Arbiter, on the same day, issued an Order 11 dismissing
the illegal dismissal case with prejudice. The order thus reads:
In view of the Release, Waiver and Quitclaim voluntarily executed by the [herein
respondent] Antonio S. Go, let the instant case be as it is hereby DISMISSED WITH
PREJUDICE.
The execution of the compromise agreement was attended by the counsel for EHSI, Kunack
and Barin, petitioner Atty. Regalado, and respondent Go, but in the absence and without
the knowledge of respondent Gos lawyer. 12
After the receipt of a copy of the Court of Appeals decision, respondent Go, through
counsel, filed, on 29 July 2003, a Manifestation with Omnibus Motion 13 seeking to nullify
the Release Waiver and Quitclaim dated 16 July 2003 on the ground of fraud, mistake or
undue influence. In the same motion, respondent Go, through counsel, moved that
petitioner Atty. Regalado be made to explain her unethical conduct for directly negotiating
with respondent Go without the knowledge of his counsel. The motion thus prays:
WHEREFORE, premises considered, it is most respectfully prayed for the Honorable Court to
declare Null and Void the dismissal of the instant (sic), with prejudice, by Labor (sic) Waldo
Emerson Gan, as well as the Release Waiver and Quitclaim dated July 16, 2003 signed by
[herein respondent Go] for having been obtained through mistake, fraud or undue
influence committed by [EHSI, Kunack and Barin] and their counsels (sic).
It is likewise prayed for [EHSI, Kunack and Barins] counsel, particularly Atty. Ma.
Concepcion Regalado, to be required to explain why no disciplinary action should be taken
against them (sic) for their (sic), unethical conduct of directly negotiating with [respondent
Go] without the presence of undersigned counsel, and for submitting the Release, Waiver
and Quitclaim before Labor Arbiter Waldo Emerson Gan knowing fully well that the
controversy between [respondent Go] and [EHSI] is still pending before this Honorable
Court.
[Respondent Go] likewise prays for such other relief [as may be] just and equitable under
the premises.14
For their part, EHSI, Kunack and Barin submitted a Manifestation and Motion with Leave of
Court15 praying that CA-G.R. SP No. 69909 be considered settled with finality in view of the
amicable settlement among the parties which resulted in the dismissal of respondent Gos
complaint with prejudice in the Labor Arbiters Order dated 16 July 2003.
In addition, EHSI, Kunack and Barin also filed a Motion for Reconsideration 16 with an ad
cautelam that in case of unfavorable action on their foregoing Manifestation and Motion,
the appellate court should reconsider its decision dated 9 July 2003.
Acting on the motions, the appellate court issued a Resolution 17 on 19 November 2003
annulling the Order of the Labor Arbiter dated 16 July 2003 for lack of jurisdiction. It also
denied for lack of merit EHSI, Kunack and Barins Motion for Reconsideration Ad Cautelam.
In the same resolution, petitioner Atty. Regalado was ordered to explain why she should not
be cited for contempt of court for violating Canon 9 of the Canons of Professional Ethics.
The decretal portion of the Resolution reads:
WHEREFORE, premises considered, the Manifestation with Omnibus Motion is PARTIALLY
GRANTED. The order of Labor Arbiter Gan dismissing the case with prejudice is hereby
declared NULL and VOID for lack of jurisdiction. [EHSI, Kunack and Barins] counsel, [herein
petitioner] Atty. Ma. Concepcion Regalado is ordered to SHOW CAUSE within five (5) days
from receipt of this Resolution why she should not be cited for contempt of court for
directly negotiating with [herein respondent Go] in violation of Canon 9 of the Canons of
Professional Ethics. On the other hand, the Motion for Reconsideration Ad Cautelam is
hereby denied for lack of merit.
EHSI, Kunack and Barin thus filed a Petition for Review on Certiorari before this Court,
assailing the Court of Appeals decision promulgated on 9 July 2003 and its Resolution dated
19 November 2003, denying their Motion for Reconsideration. The case is cognized by
another division of this Court.
For her part, petitioner Atty. Regalado submitted a Compliance 18 and explained that she
never took part in the negotiation for the amicable settlement of the illegal dismissal case
with respondent Go which led to the execution of a compromise agreement by the parties
on 16 July 2003. EHSI, Kunack and Barin, through a Mr. Ragay, a former EHSI employee and
a close ally of respondent Go, were the ones who negotiated the settlement.
Further, petitioner Atty. Regalado maintained that she never met personally respondent Go,
not until 16 July 2003, when the latter appeared before the Labor Arbiter for the execution
of the Release Waiver and Quitclaim. Petitioner Atty. Regalado claimed that she was in fact
apprehensive to release the money to respondent Go because the latter cannot present
any valid identification card to prove his identity. It was only upon the assurance of Labor
Arbiter Gan that Antonio S. Go and the person representing himself as such were one and
the same, that the execution of the agreement was consummated.
Considering the circumstances, petitioner Atty. Regalado firmly stood that there was no way
that she had directly dealt with respondent Go, to the latters damage and prejudice, and
misled him to enter into an amicable settlement with her client.
On 30 August 2004, the Court of Appeals issued a Resolution 19 disregarding petitioner Atty.
Regalados defenses and adjudging her guilty of indirect contempt under Rule 71 of the
Revised Rules of Court. As declared by the appellate court, even granting arguendo that
petitioner Atty. Regalado did not participate in the negotiation process, she was
nonetheless under the obligation to restrain her clients from doing acts that she herself was
prohibited to perform as mandated by Canon 16 of the Canons of Professional Ethics.
However, instead of preventing her clients from negotiating with respondent Go who was
unassisted by his counsel, Atty. Regalado actively participated in the consummation of the
compromise agreement by dealing directly with respondent Go and allowing him to sign
the Release Waiver and Quitclaim without his lawyer.
Undaunted, petitioner Atty. Regalado filed a Motion for Reconsideration which was also
denied by the appellate court for lack of merit. 20
Hence, this instant Petition for Review on Certiorari,21 raising the following issues:
I.
WHETHER OR NOT THE COURT OF APPEALS COMPLETELY VIOLATED PETITIONERS
CONSTITUTIONAL RIGHTS.
II.
WHETHER OR NOT THE COURT OF APPEALS TOTALLY DISREGARDED THE MANDATORY
PROVISION OF RULE 71 OF THE 1997 RULES OF CIVIL PROCEDURE.
III.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED A MANIFEST ERROR OF LAW IN
RULING THAT PETITIONER IS ESTOPPED FROM CHALLENGING ITS AUTHORITY TO ENTERTAIN
THE CONTEMPT CHARGES AGAINST HER.
IV.
WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DISREGARDING THE
OVERWHELMING EVIDENCE ON RECORD TO EFFECT THAT PETITIONER DID NOT COMMIT
ANY CONTUMACIOUS CONDUCT.
V.
WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION
AND COMMITTED A GROSS MISAPPRECIATION OF FACTS IN FINDING THE PETITIONER
GUILTY OF INDIRECT CONTEMPT ON THE BASIS OF THE CONFLICTING, UNCORROBORATED,
AND UNVERIFIED ASSERTIONS OF THE RESPONDENT.
Considering that the issues raised herein are both questions of law and fact, and consistent
with our policy that this Court is not a trier of facts, we shall address only the pure
questions of law and leave the factual issues, which are supported by evidence, as found by
the appellate court. It is an oft-repeated principle that in the exercise of the Supreme
Courts power of review, the Court is not a trier of facts and does not normally undertake
the re-examination of the evidence presented by the contending parties during the trial of
the case considering that the findings of facts of the Court of Appeals, if supported by
evidence, are conclusive and binding upon this Court.1awphi1.net22
Contempt of court is a defiance of the authority, justice or dignity of the court; such
conduct as tends to bring the authority and administration of the law into disrespect or to
interfere with or prejudice parties litigant or their witnesses during litigation. 23 It is defined
as disobedience to the Court by acting in opposition to its authority, justice, and dignity. It
signifies not only a willful disregard or disobedience of the courts orders, but such conduct
as tends to bring the authority of the court and the administration of law into disrepute or
in some manner to impede the due administration of justice. 24
The power to punish for contempt is inherent in all courts and is essential to the
preservation of order in judicial proceedings and to the enforcement of judgments, orders,
and mandates of the court, and consequently, to the due administration of justice. 25
Thus, contempt proceedings has a dual function: (1) vindication of public interest by
punishment of contemptuous conduct; and (2) coercion to compel the contemnor to do
what the law requires him to uphold the power of the Court, and also to secure the rights
of the parties to a suit awarded by the Court.26
In our jurisdiction, the Rules of Court penalizes two types of contempt, namely direct
contempt and indirect contempt. 27
Direct contempt is committed in the presence of or so near a court as to obstruct or
interrupt the proceedings before the same, and includes disrespect toward the court,
offensive personalities toward others, or refusal to be sworn or answer as a witness, or to
subscribe an affidavit or deposition when lawfully required to do so. 28
On the other hand, Section 3, Rule 71 of the Rules of Court enumerates particular acts
which constitute indirect contempt, thus:
(a) Misbehavior of an officer of a court in the performance of his official duties or
in his official transactions;
(b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a
court, including the act of a person who, after being dispossessed or ejected from
any real property by the judgment or process of any court of competent
jurisdiction, enters or attempts or induces another to enter into or upon such real
property, for the purpose of executing acts of ownership or possession, or in any
manner disturbs the possession given to the person adjudged to be entitled
thereto;
(c) Any abuse of or any unlawful interference with the processes or proceedings
of a court not constituting direct contempt under Section 1 of this Rule;
(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or
degrade the administration of justice;
(e) Assuming to be an attorney or an officer of a court, and acting as such without
authority;
 (f) Failure to obey a subpoena duly served;
(g) The rescue, or attempted rescue, of a person or property in the custody of an
officer by virtue of an order or process of a court held by him.
But nothing in this section shall be so construed as to prevent the court from issuing
process to bring the respondent into court, or from holding him in custody pending such
proceedings. (Emphasis supplied.)29
Section 4, Rule 71 of the same Rules provides how proceedings for indirect contempt
should be commenced, thus:
SEC. 4. How proceedings commenced. Proceedings for indirect contempt may be
initiated motu proprio by the court against which the contempt was committed by an order
or any other formal charge requiring the respondent to show cause why he should not be
punished for contempt.
In all other cases, charges for indirect contempt shall be commenced by a verified petition
with supporting particulars and certified true copies of documents or papers involved
therein, and upon full compliance with the requirements for filing initiatory pleadings for
civil actions in the court concerned. If the contempt charges arose out of or are related to a
principal action pending in the court, the petition for contempt shall allege that fact
but said petition shall be docketed, heard and decided separately, unless the court in its
discretion orders the consolidation of the contempt charge and the principal action for joint
hearing and decision. (Emphases supplied.)
As can be gleaned above, the provisions of the Rules are unequivocal. Indirect contempt
proceedings may be initiated only in two ways: (1) motu proprio by the court; or (2) through
a verified petition and upon compliance with the requirements for initiatory pleadings.
Procedural requirements as outlined must be complied with.
There is no doubt that the complained acts of Atty. Regalado would fall under paragraphs
(a) and (d) of Section 3, Rule 71, as in fact, she was adjudged guilty of indirect contempt.
But were the proceedings conducted in convicting petitioner done in accordance with law?
In the instant case, the indirect contempt proceedings was initiated by respondent Go
through a Manifestation with Omnibus Motion. 30 It was based on the aforesaid Motion that
the appellate court issued a Resolution31dated 19 November 2003, requiring petitioner Atty.
Regalado to show cause why she should not be cited for contempt.
Clearly, respondent Gos Manifestation with Omnibus Motion was the catalyst which set
everything in motion and led to the eventual conviction of Atty. Regalado. It was
respondent Go who brought to the attention of the appellate court the alleged misbehavior
committed by petitioner Atty. Regalado. Without such positive act on the part of
respondent Go, no indirect contempt charge could have been initiated at all.
Indeed, the appellate court itself, in its Resolution dated 30 August 2004, made categorical
findings as to how the contempt charge was initiated, to wit:
In the present case, [respondents Go] Manifestation With Omnibus Motion which led to
our 19 November 2003 Resolution requiring Atty. Regalado to explain why she should not
be cited for contempt, x x x.32
We cannot, therefore, argue that the Court of Appeals on its own initiated the indirect
contempt charge without contradicting the factual findings made by the very same court
which rendered the questioned resolution.
It is true in Leonidas v. Judge Supnet, 33 this Court ruled that the contempt proceedings was
considered commenced by the court motu proprio even if the show cause order came after
the filing of the motions to cite for contempt filed by the adverse party. The Decision thus
reads:
Thus, independently of the motions filed by the Tamondong Spouses, it was the Pasay MTC
which commenced the contempt proceedings motu proprio. No verified petition is required
if proceedings for indirect contempt are initiated in this manner, and the absence of a
verified petition does not affect the procedure adopted.
It is true that the Tamondong Spouses did file a Motion To Cite Plaintiff For Contempt Of
Court, dated May 17, 2000. In this pleading they prayed that Union Bank be declared in
indirect contempt of court for its disobedience to the Pasay MTCs Order dated May 9,
2000. This Order dated May 9, 2000 specifically directed Union Bank to "return immediately
to the defendants the replevied motor vehicle." However, the Tamondong Spouses
unverified motion dated May 17, 2000 cannot invalidate the contempt proceedings
because these proceedings were initiated by respondent judge motu proprio in accordance
with Section 4, Rule 71 of the 1997 Rules of Civil Procedure.
This above-cited case, however, has no application in the case at bar for the factual milieu
of the cases are different from each other. In Leonidas, there was an order of the court that
was utterly violated by Union Bank. Thus, even in the absence of the motion of spouses
Tamondong to cite Union Bank in contempt, the court a quo on its own can verily initiate
the action. In the present case, the appellate court could not have acquired knowledge of
petitioner Atty. Regalados misbehavior without respondent Gos Manifestation with
Omnibus Motion reiterating the alleged deceitful conduct committed by the former.
Having painstakingly laid down that the instant case was not initiated by the court motu
proprio necessitates us to look into the second mode of filing indirect contempt
proceedings.
In cases where the court did not initiate the contempt charge, the Rules prescribe that a
verified petition which has complied with the requirements of initiatory pleadings as
outlined in the heretofore quoted provision of second paragraph, Section 4, Rule 71 of the
Rules of Court, must be filed.
The manner upon which the case at bar was commenced is clearly in contravention with
the categorical mandate of the Rules. Respondent Go filed a Manifestation with Omnibus
Motion, which was unverified and without any supporting particulars and documents. Such
procedural flaw notwithstanding, the appellate court granted the motion and directed
petitioner Atty. Regalado to show cause why she should not be cited for contempt. Upon
petitioner Atty. Regalados compliance with the appellate courts directive, the tribunal
proceeded in adjudging her guilty of indirect contempt and imposing a penalty of fine,
completely ignoring the procedural infirmities in the commencement of the indirect
contempt action.
It bears to stress that the power to punish for contempt is not limitless. It must be used
sparingly with caution, restraint, judiciousness, deliberation, and due regard to the
provisions of the law and the constitutional rights of the individual. 34
The limitations in the exercise of the power to punish for indirect contempt are delineated
by the procedural guidelines specified under Section 4, Rule 71 of the Rules of Court. Strict
compliance with such procedural guidelines is mandatory considering that proceedings
against person alleged to be guilty of contempt are commonly treated as criminal in
nature.35
As explained by Justice Florenz Regalado, 36 the filing of a verified petition that has complied
with the requirements for the filing of initiatory pleading, is mandatory, and thus states:
1. This new provision clarifies with a regularity norm the proper procedure for commencing
contempt proceedings. While such proceeding has been classified as special civil action
under the former Rules, the heterogenous practice tolerated by the courts, has been for
any party to file a motion without paying any docket or lawful fees therefore and without
complying with the requirements for initiatory pleadings, which is now required in the
second paragraph of this amended section.
xxxx
Henceforth, except for indirect contempt proceedings initiated motu propio by order of or a
formal charge by the offended court, all charges shall be commenced by a verified
petition with full compliance with the requirements therefore and shall be disposed in
accordance with the second paragraph of this section.
Time and again we rule that the use of the word "shall" underscores the mandatory
character of the Rule. The term "shall" is a word of command, and one which has always or
which must be given a compulsory meaning, and it is generally imperative or mandatory. 37
In Enriquez v. Enriquez,38 this Court applied the word "shall" by giving it mandatory and
imperative import and ruled that non-compliance with the mandatory requirements of the
Rules goes into the very authority of the court to acquire jurisdiction over the subject
matter of the case, thus:
"However, the 1997 Rules of Civil Procedure, as amended, which took effect on July 1,
1997, now require that appellate docket and other lawful fees must be paid within the
same period for taking an appeal. This is clear from the opening sentence of Section 4, Rule
41 of the same rules that, "(W)ithin the period for taking an appeal, the appellant shall pay
to the clerk of court which rendered the judgment or final order appealed from, the full
amount of the appellate court docket and other lawful fees."
xxxx
Time and again, this Court has consistently held that payment of docket fee within the
prescribed period is mandatory for the perfection of an appeal. Without such payment, the
appellate court does not acquire jurisdiction over the subject matter of the action and the
decision sought to be appealed from becomes final and executory. 39(Emphases supplied.)
In United States v. de la Santa,40 which bears parallelism in the instant case, we held:
The objection in this case is not, strictly speaking, to the sufficiency of the complaint, but
goes directly to the jurisdiction of the court over the crime with which the accused was
charged. x x x. (Emphasis supplied.)
Even if the contempt proceedings stemmed from the main case over which the court
already acquired jurisdiction, the Rules direct that the petition for contempt be treated
independently of the principal action. Consequently, the necessary prerequisites for the
filing of initiatory pleadings, such as the filing of a verified petition, attachment of a
certification on non-forum shopping, and the payment of the necessary docket fees, must
be faithfully observed.41
We now proceed to the issue of estoppel raised by the Court of Appeals. When petitioner
Atty. Regalado brought to the attention of the appellate court through a Motion for
Reconsideration the remedial defect attendant to her conviction, the Court of Appeals,
instead of rectifying the palpable and patent procedural error it earlier committed,
altogether disregarded the glaring mistake by interposing the doctrine of estoppel. The
appellate court ruled that having actively participated in the contempt proceedings,
petitioner Atty. Regalado is now barred from impugning the Court of Appeals jurisdiction
over her contempt case citing the case of People v. Regalario. 42
We do not agree.
Laches is defined as the "failure or neglect for an unreasonable and unexplained length of
time, to do that which, by exercising due diligence, could or should have been done earlier,
it is negligence or omission to assert a right within a reasonable length of time, warranting
a presumption that the party entitled to assert it either has abandoned it or declined to
assert it."43
The ruling in People v. Regalario44 that was based on the landmark doctrine enunciated in
Tijam v. Sibonghanoy45 on the matter of jurisdiction by estoppel is the exception rather than
the rule. Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in
cases in which the factual milieu is analogous to that in the cited case. In such
controversies, laches should have been clearly present; that is, lack of jurisdiction must
have been raised so belatedly as to warrant the presumption that the party entitled to
assert it had abandoned or declined to assert it.46

In Sibonghanoy,47 the defense of lack of jurisdiction was raised for the first time in a motion
to dismiss filed by the Surety 48 almost 15 years after the questioned ruling had been
rendered.49 At several stages of the proceedings, in the court a quo as well as in the Court
of Appeals, the Surety invoked the jurisdiction of the said courts to obtain affirmative relief
and submitted its case for final adjudication on the merits. It was only when the adverse
decision was rendered by the Court of Appeals that it finally woke up to raise the question
of jurisdiction.50

Clearly, the factual settings attendant in Sibonghanoy are not present in the case at bar.
Petitioner Atty. Regalado, after the receipt of the Court of Appeals resolution finding her
guilty of contempt, promptly filed a Motion for Reconsideration assailing the said courts
jurisdiction based on procedural infirmity in initiating the action. Her compliance with the
appellate courts directive to show cause why she should not be cited for contempt and
filing a single piece of pleading to that effect could not be considered as an active
participation in the judicial proceedings so as to take the case within the milieu
of Sibonghanoy. Rather, it is the natural fear to disobey the mandate of the court that could
lead to dire consequences that impelled her to comply.

The provisions of the Rules are worded in very clear and categorical language. In case
where the indirect contempt charge is not initiated by the courts, the filing of a verified
petition which fulfills the requirements on initiatory pleadings is a prerequisite. Beyond
question now is the mandatory requirement of a verified petition in initiating an indirect
contempt proceeding. Truly, prior to the amendment of the 1997 Rules of Civil Procedure,
mere motion without complying with the requirements for initiatory pleadings was
tolerated by the courts.51 At the onset of the 1997 Revised Rules of Civil Procedure,
however, such practice can no longer be countenanced.

Evidently, the proceedings attendant to the conviction of petitioner Atty. Regalado for
indirect contempt suffered a serious procedural defect to which this Court cannot close its
eyes without offending the fundamental principles enunciated in the Rules that we,
ourselves, had promulgated.

The other issues raised on the merits of the contempt case have become moot and
academic.

WHEREFORE, premises considered, the instant Petition is GRANTED. The indirect contempt
proceedings before the Court of Appeals is DECLARED null and void.

SO ORDERED. Republic of the Philippines

Supreme Court
 Baguio City

This is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to reverse and set aside the Decision [1] and Resolution[2] of the Court of Appeals
(CA), in CA-G.R. CV No. 75895, entitled Kemper Insurance Company v. Cosco Philippines
Shipping, Inc. The CA Decision reversed and set aside the Order dated March 22, 2002 of
THIRD DIVISION the Regional Trial Court (RTC), Branch 8, Manila, which granted the Motion to Dismiss filed
by petitioner Cosco Philippines Shipping, Inc., and ordered that the case be remanded to
the trial court for further proceedings.

COSCO PHILIPPINES SHIPPING, INC., G.R. No. 179488 The antecedents are as follows:

Respondent Kemper Insurance Company is a foreign insurance company based in

Petitioner,
Illinois, United States of America (USA) with no license to engage in business in the
Philippines, as it is not doing business in the Philippines, except in isolated transactions;
Present:
while petitioner is a domestic shipping company organized in accordance with Philippine
laws.

In 1998, respondent insured the shipment of imported frozen boneless beef

VELASCO, JR., J., Chairperson, (owned by Genosi, Inc.), which was loaded at a port in Brisbane, Australia, for shipment to
Genosi, Inc. (the importer-consignee) in the Philippines. However, upon arrival at the
- versus - PERALTA, Manila port, a portion of the shipment was rejected by Genosi, Inc. by reason of spoilage
arising from the alleged temperature fluctuations of petitioner's reefer containers.
ABAD,
Thus, Genosi, Inc. filed a claim against both petitioner shipping company and
MENDOZA, and respondent Kemper Insurance Company. The claim was referred to McLarens Chartered for
investigation, evaluation, and adjustment of the claim. After processing the claim
PERLAS-BERNABE, JJ. documents, McLarens Chartered recommended a settlement of the claim in the amount of
$64,492.58, which Genosi, Inc. (the consignee-insured) accepted.
KEMPER INSURANCE COMPANY,

Respondent. Promulgated:

Thereafter, respondent paid the claim of Genosi, Inc. (the insured) in the amount of
April 23, 2012 $64,492.58. Consequently, Genosi, Inc., through its General Manager, Avelino S. Mangahas,
Jr., executed a Loss and Subrogation Receipt [3] dated September 22, 1999, stating that
Genosi, Inc. received from respondent the amount of $64,492.58 as the full and final
satisfaction compromise, and discharges respondent of all claims for losses and expenses
sustained by the property insured, under various policy numbers, due to spoilage brought
about by machinery breakdown which occurred on October 25, November 7 and 10, and
DECISION December 5, 14, and 18, 1998; and, in consideration thereof, subrogates respondent to the
claims of Genosi, Inc. to the extent of the said amount. Respondent then made demands
upon petitioner, but the latter failed and refused to pay the said amount.
Hence, on October 28, 1999, respondent filed a Complaint for Insurance Loss and
Damages[4] against petitioner before the trial court, docketed as Civil Case No. 99-95561,
PERALTA, J.: entitled Kemper Insurance Company v. Cosco Philippines Shipping, Inc. Respondent alleged
that despite repeated demands to pay and settle the total amount of US$64,492.58,
representing the value of the loss, petitioner failed and refused to pay the same, thereby
causing damage and prejudice to respondent in the amount of US$64,492.58; that the loss
and damage it sustained was due to the fault and negligence of petitioner, specifically, the
fluctuations in the temperature of the reefer container beyond the required setting which
was caused by the breakdown in the electronics controller assembly; that due to the
unjustified failure and refusal to pay its just and valid claims, petitioner should be held
liable to pay interest thereon at the legal rate from the date of demand; and that due to the
unjustified refusal of the petitioner to pay the said amount, it was compelled to engage the
services of a counsel whom it agreed to pay 25% of the whole amount due as attorney's
fees. Respondent prayed that after due hearing, judgment be rendered in its favor and that
petitioner be ordered to pay the amount of US$64,492.58, or its equivalent in Philippine
currency at the prevailing foreign exchange rate, or a total of P2,594,513.00, with interest
thereon at the legal rate from date of demand, 25% of the whole amount due as attorney's
fees, and costs.
In its Answer[5] dated November 29, 1999, petitioner insisted, among others, that
respondent had no capacity to sue since it was doing business in the Philippines without
the required license; that the complaint has prescribed and/or is barred by laches; that no
timely claim was filed; that the loss or damage sustained by the shipments, if any, was due
to causes beyond the carrier's control and was due to the inherent nature or insufficient
packing of the shipments and/or fault of the consignee or the hired stevedores or arrastre
operator or the fault of persons whose acts or omissions cannot be the basis of liability of
the carrier; and that the subject shipment was discharged under required temperature and
was complete, sealed, and in good order condition.
During the pre-trial proceedings, respondent's counsel proffered and marked its
exhibits, while petitioner's counsel manifested that he would mark his client's exhibits on
the next scheduled pre-trial. However, on November 8, 2001, petitioner filed a Motion to
Dismiss,[6] contending that the same was filed by one Atty. Rodolfo A. Lat, who failed to
show his authority to sue and sign the corresponding certification against forum
shopping. It argued that Atty. Lat's act of signing the certification against forum shopping
was a clear violation of Section 5, Rule 7 of the 1997 Rules of Court.
In its Order[7] dated March 22, 2002, the trial court granted petitioner's Motion to
Dismiss and dismissed the case without prejudice, ruling that it is mandatory that the
certification must be executed by the petitioner himself, and not by counsel. Since
respondent's counsel did not have a Special Power of Attorney (SPA) to act on its behalf,
hence, the certification against forum shopping executed by said counsel was fatally
defective and constituted a valid cause for dismissal of the complaint.
Respondent's Motion for Reconsideration[8] was denied by the trial court in an
Order[9] dated July 9, 2002.
On appeal by respondent, the CA, in its Decision [10] dated March 23, 2007, reversed and set
aside the trial court's order. The CA ruled that the required certificate of non-forum
shopping is mandatory and that the same must be signed by the plaintiff or principal party
concerned and not by counsel; and in case of corporations, the physical act of signing may
be performed in behalf of the corporate entity by specifically authorized individuals.
However, the CA pointed out that the factual circumstances of the case warranted the
liberal application of the rules and, as such, ordered the remand of the case to the trial
court for further proceedings.
Petitioner's Motion for Reconsideration[11] was later denied by the CA in the
Resolution[12] dated September 3, 2007.
Hence, petitioner elevated the case to this Court via Petition for Review on Certiorari under
Rule 45 of the Rules of Court, with the following issues:
THE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT ATTY. RODOLFO LAT WAS
PROPERLY AUTHORIZED BY THE RESPONDENT TO SIGN THE CERTIFICATE AGAINST FORUM
SHOPPING DESPITE THE UNDISPUTED FACTS THAT:
A) THE PERSON WHO EXECUTED THE SPECIAL POWER OF ATTORNEY (SPA) APPOINTING
ATTY. LAT AS RESPONDENT'S ATTORNEY-IN-FACT WAS MERELY AN UNDERWRITER OF THE
RESPONDENT WHO HAS NOT SHOWN PROOF THAT HE WAS AUTHORIZED BY THE BOARD
OF DIRECTORS OF RESPONDENT TO DO SO.
B) THE POWERS GRANTED TO ATTY. LAT REFER TO [THE AUTHORITY TO REPRESENT DURING
THE] PRE-TRIAL [STAGE] AND DO NOT COVER THE SPECIFIC POWER TO SIGN THE
CERTIFICATE.[13]
Petitioner alleged that respondent failed to submit any board resolution or secretary's
certificate authorizing Atty. Lat to institute the complaint and sign the certificate of non-
forum shopping on its behalf. Petitioner submits that since respondent is a juridical entity,
the signatory in the complaint must show proof of his or her authority to sign on behalf of
the corporation. Further, the SPA[14]dated May 11, 2000, submitted by Atty. Lat, which was
notarized before the Consulate General of Chicago, Illinois, USA, allegedly authorizing him
to represent respondent in the pre-trial and other stages of the proceedings was signed by
one Brent Healy (respondent's underwriter), who lacks authorization from its board of
directors.
In its Comment, respondent admitted that it failed to attach in the complaint a concrete
proof of Atty. Lat's authority to execute the certificate of non-forum shopping on its behalf.
However, there was subsequent compliance as respondent submitted an authenticated SPA
empowering Atty. Lat to represent it in the pre-trial and all stages of the proceedings.
Further, it averred that petitioner is barred by laches from questioning the purported defect
in respondent's certificate of non-forum shopping.
The main issue in this case is whether Atty. Lat was properly authorized by respondent to
sign the certification against forum shopping on its behalf.
The petition is meritorious.
We have consistently held that the certification against forum shopping must be signed by
the principal parties.[15] If, for any reason, the principal party cannot sign the petition, the
one signing on his behalf must have been duly authorized. [16] With respect to a corporation,
the certification against forum shopping may be signed for and on its behalf, by a
specifically authorized lawyer who has personal knowledge of the facts required to be
disclosed in such document. [17] A corporation 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. 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.[18]
In Philippine Airlines, Inc. v. Flight Attendants and Stewards Association of the
Philippines (FASAP),[19] we ruled that only individuals vested with authority by a
valid board resolution may sign the certificate of non-forum shopping on behalf of a
corporation. We also required proof of such authority to be presented. The petition is
subject to dismissal if a certification was submitted unaccompanied by proof of the
signatory's authority
In the present case, since respondent is a corporation, the certification must be executed by
an officer or member of the board of directors or by one who is duly authorized by a
resolution of the board of directors; otherwise, the complaint will have to be dismissed.
[20]
The lack of certification against forum shopping is generally not curable by mere
amendment of the complaint, but shall be a cause for the dismissal of the case without
prejudice.[21] 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 the complaint on behalf of the corporation. [22]
There is no proof that respondent, a private corporation, authorized Atty. Lat, through a
board resolution, to sign the verification and certification against forum shopping on its
behalf. Accordingly, the certification against forum shopping appended to the complaint is
fatally defective, and warrants the dismissal of respondent's complaint for Insurance Loss
and Damages (Civil Case No. 99-95561) against petitioner.
In Republic v. Coalbrine International Philippines, Inc., [23] the Court
cited instances wherein the lack of authority of the person making the
certification of non-forum shopping was remedied through subsequent
compliance by the parties therein. Thus
,
[w]hile there were instances where we have allowed the filing of a
certification against non-forum shopping by someone on behalf of a
corporation without the accompanying proof of authority at the
time of its filing, we did so on the basis of a special circumstance or
compelling reason. Moreover, there was a subsequent compliance
by the submission of the proof of authority attesting to the fact that
the person who signed the certification was duly authorized.
In China Banking Corporation v. Mondragon International
Philippines, Inc., the CA dismissed the petition filed by China Bank,
since the latter failed to show that its bank manager who signed
the certification against non-forum shopping was authorized to do
so. We reversed the CA and said that the case be decided on the
merits despite the failure to attach the required proof of authority,
since theboard resolution which was subsequently attached
recognized the pre-existing status of the bank manager as an
authorized signatory.
In Abaya Investments Corporation v. Merit Philippines,
where the complaint before the Metropolitan Trial Court of Manila
was instituted by petitioner's Chairman and President, Ofelia Abaya,
who signed the verification and certification against non-
forumshopping without proof of authority to sign for the
corporation, we also relaxed the rule. We did so taking into
consideration the merits of the case and to avoid a re-litigation of
the issues and further delay the administration of justice, since the
case had already been decided by the lower courts on the merits.
Moreover, Abaya's authority to sign the certification was ratified by
the Board.[24]
Contrary to the CA's finding, the Court finds that the circumstances of this case do not
necessitate the relaxation of the rules. There was no proof of authority submitted, even
belatedly, to show subsequent compliance with the requirement of the law. Neither was
there a copy of the board resolution or secretary's certificate subsequently submitted to
the trial court that would attest to the fact that Atty. Lat was indeed authorized to file said
complaint and sign the verification and certification against forum shopping, nor did
respondent satisfactorily explain why it failed to comply with the rules. Thus, there exists
no cogent reason for the relaxation of the rule on this matter. Obedience to the
requirements of procedural rules is needed if we are to expect fair results therefrom, and
utter disregard of the rules cannot justly be rationalized by harking on the policy of liberal
construction.[25]
Moreover, the SPA dated May 11, 2000, submitted by respondent allegedly authorizing Atty.
Lat to appear on behalf of the corporation, in the pre-trial and all stages of the proceedings,
signed by Brent Healy, was fatally defective and had no evidentiary value. It failed to
establish Healy's authority to act in behalf of respondent, in view of the absence of a
resolution from respondent's board of directors or secretary's certificate proving the
same. Like any other corporate act, the power of Healy to name, constitute, and appoint
Atty. Lat as respondent's attorney-in-fact, with full powers to represent respondent in the
proceedings, should have been evidenced by a board resolution or secretary's certificate.
 Respondent's allegation that petitioner is estopped by laches from
raising the defect in respondent's certificate of non-forum shopping does In Sibonghanoy, the defense of lack of jurisdiction was raised for the
not hold water. first time in a motion to dismiss filed by the Surety almost 15 years after
the questioned ruling had been rendered. At several stages of the
In Tamondong v. Court of Appeals, [26] we held that if a complaint is filed for and in proceedings, in the court a quo as well as in the Court of Appeals, the
behalf of the plaintiff who is not authorized to do so, the complaint is not deemed filed. An Surety invoked the jurisdiction of the said courts to obtain affirmative
unauthorized complaint does not produce any legal effect. Hence, the court shoulddismiss relief and submitted its case for final adjudication on the merits. It was
the complaint on the ground that it has no jurisdiction over the complaint and the plaintiff. only when the adverse decision was rendered by the Court of Appeals
[27]
Accordingly, since Atty. Lat was not duly authorized by respondent to file the complaint that it finally woke up to raise the question of jurisdiction. [32]
and sign the verification and certification against forum shopping, the complaint is
considered not filed and ineffectual, and, as a necessary consequence, is dismissable due to
lack of jurisdiction.
The factual setting attendant in Sibonghanoy is not similar to that of the present case so as
Jurisdiction is the power with which courts are invested for administering justice;
to make it fall under the doctrine ofestoppel by laches. Here, the trial court's jurisdiction
that is, for hearing and deciding cases. In order for the court to have authority to dispose of
was questioned by the petitioner during the pre-trial stage of the proceedings, and it
the case on the merits, it must acquire jurisdiction over the subject matter and the
cannot be said that considerable length of time had elapsed for laches to attach.
parties.Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint, and to
be bound by a decision, a party should first be subjected to the court's jurisdiction.
[28] WHEREFORE, the petition is GRANTED. The Decision and the Resolution of the
Clearly, since no valid complaint was ever filed with the RTC, Branch 8, Manila, the same
Court of Appeals, dated March 23, 2007 and September 3, 2007, respectively, in CA-G.R. CV
did not acquire jurisdiction over the person of respondent.
No. 75895 are REVERSED and SET ASIDE. The Orders of the Regional Trial Court, dated
March 22, 2002 and July 9, 2002, respectively, in Civil Case No. 99-95561, are REINSTATED.
Since the court has no jurisdiction over the complaint and respondent, petitioner is not
estopped from challenging the trial court's jurisdiction, even at the pre-trial stage of the
proceedings. This is so because the issue of jurisdiction may be raised at any stage of the
proceedings, even on appeal, and is not lost by waiver or by estoppel.[29]

In Regalado v. Go,[30] the Court held that laches should be clearly SO ORDERED.
present for the Sibonghanoy[31] doctrine to apply, thus:

Laches is defined as the "failure or neglect for an unreasonable and

unexplained length of time, to do that which, by exercising due
diligence, could or should have been done earlier, it is negligence or
omission to assert a right within a reasonable length of time,
warranting a presumption that the party entitled to assert it either has
abandoned it or declined to assert it.

The ruling in People v. Regalario that was based on the landmark

doctrine enunciated in Tijam v. Sibonghanoy on the matter of
jurisdiction by estoppel is the exception rather than the rule. Estoppel
by laches may be invoked to bar the issue of lack of jurisdiction only in
cases in which the factual milieu is analogous to that in the cited case. THIRD DIVISION
In such controversies, laches should have been clearly present; that is,
lack of jurisdiction must have been raised so belatedly as to warrant the
presumption that the party entitled to assert it had abandoned or
declined to assert it.
 APOLONIA BANAYAD FRIANELA, G.R. No. 169700 Respondent, a cousin of the petitioner, filed his opposition and counter-
Petitioner, petitioned for the allowance of two other holographic wills of the decedent, one dated
Present: September 27, 1989 and another dated September 28, 1989. [5]

YNARES-SANTIAGO, J., After trial on the merits, the RTC, on September 29, 1995, rendered its
- versus - Chairperson, Decision[6] declaring the September 27, 1989 holographic will as having revoked the
CHICO-NAZARIO, November 18, 1985 will, allowing the former, and appointing respondent as administrator
VELASCO, JR., of Moisess estate.[7]
NACHURA, and
SERVILLANO BANAYAD, JR., PERALTA, JJ. On appeal, the CA, in the assailed June 17, 2005 Decision, [8] modified the decision
Respondent. of the trial court and ruled that the September 27, 1989 holographic will had only revoked
Promulgated: the November 18, 1985 will insofar as the testamentary disposition of Moisess real
property was concerned.[9]
July 30, 2009
With the denial of her motion for reconsideration in the further assailed August
17, 2005 Resolution,[10] petitioner elevated the case before us via the instant petition.[11]

The Court notes that the trial court focused all of its attention on the merits of
DECISION the case without first determining whether it could have validly exercised jurisdiction to
hear and decide Sp. Proc. No. 3664-P. On appeal, the appellate court also overlooked the
issue on the jurisdictional competence of the trial court over the said case. This Court, after
a meticulous review of the records, finds that the RTC of Pasay City had no jurisdiction over
the subject matter in Sp. Proc. No. 3664-P.

The jurisdiction of the court to hear and decide a case is conferred by the law in
force at the time of the institution of the action unless such statute provides for a
NACHURA, J.: retroactive application thereof.[12] Jurisdiction is moreover determined by the allegations or
averments in the complaint or petition.[13]

Before the court is a petition for review on certiorari under Rule 45 of the Rules of
Court assailing the June 17, 2005 Decision [1] of the Court of Appeals (CA) in CA-G.R. CV No. In this case, at the time the petition for the allowance of Moisess holographic will
53929, and the August 17, 2005 Resolution [2] denying the motion for partial reconsideration was instituted, the then Sections 19 and 33 [14] of Batas Pambansa (B.P.) Blg. 129[15] were in
thereof. force, thus

Narrated in brief are the antecedent facts and proceedings, to wit:

SECTION 19. Jurisdiction in civil cases. Regional Trial Courts shall

exercise exclusive original jurisdiction:
Following the death of her uncle, the testator Moises F. Banayad, petitioner, who
was named as devisee in the will, filed before the Regional Trial Court (RTC) of Pasay City, xxxx
on June 3, 1991, Sp. Proc. No. 3664-P [3] for the allowance of the November 18, 1985
holographic will of the decedent. Petitioner alleged that Moises died without issue and left (4) In all matters of probate, both testate
to her the following properties, namely: (1) a parcel of land situated in Pasay City and and intestate, where the gross value of the estate
described in Transfer Certificate of Title No. 9741; (2) images of Oracion del exceeds twenty thousand pesos (P20,000.00);
Huerto and Pieta including the crown; and (3) all personal belongings. [4]
xxxx

SECTION 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in civil cases. Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:
(1) Exclusive original jurisdiction over civil
actions and probate proceedings, testate and
intestate, including the grant of provisional
remedies in proper cases, where the demand does
not exceed twenty thousand pesos exclusive of
interest and costs but inclusive of damages of
whatever kind, the amount of which must be
specifically alleged: Provided, That where there are
several claims or causes of action between the
same or different parties, embodied in the same
complaint, the amount of the demand shall be the
totality of the claims in all the causes of action
irrespective of whether the causes of action arose
out of the same or different transactions; and
xxxx
The applicable law, therefore, confers jurisdiction on the RTC or the MTCs over
probate proceedings depending on the gross value of the estate, [16] which value must be
alleged in the complaint or petition to be filed. Significantly, in this case, the original
petition docketed before the trial court contains only the following averments:
xxxx
1. That Petitioner is of legal age, married, Filipino and residing
at 2237 P. Burgos St., Pasay City who is named devisee in the Last Will
and Testament of MOISES BANAYAD, deceased who died in Pasay City
General Hospital on March 27, 1991 xerox copy of his death certificate
is herewith attached as Annex A to form integral part hereof;
2. That the said Last Will and Testament is herewith (sic)
attached as Annex B and made an integral part of this Petition, the
original thereof will be presented to this Honorable Court at the time of
probate;
3. That the decedent is an inhabitant of the Philippines and
residing at 2237 P. Burgos St., Pasay City at the time of his death;
4. That the properties left by the decedent consist of real and
personal properties particularly described herein below, which
decedent all bequeathed to petitioner;
A. A parcel of land described under TCT
No. 9741 xerox copy of which is herewith (sic)
attached as Annex C.
B. Imahen ng Oracion del Huerto at Pieta,
kasama and korona.
C. All personal belongings.
5. That the testator at the time of the execution of the said
Will was of sound and disposing mind.
WHEREFORE, it is most respectfully prayed of the Honorable
Court that:
a. Upon proper notice and hearing, the above mentioned Will
be admitted to probate;
b. That letters testamentary or administration be issued to
herein petitioner without bond;
Petitioner prays for such other reliefs just and equitable in
(sic) the premises.
x x x x[17]
Nowhere in the petition is there a statement of the gross value of Moisess estate.
Thus, from a reading of the original petition filed, it cannot be determined which court has
original and exclusive jurisdiction over the proceedings. [18] The RTC therefore committed
gross error when it had perfunctorily assumed jurisdiction despite the fact that the
initiatory pleading filed before it did not call for the exercise of its jurisdiction. The RTC
should have, at the outset, dismissed the case for lack of jurisdiction. Be it noted that the
dismissal on the said ground may be ordered motu proprio by the courts.[19] Further, the CA,
on appeal, should have dismissed the case on the same ground. Settled is the doctrine that
the issue of jurisdiction may be raised by any of the parties or may be reckoned by the
court, at any stage of the proceedings, even on appeal, and is not lost by waiver or by
estoppel.[20]
Despite the pendency of this case for around 18 years, the exception laid down
in Tijam v. Sibonghanoy[21] and clarified recently in Figueroa v. People[22] cannot be applied.
First, because, as a general rule, the principle of estoppel by laches cannot lie against the
government.[23] No injustice to the parties or to any third person will be wrought by the
ruling that the trial court has no jurisdiction over the instituted probate proceedings.
Second and most important, because in Tijam, the delayed invocation of lack of
jurisdiction has been made during the execution stage of a final and executory ruling of a
court. In Figueroa, the Court has emphasized that estoppel by laches only supervenes in
exceptional cases similar to the factual milieu in Tijam. It is well to note the following
factual setting of Tijam:
 On July 19, 1948 barely one month after the effectivity of
Republic Act No. 296 known as the Judiciary Act of 1948 the spouses
Serafin Tijam and Felicitas Tagalog commenced Civil Case No. R-660 in
the Court of First Instance of Cebu against the spouses Magdaleno
Sibonghanoy and Lucia Baguio to recover from them the sum of
P1,908.00, with legal interest thereon from the date of the filing of the
complaint until the whole obligation is paid, plus costs. As prayed for in
the complaint, a writ of attachment was issued by the court against
defendants' properties, but the same was soon dissolved upon the filing
of a counter-bond by defendants and the Manila Surety and Fidelity Co.,
Inc. hereinafter referred to as the Surety, on the 31st of the same
month.
After being duly served with summons the defendants filed
their answer in which, after making some admissions and denials of the
material averments of the complaint, they interposed a counterclaim.
This counterclaim was answered by the plaintiffs.
After trial upon the issues thus joined, the Court rendered
judgment in favor of the plaintiffs and, after the same had become final
and executory, upon motion of the latter, the Court issued a writ of
execution against the defendants. The writ having been returned
unsatisfied, the plaintiffs moved for the issuance of a writ of execution
against the Surety's bond (Rec. on Appeal pp. 46-49), against which the
Surety filed a written opposition (Id. pp. 49) upon two grounds, namely,
(1) Failure to prosecute and (2) Absence of a demand upon the Surety
for the payment of the amount due under the judgment. Upon these
grounds the Surety prayed the Court not only to deny the motion for
execution against its counter-bond but also the following affirmative
relief: "to relieve the herein bonding company of its liability, if any,
under the bond in question" (Id. p. 54) The Court denied this motion on
the ground solely that no previous demand had been made on the
Surety for the satisfaction of the judgment. Thereafter the necessary
demand was made, and upon failure of the Surety to satisfy the
judgment, the plaintiffs filed a second motion for execution against the
counter-bond. On the date set for the hearing thereon, the Court, upon
motion of the Surety's counsel, granted the latter a period of five days
within which to answer the motion. Upon its failure to file such answer,
the Court granted the motion for execution and the corresponding writ
was issued.
Subsequently, the Surety moved to quash the writ on the
ground that the same was issued without the required summary
hearing provided for in Section 17 of Rule 59 of the Rules of Court. As
the Court denied the motion, the Surety appealed to the Court of
Appeals from such order of denial and from the one denying its motion
for reconsideration (Id. p. 97). Its record on appeal was then printed as
required by the Rules, and in due time it filed its brief raising therein no
other question but the ones covered by the following assignment of
errors:
I. That the Honorable Court a quo erred in
issuing its order dated November 2, 1957, by
holding the incident as submitted for resolution,
without a summary hearing and compliance with
the other mandatory requirements provided for in
Section 17, Rule 59 of the Rules of Court.
II. That the Honorable Court a quo erred
in ordering the issuance of execution against the
herein bonding company-appellant.
III. That the Honorable Court a quo erred
in denying the motion to quash the writ of
execution filed by the herein bonding company-
appellant as well as its subsequent motion for
reconsideration, and/or in not quashing or setting
aside the writ of execution.
Not one of the assignment of errors it is obvious raises the
question of lack of jurisdiction, neither directly nor indirectly.
Although the appellees failed to file their brief, the Court of
Appeals, on December 11, 1962, decided the case affirming the orders
appealed from.
On January 8, 1963 five days after the Surety received notice
of the decision, it filed a motion asking for extension of time within
which to file a motion for reconsideration. The Court of Appeals granted
the motion in its resolution of January 10 of the same year. Two days
later the Surety filed a pleading entitled MOTION TO DISMISS, alleging
substantially that appellees' action was filed in the Court of First
Instance of Cebu on July 19, 1948 for the recovery of the sum of
P1,908.00 only; that a month before that date Republic Act No. 296,
otherwise known as the Judiciary Act of 1948, had already become
effective, Section 88 of which placed within the original exclusive
jurisdiction of inferior courts all civil actions where the value of the
subject-matter or the amount of the demand does not exceed
P2,000.00, exclusive of interest and costs; that the Court of First
Instance therefore had no jurisdiction to try and decide the case. Upon
these premises the Surety's motion prayed the Court of Appeals to set
aside its decision and to dismiss the case. By resolution of January 16,
1963 the Court of Appeals required the appellees to answer the motion
to dismiss, but they failed to do so. Whereupon, on May 20 of the same
year, the Court resolved to set aside its decision and to certify the case
to Us.
x x x x[24]
 Clearly, then, in Tijam, the issue of lack of jurisdiction has only been raised during
the execution stage, specifically when the matter of the trial courts denial of the suretys
motion to quash the writ of execution has been brought to the appellate court for review.
Here, the trial courts assumption of unauthorized jurisdiction over the probate proceedings
has been discovered by the Court during the appeal stage of the main case, not during the
execution stage of a final and executory decision. Thus, the exceptional rule laid down
in Tijam cannot apply.

Since the RTC has no jurisdiction over the action, all the proceedings therein,
including the decision rendered, are null and void. [25] With the above disquisition, the Court
finds it unnecessary to discuss and resolve the other issues raised in the petition.

IN THE LIGHT OF THE FOREGOING, Sp. Proc. No. 3664-P before

the Regional Trial Court of Pasay City is DISMISSED for lack of jurisdiction.

SO ORDERED.

HEIRS OF VALERIANO S. CONCHA, G.R. No. 158121

SR. NAMELY: TERESITA CONCHA-
PARAN, VALERIANO P. CONCHA,
JR., RAMON P. CONCHA, EDUARDO
P. CONCHA, REPRESENTED BY HIS
LEGAL GUARDIAN, REYNALDO P.
CONCHA, ALBERTO P. CONCHA,
BERNARDO P. CONCHA and GLORIA Present:
P. CONCHA-NUNAG, 22556 issued in the name of "Gregorio Lumocso" covering Lot No. 6195. The case was
Petitioners, PUNO, C.J., Chairperson, raffled to the RTC of Dipolog City, Branch 9, and docketed as Civil Case No. 5188. In their
YNARES-SANTIAGO, Amended Complaint, petitioners prayed that judgment be rendered:
SANDOVAL-GUTIERREZ,
- versus - CORONA, and 1. Declaring Free Patent No. (IX-8)985 and Original
AZCUNA, JJ. Certificate of Title No. 22556 issued to defendants as null and void ab
SPOUSES GREGORIO J. LUMOCSO[1] initio;
and BIENVENIDA GUYA, CRISTITA
J. LUMOCSO VDA. DE DAAN, AND
SPOUSES JACINTO J. LUMOCSO Promulgated:
and BALBINA T. LUMOCSO,[2]
2. Declaring Lot No. 6195 or 1.19122-hectare as
Respondents. December 12, 2007
private property of the plaintiffs under Sec. 48(b) of CA No. 141
otherwise known as the Public Land Act as amended by RA 1942;

DECISION 3. Ordering the defendant Lomocsos to reconvey

the properties (sic) in question Lot No. 6195 or the 1.19122 hectares in
favor of the plaintiffs within 30 days from the finality of the decision in
this case and if they refuse, ordering the Clerk of Court of this
Honorable Court to execute the deed of reconveyance with like force
PUNO, C.J.: and effect as if executed by the defendant[s] themselves;

On appeal by certiorari under Rule 45 of the Rules of Court are the decision[3] and
resolution[4] of the Court of Appeals (CA) in CA-G.R. SP No. 59499, annulling the
resolutions[5] and order[6] of the Regional Trial Court (RTC) of Dipolog City, Branch 9, in Civil 4. Ordering defendant Lomocsos to pay P60,000.00
Case Nos. 5188, 5433 and 5434 which denied the separate motions to dismiss and Joint for the 21 forest trees illegally cut; P50,000.00 for moral
Motion for Reconsideration filed by the respondents. damages; P20,000.00 for Attorneys fees; P20,000.00 for litigation
expenses; and to pay the cost of the proceedings;

The relevant facts are undisputed.

5. Declaring the confiscated three (sic) flitches kept
Petitioners, heirs of spouses Dorotea and Valeriano Concha, Sr., claim to be the rightful in the area of the plaintiffs at Dampalan San Jose, Dipolog with a total
owners of Lot No. 6195 (Civil Case No. 5188), a one-hectare portion of Lot No. 6196-A (Civil volume of 2000 board feet a[s] property of the plaintiff [they] being
Case No. 5433), and a one-hectare portion of Lot N
cut, collected and taken from the land possessed, preserved, and
os. 6196-B and 7529-A (Civil Case No. 5434), all situated in Cogon, Dipolog City, under
Section 48(b) of Commonwealth Act No. 141 (C.A. No. 141), otherwise known as the Public owned by the plaintiffs;
Land Act. Respondent siblings Gregorio Lumocso (Civil Case No. 5188), Cristita Lumocso
Vda. de Daan (Civil Case No. 5433) and Jacinto Lumocso (Civil Case No. 5434), are the
patent holders and registered owners of the subject lots.
6. The plaintiffs further pray for such other reliefs
[7]
The records show that on August 6, 1997, Valeriano Sr. and his children, petitioners and remedies which this Honorable Court may deem just and
Valeriano Jr., Ramon, Eduardo, Alberto, Bernardo, Teresita, Reynaldo, and Gloria, all equitable in the premises.[8]
surnamed Concha, filed a complaint for Reconveyance and/or Annulment of Title with
Damages against "Spouses Gregorio Lomocso and Bienvenida Guya." They sought to annul
Free Patent No. (IX-8)985 and the corresponding Original Certificate of Title (OCT) No. P-
 On September 3, 1999, two separate complaints for Reconveyance with Damages
were filed by petitioners,[9] this time against "Cristita Lomocso Vda. de Daan" for a one-
hectare portion of Lot No. 6196-A and "Spouses Jacinto Lomocso and Balbina T. Lomocso"
for a one-hectare portion of Lot Nos. 6196-B and 7529-A. The two complaints were also
raffled to Branch 9 of the RTC of Dipolog City and docketed as Civil Case Nos. 5433 and
5434,
respectively. In Civil Case No. 5433, petitioners prayed that judgment be rendered:
1. Declaring [a] portion of Lot 6196-A titled under OCT
(P23527) 4888 equivalent to one hectare located at the western
portion of Lot 4888 as private property of the plaintiffs under Sec.
48(B) CA 141 otherwise known as Public Land OCT (sic) as amended by
RA No. 1942;
2. Ordering the defendant to reconvey the equivalent of one
(1) hectare forested portion of her property in question in favor of the
plaintiffs within 30 days from the finality of the decision in this case
segregating one hectare from OCT (P23527) 4888, located at its
Western portion and if she refuse (sic), ordering the Clerk of Court of
this Honorable Court to execute the deed of reconveyance with like
force and effect, as if executed by the defenda[n]t herself;
3. Ordering defendant to pay P30,000.00 for the 22 forest
trees illegally cut; P20,000.00 for moral damages; P20,000.00 for
Attorney's fees; P20,000.00 for litigation expenses; and to pay the cost
of the proceedings.[10]
In Civil Case No. 5434, petitioners prayed that judgment be rendered:
1. Declaring [a] portion of Lot 7529-A under OCT (P-23207)
12870 and Lot 6196-B OCT (P-20845) 4889 equivalent to one hectare
located as (sic) the western portion of said lots as private property of
the plaintiffs under Sec. 48(b) of [C.A. No.] 141 otherwise know[n] as
the [P]ublic [L]and [A]ct as amended by RA 1942;
2. Ordering the defendants to reconvey the equivalent of
one (1) hectare forested portion of their properties in question in
favor of the plaintiffs within 30 days from the finality of the decision in
this case segregating one hectare from OCT (P-23207) 12870 and OCT
(T-20845)-4889 all of defendants, located at its Western portion and if
they refuse, ordering the Clerk of Court of this Honorable Court to
execute the deed of reconveyance with like force and effect as if
executed by the defendants themselves[;]
3. Ordering defendants to pay P20,000.00 for the six (6)
forest trees illegally cut; P20,000.00 for moral damages; P20,000.00
for Attorney's fees; P20,000.00 for litigation expenses; and to pay the
cost of the proceedings.[11]
The three complaints[12] commonly alleged: a) that on May 21, 1958, petitioners'
parents (spouses Valeriano Sr. and Dorotea Concha) acquired by homestead a 24-hectare
parcel of land situated in Cogon, Dipolog City; b) that since 1931, spouses Concha
"painstakingly preserved" the forest in the 24-hectare land, including the excess four (4)
hectares "untitled forest land" located at its eastern portion; c) that they possessed this
excess 4 hectares of land (which consisted of Lot No. 6195, one-hectare portion of Lot No.
6196-A and one-hectare portion of Lot Nos. 6196-B and 7529-A) "continuously, publicly,
notoriously, adversely, peacefully, in good faith and in concept of the (sic) owner since
1931;" d) that they continued possession and occupation of the 4-hectare land after the
death of Dorotea Concha on December 23, 1992 and Valeriano Sr. on May 12, 1999; e) that
the Concha spouses "have preserved the forest trees standing in [the subject lots] to the
exclusion of the defendants (respondents) or other persons from 1931" up to November
12, 1996 (for Civil Case No. 5188) or January 1997 (for Civil Case Nos. 5433 and 5434) when
respondents, "by force, intimidation, [and] stealth forcibly entered the premises, illegally
cut, collected, [and] disposed" of 21 trees (for Civil Case No. 5188), 22 trees (for Civil Case
No. 5433) or 6 trees (for Civil Case No. 5434); f) that "the land is private land or that even
assuming it was part of the public domain, plaintiffs had already acquired imperfect title
thereto" under Sec. 48(b) of C.A. No. 141, as amended by Republic Act (R.A.) No. 1942; g)
that respondents allegedly cut into flitches the trees felled in Lot No. 6195 (Civil Case No.
5188) while the logs taken from the subject lots in Civil Case Nos. 5433 and 5434 were sold
to a timber dealer in Katipunan, Zamboanga del Norte; h) that respondents
"surreptitiously" filed free patent applications over the lots despite their full knowledge
that petitioners owned the lots; i) that the geodetic engineers who conducted the original
survey over the lots never informed them of the
survey to give them an opportunity to oppose respondents' applications; j) that
respondents' free patents and the corresponding OCTs were issued "on account of fraud,
deceit, bad faith and misrepresentation"; and k) that the lots in question have not been
transferred to an innocent purchaser.
On separate occasions, respondents moved for the dismissal of the respective cases against
them on the same grounds of: (a) lack of jurisdiction of the RTC over the subject matters of
the complaints; (b) failure to state causes of action for reconveyance; (c) prescription; and
(d) waiver, abandonment, laches and estoppel.[13] On the issue of jurisdiction, respondents
contended that the RTC has no jurisdiction over the complaints pursuant to Section 19(2) of
Batas Pambansa Blg. (B.P.) 129, as amended by R.A. No. 7691, as in each case, the assessed
values of the subject lots are less than P20,000.00.
Petitioners opposed,[14] contending that the instant cases involve actions the
subject matters of which are incapable of pecuniary estimation which, under Section 19(1)
of B.P. 129, as amended by R.A. 7691, fall within the exclusive original jurisdiction of the
RTCs. They also contended that they have two main causes of action: for reconveyance and
for recovery of the value of the trees felled by respondents. Hence, the totality of the
claims must be considered which, if computed, allegedly falls within the exclusive original
jurisdiction of the RTC.
The trial court denied the respective motions to dismiss of respondents. [15] The
respondents filed a Joint Motion for Reconsideration, [16] to no avail.[17]
Dissatisfied, respondents jointly filed a Petition for Certiorari, Prohibition and
Preliminary Injunction with Prayer for Issuance of Restraining Order Ex Parte[18] with the CA,
docketed as CA-G.R. SP No. 59499. In its Decision,[19] the CA reversed the resolutions and
order of the trial court. It held that even assuming that the complaints state a cause of
action, the same have been barred by the statute of limitations. The CA ruled that an action
for reconveyance based on fraud prescribes in ten (10) years, hence, the instant complaints
must be dismissed as they involve titles issued for at least twenty-two (22) years prior to
the filing of the complaints. The CA found it unnecessary to resolve the other issues.
Hence, this appeal in which petitioners raise the following issues, viz:
FIRST - WHETHER OR NOT RESPONDENT COURT OF APPEALS (FORMER
FIRST DIVISION) ERRED IN REVERSING THE ORDER OF THE COURT A
QUO DENYING THE MOTION FOR DISMISSAL, CONSIDERING THE
DISMISSAL OF A PARTY COMPLAINT IS PREMATURE AND TRIAL ON THE
MERITS SHOULD BE CONDUCTED TO THRESH OUT EVIDENTIARY
MATTERS.
SECOND - WHETHER OR NOT THE RESPONDENT COURT OF APPEALS
(FORMER FIRST DIVISION) ERRED IN DISMISSING THE PETITIONERS'
COMPLAINTS ON [THE] GROUND OF PRESCRIPTION.
THIRD - WHETHER OR NOT THE RESPONDENT COURT OF APPEALS
(FORMER FIRST DIVISION) ERRED IN CONCLUDING THAT THERE IS NO
DOCUMENTARY EVIDENCE ON RECORD TO SHOW THAT PETITIONERS
OWN THE SUBJECT FOREST
PORTION OF THE PROPERTIES ERRONEOUSLY INCLUDED IN THE TITLES
OF PRIVATE RESPONDENTS.
FOURTH - WHETHER OR NOT THE PETITION OF HEREIN PRIVATE
RESPONDENTS FILED WITH THE RESPONDENT COURT OF APPEALS
(FORMER FIRST DIVISION) SHOULD HAVE BEEN DISMISSED
OUTRIGHTLY FOR PRIVATE RESPONDENTS' THEREIN FAILURE TO
COMPLY WITH THE MANDATORY REQUIREMENT OF SECTION 1 RULE
65 OF THE RULES OF COURT TO SUBMIT CERTIFIED TRUE COPIES OF
THE ASSAILED ORDERS OF THE TRIAL COURT WHICH RENDERED THEIR
PETITION (CA G.R. 59499) DEFICIENT IN FORM AND SUBSTANCE
CITING THE CASE OF CATUIRA VS. COURT OF APPEALS (172 SCRA 136).
[20]
In their memorandum,[21] respondents reiterated their arguments in the courts
below that: a) the complaints of the petitioners in the trial court do not state causes of
action for reconveyance; b) assuming the complaints state causes of action for
reconveyance, the same have already been barred by prescription; c) the RTC does not have
jurisdiction over the subject matter of the instant cases; d) the claims for reconveyance in
the complaints are barred by waiver, abandonment, or otherwise extinguished by laches
and estoppel; and e) there is no special reason warranting a review by this Court.
Since the issue of jurisdiction is determinative of the resolution of the instant
case yet the CA skirted the question, we resolved to require the parties to submit their
respective Supplemental Memoranda on the issue of jurisdiction. [22]
In their Supplemental Memorandum,[23] petitioners contend that the nature of
their complaints, as denominated therein and as borne by their allegations, are suits for
reconveyance, or annulment or cancellation of OCTs and damages. The cases allegedly
involve more than just the issue of title and possession since the nullity of the OCTs issued
to respondents and the reconveyance of the subject properties were also raised as issues.
Thus, the RTC has jurisdiction under Section 19(1) of B.P. 129, which provides that the RTC
has jurisdiction "[i]n all civil actions in which the subject of the litigation is incapable of
pecuniary estimation." Petitioners cited: a) Raymundo v. CA[24] which set the criteria for
determining whether an action is one not capable of pecuniary estimation; b) Swan v.
CA[25]where it was held that an action for annulment of title is under the jurisdiction of the
RTC; c) Santos v. CA[26] where it was similarly held that an action for annulment of title,
reversion and damages was within the jurisdiction of the RTC; and d) Commodities Storage
and ICE Plant Corporation v. CA[27] where it was held that "[w]here the action affects title to
the property, it should be filed in the RTC where the property is located." Petitioners also
contend that while it may be argued that the assessed values of the subject properties are
within the original jurisdiction of the municipal trial court (MTC), they have included in their
prayers "any interest included therein" consisting of 49 felled natural grown trees illegally
cut by respondents. Combining the assessed values of the properties as shown by their
respective tax declarations and the estimated value of the trees cut, the total amount
prayed by petitioners exceeds twenty thousand pesos (P20,000.00). Hence, they contend
that the RTC has jurisdiction under Section 19(2) of B.P. 129.
Jurisdiction over the subject matter is the power to hear and determine cases of
the general class to which the proceedings in question belong. [28] It is conferred by law and
an objection based on this ground cannot be waived by the parties. [29] To determine
whether a court has jurisdiction over the subject matter of a case, it is important to
determine the nature of the cause of action and of the relief sought. [30]
The trial court correctly held that the instant cases involve actions for
reconveyance.[31] An action for reconveyance respects the decree of registration as
incontrovertible but seeks the transfer of property, which has been wrongfully or
erroneously registered in other persons' names, to its rightful and legal owners, or to those
who claim to have a better right.[32] There is no special ground for an action for
reconveyance. It is enough that the aggrieved party has a legal claim on the property
superior to that of the registered owner [33] and that the property has not yet passed to the
hands of an innocent purchaser for value.[34]
The reliefs sought by the petitioners in the instant cases typify an action for
reconveyance. The following are also the common allegations in the three complaints that
are sufficient to constitute causes of action for reconveyance, viz:
(a) That plaintiff Valeriano S. Concha, Sr. together with his
spouse Dorotea Concha have painstakingly preserve[d] the forest
standing in the area [of their 24-hectare homestead] including the four
hectares untitled forest land located at the eastern portion of the
forest from 1931 when they were newly married, the date they
acquired this property by occupation or possession;[35]
(b) That spouses Valeriano S. Concha Sr. and Dorotea P. Concha have preserved the forest
trees standing in [these parcels] of land to the exclusion of the defendants Lomocsos or
other persons from 1931 up to November 12, 1996 [for Civil Case No. 5188] and January
1997 [for Civil Case Nos. 5433 and 5434] when defendants[,] by force, intimidation, [and]
stealth[,] forcibly entered the premises, illegal[ly] cut, collected, disposed a total of [twenty-
one (21) trees for Civil Case No. 5188, twenty-two (22) trees for Civil Case No. 5433 and six
(6) trees for Civil Case No. 5434] of various sizes; [36]
(c) That this claim is an assertion that the land is private land or that even assuming it was
part of the public domain, plaintiff had already acquired imperfect title thereto under Sec.
48(b) of [C.A.] No. 141[,] otherwise known as the Public Land Act[,] as amended by [R.A.]
No. [7691];[37]
(d) That [respondents and their predecessors-in-interest knew when they] surreptitiously
filed[38] [their respective patent applications and were issued their respective] free patents
and original certificates of title [that the subject lots belonged to the petitioners]; [39]
(e) [That respondents' free patents and the corresponding original certificates of titles were
issued] on account of fraud, deceit, bad faith and misrepresentation; [40] and
(f) The land in question has not been transferred to an innocent purchaser. [41]
These cases may also be considered as actions to remove cloud on one's title as
they are intended to procure the cancellation of an instrument constituting a claim on
petitioners' alleged title which was used to injure or vex them in the enjoyment of their
alleged title.[42]
Being in the nature of actions for reconveyance or actions to remove cloud on one's title,
the applicable law to determine which court has jurisdiction is Section 19(2) of B.P. 129, as
amended by R.A. No. 7691, viz:
Section 19. Jurisdiction in Civil Cases.-- Regional Trial Courts shall exercise
exclusive original jurisdiction: x x x
(2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, where the assessed value of the property involved exceeds Twenty
thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such value exceeds
Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful
detainer of lands or buildings, original jurisdiction over which is conferred upon the
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;
x x x.
In the cases at bar, it is undisputed that the subject lots are situated in
Cogon, Dipolog City and their assessed values are less than P20,000.00, to wit:
Civil Case No. Lot No. Assessed Value
5188 6195 P1,030.00
5433 6196-A 4,500.00
5434 6196-B 4,340.00
7529-A 1,880.00.[43]
Hence, the MTC clearly has jurisdiction over the instant cases.
 Petitioners' contention that this case is one that is incapable of pecuniary Ice Plant & Cold Storage is located in Sta. Maria, Bulacan.The venue in Civil Case No. 94-
estimation under the exclusive original jurisdiction of the RTC pursuant to Section 19(1) of 727076 was therefore improperly laid."
B.P. 129 is erroneous.

In a number of cases, we have held that actions for reconveyance [44] of or for
cancellation of title[45] to or to quiet title[46]over real property are actions that fall under the
Worse, the cases of Swan v. CA[52] and Santos v. CA[53] cited by the
classification of cases that involve "title to, or possession of, real property, or any interest
petitioners, contradict their own position that the nature of the instant cases falls under
therein."
Section 19(1) of B.P. 129. The complaints in Swan and Santos were filed prior to the
enactment of R.A. No. 7691. In Swan, the Court held that the action being one for
The original text of Section 19(2) of B.P. 129 as well as its forerunner, Section
annulment of title, the RTC had original jurisdiction under Section 19(2) of B.P.
44(b) of R.A. 296,[47] as amended, gave the RTCs (formerly courts of first instance) exclusive
129. In Santos, the Court similarly held that the complaint for cancellation of title, reversion
original jurisdiction "[i]n all civil actions which involve the title to, or possession of, real
and damages is also one that involves title to and possession of real property under Section
property, or any interest therein, except actions for forcible entry into and unlawful
19(2) of B.P. 129. Thus, while the Court held that the RTC had jurisdiction, the Court
detainer of lands or buildings, original jurisdiction over which is conferred upon
classified actions for "annulment of title" and "cancellation of title, reversion and damages"
Metropolitan Trial Courts, [MTCs], and Municipal Circuit Trial Courts (conferred upon the
as civil actions that involve "title to, or possession of, real property, or any interest therein"
city and municipal courts under R.A. 296, as amended)." Thus, under the old law, there was
under Section 19(2) of B.P. 129.
no substantial effect on jurisdiction whether a case is one, the subject matter of which was
incapable of pecuniary estimation, under Section 19(1) of B.P. 129 or one involving title to
Petitioners' contention that the value of the trees cut in the subject properties
property under Section 19(2). The distinction between the two classes became crucial with
constitutes "any interest therein (in the subject properties)" that should be computed in
the amendment introduced by R.A. No. 7691 [48] in 1994 which expanded the exclusive
addition to the respective assessed values of the subject properties is unavailing. Section
original jurisdiction of the first level courts to include "all civil actions which involve title to,
19(2) of B.P. 129, as amended by R.A. No. 7691, is clear that the RTC shall exercise
or possession of, real property, or any interest therein where the assessed value of the
jurisdiction "in all civil actions which involve the title to, or possession of, real property, or
property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in
any interest therein, where the assessed value of the property involved exceeds Twenty
civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand
thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such value
pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees,
exceeds Fifty thousand pesos (P50,000.00)." It is true that the recovery of the value of the
litigation expenses and costs." Thus, under the present law, original jurisdiction over cases
trees cut from the subject properties may be included in the term "any interest
the subject matter of which involves "title to, possession of, real property or any interest
therein." However, the law is emphatic that in determining which court has jurisdiction, it is
therein" under Section 19(2) of B.P. 129 is divided between the first and second level
only the assessed value of the realty involved that should be computed. [54] In this case,
courts, with the assessed value of the real property involved as the benchmark. This
there is no dispute that the assessed values of the subject properties as shown by their tax
amendment was introduced to "unclog the overloaded dockets of the RTCs which would
declarations are less than P20,000.00. Clearly, jurisdiction over the instant cases belongs
result in the speedier administration of justice."[49]
not to the RTC but to the MTC.
IN VIEW WHEREOF, the decision of the Court of Appeals is hereby AFFIRMED that the
The cases of Raymundo v. CA[50] and Commodities Storage and ICE Plant
RTC of Dipolog City, Branch 9, has no jurisdiction in Civil Case Nos. 5188, 5433 and 5434.
Corporation v. CA,[51] relied upon by the petitioners, are inapplicable to the cases at
No costs. SO ORDERED.
bar. Raymundo involved a complaint for mandatory injunction, not one for reconveyance or
annulment of title. The bone of contention was whether the case was incapable of
pecuniary estimation considering petitioner's contention that the pecuniary claim of the
complaint was only attorney's fees of P10,000, hence, the MTC had jurisdiction. The Court
defined the criterion for determining whether an action is one that is incapable of
pecuniary estimation and held that the issue of whether petitioner violated the provisions
of the Master Deed and Declaration of Restriction of the Corporation is one that is
incapable of pecuniary estimation. The claim for attorney's fees was merely incidental to
the principal action, hence, said amount was not determinative of the court's G.R. No. 176020 September 29, 2014
jurisdiction. Nor can Commodities Storage and ICE Plant Corporation provide any comfort
to petitioners for the issue resolved by the Court in said case was venue and not HEIRS OF TELESFORO JULAO, namely, ANITA VDA. DE ENRIQUEZ, SONIA J. TOLENTINO and
jurisdiction. The action therein was for damages, accounting and fixing of redemption RODERICK JULAO, Petitioners,
period which was filed on October 28, 1994, before the passage of R.A. No. 7691. In vs.
resolving the issue of venue, the Court held that "[w]here the action affects title to SPOUSES ALEJANDRO and MORENITA DE JESUS, Respondents.
property, it should be instituted in the [RTC] where the property is situated. The Sta. Maria
 DECISION
DEL CASTILLO, J.:
Jurisdiction over the subject matter is conferred by law and is determined by the material
allegations of the complaint. 1 Thus, it cannot be acquired through, or waived by, any act or
omission of the parties;2 nor can it be cured by their silence, acquiescence, or even express
consent.3
This Petition for Review on Certiorari4 under Rule 45 of the Rules of Court assails the
Decision5 dated December 4, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 72845.
Factual Antecedents
Sometime in the 1960's, Telesforo Julao (Telesforo) 6 filed before the Department of
Environment and Natural Resources (DENR), Baguio City, two Townsite Sales Applications
(TSA), TSA No. V-2132 and TSA No. V-6667. 7Upon his death on June 1, 1971, his applications
were transferred to his heirs.8
On April 30, 1979,9 Solito Julao (Solito) executed a Deed of Transfer of Rights, 10 transferring
his hereditary share in the property covered by TSA No. V-6667 to respondent spouses
Alejandro and Morenita De Jesus. In 1983, respondent spouses constructed a house on the
property they acquired from Solito.11 In 1986, Solito went missing.12
On March 15, 1996, the DENR issued an Order: Rejection and Transfer of Sales Rights, 13 to
wit:
WHEREFORE, premises considered and it appearing that herein applicant is a holder of two
(2) applications in violation with established policy in the disposition [of] public lands in the
City of Baguio, TSA V-6667 is hereby ordered dropped from the records. Accordingly, it is
henceforth ordered that TSA 2132 in the name ofTELESFORO JULAO be, as [it is] hereby
transferred to the heirs of TELESFORO JULAO, represented by ANITA VDA. DE ENRIQUEZ,
and as thus transferred, the same shall continue to be given due course. For convenience of
easy reference, it is directed that the [pertinent] records be consolidated in the name of the
latter.
SO ORDERED.14
Consequently, on December 21, 1998, Original Certificate of Title (OCT) No. P-
2446,15 covering a 641-square meter property, was issued in favor of the heirs of Telesforo. 16
On March 2, 1999, petitioners Anita Julao vda. De Enriquez, Sonia J. Tolentino and Roderick
Julao,17representing themselves to be the heirs of Telesforo, filed before the Regional Trial
Court (RTC), Baguio City, a Complaint or Recovery of Possession of Real Property, 18 docketed
as Civil Case No. 4308-R,19 against respondent spouses. Petitioners alleged that they are the
true and lawful owners of a 641-square meter parcel of land located at Naguilian Road,
Baguio City, covered by OCT No. P-2446; 20 that the subject property originated from TSA
No. V-2132;21 that respondent spouses' house encroached on 70 square meters of the
subject property;22 that on August 4, 1998, petitioners sent a demand letter to respondent
spouses asking them to return the subject property; 23 that respondent spouses refused to
accede to the demand, insisting that they acquired the subject property from petitioners'
brother, Solito, by virtue of a Deed of Transfer of Rights; 24 that in the Deed of Transfer of
Rights, Solito expressly transferred in favor of respondent spouses his hereditary share in
the parcel of land covered by TSA No. V-6667; 25 that TSA No. V-6667 was rejected by the
DENR;26 and that respondent spouses have no valid claim over the subject property
because it is covered by a separate application, TSA No. V-2132. 27
Respondent spouses filed a Motion to Dismiss 28 on the ground of prescription, which the
RTC denied for lack of merit. 29 Thus, they filed an Answer 30 contending that they are the
true and lawful owners and possessors of the subject property; 31 that they acquired the
said property from petitioners' brother, Solito;32 and that contrary to the claim of
petitioners, TSA No. V-6667 and TSA No. V-2132 pertain to the same property. 33
During the trial, petitioners disputed the validity of the Deed of Transfer of Rights executed
by Solito. They presented evidence to show that Telesforo submitted two applications, TSA
No. V-2132 and TSA No. V-6667. 34The first one, TSA No. V-2132, resulted in the issuance of
OCT No. P-2446 in favor of the heirs ofTelesforo, while the second one, TSA No. V-6667, was
dropped from the records.35 They also presented evidence to prove that Solito had no
hereditary share in the estate of Telesforo because Solito was not Telesforo's biological son,
but his stepson, and that Solito 's real name was Francisco Bognot. 36
After petitioners rested their case, respondent spouses filed a Motion for Leave of Court to
File a Demurrer to Evidence.37 The RTC, however, denied the Motion.38
The heirs of Solito then moved to intervene and filed an Answer-lnlntervention, 39 arguing
that their father, Solito, is a legitimate son ofTelesforo and that Solito sold his hereditary
share in the estate of his father to respondent spouses by virtue of a Deed of Transfer of
Rights.40
To refute the evidence presented by petitioners, respondent spouses presented two letters
from the DENR: ( 1) a letter dated April 27, 1999 issued by Amando I. Francisco, the Officer-
In-Charge of CENRO-Baguio City, stating that "it can be concluded that TSA No. V-2132 and
TSA No. V-6667 referred to one and the same application covering one and the same
lot;"41 and (2) a letter42 dated September 30, 1998 from the DENR stating that "the land
applied for with assigned number TSA No. V-2132 was renumbered as TSA No. V-6667 as
per 2nd Indorsement dated November 20, 1957 x x x." 43 They also presented two
affidavits,44 both dated August 31, 1994, executed by petitioners Sonia Tolentino and
Roderick Julao,45 acknowledging that Solito was their co-heir and that he was the eldest son
of Telesforo.46 Ruling of the Regional Trial Court
On August 10, 2001, the RTC rendered a Decision 47 in favor of petitioners.1wphi1 The RTC
found that although petitioners failed to prove their allegation that Solito was not an heir of
Telesforo,48 they were nevertheless able to convincingly show that Telesforo filed with the
DENR two applications, covering two separate parcels of land, and that it was his first
application, TSA No. V-2132, which resulted in the issuance of OCT No. P-2446. 49 And since
what Solito transferred to respondent spouses was his hereditary share in the parcel of land
covered by TSA No. V-6667, respondent spouses acquired no right over the subject
property, which was derived from a separate application, TSA No. V-2132. 50 Thus, the RTC
disposed of the case in this wise:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
[petitioners] and against the [respondents] who are hereby ordered to restore the
possession of the land in question consisting of an area of 70 square meters, more or less,
which is a portion of the land covered by [OCT] No. P-2446. The [respondents] are ordered
to remove the house and/or other improvements that they constructed over the said parcel
of land and to vacate the same upon the finality of this decision.
SO ORDERED.51
Ruling of the Court of Appeals
Aggrieved, respondent spouses elevated the case to the CA.
On December 4, 2006, the CA reversed the ruling of the RTC. The CA found the Complaint
dismissible on two grounds: (1) failure on the part of petitioners to identify the property
sought to be recovered; and (2) lack of jurisdiction. The CA noted that petitioners failed to
pinpoint the property sought to be recovered. 52 In fact, they did not present any survey
plan to show that respondent spouses actually encroached on petitioners'
property.53Moreover, the CA was not fully convinced that the two applications pertain to
two separate parcels of land since respondent spouses were able to present evidence to
refute such allegation.54 The CA likewise pointed out that the Complaint failed to establish
that the RTC had jurisdiction over the case as petitioners failed to allege the assessed value
of the subject property.55 Thus:
WHEREFORE, premises considered, the appeal is GRANTED. The decision appealed from is
REVERSED and SET ASIDE. The complaint is DISMISSED.
SO ORDERED.56
Issues
Hence, petitioners filed the instant Petition for Review on Certiorari, raising the following
errors:
I Municipal Circuit Trial Courts shall exercise:
THE [CA] COMMITTED REVERSIBLE ERROR IN RULING THAT PETITIONERS FAILED TO PROVE
THE IDENTITY OF THE PROPERTY IN QUESTION.
II
THE [CA] COMMITTED REVERSIBLE ERROR IN RULING THAT THE TRIAL COURT DID NOT
ACQUIRE JURISDICTION OVER THE COMPLAINT.57
At this juncture, it must be mentioned that in the Resolution 58 dated March 19, 2007, we
required respondent spouses to file their Comment to the Petition which they failed to
comply with. Thus, in the Resolution59 dated March 11, 2013, we dispensed with the filing
of respondent spouses' Comment. At the same time, we required petitioners to manifest
whether they are willing to submit the case for resolution based on the pleadings filed. To
date, petitioners have not done so.
Our Ruling
The Petition lacks merit.
The assessed value must be alleged in the complaint to determine which court has
jurisdiction over the action.
Jurisdiction as we have said is conferred by law and is detennined by the allegations in the
complaint, which contains the concise statement of the ultimate facts of a plaintiffs cause
of action.60
Section 19(2) and Section 33(3) of Batas Pambansa Big. 129, as amended by Republic Act
No. 7691, provide:
SEC. 19. Jurisdiction in Civil Cases. - Regional Trial Courts shall exercise exclusive original
jurisdiction:
xxxx
(2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, where the assessed value of the property involved exceeds twenty
thousand pesos (P20,000.00) or for civil actions in Metro Manila, where such value exceeds
Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful
detainer of lands or buildings, original jurisdiction over which is conferred upon the
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts:
xxxx
SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts, and
x x x x (3) Exclusive original jurisdiction in all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value of the
property or interest therein does not exceed Twenty Thousand Pesos (P20,000.00) or, in
civil actions in Metro Manila, where such assessed value does not exceed Fifty Thousand
Pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, SO ORDERED.
litigation expenses and costs: Provided, That in cases of land not declared for taxation
purposes, the value of such property shall be determined by the assessed value of the
adjacent lots.

Based on the foregoing, it is clear that in an action for recovery of possession, the assessed
value of the property sought to be recovered determines the court's jurisdiction. 61

In this case, for the RTC to exercise jurisdiction, the assessed value of the subject property
must exceed P20,000.00. Since petitioners failed to allege in their Complaint the assessed
value of the subject property, the CA correctly dismissed the Complaint as petitioners failed
to establish that the RTC had jurisdiction over it. In fact, since the assessed value of the
property was not alleged, it cannot be determined which trial court had original and
exclusive jurisdiction over the case.

Furthermore, contrary to the claim of petitioners, the issue of lack of jurisdiction was raised
by respondents in their Appellant's Brief 62 And the fact that it was raised for the first time
on appeal is of no moment. Under Section 1, 63 Rule 9 of the Revised Rules of Court,
defenses not pleaded either in a motion to dismiss or in the answer are deemed waived,
except for lack of jurisdiction, litis pendentia, res judicata, and prescription, which must be
apparent from the pleadings or the evidence on record. In other words, the defense of lack
of jurisdiction over the subject matter may be raised at any stage of the proceedings, even
for the first time on appeal.64 In fact, the court may motu proprio dismiss a complaint at any
time when it appears from the pleadings or the evidence on record that lack of jurisdiction
exists.65

In an action to recover, the property must be identified

Moreover, Article 434 of the Civil Code states that "[i]n an action to recover, the property
must be identified, and the plaintiff must rely on the strength of his title and not on the
weakness of the defendant's claim." The plaintiff, therefore, is duty-bound to clearly
identify the land sought to be recovered, in accordance with the title on which he anchors
his right of ownership. 66 It bears stressing that the failure of the plaintiff to establish the
identity of the property claimed is fatal to his case.67

In this case, petitioners failed to identify the property they seek to recover as they failed to
describe the location, the area, as well as the boundaries thereof. In fact, as aptly pointed
out by the CA, no survey plan was presented by petitioners to prove that respondent
spouses actually encroached upon the 70-square meter portion of petitioners'
property.68 Failing to prove their allegation, petitioners are not entitled to the relief prayed
for in their Complaint.
All told, we find no error on the part of the CA in dismissing the Complaint for lack of
jurisdiction and for failing to identify the property sought to be recovered.
WHEREFORE, the Petition is hereby DENIED. The Decision dated December 4, 2006 of the
Court of Appeals in CA-G.R. CV No. 72845 is hereby AFFIRMED.
G.R. No. 208232, March 10, 2014
SURVIVING HEIRS OF ALFREDO R. BAUTISTA, NAMELY: EPIFANIA
G. BAUTISTA AND ZOEY G. BAUTISTA, Petitioners, v. FRANCISCO
LINDO AND WELHILMINA LINDO; AND HEIRS OF FILIPINA
DAQUIGAN, NAMELY: MA. LOURDES DAQUIGAN, IMELDA
CATHERINE DAQUIGAN, IMELDA DAQUIGAN AND CORSINO
DAQUIGAN, REBECCA QUIAMCO AND ANDRES QUIAMCO, ROMULO
LORICA AND DELIA LORICA, GEORGE CAJES AND LAURA CAJES,
 MELIDA BAEZ AND FRANCISCO BAEZ, MELANIE GOFREDO,
GERVACIO CAJES AND ISABEL CAJES, EGMEDIO SEGOVIA AND
VERGINIA SEGOVIA, ELSA N. SAM, PEDRO M. SAM AND LINA SAM,
SANTIAGO MENDEZ AND MINA MENDEZ, HELEN M. BURTON AND
LEONARDO BURTON, JOSE JACINTO AND BIENVENIDA JACINTO,
IMELDA DAQUIGAN, LEO MATIGA AND ALICIA MATIGA,
FLORENCIO ACEDO JR., AND LYLA VALERIO, Respondents.
DECISION
VELASCO JR., J.:
The Case
This is a Petition for Review on Certiorari under Rule 45 assailing the
April 25, 2013 Order of the Regional Trial Court (RTC) in Civil Case No.
(1798)-021 as well as its Order of July 3, 2013 denying reconsideration.
The Facts
Alfredo R. Bautista (Bautista), petitioners predecessor, inherited in 1983
a free-patent land located in Poblacion, Lupon, Davao Oriental and
covered by Original Certificate of Title (OCT) No. (1572) P-6144. A few
years later, he subdivided the property and sold it to several vendees,
herein respondents, via a notarized deed of absolute sale dated May 30,
1991. Two months later, OCT No. (1572) P-6144 was canceled and
Transfer Certificates of Title (TCTs) were issued in favor of the
vendees.1crallawlibrary
Three years after the sale, or on August 5, 1994, Bautista filed a
complaint for repurchase against respondents before the RTC, Branch 32,
Lupon, Davao Oriental, docketed as Civil Case No. 1798, 2anchoring his
cause of action on Section 119 of Commonwealth Act No. (CA) 141,
otherwise known as the Public Land Act, which
reads:chanRoblesVirtualawlibrary
SECTION 119. Every conveyance of land acquired under the free patent
or homestead provisions, when proper, shall be subject to repurchase by
the applicant, his widow, or legal heirs, within a period of five years from
the date of the conveyance.
Respondents, in their Answer, raised lack of cause of action, estoppel,
prescription, and laches, as defenses.
Meanwhile, during the pendency of the case, Bautista died and was
substituted by petitioner Epifania G. Bautista (Epifania).
Respondents Francisco and Welhilmina Lindo later entered into a
compromise agreement with petitioners, whereby they agreed to cede to
Epifania a three thousand two hundred and thirty square meter (3,230
sq.m.)-portion of the property as well as to waive, abandon, surrender,
and withdraw all claims and counterclaims against each other. The
compromise was approved by the RTC in its Decision dated January 27,
2011, the fallo of which reads:chanRoblesVirtualawlibrary
WHEREFORE, a DECISION is hereby rendered based on the above-
quoted Compromise Agreement and the parties are enjoined to strictly
comply with the terms and conditions of the same.
SO ORDERED.3
Other respondents, however, filed a Motion to Dismiss 4 dated February 4,
2013, alleging that the complaint failed to state the value of the property
sought to be recovered. Moreover, they asserted that the total selling
price of all the properties is only sixteen thousand five hundred pesos
(PhP 16,500), and the selling price or market value of a property is
always higher than its assessed value. Since Batas Pambansa Blg. (BP)
129, as amended, grants jurisdiction to the RTCs over civil actions
involving title to or possession of real property or interest therein where
the assessed value is more than PhP 20,000, then the RTC has no
jurisdiction over the complaint in question since the property which
Bautista seeks to repurchase is below the PhP 20,000 jurisdictional
ceiling.
RTC Ruling5
Acting on the motion, the RTC issued the assailed order dismissing the
complaint for lack of jurisdiction. The trial court found that Bautista failed
to allege in his complaint that the value of the subject property exceeds
20 thousand pesos. Furthermore, what was only stated therein was that
the total and full refund of the purchase price of the property is PhP
16,500. This omission was considered by the RTC as fatal to the case
considering that in real actions, jurisdictional amount is determinative of
whether it is the municipal trial court or the RTC that has jurisdiction
over the case.
With respect to the belated filing of the motion, the RTC, citing Cosco
Philippines Shipping, Inc. v. Kemper Insurance Company,6 held that a
motion to dismiss for lack of jurisdiction may be filed at any stage of the
proceedings, even on appeal, and is not lost by waiver or by estoppel.
The dispositive portion of the assailed Order
reads:chanRoblesVirtualawlibrary
WHEREFORE, the complaint for Repurchase, Consignation, with
Preliminary Injunction and Damages is hereby dismissed for lack of
jurisdiction.
SO ORDERED.7crallawlibrary
Assignment of Errors
Their motion for reconsideration having been denied, petitioners now
seek recourse before this Court with the following assigned
errors:chanRoblesVirtualawlibrary
I Jurisdiction of RTCs, as may be relevant to the instant petition, is
THE PUBLIC RESPONDENT RTC ERRED IN ADMITTING THE MOTION TO
DISMISS DATED FEBRUARY 4, 2013, BELATEDLY FILED BY THE PRIVATE
RESPONDENTS IN THE CASE.
II
THE PUBLIC RESPONDENT RTC ERRED IN HOLDING THAT THE INSTANT
CASE FOR REPURCHASE IS A REAL ACTION.8crallawlibrary
The Issue
Stated differently, the issue for the Courts resolution is: whether or not
the RTC erred in granting the motion for the dismissal of the case on the
ground of lack of jurisdiction over the subject matter.
Arguments
Petitioners argue that respondents belatedly filed their Motion to Dismiss
and are now estopped from seeking the dismissal of the case, it having
been filed nine (9) years after the filing of the complaint and after they
have actively participated in the proceedings. Additionally, they allege
that an action for repurchase is not a real action, but one incapable of
pecuniary estimation, it being founded on privity of contract between the
parties. According to petitioners, what they seek is the enforcement of
their right to repurchase the subject property under Section 119 of CA
141.
Respondents, for their part, maintain that since the land is no longer
devoted to agriculture, the right of repurchase under said law can no
longer be availed of, citing Santana v. Marias.9 Furthermore, they
suggest that petitioners intend to resell the property for a higher profit,
thus, the attempt to repurchase. This, according to respondents, goes
against the policy and is not in keeping with the spirit of CA 141 which is
the preservation of the land gratuitously given to patentees by the State
as a reward for their labor in cultivating the property. Also, the Deed of
Absolute Sale presented in evidence by Bautista was unilaterally
executed by him and was not signed by respondents. Lastly, respondents
argue that repurchase is a real action capable of pecuniary estimation.
Our Ruling
The petition is meritorious.
Jurisdiction of courts is granted by the Constitution and pertinent laws.
provided in Sec. 19 of BP 129, which reads:chanRoblesVirtualawlibrary
Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise
exclusive original jurisdiction:chanRoblesVirtualawlibrary
1) In all civil actions in which the subject of the litigation is incapable of
pecuniary estimation;
2) In all civil actions which involve the title to, or possession of, real
property, or any interest therein, where the assessed value of the
property involved exceeds Twenty thousand pesos (P20,000.00) or, for
civil actions in Metro Manila, where such value exceeds Fifty thousand
pesos (P50,000.00) except actions for forcible entry into and unlawful
detainer of lands or buildings, original jurisdiction over which is conferred
upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts.
On the other hand, jurisdiction of first level courts is prescribed in Sec.
33 of BP 129, which provides:chanRoblesVirtualawlibrary
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts
and Municipal Circuit Trial Courts in civil cases. Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall
exercise:chanRoblesVirtualawlibrary
x x x x
3) Exclusive original jurisdiction in all civil actions which involve title to,
or possession of, real property, or any interest therein where the
assessed value of the property or interest therein does not exceed
Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila,
where such assessed value does not exceed Fifty thousand pesos
(P50,000.00) exclusive of interest, damages of whatever kind, attorneys
fees, litigation expenses and costs: Provided, That in cases of land not
declared for taxation purposes, the value of such property shall be
determined by the assessed value of the adjacent lots.
The core issue is whether the action filed by petitioners is one involving
title to or possession of real property or any interest therein or one
incapable of pecuniary estimation.
The course of action embodied in the complaint by the present
petitioners predecessor, Alfredo R. Bautista, is to enforce his right to
repurchase the lots he formerly owned pursuant to the right of a free-
patent holder under Sec. 119 of CA 141 or the Public Land Act.
The Court rules that the complaint to redeem a land subject of a free
patent is a civil action incapable of pecuniary estimation.
It is a well-settled rule that jurisdiction of the court is determined by the
allegations in the complaint and the character of the relief sought.10
In this regard, the Court, in Russell v. Vestil,11 wrote that in determining
whether an action is one the subject matter of which is not capable of
pecuniary estimation this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought.
If it is primarily for the recovery of a sum of money, the claim is
considered capable of pecuniary estimation, and whether jurisdiction is in
the municipal courts or in the RTCs would depend on the amount of the
claim. But where the basic issue is something other than the right to
recover a sum of money, where the money claim is purely incidental to,
or a consequence of, the principal relief sought, this Court has
considered such actions as cases where the subject of the litigation may
not be estimated in terms of money, and, hence, are incapable of
pecuniary estimation. These cases are cognizable exclusively by
RTCs.12crallawlibrary
Settled jurisprudence considers some civil actions as incapable of
pecuniary estimation, viz:chanRoblesVirtualawlibrary
1. Actions for specific performance;
2. Actions for support which will require the determination of the civil
status;
3. The right to support of the plaintiff;
4. Those for the annulment of decisions of lower courts;
5. Those for the rescission or reformation of contracts; 13crallawlibrary
6. Interpretation of a contractual stipulation. 14
The Court finds that the instant cause of action to redeem the land is one
for specific performance.
The facts are clear that Bautista sold to respondents his lots which were
covered by a free patent. While the deeds of sale do not explicitly
contain the stipulation that the sale is subject to repurchase by the
applicant within a period of five (5) years from the date of conveyance
pursuant to Sec. 119 of CA 141, still, such legal provision is deemed
integrated and made part of the deed of sale as prescribed by law. It is
basic that the law is deemed written into every contract. 15 Although a
contract is the law between the parties, the provisions of positive law
which regulate contracts are deemed written therein and shall limit and
govern the relations between the parties. 16 Thus, it is a binding
prestation in favor of Bautista which he may seek to enforce. That is
precisely what he did. He filed a complaint to enforce his right granted
by law to recover the lot subject of free patent. Ergo, it is clear that his
action is for specific performance, or if not strictly such action, then it is
akin or analogous to one of specific performance. Such being the case,
his action for specific performance is incapable of pecuniary estimation
and cognizable by the RTC.
Respondents argue that Bautistas action is one involving title to or
possession of real property or any interests therein and since the selling
price is less than PhP 20,000, then jurisdiction is lodged with the MTC.
They rely on Sec. 33 of BP 129.
Republic Act No. 769117 amended Sec. 33 of BP 129 and gave
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts exclusive original jurisdiction in all civil actions which involve
title to, or possession of, real property, or any interest therein where the
assessed value of the property or interest therein does not exceed
twenty thousand pesos (PhP 20,000) or, in civil actions in Metro Manila,
where such assessed value does not exceed fifty thousand pesos (PhP
50,000) exclusive of interest, damages of whatever kind, attorneys fees,
litigation expenses and costs.
At first blush, it appears that the action filed by Bautista involves title to
or possession of the lots he sold to respondents. Since the total selling
price is less than PhP 20,000, then the MTC, not the RTC, has jurisdiction
over the case. This proposition is incorrect for the re-acquisition of the
lots by Bautista or herein successors-in-interests, the present petitioners,
is but incidental to and an offshoot of the exercise of the right by the
latter to redeem said lots pursuant to Sec. 119 of CA 141. The
reconveyance of the title to petitioners is solely dependent on the
exercise of such right to repurchase the lots in question and is not the
principal or main relief or remedy sought. Thus, the action of petitioners
is, in reality, incapable of pecuniary estimation, and the reconveyance of
the lot is merely the outcome of the performance of the obligation to
return the property conformably to the express provision of CA 141.
Even if we treat the present action as one involving title to real property
or an interest therein which falls under the jurisdiction of the first level
court under Sec. 33 of BP 129, as the total selling price is only PhP
16,000 way below the PhP 20,000 ceiling, still, the postulation of
respondents that MTC has jurisdiction will not hold water. This is
because respondents have actually participated in the proceedings before hereby REVERSED and SET ASIDE.
the RTC and aggressively defended their position, and by virtue of which
they are already barred to question the jurisdiction of the RTC following The Regional Trial Court, Branch 32 in Lupon, Davao Oriental
the principle of jurisdiction by estoppel. is ORDERED to proceed with dispatch in resolving Civil Case No. (1798)-
021.
In Heirs of Jose Fernando v. De Belen, it was held that the party raising
defenses to the complaint, actively participating in the proceedings by No pronouncement as to costs.
filing pleadings, presenting his evidence, and invoking its authority by
asking for an affirmative relief is deemed estopped from questioning the SO ORDERED.
jurisdiction of the court.18crallawlibrary

Here, we note that aside from the belated filing of the motion to
dismiss--it having been filed nine (9) years from the filing of the
complaint--respondents actively participated in the proceedings through
the following acts:chanRoblesVirtualawlibrary

1. By filing their Answer and Opposition to the Prayer for

Injunction19 dated September 29, 1994 whereby they even
interposed counterclaims, specifically: PhP 501,000 for unpaid
survey accounts, PhP 100,000 each as litigation expenses, PhP
200,000 and PhP 3,000 per daily appearance by way of
attorneys fees, PhP 500,000 as moral damages, PhP 100,000 by
way of exemplary damages, and costs of suit;

2. By participating in Pre-trial;

3. By moving for the postponement of their presentation of

evidence;20crallawlibrary

4. By presenting their witness;21 and

5. By submitting the compromise agreement for

approval.22crallawlibrary

Having fully participated in all stages of the case, and even invoking the
RTCs authority by asking for affirmative reliefs, respondents can no
longer assail the jurisdiction of the said trial court. Simply put,
considering the extent of their participation in the case, they are, as they
should be, considered estopped from raising lack of jurisdiction as a
ground for the dismissal of the action.

WHEREFORE, premises considered, the instant petition is

hereby GRANTED. The April 25, 2013 and July 3, 2013 Orders of the
Regional Trial Court in Civil Case No. (1798)-021 are