CASES TO READ FOR MIDTERM EXAMINATION (AUGUST 14, 2015) IN The fact that respondent is under receivership does

nt is under receivership does not divest the HLURB of

PROVISIONAL REMEDIES: that jurisdiction. A receiver is a person appointed by the court, or in this
instance, by a quasi~judicial administrative agency, in behalf of all the parties
1. JESUS LIM ARRANZA, ET. AL. v. B.F. HOMES, INC., AND CA, G.R. NO. for the purpose of preserving and conserving the property and preventing its
131683, JUNE 19, 2000 possible destruction or dissipation, if it were left in the possession of any of
the parties. It is the duty of the receiver to administer the assets of the
Facts: Respondent BF Homes, Inc. (BFHI), is a domestic corporation engaged receivership estate; and in the management and disposition of the property
in developing subdivisions and selling residential lots. One of the subdivisions committed to his possession, he acts in a fiduciary capacity and with
that respondent developed was the BF Homes Paraaque Subdivision impartiality towards all interested persons. The appointment of a receiver
When the Central Bank ordered the closure of Banco Filipino, which had does not dissolve a corporation, nor does it interfere with the exercise of its
substantial investments in respondent BFHI, BFHI filed with the SEC a petition corporate rights.
for rehabilitation and a declaration that it was in a state of suspension of In this case where there appears to be no restraints imposed upon
payments. respondent as it undergoes rehabilitation receivership, respondent
On 18 March 1985, the SEC placed respondent under a management continues to exist as a corporation and hence, continues or should continue
committee. Upon that committees dissolution on 2 February 1988, the SEC to perform its contractual and statutory responsibilities to petitioners as
appointed Atty. Florencio B. Orendain as a Receiver, homeowners.
As a Receiver, Orendain instituted a central security system and unified the Receivership is aimed at the preservation of, and at making more secure,
sixty~five homeowners associations into an umbrella homeowners existing rights; it cannot be used as an instrument for the destruction of
association called United BF Homeowners Associations, Inc. (UBFHAI), which those rights.
was thereafter incorporated with the Home Insurance and Guaranty No violation of the SEC order suspending payments to creditors would
Corporation (HIGC). result as far as petitioners complaint before the HLURB is concerned. To
In 1989, respondent, through Orendain, turned over to UBFHAI control and reiterate, what petitioners seek to enforce are respondents obligations as a
administration of security in the subdivision, the Clubhouse and the open subdivision developer. Such claims are basically not pecuniary in nature
spaces along Concha Cruz Drive. Through the Philippine Waterworks and although it could incidentally involve monetary considerations.
Construction Corporation (PWCC), respondents managing company for
waterworks in the various BF Homes subdivisions, respondent entered into
an agreement with UBFHAI for the annual collection of community
assessment fund and for the purchase of eight new pumps to replace the
over~capacitated pumps in the old wells.
On 7 November 1994, Orendain was relieved by the SEC of his duties as a
Receiver, and a new Board of Receivers consisting of eleven members of
respondents Board of Directors was appointed for the implementation of
Phases II and III of respondents rehabilitation.
The new Board, through its Chairman, Albert C. Aguirre, revoked the
authority given by Orendain to use the open spaces at Concha Cruz Drive and
to collect community assessment funds; deferred the purchase of new
pumps; recognized BF Paraaque Homeowners Association, Inc., (BFPHAI) as
the representative of all homeowners in the subdivision; took over the
management of the Clubhouse; and deployed its own security guards in the
subdivision.
Consequently, on 5 July 1995, herein petitioners filed with the HLURB a class
suit "for and in behalf of the more than 7,000 homeowners in the
subdivision" against respondent BFHI, BF Citiland Corporation, PWCC and A.C.
Aguirre Management Corporation "to enforce the rights of purchasers of
lots" in BF Homes Paranaque
Petitioners raised "issues" on the following basic needs of the homeowners:
rights~of~way; water; open spaces; road and perimeter wall repairs; security;
and the interlocking corporations that allegedly made it convenient for
respondent "to compartmentalize its obligations as general developer, even if
all of these are hooked into the water, roads, drainage and sewer systems of
the subdivision."
In its answer, respondent claimed that (a) it had complied with its contractual
obligations relative to the subdivisions development; (b) respondent could
not be compelled to abide by agreements resulting from Orendains ultra
vires acts; and (c) petitioners were precluded from instituting the instant 2. SPS. CESAR A. LARROBIS, JR. AND VIRGINIA S. LARROBIS v. PHIL
action on account of Section 6(c) of P.D. No. 902~A providing for the VETERANS BANK, G.R. NO. 135706, OCT. 1, 2004
suspension of all actions for claims against a corporation under receivership.
RECEIVERSHIP
Issue: may the proceedings therein be suspended pending the outcome of FACTS:
the receivership before the SEC?"  Petitioner spouses contracted a monetary loan with respondent
HELD: NO. Philippine Veterans Bank in the amount of P135,000.00,
The HLURB, not the RTC, has jurisdiction over the complaint of lot buyers for evidenced by a promissory note, due and demandable on
specific performance of alleged contractual and statutory obligations of the February 27, 1981, and secured by a Real Estate Mortgage
defendants, to wit, the execution of contracts of sale in favor of the plaintiffs executed on their lot together with the improvements thereon.
and the introduction in the disputed property of the necessary facilities such  Respondent bank went bankrupt and was placed under
as asphalting and street lights. receivership/liquidation by the Central Bank from April 25, 1985
In the case at bar, petitioners complaint is for specific performance to enforce until August 1992.
their rights as purchasers of subdivision lots as regards rights of way, water,  On August 23, 1985, the bank, through Francisco Go, sent the
open spaces, road and perimeter wall repairs, and security. Indisputably then, spouses a demand letter for accounts receivable in the total
the HLURB has jurisdiction over the complaint. amount of P6,345.00 as of August 15, 1984, which pertains to the

1
 insurance premiums advanced by respondent bank over the
mortgaged property of petitioners
 On August 23, 1995, more than fourteen years from the time the
loan became due and demandable, respondent bank filed a
petition for extrajudicial foreclosure of mortgage of petitioners
property
 On April 26, 1996, petitioners filed a complaint with the RTC,
Cebu City, to declare the extra-judicial foreclosure and the
subsequent sale thereof to respondent bank null and void
RTC RULING
 When defendant bank was placed under receivership, it was
restrained to do business.
 Defendant banks right to foreclose the mortgaged property
prescribes in ten (10) years but such period was interrupted when
it was placed under receivership
 Even assuming that the liquidation of defendant bank did not
affect its right to foreclose the plaintiffs mortgaged property, the
questioned extrajudicial foreclosure was well within the ten (10)
year prescriptive period since it was renewed again when on
March 24, 1995 defendant bank through its officer-in-charge
Llanto made the second extrajudicial demand. A written
extrajudicial demand wipes out the period that has already
elapsed and starts anew the prescriptive period.
 Petition denied.
 Petition of Review with SC.
PETITIONER’S ARGUMENTS
 a liquidator was duly appointed for respondent bank and there
was no judgment or court order that would legally or physically
hinder or prohibit it from foreclosing petitioners property; despite
the absence of such legal or physical hindrance, respondent banks
receiver or liquidator failed to foreclose petitioners property and
therefore such inaction should bind respondent bank; foreclosure
of mortgages is part of the receivers/liquidators duty of
administering the banks assets for the benefit of its depositors
and creditors, thus, the ten-year prescriptive period which started
on February 27, 1981, was not interrupted by the time during
which the respondent bank was placed under receivership
 The demand letter, dated March 24, 1995, was sent after the ten-
year prescriptive period and the demand letter sent by Mr. Go
refers to the insurance premium on the house of petitioners,
advanced by respondent bank, thus such demand letter referred
to another obligation and could not have the effect of interrupting
the running of the prescriptive period in favor of herein
petitioners insofar as foreclosure of the mortgage is concerned
RESPONDENT’S ARGUMENTS
 the period within which it was placed under receivership and
liquidation was a fortuitous event that interrupted the running of
the prescriptive period for the foreclosure of petitioners
mortgaged property
ISSUES:
 WON THE PERIOD WITHIN WHICH RESPONDENT BANK WAS PUT
UNDER RECEIVERSHIP AND LIQUIDATION WAS A FORTUITOUS
EVENT THAT INTERRUPTED THE RUNNING OF THE PRESCRIPTIVE
PERIOD.
 WON THE WRITTEN EXTRA-JUDICIAL DEMAND MADE BY
RESPONDENT ON PETITIONERS WIPED OUT THE PERIOD THAT
HAD ALREADY ELAPSED.
SC RULING: PETITION DENIED
FIRST ISSUE:
 While it is true that foreclosure falls within the broad definition of
doing business, it should not be considered included, however, in
the acts prohibited whenever banks are prohibited from doing
business during receivership and liquidation proceedings.
 When a bank is declared insolvent and placed under receivership,
the Central Bank, through the Monetary Board, determines
whether to proceed with the liquidation or reorganization of the
financially distressed bank. A receiver, who concurrently
represents the bank, then takes control and possession of its
assets for the benefit of the banks creditors. A liquidator
meanwhile assumes the role of the receiver upon the
2
determination by the Monetary Board that the bank can no longer
resume business. His task is to dispose of all the assets of the bank
and effect partial payments of the banks obligations in accordance
with legal priority
 In both receivership and liquidation proceedings, the bank retains
its juridical personality notwithstanding the closure of its business
and may even be sued as its corporate existence is assumed by
the receiver or liquidator. The receiver or liquidator meanwhile
acts not only for the benefit of the bank, but for its creditors as
well
 Provident Savings Bank vs. Court of Appeals:
When a bank is prohibited from continuing to do business by the
Central Bank and a receiver is appointed for such bank, that bank
would not be able to do new business.
However, the receiver of the bank is in fact obliged to collect
debts owing to the bank, which debts form part of the assets of
the bank. The receiver must assemble the assets and pay the
obligation of the bank under receivership, and take steps to
prevent dissipation of such assets. Accordingly, the receiver of
the bank is obliged to collect pre-existing debts due to the bank,
and in connection therewith, to foreclose mortgages securing
such debts.
 There is also no truth to respondents claim that it could not
continue doing business from the period of April 1985 to August
1992, the time it was under receivership. Respondent was even
able to send petitioners a demand letter, through Francisco Go, on
August 23, 1985 for accounts receivable in the total amount
of P6,345.00 as of August 15, 1984 for the insurance premiums
advanced by respondent bank over the mortgaged property of
petitioners.
 Settled is the principle that a bank is bound by the acts, or failure
to act of its receiver
 All the acts of the receiver and liquidator pertain to petitioner,
both having assumed petitioners corporate existence.
 However, the bank may go after the receiver who is liable to it for
any culpable or negligent failure to collect the assets of such bank
and to safeguard its assets
SECOND ISSUE:
 Considering that the mortgage contract and the promissory note
refer only to the loan of petitioners in the amount of P135,000.00,
there is no reason to hold that the insurance premiums, in the
amount ofP6,345.00, which was the subject of the August 1985
demand letter, should be considered as pertaining to the entire
obligation of petitioners.
3. A.M. NO. RTJ- 03-1815, OCT. 25, 2004, MACTAN CEBU INTERNATIONAL
AIRPORT AUTHORITY (MCIAA) REPRESENTED BY ITS GENERAL MANAGER,
ANGELO C. VERDAN v. JUDGE AGAPITO L. HONTANOSAS, JR., IN HIS
CAPACITY AS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, CEBU CITY,
BRANCH 16
Facts: This administrative case stems from the original case between MCIAA
and its employees. The employees filed a declaratory relief and
mandamus with writ of preliminary injunction for several benefits
in pursuant to Rep. Act. No. 6758, also known as the Salary
Standardization Law. The respondent judge rendered a decision in
favor of the employees.
Upon receipt of decision, MCIAA timely filed a notice of appeal to the court
of appeals on March 15 2002. On May 30, the employees filed a motion for
Execution of Judgment Pending Appeal with the respondent judge. A special
order on July 8 2002 was issued by respondent judge granting the order. A
writ of execution was thereafter issued, with a computation of the total
benefits due to the employees. The complainant filed an Urgent Motion for
Reconsideration, praying that the Special Order dated July 8, 2002 be set
aside on the following grounds: (1) the trial court had lost jurisdiction over
the case by reason of the perfection of the appeal; and (2) the Special Order
did not state any good reason to justify the allowance of an execution
pending appeal. The respondent denied this motion in an Order dated August
22, 2002, but ordered the suspension of the implementation of the writ of
execution in view of the appeal filed by the complainant.
On August 29, 2002, the employees filed a Motion for Reconsideration ] of the
August 22, 2002 Order, and, thereafter, an Extremely Ex-Parte Urgent Motion
to Resolve Motion for Reconsideration. Pairing Judge Fortunato M. De Gracia,
Jr., who took the place of the respondent while the latter was on official leave
of absence, issued an Order[15] dated September 27, 2002 affirming the
previous Order of August 22, 2002, in effect sustaining the suspension of the
implementation of the writ of execution.
On October 30, 2002, the complainant filed a petition for certiorari before
the Court of Appeals, docketed as CA-G.R. SP No. 73628, primarily seeking to
set aside the Special Order of July 8, 2002.
Thereafter, in an Order [16] dated November 29, 2002, the respondent resolved
the August 29, 2002 Motion for Reconsideration filed by the employees.
The complainant filed a motion for reconsideration [17] of the said order, which
motion, however, remained unresolved.
On March 18, 2003, the respondent, acting on a Motion for Clarification filed
by the Philippine National Bank (PNB) as depository bank of the complainant,
issued an Order[18] directing the latter to release the garnished amount
of P2,455,821.11 directly to Atty. Rolindo A. Navarro as award for attorneys
fees.
Thus, with all the foregoing, petitioner filed a Complaint against the
respondent judge dated April 11, 2003, alleging that he was guilty of grave
misconduct, dishonesty, knowingly rendering an unjust judgment and/or
interlocutory orders, bias and partiality, when he issued four patently
irregular interlocutory orders, to wit:
1) Special Order, dated July 8, 2002, granting the employees
Motion for Execution of Judgment Pending Appeal;
2) Order, dated August 22, 2002, denying MCIAAs Motion for
Reconsideration of the July 8, 2002 Order;
3) Order, dated November 29, 2002 allowing the
implementation of the writ of execution; and
4) Order, dated March 18, 2003, ordering PNB to release the
amount of P2,455,821.11 directly to Atty. Rolindo A.
Navarro
According to the complainant, the petition of its employees was
essentially an action for declaratory relief, and as such, it is to be assumed
that their intention therein was mainly to put forth the question of
construction or the validity of Rep. Act. No. 6758, also known as the Salary
Standardization Law, and its implementing rules. The complainant avers that
there was no justifiable controversy to speak of in the said case, and that the
respondent judge should have confined his judgment only to the question of
law involved therein. Considering that in a proceeding for declaratory
judgment, the relief which may be sought is only limited to a declaration of
rights, and not a determination or trial of issues, the respondent judge was in
grave and patent error in awarding detailed claims to the said employees.
The complainant also avers that a cursory perusal of the respondents
ratiocinations shows that his decision was grounded on mere
speculations, surmises and conjectures, and was based on manifestly
mistaken inferences. This resulted in erroneous conclusions,
constitutive of gross ignorance of the law and/or incompetence on the
part of the respondent judge. The complainant also pointed out that
there was no pending incident subject for the courts resolution to
speak of in the first place, considering that it was incumbent upon the
judge to have been aware of the September 27, 2002 Order. As such,
the respondent judge could not profess good faith for issuing a clearly
unjust interlocutory order. The complainant also pointed out that the
respondent judge, likewise, erred in disregarding basic rules and
settled jurisprudence in directing it to retain ten (10) percent of said
allowances and benefits as attorneys fees for the handling lawyer and
to pay the same directly to him, as prayed for in the Petition.
3
The respondent judge claims, that among others, The questioned
decision of respondent Judge is pending appeal before the Honorable
Court of Appeals and the questioned orders emanating from the
decision are likewise appealed to the Court of Appeals by way of a
petition for certiorari; That the judicial remedy of an ordinary appeal
and appeal by certiorari were availed of by the complainant and said
appeals are pending resolution by the Appellate Court; hence, resort
to an administrative remedy is pre-mature;
Ruling: The judge was found guilty.
1. In the case at bar, the actuations of the respondent judge cast doubt as to
his impartiality and cold neutrality. In the Special Order of July 8, 2002, the
respondent granted the employees motion for execution of judgment
pending appeal, despite the fact that the court no longer had jurisdiction
over the case, in view of the perfection of the complainants appeal and the
belated filing of such motion for execution of judgment. Furthermore, no
good reasons were stated in the said order to justify the grant of the motion.
In his July 8, 2002 Special Order granting execution pending appeal, the
respondent appeared to be sympathetic to the employees when he stated
that The dictates of social justice cannot be ignored by the Court. x x x. It is
the sentiment of the Court that technical issues should be resolved in the light
of the paramount principles of equal protection of the law and social justice.
The respondents sympathy for the employees, however, was indubitably
hollow. It was nothing but empty cant. His heart was never for them. His
ulterior motive surfaced when he issued the March 18, 2002 Order directing
PNB to release the amount of P2,455,821.11 directly to Atty. Rolindo A.
Navarro, the employees counsel.
2. The respondents order was highly suspicious as it was for the
benefit, not of the employees, but their counsel. It is elementary that
when attorneys fees are awarded, they are so adjudicated because
they are in the nature of actual damages suffered by the client (Mirasol
v. De La Cruz, 84 SCRA 337) as he was constrained to engage the
services of a counsel to represent him in a litigation for the protection
of his interest. Being in the nature of damages, the award should have
been given first to the employees, not to their counsel. Moreover, as it
was an implementation of a writ of execution, PNB should not have
been ordered to pay it directly to Atty. Navarro. The respondent should
have ordered the PNB to pay it, at least, through the sheriff who is duly
tasked to enforce such orders. By bypassing the sheriff, the
respondents directive was highly irregular
4. The respondent judge, likewise, disregarded the order issued by
Pairing Judge Fortunato M. De Gracia, Jr. on September 27, 2002 which
resolved the motion for reconsideration filed by the employees by
issuing an Order dated November 29, 2002, effectively reversing and
setting aside the same without the said employees having filed a new
motion therefor.
5. As a closing argument, let it be underscored at this juncture that in
granting the petition for certiorari of complainant MCIAA, the eighth division
of the Court of Appeals through Justice Gozo-Dadule (sic), did not find that
Respondent judge committed grave abuse of judicial discretion in connection
with his questioned Orders of July 8, 2002 and August 22, 2002. There is no
finding even of simple abuse of discretion.
While with respect to the Order of March 18, 2003 directing the PNB-
Lapu-Lapu City branch to release direct(ly) to Atty. Rolindo Navarro his
partial attorneys fees in the amount of P2,455,821.11, the Court of
Appeals ruled that such Order was a misplaced ratiocination which
means that such an Order proceeded from an illogical reasoning (sic).
Thus, such an Order was a mere error of judgment which could have
been corrected had complainant MCIAA made a timely objection or
filed an appropriate motion to block the release of its funds at the PNB
Lapu-Lapu City branch considering that it had seven days within which
to make its move
4. FILM DEVELOPMENT COUNCIL OF THE PHILIPPINES v. SM PRIME
HOLDINGS, INC., G.R. NO. 197937, APRIL 3, 2013
Cinema house -> remit tax -> to FDCP? Or to Cebu City?
Declaratory relief filed. Sometime in May 2009, the City of Cebu filed in the
RTC of Cebu City (Cebu City RTC) a petition 8 for DECLARATORY RELIEF WITH
APPLICATION FOR A WRIT OF PRELIMINARY INJUNCTION AGAINST the
petitioner, docketed as Civil Case No. CEB-35529. The City of Cebu sought to
declare Section 14 of R.A. No. 9167 as invalid and unconstitutional.
FDCP filed an action against the respondent for the payment
of P76,836,807.08 representing the unpaid amusement tax incentive reward.
(Civil Case 72238)
On February 21, 2011, the Pasig City RTC issued the assailed order granting
the motion to dismiss, holding that the action before the Cebu City RTC (Civil
Case No. CEB-35529) is the appropriate vehicle for litigating the issues
between the parties in Civil Case No. 72238. Moreover, said court found all
the elements of litis pendentia present and accordingly dismissed the
complaint.
Argument of FDCP
Petitioner submits that while there is identity of parties in Civil Case Nos.
CEB-35529 and 72238, the second and third requisites are absent. It points
out that in the former, it is not claiming any monetary award but merely
prayed for the dismissal of the declaratory relief petition. Moreover, since the
issues raised in the former case are purely legal, petitioner is not necessarily
called upon to present testimonial or documentary evidence to prove factual
matters. Petitioner thus concludes that the judgment in former case would
not amount to res judicata in the latter case. Petitioner further notes that
when a judgment dismissing the former case is appealed and the assailed
provisions of R.A. No. 9167 are declared constitutional by this Court,
petitioner will not be automatically awarded the unpaid amusement taxes it
is claiming against respondent in Civil Case No. 72238.
ISSUE
WON the dismissal of the 2nd action was proper.
RULING
Yes.
We do not subscribe to petitioner’s view that the dismissal of the complaint
in Civil Case No. 72238 amounts to an abdication of the Pasig City RTC’s
concurrent jurisdiction to settle constitutional questions involving a statute or
its implementing rules. The 1997 Rules of Civil Procedure, as amended,
provides for specific grounds for the dismissal of any complaint in civil cases
including those where the trial court has competence and authority to hear
and decide the issues raised and relief sought. One of these grounds is litis
pendentia.
[Interpleader action proper, SM Prime does not know to whom remittance
of the tax must be made]
In this case, what petitioner failed to take into account is that the Cebu City
RTC allowed respondent to intervene in Civil Case No. CEB-35529 by way of
an INTERPLEADER ACTION as to which government entity – whether FDCP or
the Cebu City Government – should have remitted the amusement taxes it
collected from the admission fees of graded films shown in respondent’s
cinemas in Cebu City. It must be noted that since 1993 when City Tax
Ordinance No. LXIX was enforced, respondent had been faithfully remitting
amusement taxes to the City of Cebu and because of the collection suit filed
by petitioner, such defense of prior payment and evidence to prove it which
respondent could have presented at the trial in Civil Case No. 72238 would be
the same defense and evidence necessary to sustain respondent’s
interpleader action in Civil Case No. CEB-35529 before the Cebu City RTC.
Also, in both cases, respondent had raised the matter of conflicting provisions
of R.A. No. 9167 and Local Government Code of 1991, while petitioner
pleaded and argued the constitutionality and validity of Sections 13 and 14 of
R.A. No. 9167.
[The second action (FDCP vs SM Prime) is dependent on the resolution of
the declaratory relief (Cebu City vs law creating FDCP)]
The interpleader action of respondent/intervenor, anchored on its defense of
prior payment, would be considered by the Cebu City RTC in its final
determination of the parties’ rights and interests as it resolves the legal
questions. The Pasig City RTC is likewise confronted with the legal and
constitutional issues in the collection suit, alongside with respondent’s
defense of prior payment. It is evident that petitioner’s claim against the
respondent hinges on the correct interpretation of the conflicting provisions
of the Local Government Code of 1991 and R.A. No. 9167. There could be no
doubt that a judgment in either case would constitute res judicata to the
other. Sound practice thus dictates that the common factual and legal issues
be resolved in a single proceeding.
Litis pendentia present
Under the established jurisprudence on litis pendentia, the following
considerations predominate in the ascending order of importance in
4
determining which action should prevail: (1) the date of filing, with
preference generally given to the first action filed to be retained; (2) whether
the action sought to be dismissed was filed merely to preempt the later
action or to anticipate its filing and lay the basis for its dismissal; and (3)
whether the action is the appropriate vehicle for litigating the issues between
the parties.29
Moreover, considering the predicament of respondent, we also find relevant
the criterion of the consideration of the interest of justice we enunciated in
Roa v. Magsaysay.30 In applying this standard, what was asked was which
court would be "in a better position to serve the interests of justice," taking
into account (a) the nature of the controversy, (b) the comparative
accessibility of the court to the parties and (c) other similar factors. 31
In this case, all things considered, there can be no doubt Civil Case No. CEB-
35529 is the appropriate vehicle to determine the rights of petitioner and
respondent. In that declaratory relief case instituted by the City of Cebu, to
which respondent had been remitting the subject amusement taxes being
claimed by petitioner in Civil Case No. 72238, the issue of validity or
constitutionality of Sections 13 and 14 of R.A. No. 9167 was directly pleaded
and argued between petitioner and the City of Cebu, with subsequent
inclusion of respondent as intervenor. Moreover, the presence of City of Cebu
as party plaintiff would afford proper relief to respondent in the event the
Cebu City R TC renders judgment sustaining the validity of the said provisions.
Respondent had vigorously asserted in both courts that it had remitted the
amusement taxes in good faith to the City of Cebu which had threatened
sanctions for non-compliance with City Tax Ordinance No. LXIX, and that it
should not be made to pay once again the same taxes to petitioner. As
equally dire consequences for non-compliance with the demand for payment
having been made by petitioner, such defense of good faith is best ventilated
in Civil Case No. CEB-35529 where the City of Cebu is a party.
Reason for litis pendentia: to prevent the unnecessary burdening of our
courts and undue taxing of the manpower and financial resources of the
judiciary; to avoid the situation where co-equal courts issue conflicting
decisions over the same cause; and to preclude one party from harassing the
other party through the filing of an unnecessary or vexatious suit.32
5. GAN HUA UY FLORES, ET. AL. v. JOHNNY K.H. UY, G.R. NO. 121492, OCT.
26, 2001; JOHNNY K.H. UY v. CA, ET. AL., G.R. NO. 124325, OCT. 26, 2001
BAN HUA UY FLORES vs UY
FACTS: Uy family owns Soon Kee Commercial Corporation. Johnny Uy and
Ban Ha Chua and Ban Hua Flores are brothers and sisters and were among
the stockholders of the corporation. Sometime in 1986 and 1987, disputes
racked the family which later caused Johnny Uy and his wife Magdalena to
break away from the rest of the family. They later transferred their
investments in Soon Kee to the other stockholders of the corporation.
This particular case takes its roots from a complaint for interpleader
instituted by Hongfil Shipping Corporation and Edward Tan Chona to
determine the rightful owner of a certain sum of money originally invested
with the corporation.
Tan Chona have since received demands from the Uy family members. But
being close and in good terms with all of them, Tan Chona decided to
deposit the amount with the bank and instituted an interpleader action so
as not to be misunderstood by the Uy family.
Tan Chona then prayed that the court render judgment on the respective
rights of the defendants on the amount currently deposited with the bank
and the interest that will accrue thereon. It was also prayed that attorney's
fees and expenses incurred by the plaintiffs be declared to constitute a first
lien or charge on the disputed amount.
ISSUE:
1. WON Johnny K. H. Uy was the sole owner of the US$100,000.00
investment of the Uy family in the Hongfil Shipping Corporation; and
2. WON damages may be assessed against respondent Johnny K. H. Uy and
awarded in favor of petitioners.
RULING:
1. The first issue is factual. In an appeal via certiorari, we may not review
the findings of fact of the Court of Appeals. When supported by substantial
evidence, the findings of fact of the Court of Appeals are conclusive and
binding on the parties and are not reviewable by the Court, unless the case
falls under any of the exceptions to the rule.
Petitioner has not shown that the case falls within the exceptions. The
Supreme Court is not a trier of facts. It is not our function to review,
examine and evaluate or weigh the probative value of the evidence
presented. A question of fact would arise in such event. Questions of fact
cannot be raised in an appeal via certiorari before the Supreme Court and
are not proper for its consideration.
2. On the second issue, actual damages may therefore be assessed against
respondent Johnny Uy. The actual expenses incurred by petitioner Ban Hua
Uy Flores consisted not merely of the attorney's fees and other litigation
expenses but also other expenses related to the trial of this case in Cebu
City. Two (2) lawyers always attended the trial of the case. The lawyers
came from Manila. Petitioner Ban Hua Uy Flores had to come from Bacolod
City. The lawyers and petitioner Ban Hua Uy Flores not only incurred
expenses for plane fare but also for hotel accommodations and food, as
well as other miscellaneous expenses.
Johnny Uy acted in gross and evident bad faith in making a false claim that
he owned 100% of the Uy family investment in the Hongfil Shipping
Corporation. Despite the fact he had made a written admission that the
investment in the Hongfil Shipping venture in the amount of US$100,000.00
was for the Uy family, stockholders of Soon Kee Commercial, he persisted in
claiming as his own one hundred (100%) percent of the investment. On
appeal, the Court of Appeals reversed the judgment and declared that he
was only entitled to 26% of the investment.
For such acts, we rule that actual and moral damages may be assessed
against him. Actual or compensatory damages may be awarded for
wrongful acts or omissions. Indeed, actual damages are primarily intended
to simply make good or replace the loss caused by a wrong. However, these
must be duly proved and established with reasonable degree of certainty
Similarly, reasonable attorney's fees and moral damages may be awarded
to the prevailing parties who had to endure a long drawn out litigation to
establish their right.
6. ARREZA v. DIAZ, JR., 364 SCRA 88
EDGAR H. ARREZA, petitioner,
vs.
MONTANO M. DIAZ, JR., respondent.
QUISUMBING, J.:
In the course of a case involving a conflict of ownership Arreza and Diaz, Bliss
Development Corporation filed a complaint for interpleader.
The RTC ruled in favor of Arreza.
The decision became final and was duly executed with Bliss executing a
Contract to Sell the aforementioned property to petitioner Arreza.
Respondent Diaz was constrained to deliver the property with all its
improvements to petitioner.
Diaz sued them for reimbursement of the cost of the improvements.
Arreza opposed citing as grounds res adjudicata or conclusiveness of the
judgment in the interpleader case as well as lack of cause of action.
Diaz, however, contends that the trial court did not acquire jurisdiction over
the property subject of the action, as the action was instituted in Makati
City while the subject unit is situated in Quezon City.
Diaz also claims that there is no identity of causes of action, the present case
subject of this petition, as the former involved a complaint for interpleader
while the latter now involves an action for a sum of money and damages. He
avers that a complaint for interpleader is nothing more than the
determination of rights over the subject matter involved.
ISSUE
Whether respondent Diaz's claims for reimbursement against petitioner
Arreza are barred by res adjudicata.
RULING
The elements of res adjudicata are: (a) that the former judgment must be
final; (b) the court which rendered judgment had jurisdiction over the parties
5
and the subject matter; (c) it must be a judgment on the merits; and (d) there
must be between the first and second causes of action identity of the parties,
subject matter, and cause of action.8
Diaz is estopped from assailing the lack of jurisdiction.
DIAZ in his answer alleged:
20. That should the said additional provision be declared valid and
in the remote possibility that the alleged conflicting claimant is
adjudged to possess better right herein answering defendant is
asserting his right as a buyer for value and in good faith against all
persons/parties concerned.10 (Italics supplied)
Respondent in his answer also prayed that:
D. Should the said additional provision be found valid and in the
event his co-defendant is found to possess better rights, to
adjudge him (Diaz) entitled to rights as a buyer in good faith and
for value.11
By asserting his right as a buyer for value and in good faith of the subject
property, and asking for relief arising therefrom, Diaz invoked the jurisdiction
of the trial court. Having invoked the jurisdiction of the Regional Trial Court of
Makati (Branch 146) by filing his answer to secure affirmative relief against
petitioner, respondent is now estopped from challenging the jurisdiction of
said court after it had decided the case against him. Surely we cannot
condone here the undesirable practice of a party submitting his case for
decision and then accepting the judgment only if favorable, but attacking it
on grounds of jurisdiction when adverse.12
Identity of causes of action present.
As stated by the Court of Appeals, the court in a complaint for interpleader
shall determine the rights and obligations of the parties and adjudicate their
respective claims. Such rights, obligations, and claims could only be
adjudicated if put forward by the aggrieved party in assertion of his rights.
That party in this case referred to respondent Diaz. The second paragraph of
Section 5 of Rule 62 of the 1997 Rules of Civil Procedure provides that the
parties in an interpleader action may file counterclaims, cross-claims, third
party complaints and responsive pleadings thereto, "as provided by these
Rules." The second paragraph was added to Section 5 to expressly authorize
the additional pleadings and claims enumerated therein, in the interest of a
complete adjudication of the controversy and its incidents.15
Pursuant to said Rules, respondent should have filed his claims against
petitioner Arreza in the interpleader action. Having asserted his rights as a
buyer in good faith in his answer, and praying relief therefor, respondent Diaz
should have crystallized his demand into specific claims for reimbursement by
petitioner Arreza. This he failed to do. Under the Baclayon case:
A corollary question that We might as well resolve now (although
not raised as an issue in the present petition, but conformably
with Gayos, et al. v. Gayos, et al., G.R. No. L-27812, September 26,
197S, 67 SCRA 146, that it is a cherished rule of procedure that a
court should always strive to settle the entire controversy in a
single proceeding leaving no root or branch to bear the seeds in
future litigation) is whether or not the private respondents can
still file a separate complaint against the petitioners on the ground
that they are builders in good faith and consequently, recover the
value of the improvements introduced by them on the subject lot.
The case of Heirs of Laureano Marquez v. Valencia, 99 Phil. 740,
provides the answer:
If, aside from relying solely on the deed of sale with a
right to repurchase and failure on the part of the
vendors to purchase it within the period stipulated
therein, the defendant had set up an alternative
though inconsistent defense that he had inherited the
parcel of land from his late maternal grandfather and
presented evidence in support of both defenses, the
overruling of the first would not bar the determination
by the court of the second. The defendant having
failed to set up such alternative defenses and chosen or
elected to rely on one only, the overruling thereof was
a complete determination of the controversy between
the parties which bars a subsequent action based upon
an unpleaded defense, or any other cause of action,
except that of Failure of the complaint to state a cause
of action and of lack of jurisdiction of the Court. The
determination of the issue joined by the parties
constitutes res judicata. (Italics supplied)
 Although the alternative defense of being builders in good faith is
only permissive, the counterclaim for reimbursement of the value
of the improvements is in the nature of a compulsory
counterclaim. Thus, the failure by the private respondents to set it
up bars their right to raise it in a subsequent litigation (Rule 9,
Section 4 of the Rules of Court). While We realize the plight of the
private respondents, the rule on compulsory counterclaim is
designed to enable the disposition of the whole controversy at
one time and in one action. The philosophy of the rule is to
discourage multiplicity of suits. (Italics supplied)
Having failed to set up his claim for reimbursement, said claim of respondent
Diaz being in the nature of a compulsory counterclaim is now barred.16
In cases involving res adjudicata, the parties and the causes of action are
identical or substantially the same in the prior as well as the subsequent
action. The judgment in the first action is conclusive as to every matter
offered and received therein and as to any other matter admissible therein
and which might have been offered for that purpose, hence said judgment is
an absolute bar to a subsequent action for the same cause.17 The bar extends
to questions "necessarily involved in an issue, and necessarily adjudicated, or
necessarily implied in the final judgment, although no specific finding may
have been made in reference thereto, and although such matters were
directly referred to in the pleadings and were not actually or formally
presented"18 Said prior judgment is conclusive in a subsequent suit between
the same parties on the same subject matter, and on the same cause of
action, not only as to matters which were decided in the first action, but also
as to every other matter which the parties could have properly set up in the
prior suit.19
In the present case, we find there is an identity of causes of action between
Civil Case No. 94-2086 and Civil Case No. 96-1372. Respondent Diaz's cause
of action in the prior case, now the crux of his present complaint against
petitioner, was in the nature of an unpleaded compulsory counterclaim,
which is now barred. There being a former final judgment on the merits in
the prior case, rendered in Civil Case No. 94-2086 by Branch 146 of the
Regional Trial Court of Makati, which acquired jurisdiction over the same
parties, the same subject property, and the same cause of action, the present
complaint of respondent herein (Diaz) against petitioner Arreza docketed as
Civil Case No. 96-1372 before the Regional Trial of Makati, Branch 59 should
be dismissed on the ground ofres adjudicata.
7. COMMISSIONER OF CUSTOMS and the DISTRICT COLLECTOR OF THE
PORT OF SUBIC, vs. HYPERMIX FEEDS CORPORATION
G.R. No. 179579 February 1, 2012
A Petition for Review under Rule 45, assailing the Decision and the Resolution
of the Court of Appeals (CA), which nullified the Customs Memorandum
Order (CMO) No. 27-2003 on the tariff classification of wheat issued by
petitioner Commissioner of Customs.
Facts:
Petitioner issued CMO No. 27-2003 which classified wheat, for tariff
purposes, according to the following: (1) importer or consignee; (2) country
of origin; and (3) port of discharge. Furthermore, the regulation provided an
exclusive list of corporations, ports of discharge, commodity descriptions and
countries of origin. Depending on these factors, wheat would be classified
either as food grade or feed grade, with tariff rates at 3% and 7% respectively.
Respondent filed a Petition for Declaratory Relief with the Regional Trial
Court (RTC) of Las Pinas City, in anticipation of the implementation of said
regulation on its imported and perishable Chinese milling wheat in transit
from China. He provided for the following contentions: (a) that CMO 27-2003
was issued without following the mandate of the Revised Administrative
Code on public participation, prior notice, and publication or registration with
the University of the Philippines Law Center; (b) the regulation summarily
adjudged it to be a feed grade supplier without the benefit of prior
assessment and examination; (c) violation of the equal protection clause of
the Constitution by treating non-flour millers differently from flour millers for
no reason at all; and (d) the retroactive application of the regulation was
confiscatory in nature.
RTC issued a Temporary Restraining Order (TRO) effective for twenty (20)
days from notice.
6
Petitioner filed a Motion to Dismiss and alleged that the RTC did not
have jurisdiction over the subject matter of the case because
respondent was asking for a judicial determination of the classification
of wheat, thus, action for declaratory relief is improper.
RTC held that it had jurisdiction over the subject matter, given that the issue
raised by respondent concerned the quasi-legislative powers of petitioners. It
likewise stated that a petition for declaratory relief was the proper remedy,
and that respondent was the proper party to file it. The court considered that
respondent was a regular importer, and that the latter would be subjected to
the application of the regulation in future transactions.
Petitioners appealed to the CA which dismissed the appeal and held that:
since the regulation affected substantial rights of petitioners and other
importers, petitioners should have observed the requirements of notice,
hearing and publication.
Issue(s):
(a) WoN an action for declaratory relief is proper.
(b) WoN RTC has jurisdiction.
(c) WoN CMO 27-2003 is in valid.
Ruling: Yes in all three issues.
(a) An action for declaratory relief is proper.
Rule 63, Section 1 provides:
Who may file petition. – Any person interested under a
deed, will, contract or other written instrument, or whose
rights are affected by a statute, executive order or
regulation, ordinance, or any other governmental
regulation 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 requirements of an action for declaratory relief are as follows:
(1) there must be a justiciable controversy;
(2) the controversy must be between persons whose interests are
adverse;
(3) the party seeking declaratory relief must have a legal interest
in the controversy; and
(4) the issue involved must be ripe for judicial determination
The case at bar satisfies the following requirements in that:
(1) The subject of the controversy is the constitutionality of CMO 27-
2003, a governmental regulation, issued by petitioner
Commissioner of Customs;
(2) The controversy is between two parties that have adverse
interests. Petitioners are summarily imposing a tariff rate that the
respondent is refusing to pay;
(3) Respondent has a legal and substantive interest in the
implementation of CMO 27-2003. He has adequately shown that,
as a regular importer of wheat, upon arrival of its shipments, it
would be subjected to the regulation which calls for the
imposition of different tariff rates, depending on the factors
enumerated therein. Each and every importation will be subjected
to constant disputes, resulting in the delays of delivery and
expenses on the part of the respondent; and
(4) The issue raised by respondent is ripe for judicial determination,
because litigation is inevitable for the simple and uncontroverted
reason that respondent is not included in the enumeration of flour
millers classified as food grade wheat importers. Thus, it would
have to file a protest case each time it imports food grade wheat
and be subjected to the 7% tariff.
(b) RTC has jurisdiction.
An action for declaratory relief is within the original and exclusive
jurisdiction of the RTC (Rule 63, Sec. 1 [1]. The determination of whether a
specific rule or set of rules issued by an administrative agency
contravenes the law or the constitution is within the jurisdiction of the
regular courts. Indeed, the Constitution vests the power of judicial
review or the power to declare a law, treaty, international or executive
agreement, presidential decree, order, instruction, ordinance, or
regulation in the courts, including the regional trial courts. This is within
the scope of judicial power, which includes the authority of the courts
to determine the validity of the acts of the political departments.
(c) CMO 27-2003 is invalid.
The Commissioner of Customs (1) violated the right to due process in
the issuance of CMO 27-2003 when he failed to observe the requirements
under the Revised Administrative Code, (2) violated the right to equal
protection of laws when he provided for an unreasonable classification in the
application of the regulation, and (3) went beyond his powers of delegated
authority when the regulation limited the powers of the customs officer to
examine and assess imported articles. CMO 27-2003 was issued without
following the mandate of the Revised Administrative Code on public
participation, prior notice, and publication or registration with the University
of the Philippines Law Center.
The classification of wheat according to the following: (1) importer or
consignee; (2) country of origin; and (3) port of discharge, is a violation of the
equal protection clause under the Constitution. The Court does not see how
the quality of wheat is affected by who imports it, where it is discharged, or
which country it came from. Thus, on the one hand, even if other millers
excluded from CMO 27-2003 have imported food grade wheat, the product
would still be declared as feed grade wheat, a classification subjecting them
to 7% tariff. On the other hand, even if the importers listed under CMO 27-
2003 have imported feed grade wheat, they would only be made to pay 3%
tariff, thus depriving the state of the taxes due. The regulation, therefore,
does not become disadvantageous to respondent only, but even to the state.
Section 1403 of the Tariff and Customs Law, as amended mandates that
the customs officer must first assess and determine the classification of the
imported article before tariff may be imposed. Unfortunately, CMO 23-2007
has already classified the article even before the customs officer had the
chance to examine it.
Finally, Commissioner of Customs diminished the powers granted by the
Tariff and Customs Code with regard to wheat importation when it no longer
required the customs officer’s prior examination and assessment of the
proper classification of the wheat.
8. MALANA v. TAPPA, G.R. No. 181303, SEPTEMBER 17, 2009
FACTS: Petitioners inherited the subject property from Anastacio, who died
intestate. During the lifetime of Anastacio, he had allowed Consuelo to build
on and occupy the subject property but would vacate the said land at any
time that Anastacio and his heirs might need it.
Respondents, Consuelos family members, continued to occupy the subject
property even after her death. Petitioners demanded that respondents
vacate the same. Respondents but they refused.
Petitioners referred their land dispute for conciliation. Respondents
presented documents ostensibly supporting their claim of ownership.
According to petitioners, respondents documents were highly dubious,
falsified, and incapable of proving the latters claim of ownership over the
subject property; nevertheless, they created a cloud upon petitioners title to
the property.
Petitioners filed before the RTC their Complaint for Reivindicacion, Quieting
of Title, and Damages. RTC dismissed the Complaint on the ground of lack of
jurisdiction. The RTC referred to the Judiciary Reorganization Act of 1980,
which vests the RTC with jurisdiction over real actions, where the assessed
value of the property involved exceeds P20,000.00. It found that the subject
property had a value of less than P20,000.00; hence, petitioners action to
recover the same was outside the jurisdiction of the RTC.
Issue: Whether the RTC committed grave abuse of discretion in dismissing
petitioners Complaint for lack of jurisdiction?
7
Ruling: NO.
The use of the word may under Section 1, Rule 63 (which vests jurisdiction in
the RTC) denotes that the provision is merely permissive and indicates a mere
possibility, an opportunity or an option.
To determine which court has jurisdiction over the actions identified in the
second paragraph of, said provision must be read together with those of the
Judiciary Reorganization Act of 1980. The Judiciary Reorganization Act of
1980, as amended, uses the word shall and explicitly requires the MTC to
exercise exclusive original jurisdiction over all civil actions which involve title
to or possession of real property where the assessed value does not
exceed P20,000.00, thus:
As found by the RTC, the assessed value of the subject property is P410.00;
therefore, petitioners Complaint involving title to and possession of the said
property is within the exclusive original jurisdiction of the MTC, not the RTC.
Furthermore, an action for declaratory relief presupposes that there has
been no actual breach of the instruments involved or of rights arising
thereunder. In the present case, petitioners Complaint for quieting of title
was filed after petitioners already demanded and respondents refused to
vacate the subject property
Since petitioners averred in the Complaint that they had already been
deprived of the possession of their property, the proper remedy for them is
the filing of an accion publiciana or an accion reivindicatoria, not a case for
declaratory relief. Given that the subject property herein is valued only
at P410.00, then the MTC, not the RTC, has jurisdiction over an action to
recover the same.
RTC is ordered to REMAND the records of this case to the MTC or the court of
proper jurisdiction for proper disposition.
9. ABS-CBN BROADCASTING CORP. v. COMELEC, 360 PHIL 780
This is a petition for certiorari under Rule 65 assailing COMELEC Resolution
No. 98-1419 Petitioner asserts that respondent acted with grave abuse of
discretion amounting to a lack or excess of jurisdiction when it approved the
issuance of a restraining order enjoining the petitioner or any other group
from conducting exit polls during the May 11 elections.
The solicitor general contends that the petition is moot and academic,
because the May 11, 1998 election has already been held and done with.
ISSUE: Is the “moot and academic” principle a magical formula that can
automatically dissuade the courts in resolving a case?
RULING:
The issue is not totally moot. While the assailed Resolution referred
specifically to the May 11, 1998 election, its implications on the people's
fundamental freedom of expression transcend the past election. The holding
of periodic elections is a basic feature of our democratic government. By its
very nature, exit polling is tied up with elections. To set aside the resolution
of the issue now will only postpone a task that could well crop up again in
future elections.
In any event, in Salonga v. Cruz Paño, the Court had occasion to reiterate that
it "also has the duty to formulate guiding and controlling constitutional
principles, precepts, doctrines, or rules. It has the symbolic function of
educating bench and bar on the extent of protection given by constitutional
guarantees."7 Since the fundamental freedoms of speech and of the press
are being invoked here, we have resolved to settle, for the guidance of
posterity, whether they likewise protect the holding of exit polls and the
dissemination of data derived therefrom.
This Court, however, has ruled in the past that this procedural requirement
may be glossed over to prevent a miscarriage of justice,8 when the issue
involves the principle of social justice or the protection of labor,9 when the
decision or resolution sought to be set aside is a nullity,10 or when the need
for relief is extremely urgent and certiorari is the only adequate and speedy
remedy available.
The instant Petition assails a Resolution issued by the Comelec en banc on
April 21, 1998, only twenty (20) days before the election itself. Besides, the
petitioner got hold of a copy thereof only on May 4, 1998. Under the
circumstances, there was hardly enough opportunity to move for a
reconsideration and to obtain a swift resolution in time or the May 11, 1998
elections. Moreover, not only is time of the essence; the Petition involves
transcendental constitutional issues. Direct resort to this Court through a
special civil action for certiorari is therefore justified
10. REPOL v. COMELEC, 428 SCRA 321
Repol vs. COMELEC
FACTS:
Repol and private respondent VioletoCeracas (Ceracas) were
candidates for Municipal Mayor of Pagsanghan, Samar in the 14 May 2001
elections. On 16 May 2001, Ceracas was proclaimed as the duly elected
mayor with 66 votes more than Repol. Repol filed an election protest before
the Regional Trial Court of Tarangnan, Samar, Branch 40 (trial court),
docketed as Election Case No. T-001.Claiming that fraud and other
irregularities marred the elections in Precincts 3A, 5A and 71, Repol prayed
for revision of the ballots in these precincts. Judge Francisco Mazo dismissed
the election protest on 28 August 2001. On certiorari, the COMELEC First
Division reversed the dismissal order of Judge Mazo in a Resolution dated 22
May 2002 for being issued with grave abuse of discretion tantamount to lack
of jurisdiction. The COMELEC First Division directed the trial court to reinstate
the subject election protest, conduct the revision of ballots from the
protested precincts and render its Decision with immediate dispatch. On 18
September 2003, the COMELEC en banc denied Ceracass motion to
reconsider the Resolution dated 22 May 2002. The COMELEC en
banc affirmed in toto the reinstatement of Repols election protest. This time
around, trial and revision of the ballots ensued with Judge Roberto A.
Navidad presiding.
On 30 December 2003, the trial court declared Ceracass proclamation
void and proclaimed Repol the duly elected mayor of Pagsanghan, Samar.
Repol filed before the trial court a motion for execution pending
appeal. On 5 January 2004, the trial court granted Repols motion and issued
a writ of execution. Meanwhile, Ceracas appealed the trial courts judgment
to the COMELEC.
On 6 January 2004, Repol took his oath of office as the duly elected
mayor of Pagsanghan, Samar. On the same date, Ceracas filed before the trial
court an omnibus motion to reconsider, set aside and quash the writ of
execution.
During the pendency of Ceracass appeal with the COMELEC and
without waiting for the trial court to resolve his omnibus motion, Ceracas
filed with the COMELEC a Petition for Certiorari (with prayer for temporary
restraining order, writ of preliminary injunction and/or status quo ante)
assailing the writ of execution, docketed as SPR No. 1-2004. [5] On 12 January
2004, the COMELEC First Division issued the assailed Order directing the
parties to maintain the status quo ante.
Issue:
WHETHER THE COMELEC IS EMPOWERED UNDER ANY STATUTE, RULE, OR
JURISPRUDENCE TO ISSUE A STATUS QUO ANTE IN EFFECT OVERTURNING
THE EFFECTIVE ENFORCEMENT OF THE WRIT OF EXECUTION ISSUED BY THE
TRIAL COURT AND SUSPENDING INDEFINITELY, WITHOUT PRIOR NOTICE AND
HEARING, THE IMPLEMENTATION OF SUCH WRIT.
8
Ruling:
The petition is meritorious.
Only final orders of the COMELEC in Division may be raised before the
COMELEC en banc. Sec. 3, Art. IX-C of the 1987 Constitution mandates that
only motions for reconsideration of final decisions shall be decided by the
COMELEC en banc. Under this constitutional provision, the COMELEC en banc
shall decide motion for reconsideration only of “decisions” of a Division,
meaning those acts having a final character. Clearly, the assailed status quo
ante Order, being interlocutory, should first be resolved by the COMELEC First
Division via a motion for reconsideration.
11. MAGALLONA, ET. AL. v. ERMITA, ET. AL., G.R. NO. 187167, AUG. 16, 2011
Facts:
1. In 1961, Congress passed RA 3046 demarcating the maritime
baselines of the Philippines as an archipelagic State. This law
followed the framing of the Convention on the Territorial Sea and
the Contiguous Zone in 1958 (UNCLOS I), codifying, among others,
the sovereign right of States parties over their “territorial sea,” the
breadth of which, however, was left undetermined. Attempts to fill
this void during the second round of negotiations in Geneva in
1960 (UNCLOS II) proved futile. Thus, domestically, RA 3046
remained unchanged for nearly five decades, save for legislation
passed in 1968 RA 5446 correcting typographical errors and
reserving the drawing of baselines around Sabah in North Borneo.
2. In March 2009, Congress amended RA 3046 by enacting RA 9522,
the statute now under scrutiny. The change was prompted by the
need to make RA 3046 compliant with the terms of the United
Nations Convention on the Law of the Sea (UNCLOS III), which the
Philippines ratified on 27 February 1984. Among others, UNCLOS
III prescribes the water-land ratio, length, and contour of baselines
of archipelagic States like the Philippines and sets the deadline for
the filing of application for the extended continental shelf.
Complying with these requirements, RA 9522 shortened one
baseline, optimized the location of some basepoints around the
Philippine archipelago and classified adjacent territories, namely,
the Kalayaan Island Group (KIG) and the Scarborough Shoal, as
“regimes of islands” whose islands generate their own applicable
maritime zones.
3. Petitioners assail the constitutionality of RA 9522 on two principal
grounds, namely: (1) RA 9522 reduces Philippine maritime
territory, and logically, the reach of the Philippine state’s sovereign
power, in violation of Article 1 of the 1987 Consti, embodying the
terms of the Treaty of Paris and ancillary treaties,(2) RA 9522
opens the country’s waters landward of the baselines to maritime
passage by all vessels and aircrafts, undermining Philippine
sovereignty and national security, contravening the country’s
nuclear-free policy, and damaging marine resources, in violation of
relevant constitutional provisions, and (3) that RA 9522’s
treatment of the KIG as “regime of islands” not only results in the
loss of a large maritime area but also prejudices the livelihood of
subsistence fishermen. To buttress their argument of territorial
diminution, petitioners facially attack RA 9522 for what it excluded
and included – its failure to reference either the Treaty of Paris or
Sabah and its use of UNCLOS III’s framework of regime of islands
to determine the maritime zones of the KIG and the Scarborough
Shoal.
 4. Commenting on the petition, respondent officials raised threshold
issues questioning (1) the petitions compliance with the case or
controversy requirement for judicial review grounded on
petitioners alleged lack of locus standi and (2) the propriety of the
writs of certiorari and prohibition to assail the constitutionality
of RA 9522. On the merits, respondents defended RA 9522 as the
countrys compliance with the terms of UNCLOS III, preserving
Philippine territory over the KIG or Scarborough Shoal.
Respondents add that RA 9522 does not undermine the countrys
security, environment and economic interests or relinquish the
Philippines claim over Sabah.

Issues:
1. Whether petitioners possess locus standi to bring this suit; and
2. Whether the writs of certiorari and prohibition are the proper
remedies to assail the constitutionality of RA 9522.
3. On the merits, whether RA 9522 is unconstitutional.

Ruling:

1. Petitioners themselves undermine their assertion of locus standi

as legislators and taxpayers because the petition alleges neither
infringement of legislative prerogative15 nor misuse of public
funds, occasioned by the passage and implementation of RA 9522.
Nonetheless, we recognize petitioners’ locus standi as citizens
with constitutionally sufficient interest in the resolution of the
merits of the case which undoubtedly raises issues of national
significance necessitating urgent resolution. Indeed, owing to the
peculiar nature of RA 9522, it is understandably difficult to find
other litigants possessing a more direct and specific interest to
bring the suit, thus satisfying one of the requirements for granting
citizenship standing.

2. Respondents’ submission holds true in ordinary civil proceedings.

When this Court exercises its constitutional power of judicial
review, however, we have, by tradition, viewed the writs of
certiorari and prohibition as proper remedial vehicles to test the
constitutionality of statutes, and indeed, of acts of other branches
of government. Issues of constitutional import are sometimes
crafted out of statutes which, while having no bearing on the
personal interests of the petitioners, carry such relevance in the
life of this nation that the Court inevitably finds itself constrained
to take cognizance of the case and pass upon the issues raised,
non-compliance with the letter of procedural rules
notwithstanding. The statute sought to be reviewed here is one
such law.

3. Not unconstitutional. RA 9522 is a Statutory Tool to Demarcate the

Country’s Maritime Zones and Continental Shelf Under UNCLOS III,
not to Delineate Philippine Territory. RA 9522’s Use of the
Framework of Regime of Islands to Determine the Maritime Zones
of the KIG and the Scarborough Shoal is also not Inconsistent with
the Philippines’ Claim of Sovereignty Over these Areas. UNCLOS III
and RA 9522 are not Incompatible with the Constitution’s
Delineation of Internal Waters.