Page 1 of 458
[G.R. No. 131282. January 4, 2002.] lack of jurisdiction of the court over an action cannot be
GABRIEL L. DUERO, petitioner, vs.
HON. COURT OF APPEALS, and
BERNARDO A. ERADEL, respondents.
Sua & Alambra Law Offices for petitioner.
Gerardo M. Maglinte for private respondent.
SYNOPSIS
In a complaint for Recovery of Possession and Ownership
filed by petitioner Gabriel L. Duero against private
respondent Bernardo A Eradel and two others, private
respondent was declared in default for failure to file his
answer. As a consequence, judgment was rendered in
favor of the petitioner. Private respondent filed a Motion for
New Trial, but was denied by the trial court. Subsequently,
he filed a Petition for Relief from Judgment based on the
same ground as in his motion for new trial. But the said
petition was denied by the trial court. In a motion for
reconsideration, he alleged that the Regional
Trial Court (RTC) had no jurisdiction over the case since
the value of the land was only P5,240. Again, it was denied
by the trial court. Private respondent filed a Petition
for Certiorari before the Court of Appeals. The
appellatecourt gave due course to the petition by
maintaining that private respondent was not estopped from
assailing the jurisdiction of the RTC. Hence, this petition.
The Court could not fault the Court of Appeals in overruling
the RTC. The fundamental rule is that, the
waived by the parties, or even cured by their silence,
acquiescence or even by their express consent. Even if
private respondent actively participated in the proceedings
before said court, the doctrine of estoppel cannot be
properly invoked against him because the
question of lack of jurisdiction may be raised at anytime
and at any stage of the action.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; DOCUMENTARY
EVIDENCE; XEROX COPIES ARE WITHOUT
EVIDENTIARY VALUE. Petitioner through counsel
submitted to this Courtpleadings that contain inaccurate
statements. Thus, on page 5 of his petition, we find that to
bolster the claim that the appellate court erred in holding
that the RTC had no jurisdiction, petitioner pointed
to Annex E of his petition which supposedly is the
Certification issued by the Municipal Treasurer of San
Miguel, Surigao, specifically containing the notation, "Note:
Subject for General Revision Effective 1994." But it
appears that Annex E of his petition is not a Certification
but a xerox copy of a Declaration of Real Property.
Nowhere does the document contain a notation, "Note:
Subject for General Revision Effective 1994." Petitioner
also asked this Court to refer to Annex F, where he said
the zonal value of the disputed land was P1.40 per sq.m.,
thus placing the computed value of the land at the time the
complaint was filed before the RTC at P57,113.98, hence
beyond the jurisdiction of the municipal court and within the
jurisdiction of the regional trial court. However, we find that
 Page 2 of 458

these annexes are both merely xerox copies. They are
obviously without evidentiary weight or value.
4. REMEDIAL LAW; JURISDICTION;
DOCTRINE OF ESTOPPEL; AN EQUITABLE DEFENSE
THAT IS BOTH SUBSTANTIVE AND REMEDIAL. While
participation in all stagesof a case before the trial court,
including invocation of its authority in asking for affirmative
relief, effectively bars a party by estoppel from challenging
the court's jurisdiction, we note that estoppel has become
an equitable defense that is both substantive and remedial
and its successful invocation can bar a right and not merely
its equitable enforcement. Hence, estoppel ought to be
applied with caution. For estoppel to apply, the action
giving rise thereto must be unequivocal and intentional
because, if misapplied, estoppel may become a
tool of injustice.
5. ID.; ID.; ID.; NOT APPLICABLE IN CASE AT BAR. In
the present case, private respondent questions the
jurisdiction of RTC in Tandag, Surigao del Sur, on legal
grounds. Recall that it was petitioner who filed the
complaint against private respondent and two other parties
before the said court, believing that the RTC had
jurisdiction over his complaint. But by
then, Republic Act 7691 amending BP 129 had become
effective, such that jurisdiction already belongs not to the
RTC but to the MTC pursuant to said amendment. . . . Note
that private respondent raised the
issue of lack of jurisdiction, not when the case was already
on appeal, but when the case was still before the RTC that
ruled him in default, denied his motion for new trial as well
as for relief from judgment, and denied likewise his two
motions for reconsideration. After the RTC still refused to
reconsider the denial of private respondent's motion for
relief from judgment, it went on to issue the order for
entry ofjudgment and a writ of execution. Under these
circumstances, we could not fault the Court of Appeals in
overruling the RTC and in holding that private respondent
was not estopped from questioning the jurisdiction of the
regional trial court.
6. ID.; ID.; ID.; APPLICABLE IN EXCEPTIONAL CASES
ONLY; NOT PRESENT IN CASE AT BAR. In holding
that estoppel did not prevent private respondent from
questioning the RTC's jurisdiction, the
appellate court reiterated the doctrine that estoppel must
be applied only in exceptional cases, as its misapplication
could result in a miscarriage of justice. Here, we find that
petitioner, who claims ownership of a parcel of land, filed
his complaint before a court without appropriate
jurisdiction. Defendant, a farmer whose tenancy status is
still pending before the proper administrative agency
concerned, could have moved for dismissal of the case on
jurisdictional grounds. But the farmer as defendant therein
could not be expected to know the nuances of jurisdiction
and related issues. This farmer, who is now the private
respondent, ought not to be penalized when he claims that
he made an honest mistake when he initially submitted his
motions before the RTC, before he realized that the
controversy was outside the RTC's cognizance but within
the jurisdiction of the municipal trial court. To hold him in
estoppel as the RTC did would amount to foreclosing his
avenue to obtain a proper resolution of his case.
Furthermore, if the RTC's order were to be sustained, he
would be evicted from the land prematurely, while RED
Conflict Case No. 1029 would remain unresolved. Such
eviction on a technicality if allowed could result in an
 Page 3 of 458
injustice, if it is later found that he has a legal right to till the
land he now occupies as tenant-lessee. AEScHa
7. ID.; ID.; NOT A QUESTION OF ACQUIESCENCE AS A
MATTER OF FACT BUT AN ISSUE OF CONFERMENT
AS A MATTER OF LAW. The fundamental rule is that,
the lack of jurisdiction of the court over an action cannot be
waived by the parties, or even cured by their silence,
acquiescence or even by their express consent. Further, a
party may assail the jurisdiction of the court over the action
at any stage of the proceedings and even on appeal. The
appellate court did not err in saying that the RTC should
have declared itself barren of jurisdiction over the action.
Even if private respondent actively participated in the
proceedings before said court, the doctrine ofestoppel
cannot still be properly invoked against him because the
question of lack of jurisdiction may be raised at anytime
and at any stage of the action. Precedents tell us that as a
general rule, the jurisdiction of a court is not a
question of acquiescence as a matter of fact, but an
issue of conferment as a matter of law. Also, neither waiver
nor estoppel shall apply to confer jurisdiction upon a court,
barring highly meritorious and exceptional circumstances.
8. ID.; CIVIL PROCEDURE; JUDGMENT;
DECISION OF A COURT WITHOUT JURISDICTION IS
NULL AND VOID. Indeed, ". . . the trial court was duty-
bound to take judicial notice of the parameters of its
jurisdiction and its failure to do so, makes its decision a
'lawless' thing." Since a decision of a court without
jurisdiction is null and void, it could logically never become
final and executory, hence appeal therefrom by writ of error
would be out of the question. Resort by private respondent
to a petition for certiorari before the Court of Appeals was
in order.
9. ID.; ID.; PLEADINGS; IF THE COURT HAS NO
JURISDICTION OVER THE CASE, DEFENDANT HAS
JUSTIFIABLE REASON NOT TO FILE AN ANSWER.
Suffice it to say that, given the circumstances in this case,
no error was committed on this score by respondent
appellate court. Since the RTC had no jurisdiction over the
case, private respondent had justifiable reason in law not to
file an answer, aside from the fact that he believed the suit
was properly his landlord's concern.
DECISION
QUISUMBING, J : p
This petition for certiorari assails the Decision 1 dated
September 17, 1997, of the Court of Appeals in CA-G.R.
No. SP No. 2340-UDK, entitled Bernardo Eradel vs. Hon.
Ermelino G. Andal, setting aside all proceedings in Civil
Case No. 1075, Gabriel L. Duero vs. Bernardo
Eradel, before the Branch 27 of the Regional
Trial Court ofTandang, Surigao del Sur.
The pertinent facts are as follows:
Sometime in 1988, according to petitioner, private
respondent Bernardo Eradel 2 entered and occupied
petitioner's land covered by Tax Declaration No. A-16-13-
302, located in Baras, San Miguel, Surigao del Sur. As
shown in the tax declaration, the land had an assessed
value of P5,240. When petitioner politely informed private
respondent that the land was his and requested the latter
to vacate the land, private respondent refused, but instead
 Page 4 of 458
threatened him with bodily harm. Despite repeated
demands, private respondent remained steadfast in his
refusal to leave the land.
On June 16, 1995, petitioner filed before the RTC a
complaint for Recovery of Possession and Ownership with
Damages and Attorney's Fees against private respondent
and two others, namely, Apolinario and Inocencio Ruena.
Petitioner appended to the complaint the aforementioned
tax declaration. The counsel of the Ruenas asked for
extension to file their Answer and was given until July 18,
1995. Meanwhile, petitioner and the Ruenas executed a
compromise agreement, which became the trialcourt's
basis for a partial judgment rendered on January 12, 1996.
In this agreement, the Ruenas through their counsel, Atty.
Eusebio Avila, entered into a Compromise Agreement with
herein petitioner, Gabriel Duero. Inter alia, the agreement
stated that the Ruenas recognized and bound themselves
to respect the ownership and
possession of Duero. 3 Herein private respondent Eradel
was not a party to the agreement, and he was declared in
default for failure to file his answer to the complaint.4
Petitioner presented his evidence ex parte on February 13,
1996. On May 8, 1996, judgment was rendered in his favor,
and private respondent was ordered to peacefully vacate
and turn over Lot No. 1065 Cad. 537-D to petitioner; pay
petitioner P2,000 annual rental from 1988 up the time he
vacates the land, and P5,000 as attorney's fees and the
cost of the suit. 5 Private respondent received a copy of the
decision on May 25, 1996.
On June 10, 1996, private respondent filed a Motion for
New Trial, alleging that he has been occupying the land as
a tenant of Artemio Laurente, Sr., since 1958. He explained
that he turned over the complaint and summons to
Laurente in the honest belief that as landlord, the latter had
a better right to the land and was responsible to defend any
adverse claim on it. However, the trial court denied the
motion for new trial.
Meanwhile, RED Conflict Case No. 1029, an administrative
case between petitioner and applicant-contestants Romeo,
Artemio and Jury Laurente, remained pending with the
Office of the Regional Director of the
Department of Environment and Natural Resources in
Davao City. Eventually, it was forwarded to the DENR
Regional Office in Prosperidad, Agusan del Sur.
On July 24, 1996, private respondent filed before the RTC
a Petition for Relief from Judgment, reiterating the same
allegation in his Motion for New Trial. He averred that
unless there is a determination on who owned the land, he
could not be made to vacate the land. He also averred that
the judgment of the trial court was void inasmuch as the
heirs of Artemio Laurente, Sr., who are indispensable
parties, were not impleaded.
On September 24, 1996, Josephine, Ana Soledad and
Virginia, all surnamed Laurente, grandchildren of Artemio
who were claiming ownership of the land, filed a Motion for
Intervention. The RTC denied the motion.
On October 8, 1996, the trial court issued an order denying
the Petition for Relief from Judgment. In a Motion for
Reconsideration of said order, private respondent alleged
that the RTC had no jurisdiction over the case, since the
value of the land was only P5,240 and therefore it was
under the jurisdiction of the municipal trial court. On
November 22, 1996, the RTC denied the motion for
reconsideration.
 Page 5 of 458
On January 22, 1997, petitioner filed a Motion for
Execution, which the RTC granted on January 28. On
February 18, 1997, Entry of Judgment was made of record
and a writ of execution was issued by the RTC on February
27, 1997. On March 12, 1997, private respondent filed his
petition for certiorari before the Court of Appeals.
The Court of Appeals gave due course to the petition,
maintaining that respondent is not estopped from assailing
the jurisdiction of the RTC, Branch 27 in Tandag, Surigao
del Sur, when private respondent filed with said court his
Motion for Reconsideration And/Or
Annulment of Judgment. The Court of Appeals decreed as
follows:
IN THE LIGHT OF ALL THE FOREGOING, the
Petition is GRANTED. All proceedings in
"Gabriel L. Duero vs. Bernardo Eradel, et al. Civil
Case 1075" filed in the Court a quo, including its
Decision, Annex "E" of the petition, and its
Orders and Writ of Execution and the turn
over of the property to the Private Respondent
by the Sheriff of theCourt a quo, are declared
null and void and hereby SET ASIDE. No
pronouncement as to costs.
SO ORDERED. 6
Petitioner now comes before this Court, alleging that
the Court of Appeals acted with grave abuse of discretion
amounting to lack or in excess of jurisdiction when it held
that:
I.
. . . THE LOWER COURT HAS NO JURISDICTION OVER THE
SUBJECT MATTER OF THE CASE.
II.
. . . PRIVATE RESPONDENT WAS NOT THEREBY
ESTOPPED FROM QUESTIONING THE
JURISDICTION OF THE LOWER COURT EVEN AFTER IT
SUCCESSFULLY SOUGHT AFFIRMATIVE RELIEF
THEREFROM.
III.
. . . THE FAILURE OF PRIVATE RESPONDENT TO FILE HIS
ANSWER IS JUSTIFIED. 7
The main issue before us is whether
the Court of Appeals gravely abused its discretion when it
held that the municipal trial court had jurisdiction, and that
private respondent was not estopped from assailing the
jurisdiction of the RTC after he had filed several motions
before it. The secondary issue is whether
the Court of Appealserred in holding that private
respondent's failure to file an answer to the complaint was
justified.
At the outset, however, we note that petitioner through
counsel submitted to this Court pleadings that contain
inaccurate statements. Thus, on page 5 of his petition, 8we
find that to bolster the claim that the appellate court erred
in holding that the RTC had no jurisdiction, petitioner
pointed to Annex E 9 of his petition which supposedly is the
Certification issued by the Municipal Treasurer of San
Miguel, Surigao, specifically containing the notation, "Note:
Subject for General Revision Effective 1994". But it
appears that Annex E of his petition is not a Certification
but a xerox copy of a Declaration of Real Property.
Nowhere does the document contain a notation, "Note:
Subject for General Revision Effective 1994". Petitioner
also asked this Court to refer to Annex F, 10 where he said
 Page 6 of 458
the zonal value of the disputed land was P1.40 per sq.m.,
thus placing the computed value of the land at the time the
complaint was filed before the RTC at P57,113.98, hence
beyond the jurisdiction of the municipal court and within the
jurisdiction of the regional trial court. However, we find that
these annexes are both merely xerox copies. They are
obviously without evidentiary weight or value.
Coming now to the principal issue, petitioner contends that
respondent appellate court acted with grave
abuse of discretion. By "grave abuse of discretion" is
meant such capricious and whimsical exercise of judgment
which is equivalent to an excess or a lack of jurisdiction.
The abuse of discretion must be so patent and gross as to
amount to an evasion of a positive duty or a virtual refusal
to perform a duty enjoined by law, or to act at all in
contemplation of law as where the power is exercised in an
arbitrary and despotic manner by reason of passion or
hostility. 11 But here we find that in its decision holding that
the municipal court has jurisdiction over the case and that
private respondent was not estopped from questioning the
jurisdiction of the RTC,
respondent Court of Appeals discussed the facts on which
its decision is grounded as well as the law and
jurisprudence on the matter. 12 Its action was neither
whimsical nor capricious.
Was private respondent estopped from questioning that
jurisdiction of the RTC? In this case, we are in agreement
with the Court of Appeals that he was not. While
participation in all stages of a case before the trial court,
including invocation of its authority in asking for affirmative
relief, effectively bars a party by estoppel from challenging
the court's jurisdiction, 13 we note that estoppel has
become an equitable defense that is both substantive and
remedial and its successful invocation can bar a right and
not merely its equitable enforcement. 14 Hence, estoppel
ought to be applied with caution. For estoppel to apply, the
action giving rise thereto must be unequivocal and
intentional because, if misapplied, estoppel may become a
tool of injustice. 15
In the present case, private respondent questions the
jurisdiction of RTC in Tandag, Surigao del Sur, on legal
grounds. Recall that it was petitioner who filed the
complaint against private respondent and two other parties
before the said court, 16 believing that the RTC had
jurisdiction over his complaint. But by
then, Republic Act7691 17 amending BP 129 had become
effective, such that jurisdiction already belongs not to the
RTC but to the MTC pursuant to said amendment. Private
respondent, an unschooled farmer, in the mistaken belief
that since he was merely a tenant of the late Artemio
Laurente Sr., his landlord, gave the summons to a Hipolito
Laurente, one of the surviving heirs of Artemio Sr., who did
not do anything about the summons. For failure to answer
the complaint, private respondent was declared in default.
He then filed a Motion for New Trial in the same court and
explained that he defaulted because of his belief that the
suit ought to be answered by his landlord. In that motion he
stated that he had by then the evidence to prove that he
had a better right than petitioner over the land
because of his long, continuous and uninterrupted
possession as bona fide tenant-lessee of the land. 18 But
his motion was denied. He tried an alternative recourse. He
filed before the RTC a Motion for Relief from Judgment.
Again, the same court denied his motion, hence he moved
for reconsideration of the denial. In his Motion for
Reconsideration, he raised for the first time the RTC's
 Page 7 of 458
lack of jurisdiction. This motion was again denied. Note that
private respondent raised the issue of lack of jurisdiction,
not when the case was already on appeal, but when the
case was still before the RTC that ruled him in default,
denied his motion for new trial as well as for relief from
judgment, and denied likewise his two motions for
reconsideration. After the RTC still refused to reconsider
that denial of private respondent's motion for relief from
judgment, it went on to issue the order for
entry of judgment and a writ of execution.
Under these circumstances, we could not fault
the Court of Appeals in overruling the RTC and in holding
that private respondent was not estopped from questioning
the jurisdiction of the regional trial court. The fundamental
rule is that, the lack of jurisdiction of the court over an
action cannot be waived by the parties, or even cured by
their silence, acquiescence or even by their express
consent. 19 Further, a party may assail the
jurisdiction of the court over the action at any stage of the
proceedings and even on appeal. 20 The appellate court did
not err in saying that the RTC should have declared itself
barren of jurisdiction over the action. Even if private
respondent actively participated in the proceedings before
said court, the doctrine of estoppel cannot still be properly
invoked against him because the
question of lack ofjurisdiction may be raised at anytime and
at any stage of the action. 21 Precedents tell us that as a
general rule, the jurisdiction of a court is not a
question ofacquiescence as a matter of fact, but an
issue of conferment as a matter of law. 22 Also, neither
waiver nor estoppel shall apply to confer jurisdiction upon
a court, barring highly meritorious and exceptional
circumstances. 23 The Court of Appeals found support for
its ruling in our decision
in Javier vs. Court of Appeals, thus:
. . . The point simply is that when a party
commits error in filing his suit or proceeding in
a court that lacks jurisdiction to take
cognizance of the same, such act may not at
once be deemed sufficient basis of estoppel. It
could have been the result of an honest mistake,
or of divergent interpretations of doubtful legal
provisions. If any fault is to be imputed to a party
taking such course of action, part of the blame
should be placed on the court which shall
entertain the suit, thereby lulling the parties into
believing that they pursued their remedies in the
correct forum. Under the rules, it is the
duty of the court to dismiss an action 'whenever
it appears that the courthas no jurisdiction over
the subject matter.' (Sec. 2, Rule 9,
Rules of Court) Should the Court render a
judgment without jurisdiction, such judgment
may be impeached or annulled for
lack of jurisdiction (Sec. 30, Rule 132, Ibid.),
within ten (10) years from the finality of the
same. [Italics supplied] 24
Indeed, ". . . the trial court was duty-bound to take judicial
notice of the parameters of its jurisdiction and its failure to
do so, makes its decision a 'lawless' thing." 25
Since a decision of a court without jurisdiction is null and
void, it could logically never become final and executory,
hence appeal therefrom by writ of error would be outof the
question. Resort by private respondent to a petition
for certiorari before the Court of Appeals was in order.
 Page 8 of 458

In holding that estoppel did not prevent private respondent jurisdiction over the case, private respondent had justifiable
from questioning the RTC's jurisdiction, the reason in law not to file an answer, aside from the fact that
appellate court reiterated the doctrine that estoppel must he believed the suit was properly his landlord's concern.
be applied only in exceptional cases, as its misapplication
WHEREFORE, the petition is DISMISSED. The assailed
could result in a miscarriage of justice. Here, we find that
decision of the Court of Appeals is AFFIRMED. The
petitioner, who claims ownership of a parcel of land, filed
decision of the Regional Trial Court in Civil Case No. 1075
his complaint before a court without appropriate
entitled Gabriel L. Duero vs. Bernardo Eradel, its Order that
jurisdiction. Defendant, a farmer whose tenancy status is
private respondent turn over the disputed land to petitioner,
still pending before the proper administrative agency
and the Writ of Execution it issued, are ANNULLED and
concerned, could have moved for dismissal of the case on
SET ASIDE. Costs against petitioner. aCSDIc
jurisdictional grounds. But the farmer as defendant therein
could not be expected to know the nuances ofjurisdiction SO ORDERED.
and related issues. This farmer, who is now the private
Bellosillo, Mendoza and De Leon, Jr., JJ., concur.
respondent, ought not to be penalized when he claims that
he made an honest mistake when he initially submitted his |||

motions before the RTC, before he realized that the

controversy was outside the RTC's cognizance but within
the jurisdiction of the municipal trialcourt. To hold him in
estoppel as the RTC did would amount to foreclosing his
avenue to obtain a proper resolution of his case.
Furthermore, if the RTC's order were to be sustained, he
would be evicted from the land prematurely, while RED
Conflict Case No. 1029 would remain unresolved. Such
eviction on a technicality if allowed could result in an
injustice, if it is later found that he has a legal right to till the
land he now occupies as tenant-lessee.
Having determined that there was no grave
abuse of discretion by the appellate court in ruling that
private respondent was not estopped from questioning the
jurisdiction of the RTC, we need not tarry to consider in
detail the second issue. Suffice it to say that, given the
circumstances in this case, no error was committed on this
score by respondent appellate court. Since the RTC had no
 Page 9 of 458
[G.R. No. 129638. December 8, 2003.]
ANTONIO
T. DONATO, petitioner, vs. COURT OF APP
EALS, FILOMENO ARCEPE, TIMOTEO
BARCELONA, IGNACIO BENDOL,
THELMA P. BULICANO, ROSALINDA
CAPARAS, ROSITA DE COSTO, FELIZA
DE GUZMAN, LETICIA DE LOS REYES,
ROGELIO GADDI, PAULINO GAJARDO,
GERONIMO IMPERIAL, HOMER
IMPERIAL, ELVIRA LESLIE, CEFERINO
LUGANA, HECTOR PIMENTEL, NIMFA
PIMENTEL, AURELIO G. ROCERO,
ILUMINADA TARA, JUANITO VALLESPIN,
AND NARCISO YABUT, respondents.
DECISION
AUSTRIA-MARTINEZ, J : p
Before us is a "petition for review on certiorari" filed on July
17, 1997 which should be a petition for certiorari under
Rule 65 of the Rules of Court. It assails the
Resolutions 1 dated March 21, 1997 and June 23, 1997
issued by the Court of Appeals in CA-G.R. SP No. 41394. 2
The factual background of the case is as follows:
Petitioner Antonio T. Donato is the registered owner of a
real property located at Ciriaco Tuason Street, San Andres,
Manila, covered by Transfer Certificate of Title No. 131793
issued by the Register of Deeds of the City of Manila on
November 24, 1978. On June 7, 1994, petitioner filed a
complaint before the Metropolitan Trial Court(Branch
26) of Manila (MeTC) for forcible entry and unlawful
detainer against 43 named defendants and "all unknown
occupants" of the subject property. 3
Petitioner alleges that: private respondents had oral
contracts of lease that expired at the end of each month
but were impliedly renewed under the same terms by mere
acquiescence or tolerance; sometime in 1992, they
stopped paying rent; on April 7, 1994, petitioner sent them
a written demand to vacate; the non-compliance with said
demand letter constrained him to file the ejectment case
against them. 4
Of the 43 named defendants, only 20 (private
respondents, 5 for brevity) filed a consolidated Answer
dated June 29, 1994 wherein they denied non-
payment of rentals. They contend that they cannot be
evicted because the Urban Land Reform Law guarantees
security of tenure and priority right to purchase the subject
property; and that there was a negotiation for the
purchase of the lots occupied by them but when the
negotiation reached a passive stage, they decided to
continue payment ofrentals and tendered payment to
petitioner's counsel and thereafter initiated a petition for
consignation of the rentals in Civil Case No. 144049 while
they await the outcome of the negotiation to purchase.
Following trial under the Rule on Summary Procedure, the
MeTC rendered judgment on September 19, 1994 against
the 23 non-answering defendants, ordering them to vacate
the premises occupied by each of them, and to pay jointly
and severally P10,000.00 per month from the date they last
paid their rent until the date they actually vacate, plus
 Page 10 of 458

interest thereon at the legal rate allowed by law, as well as reconsideration submitting the duly authenticated
P10,000.00 as attorney's fees and the costs of the suit. As original of the certification of non-forum shopping signed by
to the 20 private respondents, the MeTC issued a separate petitioner. 15
judgment 6 on the same day sustaining their rights under
In a Resolution 16 dated June 23, 1997 the CA denied
the Land Reform Law, declaring petitioner's cause of action
petitioner's motion for reconsideration and its supplement,
as not duly warranted by the facts and
ruling that "petitioner's subsequent compliance did not cure
circumstances of the case and dismissing the case without
the defect in the instant petition." 17
prejudice.
Hence, the present petition anchored on the following
Not satisfied with the judgment dismissing the complaint as
grounds:
against the private respondents, petitioner appealed to the
Regional Trial Court (Branch 47) of Manila (RTC).7 In a I.
Decision 8 dated July 5, 1996, the RTC sustained the RESPONDENT COURT OF APPEALS GRAVEL
decision of the MeTC. Y ERRED IN DISMISSING THE PETITION
Undaunted, petitioner filed a petition for review with BASED ON HYPER-TECHNICAL GROUNDS
the Court of Appeals (CA for brevity), docketed as CA-G.R. BECAUSE:
SP No. 41394. In a Resolution dated March 21, 1997, A. PETITIONER HAS SUBSTANTIALLY
theCA dismissed the petition on two grounds: (a) the COMPLIED WITH
certification of non-forum shopping was signed by SUPREME COURT CIRCULAR
petitioner's counsel and not by petitioner himself, in NO. 28-91. MORE, PETITIONER
violation ofRevised Circular No. 28-91; 9 and, (b) the only SUBSEQUENTLY SUBMITTED
annex to the petition is a certified copy of the questioned DURING THE
PENDENCY OF THE
decision but copies of the pleadings and other material
PROCEEDINGS A DULY
portionsof the record as would support the
AUTHENTICATED
allegations of the petition are not annexed, contrary CERTIFICATE OF NON-FORUM
to Section 3, paragraph b, Rule 6 of the Revised Internal SHOPPING WHICH HE HIMSELF
Rules of the Court ofAppeals (RIRCA). 10 SIGNED AND EXECUTED IN THE
On April 17, 1997, petitioner filed a Motion for UNITED STATES.
Reconsideration, 11 attaching thereto a photocopy of the B. PETITIONER HAS SUBSTANTIALLY
certification of non-forum shopping duly signed by COMPLIED WITH SECTION 3,
petitioner himself 12 and the relevant records of the MeTC RULE 6 OF THE REVISED
and the RTC. 13 Five days later, or on April 22, 1997, INTERNAL
petitioner filed a Supplement 14 to his motion for RULES OF THE COURT OF APPE
ALS. MORE, PETITIONER
 Page 11 of 458

SUBSEQUENTLY SUBMITTED THE RTC MANILA COMMITTED

DURING THE REVERSIBLE ERROR IN NOT
PENDENCY OF THE RULING THAT TENANTS
PROCEEDINGS COPIES OF THE UNDERP.D. 1517 MAY BE
RELEVANT DOCUMENTS IN THE EVICTED FOR NON-
CASES BELOW. PAYMENT OF RENT,
TERMINATION OF LEASE OR
C. PETITIONER HAS A MERITORIOUS
OTHER GROUNDS FOR
APPEAL, AND HE STANDS TO
EJECTMENT.
LOSE SUBSTANTIAL PROPERTY
IF THE APPEAL IS NOT GIVEN B. RESPONDENT COURT OF APPEALS
DUE COURSE. THE SHOULD HAVE RULED THAT
RULES OFPROCEDURE MUST THE RTC MANILA COMMITTED
BE LIBERALLY CONSTRUED TO REVERSIBLE ERROR IN NOT
DO SUBSTANTIAL JUSTICE. RULING THAT THE ALLEGED
"PRIORITY RIGHT TO BUY THE
II.
LOT THEY OCCUPY" DOES NOT
RESPONDENT COURT OF APPEALS GRAVEL APPLY WHERE THE
Y ERRED IN NOT RULING THAT ALL THE LANDOWNER DOES NOT
ELEMENTS OF UNLAWFUL DETAINER ARE INTEND TO SELL THE SUBJECT
PRESENT IN THE CASE AT BAR. PROPERTY, AS IN THE CASE AT
BAR.ScTaEA

III.
C. RESPONDENT COURT OF APPEALS
RESPONDENT COURT OF APPEALS ERRED SHOULD HAVE RULED THAT
IN NOT RULING THAT THE RTC MANILA, THE RTC MANILA COMMITTED
BRANCH 47, COMMITTED REVERSIBLE REVERSIBLE ERROR IN RULING
ERROR IN AFFIRMING THE FINDING OF MTC THAT THE SUBJECT PROPERTY
MANILA, BRANCH 26, THAT PRIVATE IS LOCATED WITHIN A ZONAL
RESPONDENTS CANNOT BE EJECTED IMPROVEMENT AREA OR APD.
FROM THE SUBJECT PROPERTY WITHOUT
VIOLATING THEIR SECURITY OF TENURE D. RESPONDENT COURT OF APPEALS
EVEN IF THE TERM OF THE LEASE IS SHOULD HAVE RULED THAT
MONTH-TO-MONTH WHICH EXPIRES AT THE THE RTC MANILA COMMITTED
END OF EACH MONTH. IN THIS REGARD, REVERSIBLE ERROR IN NOT
RULING THAT PRIVATE
A. RESPONDENT COURT OF APPEALS RESPONDENTS' NON-
SHOULD HAVE RULED THAT COMPLIANCE WITH THE
 Page 12 of 458
CONDITIONS UNDER THE LAW
RESULT IN THE
WAIVER OF PROTECTION
AGAINST EVICTION.
E. RESPONDENT COURT OF APPEALS
SHOULD HAVE RULED THAT
THE RTC MANILA COMMITTED
REVERSIBLE ERROR IN NOT
RULING THAT PRIVATE
RESPONDENTS CANNOT BE
ENTITLED TO PROTECTION
UNDER P.D. 2016 SINCE THE
GOVERNMENT HAS NO
INTENTION OF ACQUIRING THE
SUBJECT PROPERTY.
F. RESPONDENT COURT OF APPEALS
SHOULD HAVE RULED THAT
THE RTC MANILA COMMITTED
REVERSIBLE ERROR IN
FINDING THAT THERE IS AN ON-
GOING NEGOTIATION FOR THE
SALE OF THE SUBJECT
PROPERTY AND THAT IT
RENDERS THE
EVICTION OF PRIVATE
RESPONDENTS PREMATURE.
G. RESPONDENT COURT OF APPEALS
SHOULD HAVE RULED THAT
THE RTC MANILA COMMITTED
REVERSIBLE ERROR IN NOT
RULING THAT THE ALLEGED
CASE FOR CONSIGNATION
DOES NOT BAR THE
EVICTION OF PRIVATE
RESPONDENTS.
IV.
RESPONDENT COURT OF APPEALS GRAVEL
Y ERRED IN NOT FINDING THAT
RESPONDENTS SHOULD PAY PETITIONER A
REASONABLE COMPENSATION FOR THEIR
USE AND OCCUPANCY OF THE SUBJECT
PROPERTY IN THE AMOUNT OF AT LEAST
P10,000.00 PER MONTH FROM THE DATE
THEY LAST PAID RENT UNTIL THE TIME
THEY ACTUALLY VACATE THE SAME, WITH
LEGAL INTEREST AT THE MAXIMUM RATE
ALLOWED BY LAW UNTIL PAID.
V.
RESPONDENT COURT OF APPEALS GRAVEL
Y ERRED IN NOT FINDING THAT
RESPONDENTS SHOULD PAY PETITIONER
ATTORNEY'S FEES AND
EXPENSES OF LITIGATIONOF AT LEAST
P20,000.00, PLUS COSTS. 18
Petitioner submits that a relaxation of the rigid
rules of technical procedure is called for in view of the
attendant circumstances showing that the objectives of the
rule on certification of non-forum shopping and the rule
requiring material portions of the record be attached to the
petition have not been glaringly violated and, more
importantly, the petition is meritorious.
The proper recourse of an aggrieved party from a
decision of the CA is a petition for review
on certiorari under Rule 45 of the Rules of Court. However,
if the error, subject of the recourse, is one of jurisdiction, or
the act complained of was perpetrated by a court with
grave abuse of discretion amounting to lack or
excess ofjurisdiction, the proper remedy available to the
 Page 13 of 458
aggrieved party is a petition for certiorari under Rule
65 of the said Rules. As enunciated by
the Court in Fortich vs.Corona: 19
Anent the first issue, in order to determine
whether the recourse of petitioners is proper or
not, it is necessary to draw a line between an
error of judgment and an error of jurisdiction.
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. On
the other hand, an error of jurisdiction is one
where the act complained of was issued by
the court, officer or a quasi-judicial
body without or in excess of jurisdiction, orwith
grave abuse of discretion which is tantamount to
lack or in excess of jurisdiction. This error is
correctible only by the extraordinary
writ of certiorari. 20 (Emphasis supplied).
Inasmuch as the present petition principally assails the
dismissal of the petition on ground of procedural flaws
involving the jurisdiction of the court a quo to entertain
the petition, it falls within the ambit of a special civil
action for certiorari under Rule 65 of the Rules of Court.
At the time the instant petition for certiorari was filed, i.e.,
on July 17, 1997, the prevailing rule is the newly
promulgated 1997 Rules of Civil Procedure. However,
considering that the CA Resolution being assailed was
rendered on March 21, 1997, the applicable rule is the
three-month reglementary period, established by
jurisprudence. 21 Petitioner received notice of the
assailed CA Resolution dismissing his petition for review
on April 4, 1997. He filed his motion reconsideration on
April 17, 1997, using up only thirteen days of the 90-day
period. Petitioner received the CA Resolution denying his
motion on July 3, 1997 and fourteen days later, or on July
17, 1997, he filed a motion for 30-day extension of time to
file a "petition for review" which was granted by us; and
petitioner duly filed his petition on August 15, 1997, which
is well-within the period of extension granted to him.
We now go to the merits of the case.
We find the instant petition partly meritorious.
The requirement regarding the need for a
certification of non-forum shopping in cases filed before
the CA and the corresponding sanction for non-compliance
thereto are found in the then prevailing Revised Circular
No. 28-91. 22 It provides that the petitioner himself must
make the certification against forum shopping and a
violation thereof shall be a cause for the summary
dismissal of the multiple petition or complaint. The rationale
for the rule of personal execution of the certification by the
petitioner himself is that it is only the petitioner who has
actual knowledge of whether or not he has initiated similar
actions or proceedings in other courts or tribunals; even
counsel of record may be unaware of such
fact. 23 The Court has ruled that with respect to the
contents of the certification, the rule on substantial
compliance may be availed of. This is so because the
requirement of strict compliance with the rule regarding the
certification of non-forum shopping simply underscores its
mandatory nature in that the certification cannot be
altogether dispensed with or its requirements completely
disregarded, but it does not thereby interdict substantial
compliance with its provisions under justifiable
circumstances. 24
 Page 14 of 458
The petition for review filed before the CA contains a
certification against forum shopping but said certification
was signed by petitioner's counsel. In submitting the
certification of non-forum shopping duly signed by himself
in his motion for reconsideration, 25 petitioner has aptly
drawn the Court's attention to the physical
impossibility of filing the petition for review within the 15-
day reglementary period to appeal considering that he is a
resident of 1125 South Jefferson Street, Roanoke, Virginia,
U.S.A. were he to personally accomplish and sign the
certification.
We fully agree with petitioner that it was physically
impossible for the petition to have been prepared and sent
to the petitioner in the United States, for him to travel from
Virginia, U.S.A. to the nearest Philippine Consulate in
Washington, D.C., U.S.A., in order to sign the certification
before the Philippine Consul, and for him to send back the
petition to the Philippines within the 15-day reglementary
period. Thus, we find that petitioner has adequately
explained his failure to personally sign the certification
which justifies relaxation of the rule.
We have stressed that the rules on forum shopping, which
were precisely designed to promote and facilitate the
orderly administration of justice, should not be interpreted
with such absolute literalness as to subvert its own ultimate
and legitimate objective 26 which is simply to prohibit and
penalize the evils of forum-shopping.27 The subsequent
filing of the certification duly signed by the petitioner
himself should thus be deemed substantial compliance, pro
hac vice.
In like manner, the failure of the petitioner to comply with
Section 3, paragraph b, Rule 6 of the RIRCA, that is, to
append to his petition copies of the pleadings and other
material portions of the records as would support the
petition, does not justify the outright dismissal of the
petition. It must be emphasized that the RIRCA gives the
appellate court a certain leeway to require parties to submit
additional documents as may be necessary in the
interest of substantial justice. Under Section 3, paragraph
d of Rule 3 of the RIRCA, 28 the CA may require the parties
to complete the annexes as the court deems necessary,
and if the petition is given due course, the CA may require
the elevation of a complete record of the case as provided
for under Section 3(d)(5) of Rule 6 of the RIRCA. 29 At any
rate, petitioner attached copies of the pleadings and other
material portions of the records below with his motion for
reconsideration. 30 In Jaro vs. Court of Appeals, 31 the Cour
t reiterated the doctrine laid down in Cusi-
Hernandez vs. Diaz 32 and Piglas-Kamao vs. National
Labor Relations Commission 33 that subsequent
submission of the missing documents with the motion for
reconsideration amounts to substantial compliance which
calls for the relaxation of the rules of procedure. We find no
cogent reason to depart from this doctrine.
Truly, in dismissing the petition for review, the CA had
committed grave abuse of discretion amounting to
lack of jurisdiction in putting a premium on technicalities at
the expense of a just resolution of the case.
Needless to stress, "a litigation is not a
game of technicalities." 34 When technicality deserts its
function of being an aid to justice, the Court is justified in
exempting from its operations a particular
case. 35 Technical rules of procedure should be used to
promote, not frustrate justice. While the swift
 Page 15 of 458

unclogging of court dockets is a laudable objective,
granting substantial justice is an even more urgent ideal. 36
The Court's pronouncement
in Republic vs. Court of Appeals 37 is worth echoing: "cases
should be determined on the merits, after full opportunity to
all parties for ventilation of their causes and defenses,
rather than on technicality or some procedural
imperfections. In that way, the ends of justice would be
better served." 38 Thus, what should guide judicial action is
that a party litigant is given the fullest opportunity to
establish the merits of his action or defense rather than for
him to lose life, honor or property on mere
technicalities. 39 This guideline is especially true when the
petitioner has satisfactorily explained the lapse and fulfilled
the requirements in his motion for reconsideration, 40 as in
this case.
In addition, petitioner prays that we decide the present
petition on the merits without need of remanding the case
to the CA. He insists that all the elements of unlawful
detainer are present in the case. He further argues that the
alleged "priority right to buy the lot they occupy" does not
apply where the landowner does not intend to sell the
subject property, as in the case; that respondents cannot
be entitled to protection under P.D. No. 2016 since the
government has no intention of acquiring the subject
property, nor is the subject property located within a zonal
issues involved are factual issues which inevitably require
the weighing of evidence. These are matters that are
beyond the province of this Court in a special civil action
for certiorari. These issues are best addressed to the CA in
the petition for review filed before it. As an appellate court,
it is empowered to require parties to submit additional
documents, as it may find necessary, or to receive
evidence, to promote the ends of justice, pursuant to
the last paragraph of Section 9, B.P. Blg. 129, otherwise
known as The Judiciary Reorganization Act of 1980, to wit:
The Intermediate Appellate Court shall have the
power to try cases and conduct hearings, receive
evidence and perform any and all acts necessary
to resolve factual issues raised in cases falling
within its original and appellate jurisdiction,
including the power to grant and conduct new
trials or further proceedings.
WHEREFORE, the petition is PARTLY GRANTED. The
Resolutions dated March 21, 1997 and June 23,
1997 of the Court of Appeals in CA-G.R. SP No. 41394 are
REVERSED and SET ASIDE. The case is REMANDED to
the Court of Appeals for further proceedings in CA-G.R.
No. 41394, entitled, "Antonio
T . Donato vs. Hon. Judge of the Regional
Trial Court of Manila, Branch 47, Filomeno Arcepe, et al."
(Donato v. Court of Appeals, G.R. No. 129638,
|||

improvement area; and, that assuming that there is a [December 8, 2003], 462 PHIL 676-693)
negotiation for the sale of the subject property or a pending
case for consignation of rentals, these do not bar the
eviction of respondents.
We are not persuaded. We shall refrain from ruling on the
foregoing issues in the present petition for certiorari. The
 Page 16 of 458
[G.R. No. 144025. December 27, 2002.]
SPS. RENE GONZAGA and
LERIO GONZAGA, petitioners, vs.
HON. COURT OF APPEALS, Second
Division, Manila, HON. QUIRICO G.
DEFENSOR, Judge, RTC, Branch 36, Sixth
Judicial Region, Iloilo City, and LUCKY
HOMES, INC., represented by WILSON
JESENA, JR., as Manager, respondents.
Salvador T. Sabio for petitioners.
Marmen B. Daquilanea for private respondent.
The Solicitor General for public respondent.
SYNOPSIS
Petitioners purchased a parcel of land from private
respondent Lucky Homes, Inc., specifically denominated as
Lot No. 19 and was mortgaged to the Social Security
Commission (SSS) as security for their housing loan.
Petitioners then started the construction of their house, not
on Lot No. 19 but on Lot No. 18, as private respondent
mistakenly identified Lot No. 18 as Lot No. 19. Petitioners
offered to buy Lot No. 18 so they continued with the
construction of their house. However, petitioners defaulted
in the payment of their housing loan from SSS.
Consequently, Lot No. 19 was foreclosed by SSS and after
which petitioners offered to swap Lot Nos. 18 and 19 and
demanded from private respondent that their
contract of sale be reformed and another deed of sale be
executed with respect to Lot No. 18. Private respondent
refused, so petitioners filed an action for
reformation of contract and damages with the Regional
Trial Court. The trial court dismissed the complaint and
ordered petitioners to pay damages. Thereafter, a
writ of execution was issued by the trial court.
Subsequently, petitioners filed an urgent motion to recall
writ of execution, alleging that the trial court had no
jurisdiction to try the case. Petitioners filed before
the Court of Appeals (CA) a petition for
annulment of judgment premised on the ground that the
trial court had no jurisdiction to try and decide the case.
The CA denied the petition and the subsequent motion for
reconsideration filed by petitioners. Hence, this instant
petition.CAHTIS
In denying the petition, the Supreme Court ruled that while
an order or decision rendered without jurisdiction is a total
nullity and may be assailed at any stage, active
participation in the proceedings in the court which rendered
the order or decision will bar such party from attacking its
jurisdiction. In the case at bar, it was petitioners
themselves who invoked the jurisdiction of the court a
quo by instituting an action for reformation of contract
against private respondents. It appeared that, in the
proceedings before the trial court, petitioners vigorously
asserted their cause from the start to finish. Not even once
did petitioners ever raise the issue of the court's jurisdiction
during the entire proceedings which lasted for two years. It
was only after the trial court rendered its decision and
issued a writ of execution against them did petitioners first
raise the issue of jurisdiction and it was only because
said decision was unfavorable to them. Petitioners thus
 Page 17 of 458
effectively waived their right to question the court's
jurisdiction over the case they themselves filed.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; JURISDICTION;
QUESTION THEREOF MAY BE RAISED AT ANY
STAGE OF THE CASE BUT ACTIVE PARTICIPATION IN
THE PROCEEDINGS IN THE COURT WHICH
RENDERED THE DECISION WILL BAR PARTIES FROM
ATTACKING ITS JURISDICTION. [W]hile an order or
decision rendered without jurisdiction is a total nullity and
may be assailed at any stage, active participation in the
proceedings in the court which rendered the order or
decision will bar such party from attacking its jurisdiction.
As we held in the leading case of Tjam vs. Sibonghanoy:
"A party may be estopped or barred from raising a question
in different ways and for different reasons. Thus we
speak of estoppel in pais, or estoppel by deed or by record,
and of estoppel by laches. . . . "It has been held that a
party cannot invoke the jurisdictionof a court to secure
affirmative relief against his opponent and, after obtaining
or failing to obtain such relief, repudiate, or question that
same jurisdiction . . . [T]he question whether the court had
jurisdiction either of the subject matter of the action
or of the parties was not important in such cases because
the party is barred from such conduct not because the
judgment or order of the court is valid and conclusive as an
adjudication, but for the reason that such a practice can not
be tolerated obviously for reasons of public policy."
Tijam has been reiterated in many succeeding cases.
Thus, in Orosa vs. Court of Appeals; Ang
Ping vs. Court of Appeals; Salva vs.Court of Appeals; Natio
nal Steel
Corporation vs. Court of Appeals; Province of Bulacan vs.
Court of Appeals; PNOC Shipping and Transport
Corporation vs. Court ofAppeals, this Court affirmed the
rule that a party's active participation in all stages of the
case before the trial court, which includes invoking
the court's authority to grant affirmative relief, effectively
estops such party from later challenging that same court's
jurisdiction.
2. ID.; ID.; ID.; ID.; CASE AT BAR. In the case at bar, it
was petitioners themselves who invoked the
jurisdiction of the court a quo by instituting an action for
reformation of contract against private respondents. It
appears that, in the proceedings before the trial court,
petitioners vigorously asserted their cause from start to
finish. Not even once did petitioners ever raise the
issue of the court's jurisdiction during the entire
proceedings which lasted for two years. It was only after
the trialcourt rendered its decision and issued a
writ of execution against them in 1998 did petitioners first
raise the issue of jurisdiction and it was only because
said decision was unfavorable to them. Petitioners thus
effectively waived their right to question the court's
jurisdiction over the case they themselves filed. Petitioners
should bear the consequence of their act. They cannot be
allowed to profit from their omission to the damage and
prejudice of the private respondent. This Courtfrowns upon
the undesirable practice of a party submitting his case for
decision and then accepting the judge but only if favorable,
and attacking it for lack ofjurisdiction if not.
DECISION
 Page 18 of 458
CORONA, J : p
Before this Court is a petition for review
on certiorari seeking the reversal of the
decision 1 of the Court of Appeals dated December 29,
1999 and its resolution dated June 1, 2000 in CA-G.R. SP
No. 54587. ASTDCH
The records disclose that, sometime in 1970, petitioner-
spouses purchased a parcel of land from private
respondent Lucky Homes, Inc., situated in Iloilo and
containing an area of 240 square meters. Said lot was
specifically denominated as Lot No. 19 under Transfer
Certificate of Title (TCT) No. 28254 and was mortgaged to
the Social Security System (SSS) as security for their
housing loan. Petitioners then started the
construction of their house, not on Lot No. 19 but on Lot
No. 18, as private respondent mistakenly identified Lot No.
18 as Lot No. 19. Upon realizing its error, private
respondent, through its general manager, informed
petitioners of such mistake but the latter offered to buy Lot
No. 18 in order to widen their premises. Thus, petitioners
continued with the construction of their house. However,
petitioners defaulted in the payment of their housing loan
from SSS. Consequently, Lot No. 19 was foreclosed by
SSS and petitioners' certificate of title was cancelled and a
new one was issued in the name of SSS. After Lot No. 19
was foreclosed, petitioners offered to swap Lot Nos. 18 and
19 and demanded from private respondent that their
contract of sale be reformed and another deed of sale be
executed with respect to Lot No. 18, considering that their
house was built therein. However, private respondent
refused. This prompted petitioners to file, on June 13,
1996, an action for reformation of contract and damages
with the Regional Trial Court of Iloilo City, Branch 36, which
was docketed as Civil Case No. 17115.
On January 15, 1998, the trial court 2 rendered its decision
dismissing the complaint for lack of merit and ordering
herein petitioners to pay private respondent the
amount of P10,000 as moral damages and another
P10,000 as attorney's fees. The pertinent conclusion of the
trial court reads as follows:
"Aware of such fact, the plaintiff nonetheless
continued to stay in the premises of Lot 18 on
the proposal that he would also buy the same.
Plaintiff however failed to buy Lot 18 and
likewise defaulted in the payment of his loan with
the SSS involving Lot 19. Consequently Lot 19
was foreclosed and sold at public auction.
Thereafter TCT No. T-29950 was cancelled and
in lieu thereof TCT No. T-86612 (Exh. '9') was
issued in favor of SSS. This being the situation
obtaining, the reformation ofinstruments, even if
allowed, or the swapping of Lot 18 and Lot 19 as
earlier proposed by the plaintiff, is no longer
feasible considering that plaintiff is no longer the
owner of Lot 19, otherwise, defendant will be
losing Lot 18 without any substitute therefore
(sic). Upon the other hand, plaintiff will be
unjustly enriching himself having in its favor both
Lot 19 which was earlier mortgaged by him and
subsequently foreclosed by SSS, as well as Lot
18 where his house is presently standing.
"The logic and common sense of the situation
lean heavily in favor of the defendant. It is
evident that what plaintiff had bought from the
defendant is Lot 19 covered by TCT No. 28254
which parcel of land has been properly indicated
 Page 19 of 458
in the instruments and not Lot 18 as claimed by
the plaintiff. The contracts being clear and
unmistakable, they reflect the true
intention of the parties, besides the plaintiff failed
to assail the contracts on mutual mistake, hence
the same need no longer be reformed." 3
On June 22, 1998, a writ of execution was issued by the
trial court. Thus, on September 17, 1998, petitioners filed
an urgent motion to recall writ of execution, alleging that
the court a quo had no jurisdiction to try the case as it was
vested in the Housing and Land Use Regulatory Board
(HLURB) pursuant to PD 957 (The Subdivision and
Condominium Buyers Protective Decree). Conformably,
petitioners filed a new complaint against private respondent
with the HLURB. Likewise, on June 30, 1999, petitioner-
spouses filed before the Court of Appeals a petition for
annulment of judgment, premised on the ground that the
trial court had no jurisdiction to try and decide Civil Case
No. 17115. HIDCTA
In a decision rendered on December 29, 1999,
the Court of Appeals denied the petition for
annulment of judgment, relying mainly on the
jurisprudential doctrine ofestoppel as laid down in the
case of Tijam vs. Sibonghanoy. 4
Their subsequent motion for reconsideration having been
denied, petitioners filed this instant petition, contending that
the Court of Appeals erred in dismissing the petition by
applying the principle of estoppel, even if the Regional
Trial Court, Branch 36 of Iloilo City had no jurisdiction to
decide Civil Case No. 17115.
At the outset, it should be stressed that petitioners are
seeking from us the annulment of a trial court judgment
based on lack of jurisdiction. Because it is not an appeal,
the correctness of the judgment is not in issue here.
Accordingly, there is no need to delve into the
propriety of the decision rendered by the trial court.
Petitioners claim that the recent
decisions of this Court have already abandoned the
doctrine laid down in Tijam vs. Sibonghanoy. 5 We do not
agree. In countless decisions, this Court has consistently
held that, while an order or decision rendered without
jurisdiction is a total nullity and may be assailed at any
stage, active participation in the proceedings in
the court which rendered the order or decision will bar such
party from attacking its jurisdiction. As we held in the
leading case ofTijam vs. Sibonghanoy: 6
"A party may be estopped or barred from raising
a question in different ways and for different
reasons. Thus we speak of estoppel in pais, or
estoppel by deed or by record, and of estoppel
by laches.
xxx xxx xxx
"It has been held that a party cannot invoke the
jurisdiction of a court to secure affirmative relief
against his opponent and, after obtaining or
failing to obtain such relief, repudiate, or
question that same jurisdiction . . . [T]he question
whether the court had jurisdiction either of the
subject matter of the action or of the parties was
not important in such cases because the party is
barred from such conduct not because the
judgment or order of the court is valid and
conclusive as an adjudication, but for the reason
 Page 20 of 458

that such a practice can not be tolerated
obviously for reasons of public policy."
Tijam has been reiterated in many succeeding cases.
Thus, in Orosa vs. Court of Appeals; 7 Ang
Ping vs. Court of Appeals; 8 Salva vs. Court of Appeals; 9 N
ational Steel
Corporation vs. Court of Appeals; 10 Province of Bulacan vs
. Court of Appeals; 11 PNOC Shipping and Transport
Corporation vs. Court of Appeals, 12 this Court affirmed the
rule that a party's active participation in all stages of the
case before the trial court, which includes invoking
the court's authority to grant affirmative relief, effectively
estops such party from later challenging that same court's
jurisdiction.
HTAEIS
submitting his case for decision and then accepting the
judgment but only if favorable, and attacking it for
lack ofjurisdiction if not. 13
Public policy dictates that this Court must strongly
condemn any double-dealing by parties who are disposed
to trifle with the courts by deliberately taking inconsistent
positions, in utter disregard of the elementary
principles of justice and good faith. 14 There is no denying
that, in this case, petitioners never raised the
issue ofjurisdiction throughout the entire proceedings in the
trial court. Instead, they voluntarily and willingly submitted
themselves to the jurisdiction of said court. It is now too
late in the day for them to repudiate the jurisdiction they
were invoking all along. ETHIDa

In the case at bar, it was petitioners themselves who
invoked the jurisdiction of the court a quo by instituting an
action for reformation of contract against private
respondents. It appears that, in the proceedings before the
trial court, petitioners vigorously asserted their cause from
start to finish. Not even once did petitioners ever raise the
issue of the court's jurisdiction during the entire
WHEREFORE, the petition for review is hereby DENIED.
SO ORDERED.
Puno, Panganiban, Sandoval-Gutierrez and Carpio-
Morales, JJ., concur.
(Sps. Gonzaga v. Court of Appeals, G.R. No. 144025,
|||

proceedings which lasted for two years. It was only after [December 27, 2002], 442 PHIL 735-742)
the trial court rendered its decision and issued a
writof execution against them in 1998 did petitioners first
raise the issue of jurisdiction and it was only because
said decision was unfavorable to them. Petitioners thus
effectively waived their right to question the court's
jurisdiction over the case they themselves filed.
Petitioners should bear the consequence of their act. They
cannot be allowed to profit from their omission to the
damage and prejudice of the private respondent.
ThisCourt frowns upon the undesirable practice of a party
 Page 21 of 458
[G.R. No. 124644. February 5, 2004.]
ARNEL ESCOBAL, petitioner, vs. HON.
FRANCIS GARCHITORENA, Presiding
Justice of the Sandiganbayan, Atty.
Luisabel Alfonso-Cortez, Executive Clerk
of Court IV of the Sandiganbayan, Hon.
David C. Naval, Presiding Judge of the
Regional Trial Court of Naga City, Branch
21, Luz N. Nueca,respondents.
DECISION
CALLEJO, SR., J : p caused his death, and as a consequence
This is a petition for certiorari with a prayer for the issuance
of a temporary restraining order and preliminary injunction
filed by Arnel Escobal seeking the nullification of the
remand by the Presiding Justice of the Sandiganbayan of
the records of Criminal Case No. 90-3184 to the Regional
Trial Court (RTC) of Naga City, Branch 21.
The petition at bench arose from the following milieu:
The petitioner is a graduate of the Philippine Military
Academy, a member of the Armed Forces of the
Philippines and the Philippine Constabulary, as well as the
Intelligence Group of the Philippine National Police. On
March 16, 1990, the petitioner was conducting surveillance
operations on drug trafficking at the Sa Harong Caf Bar
and Restaurant located along Barlin St., Naga City. He
somehow got involved in a shooting incident, resulting in
the death of one Rodney Rafael N. Nueca. On February 6,
1991, an amended Information was filed with the RTC of
Naga City, Branch 21, docketed as Criminal Case No. 90-
3184 charging the petitioner and a certain Natividad
Bombita, Jr. alias "Jun Bombita" with murder. The
accusatory portion of the amended Information reads: DcCITS
That on or about March 16, 1990, in the City of
Naga, Philippines, and within the jurisdiction of
this Honorable Court by virtue of the Presidential
Waiver, dated June 1, 1990, with intent to kill,
conspiring and confederating together and
mutually helping each other, did, then and there,
willfully, unlawfully and feloniously attack, assault
and maul one Rodney Nueca and accused 2Lt
Arnel Escobal armed with a caliber .45 service
pistol shoot said Rodney Nueca thereby inflicting
upon him serious, mortal and fatal wounds which
thereof, complainant LUZ N. NUECA, mother of
the deceased victim, suffered actual and
compensatory damages in the amount of
THREE HUNDRED SIXTY-SEVEN THOUSAND
ONE HUNDRED SEVEN & 95/100
(P367,107.95) PESOS, Philippine Currency, and
moral and exemplary damages in the amount of
ONE HUNDRED THIRTY-FIVE THOUSAND
(P135,000.00) PESOS, Philippine Currency. 1
On March 19, 1991, the RTC issued an Order preventively
suspending the petitioner from the service
under Presidential Decree No. 971, as amended by P.D.
No. 1847. When apprised of the said order, the General
Headquarters of the PNP issued on October 6, 1992
Special Order No. 91, preventively suspending the
petitioner from the service until the case was terminated. 2
 Page 22 of 458
The petitioner was arrested by virtue of a warrant issued by
the RTC, while accused Bombita remained at large. The
petitioner posted bail and was granted temporary liberty.
When arraigned on April 9, 1991, 3 the petitioner, assisted
by counsel, pleaded not guilty to the offense charged.
Thereafter, on December 23, 1991, the petitioner filed a
Motion to Quash 4 the Information alleging that as
mandated by Commonwealth Act No. 408, 5 in relation
to Section 1, Presidential Decree No. 1822 and Section 95
ofR.A. No. 6975, the court martial, not the RTC, had
jurisdiction over criminal cases involving PNP members
and officers.
Pending the resolution of the motion, the petitioner on June
25, 1993 requested the Chief of the PNP for his
reinstatement. He alleged that under R.A. No. 6975, his
suspension should last for only 90 days, and, having
served the same, he should now be reinstated. On
September 23, 1993, 6 the PNP Region V Headquarters
wrote Judge David C. Naval requesting information on
whether he issued an order lifting the petitioner's
suspension. The RTC did not reply. Thus, on February 22,
1994, the petitioner filed a motion in the RTC for the lifting
of the order of suspension. He alleged that he had served
the 90-day preventive suspension and pleaded for
compassionate justice. The RTC denied the motion on
March 9, 1994. 7 Trial thereafter proceeded, and the
prosecution rested its case. The petitioner commenced the
presentation of his evidence. On July 20, 1994, he filed a
Motion to Dismiss 8 the case. Citing Republic of the
Philippines v. Asuncion, et al., 9 he argued that since he
committed the crime in the performance of his duties, the
Sandiganbayan had exclusive jurisdiction over the case.
On October 28, 1994, the RTC issued an Order 10 denying
the motion to dismiss. It, however, ordered the conduct of a
preliminary hearing to determine whether or not the crime
charged was committed by the petitioner in relation to his
office as a member of the PNP.
In the preliminary hearing, the prosecution manifested that
it was no longer presenting any evidence in connection
with the petitioner's motion. It reasoned that it had already
rested its case, and that its evidence showed that the
petitioner did not commit the offense charged in connection
with the performance of his duties as a member of the
Philippine Constabulary. According to the prosecution, they
were able to show the following facts: (a) the petitioner was
not wearing his uniform during the incident; (b) the offense
was committed just after midnight; (c) the petitioner was
drunk when the crime was committed; (d) the petitioner
was in the company of civilians; and, (e) the offense was
committed in a beerhouse called "Sa Harong Caf Bar and
Restaurant." 11
For his part, the petitioner testified that at about 10:00 p.m.
on March 15, 1990, he was at the Sa Harong Caf Bar and
Restaurant at Barlin St., Naga City, to conduct surveillance
on alleged drug trafficking, pursuant to Mission Order No.
03-04 issued by Police Superintendent Rufo R. Pulido. The
petitioner adduced in evidence the sworn statements of
Benjamin Cario and Roberto Fajardo who corroborated
his testimony that he was on a surveillance mission on the
aforestated date. 12
On July 31, 1995, the trial court issued an Order declaring
that the petitioner committed the crime charged while not in
the performance of his official function. The trial court
added that upon the enactment of R.A. No. 7975, 13 the
 Page 23 of 458
issue had become moot and academic. The amendatory
law transferred the jurisdiction over the offense charged
from the Sandiganbayan to the RTC since the petitioner did
not have a salary grade of "27" as provided for in or
by Section 4(a)(1), (3) thereof. The trial court nevertheless
ordered the prosecution to amend the Information pursuant
to the ruling in Republic v. Asuncion 14 and R.A. No. 7975.
The amendment consisted in the inclusion therein of an
allegation that the offense charged was not committed by
the petitioner in the performance of his duties/functions, nor
in relation to his office.
The petitioner filed a motion for the reconsideration 15 of
the said order, reiterating that based on his testimony and
those of Benjamin Cario and Roberto Fajardo, the offense
charged was committed by him in relation to his official
functions. He asserted that the trial court failed to consider
the exceptions to the prohibition. He asserted that R.A. No.
7975, which was enacted on March 30, 1995, could not be
applied retroactively. 16
The petitioner further alleged that Luz Nacario Nueca, the
mother of the victim, through counsel, categorically and
unequivocably admitted in her complaint filed with the
People's Law Enforcement Board (PLEB) that he was on
an official mission when the crime was committed.
On November 24, 1995, the RTC made a volte face and
issued an Order reversing and setting aside its July 31,
1995 Order. It declared that based on the petitioner's
evidence, he was on official mission when the shooting
occurred. It concluded that the prosecution failed to adduce
controverting evidence thereto. It likewise considered Luz
Nacario Nueca's admission in her complaint before the
PLEB that the petitioner was on official mission when the
shooting happened.
The RTC ordered the public prosecutor to file a Re-
Amended Information and to allege that the offense
charged was committed by the petitioner in the
performance of his duties/functions or in relation to his
office; and, conformably to R.A. No. 7975, to thereafter
transmit the same, as well as the complete records with the
stenographic notes, to the Sandiganbayan, to wit:
WHEREFORE, the Order dated July 31, 1995 is
hereby SET ASIDE and RECONSIDERED, and
it is hereby declared that after preliminary
hearing, this Court has found that the offense
charged in the Information herein was committed
by the accused in his relation to his function and
duty as member of the then Philippine
Constabulary.
Conformably with R.A. No. 7975 and the ruling of
the Supreme Court in Republic v. Asuncion, et
al., G.R. No. 180208, March 11, 1994:
(1) The City Prosecutor is hereby ordered
to file a Re-Amended Information
alleging that the offense charged
was committed by the Accused in
the performance of his
duties/functions or in relation to his
office, within fifteen (15) days from
receipt hereof;
(2) After the filing of the Re-Amended
Information, the complete records
of this case, together with the
transcripts of the stenographic
notes taken during the entire
 Page 24 of 458
proceedings herein, are hereby
ordered transmitted immediately to
the Honorable Sandiganbayan,
through its Clerk of Court, Manila,
for appropriate proceedings. 17
On January 8, 1996, the Presiding Justice of the
Sandiganbayan ordered the Executive Clerk of Court IV,
Atty. Luisabel Alfonso-Cortez, to return the records of
Criminal Case No. 90-3184 to the court of origin, RTC of
Naga City, Branch 21. It reasoned that under P.D. No.
1606, as amended by R.A. No. 7975, 18 the RTC retained
jurisdiction over the case, considering that the petitioner
had a salary grade of "23." Furthermore, the prosecution
had already rested its case and the petitioner had
commenced presenting his evidence in the RTC; following
the rule on continuity of jurisdiction, the latter court should
continue with the case and render judgment therein after
trial.
Upon the remand of the records, the RTC set the case for
trial on May 3, 1996, for the petitioner to continue
presenting his evidence. Instead of adducing his evidence,
the petitioner filed a petition for certiorari, assailing the
Order of the Presiding Justice of the Sandiganbayan
remanding the records of the case to the RTC.
The threshold issue for resolution is whether or not the
Presiding Justice of the Sandiganbayan committed a grave
abuse of his discretion amounting to excess or lack of
jurisdiction in ordering the remand of the case to the RTC.
The petitioner contends that when the amended
information was filed with the RTC on February 6,
1991, P.D. No. 1606 was still in effect. Under Section 4(a)
of the decree, the Sandiganbayan had exclusive
jurisdiction over the case against him as he was charged
with homicide with the imposable penalty of reclusion
temporal, and the crime was committed while in the
performance of his duties. He further asserts that
although P.D. No. 1606, as amended by P.D. No. 1861 and
by R.A. No. 7975provides that crimes committed by
members and officers of the PNP with a salary grade below
"27" committed in relation to office are within the exclusive
jurisdiction of the proper RTC, the amendment thus
introduced by R.A. No. 7975 should not be applied
retroactively. This is so, the petitioner asserts, because
under Section 7 ofR.A. No. 7975, only those cases where
trial has not begun in the Sandiganbayan upon the
effectivity of the law should be referred to the proper trial
court.
The private complainant agrees with the contention of the
petitioner. In contrast, the Office of the Special Prosecutor
contends that the Presiding Justice of the Sandiganbayan
acted in accordance with law when he ordered the remand
of the case to the RTC. It asserts that R.A. No.
7975 should be applied retroactively. Although the
Sandiganbayan had jurisdiction over the crime committed
by the petitioner when the amended information was filed
with the RTC, by the time it resolved petitioner's motion to
dismiss on July 31, 1995, R.A. No. 7975 had already taken
effect. Thus, the law should be given retroactive effect.EHTIcD
The Ruling of the Court
The respondent Presiding Justice acted in accordance with
law and the rulings of this Court when he ordered the
remand of the case to the RTC, the court of origin.
 Page 25 of 458
The jurisdiction of the court over criminal cases is
determined by the allegations in the Information or the
Complaint and the statute in effect at the time of the
commencement of the action, unless such statute provides
for a retroactive application thereof. The jurisdictional
requirements must be alleged in the Information. 19Such
jurisdiction of the court acquired at the inception of the
case continues until the case is terminated. 20
Under Section 4(a) of P.D. No. 1606 as amended by P.D.
No. 1861, the Sandiganbayan had exclusive jurisdiction in
all cases involving the following:
(1) Violations of Republic Act No. 3019, as
amended, otherwise known as the Anti-
Graft and Corrupt Practices Act, Republic
Act No. 1379, and Chapter II, Section 2,
Title VII of the Revised Penal Code;
(2) Other offenses or felonies committed by
public officers and employees in relation
to their office, including those employed in
government-owned or controlled
corporations, whether simple or
complexed with other crimes, where the
penalty prescribed by law is higher
than prision correccional or imprisonment
for six (6) years, or a fine of P6,000.00 . . .
. 21
However, for the Sandiganbayan to have exclusive
jurisdiction under the said law over crimes committed by
public officers in relation to their office, it is essential that
the facts showing the intimate relation between the office of
the offender and the discharge of official duties must be
alleged in the Information. It is not enough to merely allege
in the Information that the crime charged was committed by
the offender in relation to his office because that would be
a conclusion of law. 22 The amended Information filed with
the RTC against the petitioner does not contain any
allegation showing the intimate relation between his office
and the discharge of his duties. Hence, the RTC had
jurisdiction over the offense charged when on November
24, 1995, it ordered the re-amendment of the Information to
include therein an allegation that the petitioner committed
the crime in relation to office. The trial court erred when it
ordered the elevation of the records to the
Sandiganbayan. It bears stressing that R.A. No.
7975 amending P.D. No. 1606 was already in effect and
under Section 2 of the law:
In cases where none of the principal accused are
occupying positions corresponding to salary
grade "27" or higher, as prescribed in the
said Republic Act No. 6758, or PNP officers
occupying the rank of superintendent or higher,
or their equivalent, exclusive jurisdiction thereof
shall be vested in the proper Regional Trial
Court, Metropolitan Trial Court, Municipal Trial
Court, and Municipal Circuit Trial Court, as the
case may be, pursuant to their respective
jurisdiction as provided in Batas Pambansa Blg.
129.
Under the law, even if the offender committed the crime
charged in relation to his office but occupies a position
corresponding to a salary grade below "27," the proper
Regional Trial Court or Municipal Trial Court, as the case
may be, shall have exclusive jurisdiction over the case. In
this case, the petitioner was a Police Senior Inspector, with
salary grade "23." He was charged with homicide
punishable by reclusion temporal. Hence, the RTC had
exclusive jurisdiction over the crime charged conformably
 Page 26 of 458

to Sections 20 and 32 of Batas Pambansa Blg. 129, as [G.R. No. 155001. May 5, 2003.]
amended by Section 2 of R.A. No. 7691.
The petitioner's contention that R.A. No. 7975 should not DEMOSTHENES P. AGAN, JR., JOSEPH
be applied retroactively has no legal basis. It bears B. CATAHAN, JOSE MARI B. REUNILLA,
stressing that R.A. No. 7975 is a substantive procedural MANUEL ANTONIO B. BOE, MAMERTO
law which may be applied retroactively. 23 S. CLARA, REUEL E. DIMALANTA, MORY
V. DOMALAON, CONRADO G. DIMAANO,
IN LIGHT OF ALL THE FOREGOING, the petition is LOLITA R. HIZON, REMEDIOS P.
DISMISSED. No pronouncement as to costs. ADOLFO, BIENVENIDO C. HILARIO,
SO ORDERED. MIASCOR WORKERS UNION-NATIONAL
LABOR UNION (MWU-NLU), and
Puno, Quisumbing, Austria-Martinez and Tinga, PHILIPPINE AIRLINES EMPLOYEES
JJ., concur. ASSOCIATION (PALEA), petitioners, vs.
PHILIPPINE INTERNATIONAL AIR
TERMINALS CO., INC., MANILA
INTERNATIONAL AIRPORT AUTHORITY,
DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS and
SECRETARY LEANDRO M. MENDOZA, in
his capacity as Head of the Department of
Transportation and
Communications,respondents.

MIASCOR GROUNDHANDLING
CORPORATION, DNATA-WINGS
AVIATION SYSTEMS CORPORATION,
MACROASIA-EUREST SERVICES, INC.,
MACROASIA-MENZIES AIRPORT
SERVICES CORPORATION, MIASCOR
CATERING SERVICES CORPORATION,
MIASCOR AIRCRAFT MAINTENANCE
CORPORATION, and MIASCOR
 Page 27 of 458

LOGISTICS CORPORATION, petitioners-in- CEFERINO C. LOPEZ, RAMON M. SALES,

intervention, ALFREDO B. VALENCIA, MA. TERESA V.
GAERLAN, LEONARDO DE LA ROSA,
DINA C. DE LEON, VIRGIE CATAMIN
[G.R. No. 155547. May 5, 2003.]
RONALD SCHLOBOM, ANGELITO
SANTOS, MA. LUISA M. PALCON and
SALACNIB F. BATERINA, CLAVEL A. SAMAHANG MANGGAGAWA SA
MARTINEZ and CONSTANTINO G. PALIPARAN NG PILIPINAS
JARAULA, petitioners, vs. PHILIPPINE (SMPP),petitioners, vs. PHILIPPINE
INTERNATIONAL AIR TERMINALS CO., INTERNATIONAL AIR TERMINALS CO.,
INC., MANILA INTERNATIONAL AIRPORT INC., MANILA INTERNATIONAL AIRPORT
AUTHORITY, DEPARTMENT OF AUTHORITY, DEPARTMENT OF
TRANSPORTATION AND TRANSPORTATION AND
COMMUNICATIONS, DEPARTMENT OF COMMUNICATIONS, SECRETARY
PUBLIC WORKS AND HIGHWAYS, LEANDRO M. MENDOZA, in his capacity
SECRETARY LEANDRO M. MENDOZA, in as Head of the Department of
his capacity as Head of the Department of Transportation and
Transportation and Communications, and Communications, respondents.
SECRETARY SIMEON A. DATUMANONG,
in his capacity as Head of the Department
of Public Works and Salonga Hernandez & Mendoza for petitioners in G.R.
Highways, respondents, No. 155001.
Jose A. Bernas for petitioners in G.R. No. 155547.
JACINTO V. PARAS, RAFAEL P. NANTES, Erwin P. Erfe for petitioners in G.R. No. 155661.
EDUARDO C. ZIALCITA, WILLY BUYSON
VILLARAMA, PROSPERO C. NOGRALES, Jose Espinas for MWU-NLU.
PROSPERO A. PICHAY, JR., HARLIN Jose E. Marigondon for PALEA.
CAST ABAYON, and BENASING O.
MACARANBON, respondents-intervenors, Angara Abello Concepcion Regala and Cruz for petitioners-
in-intervention.

[G.R. No. 155661. May 5, 2003.] Arthur D. Lim Law Office for Asia's Emerging Dragon etc.
 Page 28 of 458
Romulo Mabanta Buenaventura Sayoc & Delos Angeles,
Chavez & Laureta & Associate and Moises Tolentino,
Jr. for PIATCO.
The Office of the Government Corporate Counsel for MIAA.
The Solicitor General for public respondents.
Mario E. Ongkiko, Fernando F. Manas, Jr. Raymund C. de
Castro & Angelito S. Lazaro, Jr. for respondents-
intervenors.
SYNOPSIS
On October 5, 1994, Asia's Emerging Dragon Corp.
(AEDC) submitted an unsolicited proposal to the
Government for the development of Ninoy Aquino
International Airport International Passenger Terminal III
(NAIA IPT III) under a build-operate-and-transfer
arrangement pursuant to RA 6957, as amended. It was
endorsed to the National Economic Development Authority
(NEDA), which, in turn, reviewed and approved it for
bidding. The Paircargo Consortium was the only company
that submitted a competitive proposal. AEDC questioned,
among others, the financial capability of Paircargo
Consortium. However, the Pre-Qualification Bids and
Awards Committee (PBAC) had prequalified the Paircargo
Consortium to undertake the project. Later, Paircargo
Consortium incorporated into Philippine International
Airport Terminals Co., (PIATCO). And for failure of AEDC
to match the price proposal submitted by PIATCO, the
project was awarded to PIATCO. On July 12, 1997, the
Government signed the 1997 Concession Agreement.
Thereafter, the Amended and Restated Concession
Agreement (ARCA) and three Supplements thereto were
signed by the Government and PIATCO. Consequently, the
workers of the international airline service providers,
claiming that they stand to lose their employment upon the
implementation of the said agreements, filed before this
Court a petition for prohibition docketed as G.R.
No. 155001. Later, the service providers joined their cause.
Congressmen Salacnib Baterina, Clavel Martinez and
Constantino Jaraula, alleging that the said contracts
compelled government expenditure without appropriation,
filed a similar petition docketed as G.R. No. 155547. And
several employees of the MIAA likewise filed a petition
docketed as G.R. No. 155661 assailing the legality of these
agreements.
The Court ruled that in accordance with the provisions
of R.A. No. 337, as amended, the maximum amount that
Security Bank, as one of the members of the Paircargo
Consortium could validly invest, is only 15% of its entire net
worth. The total net worth, therefore of the Paircargo
Consortium, after considering the maximum amounts that
may be validly invested by each of its members, is only
6.08% of the project cost, which substantially less than the
prescribed minimum equity investment which is 30% of the
project cost. Thus, the award of the contract by the PBAC
to the Paircargo Consortium, a disqualified bidder, is null
and void.
As to the validity of the agreements, the ARCA obligates
the Government to pay for all loans, advances and
obligations arising out of financial facilities extended to
PIATCO for the implementation of the NAIA IPT III project
should PIATCO default in its loan obligations to its Senior
Lenders and the latter fails to appoint a qualified nominee
or transferee. This in effect would make the Government
liable for PIATCO's loans should the conditions set forth in
 Page 29 of 458
the ARCA arise. This is a form of direct government
guarantee and to declare the PIATCO contracts valid
despite the clear statutory prohibitions against a direct
government guarantee would only make a mockery of
that the BOT Law seeks to prevent. The Court also ruled
that the operation of an international passenger airport
terminal is no doubt an undertaking imbued with public
interest. Thus, the privilege given to PIATCO is subject to
reasonable regulation and supervision by the Government
through the MIAA. Another thing, PIATCO, by the mere
expedient of claiming an exclusive right to operate, cannot
require the Government to break its contractual obligations
to the service providers. Accordingly, the 1997 Concession
Agreement, the Amended and Restated Concession
Agreement and the Supplements thereto were set aside for
being null and void.TCEaDI
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; PARTIES;
INTEREST OF PERSON ASSAILING THE
CONSTITUTIONALITY OF A STATUTE MUST BE
DIRECT AND PERSONAL. The question on legal
standing is whether such parties have "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 constitutional
questions." Accordingly, it has been held that the interest of
a person assailing the constitutionality of a statute must be
direct and personal. He must be able, to show, not only
that the law or any government act is invalid, but also that
he sustained or is in imminent danger of sustaining some
direct injury as a result of its enforcement, and not merely
that he suffers thereby in some indefinite way. It must
appear that the person complaining has been or is about to
be denied some right or privilege to which he is lawfully
entitled or that he is about to be subjected to some burdens
or penalties by reason of the statute or act complained of.
2. ID.; ID.; ID.; ID.; FINANCIAL PREJUDICE IS A
LEGITIMATE INTEREST SUFFICIENT TO CONFER THE
REQUISITE STANDING. [P]etitioners have a direct and
substantial interest to protect by reason of the
implementation of the PIATCO Contracts. They stand to
lose their source of livelihood, a property right which is
zealously protected by the Constitution. Moreover,
subsisting concession agreements between MIAA and
petitioners-intervenors and service contracts between
international airlines and petitioners-intervenors stand to be
nullified or terminated by the operation of the NAIA IPT III
under the PIATCO Contracts. The financial prejudice
brought about by the PIATCO Contracts on petitioners and
petitioners-intervenors in these cases are legitimate
interests sufficient to confer on them the requisite standing
to file the instant petitions.
3. ID.; ID.; ID.; ID.; COURT MUST BE MORE LIBERAL IN
DETERMINING WHETHER THE PETITIONERS HAVE
LOCUS STANDI TO FILE A PETITION. Standing is a
peculiar concept in constitutional law because in some
cases, suits are not brought by parties who have been
personally injured by the operation of a law or any other
government act but by concerned citizens, taxpayers or
voters who actually sue in the public interest. Although we
are not unmindful of the cases of Imus Electric Co. v.
Municipality of Imus and Gonzales v. Raquiza wherein this
Court held that appropriation must be made only on
 Page 30 of 458
amounts immediately demandable, public interest
demands that we take a more liberal view in determining
whether the petitioners suing as legislators, taxpayers and
citizens have locus standi to file the instant petition.
In Kilosbayan, Inc. v. Guingona, this Court held "[i]n line
with the liberal policy of this Court on locus standi, ordinary
taxpayers, members of Congress, and even association of
planters, and non-profit civic organizations were allowed to
initiate and prosecute actions before this Court to question
the constitutionality or validity of laws, acts, decisions,
rulings, or orders of various government agencies or
instrumentalities," Further, "insofar as taxpayers' suits are
concerned . . . (this Court) is not devoid of discretion as to
whether or not it should be entertained." As such ". . . even
if, strictly speaking, they [the petitioners] are not covered by
the definition, it is still within the wide discretion of the
Court to waive the requirement and so remove the
impediment to its addressing and resolving the serious
constitutional questions raised." In view of the serious legal
questions involved and their impact on public interest, we
resolve to grant standing to the petitioners.
4. ID.; ID.; JURISDICTION; HIERARCHY OF COURTS
MAY BE RELAXED WHEN THE REDRESS DESIRED
CANNOT BE OBTAINED IN THE APPROPRIATE
COURTS. The rule on hierarchy of courts will not also
prevent this Court from assuming jurisdiction over the
cases at bar. The said rule may be relaxed when the
redress desired cannot be obtained in the appropriate
courts or where exceptional and compelling circumstances
justify availment of a remedy within and calling for the
exercise of this Court's primary jurisdiction. ATaDHC
5. ID.; ID.; ID.; PROCEDURAL BARS MAY BE LOWERED
TO GIVE WAY FOR THE SPEEDY DISPOSITION OF
CASES OF TRANSCENDENTAL IMPORTANCE. It is
easy to discern that exceptional circumstances exist in the
cases at bar that call for the relaxation of the rule. Both
petitioners and respondents agree that these cases are
oftranscendental importance as they involve the
construction and operation of the country's premier
international airport. Moreover, the crucial issues submitted
for resolution are of first impression and they entail the
proper legal interpretation of key provisions of the
Constitution, the BOT Law and its Implementing Rules and
Regulations. Thus, considering the nature of the
controversy before the Court, procedural bars may be
lowered to give way for the speedy disposition of the
instant cases.
6. CIVIL LAW; OBLIGATIONS AND CONTRACTS;
ARBITRATION CLAUSE; NOT BINDING TO PERSONS
NOT PARTIES TO THE CONTRACT. It is established
thatpetitioners in the present cases who have presented
legitimate interests in the resolution of the controversy
are not parties to the PIATCO Contracts. Accordingly, they
cannot be bound by the arbitration clause provided for in
the ARCA and hence, cannot be compelled to submit to
arbitration proceedings. A speedy and decisive resolution
of all the critical issues in the present controversy, including
those raised by petitioners, cannot be made before an
arbitral tribunal. The object of arbitration is precisely to
allow an expeditious determination of a dispute. This
objective would not be met if this Court were to allow the
parties to settle the cases by arbitration as there are certain
issues involving non-parties to the PIATCO Contracts
which the arbitral tribunal will not be equipped to resolve.
 Page 31 of 458

7. POLITICAL LAW; ADMINISTRATIVE LAW; REPUBLIC
ACT NO. 6957 (BUILD-OPERATE-AND-TRANSFER or
BOT LAW); CONTRACT SHALL BE AWARDED TO THE
BIDDER WHO SATISFIED THE. MINIMUM FINANCIAL,
TECHNICAL, ORGANIZATIONAL AND LEGAL
STANDARDS REQUIRED BY LAW. Under the BOT
Law, in case of a build-operate-and-transfer arrangement,
therefore of the Paircargo Consortium, after considering
the maximum amounts that may be validly invested by
each of its members is P558,384,871.55 or only 6.08% of
the project cost, an amount substantially less than the
prescribed minimum equity investment required for the
project in the amount of P2,755,095,000.00 or 30% of the
project cost.cHaADC

the contract shall be awarded to the bidder "who, having

9. ID.; ID.; PUBLIC BIDDING; PRE-QUALIFICATION
satisfied the minimum financial, technical, organizational
STAGE; GOVERNMENT AGENCY MUST DETERMINE
and leg standards" required by the law, has submitted the
THE BIDDER'S FINANCIAL CAPACITY. The purpose of
lowest bid and most favorable terms of the project. . . .
pre-qualification in any public bidding is to determine, at the
Accordingly, . . . the Paircargo Consortium or any
earliest opportunity, the ability of the bidder to undertake
challenger to the unsolicited proposal of AEDC has to show
the project. Thus, with respect to the bidder's financial
that it possesses the requisite financial capability to
capacity at the pre-qualification stage, the law requires the
undertake the project in the minimum amount of 30% of the
government agency to examine and determine the ability of
project cost through (i) proof of the ability to provide a
the bidder to fund the entire cost of the project by
minimum amount of equity to the project, and (ii) a letter
considering the maximum amounts that each bidder may
testimonial from reputable banks attesting that the project
invest in the project at the time of pre-qualification.
proponent or members of the consortium are banking with
them, that they are in good financial standing, and that they 10. ID.; ID.; ID.; ID.; ID.; SHOULD DETERMINE THE
have adequate resources. MAXIMUM AMOUNT THAT EACH MEMBER OF THE
CONSORTIUM MAY COMMIT WITHOUT
8. ID.; ID.; ID.; ID.; TOTAL NET WORTH OF THE
DISREGARDING THE INVESTMENT CEILINGS
PAIRCARGO CONSORTIUM IS LESS THAT THE
PROVIDED BY APPLICABLE LAW. The PBAC has
PRESCRIBED MINIMUM EQUITY INVESTMENT
determined that any prospective bidder, for the
REQUIRED FOR THE PROJECT. We agree with public
construction, operation and maintenance of the NAIA IPT
respondents that with respect to Security Bank, the entire
III project should prove that it has the ability to provide
amount of its net worth could not be invested in a single
equity in the minimum amount of 30% of the project cost, in
undertaking or enterprise, whether allied or non-allied in
accordance with the 70:30 debt-to-equity ratio prescribed in
accordance with the provisions of R.A. No. 337, as
the Bid Documents. Thus, in the case of Paircargo
amended or the General Banking Act[.] . . . Thus, the
Consortium, the PBAC should determine the maximum
maximum amount that Security Bank could validly invest in
amounts that each member of the consortium may commit
the Paircargo Consortium is only P528,525,656.55,
for the construction, operation and maintenance of the
representing 15% of its entire net worth. The total net worth
NAIA IPT III project at the time of pre-qualification. With
 Page 32 of 458
respect to Security Bank, the maximum amount which may
be invested by it would only be 15% of its net worth in view
of the restrictions imposed by the General Banking Act.
Disregarding the investment ceilings provided by applicable
law would not result in a proper evaluation of whether or
not a bidder is pre-qualified to undertake the project as for
all intents and purposes, such ceiling or legal restriction
determines the true maximum amount which a bidder may
invest in the project.
11. ID.; ID.; ID.; ID.; ID.; EVALUATION OF THE
FINANCIAL CAPACITY OF THE BIDDER MUST BE AT
THE TIME THE BID IS SUBMITTED. [T]he
determination of whether or not a bidder is pre-qualified to
undertake the project requires an evaluation of the financial
capacity of the said bidder at the time the bid is
submitted based on the required documents presented by
the bidder. The PBAC should not be allowed to speculate
on the future financial ability of the bidder to undertake the
project on the basis of documents submitted. This would
open doors to abuse and defeat the very purpose of a
public bidding. This is especially true in the case at bar
which involves the investment of billions of pesos by the
project proponent. The relevant government authority is
duty-bound to ensure that the awardee of the contract
possesses the minimum required financial capability to
complete the project. To allow the PBAC to estimate the
bidder's future financial capability would not secure the
viability and integrity of the project.
12. ID.; ID.; ID.; ID.; ID.; IF THE BIDDER FALLS SHORT
OF THE MINIMUM AMOUNTS REQUIRED, THE SAID
BIDDER SHOULD BE DISQUALIFIED. Thus, if
the maximum amount of equity that a bidder may invest in
the project at the time the bids are submitted falls short of
the minimum amounts required to be put up by the bidder,
said bidder should be properly disqualified. Considering
that at the pre-qualification stage, the maximum amounts
which the Paircargo Consortium may invest in the project
fell short of the minimum amounts prescribed by the PBAC,
we hold that Paircargo Consortium was not a qualified
bidder. Thus the award of the contract by the PBAC to the
Paircargo Consortium, a disqualified bidder, is null and
void.
13. ID.; ID.; ID.; RESTRICTIVE AND CONSERVATIVE
APPLICATION OF THE RULES AND PROCEDURE IS
NECESSARY. A restrictive and conservative application
of the rules and procedures of public bidding is necessary
not only to protect the impartiality and regularity of the
proceedings but also to ensure the financial and technical
reliability of the project. It has been held that: "The basic
rule in public bidding is that bids should be evaluated
based on the required documents submitted before and not
after the opening of bids. Otherwise, the foundation of a fair
and competitive public bidding would be defeated. Strict
observance of the rules, regulations, and guidelines of the
bidding process is the only safeguard to a fair, honest and
competitive public bidding." ACIDSc
14. ID.; ID.; ID.; PURPOSE. By its very nature, public
bidding aims to protect the public interest by giving the
public the best possible advantages through open
competition. Thus: "Competition must be legitimate, fair
and honest. In the field of government contract law,
competition requires, not only bidding upon a common
standard, a common basis, upon the same thing, the same
subject matter, the same undertaking,' but also that it be
legitimate, fair and honest; and not designed to injure or
defraud the government."
 Page 33 of 458
15. ID.; ID.; ID.; ALL BIDDERS MUST BE ON EQUAL
FOOTING ON THE CONTRACT RIDDED UPON. An
essential element of a publicly bidded contract is that all
bidders must be on equal footing. Not simply in terms of
application of the procedural rules and regulations imposed
by the relevant government agency, but more importantly,
on the contract bidded upon. Each bidder must be able to
bid on the same thing. The rationale is obvious. If the
winning bidder is allowed to later include or modify certain
provisions in the contract awarded such that the contract is
altered in any material respect, then the essence of fair
competition in the public bidding is destroyed. A public
bidding would indeed be a farce if after the contract is
awarded, the winning bidder may modify the contract and
include provisions which are favorable to it that were not
previously made available to the other bidders.
16. ID.; ID.; ID.; AMENDMENTS TO CONTRACT BIDDED;
WINNING BIDDER IS NOT PRECLUDED FROM
MODIFYING OR AMENDING CERTAIN PROVISIONS OF
THE CONTRACT THAT DOES NOT CONSTITUTE
SUBSTANTIAL OR MATERIAL AMENDMENTS. While
we concede that a winning bidder is not precluded from
modifying or amending certain provisions of the contract
bidded upon, such changes must not constitute substantial
or material amendments that would alter the basic
parameters of the contract and would constitute a denial to
the other bidders of the opportunity to bid on the same
terms. Hence, the determination of whether or not a
modification or amendment of a contract bidded out
constitutes a substantial amendment rests on whether the
contract, when taken as a whole, would contain
substantially different terms and conditions that would have
the effect of altering the technical and/or financial
proposals previously submitted by other bidders. The
alterations and modifications in the contract executed
between the government and the winning bidder must be
such as to render such executed contract to be an entirely
different contract from the one that was bidded upon.
17. ID.; ID.; ID.; ID.; SIGNIFICANT AMENDMENTS IN THE
PIATCO'S DRAFT CONCESSION AGREEMENT; TYPES
OF FEES THAT MAY BE IMPOSED AND COLLECTED
BY PIATCO. When taken as a whole, the changes
under the 1997 Concession Agreement with respect to
reduction in the types of fees that are subject to MIAA
regulation and the relaxation of such regulation with
respect to other fees are significant amendments that
substantially distinguish the draft Concession Agreement
from the 1997 Concession Agreement. The 1997
Concession Agreement, in this respect, clearly gives
PIATCO more favorable terms than what was available to
other bidders at the time the contract was bidded out. It is
not very difficult to see that the changes in the 1997
Concession Agreement translate to direct and concrete
financial advantages for PIATCO which were not available
at the time the contract was offered for bidding. It cannot
be denied that under the 1997 Concession Agreement only
"Public Utility Revenues" are subject to MIAA regulation.
Adjustments of all other fees imposed and collected by
PIATCO are entirely within its control. Moreover, with
respect to terminal fees, under the 1997 Concession
Agreement, the same is further subject to "Interim
Adjustments" not previously stipulated in the draft
Concession Agreement. Finally, the change in the currency
stipulated for "Public Utility Revenues" under the 1997
Concession Agreement, except terminal fees, gives
 Page 34 of 458
PIATCO an added benefit which was not available at the
time of bidding. acHCSD
18. ID.; ID.; ID.; ID.; ID.; ASSUMPTION BY THE
GOVERNMENT OF THE LIABILITIES OF PIATCO IN THE
EVENT OF THE LATTER'S DEFAULT TRANSLATES
BETTER TERMS AND CONDITION FOR PIATCO.
Under the draft Concession Agreement, default by PIATCO
of any of its obligations to creditors who have provided,
loaned or advanced funds for the NAIA IPT III project does
not result in the assumption by the Government of these
liabilities. In fact, nowhere in the said contract does default
of PIATCO's loans figure in the agreement. Such default
does not directly result in any concomitant right or
obligation in favor of the Government. However, the 1997
Concession Agreement . . . [u]nder . . . Section 4.04 in
relation to the definition of "Attendant Liabilities," default by
PIATCO of its loans used to finance the NAIA IPT III
project triggers the occurrence of certain events that leads
to the assumption by the Government of the liability for the
loans. Only in one instance may the Government escape
the assumption of PIATCO's liabilities, i.e., when the
Government so elects and allows a qualified operator to
take over as Concessionaire. However, this circumstance
is dependent on the existence and availability of a qualified
operator who is willing to take over the rights and
obligations of PIATCO under the contract, a circumstance
that is not entirely within the control of the Government.
Without going into the validity of this provision at this
juncture, suffice it to state that Section 4.04 of the 1997
Concession Agreement may be considered a form of
security for the loans PIATCO has obtained to finance the
project, an option that was not made available in the draft
Concession Agreement. Section 4.04 is an important
amendment to the 1997 Concession Agreement because it
grants PIATCO a financial advantage or benefit which was
not previously made available during the bidding process.
This financial advantage is a significant modification that
translates to better terms and conditions for PIATCO.
19. ID.; ID.; ID.; ID.; SHOULD ALWAYS CONFORM TO
THE GENERAL PUBLIC POLICY. [T]his Court
maintains that amendments to the contract bidded upon
should always conform to the general policy on public
bidding if such procedure is to be faithful to its real nature
and purpose. By its very nature and characteristic,
competitive public bidding aims to protect the public
interest by giving the public the best possible advantages
through open competition. It has been held that the three
principles in public bidding are (1) the offer to the public; (2)
opportunity for competition; and (3) a basis for the exact
comparison of bids. A regulation of the matter which
excludes any of these factors destroys the distinctive
character of the system and thwarts the purpose of its
adoption. These are the basic parameters which every
awardee of a contract bidded out must conform to,
requirements of financing and borrowing notwithstanding.
Thus, upon a concrete showing that, as in this case, the
contract signed by the government and the contract
awardee is an entirely different contract from the contract
bidded, courts should not hesitate to strike down said
contract in its entirety for violation of public policy on public
bidding. A strict adherence on the principles, rules and
regulations on public bidding must be sustained if only to
preserve the integrity and the faith of the general public on
the procedure.
20. ID.; ID.; ID.; ID.; ANY GOVERNMENT ACTION WHICH
PERMITS ANY SUBSTANTIAL VARIANCE THEREOF IS
 Page 35 of 458

A GRAVE ABUSE OF DISCRETION. Public bidding is a financial benefit to PIATCO which may have altered the
standard practice for procuring government contracts for technical and financial parameters of other bidders had
public service and for furnishing supplies and other they known that such terms were available.
materials. It aims to secure for the government the lowest
22. ID.; ID.; BOT LAW; PURPOSE. One of the main
possible price under the most favorable terms and
impetus for the enactment of the BOT Law is the lack of
conditions, to curtail favoritism in the award of government
government funds to construct the infrastructure and
contracts and avoid suspicion of anomalies and it places all
development projects necessary for economic growth and
bidders in equal footing. Any government action which
development. This is why private sector resources are
permits any substantial variance between the conditions
being tapped in order to finance these projects. The BOT
under which the bids are invited and the contract executed
law allows the private sector to participate, and is in fact
after the award thereof is a grave abuse of discretion
encouraged to do so by way of incentives, such as
amounting to lack or excess of jurisdiction which warrants
minimizing, the unstable flow of returns, provided that the
proper judicial action.
CaHcET
government would not have to unnecessarily expend
21. ID.; ID.; ID.; ID.; DIRECTLY TRANSLATES scarcely available funds for the project itself. As such,
CONCRETE FINANCIAL ADVANTAGES TO PIATCO direct guarantee, subsidy and equity by the government in
THAT WERE PREVIOUSLY NOT AVAILABLE DURING these projects are strictly prohibited. This is but logical for if
THE BIDDING PROCESS. The fact that the . . . the government would in the end still be at a risk of paying
substantial amendments were made on the 1997 the debts incurred by the private entity in the BOT projects,
Concession Agreement renders the same null and void for then the purpose of the law is subverted.
being contrary to public policy. These amendments convert
23. ID.; ID.; ID.; CONDITIONS FOR THE ACCEPTANCE
the 1997 Concession Agreement to an entirely different
OF THE UNSOLICITED PROPOSAL FOR A BOT
agreement from the contract bidded out or the draft
PROJECT. The BOT Law and its implementing rules
Concession Agreement. It is not difficult to see that the
provide that in order for an unsolicited proposal for a BOT
amendments on (1) the types of fees or charges that are
project may be accepted, the following conditions must first
subject to MIAA regulation or control and the extent thereof
be met: (1) the project involves a new concept in
and (2) the assumption by the Government, under certain
technology and/or is not part of the list of priority
conditions, of the liabilities of PIATCO directly translates
projects, (2) no direct government guarantee, subsidy or
concrete financial advantages to PIATCO that were
equity is required, and (3) the government agency or local
previously not available during the bidding process. These
government unit has invited by publication other interested
amendments cannot be taken as merely supplements to or
parties to a public bidding and conducted the same. The
implementing provisions of those already existing in the
failure to meet any of the above conditions will result in the
draft Concession Agreement. The amendments discussed
denial of the proposal.
above present new terms and conditions which provide
 Page 36 of 458
24. ID.; ID.; ID.; STRICTLY PROHIBITS DIRECT
GOVERNMENT GUARANTEE, SUBSIDY AND EQUITY IN
UNSOLICITED PROPOSAL. It is further provided that
the presence of direct government guarantee, subsidy or
equity will "necessarily, disqualify a proposal from being
treated and accepted as an unsolicited proposal." The BOT
Law clearly and strictly prohibits direct government
guarantee, subsidy and equity in unsolicited proposals that
the mere inclusion of a provision to that effect is fatal and is
sufficient to deny the proposal. It stands to reason
therefore that if a proposal can be denied by reason of the
existence of direct government guarantee, then its
inclusion in the contract executed after the said proposal
has been accepted is likewise sufficient to invalidate the
contract itself. A prohibited provision, the inclusion of which
would result in the denial of a proposal cannot, and should
not, be allowed to later on be inserted in the contract
resulting from the said proposal. The basic rules of justice
and fair play alone militate against such an occurrence and
must not, therefore, be countenanced particularly in this
instance where the government is exposed to the risk of
shouldering hundreds of million of dollars in debt.
CSDcTA
25. ID.; ID.; ID.; ID.; VIOLATED IN CASE AT BAR. The
proscription against government guarantee in any form is
one of the policy considerations behind the BOT Law.
Clearly, in the present case, the ARCA obligates the
Government to pay for all loans, advances and obligations
arising out of financial facilities extended to PIATCO for the
implementation of the NAIA IPT III project should PIATCO
default in its loan obligations to its Senior Lenders and the
latter fails to appoint a qualified nominee or transferee. This
in effect would make the Government liable for PIATCO's
loans should the conditions as set forth in the ARCA arise.
This is a form of direct government guarantee. . . . This
Court has long and consistently adhered to the legal maxim
that those that cannot be done directly cannot be done
indirectly. To declare the PIATCO contracts valid despite
the clear statutory prohibition against a direct government
guarantee would not only make a mockery of what the BOT
Law seeks to prevent which is to expose the
government to the risk of incurring a monetary obligation
resulting from a contract of loan between the project
proponent and its lenders and to which the Government is
not a party to but would also render the BOT
Law useless for what it seeks to achieve to make use of
the resources of the private sector in the "financing,
operation and maintenance of infrastructure and
development projects" which are necessary for national
growth and development but which the government,
unfortunately, could ill-afford to finance at this point in time.
26. ID.; CONSTITUTIONAL LAW; POLICE POWER;
TEMPORARY TAKEOVER OF BUSINESS AFFECTED
WITH PUBLIC INTEREST; GOVERNMENT IS NOT
REQUIRED TO COMPENSATE THE PRIVATE ENTITY-
OWNER. Article XII, Section 17 of the 1987
Constitution . . . pertains to the right of the State in times of
national emergency, and in the exercise of its police power,
to temporarily take over the operation of any business
affected with public interest. In the 1986 Constitutional
Commission, the term "national emergency" was defined to
include threat from external aggression, calamities or
national disasters, but not strikes "unless it is of such
proportion that would paralyze government service." The
duration of the emergency itself is the determining factor as
to how long the temporary takeover by the government
would last. The temporary takeover by the government
 Page 37 of 458
extends only to the operation of the business and not to the
ownership thereof. As such the government is not required
to compensate the private entity-owner of the said
business as there is no transfer of ownership, whether
permanent or temporary. The private entity-owner affected
by the temporary takeover cannot, likewise, claim just
compensation for the use of the said business and its
properties as the temporary takeover by the government is
in exercise of its police power and not of its power of
eminent domain.
27. ID.; ID.; ID.; ID.; ID.; CANNOT BE CONTRAVENED BY
MERE CONTRACTUAL STIPULATION. PIATCO
cannot, by mere contractual stipulation, contravene the
Constitutional provision on temporary government takeover
and obligate the government to pay "reasonable cost for
the use of the Terminal and/or Terminal Complex." Article
XII, Section 17 of the 1987 Constitution envisions a
situation wherein the exigencies of the times necessitate
the government to "temporarily take over or direct the
operation of any privately owned public utility or business
affected with public interest." It is the welfare and interest
of the public which is the paramount consideration in
determining whether or not to temporarily take over a
particular business. Clearly, the State in effecting the
temporary takeover is exercising its police power. Police
power is the "most essential, insistent, and illimitable of
powers." Its exercise therefore must not be unreasonably
hampered nor its exercise be a source of obligation by the
government in the absence of damage due to arbitrariness
of its exercise. Thus, requiring the government to pay
reasonable compensation for the reasonable use of the
property pursuant to the operation of the business
contravenes the Constitution.
28. ID.; ID.; NATIONAL ECONOMY AND
PATRIMONY; CONSTITUTION STRICTLY REGULATES
MONOPOLIES. A monopoly is "a privilege or peculiar
advantage vested in one or more persons or companies,
consisting in the exclusive right (or power) to carry on a
particular business or trade, manufacture a particular
article, or control the sale of a particular commodity." The
1987 Constitution strictly regulates monopolies, whether
private or public, and even provides for their prohibition if
public interest so requires. . . . Clearly, monopolies are
not per se prohibited by the Constitution but may be
permitted to exist to aid the government in carrying on an
enterprise or to aid in the performance of various services
and functions in the interest of the public. Nonetheless, a
determination must first be made as to whether public
interest requires a monopoly. As monopolies are subject to
abuses that can inflict severe prejudice to the public, they
are subject to a higher level of State regulation than an
ordinary business undertaking. ETHIDa
29. ID.; ID.; ID.; ID.; PRIVILEGE GIVEN TO PIATCO
SHOULD BE SUBJECT TO REASONABLE REGULATION
AND SUPERVISION BY THE GOVERNMENT. The
operation of an international passenger airport terminal is
no doubt an undertaking imbued with public interest. In
entering into a Build-Operate-and-Transfer contract for the
construction, operation and maintenance of NAIA IPT III,
the government has determined that public interest would
be served better if private sector resources were used in its
construction and an exclusive right to operate be granted to
the private entity undertaking the said project, in this case
PIATCO. Nonetheless, the privilege given to PIATCO is
subject to reasonable regulation and supervision by the
Government through the MIAA, which is the government
 Page 38 of 458
agency authorized to operate the NAIA complex, as well as
DOTC, the department to which MIAA is attached. This is
in accord with the Constitutional mandate that a monopoly
which is not prohibited must be regulated.
30. ID.; ID.; ID.; ID.; OPERATION OF PUBLIC UTILITY
CANNOT BE DONE IN AN ARBITRARY MANNER TO
THE DETRIMENT OF THE PUBLIC. While it is the
declared policy of the BOT Law to encourage private sector
participation by "providing a climate of minimum
government regulations," the same does not mean that
Government must completely surrender its sovereign
power to protect public interest in the operation of a public
utility as a monopoly. The operation of said public utility
can not be done in an arbitrary manner to the detriment of
the public which it seeks to serve. The right granted to the
public utility may be exclusive but the exercise of the right
cannot run riot. Thus, while PIATCO may be authorized to
exclusively operate NAIA IPT III as an international
passenger terminal, the Government, through the MIAA,
has the right and the duty to ensure that it is done in accord
with public interest. PIATCO's right to operate NAIA IPT III
cannot also violate the rights of third parties.
31. ID.; ID.; BILL OF RIGHTS NON-IMPAIRMENT OF
OBLIGATIONS OF CONTRACT; PIATCO, BY CLAIMING
AN EXCLUSIVE RIGHT TO OPERATE, CANNOT
REQUIRE THE GOVERNMENT TO BREAK ITS
CONTRACTUAL OBLIGATIONS TO THE SERVICE
PROVIDERS. We hold that while the service providers
presently operating at NAIA Terminal 1 do not have an
absolute right for the renewal or the extension of their
respective contracts, those contracts whose duration
extends beyond NAIA IPT III's In-Service-Date should not
be unduly prejudiced. These contracts must be respected
not just by the parties thereto but also by third parties.
PIATCO cannot, by law and certainly not by contract,
render a valid and binding contract nugatory. PIATCO, by
the mere expedient of claiming an exclusive right to
operate, cannot require the Government to break its
contractual obligations to the service providers. In contrast
to the arrastre and stevedoring service providers in the
case of Anglo-Fil Trading Corporation v. Lazaro whose
contracts consist of temporary hold-over permits, the
affected service providers in the cases at bar, have a valid
and binding contract with the Government, through MIAA,
whose period of effectivity, as well as the other terms and
conditions thereof cannot be violated.
32. ID.; ID.; ID.; ID.; MIAA SHOULD ENSURE THAT
WHOEVER BY CONTRACT IS GIVEN THE RIGHT TO
OPERATE NAIA IPT III WILL DO SO WITHIN THE
BOUNDS OF THE LAW. In fine, the efficient functioning
of NAIA IPT III is imbued with public interest. The
provisions of the 1997 Concession Agreement and the
ARCA did not strip government, thru the MIAA, of its right
to supervise the operation of the whole NAIA complex,
including NAIA IPT III. As the primary government agency
tasked with the job, it is MIAA's responsibility to ensure that
whoever by contract is given the right to operate NAIA IPT
III will do so within the bounds of the law and with due
regard to the rights of third parties and above all, the
interest of the public.
TSHIDa
PANGANIBAN, J., separate opinion:
1. REMEDIAL LAW; SPECIAL CIVIL ACTION;
PROHIBITION; DIRECT RESORT TO THE SUPREME
COURT BY THE EMPLOYEES WHO FEARED LOSS OF
THEIR JOBS IS JUSTIFIED. The Court has, in the past,
 Page 39 of 458
held that questions relating to gargantuan government
contracts ought to be settled without delay. This holding
applies with greater force to the instant cases. Respondent
Piatco is partly correct in averring that petitioners can
obtain relief from the regional trial courts via an action to
annul the contracts. Nevertheless, the unavoidable
consequence of having to await the rendition and the
finality of any such judgment would be a prolonged state of
uncertainty that would be prejudicial to the nation, the
parties and the general public. And, in light of the feared
loss of jobs of the petitioning workers, consequent to the
inevitable pretermination of contracts of the petitioning
service providers that will follow upon the heels of the
impending opening of NAIA Terminal III, the need for relief
is patently urgent, and therefore, direct resort to this Court
through the special civil action of prohibition is thus
justified.
2. ID.; ID.; ID.; DISPOSITION THEREOF ULTIMATELY
RUNS ON QUESTIONS OF LAW; CASE AT BAR.
Contrary to Piatco's argument that the resolution of the
issues raised in the Petitions will require delving into factual
questions, I submit that their disposition ultimately turns on
questions of law. Further, many of the significant and
relevant factual questions can be easily addressed by an
examination of the documents submitted by the parties. In
any event, the Petitions raise some novel questions
involving the application of the amended BOT Law, which
this Court has seen fit to tackle.
3. ID.; CIVIL PROCEDURE; ARBITRATION
PROCEEDINGS; CANNOT ADDRESS, DETERMINE AND
DEFINITIVELY RESOLVE THE CONSTITUTIONAL AND
LEGAL QUESTIONS. As will be discussed at length
later, the Piatco contracts are indeed void in their entirety;
thus, a resort to the aforesaid provision on arbitration is
unavailing. Besides, petitioners and petitioners-in-
intervention have pointed out that, even
granting arguendo that the arbitration clause remained a
valid provision, it still cannot bind them inasmuch as they
are not parties to the Piatco contracts. And in the final
analysis, it is unarguable that the arbitration process
provided for under Section 10.02 of the Amended and
Restated Concession Agreement (ARCA), to be
undertaken by a panel of three (3) arbitrators appointed in
accordance with the Rules of Arbitration of the International
Chamber of Commerce, will not be able to address,
determine and definitively resolve the constitutional and
legal questions that have been raised in the Petitions
before us.
4. ID.; ID.; LOCUS STANDI; CITIZEN, TAXPAYER AND
MEMBERS OF THE HOUSE OF REPRESENTATIVES
ARE SUFFICIENTLY CLOTHED WITH STANDING TO
BRING SUIT QUESTIONING THE VALIDITY OF
CONTRACT AFFECTING PUBLIC INTEREST. Given
this Court's previous decisions in cases of similar import,
no one will seriously doubt that, being taxpayers and
members of the House of Representatives, Petitioners
Baterina et al. have locus standi to bring the Petition in GR
No. 155547. In Albano v. Reyes, this Court held that the
petitioner therein, suing as a citizen, taxpayer and member
of the House of Representatives, was sufficiently clothed
with standing to bring the suit questioning the validity of the
assailed contract. The Court cited the fact that public
interest was involved, in view of the important role of the
Manila International Container Terminal (MICT) in the
 Page 40 of 458
country's economic development and the magnitude of the
financial consideration. This, notwithstanding the fact that
expenditure of public funds was not required under the
assailed contract. CcEHaI
5. ID.; ID.; ID.; MEMBERS OF HOUSE OF
REPRESENTATIVES ARE DEPRIVED OF DISCRETION;
CASE AT BAR. In the cases presently under
consideration, petitioners' personal and substantial interest
in the controversy is shown by the fact that certain
provisions in the Piatco contracts create obligations on the
part of government (through the DOTC and the MIAA) to
disburse public funds without prior congressional
appropriations. Petitioners thus correctly assert that the
injury to them has a twofold aspect: (1) they are adversely
affected as taxpayers on account of the illegal
disbursement of public funds; and (2) they are
prejudiced qua legislators, since the contractual provisions
requiring the government to incur expenditures without
appropriations also operate as limitations upon the
exclusive power and prerogative of Congress over the
public purse. As members of the House of
Representatives, they are actually deprived of discretion
insofar as the inclusion of those items of expenditure in the
budget is concerned. To prevent such encroachment upon
the legislative privilege and obviate injury to the institution
of which they are members, petitioners-legislators
have locus standi to bring suit.
6. ID.; ID.; ID.; EMPLOYEES ARE CONFRONTED WITH
THE PROSPECT OF BEING LAID OFF FROM THEIR
JOBS. Messrs. Agan et al. and Lopez et al., are likewise
taxpayers and thus possessed of standing to challenge the
illegal disbursement of public funds. Messrs. Agan et al., in
particular, are employees (or representatives of
employees) of various service providers that have (1)
existing concession agreements with the MIAA to provide
airport services necessary to the operation of the NAIA and
(2) service agreements to furnish essential support
services to the international airlines operating at the NAIA.
Messrs. Lopez et al. are employees of the MIAA. These
petitioners (Messrs. Agan et al. and Messrs. Lopez et al.)
are confronted with the prospect of being laid off from their
jobs and losing their means of livelihood when their
employer-companies are forced to shut down or otherwise
retrench and cut back on manpower. Such development
would result from the imminent implementation of certain
provisions in the contracts that tend toward the creation of
a monopoly in favor of Piatco, its subsidiaries and related
companies.
7. ID.; ID.; ID.; SERVICE PROVIDERS CLAIM TO BE
DEPRIVED OF THEIR PROPERTY AND OF THE
LIBERTY TO CONTRACT WITHOUT DUE PROCESS OF
LAW. Petitioners-in-intervention are service providers in
the business of furnishing airport-related services to
international airlines and passengers in the NAIA and are
therefore competitors of Piatco as far as that line of
business is concerned. On account of provisions in the
Piatco contracts, petitioners-in-intervention have to enter
into a written contract with Piatco so as not to be shut out
of NAIA Terminal III and barred from doing business there.
Since there is no provision to ensure or safeguard free and
fair competition, they are literally at its mercy. They claim
injury on account of their deprivation of property (business)
and of the liberty to contract, without due process of law.
8. ID.; ID.; ID.; IN CASES OF TRANSCENDENTAL
IMPORTANCE, THE SUPREME COURT MAY RELAX
THE STANDING REQUIREMENTS AND ALLOW A SUIT
 Page 41 of 458
TO PROSPER. And even if petitioners and petitioners-
in-intervention were not sufficiently clothed with legal
standing, I have at the outset already established that,
given its impact on the public and on national interest, this
controversy is laden with transcendental importance and
constitutional significance. Hence, I do not hesitate to
adopt the same position as was enunciated in Kilosbayan
v. Guingona Jr. that "in cases of transcendental
importance, the Court may relax the standing requirements
and allow a suit to prosper even when there is no direct
injury to the party claiming the right of judicial review."
9. POLITICAL LAW; ADMINISTRATIVE LAW; REPUBLIC
ACT NO. 6957 (BUILD-OPERATE-AND TRANSFER or
BOT LAW); PUBLIC BIDDING; BIDDER MUST SATISFY
THE MINIMUM REQUIREMENTS AND MEET THE
TECHNICAL, FINANCIAL, ORGANIZATIONAL AND
LEGAL STANDARDS. I must emphasize that the law
requires the award of a BOT project to the bidder that has
satisfied the minimum requirements; and met the technical,
financial, organizational and legal standards provided in the
BOT Law. DAHaTc
10. ID.; ID.; ID.; ID.; MUST BE CONDUCTED UNDER A
TWO-STAGE SYSTEM. Section 5 of this statute
requires that the price challenge via public bidding "must
be conducted under a two-envelope/two-stage system: the
first envelope to contain the technical proposal and the
second envelope to contain the financial proposal."
Moreover, the 1994 Implementing Rules and Regulations
(IRR) provide that only those bidders that have passed the
prequalification stage are permitted to have their two
envelopes reviewed. In other words, prospective bidders
must prequalify by submitting their prequalification
documents for evaluation; and only the pre-qualified
bidders would be entitled to have their bids opened,
evaluated and appreciated. On the other hand, disqualified
bidders are to be informed of the reason for their
disqualification. This procedure was confirmed and
reiterated in the Bid Documents, which I quote thus:
"Prequalified proponents will be considered eligible to
move to second stage technical proposal evaluation. The
second and third envelopes of pre-disqualified proponents
will be returned."
11. ID.; ID.; ID.; ID.; PROPONENT MUST PROVE THAT IT
IS ABLE TO RAISE THE MINIMUM AMOUNT REQUIRED
FOR THE PROJECT. Aside from complying with the
legal and technical requirements (track record or
experience of the firm and its key personnel), a project
proponent desiring to prequalify must also demonstrate its
financial capacity to undertake the projects. To establish
such capability, a proponent must prove that it is able to
raise the minimum amount of equity required for the project
and to procure the loans or financing needed for it. Since
the minimum amount of equity for the project was set at 30
percent of the minimum project cost of US$350 million, the
minimum amount of equity required of any proponent stood
at US$105 million. Converted to pesos at the exchange
rate then of P26.239 to US$1.00 (as quoted by the Bangko
Sentral ng Pilipinas), the peso equivalent of the minimum
equity was P2,755,095,000.
12. ID.; ID.; ID.; ID.; ID.; NOT COMPLIED WITH IN CASE
AT BAR. However, the combined equity or net worth of
the Paircargo consortium stood at only P558,384,871.55.
This amount was only slightly over 6 percent of the
minimum project cost and very much short of the required
minimum equity, which was equivalent to 30 percent of the
 Page 42 of 458
project cost. Such deficiency should have immediately
caused the disqualification of the Paircargo consortium.
13. ID.; ID.; ID.; ID.; RULES, REGULATIONS AND
GUIDELINES MUST BE STRICTLY APPLIED; VIOLATED
IN CASE AT BAR. By virtue of the prequalified status
conferred upon the Paircargo, Undersecretary Cal's
findings in effect relieved the consortium of the need to
comply with the financial capability requirement imposed
by the BOT Law and IRR. This position is unmistakably
and squarely at odds with the Supreme Court's consistent
doctrine emphasizing the strict application of pertinent
rules, regulations and guidelines for the public bidding
process, in order to place each bidder actual or potential
on the same footing. Thus, it is unarguably irregular and
contrary to the very concept of public bidding to permit a
variance between the conditions under which bids are
invited and those under which proposals are submitted and
approved.
14. ID.; ID.; ID.; ID.; ESSENCE. Republic v.
Capulong teaches that if one bidder is relieved from having
to conform to the conditions that impose some duty upon it,
that bidder is not contracting in fair competition with those
bidders that propose to be bound by all conditions. The
essence of public bidding is, after all, an opportunity for fair
competition and a basis for the precise comparison of bids.
Thus, each bidder must bid under the same conditions; and
be subject to the same guidelines, requirements and
limitations. The desired result is to be able to determine the
best offer or lowest bid, all things being equal.
15. ID.; ID.; ID.; ID.; SINCE THE ENTIRE BIDDING
PROCESS WAS FLAWED. AND TAINTED FROM THE
VERY OUTSET, THE AWARD OF CONCESSION WAS
VOID. Inasmuch as the Paircargo consortium did not
possess the minimum equity equivalent to 30 percent of
the minimum project cost, it should not have been
prequalified or allowed to participate further in the bidding.
The Prequalification and Bidding Committee (PBAC)
should therefore not have opened the two envelopes of the
consortium containing its technical and financial proposals;
required AEDC to match the consortium's bid; or awarded
the Concession Agreement to the consortium's successor-
in-interest, Piatco. As there was effectively no public
bidding to speak of, the entire bidding process having been
flawed and tainted from the very outset, therefore, the
award of the concession to Paircargo's successor Piatco
was void, and the Concession Agreement executed with
the latter was likewise void ab initio. For this reason, Piatco
cannot and should not be allowed to benefit from that
Agreement. ICDcEA
16. ID.; ID.; ID.; ID.; PROTECTION OF THE
PROPRIETARY INFORMATION IS APPLICABLE TO THE
ORIGINATOR OF THE UNSOLICITED PROPOSAL
ONLY. The "proprietary information" referred to in
Section 11.6 of the IRR pertains only to the proprietary
information of the originator of an unsolicited proposal, and
not to those belonging to a challenger. The reason for the
protection accorded proprietary information at all is the fact
that, according to Section 4-A of the BOT Law as
amended, a proposal qualifies as an "unsolicited proposal"
when it pertains to a project that involves "a new concept
or technology," and/or a project that is not on the
government's list of priority projects.
17. ID.; ID.; ID.; ID.; ID.; RATIONALE. To be considered
as utilizing a new concept or technology, a project must
 Page 43 of 458
involve the possession of exclusive rights (worldwide or
regional) over a process; or possession of intellectual
property rights over a design, methodology or engineering
concept. Patently, the intent of the BOT Law is to
encourage individuals and groups to come up with creative
innovations, fresh ideas and new technology. Hence, the
significance and necessity of protecting proprietary
information in connection with unsolicited proposals. And to
make the encouragement real, the law also extends to
such individuals and groups what amounts to a "right of
first refusal" to undertake the project they conceptualized,
involving the use of new technology or concepts, through
the mechanism of matching a price challenge.
18. ID.; ID.; ID.; ID.; BIDDER MUST BE GIVEN ACCESS
TO THE ASSUMPTION AND THE CALCULATIONS THAT
WENT INTO CRAFTING THE COMPETING BID. A
competing bid is never just any figure conjured from out of
the blue; it is arrived at after studying economic, financial,
technical and other factors; it is likewise based on certain
assumptions as to the nature of the business, the market
potentials, the probable demand for the product or service,
the future behavior of cost items, political and other risks,
and so on. It is thus self-evident that in order to be able to
intelligently match a bid or price challenge, a bidder must
be given access to the assumptions and the calculations
that went into crafting the competing bid. In this instance,
the financial and technical proposals of Piatco would have
provided AEDC with the necessary information to enable it
to make a reasonably informed matching bid. To put it
more simply, a bidder unable to access the competitor's
assumptions will never figure out how the competing bid
came about; requiring him to "counter-propose" is like
having him shoot at a target in the dark while blindfolded.
19. ID.; ID.; ID.; DEFINITE AND FIRM TIMETABLE FOR
THE SUBMISSION OF THE REQUIREMENTS TO
EXPOSE AND WEED OUT UNQUALIFIED
PROPONENTS. The purpose of having a definite and
firm timetable for the submission of the requirements is not
only to prevent delays in the project implementation, but
also to expose and weed out unqualified proponents, who
might have unceremoniously slipped through the earlier
prequalification process, by compelling them to put their
money where their mouths are, so to speak.
20. ID.; ID.; ID.; ID.; EASILY CIRCUMVENTED BY
MERELY POSTPONING THE ACTUAL ISSUANCE OF
THE NOTICE OF AWARD. Nevertheless, this provision
can be easily circumvented by merely postponing the
actual issuance of the Notice of Award, in order to give the
favored proponent sufficient time to comply with the
requirements. Hence, to aver or minimize the manipulation
of the post-bidding process, the IRR not only set out the
precise sequence of events occurring between the
completion of the evaluation of the technical bids and the
issuance of the Notice of Award, but also specified the
timetables for each such event. Definite allowable
extensions of time were provided for, as were the
consequences of a failure to meet a particular deadline.
21. ID.; ID.; ID.; ID.; TO DISCOURAGE COLLUSION AND
REDUCE THE OPPORTUNITY FOR AGENTS OF
GOVERNMENT TO ABUSE THEIR DISCRETION. The
highly regulated time-frames within which the agents of
government were to act evinced the intent to impose upon
them the duty to act expeditiously throughout the process,
to the end that the project be prosecuted and implemented
without delay. This regulated scenario was likewise
intended to discourage collusion and substantially reduce
 Page 44 of 458
the opportunity for agents of government to abuse their
discretion in the course of the award process. DcTSHa
22. ID.; ID.; ID.; PROCEDURE FOR THE AWARD OF THE
PROJECTS. In particular, Section 9.1 of the 1994 IRR
prescribed that within 30 calendar days from the time the
second-stage evaluation shall have been completed, the
Committee must come to a decision whether or not to
award the contract and, within 7 days therefrom, the Notice
of Award must be approved by the head of agency or local
government unit (LGU) concerned, and its issuance must
follow within another 7 days thereafter. Section 9.2 of the
IRR set the procedure applicable to projects involving
substantial government undertakings as follows: Within 7
days after the decision to award is made, the draft contract
shall be submitted to the ICC for clearance on a no-
objection basis. If the draft contract includes government
undertakings already previously approved, then the
submission shall be for information only. However, should
there be additional or new provisions different from the
original government undertakings, the draft shall have to be
reviewed and approved. The ICC has 15 working days to
act thereon, and unless otherwise specified, its failure to
act on the contract within the specified time frame signifies
that the agency or LGU may proceed with the award. The
head of agency or LGU shall approve the Notice of Award
within seven days of the clearance by the ICC on a no-
objection basis, and the Notice itself has to be issued
within seven days thereafter.
23. ID.; ID.; ID.; VIOLATED IN CASE AT BAR. Despite
the clear timetables set out in the IRR, several lengthy and
still-unexplained delays occurred in the award process, as
can be observed from the presentation made by the
counsel for public respondents. [T]he chronology of events
bespeaks an unmistakable disregard, if not disdain, by the
persons in charge of the award process for the time
limitations prescribed by the IRR. Their attitude flies in the
face of this Court's solemn pronouncement in Republic v.
Capulong that "strict observance of the rules, regulations
and guidelines of the bidding process is the only safeguard
to a fair, honest and competitive public bidding." From the
foregoing, the only conclusion that can possibly be drawn
is that the BOT law and its IRR were repeatedly violated
with unmitigated impunity and by agents of government,
no less! On account of such violation, the award of the
contract to Piatco, which undoubtedly gained time and
benefited from the delays, must be deemed null and void
from the beginning.
24. ID.; ID.; ID.; CHANGES TO THE CONTRACT BIDDED
OUT RESULTED IN A SUBSTANTIALLY DIFFERENT
CONTRACT. After the PBAC made its decision on
December 11, 1996 to award the contract to Piatco, the
latter negotiated changes to the Contract bidded out and
ended up with what amounts to a substantially new
contractwithout any public bidding. This Contract was
subsequently further amended four more times through
negotiation and without any bidding. Thus, the contract
actually executed between Piatco and DOTC/MIAA on July
12, 1997 (the Concession Agreement or "CA") differed
from the contract bidded out[.] It goes without saying that
the amendment of the Contract bidded out (the DCA or
draft concession agreement) in such substantial
manner, without any public bidding, and after the bidding
process had been concluded on December 11, 1996 is
violative of public policy on public biddings, as well as the
spirit and intent of the BOT Law. The whole point of going
through the public bidding exercise was completely lost. Its
 Page 45 of 458
very rationale was totally subverted by permitting Piatco to
amend the contract for which public bidding had already
been concluded. Competitive bidding aims to obtain the
best deal possible by fostering transparency and
preventing favoritism, collusion and fraud in the awarding
of contracts. That is the reason why procedural rules
pertaining to public bidding demand strict observance.
25. ID.; ID.; ID.; SUBSTANTIVE AMENDMENTS TO A
CONTRACT FOR WHICH A PUBLIC BIDDING HAS
ALREADY BEEN FINISHED SHOULD ONLY BE
AWARDED AFTER ANOTHER PUBLIC BIDDING. In a
relatively early case, Caltex v. Delgado Brothers, this Court
made it clear that substantive amendments to a contract for
which a public bidding has already been finished should
only be awarded after another public bidding: "The due
execution of a contract after public bidding is a limitation
upon the right of the contracting parties to alter or amend it
without another public bidding, for otherwise what would a
public bidding be good for if after the execution of a
contract after public bidding, the contracting parties may
alter or amend the contract, or even cancel it, at their will?
Public biddings are held for the protection of the public, and
to give the public the best possible advantages by means
of open competition between the bidders. He who bids or
offers the best terms is awarded the contract subject of the
bid, and it is obvious that such protection and best possible
advantages to the public will disappear if the parties to a
contract executed after public bidding may alter or amend it
without another previous public bidding." EaIcAS
26. ID.; ID.; ID.; TERMS, CONDITIONS AND
STIPULATIONS OF THE CONTRACTS MUST REMAIN
INTACT AND NOT BE SUBJECT TO FURTHER
NEGOTIATION. The BOT Law cannot be said to allow
the negotiation of contractual stipulations resulting in a
substantially new contract after the bidding process and
price challenge had been concluded. In fact, the BOT Law,
in recognition of the time, money and effort invested in an
unsolicited proposal, accords its originator the privilege of
matching the challenger's bid. Section 4-A of the BOT
Law specifically refers to a "lower price proposal" by a
competing bidder; and to the right of the original proponent
"to match the price" of the challenger. Thus, only the price
proposals are in play. The terms, conditions and
stipulations in the contract for which public bidding has
been concluded are understood to remain intact and not be
subject to further negotiation. Otherwise, the very essence
of public bidding will be destroyed there will no basis for
an exact comparison between bids. Moreover, Piatco
misinterpreted the meaning behind PBAC Bid Bulletin No.
3. The phrase amendments . . . from time to time refers
only to those amendments to the draft concession
agreement issued by the PBAC prior to the submission of
the price challenge; it certainly does not include or permit
amendments negotiated for and introduced after the
bidding process, has been terminated.
27. ID.; ID.; ID.; REVISIONS AND AMENDMENTS IN THE
CONTRACTS THAT GIVE UNDUE ADVANTAGE TO THE
GOVERNMENT IS ILLEGAL. In sum, the revisions and
amendments as embodied in the ARCA constitute very
material alterations of the terms and conditions of the CA,
and give further manifestly undue advantage to Piatcoat
the expense of government. Piatco claims that the changes
to the CA were necessitated by the demands of its foreign
lenders. However, no proof whatsoever has been adduced
 Page 46 of 458
to buttress this claim. In any event, it is quite patent that the
sum total of the aforementioned changes resulted
in drastically weakening the position of government to a
degree that seems quite excessive, even from the
standpoint of a businessperson who regularly transacts
with banks and foreign lenders, is familiar with their mind-
set, and understands what motivates them. On the other
hand, whatever it was that impelled government officials
concerned to accede to those grossly disadvantageous
changes, I can only hazard a guess. There is no question
in my mind that the ARCA was unauthorized and illegal for
lack of public bidding and for being patently
disadvantageous to government.
28. ID.; ID.; ID.; FIRST SUPPLEMENT TO VOID AND
INEXISTENT ORIGINAL CONCESSION AGREEMENT IS
ALSO VOID AND INOPERATIVE; CASE AT BAR. I
must emphasize that the First Supplement [FS] is void in
two respects. First, it is merely an amendment to the
ARCA, upon which it is wholly dependent; therefore, since
the ARCA is void, inexistent and not capable of being
ratified or amended, it follows that the FS too is void,
inexistent and inoperative. Second, even
assuming arguendo that the ARCA is somehow remotely
valid, nonetheless the FS, in imposing significant new
obligations upon government, altered the fundamental
terms and stipulations of the ARCA, thus necessitating a
public bidding all over again. That the FS was entered into
sans public bidding renders it utterly void and inoperative.
29. ID.; ID.; ID.; SECOND SUPPLEMENT IS ALSO VOID
AND INOPERATIVE AS IT DID NOT UNDERGO ANY
PUBLIC BIDDING. The Second Supplement ("SS") was
executed between the government and Piatco on
September 4, 2000. It calls for Piatco, acting not as
concessionaire of NAIA Terminal III but as a public works
contractor, to undertake in the government's stead
the clearing, removal, demolition and disposal of
improvements, subterranean obstructions and waste
materials at the project site. The scope of the works, the
procedures involved, and the obligations of the contractor
are provided for in Parts II and III of the SS. Section 4.1
sets out the compensation to be paid, listing specific rates
per cubic meter of materials for each phase of the work
excavation, leveling, removal and disposal, backfilling and
dewatering. The amounts collectible by Piatco are to be
offset against the Annual Guaranteed Payments it must
pay government. Though denominated as Second
Supplement, it was nothing less than an entirely new public
works contract. Yet it, too, did not undergo any public
bidding, for which reason it is also void and inoperative.
Not surprisingly, Piatco had to subcontract the works to a
certain Wintrack Builders, a firm reputedly owned by a
former high-ranking DOTC official. But that is another story
altogether.AaSHED
30. ID.; ID.; ID.; THIRD SUPPLEMENT IS VOID AB INITIO
AS IT CREATED A NEW MONETARY OBLIGATION ON
THE PART OF THE GOVERNMENT WITHOUT PRIOR
APPROPRIATIONS. The Third Supplement (TS)
depends upon and is intended to supplement the ARCA as
well as the First Supplement, both of which are void and
inexistent and not capable of being ratified or amended. It
follows that the TS is likewise void, inexistent and
inoperative. And even if, hypothetically speaking, both
ARCA and FS are valid, still, the Third Supplement
imposing as it does significant new obligations upon
government would in effect alter the terms and
stipulations of the ARCA in material respects, thus
 Page 47 of 458
necessitating another public bidding. Since the TS was not
subjected to public bidding, it is consequently utterly void
as well. At any rate, the TS created new monetary
obligations on the part of government, for which there were
no prior appropriations. Hence, it follows that the same is,
void ab initio.
31. ID.; ID.; ID.; DIRECT GOVERNMENT GUARANTEE IS
PROHIBITED IN UNSOLICITED PROPOSALS. Section
4-A of the BOT Law as amended states that unsolicited
proposals, such as the NAIA Terminal III Project, may be
accepted by government provided inter alia that no direct
government guarantee, subsidy or equity is required. In
short, such guarantee is prohibited in unsolicited proposals.
Section 2(n) of the same legislation defines direct
government guarantee as "an agreement whereby the
government or any of its agencies or local government
units (will) assume responsibility for the repayment of debt
directly incurred by the project proponent in implementing
the project in case of a loan default."
32. ID.; ID.; ID.; ID.; REASON. In the final analysis,
Section 4.04(c)(iv) to (vi) of the ARCA is diametrically at
odds with the spirit and the intent of the BOT Law. The law
meant to mobilize private resources (the private sector) to
take on the burden and the risks of financing the
construction, operation and maintenance of relevant
infrastructure and development projects for the simple
reason that government is not in a position to do so. By the
same token, government guarantee was prohibited, since it
would merely defeat the purpose and raison d'tre of a
build-operate-and-transfer project to be undertaken by the
private sector. To the extent that the project proponent is
able to obtain loans to fund the project, those risks are
shared between the project proponent on the one hand,
and its banks and other lenders on the other. But where the
proponent or its lenders manage to cajol or coerce the
government into extending a guarantee of payment of the
loan obligations, the risks assumed by the lenders are
passed right back to government. I cannot understand why,
in the instant case, government cheerfully assented to re-
assuming the risks of the project when it gave the
prohibited guarantee and thus simply negated the very
purpose of the BOT Law and the protection it gives the
government.
33. ID.; ID.; ID.; ID.; THE AMOUNT TO BE PAID BY
GOVERNMENT IS GREATER OF EITHER THE
APPRAISED VALUE OF THE PROJECT OR THE
AGGREGATE AMOUNT OF THE MONEYS OWED BY
PIATCO; CASE AT BAR. Government's agreement to
pay becomes effective in the event of a default by Piatco
on any of its loan obligations to the Senior Lenders, and
the amount to be paid by government is the greater of
either the Appraised Value of Terminal III or the aggregate
amount of the moneys owed by Piatco whether to the
Senior Lenders or to other entities, including its suppliers,
contractors and subcontractors. In effect, therefore, this
agreement already constitutes the prohibited assumption
by government of responsibility for repayment of Piatco's
debts in case of a loan default. In fine, a direct government
guarantee. It matters not that there is a roundabout
procedure prescribed by Section 4.04(c)(iv), (v) and (vi)
that would require, first, an attempt (albeit unsuccessful) by
the Senior Lenders to transfer Piatco's rights to a
transferee of their choice; and, second, an effort (equally
unsuccessful) to "enter into any other arrangement" with
the government regarding the Terminal III facility, before
government is required to make good on its guarantee.
 Page 48 of 458

What is abundantly clear is the fact that, in the devious
labyrinthine process detailed in the aforesaid section, it is
entirely within the Senior Lenders' power, prerogative and
control exercisable via a mere refusal or inability to
agree upon "a transferee" or "any other arrangement"
regarding the terminal facility to push the process
forward to the ultimate contractual cul-de-sac, wherein
government will be compelled to abjectly surrender and
make good on its guarantee of payment.
government would be paying several hundreds of millions
of dollars, but the mortgage liens on the facility may still be
foreclosed by the Senior Lenders just the same.
Consequently, the Piatco contracts are also objectionable
for grievously failing to adequately protect government's
interests. More accurately, the contracts would consistently
weaken and do away with protection of government
interests. As such, they are therefore grossly lopsided in
favor of Piatco and/or its Senior Lenders. IAEcaH

35. ID.; ID.; ID.; ID.; AMENDED AND RESTATED

CONCESSION AGREEMENT (ARCA) INTENDS TO
34. ID.; ID.; ID.; ID.; PIATCO CONTRACTS ARE
HAVE ALL PIATCO'S DEBTS COVERED BY THE
GROSSLY LOPSIDED IN FAVOR OF PIATCO AND/OR
GUARANTEE. While on this subject, it is well to recall
ITS SENIOR LENDERS. Piatco also argues that there is
the earlier discussion regarding a particularly noticeable
no provisorequiring government to pay the Senior Lenders
alteration of the concept of "Attendant Liabilities." In
in the event of Piatco's default. This is literally true, in the
Section 1.06 of the CA defining the term, the Piatco debts
sense that Section 4.04(c)(vi) of ARCA speaks of
to be assumed/paid by government were qualified by the
government making the termination payment to Piatco, not
phrases recorded and from time to time outstanding in the
to the lenders. However, it is almost a certainty that the
books of the Concessionaire and actually used for the
Senior tenders will already have made Piatco sign over to
project. These phrases were eliminated from the ARCA's
them, ahead of time, its right to receive such payments
definition of Attendant Liabilities. Since no explanation has
from government; and/or they may already have had
been forthcoming from Piatco as to the possible
themselves appointed its attorneys-in-fact for the purpose
justification for such a drastic change, the only conclusion
of collecting and receiving such payments. Nevertheless,
possible is that it intends to have all of its debts covered by
as petitioners-in-intervention pointed out in their
the guarantee, regardless of whether or not they are
Memorandum, the termination payment is to be made to
disclosed in its books. This has particular reference to
Piatco, not to the lenders; and there is no provision
those borrowings which were obtained in violation of the
anywhere in the contract documents to prevent it from
loan covenants requiring Piatco to maintain a minimum
diverting the proceeds to its own benefit and/or to ensure
70:30 debt-to-equity ratio, and even if the loan proceeds
that it will necessarily use the same to pay off the Senior
were not actually used for the project itself. This point
Lenders and other creditors, in order to avert the
brings us back to the guarantee itself. In Section 4.04(c)(vi)
foreclosure of the mortgage and other liens on the terminal
of ARCA, the amount which government has guaranteed to
facility. Such deficiency puts the interests of government at
pay as termination payment is the greater of either (i) the
great risk. Indeed, if the unthinkable were to happen,
 Page 49 of 458
Appraised Value of the terminal facility or (ii) the aggregate
of the Attendant Liabilities. Given that the Attendant
Liabilities may include practically any Piatco debt under the
sun, it is highly conceivable that their sum may greatly
exceed the appraised value of the facility, and government
may end up paying very much more than the real worth of
Terminal III. (So why did government have to bother with
public bidding anyway?)
36. ID.; ID.; ID.; INSTANCES WHEN TERMINATION
COMPENSATION MAY BE ALLOWED. Section 7 of the
BOT Law as amended in effect provides for the following
limited instances when termination compensation may be
allowed: 1. Termination by the government through no fault
of the project proponent 2. Termination upon the parties'
mutual agreement and 3. Termination by the proponent
due to government's default on certain major contractual
obligations. To emphasize, the law does not permit
compensation for the project proponent when contract
termination is due to the proponent's own fault or breach of
contract.
37. ID.; ID.; ID.; ID.; VIOLATED IN CASE AT BAR. This
principle was clearly violated in the Piatco Contracts. The
ARCA stipulates that government is to pay termination
compensation to Piatco even when termination is initiated
by government. Clearly, this condition is not in line with
Section 7 of the BOT Law. That provision permits a project
proponent to recover the actual expenses it incurred in the
prosecution of the project plus a reasonable rate of return
not in excess of that provided in the contract; or to be
compensated for the equivalent or proportionate contract
cost as defined in the contract, in case the government is in
default on certain major contractual obligations.
38. ID.; ID.; ID.; ID.; IN TERMINATION COMPENSATION,
IT IS INDISPENSABLE THAT THE INTEREST OF
GOVERNMENT BE DULY INSURED; NOT PRESENT IN
CASE AT BAR. [I]n those instances where such
termination compensation is authorized by the BOT Law, it
is indispensable that the interest of government be duly
insured. Section 5.08 the ARCA mandates insurance
coverage for the terminal facility; but all insurance policies
are to be assigned, and all proceeds are payable, to the
Senior Lenders. In brief, the interest being secured by such
coverage is that of the Senior Lenders, not that of
government. This can hardly be considered compliance
with law.
39. ID.; ID.; ID.; PROHIBITS A DIRECT GOVERNMENT
SUBSIDY FOR UNSOLICITED PROPOSALS. It will be
recalled that Section 4-A of the BOT Law as amended
prohibits not only direct government guarantees, but
likewise a direct government subsidy for unsolicited
proposals. Section 13.2. b iii. of the 1999 IRR defines
a direct government subsidy as encompassing "an
agreement whereby the Government . . . will . . . postpone
any payments due from the proponent." By any manner of
interpretation or application, however, Section 8.01(d) of
the ARCA clearly mandates the indefinite postponement of
payment of all of Piatco's obligations to the government, in
order to ensure that Piatco's obligations to the Senior
Lenders are paid in full first. That is nothing more or less
than the direct government subsidy prohibited by the BOT
Law and the IRR. The fact that Piatco will pay interest on
the unpaid amounts owed to government does not change
the situation or render the prohibited subsidy any less
unacceptable. DTAIaH
 Page 50 of 458
40. ID.; ID.; ID.; GOVERNMENT WILL BE AT THE MERCY
OF THE FOREIGN LENDERS; CASE AT BAR. Earlier; I
mentioned that Section 8.01(d) of the ARCA completely
eliminated the proviso in Section 8.04(d) of the CA which
gave government the right to appoint a financial controller
to manage the cash position of Piatco during situations of
financial distress. Not only has government been deprived
of any means of monitoring and managing the situation;
worse, as can be seen from Section 8.01(d) above-quoted,
the Senior Lenders have effectively locked in on the right to
exercise financial controllership over Piatco and to allocate
its cash resources to the payment of all amounts owed to
the Senior Lenders before allowing any payment to be
made to government. In brief, this particular provision of
the ARCA has placed in the hands of foreign lenders the
power and the authority to determine how much (if at all)
and when the Philippine government (as grantor of the
franchise) may be allowed to receive from Piatco. In that
situation, government will be at the mercy of the foreign
lenders. This is a situation completely contrary to the
rationale of the BOT Law and to public policy. The
aforesaid provision rouses mixed emotions shame and
disgust at the parties' (especially the government officials')
docile submission and abject servitude and surrender to
the imperious and excessive demands of the foreign
lenders, on the one hand; and vehement outrage at the
affront to the sovereignty of the Republic and to the
national honor, on the other. It is indeed time to put an end
to such an unbearable, dishonorable situation.
41. ID.; CONSTITUTIONAL LAW; NATIONAL ECONOMY
AND PATRIMONY; CONSTITUTION EXPRESSLY
PROSCRIBES MAKING A FRANCHISE EXCLUSIVE;
VIOLATED IN CASE AT BAR. What was granted to
Piatco was not merely a franchise, but an "exclusive right"
to operate an international passenger terminal within the
"Island of Luzon." What this grant effectively means is that
the government is now estopped from exercising its
inherent power to award any other person another
franchise or a right to operate such a public utility, in the
event public interest in Luzon requires it. This restriction is
highly detrimental to government and to the public interest.
While it cannot be gainsaid that an enterprise that is a
public utility may happen to constitute a monopoly on
account of the very nature of its business and the absence
of competition, such a situation does not however
constitute justification to violate the constitutional
prohibition and grant an exclusive franchise or exclusive.
right to operate a public utility. Piatco's contention that the
Constitution does not actually prohibit monopolies is beside
the point. As correctly argued, the existence of a monopoly
by a public utility is a situation created by circumstances
that do not encourage competition. This situation is
different from the grant of a franchise to operate a public
utility, a privilege granted by government. Of course, the
grant of a franchise may result in a monopoly. But making
such franchise exclusive is what is expressly proscribed
by the Constitution.
42. ID.; ID.; ID.; EASY PAYMENT PLAN OF PIATCO
CONTRACTS VIOLATES THE TIME LIMITATION ON
FRANCHISES. Section 11 of Article XII of the
Constitution also provides that "no franchise, certificate or
any other form of authorization for the operation of a public
utility shall be . . . for a longer period than fifty years." After
all, a franchise held for an unreasonably long time would
likely give rise to the same evils as a monopoly. The Piatco
Contracts have come up with an innovative way to
 Page 51 of 458
circumvent the prohibition and obtain an extension. This
fact can be gleaned from Section 8.03(b) of the ARCA [.]
The easy payment scheme therein is less beneficial than it
first appears. Although it enables government to avoid
having to make outright payment of an obligation that will
likely run into billions of pesos, this easy payment plan will
nevertheless cost government considerable loss of income,
which it would earn if it were to operate Terminal III by
itself. Inasmuch as payments to the concessionaire
(Piatco) will be on "installment basis," interest charges on
the remaining unpaid balance would undoubtedly cause
the total outstanding balance to swell. Piatco would thus be
entitled to remain in the driver's seat and keep operating
the terminal for an indefinite length of time.
43. ID.; ID.; ID.; MONOPOLY; ELUCIDATED:
Gokongwei Jr. v. Securities and Exchange
Commission elucidates the criteria to be employed: "A
'monopoly' embraces any combination the tendency of
which is to prevent competition in the broad and general
sense, or to control prices to the detriment of the public. In
short, it is the concentration of business in the hands of a
few. The material consideration in determining its existence
is not that prices are raised and competition actually
excluded, but that power exists to raise prices or exclude
competition when desired."
44. ID.; ID.; ID.; ID.; PIATCO CONTRACTS GIVE THE
CONCESSIONAIRE LIMITLESS POWER OVER THE
CHARGING OF FEES, RENTALS AND SO FORTH.
Aside from creating a monopoly, the Piatco contracts also
give the concessionaire virtually limitless power over the
charging of fees, rentals and so forth. What little "oversight
function" the government might be able and minded to
exercise is less than sufficient to protect the public
interest[.] It will be noted that Sec. 6.06 (Adjustment of
Non-Public Utility Fees and Charges) has no teeth, so the
concessionaire can defy the government without fear of
any sanction. Moreover, Section 6.06 taken together
with Section 6.03(c) of the ARCA falls short of the
standard set by the BOT Law as amended, which
expressly requires in Section 2(b) that the project
proponent is "allowed to charge facility users appropriate
tolls, fees, rentals and charges, not exceeding those
proposed in its bid or as negotiated and incorporated in the
contract . . ."
45. ID.; ID.; BILL OF RIGHTS; PROHIBITION AGAINST
IMPAIRMENT OF CONTRACTS; VIOLATED IN CASE AT
BAR. By the In-Service Date, Terminal III shall be the
only facility to be operated as an international passenger
terminal at the NAIA; thus, Terminal I and II shall no longer
operate as such, and no one shall be allowed to compete
with Piatco in the operation of an international passenger
terminal in the NAIA. The bottom line is that, as of the In-
Service Date, Terminal III will be the only terminal where
the business of providing airport-related services to
international airlines and passengers may be conducted at
all. Consequently, government through the DOTC/MIAA
will be compelled to cease honoring existing contracts with
service providers after the In-Service Date, as they cannot
be allowed to operate in Terminal III. In short, the CA and
the ARCA obligate and constrain government to break its
existing contracts with these service providers.
46. ID.; ID.; ID.; PROHIBITION AGAINST DEPRIVATION
OF PROPERTY WITHOUT DUE PROCESS; VIOLATED
IN CASE AT BAR. Notably, government is not in a
position to require Piatco to accommodate the displaced
 Page 52 of 458
service providers, and it would be unrealistic to think that
these service providers can perform their service contracts
in some other international airport outside Luzon.
Obviously, then, these displaced service providers are
to borrow a quaint expression up the river without a
paddle. In plainer terms, they will have lost their
businesses entirely, in the blink of an eye. Moreover, since
the displaced service providers, being unable to operate,
will be forced to close shop, their respective employees
among them Messrs. Agan and Lopez et al. have very
grave cause for concern, as they will find themselves out of
employment and bereft of their means of livelihood. This
situation comprises still another violation of the
constitution prohibition against deprivation of property
without due process. True, doing business at the NAIA may
be viewed more as a privilege than as a right. Nonetheless,
where that privilege has been availed of by the petitioners-
in-intervention service providers for years on end, a
situation arises, similar to that in American Inter-fashion v.
GTEB. We held therein that a privilege enjoyed for seven
years "evolved into some form of property right which
should not be removed . . . arbitrarily and without due
process." Said pronouncement is particularly relevant and
applicable to the situation at bar because the livelihood of
the employees of petitioners-intervenors are at stake. DaIACS
47. ID.; ID.; ID.; PROHIBITION AGAINST DEPRIVATION
OF LIBERTY WITHOUT DUE PROCESS; VIOLATED IN
CASE AT BAR. The Piatco Contracts by locking out
existing service providers from entry into Terminal III and
restricting entry of future service providers, thereby
infringed upon the freedom guaranteed to and
heretofore enjoyed by international airlines to contract
with local service providers of their choice, and vice versa.
Both the service providers and their client airlines will be
deprived of the right to liberty, which includes the right to
enter into all contracts, and/or the right to make a contract
in relation to one's business.
48. ID.; LEGISLATIVE DEPARTMENT; PROHIBITION
AGAINST DISBURSEMENT OF PUBLIC FUNDS
WITHOUT VALID APPROPRIATION; EFFECT. Clearly
prohibited bythe Constitution is the disbursement of public
funds out of the treasury, except in pursuance of an
appropriation made by law. The immediate effect of this
constitutional ban is that all the various agencies of
government are constrained to limit their expenditures to
the amounts appropriated by law for each fiscal year; and
to carefully count their cash before taking on contractual
commitments.
49. ID.; ID.; ID.; EXISTENCE OF APPROPRIATIONS AND
THE AVAILABILITY OF FUNDS ARE INDISPENSABLE
TO THE EXECUTION OF GOVERNMENT CONTRACTS.
[T]his Court has held that "(I)t is quite evident from the
tenor of the language of the law that the existence of
appropriations and the availability of funds are
indispensable pre-requisites to or conditions sine qua
non for the execution of government contracts. The
obvious intent is to impose such conditions as a
priori requisites to the validity of the proposed contract."
50. ID.; ID.; LEGISLATIVE POWER OVER THE PUBLIC
PURSE; VIOLATED IN CASE AT BAR. But the
particularly sad thing about this transaction between MIAA
and DPWH is the fact that both agencies were maneuvered
into (or allowed themselves to be maneuvered into) an
agreement that would ensure delivery of upgraded roads
for Piatco's benefit, using funds not allocated for that
 Page 53 of 458
purpose. The agreement would then be presented to
Congress as a done deal. Congress would thus be obliged
to uphold the agreement and support it with the necessary
allocations and appropriations for three years, in order to
enable DPWH to deliver on its committed repayments to
MIAA. The net result is an infringement on the legislative
power over the public purse and a diminution of Congress'
control over expenditures of public funds a development
that would not have come about, were it not for the
Supplements. Very clever but very illegal!
51. CIVIL LAW; OBLIGATIONS AND CONTRACTS;
CRITERIA FOR DETERMINING WHETHER THE BEST-
EFFORTS BASIS WILL APPLY. To determine whether
the additional obligations under the Supplements may
really be undertaken on a best-efforts basis only, the
nature of each of these obligations must be examined in
the context of its relevance and significance to the Terminal
III Project, as well as of any adverse impact that may result
if such obligation is not performed or undertaken on time.
In short, the criteria for determining whether the best-efforts
basis will apply is whether the obligations are critical to the
success of the Project and, accordingly, whether failure to
perform them (or to perform them on time) could result in a
material breach of the contract.
52. ID.; ID.; ID.; OBLIGATIONS IN THE SUPPLEMENTS
ARE MANDATORY IN CHARACTER AND NOT FOR
BEST-EFFORTS COMPLIANCE ONLY. Viewed in this
light, the "Additional Special Obligations" set out in Section
4 of the FS take on a different aspect. In particular, each of
the following may all be deemed to play a major role in the
successful and timely prosecution of the Terminal III
Project: the obtention of land required by PIATCO for the
taxilane and taxiway; the implementation of government's
existing storm drainage master plan; and coordination with
DPWH for the completion of the three left-turning
overpasses before the In-Service Date, as well as
acquisition and delivery of additional land for the
construction of the T2-T3 access road. Conversely, failure
to deliver on any of these obligations may conceivably
result in substantial prejudice to the concessionaire, to
such an extent as to constitute a material breach of the
Piatco Contracts. Whereupon, the concessionaire may
outrightly terminate the Contracts pursuant to Section 8.01
(b)(i) and (ii) of the ARCA and seek payment of Liquidated
Damages in accordance with Section 8.02(a) of the ARCA;
or the concessionaire may instead require government to
pay the Incremental and Consequential Losses under
Section 1.23 of the ARCA. The logical conclusion then is
that the obligations in the Supplements are not to be
performed on a best-efforts basis only, but are unarguably
mandatory in character.
53. ID.; ID.; PIATCO CONTRACTS ARE VOID AB INITIO
AND INOPERATIVE. I find that all the Piatco contracts,
without exception, are void ab initio, and therefore
inoperative. Even the very process by which the contracts
came into being the bidding and the award has been
riddled with irregularities galore and blatant violations of
law and public policy, far too many to ignore. There is thus
no conceivable way, as proposed by some, of saving one
(the original Concession Agreement) while junking all the
rest. Neither is it possible to argue for the retention of the
Draft Concession Agreement (referred to in the various
pleadings as the Contract Bidded Out) as the contract that
should be kept in force and effect to govern the situation,
inasmuch as it was never executed by the parties. What
Piatco and the government executed was the Concession
 Page 54 of 458
Agreement which is entirely different from the Draft
Concession Agreement.
54. ID.; ID.; ID.; KEEPING PIATCO ON AS
CONCESSIONAIRE IS UNCONSCIONABLE.
Ultimately, though, it would be tantamount to an
outrageous, grievous and unforgivable mutilation of public
policy and an insult to ourselves if we opt to keep in place a
contract any contract for to do so would assume that
we agree to having Piatco continue as the concessionaire
for Terminal III. Despite all the insidious contraventions
of the Constitution, law and public policy Piatco
perpetrated, keeping Piatco on as concessionaire and even
rewarding it by allowing it to operate and profit from
Terminal III instead of imposing upon it the stiffest
sanctions permissible under the laws is unconscionable.
It is no exaggeration to say that Piatco may not really mind
which contract we decide to keep in place. For all it may
care, we can do just as well without one, if we only let it
continue and operate the facility. After all, the real money
will come not from building the Terminal, but fromactually
operating it for fifty or more years and charging whatever it
feels like, without any competition at all. This scenario must
not be allowed to happen. EAHDac
55. ID.; ID.; ID.; AEDC SHOULD NOT BE ALLOWED TO
OPERATE THE TERMINAL III. If the Piatco contracts
are junked altogether as I think they should be, should not
AEDC automatically be considered the winning bidder and
therefore allowed to operate the facility? My answer is a
stone-cold 'No.' AEDC never won the bidding, never signed
any contract, and never built any facility. Why should it be
allowed to automatically step in and benefit from the greed
of another?
56. ID.; ID.; ID.; GOVERNMENT SHOULD PAY ALL
REASONABLE EXPENSES INCURRED IN THE
CONSTRUCTION OF TERMINAL III. Should
government pay at all for reasonable expenses incurred in
the construction of the Terminal? Indeed it should,
otherwise it will be unjustly enriching itself at the expense
of Piatco and, in particular, its funders, contractors and
investors both local and foreign. After all, there is no
question that the State needs and will make use of
Terminal III, it being part and parcel of the critical
infrastructure and transportation-related programs of
government. In Melchor v. Commission on Audit, this Court
held that even if the contract therein was void, the principle
of payment by quantum meruit was found applicable, and
the contractor was allowed to recover the reasonable value
of the thing or services rendered (regardless of any
agreement as to the supposed value), in order to avoid
unjust enrichment on the part of government. The principle
ofquantum meruit was likewise applied in Eslao v.
Commission on Audit, because to deny payment for a
building almost completed and already occupied would be
to permit government to unjustly enrich itself at the
expense of the contractor. The same principle was applied
in Republic v. Court of Appeals.
57. ID.; ID.; ID.; POSSIBLE PRACTICAL SOLUTION IS TO
BID OUT THE OPERATION OF TERMINAL III. One
possible practical solution would be for government in
view of the nullity of the Piatco contracts and of the fact
that Terminal III has already been built and is almost
finished to bid out the operation of the facility under the
same or analogous principles as build-operate-and-transfer
projects. To be imposed, however, is the condition that the
winning bidder must pay the builder of the facility a price
 Page 55 of 458

fixed by government based on quantum meruit; on the real,
reasonable not inflated value of the built facility. How
the payment or series of payments to the builder, funders,
investors and contractors will be staggered and scheduled,
will have to be built into the bids, along with the annual
guaranteed payments to government. In this manner, this
whole sordid mess could result in something truly beneficial
for all, especially for the Filipino people.
VITUG, J., separate dissenting opinion:
1. REMEDIAL LAW; CIVIL PROCEDURE; JURISDICTION;
SUPREME COURT IS BEREFT OF JURISDICTION OVER
CASES INVOLVING NULLIFICATION OF CONTRACTS.
This Court is bereft of jurisdiction to hear the petitions at
bar. The Constitution provides that the Supreme Court
shall exercise original jurisdiction over, among other actual
controversies, petitions for certiorari, prohibition,
mandamus, quo warranto, and habeas corpus. The cases
in question, although denominated to be petitions for
prohibition, actually pray for the nullification of the PIATCO
contracts and to restrain respondents from implementing
said agreements for being illegal and unconstitutional.
2. ID.; ID.; ID.; SUPREME COURT IS NOT A TRIER OF
FACTS. The rule is explicit. A petition for prohibition
may be filed against a tribunal, corporation, board, officer
or person, exercising judicial, quasi-judicial or ministerial
functions. What the petitions seek from respondents do not
involve judicial, quasi-judicial or ministerial functions. In
prohibition, only legal issues affecting the jurisdiction of the
tribunal, board or officer involved may be resolved on the
basis of undisputed facts. The parties allege, respectively,
contentious evidentiary facts. It would be difficult, if not
anomalous, to decide the jurisdictional issue on the basis
of the contradictory factual submissions made by the
parties. As the Court has so often exhorted, it is not a trier
of facts.
3. ID.; ID.; ID.; PETITIONS FOR DECLARATORY RELIEF
ARE COGNIZABLE BY THE REGIONAL TRIAL COURT.
The petitions, in effect, are in the nature of actions for
declaratory relief under Rule 63 of the Rules of Court. The
Rules provide that any person interested under a contract
may, before breach or violation thereof, bring an action in
the appropriate Regional Trial Court to determine any
question of construction or validity arising, and for a
declaration of his rights or duties thereunder. The Supreme
Court assumes no jurisdiction over petitions for declaratory
relief which are cognizable by regional trial courts.
4. POLITICAL LAW; SEPARATION OF POWERS; COURT
MAY NOT INTRUDE INTO EVERY AFFAIR OF
GOVERNMENT. As I have so expressed in Tolentino
vs. Secretary of Finance, reiterated in Santiago vs.
Guingona, Jr., the Supreme Court should not be thought of
as having been tasked with the awesome responsibility of
overseeing the entire bureaucracy. Pervasive and limitless,
such as it may seem to be under the 1987 Constitution,
judicial power still succumbs to the paramount doctrine of
separation of powers. The Court may not at good liberty
intrude, in the guise of sovereign imprimatur, into every
affair of government. What significance can still then
remain of the time-honored and widely acclaimed principle
of separation of powers if, at every turn, the Court allows
itself to pass upon at will the disposition of a co-equal,
independent and coordinate branch in our system of
government. I dread to think of the so varied uncertainties
that such an undue interference can lead to.
 Page 56 of 458
DECISION
PUNO, J :p
Petitioners and petitioners-in-intervention filed the instant
petitions for prohibition under Rule 65 of the Revised Rules
of Court seeking to prohibit the Manila International Airport
Authority (MIAA) and the Department of Transportation and
Communications (DOTC) and its Secretary from
implementing the following agreements executed by the
Philippine Government through the DOTC and the MIAA
and the Philippine International Air Terminals Co., Inc.
(PIATCO): (1) the Concession Agreement signed on July
12, 1997, (2) the Amended and Restated Concession
Agreement dated November 26, 1999, (3) the First
Supplement to the Amended and Restated Concession
Agreement dated August 27, 1999, (4) the Second
Supplement to the Amended and Restated Concession
Agreement dated September 4, 2000, and (5) the Third
Supplement to the Amended and Restated Concession
Agreement dated June 22, 2001 (collectively, the PIATCO
Contracts).
The facts are as follows:
In August 1989, the DOTC engaged the services of
Aeroport de Paris (ADP) to conduct a comprehensive study
of the Ninoy Aquino International Airport (NAIA) and
determine whether the present airport can cope with the
traffic development up to the year 2010. The study
consisted of two parts: first, traffic forecasts, capacity of
existing facilities, NAIA future requirements, proposed
master plans and development plans; and second,
presentation of the preliminary design of the passenger
terminal building. The ADP submitted a Draft Final Report
to the DOTC in December 1989.
Some time in 1993, six business leaders consisting of John
Gokongwei, Andrew Gotianun, Henry Sy, Sr., Lucio Tan,
George Ty and Alfonso Yuchengco met with then President
Fidel V. Ramos to explore the possibility of investing in the
construction and operation of a new international airport
terminal. To signify their commitment to pursue the project,
they formed the Asia's Emerging Dragon Corp. (AEDC)
which was registered with the Securities and Exchange
Commission (SEC) on September 15, 1993. CSaITD
On October 5, 1994, AEDC submitted an unsolicited
proposal to the Government through the DOTC/MIAA for
the development of NAIA International Passenger Terminal
III (NAIA IPT III) under a build-operate-and-transfer
arrangement pursuant to RA 6957 as amended by RA
7718 (BOT Law). 1
On December 2, 1994, the DOTC issued Dept. Order No.
94-832 constituting the Prequalification Bids and Awards
Committee (PBAC) for the implementation of the NAIA IPT
III project.
On March 27, 1995, then DOTC Secretary Jose Garcia
endorsed the proposal of AEDC to the National Economic
and Development Authority (NEDA). A revised proposal,
however, was forwarded by the DOTC to NEDA on
December 13, 1995. On January 5, 1996, the NEDA
Investment Coordinating Council (NEDA ICC) Technical
Board favorably endorsed the project to the ICC Cabinet
Committee which approved the same, subject to certain
conditions, on January 19, 1996. On February 13, 1996,
the NEDA passed Board Resolution No. 2 which approved
the NAIA IPT III Project.
 Page 57 of 458
On June 7, 14, and 21, 1996, DOTC/MIAA caused the
publication in two daily newspapers of an invitation for
competitive or comparative proposals on AEDC's
unsolicited proposal, in accordance with Sec. 4-A of RA
6957, as amended. The alternative bidders were required
to submit three (3) sealed envelopes on or before 5:00 p.m.
of September 20, 1996. The first envelope should contain
the Prequalification Documents, the second envelope the
Technical Proposal, and the third envelope the Financial
Proposal of the proponent.
On June 20, 1996, PBAC Bulletin No. 1 was issued,
postponing the availment of the Bid Documents and the
submission of the comparative bid proposals. Interested
firms were permitted to obtain the Request for Proposal
Documents beginning June 28, 1996, upon submission of a
written application and payment of a non-refundable fee of
P50,000.00 (US$2,000).
The Bid Documents issued by the PBAC provided among
others that the proponent must have adequate capability to
sustain the financing requirement for the detailed
engineering, design, construction, operation, and
maintenance phases of the project. The proponent would
be evaluated based on its ability to provide a minimum
amount of equity to the project, and its capacity to secure
external financing for the project.
On July 23, 1996, the PBAC issued PBAC Bulletin No. 2
inviting all bidders to a pre-bid conference on July 29,
1996.
On August 16, 1996, the PBAC issued PBAC Bulletin No. 3
amending the Bid Documents. The following amendments
were made on the Bid Documents:
a. Aside from the fixed Annual Guaranteed
Payment, the proponent shall include
in its financial proposal an additional
percentage of gross revenue share of
the Government, as follows:
i. First 5 years 5.0%
ii. Next 10 years 7.5%
iii. Next 10 years 10.0%
b. The amount of the fixed Annual
Guaranteed Payment shall be subject
of the price challenge. Proponent may
offer an Annual Guaranteed Payment
which need not be of equal amount,
but payment of which shall start upon
site possession.
c. The project proponent must have
adequate capability to sustain the
financing requirement for the detailed
engineering, design, construction,
and/or operation and maintenance
phases of the project as the case may
be. For purposes of pre-qualification,
this capability shall be measured in
terms of:
i. Proof of the availability of the project
proponent and/or the consortium
to provide the minimum amount
of equity for the project; and
 Page 58 of 458
ii. a letter testimonial from reputable
banks attesting that the project
proponent and/or the members
of the consortium are banking
with them, that the project
proponent and/or the members
are of good financial standing,
and have adequate resources.
d. The basis for the prequalification shall be
the proponent's compliance with the
minimum technical and financial
requirements provided in the Bid
Documents and the IRR of the BOT
Law. The minimum amount of equity
shall be 30% of the Project Cost. CSaITD
e. Amendments to the draft Concession
Agreement shall be issued from time
to time. Said amendments shall only
cover items that would not materially
affect the preparation of the
proponent's proposal.
On August 29, 1996, the Second Pre-Bid Conference was
held where certain clarifications were made. Upon the
request of prospective bidder People's Air Cargo &
Warehousing Co., Inc (Paircargo), the PBAC warranted
that based on Sec. 11.6, Rule 11 of the Implementing
Rules and Regulations of the BOT Law, only the proposed
Annual Guaranteed Payment submitted by the challengers
would be revealed to AEDC, and that the challengers'
technical and financial proposals would remain confidential.
The PBAC also clarified that the list of revenue sources
contained in Annex 4.2a of the Bid Documents was merely
indicative and that other revenue sources may be included
by the proponent, subject to approval by DOTC/MIAA.
Furthermore, the PBAC clarified that only those fees and
charges denominated as Public Utility Fees would be
subject to regulation, and those charges which would be
actually deemed Public Utility Fees could still be revised,
depending on the outcome of PBAC's query on the matter
with the Department of Justice.
In September 1996, the PBAC issued Bid Bulletin No. 5,
entitled "Answers to the Queries of PAIRCARGO as Per
Letter Dated September 3 and 10, 1996." Paircargo's
queries and the PBAC's responses were as follows:
1. It is difficult for Paircargo and Associates to
meet the required minimum equity requirement
as prescribed in Section 8.3.4 of the Bid
Documents considering that the capitalization of
each member company is so structured to meet
the requirements and needs of their current
respective business undertaking/activities. In
order to comply with this equity requirement,
Paircargo is requesting PBAC to just allow each
member of (sic) corporation of the joint Venture
to just execute an agreement that embodies a
commitment to infuse the required capital in case
the project is awarded to the Joint Venture
instead of increasing each corporation's current
authorized capital stock just for prequalification
purposes.
In prequalification, the agency is interested in
one's financial capability at the time of
prequalification, not future or potential capability.
A commitment to put up equity once awarded the
project is not enough to establish that "present"
financial capability. However, total financial
 Page 59 of 458
capability of all member companies of the
Consortium, to be established by submitting the
respective companies' audited financial
statements, shall be acceptable.
2. At present, Paircargo is negotiating with banks
and other institutions for the extension of a
Performance Security to the joint venture in the
event that the Concessions Agreement (sic) is
awarded to them. However, Paircargo is being
required to submit a copy of the draft concession
as one of the documentary
requirements. Therefore, Paircargo is requesting
that they'd (sic) be furnished copy of the
approved negotiated agreement between the
PBAC and the AEDC at the soonest possible
time.
A copy of the draft Concession Agreement is
included in the Bid Documents. Any material
changes would be made known to prospective
challengers through bid bulletins. However, a
final version will be issued before the award of
contract.SECAHa
The PBAC also stated that it would require AEDC to sign
Supplement C of the Bid Documents (Acceptance of
Criteria and Waiver of Rights to Enjoin Project) and to
submit the same with the required Bid Security.
On September 20, 1996, the consortium composed of
People's Air Cargo and Warehousing Co., Inc. (Paircargo),
Phil. Air and Grounds Services, Inc. (PAGS) and Security
Bank Corp. (Security Bank) (collectively, Paircargo
Consortium) submitted their competitive proposal to the
PBAC. On September 23, 1996, the PBAC opened the first
envelope containing the prequalification documents of the
Paircargo Consortium. On the following day, September
24, 1996, the PBAC prequalified the Paircargo Consortium.
On September 26, 1996, AEDC informed the PBAC in
writing of its reservations as regards the Paircargo
Consortium, which include:
a. The lack of corporate approvals and
financial capability of PAIRCARGO;
b. The lack of corporate approvals and
financial capability of PAGS;
c. The prohibition imposed by RA 337, as
amended (the General Banking Act)
on the amount that Security Bank
could legally invest in the project;
d. The inclusion of Siemens as a contractor
of the PAIRCARGO Joint Venture, for
prequalification purposes; and
e. The appointment of Lufthansa as the
facility operator, in view of the
Philippine requirement in the operation
of a public utility.
The PBAC gave its reply on October 2, 1996, informing
AEDC that it had considered the issues raised by the latter,
and that based on the documents submitted by Paircargo
and the established prequalification criteria, the PBAC had
found that the challenger, Paircargo, had prequalified to
undertake the project. The Secretary of the DOTC
approved the finding of the PBAC.
The PBAC then proceeded with the opening of the second
envelope of the Paircargo Consortium which contained its
Technical Proposal.
 Page 60 of 458
On October 3, 1996, AEDC reiterated its objections,
particularly with respect to Paircargo's financial capability,
in view of the restrictions imposed by Section 21-B of
theGeneral Banking Act and Sections 1380 and 1381 of
the Manual Regulations for Banks and Other Financial
Intermediaries. On October 7, 1996, AEDC again
manifested its objections and requested that it be furnished
with excerpts of the PBAC meeting and the accompanying
technical evaluation report where each of the issues they
raised were addressed.
On October 16, 1996, the PBAC opened the third envelope
submitted by AEDC and the Paircargo Consortium
containing their respective financial proposals. Both
proponents offered to build the NAIA Passenger Terminal
III for at least $350 million at no cost to the government and
to pay the government: 5% share in gross revenues for the
first five years of operation, 7.5% share in gross revenues
for the next ten years of operation, and 10%. share in gross
revenues for the last ten years of operation, in accordance
with the Bid Documents. However, in addition to the
foregoing, AEDC offered to pay the government a total of
P135 million as guaranteed payment for 27 years while
Paircargo Consortium offered to pay the government a total
of P17.75 billion for the same period. CSaITD
Thus, the PBAC formally informed AEDC that it had
accepted the price proposal submitted by the Paircargo
Consortium, and gave AEDC 30 working days or until
November 28, 1996 within which to match the said bid,
otherwise, the project would be awarded to Paircargo.
As AEDC failed to match the proposal within the 30-day
period, then DOTC Secretary Amado Lagdameo, on
December 11, 1996, issued a notice to Paircargo
Consortium regarding AEDC's failure to match the
proposal.
On February 27, 1997, Paircargo Consortium incorporated
into Philippine International Airport Terminals Co., Inc.
(PIATCO).
AEDC subsequently protested the alleged undue
preference given to PIATCO and reiterated its objections
as regards the prequalification of PIATCO.
On April 11, 1997, the DOTC submitted the concession
agreement for the second-pass approval of the NEDA-ICC,
On April 16, 1997, AEDC filed with the Regional Trial Court
of Pasig a Petition for Declaration of Nullity of the
Proceedings, Mandamus and Injunction against the
Secretary of the DOTC, the Chairman of the PBAC, the
voting members of the PBAC and Pantaleon D. Alvarez, in
his capacity as Chairman of the PBAC Technical
Committee.
On April 17, 1997, the NEDA-ICC conducted an ad
referendum to facilitate the approval, on a no-objection
basis, of the BOT agreement between the DOTC and
PIATCO. As the ad referendum gathered only four (4) of
the required six (6) signatures, the NEDA merely noted the
agreement.
On July 9, 1997, the DOTC issued the notice of award for
the project to PIATCO.
On July 12, 1997, the Government, through then DOTC
Secretary Arturo T. Enrile, and PIATCO, through its
President, Henry T. Go, signed the "Concession
Agreement for the Build-Operate-and-Transfer
Arrangement of the Ninoy Aquino International Airport
 Page 61 of 458
Passenger Terminal III" (1997 Concession Agreement).
The Government granted PIATCO the franchise to operate
and maintain the said terminal during the concession
period and to collect the fees, rentals and other charges in
accordance with the rates or schedules stipulated in the
1997 Concession Agreement. The Agreement provided
that the concession period shall be for twenty-five (25)
years commencing from the in-service date, and may be
renewed at the option of the Government for a period not
exceeding twenty-five (25) years. At the end of the
concession period, PIATCO shall transfer the development
facility to MIAA.
On November 26, 1998, the Government and PIATCO
signed an Amended and Restated Concession Agreement
(ARCA). Among the provisions of the 1997 Concession
Agreement that were amended by the ARCA were: Sec.
1.11 pertaining to the definition of "certificate of
completion"; Sec. 2.05 pertaining to the Special Obligations
of GRP; Sec. 3.02 (a) dealing with the exclusivity of the
franchise given to the Concessionaire; Sec. 4.04
concerning the assignment by Concessionaire of its
interest in the Development Facility; Sec. 5.08 (c) dealing
with the proceeds of Concessionaire's insurance; Sec. 5.10
with respect to the temporary take-over of operations by
GRP; Sec. 5.16 pertaining to the taxes, duties and other
imposts that may be levied on the Concessionaire; Sec.
6.03 as regards the periodic adjustment of public utility fees
and charges; the entire Article VIII concerning the
provisions on the termination of the contract; and Sec.
10.02 providing for the venue of the arbitration proceedings
in case a dispute or controversy arises between the parties
to the agreement.
Subsequently, the Government and PIATCO signed three
Supplements to the ARCA. The First Supplement was
signed on August 27, 1999; the Second Supplement on
September 4, 2000; and the Third Supplement on June 22,
2001 (collectively, Supplements).
The First Supplement to the ARCA amended Sec. 1.36 of
the ARCA defining "Revenues" or "Gross Revenues"; Sec.
2.05 (d) of the ARCA referring to the obligation of MIAA to
provide sufficient funds for the upkeep, maintenance, repair
and/or replacement of all airport facilities and equipment
which are owned or operated by MIAA; and further
providing additional special obligations on the part of GRP
aside from those already enumerated in Sec. 2.05 of the
ARCA. The First Supplement also provided a stipulation as
regards the construction of a surface road to connect NAIA
Terminal II and Terminal III in lieu of the proposed access
tunnel crossing Runway 13/31; the swapping of obligations
between GRP and PIATCO regarding the improvement of
Sales Road; and the changes in the timetable. It also
amended Sec. 6.01 (c) of the ARCA pertaining to the
Disposition of Terminal Fees; Sec. 6.02 of the ARCA by
inserting an introductory paragraph; and Sec. 6.02 (a) (iii)
of the ARCA referring to the Payments of Percentage,
Share in Gross Revenues. CSaITD
The Second Supplement to the ARCA contained provisions
concerning the clearing, removal, demolition or disposal of
subterranean structures uncovered or discovered at the
site of the construction of the terminal by the
Concessionaire. It defined the scope of works; it provided
for the procedure for the demolition of the said structures
and the consideration for the same which the GRP shall
pay PIATCO; it provided for time extensions, incremental
and consequential costs and losses consequent to the
 Page 62 of 458
existence of such structures; and it provided for some
additional obligations on the part of PIATCO as regards the
said structures.
Finally, the Third Supplement provided for the obligations
of the Concessionaire as regards the construction of the
surface road connecting Terminals II and III.
Meanwhile, the MIAA which is charged with the
maintenance and operation of the NAIA Terminals I and II,
had existing concession contracts with various service
providers to offer international airline airport services, such
as in-flight catering, passenger handling, ramp and ground
support, aircraft maintenance and provisions, cargo
handling and warehousing, and other services, to several
international airlines at the NAIA. Some of these service
providers are the Miascor Group, DNATA-Wings Aviation
Systems Corp., and the MacroAsia Group. Miascor,
DNATA and MacroAsia, together with Philippine Airlines
(PAL), are the dominant players in the industry with an
aggregate market share of 70%.
On September 17, 2002, the workers of the international
airline service providers, claiming that they stand to lose
their employment upon the implementation of the
questioned agreements, filed before this Court a petition for
prohibition to enjoin the enforcement of said agreements. 2
On October 15, 2002, the service providers, joining the
cause of the petitioning workers, filed a motion for
intervention and a petition-in-intervention.
On October 24, 2002, Congressmen Salacnib Baterina,
Clavel Martinez and Constantino Jaraula filed a similar
petition with this Court. 3
On November 6, 2002, several employees of the MIAA
likewise filed a petition assailing the legality of the various
agreements. 4
On December 11, 2002. another group of Congressmen,
Hon. Jacinto V. Paras, Rafael P. Nantes, Eduardo C.
Zialcita, Willie B. Villarama, Prospero C. Nograles,
Prospero A. Pichay, Jr., Harlin Cast Abayon and Benasing
O. Macaranbon, moved to intervene in the case as
Respondents-Intervenors. They filed their Comment-In-
Intervention defending the validity of the assailed
agreements and praying for the dismissal of the petitions.
During the pendency of the case before this Court,
President Gloria Macapagal Arroyo, on November 29,
2002, in her speech at the 2002 Golden Shell Export
Awards at Malacaang Palace, stated that she will not
"honor (PIATCO) contracts which the Executive Branch's
legal offices have concluded (as) null and void." 5
Respondent PIATCO filed its Comments to the present
petitions on November 7 and 27, 2002. The Office of the
Solicitor General and the Office of the Government
Corporate Counsel filed their respective Comments in
behalf of the public respondents.
On December 10, 2002, the Court heard the case on oral
argument. After the oral argument, the Court then resolved
in open court to require the parties to file simultaneously
their respective Memoranda in amplification of the issues
heard in the oral arguments within 30 days and to explore
the possibility of arbitration or mediation as provided in the
challenged contracts. CSaITD
In their consolidated Memorandum, the Office of the
Solicitor General and the Office of the Government
 Page 63 of 458
Corporate Counsel prayed that the present petitions be
given due course and that judgment be rendered declaring
the 1997 Concession Agreement, the ARCA and the
Supplements thereto void for being contrary to the
Constitution, the BOT Law and its Implementing Rules and
Regulations.
On March 6, 2003, respondent PIATCO informed the Court
that on March 4, 2003 PIATCO commenced arbitration
proceedings before the International Chamber of
Commerce, International Court of Arbitration (ICC) by filing
a Request for Arbitration with the Secretariat of the ICC
against the Government of the Republic of the Philippines
acting through the DOTC and MIAA.
In the present cases, the Court is again faced with the task
of resolving complicated issues made difficult by their
intersecting legal and economic implications. The Court is
aware of the far reaching fall out effects of the ruling which
it makes today. For more than a century and whenever the
exigencies of the times demand it, this Court has never
shirked from its solemn duty to dispense justice and
resolve "actual controversies involving rights which are
legally demandable and enforceable, and to determine
whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction." 6 To be sure,
this Court will not begin to do otherwise today.
We shall first dispose of the procedural issues raised by
respondent PIATCO which they allege will bar the
resolution of the instant controversy.
Petitioners' Legal Standing to File
the present Petitions
a. G.R. Nos. 155001 and 155661
In G.R. No. 155001 individual petitioners are employees of
various service providers 7 having separate concession
contracts with MIAA and continuing service agreements
with various international airlines to provide in-flight
catering, passenger handling, ramp and ground support,
aircraft maintenance and provisions, cargo handling and
warehousing and other services. Also included as
petitioners are labor unions MIASCOR Workers Union-
National Labor Union and Philippine Airlines Employees
Association, These petitioners filed the instant action for
prohibition as taxpayers and as parties whose rights and
interests stand to be violated by the implementation of the
PIATCO Contracts.
Petitioners-Intervenors in the same case are all
corporations organized and existing under Philippine laws
engaged in the business of providing in-flight catering,
passenger handling, ramp and ground support, aircraft
maintenance and provisions, cargo handling and
warehousing and other services to several international
airlines at the Ninoy Aquino International Airport.
Petitioners-Intervenors allege that as tax-paying
international airline and airport-related service operators,
each one of them stands to be irreparably injured by the
implementation of the PIATCO Contracts. Each of the
petitioners-intervenors have separate and subsisting
concession agreements with MIAA and with various
international airlines which they allege are being interfered
with and violated by respondent PIATCO.
In G.R. No. 155661, petitioners constitute employees of
MIAA and Samahang Manggagawa sa Paliparan ng
Pilipinas a legitimate labor union and accredited as the
sole and exclusive bargaining agent of all the employees in
MIAA. Petitioners anchor their petition for prohibition on the
 Page 64 of 458
nullity of the contracts entered into by the Government and
PIATCO regarding the build-operate-and-transfer of the
NAIA IPT III. They filed the petition as taxpayers and
persons who have a legitimate interest to protect in the
implementation of the PIATCO Contracts.
Petitioners in both cases raise the argument that the
PIATCO Contracts contain stipulations which directly
contravene numerous provisions of the Constitution,
specific provisions of the BOT Law and its Implementing
Rules and Regulations, and public policy. Petitioners
contend that the DOTC and the MIAA, by entering into said
contracts, have committed grave abuse of discretion
amounting to lack or excess of jurisdiction which can be
remedied only by a writ of prohibition, there being no plain,
speedy or adequate remedy in the ordinary course of law.
In particular, petitioners assail the provisions in the 1997
Concession Agreement and the ARCA which grant
PIATCO the exclusive right to operate a commercial
international passenger terminal within the Island of Luzon,
except those international airports already existing at the
time of the execution of the agreement. The contracts
further provide that upon the commencement of operations
at the NAIA IPT III, the Government shall cause the closure
of Ninoy Aquino International Airport Passenger Terminals
I and II as international passenger terminals. With respect
to existing concession agreements between MIAA and
international airport service providers regarding certain
services or operations, the 1997 Concession Agreement
and the ARCA uniformly provide that such services or
operations will not be carried over to the NAIA IPT III and
PIATCO is under no obligation to permit such carry over
except through a separate agreement duly entered into
with PIATCO. 8
With respect to the petitioning service providers and their
employees, upon the commencement of operations of the
NAIA IPT III, they allege that they will be effectively barred
from providing international airline airport services at the
NAIA Terminals I and II as all international airlines and
passengers will be diverted to the NAIA IPT III. The
petitioning service providers will thus be compelled to
contract with PIATCO alone for such services, with no
assurance that subsisting contracts with MIAA and other
international airlines will be respected. Petitioning service
providers stress that despite the very competitive market,
the substantial capital investments required and the high
rate of fees, they entered into their respective contracts
with the MIAA with the understanding that the said
contracts will be in force for the stipulated period, and
thereafter, renewed so as to allow each of the petitioning
service providers to recoup their investments and obtain a
reasonable return thereon.
Petitioning employees of various service providers at the
NAIA Terminals I and II and of MIAA on the other hand
allege that with the closure of the NAIA Terminals I and II
as international passenger terminals under the PIATCO
Contracts, they stand to lose employment.
The question on legal standing is whether such parties
have "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 constitutional
questions." 9 Accordingly, it has been held that the interest
of a person assailing the constitutionality of a statute must
 Page 65 of 458
be direct and personal. He must be able, to show, not only
that the law or any government act is invalid, but also that
he sustained or is in imminent danger of sustaining some
direct injury as a result of its enforcement, and not merely
that he suffers thereby in some indefinite way. It must
appear that the person complaining has been or is about to
be denied some right or privilege to which he is lawfully
entitled or that he is about to be subjected to some burdens
or penalties by reason of the statute or act complained
of. 10
We hold that petitioners have the requisite standing. In the
abovementioned cases, petitioners have a direct and
substantial interest to protect by reason of the
implementation of the PIATCO Contracts. They stand to
lose their source of livelihood, a property right which is
zealously protected by the Constitution. Moreover,
subsisting concession agreements between MIAA and
petitioners-intervenors and service contracts between
international airlines and petitioners-intervenors stand to be
nullified or terminated by the operation of the NAIA IPT III
under the PIATCO Contracts. The financial prejudice
brought about by the PIATCO Contracts on petitioners and
petitioners-intervenors in these cases are legitimate
interests sufficient to confer on them the requisite standing
to file the instant petitions.
CSaITD
b. G.R. No. 155547
In G.R. No. 155547, petitioners filed the petition for
prohibition as members of the House of Representatives,
citizens and taxpayers. They allege that as members of the
House of Representatives, they are especially interested in
the PIATCO Contracts, because the contracts compel the
Government and/or the House of Representatives to
appropriate funds necessary to comply with the provisions
therein. 11 They cite provisions of the PIATCO Contracts
which require disbursement of unappropriated amounts in
compliance with the contractual obligations of the
Government. They allege that the Government obligations
in the PIATCO Contracts which compel government
expenditure without appropriation is a curtailment of their
prerogatives as legislators, contrary to the mandate of
the Constitution that "[n]o money shall be paid out of the
treasury except in pursuance of an appropriation made by
law." 12
Standing is a peculiar concept in constitutional law
because in some cases, suits are not brought by parties
who have been personally injured by the operation of a law
or any other government act but by concerned citizens,
taxpayers or voters who actually sue in the public interest.
Although we are not unmindful of the cases of Imus Electric
Co. v. Municipality of Imus 13 and Gonzales
v. Raquiza 14 wherein this Court held that appropriation
must be made only on amounts immediately
demandable,public interest demands that we take a more
liberal view in determining whether the petitioners suing as
legislators, taxpayers and citizens have locus standi to file
the instant petition. In Kilosbayan, Inc. v. Guingona, 15 this
Court held "[i]n line with the liberal policy of this Court
on locus standi, ordinary taxpayers, members of Congress,
and even association of planters, and non-profit civic
organizations were allowed to initiate and prosecute
actions before this Court to question the constitutionality or
validity of laws, acts, decisions, rulings, or orders of various
government agencies or instrumentalities," 16 Further,
"insofar as taxpayers' suits are concerned . . . (this Court)
is not devoid of discretion as to whether or not it should be
 Page 66 of 458
entertained." 17 As such ". . . even if, strictly speaking, they
[the petitioners] are not covered by the definition, it is still
within the wide discretion of the Court to waive the
requirement and so remove the impediment to its
addressing and resolving the serious constitutional
questions raised." 18 In view of the serious legal questions
involved and their impact on public interest, we resolve to
grant standing to the petitioners.
Other Procedural Matters
Respondent PIATCO further alleges that this Court is
without jurisdiction to review the instant cases as factual
issues are involved which this Court is ill-equipped to
resolve. Moreover, PIATCO alleges that submission of this
controversy to this Court at the first instance is a violation
of the rule on hierarchy of courts. They contend that trial
courts have concurrent jurisdiction with this Court with
respect to a special civil action for prohibition and hence,
following the rule on hierarchy of courts, resort must first be
had before the trial courts.
After a thorough study and careful evaluation of the issues
involved, this Court is of the view that the crux of the
instant controversy involves significant legal questions. The
facts necessary to resolve these legal questions are well
established and, hence, need not be determined by a trial
court.
The rule on hierarchy of courts will not also prevent this
Court from assuming jurisdiction over the cases at bar. The
said rule may be relaxed when the redress desired cannot
be obtained in the appropriate courts or where exceptional
and compelling circumstances justify availment of a
remedy within and calling for the exercise of this Court's
primary jurisdiction. 19
It is easy to discern that exceptional circumstances exist in
the cases at bar that call for the relaxation of the rule. Both
petitioners and respondents agree that these cases are
of transcendental importance as they involve the
construction and operation of the country's premier
international airport. Moreover, the crucial issues submitted
for resolution are of first impression and they entail the
proper legal interpretation of key provisions of the
Constitution, the BOT Law and its Implementing Rules and
Regulations. Thus, considering the nature of the
controversy before the Court, procedural bars may be
lowered to give way for the speedy disposition of the
instant cases.
Legal Effect of the Commencement
of Arbitration Proceedings by
PIATCO
There is one more procedural obstacle which must be
overcome. The Court is aware that arbitration proceedings
pursuant to Section 10.02 of the ARCA have been filed at
the instance of respondent PIATCO. Again, we hold that
the arbitration step taken by PIATCO will not oust this
Court of its jurisdiction over the cases at bar.
In Del Monte Corporation-USA v. Court of Appeals, 20 even
after finding that the arbitration clause in the Distributorship
Agreement in question is valid and the dispute between the
parties is arbitrable, this Court affirmed the trial court's
decision denying petitioner's Motion to Suspend
Proceedings pursuant to the arbitration clause under the
contract. In so ruling, this Court held that as contracts
produce legal effect between the parties, their assigns and
heirs, only the parties to the Distributorship Agreement are
bound by its terms, including the arbitration clause
 Page 67 of 458
stipulated therein. This Court ruled that arbitration
proceedings could be called for but only with respect to the
parties to the contract in question. Considering that there
are parties to the case who are neither parties to the
Distributorship Agreement nor heirs or assigns of the
parties thereto, this Court, citing its previous ruling in Salas,
Jr. v. Laperal Realty Corporation, 21 held that to tolerate
the splitting of proceedings by allowing arbitration as to
some of the parties on the one hand and trial for the others
on the other hand would, in effect, result in multiplicity of
suits, duplicitous procedure and unnecessary
delay. 22 Thus, we ruled that the interest of justice would
best be served if the trial court hears and adjudicates the
case in a single and complete proceeding.
It is established that petitioners in the present cases who
have presented legitimate interests in the resolution of the
controversy are not parties to the PIATCO Contracts.
Accordingly, they cannot be bound by the arbitration clause
provided for in the ARCA and hence, cannot be compelled
to submit to arbitration proceedings. A speedy and decisive
resolution of all the critical issues in the present
controversy, including those raised by petitioners, cannot
be made before an arbitral tribunal. The object of
arbitration is precisely to allow an expeditious
determination of a dispute. This objective would not be met
if this Court were to allow the parties to settle the cases by
arbitration as there are certain issues involving non-parties
to the PIATCO Contracts which the arbitral tribunal will not
be equipped to resolve.
Now, to the merits of the instant controversy.
I
Is PIATCO a qualified bidder?
Public respondents argue that the Paircargo Consortium,
PIATCO's predecessor, was not a duly pre-qualified bidder
on the unsolicited proposal submitted by AEDC as the
Paircargo Consortium failed to meet the financial capability
required under the BOT Law and the Bid Documents. They
allege that in computing the ability of the Paircargo
Consortium to meet the minimum equity requirements for
the project, the entire net worth of Security Bank, a
member of the consortium, should not be considered.
PIATCO relies, on the other hand, on the strength of the
Memorandum dated October 14, 1996 issued by the DOTC
Undersecretary Primitivo C. Cal stating that the Paircargo
Consortium is found to have a combined net worth of
P3,900,000,000.00, sufficient to meet the equity
requirements of the project. The said Memorandum was in
response to a letter from Mr. Antonio Henson of AEDC to
President Fidel V. Ramos questioning the financial
capability of the Paircargo Consortium on the ground that it
does not have the financial resources to put up the
required minimum equity of P2,700,000,000.00. This
contention is based on the restriction under R.A. No. 337,
as amended or the General Banking Act that a commercial
bank cannot invest in any single enterprise in an amount
more than 15% of its net worth. In the said Memorandum,
Undersecretary Cal opined:
The Bid Documents, as clarified through Bid
Bulletin Nos. 3 and 5, require that financial
capability will be evaluated based on total
financial capability of all the member companies
of the [Paircargo] Consortium. In this connection,
the Challenger was found to have a combined
net worth of P3,926,421,242.00 that could
 Page 68 of 458
support a project costing approximately P13
Billion.
CSaITD
It is not a requirement that the net worth must be
"unrestricted." To impose that as a requirement
now will be nothing less than unfair.
The financial statement or the net worth is not
the sole basis in establishing financial capability.
As stated in Bid Bulletin No. 3, financial
capability may also be established by testimonial
letters issued by reputable banks. The
Challenger has complied with this requirement.
To recap, net worth reflected in the Financial
Statement should not be taken as the amount of
the money to be used to answer the required
thirty percent (30%) equity of the challenger but
rather to be used in establishing if there is
enough basis to believe that the challenger can
comply with the required 30% equity. In fact,
proof of sufficient equity is required as one of the
conditions for award of contract (Section 12.1
IRR of the BOT Law) but not for pre-qualification
(Section 5.4 of the same document). 23
Under the BOT Law, in case of a build-operate-and-
transfer arrangement, the contract shall be awarded to the
bidder "who, having satisfied the minimum financial,
technical, organizational and legal standards" required by
the law, has submitted the lowest bid and most favorable
terms of the project, 24 Further, the 1994 Implementing
Rules and Regulations of the BOT Law provide:
Section 5.4 Pre-qualification Requirements.
xxx xxx xxx
c. Financial Capability: The project proponent
must have adequate capability to sustain the
financing requirements for the detailed
engineering design, construction and/or
operation and maintenance phases of the
project, as the case may be. For purposes of
pre-qualification, this capability shall be
measured in terms of (i) proof of the ability of the
project proponent and/or the consortium to
provide a minimum amount of equity to the
project, and (ii) a letter testimonial from reputable
banks attesting that the project proponent and/or
members of the consortium are banking with
them, that they are in good financial standing,
and that they have adequate resources. The
government agency/LGU concerned shall
determine on a project-to-project basis and
before pre-qualification, the minimum amount of
equity needed. (Italics supplied)
Pursuant to this provision, the PBAC issued PBAC Bulletin
No. 3 dated August 16, 1996 amending the financial
capability requirements for pre-qualification of the project
proponent as follows:
6. Basis of Pre-qualification
The basis for the pre-qualification shall be on
the compliance of the proponent to the
minimum technical and financial
requirements provided in the Bid Documents
and in the IRR of the BOT Law, R.A. No.
6957, as amended by R.A. 7718.
The minimum amount of equity to which the
proponent's financial capability will be based
shall be thirty percent (30%) of the project
 Page 69 of 458
cost instead of the twenty percent (20%)
specified in Section 3.6.4 of the Bid
Documents. This is to correlate with the
required debt-to-equity ratio of 70:30 in
Section 2.01a of the draft concession
agreement, The debt portion of the project
financing should not exceed 70% of the
actual project cost.
Accordingly, based on the above provisions of law, the
Paircargo Consortium or any challenger to the unsolicited
proposal of AEDC has to show that it possesses the
requisite financial capability to undertake the project in the
minimum amount of 30% of the project cost through (i)
proof of the ability to provide a minimum amount of equity
to the project, and (ii) a letter testimonial from reputable
banks attesting that the project proponent or members of
the consortium are banking with them, that they are in good
financial standing, and that they have adequate resources.
As the minimum project cost was estimated to be
US$350,000,000.00 or roughly P9,183,650,000.00, 25 the
Paircargo Consortium had to show to the satisfaction of the
PBAC that it had the ability to provide the minimum equity
for the project in the amount of at least P2,755,095,000.00.
Paircargo's Audited Financial Statements as of 1993 and
1994 indicated that it had a net worth of P2,783,592,00 and
P3,123,515,00 respectively. 26 PAGS' Audited Financial
Statements as of 1995 indicate that it has approximately
P26,735,700.00 to invest as its equity for the
project. 27 Security Bank's Audited Financial Statements as
of 1995 show that it has a net worth equivalent to its capital
funds in the amount of P3,523,504,377.00. 28
We agree with public respondents that with respect to
Security Bank, the entire amount of its net worth could not
be invested in a single undertaking or enterprise, whether
allied or non-allied in accordance with the provisions
of R.A. No. 337, as amended or the General Banking Act:
Sec. 21-B. The provisions in this or in any other
Act to the contrary notwithstanding, the Monetary
Board, whenever it shall deem appropriate and
necessary to further national development
objectives or support national priority
projects, may authorize a commercial bank, a
bank authorized to provide commercial banking
services, as well as a government-owned and
controlled bank, to operate under an expanded
commercial banking authority and by virtue
thereof exercise, in addition to powers
authorized for commercial banks, the powers of
an Investment House as provided in Presidential
Decree No. 129, invest in the equity of a non-
allied undertaking, or own a majority or all of the
equity in a financial intermediary other than a
commercial bank or a bank authorized to provide
commercial banking services; Provided, That (a)
the total investment in equities shall not exceed
fifty percent (50%) of the net worth of the
bank; (b) the equity investment in any one
enterprise whether allied or non-allied shall not
exceed fifteen percent (15%) of the net worth of
the bank; (c) the equity investment of the bank,
or of its wholly or majority-owned subsidiary, in a
single non-allied undertaking shall not exceed
thirty-five percent (35%) of the total equity in the
enterprise nor shall it exceed thirty-five percent
(35%) of the voting stock in that enterprise; and
(d) the equity investment in other banks shall be
deducted from the investing bank's net worth for
 Page 70 of 458
purposes of computing the prescribed ratio of net
worth to risk assets.
xxx xxx xxx
Further, the 1993 Manual of Regulations for Banks
provides:
SECTION X383. Other Limitations and
Restrictions. The following limitations and
restrictions shall also apply regarding equity
investments of banks.
a. In any single enterprise. The equity
investments of banks in any single enterprise
shall not exceed at any time fifteen percent
(15%) of the net worth of the 'investing bank as
defined in Sec. X106 and Subsec. X121.5. CSaITD
Thus, the maximum amount that Security Bank could
validly invest in the Paircargo Consortium is only
P528,525,656.55, representing 15% of its entire net worth.
The total net worth therefore of the Paircargo Consortium,
after considering the maximum amounts that may be
validly invested by each of its members is P558,384,871.55
or only 6.08% of the project cost, 29 an amount
substantially less than the prescribed minimum equity
investment required for the project in the amount of
P2,755,095,000.00 or 30% of the project cost.
The purpose of pre-qualification in any public bidding is to
determine, at the earliest opportunity, the ability of the
bidder to undertake the project. Thus, with respect to the
bidder's financial capacity at the pre-qualification stage, the
law requires the government agency to examine and
determine the ability of the bidder to fund the entire cost of
the project by considering the maximum amounts that each
bidder may invest in the project at the time of pre-
qualification.
The PBAC has determined that any prospective bidder, for
the construction, operation and maintenance of the NAIA
IPT III project should prove that it has the ability to provide
equity in the minimum amount of 30% of the project cost, in
accordance with the 70:30 debt-to-equity ratio prescribed in
the Bid Documents. Thus, in the case of Paircargo
Consortium, the PBAC should determine the maximum
amounts that each member of the consortium may commit
for the construction, operation and maintenance of the
NAIA IPT III project at the time of pre-qualification. With
respect to Security Bank, the maximum amount which may
be invested by it would only be 15% of its net worth in view
of the restrictions imposed by the General Banking Act.
Disregarding the investment ceilings provided by applicable
law would not result in a proper evaluation of whether or
not a bidder is pre-qualified to undertake the project as for
all intents and purposes, such ceiling or legal restriction
determines thetrue maximum amount which a bidder may
invest in the project.
Further, the determination of whether or not a bidder is pre-
qualified to undertake the project requires an evaluation of
the financial capacity of the said bidder at the time the bid
is submitted based on the required documents presented
by the bidder. The PBAC should not be allowed to
speculate on the future financial ability of the bidder to
undertake the project on the basis of documents submitted.
This would open doors to abuse and defeat the very
purpose of a public bidding. This is especially true in the
case at bar which involves the investment of billions of
 Page 71 of 458
pesos by the project proponent. The relevant government
authority is duty-bound to ensure that the awardee of the
contract possesses the minimum required financial
capability to complete the project. To allow the PBAC to
estimate the bidder's future financial capability would not
secure the viability and integrity of the project. A restrictive
and conservative application of the rules and procedures of
public bidding is necessary not only to protect the
impartiality and regularity of the proceedings but also to
ensure the financial and technical reliability of the project. It
has been held that:
The basic rule in public bidding is that bids
should be evaluated based on the required
documents submitted before and not after the
opening of bids. Otherwise, the foundation of a
fair and competitive public bidding would be
defeated. Strict observance of the rules,
regulations, and guidelines of the bidding
process is the only safeguard to a fair, honest
and competitive public bidding. 30
Thus, if the maximum amount of equity that a bidder may
invest in the project at the time the bids are submitted falls
short of the minimum amounts required to be put up by the
bidder, said bidder should be properly disqualified.
Considering that at the pre-qualification stage, the
maximum amounts which the Paircargo Consortium may
invest in the project fell short of the minimum amounts
prescribed by the PBAC, we hold that Paircargo
Consortium was not a qualified bidder. Thus the award of
the contract by the PBAC to the Paircargo Consortium, a
disqualified bidder, is null and void.
While it would be proper at this juncture to end the
resolution of the instant controversy, as the legal effects of
the disqualification of respondent PIATCO's predecessor
would come into play and necessarily result in the nullity of
all the subsequent contracts entered by it in pursuance of
the project, the Court feels that it is necessary to discuss in
full the pressing issues of the present controversy for a
complete resolution thereof.
II
Is the 1997 Concession Agreement valid?
Petitioners and public respondents contend that the 1997
Concession Agreement is invalid as it contains provisions
that substantially depart from the draft Concession
Agreement included in the Bid Documents. They maintain
that a substantial departure from the draft Concession
Agreement is a violation of public policy and renders the
1997 Concession Agreement null and void.
PIATCO maintains, however, that the Concession
Agreement attached to the Bid Documents is intended to
be a draft, i.e., subject to change, alteration or modification,
and that this intention was clear to all participants, including
AEDC, and DOTC/MIAA. It argued further that said
intention is expressed in Part C (6) of Bid Bulletin No. 3
issued by the PBAC which states:
6. Amendments to the Draft Concessions
Agreement
Amendments to the Draft Concessions
Agreement shall be issued from time to
time. Said amendments shall only cover
items that would not materially affect the
preparation of the proponent's proposal.
 Page 72 of 458
By its very nature, public bidding aims to protect the public
interest by giving the public the best possible advantages
through open competition. Thus:
Competition must be legitimate, fair and honest.
In the field of government contract law,
competition requires, not only bidding upon a
common standard, a common basis, upon the
same thing, the same subject matter, the same
undertaking,' but also that it be legitimate, fair
and honest; and not designed to injure or
defraud the government. 31
An essential element of a publicly bidded contract is that all
bidders must be on equal footing. Not simply in terms of
application of the procedural rules and regulations imposed
by the relevant government agency, but more importantly,
on the contract bidded upon. Each bidder must be able to
bid on the same thing. The rationale is obvious. If the
winning bidder is allowed to later include or modify certain
provisions in the contract awarded such that the contract is
altered in any material respect, then the essence of fair
competition in the public bidding is destroyed. A public
bidding would indeed be a farce if after the contract is
awarded, the winning bidder may modify the contract and
include provisions which are favorable to it that were not
previously made available to the other bidders. Thus:
It is inherent in public biddings that there shall be
a fair competition among the bidders. The
specifications in such biddings provide the
common ground or basis for the bidders. The
specifications should, accordingly, operate
equally or indiscriminately upon all bidders. 32
The same rule was restated by Chief Justice Stuart of the
Supreme Court of Minnesota:
The law is well settled that where, as in this
case, municipal authorities can only let a
contract for public work to the lowest responsible
bidder, the proposals and specifications
therefore must be so framed as to permit free
and full competition. Nor can they enter into a
contract with the best bidder containing
substantial provisions beneficial to him, not
included or contemplated in the terms and
specifications upon which the bids were
invited. 33
In fact, in the PBAC Bid Bulletin No. 3 cited by PIATCO to
support its argument that the draft concession agreement
is subject to amendment, the pertinent portion of which was
quoted above, the PBAC also clarified that "[s]aid
amendments shall only cover items that would not
materially affect the preparation of the proponent's
proposal."
While we concede that a winning bidder is not precluded
from modifying or amending certain provisions of the
contract bidded upon, such changes must not constitute
substantial or material amendments that would alter the
basic parameters of the contract and would constitute a
denial to the other bidders of the opportunity to bid on the
same terms. Hence, the determination of whether or not a
modification or amendment of a contract bidded out
constitutes a substantial amendment rests on whether the
contract, when taken as a whole, would contain
substantially different terms and conditions that would have
the effect of altering the technical and/or financial
proposals previously submitted by other bidders. The
alterations and modifications in the contract executed
between the government and the winning bidder must be

such as to render such executed contract to be an entirely
different contract from the one that was bidded upon.
In the case of Caltex (Philippines), Inc. v. Delgado
Brothers, Inc., 34 this Court quoted with approval the ruling
of the trial court that an amendment to a contract awarded
through public bidding, when such subsequent amendment
was made without a new public bidding, is null and void:
The Court agrees with the contention of counsel
for the plaintiffs that the due execution of a
contract after public bidding is a limitation upon
the right of the contracting parties to alter or
amend it without another public bidding, for
otherwise what would a public bidding be good
for if after the execution of a contract after public
bidding, the contracting parties may alter or
amend the contract, or even cancel it, at their
will? Public biddings are held for the protection of
the public, and to give the public the best
possible advantages by means of open
competition between the bidders. He who bids or
offers the best terms is awarded the contract
subject of the bid, and it is obvious that such
protection and best possible advantages to the
public will disappear if the parties to a contract
executed after public bidding may alter or amend
it without another previous public bidding. 35
Hence, the question that comes to fore is this: is the 1997
Concession Agreement the same agreement that was
offered for public bidding, i.e., the draft Concession
Agreement attached to the Bid Documents? A close
comparison of the draft Concession Agreement attached to
the Bid Documents and the 1997 Concession Agreement
reveals that the documents differ in at least two material
respects:
Page 73 of 458
a. Modification on the Public
CSaITD Utility Revenues and Non-Public
Utility Revenues that may be
collected by PIATCO
The fees that may be, imposed and collected by PIATCO
under the draft Concession Agreement and the 1997
Concession Agreement may be classified into three distinct
categories: (1) fees which are subject to periodic
adjustment of once every two years in accordance with a
prescribed parametric formula and adjustments are made
effective only upon written approval by MIAA; (2) fees other
than those included in the first category which may be
adjusted by PIATCO whenever it deems necessary without
need for consent of DOTC/MIAA; and (3) new fees and
charges that may be imposed by PIATCO which have not
been previously imposed or collected at the Ninoy Aquino
International Airport Passenger Terminal I, pursuant
to Administrative Order No. 1, Series of 1993, as amended.
The glaring distinctions between the draft Concession
Agreement and the 1997 Concession Agreement lie in the
types of fees included in each category and the extent of
the supervision and regulation which MIAA is allowed to
exercise in relation thereto.
For fees under the first category, i.e., those which are
subject to periodic adjustment in accordance with a
prescribed parametric formula and effective only upon
written approval by MIAA, the draft Concession
Agreement includes the following: 36
(1) aircraft parking fees;
(2) aircraft tacking fees;
 Page 74 of 458
(3) groundhandling fees;
(4) rentals and airline offices;
(5) check-in counter rentals; and
(6) porterage fees.
Under the 1997 Concession Agreement, fees which are
subject to adjustment and effective upon MIAA approval
are classified as "Public Utility Revenues" and include: 37
(1) aircraft parking fees;
(2) aircraft tacking fees;
(3) check-in counter fees; and
(4) Terminal Fees.
The implication of the reduced number of fees that are
subject to MIAA approval is best appreciated in relation to
fees included in the second category identified above.
Under the 1997 Concession Agreement, fees which
PIATCO may adjust whenever it deems necessary without
need for consent of DOTC/MIAA are "Non-Public Utility
Revenues" and is defined as "all other income not
classified as Public Utility Revenues derived from
operations of the Terminal and the Terminal
Complex." 38 Thus, under the 1997 Concession
Agreement, groundhandling fees, rentals from airline
offices and porterage fees are no longer subject to MIAA
regulation.
Further, under Section 6.03 of the draft Concession
Agreement; MIAA reserves the right to regulate (1) lobby
and vehicular parking fees and (2) other new fees and
charges that may be imposed by PIATCO. Such regulation
may be made by periodic adjustment and is effective only
upon written approval of MIAA. The full text of said
provision is quoted below:
Section 6.03. Periodic Adjustment in Fees and
Charges. Adjustments in the aircraft parking
fees, aircraft tacking fees, groundhandling fees,
rentals and airline offices, check-in-counter
rentals and porterage fees shall be allowed only
once every two years and in accordance with the
Parametric Formula attached hereto as Annex F.
Provided that adjustments shall be made
effective only after the written express approval
of the MIAA. Provided, further, that such
approval of the MIAA, shall be contingent only on
the conformity of the adjustments with the above
said parametric formula. The first adjustment
shall be made prior to the In-Service Date of the
Terminal.
The MIAA reserves the right to regulate under
the foregoing terms and conditions the lobby and
vehicular parking fees and other new fees and
charges as contemplated in paragraph 2 of
Section 6.01 if in its judgment the users of the
airport shall be deprived of a free option for the
services they cover. 39
On the other hand, the equivalent provision under the 1997
Concession Agreement reads:
Section 6.03 Periodic Adjustment in Fees, and Charges.
xxx xxx xxx
(c) Concessionaire shall at all times be judicious
in fixing fees and charges constituting Non-
Public Utility Revenues in order to ensure that
End Users are not unreasonably deprived of
services. While the vehicular parking fee,
 Page 75 of 458
porterage fee and greeter/well wisher fee
constitute Non-Public Utility Revenues of
Concessionaire, GRP may intervene and require
Concessionaire to explain and justify the fee it
may set from time to time, if in the reasonable
opinion of GRP the said fees have become
exorbitant resulting in the unreasonable
deprivation of End Users of such services. 40
Thus, under the 1997 Concession Agreement, with respect
to (1) vehicular parking fee, (2) porterage fee and (3)
greeter/well wisher fee, all that MIAA can do is to require
PIATCO to explain and justify the fees set by PIATCO. In
the draft Concession Agreement, vehicular parking fee is
subject to MIAA regulation and approval under the second
paragraph of Section 6.03 thereof while porterage fee is
covered by the first paragraph of the same provision. There
is an obvious relaxation of the extent of control and
regulation by MIAA with respect to the particular fees that
may be charged by PIATCO. CSaITD
Moreover, with respect to the third category of fees that
may be imposed and collected by PIATCO, i.e., new fees
and charges that may be imposed by PIATCO which have
not been previously imposed or collected at the Ninoy
Aquino International Airport Passenger Terminal I, under
Section 6.03 of the draft Concession AgreementMIAA has
reserved the right to regulate the same under the same
conditions that MIAA may regulate fees under the first
category, i.e., periodic adjustment of once every two years
in accordance with a prescribed parametric formula and
effective only upon written approval by MIAA. However,
under the 1997 Concession Agreement, adjustment of fees
under the third category is not subject to MIAA regulation.
With respect to terminal fees that may be charged by
PIATCO, 41 as shown earlier, this was included within the
category of "Public Utility Revenues" under the 1997
Concession Agreement. This classification is significant
because under the 1997 Concession Agreement, "Public
Utility Revenues" are subject to an "Interim Adjustment" of
fees upon the occurrence of certain extraordinary events
specified in the agreement. 42 However, under the draft
Concession Agreement, terminal fees are not included in
the types of fees that may be subject to "Interim
Adjustment." 43
Finally, under the 1997 Concession Agreement, "Public
Utility Revenues," except terminal fees, are denominated in
US Dollars 44 while payments to the Government are in
Philippine Pesos. In the draft Concession Agreement, no
such stipulation was included. By stipulating that "Public
Utility Revenues" will be paid to PIATCO in US Dollars
while payments by PIATCO to the Government are in
Philippine currency under the 1997 Concession
Agreement, PIATCO is able to enjoy the benefits of
depreciations of the Philippine Peso, while being effectively
insulated from the detrimental effects of exchange rate
fluctuations.
When taken as a whole, the changes under the 1997
Concession Agreement with respect to reduction in the
types of fees that are subject to MIAA regulation and the
relaxation of such regulation with respect to other fees are
significant amendments that substantially distinguish the
draft Concession Agreement from the 1997 Concession
Agreement. The 1997 Concession Agreement, in this
respect, clearly gives PIATCO more favorable terms than
what was available to other bidders at the time the contract
was bidded out. It is not very difficult to see that the
 Page 76 of 458
changes in the 1997 Concession Agreement translate
to direct and concrete financial advantages for
PIATCO which were not available at the time the contract
was offered for bidding. It cannot be denied that under the
1997 Concession Agreement only "Public Utility Revenues"
are subject to MIAA regulation. Adjustments of all other
fees imposed and collected by PIATCO are entirely within
its control. Moreover, with respect to terminal fees, under
the 1997 Concession Agreement, the same is further
subject to "Interim Adjustments" not previously stipulated in
the draft Concession Agreement. Finally, the change in the
currency stipulated for "Public Utility Revenues" under the
1997 Concession Agreement, except terminal fees, gives
PIATCO an added benefit which was not available at the
time of bidding. aSTAIH
b. Assumption by
the Government
of the liabilities of
PIATCO in the
event
of the latter's default
thereof
Under the draft Concession Agreement, default by PIATCO
of any of its obligations to creditors who have provided,
loaned or advanced funds for the NAIA IPT III project does
not result in the assumption by the Government of these
liabilities. In fact, nowhere in the said contract does default
of PIATCO's loans figure in the agreement. Such default
does not directly result in any concomitant right or
obligation in favor of the Government.
However, the 1997 Concession Agreement provides:
Section 4.04 Assignment.
xxx xxx xxx
(b) In the event Concessionaire should default in
the payment of an Attendant Liability, and the
default has resulted in the acceleration of the
payment due date of the Attendant Liability prior
to its stated date of maturity, the Unpaid
Creditors and Concessionaire shall immediately
inform GRP in writing of such default. GRP shall,
within one hundred eighty (180) Days from
receipt of the joint written notice of the Unpaid
Creditors and Concessionaire, either (i) take
over the Development Facility and assume the
Attendant Liabilities, or (ii) allow the Unpaid
Creditors, if qualified, to be substituted as
concessionaire and operator of the Development
Facility in accordance with the terms and
conditions hereof, or designate a qualified
operator acceptable to GRP to operate the
Development Facility, likewise under the terms
and conditions of this Agreement; Provided that
if at the end of the 180-day period GRP shall not
have served the Unpaid Creditors and
Concessionaire written notice of its choice, GRP
shall be deemed to have elected to take over the
Development Facility with the concomitant
assumption of Attendant Liabilities.
(c) If GRP should, by written notice, allow the
Unpaid Creditors to be substituted as
concessionaire, the latter shall form and
organize a concession company qualified to take
over the operation of the Development Facility. If
the concession company should elect to
designate an operator for the Development
Facility, the concession company shall in good
faith identify and designate a qualified operator
acceptable to GRP within one hundred eighty
 Page 77 of 458
(180) days from receipt of GRP's written notice.
If the concession company, acting in good faith
and with due diligence, is unable to designate a
qualified operator within the aforesaid period,
then GRP shall at the end of the 180-day period
take over the Development Facility and assume
Attendant Liabilities.
The term "Attendant Liabilities" under the 1997 Concession
Agreement is defined as:
Attendant Liabilities refer to all amounts recorded
and from time to time outstanding in the books of
the Concessionaire as owing to Unpaid Creditors
who have provided, loaned or advanced funds
actually used for the Project, including all
interests, penalties, associated fees, charges,
surcharges, indemnities, reimbursements and
other related expenses, and further including
amounts owed by Concessionaire to its
suppliers, contractors and sub-contractors.
Under the above quoted portions of Section 4.04 in relation
to the definition of "Attendant Liabilities," default by
PIATCO of its loans used to finance the NAIA IPT III
project triggers the occurrence of certain events that leads
to the assumption by the Government of the liability for the
loans. Only in one instance may the Government escape
the assumption of PIATCO's liabilities, i.e., when the
Government so elects and allows a qualified operator to
take over as Concessionaire. However, this circumstance
is dependent on the existence and availability of a qualified
operator who is willing to take over the rights and
obligations of PIATCO under the contract, a circumstance
that is not entirely within the control of the Government.
Without going into the validity of this provision at this
juncture, suffice it to state that Section 4.04 of the 1997
Concession Agreement may be considered a form of
security for the loans PIATCO has obtained to finance the
project, an option that was not made available in the draft
Concession Agreement. Section 4.04 is an important
amendment to the 1997 Concession Agreement because it
grants PIATCO a financial advantage or benefit which was
not previously made available during the bidding process.
This financial advantage is a significant modification that
translates to better terms and conditions for PIATCO.
PIATCO, however, argues that the parties to the bidding
procedure acknowledge that the draft Concession
Agreement is subject to amendment because the Bid
Documents permit financing or borrowing. They claim that
it was the lenders who proposed the amendments to the
draft Concession Agreement which resulted in the 1997
Concession Agreement.
We agree that it is not inconsistent with the rationale and
purpose of the BOT Law to allow the project proponent or
the winning bidder to obtain financing for the project,
especially in this case which involves the construction,
operation and maintenance of the NAIA IPT III. Expectedly,
compliance by the project proponent of its undertakings
therein would involve a substantial amount of investment. It
is therefore inevitable for the awardee of the contract to
seek alternate sources of funds to support the project. Be
that as it may, this Court maintains that amendments to the
contract bidded upon should always conform to the general
policy on public bidding if such procedure is to be faithful to
its real nature and purpose. By its very nature and
characteristic, competitive public bidding aims to protect
the public interest by giving the public the best possible
 Page 78 of 458
advantages through open competition. 45 It has been held
that the three principles in public bidding are (1) the offer to
the public; (2) opportunity for competition; and (3) a basis
for the exact comparison of bids. A regulation of the matter
which excludes any of these factors destroys the distinctive
character of the system and thwarts the purpose of its
adoption. 46 These are the basic parameters which every
awardee of a contract bidded out must conform to,
requirements of financing and borrowing notwithstanding.
Thus, upon a concrete showing that, as in this case, the
contract signed by the government and the contract
awardee is an entirely different contract from the contract
bidded, courts should not hesitate to strike down said
contract in its entirety for violation of public policy on public
bidding. A strict adherence on the principles, rules and
regulations on public bidding must be sustained if only to
preserve the integrity and the faith of the general public on
the procedure.
Public bidding is a standard practice for procuring
government contracts for public service and for furnishing
supplies and other materials. It aims to secure for the
government the lowest possible price under the most
favorable terms and conditions, to curtail favoritism in the
award of government contracts and avoid suspicion of
anomalies and it places all bidders in equal footing. 47 Any
government action which permits any substantial variance
between the conditions under which the bids are invited
and the contract executed after the award thereof is a
grave abuse of discretion amounting to lack or excess of
jurisdiction which warrants proper judicial action.
In view of the above discussion, the fact that the foregoing
substantial amendments were made on the 1997
Concession Agreement renders the same null and void for
being contrary to public policy. These amendments convert
the 1997 Concession Agreement to an entirely different
agreement from the contract bidded out or the draft
Concession Agreement. It is not difficult to see that the
amendments on (1) the types of fees or charges that are
subject to MIAA regulation or control and the extent thereof
and (2) the assumption by the Government, under certain
conditions, of the liabilities of PIATCO directly translates
concrete financial advantages to PIATCO that were
previously not available during the bidding process. These
amendments cannot be taken as merely supplements to or
implementing provisions of those already existing in the
draft Concession Agreement. The amendments discussed
above present new terms and conditions which provide
financial benefit to PIATCO which may have altered the
technical and financial parameters of other bidders had
they known that such terms were available.
III
Direct Government Guarantee
Article IV, Section 4.04(b) and (c), in relation to Article 1.06,
of the 1997 Concession Agreement provides:
Section 4.04 Assignment
xxx xxx xxx
(b) In the event Concessionaire should default in
the payment of an Attendant Liability, and the
default resulted in the acceleration of the
payment due date of the Attendant Liability prior
to its stated date of maturity, the Unpaid
Creditors and Concessionaire shall immediately
inform GRP in writing of such default. GRP shall
within one hundred eighty (180) days from
receipt of the joint written notice of the Unpaid
 Page 79 of 458
Creditors and Concessionaire, either (i) take
over the Development Facility andassume the
Attendant Liabilities, or (ii) allow the Unpaid
Creditors, if qualified to be substituted as
concessionaire and operator of the Development
facility in accordance with the terms and
conditions hereof, or designate a qualified
operator acceptable to GRP to operate the
Development Facility, likewise under the terms
and conditions of this Agreement; Provided, that
if at the end of the 180-day period GRP shall not
have served the Unpaid Creditors and
Concessionaire written notice of its choice, GRP
shall be deemed to have elected to take over the
Development Facility with the concomitant
assumption of Attendant Liabilities.
(c) If GRP, by written notice, allow the Unpaid
Creditors to be substituted as concessionaire,
the latter shall form and organize a concession
company qualified to takeover the operation of
the Development Facility. If the concession
company should elect to designate an operator
for the Development Facility, the concession
company shall in good faith identify and
designate a qualified operator acceptable to
GRP within one hundred eighty (180) days from
receipt of GRP's written notice. If the concession
company, acting in good faith and with due
diligence, is unable to designate a qualified
operator within the aforesaid period, then
GRP shall at the end of the 180-day period take
over the Development Facility and assume
Attendant Liabilities.
xxx xxx xxx
Section 1.06. Attendant Liabilities
Attendant Liabilities refer to all amounts recorded
and from time to time outstanding in the books of
the Concessionaire as owing to Unpaid
Creditors who have provided, loaned or
advanced funds actually used for the
Project, including all interests, penalties,
associated fees, charges, surcharges,
indemnities, reimbursements and other related
expenses, and further including amounts owed
by Concessionaire to its suppliers, contractors
and subcontractors. 48
It is clear from the above-quoted provisions
that Government, in the event that PIATCO defaults in its
loan obligations, is obligated to pay "all amounts recorded
and from time to time outstanding from the books" of
PIATCO which the latter owes to its creditors. 49 These
amounts include "all interests, penalties, associated fees,
charges, surcharges, indemnities, reimbursements and
other related expenses." 50 This obligation of the
Government to pay PIATCO's creditors upon PIATCO's
default would arise if the Government opts to take over
NAIA IPT III. It should be noted, however, that even if the
Government chooses the second option, which is to allow
PIATCO's unpaid creditors operate NAIA IPT III, the
Government is still at a risk of being liable to PIATCO's
creditors should the latter be unable to designate a
qualified operator within the prescribed period. 51 In
effect, whatever option the Government chooses to take in
the event of PIATCO's failure to fulfill its loan obligations,
the Government is still at a risk of assuming PIATCO's
outstanding loans. This is due to the fact that the
Government would only be free from assuming PIATCO's
debts if the unpaid creditors would be able to designate a
qualified operator within the period provided for in the
 Page 80 of 458
contract. Thus, the Government's assumption of liability is
virtually out of its control. The Government under the
circumstances provided for in the 1997 Concession
Agreement is at the mercy of the existence, availability and
willingness of a qualified operator. The above contractual
provisions constitute a direct government guarantee which
is prohibited by law.
One of the main impetus for the enactment of the BOT
Law is the lack of government funds to construct the
infrastructure and development projects necessary for
economic growth and development. This is why private
sector resources are being tapped in order to finance these
projects. The BOT law allows the private sector to
participate, and is in fact encouraged to do so by way of
incentives, such as minimizing, the unstable flow of
returns, 52 provided that the government would not have to
unnecessarily expend scarcely available funds for the
project itself. As such, direct guarantee, subsidy and equity
by the government in these projects are strictly
prohibited. 53 This is but logical for if the government would
in the end still be at a risk of paying the debts incurred by
the private entity in the BOT projects, then the purpose of
the law is subverted.
Section 2(n) of the BOT Law defines direct guarantee as
follows:
(n) Direct government guarantee An
agreement whereby the government or any of its
agencies or local government units assume
responsibility for therepayment of debt directly
incurred by the project proponent in
implementing the project in case of a loan
default.
Clearly by providing that the Government "assumes" the
attendant liabilities, which consists of PIATCO's unpaid
debts, the 1997 Concession Agreement provided for a
direct government guarantee for the debts incurred by
PIATCO in the implementation of the NAIA IPT III project. It
is of no moment that the relevant sections are subsumed
under the title of "assignment". The provisions providing for
direct government guarantee which is prohibited by law is
clear from the terms thereof.
The fact that the ARCA superseded the 1997 Concession
Agreement did not cure this fatal defect. Article IV, Section
4.04(c), in relation to Article 1, Section 1.06, of the ARCA
provides:
Section 4.04 Security
xxx xxx xxx
(c) GRP agrees with Concessionaire (PIATCO)
that it shall negotiate in good faith and enter into
direct agreement with the Senior Lenders, or
with an agent of such Senior Lenders (which
agreement shall be subject to the approval of the
Bangko Sentral ng Pilipinas), in such form as
may be reasonably acceptable to both GRP and
Senior Lenders, with regard, inter alia, to the
following parameters:
xxx xxx xxx
(iv) If the Concessionaire [PIATCO] is in default
under a payment obligation owed to the Senior
Lenders, and as a result thereof the Senior
Lenders have become entitled to accelerate the
Senior Loans, the Senior Lenders shall have the
 Page 81 of 458
right to notify GRP of the same, and without
prejudice to any other rights of the Senior
Lenders or any Senior Lenders' agent may have
(including without limitation under security
interests granted in favor of the Senior Lenders),
to either in good faith identify and designate a
nominee which is qualified under sub-clause
(viii)(y) below to operate the Development
Facility [NAIA Terminal 3] or transfer the
Concessionaire's [PIATCO] rights and
obligations under this Agreement to a transferee
which is qualified under sub-clause (viii) below;
xxx xxx xxx
(vi) if the Senior Lenders, acting in good faith
and using reasonable efforts, are unable to
designate a nominee or effect a transfer in terms
and conditions satisfactory to the Senior Lenders
within one hundred eighty (180) days after giving
GRP notice as referred to respectively in (iv) or
(v) above, then GRP and the Senior Lenders
shall endeavor in good faith to enter into any
other arrangement relating to the Development
Facility [NAIA Terminal 3] (other than a turnover
of the Development Facility [NAIA Terminal 3] to
GRP) within the following one hundred eighty
(180) days. If no agreement relating to the
Development Facility [NAIA Terminal 3] is
arrived at by GRP and the Senior Lenders within
the said 180-day period, then at the end thereof
the Development Facility [NAIA Terminal 3] shall
be transferred by the Concessionaire [PIATCO]
to GRP or its designee and GRP shall make a
termination payment to Concessionaire
[PIATCO] equal to the Appraised Value (as
hereinafter defined) of the Development Facility
[NAIA Terminal 3] or the sum of the Attendant
Liabilities, if greater. Notwithstanding Section
8.01 (c) hereof, this Agreement shall be deemed
terminated upon the transfer of the Development
Facility [NAIA Terminal 3] to GRP pursuant
hereto;
xxx xxx xxx
Section 1.06. Attendant Liabilities
Attendant Liabilities refer to all amounts in each
case supported by verifiable evidence from time
to time owed or which may become owing by
Concessionaire [PIATCO] to Senior Lenders or
any other persons or entities who have provided,
loaned, or advanced funds or provided financial
facilities to Concessionaire [PIATCO]for the
Project [NAIA Terminal 3], including, without
limitation, all principal, interest, associated fees,
charges, reimbursements, and other related
expenses (including the fees, charges and
expenses of any agents or trustees of such
persons or entities), whether payable at maturity,
by acceleration or otherwise, and further
including amounts owed by Concessionaire
[PIATCO] to its professional consultants and
advisers, suppliers, contractors and sub-
contractors. 54
It is clear from the foregoing contractual provisions that in
the event that PIATCO fails to fulfill its loan obligations to
its Senior Lenders, the Government is obligated to directly
negotiate and enter into an agreement relating to NAIA IPT
III with the Senior Lenders, should the latter fail to appoint
a qualified nominee or transferee who will take the place of
PIATCO. If the Senior Lenders and the Government are
unable to enter into an agreement after the prescribed
period, the Government must then pay PIATCO, upon
 Page 82 of 458
transfer of NAIA IPT III to the Government, termination
payment equal to the appraised value of the project or the
value of the attendant liabilities whichever is greater.
Attendant liabilities as defined in the ARCA includes all
amounts owed or thereafter may be owed by PIATCO not
only to the Senior Lenders with whom PIATCO has
defaulted in its loan obligations but to all other persons who
may have loaned, advanced funds or provided any other
type of financial facilities to PIATCO for NAIA IPT III. The
amount of PIATCO's debt that the Government would have
to pay as a result of PIATCO's default in its loan obligations
in case no qualified nominee or transferee is appointed
by the Senior Lenders and no other agreement relating to
NAIA IPT III has been reached between the Government
and the Senior Lenders includes, but is not limited to,
"all principal, interest, associated fees, charges,
reimbursements, and other related expenses . . . whether
payable at maturity, by acceleration or otherwise." 55
It is clear from the foregoing that the ARCA provides for a
direct guarantee by the government to pay PIATCO's loans
not only to its Senior Lenders but all other entities who
provided PIATCO funds or services upon PIATCO's default
in its loan obligation with its Senior Lenders. The fact that
the Government's obligation to pay PIATCO's lenders for
the latter's obligation would only arise after the Senior
Lenders fail to appoint a qualified nominee or transferee
does not detract from the fact that, should the conditions as
stated in the contract occur, the ARCA still obligates the
Government to pay any and all amounts owed by PIATCO
to its lenders in connection with NAIA IPT III. Worse, the
conditions that would make the Government liable for
PIATCO's debts is triggered by PIATCO's own default of its
loan obligations to its Senior Lenders to which loan
contracts the Government was never a party to. The
Government was not even given an option as to what
course of action it should take in case PIATCO defaulted in
the payment of its senior loans. The Government, upon
PIATCO's default, would be merely notified by the Senior
Lenders of the same and it is the Senior Lenders who are
authorized to appoint a qualified nominee or transferee.
Should the Senior Lenders fail to make such an
appointment, the Government is then automatically
obligated to "directly deal and negotiate" with the Senior
Lenders regarding NAIA IPT III. The only way the
Government would not be liable for PIATCO's debt is for a
qualified nominee or transferee to be appointed in place of
PIATCO to continue the construction, operation and
maintenance of NAIA IPT III. This "pre-condition", however,
will not take the contract out of the ambit of a direct
guarantee by the government as the existence, availability
and willingness of a qualified nominee or transferee is
totally out of the government's control. As such the
Government is virtually at the mercy of PIATCO (that it
would not default on its loan obligations to its Senior
Lenders), the Senior Lenders (that they would appoint a
qualified nominee or transferee or agree to some other
arrangement with the Government) and the existence of a
qualified nominee or transferee who is able and willing to
take the place of PIATCO in NAIA IPT III.
The proscription against government guarantee in any form
is one of the policy considerations behind the BOT Law.
Clearly, in the present case, the ARCA obligates the
Government to pay for all loans, advances and obligations
arising out of financial facilities extended to PIATCO for the
implementation of the NAIA IPT III project should PIATCO
default in its loan obligations to its Senior Lenders and the
 Page 83 of 458

latter fails to appoint a qualified nominee or transferee. This
in effect would make the Government liable for PIATCO's
loans should the conditions as set forth in the ARCA arise.
This is a form of direct government guarantee.
The BOT Law and its implementing rules provide that in
order for an unsolicited proposal for a BOT project may be
accepted, the following conditions must first be met: (1) the
project involves a new concept in technology and/or is not
part of the list of priority projects, (2) no direct government
guarantee, subsidy or equity is required, and (3) the
government agency or local government unit has invited by
publication other interested parties to a public bidding and
conducted the same. 56 The failure to meet any of the
above conditions will result in the denial of the proposal. It
is further provided that the presence of direct government
guarantee, subsidy or equity will "necessarily, disqualify a
proposal from being treated and accepted as an unsolicited
proposal." 57 The BOT Law clearly and strictly prohibits
direct government guarantee, subsidy and equity in
unsolicited proposals that the mere inclusion of a provision
to that effect is fatal and is sufficient to deny the proposal. It
stands to reason therefore that if a proposal can be denied
by reason of the existence of direct government guarantee,
then its inclusion in the contract executed after the said
proposal has been accepted is likewise sufficient to
invalidate the contract itself. A prohibited provision, the
inclusion of which would result in the denial of a proposal
cannot, and should not, be allowed to later on be inserted
in the contract resulting from the said proposal. The basic
rules of justice and fair play alone militate against such an
occurrence and must not, therefore, be countenanced
particularly in this instance where the government is
exposed to the risk of shouldering hundreds of million of
dollars in debt.
This Court has long and consistently adhered to the legal
maxim that those that cannot be done directly cannot be
done indirectly. 58 To declare the PIATCO contracts valid
despite the clear statutory prohibition against a direct
government guarantee would not only make a mockery of
what the BOT Law seeks to prevent which is to expose
the government to the risk of incurring a monetary
obligation resulting from a contract of loan between the
project proponent and its lenders and to which the
Government is not a party to but would also render the
BOT Law useless for what it seeks to achieve to make
use of the resources of the private sector in the "financing,
operation and maintenance of infrastructure and
development projects" 59 which are necessary for national
growth and development but which the government,
unfortunately, could ill-afford to finance at this point in time.
IV
Temporary takeover of business affected with public
interest
Article XII, Section 17 of the 1987 Constitution provides:
Section 17. In times of national emergency,
when the public interest so requires, the State
may, during the emergency and under
reasonable terms prescribed by it, temporarily
take over or direct the operation of any privately
owned public utility or business affected with
public interest.
 Page 84 of 458
The above provision pertains to the right of the State in
times of national emergency, and in the exercise of its
police power, to temporarily take over the operation of any
business affected with public interest. In the 1986
Constitutional Commission, the term "national emergency"
was defined to include threat from external aggression,
calamities or national disasters, but not strikes "unless it is
of such proportion that would paralyze government
service." 60 The duration of the emergency itself is the
determining factor as to how long the temporary takeover
by the government would last. 61 The temporary takeover
by the government extends only to the operation of the
business and not to the ownership thereof. As such
the government is not required to compensate the private
entity-owner of the said business as there is no transfer of
ownership, whether permanent or temporary. The private
entity-owner affected by the temporary takeover cannot,
likewise, claim just compensation for the use of the said
business and its properties as the temporary takeover by
the government is in exercise of its police power and not of
its power of eminent domain.
Article V, Section 5.10 (c) of the 1997 Concession
Agreement provides:
Section 5.10 Temporary Take-over of operations
by GRP.
xxx xxx xxx
(c) In the event the development Facility or any
part thereof and/or the operations of
Concessionaire or any part thereof, become the
subject matter of or be included in any notice,
notification, or declaration concerning or relating
to acquisition, seizure or appropriation by GRP in
times of war or national emergency, GRP shall,
by written notice to Concessionaire, immediately
take over the operations of the Terminal and/or
the Terminal Complex. During such take over by
GRP, the Concession Period shall be
suspended; provided, that upon termination of
war, hostilities or national emergency, the
operations shall be returned to Concessionaire,
at which time, the Concession period shall
commence to run again. Concessionaire shall be
entitled to reasonable compensation for the
duration of the temporary take over by GRP,
which compensation shall take into account the
reasonable cost for the use of the Terminal
and/or Terminal Complex, (which is in the
amount at least equal to the debt service
requirements of Concessionaire, if the temporary
take over should occur at the time when
Concessionaire is still servicing debts owed to
project lenders), any loss or damage to the
Development Facility, and other consequential
damages. If the parties cannot agree on the
reasonable compensation of Concessionaire, or
on the liability of GRP as aforesaid, the matter
shall be resolved in accordance with Section
10.01 [Arbitration]. Any amount determined to be
payable by GRP to Concessionaire shall be
offset from the amount next payable by
Concessionaire to GRP. 62
PIATCO cannot, by mere contractual stipulation,
contravene the Constitutional provision on temporary
government takeover and obligate the government to pay
"reasonable cost for the use of the Terminal and/or
Terminal Complex." 63 Article XII, section 17 of the 1987
Constitution envisions a situation wherein the exigencies of
the times necessitate the government to "temporarily take
 Page 85 of 458
over or direct the operation of any privately owned public
utility or business affected with public interest." It is the
welfare and interest of the public which is the paramount
consideration in determining whether or not to temporarily
take over a particular business. Clearly, the State in
effecting the temporary takeover is exercising its police
power. Police power is the "most essential, insistent, and
illimitable of powers." 64 Its exercise therefore must not be
unreasonably hampered nor its exercise be a source of
obligation by the government in the absence of damage
due to arbitrariness of its exercise. 65 Thus, requiring the
government to pay reasonable compensation for the
reasonable use of the property pursuant to the operation of
the business contravenes the Constitution.
V Economic Zone ("CSEZ") and in Laoag City. 69 As such,
Regulation of Monopolies
A monopoly is "a privilege or peculiar advantage vested in
one or more persons or companies, consisting in the
exclusive right (or power) to carry on a particular business
or trade, manufacture a particular article, or control the sale
of a particular commodity." 66 The 1987 Constitution strictly
regulates monopolies, whether private or public, and even
provides for their prohibition if public interest so
requires. Article XII, Section 19 of the 1987
Constitution states:
Sec. 19. The state shall regulate or prohibit
monopolies when the public interest so requires.
No combinations in restraint of trade or unfair
competition shall be allowed.
Clearly, monopolies are not per se prohibited by the
Constitution but may be permitted to exist to aid the
government in carrying on an enterprise or to aid in the
performance of various services and functions in the
interest of the public. 67 Nonetheless, a determination must
first be made as to whether public interest requires a
monopoly. As monopolies are subject to abuses that can
inflict severe prejudice to the public, they are subject to a
higher level of State regulation than an ordinary business
undertaking.
In the cases at bar, PIATCO, under the 1997 Concession
Agreement and the ARCA, is granted the "exclusive right to
operate a commercial international passenger terminal
within the Island of Luzon" at the NAIA IPT III. 68 This is
with the exception of already existing international airports
in Luzon such as those located in the Subic Bay Freeport
Special Economic Zone ("SBFSEZ"), Clark Special
upon commencement of PIATCO's operation of NAIA IPT
III, Terminals 1 and 2 of NAIA would cease to function as
international passenger terminals. This, however, does not
prevent MIAA to use Terminals 1 and 2 as domestic
passenger terminals or in any other manner as it may
deem appropriate except those activities that would
compete with NAIA IPT III in the latter's operation as an
international passenger terminal. 70 The right granted to
PIATCO to exclusively operate NAIA IPT III would be for a
period of twenty-five (25) years from the In-Service
Date 71 and renewable for another twenty-five (25) years at
the option of the government. 72 Both the 1997 Concession
Agreement and the ARCA further provide that, in view of
the exclusive right granted to PIATCO, the concession
contracts of the service providers currently servicing
Terminals 1 and 2 would no longer be renewed and those
concession contracts whose expiration are subsequent to
 Page 86 of 458
the In-Service Date would cease to be effective on the said
date. 73
The operation of an international passenger airport terminal
is no doubt an undertaking imbued with public interest. In
entering into a Build-Operate-and-Transfer contract for the
construction, operation and maintenance of NAIA IPT III,
the government has determined that public interest would
be served better if private sector resources were used in its
construction and an exclusive right to operate be granted to
the private entity undertaking the said project, in this case
PIATCO. Nonetheless, the privilege given to PIATCO is
subject to reasonable regulation and supervision by the
Government through the MIAA, which is the government
agency authorized to operate the NAIA complex, as well as
DOTC, the department to which MIAA is attached. 74
This is in accord with the Constitutional mandate that a
monopoly which is not prohibited must be
regulated. 75 While it is the declared policy of the BOT
Law to encourage private sector participation by "providing
a climate of minimum government regulations," 76 the same
does not mean that Government must completely
surrender its sovereign power to protect public interest in
the operation of a public utility as a monopoly. The
operation of said public utility can not be done in an
arbitrary manner to the detriment of the public which it
seeks to serve. The right granted to the public utility may
be exclusive but the exercise of the right cannot run riot.
Thus, while PIATCO may be authorized to exclusively
operate NAIA IPT III as an international passenger
terminal, the Government, through the MIAA, has the right
and the duty to ensure that it is done in accord with public
interest. PIATCO's right to operate NAIA IPT III cannot also
violate the rights of third parties.
Section 3.01(e) of the 1997 Concession Agreement and
the ARCA provide:
3.01 Concession Period
xxx xxx xxx
(e) GRP confirms that certain concession
agreements relative to certain services and
operations currently being undertaken at the
Ninoy Aquino International Airport passenger
Terminal I have a validity period extending
beyond the In-Service Date. GRP through
DOTC/MIAA, confirms that these services and
operations shall not be carried over to the
Terminal and the Concessionaire is under no
legal obligation to permit such carry-over except
through a separate agreement duly entered into
with Concessionaire. In the event
Concessionaire becomes involved in any
litigation initiated by any such concessionaire or
operator, GRP undertakes and hereby holds
Concessionaire free and harmless on full
indemnity basis from and against any loss and/or
any liability resulting from any such litigation,
including the cost of litigation and the reasonable
fees paid or payable to Concessionaire's counsel
of choice, all such amounts shall be fully
deductible by way of an offset from any amount
which the Concessionaire is bound to pay GRP
under this Agreement.
During the oral arguments on December 10, 2002, the
counsel for the petitioners-in-intervention for G.R.
No. 155001 stated that there are two service providers
whose contracts are still existing and whose validity
 Page 87 of 458
extends beyond the In-Service Date. One contract remains
valid until 2008 and the other until 2010. 77
We hold that while the service providers presently
operating at NAIA Terminal 1 do not have an absolute right
for the renewal or the extension of their respective
contracts, those contracts whose duration extends beyond
NAIA IPT III's In-Service-Date should not be unduly
prejudiced. These contracts must be respected not just by
the parties thereto but also by third parties. PIATCO
cannot, by law and certainly not by contract, render a valid
and binding contract nugatory. PIATCO, by the mere
expedient of claiming an exclusive right to operate, cannot
require the Government to break its contractual obligations
to the service providers. In contrast to the arrastre and
stevedoring service providers in the case of Anglo-Fil
Trading Corporation v. Lazaro 78 whose contracts consist of
temporary hold-over permits, the affected service providers
in the cases at bar, have a valid and binding contract with
the Government, through MIAA, whose period of effectivity,
as well as the other terms and conditions thereof cannot be
violated.
In fine, the efficient functioning of NAIA IPT III is imbued
with public interest. The provisions of the 1997 Concession
Agreement and the ARCA did not strip government, thru
the MIAA, of its right to supervise the operation of the
whole NAIA complex, including NAIA IPT III. As the primary
government agency tasked with the job, 79 it is MIAA's
responsibility to ensure that whoever by contract is given
the right to operate NAIA IPT III will do so within the
bounds of the law and with due regard to the rights of third
parties and above all, the interest of the public.
VI
CONCLUSION
In sum, this Court rules that in view of the absence of the
requisite financial capacity of the Paircargo Consortium,
predecessor of respondent PIATCO, the award by the
PBAC of the contract for the construction, operation and
maintenance of the NAIA IPT III is null and void. Further,
considering that the 1997 Concession Agreement contains
material and substantial amendments, which amendments
had the effect of converting the 1997 Concession
Agreement into an entirely different agreement from the
contract bidded upon, the 1997 Concession Agreement is
similarly null and void for being contrary to public policy.
The provisions under Sections 4.04(b) and (c) in relation to
Section 1.06 of the 1997 Concession Agreement and
Section 4.04(c) in relation to Section 1.06 of the ARCA,
which constitute a direct government guarantee expressly
prohibited by, among others, the BOT Law and its
Implementing Rules and Regulations are also null and
void. The Supplements, being accessory contracts to the
ARCA, are likewise null and void. TcEaAS
WHEREFORE, the 1997 Concession Agreement, the
Amended and Restated Concession Agreement and the
Supplements thereto are set aside for being null and void.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Ynares-Santiago, Sandoval-
Gutierrez, Austria Martinez, Corona and Carpio Morales,
JJ., concur.
Vitug, J., please see separate (dissenting) opinion
Panganiban, J., please see separate opinion
 Page 88 of 458
Quisumbing and Azcuna, JJ., concur with separate
(dissenting) opinion of J. Vitug.
Callejo, Sr., J., concurs with separate opinion of J.
Panganiban.
Carpio, J., took no part.
Separate Opinions
VITUG, J.:
This Court is bereft of jurisdiction to hear the petitions at
bar. The Constitution provides that the Supreme Court
shall exercise original jurisdiction over, among other actual
controversies, petitions for certiorari, prohibition,
mandamus, quo warranto, and habeas corpus. 1 The cases
in question, although denominated to be petitions for
prohibition, actually pray for the nullification of the PIATCO
contracts and to restrain respondents from implementing
said agreements for being illegal and unconstitutional.
Section 2, Rule 65 of the Rules of Court states:
"When the proceedings of any tribunal,
corporation, board, officer or person, whether
exercising judicial, quasi-judicial or ministerial
functions, are without or in excess of its or his
jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and
there is no appeal or any other plain, speedy and
adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered
commanding the respondent to desist from
further proceedings in the action or matter
specified therein, or otherwise granting such
incidental reliefs as law and justice may require."
The rule is explicit. A petition for prohibition may be filed
against a tribunal, corporation, board, officer or person,
exercising judicial, quasi-judicial or ministerial functions.
What the petitions seek from respondents do not involve
judicial, quasi-judicial or ministerial functions. In prohibition,
only legal issues affecting the jurisdiction of the tribunal,
board or officer involved may be resolved on the basis
of undisputed facts. 2 The parties allege, respectively,
contentious evidentiary facts. It would be difficult, if not
anomalous, to decide the jurisdictional issue on the basis
of the contradictory factual submissions made by the
parties. 3 As the Court has so often exhorted, it is not a trier
of facts.
The petitions, in effect, are in the nature of actions for
declaratory relief under Rule 63 of the Rules of Court. The
Rules provide that any person interested under a contract
may, before breach or violation thereof, bring an action in
the appropriate Regional Trial Court to determine any
question of construction or validity arising, and for a
declaration of his rights or duties thereunder. 4 The
Supreme Court assumes no jurisdiction over petitions for
declaratory relief which are cognizable by regional trial
courts. 5
As I have so expressed in Tolentino vs. Secretary of
Finance, 6 reiterated in Santiago vs. Guingona, Jr., 7 the
Supreme Court should not be thought of as having been
tasked with the awesome responsibility of overseeing the
entire bureaucracy. Pervasive and limitless, such as it may
seem to be under the 1987 Constitution, judicial power still
succumbs to the paramount doctrine of separation of
 Page 89 of 458
powers. The Court may not at good liberty intrude, in the
guise of sovereign imprimatur, into every affair of
government. What significance can still then remain of the
time-honored and widely acclaimed principle of separation
of powers if, at every turn, the Court allows itself to pass
upon at will the disposition of a co-equal, independent and
coordinate branch in our system of government. I dread to
think of the so varied uncertainties that such an undue
interference can lead to. CSTDIE
Accordingly, I vote for the dismissal of the petition.
PANGANIBAN, J.:
The five contracts for the construction and the operation of
Ninoy Aquino International Airport (NAIA) Terminal III, the
subject of the consolidated Petitions before the Court, are
replete with outright violations of law, public policy and the
Constitution. The only proper thing to do is declare them all
null and void ab initio and let the chips fall where they
may. Fiat iustitia ruat coelum.
The facts leading to this controversy are already well
presented in the ponencia. I shall not burden the readers
with a retelling thereof. Instead, I will cut to the chase and
directly address the two sets of gut issues:
1. The first issue is procedural: Does the Supreme Court
have original jurisdiction to hear and decide the Petitions?
Corollarily, do petitioners have locus standi and should this
Court decide the cases without any mandatory referral to
arbitration?
2. The second one is substantive in character: Did the
subject contracts violate the Constitution, the laws, and
public policy to such an extent as to render all of them void
and inexistent?
My answer to all the above questions is a firm "Yes."
The Procedural Issue:
Jurisdiction, Standing and Arbitration
Definitely and surely, the issues involved in these Petitions
are clearly of transcendental importance and of national
interest. The subject contracts pertain to the construction
and the operation of the country's premiere international
airport terminal an ultramodern world-class public utility
that will play a major role in the country's economic
development and serve to project a positive image of our
country abroad. The five build-operate-&-transfer (BOT)
contracts, while entailing the investment of billions of pesos
in capital and the availment of several hundred millions of
dollars in loans, contain provisions that tend to establish a
monopoly, require the disbursements of public funds sans
appropriations, and provide government guarantees in
violation of statutory prohibitions, as well as other
provisions equally offensive to law, public policy and the
Constitution. Public interest will inevitably be affected
thereby.
Thus, objections to these Petitions, grounded upon (a) the
hierarchy of courts, (b) the need for arbitration prior to court
action, and (c) the alleged lack of sufficient personality,
standing or interest, being in the main procedural matters,
must now be set aside, as they have been in past cases.
This Court must be permitted to perform its constitutional
duty of determining whether the other agencies of
government have acted within the limits of the Constitution
 Page 90 of 458
and the laws, or if they have gravely abused the discretion
entrusted to them. 1
Hierarchy of Courts
The Court has, in the past, held that questions relating to
gargantuan government contracts ought to be settled
without delay. 2 This holding applies with greater force to
the instant cases. Respondent Piatco is partly correct in
averring that petitioners can obtain relief from the regional
trial courts via an action to annul the contracts.
Nevertheless, the unavoidable consequence of having to
await the rendition and the finality of any such judgment
would be a prolonged state of uncertainty that would be
prejudicial to the nation, the parties and the general public.
And, in light of the feared loss of jobs of the petitioning
workers, consequent to the inevitable pretermination of
contracts of the petitioning service providers that will follow
upon the heels of the impending opening of NAIA Terminal
III, the need for relief is patently urgent, and therefore,
direct resort to this Court through the special civil action of
prohibition is thus justified. 3
Contrary to Piatco's argument that the resolution of the
issues raised in the Petitions will require delving into factual
questions, 4 I submit that their disposition ultimately turns
on questions of law. 5 Further, many of the significant and
relevant factual questions can be easily addressed by an
examination of the documents submitted by the parties. In
any event, the Petitions raise some novel questions
involving the application of the amended BOT Law, which
this Court has seen fit to tackle.
Arbitration
Should the dispute be referred to arbitration prior to judicial
recourse? Respondent Piatco claims that Section 10.02 of
the Amended and Restated Concession Agreement
(ARCA) provides for arbitration under the auspices of the
International Chamber of Commerce to settle any dispute
or controversy or claim arising in connection with the
Concession Agreement, its amendments and supplements.
The government disagrees, however, insisting that there
can be no arbitration based on Section 10.02 of the ARCA,
since all the Piatco contracts are void ab initio. Therefore,
all contractual provisions, including Section 10.02 of the
ARCA, are likewise void, inexistent and inoperative. To
support its stand, the government cites Chavez
v. Presidential Commission on Good Government: 6 "The
void agreement will not be rendered operative by the
parties' alleged performance (partial or full) of their
respective prestations. A contract that violates
the Constitution and the law is null and void ab initio and
vests no rights and creates no obligations. It produces no
legal effect at all."
As will be discussed at length later, the Piatco contracts
are indeed void in their entirety; thus, a resort to the
aforesaid provision on arbitration is unavailing. Besides,
petitioners and petitioners-in-intervention have pointed out
that, even granting arguendo that the arbitration clause
remained a valid provision, it still cannot bind them
inasmuch as they are not parties to the Piatco contracts.
And in the final analysis, it is unarguable that the arbitration
process provided for under Section 10.02 of the ARCA, to
be undertaken by a panel of three (3) arbitrators appointed
in accordance with the Rules of Arbitration of the
International Chamber of Commerce, will not be able to
address, determine and definitively resolve the
 Page 91 of 458
constitutional and legal questions that have been raised in
the Petitions before us.
Locus Standi
Given this Court's previous decisions in cases of similar
import, no one will seriously doubt that, being taxpayers
and members of the House of Representatives, Petitioners
Baterina et al., have locus standi to bring the Petition in GR
No. 155547. In Albano v. Reyes, 7 this Court held that the
petitioner therein, suing as a citizen, taxpayer and member
of the House of Representatives, was sufficiently clothed
with standing to bring the suit questioning the validity of the
assailed contract. The Court cited the fact that public
interest was involved, in view of the important role of the
Manila International Container Terminal (MICT) in the
country's economic development and the magnitude of the
financial consideration. This, notwithstanding the fact that
expenditure of public funds was not required under the
assailed contract.
In the cases presently under consideration, petitioners'
personal and substantial interest in the controversy is
shown by the fact that certain provisions in the Piatco
contracts create obligations on the part of government
(through the DOTC and the MIAA) to disburse public funds
without prior congressional appropriations.
Petitioners thus correctly assert that the injury to them has
a twofold aspect: (1) they are adversely affected as
taxpayers on account of the illegal disbursement of public
funds; and (2) they are prejudiced qua legislators, since the
contractual provisions requiring the government to incur
expenditures without appropriations also operate as
limitations upon the exclusive power and prerogative of
Congress over the public purse. As members of the House
of Representatives, they are actually deprived of discretion
insofar as the inclusion of those items of expenditure in the
budget is concerned. To prevent such encroachment upon
the legislative privilege and obviate injury to the institution
of which they are members, petitioners-legislators
have locus standi to bring suit.
Messrs. Agan et al and Lopez et al., are likewise taxpayers
and thus possessed of standing to challenge the illegal
disbursement of public funds. Messrs. Agan et al., in
particular, are employees (or representatives of
employees) of various service providers that have (1)
existing concession agreements with the MIAA to provide
airport services necessary to the operation of the NAIA and
(2) service agreements to furnish essential support
services to the international airlines operating at the NAIA.
On the other hand, Messrs. Lopez et al. are employees of
the MIAA. These petitioners (Messrs. Agan et al. and
Messrs. Lopez et al.) are confronted with the prospect of
being laid off from their jobs and losing their means of
livelihood when their employer-companies are forced to
shut down or otherwise retrench and cut back on
manpower. Such development would result from the
imminent implementation of certain provisions in the
contracts that tend toward the creation of a monopoly in
favor of Piatco, its subsidiaries and related companies.
Petitioners-in-intervention are service providers in the
business of furnishing airport-related services to
international airlines and passengers in the NAIA and are
therefore competitors of Piatco as far as that line of
business is concerned. On account of provisions in the
Piatco contracts, petitioners-in-intervention have to enter
into a written contract with Piatco so as not to be shut out
 Page 92 of 458
of NAIA Terminal III and barred from doing business there.
Since there is no provision to ensure or safeguard free and
fair competition, they are literally at its mercy. They claim
injury on account of their deprivation of property (business)
and of the liberty to contract, without due process of law.
And even if petitioners and petitioners-in-intervention were
not sufficiently clothed with legal standing, I have at the
outset already established that, given its impact on the
public and on national interest, this controversy is laden
with transcendental importance and constitutional
significance. Hence, I do not hesitate to adopt the same
position as was enunciated in Kilosbayan v. Guingona
Jr. 8 that "in cases of transcendental importance, the Court
may relax the standing requirements and allow a suit to
prosper even when there is no direct injury to the party
claiming the right of judicial review." 9
The Substantive Issue:
Violations of the Constitution and the Laws
From the Outset, the Bidding
Process Was Flawed and Tainted
After studying the documents submitted and arguments
advanced by the parties, I have no doubt that, right at the
outset, Piatco was not qualified to participate in the bidding
process for the Terminal III project, but was nevertheless
permitted to do so. It even won the bidding and was helped
along by what appears to be a series of collusive and
corrosive acts.
The build-operate-and-transfer (BOT) project for the NAIA
Passenger Terminal III comes under the category of an
"unsolicited proposal," which is the subject of Section 4-A
of the BOT Law. 10 The unsolicited proposal was originally
submitted by the Asia's Emerging Dragon Corporation
(AEDC) to the Department of Transportation and
Communications (DOTC) and the Manila International
Airport Authority (MIAA), which reviewed and approved the
proposal.
The draft of the concession agreement as negotiated
between AEDC and DOTC/MIAA was endorsed to the
National Economic Development Authority (NEDA-ICC),
which in turn reviewed it on the basis of its scope,
economic viability, financial indicators and risks; and
thereafter approved it for bidding.
The DOTC/MIAA then prepared the Bid Documents,
incorporating therein the negotiated Draft Concession
Agreement, and published invitations for public bidding,
i.e., for the submission of comparative or competitive
proposals. Piatco's predecessor-in-interest, the Paircargo
Consortium, was the only company that submitted a
competitive bid or price challenge.
At this point, I must emphasize that the law requires the
award of a BOT project to the bidder that has satisfied the
minimum requirements; and met the technical, financial,
organizational and legal standards provided in the BOT
Law. Section 5 of this statute states:
"Sec. 5. Public bidding of projects. - . . .
"In the case of a build-operate-and-transfer
arrangement, the contract shall be awarded to
the bidder who, having satisfied the minimum
financial, technical, organizational and legal
standards required by this Act, has submitted the
lowest bid and most favorable terms for the
 Page 93 of 458
project, based on the present value of its
proposed tolls, fees, rentals and charges over a
fixed term for the facility to be constructed,
rehabilitated, operated and maintained according
to the prescribed minimum design and
performance standards, plans and specifications.
. . ." (Italics supplied.)
The same provision requires that the price challenge via
public bidding "must be conducted under a two-
envelope/two-stage system: the first envelope to contain
the technical proposal and the second envelope to contain
the financial proposal." Moreover, the 1994 Implementing
Rules and Regulations (IRR) provide that only those
bidders that have passed the prequalification stage are
permitted to have their two envelopes reviewed.
In other words, prospective bidders must prequalify by
submitting their prequalification documents for evaluation;
and only the pre-qualified bidders would be entitled to have
their bids opened, evaluated and appreciated. On the other
hand, disqualified bidders are to be informed of the reason
for their disqualification. This procedure was confirmed and
reiterated in the Bid Documents, which I quote thus:
"Prequalified proponents will be considered eligible to
move to second stage technical proposal evaluation. The
second and third envelopes of pre-disqualified proponents
will be returned." 11
Aside from complying with the legal and technical
requirements (track record or experience of the firm and its
key personnel), a project proponent desiring to prequalify
must also demonstrate its financial capacity to undertake
the project. To establish such capability, a proponent must
prove that it is able to raise the minimum amount of equity
required for the project and to procure the loans or
financing needed for it. Section 5.4(c) of the 1994 IRR
provides:
"Sec. 5.4. Prequalification Requirements. To
pre-qualify, a project proponent must comply
with the following requirements:
xxx xxx xxx
"c. Financial Capability. The project proponent
must have adequate capability to sustain the
financing requirements for the detailed
engineering design, construction, and/or
operation and maintenance phases of the
project, as the case may be. For purposes of
prequalification, this capability shall be measured
in terms of: (i) proof of the ability of the project
proponent and/or the consortium to provide a
minimum amount of equity to the project, and (ii)
a letter testimonial from reputable banks
attesting that the project proponent and/or
members of the consortium are banking with
them, that they are in good financial standing,
and that they have adequate resources. The
government Agency/LGU concerned shall
determine on a project-to-project basis, and
before prequalification, the minimum amount of
equity needed. . . .." (Italics supplied)
Since the minimum amount of equity for the project was set
at 30 percent 12 of the minimum project cost of US$350
million, the minimum amount of equity required of any
proponent stood at US$105 million. Converted to pesos at
the exchange rate then of P26.239 to US$1.00 (as quoted
by the Bangko Sentral ng Pilipinas), the peso equivalent of
the minimum equity was P2,755,095,000.
 Page 94 of 458
However, the combined equity or net worth of the
Paircargo consortium stood at only
P558,384,871.55. 13 This amount was only slightly over 6
percent of the minimum project cost and very much short of
the required minimum equity, which was equivalent to 30
percent of the project cost. Such deficiency should have
immediately caused the disqualification of the Paircargo
consortium. This matter was brought to the attention of the
Prequalification and Bidding Committee (PBAC).
Notwithstanding the glaring deficiency, DOTC
Undersecretary Primitivo C. Cal, concurrent chair of the
PBAC, declared in a Memorandum dated 14 October 1996
that "the Challenger (Paircargo consortium) was found to
have a combined net worth of P3,926,421,242.00 that
could support a project costing approximately P13 billion."
To justify his conclusion, he asserted: "It is not a
requirement that the networth must be `unrestricted.' To
impose this as a requirement now will be nothing less than
unfair."
He further opined, "(T)he networth reflected in the Financial
Statement should not be taken as the amount of money to
be used to answer the required thirty (30%) percent equity
of the challenger but rather to be used in establishing if
there is enough basis to believe that the challenger can
comply with the required 30% equity. In fact, proof of
sufficient equity is required as one of the conditions for
award of contract (Sec. 12.1 of IRR of the BOT Law) but
not for prequalification (Sec. 5.4 of same document)."
On the basis of the foregoing dubious declaration, the
Paircargo consortium was deemed prequalified and thus
permitted to proceed to the other stages of the bidding
process.
By virtue of the prequalified status conferred upon the
Paircargo, Undersecretary Cal's findings in effect relieved
the consortium of the need to comply with the financial
capability requirement imposed by the BOT Law and IRR.
This position is unmistakably and squarely at odds with the
Supreme Court's consistent doctrine emphasizing the strict
application of pertinent rules, regulations and guidelines for
the public bidding process, in order to place each bidder
actual or potential on the same footing. Thus, it is
unarguably irregular and contrary to the very concept of
public bidding to permit a variance between the conditions
under which bids are invited and those under which
proposals are submitted and approved.
Republic v. Capulong 14 teaches that if one bidder is
relieved from having to conform to the conditions that
impose some duty upon it, that bidder is not contracting in
fair competition with those bidders that propose to be
bound by all conditions. The essence of public bidding is,
after all, an opportunity for fair competition and a basis for
the precise comparison of bids. 15 Thus, each bidder must
bid under the same conditions; and be subject to the same
guidelines, requirements and limitations. The desired result
is to be able to determine the best offer or lowest bid, all
things being equal.
Inasmuch as the Paircargo consortium did not possess the
minimum equity equivalent to 30 percent of the minimum
project cost, it should not have been prequalified or allowed
to participate further in the bidding. The Prequalification
and Bidding Committee (PBAC) should therefore not have
opened the two envelopes of the consortium containing its
technical and financial proposals; required AEDC to match
the consortium's bid; 16 or awarded the Concession
 Page 95 of 458
Agreement to the consortium's successor-in-interest,
Piatco.
As there was effectively no public bidding to speak of, the
entire bidding process having been flawed and tainted from
the very outset, therefore, the award of the concession to
Paircargo's successor Piatco was void, and the
Concession Agreement executed with the latter was
likewise void ab initio. For this reason, Piatco cannot and
should not be allowed to benefit from that Agreement. 17
AEDC Was Deprived of the
Right to Match PIATCO's
Price Challenge
In DOTC PBAC Bid Bulletin No. 4 (par. 3), Undersecretary
Cal declared that, for purposes of matching the price
challenge of Piatco, AEDC as originator of the unsolicited
proposal would be permitted access only to the schedule of
proposed Annual Guaranteed Payments submitted by
Piatco, and not to the latter's financial and technical
proposals that constituted the basis for the price challenge
in the first place. This was supposedly in keeping with
Section 11.6 of the 1994 IRR, which provides that
proprietary information is to be respected, protected and
treated with utmost confidentiality, and is therefore not to
form part of the bidding/tender and related documents.
This pronouncement, I believe, was a grievous
misapplication of the mentioned provision. The "proprietary
information" referred to in Section 11.6 of the IRR pertains
only to the proprietary information of the originator of an
unsolicited proposal, and not to those belonging to
a challenger. The reason for the protection accorded
proprietary information at all is the fact that, according to
Section 4-A of the BOT Law as amended, a proposal
qualifies as an "unsolicited proposal" when it pertains to a
project that involves "a new concept or technology," and/or
a project that is not on the government's list of priority
projects.
To be considered as utilizing a new concept or technology,
a project must involve the possession of exclusive rights
(worldwide or regional) over a process; or possession of
intellectual property rights over a design, methodology or
engineering concept. 18 Patently, the intent of the BOT
Law is to encourage individuals and groups to come up
with creative innovations, fresh ideas and new technology.
Hence, the significance and necessity of protecting
proprietary information in connection with unsolicited
proposals. And to make the encouragement real, the law
also extends to such individuals and groups what amounts
to a "right of first refusal" to undertake the project they
conceptualized, involving the use of new technology or
concepts, through the mechanism of matching a price
challenge.
A competing bid is never just any figure conjured from out
of the blue; it is arrived at after studying economic,
financial, technical and other, factors; it is likewise based
on certain assumptions as to the nature of the business,
the market potentials, the probable demand for the product
or service, the future behavior of cost items, political and
other risks, and so on. It is thus self-evident that in order to
be able to intelligently match a bid or price challenge, a
bidder must be given access to the assumptions and the
calculations that went into crafting the competing bid.
In this instance, the financial and technical proposals of
Piatco would have provided AEDC with the necessary
 Page 96 of 458
information to enable it to make a reasonably informed
matching bid. To put it more simply, a bidder unable to
access the competitor's assumptions will never figure out
how the competing bid came about; requiring him to
"counter-propose" is like having him shoot at a target in the
dark while blindfolded.
By withholding from AEDC the challenger's financial and
technical proposals containing the critical information it
needed, Undersecretary Cal actually and effectively
deprived AEDC of the ability to match the price challenge.
One could say that AEDC did not have the benefit of a
"level playing field." It seems to me, though, that AEDC
was actually shut out of the game altogether.
At the end of the day, the bottom line is that the validity and
the propriety of the award to Piatco had been irreparably
impaired.
Delayed Issuance of the
Notice of Award Violated
the BOT Law and the IRR
Section 9.5 of the IRR requires that the Notice of Award
must indicate the time frame within which the winner of the
bidding (and therefore the prospective awardee) shall
submit the prescribed performance security, proof of
commitment of equity contributions, and indications of
sources of financing (loans); and, in the case of joint
ventures, an agreement showing that the members are
jointly and severally responsible for the obligations of the
project proponent under the contract.
The purpose of having a definite and firm timetable for the
submission of the aforementioned requirements is not only
to prevent delays in the project implementation, but also to
expose and weed out unqualified proponents, who might
have unceremoniously slipped through the earlier
prequalification process, by compelling them to put their
money where their mouths are, so to speak.
Nevertheless, this provision can be easily circumvented by
merely postponing the actual issuance of the Notice of
Award, in order to give the favored proponent sufficient
time to comply with the requirements. Hence, to avert or
minimize the manipulation of the post-bidding process, the
IRR not only set out the precise sequence of events
occurring between the completion of the evaluation of the
technical bids and the issuance of the Notice of Award, but
also specified the timetables for each such event. Definite
allowable extensions of time were provided for, as were the
consequences of a failure to meet a particular deadline.
In particular, Section 9.1 of the 1994 IRR prescribed that
within 30 calendar days from the time the second-stage
evaluation shall have been completed, the Committee must
come to a decision whether or not to award the contract
and, within 7 days therefrom, the Notice of Award must be
approved by the head of agency or local government unit
(LGU) concerned, and its issuance must follow within
another 7 days thereafter.
Section 9.2 of the IRR set the procedure applicable to
projects involving substantial government undertakings as
follows: Within 7 days after the decision to award is made,
the draft contract shall be submitted to the ICC for
clearance on a no-objection basis. If the draft contract
includes government undertakings already previously
approved, then the submission shall be for information
only.
 Page 97 of 458
However, should there be additional or new provisions
different from the original government undertakings, the
draft shall have to be reviewed and approved. The ICC has
15 working days to act thereon, and unless otherwise
specified, its failure to act on the contract within the
specified time frame signifies that the agency or LGU may
proceed with the award. The head of agency or LGU shall
approve the Notice of Award within seven days of the
clearance by the ICC on a no-objection basis, and the
Notice itself has to be issued within seven days thereafter.
The highly regulated time-frames within which the agents
of government were to act evinced the intent to impose
upon them the duty to act expeditiously throughout the
process, to the end that the project be prosecuted and
implemented without delay. This regulated scenario was
likewise intended to discourage collusion and substantially
reduce the opportunity for agents of government to abuse
their discretion in the course of the award process.
Despite the clear timetables set out in the IRR, several
lengthy and still-unexplained delays occurred in the award
process, as can be observed from the presentation made
by the counsel for public respondents, 19 quoted
hereinbelow:
"11 Dec. 1996 The Paircargo Joint Venture
was informed by the PBAC that AEDC failed to
match and that negotiations preparatory to
Notice of Award should be commenced. This
was the decision to award that should have
commenced the running of the 7-day period to
approve the Notice of Award, as per Section 9.1
of the IRR, or to submit the draft contract to the
ICC for approval conformably with Section 9.2.
"01 April 1997 The PBAC resolved that a
copy of the final draft of the Concession
Agreement be submitted to the NEDA for
clearance on a no-objection basis. This
resolution came more than 3 months too late as
it should have been made on the 20th of
December 1996 at the latest.
"16 April 1997 The PBAC resolved that the
period of signing the Concession Agreement be
extended by 15 days.
"18 April 1997 NEDA approved the
Concession Agreement. Again this is more than
3 months too late as the NEDA's decision should
have been released on the 16th of January 1997
or fifteen days after it should have been
submitted to it for review.
"09 July 1997 The Notice of Award was
issued to PIATCO. Following the provisions of
the IRR, the Notice of Award should have been
issued fourteen days after NEDA's approval, or
the 28th of January 1997. In any case, even if it
were to be assumed that the release of NEDA's
approval on the 18th of April was timely, the
Notice of Award should have been issued on the
9th of May 1997. In both cases, therefore, the
release of the Notice of Award occurred in a
decidedly less than timely fashion."
This chronology of events bespeaks an unmistakable
disregard, if not disdain, by the persons in charge of the
award process for the time limitations prescribed by the
IRR. Their attitude flies in the face of this Court's solemn
pronouncement in Republic v. Capulong 20 that "strict
observance of the rules, regulations and guidelines of the
 Page 98 of 458

bidding process is the only safeguard to a fair, honest and 2. The CA provided that government is to
competitive public bidding." answer for Piatco's unpaid loans and
debts (lumped under the
From the foregoing, the only conclusion that can possibly
term Attendant Liabilities) in the event
be drawn is that the BOT law and its IRR were repeatedly
Piatco fails to pay its senior lenders. 22
violated with unmitigated impunity and by agents of
government, no less! On account of such violation, the 3. The CA provided that in case of
award of the contract to Piatco, which undoubtedly gained termination of the contract due to the
time and benefited from the delays, must be deemed null fault of government, government shall
and void from the beginning. pay all expenses that Piatco incurred
for the project plus the appraised value
Further Amendments Resulted
of the Terminal. 23
in a Substantially Different
Contract, Awarded Without 4. The CA imposed new and special
Public Bidding obligations on government, including
But the violations and desecrations did not stop there. After delivery of clean possession of the site
the PBAC made its decision on December 11, 1996 to for the terminal; acquisition of
award the contract to Piatco, the latter negotiated changes additional land at the government's
to the Contract bidded out and ended up with what expense for construction of road
amounts to a substantially new contract without any public networks required by Piatco's
bidding. This Contract was subsequently further amended approved plans and specifications; and
four more times through negotiation and without any assistance to Piatco in securing site
bidding. Thus, the contract actually executed between utilities, as well as all necessary
Piatco and DOTC/MIAA on July 12, 1997 (the Concession permits, licenses and authorizations. 24
Agreement or "CA") differed from the contract bidded out 5. Where Section 3.02 of the DCA
(the draft concession agreement or "DCA") in the following requires government to refrain from
very significant respects: competing with the contractor with
1. The CA inserted stipulations creating a respect to the operation of NAIA
monopoly in favor of Piatco in the Terminal III, Section 3.02(b) of the CA
business of providing airport-related excludes and prohibits everyone,
services for international airlines and including government, from directly or
passengers. 21 indirectly competing with Piatco, with
respect to the operation of, as well
as operations in, NAIA Terminal
 Page 99 of 458

III. Operations in is sufficiently broad to

encompass all retail and other
7. Section 1.29 of the DCA provides that the
commercial business enterprises
terminal fees, aircraft tacking fees,
operating within Terminal III, inclusive
aircraft parking fees, check-in counter
of the businesses of providing various
fees and other fees are to be quoted
airport-related services to international
and paid in Philippine pesos. But per
airlines, within the scope of the
Section 1.33 of the CA, all the
prohibition.
aforesaid fees save the terminal fee
6. Under Section 6.01 of the DCA, the are denominated in US Dollars.
following fees are subject to the written
8. Under Section 8.07 of the DCA, the
approval of MIAA: lease/rental
term attendant liabilities refers
charges, concession privilege fees for
to liabilities pertinent to NAIA Terminal
passenger services, food services,
III, such as payment of lease rentals
transportation utility concessions,
and performance of other obligations
groundhandling, catering and
under the Land Lease Agreement; the
miscellaneous concession fees,
obligations under the Tenant
porterage fees, greeter/well-wisher
Agreements; and payment of all taxes,
fees, carpark fees, advertising fees,
fees, charges and assessments of
VIP facilities fees and others.
whatever kind that may be imposed on
Moreover, adjustments to the
NAIA Terminal III or parts thereof. But
groundhandling fees, rentals and
in Section 1.06 of the CA, Attendant
porterage fees are permitted only once
Liabilities refers to unpaid debts of
every two years and in accordance
Piatco: "All amounts recorded and
with a parametric formula, per DCA
from time to time outstanding in the
Section 6.03. However, the CA as
books of (Piatco) as owing to Unpaid
executed with Piatco provides in
Creditors who have provided, loaned
Section 6.06 that all the aforesaid fees,
or advanced funds actually used for
rentals and charges may be
the Project, including all interests,
adjusted without MIAA's approval or
penalties, associated fees, charges,
intervention. Neither are the
surcharges, indemnities,
adjustments to these fees and charges
reimbursements and other related
subject to or limited by any parametric
expenses, and further including
formula. 25
amounts owed by [Piatco] to its
 Page 100 of 458
suppliers, contractors and
subcontractors."
9. Per Sections 8.04 and 8.06 of the DCA,
government may, on account of the
contractors breach, rescind the
contract and select one of four options:
(a) take over the terminal and assume
all its attendant liabilities; (b) allow the
contractor's creditors to assign the
Project to another entity acceptable to
DOTC/MIAA; (c) pay the contractor
rent for the facilities and equipment the
DOTC may utilize; or (d) purchase the
terminal at a price established by
independent appraisers. Depending on
the option selected, government may
take immediate possession and control
of the terminal and its operations.
Government will be obligated to
compensate the contractor for the
"equivalent or proportionate contract
costs actually disbursed," but only
where government is the one in breach
of the contract. But under Section
8.06(a) of the CA, whether on account
of Piatco's breach of contract or its
inability to pay its creditors,
government is obliged to either (a)
take over Terminal III and assume all
of Piatco's debts or (b) permit the
qualified unpaid creditors to be
substituted in place of Piatco or to
designate a new operator. And in the
event of government's breach of
contract, Piatco may compel it to
purchase the terminal at fair market
value, per Section 8.06(b) of the CA.
10. Under the DCA, any delay by Piatco in
the payment of the amounts due the
government constitutes breach of
contract. However, under the CA, such
delay does not necessarily constitute
breach of contract, since Piatco is
permitted to suspend payments to the
government in order to first satisfy the
claims of its secured creditors, per
Section 8.04(d) of the CA.
It goes without saying that the amendment of the Contract
bidded out (the DCA or draft concession agreement) in
such substantial manner, without any public bidding,
and after the bidding process had been concluded on
December 11, 1996 is violative of public policy on public
biddings, as well as the spirit and intent of the BOT
Law. The whole point of going through the public bidding
exercise was completely lost. Its very rationale was totally
subverted by permitting Piatco to amend the contract for
which public bidding had already been
concluded. Competitive bidding aims to obtain the best
deal possible by fostering transparency and preventing
favoritism, collusion and fraud in the awarding of contracts.
That is the reason why procedural rules pertaining to public
bidding demand strict observance. 26
In a relatively early case, Caltex v. Delgado
Brothers, 27 this Court made it clear that substantive
amendments to a contract for which a public bidding has
 Page 101 of 458
already been finished should only be awarded after another
public bidding:
"The due execution of a contract after public
bidding is a limitation upon the right of the
contracting parties to alter or amend it without
another public bidding, for otherwise what would
a public bidding be good for if after the execution
of a contract after public bidding, the contracting
parties may alter or amend the contract, or even
cancel it, at their will? Public biddings are held
for the protection of the public, and to give the
public the best possible advantages by means of
open competition between the bidders. He who
bids or offers the best terms is awarded the
contract subject of the bid, and it is obvious that
such protection and best possible advantages to
the public will disappear if the parties to a
contract executed after public bidding may alter
or amend it without another previous public
bidding." 28
The aforementioned case dealt with the unauthorized
amendment of a contract executed after public bidding; in
the situation before us, the amendments were made also
after the bidding, but prior to execution. Be that as it may,
the same rationale underlying Caltex applies to the present
situation with equal force. Allowing the winning bidder to
renegotiate the contract for which the bidding process has
ended is tantamount to permitting it to put in anything it
wants. Here, the winning bidder (Piatco) did not even
bother to wait until after actual execution of the contract
before rushing to amend it. Perhaps it believed that if the
changes were made to a contract already won through
bidding (DCA) instead of waiting until it is executed, the
amendments would not be noticed or discovered by the
public.
In a later case, Mata v. San Diego, 29 this Court reiterated
its ruling as follows:
IcaEDC
"It is true that modification of government
contracts, after the same had been awarded
after a public bidding, is not allowed because
such modification serves to nullify the effects of
the bidding and whatever advantages the
Government had secured thereby and may also
result in manifest injustice to the other bidders.
This prohibition, however, refers to a change in
vital and essential particulars of the agreement
which results in a substantially new contract."
Piatco's counter-argument may be summed up thus: There
was nothing in the 1994 IRR that prohibited further
negotiations and eventual amendments to the DCA even
after the bidding had been concluded. In fact, PBAC Bid
Bulletin No. 3 states: "[A]mendments to the Draft
Concession Agreement shall be issued from time to
time. Said amendments will only cover items that would not
materially affect the preparation of the proponent's
proposal."
I submit that accepting such warped argument will result in
perverting the policy underlying public bidding. The BOT
Law cannot be said to allow the negotiation of contractual
stipulations resulting in a substantially new
contract after the bidding process and price challenge had
been concluded. In fact, the BOT Law, in recognition of the
time, money and effort invested in an unsolicited proposal,
accords its originator the privilege of matching the
challenger's bid.
 Page 102 of 458

Section 4-A of the BOT Law specifically refers to a those loans recorded in Piatco's books
"lower price proposal" by a competing bidder; and to the or loans whose proceeds were actually
right of the original proponent "to match the price" of the used in the Terminal III project.30
challenger. Thus, only the price proposals are in play.
2. Although the contract may be terminated
The terms, conditions and stipulations in the contract for
due to breach by Piatco, it will not be
which public bidding has been concluded are understood
liable to pay the government any
to remain intact and not be subject to further
Liquidated Damages if a new operator
negotiation. Otherwise, the very essence of public bidding
is designated to take over the
will be destroyed there will be no basis for an exact
operation of the terminal. 31
comparison between bids.
3. The Liquidated Damages which
Moreover, Piatco misinterpreted the meaning behind PBAC
government becomes liable for in case
Bid Bulletin No. 3. The phrase amendments . . . from time
of its breach of contract were
to time refers only to those amendments to the draft
substantially increased. 32
concession agreement issued by the PBAC prior to the
submission of the price challenge; it certainly does not 4. Government's right to appoint a
include or permit amendments negotiated for and comptroller for Piatco in case the latter
introduced after the bidding process, has been terminated. encounters liquidity problems was
deleted. 33
Piatco's Concession
Agreement Was Further 5. Government is made liable for Incremental
Amended, (ARCA) Again and Consequential Costs and Losses
Without Public Bidding in case it fails to comply or cause any
Not satisfied with the Concession Agreement, Piatco third party under its direct or indirect
once more without bothering with public bidding control to comply with the special
negotiated with government for still more substantial obligations imposed on government. 34
changes. The result was the Amended and Restated 6. The insurance policies obtained by Piatco
Concession Agreement (ARCA) executed on November covering the terminal are now required
26, 1998. The following changes were introduced: to be assigned to the Senior Lenders
1. The definition of Attendant Liabilities was as security for the loans; previously,
further amended with the result that their proceeds were to be used to
the unpaid loans of Piatco, for which repair and rehabilitate the facility in
government may be required to case of damage. 35
answer, are no longer limited to only
 Page 103 of 458
7. Government bound itself to set the initial
rate of the terminal fee, to be charged
when Terminal III begins operations, at
an amount higher than US$20. 36
8. Government waived its defense of the
illegality of the contract and even
agreed to be liable to pay damages to
Piatco in the event the contract was
declared illegal. 37
9. Even though government may be entitled
to terminate the ARCA on account of
breach by Piatco, government is still
liable to pay Piatco the appraised
value of Terminal III or the Attendant
Liabilities, if the termination occurs
before the In-Service Date. 38 This
condition contravenes the BOT
Law provision on termination
compensation.
10. Government is obligated to take the
administrative action required for
Piatco's imposition, collection and
application of all Public Utility
Revenues.39 No such obligation
existed previously.
11. Government is now also obligated to
perform and cause other persons and
entities under its direct or indirect
control to perform all acts necessary to
perfect the security interests to be
created in favor of Piatco's Senior
Lenders. 40 No such obligation existed
previously.
12. DOTC/MIAA's right of intervention in
instances where Piatco's Non-Public
Utility Revenues become exorbitant or
excessive has been removed. 41
13. The illegality and unenforceability of the
ARCA or any of its material provisions
was made an event of default on the
part of government only, thus
constituting a ground for Piatco to
terminate the ARCA. 42
14. Amounts due from and payable by
government under the contract were
made payable on demand net of
taxes, levies, imposts, duties, charges
or fees of any kind except as required
by law. 43
15. The Parametric Formula in the contract,
which is utilized to compute for
adjustments/increases to the public
utility revenues (i.e., aircraft parking
and tacking fees, check-in counter fee
and terminal fee), was revised to
permit Piatco to input its more costly
short-term borrowing rates instead of
the longer-terms rates in the
computations for adjustments, with the
end result that the changes will
redound to its greater financial benefit.
 Page 104 of 458
16. The Certificate of Completion simply
deleted the successful performance-
testing of the terminal facility in
accordance with defined performance
standards as a pre-condition for
government's acceptance of the
terminal facility. 44
In sum, the foregoing revisions and amendments as
embodied in the ARCA constitute very material
alterations of the terms and conditions of the CA, and give
further manifestly undue advantage to Piatco at the
expense of government. Piatco claims that the changes to
the CA were necessitated by the demands of its foreign
lenders. However, no proof whatsoever has been adduced
to buttress this claim.
In any event, it is quite patent that the sum total of the
aforementioned changes resulted in drastically
weakening the position of government to a degree that
seems quite excessive, even from the standpoint of a
businessperson who regularly transacts with banks and
foreign lenders, is familiar with their mind-set, and
understands what motivates them. On the other hand,
whatever it was that impelled government officials
concerned to accede to those grossly disadvantageous
changes, I can only hazard a guess.
There is no question in my mind that the ARCA was
unauthorized and illegal for lack of public bidding and for
being patently disadvantageous to government.
The Three Supplements
Imposed New Obligations on
Government, Also Without
Prior Public Bidding
After Piatco had managed to breach the protective rampart
of public bidding, it recklessly went on a rampage of further
assaults on the ARCA.
The First Supplement Is
as Void as the ARCA
In the First Supplement ("FS") executed on August 27,
1999, the following changes were made to the ARCA:
1. The amounts payable by Piatco to
government were reduced by allowing
additional exceptions to the Gross
Revenues in which government is
supposed to participate. 45
2. Made part of the properties which
government is obliged to construct
and/or maintain and keep in good
repair are (a) the access road
connecting Terminals II and III the
construction of this access road is the
obligation of Piatco, in lieu of its
obligation to construct an Access
Tunnel connecting Terminals II and III;
and (b) the taxilane and taxiway
these are likewise part of Piatco's
obligations, since they are part and
parcel of the project as described in
Clause 1.3 of the Bid Documents. 46
3. The MIAA is obligated to provide funding
for the maintenance and repair of the
airports and facilities owned or
operated by it and by third persons
under its control. It will also be liable to
 Page 105 of 458
Piatco for the latter's losses, expenses
and damages as well as liability to
third persons, in case MIAA fails to
perform such obligations. In addition,
MIAA will also be liable for the
incremental and consequential costs of
the remedial work done by Piatco on
account of the former's default. 47
4. The FS also imposed on government ten
(10) "Additional Special Obligations,"
including the following:
(a) Working for the removal of the
general aviation traffic from the
NAIA airport complex 48
(b) Providing through MIAA the land
required by Piatco for the
taxilane and one taxiway at no
cost to Piatco 49
(c) Implementing the government's
existing storm drainage master
plan 50
(d) Coordinating with DPWH the
financing, the implementation
and the completion of the
following works before the In-
Service Date: three left-turning
overpasses (EDSA to Tramo St.,
Tramo to Andrews Ave., and
Manlunas Road to Sales
Ave.); 51 and a road upgrade
and improvement program
involving widening, repair and
resurfacing of Sales Road,
Andrews Avenue and Manlunas
Road; improvement of Nichols
Interchange; and removal of
squatters along Andrews
Avenue. 52
(e) Dealing directly with BCDA and the
Phil. Air Force in acquiring
additional land or right of way for
the road upgrade and
improvement program.53
5. Government is required to work for the
immediate reversion to MIAA of
the Nayong Pilipino National Park. 54
6. Government's share in the terminal fees
collected was revised from a flat rate
of P180 to 36 percent thereof; together
with government's percentage share in
the gross revenues of Piatco, the
amount will be remitted to government
in pesos instead of US dollars. 55 This
amendment enables Piatco to benefit
from the further erosion of the peso-
dollar exchange rate, while preventing
government from building up its foreign
exchange reserves.
7. All payments from Piatco to government
are now to be invoiced to MIAA, and
payments are to accrue to the latter's
exclusive benefit. 56 This move
 Page 106 of 458

appears to be in support of the funds Though denominated as Second Supplement, it was

MIAA advanced to DPWH.
I must emphasize that the First Supplement is void in two
respects. First, it is merely an amendment to the ARCA,
upon which it is wholly dependent; therefore, since the
ARCA is void, inexistent and not capable of being ratified
or amended, it follows that the FS too is void, inexistent
and inoperative. Second, even assuming arguendo that the
ARCA is somehow remotely valid, nonetheless the FS, in
imposing significant new obligations upon government,
altered the fundamental terms and stipulations of the
ARCA, thus necessitating a public bidding all over again.
That the FS was entered into sans public bidding renders it
utterly void and inoperative.
The Second Supplement Is
Similarly Void and Inexistent
The Second Supplement ("SS") was executed between the
government and Piatco on September 4, 2000. It calls for
Piatco, acting not as concessionaire of NAIA Terminal III
but as a public works contractor, to undertake in the
government's stead the clearing, removal, demolition
and disposal of improvements, subterranean obstructions
and waste materials at the project site. 57
The scope of the works, the procedures involved, and the
obligations of the contractor are provided for in Parts II and
III of the SS. Section 4.1 sets out the compensation to be
paid, listing specific rates per cubic meter of materials for
each phase of the work excavation, leveling, removal
and disposal, backfilling and dewatering. The amounts
collectible by Piatco are to be offset against the Annual
Guaranteed Payments it must pay government.
nothing less than an entirely new public works contract. Yet
it, too, did not undergo any public bidding, for which reason
it is also void and inoperative.
Not surprisingly, Piatco had to subcontract the works to a
certain Wintrack Builders, a firm reputedly owned by a
former high-ranking DOTC official. But that is another story
altogether.
The Third Supplement Is
Likewise Void and Inexistent
The Third Supplement ("TS"), executed between the
government and Piatco on June 22, 2001, passed on to the
government certain obligations of Piatco as Terminal III
concessionaire, with respect to the surface road connecting
Terminals II and III.
By way of background, at the inception of and forming part
of the NAIA Terminal III project was the proposed
construction of an access tunnel crossing Runway 13/31,
which would connect Terminal III to Terminal II. The Bid
Documents in Section 4.1.2.3[B][i] declared that the said
access tunnel was subject to further negotiation; but for
purposes of the bidding, the proponent should submit a bid
for it as well. Therefore, the tunnel was supposed to be part
and parcel of the Terminal III project.
However, in Section 5 of the First Supplement, the parties
declared that the access tunnel was not economically
viable at that time. In lieu thereof, the parties agreed that a
surface access road (now called the T2-T3 Road) was to
be constructed by Piatco to connect the two terminals.
Since it was plainly in substitution of the tunnel, the surface
road construction should likewise be considered part and
 Page 107 of 458
parcel of the same project, and therefore part of Piatco's
obligation as well. While the access tunnel was estimated
to cost about P800 million, the surface road would have a
price tag in the vicinity of about P100 million, thus
producing significant savings for Piatco.
Yet, the Third Supplement, while confirming that Piatco
would construct the T2-T3 Road, nevertheless shifted to
government some of the obligations pertaining to the
former, as follows:
1. Government is now obliged to remove at
its own expense all tenants, squatters,
improvements and/or waste materials
on the site where the T2-T3 road is to
be constructed. 58 There was no
similar obligation on the part of
government insofar as the access
tunnel was concerned.
2. Should government fail to carry out its
obligation as above described, Piatco
may undertake it on government's
behalf, subject to the terms and
conditions (including compensation
payments) contained in the Second
Supplement. 59
3. MIAA will answer for the operation,
maintenance and repair of the T2-T3
Road. 60
The TS depends upon and is intended to supplement the
ARCA as well as the First Supplement, both of which are
void and inexistent and not capable of being ratified or
amended. It follows that the TS is likewise void, inexistent
and inoperative. And even if, hypothetically speaking, both
ARCA and FS are valid, still, the Third Supplement
imposing as it does significant new obligations upon
government would in effect alter the terms and
stipulations of the ARCA in material respects, thus
necessitating another public bidding. Since the TS was not
subjected to public bidding, it is consequently utterly void
as well. At any rate, the TS created new monetary
obligations on the part of government, for which there were
no prior appropriations. Hence it follows that the same is
void ab initio.
In patiently tracing the progress of the Piatco contracts
from their inception up to the present, I noted that the
whole process was riddled with significant lapses, if not
outright irregularity and wholesale violations of law and
public policy. The rationale of beginning at the beginning,
so to speak, will become evident when the question of what
to do with the five Piatco contracts is discussed later on.
In the meantime, I shall take up specific, provisions or
changes in the contracts and highlight the more prominent
objectionable features.
Government Directly
Guarantees Piatco Debts
Certainly the most discussed provision in the parties'
arguments is the one creating an unauthorized, direct
government guarantee of Piatco's obligations in favor of
the lenders.
Section 4-A of the BOT Law as amended states
that unsolicited proposals, such as the NAIA Terminal III
Project, may be accepted by government provided inter
 Page 108 of 458
alia thatno direct government guarantee, subsidy or equity
is required. In short, such guarantee is prohibited in
unsolicited proposals. Section 2(n) of the same legislation
defines direct government guarantee as "an agreement
whereby the government or any of its agencies or local
government units (will) assume responsibility for the
repayment of debt directly incurred by the project
proponent in implementing the project in case of a loan
default."
Both the CA and the ARCA have provisions that
undeniably create such prohibited government guarantee.
Section 4.04 (c)(iv) to (vi) of the ARCA, which is similar to
Section 4.04 of the CA, provides thus:
"(iv) that if Concessionaire is in default under a
payment obligation owed to the Senior Lenders,
and as a result thereof the Senior Lenders have
become entitled to accelerate the Senior Loans,
the Senior Lenders shall have the right to notify
GRP of the same . . .;
(v) . . . the Senior Lenders may after written
notification to GRP, transfer the
Concessionaire's rights and obligations to a
transferee . . .;
(vi) if the Senior Lenders . . . are unable to . . .
effect a transfer . . ., then GRP and the Senior
Lenders shall endeavor . . . to enter into any
other arrangement relating to the Development
Facility. . . . If no agreement relating to the
Development Facility is arrived at by GRP and
the Senior Lenders within the said 180-day
period, then at the end thereof the Development
Facility shall be transferred by the
Concessionaire to GRP or its designee and GRP
shall make a termination payment to
Concessionaire equal to the Appraised Value (as
hereinafter defined) of the Development Facility
or the sum of the Attendant Liabilities, if greater .
. . ."
In turn, the term Attendant Liabilities is defined in Section
1.06 of the ARCA as follows:
"Attendant Liabilities refer to all amounts in each
case supported by verifiable evidence from time
to time owed or which may become, owing by
Concessionaire to Senior Lenders or any other
persons or entities who have provided, loaned or
advanced funds or provided financial facilities to
Concessionaire for the Project, including, without
limitation, all principal, interest, associated fees,
charges, reimbursements, and other related
expenses (including the fees, charges and
expenses of any agents or trustees of such
persons or entities), whether payable at maturity,
by acceleration or otherwise, and further
including amounts owed by Concessionaire to its
professional consultants and advisers, suppliers,
contractors and sub-contractors."
Government's agreement to pay becomes effective in the
event of a default by Piatco on any of its loan obligations to
the Senior Lenders, and the amount to be paid by
government is the greater of either the Appraised Value of
Terminal III or the aggregate amount of the moneys owed
by Piatco whether to the Senior Lenders or to other
entities, including its suppliers, contractors and
subcontractors. In effect, therefore, this agreement already
constitutes the prohibited assumption by government of
responsibility for repayment of Piatco's debts in case of a
loan default. In fine, a direct government guarantee.
 Page 109 of 458
It matters not that there is a roundabout procedure
prescribed by Section 4.04(c)(iv), (v) and (vi) that would
require, first, an attempt (albeit unsuccessful) by the Senior
Lenders to transfer Piatco's rights to a transferee of their
choice; and, second, an effort (equally unsuccessful) to
"enter into any other arrangement" with the government
regarding the Terminal III facility, before government is
required to make good on its guarantee. What is
abundantly clear is the fact that, in the devious labyrinthine
process detailed in the aforesaid section, it is entirely within
the Senior Lenders' power, prerogative and control
exercisable via a mere refusal or inability to agree upon "a
transferee" or "any other arrangement" regarding the
terminal facility to push the process forward to the
ultimate contractual cul-de-sac, wherein government will be
compelled to abjectly surrender and make good on its
guarantee of payment.
Piatco also argues that there is no proviso requiring
government to pay the Senior Lenders in the event of
Piatco's default. This is literally true, in the sense that
Section 4.04(c)(vi) of ARCA speaks of government making
the termination payment to Piatco, not to the lenders.
However, it is almost a certainty that the Senior Lenders
will already have made Piatco sign over to them, ahead of
time, its right to receive such payments from government;
and/or they may already have had themselves appointed
its attorneys-in-fact for the purpose of collecting and
receiving such payments.
Nevertheless, as petitioners-in-intervention pointed out in
their Memorandum, 61 the termination payment is to be
made to Piatco, not to the lenders; and there is no
provision anywhere in the contract documents to prevent it
from diverting the proceeds to its own benefit and/or to
ensure that it will necessarily use the same to pay off the
Senior Lenders and other creditors, in order to avert the
foreclosure of the mortgage and other liens on the terminal
facility. Such deficiency puts the interests of government at
great risk. Indeed, if the unthinkable were to happen,
government would be paying several hundreds of millions
of dollars, but the mortgage liens on the facility may still be
foreclosed by the Senior Lenders just the same.
Consequently, the Piatco contracts are also objectionable
for grievously failing to adequately protect government's
interests. More accurately, the contracts would consistently
weaken and do away with protection of government
interests. As such, they are therefore grossly lopsided in
favor of Piatco and/or its Senior Lenders.
While on this subject, it is well to recall the earlier
discussion regarding a particularly noticeable alteration of
the concept of "Attendant Liabilities." In Section 1.06 of the
CA defining the term, the Piatco debts to be assumed/paid
by government were qualified by the phrases recorded and
from time to time outstanding in the books of the
Concessionaire and actually used for the project. These
phrases were eliminated from the ARCA's definition of
Attendant Liabilities.
Since no explanation has been forthcoming from Piatco as
to the possible justification for such a drastic change, the
only conclusion, possible is that it intends to haveall of its
debts covered by the guarantee, regardless of whether or
not they are disclosed in its books. This has particular
reference to those borrowings which were obtained in
violation of the loan covenants requiring Piatco to maintain
a minimum 70:30 debt-to-equity ratio, and even if the loan
proceeds were not actually used for the project itself.
 Page 110 of 458
This point brings us back to the guarantee itself. In Section
4.04(c)(vi) of ARCA, the amount which government has
guaranteed to pay as termination payment is thegreater of
either (i) the Appraised Value of the terminal facility or (ii)
the aggregate of the Attendant Liabilities. Given that the
Attendant Liabilities may include practically any Piatco debt
under the sun, it is highly conceivable that their sum may
greatly exceed the appraised value of the facility, and
government may end up paying very much more than the
real worth of Terminal III. (So why did government have to
bother with public bidding anyway?)
In the final analysis, Section 4.04(c)(iv) to (vi) of the ARCA
is diametrically at odds with the spirit and the intent of the
BOT Law. The law meant to mobilize private resources (the
private sector) to take on the burden and the risks of
financing the construction, operation and maintenance of
relevant infrastructure and development projects for the
simple reason that government is not in a position to do so.
By the same token, government guarantee was prohibited,
since it would merely defeat the purpose and raison
d'tre of a build-operate-and-transfer project to be
undertaken by the private sector.
To the extent that the project proponent is able to obtain
loans to fund the project, those risks are shared between
the project proponent on the one hand, and its banks and
other lenders on the other. But where the proponent or its
lenders manage to cajol or coerce the government into
extending a guarantee of payment of the loan obligations,
the risks assumed by the lenders are passed right back to
government. I cannot understand why, in the instant case,
government cheerfully assented to re-assuming the risks of
the project when it gave the prohibited guarantee and thus
simply negated the very purpose of the BOT Law and the
protection it gives the government.
Contract Termination
Provisions in the Piatco
Contracts Are Void
The BOT Law as amended provides for contract
termination as follows:
"Sec. 7. Contract Termination. In the event
that a project is revoked, cancelled or terminated
by the government through no fault of the project
proponent or by mutual agreement, the
Government shall compensate the said project
proponent for its actual expenses incurred in the
project plus a reasonable rate of return thereon
not exceeding that stated in the contract as of
the date of such revocation, cancellation or
termination: Provided, That the interest of the
Government in this instances [sic] shall be duly
insured with the Government Service Insurance
System or any other insurance entity duly
accredited by the Office of the Insurance
Commissioner: Provided, finally, That the cost of
the insurance coverage shall be included in the
terms and conditions of the bidding referred to
above.
"In the event that the government defaults on
certain major obligations in the contract and such
failure is not remediable or if remediable shall
remain unremedied for an unreasonable length
of time, the project proponent/contractor may, by
prior notice to the concerned national
government agency or local government unit
specifying the turn-over date, terminate the
 Page 111 of 458
contract. The project proponent/contractor shall
be reasonably compensated by the Government
for equivalent or proportionate contract cost as
defined in the contract."
The foregoing statutory provision in effect provides for the
following limited instances when termination
compensation may be allowed:
1. Termination by the government through no
fault of the project proponent
2. Termination upon the parties' mutual
agreement
3. Termination by the proponent due to
government's default on certain major
contractual obligations
To emphasize, the law does not permit compensation for
the project proponent when contract termination is due to
the proponent's own fault or breach of contract.
This principle was clearly violated in the Piatco Contracts.
The ARCA stipulates that government is to pay termination
compensation to Piatco even when termination is initiated
by government for the following causes:
"(i) Failure of Concessionaire to finish the Works
in all material respects in accordance with the
Tender Design and the Timetable;
(ii) Commission by Concessionaire of a material
breach of this Agreement . . .;
(iii) . . . a change in control of Concessionaire
arising from the sale, assignment, transfer or
other disposition of capital stock which results in
an ownership structure violative of statutory or
constitutional limitations;
(iv) A pattern of continuing or repeated non-
compliance, willful violation, or non-performance
of other terms and conditions hereof which is
hereby deemed a material breach of this
Agreement . . ." 62
As if that were not bad enough, the ARCA also inserted
into Section 8.01 the phrase "Subject to Section 4.04." The
effect of this insertion is that in those instances where
government may terminate the contract on account of
Piatco's breach, and it is nevertheless required under the
ARCA to make termination compensation to Piatco even
though unauthorized by law, such compensation is to be
equivalent to the payment amount guaranteed by
government either a) the Appraised Value of the
terminal facility or (b) the aggregate of the Attendant
Liabilities, whichever amount is greater!
Clearly, this condition is not in line with Section 7 of the
BOT Law. That provision permits a project proponent to
recover the actual expenses it incurred in the prosecution
of the project plus a reasonable rate of return not in excess
of that provided in the contract; or to be compensated for
the equivalent or proportionate contract cost as defined in
the contract, in case the government is in default on certain
major contractual obligations.
Furthermore, in those instances where such termination
compensation is authorized by the BOT Law, it is
indispensable that the interest of government be duly
insured. Section 5.08 the ARCA mandates insurance
coverage for the terminal facility; but all insurance policies
are to be assigned, and all proceeds are payable, to the
 Page 112 of 458
Senior Lenders. In brief, the interest being secured by such
coverage is that of the Senior Lenders, not that of
government. This can hardly be considered compliance
with law.
In essence, the ARCA provisions on termination
compensation result in another unauthorized government
guarantee, this time in favor of Piatco.
A Prohibited Direct Government Subsidy,
Which at the Same Time Is an Assault
on the National Honor
Still another contractual provision offensive to law and
public policy is Section 8.01(d) of the ARCA, which is a
"bolder and badder" version of Section 8.04(d) of the CA.
It will be recalled that Section 4-A of the BOT Law as
amended prohibits not only direct government guarantees,
but likewise a direct government subsidy for unsolicited
proposals. Section 13.2. b. iii. of the 1999 IRR defines
a direct government subsidy as encompassing "an
agreement whereby the Government . . . will . . . postpone
any payments due from the proponent."
Despite the statutory ban, Section 8.01 (d) of the ARCA
provides thus:
"(d) The provisions of Section 8.01(a)
notwithstanding, and for the purpose of
preventing a disruption of the operations in the
Terminal and/or Terminal Complex, in the event
that at any time Concessionaire is of the
reasonable opinion that it shall be unable to
meet a payment obligation owed to the Senior
Lenders, Concessionaire shall give prompt
notice to GRP, through DOTC/MIAA and to the
Senior Lenders. In such circumstances, the
Senior Lenders (or the Senior Lenders'
Representative) may ensure that after making
provision for administrative expenses and
depreciation, the cash resources of
Concessionaire shall first be used and applied to
meet all payment obligations owed to the Senior
Lenders. Any excess cash, after meeting such
payment obligations, shall be earmarked for the
payment of all sums payable by Concessionaire
to GRP under this Agreement. If by reason of the
foregoing GRP should be unable to collect in full
all payments due to GRP under this Agreement,
then the unpaid balance shall be payable within
a 90-day grace period counted from the relevant
due date, with interest per annum at the rate
equal to the average 91-day Treasury Bill Rate
as of the auction date immediately preceding the
relevant due date. If payment is not effected by
Concessionaire within the grace period, then a
spread of five (5%) percent over the applicable
91-day Treasury Bill Rate shall be added on the
unpaid amount commencing on the expiry of the
grace period up to the day of full payment. When
the temporary illiquidity of Concessionaire shall
have been corrected and the cash position of
Concessionaire should indicate its ability to meet
its maturing obligations, then the provisions set
forth under this Section 8.01(d) shall cease to
apply. The foregoing remedial measures shall be
applicable only while there remains unpaid and
outstanding amounts owed to the Senior
Lenders." (Italics supplied)
By any manner of interpretation or application, Section
8.01(d) of the ARCA clearly mandates
the indefinite postponement of payment of all of Piatco's
obligations to the government, in order to ensure that
 Page 113 of 458
Piatco's obligations to the Senior Lenders are paid in full
first. That is nothing more or less than the direct
government subsidy prohibited by the BOT Law and the
IRR. The fact that Piatco will pay interest on the unpaid
amounts owed to government does not change the
situation or render the prohibited subsidy any less
unacceptable.
But beyond the clear violations of law, there are larger
issues involved in the ARCA. Earlier, I mentioned that
Section 8.01(d) of the ARCA completely eliminated the
proviso in Section 8.04(d) of the CA which gave
government the right to appoint a financial controller to
manage the cash position of Piatco during situations of
financial distress. Not only has government been deprived
of any means of monitoring and managing the situation;
worse, as can be seen from Section 8.01(d) above-quoted,
the Senior Lenders have effectively locked in on the right to
exercise financial controllership over Piatco and to allocate
its cash resources to the payment of all amounts owed to
the Senior Lenders before allowing any payment to be
made to government.
In brief, this particular provision of the ARCA has placed in
the hands of foreign lenders the power and the authority to
determine how much (if at all) and when the Philippine
government (as grantor of the franchise) may be allowed to
receive from Piatco. In that situation, government will be at
the mercy of the foreign lenders. This is a situation
completely contrary to the rationale of the BOT Law and to
public policy.
The aforesaid provision rouses mixed emotions shame
and disgust at the parties' (especially the government
officials') docile submission and abject servitude and
surrender to the imperious and excessive demands of the
foreign lenders, on the one hand; and vehement outrage at
the affront to the sovereignty of the Republic and to the
national honor, on the other. It is indeed time to put an end
to such an unbearable, dishonorable situation.
The Piatco Contracts Unarguably
Violate Constitutional Injunctions
I will now discuss the manner in which the Piatco Contracts
offended the Constitution.
The Exclusive Right Granted to Piatco
to Operate a Public Utility Is Prohibited
by the Constitution
While Section 2.02 of the ARCA spoke of granting to Piatco
"a franchise to operate and maintain the Terminal
Complex," Section 3.02(a) of the same ARCA granted to
Piatco, for the entire term of the concession agreement,
"the exclusive right to operate a commercial international
passenger terminal within the Island of Luzon" with the
exception of those three terminals already existing 63 at the
time of execution of the ARCA.
Section 11 of Article XII of the Constitution prohibits the
grant of a "franchise, certificate, or any other form of
authorization for the operation of a public utility" that is
"exclusive in character."
In its Opinion No. 078, Series of 1995, the Department of
justice held that "the NAIA Terminal III which . . . is a
'terminal for public use' is a public utility." Consequently,
the constitutional prohibition against the exclusivity of a
franchise applies to the franchise for the operation of NAIA
Terminal III as well.
 Page 114 of 458
What was granted to Piatco was not merely a franchise,
but an "exclusive right" to operate an international
passenger terminal within the "Island of Luzon." What this
grant effectively means is that the government is now
estopped from exercising its inherent power to award any
other person another franchise or a right to operate such a
public utility, in the event public interest in Luzon requires
it. This restriction is highly detrimental to government and
to the public interest. Former Secretary of Justice
Hernando B. Perez expressed this point well in his
Memorandum for the President dated 21 May 2002:
"Section 3.02 on 'Exclusivity'
"This provision gives to PIATCO (the
Concessionaire) the exclusive right to operate a
commercial international airport within the Island
of Luzon with the exception of those already
existing at the time of the execution of the
Agreement, such as the airports at Subic, Clark
and Laoag City. In the case of the Clark
International Airport, however, the provision
restricts its operation beyond its design capacity
of 850,000 passengers per annum and the
operation of new terminal facilities therein until
after the new NAIA Terminal III shall have
consistently reached or exceeded its design
capacity of ten (10) million passenger capacity
per year for three (3) consecutive years during
the concession period.
"This is an onerous and disadvantageous
provision. It effectively grants PIATCO
a monopoly in Luzon and ties the hands of
government in the matter of developing new
airports which may be found expedient and
necessary in carrying out any future plan for an
inter-modal transportation system in Luzon.
"Additionally, it imposes an unreasonable
restriction on the operation of the Clark
International Airport which could adversely affect
the operation and development of the Clark
Special Economic Zone to the economic
prejudice of the local constituencies that are
being benefited by its operation." (Italics
supplied)
While it cannot be gainsaid that an enterprise that is a
public utility may happen to constitute a monopoly on
account of the very nature of its business and the absence
of competition, such a situation does not however
constitute justification to violate the constitutional
prohibition and grant an exclusive franchise or exclusive
right to operate a public utility.
Piatco's contention that the Constitution does not actually
prohibit monopolies is beside the point. As correctly
argued, 64 the existence of a monopoly by a public utility is
a situation created by circumstances that do not encourage
competition. This situation is different from the grant of a
franchise to operate a public utility, a privilege granted by
government. Of course, the grant of a franchise may result
in a monopoly. But making such franchise exclusive is what
is expressly proscribed by the Constitution.
Actually, the aforementioned Section 3.02 of the ARCA
more than just guaranteed exclusivity; it also guaranteed
that the government will not improve or expand the facilities
at Clark and in fact is required to put a cap on the
latter's operations until after Terminal III shall have been
operated at or beyond its peak capacity for three
consecutive years. 65 As counsel for public respondents
 Page 115 of 458
pointed out, in the real world where the rate of influx of
international passengers can fluctuate substantially from
year to year, it may take many years before Terminal III
sees three consecutive years' operations at peak capacity.
The Diosdado Macapagal International Airport may thus
end up stagnating for a long time. Indeed, in order to
ensure greater profits for Piatco, the economic progress of
a region has had to be sacrificed.
The Piatco Contracts Violate
the Time Limitation on Franchises
Section 11 of Article XII of the Constitution also provides
that "no franchise, certificate or any other form of
authorization for the operation of a public utility shall be . . .
for a longer period than fifty years." After all, a franchise
held for an unreasonably long time would likely give rise to
the same evils as a monopoly.
The Piatco Contracts have come up with an innovative way
to circumvent the prohibition and obtain an extension. This
fact can be gleaned from Section 8.03(b) of the ARCA,
which I quote thus:
"Sec. 8.03. Termination Procedure and
Consequences of Termination.
a) . . .
b) In the event the Agreement is terminated
pursuant to Section 8.01 (b) hereof,
Concessionaire shall be entitled to collect the
Liquidated Damages specified in Annex 'G'. The
full payment by GRP to Concessionaire of the
Liquidated Damages shall be a condition
precedent to the transfer by Concessionaire to
GRP of the Development Facility. Prior to the full
payment of the Liquidated Damages,
Concessionaire shall to the extent practicable
continue to operate the Terminal and the
Terminal Complex and shall be entitled to retain
and withhold all payments to GRP for the
purpose of offsetting the same against the
Liquidated Damages. Upon full payment of the
Liquidated Damages, Concessionaire shall
immediately transfer the Development Facility to
GRP on 'as-is-where-is' basis."
The aforesaid easy payment scheme is less beneficial than
it first appears. Although it enables government to avoid
having to make outright payment of an obligation that will
likely run into billions of pesos, this easy payment plan will
nevertheless cost government considerable loss of income,
which it would earn if it were to operate Terminal III by
itself. Inasmuch as payments to the concessionaire
(Piatco) will be on "installment basis," interest charges on
the remaining unpaid balance would undoubtedly cause
the total outstanding balance to swell. Piatco would thus be
entitled to remain in the driver's seat and keep operating
the terminal for an indefinite length of time.
The Contracts Create Two
Monopolies for Piatco
By way of background, two monopolies were actually
created by the Piatco contracts. The first and more obvious
one refers to the business of operating an international
passenger terminal in Luzon, the business end of which
involves providing international airlines with parking space
for their aircraft, and airline passengers with the use of
departure and arrival areas, check-in counters, information
systems, conveyor systems, security equipment and
paraphernalia, immigrations and customs processing
 Page 116 of 458
areas; and amenities such as comfort rooms, restaurants
and shops.
In furtherance of the first monopoly, the Piatco Contracts
stipulate that the NAIA Terminal III will be the only facility to
be operated as an international passenger terminal; 66 that
NAIA Terminals I and II will no longer be operated as
such; 67 and that no one (including the government) will be
allowed to compete with Piatco in the operation of an
international passenger terminal in the NAIA
Complex. 68 Given that, at this time, the government and
Piatco are the only ones engaged in the business of
operating an international passenger terminal, I am not
acutely concerned with this particular monopolistic
situation.
There was however another monopoly within the NAIA
created by the subject contracts for Piatco in the
business of providing international airlines with the
following: groundhandling, in-flight catering, cargo
handling, and aircraft repair and maintenance services.
These are lines of business activity in which are engaged
many service providers (including the petitioners-in-
intervention), who will be adversely affected upon full
implementation of the Piatco Contracts, particularly
Sections 3.01(d) 69 and (e) 70 of both the ARCA and the
CA.
On the one hand, Section 3.02(a) of the ARCA makes
Terminal III the only international passenger terminal at the
NAIA, and therefore the only place within the NAIA
Complex where the business of providing airport-related
services to international airlines may be conducted. On the
other hand, Section 3.01(d) of the ARCA requires
government, through the MIAA, not to allow service
providers with expired MIAA contracts to renew or extend
their contracts to render airport-related services to airlines.
Meanwhile, Section 3.01(e) of the ARCA requires
government, through the DOTC and MIAA, not to allow
service providers those with subsisting concession
agreements for services and operations being conducted at
Terminal I to carry over their concession agreements,
services and operations to Terminal III, unless they first
enter into a separate agreement with Piatco. ACaTIc
The aforementioned provisions vest in Piatco effective and
exclusive control over which service provider may and may
not operate at Terminal III and render the airport-related
services needed by international airlines. It thereby
possesses the power to exclude competition. By necessary
implication, it also has effective control over the fees and
charges that will be imposed and collected by these service
providers.
This intention is exceedingly clear in the declaration by
Piatco that it is "completely within its rights to exclude any
party that it has not contracted with from NAIA Terminal
III." 71
Worse, there is nothing whatsoever in the Piatco Contracts
that can serve to restrict, control or regulate the
concessionaire's discretion and power to reject any service
provider and/or impose any term or condition it may see fit
in any contract it enters into with a service provider. In
brief, there is no safeguard whatsoever to ensure free and
fair competition in the service-provider sector.
In the meantime, and not surprisingly, Piatco is first in line,
ready to exploit the unique business opportunity. It
announced 72 that it has accredited three groundhandlers
 Page 117 of 458
for Terminal III. Aside from the Philippine Airlines, the other
accredited entities are the Philippine Airport and Ground
Services Globeground, Inc. ("PAGSGlobeground") and the
Orbit Air Systems, Inc. ("Orbit"). PAGSGlobeground is a
wholly-owned subsidiary of the Philippine Airport and
Ground Services, Inc. or PAGS, 73 while Orbit is a wholly-
owned subsidiary of Friendship Holdings, Inc., 74 which is in
turn owned 80 percent by PAGS. 75 PAGS is a service
provider owned 60 percent by the Cheng Family; 76 it is a
stockholder of 35 percent of Piatco 77 and is the latter's
designated contractor-operator for NAIA Terminal III. 78
Such entry into and domination of the airport-related
services sector appear to be very much in line with the
following provisions contained in the First Addendum to the
Piatco Shareholders Agreement, 79 executed on July 6,
1999, which appear to constitute a sort of master plan to
create a monopoly and combinations in restraint of trade:
"11. The Shareholders shall ensure:
a. . . .
b. That (Phil. Airport and Ground
Services, Inc.) PAGS and/or its
designated Affiliates shall, at all times
during the Concession Period, be
exclusively authorized by (PIATCO) to
engage in the provision of ground-
handling, catering and fueling services
within the Terminal Complex.
c. That PAIRCARGO and/or its
designated Affiliate shall, during the
Concession Period, be the only entities
authorized to construct and operate a
warehouse for all cargo handling and
related services within the Site."
Precisely, proscribed by our Constitution are the monopoly
and the restraint of trade being fostered by the Piatco
Contracts through the erection of barriers to the entry of
other service providers into Terminal III. In Tatad
v. Secretary of the Department of Energy, 80 the Court
ruled:
". . . [S]ection 19 of Article XII of the
Constitution . . . mandates: 'The State shall
regulate or prohibit monopolies when the public
interest so requires. No combinations in restraint
of trade or unfair competition shall be allowed.'
"A monopoly is a privilege or peculiar advantage
vested in one or more persons or companies,
consisting in the exclusive right or power to carry
on a particular business or trade, manufacture a
particular article, or control the sale or the whole
supply of a particular commodity. It is a form of
market structure in which one or only a few firms
dominate the total sales of a product or service.
On the other hand, a combination in restraint of
trade is an agreement or understanding between
two or more persons, in the form of a contract,
trust, pool, holding company, or other form of
association, for the purpose of unduly restricting
competition, monopolizing trade and commerce
in a certain commodity, controlling its production,
distribution and price, or otherwise interfering
with freedom of trade without statutory authority.
Combination in restraint of trade refers to the
means while monopoly refers to the end.
"xxx xxx xxx
"Section 19, Article XII of our Constitution is anti-
trust in history and in spirit. It espouses
competition. The desirability of competition is the
 Page 118 of 458
reason for the prohibition against restraint of
trade, the reason for the interdiction of unfair
competition, and the reason for regulation of
unmitigated monopolies. Competition is thus the
underlying principle of [S]ection 19, Article XII of
our Constitution,. . ." 81
Gokongwei Jr. v. Securities and Exchange
Commission 82 elucidates the criteria to be employed: "A
'monopoly' embraces any combination the tendency of
which is to prevent competition in the broad and general
sense, or to control prices to the detriment of the public. In
short, it is the concentration of business in the hands of a
few.The material consideration in determining its existence
is not that prices are raised and competition actually
excluded, but that power exists to raise prices or exclude
competition when desired." 83 (Italics supplied)
The Contracts Encourage Monopolistic Pricing, Too
Aside from creating a monopoly, the Piatco contracts also
give the concessionaire virtually limitless power over the
charging of fees, rentals and so forth. What little "oversight
function" the government might be able and minded to
exercise is less than sufficient to protect the public interest,
as can be gleaned from the following provisions:
"Sec. 6.06. Adjustment of Non-Public Utility Fees
and Charges
"For fees, rentals and charges constituting Non-
Public Utility Revenues, Concessionaire may
make any adjustments it deems appropriate
without need for the consent of GRP or any
government agency subject to Sec. 6.03(c)."
Section 6.03(c) in turn provides:
"(c) Concessionaire shall at all times be judicious
in fixing fees and charges constituting Non-
Public Utility Revenues in order to ensure that
End Users are not unreasonably deprived of
services. While the vehicular parking fee,
porterage fee and greeter/wellwisher fee
constitute Non-Public Utility Revenues of
Concessionaire, GRP may require
Concessionaire to explain and justify the fee it
may set from time to time, if in the reasonable
opinion of GRP the said fees have become
exorbitant resulting in the unreasonable
deprivation of End Users of such services."
It will be noted that the above-quoted provision has no
teeth, so the concessionaire can defy the government
without fear of any sanction. Moreover, Section 6.06
taken together with Section 6.03(c) of the ARCA falls
short of the standard set by the BOT Law as amended,
which expressly requires in Section 2(b) that the project
proponent is "allowed to charge facility users appropriate
tolls, fees, rentals and charges not exceeding those
proposed in its bid or as negotiated and incorporated in the
contract . . . ."
The Piatco Contracts Violate
Constitutional Prohibitions
Against Impairment of Contracts
and Deprivation of Property Without
Due Process
Earlier, I discussed how Section 3.01(e) 84 of both the CA
and the ARCA requires government, through DOTC/MIAA,
not to permit the carry-over to Terminal III of the services
and operations of certain service providers currently
operating at Terminal I with subsisting contracts.
 Page 119 of 458
By the In-Service Date, Terminal III shall be the only facility
to be operated as an international passenger terminal at
the NAIA; 85 thus, Terminals I and II shall no longer operate
as such, 86 and no one shall be allowed to compete with
Piatco in the operation of an international passenger
terminal in the NAIA. 87 The bottom line is that, as of the In-
Service Date, Terminal III will be the only terminal where
the business of providing airport-related services to
international airlines and passengers may be conducted at
all.
Consequently, government through the DOTC/MIAA will be
compelled to cease honoring existing contracts with service
providers after the In-Service Date, as they cannot be
allowed to operate in Terminal III.
In short, the CA and the ARCA obligate and constrain
government to break its existing contracts with these
service providers.
Notably, government is not in a position to require Piatco to
accommodate the displaced service providers, and it would
be unrealistic to think that these service providers can
perform their service contracts in some other international
airport outside Luzon. Obviously, then, these displaced
service providers are to borrow a quaint expression
up the river without a paddle. In plainer terms, they will
have lost their businesses entirely, in the blink of an eye.
What we have here is a set of contractual provisions that
impair the obligation of contracts and contravene the
constitutional prohibition against deprivation of property
without due process of law. 88
Moreover, since the displaced service providers, being
unable to operate, will be forced to close shop, their
respective employees among them Messrs. Agan and
Lopez et al. have very grave cause for concern, as they
will find themselves out of employment and bereft of their
means of livelihood. This situation comprises still another
violation of the constitution prohibition against deprivation
of property without due process.
True, doing business at the NAIA may be viewed more as
a privilege than as a right. Nonetheless, where that
privilege has been availed of by the petitioners-in-
intervention service providers for years on end, a situation
arises, similar to that in American Inter-fashion
v. GTEB. 89 We held therein that a privilege enjoyed for
seven years "evolved into some form of property right
which should not be removed . . . arbitrarily and without
due process." Said pronouncement is particularly relevant
and applicable to the situation at bar because the livelihood
of the employees of petitioners-intervenors are at stake.
The Piatco Contracts Violate
Constitutional Prohibition Against
Deprivation of Liberty Without
Due Process
The Piatco Contracts by locking out existing service
providers from entry into Terminal III and restricting entry of
future service providers, thereby infringed upon the
freedom guaranteed to and heretofore enjoyed by
international airlines to contract with local service
providers of their choice, and vice versa.
Both the service providers and their client airlines will be
deprived of the right to liberty, which includes the right to
 Page 120 of 458
enter into all contracts, 90 and/or the right to make a
contract in relation to one's business. 91
By Creating New Financial Obligations for Government,
Supplements to the ARCA Violate the Constitutional
Ban on Disbursement of Public Funds Without Valid
Appropriation
Clearly prohibited by the Constitution is the disbursement
of public funds out of the treasury, except in pursuance of
an appropriation made by law. 92 The immediate effect of
this constitutional ban is that all the various agencies of
government are constrained to limit their expenditures to
the amounts appropriated by law for each fiscal year; and
to carefully count their cash before taking on contractual
commitments. Giving flesh and form to the injunction of the
fundamental law, Sections 46 and 47 of Executive Order
292, otherwise known as the Administrative Code of 1987,
provide as follows:
"Sec. 46. Appropriation Before Entering into
Contract. (1) No contract involving the
expenditure of public funds shall be entered into
unless there is an appropriation therefor, the
unexpended balance of which, free of other
obligations, is sufficient to cover the proposed
expenditure; and . . .
"Sec. 47. Certificate Showing Appropriation to
Meet Contract. Except in the case of a
contract for personal service, for supplies for
current consumption or to be carried in stock not
exceeding the estimated consumption for three
(3) months, or banking transactions of
government-owned or controlled banks, no
contract involving the expenditure of public funds
by any government agency shall be entered into
or authorized unless the proper accounting
official of the agency concerned shall have
certified to the officer entering into the obligation
that funds have been duly appropriated for the
purpose and that the amount necessary to cover
the proposed contract for the current calendar
year is available for expenditure on account
thereof, subject to verification by the auditor
concerned. The certificate signed by the proper
accounting official and the auditor who verified it,
shall be attached to and become an integral part
of the proposed contract, and the sum so
certified shall not thereafter be available for
expenditure for any other purpose until the
obligation of the government agency concerned
under the contract is fully extinguished."
Referring to the aforequoted provisions, this Court has held
that "(I)t is quite evident from the tenor of the language of
the law that the existence of appropriations and the
availability of funds are indispensable pre-requisites to or
conditions sine qua non for the execution of government
contracts. The obvious intent is to impose such conditions
as a priori requisites to the validity of the proposed
contract." 93
Notwithstanding the constitutional ban, statutory mandates
and Jurisprudential precedents, the three Supplements to
the ARCA, which were not approved by NEDA, imposed on
government the additional burden of spending public
moneys without prior appropriation.
In the First Supplement ("FS") dated August 27, 1999, the
following requirements were imposed on the government:
To construct, maintain and keep in good
repair and operating condition all
 Page 121 of 458

airport support services, facilities, taxilane and one taxiway, at no

equipment and infrastructure owned cost to Piatco
and/or operated by MIAA, which are
Implementing the government's
not part of the Project or which are
existing storm drainage master
located outside the Site, even though
plan
constructed by Concessionaire
including the access road connecting Coordinating with DPWH the
Terminals II and III and the taxilane, financing, implementation and
taxiways and runways completion of the following
works before the In-Service
To obligate the MIAA to provide funding for
Date: three left-turning
the upkeep, maintenance and repair of
overpasses (Edsa to Tramo St.,
the airports and facilities owned or
Tramo to Andrews Ave., and
operated by it and by third persons
Manlunas Road to Sales Ave.)
under its control in order to ensure
and a road upgrade and
compliance with international
improvement program involving
standards; and holding MIAA liable to
widening, repair and resurfacing
Piatco for the latter's losses, expenses
of Sales Road, Andrews Avenue
and damages as well as for the latter's
and Manlunas Road;
liability to third persons, in case MIAA
improvement of Nichols
fails to perform such obligations; in
Interchange; and removal of
addition, MIAA will also be liable for
squatters along Andrews
the incremental and consequential
Avenue
costs of the remedial work done by
Piatco on account of the former's Dealing directly with BCDA and the
default. Philippine Air Force in acquiring
additional land or right of way for
Section 4 of the FS imposed on
the road upgrade and
government ten (10) "Additional
improvement program
Special Obligations," including the
following: Requiring government to work for
the immediate reversion to MIAA
Providing thru MIAA the land
of the Nayong Pilipino National
required by Piatco for the
Park, in order to permit the
 Page 122 of 458
building of the second west
parallel taxiway
Section 5 of the FS also provides that in
lieu of the access tunnel, a surface
access road (T2-T3) will be
constructed. This provision requires
government to expend funds to
purchase additional land from Nayong
Pilipino and to clear the same in order
to be able to deliver clean possession
of the site to Piatco, as required in
Section 5(c) of the FS.
On the other hand, the Third Supplement ("TS") obligates
the government to deliver, within 120 days from date
thereof, clean possession of the land on which the T2-T3
Road is to be constructed.
The foregoing contractual stipulations undeniably impose
on government the expenditures of public funds not
included in any congressional appropriation or authorized
by any other statute. Piatco however attempts to take these
stipulations out of the ambit of Sections 46 and 47 of the
Administrative Code by characterizing them as stipulations
for compliance on a "best-efforts basis" only.
To determine whether the additional obligations under the
Supplements may really be undertaken on a best-efforts
basis only, the nature of each of these obligations must be
examined in the context of its relevance and significance to
the Terminal III Project, as well as of any adverse impact
that may result if such obligation is not performed or
undertaken on time. In short, the criteria for determining
whether the best-efforts basis will apply is whether the
obligations are critical to the success of the Project and,
accordingly, whether failure to perform them (or to perform
them on time) could result in a material breach of the
contract.
Viewed in this light, the "Additional Special Obligations" set
out in Section 4 of the FS take on a different aspect. In
particular, each of the following may all be deemed to play
a major role in the successful and timely prosecution of the
Terminal III Project: the obtention of land required by
PIATCO for the taxilane and taxiway; the implementation of
government's existing storm drainage master plan; and
coordination with DPWH for the completion of the three
left-turning overpasses before the In-Service Date, as well
as acquisition and delivery of additional land for the
construction of the T2-T3 access road.
Conversely, failure to deliver on any of these obligations
may conceivably result in substantial prejudice to the
concessionaire, to such an extent as to constitute a
material breach of the Piatco Contracts. Whereupon, the
concessionaire may outrightly terminate the Contracts
pursuant to Section 8.01(b)(i) and (ii) of the ARCA and
seek payment of Liquidated Damages in accordance with
Section 8.02(a) of the ARCA; or the concessionaire may
instead require government to pay the Incremental and
Consequential Losses under Section 1.23 of the
ARCA. 94 The logical conclusion then is that the obligations
in the Supplements are not to be performed on a best-
efforts basis only, but are unarguably mandatory in
character.
Regarding MIAA's obligation to coordinate with the DPWH
for the complete implementation of the road upgrading and
improvement program for Sales, Andrews and Manlunas
Roads (which provide access to the Terminal III site) prior
 Page 123 of 458
to the In-Service Date, it is essential to take note of the fact
that there was a pressing need to complete the program
before the opening of Terminal III. 95 For that reason, the
MIAA was compelled to enter into a memorandum of
agreement with the DPWH in order to ensure the timely
completion of the road widening and improvement
program. MIAA agreed to advance the total amount of
P410.11 million to DPWH for the works, while the latter
was committed to do the following:
"2.2.8. Reimburse all advance payments to
MIAA including but not limited to interest, fees,
plus other costs of money within the periods
CY2004 and CY2006 with payment of no less
than One Hundred Million Pesos (PhP100M)
every year.
"2.2.9. Perform all acts necessary to include in
its CY2004 to CY2006 budget allocation the
repayments for the advances made by MIAA, to
ensure that the advances are fully repaid by
CY2006. For this purpose, DPWH shall include
the amounts to be appropriated for
reimbursement to MIAA in the "Not Needing
Clearance" column of their Agency Budget
Matrix (ABM) submitted to the Department of
Budget and Management."
It can be easily inferred, then, that DPWH did not set aside
enough funds to be able to complete the upgrading
program for the crucially situated access roads prior to the
targeted opening date of Terminal III; and that, had MIAA
not agreed to lend the P410 Million, DPWH would not have
been able to complete the program on time. As a
consequence, government would have been in breach of a
material obligation. Hence, this particular undertaking of
government may likewise not be construed as being for
best-efforts compliance only.
They also Infringe on the Legislative
Prerogative and Power Over the Public Purse
But the particularly sad thing about this transaction
between MIAA and DPWH is the fact that both agencies
were maneuvered into (or allowed themselves to be
maneuvered into) an agreement that would ensure delivery
of upgraded roads for Piatco's benefit, using funds not
allocated for that purpose. The agreement would then be
presented to Congress as a done deal. Congress would
thus be obliged to uphold the agreement and support it with
the necessary allocations and appropriations for three
years, in order to enable DPWH to deliver on its committed
repayments to MIAA. The net result is an infringement on
the legislative power over the public purse and a diminution
of Congress' control over expenditures of public funds a
development that would not have come about, were it not
for the Supplements. Very clever but very illegal!
EPILOGUE
What Do We Do Now?
In the final analysis, there remains but one ultimate
question, which I raised during the Oral Argument on
December 10, 2002: What do we do with the Piatco
Contracts and Terminal III? 96 (Feeding directly into the
resolution of the decisive question is the other nagging
issue: Why should we bother with determining the legality
and validity of these contracts, when the Terminal itself has
already been built and is practically complete?)
 Page 124 of 458
Prescinding from all the foregoing disquisition, I find that all
the Piatco contracts, without exception, are void ab initio,
and therefore inoperative. Even the very process by which
the contracts came into being the bidding and the award
has been riddled with irregularities galore and blatant
violations of law and public policy, far too many to ignore.
There is thus no conceivable way, as proposed by some, of
saving one (the original Concession Agreement) while
junking all the rest.
Neither is it possible to argue for the retention of the Draft
Concession Agreement (referred to in the various
pleadings as the Contract Bidded Out) as the contract that
should be kept in force and effect to govern the situation,
inasmuch as it was never executed by the parties. What
Piatco and the government executed was the Concession
Agreement which is entirely different from the Draft
Concession Agreement.
Ultimately, though, it would be tantamount to an
outrageous, grievous and unforgivable mutilation of public
policy and an insult to ourselves if we opt to keep in place a
contract any contract for to do so would assume that
we agree to having Piatco continue as the concessionaire
for Terminal III.
Despite all the insidious contraventions of the Constitution,
law and public policy Piatco perpetrated, keeping Piatco on
as concessionaire and even rewarding it by allowing it to
operate and profit from Terminal III instead of imposing
upon it the stiffest sanctions permissible under the laws
is unconscionable.
It is no exaggeration to say that Piatco may not really mind
which contract we decide to keep in place. For all it may
care, we can do just as well without one, if we only let it
continue and operate the facility. After all, the real money
will come not from building the Terminal, but from actually
operating it for fifty or more years and charging whatever it
feels like, without any competition at all. This scenario must
not be allowed to happen. aATESD
If the Piatco contracts are junked altogether as I think they
should be, should not AEDC automatically be considered
the winning bidder and therefore allowed to operate the
facility? My answer is a stone-cold 'No'. AEDC never won
the bidding, never signed any contract, and never built any
facility. Why should it be allowed toautomatically step in
and benefit from the greed of another?
Should government pay at all for reasonable expenses
incurred in the construction of the Terminal? Indeed it
should, otherwise it will be unjustly enriching itself at the
expense of Piatco and, in particular, its funders, contractors
and investors both local and foreign. After all, there is no
question that the State needs and will make use of
Terminal III, it being part and parcel of the critical
infrastructure and transportation-related programs of
government.
In Melchor v. Commission on Audit, 97 this Court held that
even if the contract therein was void, the principle of
payment by quantum meruit was found applicable, and the
contractor was allowed to recover the reasonable value of
the thing or services rendered (regardless of any
agreement as to the supposed value), in order to avoid
unjust enrichment on the part of government. The principle
of quantum meruit was likewise applied in Eslao
v. Commission on Audit, 98 because to deny payment for a
building almost completed and already occupied would be
to permit government to unjustly enrich itself at the
 Page 125 of 458

expense of the contractor. The same principle was applied

in Republic v. Court of Appeals. 99
One possible practical solution would be for government
in view of the nullity of the Piatco contracts and of the fact G.R. No. 154599. January 21, 2004.]
that Terminal III has already been built and is almost
finished to bid out the operation of the facility under the THE LIGA NG MGA BARANGAY
same or analogous principles as build-operate-and-transfer NATIONAL, petitioner, vs. THE CITY
projects. To be imposed, however, is the condition that the MAYOR OF MANILA, HON. JOSE
winning bidder must pay the builder of the facility a price ATIENZA, JR., and THE CITY COUNCIL
fixed by government based on quantum meruit; on the real, OF MANILA,respondents.
reasonable not inflated value of the built facility.
How the payment or series of payments to the builder,
funders, investors and contractors will be staggered and DECISION
scheduled, will have to be built into the bids, along with the
annual guaranteed payments to government. In this
manner, this whole sordid mess could result in something DAVIDE, JR., C.J :p

truly beneficial for all, especially for the Filipino people.

WHEREFORE, I vote to grant the Petitions and to declare
the subject contracts NULL and VOID.
(Agan, Jr. v. Philippine International Air Terminals Co.,
|||
Inc., G.R. No. 155001, 155547, 155661, [May 5, 2003], 450
PHIL 744-902)
This petition for certiorari under Rule 65 of the Rules of
Court seeks the nullification of Manila City Ordinance No.
8039, Series of 2002, 1 and respondent City Mayor's
Executive Order No. 011, Series of 2002, 2 dated 15
August 2002, for being patently contrary to law.
The antecedents are as follows:
Petitioner Liga ng mga Barangay National (Liga for brevity)
is the national organization of all the barangays in the
Philippines, which pursuant to Section 492 of Republic Act
No. 7160, otherwise known as The Local Government
Code of 1991, constitutes the duly elected presidents of
highly-urbanized cities, provincial chapters, the
metropolitan Manila Chapter, and metropolitan political
subdivision chapters.
 Page 126 of 458
Section 493 of that law provides that "[t]he liga at the
municipal, city, provincial, metropolitan political subdivision,
and national levels directly elect a president, a vice-
president, and five (5) members of the board of
directors." All other matters not provided for in the law
affecting the internal organization of the leagues of local
government units shall be governed by their respective
constitution and by-laws, which must always conform to the
provisions of the Constitution and existing laws. 3
On 16 March 2000, the Liga adopted and ratified its own
Constitution and By-laws to govern its internal
organization. 4 Section 1, third paragraph, Article XI of said
Constitution and By-Laws states:
All other election matters not covered in this
Article shall be governed by the "Liga Election
Code" or such other rules as may be
promulgated by the National Liga Executive
Board in conformity with the provisions of
existing laws.
By virtue of the above-cited provision, the Liga adopted
and ratified its own Election Code. 5 Section 1.2, Article I of
the Liga Election Code states:
1.2 Liga ng mga Barangay Provincial,
Metropolitan, HUC/ICC Chapters. There shall be
nationwide synchronized elections for the
provincial, metropolitan, and HUC/ICC chapters
to be held on the third Monday of the month
immediately after the month when the
synchronized elections in paragraph 1.1 above
was held. The incumbent Liga chapter president
concerned duly assisted by the proper
government agency, office or department, e.g.
Provincial/City/NCR/Regional Director, shall
convene all the duly elected Component
City/Municipal Chapter Presidents and all the
current elected Punong Barangays (for
HUC/ICC) of the respective chapters in any
public place within its area of jurisdiction for the
purpose of reorganizing and electing the officers
and directors of the provincial, metropolitan or
HUC/ICC Liga chapters. Said president duly
assisted by the government officer
aforementioned, shall notify, in writing, all the
above concerned at least fifteen (15) days before
the scheduled election meeting on the exact
date, time, place and requirements of the said
meeting.
The Liga thereafter came out with its Calendar of Activities
and Guidelines in the Implementation of the Liga Election
Code of 2002, 6 setting on 21 October 2002 the
synchronized elections for highly urbanized city chapters,
such as the Liga Chapter of Manila, together with
independent component city, provincial, and metropolitan
chapters.
On 28 June 2002, respondent City Council of Manila
enacted Ordinance No. 8039, Series of 2002, providing,
among other things, for the election of representatives of
the District Chapters in the City Chapter of Manila and
setting the elections for both chapters thirty days after the
barangay elections. Section 3(A) and (B) of the assailed
ordinance read:
SEC. 3. Representation Chapters. Every
Barangay shall be represented in the said Liga
Chapters . . . by the Punong Barangay . . . or, in
his absence or incapacity, by the kagawad duly
elected for the purpose among its members. . . .
 Page 127 of 458

A. District Chapter WHETHER OR NOT THE RESPONDENT CITY

COUNCIL OF MANILA COMMITTED GRAVE
All elected Barangay Chairman in each
ABUSE OF DISCRETION AMOUNTING TO
District shall elect from among themselves
LACK OF OR IN EXCESS OF JURISDICTION,
the President, Vice-President and five (5)
WHEN IT ENACTED CITY ORDINANCE NO.
members of the Board. . . .
8039 S. 2002 PURPOSELY TO GOVERN THE
B. City Chapter ELECTIONS OF THE MANILA CHAPTER OF
THE LIGA NG MGA BARANGAYS AND WHICH
The District Chapter representatives shall PROVIDES A DIFFERENT MANNER OF
automatically become members of the ELECTING ITS OFFICERS, DESPITE THE
Board and they shall elect from among FACT THAT SAID CHAPTER'S ELECTIONS,
themselves a President, Vice-President, AND THE ELECTIONS OF ALL OTHER
Secretary, Treasurer, Auditor and create CHAPTERS OF THE LIGA NG MGA
other positions as it may deem necessary BARANGAYS FOR THAT MATTER, ARE BY
for the management of the chapter. LAW MANDATED TO BE GOVERNED BY THE
The assailed ordinance was later transmitted to respondent LIGA CONSTITUTION AND BY-LAWS AND
City Mayor Jose L. Atienza, Jr., for his signature and THE LIGA ELECTION CODE.
approval. II
On 16 July 2002, upon being informed that the ordinance WHETHER OR NOT THE RESPONDENT CITY
had been forwarded to the Office of the City Mayor, still MAYOR OF MANILA COMMITTED GRAVE
unnumbered and yet to be officially released, the Liga sent ABUSE OF DISCRETION AMOUNTING TO
respondent Mayor of Manila a letter requesting him that LACK OF OR IN EXCESS OF JURISDICTION
said ordinance be vetoed considering that it encroached WHEN HE ISSUED EXECUTIVE ORDER NO.
upon, or even assumed, the functions of the Liga through 011 TO IMPLEMENT THE QUESTIONED CITY
ORDINANCE NO. 8039 S. 2002.
legislation, a function which was clearly beyond the ambit
of the powers of the City Council. 7 In support of its petition, the Liga argues that City
Respondent Mayor, however, signed and approved the Ordinance No. 8039, Series of 2002, and Executive Order
No. 011, Series of 2002, contradict the Liga Election Code
assailed city ordinance and issued on 15 August 2002
Executive Order No. 011, Series of 2002, to implement the and are therefore invalid. There exists neither rhyme nor
ordinance. reason, not to mention the absence of legal basis, for the
Manila City Council to encroach upon, or even assume, the
Hence, on 27 August 2002, the Liga filed the instant functions of the Liga by prescribing, through legislation, the
petition raising the following issues: manner of conducting the Liga elections other than what
I has been provided for by the Liga Constitution and By-laws
 Page 128 of 458
and the Liga Election Code. Accordingly, the subject
ordinance is an ultra vires act of the respondents and, as
such, should be declared null and void.
As for its prayer for the issuance of a temporary restraining
order, the petitioner cites as reason therefor the fact that
under Section 5 of the assailed city ordinance, the Manila
District Chapter elections would be held thirty days after
the regular barangay elections. Hence, it argued that the
issuance of a temporary restraining order and/or
preliminary injunction would be imperative to prevent the
implementation of the ordinance and executive order.
On 12 September 2002, Barangay Chairman Arnel Pea,
in his capacity as a member of the Liga ng mga Barangay
in the City Chapter of Manila, filed a Complaint in
Intervention with Urgent Motion for the Issuance of
Temporary Restraining Order and/or Preliminary
Injunction. 8 He supports the position of the Liga and prays
for the declaration of the questioned ordinance and
executive order, as well as the elections of the Liga ng mga
Barangay pursuant thereto, to be null and void. The
assailed ordinance prescribing for an "indirect manner of
election" amended, in effect, the provisions of the Local
Government Code of 1991, which provides for the election
of the Liga officers at large. It also violated and curtailed
the rights of the petitioner and intervenor, as well as the
other 896 Barangay Chairmen in the City of Manila, to vote
and be voted upon in a direct election.ETDAaC
On 25 October 2002, the Office of the Solicitor General
(OSG) filed a Manifestation in lieu of Comment. 9 It
supports the petition of the Liga, arguing that the assailed
city ordinance and executive order are clearly inconsistent
with the express public policy enunciated in R.A. No. 7160.
Local political subdivisions are able to legislate only by
virtue of a valid delegation of legislative power from the
national legislature. They are mere agents vested with
what is called the power of subordinate legislation. Thus,
the enactments in question, which are local in origin,
cannot prevail against the decree, which has the force and
effect of law.
On the issue of non-observance by the petitioners of the
hierarchy-of-courts rule, the OSG posits that technical rules
of procedure should be relaxed in the instant petition.
While Batas Pambansa Blg. 129, as amended, grants
original jurisdiction over cases of this nature to the
Regional Trial Court (RTC), the exigency of the present
petition, however, calls for the relaxation of this rule.
Section 496 (should be Section 491) of the Local
Government Code of 1991 primarily intended that the Liga
ng mga Barangay determine the representation of the Liga
in the sanggunians for the immediate ventilation,
articulation, and crystallization of issues affecting barangay
government administration. Thus, the immediate resolution
of this petition is a must.
On the other hand, the respondents defend the validity of
the assailed ordinance and executive order and pray for
the dismissal of the present petition on the following
grounds: (1) certiorari under Rule 65 of the Rules of Court
is unavailing; (2) the petition should not be entertained by
this Court in view of the pendency before the Regional Trial
Court of Manila of two actions or petitions questioning the
subject ordinance and executive order; (3) the petitioner is
guilty of forum shopping; and (4) the act sought to be
enjoined is fait accompli.
 Page 129 of 458
The respondents maintain that certiorari is an extraordinary
remedy available to one aggrieved by the decision of a
tribunal, officer, or board exercising judicial or quasi-judicial
functions. The City Council and City Mayor of Manila are
not the "board" and "officer" contemplated in Rule 65 of the
Rules of Court because both do not exercise judicial
functions. The enactment of the subject ordinance and
issuance of the questioned executive order are legislative
and executive functions, respectively, and thus, do not fall
within the ambit of "judicial functions." They are both within
the prerogatives, powers, and authority of the City Council
and City Mayor of Manila, respectively. Furthermore, the
petition failed to show with certainty that the respondents
acted without or in excess of jurisdiction or with grave
abuse of discretion.
The respondents also asseverate that the petitioner cannot
claim that it has no other recourse in addressing its
grievance other than this petition for certiorari. As a matter
of fact, there are two cases pending before Branches 33
and 51 of the RTC of Manila (one is for mandamus; the
other, for declaratory relief) and three in the Court of
Appeals (one is for prohibition; the two other cases, for quo
warranto), which are all akin to the present petition in the
sense that the relief being sought therein is the declaration
of the invalidity of the subject ordinance. Clearly, the
petitioner may ask the RTC or the Court of Appeals the
relief being prayed for before this Court. Moreover, the
petitioner failed to prove discernible compelling reasons
attending the present petition that would warrant
cognizance of the present petition by this Court.
Besides, according to the respondents, the petitioner has
transgressed the proscription against forum-shopping in
filing the instant suit. Although the parties in the other
pending cases and in this petition are different individuals
or entities, they represent the same interest.
With regard to petitioner's prayer for temporary restraining
order and/ or preliminary injunction in its petition, the
respondents maintain that the same had become moot and
academic in view of the elections of officers of the City Liga
ng mga Barangay on 15 September 2002 and their
subsequent assumption to their respective offices. 10 Since
the acts to be enjoined are now fait accompli, this petition
for certiorari with an application for provisional remedies
must necessarily fail. Thus, where the records show that
during the pendency of the case certain events or
circumstances had taken place that render the case moot
and academic, the petition forcertiorari must be dismissed.
After due deliberation on the pleadings filed, we resolve to
dismiss this petition for certiorari.
First, the respondents neither acted in any judicial or quasi-
judicial capacity nor arrogated unto themselves any judicial
or quasi-judicial prerogatives. A petition forcertiorari under
Rule 65 of the 1997 Rules of Civil Procedure is a special
civil action that may be invoked only against a tribunal,
board, or officer exercising judicial or quasi-judicial
functions.
Section 1, Rule 65 of the 1997 Rules of Civil Procedure
provides:
SECTION 1. Petition for certiorari. When any
tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in
excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess
of jurisdiction, and there is no appeal, or any
plain, speedy, and adequate remedy in the
 Page 130 of 458
ordinary course of law, a person aggrieved
thereby may file a verified petition in the proper
court, alleging the facts with certainty and
praying that judgment be rendered annulling or
modifying the proceedings of such tribunal,
board or officer, and granting such incidental
reliefs as law and justice may require.
Elsewise stated, for a writ of certiorari to issue, the
following requisites must concur: (1) it must be directed
against a tribunal, board, or officer exercising judicial or
quasi-judicial functions; (2) the tribunal, board, or officer
must have acted without or in excess of jurisdiction or with
grave abuse of discretion amounting lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy,
and adequate remedy in the ordinary course of law.
A respondent is said to be exercising judicial
function where he has the power to determine what the law
is and what the legal rights of the parties are, and then
undertakes to determine these questions and adjudicate
upon the rights of the parties. 11
Quasi-judicial function, on the other hand, is "a term which
applies to the actions, discretion, etc., of public
administrative officers or bodies . . . required to investigate
facts or ascertain the existence of facts, hold hearings, and
draw conclusions from them as a basis for their official
action and to exercise discretion of a judicial nature."12
Before a tribunal, board, or officer may exercise judicial or
quasi-judicial acts, it is necessary that there be a law that
gives rise to some specific rights of persons or property
under which adverse claims to such rights are made, and
the controversy ensuing therefrom is brought before a
tribunal, board, or officer clothed with power and authority
to determine the law and adjudicate the respective rights of
the contending parties. 13
The respondents do not fall within the ambit of tribunal,
board, or officer exercising judicial or quasi-judicial
functions. As correctly pointed out by the respondents, the
enactment by the City Council of Manila of the assailed
ordinance and the issuance by respondent Mayor of the
questioned executive order were done in the exercise of
legislative and executive functions, respectively, and not
of judicial or quasi-judicial functions. On this score
alone, certiorari will not lie.
Second, although the instant petition is styled as a petition
for certiorari, in essence, it seeks the declaration by this
Court of the unconstitutionality or illegality of the
questioned ordinance and executive order. It, thus,
partakes of the nature of a petition for declaratory relief
over which this Court has only appellate, not original,
jurisdiction. 14 Section 5, Article VIII of the Constitution
provides:
Sec. 5. The Supreme Court shall have the
following powers:
(1) Exercise original jurisdiction over cases
affecting ambassadors, other public ministers
and consuls, and over petitions for certiorari,
prohibition, mandamus, quo warranto,
and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on
appeal or certiorari as the law or the Rules of
Court may provide, final judgments and orders of
lower courts in:
(a) All cases in which the constitutionality
or validity of any treaty, international or
 Page 131 of 458
executive agreement, law, presidential
decree, proclamation, order,
instruction, ordinance, or regulation is in
question. (Italics supplied).
As such, this petition must necessary fail, as this Court
does not have original jurisdiction over a petition for
declaratory relief even if only questions of law are
involved.15
Third, even granting arguendo that the present petition is
ripe for the extraordinary writ of certiorari, there is here a
clear disregard of the hierarchy of courts. No special and
important reason or exceptional and compelling
circumstance has been adduced by the petitioner or the
intervenor why direct recourse to this Court should be
allowed.
We have held that this Court's original jurisdiction to issue
a writ of certiorari (as well as of prohibition,
mandamus, quo warranto, habeas corpus and injunction) is
not exclusive, but is concurrent with the Regional Trial
Courts and the Court of Appeals in certain cases. As aptly
stated in People v. Cuaresma: 16
This concurrence of jurisdiction is not, however,
to be taken as according to parties seeking any
of the writs an absolute, unrestrained freedom of
choice of the court to which application therefore
will be directed. There is after all a hierarchy of
courts. That hierarchy is determinative of the
venue of appeals, and also serves as a general
determinant of the appropriate forum for petitions
for the extraordinary writs. A becoming regard of
that judicial hierarchy most certainly indicates
that petitions for the issuance of extraordinary
writs against first level ("inferior") courts should
be filed with the Regional Trial Court, and those
against the latter, with the Court of Appeals. A
direct invocation of the Supreme Court's original
jurisdiction to issue these writs should be
allowed only when there are special and
important reasons therefor, clearly and
specifically set out in the petition. This is [an]
established policy. It is a policy necessary to
prevent inordinate demands upon the Court's
time and attention which are better devoted to
those matters within its exclusive jurisdiction,
and to prevent further over-crowding of the
Court's docket.
As we have said in Santiago v. Vasquez, 17 the propensity
of litigants and lawyers to disregard the hierarchy of courts
in our judicial system by seeking relief directly from this
Court must be put to a halt for two reasons: (1) it would be
an imposition upon the precious time of this Court; and (2)
it would cause an inevitable and resultant delay, intended
or otherwise, in the adjudication of cases, which in some
instances had to be remanded or referred to the lower
court as the proper forum under the rules of procedure, or
as better equipped to resolve the issues because this Court
is not a trier of facts.
Thus, we shall reaffirm the judicial policy that this Court will
not entertain direct resort to it unless the redress desired
cannot be obtained in the appropriate courts, and
exceptional and compelling circumstances justify the
availment of the extraordinary remedy of writ of certiorari,
calling for the exercise of its primary jurisdiction. 18
Petitioner's reliance on Pimentel v. Aguirre 19 is misplaced
because the non-observance of the hierarchy-of-courts rule
was not an issue therein. Besides, what was sought to be
 Page 132 of 458

nullified in the petition for certiorari and prohibition therein WHEREFORE, the petition is DISMISSED. IEAHca

was an act of the President of the Philippines, which would

SO ORDERED.
have greatly affected all local government units. We
reiterated therein that when an act of the legislative (Liga ng mga Barangay National v. City Mayor of Manila,
|||

department is seriously alleged to have infringed the G.R. No. 154599, [January 21, 2004], 465 PHIL 529-544)
Constitution, settling the controversy becomes the duty of
this Court. The same is true when what is seriously alleged
to be unconstitutional is an act of the President, who in our
constitutional scheme is coequal with Congress.

We hesitate to rule that the petitioner and the intervenor

are guilty of forum-shopping. Forum-shopping exists where
the elements of litis pendentia are present or when a final
judgment in one case will amount to res judicata in the
other. For litis pendentia to exist, the following requisites
must be present: (1) identity of parties, or at least such
parties as are representing the same interests in both
actions; (2) identity of rights asserted and reliefs prayed for,
the reliefs being founded on the same facts; and (3) identity [G.R. No. 139791. December 12, 2003.]
with respect to the two preceding particulars in the two
cases, such that any judgment that may be rendered in the MANILA BANKERS LIFE INSURANCE
pending case, regardless of which party is successful, CORPORATION, petitioner, vs. EDDY NG
would amount to res judicata in the other case. 20 KOK WEI, respondent.
In the instant petition, and as admitted by the respondents,
the parties in this case and in the alleged other pending Roy, Enrico C. Santos for petitioner.
cases are different individuals or entities; thus, forum-
Rogelio Velarde for respondent.
shopping cannot be said to exist. Moreover, even
assuming that those five petitions are indeed pending SYNOPSIS
before the RTC of Manila and the Court of Appeals, we can
Respondent instituted before the Makati Regional Trial
only guess the causes of action and issues raised before
Court a complaint for specific performance and damages
those courts, considering that the respondents failed to
against the petitioner. Petitioner allegedly failed to deliver
furnish this Court with copies of the said petitions.
the condominium unit to the respondent on the date
 Page 133 of 458
specified in the Contract to Sell. After due trial, the trial
court found the petitioner liable for payment of damages
due to unreasonable delay in the delivery of the
condominium unit to respondent. The decision of the trial
court was affirmed in toto by the Court of Appeals. Hence,
this petition for review on certiorari where petitioner
assailed the jurisdiction of the trial court.cHCSDa
The Supreme Court has consistently held that complaints
for specific performance with damages by a lot owner or
condominium buyer against the owner or developer falls
under the exclusive jurisdiction of the Housing and Land
Use Regulatory Board. However, while it is true that the
trial court is without jurisdiction over respondent's
complaint, petitioner's active participation in the
proceedings estopped it from assailing such lack of it.
Furthermore, petitioner failed to raise the question of
jurisdiction before the trial court and the appellate court. In
effect, petitioner confirmed and ratified the trial court's
jurisdiction over the case. Thus, it is now in estoppel and
can no longer question the trial court's jurisdiction. On
petitioner's claim that it did not incur delay, this is a factual
issue. The Court ruled that the factual findings of the trial
court are given weight when supported by substantial
evidence and carries more weight when affirmed by the
Court of Appeals. The Court affirmed in toto the decision of
the Court of Appeals. STcEIC
SYLLABUS
1. ADMINISTRATIVE LAW; ADMINISTRATIVE AGENCY;
HOUSING AND LAND USE REGULATORY BOARD; HAS
EXCLUSIVE JURISDICTION OVER COMPLAINTS FOR
SPECIFIC PERFORMANCE WITH DAMAGES BY A LOT
OR CONDOMINIUM UNIT BUYER AGAINST THE
OWNER OR DEVELOPER. Pursuant to Section 1 (c)
of Presidential Decree No. 1344, as amended, it is the
HLURB which has jurisdiction over the instant case. We
have consistently held that complaints for specific
performance with damages by a lot or condominium unit
buyer against the owner or developer falls under the
exclusive jurisdiction of the HLURB. IcCDAS
2. REMEDIAL LAW; COURTS; JURISDICTION; A PARTY
WHO ACTIVELY PARTICIPATED IN THE
PROCEEDINGS IS ESTOPPED FROM ASSAILING THE
LACK THEREOF. While it may be true that the trial
court is without jurisdiction over the case, petitioner's active
participation in the proceedings estopped it from assailing
such lack of it. We have held that it is an undesirable
practice of a party participating in the proceedings and
submitting its case for decision and then accepting the
judgment, only if favorable, and attacking it for lack of
jurisdiction, when adverse. Here, petitioner failed to raise
the question of jurisdiction before the trial court and the
Appellate Court. In effect, petitioner confirmed and ratified
the trial court's jurisdiction over this case. Certainly, it is
now in estoppel and can no longer question the trial court's
jurisdiction.
IHDCcT
3. ID.; EVIDENCE; FACTUAL FINDINGS OF TRIAL
COURT GIVEN WEIGHT WHEN SUPPORTED BY
SUBSTANTIAL EVIDENCE AND CARRIES MORE
WEIGHT WHEN AFFIRMED BY THE COURT OF
APPEALS. On petitioner's claim that it did not incur
delay, suffice it to say that this is a factual issue. Time and
again, we have ruled that "the factual findings of the trial
court are given weight when supported by substantial
evidence and carries more weight when affirmed by the
 Page 134 of 458
Court of Appeals." Whether or not petitioner incurred delay
and thus, liable to pay damages as a result thereof are
indeed factual questions.
4. ID.; APPEALS; PETITION FOR REVIEW
ON CERTIORARI; LIMITED TO REVIEW OF ERRORS OF
LAW, NOT OF FACT. The jurisdiction of this Court in a
petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure, as amended, is limited to
reviewing only errors of law, not of fact, unless the factual
findings being assailed are not supported by evidence on
record or the impugned judgment is based on a
misapprehension of facts. These exceptions are not
present here. TEHDIA
DECISION
SANDOVAL-GUTIERREZ, J : p
Before us is a petition for review on certiorari assailing the
Decision 1 dated March 26, 1999 and Resolution 2 dated
August 5, 1999 of the Court of Appeals in CA-G.R. CV No.
40504, entitled "Eddy Ng Kok Wei vs. Manila Bankers Life
Insurance Corporation."
The factual antecedents as borne by the records are:
Eddy Ng Kok Wei, respondent, is a Singaporean
businessman who ventured into investing in the
Philippines. On November 29, 1988, respondent, in a
Letter of Intent addressed to Manila Bankers Life Insurance
Corporation, petitioner, expressed his intention to purchase
a condominium unit at Valle Verde Terraces.
Subsequently or on December 5, 1988, respondent paid
petitioner a reservation fee of P50,000.00 for the purchase
of a 46-square meter condominium unit (Unit 703) valued
at P860,922.00. On January 16, 1989, respondent paid
90% of the purchase price in the sum of P729,830.00.
Consequently, petitioner, through its President, Mr. Antonio
G. Puyat, executed a Contract to Sell in favor of the
respondent. The contract expressly states that the subject
condominium unit "shall substantially be completed and
delivered" to the respondent "within fifteen (15) months"
from February 8, 1989 or on May 8, 1990, and that
"(S)hould there be no substantial completion and fail(ure)
to deliver the unit on the date specified, a penalty of 1% of
the total amount paid (by respondent) shall be charged
against (petitioner)."
Considering that the stipulated 15-month period was at
hand, respondent returned to the Philippines sometime in
April, 1990.
In a letter dated April 5, 1990, petitioner, through its Senior
Assistant Vice-President, Mr. Mario G. Zavalla, informed
respondent of the substantial completion of his
condominium unit, however, due to various uncontrollable
forces (such as coup d'etat attempts, typhoon and steel
and cement shortage), the final turnover is reset to May 31,
1990.
Meanwhile, on July 5, 1990, upon receipt of petitioner's
notice of delivery dated May 31, 1990, respondent again
flew back to Manila. He found the unit still uninhabitable for
lack of water and electric facilities.
Once more, petitioner issued another notice to move-in
addressed to its building administrator advising the latter
 Page 135 of 458
that respondent is scheduled to move in on August 22,
1990.
On October 5, 1990, respondent returned to the Philippines
only to find that his condominium unit was still unlivable.
Exasperated, he was constrained to send petitioner a letter
dated November 21, 1990 demanding payment for the
damages he sustained. But petitioner ignored such
demand, prompting respondent to file with the Regional
Trial Court, Branch 150, Makati City, a complaint against
the former for specific performance and damages,
docketed as Civil Case No. 90-3440.
Meanwhile, during the pendency of the case, respondent
finally accepted the condominium unit and on April 12,
1991, occupied the same. Thus, respondent's cause of
action has been limited to his claim for damages.
On December 18, 1992, the trial court rendered a
Decision 3 finding the petitioner liable for payment of
damages due to the delay in the performance of its
obligation to the respondent. The dispositive portion reads:
"WHEREFORE, judgment is hereby rendered in
favor of plaintiff and against defendant, ordering
Manila Bankers Life Insurance Corporation to
pay plaintiff Eddy Ng Kok Wei the following:
1. One percent (1%) of the total amount plaintiff paid
defendant;
2. P100,000.00 as moral damages;
3. P50,000.00 as exemplary damages;
4. P25,000.00 by way of attorney's fees; and
5. Cost of suit.
"SO ORDERED."
On appeal, the Court of Appeals, in a Decision dated
March 26, 1999, affirmed in toto the trial court's award of
damages in favor of the respondent.
Unsatisfied, petitioner filed a motion for reconsideration but
was denied by the Appellate Court in a Resolution dated
August 5, 1999.
Hence, this petition for review on certiorari. Petitioner
contends that the trial court has no jurisdiction over the
instant case; and that the Court of Appeals erred in
affirming the trial court's finding that petitioner incurred
unreasonable delay in the delivery of the condominium unit
to respondent.
On petitioner's contention that the trial court has no
jurisdiction over the instant case, Section 1(c)
of Presidential Decree No. 1344, as amended, provides:
"SECTION 1. In the exercise of its functions to
regulate the real estate trade and business and
in addition to its powers provided for
in Presidential Decree No. 957, the National
Housing Authority [now Housing and Land Use
Regulatory Board (HLURB)] 4 shall
have exclusive jurisdiction to hear and decide
cases of the following nature:
xxx xxx xxx
"C. Cases involving specific performance of
contractual and statutory obligations filed by
buyers of subdivision lots or condominium units
against the owner, developer, dealer, broker or
salesman.
xxx xxx xxx."
 Page 136 of 458

Pursuant to the above provisions, it is the HLURB which
has jurisdiction over the instant case. We have consistently
held that complaints for specific performance with damages
by a lot or condominium unit buyer against the owner or
developer falls under the exclusive jurisdiction of the
HLURB. 5
While it may be true that the trial court is without jurisdiction
over the case, petitioner's active participation in the
proceedings estopped it from assailing such lack of it. We
have held that it is an undesirable practice of a party
participating in the proceedings and submitting its case for
decision and then accepting the judgment, only if favorable,
and attacking it for lack of jurisdiction, when adverse. 6
are not supported by evidence on record or the impugned
judgment is based on a misapprehension of facts. 8These
exceptions are not present here.
WHEREFORE, the petition is DENIED. The assailed
Decision dated March 26, 1999 and Resolution dated
August 5, 1999 of the Court of Appeals are hereby
AFFIRMED IN TOTO.
Costs against the petitioner.
SO ORDERED.
(Manila Bankers Life Insurance Corp. v. Eddy Ng Kok
|||
Wei, G.R. No. 139791, [December 12, 2003], 463 PHIL
871-878)

Here, petitioner failed to raise the question of jurisdiction

before the trial court and the Appellate Court. In effect,
petitioner confirmed and ratified the trial court's jurisdiction
over this case. Certainly, it is now in estoppel and can no
longer question the trial court's jurisdiction.
On petitioner's claim that it did not incur delay, suffice it to
say that this is a factual issue. Time and again, we have
ruled that "the factual findings of the trial court are given
weight when supported by substantial evidence and carries
more weight when affirmed by the Court of
Appeals." 7 Whether or not petitioner incurred delay and [A.M. No. MTJ-01-1370. April 25, 2003.]
thus, liable to pay damages as a result thereof, are indeed
(formerly A.M. No. 00-11-238-MTC)
factual questions.
The jurisdiction of this Court in a petition for review OFFICE OF THE COURT
on certiorari under Rule 45 of the 1997 Rules of Civil ADMINISTRATOR, complainant, vs. JUDGE
Procedure, as amended, is limited to reviewing only errors AGUSTIN T. SARDIDO, Municipal Trial
of law, not of fact, unless the factual findings being assailed
 Page 137 of 458
Court of Koronadal, South
Cotabato,respondent.
SYNOPSIS
The Office of the Court Administrator charged respondent
Agustin Sardido, formerly presiding judge of the Municipal
Trial Court of Koronadal, South Cotabato, with gross
ignorance of the law. Respondent allegedly excluded a
certain Judge Braulio Hurtado, Jr. of the Regional Trial
Court of Kabacan, North Cotabato as one of the accused in
a case for Falsification and Use of Falsified Document. In
his Explanation, Judge Sardido reasoned out that he
excluded Judge Hurtado because Circular No. 3-89 directs
the IBP to forward to the Supreme Court for appropriate
action all cases involving justices and judges of lower
courts. Judge Sardido claimed that the Circular likewise
applies to courts in cases involving justices or judges of the
lower courts, especially so in this case where Judge
Hurtado was charged with falsification of public document
as a notary public while he was still the Clerk of Court of
the Regional Trial Court, Koronadal, South Cotabato.
The Supreme Court found respondent judge guilty of gross
ignorance of the law. According to the Court, Circular No.
3-89 does not refer to criminal cases against erring justices
of appellate courts or judges of lower courts. Trial courts
retain jurisdiction over the criminal aspect of offenses
committed by justices of appellate courts and judges of
lower courts. It is clear from the Circular directing the IBP,
and not the trial courts, to refer all administrative cases
filed against justices of appellate courts and judges of
lower courts to the Supreme Court. The case filed against
Judge Hurtado is not an administrative case filed with the
IBP, but a criminal case filed with the trial court under its
jurisdiction. The Court further ruled that whether the
criminal case against Judge Hurtado relates to an act
committed before or after he became a judge is
of no moment. Neither is it material that an MTC judge will
be trying an RTC judge in the criminal case. A criminal
case against an attorney or judge is distinct and separate
from an administrative case against him and the dismissal
of the criminal case does not warrant the dismissal of an
administrative case arising from the same set of facts. The
quantum of evidence that is required in the latter is only
preponderance of evidence, and not proof beyond
reasonable doubt which is required in criminal cases.
Respondent Judge Agustin T. Sardido was fined Ten
Thousand Pesos (P10,000.00).
SYLLABUS
1. POLITICAL LAW; ADMINISTRATIVE LAW; PUBLIC
OFFICERS; JUDGES; CIRCULAR NO. 3-89 DOES NOT
REFER TO CRIMINAL CASES AGAINST ERRING
JUSTICES OF APPELLATE COURTS OR JUDGES OF
LOWER COURTS; TRIAL COURTS RETAIN
JURISDICTION OVER THE CRIMINAL ASPECT OF THE
OFFENSES COMMITTED. Under Circular No. 3-89, the
Court has directed the IBP to refer to the Supreme Court
for appropriate action all administrative cases filed with IBP
against justices of appellate courts and judges of the lower
courts. As mandated by the Constitution, the Court
exercises the exclusive power to discipline administratively
justices of appellate courts and judges of lower courts.
Circular No. 3-89 does not refer to criminal cases against
erring justices of appellate courts or judges of lower courts.
 Page 138 of 458
Trial courts retain jurisdiction over the criminal aspect of
offenses committed by justices of appellate courts and
judges of lower courts. This is clear from the Circular
directing the IBP, and not the trial courts, to refer all
administrative cases filed against justices of appellate
courts and judges of lower courts to the Supreme Court.
The case filed against Judge Hurtado is not an
administrative case filed with the IBP. It is a criminal case
filed with the trial court under its jurisdiction as prescribed
by law. aDSIHc
2. ID.; ID.; ID.; ID.; ID.; A CRIMINAL CASE AGAINST AN
ATTORNEY OR JUDGE IS DISTINCT AND SEPARATE
FROM AN ADMINISTRATIVE CASE AGAINST HIM;
DISMISSAL OF THE CRIMINAL CASE DOES NOT
WARRANT THE DISMISSAL OF THE ADMINISTRATIVE
CASE ARISING FROM THE SAME SET OF FACTS.
The acts or omissions of a judge may well constitute at the
same time both a criminal act and an administrative
offense. Whether the criminal case against Judge Hurtado
relates to an act committed before or after he became a
judge is of no moment. Neither is it material that an MTC
judge will be trying an RTC judge in the criminal case. A
criminal case against an attorney or judge is distinct and
separate from an administrative case against him. The
dismissal of the criminal case does not warrant the
dismissal of an administrative case arising from the same
set of facts. The quantum of evidence that is required in the
latter is only preponderance of evidence, and not proof
beyond reasonable doubt which is required in criminal
cases.
3. ID.; ID.; ID.; ID.; IGNORANCE OF THE LAW: A judge is
called upon to exhibit more than just a cursory
acquaintance with statutes and procedural rules. He must
be conversant with basic legal principles and well-settled
doctrines. He should strive for excellence and seek the
truth with passion. Judge Sardido failed in this regard. He
erred in excluding Judge Hurtado as one of the accused in
the Amended Information and in forwarding the criminal
case against Judge Hurtado to the Court.
DECISION
CARPIO, J :p
The Case
This is an administrative case against respondent Judge
Agustin T. Sardido ("Judge Sardido"), formerly presiding
judge of the Municipal Trial Court of Koronadal, South
Cotabato, for gross ignorance of the law. Judge Sardido
issued an Order dated 20 October 1998 excluding Judge
Braulio Hurtado, Jr. ("Judge Hurtado") of the Regional Trial
Court of Kabacan, North Cotabato as one of the accused in
an Amended Information. 1 Judge Sardido ruled that
Supreme Court Circular No. 3-89 requires that Judge
Hurtado be dropped from the Amended Information and his
case be forwarded to the Court. DIEACH
The Facts
Private complainant Teresita Aguirre Magbanua accused
Oscar Pagunsan and Danilo Ong of the crime of
"Falsification by Private Individual and Use of Falsified
Document." 2 The Amended Information included Judge
Hurtado. The case, docketed as Criminal Case No. 14071,
was raffled to Judge Sardido, then presiding judge of the
 Page 139 of 458
Municipal Trial Court of Koronadal, South Cotabato ("MTC-
Koronadal").
In a Deed of Absolute Sale dated 8 August 1993, private
complainant Magbanua and six other vendors allegedly
sold two parcels of land, covered by TCT Nos. 47873 and
33633 and located at the commercial district of Koronadal,
to Davao Realty Development Corporation, represented by
accused Ong, with co-accused Pagunsan, as broker.
Judge Hurtado, who at that time was the Clerk of Court of
RTC-Koronadal and ex-officio notary public, notarized the
Deed of Absolute Sale.
However, private complainant Magbanua denies signing
the Deed of Absolute Sale dated 8 August 1993 which
states that the consideration for the sale was only
P600,000.00. Private complainant asserts that what she
and the other vendors signed was a Deed of Absolute Sale
dated 6 August 1996 for a consideration of
P16,000,000.00. Under the terms of the sale, the vendee
agreed to pay for the capital gains tax. The consideration in
the 8 August 1993 Deed of Absolute Sale was apparently
undervalued. Subsequently, the Bureau of Internal
Revenue assessed the vendors a deficiency capital gains
tax of P1,023,375.00.
Judge Hurtado filed a motion praying that the criminal
complaint against him be forwarded to the Supreme Court.
Judge Hurtado claimed that Circular No. 3-89 dated 6
February 1989 requires "all cases involving justices and
judges of the lower courts, whether or not such complaints
deal with acts apparently unrelated to the discharge of their
official functions, such as acts of immorality, estafa, crimes
against persons and property, etc." to be forwarded to the
Supreme Court. Judge Hurtado asserted that since the
case against him is one involving a judge of a lower court,
the same should be forwarded to the Supreme Court
pursuant to Circular No. 3-89.
The Provincial Prosecutor opposed Judge Hurtado's
motion, arguing that the case against Judge Hurtado is not
within the scope of Circular No. 3-89 since it is not an IBP-
initiated case. Moreover, the offense charged was
committed in 1993 when Judge Hurtado was still a clerk of
court and ex-officio notary public.
On 20 October 1998, Judge Sardido issued an Order, the
pertinent portions of which read:
The issue to be resolved in the instant case is,
whether the case of Judge Hurtado, who is
charged for acts committed prior to his
appointment as an RTC Judge, falls within the
purview of the afore-said Circular No. 3-89.
It is the humble submission of the Court that the
case of Judge Hurtado, an RTC Judge of the
Regional Trial Court of Kabacan, North
Cotabato, falls within the meaning and intent of
the said circular.
For reasons being, firstly, the said circular
provides that all cases involving justices and
judges of lower courts shall be forwarded to the
Supreme Court for appropriate action, whether
or not such complaints deal with acts apparently
unrelated to the discharge of their official
functions, and regardless of the nature of the
crime, without any qualification whether the
crime was committed before or during his tenure
of office. Under the law on Legal Hermeneutics,
if the law does not qualify we must not qualify.
Secondly, it would sound, to the mind of the
 Page 140 of 458
Court, awkward for a first level court to be trying
an incumbent judge of a second level court.
For reasons afore-stated, this Court can not and
shall not try this case as against Judge Hurtado,
unless the Honorable Supreme Court would
order otherwise.
Wherefore, the foregoing premises duly
considered, the name of Judge Braulio L.
Hurtado, Jr. is ordered excluded from the
amended information and the case against him
is ordered forwarded to the Honorable Supreme
Court, pursuant to the afore-said Circular No. 3-
89 of the Supreme Court, dated February 9,
1989.
Accordingly, Maxima S. Borja ("Borja"), Stenographer I and
Acting Clerk of Court II of the MTC-Koronadal, South
Cotabato, wrote a letter dated 21 July 1999 forwarding the
criminal case against Judge Hurtado to the Court
Administrator for appropriate action.
Then Court Administrator Alfredo L. Benipayo issued a
Memorandum dated 25 October 2000 pointing out that
Circular No. 3-89 refers only to administrative complaints
filed with the IBP against justices and judges of lower
courts. The Circular does not apply to criminal cases filed
before trial courts against such justices and judges.
Thus, in the Resolution of 6 December 2000, the Court
directed that the letter of Acting Clerk of Court Borja be
returned to the MTC-Koronadal together with the records of
the criminal case. The Court directed Judge Sardido to
explain in writing why he should not be held liable for gross
ignorance of the law for excluding Judge Hurtado from the
Amended Information and for transmitting the records of
Judge Hurtado's case to the Court.
In his Explanation dated 26 January 2001, Judge Sardido
reasoned out that he excluded Judge Hurtado because
Circular No. 3-89 directs the IBP to "forward to the
Supreme Court for appropriate action all cases involving
justices and judges of lower courts . . .." Judge Sardido
claims that the Circular likewise "applies to courts in cases
involving justices or judges of the lower courts," especially
so in this case where "Judge Hurtado was charged with
falsification of public document as a notary public while he
was still the Clerk of Court of the Regional Trial Court of
the 11th Judicial Region in Koronadal, South Cotabato."
In the Resolution of 28 March 2001, the Court referred this
case to the Office of the Court Administrator ("OCA") for
evaluation, report and recommendation. On 10 July 2001,
the OCA submitted a Memorandum recommending that
this case be re-docketed as a regular administrative matter.
Judge Sardido filed his Manifestation dated 20 September
2001 stating that he is submitting the case for decision
based on the pleadings and records already filed. Judge
Sardido insisted that he did "what he had done in all
honesty and good faith."
OCA's Findings and Conclusions
The OCA found that Judge Sardido erred in excluding
Judge Hurtado as one of the accused in the Amended
Information in Criminal Case No. 14071. The OCA held
that Circular No. 3-89, which is Judge Sardido's basis in
issuing the Order of 20 October 1998, refers to
administrative complaints filed with the IBP against justices
and judges of lower courts. The Circular does not apply to
 Page 141 of 458
criminal cases filed against justices and judges of lower
courts. The OCA recommended that a fine of P5,000.00 be
imposed on Judge Sardido for gross ignorance of the
law.HTSaEC
The Court's Ruling
The Court issued Circular No. 3-89 in response to a letter
dated 19 December 1988 by then IBP President Leon M.
Garcia, seeking clarification of the Court's En
BancResolution of 29 November 1998 in RE: Letter of then
Acting Presiding Justice Rodolfo A. Nocon 3 and Associate
Justices Reynato Puno 4 and Alfredo Marigomen 5 of the
Court of Appeals.
A certain Atty. Eduardo R. Balaoing had filed a complaint
against Court of Appeals Justices Nocon, Puno and
Marigomen relating to a petition filed before their division.
In its En Banc Resolution of 29 November 1988, the Court
required the IBP to refer to the Supreme Court for
appropriate action the complaint 6 filed by Atty. Balaoing
with the IBP Commission on Bar Discipline. The Court
stated that the power to discipline justices and judges of
the lower courts is within the Court's exclusive power and
authority as provided in Section 11, Article VII of the 1987
Constitution. 7 The Court Administrator publicized the En
Banc Resolution of 29 November 1988 by issuing
Circular No. 17 dated 20 December 1988.
The Court issued Circular No. 3-89 on 6 February 1989
clarifying the En Banc Resolution of 29 November 1988.
Circular No. 3-89 provides in part as follows:
(1) The IBP (Board of Governors and
Commission on Bar Discipline) shall forward to
the Supreme Court for appropriate action all
cases involving justices and judges of lower
courts, whether or not such complaints deal with
acts apparently unrelated to the discharge of
their official functions, such as acts of
immorality, estafa, crimes against persons and
property, etc. . . .. (Emphasis supplied)
Circular No. 3-89 clarified the second paragraph, Section 1
of Rule 139-B of the Rules of Court which states that:
The IBP Board of Governors may, motu
proprio or upon referral by the Supreme Court or
by a Chapter Board of Officers, or at the instance
of any person, initiate and prosecute proper
charges against erring attorneys including those
in the government service. (Emphasis supplied).
As clarified, the phrase "attorneys . . . in the government
service" in Section 1 of Rule 139-B does not include
justices of appellate courts and judges of lower courts
who are not subject to the disciplining authority of the
IBP. All administrative cases against justices of
appellate courts and judges of lower courts fall
exclusively within the jurisdiction of the Supreme Court.
However, Rule 139-B refers to Disbarment and Discipline
of Attorneys which is administrative and not criminal in
nature. The cases referred to in Circular No. 3-89 are
administrative cases for disbarment, suspension or
discipline of attorneys, including justices of appellate courts
and judges of the lower courts. The Court has vested the
IBP with the power to initiate and prosecute administrative
cases against erring lawyers. 8 However, under
Circular No. 3-89, the Court has directed the IBP to refer to
the Supreme Court for appropriate action all administrative
cases filed with IBP against justices of appellate courts and
judges of the lower courts. As mandated bythe
Constitution, the Court exercises the exclusive power to
 Page 142 of 458
discipline administratively justices of appellate courts and
judges of lower courts. SHEIDC
Circular No. 3-89 does not refer to criminal cases against
erring justices of appellate courts or judges of lower courts.
Trial courts retain jurisdiction over the criminal aspect of
offenses committed by justices of appellate courts 9 and
judges of lower courts. This is clear from the Circular
directing the lBP, and not the trial courts, to refer all
administrative cases filed against justices of appellate
courts and judges of lower courts to the Supreme Court.
The case filed against Judge Hurtado is not an
administrative case filed with the IBP. It is a criminal case
filed with the trial court under its jurisdiction as prescribed
by law.
The acts or omissions of a judge may well constitute at the
same time both a criminal act and an administrative
offense. Whether the criminal case against Judge Hurtado
relates to an act committed before or after he became a
judge is of no moment. Neither is it material that an MTC
judge will be trying an RTC judge in the criminal case. A
criminal case against an attorney or judge is distinct and
separate from an administrative case against him. The
dismissal of the criminal case does not warrant the
dismissal of an administrative case arising from the same
set of facts. The quantum of evidence that is required in the
latter is only preponderance of evidence, and not proof
beyond reasonable doubt which is required in criminal
cases. 10 As held in Gatchalian Promotions Talents Pool,
Inc. v. Naldoza: 11
Administrative cases against lawyers belong to a
class of their own. They are distinct from and
they may proceed independently of civil and
criminal cases.
The burden of proof for these types of cases
differ. In a criminal case, proof beyond
reasonable doubt is necessary; in an
administrative case for disbarment or
suspension, 'clearly preponderant evidence' is all
that is required. Thus, a criminal prosecution will
not constitute a prejudicial question even if the
same facts and circumstances are attendant in
the administrative proceedings.
It should be emphasized that a finding of guilt in
the criminal case will not necessarily result in a
finding of liability in the administrative case.
Conversely, respondent's acquittal does not
necessarily exculpate him administratively. In the
same vein, the trial court's finding of civil liability
against the respondent will not inexorably lead to
a similar finding in the administrative action
before this Court. Neither will a favorable
disposition in the civil action absolve the
administrative liability of the lawyer. The basic
premise is that criminal and civil cases are
altogether different from administrative matters,
such that the disposition in the first two will not
inevitably govern the third and vice versa. For
this reason, it would be well to remember the
Court's ruling in In re Almacen, which we quote:
". . . Disciplinary proceedings against
lawyers are sui generis. Neither purely
civil nor purely criminal, they do not
involve a trial of an action or a suit, but
are rather investigations by the Court into
the conduct of one of its officers. Not
being intended to inflict punishment, [they
are] in no sense a criminal prosecution.
Accordingly, there is neither a plaintiff nor
a prosecutor therein. [They] may be
 Page 143 of 458
initiated by the Court motu proprio. Public
interest is [their] primary objective, and
the real question for determination is
whether or not the attorney is still a fit
person to be allowed the privileges as
such. Hence, in the exercise of its
disciplinary powers, the Court merely calls
upon a member of the Bar to account for
his actuations as an officer of the Court
with the end in view of preserving the
purity of the legal profession and the
proper and honest administration of
justice by purging the profession of
members who by their misconduct have
prove[n] themselves no longer worthy to
be entrusted with the duties and
responsibilities pertaining to the office of
an attorney. . . ."
A judge is called upon to exhibit more than just a cursory
acquaintance with statutes and procedural rules. He must
be conversant with basic legal principles and well-settled
doctrines. He should strive for excellence and seek the
truth with passion. 12 Judge Sardido failed in this regard.
He erred in excluding Judge Hurtado as one of the
accused in the Amended Information and in forwarding the
criminal case against Judge Hurtado to the Court.
One last point. This administrative case against Judge
Sardido started before the amendment 13 of Rule 140
classifying gross ignorance of the law a serious offense
punishable by a fine of more than P20,000.00 but not
exceeding P40,000.00. The amendment cannot apply
retroactively to Judge Sardido's case. However, the fine of
P5,000.00 recommended by the OCA is too light a penalty
considering that this is not the first offense of Judge
Sardido.
In RE: Hold Departure Order Issued by Judge Agustin T.
Sardido, 14 the Court reprimanded Judge Sardido for
issuing a hold-departure order contrary to Circular No. 39-
97. In Cabilao v. Judge Sardido, 15 the Court fined Judge
Sardido P5,000.00 for gross ignorance of the law, grave
abuse of discretion and gross misconduct. The Court gave
a stern warning to Judge Sardido that a commission of the
same or similar act would be dealt with more severely.
In Almeron v. Judge Sardido, 16 the Court imposed on
Judge Sardido a stiffer fine of P10,000,00 for gross
ignorance of the law. He was again sternly warned that the
commission of the same or similar act in the future would
be dealt with more severely including, if warranted, his
dismissal from the service.
In a more recent administrative case, Torcende v. Judge
Sardido, 17 the Court found Judge Sardido again guilty of
gross ignorance of the law and of gross misconduct. This
time the Court dismissed Judge Sardido from the service
with forfeiture of his retirement benefits, except accrued
leave credits. The dismissal was with prejudice to
reemployment in any branch of the government or any of
its agencies or instrumentalities, including government-
owned and controlled corporations.
The records of the OCA further disclose that Judge Sardido
has other similar administrative complaints 18 still pending
against him. Such an unflattering service record erodes the
people's faith and confidence in the judiciary. It is the duty
of every member of the bench to avoid any impression of
impropriety to protect the image and integrity of the
judiciary. 19 The Court may still impose a fine on Judge
 Page 144 of 458

Sardido in the instant case despite his dismissal from the PANGANIBAN, J : p

service.
Where prescription, lack of jurisdiction or failure to state a
WHEREFORE, respondent Judge Agustin T. Sardido is cause of action clearly appear from the complaint filed with
FINED Ten Thousand Pesos (P10,000.00) for gross the trial court, the action may be dismissed motu proprio by
ignorance of the law. The fine may be deducted from his the Court of Appeals, even if the case has been elevated
accrued leave credits. for review on different grounds. Verily, the dismissal of
SO ORDERED. such cases appropriately ends useless litigations.
(Office of the Court Administrator v. Sardido, A.M. No.
|||
The Case
MTJ-01-1370, [April 25, 2003], 449 PHIL 619-631) Before us is a Petition for Review 1 under Rule 45 of the
Rules of Court, assailing the December 8, 2000
Decision 2 and the November 20, 2001 Resolution 3 of the
Court of Appeals in CA-GR SP No. 57496. The assailed
Decision disposed as follows:
"Assuming that petitioner is correct in saying that
he has the exclusive right in applying for the
patent over the land in question, it appears that
his action is already barred by laches because
he slept on his alleged right for almost 23 years
from the time the original certificate of title has
been issued to respondent Manuel Palanca, Jr.,
or after 35 years from the time the land was
certified as agricultural land. In addition, the
proper party in the annulment of patents or titles
[G.R. No. 151149. September 7, 2004.] acquired through fraud is the State; thus, the
petitioner's action is deemed misplaced as he
GEORGE KATON, petitioner, vs. MANUEL really does not have any right to assert or
PALANCA JR., LORENZO AGUSTIN, protect. What he had during the time he
requested for the re-classification of the land was
JESUS GAPILANGO and JUAN
the privilege of applying for the patent over the
FRESNILLO, respondents.
same upon the land's conversion from forest to
agricultural.

DECISION "WHEREFORE, the petition is hereby

DISMISSED. No pronouncement as to cost." 4
 Page 145 of 458
The assailed Resolution, on the other hand, denied the
Motion for Reconsideration filed by petitioner. It affirmed
the RTC's dismissal of his Complaint in Civil Case No.
3231, not on the grounds relied upon by the trial court, but
because of prescription and lack of jurisdiction. cSEaDA
The Antecedent Facts
The CA narrates the antecedent facts as follows:
"On August 2, 1963, herein [P]etitioner [George
Katon] filed a request with the District Office of
the Bureau of Forestry in Puerto Princesa,
Palawan, for the re-classification of a piece of
real property known as Sombrero Island, located
in Tagpait, Aborlan, Palawan, which consists of
approximately 18 hectares. Said property is
within Timberland Block of LC Project No. 10-C
of Aborlan, Palawan, per BF Map LC No. 1582.
"Thereafter, the Bureau of Forestry District
Office, Puerto Princesa, Palawan, ordered the
inspection, investigation and survey of the land
subject of the petitioner's request for eventual
conversion or re-classification from forest to
agricultural land, and thereafter for George
Katon to apply for a homestead patent.
"Gabriel Mandocdoc (now retired Land
Classification Investigator) undertook the
investigation, inspection and survey of the area
in the presence of the petitioner, his brother
Rodolfo Katon (deceased) and his cousin,
[R]espondent Manuel Palanca, Jr. During said
survey, there were no actual occupants on the
island but there were some coconut trees
claimed to have been planted by petitioner and
[R]espondent Manuel Palanca, Jr. (alleged
overseer of petitioner) who went to the island
from time to time to undertake development
work, like planting of additional coconut trees.
"The application for conversion of the whole
Sombrero Island was favorably endorsed by the
Forestry District Office of Puerto Princesa to its
main office in Manila for appropriate action. The
names of Felicisimo Corpuz, Clemente
Magdayao and Jesus Gapilango and Juan
Fresnillo were included in the endorsement as
co-applicants of the petitioner.
"In a letter dated September 23, 1965, then Asst.
Director of Forestry R.J.L. Utleg informed the
Director of Lands, Manila, that since the subject
land was no longer needed for forest purposes,
the same is therefore certified and released as
agricultural land for disposition under the Public
Land Act.
"Petitioner contends that the whole area known
as Sombrero Island had been classified from
forest land to agricultural land and certified
available for disposition upon his request and at
his instance. However, Mr. Lucio Valera, then
[l]and investigator of the District Land Office,
Puerto Princesa, Palawan, favorably endorsed
the request of [R]espondents Manuel Palanca Jr.
and Lorenzo Agustin, for authority to survey on
November 15, 1965. On November 22, a second
endorsement was issued by Palawan District
Officer Diomedes De Guzman with specific
instruction to survey vacant portions of Sombrero
Island for the respondents consisting of five (5)
hectares each. On December 10, 1965, Survey
Authority No. R III-342-65 was issued authorizing
Deputy Public Land Surveyor Eduardo Salvador
to survey ten (10) hectares of Sombrero Island
 Page 146 of 458
for the respondents. On December 23, 1990,
[R]espondent Lorenzo Agustin filed a homestead
patent application for a portion of the subject
island consisting of an area of 4.3 hectares. STaHIC
"Records show that on November 8, 1996,
[R]espondent Juan Fresnillo filed a homestead
patent application for a portion of the island
comprising 8.5 hectares. Records also reveal
that [R]espondent Jesus Gapilango filed a
homestead application on June 8, 1972.
Respondent Manuel Palanca, Jr. was issued
Homestead Patent No. 145927 and OCT No. G-
7089 on March 3, 1977 5 with an area of 6.84
hectares of Sombrero Island.
"Petitioner assails the validity of the homestead
patents and original certificates of title covering
certain portions of Sombrero Island issued in
favor of respondents on the ground that the
same were obtained through fraud. Petitioner
prays for the reconveyance of the whole island in
his favor.
"On the other hand, [R]espondent Manuel
Palanca, Jr. claims that he himself requested for
the reclassification of the island in dispute and
that on or about the time of such request,
[R]espondents Fresnillo, Palanca and Gapilango
already occupied their respective areas and
introduced numerous improvements. In addition,
Palanca said that petitioner never filed any
homestead application for the island.
Respondents deny that Gabriel Mandocdoc
undertook the inspection and survey of the
island.
"According to Mandocdoc, the island was
uninhabited but the respondents insist that they
already had their respective occupancy and
improvements on the island. Palanca denies that
he is a mere overseer of the petitioner because
he said he was acting for himself in developing
his own area and not as anybody's caretaker.
"Respondents aver that they are all bona fide
and lawful possessors of their respective
portions and have declared said portions for
taxation purposes and that they have been
faithfully paying taxes thereon for twenty years.
"Respondents contend that the petitioner has no
legal capacity to sue insofar as the island is
concerned because an action for reconveyance
can only be brought by the owner and not a
mere homestead applicant and that petitioner is
guilty of estoppel by laches for his failure to
assert his right over the land for an unreasonable
and unexplained period of time.
"In the instant case, petitioner seeks to nullify the
homestead patents and original certificates of
title issued in favor of the respondents covering
certain portions of the Sombrero Island as well
as the reconveyance of the whole island in his
favor. The petitioner claims that he has the
exclusive right to file an application for
homestead patent over the whole island since it
was he who requested for its conversion from
forest land to agricultural land." 6
Respondents filed their Answer with Special and/or
Affirmative Defenses and Counterclaim in due time. On
June 30, 1999, they also filed a Motion to Dismiss on the
ground of the alleged defiance by petitioner of the trial
 Page 147 of 458
court's Order to amend his Complaint so he could thus
effect a substitution by the legal heirs of the deceased,
Respondent Gapilango. The Motion to Dismiss was
granted by the RTC in its Order dated July 29, 1999.
Petitioner's Motion for Reconsideration of the July 29, 1999
Order was denied by the trial court in its Resolution dated
December 17, 1999, for being a third and prohibited
motion. In his Petition for Certiorari before the CA,
petitioner charged the trial court with grave abuse of
discretion on the ground that the denied Motion was his
first and only Motion for Reconsideration of the aforesaid
Order.
Ruling of the Court of Appeals
Instead of limiting itself to the allegation of grave abuse of
discretion, the CA ruled on the merits. It held that while
petitioner had caused the reclassification of Sombrero
Island from forest to agricultural land, he never applied for
a homestead patent under the Public Land Act. Hence, he
never acquired title to that land.
The CA added that the annulment and cancellation of a
homestead patent and the reversion of the property to the
State were matters between the latter and the homestead
grantee. Unless and until the government takes steps to
annul the grant, the homesteader's right thereto stands.
Finally, granting arguendo that petitioner had the exclusive
right to apply for a patent to the land in question, he was
already barred by laches for having slept on his right for
almost 23 years from the time Respondent Palanca's title
had been issued.
In the Assailed Resolution, the CA acknowledged that it
had erred when it ruled on the merits of the case. It agreed
with petitioner that the trial court had acted without
jurisdiction in perfunctorily dismissing his September 10,
1999 Motion for Reconsideration, on the erroneous ground
that it was a third and prohibited motion when it was
actually only his first motion.
Nonetheless, the Complaint was dismissed motu proprio by
the challenged Resolution of the CA Special Division of five
members with two justices dissenting pursuant to its
"residual prerogative" under Section 1 of Rule 9 of the
Rules of Court.
From the allegations of the Complaint, the appellate court
opined that petitioner clearly had no standing to seek
reconveyance of the disputed land, because he neither
held title to it nor even applied for a homestead patent. It
reiterated that only the State could sue for cancellation of
the title issued upon a homestead patent, and for reversion
of the land to the public domain.IAEcCT
Finally, it ruled that prescription had already barred the
action for reconveyance. First, petitioner's action was
brought 24 years after the issuance of Palanca's
homestead patent. Under the Public Land Act, such action
should have been taken within ten years from the issuance
of the homestead certificate of title. Second, it appears
from the submission (Annex "F" of the Complaint) of
petitioner himself that Respondents Fresnillo and Palanca
had been occupying six hectares of the island since 1965,
or 33 years before he took legal steps to assert his right to
the property. His action was filed beyond the 30-year
prescriptive period under Articles 1141 and 1137 of the
Civil Code.
 Page 148 of 458
Hence, this Petition. 7
Issues
In his Memorandum, petitioner raises the following issues:
"1. Is the Court of Appeals correct in resolving
the Petition for Certiorari based on an issue not
raised (the merits of the case) in the Petition?
"2. Is the Court of Appeals correct in invoking its
alleged 'residual prerogative' under Section 1,
Rule 9 of the 1997 Rules of Civil Procedure in
resolving the Petition on an issue not raised in
the Petition?" 8
The Court's Ruling
The Petition has no merit.
First Issue:
Propriety of Ruling on the Merits
This is not the first time that petitioner has taken issue with
the propriety of the CA's ruling on the merits. He raised it
with the appellate court when he moved for reconsideration
of its December 8, 2000 Decision. The CA even corrected
itself in its November 20, 2001 Resolution, as follows:
"Upon another review of the case, the Court
concedes that it may indeed have lost its way
and been waylaid by the variety, complexity and
seeming importance of the interests and issues
involved in the case below, the apparent
reluctance of the judges, five in all, to hear the
case, and the volume of the conflicting, often
confusing, submissions bearing on incidental
matters. We stand corrected." 9
That explanation should have been enough to settle the
issue. The CA's Resolution on this point has rendered
petitioner's issue moot. Hence, there is no need to discuss
it further. Suffice it to say that the appellate court indeed
acted ultra jurisdictio in ruling on the merits of the case
when the only issue that could have been, and was in fact,
raised was the alleged grave abuse of discretion committed
by the trial court in denying petitioner's Motion for
Reconsideration. Settled is the doctrine that the sole office
of a writ of certiorari is the correction of errors of
jurisdiction. Such writ does not include a review of the
evidence, 10 more so when no determination of the merits
has yet been made by the trial court, as in this case.
Second Issue:
Dismissal for Prescription and Lack of Jurisdiction
Petitioner next submits that the CA erroneously invoked its
"residual prerogatives" under Section 1 of Rule 9 of the
Rules of Court when it motu proprio dismissed the Petition
for lack of jurisdiction and prescription. According to him,
residual prerogative refers to the power that the trial court,
in the exercise of its original jurisdiction, may still validly
exercise even after perfection of an appeal. It follows that
such powers are not possessed by an appellate court.
Petitioner has confused what the CA adverted to as its
"residual prerogatives" under Section 1 of Rule 9 of the
Rules of Court with the "residual jurisdiction" of trial courts
over cases appealed to the CA.
Under Section 1 of Rule 9 of the Rules of Court, defenses
and objections not pleaded either in a motion to dismiss or
in the answer are deemed waived, except when (1) lack of
jurisdiction over the subject matter, (2) litis pendentia,
(3) res judicata and (4) prescription are evident from the

pleadings or the evidence on record. In the four excepted
instances, the court shall motu proprio dismiss the claim or
action. In Gumabon v. Larin 11 we explained thus:
". . . [T]he motu proprio dismissal of a case was
traditionally limited to instances when the court
clearly had no jurisdiction over the subject matter
and when the plaintiff did not appear during
trial, failed to prosecute his action for an
unreasonable length of time or neglected to
comply with the rules or with any order of the
court. Outside of these instances, any motu
proprio dismissal would amount to a violation of
the right of the plaintiff to be heard. Except for
qualifying and expanding Section 2, Rule 9, and
Section 3, Rule 17, of the Revised Rules of
Court, the amendatory 1997 Rules of Civil
Procedure brought about no radical
change. Under the new rules, a court may motu
proprio dismiss a claim when it appears from the
pleadings or evidence on record that it has no
jurisdiction over the subject matter; when there is
another cause of action pending between the
same parties for the same cause, or where the
action is barred by a prior judgment or by statute
of limitations. . . ." 12 (Italics supplied)
On the other hand, "residual jurisdiction" is embodied
in Section 9 of Rule 41 of the Rules of Court, as follows:
"SEC. 9. Perfection of appeal; effect thereof .
A party's appeal by notice of appeal is deemed
perfected as to him upon the filing of the notice
of appeal in due time.
"A party's appeal by record on appeal is deemed
perfected as to him with respect to the subject
Page 149 of 458
matter thereof upon the approval of the record
on appeal filed in due time.
"In appeals by notice of appeal, the court loses
jurisdiction over the case upon the perfection of
the appeals filed in due time and the expiration
of the time to appeal of the other parties.
"In appeals by record on appeal, the court loses
jurisdiction only over the subject matter thereof
upon the approval of the records on appeal filed
in due time and the expiration of the time to
appeal of the other parties.
"In either case, prior to the transmittal of the
original record or the record on appeal, the court
may issue orders for the protection and
preservation of the rights of the parties which do
not involve any matter litigated by the appeal,
approve compromises, permit appeals of
indigent litigants, order execution pending appeal
in accordance with Section 2 of Rule 39, and
allow withdrawal of the appeal." (Italics supplied)
The "residual jurisdiction" of trial courts is available at a
stage in which the court is normally deemed to have lost
jurisdiction over the case or the subject matter involved in
the appeal. This stage is reached upon the perfection of
the appeals by the parties or upon the approval of the
cCTESa
records on appeal, but prior to the transmittal of the original
records or the records on appeal. 13 In either instance, the
trial court still retains its so-called residual jurisdiction to
issue protective orders, approve compromises, permit
appeals of indigent litigants, order execution pending
appeal, and allow the withdrawal of the appeal.
The CA's motu proprio dismissal of petitioner's Complaint
could not have been based, therefore, on residual
 Page 150 of 458
jurisdiction under Rule 41. Undeniably, such order of
dismissal was not one for the protection and preservation
of the rights of the parties, pending the disposition of the
case on appeal. What the CA referred to as residual
prerogatives were the general residual powers of the courts
to dismiss an action motu proprio upon the grounds
mentioned in Section 1 of Rule 9 of the Rules of Court and
under authority of Section 2 of Rule 1 14 of the same rules.
To be sure, the CA had the excepted instances in mind
when it dismissed the Complaint motu proprio "on more
fundamental grounds directly bearing on the lower court's
lack of jurisdiction" 15 and for prescription of the action.
Indeed, when a court has no jurisdiction over the subject
matter, the only power it has is to dismiss the action. 16
Jurisdiction over the subject matter is conferred by law and
is determined by the allegations in the complaint and the
character of the relief sought. 17 In his Complaint for
"Nullification of Applications for Homestead and Original
Certificate of Title No. G-7089 and for Reconveyance of
Title," 18 petitioner averred:
"2. That on November 10, 1965, without the
knowledge of [petitioner, Respondent] Manuel
Palanca Jr., [petitioner's] cousin, in connivance
with his co-[respondent], Lorenzo Agustin, . . .
fraudulently and in bad faith:
2.1. . . . made the request for authority to
survey as a pre-requisite to the filing of an
application for homestead patent in his
name and that of his Co-[Respondent]
Agustin, [despite being] fully aware that
[Petitioner] KATON had previously applied
or requested for re-classification and
certification of the same land from forest
land to agricultural land which request
was favorably acted upon and approved
as mentioned earlier; a clear case of
intrinsic fraud and misrepresentation;
xxx xxx xxx
2.3. In stating in his application for
homestead patent that he was applying
for the VACANT PORTION of Sombrero
Island where there was none, the same
constituted another clear case of fraud
and misrepresentation;
"3. That the issuance of Homestead Patent No.
145927 and OCT No. G-7089 in the name of
[Respondent] Manuel Palanca Jr. and the filing
of Homestead Patent Applications in the names
of [respondents], Lorenzo Agustin, Jesus
Gapilango and Juan Fresnillo[,] having been
done fraudulently and in bad faith, are ipso
facto null and void and of no effect
whatsoever." 19
xxx xxx xxx
". . . By a wrongful act or a willful omission and
intending the effects with natural necessity arise
knowing from such act or omission, [Respondent
Palanca] on account of his blood relation, first
degree cousins, trust, interdependence and
intimacy is guilty of intrinsic fraud [sic] . . ." 20
Thereupon, petitioner prayed, among others, for a
judgment (1) nullifying the homestead patent applications
of Respondents Agustin, Fresnillo and Gapilango as well
as Homestead Patent No. 145927 and OCT No. G-7089 in
the name of Respondent Palanca; and (2) ordering the
 Page 151 of 458

director of the Land Management Bureau to reconvey the property through mistake or fraud is bound to hold and
Sombrero Island to petitioner. 21 reconvey to the plaintiff the property or the title thereto. 26
The question is, did the Complaint sufficiently allege an In the present case, nowhere in the Complaint did
action for declaration of nullity of the free patent and petitioner allege that he had previously held title to the land
certificate of title or, alternatively, for reconveyance? Or did in question. On the contrary, he acknowledged that the
it plead merely for reversion? disputed island was public land, 27 that it had never been
privately titled in his name, and that he had not applied for
The Complaint did not sufficiently make a case for any of
a homestead under the provisions of the Public Land
such actions, over which the trial court could have
Act. 28 This Court has held that a complaint by a private
exercised jurisdiction. HECTaA
party who alleges that a homestead patent was obtained
In an action for nullification of title or declaration of its by fraudulent means, and who consequently prays for its
nullity, the complaint must contain the following allegations: annulment, does not state a cause of action; hence, such
1) that the contested land was privately owned by the complaint must be dismissed. 29
plaintiff prior to the issuance of the assailed certificate of
Neither can petitioner's case be one for reversion. Section
title to the defendant; and 2) that the defendant
101 of the Public Land Act categorically declares that only
perpetuated a fraud or committed a mistake in obtaining a
the solicitor general or the officer in his stead may institute
document of title over the parcel of land claimed by the
such an action. 30 A private person may not bring an action
plaintiff. 22 In these cases, the nullity arises not from fraud
for reversion or any other action that would have the effect
or deceit, but from the fact that the director of the Land
of canceling a free patent and its derivative title, with the
Management Bureau had no jurisdiction to bestow title;
result that the land thereby covered would again form part
hence, the issued patent or certificate of title was void ab
of the public domain. 31
initio. 23
Thus, when the plaintiff admits in the complaint that the
In an alternative action for reconveyance, the certificate of
disputed land will revert to the public domain even if the
title is also respected as incontrovertible, but the transfer of
title is canceled or amended, the action is for reversion;
the property or title thereto is sought to be nullified on the
and the proper party who may bring action is the
ground that it was wrongfully or erroneously registered in
government, to which the property will revert. 32 A mere
the defendant's name. 24 As with an annulment of title, a
homestead applicant, not being the real party in interest,
complaint must allege two facts that, if admitted, would
has no cause of action in a suit for reconveyance. 33 As it
entitle the plaintiff to recover title to the disputed land: (1)
is, vested rights over the land applied for under a
that the plaintiff was the owner of the land, and (2) that the
homestead may be validly claimed only by the applicant,
defendant illegally dispossessed the plaintiff of the
after approval by the director of the Land Management
property. 25 Therefore, the defendant who acquired the
Bureau of the former's final proof of homestead patent. 34
 Page 152 of 458
Consequently, the dismissal of the Complaint is proper not
only because of lack of jurisdiction, but also because of the
utter absence of a cause of action, 35 a defense raised by
respondents in their Answer. 36 Section 2 of Rule 3 of the
Rules of Court 37 ordains that every action must be
prosecuted or defended in the name of the real party in
interest, who stands to be benefited or injured by the
judgment in the suit. Indeed, one who has no right or
interest to protect has no cause of action by which to
invoke, as a party-plaintiff, the jurisdiction of the court. 38
Finally, assuming that petitioner is the proper party to bring
the action for annulment of title or its reconveyance, the
case should still be dismissed for being time-barred. 39 It is
not disputed that a homestead patent and an Original
Certificate of Title was issued to Palanca on February 21,
1977, 40 while the Complaint was filed only on October 6,
1998. Clearly, the suit was brought way past ten years from
the date of the issuance of the Certificate, the prescriptive
period for reconveyance of fraudulently registered real
property. 41
It must likewise be stressed that Palanca's title which
attained the status of indefeasibility one year from the
issuance of the patent and the Certificate of Title in
February 1977 is no longer open to review on the
ground of actual fraud. Ybanez v. Intermediate Appellate
Court 42 ruled that a certificate of title, issued under an
administrative proceeding pursuant to a homestead patent,
is as indefeasible as one issued under a judicial
registration proceeding one year from its issuance;
provided, however, that the land covered by it is disposable
public land, as in this case.
In Aldovino v. Alunan, 43 the Court has held that when the
plaintiff's own complaint shows clearly that the action has
prescribed, such action may be dismissed even if the
defense of prescription has not been invoked by the
defendant. In Gicano v. Gegato, 44 we also explained thus:
". . . [T]rial courts have authority and discretion to
dismiss an action on the ground of prescription
when the parties' pleadings or other facts on
record show it to be indeed time-barred;
(Francisco v. Robles, Feb. 15, 1954; Sison
v. McQuaid, 50 O.G. 97; Bambao v. Lednicky,
Jan. 28, 1961; Cordova v. Cordova, Jan. 14,
1958; Convets, Inc.v. NDC, Feb. 28, 1958; 32
SCRA 529; Sinaon v. Sorongan, 136 SCRA
408); and it may do so on the basis of a motion
to dismiss (Sec. 1, f, Rule 16, Rules of Court), or
an answer which sets up such ground as an
affirmative defense (Sec. 5, Rule 16), or even if
the ground is alleged after judgment on the
merits, as in a motion for reconsideration (Ferrer
v. Ericta, 84 SCRA 705); or even if the defense
has not been asserted at all, as where no
statement thereof is found in the pleadings
(Garcia v.Mathis, 100 SCRA 250; PNB v. Pacific
Commission House, 27 SCRA 766; Chua Lamco
v. Dioso, et al., 97 Phil. 821); or where a
defendant has been declared in default (PNB
v. Perez, 16 SCRA 270). What is essential only,
to repeat, is that the facts demonstrating the
lapse of the prescriptive period be otherwise
sufficiently and satisfactorily apparent on the
record; either in the averments of the plaintiff's
complaint, or otherwise established by the
evidence." 45 (Italics supplied)
 Page 153 of 458

Clearly then, the CA did not err in dismissing the present NACHURA, J : p

case. After all, if and when they are able to do so, courts
must endeavor to settle entire controversies before them to
prevent future litigations. 46
WHEREFORE, the Petition is hereby DENIED, and the
assailed Resolution AFFIRMED. The dismissal of the
When is a litigant estopped by laches from
assailing the jurisdiction of a tribunal? This is the
paramount issue raised in this petition for review of the
February 28, 2001 Decision 2 of the Court of Appeals
(CA) in CA-G.R. CR No. 22697. DcCIAa

Complaint in Civil Case No. 3231 is SUSTAINED on the

grounds of lack of jurisdiction, failure to state a cause of Pertinent are the following antecedent facts and
action and prescription. Costs against petitioner. proceedings:

SO ORDERED. AEIDTc
On July 8, 1994, an information 3 for reckless
imprudence resulting in homicide was filed against the
Sandoval-Gutierrez and petitioner before the Regional Trial Court (RTC) of
(Katon v. Palanca, Jr., G.R. No. 151149, [September 7,
|||
Bulacan, Branch 18. 4 The case was docketed as
Criminal Case No. 2235-M-94. 5 Trial on the merits
2004], 481 PHIL 168-188)
ensued and on August 19, 1998, the trial court
convicted the petitioner as charged. 6 In his appeal
before the CA, the petitioner questioned, among others,
for the first time, the trial court's jurisdiction. 7
The appellate court, however, in the challenged
decision, considered the petitioner to have actively
participated in the trial and to have belatedly attacked
the jurisdiction of the RTC; thus, he was already
estopped by laches from asserting the trial court's lack
of jurisdiction. Finding no other ground to reverse the
[G.R. No. 147406. July 14, 2008.] trial court's decision, the CA affirmed the petitioner's
conviction but modified the penalty imposed and the
VENANCIO FIGUEROA y damages awarded. 8
CERVANTES, 1 petitioner, vs. PEOPLE OF Dissatisfied, the petitioner filed the instant petition
THE PHILIPPINES, respondent. for review on certiorari raising the following issues for
our resolution:
a. Does the fact that the petitioner failed to raise
DECISION the issue of jurisdiction during the trial of this
 Page 154 of 458
case, which was initiated and filed by the public
prosecutor before the wrong court, constitute
laches in relation to the doctrine laid down
in Tijam v. Sibonghanoy, notwithstanding the fact
that said issue was immediately raised in
petitioner's appeal to the Honorable Court of
Appeals? Conversely, does the active
participation of the petitioner in the trial of his
case, which is initiated and filed not by him but
by the public prosecutor, amount to estoppel?
b. Does the admission of the petitioner that it is
difficult to immediately stop a bus while it is
running at 40 kilometers per hour for the
purpose of avoiding a person who
unexpectedly crossed the road, constitute
enough incriminating evidence to warrant his
conviction for the crime charged?
c. Is the Honorable Court of Appeals justified in
considering the place of accident as falling within
Item 4 of Section 35 (b) of the Land
Transportation and Traffic Code, and
subsequently ruling that the speed limit thereto is
only 20 kilometers per hour, when no evidence
whatsoever to that effect was ever presented by
the prosecution during the trial of this case?
d. Is the Honorable Court of Appeals justified in
convicting the petitioner for homicide through
reckless imprudence (the legally correct
designation is "reckless imprudence resulting to
homicide") with violation of the Land
Transportation and Traffic Code when the
prosecution did not prove this during the trial
and, more importantly, the information filed
against the petitioner does not contain an
allegation to that effect?
EcHAaS
e. Does the uncontroverted testimony of the
defense witness Leonardo Hernal that the victim
unexpectedly crossed the road resulting in him
getting hit by the bus driven by the petitioner not
enough evidence to acquit him of the crime
charged? 9
Applied uniformly is the familiar rule that the
jurisdiction of the court to hear and decide a case is
conferred by the law in force at the time of the institution
of the action, unless such statute provides for a
retroactive application thereof. 10 In this case, at the
time the criminal information for reckless imprudence
resulting in homicide with violation of the Automobile
Law (now Land Transportation and Traffic Code) was
filed, Section 32 (2) of Batas
Pambansa (B.P.) Blg. 129 11 had already been
amended by Republic Act No. 7691. 12 The said
provision thus reads:
Sec. 32. Jurisdiction of Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial
Courts in Criminal Cases. Except in cases
falling within the exclusive original jurisdiction of
Regional Trial Courts and the Sandiganbayan,
the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts shall
exercise:
xxx xxx xxx
(2) Exclusive original jurisdiction over all
offenses punishable with imprisonment not
exceeding six (6) years irrespective of the
amount of fine, and regardless of other
imposable accessory or other penalties,
including the civil liability arising from such
offenses or predicated thereon, irrespective of
 Page 155 of 458
kind, nature, value or amount thereof: Provided,
however, That in offenses involving damage to
property through criminal negligence, they shall
have exclusive original jurisdiction thereof.
As the imposable penalty for the crime charged
herein is prision correccional in its medium and
maximum periods or imprisonment for 2 years, 4
months and 1 day to 6 years, 13 jurisdiction to hear and
try the same is conferred on the Municipal Trial Courts
(MTCs). Clearly, therefore, the RTC of Bulacan does
not have jurisdiction over Criminal Case No. 2235-M-94.
While both the appellate court and the Solicitor
General acknowledge this fact, they nevertheless are of
the position that the principle of estoppel by laches has
already precluded the petitioner from questioning the
jurisdiction of the RTC the trial went on for 4 years
with the petitioner actively participating therein and
without him ever raising the jurisdictional infirmity. The
petitioner, for his part, counters that the lack of
jurisdiction of a court over the subject matter may be
raised at any time even for the first time on appeal. As
undue delay is further absent herein, the principle of
laches will not be applicable.aCTADI
To settle once and for all this problem of
jurisdiction vis--vis estoppel by laches, which
continuously confounds the bench and the bar, we shall
analyze the various Court decisions on the matter.
As early as 1901, this Court has declared
that unless jurisdiction has been conferred by some
legislative act, no court or tribunal can act on a matter
submitted to it. 14 We went on to state in U.S. v. De La
Santa 15 that:
It has been frequently held that a lack of
jurisdiction over the subject-matter is fatal, and
subject to objection at any stage of the
proceedings, either in the court below or on
appeal (Ency. of Pl. & Pr., vol. 12, p. 189, and
large array of cases there cited), and
indeed, where the subject-matter is not within
the jurisdiction, the court may dismiss the
proceeding ex mero motu. (4 Ill., 133; 190 Ind.,
79; Chipman vs. Waterbury, 59 Conn., 496).
Jurisdiction over the subject-matter in a judicial
proceeding is conferred by the sovereign
authority which organizes the court; it is given
only by law and in the manner prescribed by law
and an objection based on the lack of such
jurisdiction can not be waived by the parties. .
. . 16
Later, in People v. Casiano, 17 the Court
explained:
4. The operation of the principle of estoppel
on the question of jurisdiction seemingly
depends upon whether the lower court
actually had jurisdiction or not. If it
had no jurisdiction, but the case was tried
and decided upon the theory that
it had jurisdiction, the parties are not barred,
on appeal, from assailing such jurisdiction,
for the same "must exist as a matter of
law, and may not be conferred by consent of
the parties or by estoppel" (5 C.J.S., 861-863).
However, if the lower court had jurisdiction, and
the case was heard and decided upon a given
theory, such, for instance, as that the court
had no jurisdiction, the party who induced it to
adopt such theory will not be permitted, on
 Page 156 of 458
appeal, to assume an inconsistent position
that the lower court had jurisdiction. Here, the
principle of estoppel applies. The rule that
jurisdiction is conferred by law, and does not
depend upon the will of the parties,
has no bearing thereon. Thus, Corpus Juris
Secundum says: DcaSIH
Where accused has secured a decision
that the indictment is void, or has been
granted an instruction based on its
defective character directing the jury to
acquit, he is estopped, when
subsequently indicted, to assert that the
former indictment was valid. In such
case, there may be a new prosecution
whether the indictment in the former
prosecution was good or
bad. Similarly, where, after the jury was
impaneled and sworn, the court on
accused's motion quashed the information
on the erroneous assumption that the
court had no jurisdiction, accused cannot
successfully plead former jeopardy to a
new information. . . . (22 C.J.S., sec. 252,
pp. 388-389; italics ours).
Where accused procured a prior
conviction to be set aside on the ground
that the court was without jurisdiction, he
is estopped subsequently to assert, in
support of a defense of previous jeopardy,
that such court had jurisdiction." (22
C.J.S. p. 378). 18
But in Pindagan Agricultural Co., Inc. v.
Dans, 19 the Court, in not sustaining the plea of lack of
jurisdiction by the plaintiff-appellee therein, made the
following observations:
It is surprising why it is only now, after the
decision has been rendered, that the plaintiff-
appellee presents the question of this Court's
jurisdiction over the case.Republic Act No.
2613 was enacted on August 1, 1959. This case
was argued on January 29, 1960.
Notwithstanding this fact, the jurisdiction of this
Court was never impugned until the adverse
decision of this Court was handed down. The
conduct of counsel leads us to believe that they
must have always been of the belief that
notwithstanding said enactment of Republic Act
2613 this Court has jurisdiction of the case, such
conduct being born out of a conviction that the
actual real value of the properties in question
actually exceeds the jurisdictional amount of this
Court (over P200,000). Our minute resolution in
G.R. No. L-10096, Hyson Tan, et al. vs. Filipinas
Compaa de Seguros, et al., of March 23, 1956,
a parallel case, is applicable to the conduct of
plaintiff-appellee in this case, thus:
DaIACS
. . . that an appellant who files his brief
and submits his case to the Court of
Appeals for decision, without questioning
the latter's jurisdiction until decision is
rendered therein, should be considered as
having voluntarily waived so much of his
claim as would exceed the jurisdiction of
said Appellate Court; for the reason that a
contrary rule would encourage the
undesirable practice of appellants
submitting their cases for decision to the
Court of Appeals in expectation of
 Page 157 of 458
favorable judgment, but with intent of
attacking its jurisdiction should the
decision be unfavorable: . . . 20
Then came our ruling in Tijam v.
Sibonghanoy 21 that a party may be barred by laches
from invoking lack of jurisdiction at a late hour for the
purpose of annulling everything done in the case with
the active participation of said party invoking the plea.
We expounded, thus:
A party may be estopped or barred from raising
a question in different ways and for different
reasons. Thus, we speak of estoppel in pais, of
estoppel by deed or by record, and of estoppel
by laches.
Laches, in a general sense, is failure or neglect,
for an unreasonable and unexplained length of
time, to do that which, by exercising due
diligence, could or should have been done
earlier; it is negligence or omission to assert a
right within a reasonable time, warranting a
presumption that the party entitled to assert it
either has abandoned it or declined to assert it.
The doctrine of laches or of "stale demands" is
based upon grounds of public policy which
requires, for the peace of society, the
discouragement of stale claims and, unlike the
statute of limitations, is not a mere question of
time but is principally a question of the inequity
or unfairness of permitting a right or claim to be
enforced or asserted.
It has been held that a party cannot invoke the
jurisdiction of a court to secure affirmative relief
against his opponent and, after obtaining or
failing to obtain such relief, repudiate or question
that same jurisdiction (Dean vs. Dean, 136 Or.
694, 86 A.L.R. 79). In the case just cited, by way
of explaining the rule, it was further said that the
question whether the court had jurisdiction either
of the subject matter of the action or of the
parties was not important in such cases because
the party is barred from such conduct not
because the judgment or order of the court is
valid and conclusive as an adjudication, but for
the reason that such a practice cannot be
tolerated obviously for reasons of public
policy.
Furthermore, it has also been held that after
voluntarily submitting a cause and encountering
an adverse decision on the merits, it is too late
for the loser to question the jurisdiction or power
of the court (Pease vs. Rathbun-Jones etc., 243
U.S. 273, 61 L. Ed. 715, 37 S.Ct. 283; St. Louis
etc. vs. McBride, 141 U.S. 127, 35 L. Ed. 659).
And inLittleton vs. Burgess, 16 Wyo. 58, the
Court said that it is not right for a party who has
affirmed and invoked the jurisdiction of a court in
a particular matter to secure an affirmative relief,
to afterwards deny that same jurisdiction to
escape a penalty. DCScaT
Upon this same principle is what We said in the
three cases mentioned in the resolution of the
Court of Appeals of May 20, 1963 (supra) to
the effect that we frown upon the "undesirable
practice" of a party submitting his case for
decision and then accepting the judgment, only if
favorable, and attacking it for lack of jurisdiction,
when adverse as well as in Pindagan etc. vs.
Dans et al., G.R. L-14591, September 26,
1962; Montelibano et al. vs. Bacolod-Murcia
Milling Co., Inc., G.R. L-15092;Young Men Labor
 Page 158 of 458
Union etc. vs. The Court of Industrial Relations
et al., G.R. L-20307, Feb. 26, 1965, and Mejia
vs. Lucas, 100 Phil. p. 277.
The facts of this case show that from the time the
Surety became a quasi-party on July 31, 1948, it could
have raised the question of the lack of jurisdiction of the
Court of First Instance of Cebu to take cognizance of
the present action by reason of the sum of money
involved which, according to the law then in force, was
within the original exclusive jurisdiction of inferior courts.
It failed to do so. Instead, at several stages of the
proceedings in the court a quo, as well as in the Court
of Appeals, it invoked the jurisdiction of said courts to
obtain affirmative relief and submitted its case for a final
adjudication on the merits. It was only after an adverse
decision was rendered by the Court of Appeals that it
finally woke up to raise the question of jurisdiction. Were
we to sanction such conduct on its part, We would in
effect be declaring as useless all the proceedings had in
the present case since it was commenced on July 19,
1948 and compel the judgment creditors to go up their
Calvary once more. The inequity and unfairness of this
is not only patent but revolting. 22 aTcIAS
For quite a time since we made this
pronouncement in Sibonghanoy, courts and tribunals, in
resolving issues that involve the belated invocation of
lack of jurisdiction, have applied the principle of
estoppel by laches. Thus, in Calimlim v. Ramirez, 23 we
pointed out that Sibonghanoy was developing into a
general rule rather than the exception:
A rule that had been settled by unquestioned
acceptance and upheld in decisions so
numerous to cite is that the jurisdiction of a court
over the subject-matter of the action is a matter
of law and may not be conferred by consent or
agreement of the parties. The lack of jurisdiction
of a court may be raised at any stage of the
proceedings, even on appeal. This doctrine has
been qualified by recent pronouncements which
stemmed principally from the ruling in the cited
case of Sibonghanoy. It is to be regretted,
however, that the holding in said case had been
applied to situations which were obviously not
contemplated therein. The exceptional
circumstance involved in Sibonghanoy which
justified the departure from the accepted concept
of non-waivability of objection to jurisdiction has
been ignored and, instead a blanket doctrine had
been repeatedly upheld that rendered the
supposed ruling in Sibonghanoy not as the
exception, but rather the general rule, virtually
overthrowing altogether the time-honored
principle that the issue of jurisdiction is not lost
by waiver or by estoppel. DIcTEC
In Sibonghanoy, the defense of lack of
jurisdiction of the court that rendered the
questioned ruling was held to be barred by
estoppel by laches. It was ruled that the lack of
jurisdiction having been raised for the first time in
a motion to dismiss filed almost fifteen (15) years
after the questioned ruling had been rendered,
such a plea may no longer be raised for being
barred by laches. As defined in said case, laches
is "failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by
exercising due diligence, could or should have
been done earlier; it is negligence or omission to
assert a right within a reasonable time,
warranting a presumption that the party entitled
 Page 159 of 458
to assert has abandoned it or declined to assert
it. 24
In Calimlim, despite the fact that the one who
benefited from the plea of lack of jurisdiction was the
one who invoked the court's jurisdiction, and who later
obtained an adverse judgment therein, we refused to
apply the ruling in Sibonghanoy. The Court accorded
supremacy to the time-honored principle that the
issue of jurisdiction is not lost by waiver or by
estoppel.
Yet, in subsequent cases decided
after Calimlim, which by sheer volume are too plentiful
to mention, the Sibonghanoy doctrine, as foretold
in Calimlim,became the rule rather than the exception.
As such, in Soliven v. Fastforms Philippines, Inc., 25 the
Court ruled:
While it is true that jurisdiction may be raised at
any time, "this rule presupposes that estoppel
has not supervened." In the instant case,
respondent actively participated in all stages of
the proceedings before the trial court and
invoked its authority by asking for an affirmative
relief. Clearly, respondent is estopped from
challenging the trial court's jurisdiction,
especially when an adverse judgment has been
rendered. In PNOC Shipping and Transport
Corporation vs. Court of Appeals,we held:
Moreover, we note that petitioner did not
question at all the jurisdiction of the lower
court . . . in its answers to both the
amended complaint and the second
amended complaint. It did so only in its
motion for reconsideration of the decision
of the lower court after it had received an
adverse decision. As this Court held
in Pantranco North Express, Inc. vs. Court
of Appeals (G.R. No. 105180, July 5,
1993, 224 SCRA 477, 491), participation
in all stages of the case before the trial
court, that included invoking its authority
in asking for affirmative relief, effectively
barred petitioner by estoppel from
challenging the court's jurisdiction.
Notably, from the time it filed its answer to
the second amended complaint on April
16, 1985, petitioner did not question the
lower court's jurisdiction. It was only on
December 29, 1989 when it filed its
motion for reconsideration of the lower
court's decision that petitioner raised the
question of the lower court's lack of
jurisdiction. Petitioner thus foreclosed its
right to raise the issue of jurisdiction by its
own inaction. (italics ours) cAaDCE
Similarly, in the subsequent case of Sta. Lucia
Realty and Development, Inc. vs. Cabrigas, we
ruled:
In the case at bar, it was found by the trial
court in its 30 September 1996 decision in
LCR Case No. Q-60161(93) that private
respondents (who filed the petition for
reconstitution of titles) failed to comply
with both sections 12 and 13 of RA
26 and therefore, it had no jurisdiction
over the subject matter of the case.
However, private respondents never
questioned the trial court's jurisdiction
over its petition for reconstitution
throughout the duration of LCR Case No.
Q-60161(93). On the contrary, private
 Page 160 of 458
respondents actively participated in the
reconstitution proceedings by filing
pleadings and presenting its evidence.
They invoked the trial court's jurisdiction
in order to obtain affirmative relief the
reconstitution of their titles. Private
respondents have thus foreclosed their
right to raise the issue of jurisdiction by
their own actions. cAHIST
The Court has constantly upheld the
doctrine that while jurisdiction may be
assailed at any stage, a litigant's
participation in all stages of the case
before the trial court, including the
invocation of its authority in asking for
affirmative relief, bars such party from
challenging the court's jurisdiction (PNOC
Shipping and Transport Corporation vs.
Court of Appeals, 297 SCRA 402
[1998]). A party cannot invoke the
jurisdiction of a court to secure affirmative
relief against his opponent and after
obtaining or failing to obtain such relief,
repudiate or question that same
jurisdiction (Asset Privatization Trust vs.
Court of Appeals, 300 SCRA 579
[1998]; Province of Bulacan vs. Court of
Appeals, 299 SCRA 442 [1998]). The
Court frowns upon the undesirable
practice of a party participating in the
proceedings and submitting his case for
decision and then accepting judgment,
only if favorable, and attacking it for lack
of jurisdiction, when adverse (Producers
Bank of the Philippines vs. NLRC, 298
SCRA 517 [1998], citing Ilocos Sur
Electric Cooperative, Inc. vs. NLRC, 241
SCRA 36 [1995]). (italics ours) 26
Noteworthy, however, is that, in the 2005 case
of Metromedia Times Corporation v. Pastorin, 27 where
the issue of lack of jurisdiction was raised only in the
National Labor Relations Commission (NLRC) on
appeal, we stated, after examining the doctrines of
jurisdiction vis--vis estoppel, that the ruling
in Sibonghanoystands as an exception, rather than
the general rule. Metromedia, thus, was not estopped
from assailing the jurisdiction of the labor arbiter before
the NLRC on appeal. 28
Later, in Francel Realty Corporation v.
Sycip, 29 the Court clarified that:
Petitioner argues that the CA's affirmation of the
trial court's dismissal of its case was erroneous,
considering that a full-blown trial had already
been conducted. In effect, it contends that lack of
jurisdiction could no longer be used as a ground
for dismissal after trial had ensued and ended.
The above argument is anchored on estoppel by
laches, which has been used quite successfully
in a number of cases to thwart dismissals based
on lack of jurisdiction.Tijam v. Sibonghanoy, in
which this doctrine was espoused, held that a
party may be barred from questioning a court's
jurisdiction after being invoked to secure
affirmative relief against its opponent. In fine,
laches prevents the issue of lack of jurisdiction
from being raised for the first time on appeal by a
litigant whose purpose is to annul everything
done in a trial in which it has actively
participated.TcEaAS
 Page 161 of 458
Laches is defined as the "failure or neglect for an
unreasonable and unexplained length of time, to
do that which, by exercising due diligence, could
or should have been done earlier; it is
negligence or omission to assert a right within a
reasonable time, warranting a presumption that
the party entitled to assert it either has
abandoned it or declined to assert it."
The ruling in Sibonghanoy on the matter of
jurisdiction is, however, the exception rather than
the rule. Estoppel by laches may be invoked to
bar the issue of lack of jurisdiction only in cases
in which the factual milieu is analogous to that in
the cited case. In such controversies, laches
should be clearly present; that is, lack of
jurisdiction must have been raised so belatedly
as to warrant the presumption that the party
entitled to assert it had abandoned or declined to
assert it. ThatSibonghanoy applies only to
exceptional circumstances is clarified in Calimlim
v. Ramirez, which we quote:
A rule that had been settled by
unquestioned acceptance and upheld in
decisions so numerous to cite is that the
jurisdiction of a court over the subject-
matter of the action is a matter of law and
may not be conferred by consent or
agreement of the parties. The lack of
jurisdiction of a court may be raised at any
stage of the proceedings, even on
appeal. This doctrine has been qualified
by recent pronouncements which
stemmed principally from the ruling in the
cited case ofSibonghanoy. It is to be
regretted, however, that the holding in
said case had been applied to situations
which were obviously not contemplated
therein. The exceptional circumstance
involved in Sibonghanoy which justified
the departure from the accepted concept
of non-waivability of objection to
jurisdiction has been ignored and, instead
a blanket doctrine had been repeatedly
upheld that rendered the supposed ruling
in Sibonghanoy not as the exception, but
rather the general rule, virtually
overthrowing altogether the time-honored
principle that the issue of jurisdiction is not
lost by waiver or by estoppel.
Indeed, the general rule remains: a court's lack
of jurisdiction may be raised at any stage of the
proceedings, even on appeal. The reason is that
jurisdiction is conferred by law, and lack of it
affects the very authority of the court to take
cognizance of and to render judgment on the
action. Moreover, jurisdiction is determined by
the averments of the complaint, not by the
defenses contained in the answer. 30 HScDIC
Also, in Mangaliag v. Catubig-Pastoral, 31 even if
the pleader of lack of jurisdiction actively took part in the
trial proceedings by presenting a witness to seek
exoneration, the Court, reiterating the doctrine
in Calimlim, said:
Private respondent argues that the defense of
lack of jurisdiction may be waived by estoppel
through active participation in the trial. Such,
however, is not the general rule but an
exception, best characterized by the peculiar
circumstances in Tijam vs. Sibonghanoy.
In Sibonghanoy, the party invoking lack of
jurisdiction did so only after fifteen years and at a
 Page 162 of 458
stage when the proceedings had already been
elevated to the CA. Sibonghanoy is an
exceptional case because of the presence of
laches, which was defined therein as failure or
neglect for an unreasonable and unexplained
length of time to do that which, by exercising due
diligence, could or should have been done
earlier; it is the negligence or omission to assert
a right within a reasonable time, warranting a
presumption that the party entitled to assert has
abandoned it or declined to assert it. 32
And in the more recent Regalado v. Go, 33 the
Court again emphasized that laches should be clearly
present for the Sibonghanoy doctrine to be applicable,
thus:TAIaHE
Laches is defined as the "failure or neglect for an
unreasonable and unexplained length of time, to
do that which, by exercising due diligence, could
or should have been done earlier, it is
negligence or omission to assert a right within a
reasonable length of time, warranting a
presumption that the party entitled to assert it
either has abandoned it or declined to assert it."
The ruling in People v. Regalario that was based
on the landmark doctrine enunciated in Tijam v.
Sibonghanoy on the matter of jurisdiction
by estoppel is the exception rather than the
rule. Estoppel by laches may be invoked to bar
the issue of lack of jurisdiction only in cases in
which the factual milieu is analogous to that in
the cited case. In such
controversies, laches should have been clearly
present; that is, lack of jurisdiction must have
been raised so belatedly as to warrant the
presumption that the party entitled to assert it
had abandoned or declined to assert it.
In Sibonghanoy, the defense of lack of
jurisdiction was raised for the first time in a
motion to dismiss filed by the Surety almost 15
years after the questioned ruling had been
rendered. At several stages of the proceedings,
in the court a quo as well as in the Court of
Appeals, the Surety invoked the jurisdiction of
the said courts to obtain affirmative relief and
submitted its case for final adjudication on the
merits. It was only when the adverse decision
was rendered by the Court of Appeals that it
finally woke up to raise the question of
jurisdiction.
Clearly, the factual settings attendant
in Sibonghanoy are not present in the case at
bar. Petitioner Atty. Regalado, after the receipt of
the Court of Appeals resolution finding her guilty
of contempt, promptly filed a Motion for
Reconsideration assailing the said court's
jurisdiction based on procedural infirmity in
initiating the action. Her compliance with the
appellate court's directive to show cause why
she should not be cited for contempt and filing a
single piece of pleading to that effect could not
be considered as an active participation in the
judicial proceedings so as to take the case within
the milieu of Sibonghanoy. Rather, it is the
natural fear to disobey the mandate of the court
that could lead to dire consequences that
impelled her to comply. 34 cEaTHD
The Court, thus, wavered on when to apply the
exceptional circumstance in Sibonghanoy and on when
to apply the general rule enunciated as early as in De
 Page 163 of 458
La Santa and expounded at length in Calimlim. The
general rule should, however, be, as it has always been,
that the issue of jurisdiction may be raised at any stage
of the proceedings, even on appeal, and is not lost by
waiver or by estoppel. Estoppel by laches, to bar a
litigant from asserting the court's absence or lack of
jurisdiction, only supervenes in exceptional cases
similar to the factual milieu of Tijam v. Sibonghanoy.
Indeed, the fact that a person attempts to invoke
unauthorized jurisdiction of a court does not estop him
from thereafter challenging its jurisdiction over the
subject matter, since such jurisdiction must arise by law
and not by mere consent of the parties. This is
especially true where the person seeking to invoke
unauthorized jurisdiction of the court does not thereby
secure any advantage or the adverse party does not
suffer any harm. 35 ITScHa
Applying the said doctrine to the instant case, the
petitioner is in no way estopped by laches in assailing
the jurisdiction of the RTC, considering that he raised
the lack thereof in his appeal before the appellate court.
At that time, no considerable period had yet elapsed for
laches to attach. True, delay alone, though
unreasonable, will not sustain the defense of "estoppel
by laches" unless it further appears that the party,
knowing his rights, has not sought to enforce them until
the condition of the party pleading laches has in good
faith become so changed that he cannot be restored to
his former state, if the rights be then enforced, due to
loss of evidence, change of title, intervention of equities,
and other causes. 36 In applying the principle of
estoppel by laches in the exceptional case
of Sibonghanoy,the Court therein considered the patent
and revolting inequity and unfairness of having the
judgment creditors go up their Calvary once more after
more or less 15 years. 37 The same, however, does not
obtain in the instant case.
We note at this point that estoppel, being in the
nature of a forfeiture, is not favored by law. It is to be
applied rarely only from necessity, and only in
extraordinary circumstances. The doctrine must be
applied with great care and the equity must be strong in
its favor. 38 When misapplied, the doctrine of estoppel
may be a most effective weapon for the
accomplishment of injustice. 39 Moreover, a judgment
rendered without jurisdiction over the subject matter is
void. 40 Hence, the Revised Rules of Court provides for
remedies in attacking judgments rendered by courts or
tribunals that have no jurisdiction over the concerned
cases. No laches will even attach when the judgment is
null and void for want of jurisdiction. 41 As we have
stated in Heirs of Julian Dela Cruz and Leonora Talaro
v. Heirs of Alberto Cruz, 42
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. Jurisdiction over the nature and
subject matter of an action is conferred by the
Constitution and the law, and not by the consent
or waiver of the parties where the court
otherwise would have no jurisdiction over the
nature or subject matter of the action. Nor can it
be acquired through, or waived by, any act or
 Page 164 of 458
omission of the parties. Moreover, estoppel does
not apply to confer jurisdiction to a tribunal that
has none over the cause of action. . . .
Indeed, the jurisdiction of the court or tribunal is
not affected by the defenses or theories set up
by the defendant or respondent in his answer or
motion to dismiss. Jurisdiction should be
determined by considering not only the status or
the relationship of the parties but also the nature
of the issues or questions that is the subject of
the controversy. . . . The proceedings before a
court or tribunal without jurisdiction, including its
decision, are null and void, hence, susceptible to
direct and collateral attacks. 43cIADaC
With the above considerations, we find it
unnecessary to resolve the other issues raised in the
petition.
WHEREFORE, premises considered, the petition
for review on certiorari is GRANTED. Criminal Case No.
2235-M-94 is hereby DISMISSED without prejudice.
SO ORDERED.
(Figueroa y Cervantes v. People, G.R. No. 147406, [July
|||
14, 2008], 580 PHIL 58-78)
[G.R. No. 147406. July 14, 2008.]
VENANCIO FIGUEROA y
CERVANTES, 1 petitioner, vs. PEOPLE OF
THE PHILIPPINES, respondent.
DECISION
NACHURA, J : p
When is a litigant estopped by laches from
assailing the jurisdiction of a tribunal? This is the
paramount issue raised in this petition for review of the
February 28, 2001 Decision 2 of the Court of Appeals
(CA) in CA-G.R. CR No. 22697. DcCIAa
Pertinent are the following antecedent facts and
proceedings:
On July 8, 1994, an information 3 for reckless
imprudence resulting in homicide was filed against the
petitioner before the Regional Trial Court (RTC) of
Bulacan, Branch 18. 4 The case was docketed as
Criminal Case No. 2235-M-94. 5 Trial on the merits
ensued and on August 19, 1998, the trial court
convicted the petitioner as charged. 6 In his appeal
before the CA, the petitioner questioned, among others,
for the first time, the trial court's jurisdiction. 7
The appellate court, however, in the challenged
decision, considered the petitioner to have actively
participated in the trial and to have belatedly attacked
the jurisdiction of the RTC; thus, he was already
 Page 165 of 458
estopped by laches from asserting the trial court's lack
of jurisdiction. Finding no other ground to reverse the
trial court's decision, the CA affirmed the petitioner's
conviction but modified the penalty imposed and the
damages awarded. 8
Dissatisfied, the petitioner filed the instant petition
for review on certiorari raising the following issues for
our resolution:
a. Does the fact that the petitioner failed to raise
the issue of jurisdiction during the trial of this
case, which was initiated and filed by the public
prosecutor before the wrong court, constitute
laches in relation to the doctrine laid down
in Tijam v. Sibonghanoy, notwithstanding the fact
that said issue was immediately raised in
petitioner's appeal to the Honorable Court of
Appeals? Conversely, does the active
participation of the petitioner in the trial of his
case, which is initiated and filed not by him but
by the public prosecutor, amount to estoppel?
b. Does the admission of the petitioner that it is
difficult to immediately stop a bus while it is
running at 40 kilometers per hour for the
purpose of avoiding a person who
unexpectedly crossed the road, constitute
enough incriminating evidence to warrant his
conviction for the crime charged?
c. Is the Honorable Court of Appeals justified in
considering the place of accident as falling within
Item 4 of Section 35 (b) of the Land
Transportation and Traffic Code, and
subsequently ruling that the speed limit thereto is
only 20 kilometers per hour, when no evidence
whatsoever to that effect was ever presented by
the prosecution during the trial of this case?
d. Is the Honorable Court of Appeals justified in
convicting the petitioner for homicide through
reckless imprudence (the legally correct
designation is "reckless imprudence resulting to
homicide") with violation of the Land
Transportation and Traffic Code when the
prosecution did not prove this during the trial
and, more importantly, the information filed
against the petitioner does not contain an
allegation to that effect?EcHAaS
e. Does the uncontroverted testimony of the
defense witness Leonardo Hernal that the victim
unexpectedly crossed the road resulting in him
getting hit by the bus driven by the petitioner not
enough evidence to acquit him of the crime
charged? 9
Applied uniformly is the familiar rule that the
jurisdiction of the court to hear and decide a case is
conferred by the law in force at the time of the institution
of the action, unless such statute provides for a
retroactive application thereof. 10 In this case, at the
time the criminal information for reckless imprudence
resulting in homicide with violation of the Automobile
Law (now Land Transportation and Traffic Code) was
filed, Section 32 (2) of Batas
Pambansa (B.P.) Blg. 129 11 had already been
amended by Republic Act No. 7691. 12 The said
provision thus reads:
Sec. 32. Jurisdiction of Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial
Courts in Criminal Cases. Except in cases
falling within the exclusive original jurisdiction of
 Page 166 of 458
Regional Trial Courts and the Sandiganbayan,
the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts shall
exercise:
xxx xxx xxx
(2) Exclusive original jurisdiction over all
offenses punishable with imprisonment not
exceeding six (6) years irrespective of the
amount of fine, and regardless of other
imposable accessory or other penalties,
including the civil liability arising from such
offenses or predicated thereon, irrespective of
kind, nature, value or amount thereof: Provided,
however, That in offenses involving damage to
property through criminal negligence, they shall
have exclusive original jurisdiction thereof.
As the imposable penalty for the crime charged
herein is prision correccional in its medium and
maximum periods or imprisonment for 2 years, 4
months and 1 day to 6 years, 13 jurisdiction to hear and
try the same is conferred on the Municipal Trial Courts
(MTCs). Clearly, therefore, the RTC of Bulacan does
not have jurisdiction over Criminal Case No. 2235-M-94.
While both the appellate court and the Solicitor
General acknowledge this fact, they nevertheless are of
the position that the principle of estoppel by laches has
already precluded the petitioner from questioning the
jurisdiction of the RTC the trial went on for 4 years
with the petitioner actively participating therein and
without him ever raising the jurisdictional infirmity. The
petitioner, for his part, counters that the lack of
jurisdiction of a court over the subject matter may be
raised at any time even for the first time on appeal. As
undue delay is further absent herein, the principle of
laches will not be applicable. aCTADI
To settle once and for all this problem of
jurisdiction vis--vis estoppel by laches, which
continuously confounds the bench and the bar, we shall
analyze the various Court decisions on the matter.
As early as 1901, this Court has declared
that unless jurisdiction has been conferred by some
legislative act, no court or tribunal can act on a matter
submitted to it. 14 We went on to state in U.S. v. De La
Santa 15 that:
It has been frequently held that a lack of
jurisdiction over the subject-matter is fatal, and
subject to objection at any stage of the
proceedings, either in the court below or on
appeal (Ency. of Pl. & Pr., vol. 12, p. 189, and
large array of cases there cited), and
indeed, where the subject-matter is not within
the jurisdiction, the court may dismiss the
proceeding ex mero motu. (4 Ill., 133; 190 Ind.,
79; Chipman vs. Waterbury, 59 Conn., 496).
Jurisdiction over the subject-matter in a judicial
proceeding is conferred by the sovereign
authority which organizes the court; it is given
only by law and in the manner prescribed by law
and an objection based on the lack of such
jurisdiction can not be waived by the parties. .
. . 16
Later, in People v. Casiano, 17 the Court
explained:
4. The operation of the principle of estoppel
on the question of jurisdiction seemingly
depends upon whether the lower court
 Page 167 of 458
actually had jurisdiction or not. If it
had no jurisdiction, but the case was tried
and decided upon the theory that
it had jurisdiction, the parties are not barred,
on appeal, from assailing such jurisdiction,
for the same "must exist as a matter of
law, and may not be conferred by consent of
the parties or by estoppel" (5 C.J.S., 861-863).
However, if the lower court had jurisdiction, and
the case was heard and decided upon a given
theory, such, for instance, as that the court
had no jurisdiction, the party who induced it to
adopt such theory will not be permitted, on
appeal, to assume an inconsistent position
that the lower court had jurisdiction. Here, the
principle of estoppel applies. The rule that
jurisdiction is conferred by law, and does not
depend upon the will of the parties,
has no bearing thereon. Thus, Corpus Juris
Secundum says: DcaSIH
Where accused has secured a decision
that the indictment is void, or has been
granted an instruction based on its
defective character directing the jury to
acquit, he is estopped, when
subsequently indicted, to assert that the
former indictment was valid. In such
case, there may be a new prosecution
whether the indictment in the former
prosecution was good or
bad. Similarly, where, after the jury was
impaneled and sworn, the court on
accused's motion quashed the information
on the erroneous assumption that the
court had no jurisdiction, accused cannot
successfully plead former jeopardy to a
new information. . . . (22 C.J.S., sec. 252,
pp. 388-389; italics ours).
Where accused procured a prior
conviction to be set aside on the ground
that the court was without jurisdiction, he
is estopped subsequently to assert, in
support of a defense of previous jeopardy,
that such court had jurisdiction." (22
C.J.S. p. 378). 18
But in Pindagan Agricultural Co., Inc. v.
Dans, 19 the Court, in not sustaining the plea of lack of
jurisdiction by the plaintiff-appellee therein, made the
following observations:
It is surprising why it is only now, after the
decision has been rendered, that the plaintiff-
appellee presents the question of this Court's
jurisdiction over the case.Republic Act No.
2613 was enacted on August 1, 1959. This case
was argued on January 29, 1960.
Notwithstanding this fact, the jurisdiction of this
Court was never impugned until the adverse
decision of this Court was handed down. The
conduct of counsel leads us to believe that they
must have always been of the belief that
notwithstanding said enactment of Republic Act
2613 this Court has jurisdiction of the case, such
conduct being born out of a conviction that the
actual real value of the properties in question
actually exceeds the jurisdictional amount of this
Court (over P200,000). Our minute resolution in
G.R. No. L-10096, Hyson Tan, et al. vs. Filipinas
Compaa de Seguros, et al., of March 23, 1956,
a parallel case, is applicable to the conduct of
plaintiff-appellee in this case, thus:
DaIACS
 Page 168 of 458
. . . that an appellant who files his brief
and submits his case to the Court of
Appeals for decision, without questioning
the latter's jurisdiction until decision is
rendered therein, should be considered as
having voluntarily waived so much of his
claim as would exceed the jurisdiction of
said Appellate Court; for the reason that a
contrary rule would encourage the
undesirable practice of appellants
submitting their cases for decision to the
Court of Appeals in expectation of
favorable judgment, but with intent of
attacking its jurisdiction should the
decision be unfavorable: . . . 20
Then came our ruling in Tijam v.
Sibonghanoy 21 that a party may be barred by laches
from invoking lack of jurisdiction at a late hour for the
purpose of annulling everything done in the case with
the active participation of said party invoking the plea.
We expounded, thus:
A party may be estopped or barred from raising
a question in different ways and for different
reasons. Thus, we speak of estoppel in pais, of
estoppel by deed or by record, and of estoppel
by laches.
Laches, in a general sense, is failure or neglect,
for an unreasonable and unexplained length of
time, to do that which, by exercising due
diligence, could or should have been done
earlier; it is negligence or omission to assert a
right within a reasonable time, warranting a
presumption that the party entitled to assert it
either has abandoned it or declined to assert it.
The doctrine of laches or of "stale demands" is
based upon grounds of public policy which
requires, for the peace of society, the
discouragement of stale claims and, unlike the
statute of limitations, is not a mere question of
time but is principally a question of the inequity
or unfairness of permitting a right or claim to be
enforced or asserted.
It has been held that a party cannot invoke the
jurisdiction of a court to secure affirmative relief
against his opponent and, after obtaining or
failing to obtain such relief, repudiate or question
that same jurisdiction (Dean vs. Dean, 136 Or.
694, 86 A.L.R. 79). In the case just cited, by way
of explaining the rule, it was further said that the
question whether the court had jurisdiction either
of the subject matter of the action or of the
parties was not important in such cases because
the party is barred from such conduct not
because the judgment or order of the court is
valid and conclusive as an adjudication, but for
the reason that such a practice cannot be
tolerated obviously for reasons of public
policy.
Furthermore, it has also been held that after
voluntarily submitting a cause and encountering
an adverse decision on the merits, it is too late
for the loser to question the jurisdiction or power
of the court (Pease vs. Rathbun-Jones etc., 243
U.S. 273, 61 L. Ed. 715, 37 S.Ct. 283; St. Louis
etc. vs. McBride, 141 U.S. 127, 35 L. Ed. 659).
And inLittleton vs. Burgess, 16 Wyo. 58, the
Court said that it is not right for a party who has
affirmed and invoked the jurisdiction of a court in
a particular matter to secure an affirmative relief,
 Page 169 of 458
to afterwards deny that same jurisdiction to
escape a penalty. DCScaT
Upon this same principle is what We said in the
three cases mentioned in the resolution of the
Court of Appeals of May 20, 1963 (supra) to
the effect that we frown upon the "undesirable
practice" of a party submitting his case for
decision and then accepting the judgment, only if
favorable, and attacking it for lack of jurisdiction,
when adverse as well as in Pindagan etc. vs.
Dans et al., G.R. L-14591, September 26,
1962; Montelibano et al. vs. Bacolod-Murcia
Milling Co., Inc., G.R. L-15092;Young Men Labor
Union etc. vs. The Court of Industrial Relations
et al., G.R. L-20307, Feb. 26, 1965, and Mejia
vs. Lucas, 100 Phil. p. 277.
The facts of this case show that from the time the
Surety became a quasi-party on July 31, 1948, it could
have raised the question of the lack of jurisdiction of the
Court of First Instance of Cebu to take cognizance of
the present action by reason of the sum of money
involved which, according to the law then in force, was
within the original exclusive jurisdiction of inferior courts.
It failed to do so. Instead, at several stages of the
proceedings in the court a quo, as well as in the Court
of Appeals, it invoked the jurisdiction of said courts to
obtain affirmative relief and submitted its case for a final
adjudication on the merits. It was only after an adverse
decision was rendered by the Court of Appeals that it
finally woke up to raise the question of jurisdiction. Were
we to sanction such conduct on its part, We would in
effect be declaring as useless all the proceedings had in
the present case since it was commenced on July 19,
1948 and compel the judgment creditors to go up their
Calvary once more. The inequity and unfairness of this
is not only patent but revolting. 22 aTcIAS
For quite a time since we made this
pronouncement in Sibonghanoy, courts and tribunals, in
resolving issues that involve the belated invocation of
lack of jurisdiction, have applied the principle of
estoppel by laches. Thus, in Calimlim v. Ramirez, 23 we
pointed out that Sibonghanoy was developing into a
general rule rather than the exception:
A rule that had been settled by unquestioned
acceptance and upheld in decisions so
numerous to cite is that the jurisdiction of a court
over the subject-matter of the action is a matter
of law and may not be conferred by consent or
agreement of the parties. The lack of jurisdiction
of a court may be raised at any stage of the
proceedings, even on appeal. This doctrine has
been qualified by recent pronouncements which
stemmed principally from the ruling in the cited
case of Sibonghanoy. It is to be regretted,
however, that the holding in said case had been
applied to situations which were obviously not
contemplated therein. The exceptional
circumstance involved in Sibonghanoy which
justified the departure from the accepted concept
of non-waivability of objection to jurisdiction has
been ignored and, instead a blanket doctrine had
been repeatedly upheld that rendered the
supposed ruling in Sibonghanoy not as the
exception, but rather the general rule, virtually
overthrowing altogether the time-honored
principle that the issue of jurisdiction is not lost
by waiver or by estoppel. DIcTEC
In Sibonghanoy, the defense of lack of
jurisdiction of the court that rendered the
 Page 170 of 458
questioned ruling was held to be barred by
estoppel by laches. It was ruled that the lack of
jurisdiction having been raised for the first time in
a motion to dismiss filed almost fifteen (15) years
after the questioned ruling had been rendered,
such a plea may no longer be raised for being
barred by laches. As defined in said case, laches
is "failure or neglect, for an unreasonable and
unexplained length of time, to do that which, by
exercising due diligence, could or should have
been done earlier; it is negligence or omission to
assert a right within a reasonable time,
warranting a presumption that the party entitled
to assert has abandoned it or declined to assert
it. 24
In Calimlim, despite the fact that the one who
benefited from the plea of lack of jurisdiction was the
one who invoked the court's jurisdiction, and who later
obtained an adverse judgment therein, we refused to
apply the ruling in Sibonghanoy. The Court accorded
supremacy to the time-honored principle that the
issue of jurisdiction is not lost by waiver or by
estoppel.
Yet, in subsequent cases decided
after Calimlim, which by sheer volume are too plentiful
to mention, the Sibonghanoy doctrine, as foretold
in Calimlim,became the rule rather than the exception.
As such, in Soliven v. Fastforms Philippines, Inc., 25 the
Court ruled:
While it is true that jurisdiction may be raised at
any time, "this rule presupposes that estoppel
has not supervened." In the instant case,
respondent actively participated in all stages of
the proceedings before the trial court and
invoked its authority by asking for an affirmative
relief. Clearly, respondent is estopped from
challenging the trial court's jurisdiction,
especially when an adverse judgment has been
rendered. In PNOC Shipping and Transport
Corporation vs. Court of Appeals,we held:
Moreover, we note that petitioner did not
question at all the jurisdiction of the lower
court . . . in its answers to both the
amended complaint and the second
amended complaint. It did so only in its
motion for reconsideration of the decision
of the lower court after it had received an
adverse decision. As this Court held
in Pantranco North Express, Inc. vs. Court
of Appeals (G.R. No. 105180, July 5,
1993, 224 SCRA 477, 491), participation
in all stages of the case before the trial
court, that included invoking its authority
in asking for affirmative relief, effectively
barred petitioner by estoppel from
challenging the court's jurisdiction.
Notably, from the time it filed its answer to
the second amended complaint on April
16, 1985, petitioner did not question the
lower court's jurisdiction. It was only on
December 29, 1989 when it filed its
motion for reconsideration of the lower
court's decision that petitioner raised the
question of the lower court's lack of
jurisdiction. Petitioner thus foreclosed its
right to raise the issue of jurisdiction by its
own inaction. (italics ours) cAaDCE
Similarly, in the subsequent case of Sta. Lucia
Realty and Development, Inc. vs. Cabrigas, we
ruled:
 Page 171 of 458
In the case at bar, it was found by the trial
court in its 30 September 1996 decision in
LCR Case No. Q-60161(93) that private
respondents (who filed the petition for
reconstitution of titles) failed to comply
with both sections 12 and 13 of RA
26 and therefore, it had no jurisdiction
over the subject matter of the case.
However, private respondents never
questioned the trial court's jurisdiction
over its petition for reconstitution
throughout the duration of LCR Case No.
Q-60161(93). On the contrary, private
respondents actively participated in the
reconstitution proceedings by filing
pleadings and presenting its evidence.
They invoked the trial court's jurisdiction
in order to obtain affirmative relief the
reconstitution of their titles. Private
respondents have thus foreclosed their
right to raise the issue of jurisdiction by
their own actions. cAHIST
The Court has constantly upheld the
doctrine that while jurisdiction may be
assailed at any stage, a litigant's
participation in all stages of the case
before the trial court, including the
invocation of its authority in asking for
affirmative relief, bars such party from
challenging the court's jurisdiction (PNOC
Shipping and Transport Corporation vs.
Court of Appeals, 297 SCRA 402
[1998]). A party cannot invoke the
jurisdiction of a court to secure affirmative
relief against his opponent and after
obtaining or failing to obtain such relief,
repudiate or question that same
jurisdiction (Asset Privatization Trust vs.
Court of Appeals, 300 SCRA 579
[1998]; Province of Bulacan vs. Court of
Appeals, 299 SCRA 442 [1998]). The
Court frowns upon the undesirable
practice of a party participating in the
proceedings and submitting his case for
decision and then accepting judgment,
only if favorable, and attacking it for lack
of jurisdiction, when adverse (Producers
Bank of the Philippines vs. NLRC, 298
SCRA 517 [1998], citing Ilocos Sur
Electric Cooperative, Inc. vs. NLRC, 241
SCRA 36 [1995]). (italics ours) 26
Noteworthy, however, is that, in the 2005 case
of Metromedia Times Corporation v. Pastorin, 27 where
the issue of lack of jurisdiction was raised only in the
National Labor Relations Commission (NLRC) on
appeal, we stated, after examining the doctrines of
jurisdiction vis--vis estoppel, that the ruling
in Sibonghanoystands as an exception, rather than
the general rule. Metromedia, thus, was not estopped
from assailing the jurisdiction of the labor arbiter before
the NLRC on appeal. 28
Later, in Francel Realty Corporation v.
Sycip, 29 the Court clarified that:
Petitioner argues that the CA's affirmation of the
trial court's dismissal of its case was erroneous,
considering that a full-blown trial had already
been conducted. In effect, it contends that lack of
jurisdiction could no longer be used as a ground
for dismissal after trial had ensued and ended.
 Page 172 of 458

The above argument is anchored on estoppel by A rule that had been settled by
laches, which has been used quite successfully unquestioned acceptance and upheld in
in a number of cases to thwart dismissals based decisions so numerous to cite is that the
on lack of jurisdiction.Tijam v. Sibonghanoy, in jurisdiction of a court over the subject-
which this doctrine was espoused, held that a matter of the action is a matter of law and
party may be barred from questioning a court's may not be conferred by consent or
jurisdiction after being invoked to secure agreement of the parties. The lack of
affirmative relief against its opponent. In fine, jurisdiction of a court may be raised at any
laches prevents the issue of lack of jurisdiction stage of the proceedings, even on
from being raised for the first time on appeal by a appeal. This doctrine has been qualified
litigant whose purpose is to annul everything by recent pronouncements which
done in a trial in which it has actively stemmed principally from the ruling in the
participated.TcEaAS cited case ofSibonghanoy. It is to be
regretted, however, that the holding in
Laches is defined as the "failure or neglect for an
said case had been applied to situations
unreasonable and unexplained length of time, to
which were obviously not contemplated
do that which, by exercising due diligence, could
therein. The exceptional circumstance
or should have been done earlier; it is
involved in Sibonghanoy which justified
negligence or omission to assert a right within a
the departure from the accepted concept
reasonable time, warranting a presumption that
of non-waivability of objection to
the party entitled to assert it either has
jurisdiction has been ignored and, instead
abandoned it or declined to assert it."
a blanket doctrine had been repeatedly
The ruling in Sibonghanoy on the matter of upheld that rendered the supposed ruling
jurisdiction is, however, the exception rather than in Sibonghanoy not as the exception, but
the rule. Estoppel by laches may be invoked to rather the general rule, virtually
bar the issue of lack of jurisdiction only in cases overthrowing altogether the time-honored
in which the factual milieu is analogous to that in principle that the issue of jurisdiction is not
the cited case. In such controversies, laches lost by waiver or by estoppel.
should be clearly present; that is, lack of
Indeed, the general rule remains: a court's lack
jurisdiction must have been raised so belatedly
of jurisdiction may be raised at any stage of the
as to warrant the presumption that the party
proceedings, even on appeal. The reason is that
entitled to assert it had abandoned or declined to
jurisdiction is conferred by law, and lack of it
assert it. ThatSibonghanoy applies only to
affects the very authority of the court to take
exceptional circumstances is clarified in Calimlim
cognizance of and to render judgment on the
v. Ramirez, which we quote:
action. Moreover, jurisdiction is determined by
 Page 173 of 458
the averments of the complaint, not by the
defenses contained in the answer. 30 HScDIC
Also, in Mangaliag v. Catubig-Pastoral, 31 even if
the pleader of lack of jurisdiction actively took part in the
trial proceedings by presenting a witness to seek
exoneration, the Court, reiterating the doctrine
in Calimlim, said:
Private respondent argues that the defense of
lack of jurisdiction may be waived by estoppel
through active participation in the trial. Such,
however, is not the general rule but an
exception, best characterized by the peculiar
circumstances in Tijam vs. Sibonghanoy.
In Sibonghanoy, the party invoking lack of
jurisdiction did so only after fifteen years and at a
stage when the proceedings had already been
elevated to the CA. Sibonghanoy is an
exceptional case because of the presence of
laches, which was defined therein as failure or
neglect for an unreasonable and unexplained
length of time to do that which, by exercising due
diligence, could or should have been done
earlier; it is the negligence or omission to assert
a right within a reasonable time, warranting a
presumption that the party entitled to assert has
abandoned it or declined to assert it. 32
And in the more recent Regalado v. Go, 33 the
Court again emphasized that laches should be clearly
present for the Sibonghanoy doctrine to be applicable,
thus:TAIaHE
Laches is defined as the "failure or neglect for an
unreasonable and unexplained length of time, to
do that which, by exercising due diligence, could
or should have been done earlier, it is
negligence or omission to assert a right within a
reasonable length of time, warranting a
presumption that the party entitled to assert it
either has abandoned it or declined to assert it."
The ruling in People v. Regalario that was based
on the landmark doctrine enunciated in Tijam v.
Sibonghanoy on the matter of jurisdiction
by estoppel is the exception rather than the
rule. Estoppel by laches may be invoked to bar
the issue of lack of jurisdiction only in cases in
which the factual milieu is analogous to that in
the cited case. In such
controversies, laches should have been clearly
present; that is, lack of jurisdiction must have
been raised so belatedly as to warrant the
presumption that the party entitled to assert it
had abandoned or declined to assert it.
In Sibonghanoy, the defense of lack of
jurisdiction was raised for the first time in a
motion to dismiss filed by the Surety almost 15
years after the questioned ruling had been
rendered. At several stages of the proceedings,
in the court a quo as well as in the Court of
Appeals, the Surety invoked the jurisdiction of
the said courts to obtain affirmative relief and
submitted its case for final adjudication on the
merits. It was only when the adverse decision
was rendered by the Court of Appeals that it
finally woke up to raise the question of
jurisdiction.
Clearly, the factual settings attendant
in Sibonghanoy are not present in the case at
bar. Petitioner Atty. Regalado, after the receipt of
the Court of Appeals resolution finding her guilty
of contempt, promptly filed a Motion for
 Page 174 of 458
Reconsideration assailing the said court's
jurisdiction based on procedural infirmity in
initiating the action. Her compliance with the
appellate court's directive to show cause why
she should not be cited for contempt and filing a
single piece of pleading to that effect could not
be considered as an active participation in the
judicial proceedings so as to take the case within
the milieu of Sibonghanoy. Rather, it is the
natural fear to disobey the mandate of the court
that could lead to dire consequences that
impelled her to comply. 34cEaTHD
The Court, thus, wavered on when to apply the
exceptional circumstance in Sibonghanoy and on when
to apply the general rule enunciated as early as in De
La Santa and expounded at length in Calimlim. The
general rule should, however, be, as it has always been,
that the issue of jurisdiction may be raised at any stage
of the proceedings, even on appeal, and is not lost by
waiver or by estoppel. Estoppel by laches, to bar a
litigant from asserting the court's absence or lack of
jurisdiction, only supervenes in exceptional cases
similar to the factual milieu of Tijam v. Sibonghanoy.
Indeed, the fact that a person attempts to invoke
unauthorized jurisdiction of a court does not estop him
from thereafter challenging its jurisdiction over the
subject matter, since such jurisdiction must arise by law
and not by mere consent of the parties. This is
especially true where the person seeking to invoke
unauthorized jurisdiction of the court does not thereby
secure any advantage or the adverse party does not
suffer any harm. 35 ITScHa
Applying the said doctrine to the instant case, the
petitioner is in no way estopped by laches in assailing
the jurisdiction of the RTC, considering that he raised
the lack thereof in his appeal before the appellate court.
At that time, no considerable period had yet elapsed for
laches to attach. True, delay alone, though
unreasonable, will not sustain the defense of "estoppel
by laches" unless it further appears that the party,
knowing his rights, has not sought to enforce them until
the condition of the party pleading laches has in good
faith become so changed that he cannot be restored to
his former state, if the rights be then enforced, due to
loss of evidence, change of title, intervention of equities,
and other causes. 36 In applying the principle of
estoppel by laches in the exceptional case
of Sibonghanoy,the Court therein considered the patent
and revolting inequity and unfairness of having the
judgment creditors go up their Calvary once more after
more or less 15 years. 37 The same, however, does not
obtain in the instant case.
We note at this point that estoppel, being in the
nature of a forfeiture, is not favored by law. It is to be
applied rarely only from necessity, and only in
extraordinary circumstances. The doctrine must be
applied with great care and the equity must be strong in
its favor. 38 When misapplied, the doctrine of estoppel
may be a most effective weapon for the
accomplishment of injustice. 39 Moreover, a judgment
rendered without jurisdiction over the subject matter is
void. 40 Hence, the Revised Rules of Court provides for
remedies in attacking judgments rendered by courts or
tribunals that have no jurisdiction over the concerned
cases. No laches will even attach when the judgment is
null and void for want of jurisdiction. 41 As we have
 Page 175 of 458

stated in Heirs of Julian Dela Cruz and Leonora Talaro WHEREFORE, premises considered, the petition
v. Heirs of Alberto Cruz, 42 for review on certiorari is GRANTED. Criminal Case No.
It is axiomatic that the jurisdiction of a tribunal, 2235-M-94 is hereby DISMISSED without prejudice.
including a quasi-judicial officer or government SO ORDERED.
agency, over the nature and subject matter of a
petition or complaint is determined by the (Figueroa y Cervantes v. People, G.R. No. 147406, [July
|||

material allegations therein and the character of 14, 2008], 580 PHIL 58-78)
the relief prayed for, irrespective of whether the
petitioner or complainant is entitled to any or all
such reliefs. Jurisdiction over the nature and
subject matter of an action is conferred by the
Constitution and the law, and not by the consent
or waiver of the parties where the court
otherwise would have no jurisdiction over the
nature or subject matter of the action. Nor can it
be acquired through, or waived by, any act or
omission of the parties. Moreover, estoppel does
not apply to confer jurisdiction to a tribunal that
has none over the cause of action. . . .
Indeed, the jurisdiction of the court or tribunal is
not affected by the defenses or theories set up
by the defendant or respondent in his answer or
motion to dismiss. Jurisdiction should be
determined by considering not only the status or
the relationship of the parties but also the nature
of the issues or questions that is the subject of [G.R. No. 173915. February 22, 2010.]
the controversy. . . . The proceedings before a
court or tribunal without jurisdiction, including its
IRENE SANTE AND REYNALDO
decision, are null and void, hence, susceptible to
SANTE, petitioners, vs. HON. EDILBERTO
direct and collateral attacks. 43cIADaC
T. CLARAVALL, in his capacity as
With the above considerations, we find it Presiding Judge of Branch 60, Regional
unnecessary to resolve the other issues raised in the Trial Court of Baguio City, and VITA N.
petition. KALASHIAN, respondents.
 Page 176 of 458

DECISION petitioners be held liable to pay moral damages in the

amount of P300,000.00; P50,000.00 as exemplary
damages; P50,000.00 attorney's fees; P20,000.00
VILLARAMA, JR., J : p litigation expenses; and costs of suit.
Petitioners filed a Motion to Dismiss 5 on the
Before this Court is a petition for certiorari 1 under
ground that it was the Municipal Trial Court in Cities
Rule 65 of the 1997 Rules of Civil Procedure, as
(MTCC) and not the RTC of Baguio, that had jurisdiction
amended, filed by petitioners Irene and Reynaldo Sante
over the case. They argued that the amount of the claim
assailing the Decision 2 dated January 31, 2006 and the
for moral damages was not more than the jurisdictional
Resolution 3 dated June 23, 2006 of the Seventeenth
amount of P300,000.00, because the claim for
Division of the Court of Appeals in CA-G.R. SP No.
exemplary damages should be excluded in computing
87563. The assailed decision affirmed the orders of the
the total claim.
EIDaAH

Regional Trial Court (RTC) of Baguio City, Branch 60,

denying their motion to dismiss the complaint for
damages filed by respondent Vita Kalashian against
them.
The facts, culled from the records, are as follows:
On April 5, 2004, respondent filed before the RTC
of Baguio City a complaint for damages 4 against
petitioners. In her complaint, docketed as Civil Case No.
5794-R, respondent alleged that while she was inside
the Police Station of Natividad, Pangasinan, and in the
presence of other persons and police officers, petitioner
Irene Sante uttered words, which when translated in
English are as follows, "How many rounds of sex did
you have last night with your boss, Bert? You fuckin'
bitch!"Bert refers to Albert Gacusan, respondent's friend
and one (1) of her hired personal security guards
detained at the said station and who is a suspect in the
killing of petitioners' close relative. Petitioners also
allegedly went around Natividad, Pangasinan telling
people that she is protecting and cuddling the suspects
in the aforesaid killing. Thus, respondent prayed that
On June 24, 2004, 6 the trial court denied the
motion to dismiss citing our ruling in Movers-Baseco
Integrated Port Services, Inc. v. Cyborg Leasing
Corporation. 7The trial court held that the total claim of
respondent amounted to P420,000.00 which was above
the jurisdictional amount for MTCCs outside Metro
Manila. The trial court also later issued Orders on July
7, 2004 8 and July 19, 2004, 9 respectively reiterating its
denial of the motion to dismiss and denying petitioners'
motion for reconsideration.
Aggrieved, petitioners filed on August 2, 2004, a
Petition for Certiorari and Prohibition, 10 docketed
as CA-G.R. SP No. 85465, before the Court of Appeals.
Meanwhile, on July 14, 2004, respondent and her
husband filed an Amended Complaint 11 increasing the
claim for moral damages from P300,000.00 to
P1,000,000.00. Petitioners filed a Motion to Dismiss
with Answer Ad Cautelam and Counterclaim, but the
trial court denied their motion in an Order 12 dated
September 17, 2004.
 Page 177 of 458
Hence, petitioners again filed a Petition
for Certiorari and Prohibition 13 before the Court of
Appeals, docketed as CA-G.R. SP No. 87563, claiming
that the trial court committed grave abuse of discretion
in allowing the amendment of the complaint to increase
the amount of moral damages from P300,000.00 to
P1,000,000.00. The case was raffled to the
Seventeenth Division of the Court of Appeals.
On January 23, 2006, the Court of Appeals,
Seventh Division, promulgated a decision in CA-G.R.
SP No. 85465, as follows:
WHEREFORE, finding grave abuse of discretion
on the part of [the] Regional Trial Court of
Baguio, Branch 60, in rendering the assailed
Orders dated June 24, 2004 and July [19], 2004
in Civil Case No. 5794-R the instant petition
for certiorari is GRANTED. The assailed Orders
are hereby ANNULLED and SET ASIDE. Civil
Case No. 5794-R for damages is ordered
DISMISSED for lack of jurisdiction.
SO ORDERED. 14
The Court of Appeals held that the case clearly
falls under the jurisdiction of the MTCC as the
allegations show that plaintiff was seeking to recover
moral damages in the amount of P300,000.00, which
amount was well within the jurisdictional amount of the
MTCC. The Court of Appeals added that the totality of
claim rule used for determining which court had
jurisdiction could not be applied to the instant case
because plaintiff's claim for exemplary damages was
not a separate and distinct cause of action from her
claim of moral damages, but merely incidental to it.
Thus, the prayer for exemplary damages should be
excluded in computing the total amount of the claim.
On January 31, 2006, the Court of Appeals, this
time in CA-G.R. SP No. 87563, rendered a decision
affirming the September 17, 2004 Order of the RTC
denying petitioners' Motion to Dismiss Ad Cautelam. In
the said decision, the appellate court held that the total
or aggregate amount demanded in the complaint
constitutes the basis of jurisdiction. The Court of
Appeals did not find merit in petitioners' posture that the
claims for exemplary damages and attorney's fees are
merely incidental to the main cause and should not be
included in the computation of the total claim. EASCDH
The Court of Appeals additionally ruled that
respondent can amend her complaint by increasing the
amount of moral damages from P300,000.00 to
P1,000,000.00, on the ground that the trial court has
jurisdiction over the original complaint and respondent is
entitled to amend her complaint as a matter of right
under the Rules.
Unable to accept the decision, petitioners are now before
us raising the following issues:
I.
WHETHER OR NOT THERE WAS GRAVE
ABUSE OF DISCRETION AMOUNTING TO
LACK OR IN EXCESS OF JURISDICTION ON
THE PART OF THE (FORMER)
SEVENTEENTH DIVISION OF THE
HONORABLE COURT OF APPEALS WHEN IT
RESOLVED THAT THE REGIONAL TRIAL
COURT OF BAGUIO CITY BRANCH 60 HAS
JURISDICTION OVER THE SUBJECT MATTER
 Page 178 of 458
OF THE CASE FOR DAMAGES AMOUNTING
TO P300,000.00;
II.
WHETHER OR NOT THERE WAS GRAVE
ABUSE OF DISCRETION ON THE PART OF
THE HONORABLE RESPONDENT JUDGE OF
THE REGIONAL TRIAL COURT OF BAGUIO
BRANCH 60 FOR ALLOWING THE
COMPLAINANT TO AMEND THE COMPLAINT
(INCREASING THE AMOUNT OF DAMAGES
TO 1,000,000.00 TO CONFER JURISDICTION
OVER THE SUBJECT MATTER OF THE CASE
DESPITE THE PENDENCY OF A PETITION
FOR CERTIORARI FILED AT THE COURT OF
APPEALS, SEVENTH DIVISION, DOCKETED
AS CA G.R. NO. 85465. 15
In essence, the basic issues for our resolution
are:
1) Did the RTC acquire jurisdiction over the
case? and
2) Did the RTC commit grave abuse of
discretion in allowing the amendment
of the complaint?
Petitioners insist that the complaint falls under the
exclusive jurisdiction of the MTCC. They maintain that
the claim for moral damages, in the amount of
P300,000.00 in the original complaint, is the main
action. The exemplary damages being discretionary
should not be included in the computation of the
jurisdictional amount. And having no jurisdiction over
the subject matter of the case, the RTC acted with
grave abuse of discretion when it allowed the
amendment of the complaint to increase the claim for
moral damages in order to confer jurisdiction.
In her Comment, 16 respondent averred that the
nature of her complaint is for recovery of damages. As
such, the totality of the claim for damages, including the
exemplary damages as well as the other damages
alleged and prayed in the complaint, such as attorney's
fees and litigation expenses, should be included in
determining jurisdiction. The total claim being
P420,000.00, the RTC has jurisdiction over the
complaint.
We deny the petition, which although
denominated as a petition for certiorari, we treat as a
petition for review on certiorari under Rule 45 in view of
the issues raised. aDSHCc
Section 19 (8) of Batas Pambansa Blg. 129, 17 as
amended by Republic Act No. 7691, 18 states:
SEC. 19. Jurisdiction in civil cases. Regional
Trial Courts shall exercise exclusive original
jurisdiction:
xxx xxx xxx
(8) In all other cases in which the demand,
exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses, and costs or
the value of the property in controversy exceeds
One hundred thousand pesos (P100,000.00) or,
in such other cases in Metro Manila, where the
demand, exclusive of the abovementioned items
exceeds Two hundred thousand pesos
(P200,000.00).
Section 5 of Rep. Act No. 7691 further provides:
 Page 179 of 458
SEC. 5. After five (5) years from the effectivity of
this Act, the jurisdictional amounts mentioned in
Sec. 19(3), (4), and (8); and Sec. 33(1) of Batas
Pambansa Blg. 129as amended by this Act, shall
be adjusted to Two hundred thousand pesos
(P200,000.00). Five (5) years thereafter, such
jurisdictional amounts shall be adjusted further to
Three hundred thousand pesos
(P300,000.00): Provided, however, That in the
case of Metro Manila, the abovementioned
jurisdictional amounts shall be adjusted after five
(5) years from the effectivity of this Act to Four
hundred thousand pesos (P400,000.00).
Relatedly, Supreme Court Circular No. 21-99 was
issued declaring that the first adjustment in jurisdictional
amount of first level courts outside of Metro Manila from
P100,000.00 to P200,000.00 took effect on March 20,
1999. Meanwhile, the second adjustment from
P200,000.00 to P300,000.00 became effective on
February 22, 2004 in accordance with OCA Circular No.
65-2004 issued by the Office of the Court Administrator
on May 13, 2004.
Based on the foregoing, there is no question that
at the time of the filing of the complaint on April 5, 2004,
the MTCC's jurisdictional amount has been adjusted to
P300,000.00.
But where damages is the main cause of action,
should the amount of moral damages prayed for in the
complaint be the sole basis for determining which court
has jurisdiction or should the total amount of all the
damages claimed regardless of kind and nature, such
as exemplary damages, nominal damages, and
attorney's fees, etc., be used?
In this regard, Administrative Circular No. 09-94 19 is
instructive:AICDSa
xxx xxx xxx
2. The exclusion of the term "damages of
whatever kind" in determining the jurisdictional
amount under Section 19 (8) and Section 33 (1)
of B.P. Blg. 129, as amended by R.A. No. 7691,
applies to cases where the damages are merely
incidental to or a consequence of the main cause
of action. However, in cases where the claim
for damages is the main cause of action, or
one of the causes of action, the amount of
such claim shall be considered in
determining the jurisdiction of the court.
(Emphasis ours.)
In the instant case, the complaint filed in Civil
Case No. 5794-R is for the recovery of damages for the
alleged malicious acts of petitioners. The complaint
principally sought an award of moral and exemplary
damages, as well as attorney's fees and litigation
expenses, for the alleged shame and injury suffered by
respondent by reason of petitioners' utterance while
they were at a police station in Pangasinan. It is settled
that jurisdiction is conferred by law based on the facts
alleged in the complaint since the latter comprises a
concise statement of the ultimate facts constituting the
plaintiff's causes of action. 20 It is clear, based on the
allegations of the complaint, that respondent's main
action is for damages. Hence, the other forms of
damages being claimed by respondent, e.g., exemplary
damages, attorney's fees and litigation expenses, are
not merely incidental to or consequences of the main

action but constitute the primary relief prayed for in the
complaint.
In Mendoza v. Soriano, 21 it was held that in
cases where the claim for damages is the main cause of
action, or one of the causes of action, the amount of
such claim shall be considered in determining the
jurisdiction of the court. In the said case, the
respondent's claim of P929,000.06 in damages and
P25,000 attorney's fees plus P500 per court
appearance was held to represent the monetary
equivalent for compensation of the alleged injury. The
Court therein held that the total amount of monetary
claims including the claims for damages was the basis
to determine the jurisdictional amount.
Also, in Iniego v. Purganan, 22 the Court has held:
The amount of damages claimed is within the
jurisdiction of the RTC, since it is the claim for all
kinds of damages that is the basis of determining
the jurisdiction of courts, whether the claims for
damages arise from the same or from different
causes of action.
xxx xxx xxx
Considering that the total amount of damages
claimed was P420,000.00, the Court of Appeals was
correct in ruling that the RTC had jurisdiction over the
case.
Lastly, we find no error, much less grave abuse of
discretion, on the part of the Court of Appeals in
affirming the RTC's order allowing the amendment of
the original complaint from P300,000.00
P1,000,000.00 despite the pendency of a petition
for certiorari filed before the Court of Appeals. While it is
Page 180 of 458
a basic jurisprudential principle that an amendment
cannot be allowed when the court has no jurisdiction
over the original complaint and the purpose of the
amendment is to confer jurisdiction on the court, 23 here,
the RTC clearly had jurisdiction over the original
complaint and amendment of the complaint was then
still a matter of right. 24
ICcDaA
WHEREFORE, the petition is DENIED, for lack of
merit. The Decision and Resolution of the Court of
Appeals dated January 31, 2006 and June 23, 2006,
respectively, are AFFIRMED. The Regional Trial Court
of Baguio City, Branch 60 is DIRECTED to continue
with the trial proceedings in Civil Case No. 5794-R with
deliberate dispatch.
No costs.
SO ORDERED.
(Sante v. Claravall, G.R. No. 173915, [February 22,
|||
2010])
to
 Page 181 of 458
[G.R. No. 179267. June 25, 2013.]
JESUS C. GARCIA, petitioner, vs. THE
HONORABLE RAY ALAN T. DRILON,
Presiding Judge, Regional Trial Court-
Branch 41, Bacolod City, and ROSALIE
JAYPE-GARCIA, for herself and in behalf
of minor children, namely: JO-ANN,
JOSEPH EDUARD, JESSE ANTHONE, all
surnamed GARCIA, respondents.
DECISION
PERLAS-BERNABE, J : p
Hailed as the bastion of Christianity in Asia, the Philippines
boasts of 86.8 million Filipinos or 93 percent of a total
population of 93.3 million adhering to the teachings of
Jesus Christ. 1 Yet, the admonition for husbands to love
their wives as their own bodies just as Christ loved the
church and gave himself up for her 2 failed to prevent, or
even to curb, the pervasiveness of violence against Filipino
women. The National Commission on the Role of Filipino
Women (NCRFW) reported that, for the years 2000-2003,
"female violence comprised more than 90% of all forms of
abuse and violence and more than 90% of these reported
cases were committed by the women's intimate partners
such as their husbands and live-in partners." 3
Thus, on March 8, 2004, after nine (9) years of spirited
advocacy by women's groups, Congress enacted Republic
Act (R.A.) No. 9262, entitled "An Act Defining Violence
Against Women and Their Children, Providing for
Protective Measures for Victims, Prescribing Penalties
Therefor, and for Other Purposes." It took effect on March
27, 2004. 4 aHDTAI
R.A. 9262 is a landmark legislation
that defines and criminalizes acts of violence against
women and their children (VAWC) perpetrated by women's
intimate partners,i.e., husband; former husband; or any
person who has or had a sexual or dating relationship, or
with whom the woman has a common child. 5 The law
provides forprotection orders from the barangay and the
courts to prevent the commission of further acts of VAWC;
and outlines the duties and responsibilities of barangay
officials, law enforcers, prosecutors and court personnel,
social workers, health care providers, and other local
government officials in responding to complaints of VAWC
or requests for assistance.
A husband is now before the Court assailing the
constitutionality of R.A. 9262 as being violative of the equal
protection and due process clauses, and an undue
delegation of judicial power to barangay officials.
The Factual Antecedents
On March 23, 2006, Rosalie Jaype-Garcia (private
respondent) filed, for herself and in behalf of her minor
children, a verified petition 6 (Civil Case No. 06-797) before
the Regional Trial Court (RTC) of Bacolod City for the
issuance of a Temporary Protection Order (TPO) against
her husband, Jesus C. Garcia (petitioner), pursuant to R.A.
9262. She claimed to be a victim of physical abuse;
 Page 182 of 458
emotional, psychological, and economic violence as a
result of marital infidelity on the part of petitioner, with
threats of deprivation of custody of her children and of
financial support. 7
Private respondent's claims
Private respondent married petitioner in 2002 when she
was 34 years old and the former was eleven years her
senior. They have three (3) children, namely: Jo-Ann J.
Garcia, 17 years old, who is the natural child of petitioner
but whom private respondent adopted; Jessie Anthone J.
Garcia, 6 years old; and Joseph Eduard J. Garcia, 3 years
old. 8
Private respondent described herself as a dutiful and
faithful wife, whose life revolved around her husband. On
the other hand, petitioner, who is of Filipino-Chinese
descent, is dominant, controlling, and demands absolute
obedience from his wife and children. He forbade private
respondent to pray, and deliberately isolated her from her
friends. When she took up law, and even when she was
already working part time at a law office, petitioner
trivialized her ambitions and prevailed upon her to just stay
at home. He was often jealous of the fact that his attractive
wife still catches the eye of some men, at one point
threatening that he would have any man eyeing her killed. 9
Things turned for the worse when petitioner took up an
affair with a bank manager of Robinson's Bank, Bacolod
City, who is the godmother of one of their sons. Petitioner
admitted to the affair when private respondent confronted
him about it in 2004. He even boasted to the household
help about his sexual relations with said bank manager.
Petitioner told private respondent, though, that he was just
using the woman because of their accounts with the
bank. 10EHTIcD
Petitioner's infidelity spawned a series of fights that left
private respondent physically and emotionally wounded. In
one of their quarrels, petitioner grabbed private respondent
on both arms and shook her with such force that caused
bruises and hematoma. At another time, petitioner hit
private respondent forcefully on the lips that caused some
bleeding. Petitioner sometimes turned his ire on their
daughter, Jo-Ann, who had seen the text messages he
sent to his paramour and whom he blamed for squealing
on him. He beat Jo-Ann on the chest and slapped her
many times. When private respondent decided to leave
petitioner, Jo-Ann begged her mother to stay for fear that if
the latter leaves, petitioner would beat her up. Even the
small boys are aware of private respondent's sufferings.
Their 6-year-old son said that when he grows up, he would
beat up his father because of his cruelty to private
respondent. 11
All the emotional and psychological turmoil drove private
respondent to the brink of despair. On December 17, 2005,
while at home, she attempted suicide by cutting her wrist.
She was found by her son bleeding on the floor. Petitioner
simply fled the house instead of taking her to the hospital.
Private respondent was hospitalized for about seven (7)
days in which time petitioner never bothered to visit, nor
apologized or showed pity on her. Since then, private
respondent has been undergoing therapy almost every
week and is taking anti-depressant medications. 12
When private respondent informed the management of
Robinson's Bank that she intends to file charges against
the bank manager, petitioner got angry with her for
 Page 183 of 458
jeopardizing the manager's job. He then packed his things
and told private respondent that he was leaving her for
good. He even told private respondent's mother, who lives
with them in the family home, that private respondent
should just accept his extramarital affair since he is not
cohabiting with his paramour and has not sired a child with
her. 13
Private respondent is determined to separate from
petitioner but she is afraid that he would take her children
from her and deprive her of financial support. Petitioner
had previously warned her that if she goes on a legal battle
with him, she would not get a single centavo. 14
Petitioner controls the family businesses involving mostly
the construction of deep wells. He is the President of three
corporations 326 Realty Holdings, Inc., Negros Rotadrill
Corporation, and J-Bros Trading Corporation of which
he and private respondent are both stockholders. In
contrast to the absolute control of petitioner over said
corporations, private respondent merely draws a monthly
salary of P20,000.00 from one corporation only, the Negros
Rotadrill Corporation. Household expenses amounting to
not less than P200,000.00 a month are paid for by private
respondent through the use of credit cards, which, in turn,
are paid by the same corporation together with the bills for
utilities. 15
cDCIHT
On the other hand, petitioner receives a monthly salary of
P60,000.00 from Negros Rotadrill Corporation, and enjoys
unlimited cash advances and other benefits in hundreds of
thousands of pesos from the corporations. 16 After private
respondent confronted him about the affair, petitioner
forbade her to hold office at JBTC Building, Mandalagan,
where all the businesses of the corporations are
conducted, thereby depriving her of access to full
information about said businesses. Until the filing of the
petition a quo, petitioner has not given private respondent
an accounting of the businesses the value of which she
had helped raise to millions of pesos. 17
Action of the RTC of Bacolod City
Finding reasonable ground to believe that an imminent
danger of violence against the private respondent and her
children exists or is about to recur, the RTC issued a
TPO 18 on March 24, 2006 effective for thirty (30) days,
which is quoted hereunder:
Respondent (petitioner herein), Jesus Chua
Garcia, is hereby:
a) Ordered to remove all his personal
belongings from the conjugal dwelling or family
home within 24 hours from receipt of the
Temporary Restraining Order and if he refuses,
ordering that he be removed by police officers
from the conjugal dwelling; this order is
enforceable notwithstanding that the house is
under the name of 236 Realty Holdings, Inc.
(Republic Act No. 9262 states "regardless of
ownership"), this is to allow the Petitioner
(private respondent herein) to enter the
conjugal dwelling without any danger from the
Respondent. IcADSE
After the Respondent leaves or is removed
from the conjugal dwelling, or anytime the
Petitioner decides to return to the conjugal
dwelling to remove things, the Petitioner shall
be assisted by police officers when re-entering
the family home.
 Page 184 of 458
The Chief of Police shall also give the
Petitioner police assistance on Sunday, 26
March 2006 because of the danger that the
Respondent will attempt to take her children
from her when he arrives from Manila and finds
out about this suit.
b) To stay away from the petitioner and her
children, mother and all her household help
and driver from a distance of 1,000 meters,
and shall not enter the gate of the subdivision
where the Petitioner may be temporarily
residing.
c) Not to harass, annoy, telephone, contact or
otherwise communicate with the Petitioner,
directly or indirectly, or through other persons,
or contact directly or indirectly her children,
mother and household help, nor send gifts,
cards, flowers, letters and the like. Visitation
rights to the children may be subject of a
modified TPO in the future.
d) To surrender all his firearms including a
.9MM caliber firearm and a Walther PPK and
ordering the Philippine National Police
Firearms and Explosives Unit and the
Provincial Director of the PNP to cancel all the
Respondent's firearm licenses. He should also
be ordered to surrender any unlicensed
firearms in his possession or control.
e) To pay full financial support for the Petitioner
and the children, including rental of a house for
them, and educational and medical expenses.
f) Not to dissipate the conjugal business. aCTHEA
g) To render an accounting of all advances,
benefits, bonuses and other cash he received
from all the corporations from 1 January 2006
up to 31 March 2006, which himself and as
President of the corporations and his
Comptroller, must submit to the Court not later
than 2 April 2006. Thereafter, an accounting of
all these funds shall be reported to the court by
the Comptroller, copy furnished to the
Petitioner, every 15 days of the month, under
pain of Indirect Contempt of Court.
h) To ensure compliance especially with the
order granting support pendente lite, and
considering the financial resources of the
Respondent and his threat that if the Petitioner
sues she will not get a single centavo, the
Respondent is ordered to put up a BOND TO
KEEP THE PEACE in the amount of FIVE
MILLION PESOS, in two sufficient sureties.
On April 24, 2006, upon motion 19 of private respondent,
the trial court issued an amended TPO, 20 effective for
thirty (30) days, which included the following additional
provisions:
i) The petitioners (private respondents herein)
are given the continued use of the Nissan
Patrol and the Starex Van which they are using
in Negros Occidental.
j) The petitioners are given the continued use
and occupation of the house in Paraaque, the
continued use of the Starex van in Metro
Manila, whenever they go to Manila.
k) Respondent is ordered to immediately post a
bond to keep the peace, in two sufficient
sureties.
 Page 185 of 458
l) To give monthly support to the petitioner
provisionally fixed in the sum of One Hundred
Fifty Thousand Pesos (Php150,000.00) per
month plus rental expenses of Fifty Thousand
Pesos (Php50,000.00) per month until the
matter of support could be finally resolved.
cAaDCE
Two days later, or on April 26, 2006, petitioner filed an
Opposition to the Urgent Ex-Parte Motion for Renewal of
the TPO 21 seeking the denial of the renewal of the TPO on
the grounds that it did not (1) comply with the three-day
notice rule, and (2) contain a notice of hearing. He further
asked that the TPO be modified by (1) removing one
vehicle used by private respondent and returning the same
to its rightful owner, the J-Bros Trading Corporation, and
(2) cancelling or reducing the amount of the bond from
P5,000,000.00 to a more manageable level at
P100,000.00.
Subsequently, on May 23, 2006, petitioner moved 22 for the
modification of the TPO to allow him visitation rights to his
children.
On May 24, 2006, the TPO was renewed and extended yet
again, but subject only to the following modifications
prayed for by private respondent:
a) That respondent (petitioner herein) return
the clothes and other personal belongings of
Rosalie and her children to Judge Jesus
Ramos, co-counsel for Petitioner, within 24
hours from receipt of the Temporary Protection
Order by his counsel, otherwise be declared in
Indirect Contempt of Court;
b) Respondent shall make an accounting or list
of furniture and equipment in the conjugal
house in Pitimini St., Capitolville Subdivision,
Bacolod City within 24 hours from receipt of the
Temporary Protection Order by his counsel;
c) Ordering the Chief of the Women's Desk of
the Bacolod City Police Headquarters to
remove Respondent from the conjugal dwelling
within eight (8) hours from receipt of the
Temporary Protection Order by his counsel,
and that he cannot return until 48 hours after
the petitioners have left, so that the petitioner
Rosalie and her representatives can remove
things from the conjugal home and make an
inventory of the household furniture, equipment
and other things in the conjugal home, which
shall be submitted to the Court.
d) Deliver full financial support of
Php200,000.00 and Php50,000.00 for rental
and Php25,000.00 for clothes of the three
petitioners (sic) children within 24 hours from
receipt of the Temporary Protection Order by
his counsel, otherwise be declared in indirect
contempt of Court; DaHSIT
e) That respondent surrender his two firearms
and all unlicensed firearms to the Clerk of
Court within 24 hours from receipt of the
Temporary Protection Order by his counsel;
f) That respondent shall pay petitioner
educational expenses of the children upon
presentation of proof of payment of such
expenses. 23
Claiming that petitioner continued to deprive them of
financial support; failed to faithfully comply with the TPO;
and committed new acts of harassment against her and
their children, private respondent filed another
application 24 for the issuance of a TPO ex parte. She
 Page 186 of 458
alleged inter alia that petitioner contrived a replevin suit
against himself by J-Bros Trading, Inc., of which the latter
was purportedly no longer president, with the end in view of
recovering the Nissan Patrol and Starex Van used by
private respondent and the children. A writ of replevin was
served upon private respondent by a group of six or seven
policemen with long firearms that scared the two small
boys, Jessie Anthone and Joseph Eduard. 25
While Joseph Eduard, then three years old, was driven to
school, two men allegedly attempted to kidnap him, which
incident traumatized the boy resulting in his refusal to go
back to school. On another occasion, petitioner allegedly
grabbed their daughter, Jo-Ann, by the arm and threatened
her. 26 The incident was reported to the police, and Jo-Ann
subsequently filed a criminal complaint against her father
for violation of R.A. 7610, also known as the "Special
Protection of Children Against Child Abuse, Exploitation
and Discrimination Act."
Aside from the replevin suit, petitioner's lawyers initiated
the filing by the housemaids working at the conjugal home
of a complaint for kidnapping and illegal detention against
private respondent. This came about after private
respondent, armed with a TPO, went to said home to get
her and her children's belongings. Finding some of her
things inside a housemaid's (Sheryl Jamola) bag in the
maids' room, private respondent filed a case for qualified
theft against Jamola. 27CDTHSI
On August 23, 2006, the RTC issued a TPO, 28 effective for
thirty (30) days, which reads as follows:
Respondent (petitioner herein), Jesus Chua
Garcia, is hereby:
1) Prohibited from threatening to commit or
committing, personally or through another, acts
of violence against the offended party;
2) Prohibited from harassing, annoying,
telephoning, contacting or otherwise
communicating in any form with the offended
party, either directly or indirectly;
3) Required to stay away, personally or
through his friends, relatives, employees or
agents, from all the Petitioners Rosalie J.
Garcia and her children, Rosalie J. Garcia's
three brothers, her mother Primitiva Jaype,
cook Novelita Caranzo, driver Romeo
Hontiveros, laundrywoman Mercedita
Bornales, security guard Darwin Gayona and
the petitioner's other household helpers from a
distance of 1,000 meters, and shall not enter
the gate of the subdivision where the
Petitioners are temporarily residing, as well as
from the schools of the three children;
Furthermore, that respondent shall not contact
the schools of the children directly or indirectly
in any manner including, ostensibly to pay for
their tuition or other fees directly, otherwise he
will have access to the children through the
schools and the TPO will be rendered
nugatory;
4) Directed to surrender all his firearms
including .9MM caliber firearm and a Walther
PPK to the Court;
5) Directed to deliver in full financial support of
Php200,000.00 a month and Php50,000.00 for
rental for the period from August 6 to
September 6, 2006; and support in arrears
 Page 187 of 458
from March 2006 to August 2006 the total
amount of Php1,312,000.00; CIaDTE
6) Directed to deliver educational expenses for
2006-2007 the amount of Php75,000.00 and
Php25,000.00;
7) Directed to allow the continued use of a
Nissan Patrol with Plate No. FEW 508 and a
Starex van with Plate No. FFD 991 and should
the respondent fail to deliver said vehicles,
respondent is ordered to provide the petitioner
another vehicle which is the one taken by J
Bros Tading;
8) Ordered not to dissipate, encumber,
alienate, sell, lease or otherwise dispose of the
conjugal assets, or those real properties in the
name of Jesus Chua Garcia only and those in
which the conjugal partnership of gains of the
Petitioner Rosalie J. Garcia and respondent
have an interest in, especially the conjugal
home located in No. 14, Pitimini St., Capitolville
Subdivision, Bacolod City, and other properties
which are conjugal assets or those in which the
conjugal partnership of gains of Petitioner
Rosalie J. Garcia and the respondent have an
interest in and listed in Annexes "I," "I-1," and
"I-2," including properties covered by TCT Nos.
T-186325 and T-168814;
9) Ordered that the Register of Deeds of
Bacolod City and E.B. Magalona shall be
served a copy of this TEMPORARY
PROTECTION ORDER and are ordered not to
allow the transfer, sale, encumbrance or
disposition of these above-cited properties to
any person, entity or corporation without the
personal presence of petitioner Rosalie J.
Garcia, who shall affix her signature in the
presence of the Register of Deeds, due to the
fear of petitioner Rosalie that her signature will
be forged in order to effect the encumbrance or
sale of these properties to defraud her or the
conjugal partnership of gains.
In its Order 29 dated September 26, 2006, the trial court
extended the aforequoted TPO for another ten (10) days,
and gave petitioner a period of five (5) days within which to
show cause why the TPO should not be renewed,
extended, or modified. Upon petitioner's
manifestation, 30 however, that he has not received a copy
of private respondent's motion to modify/renew the TPO,
the trial court directed in its Order 31 dated October 6, 2006
that petitioner be furnished a copy of said motion.
Nonetheless, an Order 32 dated a day earlier, October 5,
had already been issued renewing the TPO dated August
23, 2006. The pertinent portion is quoted hereunder: AacDHE
xxx xxx xxx
. . . it appearing further that the hearing could
not yet be finally terminated, the Temporary
Protection Order issued on August 23, 2006 is
hereby renewed and extended for thirty (30)
days and continuously extended and renewed
for thirty (30) days, after each expiration, until
further orders, and subject to such
modifications as may be ordered by the
court.STHAaD
After having received a copy of the foregoing Order,
petitioner no longer submitted the required comment to
private respondent's motion for renewal of the TPO arguing
that it would only be an "exercise in futility." 33
Proceedings before the CA
 Page 188 of 458

During the pendency of Civil Case No. 06-797, petitioner COLLATERAL ATTACK ON THE VALIDITY
filed before the Court of Appeals (CA) a petition 34 for OF THE LAW. EcHIAC

prohibition (CA-G.R. CEB-SP. No. 01698), with prayer for II.

injunction and temporary restraining order, challenging (1)
the constitutionality of R.A. 9262 for being violative of the THE COURT OF APPEALS COMMITTED
due process and the equal protection clauses, and (2) the SERIOUS ERROR IN FAILING TO
CONCLUDE THAT R.A. 9262 IS
validity of the modified TPO issued in the civil case for
DISCRIMINATORY, UNJUST, AND
being "an unwanted product of an invalid law." VIOLATIVE OF THE EQUAL PROTECTION
On May 26, 2006, the appellate court issued a 60-day CLAUSE.
Temporary Restraining Order 35 (TRO) against the III.
enforcement of the TPO, the amended TPOs and other
orders pursuant thereto. THE COURT OF APPEALS COMMITTED
GRAVE MISTAKE IN NOT FINDING
Subsequently, however, on January 24, 2007, the THAT R.A. 9262 RUNS COUNTER TO THE
appellate court dismissed 36 the petition for failure of DUE PROCESS CLAUSE OF THE
petitioner to raise the constitutional issue in his pleadings CONSTITUTION.
before the trial court in the civil case, which is clothed with IV.
jurisdiction to resolve the same. Secondly, the challenge to
the validity of R.A. 9262 through a petition for prohibition THE COURT OF APPEALS ERRED IN NOT
seeking to annul the protection orders issued by the trial FINDING THAT THE LAW DOES VIOLENCE
TO THE POLICY OF THE STATE TO
court constituted a collateral attack on said law.
PROTECT THE FAMILY AS A BASIC SOCIAL
His motion for reconsideration of the foregoing Decision INSTITUTION.
having been denied in the Resolution 37 dated August 14, V.
2007, petitioner is now before us alleging that
THE COURT OF APPEALS SERIOUSLY
The Issues ERRED IN NOT DECLARING R.A. No.
I. 9262 AS INVALID AND UNCONSTITUTIONAL
BECAUSE IT ALLOWS AN UNDUE
THE COURT OF APPEALS ERRED IN DELEGATION OF JUDICIAL POWER TO THE
DISMISSING THE PETITION ON THE BARANGAY OFFICIALS. 38
THEORY THAT THE ISSUE OF
CONSTITUTIONALITY WAS NOT RAISED AT The Ruling of the Court
THE EARLIEST OPPORTUNITY AND THAT, Before delving into the arguments propounded by petitioner
THE PETITION CONSTITUTES A against the constitutionality of R.A. 9262, we shall first
 Page 189 of 458
tackle the propriety of the dismissal by the appellate court
of the petition for prohibition (CA-G.R. CEB-SP. No. 01698)
filed by petitioner.
EDIHSC
As a general rule, the question of constitutionality must be
raised at the earliest opportunity so that if not raised in the
pleadings, ordinarily it may not be raised in the trial, and if
not raised in the trial court, it will not be considered on
appeal. 39 Courts will not anticipate a question of
constitutional law in advance of the necessity of deciding
it. 40
In defending his failure to attack the constitutionality of R.A.
9262 before the RTC of Bacolod City, petitioner argues that
the Family Court has limited authority and jurisdiction that
is "inadequate to tackle the complex issue of
constitutionality." 41
We disagree.
Family Courts have authority
and jurisdiction to consider the
constitutionality of a statute.
At the outset, it must be stressed that Family Courts are
special courts, of the same level as Regional Trial Courts.
Under R.A. 8369, otherwise known as the "Family Courts
Act of 1997," family courts have exclusive original
jurisdiction to hear and decide cases of domestic violence
against women and children. 42 In accordance with said
law, the Supreme Court designated from among the
branches of the Regional Trial Courts at least one Family
Court in each of several key cities identified. 43 To achieve
harmony with the first mentioned law, Section 7 of R.A.
9262 now provides that Regional Trial Courts designated
as Family Courts shall have original and exclusive
jurisdiction over cases of VAWC defined under the latter
law, viz.:
SEC. 7. Venue. The Regional Trial Court
designated as a Family Court shall have
original and exclusive jurisdiction over cases of
violence against women and their children
under this law. In the absence of such court in
the place where the offense was committed,
the case shall be filed in the Regional Trial
Court where the crime or any of its elements
was committed at the option of the
complainant. (Emphasis supplied) HIAESC
Inspite of its designation as a family court, the RTC of
Bacolod City remains possessed of authority as a court of
general original jurisdiction to pass upon all kinds of cases
whether civil, criminal, special proceedings, land
registration, guardianship, naturalization, admiralty or
insolvency. 44 It is settled that RTCs have jurisdiction to
resolve the constitutionality of a statute, 45 "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." 46 The Constitution vests the power of judicial review
or the power to declare the constitutionality or validity of a
law, treaty, international or executive agreement,
presidential decree, order, instruction, ordinance, or
regulation not only in this Court, but in all RTCs. 47 We said
in J.M. Tuason and Co., Inc. v. CA 48 that, "[p]lainly the
Constitution contemplates that the inferior courts should
have jurisdiction in cases involving constitutionality of any
treaty or law, for it speaks of appellate review of final
judgments of inferior courts in cases where such
constitutionality happens to be in issue." Section 5, Article
VIII of the 1987 Constitution reads in part as follows:
 Page 190 of 458
SEC. 5. The Supreme Court shall have the
following powers:
xxx xxx xxx
2. Review, revise, reverse, modify, or
affirm on appeal or certiorari, as
the law or the Rules of Court may
provide, final judgments and orders
of lower courts in:
a. 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. aADSIc
xxx xxx xxx
Thus, contrary to the posturing of petitioner, the issue of
constitutionality of R.A. 9262 could have been raised at the
earliest opportunity in his Opposition to the petition for
protection order before the RTC of Bacolod City, which had
jurisdiction to determine the same, subject to the review of
this Court.
Section 20 of A.M. No. 04-10-11-SC, the Rule on Violence
Against Women and Their Children, lays down a new kind
of procedure requiring the respondent to file an opposition
to the petition and not an answer. 49 Thus:
SEC. 20. Opposition to petition. (a) The
respondent may file an opposition to the
petition which he himself shall verify. It must be
accompanied by the affidavits of witnesses and
shall show cause why a temporary or
permanent protection order should not be
issued.
(b) Respondent shall not include in the
opposition any counterclaim, cross-claim
or third-party complaint, but any cause of
action which could be the subject thereof may
be litigated in a separate civil action.
(Emphasis supplied)
We cannot subscribe to the theory espoused by petitioner
that, since a counterclaim, cross-claim and third-party
complaint are to be excluded from the opposition, the issue
of constitutionality cannot likewise be raised therein.
A counterclaim is defined as any claim for money or other
relief which a defending party may have against an
opposing party. 50 A cross-claim, on the other hand, is any
claim by one party against a co-party arising out of the
transaction or occurrence that is the subject matter either
of the original action or of a counterclaim therein. 51 Finally,
a third-party complaint is a claim that a defending party
may, with leave of court, file against a person not a party to
the action for contribution, indemnity, subrogation or any
other relief, in respect of his opponent's claim. 52 As
pointed out by Justice Teresita J. Leonardo-de Castro, the
unconstitutionality of a statute is not a cause of action that
could be the subject of a counterclaim, cross-claim or a
third-party complaint. Therefore, it is not prohibited from
being raised in the opposition in view of the familiar maxim
expressio unius est exclusio alterius. IHcSCA
Moreover, it cannot be denied that this issue affects the
resolution of the case a quo because the right of private
respondent to a protection order is founded solely on the
very statute the validity of which is being attacked 53 by
petitioner who has sustained, or will sustain, direct injury as
 Page 191 of 458
a result of its enforcement. The alleged unconstitutionality
of R.A. 9262 is, for all intents and purposes, a valid cause
for the non-issuance of a protection order.
That the proceedings in Civil Case No. 06-797 are
summary in nature should not have deterred petitioner from
raising the same in his Opposition. The question relative to
the constitutionality of a statute is one of law which does
not need to be supported by evidence. 54 Be that as it may,
Section 25 of A.M. No. 04-10-11-SC nonetheless allows
the conduct of a hearing to determine legal issues, among
others, viz.:
SEC. 25. Order for further hearing. In
case the court determines the need for further
hearing, it may issue an order containing the
following:
(a) Facts undisputed and admitted;
(b) Factual and legal issues to be resolved;
(c) Evidence, including objects and documents
that have been marked and will be presented;
(d) Names of witnesses who will be ordered to
present their direct testimonies in the form of
affidavits; and
(e) Schedule of the presentation of evidence by
both parties which shall be done in one day, to
the extent possible, within the 30-day period of
the effectivity of the temporary protection order
issued. (Emphasis supplied)
To obviate potential dangers that may arise concomitant to
the conduct of a hearing when necessary, Section 26 (b)
of A.M. No. 04-10-11-SC provides that if a temporary
protection order issued is due to expire, the trial court may
extend or renew the said order for a period of thirty (30)
days each time until final judgment is rendered. It may
likewise modify the extended or renewed temporary
protection order as may be necessary to meet the needs of
the parties. With the private respondent given ample
protection, petitioner could proceed to litigate the
constitutional issues, without necessarily running afoul of
the very purpose for the adoption of the rules on summary
procedure. DcAaSI
In view of all the foregoing, the appellate court correctly
dismissed the petition for prohibition with prayer for
injunction and temporary restraining order (CA-G.R. CEB-
SP. No. 01698). Petitioner may have proceeded upon an
honest belief that if he finds succor in a superior court, he
could be granted an injunctive relief. However, Section 22
(j) of A.M. No. 04-10-11-SC expressly disallows the filing of
a petition for certiorari, mandamus or prohibition against
any interlocutory order issued by the trial court. Hence,
the 60-day TRO issued by the appellate court in this case
against the enforcement of the TPO, the amended TPOs
and other orders pursuant thereto was improper, and it
effectively hindered the case from taking its normal course
in an expeditious and summary manner.
As the rules stand, a review of the case by appeal
or certiorari before judgment is prohibited. Moreover, if the
appeal of a judgment granting permanent protection shall
not stay its enforcement, 55 with more reason that a TPO,
which is valid only for thirty (30) days at a time, 56 should
not be enjoined.
The mere fact that a statute is alleged to be
unconstitutional or invalid, does not of itself entitle a litigant
to have the same enjoined. 57 In Younger v. Harris,
 Page 192 of 458
Jr., 58 the Supreme Court of the United States declared,
thus:
Federal injunctions against state criminal
statutes, either in their entirety or with respect to
their separate and distinct prohibitions, are not to
be granted as a matter of course, even if such
statutes are unconstitutional. No citizen or
member of the community is immune from
prosecution, in good faith, for his alleged criminal
acts. The imminence of such a prosecution even
though alleged to be unauthorized and, hence,
unlawful is not alone ground for relief in equity
which exerts its extraordinary powers only to
prevent irreparable injury to the plaintiff who
seeks its aid. (Citations omitted)
The sole objective of injunctions is to preserve the status
quo until the trial court hears fully the merits of the case. It
bears stressing, however, that protection orders are
granted ex parte so as to protect women and their children
from acts of violence. To issue an injunction against such
orders will defeat the very purpose of the law against
VAWC.
Notwithstanding all these procedural flaws, we shall not
shirk from our obligation to determine novel issues, or
issues of first impression, with far-reaching implications.
We have, time and again, discharged our solemn duty as
final arbiter of constitutional issues, and with more reason
now, in view of private respondent's plea in her
Comment 59 to the instant Petition that we should put the
challenge to the constitutionality of R.A. 9262 to rest. And
so we shall.
Intent of Congress in
enacting R.A. 9262.
Petitioner claims that since R.A. 9262 is intended to
prevent and criminalize spousal and child abuse, which
could very well be committed by either the husband or the
wife, gender alone is not enough basis to deprive the
husband/father of the remedies under the law. 60 IHTaCE
A perusal of the deliberations of Congress on Senate Bill
No. 2723, 61 which became R.A. 9262, reveals that while
the sponsor, Senator Luisa Pimentel-Ejercito (better known
as Senator Loi Estrada), had originally proposed what she
called a "synthesized measure" 62 an amalgamation of
two measures, namely, the "Anti-Domestic Violence Act"
and the "Anti-Abuse of Women in Intimate Relationships
Act" 63 providing protection to "all family members,
leaving no one in isolation" but at the same time giving
special attention to women as the "usual victims" of
violence and abuse, 64 nonetheless, it was eventually
agreed that men be denied protection under the same
measure. We quote pertinent portions of the deliberations:
Wednesday, December 10, 2003
Senator Pangilinan. I just wanted to place this
on record, Mr. President. Some women's
groups have expressed concerns and relayed
these concerns to me that if we are to include
domestic violence apart from against women
as well as other members of the household,
including children or the husband, they fear
that this would weaken the efforts to address
domestic violence of which the main victims or
the bulk of the victims really are the wives, the
spouses or the female partners in a
relationship. We would like to place that on
record. How does the good Senator respond to
this kind of observation?
 Page 193 of 458
Senator Estrada. Yes, Mr. President, there is
this group of women who call themselves
"WIIR" Women in Intimate Relationship. They
do not want to include men in this domestic
violence. But plenty of men are also being
abused by women. I am playing safe so I
placed here members of the family, prescribing
penalties therefor and providing protective
measures for victims. This includes the men,
children, live-in, common-law wives, and those
related with the family. 65
xxx xxx xxx
Wednesday, January 14, 2004
xxx xxx xxx
The President Pro Tempore. . . . SDITAC
Also, may the Chair remind the group that
there was the discussion whether to limit this to
women and not to families which was the issue
of the AWIR group. The understanding that I
have is that we would be having a broader
scope rather than just women, if I remember
correctly, Madam sponsor.
Senator Estrada. Yes, Mr. President.
As a matter of fact, that was brought up by
Senator Pangilinan during the interpellation
period.
I think Senator Sotto has something to say to
that.
Senator Legarda. Mr. President, the reason I
am in support of the measure. Do not get me
wrong. However, I believe that there is a need
to protect women's rights especially in the
domestic environment.
As I said earlier, there are nameless,
countless, voiceless women who have not had
the opportunity to file a case against their
spouses, their live-in partners after years, if not
decade, of battery and abuse. If we broaden
the scope to include even the men, assuming
they can at all be abused by the women or
their spouses, then it would not equalize the
already difficult situation for women, Mr.
President. aIcDCA
I think that the sponsor, based on our earlier
conversations, concurs with this position. I am
sure that the men in this Chamber who love
their women in their lives so dearly will agree
with this representation. Whether we like it or
not, it is an unequal world. Whether we like it or
not, no matter how empowered the women are,
we are not given equal opportunities especially
in the domestic environment where the macho
Filipino man would always feel that he is
stronger, more superior to the Filipino woman.
xxx xxx xxx
The President Pro Tempore. What does the
sponsor say?
Senator Estrada. Mr. President, before
accepting this, the committee came up with this
bill because the family members have been
included in this proposed measure since the
other members of the family other than women
are also possible victims of violence. While
women are most likely the intended victims,
one reason incidentally why the measure
 Page 194 of 458
focuses on women, the fact remains that in
some relatively few cases, men also stand to
be victimized and that children are almost
always the helpless victims of violence. I am
worried that there may not be enough
protection extended to other family members
particularly children who are excluded.
Although Republic Act No. 7610, for instance,
more or less, addresses the special needs of
abused children. The same law is inadequate.
Protection orders for one are not available in
said law.
I am aware that some groups are apprehensive
about granting the same protection to men,
fearing that they may use this law to justify
their abusive behavior against women.
However, we should also recognize that there
are established procedures and standards in
our courts which give credence to evidentiary
support and cannot just arbitrarily and
whimsically entertain baseless complaints. cSCADE
Mr. President, this measure is intended to
harmonize family relations and to protect the
family as the basic social institution. Though I
recognize the unequal power relations between
men and women in our society, I believe we
have an obligation to uphold inherent rights
and dignity of both husband and wife and their
immediate family members, particularly
children.
While I prefer to focus mainly on women, I was
compelled to include other family members as
a critical input arrived at after a series of
consultations/meetings with various NGOs,
experts, sports groups and other affected
sectors, Mr. President.
Senator Sotto. Mr. President.
The President Pro Tempore. Yes, with the
permission of the other senators.
Senator Sotto. Yes, with the permission of the
two ladies on the Floor.
The President Pro Tempore. Yes, Sen. Vicente
C. Sotto III is recognized.
Senator Sotto. I presume that the effect of the
proposed amendment of Senator Legarda
would be removing the "men and children" in
this particular bill and focus specifically on
women alone. That will be the net effect of that
proposed amendment. Hearing the rationale
mentioned by the distinguished sponsor, Sen.
Luisa "Loi" Ejercito Estrada, I am not sure now
whether she is inclined to accept the proposed
amendment of Senator Legarda.
I am willing to wait whether she is accepting
this or not because if she is going to accept
this, I will propose an amendment to the
amendment rather than object to the
amendment, Mr. President. EcATDH
xxx xxx xxx
Senator Estrada. The amendment is accepted,
Mr. President.
The President Pro Tempore. Is there any
objection?
xxx xxx xxx
 Page 195 of 458
Senator Sotto. . . . May I propose an
amendment to the amendment.
The President Pro Tempore. Before we act on
the amendment?
Senator Sotto. Yes, Mr. President.
The President Pro Tempore. Yes, please
proceed.
Senator Sotto. Mr. President, I am inclined to
believe the rationale used by the distinguished
proponent of the amendment. As a matter of
fact, I tend to agree. Kung may maaabuso,
mas malamang iyong babae kaysa sa lalake.
At saka iyong mga lalake, puwede na talagang
magulpi iyan. Okey lang iyan. But I cannot
agree that we remove the children from this
particular measure.
So, if I may propose an amendment
The President Pro Tempore. To the
amendment.
Senator Sotto. more than the women, the
children are very much abused. As a matter of
fact, it is not limited to minors. The abuse is not
limited to seven, six, 5-year-old children. I have
seen 14, 15-year-old children being abused by
their fathers, even by their mothers. And it
breaks my heart to find out about these things.
Because of the inadequate existing law on
abuse of children, this particular measure will
update that. It will enhance and hopefully
prevent the abuse of children and not only
women. DEScaT
SOTTO-LEGARDA AMENDMENTS
Therefore, may I propose an amendment that,
yes, we remove the aspect of the men in the
bill but not the children.
Senator Legarda. I agree, Mr. President, with
the Minority Leader.
The President Pro Tempore. Effectively then, it
will be women AND CHILDREN.
Senator Sotto. Yes, Mr. President.
Senator Estrada. It is accepted, Mr. President.
The President Pro Tempore. Is there any
objection? [Silence] There being none, the
amendment, as amended, is approved. 66
It is settled that courts are not concerned with the wisdom,
justice, policy, or expediency of a statute. 67 Hence, we
dare not venture into the real motivations and wisdom of
the members of Congress in limiting the protection against
violence and abuse under R.A. 9262 to women and
children only. No proper challenge on said grounds may be
entertained in this proceeding. Congress has made its
choice and it is not our prerogative to supplant this
judgment. The choice may be perceived as erroneous but
even then, the remedy against it is to seek its amendment
or repeal by the legislative. By the principle of separation of
powers, it is the legislative that determines the necessity,
adequacy, wisdom and expediency of any law. 68 We only
step in when there is a violation of the Constitution.
However, none was sufficiently shown in this case.
R.A. 9262 does not violate
the guaranty of equal protection
of the laws.
 Page 196 of 458
Equal protection simply requires that all persons or things
similarly situated should be treated alike, both as to rights
conferred and responsibilities imposed. The oft-repeated
disquisition in the early case of Victoriano v. Elizalde Rope
Workers' Union 69 is instructive: cSICHD
The guaranty of equal protection of the laws is
not a guaranty of equality in the application of
the laws upon all citizens of the state. It is not,
therefore, a requirement, in order to avoid the
constitutional prohibition against inequality, that
every man, woman and child should be affected
alike by a statute. Equality of operation of
statutes does not mean indiscriminate operation
on persons merely as such, but on persons
according to the circumstances surrounding
them. It guarantees equality, not identity of
rights. The Constitution does not require that
things which are different in fact be treated in law
as though they were the same. The equal
protection clause does not forbid discrimination
as to things that are different. It does not prohibit
legislation which is limited either in the object to
which it is directed or by the territory within which
it is to operate.
The equal protection of the laws clause of the
Constitution allows classification. Classification
in law, as in the other departments of knowledge
or practice, is the grouping of things in
speculation or practice because they agree with
one another in certain particulars. A law is not
invalid because of simple inequality. The very
idea of classification is that of inequality, so that
it goes without saying that the mere fact of
inequality in no manner determines the matter of
constitutionality. All that is required of a valid
classification is that it be reasonable, which
means that the classification should be based on
substantial distinctions which make for real
differences; that it must be germane to the
purpose of the law; that it must not be limited
to existing conditions only; and that it
must apply equally to each member of the
class. This Court has held that the standard is
satisfied if the classification or distinction is
based on a reasonable foundation or rational
basis and is not palpably arbitrary. (Emphasis
supplied)
Measured against the foregoing jurisprudential yardstick,
we find that R.A. 9262 is based on a valid classification as
shall hereinafter be discussed and, as such, did not violate
the equal protection clause by favoring women over men
as victims of violence and abuse to whom the State
extends its protection.
IDAaCc
I. R.A. 9262 rests on substantial
distinctions.
The unequal power relationship between women and men;
the fact that women are more likely than men to be victims
of violence; and the widespread gender bias and prejudice
against women all make for real differences justifying the
classification under the law. As Justice McIntyre succinctly
states, "the accommodation of differences . . . is the
essence of true equality." 70
A. Unequal power relationship
between men and women
According to the Philippine Commission on Women (the
National Machinery for Gender Equality and Women's
Empowerment), violence against women (VAW) is deemed
 Page 197 of 458

to be closely linked with the unequal power relationship Traditions subordinating women
between women and men otherwise known as "gender- have a long history rooted in
based violence". Societal norms and traditions dictate patriarchy the institutional rule
people to think men are the leaders, pursuers, providers, of men. Women were seen in
and take on dominant roles in society while women are virtually all societies to be
naturally inferior both physically
nurturers, men's companions and supporters, and take on
and intellectually. In ancient
subordinate roles in society. This perception leads to men Western societies, women
gaining more power over women. With power comes the whether slave, concubine or wife,
need to control to retain that power. And VAW is a form of were under the authority of men.
men's expression of controlling women to retain In law, they were treated as
power. 71HSaIET property.
The United Nations, which has long recognized VAW as a The Roman concept of patria potestas allowed
human rights issue, passed its Resolution 48/104 on the the husband to beat, or even kill, his wife if she
Declaration on Elimination of Violence Against Women on endangered his property right over her. Judaism,
December 20, 1993 stating that "violence against women is Christianity and other religions oriented towards
a manifestation of historically unequal power relations the patriarchal family strengthened the male
between men and women, which have led to domination dominated structure of society.
over and discrimination against women by men and to the English feudal law reinforced the tradition of
prevention of the full advancement of women, and that male control over women. Even the eminent
violence against women is one of the crucial social Blackstone has been quoted in his
mechanisms by which women are forced into subordinate commentaries as saying husband and wife were
positions, compared with men." 72 one and that one was the husband. However, in
the late 1500s and through the entire 1600s,
Then Chief Justice Reynato S. Puno traced the historical English common law began to limit the right of
and social context of gender-based violence and husbands to chastise their wives. Thus, common
developments in advocacies to eradicate VAW, in his law developed the rule of thumb, which allowed
remarks delivered during the Joint Launching of R.A. husbands to beat their wives with a rod or stick
9262 and its Implementing Rules last October 27, 2004, no thicker than their thumb.TcDAHS

the pertinent portions of which are quoted hereunder:
History reveals that most societies sanctioned
the use of violence against women. The
patriarch of a family was accorded the right to
use force on members of the family under his
control. I quote the early studies:
In the later part of the 19th century, legal
recognition of these rights to chastise wives or
inflict corporeal punishment ceased. Even then,
the preservation of the family was given more
importance than preventing violence to women.
 Page 198 of 458

The metamorphosis of the law on violence in the In an average 12-month period in

United States followed that of the English this country, approximately two
common law. In 1871, the Supreme Court of million women are the victims of
Alabama became the first appellate court to severe assaults by their male
strike down the common law right of a husband partners. In a 1985 survey,
to beat his wife: women reported that nearly one
of every eight husbands had
The privilege, ancient though it
assaulted their wives during the
may be, to beat one's wife with a
past year. The [American Medical
stick, to pull her hair, choke her,
Association] views these figures
spit in her face or kick her about
as "marked underestimates,"
the floor, or to inflict upon her like
because the nature of these
indignities, is not now
incidents discourages women
acknowledged by our law. . . In
from reporting them, and
person, the wife is entitled to the
because surveys typically
same protection of the law that
exclude the very poor, those who
the husband can invoke for
do not speak English well, and
himself.
women who are homeless or in
As time marched on, the women's advocacy institutions or hospitals when the
movement became more organized. The survey is conducted. According to
temperance leagues initiated it. These leagues the AMA, "researchers on family
had a simple focus. They considered the evils of violence agree that the true
alcoholism as the root cause of wife abuse. incidence of partner violence is
Hence, they demonstrated and picketed saloons, probably double the above
bars and their husbands' other watering holes. estimates; or four million severely
Soon, however, their crusade was joined by assaulted women per year." cIDHSC

suffragette movements, expanding the liberation

Studies on prevalence suggest
movement's agenda. They fought for women's
that from one-fifth to one-third of
right to vote, to own property, and more. Since
all women will be physically
then, the feminist movement was on the roll.
assaulted by a partner or ex-
The feminist movement exposed the private partner during their lifetime. . .
invisibility of the domestic violence to the public Thus on an average day in the
gaze. They succeeded in transforming the issue United States, nearly 11,000
into an important public concern. No less than women are severely assaulted by
the United States Supreme Court, in 1992 their male partners. Many of
case Planned Parenthood v. Casey, noted: these incidents involve sexual
 Page 199 of 458

assault. . . In families where wife beings. In 1979, the UN General Assembly

beating takes place, moreover, adopted the landmark Convention on the
child abuse is often present as Elimination of all Forms of Discrimination Against
well. Women (CEDAW). In 1993, the UN General
Assembly also adopted the Declaration on the
Other studies fill in the rest of this
Elimination of Violence Against Women. World
troubling picture. Physical
conferences on the role and rights of women
violence is only the most visible
have been regularly held in Mexico City,
form of abuse. Psychological
Copenhagen, Nairobi and Beijing. The UN itself
abuse, particularly forced social
established a Commission on the Status of
and economic isolation of
Women. TEaADS
women, is also common.
The Philippines has been in cadence with the
Many victims of domestic
half and full steps of all these women's
violence remain with their
movements. No less than Section 14, Article II of
abusers, perhaps because they
our 1987 Constitutionmandates the State to
perceive no superior alternative .
recognize the role of women in nation building
. . Many abused women who find
and to ensure the fundamental equality before
temporary refuge in shelters
the law of women and men. Our Senate has
return to their husbands, in large
ratified the CEDAW as well as the Convention on
part because they have no other
the Rights of the Child and its two protocols. To
source of income. . . Returning to
cap it all, Congress, on March 8, 2004,
one's abuser can be dangerous.
enacted Rep. Act No. 9262, entitled "An Act
Recent Federal Bureau of
Defining Violence Against Women and Their
Investigation statistics disclose
Children, Providing for Protective Measures for
that 8.8 percent of all homicide
Victims, Prescribing Penalties therefor and for
victims in the United States are
other Purposes." (Citations omitted)
killed by their spouses . . . Thirty
percent of female homicide B. Women are the "usual" and
victims are killed by their male "most likely"
partners. CHTcSE
victims of violence.
Finally in 1994, the United States Congress At the time of the presentation of Senate Bill No. 2723,
enacted the Violence Against Women Act. official statistics on violence against women and children
In the International front, the women's struggle show that
for equality was no less successful. The United
. . . physical injuries had the highest number of
States Charter and the Universal Declaration of
cases at 5,058 in 2002 representing 55.63% of
Human Rights affirmed the equality of all human
 Page 200 of 458

total cases reported (9,903). And for the first Acts of 580 536 382 358 445 485 745 625
semester of 2003, there were 2,381 reported Lascivi
cases out of 4,354 cases which represent ousnes
54.31%. . . . (T)he total number of women in s
especially difficult circumstances served by the Physica
Department of Social Welfare and 3,553 2,335 1,892 1,505 1,307 1,498 2,018 1,588
l
Development (DSWD) for the year 2002, there Injuries
are 1,417 physically abused/maltreated cases Sexual 53 37 38 46 18 54 83 63
out of the total of 5,608 cases. . . . (T)here are Harass
1,091 DSWD cases out of a total number of ment
3,471 cases for the first semester of 2003. RA
Female violence comprised more than 90% of 218 924 1,269 2,387 3,599 5,285 9,974 9,021
9262
all forms of abuse and violence and more than Threats 319 223 199 182 220 208 374 213
90% of these reported cases were committed Seducti
by the women's intimate partners such as their 62 19 29 30 19 19 25 15
on
husbands and live-in partners. 73 Concub
121 102 93 109 109 99 158 128
Recently, the Philippine Commission on Women presented inage
comparative statistics on violence against women across RA
17 11 16 24 34 152 190 62
9208
an eight-year period from 2004 to August of 2011 with
Abducti
violations under R.A. 9262 ranking first among the different 29 16 34 23 28 18 25 22
on/
VAW categories since its implementation in Kidnap
2004, 74 thus: ADECcI
ping
Table 1. Annual Comparative Statistics on Violence Against Unjust
Women, 2004-2011* Vexatio 90 50 59 59 83 703 183 155
n
Report
2004 2005 2006 2007 2008 2009 2010 2011
ed
Cases

Rape 997 927 659 837 811 770 1,042 832 Total 6,271 5,374 4,881 5,729 6,905 9,485 15,104 12,948
Incestu ==== ===== ===== ===== ===== ===== ===== =====
ous 38 46 26 22 28 27 19 23 = = = = = = = =
Rape *2011 report covers only
Attempt from January to August
ed 194 148 185 147 204 167 268 201 Source: Philippine National Police Women and
Rape Children Protection Center (WCPC)
 Page 201 of 458
On the other hand, no reliable estimates may be obtained
on domestic abuse and violence against men in the
Philippines because incidents thereof are relatively low
and, perhaps, because many men will not even attempt to
report the situation. In the United Kingdom, 32% of women
who had ever experienced domestic violence did so four or
five (or more) times, compared with 11% of the smaller
number of men who had ever experienced domestic
violence; and women constituted 89% of all those who had
experienced 4 or more incidents of domestic
violence. 75 Statistics in Canada show that spousal
violence by a woman against a man is less likely to cause
injury than the other way around (18 percent versus 44
percent). Men, who experience violence from their spouses
are much less likely to live in fear of violence at the hands
of their spouses, and much less likely to experience sexual
assault. In fact, many cases of physical violence by a
woman against a spouse are in self-defense or the result of
many years of physical or emotional abuse. 76 CADSHI
While there are, indeed, relatively few cases of violence
and abuse perpetrated against men in the Philippines, the
same cannot render R.A. 9262 invalid.
In a 1960 case involving the violation of a city ordinance
requiring drivers of animal-drawn vehicles to pick up,
gather and deposit in receptacles the manure emitted or
discharged by their vehicle-drawing animals in any public
highways, streets, plazas, parks or alleys, said ordinance
was challenged as violative of the guaranty of equal
protection of laws as its application is limited to owners and
drivers of vehicle-drawing animals and not to those
animals, although not utilized, but similarly pass through
the same streets.
The ordinance was upheld as a valid classification for the
reason that, while there may be non-vehicle-drawing
animals that also traverse the city roads, "but their
number must be negligible and their appearance
therein merely occasional, compared to the rig-drawing
ones, as not to constitute a menace to the health of the
community." 77 The mere fact that the legislative
classification may result in actual inequality is not violative
of the right to equal protection, for every classification of
persons or things for regulation by law produces inequality
in some degree, but the law is not thereby rendered
invalid. 78
TcSHaD
C. Gender bias and prejudices
From the initial report to the police through prosecution,
trial, and sentencing, crimes against women are often
treated differently and less seriously than other crimes.
This was argued by then United States Senator Joseph R.
Biden, Jr., now Vice President, chief sponsor of the
Violence Against Women Act (VAWA), in defending the
civil rights remedy as a valid exercise of the U.S. Congress'
authority under the Commerce and Equal Protection
Clauses. He stressed that the widespread gender bias in
the U.S. has institutionalized historic prejudices against
victims of rape or domestic violence, subjecting them to
"double victimization" first at the hands of the offender
and then of the legal system. 79
Our own Senator Loi Estrada lamented in her Sponsorship
Speech for Senate Bill No. 2723 that "(w)henever violence
occurs in the family, the police treat it as a private matter
and advise the parties to settle the conflict themselves.
Once the complainant brings the case to the prosecutor,
the latter is hesitant to file the complaint for fear that it
 Page 202 of 458
might later be withdrawn. This lack of response or
reluctance to be involved by the police and prosecution
reinforces the escalating, recurring and often serious
nature of domestic violence." 80
Sadly, our own courts, as well, have exhibited prejudices
and biases against our women.
In a recent case resolved on March 9, 2011, we fined RTC
Judge Venancio J. Amila for Conduct Unbecoming of a
Judge. He used derogatory and irreverent language in
reference to the complainant in a petition for TPO and PPO
under R.A. 9262, calling her as "only a live-in partner" and
presenting her as an "opportunist" and a "mistress" in an
"illegitimate relationship." Judge Amila even called her a
"prostitute," and accused her of being motivated by
"insatiable greed" and of absconding with the contested
property. 81 Such remarks betrayed Judge Amila's
prejudices and lack of gender sensitivity.
The enactment of R.A. 9262 aims to address the
discrimination brought about by biases and prejudices
against women. As emphasized by the CEDAW Committee
on the Elimination of Discrimination against Women,
addressing or correcting discrimination through specific
measures focused on women does not discriminate
against men. 82 Petitioner's contention, 83 therefore,
that R.A. 9262 is discriminatory and that it is an "anti-male,"
"husband-bashing," and "hate-men" law deserves scant
consideration. As a State Party to the CEDAW, the
Philippines bound itself to take all appropriate measures "to
modify the social and cultural patterns of conduct of men
and women, with a view to achieving the elimination of
prejudices and customary and all other practices which are
based on the idea of the inferiority or the superiority of
either of the sexes or on stereotyped roles for men and
women." 84 Justice Puno correctly pointed out that "(t)he
paradigm shift changing the character of domestic violence
from a private affair to a public offense will require the
development of a distinct mindset on the part of the police,
the prosecution and the judges." 85
II. The classification is germane to the
purpose of the law.
The distinction between men and women is germane to the
purpose of R.A. 9262, which is to address violence
committed against women and children, spelled out in
itsDeclaration of Policy, as follows:
SEC. 2. Declaration of Policy. It is hereby
declared that the State values the dignity of
women and children and guarantees full
respect for human rights. The State also
recognizes the need to protect the family and
its members particularly women and children,
from violence and threats to their personal
safety and security.
Towards this end, the State shall exert efforts to
address violence committed against women and
children in keeping with the fundamental
freedoms guaranteed underthe Constitution and
the provisions of the Universal Declaration of
Human Rights, the Convention on the
Elimination of All Forms of Discrimination
Against Women, Convention on the Rights of the
Child and other international human rights
instruments of which the Philippines is a
party.DHECac
In 1979, the U.N. General Assembly adopted the CEDAW,
which the Philippines ratified on August 5, 1981.
 Page 203 of 458

Subsequently, the Optional Protocol to the CEDAW was includes, but is not limited to, the following
also ratified by the Philippines on October 6, 2003. 86 This acts:SACHcD

Convention mandates that State parties shall accord to A. "Physical Violence" refers to
women equality with men before the law 87 and shall take acts that include bodily or
all appropriate measures to eliminate discrimination against physical harm;
women in all matters relating to marriage and family
relations on the basis of equality of men and women.88 The B. "Sexual violence" refers to an
Philippines likewise ratified the Convention on the Rights of act which is sexual in nature,
committed against a woman or
the Child and its two protocols. 89 It is, thus, bound by said
her child. It includes, but is not
Conventions and their respective protocols. limited to:
III. The classification is not limited to a) rape, sexual
existing harassment, acts of
conditions only, and apply equally lasciviousness, treating a
to all members woman or her child as a
sex object, making
Moreover, the application of R.A. 9262 is not limited to the demeaning and sexually
existing conditions when it was promulgated, but to future suggestive remarks,
conditions as well, for as long as the safety and security of physically attacking the
women and their children are threatened by violence and sexual parts of the victim's
abuse. body, forcing her/him to
watch obscene
R.A. 9262 applies equally to all women and children who
publications and indecent
suffer violence and abuse. Section 3 thereof defines VAWC shows or forcing the
as: woman or her child to do
. . . any act or a series of acts committed by any indecent acts and/or make
person against a woman who is his wife, former films thereof, forcing the
wife, or against a woman with whom the person wife and mistress/lover to
has or had a sexual or dating relationship, or live in the conjugal home
with whom he has a common child, or against or sleep together in the
her child whether legitimate or illegitimate, within same room with the
or without the family abode, which result in or is abuser;
likely to result in physical, sexual, psychological b) acts causing or
harm or suffering, or economic abuse including attempting to cause the
threats of such acts, battery, assault, coercion, victim to engage in any
harassment or arbitrary deprivation of liberty. It
 Page 204 of 458
sexual activity by force,
threat of force, physical or
other harm or threat of
physical or other harm or
coercion;
c) Prostituting the woman
or child.
C."Psychological violence" refers
to acts or omissions causing or
likely to cause mental or
emotional suffering of the victim
such as but not limited to
intimidation, harassment,
stalking, damage to property,
public ridicule or humiliation,
repeated verbal abuse and
mental infidelity. It includes
causing or allowing the victim to
witness the physical, sexual or
psychological abuse of a member
of the family to which the victim
belongs, or to witness
pornography in any form or to
witness abusive injury to pets or
to unlawful or unwanted
deprivation of the right to custody
and/or visitation of common
children.CDEaAI
D. "Economic abuse" refers to
acts that make or attempt to
make a woman financially
dependent which includes, but is
not limited to the following:
1. withdrawal of financial
support or preventing the
victim from engaging in
any legitimate profession,
occupation, business or
activity, except in cases
wherein the other
spouse/partner objects on
valid, serious and moral
grounds as defined in
Article 73 of the Family
Code;
2. deprivation or threat of
deprivation of financial
resources and the right to
the use and enjoyment of
the conjugal, community or
property owned in
common;
3. destroying household
property;
4. controlling the victims'
own money or properties
or solely controlling the
conjugal money or
properties.
It should be stressed that the acts enumerated in the
aforequoted provision are attributable to research that has
exposed the dimensions and dynamics of battery. The acts
described here are also found in the U.N. Declaration on
the Elimination of Violence Against Women. 90 Hence, the
argument advanced by petitioner that the definition of what
constitutes abuse removes the difference between violent
action and simple marital tiffs is tenuous.
 Page 205 of 458
There is nothing in the definition of VAWC that is vague
and ambiguous that will confuse petitioner in his defense.
The acts enumerated above are easily understood and
provide adequate contrast between the innocent and the
prohibited acts. They are worded with sufficient
definiteness that persons of ordinary intelligence can
understand what conduct is prohibited, and need not guess
at its meaning nor differ in its application. 91 Yet, petitioner
insists 92 that phrases like "depriving or threatening to
deprive the woman or her child of a legal right," "solely
controlling the conjugal or common money or properties,"
"marital infidelity," and "causing mental or emotional
anguish" are so vague that they make every quarrel a case
of spousal abuse. However, we have stressed that the
"vagueness" doctrine merely requires a reasonable degree
of certainty for the statute to be upheld not absolute
precision or mathematical exactitude, as petitioner seems
to suggest. Flexibility, rather than meticulous specificity, is
permissible as long as the metes and bounds of the statute
are clearly delineated. An act will not be held invalid merely
because it might have been more explicit in its wordings or
detailed in its provisions. 93
There is likewise no merit to the contention that R.A.
9262 singles out the husband or father as the culprit. As
defined above, VAWC may likewise be committed "against
a woman with whom the person has or had a sexual or
dating relationship." Clearly, the use of the gender-neutral
word "person" who has or had a sexual or dating
relationship with the woman encompasses even lesbian
relationships. Moreover, while the law provides that the
offender be related or connected to the victim by marriage,
former marriage, or a sexual or dating relationship, it does
not preclude the application of the principle of
conspiracy under the Revised Penal Code (RPC). Thus,
in the case of Go-Tan v. Spouses Tan, 94 the parents-in-
law of Sharica Mari L. Go-Tan, the victim, were held to be
proper respondents in the case filed by the latter upon the
allegation that they and their son (Go-Tan's husband) had
community of design and purpose in tormenting her by
giving her insufficient financial support; harassing and
pressuring her to be ejected from the family home; and in
repeatedly abusing her verbally, emotionally, mentally and
physically.TCIEcH
R.A. 9262 is not violative of the
due process clause of the Constitution.
Petitioner bewails the disregard of R.A. 9262, specifically in
the issuance of POs, of all protections afforded by the due
process clause of the Constitution. Says he: "On the basis
of unsubstantiated allegations, and practically no
opportunity to respond, the husband is stripped of family,
property, guns, money, children, job, future employment
and reputation, all in a matter of seconds, without an inkling
of what happened." 95
A protection order is an order issued to prevent further
acts of violence against women and their children, their
family or household members, and to grant other
necessary reliefs. Its purpose is to safeguard the offended
parties from further harm, minimize any disruption in their
daily life and facilitate the opportunity and ability to regain
control of their life. 96
"The scope of reliefs in protection orders is broadened to
ensure that the victim or offended party is afforded all the
remedies necessary to curtail access by a perpetrator to
the victim. This serves to safeguard the victim from greater
risk of violence; to accord the victim and any designated
 Page 206 of 458
family or household member safety in the family residence,
and to prevent the perpetrator from committing acts that
jeopardize the employment and support of the victim. It
also enables the court to award temporary custody of minor
children to protect the children from violence, to prevent
their abduction by the perpetrator and to ensure their
financial support."97
The rules require that petitions for protection order be in
writing, signed and verified by the petitioner 98 thereby
undertaking full responsibility, criminal or civil, for every
allegation therein. Since "time is of the essence in cases of
VAWC if further violence is to be prevented," 99 the court is
authorized to issue ex parte a TPO after raffle but before
notice and hearing when the life, limb or property of the
victim is in jeopardy and there is reasonable ground to
believe that the order is necessary to protect the victim
from the immediate and imminent danger of VAWC or to
prevent such violence, which is about to recur. 100
There need not be any fear that the judge may have no
rational basis to issue an ex parte order. The victim is
required not only to verify the allegations in the petition, but
also to attach her witnesses' affidavits to the petition. 101
The grant of a TPO ex parte cannot, therefore, be
challenged as violative of the right to due process. Just like
a writ of preliminary attachment which is issued without
notice and hearing because the time in which the hearing
will take could be enough to enable the defendant to
abscond or dispose of his property, 102 in the same way,
the victim of VAWC may already have suffered harrowing
experiences in the hands of her tormentor, and possibly
even death, if notice and hearing were required before
such acts could be prevented. It is a constitutional
commonplace that the ordinary requirements of procedural
due process must yield to the necessities of protecting vital
public interests, 103 among which is protection of women
and children from violence and threats to their personal
safety and security.
It should be pointed out that when the TPO is issued ex
parte, the court shall likewise order that notice be
immediately given to the respondent directing him to file an
opposition within five (5) days from service. Moreover, the
court shall order that notice, copies of the petition and TPO
be served immediately on the respondent by the court
sheriffs. The TPOs are initially effective for thirty (30) days
from service on the respondent. 104
Where no TPO is issued ex parte, the court will
nonetheless order the immediate issuance and service of
the notice upon the respondent requiring him to file an
opposition to the petition within five (5) days from service.
The date of the preliminary conference and hearing on the
merits shall likewise be indicated on the notice. 105
The opposition to the petition which the respondent himself
shall verify, must be accompanied by the affidavits of
witnesses and shall show cause why a temporary or
permanent protection order should not be issued. 106 HSCcTD
It is clear from the foregoing rules that the respondent of a
petition for protection order should be apprised of the
charges imputed to him and afforded an opportunity to
present his side. Thus, the fear of petitioner of being
"stripped of family, property, guns, money, children, job,
future employment and reputation, all in a matter of
seconds, without an inkling of what happened" is a mere
product of an overactive imagination. The essence of due
process is to be found in the reasonable opportunity to be
 Page 207 of 458
heard and submit any evidence one may have in support of
one's defense. "To be heard" does not only mean verbal
arguments in court; one may be heard also through
pleadings. Where opportunity to be heard, either through
oral arguments or pleadings, is accorded, there is no denial
of procedural due process. 107
It should be recalled that petitioner filed on April 26, 2006
an Opposition to the Urgent Ex-Parte Motion for Renewal
of the TPO that was granted only two days earlier on April
24, 2006. Likewise, on May 23, 2006, petitioner filed a
motion for the modification of the TPO to allow him
visitation rights to his children. Still, the trial court in its
Order dated September 26, 2006, gave him five days (5)
within which to show cause why the TPO should not be
renewed or extended. Yet, he chose not to file the required
comment arguing that it would just be an "exercise in
futility," conveniently forgetting that the renewal of the
questioned TPO was only for a limited period (30 days)
each time, and that he could prevent the continued renewal
of said order if he can show sufficient cause therefor.
Having failed to do so, petitioner may not now be heard to
complain that he was denied due process of law.
Petitioner next laments that the removal and exclusion of
the respondent in the VAWC case from the residence of
the victim, regardless of ownership of the residence, is
virtually a "blank check" issued to the wife to claim any
property as her conjugal home. 108
The wording of the pertinent rule, however, does not by
any stretch of the imagination suggest that this is so. It
states:aIETCA
SEC. 11. Reliefs available to the offended
party. The protection order shall include
any, some or all of the following reliefs:
xxx xxx xxx
(c) Removing and excluding the respondent from
the residence of the offended party, regardless
of ownership of the residence, either temporarily
for the purpose of protecting the offended party,
or permanently where no property rights are
violated. If the respondent must remove personal
effects from the residence, the court shall direct
a law enforcement agent to accompany the
respondent to the residence, remain there until
the respondent has gathered his things and
escort him from the residence;
xxx xxx xxx
Indubitably, petitioner may be removed and excluded from
private respondent's residence, regardless of
ownership, only temporarily for the purpose of protecting
the latter. Such removal and exclusion may be permanent
only where no property rights are violated. How then can
the private respondent just claim any property and
appropriate it for herself, as petitioner seems to suggest?
The non-referral of a VAWC case
to a mediator is justified.
Petitioner argues that "by criminalizing run-of-the-mill
arguments, instead of encouraging mediation and
counseling, the law has done violence to the avowed policy
of the State to "protect and strengthen the family as a basic
autonomous social institution." 109
Under Section 23 (c) of A.M. No. 04-10-11-SC, the court
shall not refer the case or any issue thereof to a mediator.
 Page 208 of 458
The reason behind this provision is well-explained by the
Commentary on Section 311 of the Model Code on
Domestic and Family Violence as follows: 110
This section prohibits a court from ordering or
referring parties to mediation in a proceeding
for an order for protection. Mediation is a
process by which parties in equivalent
bargaining positions voluntarily reach
consensual agreement about the issue at
hand. Violence, however, is not a subject for
compromise. A process which involves parties
mediating the issue of violence implies that the
victim is somehow at fault. In addition,
mediation of issues in a proceeding for an
order of protection is problematic because the
petitioner is frequently unable to participate
equally with the person against whom the
protection order has been sought. (Emphasis
supplied)
There is no undue delegation of
judicial power to barangay officials.
Petitioner contends that protection orders involve the
exercise of judicial power which, under the Constitution, is
placed upon the "Supreme Court and such other lower
courts as may be established by law" and, thus, protests
the delegation of power to barangay officials to issue
protection orders. 111 The pertinent provision reads, as
follows:HCDAac
SEC. 14. Barangay Protection Orders (BPOs);
Who May Issue and How. Barangay
Protection Orders (BPOs) refer to the
protection order issued by the Punong
Barangay ordering the perpetrator to desist
from committing acts under Section 5 (a) and
(b) of this Act. A Punong Barangay who
receives applications for a BPO shall issue the
protection order to the applicant on the date of
filing after ex parte determination of the basis
of the application. If the Punong Barangay is
unavailable to act on the application for a BPO,
the application shall be acted upon by any
available Barangay Kagawad. If the BPO is
issued by a Barangay Kagawad, the order
must be accompanied by an attestation by
the Barangay Kagawad that the Punong
Barangay was unavailable at the time of the
issuance of the BPO. BPOs shall be effective
for fifteen (15) days. Immediately after the
issuance of an ex parte BPO, the Punong
Barangay or Barangay Kagawad shall
personally serve a copy of the same on the
respondent, or direct any barangay official to
effect its personal service.
The parties may be accompanied by a non-
lawyer advocate in any proceeding before
the Punong Barangay.
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.112 On the other hand,
executive power "is generally defined as the power to
enforce and administer the laws. It is the power of carrying
the laws into practical operation and enforcing their due
observance." 113
As clearly delimited by the aforequoted provision, the BPO
issued by the Punong Barangay or, in his unavailability, by
 Page 209 of 458
any available Barangay Kagawad, merely orders the
perpetrator to desist from (a) causing physical harm to the
woman or her child; and (2) threatening to cause the
woman or her child physical harm. Such function of
the Punong Barangay is, thus, purely executive in nature,
in pursuance of his duty under the Local Government
Code to "enforce all laws and ordinances," and to "maintain
public order in the barangay." 114
We have held that "(t)he mere fact that an officer is
required by law to inquire into the existence of certain facts
and to apply the law thereto in order to determine what his
official conduct shall be and the fact that these acts may
affect private rights do not constitute an exercise of judicial
powers." 115
In the same manner as the public prosecutor ascertains
through a preliminary inquiry or proceeding "whether there
is reasonable ground to believe that an offense has been
committed and the accused is probably guilty thereof,"
the Punong Barangay must determine reasonable ground
to believe that an imminent danger of violence against the
woman and her children exists or is about to recur that
would necessitate the issuance of a BPO. The preliminary
investigation conducted by the prosecutor is, concededly,
an executive, not a judicial, function. The same holds true
with the issuance of a BPO. DHEcCT
We need not even belabor the issue raised by petitioner
that since barangay officials and other law enforcement
agencies are required to extend assistance to victims of
violence and abuse, it would be very unlikely that they
would remain objective and impartial, and that the chances
of acquittal are nil. As already stated, assistance by
barangay officials and other law enforcement agencies is
consistent with their duty to enforce the law and to maintain
peace and order.
Conclusion
Before a statute or its provisions duly challenged are
voided, an unequivocal breach of, or a clear conflict
with the Constitution, not merely a doubtful or
argumentative one, must be demonstrated in such a
manner as to leave no doubt in the mind of the Court. In
other words, the grounds for nullity must be beyond
reasonable doubt.116 In the instant case, however, no
concrete evidence and convincing arguments were
presented by petitioner to warrant a declaration of the
unconstitutionality of R.A. 9262, which is an act of
Congress and signed into law by the highest officer of the
co-equal executive department. As we said in Estrada v.
Sandiganbayan, 117 courts must assume that the
legislature is ever conscious of the borders and edges of its
plenary powers, and passed laws with full knowledge of the
facts and for the purpose of promoting what is right and
advancing the welfare of the majority.
We reiterate here Justice Puno's observation that "the
history of the women's movement against domestic
violence shows that one of its most difficult struggles was
the fight against the violence of law itself. If we keep that in
mind, law will not again be a hindrance to the struggle of
women for equality but will be its
fulfillment." 118Accordingly, the constitutionality of R.A.
9262 is, as it should be, sustained.
WHEREFORE, the instant petition for review
on certiorari is hereby DENIED for lack of merit.
SO ORDERED.
 Page 210 of 458
Sereno, C.J., Carpio, Velasco, Jr., Bersamin, Del Castillo,
Villarama, Jr., Perez, Mendoza and Reyes, JJ., concur.
Leonardo-de Castro, Abad and Leonen, JJ., see separate
concurring opinion.
Brion, J., see: concurring opinion.
Peralta, J., is on official leave.
Separate Opinions
LEONARDO-DE CASTRO, J., concurring:
I concur with the conclusion reached in the ponencia ably
written by the Honorable Estela Perlas-Bernabe. With due
respect, however, I submit that the test to determine an
equal protection challenge against the law, denying
statutory remedies to men who are similarly situated as the
women who are given differential treatment in the law, on
the basis of sex or gender, should be at the level of
intermediate scrutiny or middle-tier judicial
scrutiny rather than the rational basis test used in
the ponencia of Justice Bernabe.
This Petition for Review on Certiorari assails: (1) the
Decision dated January 24, 2007 of the Court of Appeals in
CA-G.R. CEB-SP No. 01698 dismissing the Petition for
Prohibition with Injunction and Temporary Restraining
Order (Petition for Prohibition) which questioned the
constitutionality of Republic Act No. 9262, otherwise known
as the "Anti-Violence Against Women and Their Children
Act of 2004," and sought a temporary restraining order
and/or injunction to prevent the implementation of the
Temporary Protection Order (TPO) and criminal
prosecution of herein petitioner Jesus A. Garcia under the
law; and (2) the Resolution dated August 14, 2007, denying
petitioner's Motion for Reconsideration of the said
Decision. aITDAE
At the outset, it should be stressed that the Court of
Appeals, in its assailed Decision and Resolution, did not
pass upon the issue of constitutionality of Republic Act No.
9262 and instead dismissed the Petition for Prohibition on
technical grounds, as follows:
1.The constitutional issue was raised for the first time on
appeal before the Court of Appeals by petitioner and not at
the earliest opportunity, which should be before the
Regional Trial Court (RTC), Branch 41, Bacolod City,
acting as a Family Court, where private respondent Rosalie
Garcia, wife of petitioner, instituted a Petition for
Temporary and Permanent Protection
Order[s] 1 under Republic Act No. 9262, against her
husband, petitioner Jesus C. Garcia; and
2.The constitutionality of Republic Act No. 9262 can only
be questioned in a direct action and it cannot be the
subject of a collateral attack in a petition for prohibition, as
the inferior court having jurisdiction on the action may itself
determine the constitutionality of the statute, and the
latter's decision on the matter may be reviewed on appeal
and not by a writ of prohibition, as it was held in People v.
Vera. 2
Hence, the Court of Appeals Decision and Resolution
denied due course to the Petition for Prohibition "for being
fraught with fatal technical infirmities" and for not being ripe
for judicial review. Nevertheless, four out of the five issues
raised by the petitioner here dealt with the alleged
unconstitutionality of Republic Act No. 9262. More
 Page 211 of 458
accurately put, however, the Court of Appeals refrained
from touching at all those four substantive issues of
constitutionality. The Court of Appeals cannot therefore be
faulted for any erroneous ruling on the aforesaid
substantive constitutional issues.
In this instant Petition for Review, the only issue directly in
point that can be raised against the Court of Appeals
Decision and Resolution is the first one cited as a ground
for the appeal, which I quote:
THE COURT OF APPEALS ERRED IN
DISMISSING THE PETITION ON THE
THEORY THAT THE ISSUE OF
CONSTITUTIONALITY WAS NOT RAISED AT
THE FIRST OPPORTUNITY AND THAT, THE
PETITION WAS A COLLATERAL ATTACK ON
THE VALIDITY OF THE LAW. 3
Under the circumstances, whether this Court should
consider this Petition for Review as a proper occasion to
pass upon the constitutionality of Republic Act No.
9262shall be a separate subject matter that is tackled
below after the above-quoted first issue is disposed of.
On the Propriety of Raising the Issue
of Constitutionality in a Summary
Proceeding Before the RTC
Designated as a Family Court
Petitioner assails the Court of Appeals ruling that he should
have raised the issue of constitutionality in his
Opposition 4 to private respondent's petition for protective
orders pending before the RTC for the following
reasons: IDEHCa
1. The Rules on Violence Against Women and Children
(A.M. No. 04-10-11-SC), particularly Section 20 thereof,
expressly prohibit him from alleging any counterclaim,
cross-claim or third party claim, all of which are personal to
him and therefore with more reason, he cannot impugn the
constitutionality of the law by way of affirmative defense. 5
2. Since the proceedings before the Family Court are
summary in nature, its limited jurisdiction is inadequate to
tackle the complex issue of constitutionality. 6
I agree with Justice Bernabe that the RTC, designated as a
Family Court, is vested with jurisdiction to decide issues of
constitutionality of a law, and that the constitutionality
of Republic Act No. 9262 can be resolved in a summary
proceeding, in accordance with the rule that the question of
constitutionality must be raised at the earliest opportunity,
otherwise it may not be considered on appeal.
Section 20 of A.M. No. 04-10-11-SC, the Rule on Republic
Act No. 9262 provides:
Sec. 20. Opposition to Petition. (a) The
respondent may file an opposition to the petition
which he himself shall verify. It must be
accompanied by the affidavits of witnesses and
shall show cause why a temporary or permanent
protection order should not be issued.
(b) Respondent shall not include in the
opposition any counterclaim, cross-claim or third-
party complaint, but any cause of action which
could be the subject thereof may be litigated
in a separate civil action. (Emphasis
supplied.)HEacAS
Petitioner cites the above provision, particularly paragraph
(b) thereof, as one of his grounds for not challenging the
constitutionality of Republic Act No. 9262 in his Opposition.
The error of such reasoning is that it treats "any cause of
 Page 212 of 458
action" mentioned in Section 20 (b) as distinct from the
"counterclaim, cross-claim or third-party complaint" referred
to in the said Section 20 (b). On the contrary, the language
of said section clearly refers to a cause of action that is
the "subject" of the counterclaim, cross-claim, or third-
party complaint, which is barred and which may be
litigated in a separate civil action. The issue of
constitutionality is not a "cause of action" that is a subject
of the aforementioned prohibited pleadings. In fact,
petitioner admitted that such prohibited pleadings would
allege "claims which arepersonal to him." 7 Hence, Section
20 (b) cannot even be invoked as a basis for filing the
separate special civil action of Petition for Prohibition
before the Court of Appeals to question the constitutionality
of Republic Act No. 9262. cTACIa
What obviously escapes petitioner's understanding is that
the contents of the Opposition are not limited to mere
refutations of the allegations in the petition for temporary
and permanent protection order. While it is true that A.M.
No. 04-10-11-SC requires the respondent to file
an Opposition and not an Answer, 8 it does not prevent
petitioner from challenging the constitutionality of Republic
Act No. 9262 in such Opposition. In fact, Section 20 (a)
directs petitioner to state in his Opposition why a temporary
or permanent protection order should not be issued against
him. This means that petitioner should have raised in his
Opposition all defenses available to him, which may be
either negative or affirmative. Section 5 (b), Rule 6 of
the Rules of Court define negative and affirmative defenses
as follows:
(a) A negative defense is the specific denial of
the material fact or facts alleged in the pleading
of the claimant essential to his cause or causes
of action.
(b) An affirmative defense is an allegation of a
new matter which, while hypothetically admitting
the material allegations in the pleading of the
claimant, would nevertheless prevent or bar
recovery by him. The affirmative defenses
include fraud, statute of limitations, release,
payment, illegality, statute of frauds, estoppel,
former recovery, discharge in bankruptcy, and
any other matter by way of confession and
avoidance.
In Bayog v. Hon. Natino, 9 the respondent, in a complaint
for ejectment before the Municipal Circuit Trial Court
(MCTC), raised as one of his defenses, the MCTC's lack of
jurisdiction over the case in light of the agricultural tenancy
relationship between him and the petitioner. The MCTC
applied the Rule on Summary Procedure and issued an
Order stating that it could not take cognizance of the
Answer, for being filed belatedly. This Court ruled that
while the MCTC was correct in applying the Rule on
Summary Procedure as the complaint was one for
ejectment, it should have met and ruled squarely on the
issue of jurisdiction, as there was nothing in the rules that
barred it from admitting the Answer. Hence, the MCTC
should have heard and received evidence for the precise
purpose of determining whether or not it possessed
jurisdiction over the case. 10DEaCSA
Similarly, the alleged unconstitutionality of Republic Act No.
9262 is a matter that would have prevented the trial court
from granting the petition for protection order against the
petitioner. Thus, petitioner should have raised it in his
 Page 213 of 458
Opposition as a defense against the issuance of a
protection order against him.
For all intents and purposes, the Petition for Prohibition
filed before the Court of Appeals was precipitated by and
was ultimately directed against the issuance of the TPO, an
interlocutory order, which under Section 22 (j) of A.M. No.
04-10-11-SC is a prohibited pleading. An action
questioning the constitutionality of the law also cannot be
filed separately even with another branch of the RTC. This
is not technically feasible because there will be no
justiciable controversy or an independent cause of action
that can be the subject of such separate action if it were
not for the issuance of the TPO against the petitioner.
Thus, the controversy, subject of a separate action,
whether before the Court of Appeals or the RTC, would still
have to be the issuance of the TPO, which is the subject of
another case in the RTC.
Moreover, the challenge to the constitutionality of the law
must be raised at the earliest opportunity. In Dasmarias
Water District v. Monterey Foods Corporation, 11 we said:
A law is deemed valid unless declared null and
void by a competent court; more so when the
issue has not been duly pleaded in the trial court.
The question of constitutionality must be raised
at the earliest opportunity. . . . . The settled rule
is that courts will not anticipate a question of
constitutional law in advance of the necessity of
deciding it. (Citation omitted.)IEcaHS
This Court held that such opportunity is in the pleadings
before a competent court that can resolve it, such that "if it
is not raised in the pleadings, it cannot be considered at
the trial, and, if not considered at the trial, it cannot be
considered on appeal." 12 The decision upon the
constitutional question is necessary to determine whether
the TPO should be issued against petitioner. Such question
should have been raised at the earliest opportunity as an
affirmative defense in the Opposition filed with the RTC
handling the protection order proceedings, which was the
competent court to pass upon the constitutional issue. This
Court, in Drilon v. Lim, 13 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, BP 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. (Citation omitted, emphases ours.)
Furthermore, the filing of a separate action before the
Court of Appeals or the RTC for the declaration of
 Page 214 of 458

unconstitutionality of Republic Act No. 9262 would result to
multiplicity of suits. It is clear that the issues of
constitutionality and propriety of issuing a protection order
raised by petitioner are inextricably intertwined. Another
court, whether it is an appellate court or a trial court, cannot
resolve the constitutionality question in the separate action
without affecting the petition for the issuance of a TPO.
Bringing a separate action for the resolution of the issue of
constitutionality will result in an unresolved prejudicial
question to the validity of issuing a protection order. If the
proceedings for the protection order is not suspended, it
does create the danger of having inconsistent and
conflicting judgments between the two separate courts,
whether of the same or different levels in the judicial
hierarchy. These two judgments would eventually be the
subject of separate motions for reconsideration, separate
appeals, and separate petitions for review before this Court
the exact scenario the policy against multiplicity of suits
is avoiding. As we previously held, "the law and the courts
frown upon split jurisdiction and the resultant multiplicity of
actions." 14HIaSDc
It must be remembered that aside from the "earliest
opportunity" requirement, the court's power of judicial
review is subject to other limitations. Two of which are the
existence of an actual case or controversy and standing.
An aspect of the actual case or controversy requirement is
the requisite of "ripeness." This is generally treated in
terms of actual injury to the plaintiff. Thus, a question is
ripe for adjudication when the act being challenged had a
direct adverse effect on the individual challenging it. This
direct adverse effect on the individual will also be the basis
of his standing as it is necessary that the person
challenging the law must have a personal and substantial
interest in the case such that he has sustained, or will
sustain direct injury as a result of its enforcement. 15
In this case, the petitioner's challenge on the
constitutionality of Republic Act No. 9262 was on the basis
of the protection order issued against him. Verily, the
controversy became ripe only when he was in danger of or
was directly adversely affected by the statute mandating
the issuance of a protection order against him. He derives
his standing to challenge the statute from the direct injury
he would sustain if and when the law is enforced against
him. Therefore, it is clear that the proper forum to challenge
the constitutionality of the law was before the RTC handling
the protection order proceedings. The filing of a separate
action to question the constitutionality of the law amounts
to splitting a cause of action that runs counter to the policy
against multiplicity of suits.
Moreover, the filing of the Petition for Prohibition with the
Court of Appeals countenanced the evil that the law and
the rules sought to avoid. It caused the delay in the
proceedings and inconvenience, hardship and expense on
the part of the parties due to the multiplicity of suits
between them at different court levels. The RTC where the
petition for protection orders is filed should be trusted,
instead of being doubted, to be able to exercise its
jurisdiction to pass upon the issue of constitutionality within
the mandatory period set by the rules. aSITDC
In gist, there is no statutory, reglementary, or practical
basis to disallow the constitutional challenge to a law,
which is sought to be enforced, in a summary proceeding.
This is particularly true considering that the issue of a
statute's constitutionality is a question of law which may be
resolved without the reception of evidence or a full-blown
 Page 215 of 458

trial. Hence, said issue should have been raised at the CONCLUDE THAT R.A. NO. 9262 IS
earliest opportunity in the proceedings before the RTC, DISCRIMINATORY, UNJUST, AND
Bacolod City and for failure of the petitioner to do so, it VIOLATIVE OF THE EQUAL PROTECTION
cannot be raised in the separate Petition for Prohibition CLAUSE.
before the Court of Appeals, as correctly ruled by the latter, THE COURT OF APPEALS COMMITTED
nor in a separate action before the RTC. GRAVE MISTAKE IN NOT FINDING
THAT R.A. NO. 9262 RUNS COUNTER TO
On the Court Resolving the THE DUE PROCESS CLAUSE OF THE
Issue of Constitutionality of CONSTITUTION.
Republic Act No. 9262
THE COURT OF APPEALS ERRED IN NOT
Notwithstanding my position that the Court of Appeals FINDING THAT THE LAW DOES VIOLENCE
properly dismissed the Petition for Prohibition because of TO THE POLICY OF THE STATE TO
petitioner's failure to raise the issue of constitutionality PROTECT THE FAMILY AS A BASIC
of Republic Act No. 9262 at the earliest opportunity, I SOCIAL INSTITUTION.
concur that the Court, in the exercise of its sound
THE COURT OF APPEALS SERIOUSLY
discretion, 16 should still pass upon the said issue in the
ERRED IN NOT DECLARING R.A. NO.
present Petition. Notable is the fact that not only the 9262 AS INVALID AND
petitioner, but the private respondent as well, 17 pray that UNCONSTITUTIONAL BECAUSE IT
the Court resolve the constitutional issue considering its ALLOWS AN UNDUE DELEGATION OF
novelty and paramount importance. Indeed, when public JUDICIAL POWER TO THE BARANGAY
interest requires the resolution of the constitutional issue OFFICIALS. 19
raised, and in keeping with this Court's duty of determining
On the Constitutional Right to Equal
whether other agencies or even co-equal branches of
Protection of the Laws
government have remained within the limits of the
Constitution and have not abused the discretion given Petitioner challenges the constitutionality of Republic Act
them, the Court may brush aside technicalities of No. 9262 for making a gender-based classification, thus,
procedure and resolve the constitutional issue. 18 providing remedies only to wives/women and not to
husbands/men. He claims that even the title of the law, "An
Aside from the technical ground raised by petitioner in his Act Defining Violence Against Women and Their Children"
first assignment of error, petitioner questions the is already pejorative and sex-discriminatory because it
constitutionality of Republic Act No. 9262 on the following means violence by men against women. 20 The law also
grounds: EcIDaA
does not include violence committed by women against
THE COURT OF APPEALS COMMITTED children and other women. He adds that gender alone is
SERIOUS ERROR IN FAILING TO not enough basis to deprive the husband/father of the
 Page 216 of 458
remedies under it because its avowed purpose is to curb
and punish spousal violence. The said remedies are
discriminatory against the husband/male gender. There
being no reasonable difference between an abused
husband and an abused wife, the equal protection
guarantee is violated.
Pertinently, Section 1, Article III of the 1987
Constitution states:
No person shall be deprived of life, liberty, or
property without due process of law, nor shall
any person be denied the equal protection of
the laws. (Emphasis supplied.)
The above provision was lifted verbatim from the 1935 and
1973 Constitutions, which in turn was a slightly modified
version of the equal protection clause in Section 1,
Amendment 14 21 of the United States Constitution. TSEAaD
In 1937, the Court established in People v. Vera 22 the four-
fold test to measure the reasonableness of a classification
under the equal protection clause, to wit:
This basic individual right sheltered by the
Constitution is a restraint on all the three grand
departments of our government and on the
subordinate instrumentalities and subdivisions
thereof, and on many constitutional powers, like
the police power, taxation and eminent domain.
The equal protection of the laws, sententiously
observes the Supreme Court of the United
States, "is a pledge of the protection of equal
laws." Of course, what may be regarded as a
denial of the equal protection of the laws is a
question not always easily determined. No rule
that will cover every case can be formulated.
Class legislation discriminating against some
and favoring others is prohibited. But
classification on a reasonable basis, and not
made arbitrarily or capriciously, is permitted.
The classification, however, to be reasonable
must be based on substantial distinctions
which make real differences; it must be
germane to the purposes of the law; it must
not be limited to existing conditions only,
and must apply equally to each member of
the class. (Citations omitted, emphasis
supplied.) IECcAT
In our jurisdiction, the standard and analysis of equal
protection challenges in the main have followed the
foregoing "rational basis" test, coupled with a deferential
attitude to legislative classifications and a reluctance to
invalidate a law unless there is a showing of a clear and
unequivocal breach of the Constitution. 23
However, over time, three levels of tests were developed,
which are to be applied in equal protection cases,
depending on the subject matter 24 involved:
1. Rational Basis Scrutiny the traditional
test, which requires "only that government
must not impose differences in treatment
except upon some reasonable
differentiation fairly related to the object of
regulation." Simply put, it merely demands
that the classification in the
statute reasonably relates to the
legislative purpose. 25
2. Intermediate Scrutiny requires that the
classification (means) must serve
an important governmental
objective (ends) and is substantially
related to the achievement of such
 Page 217 of 458
objective. A classification based on sex is
the best-established example of an
intermediate level of review. 26
3. Strict Scrutiny requires that the
classification serve a compelling state
interest and is necessary to achieve
such interest. This level is used when
suspect classifications or fundamental
rights are involved. 27
Recent Philippine jurisprudence has recognized the need
to apply different standards of scrutiny in testing the
constitutionality of classifications. In British American
Tobacco v. Camacho, 28 this Court held that since the case
therein neither involved a suspect classification nor
impinged on a fundamental right, then "the rational basis
test was properly applied to gauge the constitutionality of
the assailed law in the face of an equal protection
challenge." 29 We added:
It has been held that "in the areas of social and
economic policy, a statutory classification that
neither proceeds along suspect lines nor
infringes constitutional rights must be upheld
against equal protection challenge if there is
any reasonably conceivable state of facts that
could provide a rational basis for the
classification." Under the rational basis test, it
is sufficient that the legislative classification is
rationally related to achieving some legitimate
State interest. . . . . 30 (Citations omitted.)
Echoing the same principle, this Court, speaking through
then Chief Justice Puno in Central Bank (now Bangko
Sentral ng Pilipinas) Employees Association, Inc. v.
Bangko Sentral ng Pilipinas, 31 stated: IcESDA
Congress retains its wide discretion in providing
for a valid classification, and its policies should
be accorded recognition and respect by the
courts of justice except when they run afoul
of the Constitution. The deference stops where
the classification violates a fundamental
right, or prejudices persons accorded special
protection by the Constitution. When these
violations arise, this Court must discharge its
primary role as the vanguard of constitutional
guaranties, and require a stricter and more
exacting adherence to constitutional
limitations. Rational basis should not suffice.
xxx xxx xxx
Under most circumstances, the Court will
exercise judicial restraint in deciding questions of
constitutionality, recognizing the broad discretion
given to Congress in exercising its legislative
power. Judicial scrutiny would be based on the
"rational basis" test, and the legislative discretion
would be given deferential treatment. DEcTIS
But if the challenge to the statute is premised
on the denial of a fundamental right, or the
perpetuation of prejudice against persons
favored by the Constitution with special
protection, judicial scrutiny ought to be more
strict. A weak and watered down view would call
for the abdication of this Court's solemn duty to
strike down any law repugnant to the
Constitution and the rights it enshrines. This is
true whether the actor committing the
unconstitutional act is a private person or the
government itself or one of its instrumentalities.
Oppressive acts will be struck down regardless
 Page 218 of 458
of the character or nature of the actor. (Citations
omitted.)
This was reiterated in League of Cities of the Philippines v.
Commission on Elections, 32 and Ang Ladlad LGBT Party
v. Commission on Elections, 33 wherein the Court, although
applying the rational basis test, noted that there are tests,
which are more appropriate in other cases, especially
those involving suspect classes and fundamental rights. In
fact, Chief Justice Puno expounded on this in his Separate
Concurring Opinion in the Ang Ladlad case. He said that
although the assailed resolutions therein were correctly
struck down, since the classification was based on
gender or sexual orientation, a quasi-suspect
classification, a heightened level of review should have
been applied and not just the rational basis test, which
is the most liberal basis of judicial scrutiny. Citing
American authority, Chief Justice Puno continued to
elucidate on the three levels of scrutiny and the classes
falling within each level, to wit:
cCESaH
If a legislative classification disadvantages a
"suspect class" or impinges upon the exercise of
a "fundamental right," then the courts will
employ strict scrutiny and the statute must fall
unless the government can demonstrate that the
classification has been precisely tailored to serve
a compelling governmental interest. Over the
years, the United States Supreme Court has
determined that suspect classes for equal
protection purposes include classifications based
on race, religion, alienage, national origin, and
ancestry. The underlying rationale of this theory
is that where legislation affects discrete and
insular minorities, the presumption of
constitutionality fades because traditional
political processes may have broken down. In
such a case, the State bears a heavy burden of
justification, and the government action will be
closely scrutinized in light of its asserted
purpose.
On the other hand, if the classification, while
not facially invidious, nonetheless gives rise
to recurring constitutional difficulties, or if a
classification disadvantages a "quasi-
suspect class," it will be treated under
intermediate or heightened review. To survive
intermediate scrutiny, the law must not only
further an important governmental interest and
be substantially related to that interest, but the
justification for the classification must be genuine
and must not depend on broad generalizations.
Noteworthy, and of special interest to us in this
case, quasi-suspect classes include
classifications based on gender or
illegitimacy.
If neither strict nor intermediate scrutiny is
appropriate, then the statute will be tested for
mere rationality. This is a relatively relaxed
standard reflecting the Court's awareness that
the drawing of lines which creates distinctions is
peculiarly a legislative task and an unavoidable
one. The presumption is in favor of the
classification, of the reasonableness and
fairness of state action, and of legitimate
grounds of distinction, if any such grounds exist,
on which the State acted. 34 (Citations omitted,
emphases supplied.) AHcaDC
This case presents us with the most opportune time to
adopt the appropriate scrutiny in deciding cases where the
issue of discrimination based on sex or gender is raised.
 Page 219 of 458
The assailed Section 3, among other provisions,
of Republic Act No. 9262 provides:
SEC. 3. Definition of Terms. As used in this
Act:
(a) "Violence against women and their children"
refers to any act or a series of acts committed by
any person against a woman who is his wife,
former wife, oragainst a woman with whom the
person has or had a sexual or dating
relationship, or with whom he has a common
child, or against her child whether legitimate or
illegitimate, within or without the family abode,
which result in or is likely to result in physical,
sexual, psychological harm or suffering, or
economic abuse including threats of such acts,
battery, assault, coercion, harassment or
arbitrary deprivation of liberty. . . . . (Emphases
supplied.)
The aforesaid law also institutionalized remedies such as
the issuance of protection orders in favor of women and
children who are victims of violence and prescribed public
penalties for violation of the said law.
Petitioner questions the constitutionality of Republic Act
No. 9262 which denies the same protection orders to
husbands who are victims of wife-abuse. It should be
stressed that under aforecited section of said law violence
may not only be physical or sexual but also psychological
and economic in nature.
The Honorable Justice Marvic Mario Victor F. Leonen in his
concurring opinion notes that "Husband abuse maybe an
under reported form of family violence." While concurring
with the majority opinion, he opines as follows: HIEASa
Nevertheless, in a future case more deserving of
our attention, we should be open to realities
which may challenge the dominant conception
that violence in intimate relationships only
happens to women and children. This may be
predominantly true, but even those in marginal
cases deserve fundamental constitutional and
statutory protection. We should be careful that in
correcting historical and cultural injustices, we
may typecast all women as victims, stereotype
all men as tormentors or make invisible the
possibility that in some intimate relationships,
men may also want to seek succor against acts
defined in Section 5 of Republic Act No. 9262 in
an expeditious manner.
Since statutory remedies accorded to women are not made
available to men, when the reality is that there are men,
regardless of their number, who are also suffering from
domestic violence, the rational basis test may be too wide
and liberal to justify the statutory classification which in
effect allows different treatment of men who are similarly
situated. In the context of the constitutional policy to
"ensure the fundamental equality before the law of women
and men" 35 the level of scrutiny applicable, to test whether
or not the classification in Republic Act No. 9262 violates
the equal protection clause, is the middle-tier scrutiny or
the intermediate standard of judicial review.
To survive intermediate review, the classification in the
challenged law must (1) serve important governmental
objectives, and (2) be substantially related to the
achievement of those objectives. 36
Important and Essential
Governmental Objectives: Safeguard
 Page 220 of 458
Human Rights, Ensure Gender
Equality and Empower Women
Republic Act No. 9262 is a legislation that furthers
important, in fact essential, governmental objectives as
enunciated in the law's Declaration of Policy, as quoted
below:
SEC. 2. Declaration of Policy. It is hereby
declared that the State values the dignity of
women and children and guarantees full respect
for human rights. The State also recognizes the
need to protect the family and its members
particularly women and children, from violence
and threats to their personal safety and security.
Towards this end, the State shall exert efforts to
address violence committed against women and
children in keeping with the fundamental
freedoms guaranteed underthe Constitution and
the Provisions of the Universal Declaration of
Human Rights, the Convention on the
Elimination of all forms of discrimination Against
Women, Convention on the Rights of the Child
and other international human rights instruments
of which the Philippines is a party.
This policy is in consonance with the constitutional
provisions, 37 which state:DcICEa
SEC. 11. The State values the dignity of every
human person and guarantees full respect for
human rights.
SEC. 12. The State recognizes the sanctity of
family life and shall protect and strengthen the
family as a basic autonomous social institution. .
...
By constitutional mandate, the Philippines is committed to
ensure that human rights and fundamental freedoms are
fully enjoyed by everyone. It was one of the countries that
voted in favor of the Universal Declaration of Human Rights
(UDHR), which was a mere two years after it gained
independence from the United States of America. In
addition, the Philippines is a signatory to many United
Nations human rights treaties such as the Convention on
the Elimination of All Forms of Racial Discrimination, the
International Covenant on Economic, Social and Cultural
Rights, the International Covenant on Civil and Political
Rights, the Convention Against Torture, and the
Convention on the Rights of the Child, among others.
As a signatory to the UDHR, the Philippines pledged itself
to achieve the promotion of universal respect for and
observance of human rights and fundamental
freedoms,38 keeping in mind the standards under the
Declaration. Among the standards under the UDHR are the
following:
Article 1. All human beings are born free and
equal in dignity and rights. They are endowed
with reason and conscience and should act
towards one another in a spirit of brotherhood.
xxx xxx xxx
Article 7. All are equal before the law and are
entitled without any discrimination to equal
protection of the law. All are entitled to
equal protection against any discrimination in
violation of this Declaration and against any
incitement to such discrimination.
Article 8. Everyone has the right to an effective
remedy by the competent national tribunals for
 Page 221 of 458
acts violating the fundamental rights granted
him by the constitution or by law. (Emphasis
ours.)
The Declaration of Policy in Republic Act No.
9262 enunciates the purpose of the said law, which is to
fulfill the government's obligation to safeguard the dignity
and human rights of women and children by providing
effective remedies against domestic violence or physical,
psychological, and other forms of abuse perpetuated by the
husband, partner, or father of the victim. The said law is
also viewed within the context of the constitutional mandate
to ensure gender equality, which is quoted as follows:
Section 14. The State recognizes the role of
women in nation-building, and shall ensure the
fundamental equality before the law of women
and men. 39 aCcHEI
It has been acknowledged that "gender-based violence is a
form of discrimination that seriously inhibits women's ability
to enjoy rights and freedoms on a basis of equality with
men." 40 Republic Act No. 9262 can be viewed therefore as
the Philippines' compliance with the Convention on the
Elimination of All Forms of Discrimination against Women
(CEDAW), which is committed to condemn discrimination
against women and directs its members to undertake,
without delay, all appropriate means to eliminate
discrimination against women in all forms both in law and in
practice. 41 Known as the International Bill of Rights of
Women, 42 the CEDAW is the central and most
comprehensive document for the advancement of the
welfare of women. 43 It brings the women into the focus of
human rights concerns, and its spirit is rooted in the goals
of the UN: to reaffirm faith in fundamental human rights, in
the dignity and worth of the human person, in the equal
rights of men and women. 44 The CEDAW, in its preamble,
explicitly acknowledges the existence of extensive
discrimination against women, and emphasized that
such is a violation of the principles of equality of rights
and respect for human dignity.
In addition, as a state party to the CEDAW, the Philippines
is under legal obligation to ensure their development and
advancement for the improvement of their position from
one of de jure as well as de facto equality with men. 45 The
CEDAW, going beyond the concept of discrimination used
in many legal standards and norms, focuses on
discrimination against women, with the emphasis that
women have suffered and are continuing to suffer from
various forms of discrimination on account of their
biological sex. 46
The Philippines' accession to various international
instruments requires it to promote and ensure the
observance of human rights and "continually affirm its
commitment to ensure that it pursues gender equality in all
aspects of the development process to eventually make
real, a gender-responsive society." 47 Thus, the
governmental objectives of protecting human rights and
fundamental freedoms, which includes promoting
gender equality and empowering women, as mandated
not only by our Constitution,but also by commitments we
have made in the international sphere, are
undeniably important and essential. DACTSH
The Gender-Based Classification in
Republic Act No. 9262 is
Substantially Related to the
Achievement of Governmental
Objectives
 Page 222 of 458
As one of the country's pervasive social problems, violence
against women is deemed to be closely linked with the
unequal power relationship between women and men and
is otherwise known as "gender-based violence." 48 Violent
acts towards women has been the subject of an
examination on a historic world-wide perspective. 49The
exhaustive study of a foreign history professor noted that
"[f]rom the earliest civilizations on, the subjugation of
women, in the form of violence, were facts of life,"50 as
three great bodies of thought, namely: Judeo-Christian
religious ideas; Greek philosophy; and the Common Law
Legal Code, which have influenced western society's views
and treatment of women, all "assumed patriarchy as
natural; that is, male domination stemming from the view of
male superiority." 51 It cited 18th century legal expert
William Blackstone, who explained that the common law
doctrine of coverture reflected the theological assumption
that husband and wife were 'one body' before God; thus
"they were 'one person' under the law, and that one person
was the husband," 52 a concept that evidently found its way
in some of our Civil Code provisions prior to the enactment
of the Family Code.
Society and tradition dictate that the culture of patriarchy
continue. Men are expected to take on the dominant roles
both in the community and in the family. This perception
naturally leads to men gaining more power over women
power, which must necessarily be controlled and
maintained. Violence against women is one of the ways
men control women to retain such power. 53
The enactment of Republic Act No. 9262 was in response
to the undeniable numerous cases involving violence
committed against women in the Philippines. In 2012, the
Philippine National Police (PNP) reported 54 that 65% or
11,531 out of 15,969 cases involving violence against
women were filed under Republic Act No. 9262. From 2004
to 2012, violations of Republic Act No. 9262 ranked first
among the different categories of violence committed
against women. The number of reported cases showed an
increasing trend from 2004 to 2012, although the numbers
might not exactly represent the real incidence of violence
against women in the country, as the data is based only on
what was reported to the PNP. Moreover, the increasing
trend may have been caused by the continuous information
campaign on the law and its strict
implementation. 55 Nonetheless, statistics show that cases
involving violence against women are prevalent, while
there is a dearth of reported cases involving violence
committed by women against men, that will require
legislature intervention or solicitous treatment of men. HaSEcA
Preventing violence against women and children through
their availment of special legal remedies, serves the
governmental objectives of protecting the dignity and
human rights of every person, preserving the sanctity of
family life, and promoting gender equality and empowering
women. Although there exists other laws on violence
against women 56 in the Philippines, Republic Act No.
9262 deals with the problem of violence within the family
and intimate relationships, which deserves special attention
because it occurs in situations or places where women and
children should feel most safe and secure but are actually
not. The law provides the widest range of reliefs for women
and children who are victims of violence, which are often
reported to have been committed not by strangers, but by a
father or a husband or a person with whom the victim has
or had a sexual or dating relationship. Aside from filing a
criminal case in court, the law provides potent legal
 Page 223 of 458
remedies to the victims that theretofore were not available.
The law recognizes, with valid factual support based on
statistics that women and children are the most vulnerable
victims of violence, and therefore need legal intervention.
On the other hand, there is a dearth of empirical basis to
anchor a conclusion that men need legal protection from
violence perpetuated by women.
The law takes into account the pervasive vulnerability of
women and children, and the seriousness and urgency of
the situation, which, in the language of the law result in or
is likely to result in physical, sexual, psychological harm or
suffering, or economic abuse including threats of such acts,
battery, assault, coercion, harassment or arbitrary
deprivation of liberty. 57 Hence, the law permits the
issuance of protection orders and the granting of certain
reliefs to women victims, even without a hearing. The law
has granted authority for barangay officials to issue a
protection order against the offender, based on the victim's
application. The RTC may likewise grant an application for
a temporary protection order (TPO) and provide other
reliefs, also on the mere basis of the application. Despite
the ex parte issuance of these protection orders, the
temporary nature of these remedies allow them to be
availed of by the victim without violating the offender's right
to due process as it is only when a full-blown hearing has
been done that a permanent protection order may be
issued. Thus, these remedies are suitable, reasonable, and
justified. More importantly, they serve the objectives of the
law by providing the victims necessary immediate
protection from the violence they perceive as threats to
their personal safety and security. This translates to the
fulfillment of other governmental objectives as well. By
assuring the victims instant relief from their situation, they
are consequently empowered and restored to a place of
dignity and equality. Such is embodied in the purpose to be
served by a protection order, to wit: CIaHDc
SEC. 8. Protection Orders. A protection order
is an order issued under this act for the purpose
of preventing further acts of violence against a
woman or her child specified in Section 5 of this
Act and granting other necessary relief. The
relief granted under a protection order serve
the purpose of safeguarding the victim from
further harm, minimizing any disruption in
the victim's daily life, and facilitating the
opportunity and ability of the victim to
independently regain control over her life. . . .
. (Emphasis supplied.)
In furtherance of the governmental objectives, especially
that of protecting human rights, violence against women
and children under this Act has been classified as a public
offense, 58 making its prosecution independent of the
victim's initial participation.
Verily, the classification made in Republic Act No.
9262 is substantially related to the important
governmental objectives of valuing every person's
dignity, respecting human rights, safeguarding family
life, protecting children, promoting gender equality,
and empowering women.
The persistent and existing biological, social, and cultural
differences between women and men prescribe that they
be treated differently under particular conditions in order to
achieve substantive equality for women. Thus, the
disadvantaged position of a woman as compared to a man
requires the special protection of the law, as gleaned from
the following recommendations of the CEDAW Committee:
 Page 224 of 458
8. [T]he Convention requires that women be
given an equal start and that they be empowered
by an enabling environment to achieve equality
of results. It is not enough to guarantee women
treatment that is identical to that of men. Rather,
biological as well as socially and culturally
constructed differences between women and
men must be taken into account. Under
certain circumstances, non-identical
treatment of women and men will be required
in order to address such differences. Pursuit
of the goal of substantive equality also calls for
an effective strategy aimed at overcoming
underrepresentation of women and a
redistribution of resources and power between
men and women. TSHEIc
9. Equality of results is the logical corollary
of de facto or substantive equality. These
results may be quantitative and/or qualitative in
nature; that is, women enjoying their rights in
various fields in fairly equal numbers with men,
enjoying the same income levels, equality in
decision-making and political influence,
andwomen enjoying freedom from
violence. 59 (Emphases supplied.)
The government's commitment to ensure that the status of
a woman in all spheres of her life are parallel to that of a
man, requires the adoption and implementation of
ameliorative measures, such as Republic Act No. 9262.
Unless the woman is guaranteed that the violence that she
endures in her private affairs will not be ignored by the
government, which is committed to uplift her to her rightful
place as a human being, then she can neither achieve
substantive equality nor be empowered.
The equal protection clause in our Constitution does not
guarantee an absolute prohibition against classification.
The non-identical treatment of women and men
underRepublic Act No. 9262 is justified to put them on
equal footing and to give substance to the policy and aim of
the state to ensure the equality of women and men in light
of the biological, historical, social, and culturally endowed
differences between men and women.
Republic Act No. 9262, by affording special and exclusive
protection to women and children, who are vulnerable
victims of domestic violence, undoubtedly serves the
important governmental objectives of protecting human
rights, insuring gender equality, and empowering women.
The gender-based classification and the special remedies
prescribed by said law in favor of women and children are
substantially related, in fact essentially necessary, to
achieve such objectives. Hence, said Act survives
the intermediate review or middle-tier judicial scrutiny.
The gender-based classification therein is therefore not
violative of the equal protection clause embodied in
the 1987 Constitution. AcSEHT
The Issuance of the TPO did not
Violate Petitioner's Right to Due
Process
A protection order is issued under Republic Act No.
9262 for the purpose of preventing further acts of violence
against a woman or her child. 60 The circumstances
surrounding the availment thereof are often attended by
urgency; thus, women and child victims must have
immediate and uncomplicated access to the same.
Hence,Republic Act No. 9262 provides for the issuance of
a TPO: TSIDEa
 Page 225 of 458
SEC. 15. Temporary Protection Orders.
Temporary Protection Orders (TPOs) refers to
the protection order issued by the court on the
date of filing of the application after ex
parte determination that such order should be
issued. A court may grant in a TPO any, some or
all of the reliefs mentioned in this Act and shall
be effective for thirty (30) days. The court shall
schedule a hearing on the issuance of a PPO
prior to or on the date of the expiration of the
TPO. The court shall order the immediate
personal service of the TPO on the respondent
by the court sheriff who may obtain the
assistance of law enforcement agents for the
service. The TPO shall include notice of the date
of the hearing on the merits of the issuance of a
PPO.
The ex parte issuance of the TPO does not make it
unconstitutional. Procedural due process refers to the
method or manner by which the law is enforced. It consists
of the two basic rights of notice and hearing, as well as the
guarantee of being heard by an impartial and competent
tribunal. 61 However, it is a constitutional commonplace that
the ordinary requirements of procedural due process yield
to the necessities of protecting vital public interests like
those involved herein. Republic Act No. 9262 and its
implementing regulations were enacted and promulgated in
the exercise of that pervasive, sovereign power of the State
to protect the safety, health, and general welfare and
comfort of the public (in this case, a particular sector
thereof), as well as the protection of human life, commonly
designated as the police power. 62
In Secretary of Justice v. Lantion, 63 the Court enumerated
three instances when notice and/or hearing may be
dispensed with in administrative proceedings:
These twin rights may, however, be considered
dispensable in certain instances, such as:
1. In proceedings where there is an urgent need
for immediate action, like the summary
abatement of a nuisance per se (Article
704, Civil Code), the preventive
suspension of a public servant facing
administrative charges (Section 63, Local
Government Code,B. P. Blg. 337), the
padlocking of filthy restaurants or theaters
showing obscene movies or like
establishments which are immediate
threats to public health and decency, and
the cancellation of a passport of a person
sought for criminal prosecution; TaDAHE
2. Where there is tentativeness of administrative
action, that is, where the respondent is
not precluded from enjoying the right to
notice and hearing at a later time without
prejudice to the person affected, such as
the summary distraint and levy of the
property of a delinquent taxpayer, and the
replacement of a temporary appointee;
and
3. Where the twin rights have previously been
offered but the right to exercise them had
not been claimed.
The principles behind the aforementioned exceptions may
also apply in the case of the ex parte issuance of the TPO,
although it is a judicial proceeding. As mentioned
 Page 226 of 458
previously, the urgent need for a TPO is inherent in its
nature and purpose, which is to immediately provide
protection to the woman and/or child victims against further
violent acts. Any delay in the issuance of a protective order
may possibly result in loss of life and limb of the victim. The
issuing judge does not arbitrarily issue the TPO as he can
only do so if there is reasonable ground to believe that an
imminent danger of violence against women and their
children exists or is about to recur based on the verified
allegations in the petition of the victim/s. 64 Since the TPO
is effective for only thirty (30) days, 65 any inconvenience,
deprivation, or prejudice the person enjoined such as
the petitioner herein may suffer, is generally limited and
temporary. Petitioner is also not completely precluded from
enjoying the right to notice and hearing at a later time.
Following the issuance of the TPO, the law and rules
require that petitioner be personally served with notice of
the preliminary conference and hearing on private
respondent's petition for a Permanent Protection Order
(PPO) 66 and that petitioner submit his opposition to private
respondent's petition for protections orders. 67 In fact, it
was petitioner's choice not to file an opposition, averring
that it would only be an "exercise in futility." Thus, the twin
rights of notice and hearing were subsequently afforded to
petitioner but he chose not to take advantage of them.
Petitioner cannot now claim that the ex parte issuance of
the TPO was in violation of his right to due process. aICHEc
There is No Undue Delegation of
Judicial Power to Barangay Officials
A Barangay Protection Order (BPO) refers to the protection
order issued by the Punos to issue a BPO is conferred
under Section 14 of Republic Act No. 9262:
SEC. 14. Barangay Protection Orders (BPOs);
Who May Issue and How. Barangay
Protection Orders (BPOs) refer to the protection
order issued by the Punong Barangay ordering
the perpetrator to desist from committing acts
under Section 5 (a) and (b) of this Act. A Punong
Barangay who receives applications for a BPO
shall issue the protection order to the applicant
on the date of filing after ex parte determination
of the basis of the application. If the Punong
Barangay is unavailable to act on the application
for a BPO, the application shall be acted upon by
any available Barangay Kagawad. If the BPO is
issued by a Barangay Kagawad the order must
be accompanied by an attestation by
the Barangay Kagawad that the Punong
Barangay was unavailable at the time for the
issuance of the BPO. BPOs shall be effective for
fifteen (15) days. Immediately after the issuance
of an ex parte BPO, the Punong Barangay or
Barangay Kagawad shall personally serve a
copy of the same on the respondent, or direct
any barangay official to effect is personal
service.
The parties may be accompanied by a non-
lawyer advocate in any proceeding before the
Punong Barangay. DcTaEH
Once more, the urgency of the purpose for which
protection orders under Republic Act No. 9262 are issued
justifies the grant of authority to barangay officials to issue
BPOs. Barangay officials live and interact closely with their
constituents and are presumably easier to approach and
more readily available than any other government official.
Their issuance of the BPO is but part of their official
executive function of enforcing all laws and ordinances
 Page 227 of 458
within their barangay 69 and maintaining public order in
the barangay. 70 It is true that the barangay officials' ing
Barangay, or in his absence the Barangay
Kagawad, ordering the perpetrator to desist from
committing acts of violence against the family or household
members particularly women and their children. 68 The
authority of barangay officialssuance of a BPO
under Republic Act No. 9262 necessarily involves the
determination of some questions of fact, but this function,
whether judicial or quasi-judicial, are merely incidental to
the exercise of the power granted by law. 71 The Court has
clarified that:
"The mere fact that an officer is required by law
to inquire the existence of certain facts and to
apply the law thereto in order to determine what
his official conduct shall be and the fact that
these acts may affect private rights do not
constitute an exercise of judicial powers.
Accordingly, a statute may give to non-judicial
officers the power to declare the existence of
facts which call into operation its provisions, and
similarly may grant to commissioners and other
subordinate officers power to ascertain and
determine appropriate facts as a basis for
procedure in the enforcement of particular laws."
(11 Am. Jur., Const.Law, p. 950, sec. 235) 72
Furthermore, while judicial power rests exclusively in the
judiciary, it may be conceded that the legislature may
confer on administrative boards or bodies, or even
particular government officials, quasi-judicial power
involving the exercise of judgment and discretion, as
incident to the performance of administrative functions. But
in so doing, the legislature must state its intention in
express terms that would leave no doubt, as even such
quasi-judicial prerogatives must be limited, if they are to be
valid, only to those incidental to or in connection with the
performance of administrative duties, which do not amount
to conferment of jurisdiction over a matter exclusively
vested in the courts. 73 In the case of a BPO, it is a mere
provisional remedy under Republic Act No. 9262, meant to
address the pressing need of the victims for instant
protection. However, it does not take the place of
appropriate judicial proceedings and remedies that provide
a more effective and comprehensive protection to the
victim. In fact, under the Implementing Rules of Republic
Act No. 9262, the issuance of a BPO or the pendency of an
application for a BPO shall not preclude the victim from
applying for, or the court from granting, a TPO or PPO.
Where a TPO has already been granted by any court,
the barangay official may no longer issue a BPO. 74 The
same Implementing Rules also require that within twenty-
four (24) hours after the issuance of a BPO,
the barangay official shall assist the victim in filing an
application for a TPO or PPO with the nearest court in the
victim's place of residence. If there is no Family Court or
RTC, the application may be filed in the Municipal Trial
Court, the Municipal Circuit Trial Court or the Metropolitan
Trial Court. 75
All things considered, there is no ground to
declare Republic Act No. 9262 constitutionally infirm. ICASEH
BRION, J., concurring:
I concur with the ponencia's conclusion that Republic
Act (R.A.) No. 9262 (An Act Defining Violence Against
Women and Their Children, Providing for Protective
Measures for Victims, Prescribing Penalties Therefore and
for Other Purposes) is constitutional and does not
 Page 228 of 458
violate the equal protection clause. As traditionally
viewed, the constitutional provision of equal protection
simply requires that similarly situated persons be treated in
the same way. It does not connote identity of rights among
individuals, nor does it require that every person is treated
identically in all circumstances. It acts as a safeguard to
ensure that State-drawn distinctions among persons are
based on reasonable classifications and made pursuant to
a proper governmental purpose. In short, statutory
classifications are not unconstitutional when shown to be
reasonable and made pursuant to a legitimate government
objective.
In my view, Congress has presented a reasonable
classification that focuses on women and children based
on protective provisions that the Constitution itself
provides. Section 11, Article II of the Constitution declares
it a state policy to value the dignity of every human person
and guarantees full respect for human rights. Further,
under Section 14, Article II of the Constitution, the State
recognizes the role of women in nation-building and
ensures Fundamental equality before the law of women
and men. These policies are given purposeful meaning
under Article XV of the Constitution on family, which states:
Section 1. The State recognizes the Filipino
family as the foundation of the nation.
Accordingly, it shall strengthen its solidarity and
actively promote its total development.
Section 2. Marriage, as an inviolable social
institution, is the foundation of the family and
shall be protected by the State.
Section 3. The State shall defend STcAIa
(1) The right of spouses to found a family
in accordance with their religious
convictions and the demands of
responsible parenthood;
(2) The right of children to assistance,
including proper care and nutrition, and
special protection from all forms of
neglect, abuse, cruelty, exploitation and
other conditions prejudicial to their
development[.]
From the terms of the law, I find it plain that Congress
enacted R.A. No. 9262 as a measure intended to
strengthen the family. Congress found that domestic and
other forms of violence against women and children
contribute to the failure to unify and strengthen family ties,
thereby impeding the State's mandate to actively promote
the family's total development. Congress also found, as a
reality, that women and children are more susceptible to
domestic and other forms of violence due to, among
others, the pervasive bias and prejudice against women
and the stereotyping of roles within the family environment
that traditionally exist in Philippine society. On this basis,
Congress found it necessary to recognize the substantial
distinction within the family between men, on the one hand,
and women and children, on the other hand. This
recognition, incidentally, is not the first to be made in
the laws as our law on persons and family under
the Civil Code also recognize, in various ways, the
distinctions between men and women in the context of
the family. 1
To be sure, Congress has not been alone in addressing
violence committed against women and children as this
move is "in keeping with the fundamental freedoms
 Page 229 of 458
guaranteed under the Constitution and the Provisions of
the Universal Declaration of Human Rights, the convention
on the Elimination of all forms of discrimination Against
Women, Convention on the Rights of the Child and other
international human rights instruments of which the
Philippines is a party." 2 The only question perhaps is
whether the considerations made in these international
instruments have reason or basis for recognition and active
application in the Philippines.AaCTcI
I believe that the policy consideration Congress made in
this regard is not without basis in history and in
contemporary Philippine society so that Congress was
acting well within its prerogative when it enacted R.A. No.
9262 "to protect the family and its members particularly
women and children, from violence and threats to their
personal safety and security." 3
I consider, too, the statutory classification under R.A. No.
9262 to be valid, and that the lowest level of scrutiny of
review should be applied in determining if the law has
established a valid classification germane to the
Constitution's objective to protect the family by protecting
its women and children members. In my view, no need
exists to further test the law's validity from the perspective
of an expanded equal protection based on social
justice. The Constitution itself has made special mention
of women and their role in society (Article II) and the
assistance and protection that must be given to children
irrespective of sex. It appears highly inconsistent to me
under this situation if the Court would impose a strict level
of scrutiny on government the primary implementor of
constitutional policies and lay on it the burden of
establishing the validity of an Act directly addressing
violence against women and children.
My serious reservation on the use of an expanded equal
protection clause and in applying a strict scrutiny standard
is, among others, based on lack of necessity; we do not
need these measures when we can fully examine R.A. No.
9262's constitutionality using the reasonableness test. The
family is a unit, in fact a very basic one, and it cannot
operate on an uneven standard where measures beyond
what is necessary are extended to women and children as
against the man the head of the family and the family
provider. The use of an expanded equal protection clause
only stresses the concept of an uneven equality that cannot
long stand in a unit living at close quarters in a situation of
mutual dependency on one another. The reasonableness
test, on the other hand, has been consistently applied to
allow the courts to uphold State action as long as the
action is found to be germane to the purpose of the law, in
this case to support the unity and development of the
family. If we are to deviate from or to modify this
established standard of scrutiny, we must do so
carefully and for strong justifiable reasons.
If we are to use a strict level of scrutiny of government
action, we must be aware of the risks that this system of
review may open. A very real risk is to open the
possibility that our social legislations will always be
subject to heightened scrutiny. Are we sure of what this
approach entails for the government and for our society in
the long run? How will this approach affect the social
legislation that our society, particularly the most vulnerable
members, need? What other effects will a system of review
that regards governmental action as illegal unless the
government can actively justify the classifications it has
made in the course of pursuing its actions have? These
are the questions that, in the long run, we have to
 Page 230 of 458
contend with, and I hate to provide an answer through
a case that is not, on its face and even in deeper
reality, representative of the questions we are asking
or need to ask. EScIAa
The cases of Central Bank Employees Assoc., Inc. v.
Bangko Sentral ng Pilipinas 4 and Serrano v. Gallant
Maritime Services, Inc.5 demonstrate the Court's
application of a heightened sense of scrutiny on social
legislations. In Central Bank and Serrano, we held that
classifications in the law that result in prejudice to persons
accorded special protection by the Constitution require a
stricter judicial scrutiny. 6 In both cases, the question may
well be asked: was there an absolute necessity for a strict
scrutiny approach when, as in Serrano, the same result
emerges when using the lowest level of scrutiny? In short, I
ask if a strict scrutiny is needed under the circumstances of
the present case as the Concurring Opinion of J. Roberto
Abad suggests.
Not to be forgotten or glossed over in answering this
question is the need to consider what a strict scrutiny
requires, as well as the consequences of an expanded
concept of equal protection clause and the accompanying
use of a strict scrutiny standard. Among others, this
approach affects the application of constitutional principles
that we vigilantly adhere to in this jurisdiction.
I outline below what a strict scrutiny approach entails.
First, the use of strict scrutiny only applies when the
challenged law or clause results in a "suspect
classification";
Second, the use of a strict scrutiny standard of review
creates a reverse onus: the ordinary presumption of
constitutionality is reversed and the government carries the
burden of proving that the challenged law or clause is
constitutional;
And third, the reverse onus in a strict scrutiny standard of
review directly strikes, in the most glaring manner, at the
regularity of the performance of functions of a co-equal
branch of government. ESHcTD
When the court uses a strict standard for review to
evaluate the constitutionality of a law, it proceeds from the
premise that the law established a "suspect classification."
A suspect classification is one where distinctions are made
based on the most invidious bases for classification that
violate the most basic human rights,i.e., on the basis of
race, national origin, alien status, religious affiliation and, to
a certain extent, sex and sexual orientation. 7 With a
suspect classification, the most stringent scrutiny of the
classification is applied: the ordinary presumption of
constitutionality is reversed and the government carries the
burden of proving the statute's constitutionality. This
approach is unlike the lowest level of scrutiny
(reasonableness test) that the Court has applied in the past
where the classification is scrutinized and constitutionally
upheld if found to be germane to the purpose of the law.
Under a reasonableness test, there is a presumption of
constitutionality and that the laws enacted by Congress are
presumed to fall within its constitutional powers.
To pass strict scrutiny, the government must actively show
that the classification established in the law is justified by a
compelling governmental interest and the means chosen
by the State to effectuate its purpose must be narrowly
tailored to the achievement of that goal. 8 In the context of
the present case, is the resulting classification in the
 Page 231 of 458
present law so outstandingly harmful to men in general so
that a strict scrutiny is called for?
I do not really see any indication that Congress actually
intended to classify women and children as a group against
men, under the terms of R.A. No. 9262. Rather than a clear
intent at classification, the overriding intent of the law is
indisputably to harmonize family relations and protect
the family as a basic social institution. 9After sifting
through the comprehensive information gathered,
Congress found that domestic and other forms of violence
against women and children impedes the harmony of the
family and the personal growth and development of family
members. In the process, Congress found that these types
of violence must pointedly be addressed as they are more
commonly experienced by women and children due to the
unequal power relations of men and women in our society;
Congress had removed these types of violence as they are
impediments that block the harmonious development that it
envisions for the family, of which men are important
component members. SHIETa
Even granting that a classification resulted in the law, I do
not consider the classification of women and children to be
within the "suspect classification" that jurisprudence has
established. As I mentioned earlier, suspect classifications
are distinctions based on the most invidious bases for
classification that violate the most basic human rights.
Some criteria used in determining suspect classifications
are: (1) the group possesses an immutable and/or highly
visible trait; 10 and (2) they are powerless to protect
themselves via the political process. 11 The group is a
"discrete" and "insular" minority. 12 Women and children, to
my mind, simply do not fall within these criteria.
In my view, a suspect classification and the accompanying
strict scrutiny should depend on the circumstances of the
case, on the impact of the illegal differential treatment on
the group involved, on the needed protection and the
impact of recognizing a suspect classification on future
classification. 13 A suspect classification label cannot solely
and automatically be triggered by the circumstance that
women and children are accorded special protection by the
Constitution. In fact, there is no place for a strict level of
scrutiny when the Constitution itself has recognized the
need for special protection; where such recognition has
been made, congressional action should carry the
presumption of validity.
Similarly, a suspect classification and the accompanying
strict scrutiny standard cannot be solely based on the
circumstance that the law has the effect of being "gender-
specific." I believe that the classification in the law was
not immediately brought on by considerations of
gender or sex; it was simply a reality as unavoidable
as the reality that in Philippine society, a marriage is
composed of a man, a woman and their children. An
obvious reason, of course, why the classification did not
solely depend on gender is because the law also covers
children, without regard to their sex or their sexual
orientation.HICcSA
Congress was sensitive to these realities and had to
address the problem as it existed in order to pinpoint and
remove the obstacles that lay along the way. With this
appreciation of reality, Congress had no recourse but to
identify domestic and other forms of violence committed on
women and their children as among the obstacles that
intrude on the development, peace and harmony of the
family. From this perspective, the objective of the law
 Page 232 of 458
the productive development of the family as a whole and
the Congress' view of what may be done in the area of
violence stand out.
Thus, with the objective of promoting solidarity and the
development of the family, R.A. No. 9262 provides the
legal redress for domestic violence that particularly affects
women and their children. Significantly, the law does not
deny, restrict or curtail civil and human rights of other
persons falling outside the classification, particularly
of the men members of the family who can avail of
remedies provided by other laws to ensure the
protection of their own rights and interests.
Consequently, the resulting classification under R.A. No.
9262 is not wholly intended and does not work an injustice
by removing remedies that are available to men in violence
committed against them. The law furthermore does not
target men against women and children and is there simply
to achieve a legitimate constitutional objective, and it does
not achieve this by a particularly harmful classification that
can be labeled "suspect" in the sense already established
by jurisprudence. Under the circumstances, the use and
application of strict scrutiny review, or even the use of an
expanded equal protection perspective, strike me as both
unnecessary and disproportionate. TCcDaE
As my final point, the level of review that the Court chooses
to apply is crucial as it determines both the process and the
outcome of a given case. The reverse onus that a strict
scrutiny brings ignores the most basic presumption of
constitutionality that the courts consistently adhere to when
resolving issues of constitutionality. It also infringes on the
Inter-government harmony and courtesy demand that we
regularity of performance of functions of co-equal branches
reserve the strict scrutiny standard of review to the worst
of government. As the Court pronounced in Drilon v. Lim: 14
possible cases of unacceptable classification, abject forms
In the exercise of this jurisdiction, lower courts
are advised to act with the utmost
circumspection, bearing in mind the
consequences of a declaration of
unconstitutionality upon the stability of laws, no
less than on the doctrine of separation of
powers. As the questioned act is usually the
handiwork of the legislative or the executive
departments, or both, it will be prudent for such
courts, if only out of a becoming modesty, to
defer to the higher judgment of this Court in the
consideration of its validity, which is better
determined after a thorough deliberation by a
collegiate body and with the concurrence of the
majority of those who participated in its
discussion.
It is also emphasized that every court, including
this Court, is charged with the duty of a
purposeful hesitation before declaring a law
unconstitutional, on the theory that the measure
was first carefully studied by the executive and
the legislative departments and determined by
them to be in accordance with the fundamental
law before it was finally approved. To doubt is to
sustain. The presumption of constitutionality can
be overcome only by the clearest showing that
there was indeed an infraction of the
Constitution, and only when such a conclusion is
reached by the required majority may the Court
pronounce, in the discharge of the duty it cannot
escape, that the challenged act must be struck
down. ISHaCD
 Page 233 of 458
of discrimination, and the worst violations of the
Constitution. 15 R.A. No. 9262 does not present such a
case.
In these lights, I conclude that a valid classification exists to
justify whatever differential treatment may exist in the law. I
vote to deny the petition and uphold the
constitutionality of R.A. No. 9262 using the lowest level
of scrutiny under the reasonableness test.
ABAD, J., concurring:
Republic Act 9262 (R.A. 9262) or the Anti-Violence against
Women and their Children Act is a historic step in the
Filipino women's long struggle to be freed from a long-held
belief that men are entitled, when displeased or minded, to
hit their wives or partners and their children. This law
institutionalizes prompt community response to this violent
behavior through barangay officials who can command the
man to immediately desist from harming his home partner
and their children. It also establishes domestic violence as
a crime, not only against its victims but against society as
well. No longer is domestic violence lightly dismissed as a
case of marital dispute that law enforcers ought not to get
into. 1
Almost eight years after the passage of this landmark
legislation, petitioner Jesus C. Garcia, a husband charged
with the offense, claims before the Court that R.A.
9262violates his constitutional rights to due process and
equal protection and that it constitutes an undue delegation
of judicial power to barangay officials with respect to the
Temporary Protection Order (TPO) that the latter could
issue against him for his alleged maltreatment of his wife
and children.
This separate concurring opinion will address the issue of
equal protection since it presents the more serious
challenge to the constitutionality of the law. Men and
women are supposed to be equal yet this particular law
provides immediate relief to complaining women and harsh
consequences to their men even before the matter reaches
the courtroom, a relief not available to the latter. The law,
Garcia says, violates his right to equal protection because
it is gender-specific, favoring only women when men could
also be victims of domestic violence.
Justice Estela Perlas-Bernabe ran the issue of equal
protection in her ponencia through the litmus test for
holding a law valid even when it affects only a particular
class, a test that the Court laid down in People v. Vera. 2 A
legislative classification, according to Vera, is reasonable
as long as: 1) it rests on substantial distinctions which
make real differences; 2) it is germane to the purpose of
the law; 3) it is not limited to existing conditions but applies
as well to future identical conditions; and 4) it applies
equally to all members of the same class. 3 I dare not
improve on Justice Bernabe's persuasive reasoning and
conclusions. aDcETC
I agree with her but would like to hinge my separate
concurring opinion on the concept of an Expanded Equal
Protection Clause that former Chief Justice Reynato S.
Puno espouses in his book: Equal Dignity and Respect:
The Substance of Equal Protection and Social Justice.
Chief Justice Puno's thesis is that the right to equal
protection casts another shadow when the issue raised
under it involves persons protected by the social justice
provision of the Constitution, specifically, Section 1, Article
XIII. The equal protection clause can no longer be
 Page 234 of 458
interpreted as only a guarantee of formal equality 4 but of
substantive equality. "It ought to be construed," said the
Chief Justice, "in consonance with social justice as 'the
heart' particularly of the 1987 Constitution a
transformative covenant in which the Filipino people
agreed to enshrine asymmetrical equality to uplift
disadvantaged groups and build a genuinely egalitarian
democracy." 5
This means that the weak, including women in relation to
men, can be treated with a measure of bias that they may
cease to be weak. aSIAHC
Chief Justice Puno goes on: "The Expanded Equal
Protection Clause, anchored on the human rights rationale,
is designed as a weapon against the indignity of
discrimination so that in the patently unequal Philippine
society, each person may be restored to his or her rightful
position as a person with equal moral status." 6Specifically,
the expanded equal protection clause should be
understood as meant to "reduce social, economic, and
political inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for the
common good." 7 Borrowing the language of Law v.
Canada 8 case and adding his own thoughts, the Chief
Justice said:
The purpose of the Expanded Equal Protection
Clause is to protect and enhance the right to
dignity by: 1) preventing the imposition,
perpetuation and aggravation "of disadvantage,
stereotyping, or political [,economic, cultural,] or
social prejudice;" and 2) promo[ting a Philippine]
society in which all persons enjoy equal
recognition at law as human beings. 9
Chief Justice Puno points out that the equal protection
clause must be interpreted in connection with the social
justice provisions of the Constitution "so as not to frustrate
or water down the constitutional commitment to promote
substantive equality and build the genuinely "just and
humane society" that Filipinos aspire for, as stated in the
Preamble of the 1987 Constitution."
But the expanded concept of equal protection, said Chief
Justice Puno, only applies to the government's ameliorative
action or discriminatory actions intended to improve the lot
of the disadvantaged. Laws challenged for invalid
classification because of being unreasonable or arbitrary,
but not discriminatory, are outside the scope of the
expanded equal protection clause. Such cases fall under
the traditional equal protection clause which protects the
right to formal equality and determines the validity of
classifications through the well established reasonableness
test. 10
CIAHDT
Here, petitioner Garcia argues that R.A. 9262 violates the
guarantee of equal protection because the remedies
against personal violence that it provides may be invoked
only by the wives or women partners but not by the
husbands or male partners even if the latter could possibly
be victims of violence by their women partners. Women, he
claims, are also capable of committing physical,
psychological, emotional, and even sexual abuse against
their husbands and children.
Garcia further assails the title of the law "An Act
Defining Violence against Women and Their Children,
Providing for Protective Measures for Victims, Prescribing
Penalties Therefor, and for Other Purposes" as
pejorative and sex-discriminatory. R.A. 9262 is an "anti-
 Page 235 of 458
male," "husband-bashing," and "hate-men" law. It
establishes a special category of domestic violence
offenses which is akin to legislating hate crimes and
imposes penalties based solely on gender; it singles out
the husband or father as the culprit, a clear form of "class
legislation."
But the Constitution requires the State to "ensure the
fundamental equality before the law of men and
women." Further, it commands Congress to "give highest
priority to the enactment of measures that protect and
enhance the rights of all the people to human dignity . . . ."
and this includes women. In his speech during the joint
launching on October 27, 2004 of R.A. 9262 and its
Implementing Rules, Chief Justice Puno recalled the
historical and social context of gender-based violence that
underpin its enactment. Thus:
History reveals that most societies sanctioned
the use of violence against women. The
patriarch of a family was accorded the right to
use force on members of the family under his
control. I quote the early studies:
Traditions subordinating women have a
long history rooted in patriarchy the
institutional rule of men. Women were
seen in virtually all societies to be
naturally inferior both physically and
intellectually. In ancient western societies,
women whether slave, concubine or wife,
were under the authority of men. In law,
they were treated as property. DSAEIT
The Roman concept of patria potestas allowed
the husband to beat, or even kill, his wife if she
endangered his property right over her. Judaism,
Christianity and other religions oriented towards
the patriarchal family strengthened the male
dominated structure of society.
English feudal law reinforced the tradition of
male control over women. Even the eminent
Blackstone has been quoted in his
commentaries as saying husband and wife were
one and that one was the husband. However, in
the late 1500s and through the entire 1600s,
English common law began to limit the right of
husbands to chastise their wives. Thus, common
law developed the rule of thumb, which allowed
husbands to beat their wives with a rod or stick
no thicker than their thumb.
Article II, Section 14 of the 1987 Constitution states:
The State recognizes the role of women in
nation-building, and shall ensure the
fundamental equality before the law of women
and men.
Also, Article XIII, Section 1 of the 1987 Constitution further
states:
The Congress shall give highest priority to the
enactment of measures that protect and
enhance the rights of all the people to human
dignity, reduce social, economic, and political
inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for
the common good. cDAITS
xxx xxx xxx
The above provisions of the Constitution abundantly
authorize Congress or the government to actively
undertake ameliorative action that would remedy existing
 Page 236 of 458
inequalities and inequities experienced by women and
children brought about by years of discrimination. The
equal protection clause when juxtaposed to this provision
provides a stronger mandate for the government to combat
such discrimination. Indeed, these provisions order
Congress to "give highest priority to the enactment of
measures that protect and enhance the right of all the
people to human dignity, reduce social, economic, and
political inequalities and remove cultural inequities."
No doubt, historically, the Philippine tribal and family model
hews close to patriarchy, a pattern that is deeply
embedded in the society's subconscious. Consequently, it
can be said that in enacting R.A. 9262, Congress has
taken an ameliorative action that would address the evil
effects of such social model on Filipino women and
children and elevate their status as human beings on the
same level as the father or the husband.
What remedies does R.A. 9262 especially provide women
and children? The law is gender-specific as only they may
file the prescribed actions against offenders, whether men
or women, with whom the victims are or were in lesbian
relationships. 11 The definition includes past or present
marital, live-in, sexual or dating relationships.
This law also provides for the remedy of a protection order
in a civil action or in a criminal action, aside from the
criminal action for its violation. It makes the process of
securing a restraining order against perpetrators easier and
more immediate by providing for the legal remedy of
protection orders from both the courts
and barangayofficials.
R.A. 9262 aims to put a stop to the cycle of male abuses
borne of discrimination against women. It is an ameliorative
measure, not a form of "reverse discrimination" against
men as Garcia would have it. Ameliorative action "is not, as
Hogg remarked, an exception to equality, but an
expression and attainment of de facto equality, the genuine
and substantive equality which the Filipino people
themselves enshrined as a goal of the 1987
Constitution." 12 Ameliorative measures are necessary as a
redistributive mechanism in an unequal society to achieve
substantive equality. 13IcHTAa
In the context of women's rights, substantive equality has
been defined by the Convention on the Elimination of all
forms of Discrimination Against Women (CEDAW) as
equality which requires that women be given an equal start
and that they be empowered by an enabling environment
to achieve equality of results. It is not enough to guarantee
women treatment that is identical to that of men. Rather,
biological as well as socially and culturally constructed
differences between women and men must be taken into
account. Under certain circumstances, non-identical
treatment of women and men will be required in order to
address such differences.
Women's struggle for equality with men has evolved under
three models:
1. Formal equality women and men are to be regarded
and treated as the same. But this model does not take into
account biological and socially constructed differences
between women and men. 14 It uses male standards and
assumes that women have equal access to such
standards. 15 By failing to take into account these
differences, a formal equality approach may in fact
perpetuate discrimination and disadvantage. 16
 Page 237 of 458
2. Protectionist model this recognizes differences
between women and men but considers women's
weakness as the rationale for different treatment. 17 This
approach reinforces the inferior status of women and does
not address the issue of discrimination of women on
account of their gender. 18
3. Substantive equality model this assumes that women
are "not vulnerable by nature, but suffer from imposed
disadvantage" and that "if these imposed disadvantages
were eliminated, there was no further need for
protection." 19 Thus, the substantive equality model gives
prime importance to women's contexts, realities, and
experiences, and the outcomes or results of acts and
measures directed, at or affecting them, with a view to
eliminating the disadvantages they experience as
women. 20 AHcCDI
Clearly, the substantive equality model inspired R.A. 9262.
For one thing, Congress enacted it because of compelling
interest in preventing and addressing the serious problem
of violence against women in the context of intimate
relationships recognized all over the world as one of the
most insidious forms of gender discrimination.21 For
another, R.A. 9262 is based on the experiences of women
who have been victims of domestic violence. The list of
acts regarded as forms of violence 22 come from true-to-life
stories of women who have suffered abuses from their
male partners. Finally, R.A. 9262 seeks women's full
participation in society. Hence, the law grants them needed
relief to ensure equality, protection, and personal safety,
enabling them to enjoy their civil, political, social, and
economic rights. The provision on protection orders, for
instance, precisely aims to safeguard "the victim from
further harm, minimizing any disruption in the victim's daily
life, and facilitating the opportunity and ability of the victim
to independently regain control over her life." 23
For the above reasons, I vote to dismiss the petition for
lack of merit.
LEONEN, J., concurring:
I join the ponencia in denying the challenge to the
constitutionality of Republic Act No. 9262 otherwise known
as the "Anti-Violence against Women and their Children
Act of 2004" at least for this case. I write separately to
clarify the basis of my agreement.
The petitioner is not the victim in this case. He does not
have legal standing to raise the constitutional issue. DcHaET
He appears to have inflicted violence against private
respondents. Petitioner admitted having an affair with a
bank manager. He callously boasted about their sexual
relations to the household help. His infidelity emotionally
wounded private respondent. Their quarrels left her with
bruises and hematoma. Petitioner also unconscionably
beat up their daughter, Jo-ann, whom he blamed for
squealing on him.
All these drove respondent to despair causing her to
attempt suicide on December 17, 2005 by slitting her wrist.
Instead of taking her to the hospital, petitioner left the
house. He never visited her when she was confined for
seven (7) days. He even told his mother-in-law that
respondent should just accept his extramarital affair since
he is not cohabiting with his paramour and has not sired a
child with her.
The private respondent was determined to separate from
petitioner. But she was afraid he would take away their
 Page 238 of 458
children and deprive her of financial support. He warned
her that if she pursued legal battle, she would not get a
single centavo from him. After she confronted him of his
affair, he forbade her to hold office at JBTC Building. This
deprived her of access to full information about their
businesses.
Thus, the Regional Trial Court found reasonable ground to
believe there was imminent danger of violence against
respondent and her children and issued a series of
Temporary Protection Orders (TPO) ordering petitioner,
among other things, to surrender all his firearms including a
.9MM caliber firearm and a Walther PPK.
This is the quintessential case where the full effects
of Republic Act No. 9262 or the "VAWC" should take effect.
Seen in this light, petitioner's belated challenge to the law
is nothing but a cheap attempt to raise cherished
fundamental constitutional principles to escape legal
responsibility for causing indignities in another human
being. There is enough in our legal order to prevent the
abuse of legal principles to condone immoral acts. TCDHaE
For us to proceed to rule on Constitutional issues, we have
required that: (1) there must be an actual case or
controversy calling for the exercise of judicial power; (2) the
person challenging the act must have "standing" to
challenge; he must have a personal and substantial
interest in the case, such that he has sustained or will
sustain, direct injury as a result of its enforcement; (3) the
question of constitutionality must be raised at the earliest
possible opportunity; and (4) the issue of constitutionality
must be the very lis mota of the case. 1
Legal standing in cases that raise constitutional issues is
essential. Locus standi is defined as "a right of appearance
in a court of justice on a given question." 2 The
fundamental question is "whether a party alleges such
personal stake in the outcome of the controversy as to
assure that concrete adverseness which sharpens the
presentation of issues upon which the court depends for
illumination of difficult constitutional questions. 3
In private suits, standing is governed by the "real-parties-
in-interest" rule under Section 2, Rule 3 of the 1997 Rules
of Civil Procedure in that "every action must be prosecuted
or defended in the name of the real party-in-
interest." 4 "Interest" means material interest or an interest
in issue to be affected by the judgment of the case, as
distinguished from mere curiosity about the question
involved. 5
Thus, there must be a present substantial interest as
distinguished from a mere inchoate expectancy or a future,
contingent, subordinate, or consequential
interest. 6Standing is based on one's own right to the relief
sought.
The doctrine of locus standi in cases raising constitutional
issues frames the power of judicial review that we wield.
This is the power "to settle actual controversies involving
rights which are legally demandable and enforceable" as
well as "to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess
jurisdiction on the part of any branch or instrumentality of
the Government." 7 HIaTDS
The presence of an "actual case" prevents this Court from
providing advisory opinions or using its immense power of
judicial review absent the presence of a party with real and
 Page 239 of 458
substantial interests to clarify the issues based upon
his/her experience and standpoint. It prevents this Court
from speculating and rendering rulings on the basis of pure
theory. Our doctrines on justiciability are self-imposed
applications of a fundamental view that we accord a
presumption of constitutionality to acts done by the other
constitutional organs and departments of government.
Generally, we do not strike down acts done by co-equal
departments until their repugnancy to the Constitution can
be shown clearly and materially.
I am aware of our precedents where this Court has waived
questions relating to the justiciability of the constitutional
issues raised when they have "transcendental importance"
to the public. 8 In my view, this accommodates our power
to promulgate guidance "concerning the protection and
enforcement of constitutional rights". 9We choose to rule
squarely on the constitutional issues in a petition wanting
all or some of the technical requisites to meet our general
doctrines on justiciability but raising clear conditions
showing imminent threat to fundamental rights. The
imminence and clarity of the threat to fundamental
constitutional rights outweigh the necessity for prudence. In
a sense, our exceptional doctrine relating to constitutional
issues of "transcendental importance" prevents courts from
the paralysis of procedural niceties when clearly faced with
the need for substantial protection.HDTISa
That necessity is wanting in this case.
The extraordinary discretion to move beyond the well
established doctrines on justiciability must be carefully
exercised in cases involving social legislation that seeks to
rectify historical and cultural injustices present in our
communities and societies. As carefully pointed out in the
erudite ponencia of Justice Perlas-Bernabe, Republic Act
No. 9262 was borne out of the struggles of countless
women who suffered indignities. It cannot be undone by a
petition filed by someone who cannot, by any stretch of the
most fertile imagination, be considered the victim.
Nevertheless, in a future case more deserving of our
attention, we should be open to realities which may
challenge the dominant conception that violence in intimate
relationships only happens to women and children. This
may be predominantly true, but even those in marginal
cases deserve fundamental constitutional and statutory
protection. We should be careful that in correcting historical
and cultural injustices, we may typecast all women as
victims, stereotype all men as tormentors or make invisible
the possibility that in some intimate relationships, men may
also want to seek succor against acts defined in Section 5
of Republic Act No. 9262 10 in an expeditious manner.
Husband abuse may be an underreported form of family
violence. 11 According to a Quezon City Police District
Crime Laboratory chief, in his 10 years as medico-legal
officer, he had only received three cases of men
complaining of spousal abuse. 12
Another recent study found the same underreporting but
explored the experiences of abuse in intimate relationships
of six Filipino husbands. 13 Their experiences were
described as follows:
All the participants acknowledged that they
experienced abuse, but the forms differed from
one husband to another. Four out of the six
participants admitted that their spouses' abusive
behavior would initially start with verbal attacks
and put-downs then would shift to physical
 Page 240 of 458
abuse as their verbal tussle intensified. Most of
the abuses cited by the participants happened in
the confines of their home, but could also
happen in public places. SCaITA
The constant threats, in the long term, affected
the emotional and psychological well being of the
participants. Four of the husbands felt that their
spouses were capable of carrying out their
threats. The frequent and long fights could be
emotionally draining. Throughout the duration of
marriage, EC suffered emotionally from the
"weird" marital set-up. For TG, emotional abuse
was associated with shattered trust.
The physical abuse for some participants
became life-threatening to the extent that the
injury incurred needed medical attention. Their
spouses could use weapons against them. Four
participants described the incidents that led to
their injuries. Coming home one night, RE saw
"this mono block chair flying . . . hit me . . . right
on the nose." DL narrated ". . . pumunta ako ng
doctor on my own para ipalinis yung sugat ko."
According to HM, his wound from a knife attack
was wide and deep and needed ". . . some
stiches." JL had to contend with the long
scratches in his chest and back. RE almost lost
an eye when he was hit with a straight punch of
the spouse. JL, RE, and DL would lie to
colleagues to avoid being laughed at. DL had to
be absent from his work after being hit by a
flying de lata (canned good) thrown at him during
a fight.
Emotional abuse co-existed with verbal and/or
physical abuse. The participants who were
recipients of physical abuse were also
emotionally abused when they became
susceptible to stress and threats of the abuser.
JL felt guilty when the spouse carried out her
threat of killing herself by intentionally taking an
overdose of pills in the middle of an intense
disagreement.
Emotional abuse could occur without physical
abuse and yet its effects were still devastating.
For instance, EC and TG were devastated by the
lies and deceit of their spouses. The spouse's
threats of suicide (JL), abandonment (RE), or
taking their children away after a fight (DL) were
as distressing as the other forms of abuse
experienced by the participants. 14
Social and cultural expectations on masculinity and male
dominance urge men to keep quiet about being a victim,
adding to the unique experience of male victims of
domestic abuse. 15 This leads to latent depression among
boys and men. 16 In a sense, patriarchy while privileging
men also victimizes them.
It is true that numerous literature relate violence against
women with the historically unequal power relations
between men and women, leading to domination over and
discrimination against the latter. 17 Sociologists cite the
18th-century English legal tradition on the "rule of thumb"
giving husbands the right to beat their wives with a stick no
thicker than a thumb. 18 In America, women were regarded
as property until the latter half of the 19th century with
marital violence considered a husband's privilege and men,
as of right, exercised physical domination over women. 19
The perspective portraying women as victims with a
heritage of victimization 20 results in the unintended
consequence of permanently perceiving all women as
 Page 241 of 458
weak. This has not always been accepted by many other
strands in the Feminist Movement. TcEAIH
As early as the 70s, the nationalist movement raised
questions on the wisdom of a women's movement and its
possible divisive effects, as "class problems deserve
unified and concentrated attention [while] the women
question is vague, abstract, and does not have material
base." 21
In the early 80s, self-identifying feminist groups were
formed. 22 The "emancipation theory" posits that female
crime has increased and has become more masculine in
character as a result of the women's liberation
movement. 23
Feminism also has its variants among Muslims. In
2009, Musawah ("equality" in Arabic) was launched as a
global movement for equity and justice in the Muslim
family. It brought together activists, scholars, legal
practitioners, policy makers, and grassroots women and
men from all over the world. 24 Their belief is that there
cannot be justice without equality, and its holistic
framework integrates Islamic teachings, universal human
rights, national constitutional guarantees of equality, and
the lived realities of women and men. 25
There is now more space to believe that portraying only
women as victims will not always promote gender equality
before the law. It sometimes aggravates the gap by
conceding that women have always been dominated by
men. In doing so, it renders empowered women invisible;
or, in some cases, that men as human beings can also
become victims.
In this light, it may be said that violence in the context of
intimate relationships should not be seen and encrusted as
a gender issue; rather, it is a power issue. 26 Thus, when
laws are not gender-neutral, male victims of domestic
violence may also suffer from double victimization first by
their abusers and second by the judicial
system.27 Incidentally, focusing on women as the victims
entrenches some level of heteronormativity. 28 It is blind to
the possibility that, whatever moral positions are taken by
those who are dominant, in reality intimate relationships
can also happen between men. 29
I accept that for purposes of advocacy and for a given
historical period, it may be important to highlight abuse of
women qua women. 30 This strategy was useful in the
passing of Republic Act No. 9262. It was a strategy that
assured that the problem of battered women and children
in the context of various intimate relationships becomes
publicly visible. However, unlike advocacy, laws have the
tendency to be resilient and permanent. Its existence may
transcend historical periods that dictate effective advocacy.
Laws also have a constitutive function the tendency to
create false consciousness when the labels and categories
it mandates succeed in reducing past evils but turn a blind
eye to other issues.
For instance, one of the first cases that laid down the
requisites for determining whether there was a violation of
the equal protection of the law clause of the
Constitution was the 1939 case of People v. Cayat. 31 It
laid down the requirements of reasonable classification
which requires that it (a) must rest on substantial
distinctions, (b) must be germane to the purposes of the
law, (c) must not be limited to existing conditions only, and
(d) must apply equally to all members of the same
 Page 242 of 458
class. 32 Even as early as 1919, the Court in Rubi v.
Provincial Board of Mindoro 33 recognized the concept of
reasonable classification holding that "[t]he pledge that no
person shall be denied the equal protection of the laws is
not infringed by a statute which is applicable to all of a
class. The classification must have a reasonable basis and
cannot be purely arbitrary in nature." 34 DEScaT
Yet, it is in these two cases that the Court concluded the
following:
As authority of a judicial nature is the decision of
the Supreme Court in the case of United States
vs. Tubban [Kalinga] ([1915], 29, Phil., 434). The
question here arose as to the effect of a tribal
marriage in connection with article 423 of the
Penal Code concerning the husband who
surprises his wife in the act of adultery. In
discussing the point, the court makes use of the
following language:
. . . we are not advised of any provision of
law which recognizes as legal a tribal
marriage of so-called non-Christians or
members of uncivilized tribes, celebrated
within that province without compliance
with the requisites prescribed by General
Orders No. 68 . . . . We hold also that the
fact that the accused is shown to be a
member of an uncivilized tribe, of a low
order of intelligence, uncultured and
uneducated, should be taken into
consideration as a second marked
extenuating circumstance. . affirmative language should imply that in the proper suit, a
. 35 (Emphasis supplied)
The description of the label and the stereotype of "non-
Christian tribe" would later on be corrected by the
Constitution, 36 law, 37 and jurisprudence. 38
The description of the label and the stereotype that only
women can be considered victims may also evolve in the
same way. We should hope that the situation of patriarchy
will not be permanent. Better cultural structures more
affirming of human dignity should evolve. 39 cIADTC
In a future case, the fact that there may be battered men
should not cause the nullification of protections given to
women and children.
The Constitution states that: "[t]he State values the dignity
of every human person and guarantees full respect for
human rights." 40 The guarantee of full respect should not
mean that protections already given to those who suffer
historical or cultural prejudices should be automatically
rescinded if only the scope of the law is found wanting.
Our Constitution also mandates that the State "shall ensure
the fundamental equality before the law of women and
men." 41 This is similar to the Convention on the Elimination
of All Forms of Discrimination Against Women
(CEDAW) 42 which requires that the Philippines as state
party take all appropriate measures "[to] modify the social
and cultural patterns of conduct of men and women, with a
view to achieving the elimination of prejudices and
customary and all other practices which are based on the
idea of the inferiority or the superiority of either of the sexes
or on stereotyped roles for men and women." 43 The use of
declaration of unconstitutionality on the ground of the equal
protection should not automatically mean that the entire
 Page 243 of 458

social legislation that provides effective and efficient
protection of women be set aside.
We have declared that "[a]n unconstitutional act is not a
law; it confers no rights; it imposes no duties; it affords no
protection; it creates no office; it is . . . as inoperative as
though it had never been passed." 44 However, the
seemingly all-inclusive statement of absolute retroactive
invalidity may not always be justified. 45 One established
exception is the doctrine of operative fact.
The doctrine of operative fact, as an exception to
the general rule, only applies as a matter of
equity and fair play. It nullifies the effects of an
unconstitutional law by recognizing that the
existence of a statute prior to a determination of
unconstitutionality is an operative fact and may
have consequences which cannot always be
ignored. The past cannot always be erased by a
But again, it is not in this case that we consider these
possibilities.
By concurring with these statements I express a hope: that
the normative constitutional requirements of human dignity
and fundamental equality can become descriptive reality.
The socially constructed distinctions between women and
men that have afflicted us and spawned discrimination and
violence should be eradicated sooner. Power and intimacy
should not co-exist.
The intimate spaces created by our human relationships
are our safe havens from the helter skelter of this world. It
is in that space where we grow in the safety of the special
other who we hope will be there for our entire lifetime. If
that is not possible, then for such time as will be sufficient
to create cherished memories enough to last for
eternity. AaIDCS

new judicial declaration.
The doctrine is applicable when a declaration of
unconstitutionality will impose an undue burden
on those who have relied on the invalid
law. 46IEaHSD
I concur in the ponencia. Against abominable acts, let this
law take its full course
||| (Garcia v. Drilon, G.R. No. 179267, [June 25, 2013])

The possibility that the constitutionality of Republic Act No.

9262 may be challenged by male victims of abuse in
intimate relationships ventures to carve another exception
if this court is to ensure the guarantee of fundamental
equality before the law of women and men 47 as well as
value the dignity of every human person. 48Applying the
general rule or the existing doctrine of operative facts
would mean removing the protection afforded to women. It
will thus contradict the very reason it is being assailed and
result to an even worse state of laws where none is
protected from intimate violence.
 Page 244 of 458
[G.R. No. 162322. March 14, 2012.]
REPUBLIC OF THE
PHILIPPINES, petitioner, vs. BANTIGUE
POINT DEVELOPMENT
CORPORATION, respondent.
DECISION
SERENO, J : p
This Rule 45 Petition requires this Court to address the
issue of the proper scope 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 Corporation's (Corporation) application
for original registration 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.
The Facts
On 17 July 1997, respondent Bantigue Point Development
Corporation filed with 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
P4,330, P1,920 and P8,670, or a total assessed value of
P14,920 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
On 18 July 1997, the RTC issued an Order setting the case
for initial hearing on 22 October 1997. 4 On 7 August 1997,
it issued a second Order setting the initial hearing on 4
November 1997. 5
Petitioner Republic filed its Opposition to the application for
registration on 8 January 1998 while the records were still
with the RTC. 6 SDTIHA
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 P100,000. 7
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) Community Environment and
Natural Resources Office (CENRO) of Batangas City that
the lot in question is within the alienable and disposable
zone. 12Thereafter, 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
jurisdictional challenge therein, petitioner is thereby
estopped from questioning the jurisdiction of the lower
court on appeal. 15 The CA further found that respondent
 Page 245 of 458
Corporation had sufficiently established the latter's
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 CA's 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 Court's 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 cautioned that Tijam must be construed as an exception to
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 IaHCAD
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 court's 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
court's 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
the general rule and applied only in the most exceptional
cases whose factual milieu is similar to that in the latter
case.
 Page 246 of 458
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
The Municipal Trial Court properly acquired
jurisdiction
over the case.
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. . . . .
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: HcTSDa
. . . [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
 Page 247 of 458
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 RTC's 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 theProperty
Registration Decree, did not affect the court's 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
respondent's application for original registration was
P160,000, 39 the MTC did not have jurisdiction over the
case. Under Section 34 of the Judiciary Reorganization
Act, as amended, 40 the MTC's delegated jurisdiction to try
cadastral and land registration cases is limited to lands, the
value of which should not exceed P100,000.
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 (P100,000.00), such value to be
ascertained by the affidavit of the claimant or by
 Page 248 of 458
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.)CAaEDH
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 P100,000.
The case at bar does not fall under the first instance,
because petitioner opposed respondent Corporation's
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 P100,000.
Contrary to petitioner's 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 P4,330, P1,920 and
P8,670, or a total assessed value of P14,920 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
P100,000. 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 MTC's exercise of its
delegated jurisdiction, we find that the lower court erred in
granting respondent Corporation's 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
 Page 249 of 458

government. 45 We held in Republic v. T.A.N. Properties, SO ORDERED.

Inc. that a CENRO certification is insufficient to prove the
(Republic v. Bantigue Point Development Corp., G.R. No.
|||
alienable and disposable character of the land sought to be
registered. 46 The applicant must also show sufficient proof 162322, [March 14, 2012], 684 PHIL 192-206)
that the DENR Secretary has approved the land
classification and released the land in question as alienable
and disposable. 47 ITaESD

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 [G.R. No. 180321. March 20, 2013.]
reception of further evidence to prove that the property in
question forms part of the alienable and disposable land of EDITHA PADLAN, petitioner, vs.
the public domain. If respondent Bantigue Point ELENITA DINGLASAN and
Development Corporation presents a certified true copy of FELICISIMO DINGLASAN, respondents.
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 DECISION
alienable and disposable based on a positive act of the
government, the application should be denied.
WHEREFORE, premises considered, the instant Petition PERALTA, J : p

for Review is DENIED. Let this case be REMANDED to the

This is a petition for review on certiorari assailing the
Municipal Trial Court of San Juan, Batangas, for reception
Decision 1 dated June 29, 2007 of the Court of Appeals
of evidence to prove that the property sought to be
(CA) in CA-G.R. CV No. 86983, and the Resolution 2 dated
registered is alienable and disposable land of the public
domain.
 Page 250 of 458
October 23, 2007 denying petitioner's Motion for
Reconsideration. 3
The factual and procedural antecedents are as follows:
Elenita Dinglasan (Elenita) was the registered owner of a
parcel of land designated as Lot No. 625 of the Limay
Cadastre which is covered by Transfer Certificate of Title
(TCT) No. T-105602, with an aggregate area of 82,972
square meters. While on board a jeepney, Elenita's mother,
Lilia Baluyot (Lilia), had a conversation with one Maura
Passion (Maura) regarding the sale of the said property.
Believing that Maura was a real estate agent, Lilia
borrowed the owner's copy of the TCT from Elenita and
gave it to Maura. Maura then subdivided the property into
several lots from Lot No. 625-A to Lot No. 625-O, under the
name of Elenita and her husband
Felicisimo Dinglasan(Felicisimo).
Through a falsified deed of sale bearing the forged
signature of Elenita and her husband Felicisimo, Maura
was able to sell the lots to different buyers. On April 26,
1990, Maura sold Lot No. 625-K to one Lorna Ong (Lorna),
who later caused the issuance of TCT No. 134932 for the
subject property under her name. A few months later, or
sometime in August 1990, Lorna sold the lot to petitioner
Editha Padlan for P4,000.00. Thus, TCT No. 134932 was
cancelled and TCT No. 137466 was issued in the name of
petitioner.
HESIcT
After learning what had happened, respondents demanded
petitioner to surrender possession of Lot No. 625-K, but the
latter refused. Respondents were then forced to file a case
before the Regional Trial Court (RTC) of Balanga, Bataan
for the Cancellation of Transfer Certificate of Title No.
137466, docketed as Civil Case No. 438-ML. Summons
was, thereafter, served to petitioner through her mother,
Anita Padlan.
On December 13, 1999, respondents moved to declare
petitioner in default and prayed that they be allowed to
present evidence ex parte. 4
On January 17, 2000, petitioner, through counsel, filed an
Opposition to Declare Defendant in Default with Motion to
Dismiss Case for Lack of Jurisdiction Over the Person of
Defendant. 5 Petitioner claimed that the court did not
acquire jurisdiction over her, because the summons was
not validly served upon her person, but only by means of
substituted service through her mother. Petitioner
maintained that she has long been residing in Japan after
she married a Japanese national and only comes to the
Philippines for a brief vacation once every two years.
On April 5, 2001, Charlie Padlan, the brother of petitioner,
testified that his sister is still in Japan and submitted a copy
of petitioner's passport and an envelope of a letter that was
allegedly sent by his sister. Nevertheless, on April 5, 2001,
the RTC issued an Order 6 denying petitioner's motion to
dismiss and declared her in default. Thereafter, trial
ensued.
On July 1, 2005, the RTC rendered a Decision 7 finding
petitioner to be a buyer in good faith and, consequently,
dismissed the complaint.
Not satisfied, respondents sought recourse before the CA,
docketed as CA-G.R. No. CV No. 86983.
On June 29, 2007, the CA rendered a Decision 8 in favor of
the respondent. Consequently, the CA reversed and set
aside the Decision of the RTC and ordered the cancellation
 Page 251 of 458

of the TCT issued in the name of Lorna and the petitioner,
and the revival of respondents' own title, to wit:
WHEREFORE, in view of the foregoing, the
Decision dated July 1, 2005 of the Regional Trial
Court, Third Judicial Region, Branch 4,
Mariveles, Bataan (Stationed in Balanga,
Bataan) in Civil Case No. 438-ML is
hereby REVERSED and SET ASIDE.
The Transfer Certificate of Title No. 134932
issued in the name of Lorna Ong and Transfer
Certificate of Title No. 137466 issued in the
name of defendant-appellee
Editha Padlan are CANCELLED and Transfer
Certificate of Title No. 134785 in the name of the
plaintiffs-appellants is REVIVED. aCTHDA
Aggrieved, petitioner filed a Motion for Reconsideration.
Petitioner argued that not only did the complaint lacks
merit, the lower court failed to acquire jurisdiction over the
subject matter of the case and the person of the petitioner.
On October 23, 2007, the CA issued a
Resolution 11 denying the motion. The CA concluded that
the rationale for the exception made in the landmark case
of Tijam v. Sibonghanoy 12 was present in the case. It
reasoned that when the RTC denied petitioner's motion to
dismiss the case for lack of jurisdiction, petitioner neither
moved for a reconsideration of the order nor did she avail
of any remedy provided by the Rules. Instead, she kept
silent and only became interested in the case again when
the CA rendered a decision adverse to her claim.

SO ORDERED. 9
Hence, the petition assigning the following errors:
I
The CA found that petitioner purchased the property in bad
faith from Lorna. The CA opined that although a purchaser WHETHER OR NOT THE HONORABLE
is not expected to go beyond the title, based on the COURT HAS JURISDICTION OVER THE
circumstances surrounding the sale, petitioner should have PERSON OF THE PETITIONER.
conducted further inquiry before buying the disputed II
property. The fact that Lorna bought a 5,000-square-meter
property for only P4,000.00 and selling it after four months WHETHER OR NOT THE HONORABLE
COURT HAS JURISDICTION OVER THE
for the same amount should have put petitioner on guard.
SUBJECT MATTER OF THE CASE. HCacTI
With the submission of the Judgment in Criminal Case No.
4326 rendered by the RTC, Branch 2, Balanga, Bataan, III
entitled People of the Philippines v. Maura Passion 10 and WHETHER OR NOT PETITIONER IS A
the testimonies of respondents, the CA concluded that BUYER IN GOOD FAITH AND FOR VALUE. 13
respondents sufficiently established that TCT No. 134932
issued in the name of Lorna and TCT No. 137466 issued in Petitioner maintains that the case of Tijam v.
the name of petitioner were fraudulently issued and, Sibonghanoy finds no application in the case at bar, since
therefore, null and void. the said case is not on all fours with the present case.
Unlike inTijam, wherein the petitioner therein actively
 Page 252 of 458
participated in the proceedings, petitioner herein asserts
that she did not participate in any proceedings before the
RTC because she was declared in default.
Petitioner insists that summons was not validly served
upon her, considering that at the time summons was
served, she was residing in Japan. Petitioner contends that
pursuant to Section 15, Rule 14 of the Rules of Civil
Procedure, when the defendant does not reside in the
Philippines and the subject of the action is property within
the Philippines of the defendant, service may be effected
out of the Philippines by personal service or by publication
in a newspaper of general circulation. In this case,
summons was served only by substituted service to her
mother. Hence, the court did not acquire jurisdiction over
her person.
Also, petitioner posits that the court lacks jurisdiction of the
subject matter, considering that from the complaint, it can
be inferred that the value of the property was only
P4,000.00, which was the amount alleged by respondents
that the property was sold to petitioner by Lorna.
Finally, petitioner stresses that she was a buyer in good
faith. It was Maura who defrauded the respondents by
selling the property to Lorna without their authority.
Respondents, on the other hand, argue that the CA was
correct in ruling in their favor.
The petition is meritorious.
Respondents filed the complaint in 1999, at the time Batas
Pambansa Blg. (BP) 129, the Judiciary Reorganization Act
of 1980, was already amended by Republic Act (RA) No.
7691, An Act Expanding the Jurisdiction of the Metropolitan
Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts, amending for the purpose BP Blg.
129. 14 Section 1 of RA 7691, amending BP Blg. 129,
provides that the RTC shall exercise exclusive original
jurisdiction on the following actions: IcHTAa
Section 1.Section 19 of Batas Pambansa Blg.
129, otherwise known as the "Judiciary
Reorganization Act of 1980," is hereby amended
to read as follows:
Sec. 19. Jurisdiction in civil cases.
Regional Trial Courts shall exercise
exclusive original jurisdiction:
(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; . . .
Section 3 of RA 7691 expanded the exclusive original
jurisdiction of the first level courts, thus:
Section 3.Section 33 of the same law [BP Blg.
129] is hereby amended to read as follows:
 Page 253 of 458

Sec. 33. Jurisdiction of Metropolitan Trial Respondents filed their Complaint with the RTC; hence,
Courts, Municipal Trial Courts and before proceeding any further with any other issues raised
Municipal Circuit Trial Courts in Civil by the petitioner, it is essential to ascertain whether the
Cases. Metropolitan Trial Courts, RTC has jurisdiction over the subject matter of this case
Municipal Trial Courts, and Municipal based on the above-quoted provisions.
Circuit Trial Courts shall exercise:
However, in order to determine which court has jurisdiction
xxx xxx xxx
over the action, an examination of the complaint is
(3) Exclusive original essential. Basic as a hornbook principle is that jurisdiction
jurisdiction in all civil over the subject matter of a case is conferred by law and
actions which involve title determined by the allegations in the complaint which
to, or possession of, real comprise a concise statement of the ultimate facts
property, or any interest constituting the plaintiff's cause of action. The nature of an
therein where the
action, as well as which court or body has jurisdiction over
assessed value of the
property or interest therein
it, is determined based on the allegations contained in the
does not exceed Twenty complaint of the plaintiff, irrespective of whether or not the
Thousand Pesos plaintiff is entitled to recover upon all or some of the claims
(P20,000.00) or, in civil asserted therein. The averments in the complaint and the
actions in Metro Manila, character of the relief sought are the ones to be consulted.
where such assessed Once vested by the allegations in the complaint, jurisdiction
value does not exceed also remains vested irrespective of whether or not the
Fifty Thousand Pesos plaintiff is entitled to recover upon all or some of the claims
(P50,000.00) exclusive of asserted therein. 15
interest, damages of
whatever kind, attorney's What determines the jurisdiction of the court is the nature
fees, litigation expenses of the action pleaded as appearing from the allegations in
and costs: Provided, That the complaint. The averments therein and the character of
in cases of land not the relief sought are the ones to be consulted. 16
declared for taxation
purposes, the value of Respondents' Complaint 17 narrates that they are the duly
such property shall be registered owners of Lot No. 625 of the Limay Cadastre
determined by the which was covered by TCT No. T-105602. Without their
assessed value of the knowledge and consent, the land was divided into several
adjacent lots. AIHECa lots under their names through the fraudulent
manipulations of Maura. One of the lots was Lot 625-K,
 Page 254 of 458

which was covered by TCT No. 134785. On April 26, 1990, a determination of who between them is legally entitled to
Maura sold the subject lot to Lorna. By virtue of the the certificate of title covering the property in question.
fictitious sale, TCT No. 134785 was cancelled and TCT No.
From the Complaint, the case filed by respondent is not
134932 was issued in the name of Lorna. Sometime in
simply a case for the cancellation of a particular certificate
August 1990, Lorna sold the lot to petitioner for a
of title and the revival of another. The determination of
consideration in the amount of P4,000.00. TCT No. 134932
such issue merely follows after a court of competent
was later cancelled and TCT No. 137466 was issued in the
jurisdiction shall have first resolved the matter of who
name of petitioner. Despite demands from the
between the conflicting parties is the lawful owner of the
respondents, petitioner refused to surrender possession of
subject property and ultimately entitled to its possession
the subject property. Respondents were thus constrained
and enjoyment. The action is, therefore, about ascertaining
to engage the services of a lawyer and incur expenses for
which of these parties is the lawful owner of the subject lot,
litigation. Respondents prayed for the RTC (a) to declare
jurisdiction over which is determined by the assessed value
TCT No. 137466 null and to revive TCT No. T-105602
of such lot. 20
which was originally issued and registered in the name of
the respondents; and (b) to order petitioner to pay In no uncertain terms, the Court has already held that a
attorney's fees in the sum of P50,000.00 and litigation complaint must allege the assessed value of the real
expenses of P20,000.00, plus cost of suit. 18 property subject of the complaint or the interest thereon to
determine which court has jurisdiction over the action. 21 In
An action "involving title to real property" means that the
the case at bar, the only basis of valuation of the subject
plaintiff's cause of action is based on a claim that he owns
property is the value alleged in the complaint that the lot
such property or that he has the legal rights to have
was sold by Lorna to petitioner in the amount of P4,000.00.
exclusive control, possession, enjoyment, or disposition of
No tax declaration was even presented that would show
the same. Title is the "legal link between (1) a person who
the valuation of the subject property. In fact, in one of the
owns property and (2) the property itself." "Title" is different
hearings, respondents' counsel informed the court that they
from a "certificate of title" which is the document of
will present the tax declaration of the property in the next
ownership under the Torrens system of registration issued
hearing since they have not yet obtained a copy from the
by the government through the Register of Deeds. While
Provincial Assessor's Office. 22 However, they did not
title is the claim, right or interest in real property, a
present such copy. IESTcD
certificate of title is the evidence of such claim. 19
To reiterate, where the ultimate objective of the plaintiffs is
In the present controversy, before the relief prayed for by
to obtain title to real property, it should be filed in the
the respondents in their complaint can be granted, the
proper court having jurisdiction over the assessed value of
issue of who between the two contending parties has the
the property subject thereof. 23 Since the amount alleged in
valid title to the subject lot must first be determined before
the Complaint by respondents for the disputed lot is only
 Page 255 of 458

P4,000.00, the MTC and not the RTC has jurisdiction over and PEOPLE OF THE
the action. Therefore, all proceedings in the RTC are null PHILIPPINES, respondents.
and void. 24
Consequently, the remaining issues raised by petitioner
need not be discussed further. DECISION

WHEREFORE, the petition is GRANTED. The Decision of

the Court of Appeals in CA-G.R. CV No. 86983, dated June REYES, R.T., J :p

29, 2007, and its Resolution dated October 23, 2007,

are REVERSED and SET ASIDE. The Decision of the CAN the Sandiganbayan try a government
Regional Trial Court, dated July 1, 2005, is scholar ** accused, along with her brother, of swindling
declared NULL and VOID. The complaint in Civil Case No. government funds? AcHaTE

438-ML is dismissed without prejudice.

MAAARI bang litisin ng Sandiganbayan ang isang
SO ORDERED. iskolar ng bayan, at ang kanyang kapatid, na kapwa
(Padlan v. Spouses Dinglasan, G.R. No. 180321, [March
|||
pinararatangan ng estafa ng pera ng bayan?
20, 2013], 707 PHIL 83-94) The jurisdictional question is posed in this petition
for certiorari assailing the Resolutions 1 of the
Sandiganbayan, Fifth Division, denying petitioner's motion
to quash the information and her motion for
reconsideration.
The Antecedents
Petitioner Hannah Eunice D. Serana was a senior student
of the University of the Philippines-Cebu. A student of a
state university is known as a government scholar. She
was appointed by then President Joseph Estrada on
December 21, 1999 as a student regent of UP, to serve a
one-year term starting January 1, 2000 and ending on
[G.R. No. 162059. January 22, 2008.] December 31, 2000.
In the early part of 2000, petitioner discussed with
HANNAH EUNICE D. President Estrada the renovation of Vinzons Hall Annex in
SERANA, petitioner, vs. SANDIGANBAYAN UP Diliman. 2 On September 4, 2000, petitioner, with her
 Page 256 of 458
siblings and relatives, registered with the Securities and
Exchange Commission the Office of the Student Regent
Foundation, Inc. (OSRFI). 3
One of the projects of the OSRFI was the renovation of the
Vinzons Hall Annex. 4 President Estrada gave Fifteen
Million Pesos (P15,000,000.00) to the OSRFI as financial
assistance for the proposed renovation. The source of the
funds, according to the information, was the Office of the
President.
The renovation of Vinzons Hall Annex failed to
materialize. 5 The succeeding student regent, Kristine
Clare Bugayong, and Christine Jill de Guzman, Secretary
General of the KASAMA sa U.P., a system-wide alliance of
student councils within the state university, consequently
filed a complaint for Malversation of Public Funds and
Property with the Office of the Ombudsman. 6 aIAcCH
On July 3, 2003, the Ombudsman, after due investigation,
found probable cause to indict petitioner and her brother
Jade Ian D. Serana for estafa, docketed as Criminal Case
No. 27819 of the Sandiganbayan. 7 The Information reads:
The undersigned Special Prosecution Officer III,
Office of the Special Prosecutor, hereby accuses
HANNAH EUNICE D. SERANA and JADE IAN
D. SERANA of the crime ofEstafa, defined and
penalized under Paragraph 2(a), Article 315 of
the Revised Penal Code, as amended committed
as follows:
That on October, 24, 2000, or sometime prior or
subsequent thereto, in Quezon City, Metro
Manila, Philippines, and within the jurisdiction of
this Honorable Court, above-named accused,
HANNAH EUNICE D. SERANA, a high-ranking
public officer, being then the Student Regent of
the University of the Philippines, Diliman,
Quezon City, while in the performance of her
official functions, committing the offense in
relation to her office and taking advantage of her
position, with intent to gain,conspiring with her
brother, JADE IAN D. SERANA, a private
individual, did then and there wilfully, unlawfully
and feloniously defraud the government by
falsely and fraudulently representing to former
President Joseph Ejercito Estrada that the
renovation of the Vinzons Hall of the University
of the Philippines will be renovated and renamed
as "President Joseph Ejercito Estrada Student
Hall," and for which purpose accused HANNAH
EUNICE D. SERANA requested the amount of
FIFTEEN MILLION PESOS (P15,000,000.00),
Philippine Currency, from the Office of the
President, and the latter relying and believing on
said false pretenses and misrepresentation gave
and delivered to said accused Land Bank Check
No. 91353 dated October 24, 2000 in the amount
of FIFTEEN MILLION PESOS (P15,000,000.00),
which check was subsequently encashed by
accused Jade Ian D. Serana on October 25,
2000 and misappropriated for their personal use
and benefit, and despite repeated demands
made upon the accused for them to return
aforesaid amount, the said accused failed and
refused to do so to the damage and prejudice of
the government in the aforesaid amount.
CONTRARY TO LAW. (Underscoring supplied)
Petitioner moved to quash the information. She claimed
that the Sandiganbayan does not have any jurisdiction over
 Page 257 of 458
the offense charged or over her person, in her capacity as
UP student regent. EcASIC
Petitioner claimed that Republic Act (R.A.) No. 3019, as
amended by R.A. No. 8249, enumerates the crimes or
offenses over which the Sandiganbayan has jurisdiction. 8 It
has no jurisdiction over the crime of estafa. 9 It only has
jurisdiction over crimes covered by Title VII, Chapter II,
Section 2 (Crimes Committed by Public Officers), Book II of
the Revised Penal Code (RPC). Estafa falling under Title
X, Chapter VI (Crimes Against Property), Book II of the
RPC is not within the Sandiganbayan's jurisdiction.
She also argued that it was President Estrada, and not the
government, that was duped. Even assuming that she
received the P15,000,000.00, that amount came from
Estrada, and not from the coffers of the government. 10
Petitioner likewise posited that the Sandiganbayan had no
jurisdiction over her person. As a student regent, she was
not a public officer since she merely represented her peers,
in contrast to the other regents who held their positions in
an ex officio capacity. She added that she was a simple
student and did not receive any salary as a student regent.
She further contended that she had no power or authority
to receive monies or funds. Such power was vested with
the Board of Regents (BOR) as a whole. Since it was not
alleged in the information that it was among her functions
or duties to receive funds, or that the crime was committed
in connection with her official functions, the same is beyond
the jurisdiction of the Sandiganbayan citing the case
of Soller v. Sandiganbayan. 11
The Ombudsman opposed the motion. 12 It disputed
petitioner's interpretation of the law. Section 4 (b)
of Presidential Decree (P.D.) No. 1606 clearly contains
the catch-all phrase "in relation to office," thus, the
Sandiganbayan has jurisdiction over the charges against
petitioner. In the same breath, the prosecution countered
that the source of the money is a matter of defense. It
should be threshed out during a full-blown trial. 13
According to the Ombudsman, petitioner, despite her
protestations, was a public officer. As a member of the
BOR, she hads the general powers of administration and
exerciseds the corporate powers of UP. Based on
Mechem's definition of a public office, petitioner's stance
that she was not compensated, hence, not a public officer,
is erroneous. Compensation is not an essential part of
public office. Parenthetically, compensation has been
interpreted to include allowances. By this definition,
petitioner was compensated. 14 IcDESA
Sandiganbayan Disposition
In a Resolution dated November 14, 2003, the
Sandiganbayan denied petitioner's motion for lack of
merit. 15 It ratiocinated:
The focal point in controversy is the jurisdiction
of the Sandiganbayan over this case.
It is extremely erroneous to hold that only
criminal offenses covered by Chapter II, Section
2, Title VII, Book II of the Revised Penal Code
are within the jurisdiction of this Court. As
correctly pointed out by the prosecution, Section
4(b) of R.A. 8249 provides that the
Sandiganbayan also has jurisdiction over other
offenses committed by public officials and
employees in relation to their office. From this
provision, there is no single doubt that this Court
 Page 258 of 458
has jurisdiction over the offense
of estafacommitted by a public official in relation
to his office.
Accused-movant's claim that being merely a
member in representation of the student body,
she was never a public officer since she never
received any compensation nor does she fall
under Salary Grade 27, is of no moment, in view
of the express provision of Section 4 of Republic
Act No. 8249 which provides:
Sec. 4. Jurisdiction The Sandiganbayan shall
exercise exclusive original jurisdiction in all
cases involving:
(A) . . .
(1) Officials of the executive branch occupying
the positions of regional director and higher,
otherwise classified as Grade "27" and higher, of
the Compensation and Position Classification
Act of 1989 (Republic Act No. 6758), specifically
including:
xxx xxx xxx
(g) Presidents, directors or trustees, or
managers of government-owned or controlled
corporations, state universities or educational
institutions or foundations.(Italics supplied) EcIDaA
It is very clear from the aforequoted provision
that the Sandiganbayan has original exclusive
jurisdiction over all offenses involving the officials
enumerated in subsection (g), irrespective of
their salary grades, because the primordial
consideration in the inclusion of these officials is
the nature of their responsibilities and functions.
Is accused-movant included in the contemplated
provision of law?
A meticulous review of the existing Charter of the
University of the Philippines reveals that the
Board of Regents, to which accused-movant
belongs, exclusively exercises the general
powers of administration and corporate powers
in the university, such as: 1) To receive and
appropriate to the ends specified by law such
sums as may be provided by law for the support
of the university; 2) To prescribe rules for its own
government and to enact for the government of
the university such general ordinances and
regulations, not contrary to law, as are consistent
with the purposes of the university; and 3) To
appoint, on recommendation of the President of
the University, professors, instructors, lecturers
and other employees of the University; to fix their
compensation, hours of service, and such other
duties and conditions as it may deem proper; to
grant to them in its discretion leave of absence
under such regulations as it may promulgate,
any other provisions of law to the contrary
notwithstanding, and to remove them for cause
after an investigation and hearing shall have
been had.
It is well-established in corporation law that the
corporation can act only through its board of
directors, or board of trustees in the case of non-
stock corporations. The board of directors or
trustees, therefore, is the governing body of the
corporation.
It is unmistakably evident that the Board of
Regents of the University of the Philippines is
 Page 259 of 458
performing functions similar to those of the
Board of Trustees of a non-stock corporation.
This draws to fore the conclusion that being a
member of such board, accused-movant
undoubtedly falls within the category of public
officials upon whom this Court is vested with
original exclusive jurisdiction, regardless of the
fact that she does not occupy a position
classified as Salary Grade 27 or higher under
theCompensation and Position Classification Act
of 1989.
Finally, this court finds that accused-movant's
contention that the same of P15 Million was
received from former President Estrada and not
from the coffers of the government, is a matter a
defense that should be properly ventilated during
the trial on the merits of this case. 16
CcAITa
On November 19, 2003, petitioner filed a motion for
reconsideration. 17 The motion was denied with finality in a
Resolution dated February 4, 2004. 18
Issue
Petitioner is now before this Court, contending that "THE
RESPONDENT COURT COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK AND/OR EXCESS
OF JURISDICTION IN NOT QUASHING THE
INFORMATION AND DISMISING THE CASE
NOTWITHSTANDING THAT IS HAS NO JURISDICTION
OVER THE OFFENSE CHARGED IN THE
INFORMATION." 19
In her discussion, she reiterates her four-fold argument
below, namely: (a) the Sandiganbayan has no jurisdiction
over estafa; (b) petitioner is not a public officer with Salary
Grade 27 and she paid her tuition fees; (c) the offense
charged was not committed in relation to her office; (d) the
funds in question personally came from President Estrada,
not from the government.
Our Ruling
The petition cannot be granted.
Preliminarily, the denial of a motion to
quash is not correctible by certiorari.
We would ordinarily dismiss this petition
for certiorari outright on procedural grounds. Well-
established is the rule that when a motion to quash in a
criminal case is denied, the remedy is not a petition
for certiorari, but for petitioners to go to trial, without
prejudice to reiterating the special defenses invoked in their
motion to quash.20 Remedial measures as regards
interlocutory orders, such as a motion to quash, are
frowned upon and often dismissed. 21 The evident reason
for this rule is to avoid multiplicity of appeals in a single
action. 22HADTEC
In Newsweek, Inc. v. Intermediate Appellate Court, 23 the
Court clearly illustrated explained and illustrated the rule
and the exceptions, thus:
As a general rule, an order denying a motion to
dismiss is merely interlocutory and cannot be
subject of appeal until final judgment or order is
rendered. (Sec. 2 of Rule 41). The ordinary
procedure to be followed in such a case is to file
an answer, go to trial and if the decision is
adverse, reiterate the issue on appeal from the
final judgment. The same rule applies to an order
denying a motion to quash, except that instead
of filing an answer a plea is entered and no
appeal lies from a judgment of acquittal.
 Page 260 of 458
This general rule is subject to certain exceptions.
If the court, in denying the motion to dismiss or
motion to quash, acts without or in excess of
jurisdiction or with grave abuse of discretion,
then certiorari or prohibition lies. The reason is
that it would be unfair to require the defendant or
accused to undergo the ordeal and expense of a
trial if the court has no jurisdiction over the
subject matter or offense, or is not the court of
proper venue, or if the denial of the motion to
dismiss or motion to quash is made with grave
abuse of discretion or a whimsical and capricious
exercise of judgment. In such cases, the ordinary
remedy of appeal cannot be plain and adequate.
The following are a few examples of the
exceptions to the general rule.
In de Jesus v. Garcia (19 SCRA 554), upon the
denial of a motion to dismiss based on lack of
jurisdiction over the subject matter, this Court
granted the petition forcertiorari and prohibition
against the City Court of Manila and directed the
respondent court to dismiss the case.
In Lopez v. City Judge (18 SCRA 616), upon the
denial of a motion to quash based on lack of
jurisdiction over the offense, this Court granted
the petition for prohibition and enjoined the
respondent court from further proceeding in the
case.
In Enriquez v. Macadaeg (84 Phil. 674), upon the
denial of a motion to dismiss based on improper
venue, this Court granted the petition for
prohibition and enjoined the respondent judge
from taking cognizance of the case except to
dismiss the same.
In Manalo v. Mariano (69 SCRA 80), upon the
denial of a motion to dismiss based on bar by
prior judgment, this Court granted the petition
for certiorari and directed the respondent judge
to dismiss the case. aCHDAE
In Yuviengco v. Dacuycuy (105 SCRA 668),
upon the denial of a motion to dismiss based on
the Statute of Frauds, this Court granted the
petition for certiorari and dismissed the amended
complaint.
In Tacas v. Cariaso (72 SCRA 527), this Court
granted the petition for certiorari after the motion
to quash based on double jeopardy was denied
by respondent judge and ordered him to desist
from further action in the criminal case except to
dismiss the same.
In People v. Ramos (83 SCRA 11), the order
denying the motion to quash based on
prescription was set aside on certiorari and the
criminal case was dismissed by this Court. 24
We do not find the Sandiganbayan to have committed a
grave abuse of discretion.
The jurisdiction of the Sandiganbayan is
set by P.D. No. 1606, as amended, not by
R.A. No. 3019, as amended.
We first address petitioner's contention that the jurisdiction
of the Sandiganbayan is determined by Section 4 of R.A.
No. 3019 (The Anti-Graft and Corrupt Practices Act, as
amended). We note that petitioner refers to Section 4 of the
said law yet quotes Section 4 of P.D. No. 1606, as
amended, in her motion to quash before the
Sandiganbayan. 25 She repeats the reference in the instant
 Page 261 of 458
petition for certiorari 26 and in her memorandum of
authorities. 27
We cannot bring ourselves to write this off as a mere
clerical or typographical error. It bears stressing that
petitioner repeated this claim twice despite corrections
made by the Sandiganbayan. 28
Her claim has no basis in law. It is P.D. No. 1606, as
amended, rather than R.A. No. 3019, as amended, that
determines the jurisdiction of the Sandiganbayan. A brief
legislative history of the statute creating the
Sandiganbayan is in order. The Sandiganbayan was
created by P.D. No. 1486, promulgated by then President
Ferdinand E. Marcos on June 11, 1978. It was promulgated
to attain the highest norms of official conduct required of
public officers and employees, based on the concept that
public officers and employees shall serve with the highest
degree of responsibility, integrity, loyalty and efficiency and
shall remain at all times accountable to the people. 29 HICATc
P.D. No. 1486 was, in turn, amended by P.D. No.
1606 which was promulgated on December 10, 1978. P.D.
No. 1606 expanded the jurisdiction of the
Sandiganbayan. 30
P.D. No. 1606 was later amended by P.D. No. 1861 on
March 23, 1983, further altering the Sandiganbayan
jurisdiction. R.A. No. 7975 approved on March 30, 1995
made succeeding amendments to P.D. No. 1606, which
was again amended on February 5, 1997 by R.A. No.
8249. Section 4 of R.A. No. 8249 further modified the
jurisdiction of the Sandiganbayan. As it now stands, the
Sandiganbayan has jurisdiction over the following:
Sec. 4. Jurisdiction. The Sandiganbayan shall
exercise exclusive original jurisdiction in all
cases involving:
A. Violations of Republic Act No. 3019, as
amended, other known as the Anti-Graft and
Corrupt Practices Act, Republic Act No. 1379,
and Chapter II, Section 2, Title VII, Book II of the
Revised Penal Code, where one or more of the
accused are officials occupying the following
positions in the government, whether in a
permanent, acting or interim capacity, at the time
of the commission of the offense:
(1) Officials of the executive branch occupying
the positions of regional director and higher,
otherwise classified as Grade "27" and higher, of
the Compensation and Position Classification
Act of 989 (Republic Act No. 6758), specifically
including:
(a) Provincial governors, vice-governors,
members of the sangguniang panlalawigan, and
provincial treasurers, assessors, engineers, and
other city department heads;
(b) City mayor, vice-mayors, members of
the sangguniang panlungsod, city treasurers,
assessors, engineers, and other city department
heads;
(c) Officials of the diplomatic service occupying
the position of consul and higher;
(d) Philippine army and air force colonels, naval
captains, and all officers of higher rank;ACcTDS
(e) Officers of the Philippine National Police
while occupying the position of provincial director
 Page 262 of 458
and those holding the rank of senior
superintended or higher;
(f) City and provincial prosecutors and their
assistants, and officials and prosecutors in the
Office of the Ombudsman and special
prosecutor;
(g) Presidents, directors or trustees, or
managers of government-owned or controlled
corporations, state universities or educational
institutions or foundations.
(2) Members of Congress and officials thereof
classified as Grade "27" and up under
the Compensation and Position Classification
Act of 1989;
(3) Members of the judiciary without prejudice to
the provisions of the Constitution;
(4) Chairmen and members of Constitutional
Commission, without prejudice to the provisions
of the Constitution; and
(5) All other national and local officials classified
as Grade "27" and higher under
the Compensation and Position Classification
Act of 1989.
B. Other offenses of felonies whether simple or
complexed with other crimes committed by the
public officials and employees mentioned in
subsection a of this section in relation to their
office.
C. Civil and criminal cases filed pursuant to and
in connection with Executive Order Nos. 1, 2,
14 and 14-A, issued in 1986.
In cases where none of the accused are
occupying positions corresponding to Salary
Grade "27" or higher, as prescribed in the
said Republic Act No. 6758, or military and PNP
officer mentioned above, exclusive original
jurisdiction thereof shall be vested in the proper
regional court, metropolitan trial court, municipal
trial court, and municipal circuit trial court, as the
case may be, pursuant to their respective
jurisdictions as provided in Batas Pambansa Blg.
129, as amended.
The Sandiganbayan shall exercise exclusive
appellate jurisdiction over final judgments,
resolutions or order of regional trial courts
whether in the exercise of their own original
jurisdiction or of their appellate jurisdiction as
herein provided. IaSAHC
The Sandiganbayan shall have exclusive original
jurisdiction over petitions for the issuance of the
writs of mandamus, prohibition, certiorari,
habeas corpus,injunctions, and other ancillary
writs and processes in aid of its appellate
jurisdiction and over petitions of similar nature,
including quo warranto, arising or that may arise
in cases filed or which may be filed under
Executive Order Nos. 1, 2, 14 and 14-A, issued
in 1986: Provided, That the jurisdiction over
these petitions shall not be exclusive of the
Supreme Court.
The procedure prescribed in Batas Pambansa
Blg. 129, as well as the implementing rules that
the Supreme Court has promulgated and may
thereafter promulgate, relative to
appeals/petitions for review to the Court of
Appeals, shall apply to appeals and petitions for
 Page 263 of 458
review filed with the Sandiganbayan. In all cases
elevated to the Sandiganbayan and from the
Sandiganbayan to the Supreme Court, the Office
of the Ombudsman, through its special
prosecutor, shall represent the People of the
Philippines, except in cases filed pursuant to
Executive Order Nos. 1, 2, 14 and 14-A, issued
in 1986.
In case private individuals are charged as co-
principals, accomplices or accessories with the
public officers or employees, including those
employed in government-owned or controlled
corporations, they shall be tried jointly with said
public officers and employees in the proper
courts which shall exercise exclusive jurisdiction
over them.
Any provisions of law or Rules of Court to the
contrary notwithstanding, the criminal action and
the corresponding civil action for the recovery of
civil liability shall, at all times, be simultaneously
instituted with, and jointly determined in, the
same proceeding by the Sandiganbayan or the
appropriate courts, the filing of the criminal
action being deemed to necessarily carry with it
the filing of the civil action, and no right to
reserve the filing such civil action separately
from the criminal action shall be recognized:
Provided, however, That where the civil action
had heretofore been filed separately but
judgment therein has not yet been rendered, and
the criminal case is hereafter filed with the
Sandiganbayan or the appropriate court, said
civil action shall be transferred to the
Sandiganbayan or the appropriate court, as the
case may be, for consolidation and joint
determination with the criminal action, otherwise
the separate civil action shall be deemed
abandoned. caHCSD
Upon the other hand, R.A. No. 3019 is a penal statute
approved on August 17, 1960. The said law represses
certain acts of public officers and private persons alike
which constitute graft or corrupt practices or which may
lead thereto. 31 Pursuant to Section 10 of R.A. No. 3019, all
prosecutions for violation of the said law should be filed
with the Sandiganbayan. 32
R.A. No. 3019 does not contain an enumeration of the
cases over which the Sandiganbayan has jurisdiction. In
fact, Section 4 of R.A. No. 3019 erroneously cited by
petitioner, deals not with the jurisdiction of the
Sandiganbayan but with prohibition on private individuals.
We quote:
Section 4. Prohibition on private individuals.
(a) It shall be unlawful for any person having
family or close personal relation with any public
official to capitalize or exploit or take advantage
of such family or close personal relation by
directly or indirectly requesting or receiving any
present, gift or material or pecuniary advantage
from any other person having some business,
transaction, application, request or contract with
the government, in which such public official has
to intervene. Family relation shall include the
spouse or relatives by consanguinity or affinity in
the third civil degree. The word "close personal
relation" shall include close personal friendship,
social and fraternal connections, and
professional employment all giving rise to
intimacy which assures free access to such
public officer.
 Page 264 of 458
(b) It shall be unlawful for any person knowingly
to induce or cause any public official to commit
any of the offenses defined in Section 3 hereof.
In fine, the two statutes differ in that P.D. No. 1606, as
amended, defines the jurisdiction of the Sandiganbayan
while R.A. No. 3019, as amended, defines graft and corrupt
practices and provides for their penalties.
Sandiganbayan has jurisdiction over
the offense of estafa.
Relying on Section 4 of P.D. No. 1606, petitioner contends
that estafa is not among those crimes cognizable by the
Sandiganbayan. We note that in hoisting this argument,
petitioner isolated the first paragraph of Section 4 of P.D.
No. 1606, without regard to the succeeding paragraphs of
the said provision. SEIcAD
The rule is well-established in this jurisdiction that statutes
should receive a sensible construction so as to avoid an
unjust or an absurd conclusion. 33 Interpretatio talis in
ambiguis semper fienda est, ut evitetur inconveniens et
absurdum. Where there is ambiguity, such interpretation as
will avoid inconvenience and absurdity is to be
adopted. Kung saan mayroong kalabuan, ang
pagpapaliwanag ay hindi dapat maging mahirap at
katawa-tawa.
Every section, provision or clause of the statute must be
expounded by reference to each other in order to arrive at
the effect contemplated by the legislature. 34 The intention
of the legislator must be ascertained from the whole text of
the law and every part of the act is to be taken into
view. 35 In other words, petitioner's interpretation lies in
direct opposition to the rule that a statute must be
interpreted as a whole under the principle that the best
interpreter of a statute is the statute itself. 36 Optima statuti
interpretatrix est ipsum statutum. Ang isang batas ay
marapat na bigyan ng kahulugan sa kanyang kabuuan
sa ilalim ng prinsipyo na ang pinakamainam na
interpretasyon ay ang mismong batas.
Section 4 (B) of P.D. No. 1606 reads:
B. Other offenses or felonies whether simple or
complexed with other crimes committed by the
public officials and employees mentioned in
subsection a of this section in relation to their
office.
Evidently, the Sandiganbayan has jurisdiction over other
felonies committed by public officials in relation to their
office. We see no plausible or sensible reason to
exclude estafa as one of the offenses included in Section 4
(B) of P.D. No. 1606. Plainly, estafa is one of those other
felonies. The jurisdiction is simply subject to the twin
requirements that (a) the offense is committed by public
officials and employees mentioned in Section 4 (A) of P.D.
No. 1606, as amended, and that (b) the offense is
committed in relation to their office.
In Perlas, Jr. v. People, 37 the Court had occasion to
explain that the Sandiganbayan has jurisdiction over an
indictment for estafa versus a director of the National Parks
Development Committee, a government instrumentality.
The Court held then: ADTEaI
The National Parks Development Committee
was created originally as an Executive
Committee on January 14, 1963, for the
development of the Quezon Memorial, Luneta
and other national parks (Executive Order No.
30). It was later designated as the National
 Page 265 of 458
Parks Development Committee (NPDC) on
February 7, 1974 (E.O. No. 69). On January 9,
1966, Mrs. Imelda R. Marcos and Teodoro F.
Valencia were designated Chairman and Vice-
Chairman respectively (E.O. No. 3). Despite an
attempt to transfer it to the Bureau of Forest
Development, Department of Natural Resources,
on December 1, 1975 (Letter of Implementation
No. 39, issued pursuant to PD No. 830, dated
November 27, 1975), the NPDC has remained
under the Office of the President (E.O. No. 709,
dated July 27, 1981).
Since 1977 to 1981, the annual appropriations
decrees listed NPDC as a regular government
agency under the Office of the President and
allotments for its maintenance and operating
expenses were issued direct to NPDC (Exh. 10-
A, Perlas, Item Nos. 2, 3).
The Sandiganbayan's jurisdiction over estafa was
reiterated with greater firmness in Bondoc v.
Sandiganbayan. 38 Pertinent parts of the Court's ruling in
Bondoc read:
Furthermore, it is not legally possible to transfer
Bondoc's cases to the Regional Trial Court, for
the simple reason that the latter would not have
jurisdiction over the offenses. As already above
intimated, the inability of the Sandiganbayan to
hold a joint trial of Bondoc's cases and those of
the government employees separately charged
for the same crimes, has not altered the nature
of the offenses charged, as estafa thru
falsification punishable by penalties higher
than prision correccional or imprisonment of six
years, or a fine of P6,000.00, committed by
government employees in conspiracy with
private persons, including Bondoc. These crimes
are within the exclusive, original jurisdiction of
the Sandiganbayan. They simply cannot be
taken cognizance of by the regular courts, apart
from the fact that even if the cases could be so
transferred, a joint trial would nonetheless not be
possible.
Petitioner UP student regent
is a public officer.
Petitioner also contends that she is not a public officer. She
does not receive any salary or remuneration as a UP
student regent. This is not the first or likely the last time
that We will be called upon to define a public officer.
In Khan, Jr. v. Office of the Ombudsman, We ruled that it is
difficult to pin down the definition of a public
officer. 39 The 1987 Constitution does not define who are
public officers. Rather, the varied definitions and concepts
are found in different statutes and jurisprudence. cTCaEA
In Aparri v. Court of Appeals, 40 the Court held that:
A public office is the right, authority, and duty
created and conferred by law, by which for a
given period, either fixed by law or enduring at
the pleasure of the creating power, an individual
is invested with some portion of the sovereign
functions of the government, to be exercise by
him for the benefit of the public ([Mechem Public
Offices and Officers,] Sec. 1). The right to hold a
public office under our political system is
therefore not a natural right. It exists, when it
exists at all only because and by virtue of some
law expressly or impliedly creating and
conferring it (Mechem Ibid., Sec. 64). There is no
 Page 266 of 458
such thing as a vested interest or an estate in an
office, or even an absolute right to hold office.
Excepting constitutional offices which provide for
special immunity as regards salary and tenure,
no one can be said to have any vested right in
an office or its salary (42 Am. Jur. 881).
In Laurel v. Desierto, 41 the Court adopted the definition of
Mechem of a public office:
A public office is the right, authority and duty,
created and conferred by law, by which, for a
given period, either fixed by law or enduring at
the pleasure of the creating power, an individual
is invested with some portion of the sovereign
functions of the government, to be exercised by
him for the benefit of the public. The individual so
invested is a public officer. 42
Petitioner claims that she is not a public officer with Salary
Grade 27; she is, in fact, a regular tuition fee-paying
student. This is likewise bereft of merit. It is not only the
salary grade that determines the jurisdiction of the
Sandiganbayan. The Sandiganbayan also has jurisdiction
over other officers enumerated in P.D. No. 1606.
InGeduspan v. People, 43 We held that while the first part of
Section 4 (A) covers only officials with Salary Grade 27 and
higher, its second part specifically includes other executive
officials whose positions may not be of Salary Grade 27
and higher but who are by express provision of law placed
under the jurisdiction of the said court. Petitioner falls under
the jurisdiction of the Sandiganbayan as she is placed
there by express provision of law. 44 HCaDET
Section 4 (A) (1) (g) of P.D. No. 1606 explictly vested the
Sandiganbayan with jurisdiction over Presidents, directors
or trustees, or managers of government-owned or
controlled corporations, state universities or educational
institutions or foundations. Petitioner falls under this
category. As the Sandiganbayan pointed out, the BOR
performs functions similar to those of a board of trustees of
a non-stock corporation. 45 By express mandate of law,
petitioner is, indeed, a public officer as contemplated
by P.D. No. 1606.
Moreover, it is well established that compensation is not an
essential element of public office. 46 At most, it is merely
incidental to the public office. 47
Delegation of sovereign functions is essential in the public
office. An investment in an individual of some portion of the
sovereign functions of the government, to be exercised by
him for the benefit of the public makes one a public
officer. 48
The administration of the UP is a sovereign function in line
with Article XIV of the Constitution. UP performs a
legitimate governmental function by providing advanced
instruction in literature, philosophy, the sciences, and arts,
and giving professional and technical training. 49 Moreover,
UP is maintained by the Government and it declares no
dividends and is not a corporation created for profit. 50
The offense charged was committed
in relation to public office, according
to the Information.
Petitioner likewise argues that even assuming that she is a
public officer, the Sandiganbayan would still not have
jurisdiction over the offense because it was not committed
in relation to her office.
According to petitioner, she had no power or authority to
act without the approval of the BOR. She adds there was
 Page 267 of 458
no Board Resolution issued by the BOR authorizing her to
contract with then President Estrada; and that her acts
were not ratified by the governing body of the state
university. Resultantly, her act was done in a private
capacity and not in relation to public office.ACETID
It is axiomatic that jurisdiction is determined by the
averments in the information. 51 More than that, jurisdiction
is not affected by the pleas or the theories set up by
defendant or respondent in an answer, a motion to dismiss,
or a motion to quash. 52 Otherwise, jurisdiction would
become dependent almost entirely upon the whims of
defendant or respondent. 53
In the case at bench, the information alleged, in no
uncertain terms that petitioner, being then a student regent
of U.P., "while in the performance of her official
functions, committing the offense in relation to her office
and taking advantage of her position, with intent to gain,
conspiring with her brother, JADE IAN D. SERANA, a
private individual, did then and there wilfully, unlawfully and
feloniously defraud the government . . . ." (Underscoring
supplied)
Clearly, there was no grave abuse of discretion on the part
of the Sandiganbayan when it did not quash the
information based on this ground.
Source of funds is a defense that should
be raised during trial on the merits.
It is contended anew that the amount came from President
Estrada's private funds and not from the government
coffers. Petitioner insists the charge has no leg to stand on.
We cannot agree. The information alleges that the funds
came from the Office of the President and not its then
occupant, President Joseph Ejercito Estrada. Under the
information, it is averred that "petitioner requested the
amount of Fifteen Million Pesos (P15,000,000.00),
Philippine Currency, from the Office of the President, and
the latter relying and believing on said false pretenses and
misrepresentation gave and delivered to said accused
Land Bank Check No. 91353 dated October 24, 2000 in the
amount of Fifteen Million Pesos (P15,000,000.00)."
Again, the Court sustains the Sandiganbayan observation
that the source of the P15,000,000 is a matter of defense
that should be ventilated during the trial on the merits of the
instant case. 54
A lawyer owes candor, fairness
and honesty to the Court.
As a parting note, petitioner's counsel, Renato G. dela
Cruz, misrepresented his reference to Section 4 of P.D.
No. 1606 as a quotation from Section 4 of R.A. No. 3019. A
review of his motion to quash, the instant petition
for certiorari and his memorandum, unveils the
misquotation. We urge petitioner's counsel to observe
Canon 10 of the Code of Professional Responsibility,
specifically Rule 10.02 of the Rules stating that "a lawyer
shall not misquote or misrepresent." DaTICc
The Court stressed the importance of this rule in Pangan v.
Ramos, 55 where Atty. Dionisio D. Ramos used the name
Pedro D.D. Ramos in connection with a criminal case. The
Court ruled that Atty. Ramos resorted to deception by using
a name different from that with which he was authorized.
We severely reprimanded Atty. Ramos and warned that a
repetition may warrant suspension or disbarment. 56
 Page 268 of 458
We admonish petitioner's counsel to be more careful and
accurate in his citation. A lawyer's conduct before the court
should be characterized by candor and fairness. 57The
administration of justice would gravely suffer if lawyers do
not act with complete candor and honesty before the
courts. 58
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.
(Serana v. Sandiganbayan, G.R. No. 162059, [January
|||
22, 2008], 566 PHIL 224-252)
[G.R. No. 198755. June 5, 2013.]
ALBERTO PAT-OG, SR., petitioner, vs.
CIVIL SERVICE COMMISSION, respondent.
DECISION
MENDOZA, J : p
Before this Court is a Petition for Review
on Certiorari under Rule 45 of the Rules of Court, which
seeks to set aside the April 6, 2011 Decision 1 of the Court
of Appeals(CA) in CA-G.R. SP No. 101700, affirming the
April 11, 2007 Decision 2 of the Civil Service
Commission (CSC), which ordered the dismissal of
petitioner Alberto Pat-og, Sr.(Pat-og) from the service for
grave misconduct.
The Facts
On September 13, 2003, Robert Bang-on (Bang-on), then
a 14-year old second year high school student of the
Antadao National High School in Sagada, Mountain
Province, filed an affidavit-complaint against Pat-og, a third
year high school teacher of the same school, before the
Civil Service Commission-Cordillera Administrative
Region (CSC-CAR).
Bang-on alleged that on the morning of August 26, 2003,
he attended his class at the basketball court of the school,
where Pat-og and his third year students were also holding
a separate class; that he and some of his classmates
joined Pat-og's third year students who were practicing
basketball shots; that Pat-og later instructed them to form
two lines; that thinking that three lines were to be formed,
he stayed in between the two lines; that Pat-og then held
his right arm and punched his stomach without warning for
failing to follow instructions; and that as a result, he
suffered stomach pain for several days and was confined in
a hospital from September 10-12, 2003, as evidenced by a
medico-legal certificate, which stated that he sustained a
contusion hematoma in the hypogastric area. cHAIES
Regarding the same incident, Bang-on filed a criminal case
against Pat-og for the crime of Less Serious Physical Injury
 Page 269 of 458
with the Regional Trial Court (RTC) of Bontoc, Mountain
Province.
Taking cognizance of the administrative case, the CSC-
CAR directed Pat-og to file his counter-affidavit. He denied
the charges hurled against him and claimed that when he
was conducting his Music, Arts, Physical Education and
Health (MAPEH) class, composed of third year students,
he instructed the girls to play volleyball and the boys to
play basketball; that he later directed the boys to form two
lines; that after the boys failed to follow his repeated
instructions, he scolded them in a loud voice and wrested
the ball from them; that while approaching them, he noticed
that there were male students who were not members of
his class who had joined the shooting practice; that one of
those male students was Bang-on, who was supposed to
be having his own MAPEH class under another teacher;
that he then glared at them, continued scolding them and
dismissed the class for their failure to follow instructions;
and that he offered the sworn statement of other students
to prove that he did not box Bang-on.
On June 1, 2004, the CSC-CAR found the existence of
a prima facie case for misconduct and formally charged
Pat-og.
While the proceedings of the administrative case were
ongoing, the RTC rendered its judgment in the criminal
case and found Pat-og guilty of the offense of slight
physical injury. He was meted the penalty of imprisonment
from eleven (11) to twenty (20) days. Following his
application for probation, the decision became final and
executory and judgment was entered.
Meanwhile, in the administrative case, a pre-hearing
conference was conducted after repeated postponement
by Pat-og. With the approval of the CSC-CAR, the
prosecution submitted its position paper in lieu of a formal
presentation of evidence and formally offered its evidence,
which included the decision in the criminal case. It offered
the affidavits of Raymund Atuban, a classmate of Bang-on;
and James Domanog, a third year high school student,
who both witnessed Pat-og hit Bang-on in the stomach. THIECD
For his defense, Pat-og offered the testimonies of his
witnesses Emiliano Dontongan (Dontongan), a teacher
in another school, who alleged that he was a member of
the Municipal Council for the Protection of Children, and
that, in such capacity, he investigated the incident and
came to the conclusion that it did not happen at all; and
Ernest Kimmot, who testified that he was in the basketball
court at the time but did not see such incident. Pat-og also
presented the affidavits of thirteen other witnesses to prove
that he did not punch Bang-on.
Ruling of the CSC-CAR
In its Decision, 3 dated September 19, 2006, the CSC-CAR
found Pat-og guilty and disposed as follows:
WHEREFORE, all premises told, respondent
Alberto Pat-og, Sr., Teacher Antadao National
High School, is hereby found guilty of Simple
Misconduct.
Under the Uniform Rules on Administrative
Cases in the Civil Service, the imposable penalty
on the first offense of Simple Misconduct is
suspension of one (1) month and one (1) day to
six (6) months.
Due to seriousness of the resulting injury to the
fragile body of the minor victim, the CSC-CAR
hereby imposed upon respondent the maximum
 Page 270 of 458
penalty attached to the offense which is six
months suspension without pay. aHATDI
The CSC-CAR gave greater weight to the version posited
by the prosecution, finding that a blow was indeed inflicted
by Pat-og on Bang-on. It found that Pat-og had a motive for
doing so his students' failure to follow his repeated
instructions which angered him. Nevertheless, the CSC-
CAR ruled that a motive was not necessary to establish
guilt if the perpetrator of the offense was positively
identified. The positive identification of Pat-og was duly
proven by the corroborative testimonies of the prosecution
witnesses, who were found to be credible and
disinterested. The testimony of defense witness,
Dontongan, was not given credence considering that the
students he interviewed for his investigation claimed that
Pat-og was not even angry at the time of the incident,
contrary to the latter's own admission.
The CSC-CAR held that the actions of Pat-og clearly
transgressed the proper norms of conduct required of a
public official, and the gravity of the offense was further
magnified by the seriousness of the injury of Bang-on
which required a healing period of more than ten (10) days.
It pointed out that, being his teacher, Pat-og's substitute
parental authority did not give him license to physically
chastise a misbehaving student. The CSC-CAR added that
the fact that Pat-og applied for probation in the criminal
case, instead of filing an appeal, further convinced it of his
guilt.
The CSC-CAR believed that the act committed by Pat-og
was sufficient to find him guilty of Grave Misconduct. It,
however, found the corresponding penalty of dismissal
from the service too harsh under the circumstances. Thus,
it adjudged petitioner guilty of Simple Misconduct and
imposed the maximum penalty of suspension for six (6)
months.
On December 11, 2006, the motion for reconsideration filed
by Pat-og was denied for lack of merit. 4
The Ruling of the CSC
In its Resolution, 5 dated April 11, 2007, the CSC
dismissed Pat-og's appeal and affirmed with modification
the decision of the CSC-CAR as follows: SEDICa
WHEREFORE, foregoing premises considered,
the instant appeal is hereby DISMISSED. The
decision of the CSC-CAR is affirmed with the
modification that Alberto Pat-og, Sr., is adjudged
guilty of grave misconduct, for which he is meted
out the penalty of dismissal from the service with
all its accessory penalties of cancellation of
eligibilities, perpetual disqualification from re-
employment in the government service, and
forfeiture of retirement benefits. 6
After evaluating the records, the CSC sustained the CSC-
CAR's conclusion that there existed substantial evidence to
sustain the finding that Pat-og did punch Bang-on in the
stomach. It gave greater weight to the positive statements
of Bang-on and his witnesses over the bare denial of Pat-
og. It also highlighted the fact that Pat-og failed to adduce
evidence of any ill motive on the part of Bang-on in filing
the administrative case against him. It likewise gave
credence to the medico-legal certificate showing that Bang-
on suffered a hematoma contusion in his hypogastric area.
The CSC ruled that the affidavits of Bang-on's witnesses
were not bereft of evidentiary value even if Pat-og was not
afforded a chance to cross-examine the witnesses of Bang-
 Page 271 of 458

on. It is of no moment because the cross-examination of
witnesses is not an indispensable requirement of
administrative due process.
The CSC noted that Pat-og did not question but, instead,
fully acquiesced in his conviction in the criminal case for
slight physical injury, which was based on the same set of
facts and circumstances, and involved the same parties
and issues. It, thus, considered his prior criminal conviction
as evidence against him in the administrative case.
Finding that his act of punching his student displayed a
flagrant and wanton disregard of the dignity of a person,
reminiscent of corporal punishment that had since been
outlawed for being harsh, unjust, and cruel, the CSC
upgraded Pat-og's offense from Simple Misconduct to
Grave Misconduct and ordered his dismissal from the
service.IHCacT
from questioning the jurisdiction of the CSC as the records
clearly showed that he actively participated in the
proceedings. It was of the view that Pat-og was not denied
due process when he failed to cross-examine Bang-on and
his witnesses because he was given the opportunity to be
heard and present his evidence before the CSC-CAR and
the CSC.
The CA also held that the CSC committed no error in
taking into account the conviction of Pat-og in the criminal
case. It stated that his conviction was not the sole basis of
the CSC for his dismissal from the service because there
was substantial evidence proving that Pat-og had indeed
hit Bang-on.
In its assailed Resolution, 9 dated September 13, 2011, the
CA denied the motion for reconsideration filed by Pat-og.
Hence, the present petition with the following: DCSETa

Pat-og filed a motion for reconsideration, questioning for Assignment of Errors

the first time the jurisdiction of CSC over the case. He
contended that administrative charges against a public WHETHER OR NOT RESPONDENT COURT
school teacher should have been initially heard by a OF APPEALS COMMITTED GRAVE ABUSE
committee to be constituted pursuant to the Magna Carta OF DISCRETION WHEN IT AFFIRMED THE
for Public School Teachers. SUPREME PENALTY OF DISMISSAL FROM
SERVICE WITH FORFEITURE OF
On November 5, 2007, the CSC denied his motion for RETIREMENT BENEFITS AGAINST THE
reconsideration. 7 It ruled that Pat-og was estopped from PETITIONER WITHOUT CONSIDERING
challenging its jurisdiction considering that he actively PETITIONER'S LONG YEARS OF
participated in the administrative proceedings against him, GOVERNMENT SERVICE?
raising the issue of jurisdiction only after his appeal was WHETHER OR NOT RESPONDENT COURT
dismissed by the CSC. OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION WHEN IT RULED THAT
Ruling of the Court of Appeals
PETITIONER IS ESTOPPED FROM
In its assailed April 6, 2011 Decision, 8 the CA affirmed the QUESTIONING THE JURISDICTION OF THE
resolutions of the CSC. It agreed that Pat-og was estopped CIVIL SERVICE COMMISSION TO HEAR
 Page 272 of 458
AND DECIDE THE ADMINISTRATIVE CASE
AGAINST HIM?
WHETHER OR NOT RESPONDENT COURT
OF APPEALS SERIOUSLY ERRED AND
COMMITTED GRAVE ABUSE OF
DISCRETION IN DISMISSING THE APPEAL
DESPITE LACK OF SUBSTANTIAL
EVIDENCE?
On Jurisdiction
Pat-og contends that Section 9 of Republic Act (R.A.) No.
4670, otherwise known as the Magna Carta for Public
School Teachers, provides that administrative charges
against a public school teacher shall be heard initially by a
committee constituted under said section. As no committee
was ever formed, the petitioner posits that he was denied
due process and that the CSC did not have the jurisdiction
to hear and decide his administrative case. He further
argues that notwithstanding the fact that the issue of
jurisdiction was raised for the first time on appeal, the rule
remains that estoppel does not confer jurisdiction on a
tribunal that has no jurisdiction over the cause of action or
subject matter of the case.
The Court cannot sustain his position.
The petitioner's argument that the administrative case
against him can only proceed under R.A. No. 4670 is
misplaced. HCITcA
In Puse v. Santos-Puse, 10 it was held that the CSC, the
Department of Education (DepEd) and the Board of
Professional Teachers-Professional Regulatory
Commission(PRC) have concurrent jurisdiction over
administrative cases against public school teachers.
Under Article IX-B of the 1987 Constitution, the CSC is the
body charged with the establishment and administration of
a career civil service which embraces all branches and
agencies of the government. 11 Executive Order (E.O.) No.
292 (the Administrative Code of 1987) 12 and Presidential
Decree (P.D.) No. 807 (the Civil Service Decree of the
Philippines) 13 expressly provide that the CSC has the
power to hear and decide administrative disciplinary cases
instituted with it or brought to it on appeal. Thus, the CSC,
as the central personnel agency of the government, has
the inherent power to supervise and discipline all members
of the civil service, including public school teachers.
Indeed, under Section 9 of R.A. No. 4670, the jurisdiction
over administrative cases of public school teachers is
lodged with the investigating committee constituted
therein. 14 Also, under Section 23 of R.A. No. 7836 (the
Philippine Teachers Professionalization Act of 1994), the
Board of Professional Teachers is given the power, after
due notice and hearing, to suspend or revoke the certificate
of registration of a professional teacher for causes
enumerated therein. 15
Concurrent jurisdiction is that which is possessed over the
same parties or subject matter at the same time by two or
more separate tribunals. When the law bestows upon a
government body the jurisdiction to hear and decide cases
involving specific matters, it is to be presumed that such
jurisdiction is exclusive unless it be proved that another
body is likewise vested with the same jurisdiction, in which
case, both bodies have concurrent jurisdiction over the
matter. 16
Where concurrent jurisdiction exists in several tribunals,
the body that first takes cognizance of the complaint shall
 Page 273 of 458
exercise jurisdiction to the exclusion of the others. In this
case, it was CSC which first acquired jurisdiction over the
case because the complaint was filed before it. Thus, it had
the authority to proceed and decide the case to the
exclusion of the DepEd and the Board of Professional
Teachers. 17
In CSC v. Alfonso, 18 it was held that special laws, such
as R.A. No. 4670, do not divest the CSC of its inherent
power to supervise and discipline all members of the civil
service, including public school teachers. Pat-og, as a
public school teacher, is first and foremost, a civil servant
accountable to the people and answerable to the CSC for
complaints lodged against him as a public servant. To hold
that R.A. No. 4670 divests the CSC of its power to
discipline public school teachers would negate the very
purpose for which the CSC was established and would
impliedly amend the Constitution itself.SAaTHc
To further drive home the point, it was ruled in CSC v.
Macud 19 that R.A. No. 4670, in imposing a separate set of
procedural requirements in connection with administrative
proceedings against public school teachers, should be
construed to refer only to the specific procedure to be
followed in administrative investigationsconducted by the
DepEd. By no means, then, did R.A. No. 4670 confer an
exclusive disciplinary authority over public school teachers
on the DepEd.
At any rate, granting that the CSC was without jurisdiction,
the petitioner is indeed estopped from raising the issue.
Although the rule states that a jurisdictional question may
be raised at any time, such rule admits of the exception
where, as in this case, estoppel has supervened. 20 Here,
instead of opposing the CSC's exercise of jurisdiction, the
petitioner invoked the same by actively participating in the
proceedings before the CSC-CAR and by even filing his
appeal before the CSC itself; only raising the issue of
jurisdiction later in his motion for reconsideration after the
CSC denied his appeal. This Court has time and again
frowned upon the undesirable practice of a party submitting
his case for decision and then accepting the judgment only
if favorable, but attacking it for lack of jurisdiction when
adverse. 21
On Administrative Due Process
On due process, Pat-og asserts that the affidavits of the
complainant and his witnesses are of questionable veracity
having been subscribed in Bontoc, which is nearly 30
kilometers from the residences of the parties. Furthermore,
he claimed that considering that the said affiants never
testified, he was never afforded the opportunity to cross-
examine them. Therefore, their affidavits were mere
hearsay and insufficient to prove his guilt.
The petitioner does not persuade.
The essence of due process is simply to be heard, or as
applied to administrative proceedings, a fair and
reasonable opportunity to explain one's side, or an
opportunity to seek a reconsideration of the action or ruling
complained of. 22 Administrative due process cannot be
fully equated with due process in its strict judicial sense. In
administrative proceedings, a formal or trial-type hearing is
not always necessary 23 and technical rules of procedure
are not strictly applied. Hence, the right to cross-examine is
not an indispensable aspect of administrative due
process. 24 The petitioner cannot, therefore, argue that the
affidavit of Bang-on and his witnesses are hearsay and
insufficient to prove his guilt.
TESDcA
 Page 274 of 458
At any rate, having actively participated in the proceedings
before the CSC-CAR, the CSC, and the CA, the petitioner
was apparently afforded every opportunity to explain his
side and seek reconsideration of the ruling against him.
As to the issue of the veracity of the affidavits, such is a
question of fact which cannot now be raised before the
Court under Rule 45 of the Rules of Court. The CSC-CAR,
the CSC and the CA did not, therefore, err in giving
credence to the affidavits of the complainants and his
witnesses, and in consequently ruling that there was
substantial evidence to support the finding of misconduct
on the part of the petitioner.
On the Penalty
Assuming that he did box Bang-on, Pat-og argues that
there is no substantial evidence to prove that he did so with
a clear intent to violate the law or in flagrant disregard of
the established rule, as required for a finding of grave
misconduct. He insists that he was not motivated by bad
faith or ill will because he acted in the belief that, as a
teacher, he was exercising authority over Bang-on in loco
parentis, and was, accordingly, within his rights to
discipline his student. Citing his 33 years in the government
service without any adverse record against him and the
fact that he is at the edge of retirement, being already 62
years old, the petitioner prays that, in the name of
substantial and compassionate justice, the CSC-CAR's
finding of simple misconduct and the concomitant penalty
of suspension should be upheld, instead of dismissal.
The Court agrees in part. THcEaS
Misconduct means intentional wrongdoing or deliberate
violation of a rule of law or standard of behaviour. To
constitute an administrative offense, misconduct should
relate to or be connected with the performance of the
official functions and duties of a public officer. In grave
misconduct, as distinguished from simple misconduct, the
elements of corruption, clear intent to violate the law or
flagrant disregard of an established rule must be
manifest. 25
Teachers are duly licensed professionals who must not
only be competent in the practice of their noble profession,
but must also possess dignity and a reputation with high
moral values. They must strictly adhere to, observe, and
practice the set of ethical and moral principles, standards,
and values laid down in the Code of Ethics of Professional
Teachers, which apply to all teachers in schools in the
Philippines, whether public or private, as provided in the
preamble of the said Code. 26 Section 8 of Article VIII of the
same Code expressly provides that "a teacher shall not
inflict corporal punishment on offending learners."
Clearly then, petitioner cannot argue that in punching
Bang-on, he was exercising his right as a teacher in loco
parentis to discipline his student. It is beyond cavil that the
petitioner, as a public school teacher, deliberately violated
his Code of Ethics. Such violation is a flagrant disregard for
the established rule contained in the said Code tantamount
to grave misconduct.
Under Section 52 (A) (2) of Rule IV of the Uniform Rules on
Administrative Cases in the Civil Service, the penalty for
grave misconduct is dismissal from the service, which
carries with it the cancellation of eligibility, forfeiture of
retirement benefits and perpetual disqualification from
reemployment in the government service. 27 This penalty
must, however, be tempered with compassion as there was
 Page 275 of 458
sufficient provocation on the part of Bang-on. Considering
further the mitigating circumstances that the petitioner has
been in the government service for 33 years, that this is his
first offense and that he is at the cusp of retirement, the
Court finds the penalty of suspension for six months as
appropriate under the circumstances. cCaATD
WHEREFORE, the Court PARTIALLY GRANTS the
petition and MODIFIES the April 6, 2011 Decision of the
Court of Appeals in CA-G.R. SP No. 101700. Accordingly,
Alberto Pat-og, Sr. is found GUILTY of Grave Misconduct,
but the penalty is reduced from dismissal from the service
to SUSPENSION for SIX MONTHS.
SO ORDERED.
(Pat-og, Sr. v. Civil Service Commission, G.R. No.
|||
198755, [June 5, 2013], 710 PHIL 501-518)
[G.R. No. 173946. June 19, 2013.]
BOSTON EQUITY RESOURCES,
INC., petitioner, vs. COURT OF APPEALS
AND LOLITA G. TOLEDO, respondents.
DECISION
PEREZ, J :p
Before the Court is a Petition for Review
on Certiorari seeking to reverse and set aside: (1) the
Decision, 1 dated 28 February 2006 and (2) the
Resolution, 2 dated 1 August 2006 of the Court of Appeals
in CA-G.R. SP No. 88586. The challenged decision
granted herein respondent's petition for certiorari upon a
finding that the trial court committed grave abuse of
discretion in denying respondent's motion to dismiss the
complaint against her. 3 Based on this finding, the Court of
Appeals reversed and set aside the Orders, dated 8
November 2004 4 and 22 December 2004, 5 respectively,
of the Regional Trial Court (RTC) of Manila, Branch 24.
The Facts
On 24 December 1997, petitioner filed a complaint for sum
of money with a prayer for the issuance of a writ of
preliminary attachment against the spouses Manuel and
Lolita Toledo. 6 Herein respondent filed an Answer dated
19 March 1998 but on 7 May 1998, she filed a Motion for
Leave to Admit Amended Answer 7 in which she alleged,
among others, that her husband and co-defendant, Manuel
Toledo (Manuel), is already dead. 8 The death
certificate 9 of Manuel states "13 July 1995" as the date of
death. As a result, petitioner filed a motion, dated 5 August
1999, to require respondent to disclose the heirs of
Manuel. 10 In compliance with the verbal order of the court
during the 11 October 1999 hearing of the case,
respondent submitted the required names and addresses
of the heirs. 11 Petitioner then filed a Motion for
 Page 276 of 458
Substitution, 12 dated 18 January 2000, praying that
Manuel be substituted by his children as party-defendants.
It appears that this motion was granted by the trial court in
an Order dated 9 October 2000. 13
Pre-trial thereafter ensued and on 18 July 2001, the trial
court issued its pre-trial order containing, among others,
the dates of hearing of the case. 14
The trial of the case then proceeded. Herein petitioner, as
plaintiff, presented its evidence and its exhibits were
thereafter admitted.
On 26 May 2004, the reception of evidence for herein
respondent was cancelled upon agreement of the parties.
On 24 September 2004, counsel for herein respondent was
given a period of fifteen days within which to file a demurrer
to evidence. 15 However, on 7 October 2004, respondent
instead filed a motion to dismiss the complaint, citing the
following as grounds: (1) that the complaint failed to
implead an indispensable party or a real party in interest;
hence, the case must be dismissed for failure to state a
cause of action; (2) that the trial court did not acquire
jurisdiction over the person of Manuel pursuant to Section
5, Rule 86 of the Revised Rules of Court; (3) that the trial
court erred in ordering the substitution of the deceased
Manuel by his heirs; and (4) that the court must also
dismiss the case against Lolita Toledo in accordance with
Section 6, Rule 86 of the Rules of Court. 16 aHADTC
The trial court, in an Order dated 8 November 2004, denied
the motion to dismiss for having been filed out of time,
citing Section 1, Rule 16 of the 1997 Rules of Courtwhich
states that: "[W]ithin the time for but before filing the
answer to the complaint or pleading asserting a claim, a
motion to dismiss may be made . . . . " 17Respondent's
motion for reconsideration of the order of denial was
likewise denied on the ground that "defendants' attack on
the jurisdiction of this Court is now barred by estoppel by
laches" since respondent failed to raise the issue despite
several chances to do so. 18
Aggrieved, respondent filed a petition for certiorari with the
Court of Appeals alleging that the trial court seriously erred
and gravely abused its discretion in denying her motion to
dismiss despite discovery, during the trial of the case, of
evidence that would constitute a ground for dismissal of the
case. 19
The Court of Appeals granted the petition based on the
following grounds:
It is elementary that courts acquire jurisdiction
over the person of the defendant . . . only when
the latter voluntarily appeared or submitted to the
court or by coercive process issued by the court
to him, . . . In this case, it is undisputed that
when [petitioner] Boston filed the complaint
on December 24, 1997, defendant Manuel S.
Toledo was already dead, . . . Such being the
case, the court a quo could not have acquired
jurisdiction over the person of defendant Manuel
S. Toledo.
. . . the court a quo's denial of [respondent's]
motion to dismiss was based on its finding that
[respondent's] attack on the jurisdiction of the
court was already barred by laches as
[respondent] failed to raise the said ground in its
[sic] amended answer and during the pre-trial,
despite her active participation in the
proceedings.
 Page 277 of 458
However, . . . it is well-settled that issue on
jurisdiction may be raised at any stage of the
proceeding, even for the first time on appeal. By
timely raising the issue on jurisdiction in her
motion to dismiss . . . [respondent] is
not estopped [from] raising the question on
jurisdiction. Moreover, when issue on jurisdiction
was raised by [respondent], the court a quo had
not yet decided the case, hence, there is no
basis for the court a quo to invoke estoppel to
justify its denial of the motion for
reconsideration; HcaDIA
It should be stressed that when the complaint
was filed, defendant Manuel S. Toledo was
already dead. The complaint should have
impleaded the estate of Manuel S. Toledo as
defendant, not only the wife, considering that the
estate of Manuel S. Toledo is an indispensable
party, which stands to be benefited or be injured
in the outcome of the case. . . .
xxx xxx xxx
[Respondent's] motion to dismiss the complaint
should have been granted by public respondent
judge as the same was in order. Considering that
the obligation of Manuel S. Toledo is solidary
with another debtor, . . . , the claim . . . should be
filed against the estate of Manuel S. Toledo, in
conformity with the provision of Section 6, Rule
86 of the Rules of Court,. . . . 20
The Court of Appeals denied petitioner's motion for
reconsideration. Hence, this petition.
The Issues
Petitioner claims that the Court of Appeals erred in not
holding that:
1. Respondent is already estopped from
questioning the trial court's jurisdiction;
2. Petitioner never failed to implead an
indispensable party as the estate of
Manuel is not an indispensable party;
3. The inclusion of Manuel as party-
defendant is a mere misjoinder of party
not warranting the dismissal of the
case before the lower court; and
4. Since the estate of Manuel is not an
indispensable party, it is not necessary
that petitioner file its claim against the
estate of Manuel.
In essence, what is at issue here is the correctness of the
trial court's orders denying respondent's motion to dismiss.
The Ruling of the Court
We find merit in the petition.
Motion to dismiss filed out of time
To begin with, the Court of Appeals erred in granting the
writ of certiorari in favor of respondent. Well settled is the
rule that the special civil action for certiorari is not the
proper remedy to assail the denial by the trial court of a
motion to dismiss. The order of the trial court denying a
motion to dismiss is merely interlocutory, as it neither
terminates nor finally disposes of a case and still leaves
something to be done by the court before a case is finally
decided on the merits. 21 Therefore, "the proper remedy in
 Page 278 of 458
such a case is to appeal after a decision has been
rendered. 22 aSTHDc
As the Supreme Court held in Indiana Aerospace
University v. Comm. on Higher Education: 23
A writ of certiorari is not intended to correct every
controversial interlocutory ruling; it is resorted
only to correct a grave abuse of discretion or a
whimsical exercise of judgment equivalent to
lack of jurisdiction. Its function is limited to
keeping an inferior court within its jurisdiction
and to relieve persons from arbitrary acts acts
which courts or judges have no power or
authority in law to perform. It is not designed to
correct erroneous findings and conclusions
made by the courts.(Emphasis supplied)
Even assuming that certiorari is the proper remedy, the trial
court did not commit grave abuse of discretion in denying
respondent's motion to dismiss. It, in fact, acted correctly
when it issued the questioned orders as respondent's
motion to dismiss was filed SIX YEARS AND FIVE
MONTHS AFTER SHE FILED HER AMENDED ANSWER.
This circumstance alone already warranted the outright
dismissal of the motion for having been filed in clear
contravention of the express mandate of Section 1, Rule
16, of the Revised Rules of Court. Under this provision, a
motion to dismiss shall be filed within the time for but
before the filing of an answer to the complaint or pleading
asserting a claim. 24
More importantly, respondent's motion to dismiss was filed
after petitioner has completed the presentation of its
evidence in the trial court, 25 giving credence to petitioner's
and the trial court's conclusion that the filing of the motion
to dismiss was a mere ploy on the part of respondent to
delay the prompt resolution of the case against her.
Also worth mentioning is the fact that respondent's motion
to dismiss under consideration herein is not the first motion
to dismiss she filed in the trial court. It appears that she
had filed an earlier motion to dismiss 26 on the sole ground
of the unenforceability of petitioner's claim under the
Statute of Frauds, which motion was denied by the trial
court. More telling is the following narration of the trial court
in its Order denying respondent's motion for
reconsideration of the denial of her motion to dismiss:
As can be gleaned from the records, with the
admission of plaintiff's exhibits, reception of
defendants' evidence was set on March 31, and
April 23, 2004 . . . . On motion of the
defendant[s], the hearing on March 31, 2004 was
cancelled.
On April 14, 2004, defendants sought the
issuance of subpoena ad
testificandum and duces tecum to one Gina M.
Madulid, to appear and testify for the defendants
on April 23, 2004. Reception of defendants'
evidence was again deferred to May 26, June 2
and June 30, 2004, . . . .
On May 13, 2004, defendants sought again the
issuance of a subpoena duces tecum and ad
testificandum to the said Gina Madulid. On May
26, 2004, reception of defendants [sic] evidence
was cancelled uponthe agreement of the parties.
On July 28, 2004, in the absence of defendants'
witness, hearing was reset to September 24 and
October 8, 2004 . . . .
 Page 279 of 458
On September 24, 2004, counsel for defendants
was given a period of fifteen (15) days to file a
demurrer to evidence. On October 7, 2004,
defendants filed instead a Motion to Dismiss . . .
. 27
Respondent's act of filing multiple motions, such as the first
and earlier motion to dismiss and then the motion to
dismiss at issue here, as well as several motions for
postponement, lends credibility to the position taken by
petitioner, which is shared by the trial court, that
respondent is deliberately impeding the early disposition of
this case. The filing of the second motion to dismiss was,
therefore, "not only improper but also dilatory." 28 Thus, the
trial court, "far from deviating or straying off course from
established jurisprudence on [the] matter, . . . had in fact
faithfully observed the law and legal precedents in this
case." 29 The Court of Appeals, therefore, erred not only in
entertaining respondent's petition for certiorari, it likewise
erred in ruling that the trial court committed grave abuse of
discretion when it denied respondent's motion to
dismiss. IECcAT
On whether or not respondent is estopped from
questioning the jurisdiction of the trial court
At the outset, it must be here stated that, as the
succeeding discussions will demonstrate, jurisdiction over
the person of Manuel should not be an issue in this case. A
protracted discourse on jurisdiction is, nevertheless,
demanded by the fact that jurisdiction has been raised as
an issue from the lower court, to the Court of Appeals and,
finally, before this Court. For the sake of clarity, and in
order to finally settle the controversy and fully dispose of all
the issues in this case, it was deemed imperative to resolve
the issue of jurisdiction.
1.Aspects of Jurisdiction
Petitioner calls attention to the fact that respondent's
motion to dismiss questioning the trial court's jurisdiction
was filed more than six years after her amended answer
was filed. According to petitioner, respondent had several
opportunities, at various stages of the proceedings, to
assail the trial court's jurisdiction but never did so for six
straight years. Citing the doctrine laid down in the case
of Tijam, et al. v. Sibonghanoy, et al.30 petitioner claimed
that respondent's failure to raise the question of jurisdiction
at an earlier stage bars her from later questioning it,
especially since she actively participated in the
proceedings conducted by the trial court.
Petitioner's argument is misplaced, in that, it failed to
consider that the concept of jurisdiction has several
aspects, namely: (1) jurisdiction over the subject matter; (2)
jurisdiction over the parties; (3) jurisdiction over the issues
of the case; and (4) in cases involving property, jurisdiction
over the res or the thing which is the subject of the
litigation. 31
The aspect of jurisdiction which may be barred from being
assailed as a result of estoppel by laches is jurisdiction
over the subject matter. Thus, in Tijam, the case relied
upon by petitioner, the issue involved was the authority of
the then Court of First Instance to hear a case for the
collection of a sum of money in the amount of P1,908.00
which amount was, at that time, within the exclusive
original jurisdiction of the municipal courts.
In subsequent cases citing the ruling of the Court
in Tijam, what was likewise at issue was the jurisdiction of
the trial court over the subject matter of the case.
Accordingly, in Spouses Gonzaga v. Court of
 Page 280 of 458
Appeals, 32 the issue for consideration was the authority of
the regional trial court to hear and decide an action for
reformation of contract and damages involving a
subdivision lot, it being argued therein that jurisdiction is
vested in the Housing and Land Use Regulatory Board
pursuant to PD 957 (The Subdivision and Condominium
Buyers Protective Decree). In Lee v. Presiding Judge,
MTC, Legaspi City, 33 petitioners argued that the
respondent municipal trial court had no jurisdiction over the
complaint for ejectment because the issue of ownership
was raised in the pleadings. Finally, in People v.
Casuga, 34 accused-appellant claimed that the crime of
grave slander, of which she was charged, falls within the
concurrent jurisdiction of municipal courts or city courts and
the then courts of first instance, and that the judgment of
the court of first instance, to which she had appealed the
municipal court's conviction, should be deemed null and
void for want of jurisdiction as her appeal should have been
filed with the Court of Appeals or the Supreme Court. ADEacC
In all of these cases, the Supreme Court barred the attack
on the jurisdiction of the respective courts concerned over
the subject matter of the case based on estoppel by
laches, declaring that parties cannot be allowed to
belatedly adopt an inconsistent posture by attacking the
jurisdiction of a court to which they submitted their cause
voluntarily. 35
Here, what respondent was questioning in her motion to
dismiss before the trial court was that court's jurisdiction
over the person of defendant Manuel. Thus, the principle of
estoppel by laches finds no application in this case.
Instead, the principles relating to jurisdiction over the
person of the parties are pertinent herein.
The Rules of Court provide:
RULE 9
EFFECT OF FAILURE TO PLEAD
Section 1. Deffenses and of objections not
pleaded. Defenses and objections not
pleaded either in a motion to dismiss or in the
answer are deemed waived. However, when it
appears from the pleadings or the evidence on
record that the court has no jurisdiction over the
subject matter, that there is another action
pending between the same parties for the same
cause, or that the action is barred by a prior
judgment or by statute of limitations, the court
shall dismiss the claim.
RULE 15 MOTIONS
Sec. 8. Omnibus motion. Subject to the
provisions of Section 1 of Rule 9, a motion
attacking a pleading, order, judgment, or
proceeding shall include all objections then
available, and all objections not so included shall
be deemed waived.
Based on the foregoing provisions, the "objection on
jurisdictional grounds which is not waived even if not
alleged in a motion to dismiss or the answer is lack of
jurisdiction over the subject matter. . . . Lack of jurisdiction
over the subject matter can always be raised anytime, even
for the first time on appeal, since jurisdictional issues
cannot be waived . . . subject, however, to the principle of
estoppel by laches." 36 cHDAIS
Since the defense of lack of jurisdiction over the person of
a party to a case is not one of those defenses which are
not deemed waived under Section 1 of Rule 9, such
 Page 281 of 458
defense must be invoked when an answer or a motion to
dismiss is filed in order to prevent a waiver of the
defense. 37 If the objection is not raised either in a motion
to dismiss or in the answer, the objection to the jurisdiction
over the person of the plaintiff or the defendant is deemed
waived by virtue of the first sentence of the above-quoted
Section 1 of Rule 9 of the Rules of Court. 38
The Court of Appeals, therefore, erred when it made a
sweeping pronouncement in its questioned decision,
stating that "issue on jurisdiction may be raised at any
stage of the proceeding, even for the first time on appeal"
and that, therefore, respondent timely raised the issue in
her motion to dismiss and is, consequently, not estopped
from raising the question of jurisdiction. As the question of
jurisdiction involved here is that over the person of the
defendant Manuel, the same is deemed waived if not
raised in the answer or a motion to dismiss. In any case,
respondent cannot claim the defense since "lack of
jurisdiction over the person, being subject to waiver, is a
personal defense which can only be asserted by the party
who can thereby waive it by silence." 39
2. Jurisdiction over the person of a defendant is
acquired through a valid service of summons; trial
court did not acquire jurisdiction over the person of
Manuel Toledo
In the first place, jurisdiction over the person of Manuel was
never acquired by the trial court. A defendant is informed of
a case against him when he receives summons.
"Summons is a writ by which the defendant is notified of
the action brought against him. Service of such writ is the
means by which the court acquires jurisdiction over his
person." 40
In the case at bar, the trial court did not acquire jurisdiction
over the person of Manuel since there was no valid service
of summons upon him, precisely because he was already
dead even before the complaint against him and his wife
was filed in the trial court. The issues presented in this
case are similar to those in the case of Sarsaba v. Vda. de
Te. 41
In Sarsaba, the NLRC rendered a decision declaring that
Patricio Sereno was illegally dismissed from employment
and ordering the payment of his monetary claims. To
satisfy the claim, a truck in the possession of Sereno's
employer was levied upon by a sheriff of the NLRC,
accompanied by Sereno and his lawyer, Rogelio Sarsaba,
the petitioner in that case. A complaint for recovery of
motor vehicle and damages, with prayer for the delivery of
the truck pendente lite was eventually filed against
Sarsaba, Sereno, the NLRC sheriff and the NLRC by the
registered owner of the truck. After his motion to dismiss
was denied by the trial court, petitioner Sarsaba filed his
answer. Later on, however, he filed an omnibus motion to
dismiss citing, as one of the grounds, lack of jurisdiction
over one of the principal defendants, in view of the fact that
Sereno was already dead when the complaint for recovery
of possession was filed.
Although the factual milieu of the present case is not
exactly similar to that of Sarsaba, one of the issues
submitted for resolution in both cases is similar: whether or
not a case, where one of the named defendants was
already dead at the time of its filing, should be dismissed
so that the claim may be pursued instead in the
proceedings for the settlement of the estate of the
deceased defendant. The petitioner in the Sarsaba
Case claimed, as did respondent herein, that since one of
 Page 282 of 458
the defendants died before summons was served on him,
the trial court should have dismissed the complaint against
all the defendants and the claim should be filed against the
estate of the deceased defendant. The petitioner
in Sarsaba, therefore, prayed that the complaint be
dismissed, not only against Sereno, but as to all the
defendants, considering that the RTC did not acquire
jurisdiction over the person of Sereno. 42 This is exactly the
same prayer made by respondent herein in her motion to
dismiss.
The Court, in the Sarsaba Case, resolved the issue in this
wise:
. . . We cannot countenance petitioner's
argument that the complaint against the other
defendants should have been dismissed,
considering that the RTC never acquired
jurisdiction over the person of Sereno. The
court's failure to acquire jurisdiction over
one's person is a defense which is personal
to the person claiming it. Obviously, it is now
impossible for Sereno to invoke the same in
view of his death. Neither can petitioner
invoke such ground, on behalf of Sereno,
so as to reap the benefit of having the case
dismissed against all of the
defendants. Failure to serve summons on
Sereno's person will not be a cause for the
dismissal of the complaint against the other
defendants, considering that they have been
served with copies of the summons and
complaints and have long submitted their
respective responsive pleadings. In fact, the
other defendants in the complaint were given
the chance to raise all possible defenses and
objections personal to them in their respective
motions to dismiss and their subsequent
answers. 43 (Emphasis supplied.) TCHcAE
Hence, the Supreme Court affirmed the dismissal by the
trial court of the complaint against Sereno only.
Based on the foregoing pronouncements, there is no basis
for dismissing the complaint against respondent herein.
Thus, as already emphasized above, the trial court
correctly denied her motion to dismiss.
On whether or not the estate of Manuel
Toledo is an indispensable party
Rule 3, Section 7 of the 1997 Rules of Court states:
SEC. 7. Compulsory joinder of indispensable
parties. Parties-in-interest without whom no
final determination can be had of an action shall
be joined either as plaintiffs or defendants.
An indispensable party is one who has such an interest in
the controversy or subject matter of a case that a final
adjudication cannot be made in his or her absence, without
injuring or affecting that interest. He or she is a party who
has not only an interest in the subject matter of the
controversy, but "an interest of such nature that a final
decree cannot be made without affecting [that] interest or
leaving the controversy in such a condition that its final
determination may be wholly inconsistent with equity and
good conscience. It has also 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 or equitable."
Further, an indispensable party is one who must be
included in an action before it may properly proceed. 44
 Page 283 of 458
On the other hand, a "person is not an indispensable party
if his interest in the controversy or subject matter is
separable from the interest of the other parties, so that it
will not necessarily be directly or injuriously affected by a
decree which does complete justice between them. Also, a
person is not an indispensable party if his presence would
merely permit complete relief between him or her and
those already parties to the action, or if he or she 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 simply because his or her presence will
avoid multiple litigations. 45
cEAaIS
Applying the foregoing pronouncements to the case at bar,
it is clear that the estate of Manuel is not an indispensable
party to the collection case, for the simple reason that the
obligation of Manuel and his wife, respondent herein, is
solidary.
The contract between petitioner, on the one hand and
respondent and respondent's husband, on the other,
states:
FOR VALUE RECEIVED, I/We jointly and
severally 46 (in solemn) promise to pay
BOSTON EQUITY RESOURCES, INC. . . . the
sum of PESOS: [ONE MILLION FOUR
HUNDRED (P1,400,000.00)] . . . . 47
The provisions and stipulations of the contract were then
followed by the respective signatures of respondent as
"MAKER" and her husband as "CO-MAKER." 48 Thus,
pursuant to Article 1216 of the Civil Code,petitioner may
collect the entire amount of the obligation from respondent
only. The aforementioned provision states: "The creditor
may proceed against any one of the solidary debtors or
some or all of them simultaneously. The demand made
against one of them shall not be an obstacle to those which
may subsequently be directed against the others, so long
as the debt has not been fully collected."
In other words, the collection case can proceed and the
demands of petitioner can be satisfied by respondent only,
even without impleading the estate of Manuel.
Consequently, the estate of Manuel is not an indispensable
party to petitioner's complaint for sum of money.
However, the Court of Appeals, agreeing with the
contention of respondent, held that the claim of petitioner
should have been filed against the estate of Manuel in
accordance with Sections 5 and 6 of Rule 86 of the Rules
of Court. The aforementioned provisions provide:
SEC. 5. Claims which must be filed under the
notice. If not filed, barred; exceptions. All
claims for money against the decedent, arising
from contract, express or implied, whether the
same be due, not due, or contingent, all claims
for funeral expenses and judgment for money
against the decedent, must be filed within the
time limited in the notice; otherwise, they are
barred forever, except that they may be set forth
as counterclaims in any action that the executor
or administrator may bring against the claimants.
....
SEC. 6. Solidary obligation of decedent.
Where the obligation of the decedent is solidary
with another debtor, the claim shall be filed
against the decedent as if he were the only
debtor, without prejudice to the right of the estate
to recover contribution from the other debtor. . . .
.
 Page 284 of 458
The Court of Appeals erred in its interpretation of the
above-quoted provisions.
In construing Section 6, Rule 87 of the old Rules of
Court,the precursor of Section 6, Rule 86 of the Revised
Rules of Court, which latter provision has been retained in
the present Rules of Court without any revisions, the
Supreme Court, in the case of Manila Surety & Fidelity Co.,
Inc. v. Villarama, et al., 49 held: 50
aAHTDS
Construing Section 698 of the Code of Civil
Procedure from whence [Section 6, Rule 87] was
taken, this Court held that where two persons
are bound in solidum for the same debt and one
of them dies, the whole indebtedness can be
proved against the estate of the latter, the
decedent's liability being absolute and primary; .
. . It is evident from the foregoing that Section 6
of Rule 87 provides the procedure should the
creditor desire to go against the deceased
debtor, but there is certainly nothing in the said
provision making compliance with such
procedure a condition precedent before an
ordinary action against the surviving solidary
debtors, should the creditor choose to demand
payment from the latter, could be entertained to
the extent that failure to observe the same would
deprive the court jurisdiction to take cognizance
of the action against the surviving debtors. Upon
the other hand, the Civil Code expressly allows
the creditor to proceed against any one of the
solidary debtors or some or all of them
simultaneously. There is, therefore, nothing
improper in the creditor's filing of an action
against the surviving solidary debtors alone,
instead of instituting a proceeding for the
settlement of the estate of the deceased debtor
wherein his claim could be filed.
The foregoing ruling was reiterated and expounded in the
later case of Philippine National Bank v. Asuncion 51 where
the Supreme Court pronounced:
A cursory perusal of Section 6, Rule 86 of the
Revised Rules of Court reveals that nothing
therein prevents a creditor from proceeding
against the surviving solidary debtors. Said
provision merely sets up the procedure in
enforcing collection in case a creditor chooses to
pursue his claim against the estate of the
deceased solidary debtor. The rule has been set
forth that a creditor (in a solidary obligation) has
the option whether to file or not to file a claim
against the estate of the solidary debtor. . . .
xxx xxx xxx
It is crystal clear that Article 1216 of the New
Civil Code is the applicable provision in this
matter. Said provision gives the creditor the
right to "proceed against anyone of the
solidary debtors or some or all of them
simultaneously." The choice is undoubtedly
left to the solidary creditor to determine
against whom he will enforce collection. In
case of the death of one of the solidary
debtors, he (the creditor) may, if he so
chooses, proceed against the surviving
solidary debtors without necessity of filing a
claim in the estate of the deceased debtors. It
is not mandatory for him to have the case
dismissed as against the surviving debtors
and file its claim against the estate of the
deceased solidary debtor, . . . For to require
 Page 285 of 458
the creditor to proceed against the estate,
making it a condition precedent for any collection
action against the surviving debtors to prosper,
would deprive him of his substantive rights
provided by Article 1216 of the New Civil Code.
(Emphasis supplied.) EHDCAI
As correctly argued by petitioner, if Section 6,
Rule 86 of the Revised Rules of Court were
applied literally, Article 1216 of the New Civil
Code would, in effect, be repealed since under
the Rules of Court,petitioner has no choice but to
proceed against the estate of [the deceased
debtor] only. Obviously, this provision diminishes
the [creditor's] right under the New Civil Code to
proceed against any one, some or all of the
solidary debtors. Such a construction is not
sanctioned by principle, which is too well settled
to require citation, that a substantive law cannot
be amended by a procedural rule. Otherwise
stated, Section 6, Rule 86 of the Revised Rules
of Courtcannot be made to prevail over Article
1216 of the New Civil Code, the former being
merely procedural, while the latter, substantive.
Based on the foregoing, the estate of Manuel is not an
indispensable party and the case can proceed as against
respondent only. That petitioner opted to collect from
respondent and not from the estate of Manuel is evidenced
by its opposition to respondent's motion to dismiss
asserting that the case, as against her, should be
dismissed so that petitioner can proceed against the estate
of Manuel.
On whether or not the inclusion of Manuel as
party defendant is a misjoinder of party
Section 11 of Rule 3 of the Rules of Court states that
"[n]either misjoinder nor non-joinder of parties is ground for
dismissal of an action. Parties may be dropped or added by
order of the court on motion of any party or on its own
initiative at any stage of the action and on such terms as
are just. Any claim against a misjoined party may be
severed and proceeded with separately."
Based on the last sentence of the afore-quoted provision of
law, a misjoined party must have the capacity to sue or be
sued in the event that the claim by or against the misjoined
party is pursued in a separate case. In this case, therefore,
the inclusion of Manuel in the complaint cannot be
considered a misjoinder, as in fact, the action would have
proceeded against him had he been alive at the time the
collection case was filed by petitioner. This being the case,
the remedy provided by Section 11 of Rule 3 does not
obtain here. The name of Manuel as party-defendant
cannot simply be dropped from the case. Instead, the
procedure taken by the Court in Sarsaba v. Vda. de
Te, 52 whose facts, as mentioned earlier, resemble those of
this case, should be followed herein. There, the Supreme
Court agreed with the trial court when it resolved the issue
of jurisdiction over the person of the deceased Sereno in
this wise:ICHcaD
As correctly pointed by defendants, the
Honorable Court has not acquired jurisdiction
over the person of Patricio Sereno since there
was indeed no valid service of summons insofar
as Patricio Sereno is concerned. Patricio Sereno
died before the summons, together with a copy
of the complaint and its annexes, could be
served upon him.
 Page 286 of 458
However, the failure to effect service of
summons unto Patricio Sereno, one of the
defendants herein, does not render the action
DISMISSIBLE, considering that the three (3)
other defendants, . . . , were validly served with
summons and the case with respect to the
answering defendants may still proceed
independently. Be it recalled that the three (3)
answering defendants have previously filed a
Motion to Dismiss the Complaint which was
denied by the Court.
Hence, only the case against Patricio Sereno
will be DISMISSED and the same may be filed
as a claim against the estate of Patricio Sereno,
but the case with respect to the three (3) other
accused [sic] will proceed. (Emphasis
supplied.) 53
As a result, the case, as against Manuel, must be
dismissed.
In addition, the dismissal of the case against Manuel is
further warranted by Section 1 of Rule 3 of the Rules of
Court,which states that: [o]nly natural or juridical persons,
or entities authorized by law may be parties in a civil
action." Applying this provision of law, the Court, in the
case of Ventura v. Militante, 54 held:
Parties may be either plaintiffs or defendants. . . .
. In order to maintain an action in a court of
justice, the plaintiff must have an actual legal
existence, that is, he, she or it must be a person
in law and possessed of a legal entity as either a
natural or an artificial person, and no suit can be
lawfully prosecuted save in the name of such a
person.
The rule is no different as regards party
defendants. It is incumbent upon a plaintiff, when
he institutes a judicial proceeding, to name the
proper party defendant to his cause of action. In
a suit or proceeding in personam of an adversary
character, the court can acquire no jurisdiction
for the purpose of trial or judgment until a party
defendant who actually or legally exists and is
legally capable of being sued, is brought before
it. It has even been held that the question of the
legal personality of a party defendant is a
question of substance going to the jurisdiction of
the court and not one of procedure.
The original complaint of petitioner named the
"estate of Carlos Ngo as represented by
surviving spouse Ms. Sulpicia Ventura" as the
defendant. Petitioner moved to dismiss the same
on the ground that the defendant as named in
the complaint had no legal personality. We
agree. cETCID
. . . Considering that capacity to be sued is a
correlative of the capacity to sue, to the same
extent, a decedent does not have the capacity
to be sued and may not be named a party
defendant in a court action. (Emphases
supplied.)
Indeed, where the defendant is neither a natural nor a
juridical person or an entity authorized by law, the
complaint may be dismissed on the ground that the
pleading asserting the claim states no cause of action or
for failure to state a cause of action pursuant to Section
1(g) of Rule 16 of the Rules of Court,because a complaint
cannot possibly state a cause of action against one who
cannot be a party to a civil action. 55
 Page 287 of 458

Since the proper course of action against the wrongful December 2004, respectively, in Civil Case No. 97-86672,
inclusion of Manuel as party-defendant is the dismissal of areREINSTATED. The Regional Trial Court, Branch 24,
the case as against him, thus did the trial court err when it Manila is hereby DIRECTED to proceed with the trial of
ordered the substitution of Manuel by his heirs. Substitution Civil Case No. 97-86672 against respondent Lolita G.
is proper only where the party to be substituted Toledo only, in accordance with the above
died during the pendency of the case, as expressly pronouncements of the Court, and to decide the case with
provided for by Section 16, Rule 3 of the Rules of dispatch.HScAEC

Court,which states:
SO ORDERED.
Death of party; duty of counsel. Whenever
a party to a pending action dies, and the claim (Boston Equity Resources, Inc. v. Court of Appeals, G.R.
|||

is not thereby extinguished, it shall be the duty of No. 173946, [June 19, 2013])
his counsel to inform the court within thirty (30)
days after such death of the fact thereof, and to
give the name and address of his legal
representative or representatives. . . .
The heirs of the deceased may be allowed to be
substituted for the deceased, without requiring
the appointment of an executor or administrator .
...
The court shall forthwith order said legal [G.R. No. 168539. March 25, 2014.]
representative or representatives to appear and
be substituted within a period of thirty (30) days PEOPLE OF THE
from notice. (Emphasis supplied.) PHILIPPINES, petitioner, vs. HENRY T. GO,
Here, since Manuel was already dead at the time of the respondent.
filing of the complaint, the court never acquired jurisdiction
over his person and, in effect, there was no party to be
substituted. DECISION

WHEREFORE, the petition is GRANTED. The Decision

dated 28 February 2006 and the Resolution dated 1 August PERALTA, J : p

2006 of the Court of Appeals in CA-G.R. SP No. 88586

are REVERSED and SET ASIDE. The Orders of the Before the Court is a petition for review
Regional Trial Court dated 8 November 2004 and 22 on certiorari assailing the Resolution 1 of the Third
 Page 288 of 458
Division 2 of the Sandiganbayan (SB) dated June 2, 2005
which quashed the Information filed against herein
respondent for alleged violation of Section 3 (g) of Republic
Act No. 3019 (R.A. 3019), otherwise known as the Anti-
Graft and Corrupt Practices Act.
The Information filed against respondent is an offshoot of
this Court's Decision 3 in Agan, Jr. v. Philippine
International Air Terminals Co., Inc. which nullified the
various contracts awarded by the Government, through the
Department of Transportation and
Communications (DOTC), to Philippine Air Terminals, Co.,
Inc. (PIATCO) for the construction, operation and
maintenance of the Ninoy Aquino International Airport
International Passenger Terminal III (NAIA IPT
III). Subsequent to the above Decision, a certain Ma.
Cecilia L. Pesayco filed a complaint with the Office of the
Ombudsman against several individuals for alleged
violation of R.A. 3019. Among those charged was herein
respondent, who was then the Chairman and President of
PIATCO, for having supposedly conspired with then DOTC
Secretary Arturo Enrile (Secretary Enrile) in entering into a
contract which is grossly and manifestly disadvantageous
to the government.
On September 16, 2004, the Office of the Deputy
Ombudsman for Luzon found probable cause to indict,
among others, herein respondent for violation of Section 3
(g) of R.A. 3019. While there was likewise a finding of
probable cause against Secretary Enrile, he was no longer
indicted because he died prior to the issuance of the
resolution finding probable cause.
Thus, in an Information dated January 13, 2005,
respondent was charged before the SB as follows: DCcTHa
On or about July 12, 1997, or sometime prior or
subsequent thereto, in Pasay City, Metro Manila,
Philippines and within the jurisdiction of this
Honorable Court, the late ARTURO ENRILE,
then Secretary of the Department of
Transportation and Communications (DOTC),
committing the offense in relation to his office
and taking advantage of the same, in conspiracy
with accused, HENRY T. GO, Chairman and
President of the Philippine International Air
Terminals, Co., Inc. (PIATCO), did then and
there, willfully, unlawfully and criminally
enter into a Concession Agreement, after the
project for the construction of the Ninoy
Aquino International Airport International
Passenger Terminal III (NAIA IPT III) was
awarded to Paircargo Consortium/PIATCO,
which Concession Agreement substantially
amended the draft Concession Agreement
covering the construction of the NAIA IPT III
under Republic Act 6957, as amended by
Republic Act 7718 (BOT law), specifically the
provision on Public Utility Revenues, as well
as the assumption by the government of the
liabilities of PIATCO in the event of the
latter's default under Article IV, Section 4.04
(b) and (c) in relation to Article 1.06 of the
Concession Agreement, which terms are
more beneficial to PIATCO while manifestly
and grossly disadvantageous to the
government of the Republic of the
Philippines. 4
The case was docketed as Criminal Case No. 28090.
On March 10, 2005, the SB issued an Order, to wit:
 Page 289 of 458

The prosecution is given a period of ten (10) this case is a private person and his alleged co-
days from today within which to show cause why conspirator-public official was already deceased
this case should not be dismissed for lack of long before this case was filed in court, for lack
jurisdiction over the person of the accused of jurisdiction over the person of the accused,
considering that the accused is a private person the Court grants the Motion to Quash and the
and the public official Arturo Enrile, his alleged Information filed in this case is hereby ordered
co-conspirator, is already deceased, and not an quashed and dismissed. 9
accused in this case. 5
Hence, the instant petition raising the following issues, to
The prosecution complied with the above Order contending wit:
that the SB has already acquired jurisdiction over the
I
person of respondent by reason of his voluntary
appearance, when he filed a motion for consolidation and WHETHER OR NOT THE COURT A
when he posted bail. The prosecution also argued that the QUO GRAVELY ERRED AND DECIDED A
SB has exclusive jurisdiction over respondent's case, even QUESTION OF SUBSTANCE IN A MANNER
if he is a private person, because he was alleged to have NOT IN ACCORD WITH LAW OR
conspired with a public officer. 6 APPLICABLE JURISPRUDENCE IN
GRANTING THE DEMURRER TO EVIDENCE
On April 28, 2005, respondent filed a Motion to Quash 7 the AND IN DISMISSING CRIMINAL CASE NO.
Information filed against him on the ground that the 28090 ON THE GROUND THAT IT HAS NO
operative facts adduced therein do not constitute an JURISDICTION OVER THE PERSON OF
offense under Section 3 (g) of R.A. 3019. Respondent, RESPONDENT GO.
citing the show cause order of the SB, also contended that, II
independently of the deceased Secretary Enrile, the public
WHETHER OR NOT THE COURT A
officer with whom he was alleged to have conspired,
QUO GRAVELY ERRED AND DECIDED A
respondent, who is not a public officer nor was capacitated
QUESTION OF SUBSTANCE IN A MANNER
by any official authority as a government agent, may not be NOT IN ACCORD WITH LAW OR
prosecuted for violation of Section 3 (g) of R.A. 3019. APPLICABLE JURISPRUDENCE, IN RULING
The prosecution filed its Opposition. 8 THAT IT HAS NO JURISDICTION OVER THE
PERSON OF RESPONDENT GO DESPITE
On June 2, 2005, the SB issued its assailed Resolution, THE IRREFUTABLE FACT THAT HE HAS
pertinent portions of which read thus: CHcTIA ALREADY POSTED BAIL FOR HIS
PROVISIONAL LIBERTY
Acting on the Motion to Quash filed by
accused Henry T. Go dated April 22, 2005, and it III
appearing that Henry T. Go, the lone accused in
 Page 290 of 458

WHETHER OR NOT THE COURT A At the outset, it bears to reiterate the settled rule that
QUO GRAVELY ERRED WHEN, IN private persons, when acting in conspiracy with public
COMPLETE DISREGARD OF THE EQUAL officers, may be indicted and, if found guilty, held liable for
PROTECTION CLAUSE OF THE the pertinent offenses under Section 3 of R.A. 3019, in
CONSTITUTION, IT QUASHED THE consonance with the avowed policy of the anti-graft law to
INFORMATION AND DISMISSED CRIMINAL
repress certain acts of public officers and private persons
CASE NO. 28090 10
alike constituting graft or corrupt practices act or which may
The Court finds the petition meritorious. lead thereto. 12 This is the controlling doctrine as
enunciated by this Court in previous cases, among which is
Section 3 (g) of R.A. 3019 provides:
a case involving herein private respondent. 13
Sec. 3. Corrupt practices of public officers.
In addition to acts or omissions of public officers The only question that needs to be settled in the present
already penalized by existing law, the following petition is whether herein respondent, a private person,
shall constitute corrupt practices of any public may be indicted for conspiracy in violating Section 3 (g)
officer and are hereby declared to be unlawful: of R.A. 3019 even if the public officer, with whom he was
alleged to have conspired, has died prior to the filing of the
xxx xxx xxx
Information.
(g) Entering, on behalf of the
Government, into any contract or Respondent contends that by reason of the death of
transaction manifestly and grossly Secretary Enrile, there is no public officer who was charged
disadvantageous to the same, whether or in the Information and, as such, prosecution against
not the public officer profited or will profit respondent may not prosper.
thereby.
The Court is not persuaded.
The elements of the above provision are: ISDCaT
It is true that by reason of Secretary Enrile's death, there is
(1) that the accused is a public officer; no longer any public officer with whom respondent can be
charged for violation of R.A. 3019. It does not mean,
(2) that he entered into a contract or
however, that the allegation of conspiracy between them
transaction on behalf of the
can no longer be proved or that their alleged conspiracy is
government; and
already expunged. The only thing extinguished by the
(3) that such contract or transaction is death of Secretary Enrile is his criminal liability. His death
grossly and manifestly did not extinguish the crime nor did it remove the basis of
disadvantageous to the government. 11 the charge of conspiracy between him and private
respondent. Stated differently, the death of Secretary Enrile
does not mean that there was no public officer who

allegedly violated Section 3 (g) of R.A. 3019. In fact, the
Office of the Deputy Ombudsman for Luzon found probable
cause to indict Secretary Enrile for infringement of Sections
3 (e) and (g) of R.A. 3019. 14 Were it not for his death, he
should have been charged.
The requirement before a private person may be indicted
for violation of Section 3 (g) of R.A. 3019, among others, is
that such private person must be alleged to have acted in
conspiracy with a public officer. The law, however, does
not require that such person must, in all instances, be
indicted together with the public officer. If circumstances
exist where the public officer may no longer be charged in
court, as in the present case where the public officer has
already died, the private person may be indicted alone.
Indeed, it is not necessary to join all alleged co-
conspirators in an indictment for conspiracy. 15 If two or
more persons enter into a conspiracy, any act done by any
of them pursuant to the agreement is, in contemplation of
law, the act of each of them and they are jointly responsible
therefor. 16 This means that everything said, written or
done by any of the conspirators in execution or furtherance
of the common purpose is deemed to have been said,
done or written by each of them and it makes no difference
whether the actual actor is alive or dead, sane or insane at
the time of trial. 17 The death of one of two or more
conspirators does not prevent the conviction of the survivor
or survivors. 18 Thus, this Court held that:
. . . [a] conspiracy is in its nature a joint offense.
One person cannot conspire alone. The crime
depends upon the joint act or intent of two or
more persons. Yet, it does not follow that one
person cannot be convicted of conspiracy.
So long as the acquittal or death of a co-
Page 291 of 458
conspirator does not remove the bases of a
charge for conspiracy, one defendant may be
found guilty of the offense. 19
The Court agrees with petitioner's contention that, as
alleged in the Information filed against respondent, which is
deemed hypothetically admitted in the latter's Motion to
Quash, he (respondent) conspired with Secretary Enrile in
violating Section 3 (g) of R.A. 3019 and that in conspiracy,
the act of one is the act of all. Hence, the criminal liability
incurred by a co-conspirator is also incurred by the other
co-conspirators.
Moreover, the Court agrees with petitioner that the avowed
policy of the State and the legislative intent to repress "acts
SDHacT
of public officers and private persons alike, which constitute
graft or corrupt practices," 20 would be frustrated if the
death of a public officer would bar the prosecution of a
private person who conspired with such public officer in
violating the Anti-Graft Law.
In this regard, this Court's disquisition in the early case
of People v. Peralta 21 as to the nature of and the principles
governing conspiracy, as construed under Philippine
jurisdiction, is instructive, to wit:
. . . A conspiracy exists when two or more
persons come to an agreement concerning the
commission of a felony and decide to commit
it. Generally, conspiracy is not a crime except
when the law specifically provides a penalty
therefor as in treason, rebellion and sedition.
The crime of conspiracy known to the common
law is not an indictable offense in the
Philippines. An agreement to commit a crime is
a reprehensible act from the view-point of
morality, but as long as the conspirators do not
 Page 292 of 458
perform overt acts in furtherance of their
malevolent design, the sovereignty of the State
is not outraged and the tranquility of the public
remains undisturbed. However, when in
resolute execution of a common scheme, a
felony is committed by two or more
malefactors, the existence of a conspiracy
assumes pivotal importance in the
determination of the liability of the
perpetrators. In stressing the significance of
conspiracy in criminal law, this Court
in U.S. vs. Infante and Barreto opined that SHcDAI
While it is true that the penalties cannot
be imposed for the mere act of conspiring
to commit a crime unless the statute
specifically prescribes a penalty therefor,
nevertheless the existence of a inseparable relation of each of
conspiracy to commit a crime is in many
cases a fact of vital importance, when
considered together with the other
evidence of record, in establishing the
existence, of the consummated crime and
its commission by the conspirators.
Once an express or implied conspiracy is
proved, all of the conspirators are liable as
co-principals regardless of the extent and
character of their respective active
participation in the commission of the crime
or crimes perpetrated in furtherance of the
conspiracy because in contemplation of
law the act of one is the act of all. The
foregoing rule is anchored on the sound
principle that "when two or more persons
unite to accomplish a criminal object,
whether through the physical volition of one,
or all, proceeding severally or collectively,
each individual whose evil will actively
contributes to the wrong-doing is in law
responsible for the whole, the same as
though performed by himself alone." Although
it is axiomatic that no one is liable for acts other
than his own, "when two or more persons agree
or conspire to commit a crime, each is
responsible for all the acts of the others, done in
furtherance of the agreement or conspiracy."
The imposition of collective liability upon the
conspirators is clearly explained in one case
where this Court held that
. . . it is impossible to graduate
the separate liability of each
(conspirator) without taking into
consideration the close and
them with the criminal act, for the
commission of which they all
acted by common agreement . . .
. The crime must therefore in
view of the solidarity of the act
and intent which existed between
the . . . accused, be regarded as
the act of the band or party
created by them, and they are all
equally responsible. . .
Verily, the moment it is established that the
malefactors conspired and confederated in the
commission of the felony proved, collective
liability of the accused conspirators attaches by
reason of the conspiracy, and the court shall not
speculate nor even investigate as to the actual
degree of participation of each of the
perpetrators present at the scene of the crime.
Of course, as to any conspirator who was remote
 Page 293 of 458
from the situs of aggression, he could be drawn
within the enveloping ambit of the conspiracy if it
be proved that through his moral ascendancy
over the rest of the conspirators the latter were
moved or impelled to carry out the conspiracy.
In fine, the convergence of the wills of the
conspirators in the scheming and execution
of the crime amply justifies the imputation to
all of them the act of any one of them. It is in
this light that conspiracy is generally viewed
not as a separate indictable offense, but a
rule for collectivizing criminal liability.aHTDAc
xxx xxx xxx
. . . A time-honored rule in the corpus of our
jurisprudence is that once conspiracy is
proved, all of the conspirators who acted in
furtherance of the common design are liable as
co-principals. This rule of collective criminal
liability emanates from the ensnaring nature of
conspiracy. The concerted action of the
conspirators in consummating their common
purpose is a patent display of their evil
partnership, and for the consequences of such
criminal enterprise they must be held solidarity
liable. 22
This is not to say, however, that private respondent should
be found guilty of conspiring with Secretary Enrile. It is
settled that the absence or presence of conspiracy is
factual in nature and involves evidentiary
matters. 23 Hence, the allegation of conspiracy against
respondent is better left ventilated before the trial court
during trial, where respondent can adduce evidence to
prove or disprove its presence.
Respondent claims in his Manifestation and Motion 24 as
well as in his Urgent Motion to Resolve 25 that in a different
case, he was likewise indicted before the SB for conspiracy
with the late Secretary Enrile in violating the same Section
3 (g) of R.A. 3019 by allegedly entering into another
agreement (Side Agreement) which is separate from the
Concession Agreement subject of the present case. The
case was docketed as Criminal Case No. 28091. Here, the
SB, through a Resolution, granted respondent's motion to
quash the Information on the ground that the SB has no
jurisdiction over the person of respondent. The prosecution
questioned the said SB Resolution before this Court via a
petition for review on certiorari. The petition was docketed
as G.R. No. 168919. In a minute resolution dated August
31, 2005, this Court denied the petition finding no
reversible error on the part of the SB. This Resolution
became final and executory on January 11, 2006.
Respondent now argues that this Court's resolution in G.R.
No. 168919 should be applied in the instant case.
The Court does not agree. Respondent should be
reminded that prior to this Court's ruling in G.R. No.
168919, he already posted bail for his provisional liberty. In
fact, he even filed a Motion for Consolidation 26 in Criminal
Case No. 28091. The Court agrees with petitioner's
contention that private respondent's act of posting bail and
filing his Motion for Consolidation vests the SB with
jurisdiction over his person. The rule is well settled that the
act of an accused in posting bail or in filing motions seeking
affirmative relief is tantamount to submission of his person
to the jurisdiction of the court. 27
Thus, it has been held that:
 Page 294 of 458
When a defendant in a criminal case is brought
before a competent court by virtue of a warrant
of arrest or otherwise, in order to avoid the
submission of his body to the jurisdiction of the
court he must raise the question of the court's
jurisdiction over his person at the very earliest
opportunity. If he gives bail, demurs to the
complaint or files any dilatory plea or pleads
to the merits, he thereby gives the court
jurisdiction over his person. (State ex
rel. John Brown vs. Fitzgerald, 51 Minn., 534)
xxx xxx xxx
As ruled in La Naval Drug vs. CA [236 SCRA 78,
86]:
"[L]ack of jurisdiction over the person of
the defendant may be waived either
expressly or impliedly. When a defendant
voluntarily appears, he is deemed to have
submitted himself to the jurisdiction of the
court. If he so wishes not to waive this
defense, he must do so seasonably by
motion for the purpose of objecting to the
jurisdiction of the court; otherwise, he
shall be deemed to have submitted
himself to that jurisdiction."
DcCITS
Moreover, "[w]here the appearance is by motion
for the purpose of objecting to the jurisdiction of
the court over the person, it must be for the sole
and separate purpose of objecting to said
jurisdiction. If the appearance is for any other
purpose, the defendant is deemed to have
submitted himself to the jurisdiction of the
court. Such an appearance gives the court
jurisdiction over the person."
Verily, petitioner's participation in the
proceedings before the Sandiganbayan was not
confined to his opposition to the issuance of a
warrant of arrest but also covered other matters
which called for respondent court's exercise of
its jurisdiction. Petitioner may not be heard now
to deny said court's jurisdiction over him. . . . . 28
In the instant case, respondent did not make any special
appearance to question the jurisdiction of the SB over his
person prior to his posting of bail and filing his Motion for
Consolidation. In fact, his Motion to Quash the Information
in Criminal Case No. 28090 only came after the SB issued
an Order requiring the prosecution to show cause why the
case should not be dismissed for lack of jurisdiction over
his person.
As a recapitulation, it would not be amiss to point out that
the instant case involves a contract entered into by public
officers representing the government. More importantly, the
SB is a special criminal court which has exclusive original
jurisdiction in all cases involving violations of R.A.
3019 committed by certain public officers, as enumerated
in P.D. 1606 as amended by R.A. 8249. This includes
private individuals who are charged as co-principals,
accomplices or accessories with the said public officers. In
the instant case, respondent is being charged for violation
of Section 3 (g) of R.A. 3019, in conspiracy with then
Secretary Enrile. Ideally, under the law, both respondent
and Secretary Enrile should have been charged before and
tried jointly by the Sandiganbayan. However, by reason of
the death of the latter, this can no longer be done.
Nonetheless, for reasons already discussed, it does not
follow that the SB is already divested of its jurisdiction over
the person of and the case involving herein respondent. To
 Page 295 of 458
rule otherwise would mean that the power of a court to
decide a case would no longer be based on the law
defining its jurisdiction but on other factors, such as the
death of one of the alleged offenders.
Lastly, the issues raised in the present petition involve
matters which are mere incidents in the main case and the
main case has already been pending for over nine (9)
years. Thus, a referral of the case to the Regional Trial
Court would further delay the resolution of the main case
and it would, by no means, promote respondent's right to a
speedy trial and a speedy disposition of his case.
WHEREFORE, the petition is GRANTED. The Resolution
of the Sandiganbayan dated June 2, 2005, granting
respondent's Motion to Quash, is
hereby REVERSED and SET ASIDE. The Sandiganbayan
is forthwith DIRECTED to proceed with deliberate dispatch
in the disposition of Criminal Case No. 28090.
SO ORDERED.
||| (People v. Go, G.R. No. 168539, [March 25, 2014])
[G.R. No. 175723. February 4, 2014.]
THE CITY OF MANILA, represented by
MAYOR JOSE L. ATIENZA, JR., and MS.
LIBERTY M. TOLEDO, in her capacity as
the City Treasurer of Manila,petitioners, vs.
HON. CARIDAD H. GRECIA-CUERDO, in
her capacity as Presiding Judge of the
Regional Trial Court, Branch 112,
Pasay City; SM MART, INC.; SM PRIME
HOLDINGS, INC.; STAR APPLIANCES
CENTER; SUPERVALUE, INC.; ACE
HARDWARE PHILIPPINES, INC.; WATSON
PERSONAL CARE STORES, PHILS., INC.;
JOLLIMART PHILS., CORP.; SURPLUS
MARKETING CORPORATION and
SIGNATURE LINES, respondents.
DECISION
PERALTA, J : p
Before the Court is a special civil action for certiorari under
Rule 65 of the Rules of Court seeking to reverse and set
aside the Resolutions 1 dated April 6, 2006 and November
29, 2006 of the Court of Appeals (CA) in CA-G.R. SP No.
87948.
The antecedents of the case, as summarized by the CA,
are as follows:
The record shows that petitioner City of Manila,
through its treasurer, petitioner Liberty Toledo,
assessed taxes for the taxable period from
January to December 2002 against private.
respondents SM Mart, Inc., SM Prime Holdings,
Inc., Star Appliances Center, Supervalue, Inc.,
Ace Hardware Philippines, Inc., Watsons
Personal Care Stores Phils., Inc., Jollimart
 Page 296 of 458
Philippines Corp., Surplus Marketing Corp. and
Signature Lines. In addition to the taxes
purportedly due from private respondents
pursuant to Sections 14, 15, 16,
17 of the Revised Revenue
Code of Manila (RRCM), said assessment
covered the local business taxes petitioners
were authorized to collect under Section
21 of the same Code. Because payment of the
taxes assessed was a precondition for the
issuance of their business permits, private
respondents were constrained to pay the
P19,316,458.77 assessment under protest. cACEaI
On January 24, 2004, private respondents filed
[with the Regional Trial Court of Pasay City] the
complaint denominated as one for "Refund or
Recovery of Illegally and/or Erroneously-
Collected Local Business Tax, Prohibition with
Prayer to Issue TRO and Writ of Preliminary
Injunction" which was docketed as Civil Case
No. 04-0019-CFM before public respondent's
sala [at Branch 112]. In the amended complaint
they filed on February 16, 2004, private
respondents alleged that, in relation to Section
21 thereof, Sections 14, 15, 16, 17, 18, 19 and
20 of the RRCM were violative of the limitations
and guidelines under Section 143 (h) of Republic
Act No. 7160[Local Government Code] on
double taxation. They further averred that
petitioner city's Ordinance No. 8011 which
amended pertinent portions of the RRCM had
already been declared to be illegal and
unconstitutional by the Department of Justice. 2
In its Order 3 dated July 9, 2004, the RTC granted private
respondents' application for a writ of preliminary injunction.
Petitioners filed a Motion for Reconsideration 4 but the RTC
denied it in its Order 5 dated October 15, 2004.
Petitioners then filed a special civil action for certiorari with
the CA assailing the July 9, 2004 and October 15, 2004
Orders of the RTC. 6
In its Resolution promulgated on April 6, 2006, the CA
dismissed petitioners' petition for certiorari holding that it
has no jurisdiction over the said petition. The CA ruled that
since appellate jurisdiction over private respondents'
complaint for tax refund, which was filed with the RTC, is
vested in the Court of Tax Appeals (CTA), pursuant to its
expanded jurisdiction under Republic Act No. 9282 (RA
9282), it follows that a petition for certiorari seeking
nullification of an interlocutory order issued in the said case
should, likewise, be filed with the CTA.
Petitioners filed a Motion for Reconsideration, 7 but the CA
denied it in its Resolution dated November 29, 2006.
Hence, the present petition raising the following issues: cDCSTA
I-Whether or not the Honorable
Court of Appeals gravely erred in dismissing
the case for lack of jurisdiction.
II-Whether or not the Honorable Regional
Trial Court gravely abuse[d] its discretion
amounting to lack or excess of jurisdiction in
enjoining by issuing a Writof Injunction the
petitioners[,] their agents and/or authorized
representatives from implementing Section
21 of the Revised Revenue Code of Manila, as
amended, against private respondents.
III-Whether or not the Honorable Regional
Trial Court gravely abuse[d] its discretion
 Page 297 of 458

amounting to lack or excess of jurisdiction in To plaintiff SM Mart, Inc. - P11,462,525.02

issuing the Writ ofInjunction despite
failure of private respondents to make a
written claim for tax credit or refund with
the City Treasurer of Manila.
IV-Whether or not the Honorable Regional
Trial Court gravely abuse[d] its discretion
amounting to lack or excess of jurisdiction
considering that under Section
21 of the Manila Revenue Code, as amended,
they are mere collecting
agents of the City Government.
V-Whether or not the Honorable Regional
Trial Court gravely abuse[d] its discretion
amounting to lack or excess of jurisdiction in
issuing the Writ ofInjunction because
petitioner City of Manila and its constituents
would result to greater damage and prejudice
thereof. (sic) 8
Without first resolving the above issues, this Court finds
that the instant petition should be denied for being moot
and academic.
Upon perusal of the original records of the instant case,
this Court discovered that a Decision 9 in the main case
had already been rendered by the RTC on August 13,
2007, the dispositive portion of which reads as follows:
WHEREFORE, in view of the foregoing, this
Court hereby renders JUDGMENT in favor of the
plaintiff and against the defendant to grant a tax
refund or credit for taxes paid pursuant to
Section 21 of the Revenue
Code of the City of Manila as amended for the
year 2002 in the following amounts: TCSEcI
To plaintiff SM Prime Holdings, Inc. - 3,118,104.63
To plaintiff Star Appliances Center - 2,152,316.54
To plaintiff Supervalue, Inc. - 1,362,750.34
To plaintiff Ace Hardware Phils., Inc. - 419,689.04
To plaintiff Watsons Personal Care - 231,453.62
Health Stores Phils., Inc.
To plaintiff Jollimart Phils., Corp. - 140,908.54
To plaintiff Surplus Marketing Corp. - 220,204.70
To plaintiff Signature Mktg. Corp. - 94,906.34
TOTAL: - P19,316,458.77
===========
Defendants are further enjoined from collecting
taxes under Section 21, Revenue
Code of Manila from herein plaintiff:
SO ORDERED. 10
The parties did not inform the Court but based on the
records, the above Decision had already become final and
executory per the Certificate of Finality 11 issued by the
same trial court on October 20, 2008. In fact, a
Writ of Execution 12 was issued by the RTC on November
25, 2009.
In view of the foregoing, it clearly appears that the issues
raised in the present petition, which merely involve the
 Page 298 of 458
incident on the preliminary injunction issued by the RTC,
have already become moot and academic considering that
the trial court, in its decision on the merits in the main case,
has already ruled in favor of respondents and that the
same decision is now final and executory. Well entrenched
is the rule that where the issues have become moot and
academic, there is no justiciable controversy, thereby
rendering the resolution of the same of no practical use or
value. 13
In any case, the Court finds it necessary to resolve the
issue on jurisdiction raised by petitioners owing to its
significance and for future guidance of both bench and bar.
It is a settled principle that courts will decide a question
otherwise moot and academic if it is capable of repetition,
yet evading review. 14
However, before proceeding, to resolve the question on
jurisdiction, the Court deems it proper to likewise address a
procedural error which petitioners committed. STIcaE
Petitioners availed of the wrong remedy when they filed the
instant special civil action for certiorari under Rule 65 of the
Rules of Court in assailing the Resolutions ofthe CA which
dismissed their petition filed with the said court and their
motion for reconsideration of such dismissal. There is no
dispute that the assailed Resolutionsof the CA are in the
nature of a final order as they disposed of the petition
completely. It is settled that in cases where an assailed
judgment or order is considered final, the remedy of the
aggrieved party is appeal. Hence, in the instant case,
petitioner should have filed a petition for review
on certiorari under Rule 45, which is a continuation of the
appellate process over the original case. 15
Petitioners should be reminded of the equally-settled rule
that a special civil action for certiorari under Rule 65 is an
original or independent action based on grave
abuse of discretion amounting to lack or
excess of jurisdiction and it will lie only if there is no appeal
or any other plain, speedy, and adequate remedy in the
ordinary course of law. 16 As such, it cannot be a substitute
for a lost appeal. 17 DaCEIc
Nonetheless, in accordance with the liberal spirit pervading
the Rules of Court and in the interest of substantial justice,
this Court has, before, treated a petition forcertiorari as a
petition for review on certiorari, particularly (1) if the petition
for certiorari was filed within the reglementary period within
which to file a petition for review on certiorari; (2) when
errors of judgment are averred; and (3) when there is
sufficient reason to justify the relaxation of the
rules. 18 Considering that the present petition was filed
within the 15-day reglementary period for filing a petition for
review on certiorari under Rule 45, that an
error of judgment is averred, and because ofthe
significance of the issue on jurisdiction, the Court deems it
proper and justified to relax the rules and, thus, treat the
instant petition for certiorari as a petition for review
on certiorari.
Having disposed of the procedural aspect, we now turn to
the central issue in this case. The basic question posed
before this Court is whether or not the CTA has jurisdiction
over a special civil action for certiorari assailing an
interlocutory order issued by the RTC in a local tax case.
This Court rules in the affirmative.
 Page 299 of 458

On June 16, 1954, Congress enacted Republic Act No. a. Exclusive appellate jurisdiction to
1125 (RA 1125) creating the CTA and giving to the said review by appeal, as herein
court jurisdiction over the following: provided:

(1) Decisions of the Collector of Internal 1. Decisions of the

Revenue in cases involving disputed Commissioner of Internal
assessments, refunds of internal revenue Revenue in cases involving
taxes, fees or other charges, penalties disputed assessments,
imposed in relation thereto, or other matters refunds of internal revenue
arising under the National Internal Revenue taxes, fees or other charges,
Code or other law or part of law administered penalties in relation thereto,
by the Bureau of Internal Revenue; or other matters arising
under the National Internal
(2) Decisions of the Commissioner of Customs Revenue or other laws
in cases involving liability for customs duties, administered by the
fees or other money charges; seizure, Bureau ofInternal Revenue;
detention or release ofproperty affected fines,
forfeitures or other penalties imposed in 2. Inaction by the
relation thereto; or other matters arising under Commissioner of Internal
the Customs Law or other law or part of law Revenue in cases involving
administered by the Bureau of Customs; and disputed assessments,
refunds of internal revenue
(3) Decisions of provincial taxes, fees or other charges,
or City Boards of Assessment Appeals in penalties in relations
cases involving the assessment and thereto, or other matters
taxation of real property or other matters arising under the National
arising under the Assessment Law, including Internal Revenue Code or
rules and regulations relative thereto. other laws administered by
On March 30, 2004, the Legislature passed into the Bureauof Internal
Revenue, where the
law Republic Act No. 9282 (RA 9282) amending RA
National Internal Revenue
1125 by expanding the jurisdiction of the CTA, enlarging its Code provides a specific
membership and elevating its rank to the level of a period of action, in which
collegiate court with special jurisdiction. Pertinent case the inaction shall be
portions of the amendatory act provides thus: deemed a denial;
Sec. 7. Jurisdiction. The CTA shall exercise: 3. Decisions, orders or
resolutions of the
 Page 300 of 458

Regional Trial Courts in Commissioner of Customs

local tax cases originally which are adverse to the
decided or resolved by Government under Section
them in the 2315 of the Tariff and
exercise oftheir original or Customs Code;
appellate jurisdiction;
7. Decisions of the
4. Decisions of the Secretary of Trade and
Commissioner of Customs Industry, in the
in cases involving liability for case of nonagricultural
customs duties, fees or product, commodity or
other money charges, article, and the
seizure, detention or Secretary of Agriculture in
releaseof property affected, the case of agricultural
fines, forfeitures or other product, commodity or
penalties in relation thereto, article, involving dumping
or other matters arising and countervailing duties
under the Customs Law or under Sections 301 and
other laws administered by 302, respectively, of the
the Bureau of Customs; CTDAaE Tariff and Customs Code,
and safeguard measures
5. Decisions of the Central
under Republic Act No.
Board of Assessment
8800, where either party
Appeals in the exercise of its
may appeal the decision to
appellate jurisdiction over
impose or not to impose
cases involving the
said duties.
assessment and
taxationof real property b. Jurisdiction over cases involving
originally decided by the criminal offenses as herein
provincial provided:
or city board of assessment
1. Exclusive original jurisdiction
appeals;
over all criminal offenses
6. Decisions of the arising from violations of the
Secretary of Finance on National Internal Revenue
customs cases elevated to Code or Tariff and Customs
him automatically for review Code and other laws
from decisions of the administered by the
 Page 301 of 458

Bureau of Internal Revenue 2. Exclusive appellate jurisdiction

or the Bureau of Customs: in criminal offenses:
Provided, however, That
a. Over appeals from the
offenses or felonies
judgments,
mentioned in this paragraph
resolutions or
where the principal
orders of the
amount of taxes and fees,
Regional Trial Courts
exclusive of charges and
in tax cases originally
penalties, claimed is less
decided by them, in
than One million pesos
their respected
(P1,000,000.00) or where
territorial
there is no specified amount
jurisdiction. STHAaD
claimed shall be tried by the
regular Courts and the b. Over petitions for
jurisdiction of the CTA shall review of the
be appellate. Any judgments,
provision of law or the resolutions or
Rules of Court to the orders of the
contrary notwithstanding, Regional Trial Courts
the criminal action and the in the
corresponding civil action for exercise of their
the recovery ofcivil liability appellate jurisdiction
for taxes and penalties shall over tax cases
at all times be originally decided by
simultaneously instituted the Metropolitan Trial
with, and jointly determined Courts, Municipal
in the same proceeding by Trial Courts and
the CTA, the filing of the Municipal Circuit Trial
criminal action being Courts in their
deemed to necessarily carry respective
with it the filing of the civil jurisdiction.
action, and no right to
reserve the filing of such c. Jurisdiction over tax
civil action separately from collection cases as
the criminal action will be herein provided:
recognized. 1. Exclusive original
jurisdiction in
 Page 302 of 458

tax collection a. Over

cases appeals
involving final from the
and executory judgme
assessments nts,
for taxes, fees, resoluti
charges and ons or
penalties: orders o
Provides, f the
however, that Regiona
collection l Trial
cases where Courts
the principal in tax
amount of taxe collectio
s and fees, n cases
exclusive of ch originall
arges and y
penalties, decided
claimed is less by
than One them, in
million pesos their
(P1,000,000.0 respecti
0) shall be ve
tried by the territoria
proper l
Municipal Trial jurisdicti
Court, on.
Metropolitan
b. Over
Trial Court and
petitions
Regional Trial
for
Court.
review o
2. Exclusive f the
appellate judgme
jurisdiction in nts,
tax collection resoluti
cases: ons or
 Page 303 of 458

orders o jurisdicti
f the on. 19
Regiona
l Trial A perusal of the above provisions would show that, while it
Courts is clearly stated that the CTA has exclusive appellate
in the jurisdiction over decisions, orders or resolutions of the
Exercis RTCs in local tax cases originally decided or resolved by
e of thei them in the exercise of their original or appellate
r jurisdiction, there is no categorical statement under RA
appellat 1125as well as the amendatory RA 9282, which provides
e that the CTA has jurisdiction over petitions
jurisdicti for certiorari assailing interlocutory orders issued by the
on over RTC in local tax cases filed before it.
tax
collectio The prevailing doctrine is that the authority to issue
n cases writs of certiorari involves the exercise of original
originall jurisdiction which must be expressly conferred by the
y Constitutionor by law and cannot be implied from the mere
decided existence of appellate jurisdiction. 20 Thus, in the
by the cases of Pimentel v. COMELEC, 21 Garcia v. De
Metropo
Jesus, 22 Veloria v. COMELEC, 23 Department of Agrarian
litan
Trial Reform Adjudication Board v. Lubrica, 24 and Garcia v.
Courts, Sandiganbayan, 25 this Court has ruled against the
Municip jurisdiction of courts or tribunals over petitions
al Trial for certiorari on the ground that there is no law which
Courts expressly gives these tribunals such power. 26 It must be
and observed, however, that with the exception of Garcia v.
Municip Sandiganbayan, 27 these rulings pertain not to regular
al courts but to tribunals exercising quasi-judicial powers.
Circuit With respect to the Sandiganbayan,Republic Act No.
Trial 8249 28 now provides that the special criminal court has
Courts, exclusive original jurisdiction over petitions for the
in their
issuance of the writs of mandamus,prohibition, certiorari,
respecti
ve habeas corpus, injunctions, and other ancillary writs and
processes in aid of its appellate jurisdiction. TAacIE
 Page 304 of 458
In the same manner, Section 5 (1), Article VIII of the 1987
Constitution grants power to the Supreme Court, in the
exercise of its original jurisdiction, to issue
writs ofcertiorari, prohibition and mandamus. With respect
to the Court of Appeals, Section 9 (1) of Batas Pambansa
Blg. 129 (BP 129) gives the appellate court, also in the
exercise of its original jurisdiction, the power to issue,
among others, a writ of certiorari, whether or not in
aid of its appellate jurisdiction. As to Regional Trial Courts,
the power to issue a writ of certiorari, in the
exercise of their original jurisdiction, is provided under
Section 21 of BP 129.
The foregoing notwithstanding, while there is no express
grant of such power, with respect to the CTA, Section 1,
Article VIII of the 1987 Constitution provides, nonetheless,
that judicial power shall be vested in one Supreme Court
and in such lower courts as may be established by law and
that judicial power includes the dutyof 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.
On the strength of the above constitutional provisions, it
can be fairly interpreted that the power of the CTA includes
that of determining whether or not there has been grave
abuse of discretion amounting to lack or
excess of jurisdiction on the part of the RTC in issuing an
interlocutory order in cases falling within the exclusive
appellate jurisdiction of the tax court. It, thus, follows that
the CTA, by constitutional mandate, is vested with
jurisdiction to issue writs of certiorari in these cases.
Indeed, in order for any appellate court, to effectively
exercise its appellate jurisdiction, it must have the authority
to issue, among others, a writ of certiorari. In transferring
exclusive jurisdiction over appealed tax cases to the CTA,
it can reasonably be assumed that the law intended to
transfer also such power as is deemed necessary, if not
indispensable, in aid of such appellate jurisdiction. There is
no perceivable reason why the transfer should only be
considered as partial, not total.
Consistent with the above pronouncement, this Court has
held as early as the case of J.M. Tuason & Co., Inc. v.
Jaramillo, et al. 29 that "if a case may be appealed to a
particular court or judicial tribunal or body, then said court
or judicial tribunal or body has jurisdiction to issue the
extraordinary writ of certiorari, in aid of its appellate
jurisdiction." 30 This principle was affirmed in De Jesus v.
Court of Appeals, 31 where the Court stated that "a court
may issue a writ of certiorari in aid of its appellate
jurisdiction if said court has jurisdiction to review, by appeal
or writ of error, the final orders or decisions of the lower
court." 32 The rulings in J.M. Tuason and De Jesus were
reiterated in the more recent cases of Galang, Jr. v.
Geronimo 33 and Bulilis v. Nuez. 34
Furthermore, Section 6, Rule 135 of the present
Rules of Court provides that when by law, jurisdiction is
conferred on a court or judicial officer, all auxiliary writs,
processes and other means necessary to carry it into effect
may be employed by such court or officer. CHDAEc
If this Court were to sustain petitioners' contention that
jurisdiction over their certiorari petition lies with the CA, this
Court would be confirming the exercise by two judicial
bodies, the CA and the CTA, of jurisdiction over basically
 Page 305 of 458

the same subject matter precisely the split-jurisdiction appeal, the final orders and decisions of the RTC, in order
situation which is anathema to the orderly to have complete supervision over the acts of the latter. 36
administration of justice. 35 The Court cannot accept that
A grant of appellate jurisdiction implies that there is
such was the legislative motive, especially considering that
included in it the power necessary to exercise it effectively,
the law expressly confers on the CTA, the tribunal with the
to make all orders that will preserve the subject of the
specialized competence over tax and tariff matters, the
action, and to give effect to the final determination of the
role of judicial review over local tax cases without
appeal. It carries with it the power to protect that jurisdiction
mention of any other court that may exercise such power.
and to make the decisions of the court thereunder effective.
Thus, the Court agrees with the ruling of the CA that since
The court, in aid of its appellate jurisdiction, has authority to
appellate jurisdiction over private respondents' complaint
control all auxiliary and incidental matters necessary to the
for tax refund is vested in the CTA, it follows that a petition
efficient and proper exercise of that jurisdiction. For this
for certiorari seeking nullification of an interlocutory order
purpose, it may, when necessary, prohibit or restrain the
issued in the said case should, likewise, be filed with the
performance of any act which might interfere with the
same court. To rule otherwise would lead to an absurd
proper exercise ofits rightful jurisdiction in cases pending
situation where one court decides an appeal in the main
before it. 37
case while another court rules on an incident in the very
same case. Lastly, it would not be amiss to point out that a court which
is endowed with a particular jurisdiction should have
Stated differently, it would be somewhat incongruent with
powers which are necessary to enable it to act effectively
the pronounced judicial abhorrence to split jurisdiction to
within such jurisdiction. These should be regarded as
conclude that the intention of the law is to divide the
powers which are inherent in its jurisdiction and the court
authority over a local tax case filed with the RTC by giving
must possess them in order to enforce its rules of practice
to the CA or this Court jurisdiction to issue a
and to suppress any abuses of its process and to defeat
writ of certiorari against interlocutory orders of the RTC but
any attempted thwarting of such process.
giving to the CTA the jurisdiction over the appeal from the
decision of the trial court in the same case. It is more in In this regard, Section 1 of RA 9282 states that the CTA
consonance with logic and legal soundness to conclude shall be of the same level as the CA and shall possess all
that the grant of appellate jurisdiction to the CTA over tax the inherent powers of a court of justice. HTCDcS

cases filed in and decided by the RTC carries with it the

Indeed, courts possess certain inherent powers which may
power to issue a writ of certiorari when necessary in
be said to be implied from a general grant of jurisdiction, in
aid of such appellate jurisdiction. The supervisory power or
addition to those expressly conferred on them. These
jurisdiction of the CTA to issue a writ of certiorari in
inherent powers are such powers as are necessary for the
aid of its appellate jurisdiction should co-exist with, and be
ordinary and efficient exercise of jurisdiction; or are
a complement to, its appellate jurisdiction to review, by
essential to the existence, dignity and functions ofthe
 Page 306 of 458

courts, as well as to the due administration of justice; or are
directly appropriate, convenient and suitable to the
execution of their granted powers; and include the power to
maintain the court's jurisdiction and render it effective in
behalf of the litigants. 38
Thus, this Court has held that "while a court may be
expressly granted the incidental powers necessary to
effectuate its jurisdiction, a grant of jurisdiction, in the
still be expressly conferred by the Constitution or by law
and cannot be implied from the mere existence of their
appellate jurisdiction. This doctrine remains as it applies
only to quasi-judicial bodies.
WHEREFORE, the petition is DENIED.
SO ORDERED.
(City of Manila v. Grecia-Cuerdo, G.R. No. 175723,
|||

absence of prohibitive legislation, implies the necessary [February 4, 2014], 726 PHIL 9-28)
and usual incidental powers essential to effectuate it, and,
subject to existing laws and constitutional provisions, every
regularly constituted court has power to do all things that
are reasonably necessary for the administration of justice
within the scope of its jurisdiction and for the THIRD DIVISION
enforcement of its judgments and mandates." 39 Hence,
demands, matters or questions ancillary or incidental to, or [G.R. No. 181622. November 20, 2013.]
growing out of, the main action, and coming within the
above principles, may be taken cognizance of by the court GENESIS INVESTMENT, INC., CEBU JAYA
and determined, since such jurisdiction is in aid of its REALTY, INC., and SPOUSES RHODORA
authority over the principal matter, even though the court and LAMBERT LIM, petitioners, vs. HEIRS
may thus be called on to consider and decide matters of CEFERINO EBARASABAL, * and
which, as original causes of action, would not be within its JULIETA EBARASABAL HAYO, LACIO
cognizance. 40 EBARASABAL; HEIRS OF FLORO
Based on the foregoing disquisitions, it can be reasonably EBARASABAL, namely: SOFIA
concluded that the authority of the CTA to take ABELONG, PEPITO EBARASABAL AND
cognizance of petitions for certiorari questioning ELPIDIO EBARASABAL; HEIRS OF
interlocutory orders issued by the RTC in a local tax case is LEONA EBARASABAL-APOLLO, namely:
included in the powers granted by the Constitution as well SILVESTRA A. MOJELLO and
as inherent in the exercise of its appellate jurisdiction. MARCELINO APOLLO; HEIRS OF PEDRO
EBARASABAL, HEIRS of BENITO
Finally, it would bear to point out that this Court is not EBARASABAL, namely: respondents.
abandoning the rule that, insofar as quasi-judicial tribunals
are concerned, the authority to issue writs ofcertiorari must
 Page 307 of 458
DECISION
PERALTA, J : p
Before the Court 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 dated July 11, 2007
and January 10, 2008, respectively, of the Court of Appeals
(CA) in CA-G.R. CEB-SP No. 01017.
The antecedents of the case are as follows:
On November 12, 2003, herein respondents filed against
herein petitioners a Complaint 3 for "Declaration of Nullity
of Documents, Recovery of Shares, Partition, Damages
and Attorney's Fees." The Complaint was filed with the
Regional Trial Court (RTC) of Barili, Cebu.
On August 5, 2004, herein petitioners filed a Motion to
Dismiss 4 contending, among others, that the RTC has no
jurisdiction to try the case on the ground that, as the case
involves title to or possession of real property or any
interest therein and since the assessed value of the subject
property does not exceed P20,000.00 (the same being only
P11,990.00), the action falls within the jurisdiction of the
Municipal Trial Court (MTC). 5
In its Order 6 dated September 29, 2004, the RTC granted
petitioners' Motion to Dismiss, holding as follows:
xxx xxx xxx
And while the prayer of the plaintiffs for the
annulment of documents qualified the case as
one incapable of pecuniary estimation thus,
rendering it cognizable supposedly by the
second level courts but considering that Republic
Act No. 7691 expressly provides to cover "all
civil actions" which phrase understandably is to
include those incapable of pecuniary estimation,
like the case at bar, this Court is of the view that
said law really finds application here more so
that the same case also "involves title to, or
possession of, real property, or any interest
therein." For being so, the assessed value of the
real property involved is determinative of which
court has jurisdiction over the case. And the
plaintiffs admitting that the assessed value of the
litigated area is less than P20,000.00, the
defendants are correct in arguing that the case is
beyond this Court's jurisdiction. 7
Respondents filed a Motion for Partial
Reconsideration, 8 arguing that their complaint consists of
several causes of action, including one for annulment of
documents, which is incapable of pecuniary estimation
and, as such, falls within the jurisdiction of the RTC. 9
On March 17, 2005, the RTC issued an Order granting
respondents' Motion for Partial Reconsideration and
reversing its earlier Order dated September 29, 2004. The
RTC ruled, thus:
On the issue of want of jurisdiction, this court
likewise finds to be with merit the contention of
the movants as indeed the main case or the
primary relief prayed for by the movants is for the
declaration of nullity or annulment of documents
which unquestionably is incapable of pecuniary
estimation and thus within the exclusive original
jurisdiction of this court to try although in the
process of resolving the controversy, claims of
title or possession of the property in question is
 Page 308 of 458
involved which together with all the other
remaining reliefs prayed for are but purely
incidental to or as a consequence of the
foregoing principal relief sought. 10
Petitioners filed a Motion for Reconsideration, 11 but the
RTC denied it in its Order dated June 23, 2005.
Aggrieved, petitioners filed a petition for certiorari with the
CA. However, the CA dismissed the petition via its assailed
Decision dated July 11, 2007, holding that the subject
matter of respondents' complaint is incapable of pecuniary
estimation and, therefore, within the jurisdiction of the RTC,
considering that the main purpose in filing the action is to
declare null and void the documents assailed therein. 12
Petitioners' Motion for Reconsideration was, subsequently,
denied in the CA Resolution dated January 10, 2008.
Hence, the instant petition for review on certiorari raising
the sole issue, to wit:
Whether or not the Honorable Court of Appeals
gravely erred in concluding that the Regional
Trial Court, Branch 60 of Barili, Cebu has
jurisdiction over the instant case when the
ALLEGATIONS IN THE COMPLAINT clearly
shows that the main cause of action of the
respondents is for the Recovery of their Title,
Interest, and Share over a Parcel of Land, which
has an assessed value of P11,990.00 and thus,
within the jurisdiction of the Municipal Trial
Court. 13
The petition lacks merit.
For a clearer understanding of the case, this Court, like the
CA, finds it proper to quote pertinent portions of
respondents' Complaint, to wit:
xxx xxx xxx
1. Plaintiffs are all Filipino, of legal age, surviving
descendants either as grandchildren or great
grandchildren and heirs and successors-in-
interest of deceased Roman Ebarsabal, who
died on 07 September 1952 . . .
xxx xxx xxx
8. During the lifetime of Roman Ebarsabal, he
acquired a parcel of land situated in Basdaku,
Saavedra, Moalboal, Cebu, . . . .
xxx xxx xxx
with a total assessed value of P2,890.00 . . . .
However, for the year 2002, the property was
already having (sic) a total assessed value of
P11,990.00 . . . .
9. Upon the death of said Roman Ebarsabal, his
eight (8) children named in par. 7 above,
became co-owners of his above-described
property by hereditary succession; taking
peaceful possession and enjoyment of the same
in fee simple pro indiviso, paying the real estate
taxes thereon and did not partition the said
property among themselves until all of them
likewise died, leaving, however, their respective
children and descendants and/or surviving heirs
and successors-in-interest, and who are now the
above-named plaintiffs herein;
10. The plaintiffs who are mostly residents
in (sic) Mindanao and Manila, have just recently
 Page 309 of 458
uncovered the fact that on 28th January 1997,
the children and descendants of deceased Gil
Ebarsabal, namely: Pelagio, Hipolito, Precela,
Fructuosa, Roberta, Florentino, Erlinda,
Sebastian, Cirilo, all surnamed Ebarsabal, have
executed among themselves a Deed of
Extrajudicial Settlement with Sale of Roman
Ebarsabal's entire property described above, by
virtue of which they allegedly extrajudicially
settled the same and, for P2,600,000.00
although only the sum of P950,000.00 was
reflected in their Deed of Sale for reason only
known to them, they sold the whole property to
defendants Genesis Investment, Inc.
represented by co-defendant Rhodora B. Lim,
the wife of Lambert Lim, without the knowledge,
permission and consent of the plaintiffs who are
the vendors' co-owners of the lot in question, . . .
. Ebarsabal.
11. Surprisingly, however, the defendant
Genesis managed to have the Tax Declaration of
the property issued in the name of co-defendant
Cebu Jaya Realty Incorporated, a firm which, as
already intimated above, is also owned by
Spouses Lambert and Rhodora B. Lim, instead
of in the name of Genesis Investment,
Incorporated, which is actually the vendee firm of
the lot in question.
xxx xxx xxx
Hence, the reason why Cebu Jaya Realty,
Incorporated is joined and impleaded herein as a
co-defendant.
12. Without the participation of the plaintiffs who
are co-owners of the lot in question in the
proceedings, the aforementioned extrajudicial
settlement with sale cannot be binding upon the
plaintiff-co-owners.
13. Further, where as in this case, the other heirs
who are the plaintiffs herein, did not consent to
the sale of their ideal shares in the inherited
property, the sale was only to be limited to the
pro indiviso share of the selling heirs.
xxx xxx xxx
14. By representation, the plaintiffs, are
therefore, by law, entitled to their rightful shares
from the estate of the deceased Roman
Ebarsabal consisting of seven (7) shares that
would have been due as the shares of seven (7)
other children of Roman Ebarsabal who are also
now deceased, namely: Ceferino, Floro, Leona,
Pedro, Isidoro, Julian and Benito, all surnamed
15. The defendants who had prior knowledge of
the existence of the other heirs who are co-
owners of the vendors of the property they
purchased, had unlawfully acted in bad faith in
insisting to buy the whole property in co-
ownership, only from the heirs and successors-
in-interest of deceased Gil Ebarsabal, who is
only one (1) of the eight (8) children of deceased
Roman Ebarsabal, and without notifying thereof
in whatever manner the plaintiffs who are the
heirs and successors-in-interest of the other co-
owners of the property-in-question; thus, have
compelled the plaintiffs herein to file this instant
case in court to protect their interests, . . . .
xxx xxx xxx
PRAYER
 Page 310 of 458
WHEREFORE, in view of all the foregoing, it is
most respectfully prayed of this Honorable Court
that, after due notice and hearing, judgment shall
be rendered in favor of the plaintiffs, as follows,
to wit:
1 Declaring as null and void and not binding
upon the plaintiffs, the following documents to
wit:
(a) Deed of Extrajudicial Settlement with Sale
executed by and between the heirs of deceased
Gil Ebarsabal headed by Pedro Ebarsabal, and
Genesis Investment, Inc., represented by
Rhodora Lim, dated 28th of January, 1997,
marked as Annex-A;
(b) Memorandum of Agreement executed
between Pedro Ebarsabal and Genesis
Investment, Inc., represented by Rhodora Lim
dated 27 January, which document is notarized;
(c) Tax Declaration of Real Property issued to
Cebu Jaya Realty, Inc., marked as Annex-D;
2 Ordering the defendants to make partition of
the property in litigation with the plaintiffs into
eight (8) equal shares; to get one (1) share
thereof, which is the only extent of what they
allegedly acquired by purchase as mentioned
above, and to transfer, restore or reconvey and
deliver to the plaintiffs, seven (7) shares thereof,
as pertaining to and due for the latter as the
heirs and successors-in-interest of the seven (7)
brothers and sister of deceased Gil Ebarsabal
already named earlier in this complaint;
xxx xxx xxx
Further reliefs and remedies just and equitable in
the premises are also herein prayed for.
xxx xxx xxx 14
It is true that one of the causes of action of respondents
pertains to the title, possession and interest of each of the
contending parties over the contested property, the
assessed value of which falls within the jurisdiction of the
MTC. However, a complete reading of the complaint would
readily show that, based on the nature of the suit, the
allegations therein, and the reliefs prayed for, the action is
within the jurisdiction of the RTC.
As stated above, it is clear from the records that
respondents' complaint was for "Declaration of Nullity of
Documents, Recovery of Shares, Partition, Damages and
Attorney's Fees." In filing their Complaint with the RTC,
respondents sought to recover ownership and possession
of their shares in the disputed parcel of land by questioning
the due execution and validity of the Deed of Extrajudicial
Settlement with Sale as well as the Memorandum of
Agreement entered into by and between some of their co-
heirs and herein petitioners. Aside from praying that the
RTC render judgment declaring as null and void the said
Deed of Extrajudicial Settlement with Sale and
Memorandum of Agreement, respondents likewise sought
the following: (1) nullification of the Tax Declarations
subsequently issued in the name of petitioner Cebu Jaya
Realty, Inc.; (2) partition of the property in litigation; (3)
reconveyance of their respective shares; and (3) payment
of moral and exemplary damages, as well as attorney's
fees, plus appearance fees.
Clearly, this is a case of joinder of causes of action which
comprehends more than the issue of partition of or
 Page 311 of 458
recovery of shares or interest over the real property in
question but includes an action for declaration of nullity of
contracts and documents which is incapable of pecuniary
estimation. 15
As cited by the CA, this Court, in the case of Singson v.
Isabela Sawmill, 16 held 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 courts of first instance would depend on
the amount of the claim. However, 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 are cognizable by courts of first
instance [now Regional Trial Courts]. 17
This rule was reiterated in Russell v. Vestil 18 and Social
Security System v. Atlantic Gulf and Pacific Company of
Manila, Inc. 19
Contrary to petitioners' contention, the principal relief
sought by petitioners is the nullification of the subject
Extrajudicial Settlement with Sale entered into by and
between some of their co-heirs and respondents, insofar as
their individual shares in the subject property are
concerned. Thus, the recovery of their undivided shares or
interest over the disputed lot, which were included in the
sale, simply becomes a necessary consequence if the
above deed is nullified. Hence, since the principal action
sought in respondents' Complaint is something other than
the recovery of a sum of money, the action is incapable of
pecuniary estimation and, thus, cognizable by the
RTC. 20 Well entrenched is the rule that jurisdiction over
the subject matter of a case is conferred by law and is
determined by the allegations in the complaint and the
character of the relief sought, irrespective of whether the
party is entitled to all or some of the claims asserted. 21
Moreover, it is provided under Section 5 (c), Rule 2 of the
Rules of Court that where the causes of action are between
the same parties but pertain to different venues or
jurisdictions, the joinder may be allowed in the RTC
provided one of the causes of action falls within the
jurisdiction of said court and the venue lies therein. Thus,
as shown above, respondents' complaint clearly falls within
the jurisdiction of the RTC.
WHEREFORE, the petition is DENIED. The Decision and
Resolution dated July 11, 2007 and January 10, 2008,
respectively, of the Court of Appeals in CA-G.R. CEB-SP
No. 01017 are AFFIRMED.
SO ORDERED.
(Genesis Investment, Inc. v. Heirs of Ebarasabal, G.R.
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No. 181622, [November 20, 2013], 721 PHIL 798-808)
 Page 312 of 458

[G.R. No. 208232. March 10, 2014.]
SURVIVING HEIRS OF ALFREDO R.
BAUTISTA, namely: EPIFANIA G.
BAUTISTA and ZOEY G.
BAUTISTA, petitioners, vs. 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
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), petitioner's 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. 1
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, 2 anchoring his cause of
action on Section 119 of Commonwealth Act No. (CA) 141,
otherwise known as the "Public Land Act," which reads: EAcCHI

BURTON, JOSE JACINTO and

SECTION 119. Every conveyance of land
BIENVENIDA JACINTO, IMELDA
acquired under the free patent or homestead
DAQUIGAN, LEO MATIGA and ALICIA provisions, when proper, shall be subject to
MATIGA, FLORENCIO ACEDO JR., and repurchase by the applicant, his widow, or legal
LYLA VALERIO, respondents. heirs, within a period of five years from the date
of the conveyance.
Respondents, in their Answer, raised lack of cause of
DECISION
action, estoppel, prescription, and laches, as defenses.
Meanwhile, during the pendency of the case, Bautista died
VELASCO, JR., J :
p and was substituted by petitioner Epifania G. Bautista
(Epifania).
The Case
 Page 313 of 458
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:
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 (PhP16,500), 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 PhP20,000,
then the RTC has no jurisdiction over the complaint in
question since the property which Bautista seeks to
repurchase is below the PhP20,000 jurisdictional ceiling.
RTC Ruling 5
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 PhP16,500. 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: ScaCEH
WHEREFORE, the complaint for Repurchase,
Consignation, with Preliminary Injunction and
Damages is hereby dismissed for lack of
jurisdiction.
SO ORDERED. 7
Assignment of Errors
Their motion for reconsideration having been denied,
petitioners now seek recourse before this Court with the
following assigned errors:
I
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
 Page 314 of 458
THE PUBLIC RESPONDENT RTC ERRED IN
HOLDING THAT THE INSTANT CASE FOR
REPURCHASE IS A REAL ACTION. 8
The Issue
Stated differently, the issue for the Court's 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, citingSantana
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.
Jurisdiction of RTCs, as may be relevant to the instant
petition, is provided in Sec. 19 of BP 129, which reads:
Sec. 19. Jurisdiction in civil cases. Regional
Trial Courts shall exercise exclusive original
jurisdiction:
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:
Sec. 33. Jurisdiction of Metropolitan Trial
Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts in civil cases. Metropolitan
 Page 315 of 458
Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts shall exercise:
xxx xxx xxx
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, 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. IATHaS
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. 12
Settled jurisprudence considers some civil actions as
incapable of pecuniary estimation, viz.:
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; 13
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.
 Page 316 of 458

The facts are clear that Bautista sold to respondents his Metro Manila, where such assessed value does not exceed
lots which were covered by a free patent. While the deeds fifty thousand pesos (PhP50,000) exclusive of interest,
of sale do not explicitly contain the stipulation that the sale damages of whatever kind, attorney's fees, litigation
is subject to repurchase by the applicant within a period of expenses and costs. aScITE

five (5) years from the date of conveyance pursuant to Sec.

At first blush, it appears that the action filed by Bautista
119 of CA 141, still, such legal provision is deemed
involves title to or possession of the lots he sold to
integrated and made part of the deed of sale as prescribed
respondents. Since the total selling price is less than
by law. It is basic that the law is deemed written into every
PhP20,000, then the MTC, not the RTC, has jurisdiction
contract. 15 Although a contract is the law between the
over the case. This proposition is incorrect for the re-
parties, the provisions of positive law which regulate
acquisition of the lots by Bautista or herein successors-in-
contracts are deemed written therein and shall limit and
interests, the present petitioners, is but incidental to and an
govern the relations between the parties.16 Thus, it is a
offshoot of the exercise of the right by the latter to redeem
binding prestation in favor of Bautista which he may seek
said lots pursuant to Sec. 119 of CA 141. The
to enforce. That is precisely what he did. He filed a
reconveyance of the title to petitioners is solely dependent
complaint to enforce his right granted by law to recover the
on the exercise of such right to repurchase the lots in
lot subject of free patent. Ergo, it is clear that his action is
question and is not the principal or main relief or remedy
for specific performance, or if not strictly such action, then it
sought. Thus, the action of petitioners is, in reality,
is akin or analogous to one of specific performance. Such
incapable of pecuniary estimation, and the reconveyance
being the case, his action for specific performance is
of the lot is merely the outcome of the performance of the
incapable of pecuniary estimation and cognizable by the
obligation to return the property conformably to the express
RTC.
provision of CA 141.
Respondents argue that Bautista's action is one involving
Even if we treat the present action as one involving title to
title to or possession of real property or any interests
real property or an interest therein which falls under the
therein and since the selling price is less than PhP20,000,
jurisdiction of the first level court under Sec. 33 ofBP 129,
then jurisdiction is lodged with the MTC. They rely on Sec.
as the total selling price is only PhP16,000 way below the
33 of BP 129.
PhP20,000 ceiling, still, the postulation of respondents that
Republic Act No. 7691 17 amended Sec. 33 of BP 129 and MTC has jurisdiction will not hold water. This is because
gave Metropolitan Trial Courts, Municipal Trial Courts, and respondents have actually participated in the proceedings
Municipal Circuit Trial Courts exclusive original jurisdiction before the RTC and aggressively defended their position,
in all civil actions which involve title to, or possession of, and by virtue of which they are already barred to question
real property, or any interest therein where the assessed the jurisdiction of the RTC following the principle of
value of the property or interest therein does not exceed jurisdiction by estoppel.
twenty thousand pesos (PhP20,000) or, in civil actions in
 Page 317 of 458

In Heirs of Jose Fernando v. De Belen, it was held that the reliefs, respondents can no longer assail the jurisdiction of
party raising defenses to the complaint, actively the said trial court. Simply put, considering the extent of
participating in the proceedings by filing pleadings, their participation in the case, they are, as they should be,
presenting his evidence, and invoking its authority by considered estopped from raising lack of jurisdiction as a
asking for an affirmative relief is deemed estopped from ground for the dismissal of the action.
questioning the jurisdiction of the court. 18
WHEREFORE, premises considered, the instant petition is
Here, we note that aside from the belated filing of the hereby GRANTED. The April 25, 2013 and July 3, 2013
motion to dismiss it having been filed nine (9) years from Orders of the Regional Trial Court in Civil Case No. (1798)-
the filing of the complaint respondents actively 021 are hereby REVERSED and SET ASIDE.
participated in the proceedings through the following acts:
The Regional Trial Court, Branch 32 in Lupon, Davao
1. By filing their Answer and Opposition to Oriental is ORDERED to proceed with dispatch in resolving
the Prayer for Injunction 19 dated Civil Case No. (1798)-021.
September 29, 1994 whereby they
No pronouncement as to costs.
even interposed counterclaims,
specifically: PhP501,000 for unpaid SO ORDERED.
survey accounts, PhP100,000 each as
Peralta, Abad, Mendoza and Leonen, JJ., concur.
litigation expenses, PhP200,000 and
PhP3,000 per daily appearance by
way of attorney's fees, PhP500,000 as
moral damages, PhP100,000 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; 20
4. By presenting their witness; 21 and
5. By submitting the compromise
agreement for approval. 22
Having fully participated in all stages of the case, and even
invoking the RTC's authority by asking for affirmative
 Page 318 of 458
[G.R. No. 176020. September 29, 2014.]
HEIRS OF TELESFORO JULAO, namely,
ANITA VDA. DE ENRIQUEZ, SONIA J.
TOLENTINO and RODERICK
JULAO, petitioners, vs. SPOUSES
ALEJANDRO and MORENITA DE
JESUS, respondents.
DECISION
DEL CASTILLO, J : p
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 Certiorari 4 under Rule 45 of the
Rules of Court assails the Decision 5 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. 7 Upon 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 of
TELESFORO 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 Anna Julao vda. de
Enriquez, Sonia J. Tolentino and Roderick
Julao, 17 representing themselves to be the heirs of
 Page 319 of 458
Telesforo, filed before the Regional Trial Court (RTC),
Baguio City, a Complaint for 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; 20that 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 HDCAaS
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. 34 The
first one, TSA No. V-2132, resulted in the issuance of OCT
No. P-2446 in favor of the heirs of Telesforo, 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-in-Intervention, 39 arguing that their father, Solito, is
a legitimate son of Telesforo 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 letter 42 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 . . . ." 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
 Page 320 of 458
Ruling of the Regional Trial Court
On August 10, 2001, the RTC rendered a Decision 47 in
favor of petitioners. 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. 53 Moreover,
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
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 AcSHCD
 Page 321 of 458
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
Resolution 59 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
determined by the allegations in the complaint, which
contains the concise statement of the ultimate facts of a
plaintiff's cause of action. 60
Section 19 (2) and Section 33 (3) of Batas Pambansa
Blg. 129, as amended by Republic Act No. 7691, provide:
SEC. 19. Jurisdiction in Civil Cases. Regional
Trial Courts shall exercise exclusive original
jurisdiction:
xxx xxx xxx
(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;
xxx xxx xxx
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:
xxx xxx xxx
(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, 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
 Page 322 of 458

Complaint the assessed value of the subject property, the In this case, petitioners failed to identify the property they
CA correctly dismissed the Complaint as petitioners failed seek to recover as they failed to describe the location, the
to establish that the RTC had jurisdiction over it. In fact, area, as well as the boundaries thereof. In fact, as aptly
since the assessed value of the property was not alleged, it pointed out by the CA, no survey plan was presented by
cannot be determined which trial court had original and petitioners to prove that respondent spouses actually
exclusive jurisdiction over the case. encroached upon the 70-square meter portion of
petitioners' property. 68 Failing to prove their allegation,
Furthermore, contrary to the claim of petitioners, the issue
petitioners are not entitled to the relief prayed for in their
of lack of jurisdiction was raised by respondents in their
Complaint.
Appellant's Brief. 62 And the fact that it was raised for the
first time on appeal is of no moment. Under Section All told, we find no error on the part of the CA in dismissing
1, 63 Rule 9 of the Revised Rules of Court, defenses not the Complaint for lack of jurisdiction and for failing to
pleaded either in a motion to dismiss or in the answer are identify the property sought to be recovered.
deemed waived, except for lack of jurisdiction, litis
WHEREFORE, the Petition is hereby DENIED. The
pendentia, res judicata, and prescription, which must be
Decision dated December 4, 2006 of the Court of Appeals
apparent from the pleadings or the evidence on record. In
in CA-G.R. CV No. 72845 is hereby AFFIRMED.
other words, the defense of lack of jurisdiction over the
subject matter may be raised at any stage of the SO ORDERED.
proceedings, even for the first time on appeal. 64 In fact, the
(Heirs of Julao v. Spouses De Jesus, G.R. No. 176020,
|||
court may motu proprio dismiss a complaint at any time
when it appears from the pleadings or the evidence on [September 29, 2014])
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
EaIcAS
 Page 323 of 458
[G.R. No. 203678. February 17, 2016.]
CONCORDE CONDOMINIUM, INC., by
itself and comprising the Unit Owners of
Concorde Condominium
Building, petitioner, vs. AUGUSTO H.
BACULIO; NEW PPI CORPORATION;
ASIAN SECURITY and INVESTIGATION
AGENCY and its security guards; ENGR.
NELSON B. MORALES, in his capacity as
Building Official of the Makati City
Engineering Department; SUPT.
RICARDO C. PERDIGON, in his capacity
as City Fire Marshal of the Makati City
Fire Station; F/C SUPT. SANTIAGO E.
LAGUNA, in his capacity as Regional
Director of the Bureau of Fire Protection-
NCR, and any and all persons acting with
or under them, respondents.
DECISION
PERALTA, J :p
This resolves the Petition for Review
on Certiorari under Rule 45 of the Rules of Court,
seeking to reverse and set aside the Order dated June
28, 2012 and Resolution dated September 20, 2012 of
the Regional Trial Court (RTC) of Makati City, Branch
149, 1 which dismissed Civil Case No. 12-309 for
Injunction with Damages for lack of jurisdiction.HTcADC
The antecedent facts are as follows:
On April 16, 2012, petitioner Concorde
Condominium, Inc., by itself and comprising the Unit
Owners of Concorde Condominium
Building, (petitioner) filed with the Regional Trial
Court (RTC) of Makati City a Petition for Injunction [with
Damages with prayer for the issuance of a Temporary
Restraining Order (TRO), Writ of Preliminary
(Prohibitory) Injunction, and Writ of Preliminary
Mandatory Injunction] against respondents New PPI
Corporation and its President Augusto H. Baculio; Asian
Security and Investigation Agency and its security
guards, Engr. Nelson B. Morales in his capacity as
Building Official of the Makati City Engineering
Department; Supt. Ricardo C. Perdigon in his capacity
as City Fire Marshal of the Makati City Fire Station; F/C
Supt. Santiago E. Laguna, in his capacity as Regional
Director of the Bureau of Fire Protection-NCR, and any
and all persons acting with or under
them (respondents).
Petitioner seeks (1) to enjoin respondents Baculio
and New PPI Corporation from misrepresenting to the
public, as well as to private and government
offices/agencies, that they are the owners of the
disputed lots and Concorde Condominium Building, and
from pushing for the demolition of the building which
they do not even own; (2) to prevent respondent Asian
Security and Investigation Agency from deploying its
security guards within the perimeter of the said building;
and (3) to restrain respondents Engr. Morales, Supt.
Perdigon and F/C Supt. Laguna from responding to and
 Page 324 of 458
acting upon the letters being sent by Baculio, who is a
mere impostor and has no legal personality with regard
to matters concerning the revocation of building and
occupancy permits, and the fire safety issues of the
same building. It also prays to hold respondents
solidarily liable for actual damages, moral damages,
exemplary damages, attorney's fees, litigation expenses
and costs of suit.
The case was docketed as Civil Case No. No. 12-
309 and raffled to the Makati RTC, Branch 149, which
was designated as a Special Commercial Court. 2
On April 24, 2012, the RTC called the case for
hearing to determine the propriety of issuing a TRO,
during which one Mary Jane Prieto testified and
identified some documents. While she was undergoing
cross-examination by a counsel from the Office of the
Solicitor General (OSG) relative to the fire deficiencies
of petitioner's building, the RTC interrupted her
testimony to find a better solution to the problem, and
issued an Order which reads: aScITE
Wherefore, this court ordered Supt.
Ricardo C. Perdigon, Fire Marshal of Makati
City, to conduct an inspection of Concorde
Condominium Building. He is hereby ordered
to submit a report on his investigation not later
than 5:00 o'clock in the afternoon tomorrow.
In the same manner, the Building
Official of Makati City, being represented by
Atty. Fabio is also hereby ordered to conduct
an investigation on the status of the said
building to ascertain whether it [is] still
structurally sound to stand. Such report shall
be submitted to this court not later than 5:00
o'clock in the afternoon tomorrow.
If the report of the Building Official is
negative, the unit owners of the condominium
will be given the opportunity to be heard on
whether to condemn the building or not.
In the same manner, the alleged owner
of the land, who should have transferred it to
the condominium corporation once the latter
was created, and it appears that it was not
complied with, they are also given the
opportunity to get their own structural engineer
to ascertain the structural soundness of the
building. Afterwhich, the court will issue the
necessary order whether to condemn or not
the building and the President of the
condominium corporation has acceded to such
undertaking because that's the only way how to
give them fair play and be heard on their right
as condominium owner of Concorde Building
located at 200 Benavidez corner Salcedo
Streets, Legaspi Village, Makati City.
The President of the condominium
corporation is hereby given, if there is still a
chance to repair, four (4) months from April 30,
2012 or up to August 30, 2012 to remedy all
those problems and/or deficiencies of the
building.
The other parties are hereby enjoined
not to threaten, interfere or molest the
condominium unit owners of said building. Any
other party, including the herein parties, who
will obstruct the smooth implementation of this
Order, is already considered to have
 Page 325 of 458
committed a direct contempt of the order of the
court.
Let the continuation of the testimony of
Ms. Mary Jane Prieto be set on September 17,
2012 at 8:30 in the morning.
SO ORDERED. 3
Meanwhile, respondents Baculio and New PPI
Corporation filed an Urgent Motion to Re-Raffle dated
April 25, 2012, claiming that it is a regular court, not a
Special Commercial Court, which has jurisdiction over
the case.
In an Order dated April 26, 2012, the RTC denied
the motion to re-raffle on the ground of failure to comply
with Sections 4 4 and 5 5 of Rule 15 of the Rules of
Court.HEITAD
In their Motion to Vacate Order and Motion to
Dismiss dated May 8, 2012, respondents Baculio and
New PPI Corporation assailed the RTC Order dated
April 24, 2012, stating that the case is beyond its
jurisdiction as a Special Commercial Court.
Respondents claimed that the petition seeks to restrain
or compel certain individuals and government officials to
stop doing or performing particular acts, and that there
is no showing that the case involves a matter embraced
in Section 5 of Presidential Decree (P.D.) No. 902-A,
which enumerates the cases over which the SEC [now
the RTC acting as Special Commercial Court pursuant
to Republic Act (R.A.) No. 8799] exercises exclusive
jurisdiction. They added that petitioner failed to exhaust
administrative remedies, which is a condition precedent
before filing the said petition.
In an Order dated June 28, 2012, the RTC
dismissed the case for lack of jurisdiction. It noted that
by petitioner's own allegations and admissions,
respondents Baculio and New PPI Corporation are not
owners of the two subject lots and the building. Due to
the absence of intra-corporate relations between the
parties, it ruled that the case does not involve an intra-
corporate controversy cognizable by it sitting as a
Special Commercial Court. It also held that there is no
more necessity to discuss the other issues raised in the
motion to dismiss, as well as the motion to vacate order,
for lack of jurisdiction over the case.
Petitioner filed a motion for reconsideration of the
Order dated June 28, 2012, which the RTC denied for
lack of merit. 6 Hence, this petition for review
oncertiorari.
Petitioner raises a sole question of law in support
of its petition:
A.
THE REGIONAL TRIAL COURT COMMITTED
A MANIFEST ERROR OF LAW AND ACTED
IN A MANNER CONTRARY TO LAW AND
ESTABLISHED JURISPRUDENCE IN
DISMISSING THE PETITION ON THE
GROUND OF LACK OF JURISDICTION. 7
Petitioner contends that its petition for injunction
with damages is an ordinary civil case correctly filed
with the RTC which has jurisdiction over actions where
the subject matter is incapable of pecuniary estimation.
However, petitioner claims that through no fault on its
part, the petition was raffled to Branch 149 of the Makati
 Page 326 of 458
RTC, a designated Special Commercial Court tasked to
hear intra-corporate disputes.
Petitioner notes that R.A. 8799 merely transferred
the Securities and Exchange Commission's jurisdiction
over cases enumerated under Section 5 of P.D. No.
902-A to the courts of general jurisdiction or the
appropriate Regional Trial Court, and that there is
nothing in R.A. 8799 or in A.M. No. 00-11-03-SC which
would limit or diminish the jurisdiction of those RTCs
designated as Special Commercial Courts. Petitioner
stresses that such courts shall continue to participate in
the raffle of other cases, pursuant to OCA Circular No.
82-2003 on Consolidation of Intellectual Property Courts
with Commercial Court. It insists that for purposes of
determining the jurisdiction of the RTC, the different
branches thereof (in case of a multiple sala court)
should not be taken as a separate or
compartmentalized unit. It, thus, concludes that the
designation by the Supreme Court of Branch 149 as a
Special Commercial Court did not divest it of its power
as a court of general jurisdiction.
ATICcS
Petitioner also submits that prior to the issuance
of the Order setting the case for hearing on April 24,
2012, the Presiding Judge of Branch 149 had already
determined from the averments in the petition that it is
an ordinary civil action and not an intra-corporate
matter; thus, he should have referred it back to the
Executive Judge or the Office of the Clerk of Court for
re-raffle to other branches of the RTC, instead of
calendaring it for hearing or dismissing it.
For public respondents Superintendent Ricardo
C. Pedrigon and Fire Chief Superintendent Santiago E.
Laguna, the OSG avers that the petition for review
oncertiorari should be denied for lack of merit. It points
out that petitioner failed to exhaust administrative
remedies, i.e., appeal the revocation of the building and
occupancy permits with the Department of Public Works
and Highways (DPWH) Secretary, pursuant to Section
307 of the National Building Code (Presidential Decree
No. 1096); hence, the filing of a petition for injunction
with damages is premature and immediately dismissible
for lack of cause of action.
The OSG further argues that even if the case is
remanded back to the RTC, the same will not prosper
due to procedural and substantive defects, and will only
further clog the trial court's dockets, for the following
reasons: (1) petitioner failed to implead an
indispensable party, namely, the DPWH Secretary to
whom the power to reinstate the building permit and the
occupancy permit is lodged; (2) with regard to the
occupancy permit and the "water sprinkler" clearance,
they cannot be issued without a building permit; and (3)
the said clearance cannot also be issued due to lack of
certification from either the Building Official or Tandem,
the structural engineers personally hired by petition, that
the structural integrity of Concorde Condominium
Building can withstand the necessary damage and load
that would be caused by the installation of the water
sprinkler system.
For their part, respondents Baculio and New PPI
Corporation aver that the petition filed before the RTC
should be dismissed for lack of proper verification. They
likewise assert that Branch 149 has no jurisdiction over
the same petition because (1) such case is not an intra-
corporate controversy; (2) petitioner failed to exhaust
administrative remedies which is a condition precedent
 Page 327 of 458
before filing such case; (3) the subject building is a
threat to the safety of members of petitioner themselves
and of the public in general; (4) the two lots allegedly
owned by petitioner are both registered in the name of
New PPI Corporation; and (5) the engineering firm hired
by petitioner could not even guarantee the building's
structural capacity.
TIADCc
Meanwhile, respondent Asian Security &
Investigation Agency claims that petitioner's allegations
against it are already moot and academic because it
had already terminated its security contract with
respondents New PPI Corporation and Baculio, and
pulled out its guards from petitioner's premises. At any
rate, it manifests that it is adopting as part of its
Comment the said respondents' Comment/Opposition to
the petition for review on certiorari.
Respondent Office of the Building Official of
Makati City, represented by Engineer Mario V. Badillo,
likewise contends that the petition for review
on certiorarishould be dismissed for these reasons: (1)
that petitioner failed to exhaust administrative remedies
which is a mandatory requirement before filing the case
with the RTC of Makati City; (2) that Branch 149, as a
Special Commercial Court, has jurisdiction over the said
case because it is not an intra-corporate controversy;
and (3) petitioner's building is old and dilapidated, and
ocular inspections conducted show that several
violations of the National Building Code were not
corrected, despite several demands and extensions
made by the Building Official.
The petition is impressed with merit.
In resolving the issue of whether Branch 149 of
the Makati RTC, a designated Special Commercial
Court, erred in dismissing the petition for injunction with
damages for lack of jurisdiction over the subject matter,
the Court is guided by the rule "that jurisdiction over the
subject matter of a case is conferred by law and
determined by the allegations in the complaint which
comprise a concise statement of the ultimate facts
constituting the plaintiff's cause of action. The nature of
an action, as well as which court or body has jurisdiction
over it, is determined based on the allegations
contained in the complaint of the plaintiff, irrespective of
whether or not the plaintiff is entitled to recover upon all
or some of the claims asserted therein. The averments
in the complaint and the character of the relief sought
are the ones to be consulted. Once vested by the
allegations in the complaint, jurisdiction also remains
vested irrespective of whether or not the plaintiff is
entitled to recover upon all or some of the claims
asserted therein." 8
As a rule, actions for injunction and damages lie
within the jurisdiction of the RTC, pursuant to Section 19
of Batas Pambansa Blg. 129, otherwise known as the
Judiciary Reorganization Act of 1980, as amended
by R.A. 7691: 9 AIDSTE
Sec. 19. Jurisdiction in civil cases.
Regional Trial Courts shall exercise exclusive
original jurisdiction:
(1) In all civil actions in which the
subject of the litigations is incapable of
pecuniary estimation;
xxx xxx xxx

(6) In all cases not within the exclusive
jurisdiction of any court, tribunal, person or
body exercising . . . judicial or quasi-judicial
functions;
xxx xxx xxx
(8) In all other cases in which the
demand, exclusive of interest, damages of
whatever kind, attorney's fees, litigation
expenses, and costs or the value of the
property in controversy exceeds Three
hundred thousand pesos (P300,000.00) or, in
such other cases in Metro Manila, where the
demand exclusive of the above-mentioned
items exceeds Four hundred thousand pesos
(P400,000.00).
Meanwhile, Section 6 (a) of P.D. No. 902-
A empowered the SEC to issue preliminary or
permanent injunctions, whether prohibitory
mandatory, in all cases in which it exercises original and
exclusive jurisdiction, 10 to wit:
(a) Devices or schemes employed by or
any acts, of the board of directors, business
associates, its officers or partnership,
amounting to fraud and misrepresentation
which may be detrimental to the interest of the
public and/or of the stockholder, partners,
members of associations or organizations
registered with the Commission;
(b) Controversies arising out of intra-
corporate or partnership relations, between
and among stockholders, members or
associates; between any or all of them and the
corporation, partnership or association of which
they are stockholders, members or associates,
Page 328 of 458
respectively; and between such corporation,
partnership or association and the state insofar
as it concerns their individual franchise or right
to exist as such entity; and
(c) Controversies in the election or
appointments of directors, trustees, officers or
managers of such corporations, partnerships or
associations. 11 AaCTcI
However, jurisdiction of the SEC over intra-
corporate cases was transferred to Courts of general
jurisdiction or the appropriate Regional Trial Court
when R.A. No. 8799 took effect on August 8, 2000.
Section 5.2 of R.A. No. 8799 provides:
SEC. 5.2 The Commission's jurisdiction
over all cases enumerated under Section 5
of Presidential Decree No. 902-A is hereby
transferred to the Courts of general jurisdiction
or or the appropriate Regional Trial
Court: Provided, that the Supreme Court in the
exercise of its authority may designate the
Regional Trial Court branches that shall
exercise jurisdiction over these cases. The
Commission shall retain jurisdiction over
pending cases involving intra-corporate
disputes submitted for final resolution which
should be resolved within one (1) year from the
enactment of this Code. The Commission shall
retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30
June 2000 until finally disposed.
In GD Express Worldwide N.V., et al. v. Court of
Appeals (4th Div.) et al., 12 the Court stressed that
Special Commercial Courts are still considered courts of
general jurisdiction which have the power to hear and
 Page 329 of 458
decide cases of all nature, whether civil, criminal or
special proceedings, thus:
. . . Section 5.2 of R.A. No. 8799 directs
merely the Supreme Court's designation of
RTC branches that shall exercise jurisdiction
over intra-corporate disputes. Nothing in the
language of the law suggests the diminution of
jurisdiction of those RTCs to be designated as
SCCs. The assignment of intra-corporate
disputes to SCCs is only for the purpose of
streamlining the workload of the RTCs so that
certain branches thereof like the SCCs can
focus only on a particular subject matter.
The designation of certain RTC
branches to handle specific cases is nothing
new. For instance, pursuant to the provisions
of R.A. No. 6657 or theComprehensive
Agrarian Reform Law, the Supreme Court has
assigned certain RTC branches to hear and
decide cases under Sections 56 and 57 of R.A.
No. 6657.
The RTC exercising jurisdiction over an
intra-corporate dispute can be likened to an
RTC exercising its probate jurisdiction or sitting
as a special agrarian court. The designation of
the SCCs as such has not in any way limited
their jurisdiction to hear and decide cases of all
nature, whether civil, criminal or special
proceedings.13 EcTCAD
In Manuel Luis C. Gonzales and Francis Martin D.
Gonzales v. GJH Land, Inc. (formerly known as S.J.
Land, Inc.), Chang Hwan Jang a.k.a. Steve Jang, Sang
Rak Kim, Mariechu N. Yap and Atty. Roberto P. Mallari
II, 14 the Court en banc, voting 12-1, 15 explained why
transfer of jurisdiction over cases enumerated in Section
5 ofP.D. 902-A was made to the RTCs in general, and
not only in favor of particular RTC branches (Special
Commercial Courts), to wit:
As a basic premise, let it be emphasized
that a court's acquisition of jurisdiction over a
particular case's subject matter is different from
incidents pertaining to the exercise of its
jurisdiction. Jurisdiction over the subject matter
of a case is conferred by law, whereas a
court's exercise of jurisdiction, unless
provided by the law itself, is governed by
the Rules of Court or by the orders issued from
time to time by the Court. In Lozada v.
Bracewell, it was recently held that the matter
of whether the RTC resolves an issue in the
exercise of its general jurisdiction or of its
limited jurisdiction as a special court
is only a matter of procedure and has
nothing to do with the question of
jurisdiction.
Pertinent to this case is RA 8799 which
took effect on August 8, 2000. By virtue of said
law, jurisdiction over cases enumerated in
Section 5 of Presidential Decree No. 902-
A was transferred from the Securities and
Exchange Commission (SEC) to the RTCs,
being courts of general jurisdiction. Item
5.2, Section 5 of RA 8799 provides:
SEC. 5. Powers and Functions of
the Commission.
xxx xxx xxx
5.2 The Commission's
jurisdiction over all cases
 Page 330 of 458

enumerated under Section 5 (6) In all cases not within the

of Presidential Decree No. 902- exclusive jurisdiction of any court,
A is hereby transferred to the tribunal, person or body
Courts of general jurisdiction exercising judicial or quasi-
or the appropriate Regional judicial functions: . . . .
Trial Court: Provided, that the As enunciated in Durisol Philippines,
Supreme Court in the exercise Inc. v. CA:
of its authority may designate
the Regional Trial Court The regional trial court,
branches that shall exercise formerly the court of first
jurisdiction over the cases. The instance, is a court of general
Commission shall retain jurisdiction. All cases, the
jurisdiction over pending cases jurisdiction over which is not
involving intra-corporate disputes specifically provided for by law to
submitted for final resolution be within the jurisdiction of any
which should be resolved within other court, fall under the
one (1) year from the enactment jurisdiction of the regional trial
of this code. The Commission court.AScHCD

shall retain jurisdiction over To clarify, the word "or" in Item 5.2,
pending suspension of Section 5 of RA 8799 was intentionally used by
payment/rehabilitation cases filed the legislature to particularize the fact that the
as of 30 June 2000 until finally phrase "the Courts of general jurisdiction" is
disposed. (Emphasis equivalent to the phrase "the appropriate
supplied) HSAcaE
Regional Trial Court." In other words, the
The legal attribution of Regional Trial jurisdiction of the SEC over the cases
Court as courts of general enumerated under Section 5PD 902-A was
jurisdiction stems from Section 19 (6) Chapter transferred to the courts of general jurisdiction,
II of Batas Pambansa Bilang (BP) 129, known that is to say (or, otherwise known as), the
as "The Judiciary Reorganization Act of 1980:" proper Regional Trial Courts. This
interpretation is supported by San Miguel Corp.
Section 19. Jurisdiction in civil v. Municipal Council, wherein the Court held
cases. Regional Trial Courts
that:
shall exercise exclusive original
jurisdiction: [T]he word "or" may be
used as the equivalent of "that is
xxx xxx xxx to say" and gives that which
precedes it the same significance
 Page 331 of 458

as that which follows it. It is not suspension of payments and

always disjunctive and is receiverships that were filed
sometimes interpretative or before June 30, 2000 will
expository of the preceding word. continue with the SEC. In other
words, we are avoiding the
Further, as may be gleaned from the
possibility, upon approval of this
following excerpt of the Congressional
bill, of people filing cases with the
deliberations:
SEC, in manner of speaking, to
Senator [Raul S.] Roco: select their court.
. . . The first major xxx xxx xxx (Emphasis supplied)
departure is as regards the
Therefore, one must be disabused of
Securities and Exchange
the notion that the transfer of jurisdiction was
Commission. The Securities and
made only in favor of particular RTC branches,
Exchange Commission has been
and not the RTCs in general. AcICHD
authorized under this proposal to
reorganize itself. As an Having clearly settled that as courts of general
administrative agency, we jurisdiction, the designated Special Commercial Courts
strengthened it and at the same and the regular RTCs are both conferred by law the
time we take away the quasi- power to hear and decide civil cases in which the
judicial functions. The quasi- subject of the litigation is incapable of pecuniary
judicial functions are not given
estimation, such as an action for injunction, the Court
back to the court of general
jurisdiction The Regional will now examine the material allegations in the petition
Trial Court, except for two for injunction with damages, in order to determine
categories of cases. whether Branch 149 of the Makati RTC has jurisdiction
over the subject matter of the case.
In the case of corporate
disputes, only those that are now In its petition for injunction with
submitted for final determination damages, Concorde Condominium, Inc. (CCI), by itself
of the SEC will remain with the and comprising the unit owners of Concorde
SEC. So, all those cases, both Condominium Building, alleged that:
memos of
the plaintiff and the defendant, 8. CCI is the duly constituted
that have been submitted for Corporation or Association which owns the
resolution will continue. At the common areas in the project that
same time cases involving comprises: (a) Lot 1 where the
rehabilitation, bankruptcy, condominium stands and Lot 2 which
 Page 332 of 458

serves as the parking lot for the benefit of 9. Unfortunately, PPI, as developer
the unit owners; and (b) Concorde and engaging in unsound real estate
Condominium Building ("the building") that business practice, altered the condominium
was developed by Pulp and Paper plan to segregate a lot (Lot 2) from the
Distributors, Inc. (now, allegedly [as common areas and fraudulently cause the
claimed by respondent Baculio], the "New issuance of a separate title thereof in the
PPI Corp."). name of PPI.
8.1 Petitioner's ownership 10. CCI has questioned said fraudulent
of both the two (2) lots and the act of PPI in Housing and Land Use Regulatory
building (except only the units Board (HLURB) Case No. REM-050500-10982
specifically owned by unit entitled "Concorde Condominium, Incorporated
owners) is undisputable, as can vs. Pulp and Paper, Inc. et al." The same case
be clearly gleaned in the was elevated on appeal to the HLURB Board
following provisions of the Master of Commissioners in a case entitled "Concorde
Deed with Declaration of Condominium, Incorporated, complainant vs.
Restrictions ("Master Deed"), as Pulp and Paper, Inc., et al., respondents, vs.
well as the Amended By-laws of Landmark Philippines, Incorporated, et al.,
petitioner Concorde Intervenors." In both cases, the HLURB ruled
Condominium, Inc. in favor of CCI.
xxx xxx xxx 11. PPI did not anymore appeal the
aforementioned decision of the HLURB Board
8.4 At any rate,
of Commissioners to the Office of the
considering that the condominium
President, hence, the decision as against PPI
corporation (herein petitioner)
is already final and executory.TAIaHE
had already been established or
incorporated many years ago, xxx xxx xxx
and that the Developer (or any 12. Although HLURB has already
subsequent transferor) had decided that CCI or all the unit owners have
already sold the units in the vested rights over the subject lots, recent
building to the present unit
events have compelled petitioner to urgently
owners/members, it therefore seek from this Honorable Court the reliefs
follows that Developer had prayed for in the instant case, such as the
thereby lost its beneficial immediate issuance of a temporary restraining
ownership over Lots 1 and 2 in order (TRO) and/or writ of preliminary
favor of herein petitioner. injunction against respondents.
xxx xxx xxx
 Page 333 of 458

14. At present, a certain Augusto H. New PPI Corp. owns the two lots,
Baculio (respondent herein), by himself and but he likewise openly
on behalf of New PPI Corp., deliberately, misrepresented that he owns the
actively and with patent bad faith building, . . . and even requested
misrepresents and misleads the public and ". . . to address its 'demolition' as
certain government offices/agencies that the Concorde is already 40 years
the lot where the building stands and the lot old."
which serves as parking area are owned by xxx xxx xxx
New PPI Corp.
14.7 In a letter dated 07
xxx xxx xxx September 2011, respondent
14.1 In a letter dated 31 Supt. Ricardo C. Perdigon
January 2011, respondent forwarded or elevated to
Augusto Baculio, on behalf of respondent F/C Supt. Santiago E.
New PPI Corp., representing Laguna, Regional Director of the
themselves as owners of the Bureau of Fire Protection-NCR
above-mentioned lots, requested the matter about Concorde
from the Makati Fire Station that Condominium Building. cDHAES

the building be subjected to xxx xxx xxx

ocular inspection, . . . .
14.8 On 21 October 2011,
xxx xxx xxx CCI sent a letter to respondent
14.3 On 12 August 2011, F/C Supt. Santiago E. Laguna,
respondent Augusto H. Baculio, informing the latter of the
with the same misrepresentation, misrepresentations of
sent another letter to respondent respondents Augusto Baculio and
Supt. Ricardo C. Perdigon, City New PPI Corp.
Fire Marshal of Makati requesting xxx xxx xxx
for verification or inspection of
Concorde, . . . . 14.9 The
misrepresentation of respondents
xxx xxx xxx Baculio and New PPI Corp. did
14.4 Worth noting in the not stop there. On 17 November
aforementioned letter of 2011, Mr. Baculio requested from
respondent Baculio dated 12 Meralco for the cutting off of
August 2011 . . . is that, not only electricity in Concorde
did he misrepresent that he or Condominium Building,
 Page 334 of 458

apparently with the perimeter of the building poses

misrepresentation that he owns threat to and sows serious fear
the building. and anxiety to the unit owners.
Thus, they should be ordered to
xxx xxx xxx
leave the premises.
14.14 Moreover, on 7
17. Respondent Baculio and New PPI
March 2012, one of the unit
Corp.'s misleading, false, baseless and
owners in the building, Sister
unauthorized acts of claiming ownership
Lioba Tiamson, OSB, sought the
over the subject lots and building are clear
assistance and intervention of
violation of the rights of petitioner and its
Honorable Mayor Jejomar Erwin
unit owners to maintain their undisturbed
S. Binay, Jr. when Concorde
ownership, possession and peaceful
received a letter dated 17
enjoyment of their property. Hence, should
February 2012 from respondent
be immediately estopped, restrained and
Engr. Nelson B. Morales
permanently enjoined.
informing Concorde of the
revocation of the building and 18. Moreover, respondents Baculio
occupancy permits even if the and New PPI Corp., by deceit and
period of sixty (60) days to misrepresentation, are surreptitiously
comply has not yet lapsed.
TCAScE attempting to dispossess petitioner of
Concorde building to the extent of using the
xxx xxx xxx
instrumentality of the government to
16. Moreover, sometime in November achieve this purpose.
2011, petitioner and its unit owners noted
19. Worse, respondent Baculio and New
that security guards from Asian Security
PPI Corp. by writing letters to Makati City
and Investigation Agency have stationed
Engineering Department, are pushing for the
themselves on rotation basis 7 days a
demolition of the building which they do not
week/24 hours a day, within the perimeter
even own.
of the building. Upon inquiry of one of the
administration personnel, it was discovered 20. Surprisingly, respondent Engr.
that they were hired by respondent Augusto Nelson B. Morales has been responding to
H. Baculio/New PPI Corp. and acting upon the above-mentioned
letters being sent by respondent Baculio
xxx xxx xxx
despite the latter being a mere impostor
16.5 The presence of and has no legal personality whatsoever
respondent security agency and with regard to the matters concerning the
its security guards within the lots and Concorde Condominium Building.
 Page 335 of 458

xxx xxx xxx continuously refuses to issue the

necessary permit for the contractor . . .
20.9 It is therefore
engaged by petitioner to be able to
necessary that respondent
commence with the installation of a fire
Engr. Nelson Morales be
sprinkler system and to correct other fire
enjoined from entertaining and
safety deficiencies in the building.
acting upon the letters of
respondent Baculio. 22.1 Thus, it is certainly
ironic that the Bureau of Fire
20.10 Respondent Engr.
Protection headed by said
Morales should be immediately
respondents . . . issued
restrained from implementing
compliance order on petitioner to
the revocation of petitioner's
correct fire safety deficiencies,
building and occupancy
and yet, they refused to issue the
permit.
necessary work permit to the
20.11 Respondent Engr. contractor hired by petitioner.cTDaEH

Morales should also be

immediately restrained from
ordering the possible
demolition of the building, as
the building is structurally
sound and stable, and does
not pose any safety risks to
occupants and passers-by.
xxx xxx xxx
21. Respondents Supt. Ricardo C.
Perdigon and F/C Supt. Santiago E. Laguna
have likewise been responding to and
acting upon the above-mentioned letters
being sent by respondent Baculio despite
the latter being a mere impostor and has no
legal personality whatsoever with regard to
matters concerning the building.
22. Moreover, respondents Supt.
Ricardo C. Perdigon and F/C Supt. Santiago
E. Laguna unjustifiably refused, and
22.2 Hence, respondents
Supt. Perdigon and F/C Supt.
Laguna should be directed to
issue the necessary permit to
the contractor engaged by
petitioner. 16
The concept of an action for injunction, as an
ordinary civil action, was discussed in BPI v. Hong, et
al. 17 as follows:
An action for injunction is a suit which
has for its purpose the enjoinment of the
defendant, perpetually or for a particular time,
from the commission or continuance of a
specific act, or his compulsion to continue
performance of a particular act. It has an
independent existence, and is distinct from the
ancillary remedy of preliminary injunction which
cannot exist except only as a part or an
incident of an independent action or
proceeding. In an action for injunction, the
 Page 336 of 458
auxiliary remedy of preliminary injunction,
prohibitory or mandatory, may issue.
There is no doubt that the petition filed before the
RTC is an action for injunction, as can be gleaned from
the allegations made and reliefs sought by petitioner,
namely: (1) to enjoin respondents Baculio and New PPI
Corporation from misrepresenting to the public, as well
as to private and government offices/agencies, that they
are the owners of the disputed lots and Concorde
Condominium Building, and from pushing for the
demolition of the building which they do not even own;
(2) to prevent respondent Asian Security and
Investigation Agency from deploying its security guards
within the perimeter of the said building; and (3) to
restrain respondents Engr. Morales, Supt. Perdigon and
F/C Supt. Laguna from responding to and acting upon
the letters being sent by Baculio, who is a mere
impostor and has no legal personality with regard to
matters concerning the revocation of building and
occupancy permits, and the fire safety issues of the
same building.
Applying the relationship test 18 and the nature of
the controversy test 19 in determining whether a dispute
constitutes an intra-corporate controversy, as
enunciated in Medical Plaza Makati Condominium
Corporation v. Cullen, 20 the Court agrees with Branch
149 that Civil Case No. 12-309 for injunction with
damages is an ordinary civil case, and not an intra-
corporate controversy. cSaATC
A careful review of the allegations in the petition
for injunction with damages indicates no intra-corporate
relations exists between the opposing parties, namely
(1) petitioner condominium corporation, by itself and
comprising all its unit owners, on the one hand, and (2)
respondent New PPI Corporation which Baculio claims
to be the owner of the subject properties, together with
the respondents Building Official and City Fire Marshal
of Makati City, the Regional Director of the Bureau of
Fire Protection, and the private security agency, on the
other hand. Moreover, the petition deals with the
conflicting claims of ownership over the lots where
Concorde Condominium Building stands and the
parking lot for unit owners, which were developed by
Pulp and Paper Distributors, Inc. (now claimed by
respondent Baculio as the New PPI Corporation), as
well as the purported violations of the National Building
Code which resulted in the revocation of the building
and occupancy permits by the Building Official of Makati
City. Clearly, as the suit between petitioner and
respondents neither arises from an intra-corporate
relationship nor does it pertain to the enforcement of
their correlative rights and obligations under
the Corporation Code,and the internal and intra-
corporate regulatory rules of the corporation, Branch
149 correctly found that the subject matter of the
petition is in the nature of an ordinary civil action.
The Court is mindful of the recent guideline laid
down in the recent case of Manuel Luis C. Gonzales
and Francis Martin D. Gonzales v. GJH Land, Inc.
(formerly known as S.J. Land, Inc.), Chang Hwan Jang
a.k.a. Steve Jang, Sang Rak Kim, Mariechu N. Yap and
Atty. Roberto P. Mallari II, 21 to wit:
For further guidance, the Court finds it
apt to point out that the same principles apply
to the inverse situation of ordinary civil cases
filed before the proper RTCs but wrongly
 Page 337 of 458
raffled to its branches designated as Special
Commercial Courts. In such a scenario, the
ordinary civil case should then be referred to
the Executive Judge for re-docketing as an
ordinary civil case; thereafter, the Executive
Judge should then order the raffling of the case
to all branches of the same RTC, subject to
limitations under existing internal rules, and the
payment of the correct docket fees in case of
any difference. Unlike the limited
assignment/raffling of a commercial case only
to branches designated as Special Commercial
Courts in the scenarios stated above, the re-
raffling of an ordinary civil case in this instance
to all courts is permissible due to the fact that a
particular branch which has been designated
as a Special Commercial Court does not shed
the RTC's general jurisdiction over ordinary
civil cases under the imprimatur of statutory
law, i.e., Batas Pambansa Bilang (BP 129). To
restate, the designation of Special Commercial
Courts was merely intended as a procedural
tool to expedite the resolution of commercial
cases in line with the court's exercise of
jurisdiction. This designation was not made by
statute but only by an internal Supreme Court
rule under its authority to promulgate rules
governing matters of procedure and its
constitutional mandate to supervise the
administration of all courts and the personnel
thereof. Certainly, an internal rule promulgated
by the Court cannot go beyond the
commanding statute. But as a more
fundamental reason, the designation of Special
Commercial Courts is, to stress, merely an
incident related to the court's exercise of
jurisdiction, which, as first discussed, is distinct
from the concept of jurisdiction over the subject
matter. The RTC's general jurisdiction over
ordinary civil cases is therefore not abdicated
by an internal rule streamlining court
procedure. 22 cHDAIS
It is apt to note, however, that the foregoing
guideline applies only in a situation where the ordinary
civil case filed before the proper RTCs was "wrongly
raffled" to its branches designated as Special
Commercial Courts, which situation does not obtain in
this case. Here, no clear and convincing evidence is
shown to overturn the legal presumption that official
duty has been regularly performed when the Clerk of
Court of the Makati RTC docketed the petition for
injunction with damages as an ordinary civil case not
as a commercial case and, consequently, raffled it
among all branches of the same RTC, and eventually
assigned it to Branch 149. To recall, the designation of
the said branch as a Special Commercial Court by no
means diminished its power as a court of general
jurisdiction to hear and decide cases of all nature,
whether civil, criminal or special proceedings. There is
no question, therefore, that the Makati RTC, Branch 149
erred in dismissing the petition for injunction with
damages, which is clearly an ordinary civil case. As a
court of general jurisdiction, it still has jurisdiction over
the subject matter thereof.
In view of the above discussion, the Court finds
no necessity to delve into the other contentions raised
by the parties, as they should be properly addressed by
the Makati RTC, Branch 149 which has jurisdiction over
the subject matter of the petition for injunction with
damages.
 Page 338 of 458

WHEREFORE, the petition for review MACAPAYAG, RUPERTO DOGIA, JIMMY

on certiorari is GRANTED. The Order dated June 28, TALINO, ERMELITO ANGEL, PETOY
2012 and Resolution dated September 20, 2012 issued BESTO, VICTORINO ANGEL, RUEL
by the Regional Trial Court of Makati City, Branch 149, BOLING, JERMY ANGEL, BERTING
in Civil Case No. 12-309, are SULOD, RIO BESTO, BENDIJO
hereby REVERSED and SET ASIDE. Civil Case No. SIMBALAN, and MARK
12-309 is REINSTATED in the docket of the same BRAZIL, petitioners, vs.RAMON
branch which is further ORDERED to resolve the case ABERASTURI, CRISTINA C. LOPEZ,
with reasonable dispatch. CESAR LOPEZ JR.,DIONISIO A. LOPEZ,
This Decision is immediately executory. MERCEDES L. GASTON, AGNES H.
LOPEZ, EUSEBIO S. LOPEZ, JOSE MARIA
SO ORDERED. ISHCcT
S. LOPEZ, ANTON B. ABERASTURI, MA.
(Concorde Condominium, Inc. v. Baculio, G.R. No.
|||
RAISSA A. VELEZ, ZOILO ANTONIO A.
203678, [February 17, 2016]) VELEZ, CRISTINA ABERASTURI,
EDUARDO LOPEZ JR.,ROSARIO S.
LOPEZ, JUAN S. LOPEZ, CESAR
ANTHONY R. LOPEZ, VENANCIO L.
GASTON, ROSEMARIE S. LOPEZ, JAY A.
ASUNCION, NICOLO ABERASTURI, LISA
A. ASUNCION, INEZ A. VERAY, HERNAN
A. ASUNCION, ASUNCION LOPEZ,
THOMAS A. VELEZ, LUIS ENRIQUE
VELEZ, ANTONIO H. LOPEZ, CHARLES H.
LOPEZ, ANA L. ZAYCO, PILAR L.
QUIROS, CRISTINA L. PICAZO, RENATO
SANTOS, GERALDINE AGUIRRE, MARIA
CARMENCITA T. LOPEZ, and as
EN BANC represented by attorney-in-fact RAMON
ABERASTURI, respondents.
[G.R. No. 181284. October 20, 2015.]

LOLOY UNDURAN, BARANGAY CAPTAIN DECISION

ROMEO PACANA, NESTOR
 Page 339 of 458
PERALTA, J : p
This is a petition for review
on certiorari 1 assailing the Decision 2 dated August 17,
2006 of the Court of Appeals (CA) in CA-G.R. SP No.
00204-MIN, and the Resolution 3 dated July 4, 2007,
which denied petitioners' motion for reconsideration.
Petitioners, except for Mark Brazil and Nestor
Macapayag, are members of the Miarayon, Lapok,
Lirongan, Talaandig Tribal Association (MILALITTRA),or
Talaandig tribe, who claimed to have been living since
birth on the land located at Barangay Miarayon,
Talakag, Bukidnon, Mindanao, which they inherited from
their forefathers.
On the other hand, respondents, represented by
attorney-in-fact Ramon Aberasturi, claimed to be the
lawful owners and possessor of an unregistered parcel
of agricultural land (Lot No. 7367 Cad 630-D),with an
area of 105.7361 hectares, which appears to be located
within the ancestral domain of the Talaandig tribe.
On March 3, 2004, respondents filed a Petition
for Accion Reivindicatoria, with Prayer for the Issuance
of a Temporary Restraining Order or Preliminary
Prohibitory Injunction with Damages 4 (original
complaint for accion reivindicatoria) against petitioners
before the Regional Trial Court of Manolo Fortich,
Bukidnon(RTC).Docketed as Civil Case No. 04-03-01,
the petition was raffled off to Branch 11.
On March 20, 2004, petitioners Macapayag and
Brazil filed their Answer, alleging that respondents have
no cause of action against them.
On March 23, 2004, the rest of the petitioners
filed their Motion to Dismiss, alleging that the RTC had
no jurisdiction over the case. Petitioners alleged that
with the advent of Republic Act No. (RA) 8371,
otherwise known as the Indigenous Peoples' Rights
Act (IPRA),they, together with the rest of the tribe
members, assisted the National Commission on
Indigenous Peoples (NCIP) in the processing,
validation, and delineation of their Ancestral Domain
claim in May 2003. On July 25, 2003, Certificate of
Ancestral Domain Title (CADT) No. R-10-TAL-0703-
0010 was issued by virtue of NCIP En Banc Resolution
No. 08-02003 to the Talaandig tribe over its ancestral
domain in Talakag, Bukidnon, containing an area of
11,105.5657 hectares. On October 30, 2003, President
Gloria Macapagal-Arroyo awarded the said CADT to the
Talaandig tribe. As awardees of a CADT, petitioners
argued that NCIP has exclusive and original jurisdiction
over the case, as the subject matter concerns a dispute
and controversy over an ancestral land/domain of
Indigenous Cultural Communities (ICCs)/Indigenous
Peoples (IPs).
On July 1, 2004, the NCIP through Atty. Melanie
Pimentel, filed a Motion to Refer the Case to the
Regional Hearing Office-National Commission on
Indigenous Peoples (RHO-NCIP),alleging that the RTC
had no jurisdiction over the subject matter.
On July 5, 2004, respondents filed a Motion to
Amend and Supplement Complaint from Accion
Reivindicatoria to one for "Injunction, Damages, and
Other Relief," with the attached Amended and
Supplemental Complaint 5 (amended complaint for
 Page 340 of 458
injunction).On July 30, 2004, petitioners filed an
Opposition thereto.
On August 1, 2004, petitioners filed a Motion to
Dismiss the Amended and Supplemental Complaint,
alleging that the RTC had no jurisdiction over the
subject matter of the case and to issue a writ of
injunction therein.CAIHTE
On August 10, 2004, the RTC issued an Order
granting the Motion to Amend and Supplement
Complaint, and declared petitioners' Motion to Refer the
Case to the RHO-NCIP and Motion to Dismiss moot and
academic as a consequence of the grant of the said
motion to amend and supplement complaint.
On August 17, 2004, petitioners filed a
Manifestation praying for an ocular inspection of the
disputed land to determine the last, actual, peaceable,
uncontested status of the area.
On August 25, 2004, petitioners filed another
Motion to Refer the Case to the RHO-NCIP and Motion
to Dismiss the Amended Complaint.
On September 14, 2004, respondents filed their
Opposition and Motion for Judgment by Default.
On February 14, 2005, the RTC issued an
Order 6 resolving all pending incidents before it, the
dispositive portion of which reads:
WHEREFORE, premises considered,
defendant's [herein petitioners'] motion to refer
the case to the RHO-NCIP and its
manifestation for an ocular inspection are
hereby denied for being bereft of merit.
Further, defendants [petitioners],except
Macapayag and Brazil, are hereby declared in
default for their failure to file their Answer to the
Amended Complaint. Accordingly, let this case,
as against defendants Macapayag and Brazil,
be called for pre-trial and ex-parte presentation
of evidence as against the rest of defendants
[petitioners] on May 2, 2005 at 9:00 o'clock in
the morning.Furthermore, the injunctive writ
prayed for by the plaintiffs is hereby GRANTED
for being meritorious. Accordingly, defendants
[petitioners],their agents and privies, or any
other or all persons acting for and in their
behalves, are hereby ordered to observe,
maintain and preserve the status quo subject
of the action and/or the relation between the
parties in order to protect the rights of the
plaintiffs while the case is pending in court and
to cease and desist from performing any acts
that in one way or another contravene the
tenor of this order, while awaiting final
determination of the instant suit or until further
orders of this court. Furthermore, to answer for
whatever damage that defendants [petitioners]
may sustain by reason of this injunction order if
the court should finally decide that plaintiffs
[respondents] are not entitled to the relief it
prayed for, plaintiffs [respondents] are hereby
directed to put up a bond in the amount of ONE
HUNDRED THOUSAND PESOS
(P100,000.00) executed in favor of the party
enjoined.
SO ORDERED. 7
On April 12, 2005, petitioners filed before the
Court of Appeals a Petition for Certiorari and Prohibition
with Prayer for Preliminary Injunction and Issuance of a
Temporary Restraining Order.
 Page 341 of 458

On August 17, 2006, the CA rendered a Decision On July 4, 2007, the CA denied petitioners'
affirming the RTC's February 14, 2005 Order, which in motion for reconsideration of its August 17, 2006
turn denied the referral of the case to the NCIP, the Decision.
dispositive portion of which states: Hence, this appeal on certiorari raising the
WHEREFORE, in view of the foregoing, following issues:
the petition is hereby partly GRANTED. The
I. THE COURT OF APPEALS ERRED IN
assailed Order dated February 14, 2005 is
AFFIRMING THE JURISDICTION OF THE
hereby AFFIRMED with MODIFICATION that
COURT A QUO OVER A COMPLAINT FOR
the order of default against petitioners, except
INJUNCTION INVOLVING AN ANCESTRAL
Macapayag and Brazil, is hereby LIFTED.
DOMAIN OF THE TALAANDIGS. DETACa

SO ORDERED. 8
II. THE COURT OF APPEALS ERRED IN
The CA ruled that the RTC correctly granted the AFFIRMING THE RESOLUTION OF THE
amendment of the complaint and properly refused to COURT A QUO ALLOWING THE
refer the case to the RHO-NCIP. Based on the AMENDMENT OF THE COMPLAINT, THE
allegations of both original complaint [accion SOLE PURPOSE OF WHICH IS TO CONFER
reivindicatoria] and amended complaint [injunction],the JURISDICTION ON THE LOWER COURT.
CA found that the subject matter of both complaints is III. THE COURT OF APPEALS ERRED IN
well within the jurisdiction of the RTC. The CA noted RESOLVING THAT EVIDENCE MUST BE
that the only substantial amendment made was with PRESENTED BEFORE THE REGIONAL
regard to the nature of the action which originally was TRIAL COURT WHEN IN THE ORIGINAL
one of accion reivindicatoria and then changed to one ACTION FOR SPECIAL CIVIL ACTION
for damages. And except for some amendments as to FOR CERTIORARI BEFORE IT, THE
COURT A QUO HAS ADMITTED THAT A
petitioners' alleged violent acts and the prayer for
CADT WAS ISSUED IN FAVOR OF
declaration of their title to the subject property, the rest PETITIONERS. 9
of the amended complaint was basically the same as
the original one, including the reliefs prayed for by On the first issue, petitioners contend that the
respondents. Anent the writ of preliminary injunction, the RTC has no jurisdiction over Civil Case No. 04-03-0 for
CA held that the RTC's assailed February 14, 2005 Injunction, Damages and other Relief, because the
Order is self-explanatory as to why the issuance of the 105.7361-hectare land claimed by respondents is
same was proper considering the circumstances of the undisputedly within the ancestral domain of the
case. Talaandig tribe over which a CADT has already been
issued. Petitioners insist that, even granting that the
case is purely a personal action, the NCIP has exclusive
 Page 342 of 458
and original jurisdiction over it as it concerns a claim
and dispute involving rights of ICCs/IPs over their
ancestral domain.
On the second issue, petitioners argue that the
amendment of the complaint from accion
reivindicatoria to injunction with damages was clearly
meant to oust the NCIP of its jurisdiction over the case
and confer it on the RTC by concealing the real issue in
the case, which is the parties' conflicting claims over the
105.7361-hectare land in Miarayon, Talakag Bukidnon.
According to petitioners, the cause of action in the
complaint for accion reivindicatoria is the claim of
ownership and recovery of possession of the said land
which is undisputedly found within the Talaandig tribe's
ancestral domain covered by CADT No. R10-TAL-0703-
0010; hence, a claim within the exclusive and original
jurisdiction of the NCIP. Petitioners contend that
respondents amended the complaint to one for
injunction to downplay the real issue which is the
dispute over a land that is within the Talaandig tribe's
ancestral domain, and mainly capitalized on the acts
complained of, such as harassment, threats, acts of
terrorism, among others, supposedly committed against
respondents. HEITAD
On the third issue, petitioners fault the CA in
ruling that whether the complaint is one for Injunction
or Accion Reivindicatoria,the RTC has jurisdiction
because nowhere in respondents' original and amended
complaints is it stated that petitioners were members of
the ICCs or IPs and that the disputed property was part
of their ancestral domain. Petitioners take exception to
the rule that jurisdiction over the subject matter is
determined by the allegations of the complaint, as strict
adherence thereto would open the floodgates to the
unscrupulous practice of litigants divesting the NCIP of
jurisdiction by crafting their complaints in such a way as
would confer jurisdiction on their court of choice.
Petitioners contend that the literal averments of the
complaint are not determinative of the jurisdiction over
the subject matter where the actual issues are
evidenced by subsequent pleadings; in certain cases,
the real nature and character of the pleadings and
issues are not merely found in the complaint, but also in
the subsequent pleadings submitted by both parties.
Petitioners stress that although the complaint banners
the subject matter as one for injunction, the pleadings of
respondents show that the subject matter is the
conflicting ownership claims over the land. In fact,
petitioners point out that the records of the case show
that various pieces of evidence have been presented to
prove that the dispute involves conflicting claims over a
land covered by a CADT.
For their part, respondents contend that
petitioners do not have legal capacity or standing
and locus standi to file this petition, since they failed to
make prima facie showing that they are members of
IPs/ICCs, or that they were authorized to represent the
Talaandig tribe. Respondents insist that based on the
allegations in their amended complaint for injunction
and damages, the RTC has jurisdiction over the subject
matter which is a purely personal action and incapable
of pecuniary estimation. Respondents assert that the
real issue is whether or not petitioners are guilty of
wrongful acts of violence, terrorism, destruction,
intimidation, harassment, etc., to justify a permanent
injunction and hold the latter liable for damages.
 Page 343 of 458
Respondents also point out that petitioners cannot
invoke protection under the IPRA 8731, because the
conflict does not involve an ancestral domain and they
(respondents) are not IPs so the condition precedent
before bringing a dispute before the NCIP cannot be
satisfied, i.e.,exhaustion of remedies under customary
laws by the parties.
The petition has no merit.
On the procedural issue raised by respondents,
the Court disagrees with their contention that petitioners
do not have legal capacity or standing and locus
standi to file the petition, for failure to show that they are
members of IPs/ICCs, or that they are authorized to
represent the Talaandig tribe.
Locus standi is defined as a right of appearance
in a court of justice on a given question. In private suits,
standing is governed by the "real parties in interest" rule
found in Section 2, 10 Rule 3 of the Rules of Court. Such
concept of real party-in-interest is adapted in Section
2, 11 Rule VI of the 2014 Revised Rules of Procedure
before the NCIP. That petitioners are the real parties in
interest can be gleaned from the Entry of Appearance
with Motion to Refer the Case to the Regional Hearing
Office of the NCIP 12 filed by the NCIP Special
Transition Team-Quick Response Unit (STRAT-
QRU).The STRAT-QRU counsels alleged therein that
the respondents' complaint for recovery of
ownership (accion reinvidicatoria) sought to recover an
unregistered real property situated in Miarayon,
Bukidnon, from petitioners, all of whom are, with the
exception of Nestor Macapayag and Mark Brazil,
member-beneficiaries of CADT No. R10-TAL-0703-
0010 issued by the NCIP in the name of the Talaandig
Indigenous Peoples, located at Talakag, Province of
Bukidnon. In support of their allegation, petitioners
presented a certification 13 that the disputed land is
within the area covered by the same CADT, and the
NCIP List of Beneficiaries of Talaandig Ancestral
Domain of Miarayon, Lirongan, Lapok, San Miguel,
Talakag, Bukidnon. 14 In contrast, respondents failed to
submit any evidence to dispute petitioners' claim that
they are members of the Talaandig Tribe. Hence,
respondents' contention that petitioners have no legal
standing to file the petition, is without merit.
ATICcS
In resolving the pivotal issue of which between
the RTC and the NCIP has jurisdiction over the
respondents' amended complaint, foremost in the
Court's mind is the principle in "that jurisdiction over the
subject matter of a case is conferred by law and
determined by the allegations in the complaint which
comprise a concise statement of the ultimate facts
constituting the plaintiff's cause of action. The nature of
an action, as well as which court or body has jurisdiction
over it, is determined based on the allegations
contained in the complaint of the plaintiff, irrespective of
whether or not the plaintiff is entitled to recover upon all
or some of the claims asserted therein. The averments
in the complaint and the character of the relief sought
are the ones to be consulted. Once vested by the
allegations in the complaint, jurisdiction also remains
vested irrespective of whether or not the plaintiff is
entitled to recover upon all or some of the claims
asserted therein." 15
Under Section 19 of B.P. 129, as amended
(Judiciary Reorganization Act of 1980), the RTC shall
exercise exclusive original jurisdiction in all civil actions
 Page 344 of 458
in which the subject of the litigation is incapable of
pecuniary estimation, and in all civil actions which
involve title to, possession of, real property or any
interest therein where the assessed value of the
property or interest therein exceeds Twenty Thousand
Pesos (P20,000.00) or, in civil actions in Metro Manila,
where such assessed value exceeds Fifty Thousand
Pesos (P50,000.00).
On the other hand, the NCIP's jurisdiction is
defined under Section 66 of the IPRA as follows:
Sec. 66. Jurisdiction of the NCIP. The
NCIP, through its regional offices, shall have
jurisdiction over all claims and disputes
involving rights of ICCs/IPs;Provided,
however, That no such dispute shall be
brought to the NCIP unless the parties have
exhausted all remedies provided under their
customary laws. For this purpose, a
certification shall be issued by the Council of
Elders/Leaders who participated in the attempt
to settle the dispute that the same has not
been resolved, which certification shall be a
condition precedent to the filing of a petition
with the NCIP. 16
On the matter of NCIP's jurisdiction and of
procedures for enforcement of rights, NCIP
Administrative Order No. 1, 1998, the Implementing
Rules and Regulations (NCIP-IRR) of the IPRA, Rule
IX, Section 1 states:ETHIDa
Section 1. Primacy of Customary
Law. All conflicts related to the ancestral
domain and lands, involving ICCs/IPs, such as
but not limited to the conflicting claims and
boundary disputes, shall be resolved by the
concerned parties through the application of
customary laws in the area where the disputed
ancestral domain or land is located.
All conflicts related to the ancestral
domain or lands where one of the parties is
non-ICC/IP or where the dispute could not
be resolved through customary law shall be
heard and adjudicated in accordance with
the Rules on Pleadings, Practice and
Procedure before the NCIP to be adopted
hereafter.
All decisions of the NCIP may be
brought on Appeal by Petition for Review to the
Court of Appeals within fifteen (15) days from
receipt of the Order or Decision.17
In line with Section 69 of the IPRA on the NCIP's
quasi-judicial power to promulgate rules and regulations
governing the hearing and disposition of cases filed
before it, the NCIP issued Administrative Circular No. 1-
03 dated April 9, 2003, known as the Rules on
Pleadings, Practice and Procedure (NCIP Rules), which
reiterates its jurisdiction over claims and disputes
involving rights of ICCs/IPs and enumerates the actions
that may be brought before it. Section 5, Rule III, of
the NCIP Rulesprovides for the jurisdiction of the NCIP-
RHO:
Sec. 5. Jurisdiction of the NCIP. The
NCIP through its Regional Hearing Offices
shall exercise jurisdiction over all claims and
disputes involving rights of ICCs/IPs and all
cases pertaining to the implementation,
enforcement, and interpretation of
the IPRA 8371, including but not limited to the
following:
 Page 345 of 458

(1) Original and Exclusive Jurisdiction of the a. Petition for cancellation of

Regional Hearing Officer (RHO): Certificate of Ancestral Domain
Titles/Certificate of Ancestral
a. Cases involving disputes,
Land Titles (CADTs/CALTs)
controversies over ancestral
alleged to have been
lands/domains of ICCs/IPs;
fraudulently acquired by, and
b. Cases involving violations of issued to, any person or
the requirement of free and prior community as provided for
and informed consent of ICC/IPs; under Section 54 of R.A. 8371.
c. Actions for enforcement of Provided that such action is
decisions of ICCs/IPs involving filed within one (1) year from
violations of customary laws or the date of registration.
desecration of ceremonial sites, Anent the condition precedent to the filing of a
sacred places, or rituals; petition with the NCIP under Section 66 of the IPRA,
d. Actions for Sections 13 and 14, Rule IV of the NCIP
redemption/reconveyance under Rules pertinently provide:
Section 8(b) of R.A. 8371; and
Section 13. Certification to File Action.
e. Such other cases analogous to Upon the request of the proper party, members
the foregoing. of the indigenous dispute settlement group or
(2) Original jurisdiction of the Regional Hearing council of elders shall likewise issue a
Officer: certification to file action before the NCIP. In
giving due regard to customary laws, the
a. Cases affecting property certification may be in any form so long as it
rights, claims of ownership, states in substance the failure of settlement
hereditary succession, and notwithstanding the efforts made under
settlement of land disputes, customary law or traditional practices.
between and among ICCs/IPs
that have not been settled Section 14. Exceptions. The
under customary laws; and certification shall not be required in the
following cases:
b. Actions for damages arising
out of any violation of Republic a. Where one of the parties is a
Act No. 8371; public or private corporation,
partnership, association or
(3) Exclusive and Original Jurisdiction of the juridical person or a public
Commission: officer or employee and the
dispute is in connection with
 Page 346 of 458
the performance of his official
functions;
b. Where one of the parties is
non-IP/ICC or does not belong
to the same IP/IC Community,
except when he voluntarily
submits to the jurisdiction of
the Council of Elders/Leaders;
c. Where the relief sought for in
the complaint or petition seeks to
prevent any grave, imminent and
irreparable damage or injury that
may result if not acted upon
immediately; and
d. Where the Council of
Elders/Leaders refuse to issue
the necessary certification
without justifiable reasons. 18
Having spelled out the jurisdictions conferred by
law to the RTC and the NCIP over the subject matters
of their respective cases, the Court now examines the
allegations in the original and amended complaints to
find out which tribunal may properly exercise jurisdiction
over this case.cSEDTC
In their original complaint for accion
reivindicatoria,respondents traced the provenance of
their title over said land to one Mamerto Decano, a
Chieftain of Talaandig tribe, by virtue of a Deed of Sale
executed on July 27, 1957. They averred that, together
with their predecessor-in-interest, they have religiously
paid the real estate taxes thereon since 1957 and that
they have been in physical, actual, open, prior,
notorious, continuous, public and adverse possession of
said land in the concept of owners for more than 50
years, even prior to June 12, 1945. They alleged that
said land was declared alienable and disposable since
August 3, 1927 per certification of the Department of
Environment and Natural Resources. They claimed that
by means of fraud, stealth and surreptitious means,
petitioners entered the said land, without permission
and against the consent of the landowners, caused
damages therein and harassed respondents by
indiscriminately firing upon their farm workers. They
added that petitioners continue such harassment by
means of armed men frequenting the campsite and
firing M-16 rifles at them during nighttime, causing great
fear and threat.
Respondents prayed before the RTC for the
following reliefs, among others: (1) to cause the
preliminary injunction to be made permanent for the
respondents to enjoy possession of their property, free
from threats of physical harm, harassment and undue
obstruction caused by petitioners; (2) to order
petitioners to respect and not to harass, intimidate and
cause trouble to the prior possession of respondents as
the owners by virtue of right of title; (3) to order
petitioners to pay moral and exemplary damages,
attorney's fees, appearance fees and costs of suit; and
(4) to declare respondents' title as having become a
vested right, and as such entitled to all right and incident
of an absolute owner.
In their amended complaint for injunction and
damages, on the other hand, respondents further
alleged that sometime in November 2003, petitioners
harassed, intimidated, threatened, and fired high-
powered rifles upon respondents' farm workers to drive
 Page 347 of 458
them away from the land, without legal or justifiable
reason. They added that, despite having hired private
security guards to secure and protect their property,
these violent incidents were followed by more acts of
violence, lawlessness, harassment, terrorism to drive
away respondents from the land which they claim to
lawfully own and possess.
Respondents prayed before the RTC for the
following reliefs: (1) to order petitioners and their
representatives, to stop and refrain from committing
acts of violence, destruction, assault and other forms of
lawlessness and terrorism against respondents, and to
maintain the peaceful possession and enjoyment of the
105-hectare land by respondents as an attribute of
ownership; (2) to declare petitioners to have committed
acts of violence, harassment, intimidation, destruction,
assault and other forms of lawlessness against
respondents, and to permanently order petitioners to
stop and refrain from committing similar acts; and (3) to
hold petitioners jointly and severally liable to pay
respondents actual damages, moral damages,
exemplary damages, attorney's fees, litigation expenses
and treble costs.
After a perusal of the allegations and prayers in
both original and amended complaints, the Court notes
that respondents neither alleged therein that the parties
are members of ICCs/IPs nor that the case involves a
dispute or controversy over ancestral lands/domains of
ICC/IPs. Rather, the allegations in respondents' original
complaint make up for an accion reivindicatoria,a civil
action which involves an interest in a real property with
an assessed value of P683,760.00, while the allegations
in their amended complaint make out a case for
injunction, a civil action which is incapable of pecuniary
estimation. The Court therefore finds that the CA
correctly ruled that the subject matter of the amended
complaint based on allegations therein was within the
jurisdiction of the RTC.
Meanwhile, contrary to petitioners' contention, the
mere fact that this case involves members of ICCs/IPs
and their ancestral land is not enough to for it to fall
under the jurisdiction of the NCIP under Section 66 of
the IPRA, to wit:
Sec. 66. Jurisdiction of the NCIP. The
NCIP, through its regional offices, shall have
jurisdiction over all claims and disputes
involving rights of ICCs/IPs; Provided,
however, That no such dispute shall be
brought to the NCIP unless the parties have
exhausted all remedies provided under their
customary laws. For this purpose, a
certification shall be issued by the Council of
Elders/Leaders who participated in the attempt
to settle the dispute that the same has not
been resolved, which certification shall be a
condition precedent to the filing of a petition
with the NCIP.
A careful review of Section 66 shows that the
NCIP shall have jurisdiction over claims and disputes
involving rights of ICCs/IPs only when they arise
between or among parties belonging to the same
ICC/IP. This can be gathered from the qualifying
provision that "no such dispute shall be brought to the
NCIP unless the parties have exhausted all remedies
provided under their customary laws. For this purpose,
a certification shall be issued by the Council of
Elders/Leaders who participated in the attempt to settle
 Page 348 of 458
the dispute that the same has not been resolved, which
certification shall be a condition precedent to the filing of
a petition with the NCIP."
The qualifying provision requires two conditions
before such disputes may be brought before the NCIP,
namely: (1) exhaustion of remedies under customary
laws of the parties, and (2) compliance with condition
precedent through the said certification by the Council
of Elders/Leaders. This is in recognition of the rights of
ICCs/IPs to use their own commonly accepted justice
systems, conflict resolution institutions, peace building
processes or mechanisms and other customary laws
and practices within their respective communities, as
may be compatible with the national legal system and
with internationally recognized human rights. 19
Section 3 (f) of the IPRA, defines customary laws
as a body of written and/or unwritten rules, usages,
customs and practices traditionally and continually
recognized, accepted and observed by respective
ICCs/IPs. From this restrictive definition, it can be
gleaned that it is only when both parties to a case
belong to the same ICC/IP that the abovesaid two
conditions can be complied with. If the parties to a case
belong to different ICCs/IPs which are recognized to
have their own separate and distinct customary laws
and Council of Elders/Leaders, they will fail to meet the
abovesaid two conditions. The same holds true if one of
such parties was a non-ICC/IP member who is neither
bound by customary laws as contemplated by
the IPRA nor governed by such council. Indeed, it would
be violative of the principles of fair play and due process
for those parties who do not belong to the same ICC/IP
to be subjected to its customary laws and Council of
Elders/Leaders.
Therefore, pursuant to Section 66 of the IPRA,
the NCIP shall have jurisdiction over claims and
disputes involving rights of ICCs/IPs only when they
arise between or among parties belonging to the same
ICC/IP. When such claims and disputes arise between
or among parties who do not belong to the same
ICC/IP,i.e.,parties belonging to different ICC/IPs or
where one of the parties is a non-ICC/IP, the case shall
fall under the jurisdiction of the proper Courts of Justice,
instead of the NCIP. In this case, while most of the
petitioners belong to Talaandig Tribe, respondents do
not belong to the same ICC/IP. Thus, even if the real
issue involves a dispute over land which appear to be
located within the ancestral domain of the Talaandig
Tribe, it is not the NCIP but the RTC which shall have
the power to hear, try and decide this case. SDAaTC
There are, however, exceptional cases where the
NCIP shall still have jurisdiction over such claims and
disputes even if the parties involved do not belong to
the same ICC/IP, viz.:
1. Cases under Sections 52 and 62 of
the IPRA which contemplate a situation where a dispute
over an ancestral domain involving parties who do not
belong to the same, but to different ICCs/IPs, to wit:
SECTION 52. Delineation Process.
The identification and delineation of ancestral
domains shall be done in accordance with the
following procedures:
xxx xxx xxx
 Page 349 of 458
h) Endorsement to NCIP. Within
fifteen (15) days from publication, and of the
inspection process, the Ancestral Domains
Office shall prepare a report to the NCIP
endorsing a favorable action upon a claim that
is deemed to have sufficient proof. However, if
the proof is deemed insufficient, the Ancestral
Domains Office shall require the submission of
additional evidence: Provided, That the
Ancestral Domains Office shall reject any claim
that is deemed patently false or fraudulent after
inspection and verification: Provided, further,
That in case of rejection, the Ancestral
Domains Office shall give the applicant due
notice, copy furnished all concerned,
containing the grounds for denial. The denial
shall be appealable to the NCIP: Provided,
furthermore, That in cases where there are
conflicting claimsamong ICCs/IPs on the
boundaries of ancestral domain claims, the
Ancestral Domains Office shall cause the
contending parties to meet and assist them
in coming up with a preliminary resolution
of the conflict, without prejudice to its full
adjudication according to the section
below.
xxx xxx xxx
SECTION 62. Resolution of Conflicts.
In cases of conflicting interest, where there are
adverse claims within the ancestral domains as
delineated in the survey plan, and which can
not be resolved, the NCIP shall hear and
decide, after notice to the proper parties,
the disputes arising from the delineation of
such ancestral domains: Provided, That if
the dispute is between and/or among
ICCs/IPs regarding the traditional
boundaries of their respective ancestral
domains, customary process shall be
followed.The NCIP shall promulgate the
necessary rules and regulations to carry out its
adjudicatory functions: Provided, further, That
any decision, order, award or ruling of the
NCIP on any ancestral domain dispute or on
any matter pertaining to the application,
implementation, enforcement and interpretation
of this Act may be brought for Petition for
Review to the Court of Appeals within fifteen
(15) days from receipt of a copy thereof. 20
2. Cases under Section 54 of the IPRA over
fraudulent claims by parties who are not members of the
same ICC/IP, to wit:
SECTION 54. Fraudulent Claims.
The Ancestral Domains Office may, upon
written request from the ICCs/IPs, review
existing claims which have been fraudulently
acquired by any person or community. Any
claim found to be fraudulently acquired by,
and issued to, any person or
community may be cancelled by the NCIP
after due notice and hearing of all parties
concerned.21
Considering the general rule that the jurisdiction
of the NCIP under Section 66 of the IPRA covers only
disputes and claims between and among members of
the same ICCs/IPs involving their rights under the IPRA,
as well as the basic administrative law principle that an
administrative rule or regulation must conform, not
contradict the provisions of the enabling law, 22 the
Court declares Rule IX, Section 1 of the IPRA-
 Page 350 of 458
IRR, 23 Rule III, Section 5 24 and Rule IV, Sections 13
and 14 of the NCIP Rules 25 as null and void insofar as
they expand the jurisdiction of the NCIP under Section
66 of the IPRA to include such disputes where the
parties do not belong to the same ICC/IP. As the Court
held in Paduran v. DARAB,26 "[j]urisdiction over a
subject matter is conferred by the Constitution or the
law and rules of procedure yield to substantive law.
Otherwise stated, jurisdiction must exist as a matter of
law. 27 Only a statute can confer jurisdiction on courts
and administrative agencies; rules of procedure
cannot. 28 In the abovesaid exceptional cases where
one of the parties is a non-ICC/IP or does not belong to
the same ICC/IP, however, Rule IV, Section 14 of
the NCIP Rules validly dispenses with the requirement
of certification issued by the Council of Elders/Leaders
who participated in the failed attempt to settle the
dispute according to the customary laws of the
concerned ICC/IP.
WHEREFORE,the petition is DENIED and the
Court of Appeals Decision dated August 17, 2006, and
its Resolution dated July 4, 2007, in CA-G.R. SP No.
00204-MIN, are AFFIRMED.
SO ORDERED.
Sereno, C.J.,Leonardo-de Castro, Bersamin,
Villarama, Jr.,Mendoza, Reyes, Perlas-
Bernabe and Jardeleza, JJ.,concur.
Carpio * and Del Castillo, * JJ.,are on official
leave.
Velasco, Jr.,J.,pls. see concurring opinion.
Brion, J.,see: separate opinion.
Perez, J.,with a concurring opinion.
Leonen, J.,see separate concurring opinion.
Separate Opinions
VELASCO, JR., J.,concurring:
I concur with the ponencia that the Regional Trial
Court (RTC) has jurisdiction over the case. Both original
and amended complaints, accion reivindicatoria and
injunction, respectively, are incapable of pecuniary
estimation; thus falling within the jurisdiction of the RTC.
As correctly pointed out by the ponencia,"jurisdiction
over the subject matter of a case is conferred by law
and determined by the allegations in the complaint
which comprise a concise statement of the ultimate
facts constituting the plaintiff's cause of action." 1 It
cannot be acquired through a waiver or enlarged by the
omission of the parties or conferred by the
acquiescence of the court. 2
However, I would like to submit some points for
consideration which run counter to the opinion of my
esteemed colleague. It is my position that the National
Commission on Indigenous Peoples (NCIP) has
jurisdiction over all claims and disputes involving rights
of Indigenous Cultural Communities/Indigenous Peoples
(ICCs/IPs) regardless of whether or not they belong to
the same IP/IC Community. This is pursuant to Section
66 of Republic Act (R.A.) No. 8371, 3 otherwise known
as "The Indigenous Peoples' Rights Act of 1997" (IPRA)
as follows:acEHCD
 Page 351 of 458
SECTION 66. Jurisdiction of the NCIP. The
NCIP, through its regional offices, shall
have jurisdiction over all claims and
disputes involving rights of
ICCs/IPs:Provided, however, That no such
dispute shall be brought to the NCIP unless the
parties have exhausted all remedies provided
under their customary laws. For this purpose, a
certification shall be issued by the Council of
Elders/Leaders who participated in the attempt
to settle the dispute that the same has not
been resolved, which certification shall be a
condition precedent to the filing of a petition
with the NCIP. (Emphasis supplied.)
A careful scrutiny of Section 66 of the IPRA would
reveal that it is composed of three parts: (1) the NCIP
has jurisdiction over all claims and disputes involving
rights of ICCs/IPs; (2) the requirement of exhaustion of
all remedies provided under the customary laws of the
ICCs/IPs; and (3) a certification from the Council of
Elders/Leaders as a condition precedent to the filing of
a petition with NCIP.
The first part lays down the basis of jurisdiction of
the NCIP. It can be gleaned from this part that the law is
silent if the parties should belong to the same IP/IC
Community. What the law only provides is that the NCIP
has jurisdiction over all claims and disputes involving
rights of ICCs/IPs.
The second part contains the proviso that should
be followed before the NCIP acquires jurisdiction over
the case. Said proviso states: "Provided, however, That
no such dispute shall be brought to the NCIP unless the
parties have exhausted all remedies provided under
their customary laws."
The third part, on the other hand, refers to the
certification from the Council of Elders/Leaders as a
condition precedent to the filing of a petition with NCIP.
This is in relation to the second part requiring the
exhaustion of all remedies.
The second and third parts of the provision
should not be interpreted as limiting the jurisdiction of
the NCIP to claims and disputes involving rights of
ICCs/IPs only when they arise between or among
parties belonging to the same ICC/IP. The proviso only
provides for a condition precedent. It is merely
procedural and does not divest the NCIP of jurisdiction
over parties not belonging to the same IP/IC
Community. As provided in Section 14, Rule IV of
the Rules on Pleadings, Practice and Procedure 4 of the
NCIP (NCIP Rules), a party which does not belong to
the same IP/IC Community is exempted from the
requirement of certification, to wit:
Section 14. Exceptions. The certification
shall not be required in the following cases:
a. Where one of the parties is a public or
private corporation, partnership,
association or juridical person or a
public officer or employee and the
dispute is in connection with the
performance of his official
functions;
b. Where one of the parties is non-
IP/ICC or does not belong to the
same IP/IC Community, except
when he voluntarily submits to
the jurisdiction of the Council of
Elders/Leaders;
 Page 352 of 458
c. Where the relief sought for in the
complaint or petition seeks to
prevent any grave, imminent and
irreparable damage or injury that
may result if not acted upon
immediately; and
d. Where the Council of Elders/Leaders
refuses to issue the necessary
certification without justifiable
reasons. (Emphasis supplied.)
Thus, it is my position that the NCIP has
jurisdiction over the following:
a. claims and disputes involving rights of ICCs/IPs
arising between or among parties
belonging to the same ICC/IP; and
b. claims and disputes involving rights of ICCs/IPs
arising between or among ICCs/IPs even if
one of the parties does not belong to the
same IP/IC Community. EcTCAD
All cases and disputes where both parties are
ICCs/IPs fall under the exclusive jurisdiction of the
NCIP. Consequently, all cases and disputes where one
of the parties is a non-ICC/IP are covered by the
jurisdiction of the regular courts regardless of the
subject matter even if it involves ancestral domains or
lands of ICCs/IPs. Moreover, the regular courts have
jurisdiction over cases and disputes as long as there are
parties who are non-ICCs/IPs.
To limit the jurisdiction of the NCIP to claims and
disputes involving rights of ICCs/IPs arising between or
among parties belonging to the same ICC/IP would be
contrary to the purpose for which the NCIP was created.
It must be pointed out that the NCIP is an administrative
body entrusted with the regulation of activities coming
under its special knowledge and training. It is charged
with the implementation of the law, considering its
competence, expertise, experience and informed
judgment. As such, the NCIP is vested with quasi-
judicial and quasi-legislative powers. It is the primary
government agency "responsible for the formulation and
implementation of policies, plans and programs to
promote and protect the rights and well-being of the
ICCs/IPs and the recognition of their ancestral domains
as well as their rights thereto." 5 It is quasi-judicial
because it has jurisdiction over all claims and disputes
involving the rights of the ICCs/IPs. 6 It is quasi-
legislative because of its rule-making power. 7 Because
of its expertise in the field of ICCs/IPs, it is better
equipped than the trial courts in resolving the claims
and disputes involving rights where the parties are both
ICCs/IPs.
Anent the issue as to what customary laws apply
in cases where the parties involved in the claims and
disputes do not belong to the same IP/IC Community,
the NCIP may apply the customary law common to both
ICCs/IPs or that which can be applied by analogy.
Furthermore, it must be pointed out that there is
no need to declare the following provisions as null and
void:
i. The first and third paragraphs of Rule IX,
Section 1 of the Implementing Rules and
Regulations (IRR) of R.A. No. 8371 which
provide:
 Page 353 of 458

Section 1. Primacy of Customary Law. All ceremonial sites, sacred places, or

conflicts related to ancestral domains and rituals;
lands, involving ICCs/IPs, such as but not d. Actions for redemption/reconveyance
limited to conflicting claims and boundary under Section 8(b) of R.A. 8371;
disputes, shall be resolved by the concerned and
parties through the application of customary
laws in the area where the disputed ancestral e. Such other cases analogous to the
domain or land is located. foregoing.
xxx xxx xxx (2) Original Jurisdiction of the Regional Hearing
Officer:
All decisions of the NCIP may be brought on
Appeal by Petition for Review to the Court of a. Cases affecting property rights, claims
Appeals within fifteen (15) days from receipt of of ownership, hereditary
the Order or Decision. SDHTEC
succession, and settlement of land
disputes, between and among
ii. Rule III, Section 5 of the NCIP Rules which ICCs/IPs that have not been settled
provides: under customary laws; and
Section. 5. Jurisdiction of the NCIP. The b. Actions for damages arising out of any
NCIP through its Regional Hearing Offices violation of Republic Act No. 8371.
shall exercise jurisdiction over all claims and (3) Exclusive and Original Jurisdiction of the
disputes involving rights of ICCs/IPs and all Commission:
cases pertaining to the implementation,
enforcement, and interpretation of R.A. 8371, a. Petition for cancellation of Certificate of
including but not limited to the following: Ancestral Domain Titles/Certificate
of Ancestral Land Titles
(1) Original and Exclusive Jurisdiction of the (CADTs/CALTs) alleged to have
Regional Hearing Office (RHO): been fraudulently acquired by, and
a. Cases involving disputes and issued to, any person or
controversies over ancestral community as provided for under
lands/domains of ICCs/IPs; Section 54 of R.A. 8371. Provided
that such action is filed within one
b. Cases involving violations of the
(1) year from the date of
requirement of free and prior and
registration. 8
informed consent of ICCs/IPs;
c. Actions for enforcement of decisions of iii. Rule IV, Sections 13 and 14 of the NCIP
ICCs/IPs involving violations of Rules which provide:
customary laws or desecration of
 Page 354 of 458
Section 13. Certification to File Action. Upon
the request of the proper party, members of the
indigenous dispute settlement group or council
of elders shall likewise issue a certification to
file action before the NCIP. In giving due
regard to customary laws, the certification may
be in any form so long as it states in substance
the failure of settlement notwithstanding the
efforts made under customary law or traditional
practices. 9
Section 14. Exceptions. The certification
shall not be required in the following cases:
a. Where one of the parties is a
public or private corporation,
partnership, association or
juridical person or a public officer
or employee and the dispute is in
connection with the performance
of his official functions;
b. Where one of the parties is
non-IP/ICC or does not belong to
the same IP/IC Community,
except when he voluntarily
submits to the jurisdiction of the
Council of Elders/Leaders;
c. Where the relief sought for in
the complaint or petition seeks to
prevent any grave, imminent and
irreparable damage or injury that
may result if not acted upon
immediately; and
d. Where the Council of
Elders/Leaders refuse to issue
the necessary certification
without justifiable reasons. 10
The abovementioned rules can be interpreted in
harmony with the provisions of the IPRA law. Said rules
do not expand the jurisdiction of the NCIP but merely
enumerate the claims and disputes falling within its
jurisdiction. Section 14 (b) does not automatically
dispense with the certification required by law as the
parties may opt to voluntarily submit to the jurisdiction of
the Council of Elders/Leaders. This is akin to
a barangay conciliation proceeding under the Local
Government Code wherein the conciliation process is a
condition precedent that affects the sufficiency of the
cause of action, not the jurisdiction of the court. 11
However, the second paragraph of Rule IX,
Section 1 of the IRR of R.A. No. 8371 is not anchored
on legal mooring. Said paragraph reads:
Section 1. Primacy of Customary Law. All
conflicts related to the ancestral domains
or lands where one of the parties is a non-
ICC/IP or where the dispute could not be
resolved through customary law shall be heard
and adjudicated in accordance with the Rules
on Pleadings, Practice and Procedures Before
the NCIP to be adopted hereafter. (Emphasis
supplied.)
As earlier discussed, Section 66 of R.A. No.
8371 is explicit that the NCIP's jurisdiction is confined
only to claims and disputes where the parties are both
ICCs/IPs. Such being the case, the second paragraph
of Rule IX, Section 1 of the IRR of R.A. No. 8371 should
be declared null and void because it is contrary to the
provision of Section 66 of the IPRA. It is well-settled that
an administrative rule or regulation must conform, not
contradict, the provisions of the enabling law. 12 A rule
 Page 355 of 458
or regulation cannot modify, expand, or subtract from
the law it is intended to implement. 13 Any rule that is
not consistent with the statute itself is null and
void.14 Since the rule in question is at war with Section
66 of R.A. No. 8371, then it must be excised.
Anent the resolution of the substantive issue in
the case at bar, I agree with the ponencia that the RTC
has jurisdiction over the instant dispute.
ACCORDINGLY,I concur to DENY the Petition
for Review.
BRION, J.:
I concur with the ponencia's conclusion that the
RTC has jurisdiction over the case. I write this Separate
Opinion to express my own approach to the case, and
to elaborate on relevant points that may need
emphasis. AScHCD
I base my concurrence on the following grounds:
(1) The CA correctly ruled that the RTC's
February 14, 2005 order is not tainted with
grave abuse;
(2) Jurisdiction over the subject matter is
determined by law and the allegations of
the complaint.
(3) The National Council for Indigenous
Peoples' (NCIP) jurisdiction over disputes is
limited to cases where both parties are
members of the same ICC/IP.
I also concur with the ponencia that the NCIP has
jurisdiction over adverse claims, boundary disputes, and
cancellation of fraudulently issued Certificate of
Ancestral Domain Titles (CADTs),regardless of the
parties involved. But I clarify and emphasize my view
that while the NCIP possesses quasi-judicial powers, its
jurisdiction is only primary, and not exclusive.
The RTC's February 14, 2005 order is
NOT tainted with grave abuse of discretion.
The present petition is an appeal from the CA's
dismissal of the petitioner's petition for certiorari.Hence,
this Court must determine whether the CA correctly
ruled that the RTC did not gravely abuse its discretion in
issuing the February 14, 2005 order.
The petitioners alleged before the CA that the
February 14, 2005 order is tainted with grave abuse
because it: (i) denied the petitioners' motion to refer the
case to the NCIP; (ii) declared the petitioners in default;
and (iii) issued the writ of preliminary injunction. 1HESIcT
Jurisprudence 2 has traditionally defined grave
abuse of discretion as follows:
Grave abuse of discretion is defined as
capricious or whimsical exercise of judgment
as is equivalent to lack of jurisdiction. The
abuse of discretion must be patent and gross
as to amount to an evasion of a positive duty or
a virtual refusal to perform a duty enjoined by
law, or to act at all in contemplation of law, as
where the power is exercised in an arbitrary
and despotic manner by reason of passion and
hostility.
Based on this definition, I share the view that the
RTC did not abuse its discretion, much less commit any
grave abuse of discretion.
 Page 356 of 458
At the time the respondents amended the
complaint, the petitioners had yet to file their answers to
the original complaint, hence, the amendment was still a
matter of right. The rule on amendments as a matter of
right applies to a co-defendant who has yet to file his
responsive pleading, even if his co-defendants have
already done so. 3 Thus, while Macapayag and Brazil
have filed their answers, the respondents still have the
right to amend the complaint with respect to the rest of
the petitioners.
Likewise, the RTC did not abuse its discretion in
declaring the petitioners in default and in issuing the writ
of preliminary injunction.
The RTC declared the petitioners in default only
after they failed to file their answers within the period
allowed. On the other hand, the writ of preliminary
injunction sought to maintain the status quo to prevent
both parties from committing further acts of violence;
there is no caprice in maintaining the peace.
Nevertheless, default orders are issued on the
presumption that the defendant no longer opposes the
allegations and reliefs demanded in the complaint. 4 In
this case, the petitioners vehemently opposed the
RTC's cognizance of the complaint, and refused to file
their answers because they believed that jurisdiction
belongs to the NCIP.
In the interest of justice, I support the CA in lifting
the order of default to allow the parties to try the case
on the merits.
Jurisdiction is determined
by the allegations of the complaint
Jurisdiction over the subject matter is determined
by law and by the material allegations of the
complaint. 5 Under these standards, the petitioner's
argument,i.e.,that the NCIP has jurisdiction because the
case involves the rights of ICCs/IPs, is without merit.
As the ponencia pointed out, both the original and
the amended complaints do not allege that the
respondents were ICCs/IPs, or that the dispute involves
an ancestral dominion. 6 Hence, on the face of the
respondents' complaint, the RTC has jurisdiction over
the injunction case. 7
Neither am I impressed with the petitioners'
argument that, where the actual issue is evidenced by
the subsequent pleadings, jurisdiction does not depend
on the complaint's literal averments. This Court has
consistently ruled that jurisdiction never depends on the
defenses set up in the answer, in a motion to dismiss or
in a motion for reconsideration. 8
The NCIP's jurisdiction over disputes is limited
where both parties are members of the same ICC/IP.
I join the ponencia in ruling that the NCIP does
not have jurisdiction over disputes where one of the
parties is a non-ICC/IP, or where the opposing parties
are members of different ICC/IP.
My concurrence is based on the following: (i)
Section 66 contains a proviso that limits the NCIP's
jurisdiction; (ii) the RTC, not the NCIP, has
jurisdiction to adjudicate violations of ICC/IP rights;
(iii) Congress had no intention to apply customary
laws to non-ICCs/IPs.
 Page 357 of 458
I. Section 66 contains a proviso
that limits the NCIP's jurisdiction.
The NCIP's jurisdiction is outlined in IPRA's
Section 66:
SECTION 66. Jurisdiction of the NCIP. The
NCIP, through its regional offices, shall have
jurisdiction over all claims
and disputes involving rights of ICCs/IPs:
Provided, however, That no such dispute shall
be brought to the NCIP unless
the parties have exhausted all remedies
provided under their customary laws. For this
purpose,a certification shall be issued by the
Council of Elders/Leaders who participated in
the attempt to settle the dispute that the same
has not been resolved, which certification shall
be a condition precedent to the filing of a
petition with the NCIP. (emphasis supplied)
Section 66 is composed of three parts:
the first states the NCIP's jurisdiction;
the second requires the prior exhaustion of remedies
under customary law; and the third states that a
certification from the council of elders/leaders is a
condition precedent to the filing of a petition with the
NCIP.
The first part lays down the NCIP's
jurisdiction, i.e.,over all claims and disputes involving
the rights of ICCs/IPs.The NCIP's jurisdiction is not
dependent on who the parties are, but on whether the
dispute involves the rights of ICCs/IPs.
However, the second part contains the proviso
"Provided, However, That no such dispute shall be
brought to the NCIP unless the parties have exhausted
all remedies provided under their customary laws." The
third part begins with the phrase "for this purpose";the
"purpose" referred to being the exhaustion of remedies
under their customary laws.
Jurisprudence tells us that the office of a proviso
is to limit the application of the law.9
Taking these considerations into account, while
the NCIP's jurisdiction is initially couched in general
terms to include any and all disputes involving the rights
of ICCs/IPs, the second and third parts limit the NCIP's
jurisdiction to disputes where both parties have
remedies to exhaust under customary laws.
Consequently, the NCIP does not have
jurisdiction over disputes involving non-ICCs/IPs
because non-ICCs/IPs have no customary laws to
exhaust.
The limitation likewise applies to disputes where
the opposing parties are members of different
ICCs/IPs. caITAC
Each ICC/IP has its own set of customary laws
and council of elders/leaders. To require members of a
particular ICC/IP to appear before the council of
elders/leaders of another ICC/IP would be to require the
former to observe the customary laws of the latter. This
is repugnant to the right of each ICC/IP to use its own
commonly accepted justice systems, conflict resolution
institutions, and peace building processes or
mechanisms. 10
II. The RTC, not the NCIP, has
jurisdiction over violations of ICC/IP
rights committed by Non-ICC/IP.
 Page 358 of 458
As I had earlier discussed, the first part of Section
66 shows that jurisdiction is not dependent on who the
parties are to the dispute, but on whether the dispute
involves the rights of ICCs/IPs.
Guided by the rule that provisos should not be
construed to limit the main provisions of the
statute; 11 this Court must not read Section 66 in
isolation but must read it together with the related
provision. In this case, the Court must identify the rights
of ICCs/IPs, and determine whether the NCIP is the
proper venue for the enforcement of these rights.
The IPRA grants ICCs/IPs rights: (i) over
ancestral domains/lands; 12 (ii) to self-governance and
employment; 13 (iii) to social justice and human
rights; 14 and (iv) to cultural integrity. 15 These rights are
spread throughout several chapters, mainly under
Chapters III to VI.
It must be noted, however, that most of these
rights are state policies, and only the following are
clearly demandable and enforceable:the rights over
ancestral domains and lands; 16 the right against
unlawful intrusion; 17 the right to equal protection and to
nondiscrimination; 18 the right against unlawful acts
pertaining to employment; 19 the rights to religious,
cultural sites and ceremonies, including archaeological
artifacts; 20 and the right to withhold access to biological
and genetic resources. 21
Section 72 of the IPRA provides that any
person who violates the rights of ICCs/IPs shall be
punished "in accordance with the customary laws of the
ICCs/IPs concerned. ...without prejudice to the right of
the ICC/IP concerned to avail of the protection of
"existing laws...[i]n which case," the penalty shall be
imprisonment and/or fine, and damages, "upon the
discretion of the court." 22
"Existing laws" refer to national laws as opposed
to customary laws; while "the court" refers to the regular
courts as opposed to administrative bodies like the
NCIP. TAIaHE
Under Section 72, ICCs/IPs can avail of the
protection under national laws and file an action before
the regular courts,in which case, the penalty shall be
imprisonment and/or fine, and damages. From this
perspective, Section 72 is a special penal law that
applies to ALL persons, including non-ICCs/IPs.
The phrase "without prejudice," however, means
without limiting the course of action that one can
take. 23 Thus, a recourse under customary laws does
not take away the right of ICCs/IPs to
secure punishment under existing national laws.An
express caveat under the customary law option is that
the penalty must not be cruel, degrading, or inhuman,
nor shall it consist of the death penalty or excessive
fines. 24
Since the regular courts, not the NCIP, have
jurisdiction over national laws, then the NCIP's
jurisdiction is limited to punishment under customary
laws. 25
The NCIP's power to impose penalties under
customary laws presents two important
issues: first,whether it is legally possible to punish non-
ICCs/IPs with penalties under customary laws;
and second,whether a member of a particular ICC/IP
 Page 359 of 458
could be punished in accordance with the customary
laws of another ICC/IP.
Laws that provide for fines, forfeitures,
or penalties for their violation or otherwise impose a
burden on the people, such as tax and revenue
measures, must be published. 26
Most customary laws are not written, much less
published. Hence, it is highly unlikely that the NCIP or
even the regular courts have the power to penalize non-
ICCs/IPs with these penalties under customary laws. A
contrary ruling would be constitutionally infirm for lack of
due process.
Similarly, an ICC/IP cannot be punished under
the customary law of another. Otherwise, the former
would be forced to observe a non-binding customary
law.
Therefore, while the NCIP has jurisdiction over
violations of ICC/IP rights, its jurisdiction is limited to
those committed by and against members of the same
ICC/IP.
This view does not detract from the IPRA's policy
to "protect the rights of ICCs/IPs." ICCs/IPs, whose
rights are violated by non-ICCs/IPs or by members of a
different ICC/IP, can still file criminal charges before the
regular courts. In this situation, the NCIP's role is not to
adjudicate but to provide ICCs/IPs with "legal
assistance in litigation involving community
interest." 27
ICHDca
III. Congress had no intention to apply
customary laws to non-ICCs/IPs.
Some might conceivably argue that Congress
passed the IPRA and created the NCIP precisely to bind
non-ICCs/IPs to customary laws.
I do not agree with this view.
The records of the Senate and the bicameral
committee hearings show that the legislators focused
mainly on: (i) the grant of Ancestral Domains/Lands to
ICCs/IPs; (ii) the NCIP's organizational transition from
its predecessor-agencies; and (iii) budgetary
concerns. Section 66's controversial proviso was not
even discussed on the Senate floor or during the
bicameral committee hearings.
In the course of the bill's 28 early development,
the Senate technical working group 29 realized that it
would be difficult for the NCIP to adjudicate rights of
non-ICCs/IPs under national laws, on one hand, and the
rights of ICCs/IPs under customary laws, on the other.
They were likewise concerned with the possible conflict
between the customary laws of contending ICCs/IPs.
As a solution, the Senate technical working group
proposed the creation of the Office on Policy, Planning
and Research (OPPR) and a Consultative Body that will
compile all customary laws, and assist the NCIP in its
exercise of quasi-judicial powers:
Mr. Mike Mercado (representative of Sen. Juan
Flavier):
Sir, it's over and above the customs and
tradition. What I'm trying to point out is, it's
the whole plan for the sector. Two issues
po ang sinasabi ko.Number one is
regarding the need to put it down because
we talked about conflict of rights here. ..
 Page 360 of 458

The Presiding Officer: office ...continuing documentation of

customary laws customary law and
...With the Non-IPs.
other usage 'no for complete mediation
Mr. Mercado: or resolution, which would be derived
With the non-IPs possibly which would happen. from the culture base of the IPs.
It would be easy if the conflict could be xxx xxx xxx
between IPs of the same group. So it
would be easier to resolve. But paano po The presiding officer:
'yung if there would be a conflict between You were mentioning iyong other groups.What
an IP and non-IP. about the commission? Should they be
mandated to do the research and to, you
Mr. Raiz:
know, to compile such laws. Kasi yung
Non-IP. nakikita ko doon sa idea ni Mike is, like for
Mr. Mercado: example, kung may conflict iyong IPs and
Non-IPs, paano mo sasabihin, although
Because the assumption nga oo, 'yong sasabihin natin na yung customary law
sa civil law relations, may nga yung mag-go-govern, pero paano
mga conflicts po na possible na natin i-po-prove although kailangan
mangyayari. So, actually, sabi ko nga, natin i-recognize na mayroon ganuong
maybe we can do away with it. That's one problem.Sabihin natin it's an oral practice,
issue.... it's an oral customary law pero mas
Mr. Austria: maganda siguro kung iyon nga kung i-
compile mo tapos eto ganito yon. So
'Yong point ni Mike is very meritorious, 'yon mayroon tayong pang...
dapat, Dahil unang una, the IPs should
themselves show to the other Mr. Mercado:
sectors kung ano ba 'yon rule nila sa For example po on practical ground, I think ang
society. ... power is lodged with the Commission
Ms. Damaso: which is collective in nature iyong mga
adjudicatory power.Assuming not all of
Let's go back to that discussion on the creation them would belong to one tribe, they
of a separate office on planning and would belong to a different sector or
policy, and research. group. I know that it is being practiced and
I think it's more germane to mention those it's not written down, so I have to make
points that Mike has enunciated earlier decision also as a part of that
that this be a primary function of that Commission as a commissioner based
on something, so I have to also acquaint
 Page 361 of 458

myself on the practices of other groups
because that is part of the power of the
commission to adjudicate. For practical
purposes only, how would I know the
practices of the particular groupings,
which I am supposed to adjudicate,
assuming that we only have 113 tribes or
groupings and we have five
commissioners. Those other five or those
other commissioners who are not aware
of that particular practice, to that they will
depend their judgment on. So, there is
also a need for this five commissioners to
be familiar with the practice of other
Because there is four marriages and they
have specific law for that. If we will not
compile it, mahihirapan tayong ma-
attain 'yong level na 'yon na sana mas
maganda kung 'yong all practices, for
example on marriage sa iba't ibang
tribes ma-recognize rin ng law.Pero if
we will not document the practices, hindi
natin maa-attain 'yong level na 'yon. Kaya
mas maganda kung mayroon tayong
documentation that when legislators if and
when they decide to make it a law,
mayroon silang existing na gagamitin.
...TCAScE

groups because they will make decisions xxx xxx xxx

also.
Ms. Chavez:
Ms. Damaso:
Couldn't NCIP hire or form a consultative
Yeah, Mike, I think your point is to compile, body from which each tribe will be
meaning document. represented by a co-tribal consultant
Mr. Mercado: aside from the documentation of
customary laws? Pwede ba 'yon
Document only, hindi ho isabatas.
ganoon? Kasi kahit may
Ms. Damaso: documentation...(emphasis supplied)
But not to codify. It's a different ball game to The presiding officer:
codify.
Baka pwede isama sa IRR, implementing rules
Mr. Mercado: and regulations 'yong mga tribal tribal
Actually ginamit ko yung term, nag-usap kami ni consultancy.
Didith, sabi ko, "it's compile Ms. Chavez:
only". Because, it's beyond the power
Sa IRR.
of this commission to make
codifications.But 'yung point kanina ni The Presiding officer:
Datu Sulang is actually going a step Pwede naman siguro 'yon gawin. Anyway,
further. Kunwari like Muslims, bakit nare- specifics na 'yon. General lang 'yong
recognize na 'yong three marriages functions na ilagay natin.
 Page 362 of 458

xxx xxx xxx The second paragraph of Section 5 of

Article XII of the Constitution allows Congress
While the IPRA did create the OPPR, and
to provide "for the applicability of customary
directed the NCIP to form a consultative body, their laws governing property rights or relations in
functions had nothing to do with the NCIP's exercise of determining the ownership and extent of
quasi-judicial powers. ancestral domains." I do not see this
The OPPR's objective is to document customary statement as saying that Congress may
laws for monitoring, evaluation, and policy purposes to enact a law that would simply express that
"customary laws shall govern" and end it
assist Congress in formulating appropriate legislations
there. Had it been so,
benefiting ICCs/IPs.30 On the other hand, the
the Constitution could have itself easily
consultative body's role is to advise the NCIP on provided without having to still commission
matters "relating to the problems, aspirations, and Congress to do it. Mr. Chief Justice Davide
interests of the ICCs/IPs." 31 has explained this authority of Congress,
The variance between the deliberations and the during the deliberations of the 1986
law suggests that Congress passed the IPRA without Constitutional Convention, thus: (emphasis
supplied)
considering the inevitable conflict of rights under
national and customary laws. In my opinion, this casts "Mr. Davide....Insofar as the
doubt on whether Congress did give the NCIP the application of the customary laws
mandate to settle disputes between non-ICCs/IPs and governing property rights or
ICCs/IPs. relations in determining the
ownership and extent of the
It is true that the IPRA echoed ancestral domain is concerned, it
our Constitution 32 in "[recognizing] the applicability is respectfully submitted that the
of customary laws governing property rights or particular matter must be
relations in determining the ownership and extent of submitted to Congress. I
ancestral domain. 33 However, I do not subscribe to the understand that the idea of
idea that customary laws should bind non-ICCs/IPs Comm. Bennagen is for the
simply because Congress ordered the NCIP to compile possibility of the codification of
these customary laws. So before
them.
these are codified, we cannot
In Cruz v. Secretary of Environment and Natural now mandate that the same must
Resources,34 former Associate Justice Jose C. Vitug immediately be applicable. We
opined 35 that customary laws should not apply to non- leave it to Congress to determine
ICCs/IPs simply because Congress parroted the extent of the ancestral
the Constitution: domain and the ownership
 Page 363 of 458
thereof in relation to whatever
may have been codified earlier.
So, in short, let us not put the cart
ahead of the horse." 15
The constitutional aim, it seems to
me, is to get Congress to look closely into
the customary laws and, with specificity
and by proper recitals, to hew them to, and
make them part of, the stream of laws.The
"due process clause," as I so understand it
in Taada vs. Tuvera would require an apt
publication of a legislative enactment before it
is permitted to take force and effect. So, also,
customary laws, when specifically enacted to
become part of statutory law, must first
undergo that publication to render them
correspondingly binding and effective as such.
(emphasis in the original)
I share Justice Vitug's view. Laws must be
published before they take effect. The publication of all
laws "of a public nature" or "of general applicability" is
mandatory. 36 Without publication, non-ICCs/IPs would
be deprived of due process of law. 37
The NCIP has Primary Jurisdiction over Claims
regardless of whether the parties are non ICCs/IPs,
or members of a different ICCs/IPs.
I note that Section 66 applies only to "disputes"
and not to "claims":
SECTION 66. Jurisdiction of the NCIP. The
NCIP, through its regional offices, shall have
jurisdiction over
all claims and disputes involving rights of
ICCs/IPs: Provided, however, That no such
dispute shall be brought to the NCIP unless
the parties have exhausted all remedies
provided under their customary laws.
..(emphasis and omissions supplied)
The word "claim" in section 66 relates to rights of
ICC/IP over ancestral domains/lands. 38 cTDaEH
Four sections in the IPRA are dedicated to the
NCIP's jurisdiction over "claims": first, Section
52 (h),which refers to the power of the NCIP Ancestral
Domains Office (NCIP-ADO) to deny applications for
CADTs; second, Section 53,which refers to the NCIP-
ADO's power to reject applications for Certificate of
Ancestral Land Titles (CALTs);third, Sec. 54, on
fraudulent claims; lastly, Sec. 62,which refers to the
resolution of adverse claims.
Sections 52 (h) and 53 require the NCIP-ADO to
publish and post applications for CADTs/CALTs to
notify all persons,including non-ICCs/IPs. Section 62
allows all interested persons, including non-ICCs/IPs, to
file adverse claims over disputes arising from
delineation of ancestral domains. 39
Under Section 54, the NCIP may, upon the
written request of ICCs/IPs, review existing claims and
after notice and hearing, cancel CADTs and CALTs that
were fraudulently acquired by any person or
community. 40
In these cases, the NCIP has jurisdiction even
if one of the parties is a non-ICC/IP, or where the
opposing parties are members of different ICCs/IPs.
The NCIP's jurisdiction is
primary and not exclusive.
 Page 364 of 458

Finally, I wish to point out that while the NCIP may bring the case to the ordinary
possesses quasi-judicial powers, its jurisdiction is not courts of justice.
exclusive. Sen. Flavier:
The word "jurisdiction" in the first part of Section Without passing through the commission?
66 is unqualified. Section 66 (then Section 71) of Rep. Zapata:
Senate Bill 1728 was originally worded exclusive and
original jurisdiction.41 During the Bicameral Committee Yes. Anyway, if they go to the regular courts,
Conference, 42 the lower house objected to giving the they will have to litigate in court, because
if its (sic) exclusive, that would be good.
NCIP exclusive and original jurisdiction:
Sen. Flavier:
Sen. Juan Flavier: (Chairman of the Senate
Panel) But what he is saying is that. ..
There is exclusive original. And so what do you Rep. Zapata:
suggest? But they may not have the facility.
xxx xxx xxx Rep. _______:
Rep. Zapata (Chairman of the Panel for the Senado na lang.
House of Representatives):
Rep. Zapata:
Chairman, may I butt in?
Oo, iyong original na lang.
Sen. Flavier:
Sen. Flavier:
Yes, please. ITAaHc

In other words, it's not only the Commission

Rep. Zapata:
This was considered. The original, we were
willing in the house. But the
"exclusive",we objected to the word
"exclusive" because it would only be the
commission that would exclude the court
and the Commission may not be able to
undertake all the review nationwide. And
so we remove the word "exclusive" so
that they will have original jurisdiction
but with the removal of the word
"exclusive" that would mean that they
that can originate it, pwedeng mag-
originate sa courts.
Rep. Zapata:
Or else, we just remove "exclusive original" so
that they will say, the National will have
jurisdiction over claims. So we remove
both "exclusive and original".
Sen. Flavier:
So what version are you batting for, Mr.
Chairman?
 Page 365 of 458
Rep. Zapata:
Just to remove the word "exclusive
original." The Commission will still have
jurisdiction only that, if the parties will
opt to go to courts of justice, then this
have (sic) the proper jurisdiction, then
they may do so because we have
courts nationwide.Here there may be
not enough courts of the commission.
Sen. Flavier:
So we are going to adopt the senate version
minus the words "exclusive original"?
Rep. Zapata:
Yes, Mr. Chairman, that's my proposal.
Sen. Flavier:
No, problem. Okay Approved.
xxx xxx xxx
The Bicameral Committee's removal of the words
"exclusive and original" meant that the NCIP shares
concurrent jurisdiction with the regular courts. Thus, I
agree with the revised ponencia that it would be ultra
vires for NCIP to promulgate rules and regulations
stating that it has exclusive jurisdiction.
The NCIP's jurisdiction, however, while not
exclusive, is primary.
Under the doctrine of primary jurisdiction, courts
must refrain from determining a controversy involving a
question which is within the jurisdiction of an
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. 43
On the other hand, when Congress confers
exclusive jurisdiction to a judicial or quasi-judicial entity
over certain matters by law, its action evinces its intent
to exclude other bodies from exercising the same. 44 CHTAIc
Having primary jurisdiction is not equivalent to
having exclusive jurisdiction. Thus, to avoid confusion,
and to prevent future litigants from claiming that the
NCIP has exclusive jurisdiction, the Court should remind
the NCIP and other administrative bodies to refrain from
claiming that they have exclusive jurisdiction when no
such jurisdiction is conferred by law.
Accordingly, the NCIP's Implementing Rules and
Regulations, which state that the NCIP has exclusive
jurisdiction 45 should be modified to read "primary
jurisdiction."
Conclusion
In sum, the law's intent is neither to grant the
NCIP sole jurisdiction over disputes involving ICCs/IPs,
nor to disregard the rights of non-ICCs/IPs under
national laws. However, the NCIP maintains primary
jurisdiction over: (i) adverse claims and border disputes
arising from delineation of ancestral domains/lands; (ii)
cancellation of fraudulently issued CADTs; and (iii)
disputes and violations of ICCs/IPs rights between
members of the same ICC/IP.
For these reasons, I vote to grant the petition.
The RTC should forthwith continue with the injunction
case.
PEREZ, J.,concurring:
 Page 366 of 458
While I agree with the holding in this case that
jurisdiction over the original and amended
complaint, accion reivindicatoria and injunction, before
the court a quo,correctly lies with the Regional Trial
Courts (RTCs):(1) an accion reivindicatoria, a civil
action involving interest in real property with an
assessed value of P683,760.00; and (2) an injunction, a
civil action incapable of pecuniary estimation, I offer my
view on the complex nature of the jurisdiction of the
National Commission of Indigenous Peoples (NCIP)
conferred in the Indigenous People's Rights Act
(IPRA), Republic Act No. 8371.
Even if in this case the complaint was amended
from an accion reivindicatoria to one for injunction, both
containing allegations clearly falling within the RTCs
jurisdiction, petitioners insist and maintain that as
indigenous persons, except for two (2) petitioners, with
the subject property claimed as their ancestral land, the
NCIP has exclusive and original jurisdiction over the
case. For the petitioners, with a submission that
the ponencia already dismissed, the mere fact that this
case involves members of Indigenous Cultural
Communities/Indigenous Persons (ICCs/IPs) and their
ancestral land, automatically endows the NCIP, under
Section 66 of the IPRA, with jurisdiction over petitioners'
complaint. Even the NCIP is of the view of its original
and exclusive jurisdiction over both the original and
amended complaints. Hence, the two (2) Motions to
Refer the Case to the Regional Hearing Office-National
Commission on Indigenous Peoples (RHO-NCIP) filed
by the NCIP Hearing Officer before the court a quo. cHDAIS
I concur with the ponencia on the basis of the
principle that "jurisdiction over the subject matter of a
case is conferred by law and determined by the
allegations in the complaint, and that the averments in
the complaint and the character of the relief sought are
the ones to be consulted." As clearly delineated in
theponencia,upon a careful review of Section 66 and
based on the qualifying proviso, the NCIP shall have
jurisdiction over claims and disputes involving rights of
ICCs/IPs only when they arise between or among
parties belonging to the same ICC/IP. And, as clearly
alleged by the petitioners in their complaint, the
defendants they impleaded are not indigenous people.
I submit that the jurisdiction of the NCIP ought to
be definitively drawn to settle doubts that still linger due
to the implicit affirmation done in The City Government
of Baguio City, et al. v. Atty. Masweng, et al.1 of the
NCIP's jurisdiction over cases where one of the parties
are not ICCs/IPs.
Jurisdiction is the power and authority, conferred
by the Constitution and by statute, to hear and decide a
case. 2 The authority to decide a cause at all is what
makes up jurisdiction.
The enabling statute, Section 66 of the IPRA, is
the measure of quasi-judicial powers the NCIP may
exercise: 3
Sec. 66. Jurisdiction of the NCIP.
The NCIP, through its regional offices,
shall have jurisdiction over all claims and
disputes involving rights of
ICCs/IPs:Provided, however, That no such
dispute shall be brought to the NCIP unless
the parties have exhausted all remedies
provided under their customary laws.For
this purpose, a certification shall be issued by
 Page 367 of 458
the Council of Elders/Leaders who participated
in the attempt to settle the dispute that the
same has not been resolved, which
certification shall be a condition precedent to
the filing of a petition with the NCIP. (Emphasis
supplied).EATCcI
The conferment of such jurisdiction is consistent
with state policy averred in the IPRA which recognizes
and promotes all the rights of ICCs/IPs within the
framework of the Constitution. Such is likewise reflected
in the mandate of the NCIP to protect and promote the
interest and well-being of the ICCs/IPs with due regard
to their beliefs, customs, traditions and institutions. 4
The other provisions point out that the NCIP is the
primary government agency responsible for the
formulation and implementation of policies, plans and
programs to promote and protect the rights and well-
being of the ICCs/IPs and the recognition of their
ancestral domains as well as their rights
thereto. 5Nonetheless, the creation of such a
government agency does not per se grant it primary
and/or exclusive and original jurisdiction, excluding the
regular courts from taking cognizance, and exercising
jurisdiction over cases which may involve rights of
ICCs/IPs.
Significantly, while Section 66 uses the word "all"
to qualify the ICCs/IPs "claims and disputes" covered by
NCIP jurisdiction, it unmistakably contains the proviso,
that restrains or limits the initial generality of the grant of
jurisdiction.
As outlined in the ponencia,the elements of the
grant of jurisdiction to the NCIP are: (1) the claim and
dispute involves the rights of ICCs/IPs; and (2) both
parties have exhausted all remedies provided under
their customary laws. Both elements must be present
prior to the invocation and exercise of the NCIP's
jurisdiction.
We cannot, therefore, be confined to the first
phrase that the NCIP shall have jurisdiction over all
claims and disputes involving rights of ICCs/IPs and
therefrom deduce primary sole NCIP jurisdiction over all
ICCs/IPs claims and disputes to the exclusion of the
regular courts.If it were the legislative intention that: (1)
the NCIP exercise primary jurisdiction over, and/or (2)
the regular courts be excluded from taking cognizance
of, claims and disputes involving rights of ICCs/IPs, the
legislature could have easily done so as in other
instances conferring primary, and original and exclusive
jurisdiction to a specific administrative body.
Primary jurisdiction, also known as the doctrine of
Prior Resort, is the power and authority vested by
the Constitution or by statute upon an administrative
body to act upon a matter by virtue of its specific
competence. 6 The doctrine of primary jurisdiction
prevents the court from arrogating unto itself the
authority to resolve a controversy which falls under the
jurisdiction of a tribunal possessed with special
competence. 7 In one occasion, we have held that
regular courts cannot or should not determine a
controversy involving a question which is within the
jurisdiction of the administrative tribunal before the
question is resolved 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
 Page 368 of 458
intricate matters of fact, and a uniformity of ruling is
essential to comply with the purposes of the regulatory
statute administered. 8 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 arising in the proceeding before the
court." 9
Additionally, primary jurisdiction does not
necessarily denote exclusive jurisdiction. 10 It 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 body; in such case, the
judicial process is suspended pending referral of such
issues to the administrative body for its view. 11 In some
instances, the Constitution and statutes grant the
administrative body primary jurisdiction, concurrent with
either similarly authorized government agencies or the
regular courts, such as the distinct kinds of jurisdiction
bestowed by the Constitution and statutes on the
Ombudsman.
The case of Honasan II v. The Panel of
Investigating Prosecutors of the Department of
Justice 12 delineated primary and concurrent jurisdiction
as opposed to original and exclusive jurisdiction vested
by both the Constitution and statutes 13 on the
Ombudsman concurrent, albeit primary, with the
Department of Justice.
Paragraph (1) of Section 13, Article XI of
the Constitution, viz.:
SEC. 13. The Office of the Ombudsman
shall have the following powers, functions, and
duties:
1. Investigate on its own, or on complaint by
any person, any act or omission of any public
official, employee, office or agency, when such
act or omission appears to be illegal, unjust,
improper, or inefficient.
does not exclude other government agencies
tasked by law to investigate and prosecute
cases involving public officials. If it were the
intention of the framers of the1987
Constitution, they would have expressly
declared the exclusive conferment of the power
to the Ombudsman. Instead, paragraph (8) of
the same Section 13 of
the Constitution provides:
(8) Promulgate its rules of procedure
and exercise such other powers or perform
such functions or duties as may be provided by
law.
Accordingly, Congress enacted R.A.
6770, otherwise known as "The Ombudsman
Act of 1989." Section 15 thereof provides: DHITCc
Sec. 15. Powers, Functions and
Duties. The Office of the Ombudsman shall
have the following powers, functions and
duties:
(1) Investigate and prosecute on its own
or on complaint by any person, any act or
omission of any public officer or employee,
office or agency, when such act or omission
appears to be illegal, unjust, improper or
inefficient. It has primary jurisdiction over cases
 Page 369 of 458
cognizable by the Sandiganbayan and, in the
exercise of this primary jurisdiction, it may take
over, at any stage, from any investigatory
agency of the government, the investigation of
such cases.
Pursuant to the authority given to the
Ombudsman by the Constitution and the
Ombudsman Act of 1989 to lay down its own
rules and procedure, the Office of the
Ombudsman promulgated Administrative Order
No. 8, dated November 8, 1990,
entitled, Clarifying and Modifying Certain Rules
of Procedure of the Ombudsman,to wit:
A complaint filed in or taken cognizance
of by the Office of the Ombudsman charging
any public officer or employee including those
in government-owned or controlled
corporations, with an act or omission alleged to
be illegal, unjust, improper or inefficient is an
Ombudsman case. Such a complaint may be
the subject of criminal or administrative
proceedings, or both.
For purposes of investigation and
prosecution, Ombudsman cases involving
criminal offenses may be subdivided into two
classes, to wit: (1) those cognizable by the
Sandiganbayan, and (2) those falling under the
jurisdiction of the regular courts. The difference
between the two, aside from the category of
the courts wherein they are filed, is on the
authority to investigate as distinguished from
the authority to prosecute, such cases.
The power to investigate or conduct a
preliminary investigation on any Ombudsman
case may be exercised by an investigator or
prosecutor of the Office of the Ombudsman, or
by any Provincial or City Prosecutor or their
assistance, either in their regular capacities or
as deputized Ombudsman prosecutors.
The prosecution of cases cognizable by
the Sandiganbayan shall be under the direct
exclusive control and supervision of the Office
of the Ombudsman. In cases cognizable by the
regular Courts, the control and supervision by
the Office of the Ombudsman is only in
Ombudsman cases in the sense defined
above. The law recognizes a concurrence of
jurisdiction between the Office of the
Ombudsman and other investigative agencies
of the government in the prosecution of cases
cognizable by regular courts.
It is noteworthy that as early as 1990,
the Ombudsman had properly differentiated
the authority to investigate cases from the
authority to prosecute cases. It is on this
note that the Court will first dwell on the
nature or extent of the authority of the
Ombudsman to investigate cases. Whence,
focus is directed to the second sentence of
paragraph (1),Section 15 of the
Ombudsman Act which specifically
provides that the Ombudsman has primary
jurisdiction over cases cognizable by the
Sandiganbayan, and, in the exercise of this
primary jurisdiction, it may take over, at any
stage, from any investigating agency of the
government, the investigation of such
cases.
That the power of the Ombudsman to
investigate offenses involving public
 Page 370 of 458
officers or employees is not exclusive but
is concurrent with other similarly
authorized agencies of the government
such as the provincial, city and state
prosecutors has long been settled in
several decisions of the Court.(Emphasis
supplied)
In Cojuangco, Jr. vs. Presidential
Commission on Good Government,decided in
1990, the Court expressly declared:
A reading of the foregoing provision of
the Constitution does not show that the power
of investigation including preliminary
investigation vested on the Ombudsman is
exclusive.
Interpreting the primary jurisdiction of the
Ombudsman under Section 15 (1) of the
Ombudsman Act, the Court held in said case:
Under Section 15 (1) of Republic Act
No. 6770 aforecited, the Ombudsman has
primary jurisdiction over cases cognizable by
the Sandiganbayan so that it may take over at
any stage from any investigatory agency of the
government, the investigation of such
cases. The authority of the Ombudsman to
investigate offenses involving public officers or
employees is not exclusive but is concurrent
with other similarly authorized agencies of the
government. Such investigatory agencies
referred to include the PCGG and the
provincial and city prosecutors and their
assistants, the state prosecutors and the
judges of the municipal trial courts and
municipal circuit trial court.
In other words the provision of the law
has opened up the authority to conduct
preliminary investigation of offenses cognizable
by the Sandiganbayan to all investigatory
agencies of the government duly authorized to
conduct a preliminary investigation under
Section 2, Rule 112 of the 1985 Rules of
Criminal Procedure with the only qualification
that the Ombudsman may take over at any
stage of such investigation in the exercise of
his primary jurisdiction.
A little over a month later, the Court,
in Deloso vs. Domingo, pronounced that the
Ombudsman, under the authority of Section 13
(1) of the 1987 Constitution, has jurisdiction to
investigate any crime committed by a public
official, elucidating thus:
cEaSHC
As protector of the people, the office of
the Ombudsman has the power, function and
duty to "act promptly on complaints filed in any
form or manner against public officials" (Sec.
12) and to "investigate ...any act or omission of
any public official ...when such act or omission
appears to be illegal, unjust, improper or
inefficient." (Sec. 13.) The Ombudsman is also
empowered to "direct the officer concerned," in
this case the Special Prosecutor, "to take
appropriate action against a public official
...and to recommend his prosecution" (Sec.
13).
The clause "any [illegal] act or omission
of any public official" is broad enough to
embrace any crime committed by a public
official. The law does not qualify the nature of
the illegal act or omission of the public official
 Page 371 of 458
or employee that the Ombudsman may
investigate. It does not require that the act or
omission be related to or be connected with or
arise from, the performance of official duty.
Since the law does not distinguish, neither
should we.
The reason for the creation of the
Ombudsman in the 1987 Constitution and for
the grant to it of broad investigative authority, is
to insulate said office from the long tentacles of
officialdom that are able to penetrate judges'
and fiscals' offices, and others involved in the
prosecution of erring public officials, and
through the exertion of official pressure and
influence, quash, delay, or dismiss
investigations into malfeasances and
misfeasances committed by public officers. It
was deemed necessary, therefore, to create a
special office to investigate all criminal
complaints against public officers regardless of
whether or not the acts or omissions
complained of are related to or arise from the
performance of the duties of their office. The
Ombudsman Act makes perfectly clear that the
jurisdiction of the Ombudsman
encompasses "all kinds of malfeasance,
misfeasance, and non-feasance that have
been committed by any officer or employee as
mentioned in Section 13 hereof, during his
tenure of office" (Sec. 16, R.A. 6770).
Indeed, the labors of the constitutional
commission that created the Ombudsman as a
special body to investigate erring public
officials would be wasted if its jurisdiction were
confined to the investigation of minor and less
grave offenses arising from, or related to, the
duties of public office, but would exclude those
grave and terrible crimes that spring from
abuses of official powers and prerogatives, for
it is the investigation of the latter where the
need for an independent, fearless, and honest
investigative body, like the Ombudsman, is
greatest.
At first blush, there appears to be
conflicting views in the rulings of the Court in
the Cojuangco, Jr. case and the Deloso case.
However, the contrariety is more apparent than
real. In subsequent cases, the Court elucidated
on the nature of the powers of the Ombudsman
to investigate.
In 1993, the Court held in Sanchez vs.
Demetriou,that while it may be true that the
Ombudsman has jurisdiction to investigate and
prosecute any illegal act or omission of any
public official, the authority of the Ombudsman
to investigate is merely a primary and not an
exclusive authority, thus:
The Ombudsman is indeed empowered
under Section 15, paragraph (1) of RA 6770 to
investigate and prosecute any illegal act or
omission of any public official. However as we
held only two years ago in the case
of Aguinaldo vs. Domagas,this authority "is not
an exclusive authority but rather a shared or
concurrent authority in respect of the offense
charged."
Petitioners finally assert that the
information and amended information filed in
this case needed the approval of the
Ombudsman. It is not disputed that the
information and amended information here did
 Page 372 of 458
not have the approval of the Ombudsman.
However, we do not believe that such approval
was necessary at all. InDeloso v. Domingo,191
SCRA 545 (1990),the Court held that the
Ombudsman has authority to investigate
charges of illegal acts or omissions on the part
of any public official, i.e.,any crime imputed to
a public official. It must, however, be pointed
out that the authority of the Ombudsman to
investigate "any [illegal] act or omission of any
public official" (191 SCRA 550) is not an
exclusive authority but rather a shared or
concurrent authority in respect of the offense
charged, i.e.,the crime of sedition. Thus, the
non-involvement of the office of the
Ombudsman in the present case does not
have any adverse legal consequence upon the
authority of the panel of prosecutors to file and
prosecute the information or amended
information.IAETDc
In fact, other investigatory agencies of
the government such as the Department of
Justice in connection with the charge of
sedition, and the Presidential Commission on
Good Government, in ill gotten wealth cases,
may conduct the investigation.
In Natividad vs. Felix,a 1994 case,
where the petitioner municipal mayor
contended that it is the Ombudsman and not
the provincial fiscal who has the authority to
conduct a preliminary investigation over his
case for alleged Murder, the Court held:
The Deloso case has already been re-
examined in two cases, namely Aguinaldo vs.
Domagas and Sanchez vs.
Demetriou.However, by way of amplification,
we feel the need for tracing the history of the
legislation relative to the jurisdiction of
Sandiganbayan since the Ombudsman's
primary jurisdiction is dependent on the cases
cognizable by the former.
In the process, we shall observe how
the policy of the law, with reference to the
subject matter, has been in a state of flux.
These laws, in chronological order, are
the following: (a) Pres. Decree No. 1486,
the first law on the Sandiganbayan; (b) Pres.
Decree No. 1606 which expressly repealed
Pres. Decree No. 1486; (c) Section 20 of Batas
Pambansa Blg. 129; (d) Pres. Decree No.
1860; and (e) Pres. Decree No. 1861.
The latest law on the Sandiganbayan,
Sec. 1 of Pres. Decree No. 1861 reads as
follows:
"SECTION 1. Section 4 of Presidential
Decree No. 1606 is hereby amended to read
as follows:
'SEC. 4. Jurisdiction. The
Sandiganbayan shall exercise: '(a) Exclusive
original jurisdiction in all cases involving:
(2) Other offenses or felonies committed by
public officers and employees in relation to
their office,including those employed in
government-owned or controlled corporation,
whether simple or complexed with other
crimes, where the penalty prescribed by law is
higher that prision correccional or
imprisonment for six (6) years, or a fine of
P6,000: PROVIDED, HOWEVER, that offenses
 Page 373 of 458
or felonies mentioned in this paragraph where
the penalty prescribed by law does not
exceed prision correccional or imprisonment
for six (6) years or a fine of P6,000 shall be
tried by the proper Regional Trial Court,
Metropolitan Trial Court, Municipal Trial Court
and Municipal Circuit Trial Court." CTIEac
A perusal of the aforecited law shows
that two requirements must concur under Sec.
4 (a) (2) for an offense to fall under the
Sandiganbayan's jurisdiction, namely: the
offense committed by the public officer must be
in relation to his office and the penalty
prescribed be higher then prision
correccional or imprisonment for six (6) years,
or a fine of P6,000.00.
Applying the law to the case at bench,
we find that although the second requirement
has been met, the first requirement is wanting.
A review of these Presidential Decrees,
except Batas Pambansa Blg. 129, would reveal
that the crime committed by public officers or
employees must be "in relation to their office" if
it is to fall within the jurisdiction of the
Sandiganbayan. This phrase which is traceable
to Pres. Decree No. 1468, has been retained
by Pres. Decree No. 1861 as a requirement
before the Ombudsman can acquire primary
jurisdiction on its power to investigate.
It cannot be denied that Pres. Decree
No. 1861 is in pari materia to Article XI,
Sections 12 and 13 of the 1987
Constitution and the Ombudsman Act of
1989because, as earlier mentioned, the
Ombudsman's power to investigate is
dependent on the cases cognizable by the
Sandiganbayan. Statutes are in pari materia
when they relate to the same person or thing or
to the same class of persons or things, or
object, or cover the same specific or particular
subject matter.
It is axiomatic in statutory construction
that a statute must be interpreted, not only to
be consistent with itself, but also to harmonize
with other laws on the same subject matter, as
to form a complete, coherent and intelligible
system. The rule is expressed in the maxim,
"interpretare et concordare legibus est optimus
interpretandi," or every statute must be so
construed and harmonized with other statutes
as to form a uniform system of jurisprudence.
Thus, in the application and interpretation of
Article XI, Sections 12 and 13 of the 1987
Constitution and the Ombudsman Act of 1989,
Pres. Decree No. 1861 must be taken into
consideration. It must be assumed that when
the 1987 Constitution was written, its framers
had in mind previous statutes relating to the
same subject matter. In the absence of any
express repeal or amendment, the 1987
Constitution and the Ombudsman Act of
1989 are deemed in accord with existing
statute, specifically, Pres. Decree No. 1861.
R.A. No. 8249 which amended Section
4, paragraph (b) of the Sandiganbayan Law
(P.D. 1861) likewise provides that for other
offenses, aside from those enumerated under
paragraphs (a) and (c),to fall under the
exclusive jurisdiction of the Sandiganbayan,
they must have been committed by public
officers or employees in relation to their office.
 Page 374 of 458
In summation, the Constitution,
Section 15 of the Ombudsman Act of
1989 and Section 4 of the Sandiganbayan
Law, as amended, do not give to the
Ombudsman exclusive jurisdiction to
investigate offenses committed by public
officers or employees. The authority of the
Ombudsman to investigate offenses
involving public officers or employees is
concurrent with other government
investigating agencies such as provincial,
city and state prosecutors. However, the
Ombudsman, in the exercise of its primary
jurisdiction over cases cognizable by the
Sandiganbayan, may take over, at any
stage, from any investigating agency of the
government, the investigation of such
cases.
In other words, respondent DOJ
Panel is not precluded from conducting any
investigation of cases against public
officers involving violations of penal laws
but if the cases fall under the exclusive
jurisdiction of the Sandiganbayan, then
respondent Ombudsman may, in the
exercise of its primary jurisdiction take over
at any stage.(Emphasis supplied)
xxx xxx xxx
To reiterate for emphasis, the power
to investigate or conduct preliminary
investigation on charges against any public
officers or employees may be exercised by
an investigator or by any provincial or city
prosecutor or their assistants, either in
their regular capacities or as deputized
Ombudsman prosecutors. The fact that all
prosecutors are in effect deputized
Ombudsman prosecutors under the OMB-
DOJ Circular is a mere superfluity. The DOJ
Panel need not be authorized nor deputized
by the Ombudsman to conduct the
preliminary investigation for complaints
filed with it because the DOJ's authority to
act as the principal law agency of the
government and investigate the
commission of crimes under the Revised
Penal Code is derived from the Revised
Administrative Code which had been held
in the Natividad case as not being contrary
to the Constitution. Thus, there is not even
a need to delegate the conduct of the
preliminary investigation to an agency
which has the jurisdiction to do so in the
first place. However, the Ombudsman may
assert its primary jurisdiction at any stage
of the investigation.(Emphasis supplied)SaCIDT
I referred to Honasan II to emphasize the point
that the NCIP cannot be said to have primary
jurisdiction over all the ICC/IP cases comparable to
what the Ombudsman has in cases falling under the
exclusive jurisdiction of the Sandiganbayan. We do not
find such specificity in the grant of jurisdiction to the
NCIP in Section 66 of the IPRA.
Neither does the IPRA confer original and
exclusive jurisdiction to the NCIP over all claims and
disputes involving rights of ICCs/IPs.
Here, I revert to the point on the investiture of
primary and/or original and exclusive jurisdiction to an
administrative body which in all instances of such grant
 Page 375 of 458
was explicitly provided in the Constitution and/or the
enabling statute, to wit:
1. Commission on Elections' exclusive original
jurisdiction over all elections contests; 14
2. Securities and Exchange Commission's original
and exclusive jurisdiction over all cases enumerated
under Section 5 of Presidential Decree No. 902-
A 15prior to its transfer to courts of general jurisdiction or
the appropriate Regional Trial Court by virtue of Section
4 of the Securities Regulation Code;
3. Energy Regulatory Commission's original and
exclusive jurisdiction over all cases contesting rates,
fees, fines and penalties imposed by it in the exercise of
its powers, functions and responsibilities; 16
4. Department of Agrarian Reform's 17 primary
jurisdiction to determine and adjudicate agrarian reform
matters and its exclusive original jurisdiction over all
matters involving the implementation of agrarian reform
except those falling under the exclusive jurisdiction of
the Department of Agriculture and the Department of
Environment and Natural Resources; 18
5. Construction Industry Arbitration Commission's
original and exclusive jurisdiction over disputes
involving contracts of construction, whether government
or private, as long as the parties agree to submit the
same to voluntary arbitration; 19
6. Voluntary arbitrator or panel of voluntary
arbitrators' original and exclusive jurisdiction over all
unresolved grievances arising from the interpretation or
implementation of the collective bargaining agreement
and those arising from the interpretation or enforcement
of company personnel policies; 20
7. The National Labor Relations Commission's
original and exclusive jurisdiction over cases listed in
Article 217 of the Labor Code involving all workers,
whether agricultural or non-agricultural; and
8. Board of Commissioners of the Bureau of
Immigration's primary and exclusive jurisdiction over all
deportation cases. 21
That the proviso found in Section 66 of
the IPRA is exclusionary, specifically excluding disputes
involving rights of IPs/ICCs where the opposing party is
non-ICC/IP, is reflected in the IPRA's emphasis of
customs and customary law to govern in the lives of the
ICCs/IPs.
Indeed, non-ICCs/IPs cannot be subjected to the
special and limited jurisdiction of the NCIP even if the
dispute involves rights of ICCs/IPs since the NCIP has
no power and authority to decide on a
controversy involving as well rights of non-ICCs/IPs
which may be brought before a court of general
jurisdiction within the legal bounds of rights and
remedies.Even as a practical concern, non-IPs and
non-members of ICCs ought to be excepted from the
NCIP's competence since it cannot determine the right-
duty correlative, and breach thereof, between opposing
parties who are ICCs/IPs and non-ICCs/IPs, the
controversy necessarily contemplating application of
other laws, not only customs and customary law of the
ICCs/IPs. In short, the NCIP is only vested with
jurisdiction to determine the rights of ICCs/IPs based on
customs and customary law in a given controversy
 Page 376 of 458
against another ICC/IP, but not the applicable law for
each and every kind of ICC/IP controversy even against
an opposing non-ICC/IP.
In San Miguel Corporation v. NLRC,22 the Court
delineated the jurisdiction of the Labor Arbiter and the
NLRC, specifically paragraph 3 thereof, as all money
claims of workers, limited to "cases arising from
employer-employee relations." The same clause was
not expressly carried over, in printer's ink, in Article 217
as it exists today, but the Court ruled that such was a
limitation on the jurisdiction of the Labor Arbiter and the
NLRC, thus:
The jurisdiction of Labor Arbiters and
the National Labor Relations Commission is
outlined in Article 217 of the Labor Code ...:
"ART. 217. Jurisdiction of Labor Arbiters
and the Commission. (a) The Labor Arbiters
shall have the original and exclusive
jurisdiction to hear and decide within thirty (30)
working days after submission of the case by
the parties for decision, the following cases
involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages,
hours of work and other terms and conditions
of employment;
3. All money claims of workers, including those
based on non-payment or underpayment of
wages, overtime compensation, separation pay
and other benefits provided by law or
appropriate agreement,except claims for
employees' compensation, social security,
medicare and maternity benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article
265 of this Code, including questions involving
the legality of strikes and lockouts.
(b) The Commission shall have
exclusive appellate jurisdiction over all cases
decided by Labor Arbiters."
While paragraph 3 above refers to "all
money claims of workers," it is not necessary
to suppose that the entire universe of
money claims that might be asserted by
workers against their employers has been
absorbed into the original and exclusive
jurisdiction of Labor Arbiters.In the first
place, paragraph 3 should be read not in
isolation from but rather within the context
formed by paragraph 1 (relating to unfair labor
practices),paragraph 2 (relating to claims
concerning terms and conditions of
employment),paragraph 4 (claims relating to
household services, a particular species of
employer-employee relations),and paragraph 5
(relating to certain activities prohibited to
employees or to employers).It is evident that
there is a unifying element which runs through
paragraphs 1 to 5 and that is, that they all refer
to cases or disputes arising out of or in
connection with an employer-employee
relationship. This is, in other words, a situation
where the rule ofnoscitur a sociis may be
usefully invoked in clarifying the scope of
paragraph 3, and any other paragraph of
Article 217 of the Labor Code, as amended.
 Page 377 of 458
We reach the above conclusion from an
examination of the terms themselves of Article
217, as last amended by BP Blg. 227, and
even though earlier versions of Article 217 of
the Labor Code expressly brought within the
jurisdiction of the Labor Arbiters and the NLRC
"cases arising from employer-employee
relations," which clause was not expressly
carried over, in printer's ink, in Article 217 as it
exists today. For it cannot be presumed that
money claims of workers which do not arise
out of or in connection with their employer-
employee relationship, and which would
therefore fall within the general jurisdiction of
the regular courts of justice, were intended by
the legislative authority to be taken away from
the jurisdiction of the courts and lodged with
Labor Arbiters on an exclusive basis. The
Court, therefore, believes and so holds that the
"money claims of workers" referred to in
paragraph 3 of Article 217 embraces money
claims which arise out of or in connection the
employer-employee relationship, or some
aspect or incident of such relationship. Put a
little differently, that money claims of workers
which now fall within the original and exclusive
jurisdiction of Labor Arbiters are those money
claims which have some reasonable causal
connection with the employer-employee
relationship. (Emphasis supplied) cHECAS
Clearly, the phraseology of "all claims and
disputes involving rights of ICCs/IPs" does not
necessarily grant the NCIP all-encompassing
jurisdiction whenever the case involves rights of
ICCs/IPs without regard to the status of the
parties, i.e.,whether the opposing parties are both
ICCs/IPs.
In all, for the reason that under the provisions of
the IPRA, specifically Section 66 thereof, the jurisdiction
of the NCIP is special and limited, confined only to
cases involving rights of IPs/ICCs, where both such
parties belong to the same ICC/IP, the original and
amended complaint herein properly fall within the
jurisdiction of the regular courts, specifically the RTC.
Thus, I concur to the denial of the petition.
LEONEN, J.,concurring:
I concur with the ponencia in holding that
respondents' action, alleged to be involving a claim over
the ancestral domain of an indigenous cultural
community/indigenous people (ICC/IP),does not fall
within the exclusive original jurisdiction of the National
Commission on Indigenous Peoples (NCIP).
A careful reading of Section 66 1 of Republic Act
No. 8371, otherwise known as the Indigenous Peoples'
Rights Act of 1997, with particular emphasis on its
proviso will reveal that the jurisdiction of the NCIP is
limited to disputes where both parties are members of
ICC/IPs and come from the same ethnolinguistic group.
Thus, the assailed Decision dated August 17,
2006 and Resolution dated July 4, 2007 of the Court of
Appeals in CA-G.R. SP No. 00204-MIN must be
affirmed.
The present Petition for Review on Certiorari 2 is
an offshoot of a Petition for Accion Reivindicatoria with
prayer for issuance of a temporary restraining order or
preliminary prohibitory injunction with
 Page 378 of 458
damages 3 (Original Complaint) filed by respondents
against petitioners before the Regional Trial Court of
Manolo Fortich, Bukidnon on March 3, 2004, docketed
as Civil Case No. 04-03-01. This Petition for Accion
Reivindicatoria was subsequently amended by
respondents into a Complaint for injunction, damages,
and other relief 4 (Amended Complaint).
On March 20, 2004, petitioners Brazil and
Macapayag filed their Answer to the original Complaint,
asserting that respondents had no cause of action
against them. 5
On March 23, 2004, the other petitioners filed a
Motion to Dismiss. They argued that the Regional Trial
Court had no jurisdiction over the case. They asserted
that they were members of the Miarayon, Lapok,
Lirongan Talaandig Tribal Association or the Talaandig
Tribe, and claimed residence in Barangay Miarayon,
Talakag, Bukidnon. They noted that on July 25, 2003,
Certificate of Ancestral Domain Claim No. R-10-TAL-
0703-0010 was issued in favor of the Talaandig Tribe
through NCIP En Banc Resolution No. 08-2003. On
October 30, 2003, this Certificate of Ancestral Domain
Claim was formally awarded to the Talaandig Tribe by
former President Gloria-Macapagal-Arroyo. The
Certificate covered a total area of 11,105.5657 hectares
in Barangay Miarayon, Talakag, Bukidnon. 6 Petitioners
argued that as the case filed by respondents entailed a
dispute over the ancestral land of an ICC/IP, it fell within
the exclusive original jurisdiction of the NCIP. 7
On July 1, 2004, the NCIP filed a Motion to Refer
the Case to the Regional Hearing Office National
Commission on Indigenous Peoples (Motion to
Refer).As with petitioners who filed the Motion to
Dismiss, the NCIP insisted that the Regional Trial Court
did not have jurisdiction over the case. 8
On July 5, 2004, respondents filed a Motion to
Amend and Supplement the original Complaint into one
for injunction, damages, and other relief. Attached to
this Motion was the amended Complaint. 9
On July 30, 2004, petitioners filed their Opposition
to the Admission of the amended Complaint. On August
1, 2004, they also filed a Motion to Dismiss the
amended Complaint, insisting on the Regional Trial
Court's lack of jurisdiction. 10
On August 10, 2004, the Regional Trial Court
issued the Order granting the Motion to Amend and
Supplement. The same Order declared the NCIP's
Motion to Refer and petitioners' Motions to Dismiss
moot and academic. 11
On August 25, 2004, petitioners filed another
Motion to Refer and another Motion to Dismiss. 12
On September 14, 2004, respondents filed their
Opposition and a Motion for Judgment by Default. 13
On February 14, 2005, the Regional Trial Court
issued the Order denying the Motion to Refer, declaring
petitioners (except Macapayag and Brazil, who had
earlier filed an Answer) in default, and calling the case
for pre-trial (against Macapayag and Brazil) and for ex-
parte presentation of evidence (against the other
petitioners).The court also issued a Writ of Preliminary
Injunction subject to respondents' posting of a
P100,000.00 bond. 14
 Page 379 of 458
Aggrieved, petitioners filed a Petition
for Certiorari and Prohibition under Rule 65 of the 1997
Rules of Civil Procedure before the Court of Appeals.
In the Decision 15 dated August 17, 2006, the
Court of Appeals affirmed with modification (i.e.,lifted
the order of default) the Regional Trial Court's February
14, 2005 Order. In the Resolution dated July 4, 2007,
the Court of Appeals denied petitioners' Motion for
Reconsideration.
Hence, this Petition was filed.
Petitioners pray that the Court of Appeals' August
17, 2006 Decision and July 4, 2007 Resolution be
reversed and set aside and that a decision be rendered
declaring that the Regional Trial Court has no
jurisdiction, enjoining the Regional Trial Court from
proceeding, ordering that the case be referred to the
NCIP, and declaring void the Writ of Preliminary
Injunction issued by the Regional Trial Court.
Petitioners insist that the NCIP has exclusive and
original jurisdiction over the case as it involves the
ancestral domain of an ICC/IP. They also assail the
amendment of the Complaint from accion
reivindicatoria to one for injunction, saying that the
amendment was made merely to clothe the Regional
Trial Court with jurisdiction and to downplay how the
case is ultimately concerned with an ICC/IP's rights over
its ancestral domain. Likewise, they claim that the NCIP
should not be deprived of jurisdiction merely on account
of the Complaints' failure to allege that parties to the
case belong to ICCs/IPs. AHDacC
This case concerns the issue of which, between
the Regional Trial Court and the NCIP, has jurisdiction
over the case.
The case filed by respondents does not fall within
the scope of the NCIP's jurisdiction as laid out in
Section 66 16 of the Indigenous Peoples' Rights Act.
"Jurisdiction is the power and authority of [a]
tribunal to hear, try and decide a case." 17 Moreover,
"[j]urisdiction over a subject matter is conferred by
law." 18 It could not be conferred by any other source,
such as the parties' action or conduct and "any
judgment, order or resolution issued without it is
void." 19
The NCIP does not have jurisdiction over cases
where one of the parties does not belong to an
indigenous cultural community.
Section 38 of the Act created the NCIP to carry
out the policies set forth in the Indigenous Peoples
Rights Act. Per Section 38, the NCIP "shall be the
primary government agency responsible for the
formulation and implementation of policies, plans and
programs to promote and protect the rights and well-
being of the ICCs/IPs and the recognition of their
ancestral domains as well as their rights thereto."
Section 39 provides for the NCIP's mandate to "protect
and promote the interest and well-being of the ICCs/IPs
with due regard to their beliefs, customs, traditions and
institutions."
Chapter IX of the Indigenous Peoples' Rights
Act pertains to the quasi-judicial powers of the NCIP.
Thus, Section 69 20 expressly enables the NCIP to
exercise powers that are necessary incidents of this
 Page 380 of 458
quasi-judicial power: the promulgation of rules and
regulations; the administration of oaths; the power to
summon parties, issue subpoenas, and contempt
power; and the power to issue writs of injunction.
Section 68 21 enables the NCIP to issue writs of
execution. Section 67 22provides for the mode of appeal
from decisions of the NCIP. Section 70 23 bars inferior
courts from restraining proceedings in the NCIP.
Section 65 24 establishes a framework for resolving
disputes by recognizing the primacy of customary laws
and practices.
Section 66 specifically provides for the jurisdiction
of the NCIP:
SEC. 66. Jurisdiction of the NCIP.
The NCIP, through its regional offices, shall
have jurisdiction over all claims and disputes
involving rights of ICCs/IPs: Provided,
however, That no such dispute shall be
brought to the NCIP unless the parties have
exhausted all remedies provided under their
customary laws. For this purpose, a
certification shall be issued by the Council of
Elders/Leaders who participated in the attempt
to settle the dispute that the same has not
been resolved, which certification shall be a
condition precedent to the filing of a petition
with the NCIP.
Section 66's grant of jurisdiction is ostensibly cast
in absolute terms: "over all claims and disputes
involving rights of ICCs/IPs."cAaDHT
However, further into Section 66 are two clauses
that qualify the NCIP's jurisdiction. First is the proviso
that "no such dispute shall be brought to the NCIP
unless the parties have exhausted all remedies
provided under their customary laws." Second is that "a
certification ...issued by the Council of Elders/Leaders
who participated in the attempt to settle the dispute that
the same has not been resolved ...shall be a condition
precedent to the filing of a petition with the NCIP."
A cursory reading of these clauses shows that
they state a procedural requirement (i.e.,exhaustion of
remedies under customary law) and a formal
requirement (i.e.,certification issued by the Council of
Elders/Leaders) that must first be complied with before
the NCIP may take cognizance of a case. However,
these procedural and formal requirements are not all
there is to the qualifying clauses of Section 66.
II
Attention must be drawn to the proviso's choice of
words. To reiterate, the proviso reads: "Provided,
however, That no such dispute shall be brought to the
NCIP unless the parties have exhausted all remedies
provided under their customary laws."
The proviso uses the plural term "the parties." It
also uses the plural "their," which is a possessive
pronoun substituting for the noun phrase "the parties."
The use of the plural "the parties" necessarily
means that the requirement of exhaustion of remedies
provided under customary laws is a requirement that
isnot exclusive to a singular party.
The basic framework of adversarial litigation, as is
the case in our jurisdiction, is one that entails two (2)
parties: first, the one initiating or bringing the action
(i.e.,the plaintiff/complainant/claimant/petitioner);and the
 Page 381 of 458
one against whom an action is initiated or brought
(i.e.,the defendant/respondent).
Thus, for Section 66 to say that "the parties" must
exhaust all remedies is to say
that both plaintiff/complainant/claimant/petitioner, on
one hand, and defendant/respondent, on the other,
must comply. In a case brought by A against B, both A
and B must comply with the requirement.
Had Section 66 intended that compliance with the
requirement by only one party shall suffice, it should
have used the singular "a party," similar language like
"either party," or permissive language like "a/the
party/ies." Had Section 66 intended that the
requirement must be complied with by a specific party, it
should have used specific language like "the
petitioner."
One may point out that the plural "the parties" can
be taken to mean two or more of several petitioners, or
two or more of several respondents where there are
multiple petitioners and/or respondents. This
interpretation is untenable. Precisely, it would find
application only in situations where there are multiple
petitioners and/or respondents. To adopt this
interpretation would, therefore, be to unduly restrict and
to render inutile under general circumstances the
requirement of exhaustion of remedies.
III
The phrase "their customary laws" is significant in
two respects. First, "their" is a plural possessive
pronoun substituting for the noun phrase "the parties."
Second, "their" is a possessive determiner indicating
possession (or otherwise a sense of belonging) of the
words that follow it.
Section 66's use of the phrase "their customary
laws" is, therefore, to say that "the parties" have
customary laws. Considering what the phrase "the
parties" refers to (as explained previously),it follows
that both the petitioner(s) and the respondent(s) must
have or adhere to customary laws in order that a case
between them may fall under the jurisdiction of the
NCIP.
Section 3 (f) of the Indigenous Peoples' Rights
Act defines "customary laws" as follows:
Section 3. Definition of Terms. For purposes
of this Act, the following terms shall mean:
xxx xxx xxx
f) Customary Laws refer to a body of
written and/or unwritten rules,
usages, customs and
practices traditionally and
continually recognized, accepted
and observed by respective
ICCs/IPs[.] (Emphasis supplied)
It is evident that only those belonging to ICCs/IPs
have or adhere to customary laws. Since Section 66
refers to parties having customary laws, it follows that
the NCIP's jurisdiction, as defined in Section 66 of
the Indigenous Peoples' Rights Act, is limited to parties
who belong to ICCs/IPs. It excludes those who do not.
To hold otherwise is to summarily compel those
who do not belong to ICCs/IPs to adhere and subject
themselves to customary laws despite their not having
"traditionally and continually recognized, accepted[,]
 Page 382 of 458
and observed" 25 these laws. This runs afoul of fair play
and violates their right to due process.
Thus, Section 66's qualifiers as specifically
worded indicate that cases that fall under the
jurisdiction of the NCIP must be limited to those where
both parties belong to ICCs/IPs.
IV
The requirement that both parties must exhaust
all remedies provided under their customary laws
necessarily means that both parties must belong to the
same ICC/IP. HCaDIS
The word "respective" denotes "belonging or
relating to each one of the people or things that have
been mentioned." 26
Section 3 (f) of the Indigenous Peoples' Rights
Act conceives of "customary laws" as "refer[ring] to a
body of . . . rules, usages, customs[,] and practices
traditionally and continually recognized, accepted[,] and
observed by respective ICCs/IPs." Thus, inherent in
the Act's conception of "customary laws" is a recognition
that each ICC/IP has a set of continually recognized,
accepted, and observed rules, usages, customs, and
practices that is distinct and separate from those of
other ICCs/IPs.
The recognition that ICCs/IPs have distinct
customary laws is similarly a recognition that each
ICC/IP has a distinct dispute settlement mechanism
pursuant to their respective customary laws. To belong
to a specific ICC/IP is, therefore, to say that one
adheres not only to a specific set of customary laws but
also to a specific dispute settlement mechanism
applicable to that ICC/IP.
Thus, much as interpreting Section 66 as
encompassing disputes where a party does not belong
to an ICC/IP runs afoul of fair play and violates the (non-
ICC/IP member's) right to due process, so does
interpreting Section 66 as encompassing disputes
where the parties belong to different ICCs/IPs. As with
the former, to make such a conclusion is to summarily
compel a party who adheres to a specific set of
customary laws and dispute settlement mechanisms to
adhere and be subjected to another set of customary
laws.
Rule IV, Section 14 of NCIP Administrative
Circular No. 1-03, the Rules on Pleadings, Practice and
Procedure Before the NCIP (NCIP Rules) provides for
situations "[w]here one of the parties . . . does not
belong to the same IP/IC Community" as an exception
to the requirement of a certification issued by the
Council of Elders/Leaders who participated in the
attempt to settle the dispute. This is a recognition that
the Indigenous Peoples' Rights Act does not provide a
dispute settlement mechanism where the parties belong
to different ICCs/IPs. However, even as Rule IV,
Section 14 of the NCIP Rules does away with the
certification requirement, it cannot serve to extend the
NCIP's jurisdiction to disputes involving parties from
different ICCs/IPs.
V
Extending the NCIP's jurisdiction to those who do
not belong to an indigenous cultural community or are
 Page 383 of 458
not indigenous peoples finds no support elsewhere in
the Indigenous Peoples Rights Act.
Section 66 is the sole provision of the Indigenous
Peoples Rights Act that spells out the NCIP's
jurisdiction in respect of the exercise of its quasi-
judicial power. aCIHcD
This court has defined quasi-judicial power as
follows:
Quasi-judicial or administrative
adjudicatory power on the other hand is the
power of the administrative agency to
adjudicate the rights of persons before it.It 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. Since
rights of specific persons are affected it is
elementary that in the proper exercise of quasi-
judicial power due process must be observed
in the conduct of the
proceedings. 27 (Emphasis supplied)
Judicial power, in turn, has been defined
in Macasiano v. National Housing Authority,28 as the
"right to determine actual controversies arising between
adverse litigants." 29 In Lopez v. Roxas:30
Judicial power is the authority to settle
justiciable controversies or disputes involving
rights that are enforceable and demandable
before the courts of justice or the redress of
wrongs for violations of such rights. 31
It is true that the other provisions of the
Indigenous Peoples Rights Act pertain to the
competencies of the NCIP. However, a reading of these
provisions will show that they do not extend the NCIP's
jurisdiction, in the exercise of its quasi-judicial
power,to those who do not belong to ICCs/IPs.
Section 38 32 creates the NCIP and states its
purpose as "the primary government agency
responsible for the formulation and implementation
of policies, plans and programs to promote and
protect the rights and well-being of the ICCs/IPs and the
recognition of their ancestral domains as well as the
rights thereto."
Section 39 33 articulates in broad language the
mandate of the NCIP to "protect and promote the
interest and well-being of the ICCs/IPs with due regard
to their beliefs, customs, traditions and institutions."
Section 44 34 provides that the NCIP shall have
the "powers, jurisdiction and function" provided therein
in order that it may "accomplish its mandate." Section
44 lists 17 of such "powers, jurisdiction and
function":
AHCETa
 Page 384 of 458
(1) Item (a) identifies the NCIP "as the primary
government agency through which
ICCs/IPs can seek government
assistance and as the medium, through
which such assistance may be extended."
(2) Item (b) authorizes the NCIP "[t]o review and
assess the conditions of ICCs/IPs
to propose relevant laws and policies[,]"
a function which is evidently not (quasi-
)judicial in nature.
(3) Item (c) refers to the "formulat[ion] and
implement[ation] [of] policies, plans,
programs and projects[.]"
(4) Item (d) permits the NCIP to avail itself of "the
services and support" of experts and
consultants,whether from government or
the private sector.
(5) Item (e) places in the NCIP the authority "[t]o
issue certificate[s] of ancestral
land/domain title."
(6) Item (f) enables the NCIP "to enter
into contracts, agreements, or
arrangement[s] ...and ...to obtain loans."
(7) Item (g) enables the NCIP "[t]o negotiate
for funds and to accept grants, donations,
gifts[,] and/or properties ...and administer
the same."
(8) Item (h) makes the NCIP the "coordinat[or] [of]
development programs and projects."
(9) Item (i) enables the NCIP "[t]o convene
periodic conventions or assemblies of
IPs to review, assess as well as propose
policies or plans."
(10) Item (j) spells out the NCIP's advisory and
reportorial duties vis--vis the President of
the Philippines, i.e.,"[t]o advise the
President of the Philippines on all matters
relating to the ICCs/IPs and to submit
within sixty (60) days after the close of
each calendar year, a report of its
operations and achievements."
(11) Item (k) allows the NCIP "[t]o submit to
Congress appropriate legislative
proposals."
(12) Item (l) spells out the budgetary duty of the
NCIP, i.e.,"[t]o prepare and submit the
appropriate budget to the Office of the
President."
(13) Item (m) relates to the "issu[ance] [of]
...certification[s] as a pre-condition to the
grant of ...authority for the disposition,
utilization, management[,] and
appropriation by any private individual,
corporate entity or any government
agency, corporation or subdivision
thereof on any part or portion of the
ancestral domain[.]"
(14) Item (n) provides for the NCIP's appellate
power, i.e., "[t]o decide all appeals from
the decisions and acts of all the various
offices within the Commission."
 Page 385 of 458
(15) Item (o) provides for the NCIP's rule-making
power, i.e.,"[t]o promulgate the
necessary rules and regulations for the
implementation of this Act."
(16) Item (p) is a catch-all provision enabling the
NCIP "[t]o exercise such other powers and
functions as may be directed by the
President of the Republic of the
Philippines."
(17) Item (q) allows the NCIP "[t]o represent the
Philippine ICCs/IPs in all international
conferences and conventions dealing
with indigenous peoples and other related
concerns."
None but two (2) of these 17 "powers, jurisdiction
and function[s]" are directly related to the NCIP's
exercise of its quasi-judicial power. These two (2) items
are item (n) on the NCIP's appellate power and
Item (o) on the NCIP's rule-making power which
may be read vis--vis Section 69's investiture upon the
NCIP of the power "[t]o promulgate rules and
regulations governing the hearing and disposition of
cases filed before it as well as those pertaining to its
internal functions and such rules and regulations as
may be necessary to carry out the purposes of this Act."
Neither of these two states that the NCIP's jurisdiction
extends to disputes where a party does not belong to an
ICC/IP or to those where the parties belong to different
ICCs/IPs.
Item (m) enables the NCIP to exercise authority
over those who not belong to ICCs/IPs, i.e.,"any private
individual, corporate entity or any government agency,
corporation or subdivision thereof." However, item (m)
refers specifically to the "issuance of certification[s] as a
pre-condition to the grant of ...authority for the
disposition, utilization, management[,] and appropriation
...on any part or portion of the ancestral domain[.]" It
does not refer to the "exercise of discretion in a judicial
nature" 35 and the "determin[ation] [of] actual
controversies arising between adverse litigants." 36
VI
Reliance on the Indigenous Peoples Rights
Act's Implementing Rules and Regulations and the
NCIP's rules in support of the assertion that the NCIP
has jurisdiction is misplaced. In extending the NCIP's
jurisdiction, these rules contradict statutory provisions.
Rule IX, Section 1 of the Indigenous Peoples
Rights Act's Implementing Rules and
Regulations reads: ScHADI
RULE IX. JURISDICTION AND
PROCEDURES FOR
ENFORCEMENT OF RIGHTS
Section 1. Primacy of Customary Law. All
conflicts related to ancestral domains and
lands, involving ICCs/IPs, such as but not
limited to conflicting claims and boundary
disputes, shall be resolved by the concerned
parties through the application of customary
laws in the area where the disputed ancestral
domain or land is located.
All conflicts related to the ancestral
domains or lands where one of the parties is a
non-ICC/IP or where the dispute could not be
resolved through customary law shall be heard
and adjudicated in accordance with the Rules
 Page 386 of 458

on Pleadings, Practice and Procedures Before d. Actions for

the NCIP to be adopted hereafter. redemption/reconveyance
under Section 8(b) of R.A.
All decisions of the NCIP may be
8371; and
brought on Appeal by Petition for Review to the
Court of Appeals within fifteen (15) days from e. Such other cases analogous to
receipt of the Order or Decision. (Emphasis the foregoing.
supplied) (2) Original Jurisdiction of the Regional
Rule III, Section 5 of the NCIP Rules, NCIP Hearing Officer:
Administrative Circular No. 1-03 reads: a. Cases affecting property rights,
Sec. 5. Jurisdiction of the NCIP. The NCIP claims of ownership,
through its Regional Hearing Offices shall hereditary succession, and
exercise jurisdiction over all claims and settlement of land disputes,
disputes involving rights of ICCs/IPsand all between and among
cases pertaining to the implementation, ICCs/IPs that have not been
enforcement, and interpretation of R.A. 8371, settled under customary
including but not limited to the following: laws; and
b. Actions for damages arising out
(1) Original and Exclusive Jurisdiction of
of any violation of Republic
the Regional Hearing Office (RHO):
Act No. 8371.
a. Cases involving disputes and
(3) Exclusive and Original Jurisdiction of
controversies over ancestral
the Commission:
lands/domains of ICCs/IPs;
a. Petition for cancellation of
b. Cases involving violations of the
Certificate of Ancestral
requirement of free and prior
Domain Titles/Certificate of
and informed consent of
Ancestral Land Titles
ICCs/IPs;
(CADTs/CALTs) alleged to
c. Actions for enforcement of have been fraudulently
decisions of ICCs/IPs acquired by, and issued to,
involving violations of any person or community as
customary laws or provided for under Section
desecration of ceremonial 54 of R.A. 8371. Provided
sites, sacred places, or that such action is filed
rituals; within one (1) year from the
date of registration.
(Emphasis supplied)
 Page 387 of 458
Apart from these, Rule IV, Sections 13 and 14 of
the NCIP Rules provide:
Section 13. Certification to File Action. Upon
the request of the proper party, members of the
indigenous dispute settlement group or council
of elders shall likewise issue a certification to
file action before the NCIP. In giving due
regard to customary laws, the certification may
be in any form so long as it states in substance
the failure of settlement notwithstanding the
efforts made under customary law or traditional
practices.
Section 14. Exceptions. The certification
shall not be required in the following cases:
a. Where one of the parties is a public or private
corporation, partnership, association or
juridical person or a public officer or
employee and the dispute is in connection
with the performance of his official
functions;
b. Where one of the parties is non-IP/ICC or
does not belong to the same IP/IC
Community, except when he voluntarily
submits to the jurisdiction of the Council of
Elders/Leaders;
c. Where the relief sought for in the complaint or
petition seeks to prevent any grave,
imminent and irreparable damage or
injury that may result if not acted upon
immediately; and
d. Where the Council of Elders/Leaders refuse to
issue the necessary certification without
justifiable reasons. (Emphasis supplied)
These provisions support the conclusion that the
NCIP has jurisdiction even over cases where a party
does not belong to an ICC/IP.
However, it is a basic principle in administrative
law that an administrative rule must conform to and not
contradict the provision of an enabling law. In Fort
Bonifacio Development Corporation v. Commissioner of
Internal Revenue:37
As mandated by Article 7 of the Civil
Code, 38 an administrative rule or regulation
cannot contravene the law on which it is based
....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 objects and purposes of the law, and
should not be in contradiction to, but in
conformity with, the standards prescribed by
law.
To be valid, an administrative rule or
regulation must conform, not contradict, the
provisions of the enabling law. An
implementing rule or regulation cannot modify,
expand, or subtract from the law it is intended
to implement. Any rule that is not consistent
with the statute itself is null and void.
aICcHA
While administrative agencies ...may
issue regulations to implement statutes, they
are without authority to limit the scope of the
statute to less than what it provides, or extend
or expand the statute beyond its terms, or in
any way modify explicit provisions of the law.
 Page 388 of 458
Indeed, a quasi-judicial body or an
administrative agency for that matter cannot
amend an act of Congress. Hence, in case of a
discrepancy between the basic law and an
interpretative or administrative ruling, the basic
law prevails. 39
The Indigenous Peoples Rights Act does not
extend the NCIP's jurisdiction to disputes involving
those who do not belong to ICCs/IPs. The precise
wording of Section 66 and the silence of the remainder
of the Indigenous Peoples Rights Act on extending the
NCIP's jurisdiction bear this out.
Likewise, "[j]urisdiction over a subject matter is
conferred by law." 40 No amount of administrative rule-
making can vest jurisdiction where
neither Constitutionnor statute vests it.
Thus, Rule IX, Section 1 of the Indigenous
Peoples Rights Act's Implementing Rules and
Regulations, Rule III, Section 5, and Rule IV, Sections
13 and 14 of theNCIP Rules, insofar as they extend the
NCIP's jurisdiction to disputes where a party does not
belong to an ICC/IP, must be deemed null and void.
They are inconsistent with the Indigenous Peoples
Rights Act in that they modify and expand the NCIP's
jurisdiction as spelled out in Section 66. In light of this
discrepancy between a basic law and administrative
rules, the basic law the Indigenous Peoples Rights
Act must prevail.
VII
In sum, the requirements for the proper exercise
of the NCIP's jurisdiction over a dispute, pursuant to
Section 66 of the Indigenous Peoples Rights Act, are as
follows:
(1) The claim or dispute must involve the rights of
ICCs/IPs;
(2) Both parties must belong to the same ICC/IP;
(3) These parties must have exhausted all
remedies provided under their ICC/IP's
customary laws; and
(4) Compliance with this requirement of
exhausting remedies under customary laws
must be evidenced by a certification issued
by the Council of Elders/Leaders who
participated in the attempt to settle the
dispute, to the effect that the dispute has
not been resolved.
In this case, it is not disputed that respondents do
not belong to an ICC/IP. Their sole interest is in their
supposed ownership and possession of land which, in
turn, "appears to be located within the ancestral domain
of the Talaandig tribe." 41 Thus, the National
Commission on Indigenous Peoples may not exercise
jurisdiction over the case filed by respondents.
VII
Customary norms are as varied as there are
tribes within ethnolinguistic groups. If we are to animate
the spirit of both the Constitution and the Indigenous
Peoples Rights Act, we should not stereotype all
cultures as homogenous or incapable of dynamic
interfaces with each other. Customary law is a
descriptive label which should acknowledge that each
tribe lived through its own history and endogenously
 Page 389 of 458

emerged their own set of norms reflecting their values FIRST DIVISION
and lifeways. To say that the customary norms of the
Kalinga are the same as those of the Subanen betrays [G.R. No. 193964. December 2, 2015.]
the same colonial mindset that marginalized what our
colonizers called as "Non-Christian Tribes" in the distant
ENGINEER BEN Y. LIM, RBL FISHING
past.
CORPORATION, PALAWAN
Neither should we straightjacket any culture as AQUACULTURE CORPORATION, and
incapable of dynamic interfaces or accommodation with PENINSULA SHIPYARD
other cultures. Various groups of indigenous CORPORATION,petitioners, vs. HON.
communities are able to work with the entirety of our SULPICIO G. GAMOSA, Officer-in-Charge,
legal system in appropriate cases. This case, which NCIP REGIONAL HEARING OFFICE,
involves a party not of their tribe, is certainly one such REGION IV and TAGBANUA INDIGENOUS
case. CULTURAL COMMUNITY OF BARANGAY
ACCORDINGLY,I vote to DENY the Petition for BUENAVISTA, CORON, PALAWAN, as
Review on Certiorari.The assailed Decision dated represented by FERNANDO P. AGUIDO,
August 17, 2006 and Resolution dated July 4, 2007 of ERNESTO CINCO, BOBENCIO
the Court of Appeals in CA-G.R. SP No. 00204-MIN MOSQUERA, JURRY CARPIANO, VICTOR
must be AFFIRMED. EH
BALBUTAN, NORDITO ALBERTO, EDENG
PESRO, CLAUDINA BAQUID, NONITA
(Unduran v. Aberasturi, G.R. No. 181284, [October 20,
|||
SALVA, and NANCHITA
2015]) ALBERTO, respondents.

DECISION

PEREZ, J :p

While we recognize the rights of our Indigenous

Peoples (IPs) and Indigenous Cultural Communities
(ICCs) as determined in the Indigenous Peoples Rights
Act(IPRA), we delineate, in this case, the jurisdiction of
 Page 390 of 458
the National Commission on Indigenous Peoples (NCIP)
as provided in Section 66 1 of the IPRA.
Assailed in this Petition for Review
on Certiorari under Rule 45 of the Rules of Court is the
Decision 2 of the Court of Appeals in CA-G.R. SP No.
98268 which denied the petition for certiorari of
petitioners Engr. Ben Y. Lim, RBL Fishing Corporation,
Palawan Aquaculture Corporation, and Peninsula
Shipyard Corporation. Affirmed, then, is the
Resolution 3 of the NCIP in NCIP Case No. RHO 4-01-
2006.
Respondent Tagbanua Indigenous Cultural
Community of Barangay Buenavista, Coron, Palawan,
represented by individual respondents Fernando P.
Aguido, Ernesto Cinco, Bobencio Mosquera, Jurry
Carpiano, Victor Balbutan, Nordito Alberto, Edeng
Pesro, Claudina Baquid, Nonita Salva, and Nanchita
Alberto, filed a petition before the NCIP against
petitioners for "Violation of Rights to Free and Prior and
Informed Consent (FPIC) and Unauthorized and
Unlawful Intrusion with Prayer for the Issuance of
Preliminary Injunction and Temporary Restraining
Order." 4
Thereafter, the NCIP issued an Order dated 20
October 2006 and directing the issuance and service of
summons, and setting the preliminary conference and
initial hearing on the prayer for the issuance of a
Temporary Restraining Order on 22 November 2006
and the conduct of an ocular inspection of the subject
area on the following day, 23 November 2006.
Despite a motion to dismiss being a prohibited
pleading under the NCIP Administrative Circular No. 1-
03, petitioners moved to dismiss the petition on the
following grounds:
1) Lack of jurisdiction over the subject matter of
the petition because [petitioners] are not
members of the Indigenous Cultural
Communities/Indigenous Peoples;
2) Lack of jurisdiction over the persons of
[petitioners], because summons were
served by mail rather than by personal
service;
3) Lack of cause of action, because there is no
allegation in the petition or document
attached thereto showing that
[respondents] were indeed authorized by
the purported Tagbanua Indigenous
Cultural Community, and no Certificate of
Ancestral Domain Title has as yet been
issued over the claim; [and]
4) Violation of the rule against forum shopping
because [respondents] have already filed
criminal cases also based on the same
alleged acts before the Municipal Trial
Court of Coron-Busuanga. 5
Not contented with their filing of a Motion to
Dismiss, petitioners, by way of special appearance, filed
a Motion to Suspend Proceedings, arguing that
"considering the nature of the issues raised [in the
Motion to Dismiss], particularly, the issue on jurisdiction,
it is imperative that the [Motion to Dismiss] be resolved
first before other proceedings could be conducted in the
instant case." 6
On 30 November 2006, the NCIP issued a
Resolution 7 denying the motion to dismiss. While
 Page 391 of 458

affirming that a Motion to Dismiss is prohibited under juridical person or a public officer or employee and the
Section 29 of the Rules on Pleadings, Practice and dispute is in connection with the performance of his
Procedure before the NCIP, the NCIP squarely ruled official functions; and (2) a non-IP/ICC or does not
that: (1) it had jurisdiction over the petition filed by belong to the same IP/ICC. In all, the Court of Appeals
respondents; (2) it acquired jurisdiction over the persons affirmed the NCIP's resolution that when a claim or
of petitioners; (3) it was premature to rule on the issue dispute involves rights of the IPs/ICCs, the NCIP has
of lack of cause of action; and (4) respondents did not jurisdiction over the case regardless of whether the
violate the rule on forum shopping. 8 opposing party is a non-IP/ICC.
After the denial of their motion for Adamant, petitioners appeal to us by a petition for
reconsideration, petitioners filed a petition review on certiorari, echoing the same issues raised
for certiorari before the appellate court, seeking to before the appellate court:
reverse, annul and set aside the NCIP's twin resolutions I. WHETHER OR NOT THE HONORABLE
for being tainted with grave abuse of discretion COURT OF APPEALS SERIOUSLY
amounting to lack or excess of jurisdiction. ERRED IN HOLDING THAT . . . THE
As previously stated, the Court of Appeals denied [NCIP HAS] JURISDICTION OVER THE
the petition for certiorari and affirmed the resolutions of SUBJECT MATTER OF THE PETITION . .
the NCIP. The appellate court echoed the NCIP's .;
stance that from the wording of Section 66 of the IPRA, II. WHETHER OR NOT THE HONORABLE
the NCIP was bestowed with an all-encompassing grant COURT OF APPEALS COMMITTED
of jurisdiction over all claims and disputes involving SERIOUS ERRORS IN HOLDING THAT . .
rights of ICCs/IPs and that the requirement in the . THE [NCIP] ACQUIRED JURISDICTION
proviso contained in the section, i.e., obtaining a OVER THE PERSONS OF THE
certification from the Council of Elders/Leaders that the PETITIONERS; and
parties had exhausted all remedies provided under their
customary law prior to the filing of an action, applied III. WHETHER OR NOT THE HONORABLE
only to instances where both parties were members of COURT OF APPEALS GRAVELY ERRED
an ICC/IP. IN HOLDING THAT . . . RESPONDENTS
HAVE CAUSE/S OF ACTION AGAINST
The NCIP also cited Section 14 of its own Rules THE PETITIONERS. 9
on Pleadings, Practice and Procedure Before the NCIP
which provides exceptions to the requirement of Notably, petitioners have dropped their issue that
exhaustion of administrative remedies under customary respondents are guilty of forum shopping.
laws, such as where one of the parties is: (1) either a
public or private corporation, partnership, association or
 Page 392 of 458
At the outset, we note that none of the petitioners,
the NCIP, and the appellate court have proffered an
argument, and opined, on the specific nature of the
jurisdiction of the NCIP, whether such is primary and
concurrent with courts of general jurisdiction, and/or
original and exclusive, to the exclusion of regular courts.
In the main, petitioners argue that the NCIP does
not have jurisdiction over the petition filed by
respondents because they (petitioners) are non-
IPs/ICCs. Essentially, they interpret the jurisdiction of
the NCIP as limited to claims and disputes involving
rights of IPs/ICCs where both opposing parties are
IPs/ICCs.
On the other hand, the NCIP and the appellate
court rely mainly on the wording of Section 66 of
the IPRA and the averred purpose for the law's
enactment, "to fulfill the constitutional mandate of
protecting the rights of the indigenous cultural
communities to their ancestral land and to correct a
grave historical injustice to our indigenous
people." 10 According to the two tribunals, "[a]ny
interpretation that would restrict the applicability of
the IPRA law exclusively to its members would certainly
leave them open to oppression and exploitation by
outsiders." 11 The NCIP and the appellate court maintain
that Section 66 does not distinguish between a dispute
among members of ICCs/IPs and a dispute involving
ICC/IP members and non-members. Thus, there is no
reason to draw a distinction and limit the NCIP's
jurisdiction over "all claims and disputes involving rights
of ICCs/IPs." 12 Effectively, even without asseverating it,
the two tribunals interpret the statutory grant of
jurisdiction to the NCIP as primary, original and
exclusive, in all cases and instances where the claim or
dispute involves rights of IPs/ICCs, without regard to
whether one of the parties is non-IP/ICC.
In addition, the NCIP promulgated its rules and
regulations such as NCIP Administrative Circular No. 1-
03 dated 9 April 2003, known as the "Rules on
Pleadings, Practice and Procedure Before the NCIP,"
and Administrative Circular No. 1, Series of 2014,
known as "The 2014 Revised Rules of Procedure
before the National Commission on Indigenous
Peoples." Sections 5 and 1, respectively of both the
2003 and 2014 Administrative Circular, Rule III, provide
for the jurisdiction of the NCIP Regional Hearing Officer
(RHO), thus:
Jurisdiction of the NCIP. The NCIP
through its Regional Hearing Offices shall
exercise jurisdiction over all claims and
disputes involving rights of ICCs/IPs and all
cases pertaining to the implementation,
enforcement, and interpretation of R.A. 8371,
including but not limited to the following:
(1) Original and Exclusive Jurisdiction
of the Regional Hearing Office
(RHO):
a. Cases involving disputes and
controversies over ancestral
lands/domains of ICCs/IPs;
b. Cases involving violations of the
requirement of free and prior
and informed consent of
ICCs/IPs;
c. Actions for enforcement of
decisions of ICCs/IPs
 Page 393 of 458
involving violations of
customary laws or
desecration of ceremonial
sites, sacred places, or
rituals;
d. Actions for
redemption/reconveyance
under Section 8 (b) of R.A.
8371; and
Such other cases analogous to the
foregoing.
We first dispose of the primordial question on the
nature and scope of the NCIP's jurisdiction as provided
in the IPRA. Specifically, the definitive issue herein boils
down to whether the NCIP's jurisdiction is limited to
cases where both parties are ICCs/IPs or primary and
concurrent with regular courts, and/or original and
exclusive, to the exclusion of the regular courts, on all
matters involving rights of ICCs/IPs.
We are thus impelled to discuss jurisdiction and
the different classes thereof.
Jurisdiction is the power and authority, conferred
by the Constitution and by statute, to hear and decide a
case. 13 The authority to decide a cause at all is what
makes up jurisdiction.
Section 66 of the IPRA, the law conferring
jurisdiction on the NCIP, reads:
Sec. 66. Jurisdiction of the NCIP.
The NCIP, through its regional offices,
shall have jurisdiction over all claims and
disputes involving rights of ICCs/IPs:
Provided, however, That no such dispute
shall be brought to the NCIP unless the
parties have exhausted all remedies
provided under their customary laws. For
this purpose, a certification shall be issued by
the Council of Elders/Leaders who participated
in the attempt to settle the dispute that the
same has not been resolved, which
certification shall be a condition precedent to
the filing of a petition with the NCIP. (Emphasis
supplied).
The conferment of such jurisdiction is consistent
with state policy averred in the IPRA which recognizes
and promotes all the rights of ICCs/IPs within the
framework of the constitution. Such is likewise reflected
in the mandate of the NCIP to "protect and promote the
interest and wellbeing of the ICCs/IPs with due regard
to their beliefs, customs, traditions and[,] institutions." 14
In connection thereto, from Bank of Commerce v.
Planters Development Bank, 15 we learned that the
provisions of the enabling statute are the yardsticks by
which the Court would measure the quantum of quasi-
judicial powers an administrative agency may exercise,
as defined in the enabling act of such agency.
Plainly, the NCIP is the "primary government
agency responsible for the formulation and
implementation of policies, plans and programs to
promote and protect the rights and well-being of the
ICCs/IPs and the recognition of their ancestral domains
as well as their rights thereto." 16 Nonetheless, the
creation of such government agency does not per
se grant it primary and/or exclusive and original
jurisdiction, excluding the regular courts from taking
 Page 394 of 458
cognizance and exercising jurisdiction over cases which
may involve rights of ICCs/IPs.
Recently, in Unduran, et al. v. Aberasturi, et
al. 17 we ruled that Section 66 of the IPRA does not
endow the NCIP with primary and/or exclusive and
original jurisdiction over all claims and disputes
involving rights of ICCs/IPs. Based on the qualifying
proviso, we held that the NCIP's jurisdiction over such
claims and disputes occur only when they arise
between or among parties belonging to the same
ICC/IP. Since two of the defendants therein were not
IPs/ICCs, the regular courts had jurisdiction over the
complaint in that case.
In his concurring opinion in Unduran, Justice Jose
P. Perez submits that the jurisdiction of the NCIP ought
to be definitively drawn to settle doubts that still linger
due to the implicit affirmation done in The City
Government of Baguio City, et al. v. Atty. Masweng, et
al. 18 of the NCIP's jurisdiction over cases where one of
the parties are not ICCs/IPs.
In Unduran and as in this case, we are hard
pressed to declare a primary and/or exclusive and
original grant of jurisdiction to the NCIP over all claims
and disputes involving rights of ICCs/IPs where there is
no clear intendment by the legislature.
Significantly, the language of Section 66 is only
clear on the nature of the claim and dispute as involving
rights of ICCs/IPs, but ambiguous and indefinite in other
respects. While using the word "all" to quantify the
number of the "claims and disputes" as covering each
and every claim and dispute involving rights of
ICCs/IPs, Section 66 unmistakably contains a proviso,
which on its face restrains or limits the initial generality
of the grant of jurisdiction.
Unduran lists the elements of the grant of
jurisdiction to the NCIP: (1) the claim and dispute
involve the right of ICCs/IPs; and (2) both parties have
exhausted all remedies provided under their customary
laws. Both elements must be present prior to the
invocation and exercise of the NCIP's jurisdiction.
Thus, despite the language that the NCIP shall
have jurisdiction over all claims and disputes involving
rights of ICCs/IPs, we cannot be confined to that first
alone and therefrom deduce primary sole NCIP
jurisdiction over all ICCs/IPs claims and disputes to the
exclusion of the regular courts. If it were the intention
of the legislative that: (1) the NCIP exercise primary
jurisdiction over, and/or (2) the regular courts be
excluded from taking cognizance of, claims and
disputes involving rights of ICCs/IPs, the legislature
could have easily done so as in other instances
conferring primary, and original and exclusive
jurisdiction to a specific administrative body. We will
revert to this point shortly but find it pertinent to first
discuss the classes of jurisdiction.
Primary jurisdiction, also known as the doctrine of
Prior Resort, is the power and authority vested by the
Constitution or by statute upon an administrative body
to act upon a matter by virtue of its specific
competence. 19 The doctrine of primary jurisdiction
prevents the court from arrogating unto itself the
authority to resolve a controversy which falls under the
jurisdiction of a tribunal possessed with special
competence. 20 In one occasion, we have held that
regular courts cannot or should not determine a
 Page 395 of 458

controversy involving a question which is within the as opposed to original and exclusive jurisdiction vested
jurisdiction of the administrative tribunal before the by both the Constitution and statutes 26 on the
question is resolved by the administrative tribunal, Ombudsman concurrent, albeit primary, with the
where the question demands the exercise of sound Department of Justice.
administrative discretion requiring the special Paragraph (1) of Section 13, Article XI of the
knowledge, experience, and services of the Constitution, viz.:
administrative tribunal to determine technical and
intricate matters of fact, and a uniformity of ruling is SEC. 13. The Office of the Ombudsman
essential to comply with the premises of the regulatory shall have the following powers, functions, and
duties:
statute administered. 21 The objective of the doctrine of
primary jurisdiction is to guide a court in determining 1. Investigate on its own,
whether it should refrain from exercising its jurisdiction or on complaint by any person,
until after an administrative agency has determined any act or omission of any public
some question arising in the proceeding before the official, employee, office or
agency, when such act or
court. 22
omission appears to be illegal,
Additionally, primary jurisdiction does not unjust, improper, or inefficient.
necessarily denote exclusive jurisdiction. 23 It applies does not exclude other
where a claim is originally cognizable in the courts and government agencies tasked by
comes into play whenever enforcement of the claim law to investigate and prosecute
requires the resolution of issues which, under a cases involving public officials. If
regulatory scheme, has been placed within the special it were the intention of the
competence of an administrative body; in such case, the framers of the 1987 Constitution,
judicial process is suspended pending referral of such they would have expressly
issues to the administrative body for its view. 24 In some declared the exclusive
instances, the Constitution and statutes grant the conferment of the power to the
administrative body primary jurisdiction, concurrent with Ombudsman. Instead, paragraph
(8) of the same Section 13 of the
either similarly authorized government agencies or the
Constitution provides:
regular courts, such as the distinct kinds of jurisdiction
bestowed by the Constitution and statutes on the (8) Promulgate its rules of
Ombudsman. procedure and exercise such
other powers or perform such
The case of Honasan II v. The Panel of functions or duties as may be
Investigating Prosecutors of the Department of provided by law Accordingly,
Justice 25 delineated primary and concurrent jurisdiction Congress enacted R.A. 6770,
 Page 396 of 458

otherwise known as "The of the Ombudsman charging any

Ombudsman Act of 1989." public officer or employee
Section 15 thereof provides: including those in government-
owned or controlled corporations,
Sec. 15. Powers, Functions and Duties.
with an act or omission alleged to
The Office of the Ombudsman shall have
be illegal, unjust, improper or
the following powers, functions and duties:
inefficient is an Ombudsman
(1) Investigate and case. Such a complaint may be
prosecute on its own or on the subject of criminal or
complaint by any person, any act administrative proceedings, or
or omission of any public officer both.
or employee, office or agency,
For purposes of
when such act or omission
investigation and prosecution,
appears to be illegal, unjust,
Ombudsman cases involving
improper or inefficient. It has
criminal offenses may be
primary jurisdiction over cases
subdivided into two classes, to
cognizable by the
wit: (1) those cognizable by the
Sandiganbayan and, in the
Sandiganbayan, and (2) those
exercise of this primary
falling under the jurisdiction of the
jurisdiction, it may take over, at
regular courts. The difference
any stage, from any investigatory
between the two, aside from the
agency of the government, the
category of the courts wherein
investigation of such cases.
they are filed, is on the authority
Pursuant to the authority to investigate as distinguished
given to the Ombudsman by the from the authority to prosecute,
Constitution and the Ombudsman such cases.
Act of 1989 to lay down its own
The power to investigate
rules and procedure, the Office of
or conduct a preliminary
the Ombudsman promulgated
investigation on any Ombudsman
Administrative Order No. 8, dated
case may be exercised by an
November 8, 1990,
investigator or prosecutor of the
entitled, Clarifying and Modifying
Office of the Ombudsman, or by
Certain Rules of Procedure of the
any Provincial or City Prosecutor
Ombudsman, to wit:
or their assistance, either in their
A complaint filed in or regular capacities or as deputized
taken cognizance of by the Office Ombudsman prosecutors.
 Page 397 of 458
The prosecution of cases
cognizable by the
Sandiganbayan shall be under
the direct exclusive control and
supervision of the Office of the
Ombudsman. In cases
cognizable by the regular Courts,
the control and supervision by the
Office of the Ombudsman is only
in Ombudsman cases in the
sense defined above. The law
recognizes a concurrence of
jurisdiction between the Office of
the Ombudsman and other
investigative agencies of the
government in the prosecution of
cases cognizable by regular
courts.
It is noteworthy that as early as 1990,
the Ombudsman had properly differentiated
the authority to investigate cases from the
authority to prosecute cases. It is on this
note that the Court will first dwell on the
nature or extent of the authority of the
Ombudsman to investigate cases. Whence,
focus is directed to the second sentence of
paragraph (1), Section 15 of the
Ombudsman Act which specifically
provides that the Ombudsman has primary
jurisdiction over cases cognizable by the
Sandiganbayan, and, in the exercise of this
primary jurisdiction, it may take over, at any
stage, from any investigating agency of the
government, the investigation of such
cases.
That the power of the Ombudsman to
investigate offenses involving public
officers or employees is not exclusive but
is concurrent with other similarly
authorized agencies of the government
such as the provincial, city and state
prosecutors has long been settled in
several decisions of the Court. (Emphasis
supplied)
In Cojuangco, Jr. v. Presidential
Commission on Good Government, decided in
1990, the Court expressly declared:
A reading of the foregoing provision of
the Constitution does not show that the power
of investigation including preliminary
investigation vested on the Ombudsman is
exclusive.
Interpreting the primary jurisdiction of the
Ombudsman under Section 15 (1) of the
Ombudsman Act, the Court held in said case:
Under Section 15 (1) of Republic Act
No. 6770 aforecited, the Ombudsman has
primary jurisdiction over cases cognizable by
the Sandiganbayan so that it may take over at
any stage from any investigatory agency of the
government, the investigation of such
cases. The authority of the Ombudsman to
investigate offenses involving public officers or
employees is not exclusive but is concurrent
with other similarly authorized agencies of the
government. Such investigatory agencies
referred to include the PCGG and the
provincial and city prosecutors and their
assistants, the state prosecutors and the
 Page 398 of 458
judges of the municipal trial courts and
municipal circuit trial court.
In other words the provision of the law
has opened up the authority to conduct
preliminary investigation of offenses cognizable
by the Sandiganbayan to all investigatory
agencies of the government duly authorized to
conduct a preliminary investigation under
Section 2, Rule 112 of the 1985 Rules of
Criminal Procedure with the only qualification
that the Ombudsman may take over at any
stage of such investigation in the exercise of
his primary jurisdiction.
A little over a month later, the Court,
in Deloso vs. Domingo, pronounced that the
Ombudsman, under the authority of Section 13
(1) of the 1987 Constitution, has jurisdiction to
investigate any crime committed by a public
official, elucidating thus:
As protector of the people, the office of
the Ombudsman has the power, function and
duty to "act promptly on complaints filed in any
form or manner against public officials" (Sec.
12) and to "investigate . . . any act or omission
of any public official . . . when such act or
omission appears to be illegal, unjust, improper
or inefficient." (Sec. 1 [3].) The Ombudsman is
also empowered to "direct the officer
concerned," in this case the Special
Prosecutor, "to take appropriate action against
a public official . . . and to recommend his
prosecution" (Sec. 1 [3]).
The clause "any [illegal] act or omission
of any public official" is broad enough to
embrace any crime committed by a public
official. The law does not qualify the nature of
the illegal act or omission of the public official
or employee that the Ombudsman may
investigate. It does not require that the act or
omission be related to or be connected with or
arise from, the performance of official duty.
Since the law does not distinguish, neither
should we.
The reason for the creation of the
Ombudsman in the 1987 Constitution and for
the grant to it of broad investigative authority, is
to insulate said office from the long tentacles of
officialdom that are able to penetrate judges'
and fiscals' offices, and others involved in the
prosecution of erring public officials, and
through the exertion of official pressure and
influence, quash, delay, or dismiss
investigations into malfeasances and
misfeasances committed by public officers. It
was deemed necessary, therefore, to create a
special office to investigate all criminal
complaints against public officers regardless of
whether or not the acts or omissions
complained of are related to or arise from the
performance of the duties of their office. The
Ombudsman Act makes perfectly clear that the
jurisdiction of the Ombudsman encompasses
"all kinds of malfeasance, misfeasance, and
non-feasance that have been committed
by any officer or employee as mentioned in
Section 13 hereof, during his tenure of office"
(Sec. 16, R.A. 6770).
Indeed, the labors of the constitutional
commission that created the Ombudsman as a
special body to investigate erring public
officials would be wasted if its jurisdiction were
 Page 399 of 458
confined to the investigation of minor and less
grave offenses arising from, or related to, the
duties of public office, but would exclude those
grave and terrible crimes that spring from
abuses of official powers and prerogatives, for
it is the investigation of the latter where the
need for an independent, fearless, and honest
investigative body, like the Ombudsman, is
greatest.
At first blush, there appears to be
conflicting views in the rulings of the Court in
the Cojuangco, Jr. case and the Deloso case.
However, the contrariety is more apparent than
real. In subsequent cases, the Court elucidated
on the nature of the powers of the Ombudsman
to investigate.
In 1993, the Court held in Sanchez vs.
Demetriou, that while it may be true that the
Ombudsman has jurisdiction to investigate and
prosecute any illegal act or omission of any
public official, the authority of the Ombudsman
to investigate is merely a primary and not an
exclusive authority, thus:
The Ombudsman is indeed empowered
under Section 15, paragraph (1) of RA 6770 to
investigate and prosecute any illegal act or
omission of any public official. However as we
held only two years ago in the case
of Aguinaldo v. Domagas, this authority "is not
an exclusive authority but rather a shared or
concurrent authority in respect of the offense
charged."
Petitioners finally assert that the
information and amended information filed in
this case needed the approval of the
Ombudsman. It is not disputed that the
information and amended information here did
not have the approval of the Ombudsman.
However, we do not believe that such approval
was necessary at all. InDeloso v. Domingo;
191 SCRA 545 (1990), the Court held that the
Ombudsman has authority to investigate
charges of illegal acts or omissions on the part
of any public official, i.e.; any crime imputed to
a public official. It must, however, be pointed
out that the authority of the Ombudsman to
investigate "any [illegal] act or omission of any
public official" (191 SCRA 550) is not an
exclusive authority but rather a shared or
concurrent authority in respect of the offense
charged, i.e.; the crime of sedition. Thus, the
non-involvement of the office of the
Ombudsman in the present case does not
have any adverse legal consequence upon the
authority of the panel of prosecutors to file and
prosecute the information or amended
information.
In fact, other investigatory agencies of
the government such as the Department of
Justice in connection with the charge of
sedition, and the Presidential Commission on
Good Government, in ill-gotten wealth cases,
may conduct the investigation.
In Natividad v. Felix, a 1994 case,
where the petitioner municipal mayor
contended that it is the Ombudsman and not
the provincial fiscal who has the authority to
conduct a preliminary investigation over his
case for alleged Murder, the Court held:
 Page 400 of 458

The Deloso case has already been re- public officers and
examined in two cases, namely Aguinaldo v. employees in relation to
Domagas and Sanchez v. Demetriou. their office, including those
However, by way of amplification, we feel the employed in government-
need for tracing the history of the legislation owned or controlled
relative to the jurisdiction of Sandiganbayan corporation, whether
since the Ombudsman's primary jurisdiction is simple or complexed with
dependent on the cases cognizable by the other crimes, where the
former. penalty prescribed by law
is higher thanprision
In the process, we shall observe how
correccional or
the policy of the law, with reference to the
imprisonment for six (6)
subject matter, has been in a state of flux.
years, or a fine of P6,000:
These laws, in chronological order, are PROVIDED, HOWEVER,
the following: (a) Pres. Decree No. 1486, that offenses or felonies
the first law on the Sandiganbayan; (b) Pres. mentioned in this
Decree No. 1606 which expressly repealed paragraph where the
Pres. Decree No. 1486; (c) Section 20 of Batas penalty prescribed by law
Pambansa Blg. 129; (d) Pres. Decree No. does not exceed prision
1860; and (e) Pres. Decree No. 1861. correccional or
The latest law on the Sandiganbayan, imprisonment for six (6)
Sec. 1 of Pres. Decree No. 1861 reads as years or a fine of P6,000
follows: shall be tried by the proper
Regional Trial Court,
"SECTION 1. Section 4 of Presidential Metropolitan Trial Court,
Decree No. 1606 is hereby amended to read Municipal Trial Court and
as follows: Municipal Circuit Trial
'SEC. 4. Jurisdiction. Court."
The Sandiganbayan shall A perusal of the aforecited law shows
exercise: that two requirements must concur under Sec.
'(a) Exclusive original 4(a)(2) for an offense to fall under the
jurisdiction in all cases involving: Sandiganbayan's jurisdiction, namely: the
offense committed by the public officer must be
xxx xxx xxx in relation to his office and the penalty
(2) Other offenses prescribed be higher than prision
or felonies committed by
 Page 401 of 458
correccional or imprisonment for six (6) years,
or a fine of P6,000.00.
Applying the law to the case at bench,
we find that although the second requirement
has been met, the first requirement is wanting.
A review of these Presidential Decrees,
except Batas Pambansa Blg. 129, would reveal
that the crime committed by public officers or
employees must be "in relation to their office" if
it is to fall within the jurisdiction of the
Sandiganbayan. This phrase which is traceable
to Pres. Decree No. 1468, has been retained
by Pres. Decree No. 1861 as a requirement
before the Ombudsman can acquire primary
jurisdiction on its power to investigate.
It cannot be denied that Pres. Decree
No. 1861 is in pari materia to Article XI,
Sections 12 and 13 of the 1987 Constitution
and the Ombudsman Act of 1989because, as
earlier mentioned, the Ombudsman's power to
investigate is dependent on the cases
cognizable by the Sandiganbayan. Statutes are
in pari materia when they relate to the same
person or thing or to the same class of persons
or things, or object, or cover the same specific
or particular subject matter.
It is axiomatic in statutory construction
that a statute must be interpreted, not only to
be consistent with itself, but also to harmonize
with other laws on the same subject matter, as
to form a complete, coherent and intelligible
system. The rule is expressed in the maxim,
"interpretare et concordare legibus est optimus
interpretand," or every statute must be so
construed and harmonized with other statutes
as to form a uniform system of jurisprudence.
Thus, in the application and interpretation of
Article XI, Sections 12 and 13 of the 1987
Constitution and the Ombudsman Act of 1989,
Pres. Decree No. 1861 must be taken into
consideration. It must be assumed that when
the 1987 Constitution was written, its framers
had in mind previous statutes relating to the
same subject matter. In the absence of any
express repeal or amendment, the 1987
Constitution and the Ombudsman Act of
1989 are deemed in accord with existing
statute, specifically, Pres. Decree No. 1861.
R.A. No. 8249 which amended Section
4, paragraph (b) of the Sandiganbayan Law
(P.D. 1861) likewise provides that for other
offenses, aside from those enumerated under
paragraphs (a) and (c), to fall under the
exclusive jurisdiction of the Sandiganbayan,
they must have been committed by public
officers or employees in relation to their office.
In summation, the Constitution,
Section 15 of the Ombudsman Act of
1989 and Section 4 of the Sandiganbayan
Law, as amended, do not give to the
Ombudsman exclusive jurisdiction to
investigate offenses committed by public
officers or employees. The authority of the
Ombudsman to investigate offenses
involving public officers or employees is
concurrent with other government
investigating agencies such as provincial,
city and state prosecutors. However, the
Ombudsman, in the exercise of its primary
jurisdiction over cases cognizable by the
Sandiganbayan, may take over, at any
 Page 402 of 458
stage, from any investigating agency of the
government, the investigation of such
cases.
In other words, respondent DOJ
Panel is not precluded from conducting any
investigation of cases against public
officers involving violations of penal laws
but if the cases fall under the exclusive
jurisdiction of the Sandiganbayan, then
respondent Ombudsman may, in the
exercise of its primary jurisdiction[,] take
over at any stage.
xxx xxx xxx
To reiterate for emphasis, the power
to investigate or conduct preliminary
investigation on charges against any public
officers or employees may be exercised by
an investigator or by any provincial or city
prosecutor or their assistants, either in
their regular capacities or as deputized
Ombudsman prosecutors. The fact that all
prosecutors are in effect deputized
Ombudsman prosecutors under the OMB-
DOJ Circular is a mere superfluity. The DOJ
Panel need not be authorized nor deputized
by the Ombudsman to conduct the
preliminary investigation for complaints
filed with it because the DOJ's authority to
act as the principal law agency of the
government and investigate the
commission of crimes under the Revised
Penal Code is derived from theRevised
Administrative Code which had been held
in the Natividad case as not being contrary
to the Constitution. Thus, there is not even
a need to delegate the conduct of the
preliminary investigation to an agency
which has the jurisdiction to do so in the
first place. However, the Ombudsman may
assert its primary jurisdiction at any stage
of the investigation. 27 (Emphasis supplied)
In contrast to our holding in Honasan II, the NCIP
cannot be said to have even primary jurisdiction over all
the ICC/IP cases comparable to what the Ombudsman
has in cases falling under the exclusive jurisdiction of
the Sandiganbayan. We do not find such specificity in
the grant of jurisdiction to the NCIP in Section 66 of
the IPRA.
Neither does the IPRA confer original and
exclusive jurisdiction to the NCIP over all claims and
disputes involving rights of ICCs/IPs.
Thus, we revert to the point on the investiture of
primary and/or original and exclusive jurisdiction to an
administrative body which in all instances of such grant
was explicitly provided in the Constitution and/or the
enabling statute, to wit:
1. Commission on Elections' exclusive
original jurisdiction over all elections
contests; 28
2. Securities and Exchange
Commission's original and exclusive
jurisdiction over all cases enumerated under
Section 5 of Presidential Decree No. 902-
A, 29prior to its transfer to courts of general
jurisdiction or the appropriate Regional Trial
Court by virtue of Section 4 of the Securities
Regulation Code;
 Page 403 of 458
3. Energy Regulatory Commission's
original and exclusive jurisdiction over all cases
contesting rates, fees, fines, and penalties
imposed by it in the exercise of its powers,
functions and responsibilities; 30
4. Department of Agrarian
Reform's 31 primary jurisdiction to determine
and adjudicate agrarian reform matters, and its
exclusive original jurisdiction over all matters
involving the implementation of agrarian reform
except those falling under the exclusive
jurisdiction of the Department of Agriculture
(DA) and the Department of Environment and
Natural Resources (DENR); 32
5. Construction Industry Arbitration
Commission's original and exclusive
jurisdiction over disputes involving contracts of
construction, whether government or private,
as long as the parties agree to submit the
same to voluntary arbitration; 33
6. Voluntary arbitrator's or panel of
voluntary arbitrator's original and exclusive
jurisdiction over all unresolved grievances
arising from the interpretation or
implementation of the collective bargaining
agreement and those arising from the
interpretation or enforcement of company
personnel policies; 34
7. The National Labor Relations
Commission's (NLRC's) original and exclusive
jurisdiction over cases listed in Article 217 of
the Labor Code involving all workers, whether
agricultural or non-agricultural; and
8. Board of Commissioners of the
Bureau of Immigration's primary and exclusive
jurisdiction over all deportation cases. 35
That the proviso found in Section 66 of
the IPRA is exclusionary, specifically excluding disputes
involving rights of IPs/ICCs where the opposing party is
non-ICC/IP, is reflected in the IPRA's emphasis of
customs and customary law to govern in the lives of the
ICCs/IPs. In fact, even the IPRA itself recognizes that
customs and customary law cannot be applied to non-
IPs/ICCs since ICCs/IPs are recognized as a distinct
sector of Philippine society. This recognition
contemplates their difference from the Filipino majority,
their way of life, how they have continuously lived as an
organized community on communally bounded and
defined territory. The ICCs/IPs share common bonds of
language, customs, traditions and other distinctive
cultural traits, which by their resistance to political,
social and cultural inroads of colonization, non-
indigenous religions and cultures, became historically
differentiated from the majority. ICCs/IPs also include
descendants of ICCs/IPs who inhabited the country at
the time of conquest or colonization, who retain some or
all of their own social, economic, cultural and political
institutions but who may have been displaced from their
traditional territories, or who may have resettled outside
their ancestral domains. 36
In all, the limited or special jurisdiction of the
NCIP, confined only to a special cause involving rights
of IPs/ICCs, can only be exercised under the limitations
and circumstances prescribed by the statute.
To effect the IPRA and its thrust to recognize and
promote the rights of ICCs/IPs within the framework of
 Page 404 of 458
the Constitution goes hand in hand with the IPRA's
running theme of the primary distinctiveness of
customary laws, and its application to almost all aspects
of the lives of members of the IPs/ICCs, including the
resolution of disputes among ICCs/IPs. The NCIP was
created under the IPRA exactly to act on and resolve
claims and disputes involving the rights of ICCs/IPs. 37
Former Chief Justice Reynato Puno, in his
separate opinion in Cruz, the first challenge to the IPRA,
emphasizes the primacy of customs and customary law
in the lives of the members of ICCs/IPs:
Custom, from which customary law is
derived, is also recognized under the Civil
Code as a source of law. Some articles of the
Civil Code expressly provide that custom
should be applied in cases where no codal
provision is applicable. In other words, in the
absence of any applicable provision in the Civil
Code, custom, when duly proven, can define
rights and liabilities.
Customary law is a primary, not
secondary, source of rights under
the IPRA and uniquely applies to ICCs/IPs. Its
recognition does not depend on the absence of
a specific provision in the civil law. The
indigenous concept of ownership under
customary law is specifically acknowledged
and recognized, and coexists with the civil law
concept and the laws on land titling and land
registration. 38
Once again, the primacy of customs and
customary law sets the parameters for the NCIP's
limited and special jurisdiction and its consequent
application in dispute resolution. 39 Demonstrably, the
proviso in Section 66 of the IPRA limits the jurisdiction
of the NCIP to cases of claims and disputes involving
rights of ICCs/IPs where both parties are ICCs/IPs
because customs and customary law cannot be made
to apply to non-ICCs/IPs within the parameters of the
NCIP's limited and special jurisdiction.
Indeed, non-ICCs/IPs cannot be subjected to this
special and limited jurisdiction of the NCIP even if the
dispute involves rights of ICCs/IPs since the NCIP has
no power and authority to decide on a
controversy involving, as well, rights of non-ICCs/IPs
which may be brought before a court of general
jurisdiction within the legal bounds of rights and
remedies. Even as a practical concern, non-IPs and
non-members of ICCs ought to be excepted from the
NCIP's competence since it cannot determine the right-
duty correlative, and breach thereof, between opposing
parties who are ICCs/IPs and non-ICCs/IPs, the
controversy necessarily contemplating application of
other laws, not only customs and customary law of the
ICCs/IPs. In short, the NCIP is only vested with
jurisdiction to determine the rights of ICCs/IPs based on
customs and customary law in a given controversy
against another ICC/IP, but not the applicable law for
each and every kind of ICC/IP controversy even against
an opposing non-ICC/IP.
In San Miguel Corporation v. NLRC, 40 we
delineated the jurisdiction of the Labor Arbiter and the
NLRC, specifically paragraph 3 thereof, as all money
claims of workers, limited to "cases arising from
employer-employee relations." The same clause was
not expressly carried over, in printer's ink, in Article 217
as it exists today but the Court ruled that such was a
 Page 405 of 458
limitation on the jurisdiction of the Labor Arbiter and the
NLRC, thus:
The jurisdiction of Labor Arbiters and
the National Labor Relations Commission is
outlined in Article 217 of the Labor Code . . .:
"ART. 217. Jurisdiction of
Labor Arbiters and the
Commission. (a) The Labor
Arbiters shall have the original
and exclusive jurisdiction to hear
and decide within thirty (30)
working days after submission of
the case by the parties for
decision, the following cases
involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving
wages, hours of work and other
terms and conditions of
employment;
3. All money claims of workers, including
those based on non-payment or
underpayment of wages, overtime
compensation, separation pay and
other benefits provided by law or
appropriate agreement, except
claims for employees'
compensation, social security,
medicare and maternity benefits;
4. Cases involving household services;
and
5. Cases arising from any violation of
Article 265 of this Code, including
questions involving the legality of
strikes and lockouts.
(b) The Commission shall
have exclusive appellate
jurisdiction over all cases decided
by Labor Arbiters."
While paragraph 3 above refers to "all
money claims of workers," it is not necessary
to suppose that the entire universe of
money claims that might be asserted by
workers against their employers has been
absorbed into the original and exclusive
jurisdiction of Labor Arbiters. In the first
place, paragraph 3 should not [be] read not in
isolation from but rather within the context
formed by paragraph 1 (relating to unfair labor
practices), paragraph 2 (relating to claims
concerning terms and conditions of
employment), paragraph 4 (claims relating to
household services, a particular species of
employer-employee relations), and paragraph
5 (relating to certain activities prohibited to
employees or to employers). It is evident that
there is a unifying element which runs through
paragraphs 1 to 5 and that is, that they all refer
to cases or disputes arising out of or in
connection with an employer-employee
relationship. This is, in other words, a situation
where the rule of noscitur a sociis may be
[used] in clarifying the scope of paragraph 3,
and any other paragraph of Article 217 of
the Labor Code,as amended. We reach the
above conclusion from an examination of the
terms themselves of Article 217, as last
amended by B.P. Blg. 227, and even though
earlier versions of Article 217 of theLabor
 Page 406 of 458
Code expressly brought within the jurisdiction
of the Labor Arbiters and the NLRC "cases
arising from employer-employee relations,"
which clause was not expressly carried over, in
printer's ink, in Article 217 as it exists today.
For it cannot be presumed that money claims
of workers which do not arise out of or in
connection with their employer-employee
relationship, and which would therefore fall
within the general jurisdiction of the regular
courts of justice, were intended by the
legislative authority to be taken away from the
jurisdiction of the courts and lodged with Labor
Arbiters on an exclusive basis. The court,
therefore, believes and so holds that the
"money claims of workers" referred to in
paragraph 3 of Article 217 embraces money
claims which arise out of or in connection with
the employer-employee relationship, or some
aspect or incident of such relationship. Put a
little differently, that money claims of workers
which now fall within the original and exclusive
jurisdiction of Labor Arbiters are those money
claims which have some reasonable causal
connection with the employer-employee
relationship.
Clearly, the phraseology of "all claims and
disputes involving rights of ICCs/IPs" does not
necessarily grant the NCIP all-encompassing
jurisdiction whenever the case involves rights of
ICCs/IPs without regard to the status of the parties, i.e.,
whether the opposing parties are both ICCs/IPs.
In Union Glass & Container Corp., et al. v. SEC,
et al., 41 we learned to view the bestowal of jurisdiction
in the light of the nature and the function of the
adjudicative body that was granted jurisdiction, thus:
This grant of jurisdiction must be viewed
in the light of the nature and function of the
SEC under the law. Section 4 of PD No. 902-A
confers upon the latter "absolute jurisdiction,
supervision and control over all corporations,
partnerships or associations, who are grantees
of primary franchise and/or license or permit
issued by the government to operate in the
Philippines . . . ." The principal function of the
SEC is the supervision and control over
corporations, partnerships and associations
with the end in view that investment in these
entities may be encouraged and protected, and
their activities pursued for the promotion of
economic development.
It is in aid of this office that the
adjudicative power of the SEC must be
exercised. Thus the law explicitly specified
and delimited its jurisdiction to matters
intrinsically connected with the regulation
of corporations, partnerships and
associations and those dealing with the
internal affairs of such corporations,
partnerships or associations. 42
Drawing a parallel to Union Glass, 43 the
expertise and competence of the NCIP cover only the
implementation and the enforcement of the IPRA and
customs and customary law of specific ICCs/IPs; the
NCIP does not have competence to determine rights,
duties and obligations of non-ICCs/IPs under other laws
although such may also involve rights of ICCs/IPs.
Consistently, the wording of Section 66 that "the NCIP
 Page 407 of 458
shall have jurisdiction over all claims and disputes
involving rights of ICCs/IPs" plus the proviso necessarily
contemplate a limited jurisdiction over cases and
disputes between IPs/ICCs.
That NCIP Administrative Circulars 44 expand the
jurisdiction of the NCIP as original and exclusive in
Sections 5 and 1, respectively of Rule III:
Jurisdiction of the NCIP. The NCIP
through its Regional Hearing Offices shall
exercise jurisdiction over all claims and
disputes involving rights of ICCs/IPs and all
cases pertaining to the implementation,
enforcement, and interpretation of R.A. 8371,
including but not limited to the following:
(A.) Original and Exclusive Jurisdiction of
the Regional Hearing Office (RHO):
1.) Cases involving disputes and
controversies over ancestral
lands/domains of ICCs/IPs;
xxx xxx xxx
5.) Cases involving violations of the
requirement of free and prior
and informed consent of
ICCs/IPs;
xxx xxx xxx
6.) Actions for enforcement of
decisions of ICCs/IPs
involving violations of
customary laws or
desecration of ceremonial
sites, sacred places, or
rituals;
xxx xxx xxx
8.) Actions for
redemption/reconveyance
under Section 8(b) of R.A.
8371; and
9.) Such other cases analogous to
the foregoing.
is of no moment. The power of administrative officials to
promulgate rules in the implementation of a statute is
necessarily limited to what is provided for in the
legislative enactment. 45
It ought to be stressed that the function of
promulgating rules and regulations may be legitimately
exercised only for the purpose of carrying out the
provisions of the law into effect. The administrative
regulation must be within the scope and purview of the
law. 46 The implementing rules and regulations of a law
cannot extend the law or expand its coverage, as the
power to amend or repeal a statute is vested in the
legislature. Indeed, administrative issuances must not
override, but must remain consistent with the law they
seek to apply and implement. They are intended to
carry out, not to supplant or to modify, the law. 47
However, "administrative bodies are allowed,
under their power of subordinate legislation, to
implement the broad policies laid down in the statute by
'filling in' the details. All that is required is that the
regulation does not contradict, but conforms with the
standards prescribed by law. 48
Perforce, in this case, the NCIP's Administrative
Circulars' classification of its RHO's jurisdiction as
original and exclusive, supplants the general jurisdiction
granted by Batas Pambansa Bilang 129 to the trial
 Page 408 of 458
courts and ultimately, modifies and broadens the scope
of the jurisdiction conferred by the IPRA on the NCIP.
We cannot sustain such a classification.
As previously adverted to, we are not unaware
of The City Government of Baguio City, et al. v. Atty.
Masweng, et al. 49 and similar cases where we made an
implicit affirmation of the NCIP's jurisdiction over cases
where one of the parties are non-ICCs/IPs. Such
holding, however, and all the succeeding exercises of
jurisdiction by the NCIP, cannot tie our hands and
declare a grant of primary and/or original and exclusive
jurisdiction, where there is no such explicit conferment
by the IPRA. At best, the limited jurisdiction of the NCIP
is concurrent with that of the regular trial courts in the
exercise of the latter's general jurisdiction extending to
all controversies brought before them within the legal
bounds of rights and remedies. 50
Jurisprudence has held on more than one
occasion that in determining which body has jurisdiction
over a case, we consider the nature of the question that
is the subject of controversy as well as the status or
relationship of the parties. 51
Thus, we examine the pertinent allegations in
respondents' petition:
4. That [respondents] are members of
the Tagbanua Indigenous Cultural
Communities in the Calamianes group of
islands [in] Coron, Palawan;
5. That Barangay Buenavista, Coron is
part of the ancestral domains of the Tagbanuas
within Cluster 1 of the Calamianes group of
islands;
6. That prior to the enactment of the
Indigenous Peoples Rights Act of 1997 (IPRA),
they have already filed their claim for the
recognition of their ancestral domains with the
Department of Environment and Natural
Resources under DAO-2-93 and DAO No. 61-
91;
7. That because of the enactment of
the IPRA, the Provincial Special Task Force on
Ancestral Domains (PSTFAD) recommended
instead the validation of their proofs and claims
with the newly created National Commission
on Indigenous Peoples (NCIP) for the
corresponding issuance of a Certificate of
Ancestral Domains Title (CADT).
8. That Sections 3.1 and 11 of
the IPRA provided that the State recognizes
the rights of the Indigenous Cultural
Communities (ICCs) to our ancestral domains
by virtue of their Native Title and that, it was
even optional on their part to request for the
issuance of a title or CADT;
9. That as such, it was not even
required that they have to obtain first a CADT
before their rights to their ancestral domains be
recognized;
10. That furthermore, their free and prior
informed consent (FPIC) are required before
any person or entity, whether private or
government can enter or undertake any activity
within their ancestral domains;
11. That in order to ensure that their
rights to FPIC are not violated, Section 59 of
the IPRA provides that the NCIP had to issue
 Page 409 of 458
first a Certification Precondition (CP) that their
consent had been elicited first;
12. That their Free and Prior Informed
Consent was not elicited by [petitioners] Engr.
Ben Lim, RBL Fishing Corporation, Palawan
Aquaculture Corporation and Peninsula
Shipyard Corporation when they unlawfully
entered and occupied portions of their
ancestral domains [in] Sitio Makwaw and Sitio
Minukbay Buenavista, Coron, Palawan at a
time when the IPRA was already operative;
13. That the workers of the abovenamed
persons had destroyed the houses of [their]
tribal members, coerced some to stop from
cultivating their lands and had set up houses
within the said portions of their ancestral
domains;
14. That the unlawful intrusion and
occupation of [petitioners] within the aforesaid
portions of their ancestral domains and their
violation of the rights of [respondents] to Free
and Prior and Informed Consent and the
criminal acts committed by [petitioners']
workers had cause (sic) incalculable sufferings
among [respondents] . . . . 52
In their petition before the NCIP, respondents
alleged: (1) their status as Tagbanuas, claiming
representation of the Tagbanua Indigenous Cultural
Communities in the Calamianes Group of Islands in
Coron, Palawan; (2) the provision in the law which
recognizes native title of indigenous cultural
communities and indigenous persons; (3) that they have
already filed their claim for the recognition of their
ancestral domains with the DENR; (4) that they have yet
to obtain a Certificate of Ancestral Domain Title (CADT)
from the NICP which, under the IPRA, is the agency
tasked to validate their claim; (5) the purported violation
of petitioners of their rights to free and prior and
informed consent; and (6) that petitioners unlawfully
intruded and occupied respondents' ancestral domains.
From their allegations in the petition, such call to
the fore: (1) respondents' lack of CADT; and (2) the
status of petitioners as non-ICCs/IPs and petitioners'
apparent ignorance that respondents are IPs, and their
claim of ancestral domain over the subject property.
It should be noted that a bare allegation that one
is entitled to something is not an allegation but a
conclusion. 53 Such allegation adds nothing to the
pleading, it being necessary to plead specifically the
facts upon which such conclusion is founded. 54 Rule 8
of the Rules of Court, entitled "Manner of Making
Allegations in Pleadings" requires in Section 1, as a
general rule, for "[e]very pleading [to] contain in a
methodical and logical form, a plain, concise and direct
statement of the ultimate facts on which the party
pleading relies for his claim or defense, as the case may
be, omitting the statement of mere evidentiary facts."
Respondents' status as Tagbanuas, as
indigenous persons or members of an indigenous
cultural community, is not an ultimate fact from which
respondents can anchor the rights they claim to have
been violated by petitioners.
In this case, respondents' petition, as written,
does not mention ultimate facts that lead to the
conclusion that (1) they are Tagbanuas, and (2) they
are the representatives of the Tagbanua Indigenous
 Page 410 of 458
Cultural Community. Neither are there allegations of
ultimate facts showing acts or omissions on the part of
petitioners which constitute a violation of respondents'
rights.
We elucidate.
In this case, respondents allege that prior to the
enactment of the IPRA, they have previously applied for
recognition of their ancestral domain with the DENR
under DENR Administrative Order No. 2-93 and No. 61-
91; and with the advent of the IPRA, it was no longer
required that they first obtain a CADT. However, una
voce, they aver that it has been recommended that they
validate "their proofs and claims" with the NCIP for the
issuance of a CADT. The allegation itself goes against
respondents' conclusions that they are Tagbanuas.
Such a pronouncement does not contradict the
indigenous concept of ownership even without a paper
title and that the CADT is merely a formal recognition of
native title. 55 This is clear from Section 11 of the IPRA,
to wit:
SEC. 11. Recognition of Ancestral
Domain Rights. The rights of ICCs/IPs to
their ancestral domains by virtue of Native Title
shall be recognized and respected. Formal
recognition, when solicited by ICCs/IPs
concerned shall be embodied in a Certificate of
Ancestral Domain Title (CADT), which shall
recognize the title of the concerned ICCs/IPs
over the territories identified and delineated.
And along those lines, we have subsequently
held in Lamsis, et al. v. Dong-e 56 that:
The application for issuance of a
Certificate of Ancestral Land Title pending
before the NCIP is akin to a registration
proceeding. It also seeks an official recognition
of one's claim to a particular land and is also in
rem. The titling of ancestral lands is for the
purpose of "officially establishing" one's
land as an ancestral land. Just like a
registration proceeding, the titling of
ancestral lands does not vest ownership
upon the applicant but only recognizes
ownership that has already vested in the
applicant by virtue of his and his
predecessor-in-interest's possession of the
property since time immemorial. 57
Nonetheless, the allegation that respondents are
Tagbanuas and that they are representatives of the
Tagbanua Indigenous Cultural Communities are
conclusions of their status not derived from facts that
should have been alleged. Indeed, respondents did not
even attempt to factually demonstrate their authority to
represent the Tagbanua Indigenous Cultural
Community. This is crucial since intra IPs' conflicts and
contest for representation are not impossible.
In that regard, Section 3 (f) of the IPRA defines
"customary laws" as "a body of written and/or unwritten
rules, usages, customs and practices traditionally and
continually recognized, accepted and observed by
respective ICCs/IPs" Section 3 (i), on the other hand,
refers to "indigenous political structures" consisting of
"organizational and cultural leadership systems,
institutions, relationships, patterns and processes for
decision making and participation, identified by ICCs/IPs
such as, but not limited to, Council of Elders, Council of
 Page 411 of 458
Timuays, Bodong Holders, or any other tribunal or body
of similar nature." To establish their status as
Tagbanuas or their representation as representatives of
Tagbanua Indigenous Cultural Community,
respondents, as "plaintiffs" claiming relief under
the IPRA, should have alleged the ultimate facts
constitutive of their customs, political structures,
institutions, decision making processes, and such other
indicators of indigenous persons nature distinct and
native to them.
Truly, respondents should have asserted their
identification through a reduction into facts of the
definition and description of an ICC/IP in the IPRA:
Indigenous Cultural Communities/Indigenous
Peoples refer to a group of people or
homogenous societies identified by self
ascription and ascription by others, who have
continuously lived as organized community on
communally bounded and defined territory, and
who have, under claims of ownership since
time immemorial, occupied, possessed and
utilized such territories, sharing common bonds
of language, customs, traditions and other
distinctive cultural traits, or who have, through
resistance to political, social and cultural
inroads of colonization, non-indigenous
religions and cultures, became historically
differentiated from the majority of Filipinos.
ICCs/IPs shall likewise include peoples who
are regarded as indigenous on account of their
descent from the populations which inhabited
the country, at the time of conquest or
colonization, or at the time of inroads of non-
indigenous religions and cultures, or the
establishment of present state boundaries, who
retain some or all of their own social,
economic, cultural and political institutions, but
who may have been displaced from their
traditional domains or who may have resettled
outside their ancestral domains[.] 58
Also, the right of ancestral property requires
historical proof which, of course, must proceed from
allegations in the petition. As noted in the separate
opinion of former Chief Justice Reynato S. Puno
in Cruz v. Sec. of Environment & Natural
Resources, 59 the IPRA grants to ICCs/IPs rights over
ancestral domains and ancestral lands where land is the
central element of the IPs' existence, viz.:
. . . There is no traditional concept of
permanent, individual, land ownership. Among
the Igorots, ownership of land more accurately
applies to the tribal right to use the land or to
territorial control. The people are the
secondary owners or stewards of the land and
that if a member of the tribe ceases to work, he
loses his claim of ownership, and the land
reverts to the beings of the spirit world who are
its true and primary owners. Under the concept
of "trusteeship," the right to possess the land
does not only belong to the present generation
but the future ones as well.
Customary law on land rests on the
traditional belief that no one owns the land
except the gods and spirits, and that those who
work the land are its mere
stewards. Customary law has a strong
preference for communal ownership, which
could either be ownership by a group of
individuals or families who are related by blood
or by marriage, or ownership by residents of
 Page 412 of 458
the same locality who may not be related by
blood or marriage. The system of communal
ownership under customary laws draws its
meaning from the subsistence and highly
collectivized mode of economic production.
The Kalingas, for instance, who are engaged in
team occupation like hunting, foraging for
forest products, and swidden farming found it
natural that forest areas, swidden farms,
orchards, pasture and burial grounds should be
communally-owned. For the Kalingas,
everybody has a common right to a common
economic base. Thus, as a rule, rights and
obligations to the land are shared in common.
Although highly bent on communal
ownership, customary law on land also
sanctions individual ownership. The
residential lots and terrace rice farms are
governed by a limited system of individual
ownership. It is limited because while the
individual owner has the right to use and
dispose of the property, he does not possess
all the rights of an exclusive and full owner as
defined under our Civil Code. Under Kalinga
customary law, the alienation of individually-
owned land is strongly discouraged except in
marriage and succession and except to meet
sudden financial needs due to sickness, death
in the family, or loss of crops. Moreover, and to
be alienated should first be offered to a clan-
member before any village-member can
purchase it, and in no case may land be sold to
a non-member of the ili.
Land titles do not exist in the
indigenous peoples' economic and social
system. The concept of individual land
ownership under the civil law is alien to
them. Inherently colonial in origin, our
national land laws and governmental
policies frown upon indigenous claims to
ancestral lands. Communal ownership is
looked upon as inferior, if not inexistent. 60
Under the IPRA, ancestral domains and ancestral
lands are two concepts, distinct and different from one
another:
a) Ancestral Domains. Subject to
Section 56 hereof, refer to all areas generally
belonging to ICCs/IPs comprising lands, inland
waters, coastal areas, and natural resources
therein, held under a claim of ownership,
occupied or possessed by ICCs/IPs by
themselves or through their ancestors,
communally or individually since time
immemorial, continuously to the present except
when interrupted by war, force majeure or
displacement by force, deceit, stealth or as a
consequence of government projects or any
other voluntary dealings entered into by
government and private
individuals/corporations, and which are
necessary to ensure their economic, social and
cultural welfare. It shall include ancestral lands,
forests, pasture, residential, agricultural, and
other lands individually owned whether
alienable and disposable or otherwise, hunting
grounds, burial grounds, worship areas, bodies
of water, mineral and other natural resources,
and lands which may no longer be exclusively
occupied by ICCs/IPs but from which they
traditionally had access to for their subsistence
and traditional activities, particularly the home
 Page 413 of 458
ranges of ICCs/IPs who are still nomadic
and/or shifting cultivators;
b) Ancestral Lands. Subject to
Section 56 hereof, refers to land occupied,
possessed and utilized by individuals, families
and clans who are members of the ICCs/IPs
since time immemorial, by themselves or
through their predecessors-in-interest, under
claims of individual or traditional group
ownership, continuously, to the present except
when interrupted by war, force majeure or
displacement by force, deceit, stealth, or as a
consequence of government projects and other
voluntary dealings entered into by government
and private individuals/corporations, including,
but not limited to, residential lots, rice terraces
or paddies, private forests, swidden farms and
tree lots. 61
Respondents made no allegation outlining and
tracing the history of their indigenous ownership of
domain and land.
To further highlight the necessity of respondents'
allegation of their status as Tagbanuas is the
stewardship concept of property which is most
applicable to land among the Philippine IP: 62
Land is not an individual item which a
man owns for himself and by himself. For he
secures the rights to land in two ways: Firstly,
as a citizen of the tribe he is entitled to some
arable land and building land, and to the use of
public pasturage, fishing waters, and wild
products. Secondly, in all tribes except those
who shift their gardens widely and have an
abundance of land, he gets rights from
membership of a village and a group of
kinsfolk. That is, a man's right to land in the
tribal home depends upon his accepting
membership of a tribe, with all its obligations.
The right of every subject, while he is a
subject, is jealously safeguarded. 63
It is also significant to note that respondents do
not identify themselves with other Tagbanuas who have
been awarded a Certificate of Ancestral Domain Claim
as of 1998. 64
Palpably, in the factual milieu obtaining herein,
the NCIP does not have ipso facto jurisdiction over the
petition of respondents just by the mere expedient that
their petition involves rights of ICCs/IPs.
One other thing jumps out from all the
discussions herein: the IPRA does not contain a repeal
of Batas Pambansa Bilang 129 limiting the general
jurisdiction of the trial courts even as
the IPRA purportedly grants the NCIP jurisdiction over
"all claims and disputes involving rights of ICCs/IPs."
Section 83 of the IPRA, the repealing clause, only
specifies Presidential Decree No. 410, Executive Order
Nos. 122B and 122C as expressly repealed. While the
same section does state that "all other laws, decrees,
orders, rules and regulations or parts thereof
inconsistent with this Act are hereby repealed or
modified accordingly," such an implied repeal is
predicated upon the condition that a substantial and an
irreconcilable conflict must be found in existing and prior
Acts. The two laws refer to different subject matters,
albeit the IPRA includes the jurisdiction of the NCIP. As
such, resolution of conflicts between parties who are not
both ICCs/IPs may still fall within the general jurisdiction
 Page 414 of 458
of the regular courts dependent on the allegations in the
complaint or petition and the status of the parties.
There is no clear irreconcilable conflict from the
investiture of jurisdiction to the NCIP in instances
where, among others, all the parties are ICCs/IPs and
the claim or dispute involves their rights, and the
specific wording of Batasang Pambansa Bilang 129,
Sections 19-21 65 on the exclusive and original
jurisdiction of the Regional Trial Courts, and Sections
33-35 66 on the exclusive original jurisdiction of the
Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts.
We should not, and cannot, adopt the theory of
implied repeal except upon a clear and unequivocal
expression of the will of Congress, which is not manifest
from the language of Section 66 of the IPRA which, to
reiterate: (1) did not use the words "primary" and/or
"original and exclusive" to describe the jurisdiction of the
NCIP over "all claims and disputes involving rights of
ICCs/IPs" and (2) contained a proviso requiring
certification that the parties have exhausted their
remedies provided under customary laws.
We are quick to clarify herein that even as we
declare that in some instances the regular courts may
exercise jurisdiction over cases which involve rights of
ICCs/IPs, the governing law for these kinds of disputes
necessarily include the IPRA and the rights the law
bestows on ICCs/IPs.
All told, we rule that Section 66 of the IPRA, even
as it grants jurisdiction to the NCIP over all claims and
disputes involving rights of ICCs/IPs, requires that the
opposing parties are both ICCs/IPs who have
exhausted all their remedies under their customs and
customary law before bringing their claim and dispute to
the NCIP. The validity of respondents' claim is another
matter and a question that we need not answer for the
moment. Too, we do not resolve herein the other issues
raised by petitioners given that we already declared that
the NCIP does not have jurisdiction over the case of
respondents against petitioners.
WHEREFORE, the appeal is GRANTED. The
Decision of the Court of Appeals in CA-G.R. SP No.
98268 dated 26 April 2010 and the Resolution of the
National Commission on Indigenous Peoples in RHO 4-
01-2006 dated 30 November 2006 are REVERSED
AND SET ASIDE. The petition in RHO 4-01-2006
is DISMISSED for lack of jurisdiction of the National
Commission on Indigenous Peoples. Section 1 of
NCIP Administrative Circular No. 1, Series of 2014,
promulgated on 9 October 2014 declaring the
jurisdiction of the Regional Hearing Officer as original
and exclusive is declared VOID for expanding the law.
Respondents may refile their complaint against
petitioners in a court of general jurisdiction.
No costs.
SO ORDERED
||| (Lim v. Gamosa, G.R. No. 193964, [December 2, 2015])
 Page 415 of 458

[G.R. No. 199601. November 23, 2015.] The PCIB, on the other hand, alleged that it was a
certain Sophia La'O, as a representative of Harrington,
PHILIPPINE COMMERCIAL who presented the bank drafts for deposit.
INTERNATIONAL BANK (now BDO Upon receipt of the bank drafts, Josephine asked
UNIBANK, her immediate supervisor, Eleanor Flores, whether the
INC.), petitioner, vs. JOSEPHINE drafts payable to "Servants C/C.R. Harrington" were
D. GOMEZ, respondent. acceptable for deposit to the savings account of
Harrington. When Flores answered in the affirmative,
and after receiving from the bank's foreign exchange
DECISION supervision a Philippine Currency conversion of the
amounts reflected in the drafts, Josephine received the
deposit slip. Thereafter, the deposits were duly entered
BRION, ** J :
p in Harrington's savings account.
We resolve the petition for review On two (2) separate dates, a certain individual
on certiorari under Rule 45 of the Rules of Court 1 filed representing himself as Harrington withdrew the sums
by Philippine Commercial International Bank (PCIB) of P45,000.00 and P5,600.00. Subsequently, the bank
assailing the May 23, 2011 decision 2 and the discovered that the person who made the withdrawals
December 7, 2011 resolution 3 of the Court of Appeals was an impostor. Thus, the bank had to pay Harrington
(CA) in CA-G.R. CV No. 68288. The CA affirmed the P50,600.00 representing the amounts of the bank drafts
May 25, 1999 decision of the Regional Trial Court of in his name. AcSCaI

Makati City, Branch 145 (RTC) in toto. cSTHAC

The PCIB issued a memorandum asking
FACTUAL ANTECEDENTS Josephine to explain why no disciplinary action should
be taken against her for having accepted the bank
Josephine D. Gomez (Josephine) was a teller at
drafts for deposits. Josephine reasoned that being a
the Domestic Airport Branch of the PCIB when a certain
new teller she was not yet fully oriented with the various
Colin R. Harrington opened Savings Account No. 373-
aspects of the job. She further alleged that she had
28010-6 with said branch in January 1985.
asked the approval of her immediate supervisor prior to
The following day, Harrington presented two (2) receiving the deposits.
genuine bank drafts dated January 3, 1985, issued by
On November 14, 1985, the PCIB deducted the
the Bank of New Zealand. The first draft was in the sum
amount of P423.38 from Josephine's salary. Josephine
of US$724.57 payable to "C.R. Harrington," while the
wrote the PCIB to ask why the deduction was made.
second draft was in the sum of US$2,004.76 payable to
"Servants C/C.R. Harrington."
 Page 416 of 458
After due investigation on the matter,
the PCIB issued another memorandum finding
Josephine grossly negligent and liable for performing
acts in violation of established operating procedures.
The memorandum required Josephine to pay the
amount of P50,600.00 through deductions in her salary,
allowance, bonuses, and profit sharing until the amount
is fully paid.
Josephine wrote the PCIB to ask for the basis of
its findings that she was grossly negligent and liable to
pay the amount of P50,600.00. During trial, the RTC
found that the PCIB did not even respond to this
letter. PCIB, however, alleged that it had replied to
Josephine's letter, and explained that she was afforded
due process and the deductions made prior to January
15, 1986, were merely a withholding pending the
investigation.
The PCIB also admitted that as early as January
15, 1986, it had started to deduct the amount of
P200.00 from Josephine's salary as well as 50% of her
bonuses and profit sharing.
On February 10, 1986, Josephine filed a
complaint for damages with prayer for preliminary
injunction before the RTC of Makati City. She claimed
that the PCIBhad abused its right by gradually
deducting from her salary the amount the bank had to
pay Harrington.
The PCIB filed its answer with counterclaims and
a separate complaint with the RTC of Makati City, which
was raffled to Branch 149.
In its May 25, 1999 decision, the RTC rendered
judgment in favor of Josephine and ordered the PCIB to
pay her actual damages in the amount of P5,006.00
plus 12% interest from filing of the complaint; moral
damages in the amount of P150,000.00; and attorney's
fees in the amount of P50,000.00.
The RTC considered the PCIB's manner of
deducting from the salary and allowance of Josephine
as having been rendered in bad faith and contrary to
morals, good custom, and public policy. This was borne
out by the fact that the PCIB had already deducted from
her salary before Josephine received the memorandum
finding her liable for the P50,600.00. In addition, while
there were other individuals involved in this incident, it
appeared that it was only Josephine who was made
solely responsible.SCEHaD
On appeal, the PCIB argued that the RTC had no
jurisdiction over the case because it was a labor
dispute, which the labor tribunals are more competent to
resolve. It also maintained that there was no factual or
legal basis for the RTC to make it liable for damages
and to pay Josephine.
In its May 23, 2011 decision, the CA affirmed the
May 25, 1999 RTC decision. It held that the PCIB was
estopped from questioning the jurisdiction of the RTC
because it had filed an answer with counterclaims and
even initiated a separate case before a different branch
of the RTC. It upheld the RTC's findings and conclusion
in awarding damages and attorney's fees to Josephine
because there was no reason to disturb them.
The CA, subsequently, denied the PCIB's motion
for reconsideration on December 7, 2011; hence,
the PCIB filed the present petition.
 Page 417 of 458
First, the PCIB contends that the CA gravely
erred in ruling that its actions were in total and wanton
disregard of Articles 19 and 21 of the Civil
Code because the courts a quo summarily imputed bad
faith on how it had treated Josephine.
Second, the PCIB maintains that the CA gravely
erred in awarding moral damages and attorney's fees to
Josephine absent any basis for it while averring that bad
faith cannot be presumed and that Josephine had failed
to prove it with clear and convincing evidence.
OUR RULING
We DENY the present petition for lack of merit.
The civil courts have jurisdiction
over a case when the cause of action
does not have a reasonable causal
connection from the employer-
employee relationship.
Although the PCIB opted not to raise the issue
before this Court, we find it prudent and imperative to
justify why the RTC had jurisdiction to take cognizance
of Josephine's complaint despite the fact that her cause
of action arose because her employer arbitrarily
deducted from her salary an act expressly prohibited
by our labor laws. 4
Article 224 [217] of the Labor Code provides that
the Labor Arbiters have original and exclusive
jurisdiction to hear and decide claims for actual, moral,
exemplary, and other forms of damages arising from
employer-employee relations. The legislative intent
appears clear to allow Labor Arbiters to award to an
employee not only the reliefs provided by our labor
laws, but also moral and other forms of damages
governed by the Civil Code. Specifically, we have
mentioned, in fact, that a complaint for damages under
Articles 19, 20, and 21 of the Civil Code would not
suffice to keep the case without the jurisdictional
boundaries of our labor courts especially when the
claim for damages is interwoven with a labor
dispute. 5ACcDEa
Nevertheless, when the cause of action has no
reasonable connection with any of the claims provided
for in Article 224 of the Labor Code,jurisdiction over the
action is with the regular courts. 6 Here, since
Josephine's cause of action is based on a quasi-
delict or tort under Article 19 in relation to Article 21 of
the Civil Code,the civil courts (not the labor tribunals)
have jurisdiction over the subject matter of this case.
To be sure, the case of Singapore Airlines Ltd. v.
Ernani Cruz Pao is enlightening:
Upon the facts and issues involved,
jurisdiction over the present controversy must
be held to belong to the civil courts. While
seemingly petitioner's claim for damages arises
from employer-employee relations, and the
latest amendment to Article 217 of the Labor
Code under PD No. 1691 and BP Blg.
130 provides that all other claims arising from
employer-employee relationship are cognizable
by Labor Arbiters, in essence, petitioner's claim
for damages is grounded on the "wanton failure
and refusal" without just cause of private
respondent Cruz to report for duty despite
repeated notices served upon him of the
disapproval of his application for leave of
absence without pay. This, coupled with the
 Page 418 of 458
further averment that Cruz "maliciously and
with bad faith" violated the terms and
conditions of the conversion training course
agreement to the damage of petitioner
removes the present controversy from the
coverage of the Labor Code and brings it within
the purview of Civil Law.
Clearly, the complaint was anchored not
on the abandonment per se by private
respondent Cruz of his job as the latter was not
required in the Complaint to report back to
work but on the manner and consequent
effects of such abandonment of work
translated in terms of the damages which
petitioner had to suffer. 7 [emphasis and
underscoring supplied]
In the present case, Josephine filed a civil
complaint for damages against the PCIB based on how
her employer quickly concluded that she was negligent
and hence arbitrarily started to deduct from her salary.
Clearly, without having to dwell on the merits of the
case, Josephine opted to invoke the jurisdiction of our
civil courts because her right to fair treatment was
violated.
The discussion in Quisaba v. Sta. Ines-Melale
Veneer & Plywood, Inc. is just as relevant as it is
illuminating on the present case, to wit:
Although the acts complained of
seemingly appear to constitute "matters
involving employee-employer relations" as
Quisaba's dismissal was the severance of a
preexisting employee-employer relation, his
complaint is grounded not on his dismissal per
se as in fact he does not ask for reinstatement
or backwages, but on themanner of his
dismissal and the consequent effects of such
dismissal.EHCcIT
xxx xxx xxx
The "right" of the respondents to dismiss
Quisaba should not be confused with
the manner in which the right was exercised
and the effects flowing therefrom. If the
dismissal was done anti-socially or
oppressively, as the complaint alleges, then
the respondents violated article 1701 of
the Civil Code which prohibits acts of
oppression by either capital or labor against
the other, and article 21, which makes a
person liable for damages if he willfully causes
loss or injury to another in a manner that is
contrary to morals, good customs or public
policy, the sanction for which, by way of moral
damages, is provided in article 2219, no. 10.
(Cf. Phil. Refining Co. v. Garcia, L-21962,
Sept. 27, 1966, 18 SCRA 107). 8
From the foregoing, the case at bar is intrinsically
concerned with a civil dispute because it has something
to do with Josephine's right under Article 19 of theCivil
Code,and does not involve an existing employer-
employee relation within the meaning of Article 224 of
the Labor Code.Josephine's complaint was, therefore,
properly filed with and exclusively cognizable by the
RTC.
Questions on whether there was a
preponderance of evidence to justify
the award of damages or whether
 Page 419 of 458
there was a causal connection
between the given set of facts and
the damage suffered by the private
complainant are questions of fact.
The Court's jurisdiction under a Rule 45 review is
limited to reviewing perceived errors of law, which the
lower courts may have committed. The resolution of
factual issues is the function of the lower courts whose
findings, when aptly supported by evidence, bind this
Court. This is especially true when the CA affirms the
RTC's findings. While this Court, under established
exceptional circumstances, had deviated from the
above rule, we do not find this case to be under any of
the exceptions.
Essentially, what the PCIB seeks is a relief from
the Court on the issue of the propriety of the award of
damages. On this point alone, the petition must fail, as a
Rule 45 petition bars us from the consideration of
factual issues, especially when both the RTC and the
CA were consistent with their rulings.
Nevertheless, we still affirm the assailed CA
rulings even if we were to disregard these established
doctrinal rules.
Article 19 of the Civil Code provides that every
person in the exercise of his rights and in the
performance of his duties must act with justice, give
everyone his due, and observe honesty and good faith.
The principle embodied in this provision is more
commonly known as the "abuse of right principle." The
legal sanctions for violations of this fundamental
principle are found in Articles 20 9 and 21 10 of the Civil
Code.We explained how these two provisions correlate
with each other in GF Equity, Inc. v. Valenzona: CADacT
[Article 19], known to contain what is
commonly referred to as the principle of abuse
of rights, sets certain standards which must be
observed not only in the exercise of one's
rights but also in the performance of one's
duties. These standards are the following: to
act with justice; to give everyone his due; and
to observe honesty and good faith. The law,
therefore, recognizes a primordial limitation on
all rights; that in their exercise, the norms of
human conduct set forth in Article 19 must be
observed. A right, though by itself legal
because recognized or granted by law as
such, may nevertheless become the source
of some illegality. When a right is exercised
in a manner which does not conform with
the norms enshrined in Article 19 and
results in damage to another, a legal wrong
is thereby committed for which the
wrongdoer must be held responsible. But
while Article 19 lays down a rule of conduct for
the government of human relations and for the
maintenance of social order, it does not
provide a remedy for its violation. Generally, an
action for damages under either Article 20 or
Article 21 would be proper. 11 [emphasis
supplied]
Both the RTC and the CA found the acts of
the PCIB were in clear violation of Article 19 of the Civil
Code and held the PCIB liable for damages. While
the PCIBhas a right to penalize employees for acts of
negligence, the right must not be exercised unjustly and
illegally. In the instant case, the PCIB made deductions
 Page 420 of 458

on Josephine's salary even if the investigation was still [G.R. No. 209011. April 20, 2016.]
pending. Belatedly, the PCIB issued a memorandum
finding Josephine grossly negligent and requiring her to MALAYAN INSURANCE COMPANY,
pay the amount which the bank erroneously paid to INC., petitioner, vs. DIANA P.
Harrington's impostor. When Josephine asked for legal ALIBUDBUD, respondent.
and factual basis for the finding of negligence,
the PCIBrefused to give any. Moreover,
the PCIB continued to make deductions on Josephine's DECISION
salary, allowances, and bonuses.
The trial court and the CA also noted that while
Josephine was penalized, other employees of the bank REYES, J :p

involved in the subject transactions were not. It was

Before this Court is a Petition for Review 1 under
Josephine who was made solely responsible for the loss
Rule 45 of the 1997 Rules of Court filed by Malayan
without giving any basis therefor. It was emphasized
Insurance Company, Inc. (Malayan) seeking to reverse
that the subject deposit could not have been received
and set aside the Decision 2 dated May 15, 2013 and
by the bank and entered in Harrington's savings
Resolution 3 dated September 6, 2013 of the Court of
account without the participation of the other bank
Appeals (CA) in CA-G.R. CV No. 92940, which
employees. The PCIB could have exercised prudence
dismissed their complaint for replevin against Diana P.
before taking oppressive actions against Josephine.
Alibudbud (Alibudbud) for lack of jurisdiction.
All told, we find nothing in the record which would
Factual Background
warrant the reversal of the position held by the RTC and
the CA. Based on the above discussion, we find the Alibudbud was employed by Malayan on July 5,
award of moral damages and attorney's fees in 2004 as Senior Vice President (SVP) for its Sales
Josephine's favor proper. Department. As SVP, she was issued a 2004 Honda
Civic sedan bearing plate no. XPR 822 under Malayan's
WHEREFORE, the petition for review
Car Financing Plan 4 conditioned on the following
on certiorari is DENIED and consequently, the May 23,
stipulations: (1) she must continuously stay and serve
2011 decision and the December 7, 2011 resolution of
Malayan for at least three full years from the date of the
the Court of Appeals in CA-G.R. CV No. 68288
availment of the Car Financing Plan; and (2) that in
are AFFIRMED in toto. cSEaTH
case of resignation, retirement or termination before the
SO ORDERED. three-year period, she shall pay in full 100% share of
(Philippine Commercial International Bank v. Gomez, G.R.
|||
Malayan and the outstanding balance of his/her share of
the cost of the motor vehicle. 5 AIDSTE
No. 199601, [November 23, 2015])
 Page 421 of 458
Relatively, Alibudbud also executed a Promissory
Note 6 and a Deed of Chattel Mortgage 7 in favor of
Malayan wherein it was expressly stated that: (1) the
loan of P360,000.00 shall be payable in 60 equal
monthly installments at the rate of P7,299.50 each,
commencing on August 15, 2004 and every succeeding
month thereafter until fully paid; (2) Alibudbud shall
refund Malayan an amount equivalent to its 50% equity
share in the motor vehicle, or P360,000.00 if she leaves
Malayan within three years from the availment of the
subject vehicle; (3) should Alibudbud resign, retire or
otherwise be terminated or separated from Malayan's
employ, any remaining unpaid balance on the principal
obligation shall immediately fall due and demandable
upon her who shall remit the same to Malayan within
five days from effectivity of such separation/termination;
(4) Malayan is authorized to apply to the payment of
outstanding obligation of Alibudbud any such amounts
of money that may be due her from the company; (5)
interests on all amounts outstanding as of the date
when all Alibudbud's obligations are treated immediately
due and payable, shall be compounded every 30 days
until said obligations are fully paid; (6) Alibudbud shall
pay a penalty at the rate of 16% per annum on all
amounts due and unpaid; (7) in case Alibudbud fails to
pay any installment, or any interest, or the whole
amount remaining unpaid which has immediately
become due and payable upon her separation from the
Malayan, the mortgage on the property may be
foreclosed by Malayan, or it may take other legal action
to enforce collection of the obligation; (8) upon default,
Alibudbud shall deliver the possession of the subject
vehicle to Malayan at its principal place of business; and
(9) should Alibudbud fail or refuse to deliver the
possession of the mortgaged property to Malayan,
thereby compelling it to institute an action for delivery,
Alibudbud shall pay Malayan attorney's fees of 25% of
the principal due and unpaid, and all expenses and cost
incurred in relation therewith including the premium of
the bond obtained for the writ of possession. 8
On July 18, 2005, Alibudbud was dismissed from
Malayan due to redundancy. In view thereof, Malayan
demanded that she surrender the possession of the car
to the company. Alibudbud sternly refused to do so.
On September 21, 2005, Malayan instituted a
Complaint 9 for replevin and/or sum of money before the
Regional Trial Court (RTC) of Manila and prayed for the
seizure of the car from Alibudbud, or that she be
ordered to pay P552,599.93 representing the principal
obligation plus late payment charges and P138,149.98
as attorney's fees, should said car be no longer in
running and presentable condition when its return be
rendered impossible.
On October 12, 2005, Alibudbud, in turn, filed a
complaint 10 for illegal dismissal against Malayan before
the Labor Arbiter (LA) wherein she prayed for her
reinstatement. SDAaTC
In her Answer with Compulsory
Counterclaim, 11 Alibudbud asseverated that a
reasonable depreciation of 20% should be deducted
from the subject vehicle's book value of P720,000.00, or
P576,000.00, which makes her liable to pay only
P288,000.00 for the car's value. 12 She asserted a
counterclaim of P17,809.00 13 as compensatory
damages and P40,000.00 as attorney's fees. 14 She
prayed for the suspension of the proceedings in view of
 Page 422 of 458
the pendency of the labor dispute she filed. This was,
however, questioned by Malayan in its reply 15 as there
was no prejudicial question 16 raised in the labor
dispute.
On January 30, 2006, Alibudbud filed a Motion to
Suspend Proceedings 17 to reiterate her prayer to defer
the proceedings, asseverating that the labor case she
filed presents a prejudicial question to the instant case.
She explained that the resolution of the labor case will
determine her rights and obligations, as well as that of
Malayan.
In an Order 18 dated February 17, 2006, the RTC
of Manila, Branch 27, denied Alibudbud's motion. It was
opined that: (1) reference shall be made only on the
Promissory Note which Alibudbud executed in favor of
Malayan in determining the rights and obligations of the
parties; (2) the cause of action in the replevin case is
rooted from the Promissory Note; and (3) the issue in
the labor dispute is in no way connected with the rights
and obligations of the parties arising out of the
Promissory Note.
Trial on the merits ensued.
On July 13, 2006, Alibudbud moved for the
dismissal 19 of the action grounded on the impropriety of
the bond put up by Malayan. This was, however, denied
by the RTC in its Order 20 dated October 5, 2006 with
the pronouncement that Malayan "can[,] by itself[,] file a
surety bond in order to guaranty the return of the
subject property to the adverse party if such return be
finally adjudged . . . ." 21
Alibudbud sought for reconsideration, 22 but it was
denied in the RTC's Order 23 dated December 19, 2006.
Alibudbud then successively filed motions to
suspend the proceedings in the civil case anchored on
the same averment that suspension is necessary since
she is seeking reinstatement in the labor case which, if
granted, would result to irreconcilable conflict not
contemplated by law, much less conducive to the
orderly administration of justice. 24 However, both
motions were denied in an Order 25 dated June 6, 2007.
The RTC pointed out that the issue raised in the civil
action is completely separable with the issue raised in
the labor case. 26
Malayan applied for an ex-parte issuance of a writ
of preliminary attachment, 27 which the RTC granted in
its Order dated June 8, 2007. 28 The Honda Civic sedan
was, accordingly, attached. AaCTcI
Meanwhile, the complaint for illegal dismissal filed
by Alibudbud was dismissed. The LA's
Decision 29 dated February 19, 2008 held that the
redundancy she suffered resulted from a valid re-
organization program undertaken by Malayan in view of
the downturn in the latter's sales. 30 It further ruled that
Alibudbud failed to establish any violation or arbitrary
action exerted upon her by Malayan, which merely
exercised its management prerogative when it
terminated her services. 31
On November 28, 2008, the RTC rendered a
Decision 32 which granted the complaint for replevin.
The RTC mentioned the following observations and
conclusions, to wit: (1) Alibudbud is under obligation to
pay in full the acquisition cost of the car issued to her by
Malayan; (2) the LA's Decision dated February 19, 2008
which dismissed the illegal dismissal complaint settled
the issue being banked upon by Alibudbud when she
 Page 423 of 458
moved for the suspension of the proceedings in the civil
action; (3) Alibudbud's ownership over the car is not yet
absolute for it bears the notation "encumbered", thereby
signifying her obligation to pay its value within the
period set forth in the Promissory Note and Deed of
Chattel Mortgage; and (4) the replevin action was
converted into a money claim in view of Alibudbud's
vehement refusal to surrender the possession of the
car.
Ruling of the CA
On appeal, the CA ruled, in its Decision 33 dated
May 15, 2013, to set aside the decision of the trial court.
The CA explained that the RTC has no jurisdiction to
take cognizance over the replevin action because of the
"employer-employee" relations between the parties
which Malayan never denied. Certainly, Alibudbud could
not have availed of the benefits of the Car Financing
Plan if she was not employed by Malayan. Citing
Section 1, 34 Rule 9 of the 1997 Rules of Court, the CA
upheld to dismiss the replevin action considering that
the ground of lack of jurisdiction may be raised at any
stage of the proceedings since jurisdiction is conferred
by law. 35
Malayan's motion for reconsideration 36 was
denied. 37 Hence, this petition.
Ruling of the Court
The petition is impressed with merit.
It is well-settled that "(t)he jurisdiction of the
Supreme Court in cases brought to it from the CA is
limited to reviewing and revising the errors of law
imputed to it, its findings of fact being conclusive. In
several decisions, however, the Court enumerated the
exceptional circumstances when the Supreme Court
may review the findings of fact of the CA," 38 such as in
the instant case.
A careful study of the case would reveal that the
RTC correctly took cognizance of the action for replevin
contrary to the pronouncement of the CA.
"Replevin is an action whereby the owner or
person entitled to repossession of goods or chattels
may recover those goods or chattels from one who has
wrongfully distrained or taken, or who wrongfully detains
such goods or chattels. It is designed to permit one
having right to possession to recover property in specie
from one who has wrongfully taken or detained the
property. The term may refer either to the action itself,
for the recovery of personalty, or to the provisional
remedy traditionally associated with it, by which
possession of the property may be obtained by the
plaintiff and retained during the pendency of the
action." 39
In reversing the trial court's ruling, the CA
declared that "[Alibudbud] could not have availed of the
Car Financing Plan if she was not an employee of
[Malayan]. The status of being an employee and officer
of [Alibudbud] in [Malayan] was, therefore, one of the
pre-condition before she could avail of the benefits of
the Car Financing Plan. Such being the case, there is
no doubt that [Alibudbud's] availing of the Car Financing
Plan being offered by [Malayan] was necessarily and
intimately connected with or related to her employment
in the aforesaid Company." 40
 Page 424 of 458

It should be noted, however, that the present Court of Manila, Branch 27, in Civil Case No. 05-113528
action involves the parties' relationship as debtor and is, accordingly, REINSTATED.
creditor, not their "employer-employee" relationship. SO ORDERED.
Malayan's demand for Alibudbud to pay the 50%
company equity over the car or, to surrender its (Malayan Insurance Company, Inc. v. Alibudbud, G.R. No.
|||

possession, is civil in nature. The trial court's ruling also 209011, [April 20, 2016])
aptly noted the Promissory Note and Deed of Chattel
Mortgage voluntarily signed by Alibudbud to secure her
financial obligation to avail of the car being offered
under Malayan's Car Financing Plan. 41 Clearly, the
issue in the replevin action is separate and distinct from
the illegal dismissal case. The Court further considers it
justified for Malayan to refuse to accept her offer to
settle her car obligation for not being in accordance with
the Promissory Note and Deed of Chattel Mortgage she
executed. 42 Even the illegal dismissal case she heavily
relied upon in moving for the suspension of the replevin
action was settled in favor of Malayan which was merely
found to have validly exercised its management
prerogative in order to improve its company sales.
As consistently held, "[t]he characterization of an
employee's services as superfluous or no longer [G.R. No. 199133. September 29, 2014.]
necessary and, therefore, properly terminable, is an
exercise of business judgment on the part of the ESPERANZA TUMPAG, substituted by her
employer. The wisdom and soundness of such son, PABLITO TUMPAG BELNAS,
characterization or decision is not subject to JR., petitioner, vs.
discretionary review provided, of course, that a violation SAMUEL TUMPAG, respondent.
of law or arbitrary or malicious action is not shown." 43
WHEREFORE, in view of the foregoing, the
Decision dated May 15, 2013 and Resolution dated DECISION
September 6, 2013 of the Court of Appeals in CA-G.R.
CV No. 92940 are REVERSED and SET ASIDE. The
Decision dated November 28, 2008 of the Regional Trial BRION, J : p
 Page 425 of 458
We resolve the petition for review on certiorari 1 assailing
the November 30, 2010 decision 2 and the September 28,
2011 resolution 3 of the Court of Appeals (CA), Cebu City
in CA-G.R. CV No. 78155. The CA dismissed, without
prejudice, the complaint for recovery of possession and
damages that the petitioner filed before the Regional Trial
Court (RTC) because the complaint failed to allege the
assessed value of the disputed property in the case.
Brief Statement of Facts
On March 13, 1995, Esperanza Tumpag (petitioner) filed a
complaint for recovery of possession with damages
(docketed as Civil Case No. 666) against
Samuel Tumpag(respondent) before the RTC, Branch 61,
Kabankalan City, Negros Occidental. The complaint
alleged that:
1) Plaintiff (referring to the petitioner) is of legal
age, widow, Filipino citizen and a resident of
Barangay Tuyom, Cauayan, Negros Occidental,
while Defendant(referring to the respondent) is
also of legal age, married, Filipino and a resident
of Barangay Tuyom, Cauayan, Negros
Occidental, where he may be served with
summons and other processes of this Honorable
Court;
2) Plaintiff is the absolute owner of a parcel of
land, identified as Lot No. 1880-A, Cauayan
Cadastre, containing an area of TWELVE
THOUSAND NINE HUNDRED NINETY TWO
(12,992) SQUARE METERS, more or less,
situated in Barangay Tuyom, Cauayan, Negros
Occidental, more particularly bounded and
described in Transfer Certificate of Title No. T-
70184, dated April 27, 1983, issued by the
Register of Deeds of Negros Occidental in favor
of Plaintiff, xerox copy of which is hereto
attached as ANNEX "A" and made an integral
part hereof;
3) Defendant has been occupying a portion of
not less than ONE THOUSAND (1,000)
SQUARE METERS of the above-described
parcel of land of the Plaintiff for more than TEN
(10) years, at the tolerance of Plaintiff;
4) Sometime in 1987, Plaintiff wanted to recover
the portion occupied by Defendant but
Defendant refused to return to Plaintiff or vacate
said portion he has occupied inspite of repeated
demands from Plaintiff. And, to prevent Plaintiff
from recovering the portion he has occupied,
Defendant instigated his other relatives to file a
case against the herein Plaintiff, and, in 1988,
herein Defendant Samuel Tumpag, together with
Luz Tagle Vda. De Tumpag and other relatives,
filed a civil case, number 400, before this court
against herein Plaintiff, Esperanza Tumpag, for
cancellation of her title with damages;
5) Said Civil Case No. 400 was dismissed by this
Honorable Court through its Resolution, dated
October 11, 1989, penned by the Presiding
Judge, the late Artemio L. Balinas, prompting the
Plaintiffs in said case to elevate the said
resolution of this Honorable Court to the Court of
Appeals, and their appeal is identified as C.A.
G.R. No. CV-25699;
6) On June 28, 1991, the Court of Appeals
rendered a decision in the said appealed case,
the dispositive portion of which read:
 Page 426 of 458
"PREMISES CONSIDERED, the
appealed Resolution dated
October 11, 1989 is hereby
AFFIRMED."
and, that the same has become final on March
11, 1994 and was entered, on August 26,
1994, in the Book of Entries of Judgment,
xerox copy of said Entry of Judgment of the
Court of Appeals is hereto attached as ANNEX
"B" and made part hereof;
7) Herein Plaintiff needs the portion occupied by
Defendant and she has orally demanded from
Defendant of the return of the same, but
Defendant refused and still refuses to do so.
Hence, Plaintiff brought the matter before the
Office of the Barangay Captain of Barangay
Tuyom, Cauayan, Negros Occidental, for
conciliation, on March 3, 1995. But,
unfortunately, Defendant refused to vacate or
return the portion he occupies to Plaintiff.
Attached hereto as ANNEX "C," and made part
hereof, is the Certification of the Barangay
Captain of Barangay Tuyom, Cauayan, Negros
Occidental, certifying that this matter was
brought to his attention for conciliation;
cSITDa
8) Defendant's refusal to return the portion he
occupies to Plaintiff has caused Plaintiff to suffer
actual damages in the amount of not less than
TEN THOUSAND PESOS (P10,000.00), per
annum;
9) Defendant's unjustifiable refusal to return the
portion he occupies to Plaintiff has caused
Plaintiff to suffer mental anguish,
embarrassment, untold worries, sleepless nights,
fright and similar injuries, entitling her to moral
damages moderately assessed at not less than
FIFTY THOUSAND PESOS (P50,000.00);
10) To serve as deterrent (sic) to other persons
similarly inclined and by way of example for the
public good, Defendant should be made to pay
exemplary damages in the amount of not less
than TWENTY FIVE THOUSAND PESOS
(P25,000.00);
11) The unjustifiable refusal of Defendant to
return the property to the Plaintiff leaves Plaintiff
no other alternative but to file this present action,
forcing her to incur litigation expenses amounting
to not less than ONE THOUSAND PESOS
(P1,000.00), attorney's fees in the amount of
TWENTY THOUSAND PESOS (P20,000.00)
plus ONE THOUSAND PESOS (P1,000.00) for
every court appearance. 4
xxx xxx xxx
Together with his answer (which was later amended), the
respondent moved to dismiss the complaint on the
following grounds: failure to state a cause of action; that
the action was barred by prior judgment; and lack of
jurisdiction. 5
The RTC, in an order dated January 16, 1996, denied the
respondent's motion to dismiss and proceeded with pre-
trial and trial. 6
During the pendency of the case, the petitioner died and
was substituted by her son Pablito Tumpag Belnas, Jr. 7
In a decision 8 dated June 3, 2002, the RTC ordered the
respondent to return possession of the subject portion of
the property to the petitioner and to pay the petitioner
 Page 427 of 458
P10,000.00 as actual damages, P20,000.00 as moral
damages, and P10,000.00 as attorney's fees.
In his appeal to the CA, among the grounds the respondent
raised was the issue of the RTC's lack of jurisdiction over
the case. 9
In its assailed decision, 10 the CA agreed with the
respondent and nullified the RTC's June 3, 2002 decision
and all proceedings before the trial court. It held that the
petitioner's failure to allege in her complaint the assessed
value of the disputed property warranted the complaint's
dismissal, although without prejudice, because the court's
jurisdiction over the case should be "determined by the
material allegations of the complaint" 11 and "cannot be
made to depend upon the defenses set up in court or upon
a motion to dismiss for, otherwise, the question of
jurisdiction would depend almost entirely on the
defendant." 12 The petitioner moved to reconsider but the
CA denied her motion in its resolution 13 dated September
28, 2011. The CA's ruling and denial of the motion for
reconsideration gave rise to the present petition for review
on certiorari filed with this Court.
The petitioner now argues that the respondent, after having
actively participated in all stages of the proceedings in Civil
Case No. 666, is now estopped from assailing the RTC's
jurisdiction; that the subject case had been litigated before
the RTC for more than seven (7) years and was pending
before the CA for almost eight (8) years. Further, she
argues that the dismissal of her complaint was not
warranted considering that she had a meritorious case
as attached to her complaint was a copy of a
Declaration of Real Property indicating that the
assessed value of the disputed property is P20,790.00.
Our Ruling
We find MERIT in the present petition. The CA's
dismissal of the petitioner's complaint for recovery of
possession is erroneous and unwarranted.
It is well-settled that jurisdiction over a subject matter is
conferred by law, not by the parties' action or
conduct, 14 and is, likewise, determined from the
allegations in the complaint. 15
Under Batas Pambansa Blg. 129, 16 as amended
by Republic Act No. 7691, 17 the jurisdiction of Regional
Trial Courts over civil actions involving title to, or
possession of, real property, or any interest therein, is
limited to cases 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.18
Here, the petitioner filed a complaint for recovery of
possession of real property before the RTC but failed to
allege in her complaint the property's assessed value.
Attached, however, to the petitioner's complaint was a copy
of a Declaration of Real Property showing that the subject
property has a market value of P51,965.00 andassessed
value of P20,790.00. The CA was fully aware of this
attachment but still proceeded to dismiss the
petitioner's complaint: CDAHIT
Record shows that the complaint was filed with
the Regional Trial Court on December 13, 1995.
There is no allegation whatsoever in the
complaint for accion publicianaconcerning the
assessed value of the property
 Page 428 of 458

involved. Attached however to the complaint whether, admitting the facts alleged, the court can render a
is a copy of the Declaration of Real Property valid judgment upon the complaint in accordance with the
of subject land which was signed by the plaintiff's prayer. 25 The defendant, in filing a motion to
owner stating that its market value is P51,965 dismiss, hypothetically admits the truth of the factual and
and its assessed value is material allegations in the complaint, 26 as well as the
P20,790.00. (Emphasis ours) 19
documents attached to a complaint whose due execution
Generally, the court should only look into the facts alleged and genuineness are not denied under oath by the
in the complaint to determine whether a suit is within its defendant; these attachments must be considered as part
jurisdiction. 20 There may be instances, however, when a of the complaint without need of introducing evidence
rigid application of this rule may result in defeating thereon. 27
substantial justice or in prejudice to a party's substantial
Lastly, we note that the present petitioner's situation comes
right. 21 In Marcopper Mining Corp. v. Garcia, 22 we allowed
close with those of the respondents in Honorio Bernardo v.
the RTC to consider, in addition to the complaint, other
Heirs of Eusebio Villegas, 28 where the Villegas heirs, in
pleadings submitted by the parties in deciding whether or
filing their complaint for accion publiciana before the RTC,
not the complaint should be dismissed for lack of cause of
failed to allege the assessed value of the subject property.
action. In Guaranteed Homes, Inc. v. Heirs of Valdez, et
On the complaint's omission, the defendant questioned the
al., 23 we held that the factual allegations in a complaint
RTC's jurisdiction in his answer to the complaint and,
should be considered in tandem with the statements and
again, in his appeal before the CA.
inscriptions on the documents attached to it as annexes or
integral parts. In Bernardo v. Heirs of Villegas, 29 we affirmed the CA
ruling that upheld the RTC's jurisdiction over the case
In the present case, we find reason not to strictly apply the
despite the complaint's failure to allege the assessed value
above-mentioned general rule, and to consider the facts
of the property because the defendant-petitioner was found
contained in the Declaration of Real Property attached to
to have actively participated in the proceedings before the
the complaint in determining whether the RTC had
trial court and was already estopped from assailing the
jurisdiction over the petitioner's case. A mere reference to
jurisdiction of the RTC. While we mention this case and
the attached document could facially resolve the question
its result, we cannot, however, apply the principle
on jurisdiction and would have rendered lengthy litigation
of estoppel (on the question of jurisdiction) to the present
on this point unnecessary.
respondent.
In his comment 24 to the present petition, the respondent
We rule that the respondent is not estopped from assailing
contends that the assessed value of the property subject of
the RTC's jurisdiction over the subject civil case. Records
the case is actually much below than the value stated in
show that the respondent has consistently brought the
the attached Declaration of Real Property. However, the
issue of the court's lack of jurisdiction in his motions,
test of the sufficiency of the facts alleged in the complaint is
 Page 429 of 458

pleadings and submissions throughout the [G.R. No. 202664. November 10, 2015.]
proceedings, until the CA dismissed the petitioner's
complaint, not on the basis of a finding of lack of MANUEL LUIS C. GONZALES and
jurisdiction, but due to the insufficiency of the petitioner's FRANCIS MARTIN
complaint, i.e. failure to allege the assessed value of the D. GONZALES, petitioners, vs. GJH LAND,
subject property. Even in his comment filed before this INC. (formerly known as S.J. LAND, INC.),
Court, the respondent maintains that the RTC has no CHANG HWAN JANG a.k.a. STEVE JANG,
jurisdiction over the subject matter of the case. SANG RAK KIM, MARIECHU N. YAP, and
Lack of jurisdiction over the subject matter of the case can ATTY. ROBERTO P. MALLARI
always be raised anytime, even for the first time on II, respondents.
appeal, 30 since jurisdictional issues, as a rule, cannot be
acquired through a waiver or enlarged by the omission of
the parties or conferred by the acquiescence of the DECISION
court. 31 Thus, the respondent is not prevented from raising
the question on the court's jurisdiction in his appeal, if any,
to the June 3, 2002 decision of the RTC in Civil Case No. PERLAS-BERNABE, J : p

666. This is a direct recourse to the Court, via a

WHEREFORE, premises considered, we GRANT the
present petition for review on certiorari and SET ASIDE the
decision dated November 30, 2010 and resolution dated
September 28, 2011 of the Court of Appeals, Cebu City in
CA-G.R. CV No. 78155.
Accordingly, we REINSTATE the decision dated June 3,
2002 of the Regional Trial Court, Branch 61, Kabankalan
City, Negros Occidental in Civil Case No. 666.
SO ORDERED.
(Tumpag v. Tumpag, G.R. No. 199133, [September 29,
|||
2014])
petition for review on certiorari, 1 from the Orders dated
April 17, 2012 2 and July 9, 2012 3 of the Regional Trial
Court (RTC) of Muntinlupa City, Branch 276 (Branch
276) dismissing Civil Case No. 11-077 for lack of
jurisdiction.
The Facts
On August 4, 2011, petitioners Manuel Luis
C. Gonzales 4 and Francis Martin
D. Gonzales (petitioners) filed a Complaint 5 for
"Injunction with prayer for Issuance of Status
Quo Order, Three (3) and Twenty (20)-Day Temporary
Restraining Orders, and Writ of Preliminary Injunction
with Damages" against respondentsGJH Land, Inc.
(formerly known as S.J. Land, Inc.), Chang Hwan Jang,
Sang Rak Kim, Mariechu N. Yap, and Atty. Roberto P.
 Page 430 of 458
Mallari II 6 (respondents) before the RTC of Muntinlupa
City seeking to enjoin the sale of S.J. Land, Inc.'s
shares which they purportedly bought from S.J.
Global, Inc. on February 1, 2010. Essentially, petitioners
alleged that the subscriptions for the said shares were
already paid by them in full in the books of
S.J. Land, Inc., 7 but were nonetheless offered for sale
on July 29, 2011 to the corporation's
stockholders, 8 hence, their plea for injunction.
The case was docketed as Civil Case No. 11-077
and raffled to Branch 276, which is not a Special
Commercial Court. On August 9, 2011, said branch
issued a temporary restraining order, 9 and later, in an
Order 10 dated August 24, 2011, granted the application
for a writ of preliminary injunction.
After filing their respective answers 11 to the
complaint, respondents filed a motion to dismiss 12 on
the ground of lack of jurisdiction over the subject
matter, pointing out that the case involves an intra-
corporate dispute and should, thus, be heard by the
designated Special Commercial Court of Muntinlupa
City.13EATCcI
The RTC Ruling
In an Order 14 dated April 17, 2012, Branch 276
granted the motion to dismiss filed by respondents. It
found that the case involves an intra-corporate dispute
that is within the original and exclusive jurisdiction of the
RTCs designated as Special Commercial Courts. It
pointed out that the RTC of Muntinlupa City, Branch 256
(Branch 256) was specifically designated by the Court
as the Special Commercial Court, hence, Branch 276
had no jurisdiction over the case and cannot lawfully
exercise jurisdiction on the matter, including the
issuance of a Writ of Preliminary
Injunction. 15 Accordingly, it dismissed the case.
Dissatisfied, petitioners filed a motion for
reconsideration, 16 arguing that they filed the case with
the Office of the Clerk of Court of the RTC of Muntinlupa
City which assigned the same to Branch 276 by
raffle. 17 As the raffle was beyond their control, they
should not be made to suffer the consequences of the
wrong assignment of the case, especially after paying
the filing fees in the amount of P235,825.00 that would
be for naught if the dismissal is upheld. 18 They further
maintained that the RTC has jurisdiction over intra-
corporate disputes under Republic Act No. (RA)
8799, 19 but since the Court selected specific branches
to hear and decide such suits, the case must, at most,
be transferred or raffled off to the proper branch. 20
In an Order 21 dated July 9, 2012, Branch 276
denied the motion for reconsideration, holding that it has
no authority or power to order the transfer of the case to
the proper Special Commercial Court, citing Calleja v.
Panday 22 (Calleja); hence, the present petition.
The Issue Before the Court
The essential issue for the Court's resolution is
whether or not Branch 276 of the RTC of Muntinlupa
City erred in dismissing the case for lack of jurisdiction
over the subject matter.
The Court's Ruling
The petition is meritorious.
At the outset, the Court finds Branch 276 to have
correctly categorized Civil Case No. 11-077 as a
 Page 431 of 458
commercial case, more particularly, an intra-corporate
dispute, 23 considering that it relates to petitioners'
averred rights over the shares of stock offered for sale
to other stockholders, having paid the same in full.
Applying the relationship test and the nature of the
controversy test, the suit between the parties is clearly
rooted in the existence of an intra-corporate relationship
and pertains to the enforcement of their correlative
rights and obligations under the Corporation Code and
the internal and intra-corporate regulatory rules of the
corporation, 24 hence, intra-corporate, which should be
heard by the designated Special Commercial Court as
provided under A.M. No. 03-03-03-SC 25 dated June 17,
2003 in relation to Item 5.2, Section 5 of RA 8799.
The present controversy lies, however, in the
procedure to be followed when a commercial case
such as the instant intra-corporate dispute has
been properly filed in the official station of the
designated Special Commercial Court but is,
however, later wrongly assigned by raffle to a
regular branch of that station.
As a basic premise, let it be emphasized that a
court's acquisition of jurisdiction over a particular case's
subject matter is different from incidents pertaining to
the exercise of its jurisdiction. Jurisdiction over the
subject matter of a case is conferred by law, whereas
a court's exercise of jurisdiction, unless provided by
the law itself, is governed by the Rules of Court or by
the orders issued from time to time by the
Court. 26 In Lozada v. Bracewell, 27 it was recently held
that the matter of whether the RTC resolves an issue
in the exercise of its general jurisdiction or of its
limited jurisdiction as a special court is only a
matter of procedure and has nothing to do with the
question of jurisdiction.
Pertinent to this case is RA 8799 which took
effect on August 8, 2000. By virtue of said law,
jurisdiction over cases enumerated in Section
5 28 of Presidential Decree No. 902-A 29 was transferred
from the Securities and Exchange Commission (SEC)
to the RTCs, being courts of general jurisdiction.
Item 5.2, Section 5 of RA 8799 provides:
SEC. 5. Powers and Functions of the
Commission. . . .
xxx xxx xxx
5.2 The Commission's jurisdiction over all
cases enumerated under Section 5
of Presidential Decree No. 902-A is hereby
transferred to the Courts of general
jurisdiction or the appropriate Regional
Trial Court: Provided, that the Supreme
Court in the exercise of its authority may
designate the Regional Trial Court
branches that shall exercise jurisdiction
over the cases. The Commission shall retain
jurisdiction over pending cases involving intra-
corporate disputes submitted for final
resolution which should be resolved within one
(1) year from the enactment of this Code. The
Commission shall retain jurisdiction over
pending suspension of payments/rehabilitation
cases filed as of 30 June 2000 until finally
disposed. (Emphasis supplied)
The legal attribution of Regional Trial Courts as
courts of general jurisdiction stems from Section 19
(6), Chapter II of Batas Pambansa Bilang (BP)
 Page 432 of 458
129, 30known as "The Judiciary Reorganization Act of
1980":
Section 19. Jurisdiction in civil cases.
Regional Trial Courts shall exercise exclusive
original jurisdiction:
xxx xxx xxx
excerpt of the Congressional deliberations:
(6) In all cases not within the exclusive
jurisdiction of any court, tribunal, person or
body exercising jurisdiction or any court,
tribunal, person or body exercising judicial or
quasi-judicial functions; . . . .
DHITCc
As enunciated in Durisol Philippines, Inc. v. CA: 31
The regional trial court, formerly the
court of first instance, is a court of general
jurisdiction. All cases, the jurisdiction over
which is not specifically provided for by law to
be within the jurisdiction of any other court, fall
under the jurisdiction of the regional trial
court. 32
To clarify, the word "or" in Item 5.2, Section 5
of RA 8799 was intentionally used by the legislature to
particularize the fact that the phrase "the Courts of
general jurisdiction" is equivalent to the phrase "the
appropriate Regional Trial Court." In other words, the
jurisdiction of the SEC over the cases enumerated
under Section 5 of PD 902-A was transferred to the
courts of general jurisdiction, that is to say (or,
otherwise known as), the proper Regional Trial Courts.
This interpretation is supported by San Miguel Corp. v.
Municipal Council, 33 wherein the Court held that:
[T]he word "or" may be used as the equivalent
of "that is to say" and gives that which
precedes it the same significance as that which
follows it. It is not always disjunctive and is
sometimes interpretative or expository of the
preceding word. 34
Further, as may be gleaned from the following
Senator [Raul S.] Roco: . . . .
xxx xxx xxx
. . . . The first major departure is as regards the
Securities and Exchange Commission. The
Securities and Exchange Commission has
been authorized under this proposal to
reorganize itself. As an administrative agency,
we strengthened it and at the same time we
take away the quasi-judicial functions. The
quasi-judicial functions are now given back
to the courts of general jurisdiction the
Regional Trial Court, except for two
categories of cases.
In the case of corporate disputes, only
those that are now submitted for final
determination of the SEC will remain with the
SEC. So, all those cases, both memos of the
plaintiff and the defendant, that have been
submitted for resolution will continue. At the
same time, cases involving rehabilitation,
bankruptcy, suspension of payments and
receiverships that were filed before June 30,
2000 will continue with the SEC. In other
words, we are avoiding the possibility, upon
approval of this bill, of people filing cases with
the SEC, in manner of speaking, to select their
court. 35
 Page 433 of 458
xxx xxx xxx (Emphasis supplied)
Therefore, one must be disabused of the notion
that the transfer of jurisdiction was made only in favor of
particular RTC branches, and not the RTCs in general.
Consistent with the foregoing, history depicts that
when the transfer of SEC cases to the RTCs was first
implemented, they were transmitted to the Executive
Judges of the RTCs for raffle between or among its
different branches, unless a specific branch has been
designated as a Special Commercial Court, in which
instance, the cases were transmitted to said
branch. 36 It was only on November 21, 2000 that the
Court designated certain RTC branches to try and
decide said SEC cases 37 without, however, providing
for the transfer of the cases already distributed to or
filed with the regular branches thereof. Thus, on
January 23, 2001, the Court issued SC Administrative
Circular No. 08-2001 38 directing the transfer of said
cases to the designated courts (commercial SEC
courts). Later, or on June 17, 2003, the Court
issued A.M. No. 03-03-03-SC consolidating the
commercial SEC courts and the intellectual property
courts 39 in one RTC branch in a particular
locality, i.e., the Special Commercial Court, to
streamline the court structure and to promote
expediency. 40 Accordingly, the RTC branch so
designated was mandated to try and decide SEC cases,
as well as those involving violations of intellectual
property rights, which were, thereupon, required to be
filed in the Office of the Clerk of Court in the official
station of the designated Special Commercial
Courts, to wit:
1. The Regional Courts previously
designated as SEC Courts through the: (a)
Resolutions of this Court dated 21 November
2000, 4 July 2001, 12 November 2002, and 9
July 2002 all issued in A.M. No. 00-11-03-SC;
(b) Resolution dated 27 August 2001 in A.M.
No. 01-5-298-RTC; and (c) Resolution dated 8
July 2002 in A.M. No. 01-12-656-RTC are
hereby DESIGNATED and shall be CALLED
as Special Commercial Courts to try and
decide cases involving violations of Intellectual
Property Rights which fall within their
jurisdiction and those cases formerly
cognizable by the Securities and Exchange
Commission;
xxx xxx xxx
4. The Special Commercial Courts shall
have jurisdiction over cases arising within their
respective territorial jurisdiction with respect to
the National Capital Judicial Region and within
the respective provinces with respect to the
First to Twelfth Judicial Regions. Thus, cases
shall be filed in the Office of the Clerk of Court
in the official station of the designated Special
Commercial Court; 41
xxx xxx xxx (Underscoring supplied)
It is important to mention that the Court's
designation of Special Commercial Courts was made in
line with its constitutional authority to supervise the
administration of all courts as provided under Section 6,
Article VIII of the 1987 Constitution:
Section 6. The Supreme Court shall
have administrative supervision over all courts
and the personnel thereof. cEaSHC
 Page 434 of 458
The objective behind the designation of such
specialized courts is to promote expediency and
efficiency in the exercise of the RTCs'
jurisdiction over the cases enumerated under Section
5 of PD 902-A. Such designation has nothing to do with
the statutory conferment of jurisdiction to all RTCs
under RA 8799 since in the first place, the Court cannot
enlarge, diminish, or dictate when jurisdiction shall be
removed, given that the power to define, prescribe,
and apportion jurisdiction is, as a general rule, a
matter of legislative prerogative. 42 Section 2, Article
VIII of the 1987 Constitution provides:
Section 2. The Congress shall have the
power to define, prescribe, and apportion the
jurisdiction of the various courts but may not
deprive the Supreme Court of its jurisdiction
over cases enumerated in Section 5 hereof.
xxx xxx xxx
Here, petitioners filed a commercial case, i.e., an
intra-corporate dispute, with the Office of the Clerk of
Court in the RTC of Muntinlupa City, which is the official
station of the designated Special Commercial Court, in
accordance with A.M. No. 03-03-03-SC. It is, therefore,
from the time of such filing that the RTC of
Muntinlupa City acquired jurisdiction over the
subject matter or the nature of the
action. 43 Unfortunately, the commercial case was
wrongly raffled to a regular branch, i.e., Branch 276,
instead of being assigned 44 to the sole Special
Commercial Court in the RTC of Muntinlupa City,
which is Branch 256. This error may have been
caused by a reliance on the complaint's caption, i.e.,
"Civil Case for Injunction with prayer for Status Quo
Order, TRO and Damages," 45 which, however,
contradicts and more importantly, cannot prevail over its
actual allegations that clearly make out an intra-
corporate dispute:
16. To the surprise of MLCG and
FMDG, however, in two identical letters both
dated 13 May 2011, under the letterhead
of GJH Land, Inc., Yap, now acting as its
President, Jang and Kim demanded payment
of supposed unpaid subscriptions of MLCG
and FMDG amounting to P10,899,854.30 and
P2,625,249.41, respectively.
16.1 Copies of the letters
dated 13 May 2011 are attached
hereto and made integral parts
hereof as Annexes "J" and "K",
respectively.
17. On 29 July 2011, MLCG and FMDG
received an Offer Letter addressed to
stockholders of GJH Land, Inc. from Yap
informing all stockholders that GJHLand, Inc. is
now offering for sale the unpaid shares of stock
of MLCG and FMDG. The same letter states
that the offers to purchase these shares will be
opened on 10 August 2011 with payments to
be arranged by deposit to the depository bank
of GJH Land, Inc.
17.1 A copy of the undated
Offer Letter is attached hereto
and made an integral part hereof
as Annex "L".
18. The letter of GJH Land, Inc. through
Yap, is totally without legal and factual basis
because as evidenced by the Deeds of
 Page 435 of 458
Assignment signed and certified by Yap
herself, all the S.J. Land, Inc. shares acquired
by MLCG and FMDG have been fully paid in
the books of S.J. Land, Inc.
19. With the impending sale of the
alleged unpaid subscriptions on 10 August
2011, there is now a clear danger that
MLCG and FMDG would be deprived of
these shares without legal and factual
basis.
20. Furthermore, if they are deprived of
these shares through the scheduled sale, both
MLCG and FMDG would suffer grave and
irreparable damage incapable of pecuniary
estimation.
21. For this reason, plaintiffs now come
to the Honorable Court for injunctive relief so
that after trial on the merits, a permanent
injunction should be issued against the
defendants preventing them from selling the
shares of the plaintiffs, there being no basis for
such sale. 46
According to jurisprudence, "it is not the caption
but the allegations in the complaint or other initiatory
pleading which give meaning to the pleading and on the
basis of which such pleading may be legally
characterized." 47 However, so as to avert any future
confusion, the Court requires henceforth, that all
initiatory pleadings state the action's nature both in its
caption and the body, which parameters are defined in
the dispositive portion of this Decision.
Going back to the case at bar, the Court
nonetheless deems that the erroneous raffling to a
regular branch instead of to a Special Commercial Court
is only a matter of procedure that is, an incident
related to the exercise of jurisdiction and, thus,
should not negate the jurisdiction which the RTC of
Muntinlupa City had already acquired. In such a
scenario, the proper course of action was not for the
commercial case to be dismissed; instead, Branch 276
should have first referred the case to the Executive
Judge for re-docketing as a commercial case;
thereafter, the Executive Judge should then assign
said case to the only designated Special
Commercial Court in the station, i.e., Branch 256.
Note that the procedure would be different where
the RTC acquiring jurisdiction over the case
has multiple special commercial court branches; in
such a scenario, the Executive Judge, after re-docketing
the same as a commercial case, should proceed to
order its re-raffling among the said special branches.
Meanwhile, if the RTC acquiring jurisdiction
has no branch designated as a Special Commercial
Court, then it should refer the case to the nearest RTC
with a designated Special Commercial Court branch
within the judicial region. 48 Upon referral, the RTC to
which the case was referred to should re-docket the
case as a commercial case, and then: (a) if the said
RTC has only one branch designated as a Special
Commercial Court, assign the case to the sole special
branch; or (b) if the said RTC has multiple branches
designated as Special Commercial Courts, raffle off the
case among those special branches. CTIEac
In all the above-mentioned scenarios, any
difference regarding the applicable docket fees should
be duly accounted for. On the other hand, all docket
 Page 436 of 458
fees already paid shall be duly credited, and any
excess, refunded.
At this juncture, the Court finds it fitting to clarify
that the RTC mistakenly relied on the Calleja case to
support its ruling. In Calleja, an intra-corporate
dispute 49among officers of a private corporation with
principal address at Goa, Camarines Sur, was filed with
the RTC of San Jose, Camarines Sur, Branch 58
instead of the RTC of Naga City, which is the official
station of the designated Special Commercial Court for
Camarines Sur. Consequently, the Court set aside the
RTC of San Jose, Camarines Sur's order to transfer the
case to the RTC of Naga City and dismissed the
complaint considering that it was filed before a court
which, having no internal branch designated as a
Special Commercial Court, had no jurisdiction over
those kinds of actions, i.e., intra-corporate
disputes. Calleja involved two different RTCs,i.e., the
RTC of San Jose, Camarines Sur and the RTC of Naga
City, whereas the instant case only involves one
RTC, i.e., the RTC of Muntinlupa City, albeit involving
two different branches of the same court, i.e., Branches
256 and 276. Hence, owing to the variance in the facts
attending, it was then improper for the RTC to rely on
the Calleja ruling.
Besides, the Court observes that the fine line that
distinguishes subject matter jurisdiction and exercise of
jurisdiction had been clearly blurred
in Calleja.Harkening back to the statute that had
conferred subject matter jurisdiction, two things are
apparently clear: (a) that the SEC's subject matter
jurisdiction over intra-corporate cases under Section 5
of Presidential Decree No. 902-A was transferred to the
Courts of general jurisdiction, i.e., the appropriate
Regional Trial Courts; and (b) the designated branches
of the Regional Trial Court, as per the rules
promulgated by the Supreme Court, shall exercise
jurisdiction over such cases. Item 5.2, Section 5 of RA
8799 provides:
SEC. 5. Powers and Functions of the
Commission. . . .
xxx xxx xxx
5.2 The Commission's jurisdiction over all
cases enumerated under Section 5
of Presidential Decree No. 902-A is hereby
transferred to the Courts of general
jurisdiction or the appropriate Regional
Trial Court: Provided, that the Supreme
Court in the exercise of its authority may
designate the Regional Trial Court
branches that shall exercise
jurisdiction over the cases. . . . .
In contrast, the appropriate jurisprudential
reference to this case would be Tan v. Bausch &
Lomb, Inc., 50 which involves a criminal complaint for
violation of intellectual property rights filed before the
RTC of Cebu City but was raffled to a regular branch
thereof (Branch 21), and not to a Special Commercial
Court. As it turned out, the regular branch subsequently
denied the private complainant's motion to transfer the
case to the designated special court of the same RTC,
on the ground of lack of jurisdiction. The CA reversed
the regular branch and, consequently, ordered the
transfer of the case to the designated special court at
that time (Branch 9). The Court, affirming the CA,
 Page 437 of 458
declared that the RTC had acquired jurisdiction over the
subject matter. In view, however, of the designation of
another court as the Special Commercial Court in
the interim (Branch 11 of the same Cebu City RTC), the
Court accordingly ordered the transfer of the case and
the transmittal of the records to said Special
Commercial Court instead. 51 Similarly, the transfer of
the present intra-corporate dispute from Branch 276
to Branch 256 of the same RTC of Muntinlupa City,
subject to the parameters above-discussed is
proper and will further the purposes stated in A.M.
No. 03-03-03-SC of attaining a speedy and efficient
administration of justice.
For further guidance, the Court finds it apt to point
out that the same principles apply to the inverse
situation of ordinary civil cases filed before the
proper RTCs but wrongly raffled to its branches
designated as Special Commercial Courts. In such a
scenario, the ordinary civil case should then be
referred to the Executive Judge for re-docketing as
an ordinary civil case; thereafter, the Executive
Judge should then order the raffling of the case
to all branchesof the same RTC, subject to
limitations under existing internal rules, and the
payment of the correct docket fees in case of any
difference. Unlike the limited assignment/raffling of a
commercial case only to branches designated as
Special Commercial Courts in the scenarios stated
above, the re-raffling of an ordinary civil case in this
instance to all courts is permissible due to the fact that a
particular branch which has been designated as a
Special Commercial Court does not shed the RTC's
general jurisdiction over ordinary civil cases under the
imprimatur of statutory law, i.e., Batas Pambansa Bilang
(BP) 129. 52 To restate, the designation of Special
Commercial Courts was merely intended as a
procedural tool to expedite the resolution of commercial
cases in line with the court's exercise of
jurisdiction. This designation was not made by statute
but only by an internal Supreme Court rule under its
authority to promulgate rules governing matters of
procedure and its constitutional mandate to supervise
the administration of all courts and the personnel
thereof. 53 Certainly, an internal rule promulgated by the
Court cannot go beyond the commanding statute. But
as a more fundamental reason, the designation of
Special Commercial Courts is, to stress, merely an
incident related to the court's exercise of jurisdiction,
which, as first discussed, is distinct from the concept of
jurisdiction over the subject matter. The RTC's general
jurisdiction over ordinary civil cases is therefore not
abdicated by an internal rule streamlining court
procedure.
In fine, Branch 276's dismissal of Civil Case No.
11-077 is set aside and the transfer of said case to
Branch 256, the designated Special Commercial Court
of the same RTC of Muntinlupa City, under the
parameters above-explained, is hereby ordered.
WHEREFORE, the petition is GRANTED. The
Orders dated April 17, 2012 and July 9, 2012 of the
Regional Trial Court (RTC) of Muntinlupa City, Branch
276 in Civil Case No. 11-077 are
hereby REVERSED and SET ASIDE. Civil Case No.
11-077 is REFERRED to the Executive Judge of the
RTC of Muntinlupa City for re-docketing as a
commercial case. Thereafter, the Executive Judge
 Page 438 of 458

shall ASSIGN said case to Branch 256, the sole Commercial Court branch within
designated Special Commercial Court in the RTC of the judicial region. Upon referral,
Muntinlupa City, which is ORDERED to resolve the the RTC to which the case was
case with reasonable dispatch. In this regard, the Clerk referred to should re-docket the
of Court of said RTC shall DETERMINE the appropriate case as a commercial case, and
then: (a) if the said RTC has only
amount of docket fees and, in so doing, ORDER the
one branch designated as a
payment of any difference or, on the other hand, refund Special Commercial Court,
any excess. SaCIDT
assign the case to the sole
Furthermore, the Court hereby RESOLVES that special branch; or (b) if the said
henceforth, the following guidelines shall be observed: RTC has multiple branches
designated as Special
1. If a commercial case filed before the proper Commercial Courts, raffle off the
RTC is wrongly raffled to its regular branch, the case among those special
proper courses of action are as follows: branches.
1.1 If the RTC has only one 2. If an ordinary civil case filed before the
branch designated as a Special proper RTC is wrongly raffled to its branch
Commercial Court, then the case designated as a Special Commercial Court,
shall be referred to the Executive then the case shall be referred to the Executive
Judge for re-docketing as a Judge for re-docketing as an ordinary civil
commercial case, and thereafter, case. Thereafter, it shall be raffled off to all
assigned to the sole special courts of the same RTC (including its
branch; designated special branches which, by statute,
1.2 If the RTC has multiple are equally capable of exercising general
branches designated as Special jurisdiction same as regular branches), as
Commercial Courts, then the provided for under existing rules.
case shall be referred to the 3. All transfer/raffle of cases is subject to the
Executive Judge for re-docketing payment of the appropriate docket fees in case
as a commercial case, and of any difference. On the other hand, all docket
thereafter, raffled off among fees already paid shall be duly credited, and
those special branches; and any excess, refunded.
1.3 If the RTC has no internal 4. Finally, to avert any future confusion, the
branch designated as a Special Court requires that all initiatory pleadings state
Commercial Court, then the case the action's nature both in its caption and body.
shall be referred to the nearest Otherwise, the initiatory pleading may, upon
RTC with a designated Special
 Page 439 of 458
motion or by order of the court motu proprio, be
dismissed without prejudice to its re-filing after
due rectification. This last procedural rule is
prospective in application.
5. All existing rules inconsistent with the
foregoing are deemed superseded.
SO ORDERED.
Sereno, C.J., Carpio, Velasco, Jr., Peralta,
Bersamin, Del Castillo, Villarama, Jr.,
Reyes and Jardeleza, JJ., concur.
Leonardo-de Castro, J., I concur in the result. I
subscribe to the ruling in the Calleja case that the
misfiling of a commercial case with a court not duly
designated Special Commercial Court is an error of
jurisdiction. However, the Supreme Court has the
constitutional and legal basis (RA 8799) to promulgate
guidelines here for future cases.
Brion * and Mendoza, ** JJ., are on leave.
Perez, J., I submitted a dissenting opinion.
Leonen, J., see concurring opinion.
Separate Opinions
PEREZ, J., dissenting:
I am constrained to register my dissent to
the ponencia that the Securities and Exchange
Commission's (SEC's) jurisdiction over cases
enumerated in Section 5 of Presidential Decree (P.D.)
No. 902-A was transferred to all Regional Trial Courts,
unaffected by the proviso in the same Section that the
Supreme Court may designate the Regional Trial Court
branches that shall exercise the transferred jurisdiction.
I base my dissent on the plain wording of Section 5.2 of
Republic Act. No. 8799 or "The Securities Regulation
Code."
Briefly, the undisputed facts.
Petitioners Manuel Luis C. Gonzales and Francis
Martin D. Gonzales filed a Complaint against
respondents GJH Land, Inc. (formerly known as
S.J. Land, Inc.), Chang Hwan Jang, Sang Rak Kim,
Mariechu N. Yap, and Atty. Roberto P. Mallari II before
the Regional Trial Court (RTC) of Muntinlupa City
seeking to enjoin the sale of S.J. Land, Inc.'s shares
which petitioners purportedly already bought from, and
fully paid to, S.J. Global, Inc. on 1 February 2010.
Petitioners, the Gonzales', designated their Complaint
as a Civil Case for Injunction with prayer for
Status Quo Order, TRO and Damages. 1
Essentially, the allegations in the Complaint state
that petitioners subscribed to a total of 295,116 shares
fully paid in the books of S.J. Land, Inc., acquiring 40%
and 10% of the outstanding capital stock thereof. The
bone of contention in the Complaint is the status of the
shares, i.e., whether fully paid or unpaid by petitioners
and the consequent issue of ownership and its
incidences. cHECAS
Upon filing of the Complaint with the Office of the
Clerk of Court of the RTC of Muntinlupa City, it was
raffled to Branch 276, which is not a Special
Commercial Court. On 9 and 24 August 2011, the
RTC, Branch 276, in two separate Orders, issued a
 Page 440 of 458
temporary restraining order and a writ of preliminary
injunction.
After filing their respective answers to the
complaint, respondents filed a motion to dismiss on the
ground of lack of jurisdiction over the subject matter,
pointing out that the case involves an intra-corporate
dispute and should, thus, be heard by the designated
Special Commercial Court of Muntinlupa City.
In an Order dated 17 April 2011, Branch 276
granted the motion to dismiss, ruling that the case
involves an intra-corporate dispute falling within the
original and exclusive jurisdiction of the RTCs
designated as Special Commercial Courts, Branch 256
in this instance. Since Branch 276 was not specifically
designated by the Supreme Court as a commercial
court, it had no jurisdiction over the intra-corporate
dispute, and accordingly, the case should be dismissed.
On motion for reconsideration, petitioners argued
that: (1) they had no control over raffle of cases; (2) the
RTCs have jurisdiction over intra-corporate disputes
pursuant to Republic Act (R.A.) No. 8799, with only the
Supreme Court designating specific branches as special
commercial courts, thus, at most, the case should be
transferred or raffled to the proper branch; and (3) in all,
as a matter of justice and equity, they cannot be
prejudiced by the incorrect raffling of their case since
they complied with the rules for the filing of cases.
Branch 276 stood pat on its ruling that it was
without jurisdiction to hear, decide and act on the case,
not designated as a special commercial court pursuant
toA.M. No. 00-11-03-SC/11-21-00. Ratiocinating further
that without any kind of authority to act thereon, Branch
276 can only dismiss the case and cannot order the
transfer of the case to the proper RTC following our
ruling in Calleja v. Panday. 2 The reversal of the rulings
is the object of this Petition before us.
In granting the petition, the ponencia starts with
the basic premise that jurisdiction over the subject
matter is conferred by law, distinct from the exercise of
jurisdiction which, unless provided by the law itself, is
governed by the Rules of Court or by the orders issued
from time to time by the Court. The ponencia points
toR.A. No. 8799, specifically Section 5.2, as the law
conferring (transferring) original and exclusive
jurisdiction to the appropriate RTCs (from the Securities
and Exchange Commission) over cases enumerated in
Section 5 of Presidential Decree (P.D.) No. 902-A (SEC
Cases). The ponencia clarifies, however, that the
Supreme Court's designation of specific Special
Commercial Courts, made subject of various Supreme
Court Administrative Matters, 3 was not a conferment of
jurisdiction, but a "procedural tool to promote
expediency and efficiency in the exercise of the
RTC's jurisdiction over such cases." In this instance,
pursuant to our Rules directing the manner by which
jurisdiction shall be exercised, commercial cases were
required to be filed in the Office of the Clerk of Court in
the official station of the designated Special
Commercial Courts.
The ponencia emphasizes that, petitioners having
"correctly filed an intra-corporate case with the Office of
the Clerk of Court in the RTC of Muntinlupa City, which
is the official station of the designated Special
Commercial Court, in accordance with [the Rules]," the
 Page 441 of 458
RTC, "from the time of such filing[,] acquired jurisdiction
over the subject matter or the nature of the action."
Specifically, the ponencia holds:
Unfortunately, the case was raffled to
Branch 276 instead of being assigned to the
single Special Commercial Court in the RTC of
Muntinlupa City, which is Branch 256. As the
Court sees it, this erroneous raffling to a
regular branch instead of to a Special
Commercial Court is only a matter of
procedure that is, an incident related to the
RTC's exercise of jurisdiction and, thus,
should not negate the jurisdiction which the
RTC of Muntinlupa City had already acquired.
As such, Branch 276 should have merely
ordered the transfer of the case to Branch 256,
and not its dismissal. . . .
In sum, the ponencia, discussing and citing the
cases of Calleja, on which the court a quo based the
herein assailed Order, Tan v. Bausch &
Lomb, Inc., 4 andHome Guaranty Corporation v. R-II
Builders, Inc., 5 draws a distinction between subject
matter jurisdiction conferred by law, in this instance
falling with the RTCs, and the exercise of jurisdiction, in
accordance with the designation of appropriate RTCs by
the Supreme Court. Thus, according to
the ponencia, the RTC of Muntinlupa City regardless of
the Supreme Court designated branch, acquired
jurisdiction over Civil Case No. 11-077 upon the filing of
the complaint in the official station of the designated
Special Commercial Courts. Thus, too, Branch 276, an
RTC, albeit not designated as a Special Commercial
Court, should simply order the transfer of the case to
Branch 256, the designated Special Commercial Court,
contemplating merely a procedural matter, incidental to
the RTC's exercise of jurisdiction. In all, as per
the ponencia, the general investiture of jurisdiction to all
RTCs is absolute, and once acquired, any of the RTCs
may, in the exercise of vested jurisdiction, order the
transfer of cases to the specific branch designated by
the Supreme Court as a Special Commercial Court.
With all due respect, the ponencia proceeds from
the wrong premise that the law vested jurisdiction over
transferred SEC cases on all the Regional Trial Courts
and that the designation by the Supreme Court of
Special Commercial Courts concern only an "exercise of
jurisdiction."
AHDacC
Section 5, Item 5.2 of R.A. No. 8799 reads:
SEC. 5. Powers and Functions of the
Commission. . . .
xxx xxx xxx
5.2 The Commission's jurisdiction over all
cases enumerated under Section
5 6 of Presidential Decree No. 902-A is hereby
transferred to the Courts of general jurisdiction
or the appropriate Regional Trial
Court: Provided, that the Supreme Court in the
exercise of its authority may designate the
Regional Trial Court branches that shall
exercise jurisdiction over the cases. The
Commission shall retain jurisdiction over
pending cases involving intra-corporate
disputes submitted for final resolution which
should be resolved within one (1) year from the
enactment of this Code. The Commission shall
retain jurisdiction over pending suspension of
 Page 442 of 458
payments/rehabilitation cases filed as of 30
June 2000 until finally disposed.
Thus, I am constrained to differ based on the
statements in, and exact wording of, the law.
It is first axiom in legal hermeneutics that a
statutory provision is read as a whole and not in
disjointed parts. The rule is as respected as it is ancient.
Its sum and substance has not been diluted no matter
how frequent the free paraphrases have been. The
textbook says:
Subject always to the cardinal rule of
statutory construction, the courts should give
every reasonable interpretation to a statute
which will give effect and meaning to every part
or word thereof.
A statute should be construed that no
word, clause, sentence, provision or part shall
be rendered surplusage, or superfluous,
meaningless, void, insignificant or nugatory, if
that can be reasonably avoided.
The rule has its basis in the presumption
that the legislature could not have intended to
use words in vain or to leave part of its
enactment devoid of sense or meaning. It
cannot be presumed that the legislature
introduced into a statute, words, clauses,
provisions which would annul or mutually
destroy each other. Rather, it is to be
presumed that it is the purpose of the
legislature that the entire statute and every part
thereof should be significant and effective.
The maxim "ut res magis quam
pereat" requires not merely that a statute
should be given effect as a whole but that
effect should be given to each of its express
provisions.
Under this rule, that construction is
favored which will render every word operative
rather than one which makes some words idle
and nugatory.
However, the court may not, in order to
give effect to particular words, virtually destroy
the meaning of the entire context, e.g., give
them a significance which would be clearly
repugnant to the statute looked upon as a
whole and destructive of its obvious intent. 7
Included in the Philippine applications of the tenet are
the cases of: (1) Land Bank of the Philippines v. AMS
Farming Corporation; 8 Mactan-Cebu International
Airport Authority v. Urgello; 9 and Smart
Communications, Inc. v. The City of Danao, 10 as cited
in Philippine International Trading Corporation v.
Commission on Audit 11where the Court's ruling was:
It is a rule in statutory construction that
every part of the statute must be interpreted
with reference to the context, i.e., that every
part of the statute must be considered together
with the other parts, and kept subservient to
the general intent of the whole enactment.
Because the law must not be read in truncated
parts, its provisions must be read in relation to
the whole law. The statute's clauses and
phrases must not, consequently, be taken as
detached and isolated expressions, but the
whole and every part thereof must be
considered in fixing the meaning of any of its
parts in order to produce a harmonious whole.
 Page 443 of 458
Consistent with the fundamentals of statutory
construction, all the words in the statute must
be taken into consideration in order to
ascertain its meaning.
I must here repeat the application of the rule.
Thus must the following conclusions be reached.
Section 5, Item 5.2 of R.A. No. 8799 did not
transfer the cases enumerated under Section 5 of P.D.
No. 902-A to all the RTCs. If that was the legislative
intention, then the provision should have simply stated
that such cases are "hereby transferred to the Regional
Trial Courts." The complete investiture is, however, on
"the courts of general jurisdiction or the appropriate
Regional Trial Court: Provided, that the Supreme Court,
in the exercise of its authority may designate the
Regional Trial Court branches that shall exercise
jurisdiction over the cases." If the law is a general
conferment of jurisdiction on all RTC, then the phrase
"or the appropriate Regional Trial Court" is an inutile
surplusage and the proviso that "the Supreme Court in
the exercise of its authority may designate the Regional
Trial Court branchesthat shall exercise jurisdiction over
the cases" is a purposeless appendage and wasted
words. A general grant to all RTCs renders irrelevant
the "Supreme Court's exercise of authority" on the
matter. Such a general grant renders meaningless the
designation by the Supreme Court of the
RTC branches that shall exercise jurisdiction over the
cases.
Each word in the law was purposely written; and
all such words make up the phrased idea. This is a
basic presumption: To repeat
[T]he legislature could not have
intended to use words in vain or to leave part
of its enactment devoid of sense or meaning. It
cannot be presumed that the legislature
introduced into a statute, words, clauses,
provisions which would annul or mutually
destroy each other. Rather, it is to be
presumed that it is the purpose of the
legislature that the entire statute and every part
thereof should be significant and
effective. 12
IDSEAH
Section 5, Item 5.2 of R.A. No. 8799 should
therefore be read to mean that SEC's jurisdiction over
all cases under Section 5 of P.D. No. 902-A is
transferred to the specific RTC branch designated by
the Supreme Court in the exercise of its authority.
This is the reading of the Supreme Court as
expressed with precision in A.M. No. 00-11-03-
SC dated 21 November 2000 which is aptly titled
"Resolution Designating Certain Branches of Regional
Trial Courts To Try and Decide Cases Formerly
Cognizable by the Securities and Exchange
Commission" "arising within their respective territorial
jurisdictions with respect to the National Capital Region
and within the respective provinces in the First to the
Twelfth Judicial Regions." This En Banc Resolution
opened with a purpose clause reading "to implement
the provisions of Sec. 5.2 of Republic Act No. 8799 (The
Securities Regulation Code). This is an unequivocal
statement that the Court interprets the provision to
 Page 444 of 458
mean that only the RTC Branches that it shall designate
to hear and decide Special Commercial Court
cases can exercise jurisdiction over such cases. The
issued guideline reinforces the exclusivity of the
designation:
1. In multiple sala courts where one (1) or more
branches of the RTC are herein designated as
special courts, there will be no unloading of
cases already pending in the branches
designated. They shall continue to try and
decide the said cases in addition to the SEC
cases. In the meantime, in view of the
temporary imbalance of caseload as a result of
the transfer of SEC cases, the Executive Judge
concerned shall exclude them in the raffle of
newly filed cases in their station until their
workload equals to that of the other branches,
in which event they shall be included in the
raffle of other civil and criminal cases.
xxx xxx xxx
5. In provinces (for the First to the Twelfth
Judicial Regions) where there are no
designated special courts, the Executive Judge
of the station where new SEC cases will be
filed shall consult the Supreme Court thru the
Office of the Court Administrator.
There have been subsequent designations of
RTC Branches as SEC courts, namely: RTC Branch
142, Makati City through A.M. No. 00-11-03-SC; RTC
Branch 34, Calamba, Laguna through amendment A.M.
No. 00-11-03-SC; RTC Branch 40, in Daet, Camarines
Norte; RTC Branch 2, Tuguegarao, Cagayan; RTC
Branch 74, Malabon; RTC Branch 36, Masbate again
through an amendment of A.M. No. 00-11-03-SC; and
RTC Branch 23 of Naga City through A.M. No. 01-5-
298-RTC.
There has been, as just enumerated, as many
iterations by the court itself of its reading of Section 5,
Item 5.2 of P.D. 8799 i.e., that the law transferred the
SEC jurisdiction over the cases listed in Sec. 5 of P.D.
No. 902-A to the particular branches of the RTCs
designated by the Supreme Court as such.
Unavoidable, therefore, is the conclusion that all other
Branches of the RTCs without the Supreme Court
designation are without jurisdiction over SEC cases.
And, following unreversed rulings 13 the other Branches
of the RTC before whom a SEC case is filed must
dismiss such case for want of jurisdiction. Furthermore,
absent such jurisdiction, the non-SEC RTC cannot
direct the case to the "proper" court. 14
The unavoidable, because statutorily mandated,
allocation to RTC branches of the authority to decide
SEC cases had, just as unavoidably, resulted in
caseload imbalance in affected areas. Parenthetically,
there was a resulting caseload imbalance since R.A.
No. 8799 did not create Commercial Courts. The law
merely unloaded SEC cases to the branches
designated by the Supreme Court as Commercial
Courts. The consequent caseload problem urged the
exercise by the Court, as administrator, to effect an
equitable distribution of cases among the RTC branches
in areas where RTC branches have been given
jurisdiction over the additional case types. Thus did the
Court issue the Resolutions on the exclusion of the SEC
designated courts from the raffle of cases.
 Page 445 of 458
Such arrangement continued until the weight of
the unloaded jurisdiction eased such that the Court in 1
July 2003 issued A.M. No. 03-03-03-SC. It states:
1. The Regional Trial Courts previously
designated as SEC Courts through the:
(a) Resolutions of this Court dated 21
November 2000, 4 July 2001, 12
November 2002, and 9 July 2002, all
issued in A.M. No. 00-11-03-SC, (b)
Resolution dated 27 August 2001 in A.M.
No. 01-5-298-RTC; and (c) Resolution
dated 8 July 2002 in A.M. No. 01-12-656-
RTC are hereby DESIGNATED and shall
be CALLED as Special Commercial
Courts to try and decide cases involving
violations of Intellectual Property Rights
which fall within their jurisdiction and
those cases formerly cognizable by the
Securities and Exchange Commission;
2. The designation of Intellectual Property Courts
under Administrative Order No. 113-95
dated 2 October 1995, as amended
by Administrative Order No. 104-96 dated
21 October 1996 and Resolution dated 19
February 2002 in A.M. No. 02-1-11-SC, is
hereby revoked. However, the Regional
Trial Court, Branch 24, Manila is hereby
designated as an additional Special
Commercial Court in the City of Manila;
3. Upon the effectivity of this Resolution, all IP
cases shall be transferred to the
designated Special Commercial Courts
except those which have undergone the
pre-trial state in civil cases or those where
any of the accused has been arraigned in
criminal cases which shall be retained by
the court previously assigned to try them;
4. The Special Commercial Courts shall have
jurisdiction over cases arising within their
respective territorial jurisdiction with
respect to the National Capital Judicial
Region and within the respective
provinces with respect to the First to
Twelfth Judicial Regions. Thus, cases
shall be filed in the Office of the Clerk of
Court in the official station of the
designated Special Commercial Court; aCIHcD
5. In the event of inhibition of the judge of a
designated Special Commercial Court, the
following guidelines shall be observed: (a)
where there is only one (1) Special
Commercial Court, the case shall be
raffled among the other judges in the
station; (b) where there are two (2)
Special Commercial Courts in the station,
the Executive Judge shall immediately
assign the case to the other Special
Commercial Court; and (c) in case of
inhibition of both judges of the Special
Commercial Court, the Executive Judge
shall raffle the case among the judges in
the station; and
6. In order to ensure a just and equitable
distribution of cases, the designated
Special Commercial Courts shall continue
to participate in the raffles of other cases.
Provided, however, that the Executive
Judge concerned shall adopt a procedure
whereby every IP and SEC case assigned
to a Special Commercial Court should be
 Page 446 of 458
considered a case raffled to it and duly
credited to such court.
What must be noted is the fact that the chosen
RTC branch, now called Commercial Court, became
such, as distinguished from the other RTC branches
because of a special bestowal of jurisdiction by the
Court in implementation of the statutorily granted
authority. Without such grant mandated by the law, the
undesignated RTC branch is without SEC case
jurisdiction.
Upon the other hand, the RTC branch, or the
Commercial Court, maintain jurisdiction over the cases
enumerated in Section 19, of Batas Pambansa Blg.
129. 15
But the exercise of such jurisdiction is subject to
the regulation of the Court in the exercise of its
constitutional power of administrative supervision over
all lower courts:
SEC. 5. The Supreme Court shall have the
following powers:
xxx xxx xxx
(5) Promulgate rules concerning the
protection and enforcement of constitutional
rights, pleading, practice, and procedure in all
courts, the admission to the practice of law, the
Integrated Bar, and legal assistance to the
underprivileged. Such rules shall provide
simplified and 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.
xxx xxx xxx
Section 6. The Supreme Court shall have
administrative supervision over all courts and
the personnel thereof.
This is evident from A.M. No. 00-11-03-
SC and A.M. No. 03-03-03-SC.
Palpably, RTC caseloads and the need to
equalize the caseloads among all branches determine
the need for the Court to issue regulations regarding the
Commercial Courts' exercise of jurisdiction over non-
commercial cases.
In all, the RTC Commercial Court has exclusive
jurisdiction over commercial cases and can still exercise
jurisdiction over regular cases if, as determined by the
Supreme Court, the caseloads necessitate such
exercise.
While there may be arguments in favor of a
simpler arrangement whereby all the RTCs in all the
Judicial Districts are made Commercial Courts, such
arguments cannot be submitted for resolution by the
Court. The settlement is in the legislature.
Further on the issue, the proviso that "the
Supreme Court in the exercise of its authority may
designate the Regional Trial Court branches that shall
exercise jurisdiction over these cases" is a definition of
the conferred jurisdiction. The designation of specific
Regional Trial Court branches that will exercise
jurisdiction over cases enumerated under Section 5
of P.D. No. 902-A is pursuant to statute and not solely
 Page 447 of 458
the consequence of the Court's rule-making power and
administrative supervisory power of the Court over
lower courts under Article VIII, Sections 5 (paragraph 5)
and 6, respectively. In fact, A.M. No. 03-03-03-SC on
which the ponenciarelies heavily for its position that the
designation of specific RTC branches as a simple
procedural rule incidental to the exercise of jurisdiction,
primarily traces its authority for designation of Special
Commercial Courts to Section 5.2 of R.A. No. 8799,
gleaned from the 1st recital clause, to wit:
WHEREAS, to implement the
provisions of Section 5.2 of Republic Act
No. 8799 (The Securities and Regulation
Code), and in the interest of a speedy and
efficient administration of justice, the Supreme
Court en banc, in the (a) Resolutions dated 21
November 2000 (Annex 1), 4 July 2001 (Annex
1-a), 12 November 2002 (Annex 1-b), and 9
July 2002 (Annex 1-c), all issued in A.M. No.
00-11-03-SC; (b) Resolution dated 27 August
2001 in A.M. No. 01-5-298-RTC (Annex 2); and
(c) Resolution dated 8 July 2002 in A.M. No.
01-12-656-RTC (Annex 3), resolved to
designate certain branches of the Regional
Trial Courts to try and decide cases formerly
recognizable by the Securities and Exchange
Commission;
Plainly, the designation of Special Commercial
Courts, as implemented by the Supreme Court through
its various rules, pertains to the statutorily conferred
jurisdiction and not merely an incident related to the
court's exercise of jurisdiction.
The ponencia fails to address an equally
important precept on subject matter jurisdiction, i.e.,
jurisdiction is determined by the averments and
allegations of the complaint which in this instance is
inarguably a commercial case concerning subscription
of shares in a corporation.
From the onset, petitioners, by the filing of
their Complaint, supplied the occasion for the
exercise of jurisdiction vested by law in a particular
court.In short, petitioners invoked the jurisdiction of the
RTC (not as a court of general jurisdiction), and with the
allegations in their Complaint, specifically invoked the
RTC designated as a Special Commercial Court under
Section 5.2 of RA 8799, implemented under A.M. No.
03-03-03-SC. Petitioners cannot just simply file their
Complaint before the RTC without any specificity,
given the allegations contained therein and the
reliefs they prayed for.
I cannot give credence to petitioners' stance that
they cannot be faulted for the incorrect raffling of their
Complaint to a regular court, having filed the same
before the Office of the Clerk of Court in the RTC of
Muntinlupa City. Petitioners obviously argue that their
only responsibility as plaintiffs in this case is to file the
case with the RTC despite Section 5.2 of R.A. No.
8799 confining exclusive and original jurisdiction
over cases enumerated under Section 5 of P.D. No.
902-Ato the appropriate RTC.
I invite attention to the statement in
the ponencia that "petitioners correctly filed an intra-
corporate case with the Office of the Clerk of Court in
the RTC of Muntinlupa City, which is the official station
of the designated Special Commercial Court, in
 Page 448 of 458
accordance with A.M. No. 03-03-03-SC."
The ponencia then concludes that the RTC had validly
acquired jurisdiction over the subject matter or the
nature of the action from the time of such filing.
Quite notably, petitioners did not intend to file an
intra-corporate case: they labeled their Complaint
though incorrectly as a Civil Case for Injunction with
prayer for Status Quo Order, TRO and Damages. At
that time they filed their Complaint in 2011, petitioners
were with the aid of counsel, a full service law firm
and R.A. No. 8799 and the implementing rules of the
Supreme Court for the designation of Special
Commercial Courts, have long been effective. Subject
matter jurisdiction over their Complaint, the nature
determined by the allegations therein, has been settled
and delineated to be with not just any RTC, but the
appropriate RTC specially designated by the Supreme
Court as a Special Commercial Court pursuant to law.
Petitioners, as plaintiffs, by the filing of their
Complaint, are charged with responsibility to properly
and correctly invoke the jurisdiction of the RTC
whether in the exercise of its general jurisdiction or
as a Special Commercial Court. Palpably, petitioners'
incorrect labeling of their Complaint precipitated the
incorrect raffling thereof to a regular court, Branch 276,
which, by specific provision of law, is without subject
matter jurisdiction to act thereon given that it had not
been designated as a Special Commercial Court.
Second, with the incorrect labeling of their
Complaint and the wrong invocation of the RTC's
regular jurisdiction, the designated Special Commercial
Court did not acquire jurisdiction over the Complaint by
the mere filing thereof with the multi sala RTC. Since
petitioners had filed what they labeled as a Civil Case,
they knowingly filed it pursuant to the general
jurisdiction of the RTC under Sec. 19 of B.P. Blg.
129. ScHADI
The mere filing of the Complaint before the Office
of the Clerk of Court in the RTC of Muntinlupa City, in
the official station of the designated Special Commercial
Court as what occurred herein, is not equivalent to the
correct and proper filing of the Complaint before the
appropriate Regional Trial Court specially designated by
the Supreme Court to hear and decide cases
enumerated under Section 5 of P.D. No. 902-A. Branch
276 of the RTC, to which the Complaint was
consequently raffled, in the exercise of its general
jurisdiction, cannot order the transfer of the Complaint to
Branch 256, the designated Special Commercial Court.
Branch 276 cannot do so on the basis of authority over
the case which it did not have. Neither does it have
authority over a co-equal court.
Note that in this case, petitioners, given the
labeling of their Complaint as a Civil Case, should suffer
the consequences of its own act. The Office of the Clerk
of Court, cannot be faulted for raffling it to the RTC of
general jurisdiction as petitioners themselves invoked
such general jurisdiction.
In Calleja v. Panday, 16 we likewise took note of
the fact that therein plaintiff's petition for quo
warranto was filed as late as 2005, by that time A.M.
No. 00-11-03-SC has been in effect for four years,
and A.M. No. 03-03-03-SC effective for almost two
years, where there appears no cogent reason why
plaintiffs were not aware of the appropriate court where
their petition should be filed.
 Page 449 of 458
Such can also be said in this case, albeit there is
only one designated Special Commercial Court. With
more reason should it be noted in this case since
petitioners herein has even incorrectly labeled their
Complaint as a Civil Case. They cannot claim that it
should not be prejudiced by the incorrect raffling of their
Complaint, laying fault solely on the Office of the Clerk
of Court.
Indeed, We should, as warranted, require from
counsels disciplined knowledge of procedure. Courts
should not themselves correct the procedural mistakes
of pleaders. I cannot overemphasize, and ultimately
revert to the fact, that subject matter jurisdiction was
conferred by law (Section 5.2 of R.A. No. 8799) to the
appropriate RTC as determined thru the designation by
the Supreme Court.
Consistent with the observable conformity with,
nay affirmance by the existing administrative issuances
relative to the foregoing opinion, the following directives
are reiterated for continuing validity and, therefore,
compliance.
1. A.M. No. 00-11-03-SC, August 27, 2001
2. A.M. No. 03-03-03-SC, July 1, 2003, and
3. All related issuances
Thus, I vote to DENY the petition. The Orders
dated 17 April 2012 and 9 July 2012 of the Regional
Trial Court of Muntinlupa City, Branch 276 in Civil Case
No. 11-077 are AFFIRMED. The Complaint docketed as
Civil Case No. 11-077 is DISMISSED for lack of
jurisdiction without prejudice to its re-filing in the proper
court.
LEONEN, J., concurring:
I concur with the ponencia's conclusion that the
designation of certain Regional Trial Court branches as
Special Commercial Courts does not work to confer
jurisdiction over the branches designated as such. It
was an error for the Muntinlupa City Regional Trial
Court, Branch 276, to dismiss the Complaint filed by
petitioners. As the ponencia underscores, Branch 276
should have instead transferred the case to the
Muntinlupa City Regional Trial Court, Branch 256, the
branch duly designated to perform the Muntinlupa City
Regional Trial Court's functions as a Special
Commercial Court. The present Petition must, thus, be
granted.
Jurisdiction over what the ponencia collectively
refers to as SEC Cases was vested by Republic Act No.
8799, otherwise known as the Securities Regulation
Code, in Regional Trial Courts and is not limited to the
Regional Trial Court branches designated by this court
as Special Commercial Courts. It is only the legislature
that has the power "to define, prescribe, and apportion
the jurisdiction of various courts[.]" 1 As Congress does
not share this power with this court, in relation with
these issues, this court's competence is limited to
"administrative supervision over all courts[,]" 2 as well as
the "[p]romulgat[ion of] rules concerning . . . pleading,
practice, and procedure in all courts[.]" 3 It was purely in
the exercise of these powers, and not for the purpose of
vesting jurisdiction where previously there was none,
that this court designated certain Regional Trial Court
branches as Special Commercial Courts.
 Page 450 of 458
The text of Section 5.2 4 of the Securities
Regulation Code, the statutory provision that transferred
jurisdiction over SEC Cases from the Securities and
Exchange Commission to the Regional Trial Courts,
bears this out. It refers to Regional Trial Courts in
general and in their capacity as courts of general
jurisdiction. It delimits the capacity of this court to
designate Regional Trial Court branches as Special
Commercial Courts to only be "in the exercise of its
authority[,]" 5 i.e., administrative supervision and
promulgation of procedural rules. It specifies that the
effect of this court's designation is to enable the
branches so specified to "exercise jurisdiction" 6 and not
to vest jurisdiction.
I this court's November 21, 2000 Resolution in A.M. No.
Jurisdiction over all cases enumerated under
Section 5 7 of Presidential Decree No. 902-A, which
were previously under the jurisdiction of the Securities
and Exchange Commission, was vested in Regional
Trial Courts by Section 5.2 of the Securities Regulation
Code. Section 5.2 reads:
SEC. 5. Powers and Functions of the
Commission. . . .
xxx xxx xxx
5.2. The Commission's jurisdiction over all
cases enumerated under Section 5 incidental and necessary to the power to adjudicate
of Presidential Decree No. 902-A is hereby
transferred to the Courts of general jurisdiction
or the appropriate Regional Trial Court:
Provided, That the Supreme Court in the
exercise of its authority may designate the
Regional Trial Court branches that shall
exercise jurisdiction over these cases. The
Commission shall retain jurisdiction over
pending cases involving intra-corporate
disputes submitted for final resolution which
should be resolved within one (1) year from the
enactment of this Code. The Commission shall
retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30
June 2000 until finally disposed.aICcHA
This statutory provision was adopted pursuant to
the legislature's power under Article VIII, Section 2 8 of
the 1987 Constitution "to define, prescribe, and
apportion the jurisdiction of various courts[.]" In contrast,
the designation of Special Commercial Courts, through
00-11-03-SC, was pursuant to this court's power under
Article VIII, Section 6 9 of the 1987 Constitution to
exercise "administrative supervision over all
courts."A.M. No. 00-11-03-SC did not work to confer
jurisdiction independently of Section 5.2 of the
Securities Regulation Code. A.M. No. 00-11-03-SC itself
declares that it was adopted merely "[t]o implement the
provisions of Sec. 5.2 of Republic Act No. 8799[.]" 10
Congress' power "to define, prescribe, and
apportion the jurisdiction of various courts" is
constitutionally established. While it may be true that the
allocation of competencies among courts may be
cases, the sovereign, through the Constitution, deemed
it fit for the legislature to exercise this power to balance
and temper judicial power. We cannot, in the guise of
judicial interpretation, disregard a clear command of the
Constitution.
 Page 451 of 458
The power vested solely and exclusively in
Congress has clear limitations: First, Congress cannot
diminish the jurisdiction of this court, which jurisdiction is
spelled out in Article VIII, Section 5 11 of the 1987
Constitution; and second, Congress cannot increase the
"appellate jurisdiction of [this court] without its advice
and concurrence." 12
The exclusivity and non-delegability of Congress'
power "to define, prescribe, and apportion the
jurisdiction of various courts" is long settled.
In University of Santo Tomas v. Board of Tax
Appeals, 13 this court was confronted with an issuance
by the President of the Philippines, i.e., Executive Order
No. 401-A, that was purportedly enacted pursuant to an
enabling statute, Republic Act No. 422. 14 Executive
Order No. 401-A created the Board of Tax Appeals and
defined its jurisdiction, as follows:
SEC. 8. The Board of Tax Appeals shall
have exclusive jurisdiction to hear and decide
administratively as hereinafter provided
(1) All appeals from decisions of the
Collector of Internal Revenue in cases
involving disputed assessments, refunds of
internal revenue taxes, fees or other charges,
penalties imposed in relation thereto, or other
matters arising under the National Internal
Revenue Code or other law or part of law
administered by the Bureau of Internal
Revenue[.] 15
This court declared Executive Order No. 401-A
null and void to the extent where it interfered with the
jurisdiction of Courts of First Instance, but sustained its
validity in all other respects. 16 This court emphasized
that, in the first place, Republic Act No. 422's purpose
was limited only to "effect[ing] a reorganization of the
different bureaus, offices, agencies and
instrumentalities of the executive branch of the
government." 17 Republic Act No. 422 did not go so far
as to enable the President to create a body or to
promulgate an issuance which, "in effect deprives the
courts of first instance of their jurisdiction in actions for
recovery of taxes which is granted to them by section
306 18 of the National Internal Revenue Code." 19
For that matter, even though Republic Act No.
422 actually enabled the President to do so, this
statutory grant (i.e., delegation) of power would have
been invalid. This court categorically stated that
under the Constitution, "Congress alone has 'the power
to define, prescribe, and apportion the jurisdiction of the
various courts[,]''' 20 and that this is a power that cannot
be delegated by Congress. 21 Pursuant to this power,
jurisdiction vested in Courts of First Instance was
conferred on them by statute, i.e., an act of the
legislature, and the President, the existence of a
supposed enabling statute notwithstanding, cannot
himself define their jurisdiction:
But Executive Order No. 401-A does not
merely create the Board of Tax Appeals,
which, as an instrumentality of the Department
of Finance, may properly come within the
purview of Republic Act No. 422, but goes as
far as depriving the courts of first instance of
their jurisdiction to act on internal revenue
cases a matter which is foreign to it and which
comes within the exclusive province of
Congress. This the Chief Executive cannot do,
nor can that power be delegated by Congress,
 Page 452 of 458
for under our Constitution, Congress alone has
"the power to define, prescribe, and apportion
the jurisdiction of the various
courts." 22 (Emphasis supplied, citation
omitted)
The same conclusions were reached by this court
in Corominas, Jr., and Corominas & Co. v. Labor
Standard Commission, et al. 23 Here, this court found
the Government Survey and Reorganization
Commission to have exceeded its authority when,
through its Reorganization Plan No. 20-A, 24 it vested
jurisdiction over money claims arising from labor
standards violations in the regional offices of the (then)
Department of Labor. 25 Reorganization Plan No. 20-A
ran counter toRepublic Act No. 602, the then Minimum
Wage Law, Sections 15 (d), 26 15 (e), 27 and 16 (a) 28 of
which vested jurisdiction over money claims cases in a
"competent court."
In Corominas, this court noted that Republic Act
No. 997, 29 the statute creating the Government Survey
and Reorganization Commission, did not enable the
Commission to create a body exercising judicial power
and intruding into the jurisdiction of courts. 30 So, too,
this court emphasized that Congress could not have
done so "as the Legislature may not and cannot
delegate its power to legislate or create courts of justice
to any other agency of the Government." 31 EHaASD
Bereft of the power "to define, prescribe, and
apportion the jurisdiction of various courts[,]" this court's
competence is limited to "administrative supervision
over all courts[,]" 32 as well as the "[p]romulgat[ion] [of]
rules concerning . . . pleading, practice, and procedure
in all courts[.]" 33
II
Section 5.2 of the Securities Regulation Code's
investiture of jurisdiction over erstwhile SEC Cases in
Regional Trial Courts is clear: "The Commission's
jurisdiction over all cases enumerated under section 5
of Presidential Decree No. 902-A is hereby transferred
to the Courts of general jurisdiction or the appropriate
Regional Trial Court[.]"
Concededly, the use of the disjunctive
conjunction "or" leads to some degree of confusion.
Customarily, the use of "or" denotes that the items
mentioned are alternative to each other. Thus, Section
5.2 appears to mean that "Courts of general jurisdiction"
are distinct from Regional Trial Courts and that one can
stand in place of the other. However, it is settled that, in
our judicial system, it is the Regional Trial Courts which
themselves stand as courts of general jurisdiction. They
are one and the same. As this court stated in Durisol
Philippines, Inc. v. Court of Appeals: 34
The regional trial court, formerly the
court of first instance, is a court of general
jurisdiction. All cases, the jurisdiction over
which is not specifically provided for by law to
be within the jurisdiction of any other court, fall
under the jurisdiction of the regional trial
court. 35
The consideration of Regional Trial Courts as
courts of general jurisdiction proceeds from Section 19
(6) of Batas Pambansa Blg. 129, otherwise known
as the Judiciary Reorganization Act of 1980:
SEC. 19. Jurisdiction in civil cases. Regional
Trial Courts shall exercise exclusive original
jurisdiction:
 Page 453 of 458
xxx xxx xxx
6. In all cases not within the exclusive jurisdiction
of any court, tribunal, person or body
exercising judicial or quasi-judicial
functions[.]
The identity of Regional Trial Courts as courts of
general jurisdiction is no bar to designating certain
Regional Trial Court branches to focus on certain types
of cases. To the contrary, it is this identity which permits
it. Designating branches to focus on certain types of
cases, in order to facilitate the efficient dispensation of
justice, is well within their nature as courts competent to
take cognizance of cases not falling under the exclusive
jurisdiction of any other court, tribunal, person, or body.
Designating branches as such balances two
considerations: on the one hand, their nature as courts,
which because they have general jurisdiction, can
exercise jurisdiction over the specific matter to which
they were assigned; and, on the other, their duty to
speedily administer justice.
Accordingly, this designation does not work to
confer jurisdiction over these branches when previously
there was none. It merely exhorts them to proceed with
dispatch and deftness. This is evident from Section 23
of the Judiciary Reorganization Act of 1980:
SEC. 23. Special jurisdiction to try special
cases. The Supreme Court may designate
certain branches of the Regional Trial Courts to
handle exclusively criminal cases, juvenile and
domestic relations cases, agrarian cases,
urban land reform cases which do not fall
under the jurisdiction of quasi-judicial bodies
and agencies, and/or such other special cases
as the Supreme Court may determine in the
interest of a speedy and efficient administration
of justice. (Emphasis supplied)
Section 23 is not a blanket license for this court to
create new courts of limited jurisdiction. It is an enabling
mechanism, empowering this court to fulfill its function
as the authority having "administrative supervision over
all courts[.]" 36
When the legislature (at that time, it was the
interim Batasang Pambansa) adopted the Judiciary
Reorganization Act of 1980, it created all Regional Trial
Courts as courts of general jurisdiction, equally
competent to exercise the jurisdiction vested in them by
the same statute. So, too, when the Securities
Regulation Codetransferred jurisdiction over SEC
Cases, it did so to all of our courts which were
recognized as courts of general jurisdiction, that is, to
Regional Trial Courts.
Section 5.2's investiture of jurisdiction over
Regional Trial Courts notwithstanding, it also contains a
proviso enabling this court to "in the exercise of its
authority . . . designate the Regional Trial Court
branches that shall exercise jurisdiction over [the]
cases."
Section 5.2's qualification that this court's power
to designate is necessarily only "in the exercise of its
authority" is illuminating. It is to say that, in going about
its task of designating, this court cannot act in excess of
its constitutional authority. This affirms the Constitution's
segregation of the competencies of Congress from
those of this court. It affirms the exclusivity of Congress'
 Page 454 of 458
power "to define, prescribe, and apportion the
jurisdiction of various courts[.]" This affirms the reality
that, bereft of this power, this court's competence is
limited to "administrative supervision over all
courts[,]" 37 as well as the "[p]romulgat[ion] [of] rules
concerning . . . pleading, practice, and procedure in all
courts[.]" 38
Accordingly, it was exclusively in the performance
of these competencies that this court adopted its
November 21, 2000 Resolution in A.M. No. 00-11-03-
SC and specified the Regional Trial
Court branches which are to perform functions as
Special Commercial Courts. DaIAcC
Equally illuminating is Section 5.2's specification
that this court's competence is in designating which
branches shall "exercise jurisdiction[.]" As deftly
emphasized by the ponencia, conferment of jurisdiction
over the subject matter of a case is a matter of
substantive law. 39 In contrast, incidents pertaining to
the exercise of jurisdiction are a matter of procedure. 40
A.M. No. 00-11-03-SC did not create a new class
of courts. Its purpose is operational efficiency. In its own
words, it was adopted to serve "the interest of a speedy
and efficient administration of justice[.] 41 It is, thus, but
a procedural and administrative mechanism aimed (to
echo the words of the ponencia) "to promote
expediency and efficiency in the exercise of the
[Regional Trial Courts'] jurisdiction[.]" 42
Also in its own words, A.M. No. 00-11-03-SC was
adopted only "[t]o implement the provisions of Sec. 5.2
of Republic Act No. 8799 [or the Securities Regulation
Code]." 43 Thus, in adopting A.M. No. 00-11-03-SC, this
court was fully cognizant of how Section 5.2 limited its
authority to designate only "in the exercise of its
authority[.]" Indeed, this court could not have intended
to overstep the constitutional limits of its authority.
III
A.M. No. 00-11-03-SC is not the only
administrative issuance of this court specifying Regional
Trial Court branches which are to focus on certain types
of cases, not because this court created or transformed
them into special types of courts in lieu of their being
courts of general jurisdiction, but solely in the interest of
expediency and efficiency.
In this court's August 1, 2000 Resolution in A.M.
No. 00-8-01-SC, 44 this court designated certain
Regional Trial Court branches as "Special Courts for
drugs cases, which shall hear and decide all criminal
cases in their respective jurisdictions involving violations
of the Dangerous Drugs Act [of] 1972 (R.A. No. 6425)
as amended, regardless of the quantity of the drugs
involved." 45
This court's Resolution in A.M. No. 00-8-01-SC
made no pretenses that it was creating new courts of
limited jurisdiction or transforming Regional Trial Courts
into courts of limited jurisdiction. Instead, it repeatedly
referred to its operational and administrative purpose:
efficiency. Its preambular clauses emphasized that the
designation of Special Courts was being made because
"public policy and public interest demand that [drug]
cases . . . be expeditiously resolved[,]" 46 and in view of
"the consensus of many that the designation of certain
branches of the Regional Trial Courts as Special Courts
to try and decide drug cases . . . may immediately
 Page 455 of 458
address the problem of delay in the resolution of drugs
cases." 47 Moreover, its dispositive portion provides that
it was being adopted "pursuant to Section 23 of [the
Judiciary Reorganization Act of 1980], [and] in the
interest of speedy and efficient administration of
justice[.]" 48
SICDAa
Consistent with these operational and
administrative aims, this court's October 11, 2005
Resolution in A.M. No. 05-9-03-SC, 49 which addressed
the question of whether "special courts for dr[u]g cases
[may] be included in the raffle of civil and criminal cases
other than drug related cases[,]" 50 stated:
The rationale behind the exclusion of
dr[u]g courts from the raffle of cases other than
drug cases is to expeditiously resolve criminal
cases involving violations of [R.A. No.] 9165
(previously, of [R.A. No.] 6435). Otherwise,
these courts may be sidelined from hearing
drug cases by the assignment of non-drug
cases to them and the purpose of their
designation as special courts would be
negated. The faithful observance of the
stringent time frame imposed on drug courts
for deciding dr[u]g related cases and
terminating proceedings calls for the continued
implementation of the policy enunciated in A.M.
No. 00-8-01-SC. 51
To reiterate, at no point did this court declare the
Regional Trial Court branches identified in these
administrative issuances as being transformed or
converted into something other than Regional Trial
Courts. They retain their status as such and, along with
it, the Judiciary Reorganization Act of 1980's
characterization of them as courts of general
jurisdiction. However, this court, in the interest of
facilitating operational efficiency and promoting the
timely dispensation of justice, has opted to make these
Regional Trial Court branches focus on a certain class
of the many types of cases falling under their
jurisdiction.
Having mentioned this court's Resolutions, which
designated Regional Trial Court branches as so-called
Drugs Courts, it is crucial to draw the distinction
between, on the one hand, this court's designation of
certain Regional Trial Court branches as such Drugs
Courts, or (as is the subject of this case) Commercial
Courts, and, on the other, this court's designation of
certain Regional Trial Court branches as so-called
Family Courts.
Similarly through a Resolution in an
Administrative Matter, this court's February 1, 2000
Resolution in A.M. No. 99-11-07-SC 52 designated
certain Regional Trial Court branches as Family Courts.
As with Drugs Courts, this court declared this
designation of Family Courts to be "in the interest of the
expeditious, effective and efficient administration of
justice[.]" 53 This court further specified that this
designation was in order "[t]o implement the provisions
of Section 17 of Republic Act No. 8369, otherwise
known as the 'Family Courts Act of 1997[.]'" 54
This court's February 1, 2000 Resolution in A.M.
No. 99-11-07-SC is, thus, an offshoot of the Family
Courts Act of 1997. Section 3 of this statute did not add
to, clarify, or make specific mention of the types of
cases cognizable by Regional Trial Courts. Rather, it
created independent Family Courts that are distinct from
Regional Trial Courts. Section 5 spelled out the
 Page 456 of 458
exclusive original jurisdiction of Family Courts, that is,
subject matter jurisdiction that, henceforth, was no
longer within the jurisdiction of Regional Trial Courts.
Parenthetically, it is well to emphasize that the Family
Courts Act of 1997 is a legislative enactment.
Accordingly, it was well within its bounds to create
courts and define their jurisdiction.
Sections 3 and 5 of the Family Courts Act of
1997 provide:
SEC. 3. Establishment of Family Courts.
There shall be established a Family Court in
every province and city in the country. In case
where the city is the capital of the province, the
Family Court shall be established in the
municipality which has the highest population.
xxx xxx xxx
SEC. 5. Jurisdiction of Family Courts. The
Family Courts shall have exclusive original
jurisdiction to hear and decide the following
cases:
a) Criminal cases where one or more of the
accused is below eighteen (18) years of age
but not less than nine (9) years of age or where
one or more of the victims is a minor at the
time of the commission of the offense:
Provided, That if the minor is found guilty, the
court shall promulgate sentence and ascertain
any civil liability which the accused may have
incurred.
The sentence, however, shall be suspended
without need of application pursuant
to Presidential Decree No. 603, otherwise
known as the "Child and Youth Welfare Code";
b) Petitions for guardianship, custody of
children, habeas corpus in relation to the latter;
c) Petitions for adoption of children and the
revocation thereof;
d) Complaints for annulment of marriage,
declaration of nullity of marriage and those
relating to marital status and property relations
of husband and wife or those living together
under different status and agreements, and
petitions for dissolution of conjugal partnership
of gains;
e) Petitions for support and/or
acknowledgment;
f) Summary judicial proceedings brought under
the provisions of Executive Order No. 209,
otherwise known as the "Family Code of the
Philippines";
g) Petitions for declaration of status of children
as abandoned, dependent or neglected
children, petitions for voluntary or involuntary
commitment of children; the suspension,
termination, or restoration of parental authority
and other cases cognizable under Presidential
Decree No. 603, Executive Order No. 56,
(Series of 1986), and other related laws;
h) Petitions for the constitution of the family
home;
i) Cases against minors cognizable under the
Dangerous Drugs Act, as amended;
j) Violations of Republic Act No. 7610,
otherwise known as the "Special Protection of
Children Against Child Abuse, Exploitation and
 Page 457 of 458
Discrimination Act," as amended by Republic
Act No. 7658; and DHIcET
k) Cases of domestic violence against:
1) Women which are acts of gender
based violence that results, or are
likely to result in physical, sexual or
psychological harm or suffering to
women; and other forms of
physical abuse such as battering or
threats and coercion which violate
a woman's personhood, integrity
and freedom of movement; and
2) Children which include the
commission of all forms of abuse,
neglect, cruelty, exploitation,
violence, and discrimination and all
other conditions prejudicial to their
development.
If an act constitutes a criminal offense, the
accused or batterer shall be subject to criminal
proceedings and the corresponding penalties.
If any question involving any of the above
matters should arise as an incident in any case
pending in the regular courts, said incident
shall be determined in that court.
This court's designation of Family Courts through
its February 1, 2000 Resolution in A.M. No. 99-11-07-
SC was pursuant to a transitory provision: Section 17 of
the Family Courts Act of 1997. Section 17 required this
court to, in the meantime, designate Regional Trial
Court branches to act as Family Courts. This
designation was of a temporary nature, effective only in
the intervening period pending the establishment of
Family Courts:
SEC. 17. Transitory Provisions. Pending the
establishment of such Family Courts, the
Supreme Court shall designate from among
the branches of the Regional Trial Court at
least one Family Court in each of the cities of
Manila, Quezon, Pasay, Caloocan, Makati,
Pasig, Mandaluyong, Muntinlupa, Laoag,
Baguio, Santiago, Dagupan, Olongapo,
Cabanatuan, San Jose, Angeles, Cavite,
Batangas, Lucena, Naga, Iriga, Legazpi,
Roxas, Iloilo, Bacolod, Dumaguete, Tacloban,
Cebu, Mandaue, Tagbilaran, Surigao, Butuan,
Cagayan de Oro, Davao, General Santos,
Oroquieta, Ozamis, Dipolog, Zamboanga,
Pagadian, Iligan, and in such other places as
the Supreme Court may deem necessary.
Additional cases other than those provided in
Sec. 5 may be assigned to the Family Courts
when their dockets permit: Provided, That such
additional cases shall not be heard on the
same day family cases are heard.
In areas where there are no Family Courts, the
cases referred to in Section 5 of this Act shall
be adjudicated by the Regional Trial Court.
This court's designation of Family Courts, insofar
as there was a need to tentatively provide for
specialized courts, proceeded from the same mandate
which animated its designation of Drugs Courts, as well
as Special Commercial Courts. It was pursuant to the
power of this court to administratively supervise lower
courts.
 Page 458 of 458

The status quo engendered by A.M. No. 99-11- Court, Branch 256, the branch duly designated to
07-SC persists to the present day, more than 15 years perform the Muntinlupa City Regional Trial Court's
after its adoption and almost 18 years after the adoption functions as a Special Commercial Court.
of the Family Courts Act of 1997. However, the
Footnotes
delineation of the exclusive original jurisdiction of Family
Courts as against the subject matter jurisdiction of (Gonzales v. GJH Land, Inc., G.R. No. 202664,
|||

Regional Trial Courts remains. It is just that, from the [November 10, 2015])
time of its enactment, the Family Courts Act of 1997 has
not been fully implemented. This state of affairs is a fact
acknowledged by this court, as, on August 13, 2014,
this court issued Memorandum Order No. 20-14
establishing a Committee on Family Courts and
Juvenile Concerns, the mandate of which includes the
drafting of a plan for effecting the organization of Family
Courts.
I have no doubt that this Committee, under the
present and able leadership of Justice Teresita J.
Leonardo-de Castro, will do all it can to provide a
workable and comprehensive plan that will convince
Congress to create and fund the statutorily mandated
Family Courts. However, this temporary state of affairs
can only be remedied by an act of Congress. Hopefully,
in due time, Congress can proceed to complete what is
mandated by the Family Courts Act of 1997.
ACCORDINGLY, I vote to GRANT the Petition for
Review on Certiorari. The Orders dated April 17, 2012
and July 9, 2012 of the Muntinlupa City Regional Trial
Court, Branch 276, in Civil Case No. 11-077 must
be REVERSED and SET ASIDE. Instead of being
dismissed, Civil Case No. 11-077, must
be REFERRED to the Executive Judge of the
Muntinlupa City Regional Trial Court, in order that it may
be ASSIGNED to the Muntinlupa City Regional Trial