G.R. No.
179736 June 26, 2013 ordered to remove the video surveillance cameras and enjoined from conducting
SPOUSES BILL AND VICTORIA HING, Petitioners,
vs.
ALEXANDER CHOACHUY, SR. and ALLAN CHOACHUY, Respondents.
DECISION
DEL CASTILLO, J.:
"The concept of liberty would be emasculated if it does not likewise compel respect
for one's personality as a unique individual whose claim to privacy and non-
interference demands respect."1
2
This Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the
July 10, 2007 Decision3 and the September 11, 2007 Resolution4 of the Court of
Appeals (CA) in CA-G.R. CEB-SP No. 01473.
Factual Antecedents
On August 23, 2005, petitioner-spouses Bill and Victoria Hing filed with the Regional
Trial Court (RTC) of Mandaue City a Complaint5 for Injunction and Damages with
prayer for issuance of a Writ of Preliminary Mandatory Injunction/Temporary
Restraining Order (TRO), docketed as Civil Case MAN-5223 and raffled to Branch 28,
against respondents Alexander Choachuy, Sr. and Allan Choachuy.
Petitioners alleged that they are the registered owners of a parcel of land (Lot 1900-
B) covered by Transfer Certificate of Title (TCT) No. 42817 situated in Barangay Basak,
City of Mandaue, Cebu;6 that respondents are the owners of Aldo Development &
Resources, Inc. (Aldo) located at Lots 1901 and 1900-C, adjacent to the property of
petitioners;7 that respondents constructed an auto-repair shop building (Aldo
Goodyear Servitec) on Lot 1900-C; that in April 2005, Aldo filed a case against
petitioners for Injunction and Damages with Writ of Preliminary Injunction/TRO,
docketed as Civil Case No. MAN-5125;8 that in that case, Aldo claimed that petitioners
were constructing a fence without a valid permit and that the said construction would
destroy the wall of its building, which is adjacent to petitioners’ property;9 that the
court, in that case, denied Aldo’s application for preliminary injunction for failure to
substantiate its allegations;10 that, in order to get evidence to support the said case,
respondents on June 13, 2005 illegally set-up and installed on the building of Aldo
Goodyear Servitec two video surveillance cameras facing petitioners’ property;11 that
respondents, through their employees and without the consent of petitioners, also
took pictures of petitioners’ on-going construction;12 and that the acts of respondents
violate petitioners’ right to privacy.13 Thus, petitioners prayed that respondents be
illegal surveillance.14
In their Answer with Counterclaim,15 respondents claimed that they did not install the
video surveillance cameras,16 nor did they order their employees to take pictures of
petitioners’ construction.17 They also clarified that they are not the owners of Aldo but
are mere stockholders.18
Ruling of the Regional Trial Court
On October 18, 2005, the RTC issued an Order19 granting the application for a TRO.
The dispositive portion of the said Order reads:
WHEREFORE, the application for a Temporary Restraining Order or a Writ of
Preliminary Injunction is granted. Upon the filing and approval of a bond by
petitioners, which the Court sets at ₱50,000.00, let a Writ of Preliminary Injunction
issue against the respondents Alexander Choachuy, Sr. and Allan Choachuy. They are
hereby directed to immediately remove the revolving camera that they installed at
the left side of their building overlooking the side of petitioners’ lot and to transfer
and operate it elsewhere at the back where petitioners’ property can no longer be
viewed within a distance of about 2-3 meters from the left corner of Aldo Servitec,
facing the road.
IT IS SO ORDERED.20
Respondents moved for a reconsideration21 but the RTC denied the same in its Order22
dated February 6, 2006.23 Thus:
WHEREFORE, the Motion for Reconsideration is hereby DENIED for lack of merit. Issue
a Writ of Preliminary Injunction in consonance with the Order dated 18 October 2005.
IT IS SO ORDERED.24
Aggrieved, respondents filed with the CA a Petition for Certiorari 25 under Rule 65 of
the Rules of Court with application for a TRO and/or Writ of Preliminary Injunction.
Ruling of the Court of Appeals
On July 10, 2007, the CA issued its Decision26 granting the Petition for Certiorari. The
CA ruled that the Writ of Preliminary Injunction was issued with grave abuse of
discretion because petitioners failed to show a clear and unmistakable right to an
injunctive writ.27 The CA explained that the right to privacy of residence under Article
26(1) of the Civil Code was not violated since the property subject of the controversy
is not used as a residence.28 The CA alsosaid that since respondents are not the owners
of the building, they could not have installed video surveillance cameras. 29 They are
mere stockholders of Aldo, which has a separate juridical personality.30 Thus, they are
not the proper parties.31 The fallo reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us
GRANTING the petition filed in this case. The assailed orders dated October 18, 2005
and February 6, 2006 issued by the respondent judge are hereby ANNULLED and SET
ASIDE.
SO ORDERED.32
Issues
Hence, this recourse by petitioners arguing that:
I.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT ANNULLED AND SET ASIDE
THE ORDERS OF THE RTC DATED 18 OCTOBER 2005 AND 6 FEBRUARY 2006 HOLDING
THAT THEY WERE ISSUED WITH GRAVE ABUSE OF DISCRETION.
II.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT PETITIONER
SPOUSES HING ARE NOT ENTITLED TO THE WRIT OF PRELIMINARY INJUNCTION ON
THE GROUND THAT THERE IS NO VIOLATION OF THEIR CONSTITUTIONAL AND CIVIL
RIGHT TO PRIVACY DESPITE THE FACTUAL FINDINGS OF THE RTC, WHICH
RESPONDENTS CHOACHUY FAILED TO REFUTE, THAT THE ILLEGALLY INSTALLED
SURVEILLANCE CAMERAS OF RESPONDENTS CHOACH[U]Y WOULD CAPTURE THE
PRIVATE ACTIVITIES OF PETITIONER SPOUSES HING, THEIR CHILDREN AND
EMPLOYEES.
III.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT SINCE THE
OWNER OF THE BUILDING IS ALDO DEVELOPMENT AND RESOURCES, INC. THEN TO
SUE RESPONDENTS CHOACHUY CONSTITUTES A PURPORTEDLY UNWARRANTED
PIERCING OF THE CORPORATE VEIL.
IV.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT IGNORED THE SERIOUS
FORMAL DEFICIENCIES OF BOTH THE PETITION AND THE MOTION FOR
RECONSIDERATION DATED 15 MARCH 2006 OF RESPONDENTS CHOACHUY AND GAVE
X X X THEM DUE COURSE AND CONSIDERATION.33
Essentially, the issues boil down to (1) whether there is a violation of petitioners’ right
to privacy, and (2) whether respondents are the proper parties to this suit.
Petitioners’ Arguments
Petitioners insist that they are entitled to the issuance of a Writ of Preliminary
Injunction because respondents’ installation of a stationary camera directly facing
petitioners’ property and a revolving camera covering a significant portion of the same
property constitutes a violation of petitioners’ right to privacy.34 Petitioners cite Article
26(1) of the Civil Code, which enjoins persons from prying into the private lives of
others.35 Although the said provision pertains to the privacy of another’s residence,
petitioners opine that it includes business offices, citing Professor Arturo M.
Tolentino.36 Thus, even assuming arguendo that petitioners’ property is used for
business, it is still covered by the said provision.37
As to whether respondents are the proper parties to implead in this case, petitioners
claim that respondents and Aldo are one and the same, and that respondents only
want to hide behind Aldo’s corporate fiction.38 They point out that if respondents are
not the real owners of the building, where the video surveillance cameras were
installed, then they had no business consenting to the ocular inspection conducted by
the court.39
Respondents’ Arguments
Respondents, on the other hand, echo the ruling of the CA that petitioners cannot
invoke their right to privacy since the property involved is not used as a residence.40
Respondents maintain that they had nothing to do with the installation of the video
surveillance cameras as these were installed by Aldo, the registered owner of the
building,41 as additional security for its building.42 Hence, they were wrongfully
impleaded in this case.43
Our Ruling
The Petition is meritorious.
The right to privacy is the right to be let alone.
The right to privacy is enshrined in our Constitution44 and in our laws. It is defined as
"the right to be free from unwarranted exploitation of one’s person or from intrusion
into one’s private activities in such a way as to cause humiliation to a person’s ordinary
sensibilities."45 It is the right of an individual "to be free from unwarranted publicity,
or to live without unwarranted interference by the public in matters in which the
public is not necessarily concerned."46 Simply put, the right to privacy is "the right to
be let alone."47
The Bill of Rights guarantees the people’s right to privacy and protects them against
the State’s abuse of power. In this regard, the State recognizes the right of the people
to be secure in their houses. No one, not even the State, except "in case of overriding
social need and then only under the stringent procedural safeguards," can disturb
them in the privacy of their homes.48
The right to privacy under Article 26(1)
of the Civil Code covers business offices
where the public are excluded
therefrom and only certain individuals
are allowed to enter.
Article 26(1) of the Civil Code, on the other hand, protects an individual’s right to
privacy and provides a legal remedy against abuses that may be committed against
him by other individuals. It states:
Art. 26. Every person shall respect the dignity, personality, privacy and peace of mind
of his neighbors and other persons. The following and similar acts, though they may
not constitute a criminal offense, shall produce a cause of action for damages,
prevention and other relief:
(1) Prying into the privacy of another’s residence;
xxxx
This provision recognizes that a man’s house is his castle, where his right to privacy
cannot be denied or even restricted by others. It includes "any act of intrusion into,
peeping or peering inquisitively into the residence of another without the consent of
the latter."49 The phrase "prying into the privacy of another’s residence," however,
does not mean that only the residence is entitled to privacy. As elucidated by Civil law
expert Arturo M. Tolentino:
Our Code specifically mentions "prying into the privacy of another’s residence." This
does not mean, however, that only the residence is entitled to privacy, because the
law covers also "similar acts." A business office is entitled to the same privacy when
the public is excluded therefrom and only such individuals as are allowed to enter may
come in. x x x50 (Emphasis supplied)
Thus, an individual’s right to privacy under Article 26(1) of the Civil Code should not
be confined to his house or residence as it may extend to places where he has the
right to exclude the public or deny them access. The phrase "prying into the privacy of
another’s residence," therefore, covers places, locations, or even situations which an
individual considers as private. And as long as his right is recognized by society, other
individuals may not infringe on his right to privacy. The CA, therefore, erred in limiting
the application of Article 26(1) of the Civil Code only to residences.
The "reasonable expectation of
privacy" test is used to determine
whether there is a violation of the right
to privacy.
In ascertaining whether there is a violation of the right to privacy, courts use the
"reasonable expectation of privacy" test. This test determines whether a person has a
reasonable expectation of privacy and whether the expectation has been violated. 51
In Ople v. Torres,52 we enunciated that "the reasonableness of a person’s expectation
of privacy depends on a two-part test: (1) whether, by his conduct, the individual has
exhibited an expectation of privacy; and (2) this expectation is one that society
recognizes as reasonable." Customs, community norms, and practices may, therefore,
limit or extend an individual’s "reasonable expectation of privacy." 53 Hence, the
reasonableness of a person’s expectation of privacy must be determined on a case-
to-case basis since it depends on the factual circumstances surrounding the case.54
In this day and age, video surveillance cameras are installed practically everywhere for
the protection and safety of everyone. The installation of these cameras, however,
should not cover places where there is reasonable expectation of privacy, unless the
consent of the individual, whose right to privacy would be affected, was obtained. Nor
should these cameras be used to pry into the privacy of another’s residence or
business office as it would be no different from eavesdropping, which is a crime under
Republic Act No. 4200 or the Anti-Wiretapping Law.
In this case, the RTC, in granting the application for Preliminary Injunction, ruled that:
After careful consideration, there is basis to grant the application for a temporary
restraining order. The operation by respondents of a revolving camera, even if it were
mounted on their building, violated the right of privacy of petitioners, who are the
owners of the adjacent lot. The camera does not only focus on respondents’ property
or the roof of the factory at the back (Aldo Development and Resources, Inc.) but it
actually spans through a good portion of the land of petitioners.
the suit. Unless otherwise authorized by law or these Rules, every action must be
prosecuted or defended in the name of the real party-in-interest.
A real party defendant is "one who has a correlative legal obligation to redress a wrong
done to the plaintiff by reason of the defendant’s act or omission which had violated
the legal right of the former."57

Based on the ocular inspection, the Court understands why petitioner Hing was so
unyielding in asserting that the revolving camera was set up deliberately to monitor
the on[-]going construction in his property. The monitor showed only a portion of the
roof of the factory of Aldo. If the purpose of respondents in setting up a camera at the
back is to secure the building and factory premises, then the camera should revolve
only towards their properties at the back. Respondents’ camera cannot be made to
extend the view to petitioners’ lot. To allow the respondents to do that over the
objection of the petitioners would violate the right of petitioners as property owners.
"The owner of a thing cannot make use thereof in such a manner as to injure the rights
of a third person."55
The RTC, thus, considered that petitioners have a "reasonable expectation of privacy"
in their property, whether they use it as a business office or as a residence and that
the installation of video surveillance cameras directly facing petitioners’ property or
covering a significant portion thereof, without their consent, is a clear violation of their
right to privacy. As we see then, the issuance of a preliminary injunction was justified.
We need not belabor that the issuance of a preliminary injunction is discretionary on
the part of the court taking cognizance of the case and should not be interfered with,
unless there is grave abuse of discretion committed by the court.56 Here, there is no
indication of any grave abuse of discretion. Hence, the CA erred in finding that
petitioners are not entitled to an injunctive writ.
In ruling that respondents are not the proper parties, the CA reasoned that since they
do not own the building, they could not have installed the video surveillance
cameras.58 Such reasoning, however, is erroneous. The fact that respondents are not
the registered owners of the building does not automatically mean that they did not
cause the installation of the video surveillance cameras.
In their Complaint, petitioners claimed that respondents installed the video
surveillance cameras in order to fish for evidence, which could be used against
petitioners in another case.59 During the hearing of the application for Preliminary
Injunction, petitioner Bill testified that when respondents installed the video
surveillance cameras, he immediately broached his concerns but they did not seem to
care,60 and thus, he reported the matter to the barangay for mediation, and
eventually, filed a Complaint against respondents before the RTC. 61 He also admitted
that as early as 1998 there has already been a dispute between his family and the
Choachuy family concerning the boundaries of their respective properties.62 With
these factual circumstances in mind, we believe that respondents are the proper
parties to be impleaded.
Moreover, although Aldo has a juridical personality separate and distinct from its
stockholders, records show that it is a family-owned corporation managed by the
Choachuy family.63

This brings us to the next question: whether respondents are the proper parties to this Also quite telling is the fact that respondents, notwithstanding their claim that they
suit. are not owners of the building, allowed the court to enter the compound of Aldo and
conduct an ocular inspection. The counsel for respondents even toured Judge Marilyn
A real party defendant is one who has a Lagura-Yap inside the building and answered all her questions regarding the set-up
correlative legal obligation to redress a and installation of the video surveillance cameras.64 And when respondents moved for
wrong done to the plaintiff by reason of reconsideration of the Order dated October 18, 2005 of the RTC, one of the arguments
the defendant's act or omission which they raised is that Aldo would suffer damages if the video surveillance cameras are
had violated the legal right of the removed and transferred.65 Noticeably, in these instances, the personalities of
former. respondents and Aldo seem to merge.

Section 2, Rule 3 of the Rules of Court provides: All these taken together lead us to the inevitable conclusion that respondents are
merely using the corporate fiction of Aldo as a shield to protect themselves from this
SEC. 2. Parties-in-interest. — A real party-in-interest is the party who stands to be suit. In view of the foregoing, we find that respondents are the proper parties to this
benefited or injured by the judgment in the suit, or the party entitled to the avails of suit.
WHEREFORE, the Petition is hereby GRANTED. The Decision dated July 10, 2007 and
the Resolution dated September 11, 2007 of the Court of Appeals in CA-G.R. CEB-SP
No. 01473 are hereby REVERSED and SET ASIDE. The Orders dated October 18,2005
and February 6, 200[6] of Branch 28 of the Regional Trial Court of Mandaue City in
Civil Case No. MAN-5223 are hereby REINSTATED and AFFIRMED. NAGKAKAISANG LAKAS NG G.R. No. 171115
MANGGAGAWA SA KEIHIN
SO ORDERED. (NLMK-OLALIA-KMU) and
HELEN VALENZUELA, Present:
Petitioners,
CORONA, C. J., Chairperson,
LEONARDO-DE CASTRO,
- versus - BERSAMIN,
DEL CASTILLO, and
PEREZ, JJ.
KEIHIN PHILIPPINES
CORPORATION, Promulgated:
Respondent. August 9, 2010

x-------------------------------------------------------------------x

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari1[1] assails the November 2, 2005

Resolution2[2] of the Court of Appeals (CA) in CA-G.R. SP No. 91718 dismissing outright the
petition for certiorari filed by the petitioners, as well as its January 6, 2006 Resolution3[3]
denying petitioners Motion for Reconsideration.

Factual Antecedents
 Petitioner Helen Valenzuela (Helen) was a production associate in respondent Keihin
Philippines Corporation (Keihin), a company engaged in the production of intake manifold and
throttle body used in motor vehicles manufactured by Honda.
It is a standard operating procedure of Keihin to subject all its employees to
reasonable search before they leave the company premises.4[4] On September 5, 2003, while
Helen was about to leave the company premises, she saw a packing tape near her work area
and placed it inside her bag because it would be useful in her transfer of residence. When the
lady guard on duty inspected Helens bag, she found the packing tape inside her bag. The guard
confiscated it and submitted an incident report5[5] dated September 5, 2003 to the Guard-in-
Charge, who, in turn, submitted a memorandum6[6] regarding the incident to the Human
Resources and Administration Department on the same date.
The following day, or on September 6, 2003, respondent company issued a show
cause notice7[7] to Helen accusing her of violating F.2 of the companys Code of Conduct, which
says, Any act constituting theft or robbery, or any attempt to commit theft or robbery, of any
company property or other associates property. Penalty: D (dismissal).8[8] Paul Cupon, Helens
supervisor, called her to his office and directed her to explain in writing why no disciplinary
action should be taken against her.
Helen, in her explanation,9[9] admitted the offense and even manifested that she
would accept whatever penalty would be imposed upon her. She, however, did not reckon that
respondent company would terminate her services for her admitted offense.10[10]
On September 26, 2003, Helen received a notice11[11] of disciplinary action
informing her that Keihin has decided to terminate her services.
On October 15, 2003, petitioners filed a complaint12[12] against respondent for
illegal dismissal, non-payment of 13th month pay, with a prayer for reinstatement and payment
of full backwages, as well as moral and exemplary damages. Petitioners alleged that Helens act
of taking the packing tape did not constitute serious misconduct, because the same was done
with no malicious intent.13[13] They believed that the tape was not of great value and of no
further use to respondent company since it was already half used. Although Helen admitted
that she took the packing tape, petitioners claimed that her punishment was disproportionate
to her infraction.
 Keihin, on the other hand, maintained that Helen was guilty of serious misconduct
because there was a deliberate act of stealing from the company. Respondent company also
claimed that motive and value of the thing stolen are irrelevant in this case.
Ruling of the Labor Arbiter
On July 30, 2004, the Labor Arbiter14[14] rendered his Decision15[15] dismissing the
complaint of illegal dismissal. He brushed aside petitioners argument that the penalty imposed
on Helen was disproportionate to the offense committed,16[16] and held that she indeed
committed a serious violation of the companys policies amounting to serious
misconduct,17[17] a just cause for terminating an employee under Article 282 of the Labor
Code. The Labor Arbiter likewise upheld the right of the company to terminate Helen on the
ground of loss of confidence or breach of trust.18[18]
The Labor Arbiter further held that Keihin observed the requirements of procedural
due process in implementing the dismissal of Helen.19[19] He ruled that the following
circumstances showed that the company observed the requirements of procedural due
process: a) there was a show cause letter informing Helen of the charge of theft and requiring
her to submit an explanation; b) there was an administrative hearing giving her an opportunity
to be heard; and c) the respondent company furnished her with notice of termination stating
the facts of her dismissal, the offense for which she was found guilty, and the grounds for her
dismissal.20[20]
Ruling of the National Labor Relations Commission (NLRC)
On appeal, the NLRC dismissed the appeal of the petitioners and affirmed in toto the
Decision of the Labor Arbiter. It held that petitioners admitted in their Position Paper that Helen
took the packing tape strewn on the floor near her production line within the company
premises.21[21] By the strength of petitioners admission, the NLRC held that theft is a valid
reason for Helens dismissal.22[22]
As to the issue of due process, the pertinent portion of the Decision23[23] of the
NLRC reads:
Complainants dismissal too, was with due process. Procedural
due process only requires employers to furnish their errant employees
written notices stating the particular acts or omissions constituting the
grounds for their dismissal and to hear their side of the story (Mendoza vs.
NLRC, 310 SCRA 846 [1999]). Complainants claim that the show-cause
letter did not pass the stringent requirement of the law is belied by her
admission in her position paper that Mr. Cupon furnished her a form,
simultaneously asking her why she did such an act and x x x that Mr. Cupon
directed her to submit a written explanation on the matter, which she
 complied with. By Complainants own admission then, it is clear that she was
furnished a written notice informing her of the particular act constituting
the ground for her dismissal and that x x x her side of the story [was heard].
Evidently then, Complainant was afforded due process prior to her
dismissal.
The dispositive portion of the Decision of the NLRC reads:
WHEREFORE, premises considered, Complainants appeal is
DISMISSED for lack of merit. The Labor Arbiters assailed Decision in the
above-entitled case is hereby AFFIRMED in toto.
SO ORDERED.24[24]
Ruling of the Court of Appeals
After having their Motion for Reconsideration25[25] denied26[26] by the NLRC, the
petitioner union, the Nagkakaisang Lakas ng Manggagawa sa Keihin, filed a Petition for
Certiorari with the CA praying that the Decision of the NLRC be set aside. However, in a
Resolution27[27] dated November 2, 2005, the CA dismissed the petition outright for not
having been filed by an indispensable party in interest under Section 2, Rule 3 of the Rules of
Court.
SEC 2. Parties in interest. A real party in interest is the party who
stands to be benefited or injured by the judgment in the suit, or the party
entitled to the avails of the suit. Unless otherwise authorized by law or these
Rules, every action must be prosecuted or defended in the name of the real
party in interest.
Petitioners filed a Motion for Reconsideration28[28] but it was denied by the CA in its
Resolution29[29] of January 6, 2006.
Hence, petitioners filed the present petition for review on certiorari under Rule 45,
asking the Court to reverse the Resolutions of the CA and enter a new one declaring Helens
dismissal unjustified. They anchor their petition on the following grounds:
I.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT
THE PETITION FOR CERTIORARI FILED BY THE UNION AND MS. HELEN
VALENZUELA WAS NOT FILED BY AN INDISPENSABLE PARTY.
II.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN FAILING TO
DECIDE THE CASE ON THE MERITS DESPITE SHOWING THAT THE PETITION
FOR CERTIORARI WAS VERIFIED BY THE UNION PRESIDENT AND MS.
HELEN VALENZUELA.
III.
THE COURT OF APPEALS ERRED IN FAILING TO APPRECIATE THAT SERIOUS
MISCONDUCT UNDER EXISTING LAW AND JURISPRUDENCE CANNOT BE
ATTRIBUTED TO HEREIN PETITIONER HELEN VALENZUELA BECAUSE THE
DECISION OF THE NLRC IS NOT SUPPORTED BY SUBSTANTIAL
EVIDENCE.30[30]

Our Ruling
We affirm the ruling of the CA.
It is clear that petitioners failed to include the name of the dismissed employee Helen
Valenzuela in the caption of their petition for certiorari filed with the CA as well as in the body
of the said petition. Instead, they only indicated the name of the labor union Nagkakaisang
Lakas ng Manggagawa sa Keihin (NLMK-OLALIA) as the party acting on behalf of Helen. As a
result, the CA rightly dismissed the petition based on a formal defect.
Under Section 7, Rule 3 of the Rules of Court, parties in interest without whom no
final determination can be had of an action shall be joined as plaintiffs or defendants. If there is
a failure to implead an indispensable party, any judgment rendered would have no
effectiveness.31[31] It is precisely when an indispensable party is not before the court (that) an
action should be dismissed. The absence of an indispensable party renders all subsequent
actions of the court null and void for want of authority to act, not only as to the absent parties
but even to those present.32[32] The purpose of the rules on joinder of indispensable parties
is a complete determination of all issues not only between the parties themselves, but also as
regards other persons who may be affected by the judgment. A decision valid on its face cannot
attain real finality where there is want of indispensable parties.
At any rate, we are aware that it is the policy of courts to encourage full adjudication
of the merits of an appeal. Dismissal of appeals purely on technical grounds, especially an appeal
by a worker who was terminated and whose livelihood depends on the speedy disposition of
her case, is frowned upon. Thus, while we affirm the CAs dismissal of the petition for certiorari,
we shall still discuss the substantive aspect of the case and go into the merits.
The petitioners argue that serious misconduct under existing law and jurisprudence
could not be attributed to Helen because she was not motivated by malicious intent. According
to petitioners, during the routine inspection and even before the guard opened Helens bag, she
readily admitted that the bag contained a packing tape. Petitioners claim that the mental
attitude of Helen negates depravity, willful or wrongful intent and, thus, she cannot be held
guilty of serious misconduct. Rather, it was a mere error of judgment on the part of Helen.
Furthermore, it was Helens honest belief that the tape she took was of no use or value and that
she did not hide the same.
Thus, the issue boils down to whether, in taking the packing tape for her own personal
use, Helen committed serious misconduct, which is a just cause for her dismissal from service.
Article 282 of the Labor Code enumerates the just causes for termination. It provides:
ARTICLE 282. Termination by employer. An employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee
of the lawful orders of his employer or representative in connection with
his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed
in him by his employer or duly authorized representative;
 (d) Commission of a crime or offense by the employee against
the person of his employer or any immediate member of his family or his
duly authorized representative; and
(e) Other causes analogous to the foregoing.
Misconduct is defined as the transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and
not mere error in judgment.33[33] For serious misconduct to justify dismissal under the law,
(a) it must be serious, (b) must relate to the performance of the employees duties; and (c) must
show that the employee has become unfit to continue working for the employer.34[34]
In the case at bar, Helen took the packing tape with the thought that she could use it
for her own personal purposes. When Helen was asked to explain in writing why she took the
tape, she stated, Kumuha po ako ng isang packing tape na gagamitin ko sa paglilipat ng gamit
ko sa bago kong lilipatang bahay.35[35] In other words, by her own admission, there was intent
on her part to benefit herself when she attempted to bring home the packing tape in question.
It is noteworthy that prior to this incident, there had been several cases of theft and
vandalism involving both respondent companys property and personal belongings of other
employees. In order to address this issue of losses, respondent company issued two
memoranda implementing an intensive inspection procedure and reminding all employees
that those who will be caught stealing and performing acts of vandalism will be dealt with in
accordance with the companys Code of Conduct. Despite these reminders, Helen took the
packing tape and was caught during the routine inspection. All these circumstances point to the
conclusion that it was not just an error of judgment on the part of Helen, but a deliberate act of
theft of company property.
In the case of Firestone Tire and Rubber Company of the Philippines v. Lariosa36[36]
involving an employee who was caught by the security guards of the company during a routine
inspection with possession of company property, we held that:
There is no gainsaying that theft committed by an employee
constitutes a valid reason for his dismissal by the employer. Although as a
rule this Court leans over backwards to help workers and employees
continue with their employment or to mitigate the penalties imposed on
them, acts of dishonesty in the handling of company property are a
different matter.37[37]
We hold that Helen is guilty of serious misconduct in her act of taking the packing
tape.
The petitioners also argue that the penalty of dismissal is too harsh and
disproportionate to the offense committed since the value of the thing taken is very minimal.
Petitioners cite the case of Caltex Refinery Employees Association v. National Labor Relations
Commission38[38] where Arnelio M. Clarete (Clarete) was found to have willfully breached the
trust and confidence reposed in him by taking a bottle of lighter fluid. In said case, we refrained
from imposing the supreme penalty of dismissal since the employee had no violations in his
eight years of service and the value of the lighter fluid x x x is very minimal compared to his
salary x x x.39[39]
After a closer study of both cases, we are convinced that the case of Caltex is different
from the case at hand. Although both Clarete and Helen had no prior violations, the former had
a clean record of eight years with his employer. On the other hand, Helen was not even on her
second year of service with Keihin when the incident of theft occurred. And what further
distinguishes the instant case from Caltex is that respondent company was dealing with several
cases of theft, vandalism, and loss of company and employees property when the incident
involving Helen transpired.
Regarding the requirement of procedural due process in dismissal of employees,
petitioners argue that the first notice failed to explain the charge being leveled against Helen.
According to the petitioners, the notice was vague and lacked sufficient definitiveness.
The show-cause notice states:
Please explain in writing within 48 hours upon receipt hereof,
why you have committed an offense against company property specifically
F.2 of the companys Code of Conduct: Any act constituting theft or robbery,
or any attempt to commit theft or robbery, of any company property or
other associates property.40[40]
We reject petitioners claim that respondent company failed to observe the
requirements of procedural due process. In the dismissal of employees, it has been consistently
held that the twin requirements of notice and hearing are essential elements of due process.
The employer must furnish the employee with two written notices before termination of
employment can be legally effected: (a) a notice apprising the employee of the particular acts
or omissions for which his dismissal is sought, and (b) a subsequent notice informing the
employee of the employers decision to dismiss him.41[41]
In this case, respondent company furnished Helen a show-cause notice dated
September 6, 2003 accusing her of violating F.2 of the companys Code of Conduct which says,
Any act constituting theft or robbery, or any attempt to commit theft or robbery, of any
company property or other associates property.42[42] We find that such notice sufficiently
informed Helen of the charge of theft of company property against her. We are convinced that
such notice satisfies the due process requirement to apprise the employee of the particular acts
or omissions for which dismissal is sought.
With regard to the requirement of a hearing, the essence of due process lies in an
opportunity to be heard. Such opportunity was afforded the petitioner when she was asked to
explain her side of the story. In Metropolitan Bank and Trust Company v. Barrientos,43[43] we
held that, the essence of due process lies simply in an opportunity to be heard, and not that an
actual hearing should always and indispensably be held. Similarly in Philippine Pasay Chung Hua
Academy v. Edpan,44[44] we held that, [e]ven if no hearing or conference was conducted, the
requirement of due process had been met since he was accorded a chance to explain his side
of the controversy.
 WHEREFORE, the Petition is DENIED. The Resolutions dated November 2, 2005 and
January 6, 2006 of the Court of Appeals in CA-G.R. SP No. 91718 are AFFIRMED.
SO ORDERED.
G.R. No. 165770 August 9, 2010
HEIRS OF FRANCISCA MEDRANO, namely YOLANDA R. MEDRANO, ALFONSO R.
MEDRANO, JR., EDITA M. ALFARO, MARITES M. PALENTINOS, and GIOVANNI MEDRANO,
represented by their legal representative, Marites Medrano-Palentinos, Petitioners,
vs.
ESTANISLAO DE VERA, Respondent.
DECISION
DEL CASTILLO, J.:
In cases where the subject property is transferred by the defendant during the
pendency of the litigation, the interest of the transferee pendente lite cannot be
considered independent of the interest of his transferors. If the transferee files an
answer while the transferor is declared in default, the case should be tried on the basis
of the transferee’s answer and with the participation of the transferee.
This Petition for Review on Certiorari1 assails the June 25, 2004 Decision2 of the Court
of Appeals (CA) in CA-G.R. SP No. 80053, which contained the following dispositive
portion:
WHEREFORE, premises considered, the petition is hereby GRANTED and this Court
orders that the case be remanded to the court a quo for further trial.
SO ORDERED.3
Likewise assailed is the appellate court’s October 6, 2004 Resolution4 denying
petitioners’ Motion for Reconsideration.
Factual Antecedents
This case concerns a 463-square meter parcel of land5 covered by Transfer Certificate
of Title (TCT) No. 41860 in the name of Flaviana De Gracia (Flaviana). In 1980, Flaviana
died6 intestate, leaving her half-sisters Hilaria Martin-Paguyo (Hilaria) and Elena
Martin-Alvarado (Elena) as her compulsory heirs.
In September 1982, Hilaria and Elena, by virtue of a private document denominated
"Tapno Maamoan ti Sangalobongan,"7 waived all their hereditary rights to Flaviana’s
land in favor of Francisca Medrano (Medrano). It stated that the waiver was done in
favor of Medrano in consideration of the expenses that she incurred for Flaviana’s
medication, hospitalization, wake and burial. In the same year, Medrano built her
concrete bungalow on the land in question without any objection from Hilaria and
Elena or from their children.
When Hilaria and Elena died, some of their children affirmed the contents of the
private document executed by their deceased mothers. To that end, they executed
separate Deeds of Confirmation of Private Document and Renunciation of Rights in
favor of Medrano.8 They likewise affirmed in said documents that Medrano had been
occupying and possessing the subject property as owner since September 1982.
Due to the refusal of the other children9 to sign a similar renunciation, Medrano filed
a Complaint10 on April 27, 2001 for quieting of title, reconveyance, reformation of
instrument, and/or partition with damages against Pelagia M. Paguyo-Diaz (Pelagia),
Faustina Paguyo-Asumio (Faustina), Jesus Paguyo (Jesus), Veneranda Paguyo-
Abrenica, Emilio a.k.a. Antonio Alvarado, Francisca Alvarado-Diaz (Francisca) and
Estrellita Alvarado-Cordero (Estrellita). The case was docketed as Civil Case No. U-7316
and raffled to Branch 48 of the Regional Trial Court (RTC) of Urdaneta, Pangasinan.
Medrano then caused the annotation of a notice of lis pendens on TCT No. 4186011 on
May 3, 2001.
Summons upon the original complaint was duly served upon Pelagia and Estrellita .12
On August 29, 2001, Medrano filed an Amended Complaint13 impleading the widow
and children of Antonio Alvarado, in view of the latter’s death. 14 Summons upon the
amended complaint was served upon the other defendants,15 but no longer served
upon Pelagia and Estrellita.
On April 2, 2002, respondent Estanislao D. De Vera (De Vera) filed an Answer with
Counterclaim.16 De Vera presented himself as the real party-in-interest on the ground
that some of the named defendants (Faustina, Pelagia, Francisca, Elena Kongco-
Alvarado, Jesus, and Estrellita) had executed a Deed of Renunciation of Rights 17 in his
favor on March 23, 2002. He maintained that the "Tapno Maamoan ti Sangalobongan"
that was executed by the defendants’ predecessors in favor of Medrano was null and
void for want of consideration. Thus, while some children affirmed the renunciation
of their deceased mothers’ rights in the lot in favor of Medrano, the other children
renounced their hereditary rights in favor of De Vera.
Medrano filed a Motion to Expunge Answer with Counterclaim of Estanislao D. De Vera
and to Declare Defendants in Default.18 She argued that respondent De Vera had no
personality to answer the complaint since he was not authorized by the named
defendants to answer in their behalf.
In an Order,19 dated July 30, 2002, the trial court disagreed with Medrano’s argument
and admitted De Vera’s Answer with Counterclaim. The trial court opined that De Vera
did not need a special power of attorney from the defendants because he did not
answer the complaint in their behalf. De Vera made a voluntary appearance in the
case as the transferee of the defendants’ rights to the subject property. The trial court
further explained that when the presence of other parties is required for granting
complete relief, the court shall order them to be brought in as defendants. While it
was unsure whether De Vera was an indispensable party to the case, the trial court
opined that at the very least he was a necessary party for granting complete relief. It
thus held that the admission of De Vera’s Answer with Counterclaim is proper in order
to avoid multiplicity of suits.20 In the same Order, the court declared the named
defendants in default for not answering the complaint despite valid service of
summons. Thus, it appears that the court a quo treated the named defendants and
De Vera as distinct and separate parties.
Medrano’s response to the aforesaid order was two-fold. With regard to the order
declaring the named defendants in default, Medrano filed on February 13, 2003 a
Motion to Set Reception of Evidence Before the Branch Clerk of Court.21 She argued
that she could present evidence ex parte against the defaulting defendants on the
ground that she presented alternative causes of action against them in her complaint.
Her cause of action on the basis of acquisitive prescription can be raised solely against
the defaulting original defendants.22 She thus prayed to be allowed to present
evidence ex parte with respect to her claim of acquisitive prescription against the
defaulting defendants. As for the order admitting De Vera’s Answer with
Counterclaim, Medrano filed on February 21, 2003 a Motion for Reconsideration of
Order dated July 30, 2002.23 She asked the court to order De Vera to file a pleading-
in-intervention so that he could be properly named as a defendant in the case.
In an Order24 dated March 6, 2003, the trial court resolved to grant Medrano’s Motion
to Set Reception of Evidence. It ordered the conduct of ex parte presentation of
evidence on the same day and the continuation thereof to proceed on March 10,
2003. Thus, Medrano presented her evidence ex parte on the set dates. On March 10,
2003, the case was submitted for resolution.25
Given the court’s standing order which admitted De Vera’s Answer with Counterclaim,
De Vera filed a Motion to Set the Case for Preliminary Conference on March 27,
2003.26
The trial court resolved petitioners’ and De Vera’s respective pending motions in its
March 31, 2003 Order.27 The trial court granted Medrano’s motion and set aside its
Order which admitted De Vera’s Answer with Counterclaim. Citing Rule 19 of the Rules
of Court, the court ordered De Vera to file a pleading-in-intervention so that he could
be recognized as a party-defendant. As a necessary consequence to this ruling, the
trial court denied De Vera’s motion to set the case for preliminary conference for
prematurity.
De Vera did not comply with the court’s order despite service upon his lawyer, Atty.
Simplicio M. Sevilleja, on April 2, 2003.
Ruling of the Regional Trial Court
The RTC rendered its Decision28 on April 21, 2003. It ruled that ownership over the
titled property has vested in petitioners by virtue of good faith possession for more
than 10 years; thus, it was no longer necessary to compel the defendants - heirs of
Hilaria and Elena - to execute an instrument to confirm Medrano’s rightful ownership
over the land.
The trial court likewise held that the private document denominated as "Tapno
Maamoan Ti Sangalobongan" sufficiently conveyed to Medrano the subject property.
The court held that the conveyance was done in consideration of the various expenses
that Medrano incurred for Flaviana’s benefit. While the court conceded that the parcel
of land was not adequately described in the "Tapno Maamoan ti Sangalobongan," its
location, metes and bounds were nonetheless confirmed by the defendants’ siblings
in their respective deeds of confirmation.
The dispositive portion of the Decision reads, in toto:
WHEREFORE, judgment is hereby rendered:
(1) Declaring [Medrano], substituted by her heirs, as the rightful and lawful
owner of the land covered by T.C.T. No. 41860;29
(2) Ordering the Register of Deeds of Tayug, Pangasinan to cancel T.C.T. No.
41860 and to issue another Transfer Certificate of Title in the name of
[Medrano];
All other claims are hereby denied for lack of merit.
SO ORDERED.30
De Vera filed a Motion for Reconsideration31 arguing that he was an indispensable
party who was not given an opportunity to present his evidence in the case. He also
maintained that Medrano was not the owner of the property, but a mere
administratrix of the land as evidenced by the records in SP Proc. No. 137577.32
De Vera’s motion was denied33 for lack of merit on July 22, 2003. The court noted that
De Vera had no legal personality to file a motion for reconsideration because he did
not file a pleading-in-intervention. The trial court explained it would have allowed De
Vera to present his evidence in the case had he complied with the court’s order to file
a pleading-in-intervention.
34
On September 10, 2003, De Vera filed a Manifestation informing the trial court of
his intention to file a petition for certiorari and mandamus before the CA, pursuant to
Rule 41, Section 1, second paragraph and Rule 65 of the Rules of Court.
On October 7, 2003, petitioners filed a Motion for Entry of Judgment and Execution 35
before the trial court. They also filed a Counter-Manifestation36 to De Vera’s
Manifestation. Petitioners insisted that De Vera, as a transferee pendente lite, was
bound by the final judgment or decree rendered against his transferors. Even
assuming that De Vera had a right to appeal, the period therefor had already lapsed
on August 12, 2003.
In its Order37 dated December 10, 2003, the court a quo maintained that De Vera was
not a party to the suit, hence his appeal would not stay the finality and execution of
judgment. Thus the trial court ordered the entry of judgment in Civil Case No. U-7316.
The writ of execution was issued on December 12, 2003.
De Vera sought reconsideration38 of the above order but the same was denied 39 on
the basis that De Vera had no personality to assail any order, resolution, or decision
of the trial court in Civil Case No. U-7316.
The Register of Deeds of Tayug, Pangasinan complied with the writ by canceling TCT
No. 41860 in the name of Flaviana De Gracia and issuing TCT No. 65635 in the names
of petitioners40 on April 19, 2004.
Proceedings before the Court of Appeals
De Vera argued in his Petition for Certiorari and Mandamus41 before the CA that the
trial court erred in declaring the defendants in default and sought a writ compelling
the trial court to try the case anew. He insisted that he stepped into the shoes of the
defendants with regard to the subject property by virtue of the quitclaim that the
defendants executed in his favor. Thus, the trial court should have considered the
defendants as properly substituted by De Vera when he filed his Answer.
The standing order of the trial court with regard to De Vera at the time that it allowed
Medrano to present her evidence was to admit De Vera’s Answer with Counterclaim.
Thus, De Vera argued that it was improper for the trial court to have allowed Medrano
to present her evidence ex parte because it had yet to rule on whether De Vera had
personality to participate in the proceedings.
Ruling of the Court of Appeals
The appellate court agreed with De Vera. The CA noted that the ex parte presentation
of evidence took place on March 6 and 10, 2003; while the Motion to Expunge Answer
and Require Filing of Pleading-in-Intervention was granted much later on March 31,
2003. The CA held that the trial court gravely abused its discretion by allowing
Medrano to present her evidence ex parte while De Vera’s personality to participate
in the case still remained unresolved. The premature ex parte presentation of
evidence rendered a pleading-in-intervention moot and academic.
The CA pointed out that the trial court should have exercised its authority to order the
substitution of the original defendants instead of requiring De Vera to file a pleading-
in-intervention. This is allowed under Rule 3, Section 19 of the Rules of Court. Since a
transferee pendente lite is a proper party42 to the case, the court can order his outright
substitution for the original defendants.
The CA further held that De Vera’s failure to file the necessary pleading-in-intervention
was a technical defect that could have been easily cured. The trial court could have
settled the controversy completely on its merits had it admitted De Vera’s Answer
with Counterclaim. Not affording De Vera his right to adduce evidence is not only a
manifest grave abuse of discretion amounting to lack or excess of jurisdiction but also
runs counter to the avowed policy of avoiding multiplicity of suits.
The appellate court then ordered the case remanded to the trial court to afford De
Vera an opportunity to present his evidence.
Petitioners filed a Motion for Reconsideration,43 which motion was denied44 for lack
of merit on October 6, 2004.
Issues
I
Whether De Vera could participate in Civil Case No. U-7316
without filing a motion to intervene
II
Whether De Vera is bound by the judgment against his transferors
III
Whether it was proper for the CA to take cognizance of respondent’s Petition for
Certiorari and Mandamus
Our Ruling
We sustain the CA’s ruling that the trial court gravely abused its discretion in refusing
to allow De Vera to participate in the case and requiring him to file a motion to
intervene.
The trial court misjudged De Vera’s interest in Civil Case No. U-7316. It held that De
Vera’s right to participate in the case was independent of the named defendants.
Because of its ruling that De Vera had an "independent interest," the trial court
considered his interest as separate from Medrano’s claims against the named
defendants, and allowed the latter to be tried separately. Thus, it admitted De Vera’s
Answer with Counterclaim but declared the named defendants in default and allowed
the ex parte presentation of evidence by Medrano against the named defendants.
The trial court’s approach is seriously flawed because De Vera’s interest is not
independent of or severable from the interest of the named defendants. De Vera is a
transferee pendente lite of the named defendants (by virtue of the Deed of
Renunciation of Rights that was executed in his favor during the pendency of Civil Case
No. U-7316). His rights were derived from the named defendants and, as transferee
pendente lite, he would be bound by any judgment against his transferors under the
rules of res judicata.45 Thus, De Vera’s interest cannot be considered and tried
separately from the interest of the named defendants.
It was therefore wrong for the trial court to have tried Medrano’s case against the
named defendants (by allowing Medrano to present evidence ex parte against them)
after it had already admitted De Vera’s answer. What the trial court should have done
is to treat De Vera (as transferee pendente lite) as having been joined as a party-
defendant, and to try the case on the basis of the answer De Vera had filed and with
De Vera’s participation. As transferee pendente lite, De Vera may be allowed to join
the original defendants under Rule 3, Section 19:
SEC. 19. Transfer of interest. – In case of any transfer of interest, the action may be
continued by or against the original party, unless the court upon motion directs the
person to whom the interest is transferred to be substituted in the action or joined
with the original party. (Emphasis supplied)
The above provision gives the trial court discretion to allow or disallow the substitution
or joinder by the transferee. Discretion is permitted because, in general, the
transferee’s interest is deemed by law as adequately represented and protected by
the participation of his transferors in the case. There may be no need for the
transferee pendente lite to be substituted or joined in the case because, in legal
contemplation, he is not really denied protection as his interest is one and the same
as his transferors, who are already parties to the case.46
While the rule allows for discretion, the paramount consideration for the exercise
thereof should be the protection of the parties’ interests and their rights to due
process. In the instant case, the circumstances demanded that the trial court exercise
its discretion in favor of allowing De Vera to join in the action and participate in the
trial. It will be remembered that the trial court had already admitted De Vera’s answer
when it declared the original defendants in default. As there was a transferee
pendente lite whose answer had already been admitted, the trial court should have
tried the case on the basis of that answer, based on Rule 9, Section 3(c):
Effect of partial default. – When a pleading asserting a claim states a common cause
of action against several defending parties, some of whom answer and the others fail
to do so, the court shall try the case against all upon the answers thus filed and render
judgment upon the evidence presented.
Thus, the default of the original defendants should not result in the ex parte
presentation of evidence because De Vera (a transferee pendente lite who may thus
be joined as defendant under Rule 3, Section 19) filed an answer. The trial court should
have tried the case based on De Vera’s answer, which answer is deemed to have been
adopted by the non-answering defendants.47
To proceed with the ex parte presentation of evidence against the named defendants
after De Vera’s answer had been admitted would not only be a violation of Rule 9,
Section 3(c), but would also be a gross disregard of De Vera’s right to due process. This
is because the ex parte presentation of evidence would result in a default judgment
which would bind not just the defaulting defendants, but also De Vera, precisely
because he is a transferee pendente lite.48 This would result in an anomaly wherein
De Vera would be bound by a default judgment even if he had filed an answer and
expressed a desire to participate in the case.
We note that under Rule 3, Section 19, the substitution or joinder of the transferee is
"upon motion", and De Vera did not file any motion for substitution or joinder.
However, this technical flaw may be disregarded for the fact remains that the court
had already admitted his answer and such answer was on record when the ex parte
presentation of evidence was allowed by the court. Because De Vera’s answer had
already been admitted, the court should not have allowed the ex parte presentation
of evidence.
We are not persuaded by petitioners’ insistence that De Vera could not have
participated in the case because he did not file a motion to intervene. The purpose of
intervention is to enable a stranger to an action to become a party in order for him to
protect his interest and for the court to settle all conflicting claims. Intervention is
allowed to avoid multiplicity of suits more than on due process considerations. The
intervenor can choose not to participate in the case and he will not be bound by the
judgment.
In this case, De Vera is not a stranger to the action but a transferee pendente lite. As
mentioned, a transferee pendente lite is deemed joined in the pending action from
the moment when the transfer of interest is perfected.49 His participation in the case
should have been allowed by due process considerations.50
We likewise adopt with approval the appellate court’s observation that De Vera’s
failure to file a pleading-in-intervention will not change the long foregone violation of
his right to due process. The ex parte presentation of evidence had already been
terminated when the trial court required De Vera to file his pleading-in-intervention.
Even if he complied with the order to file a pleading-in-intervention, the damage had
already been done. The precipitate course of action taken by the trial court rendered
compliance with its order moot.
Given the Court’s finding that the ex parte presentation of evidence constituted a
violation of due process rights, the trial court’s judgment by default cannot bind De
Vera. A void judgment cannot attain finality and its execution has no basis in law. The
case should be remanded to the trial court for trial based on De Vera’s answer and
with his participation.
Certiorari petition before the CA proper
Petitioners point out that De Vera admitted receiving the trial court’s Order denying
his motion for reconsideration on July 28, 2003. Thus he only had until August 12,
2003 to file an appeal of the decision. Having lost his right to appeal by allowing the
period therefor to lapse, respondent has also lost his right to file a petition for
certiorari before the CA. A special civil action for certiorari is not a substitute for the
lost remedy of appeal.
Respondent argues that a Rule 65 certiorari petition before the CA is proper because
an ordinary appeal would not have been speedy and adequate remedy to properly
relieve him from the injurious effects of the trial court’s orders.
We agree with respondent that ordinary appeal was not an adequate remedy under
the circumstances of the case. An appeal seeks to correct errors of judgment
committed by a court, which has jurisdiction over the person and the subject matter
of the dispute. In the instant case, the trial court maintained that it had no jurisdiction
over De Vera because it did not consider him a party to the case. Its stance is that De
Vera, as a non-party to the case, could not participate therein, much less assail any of
the orders, resolutions, or judgments of the trial court. An appeal would have been an
illusory remedy in this situation because his notice of appeal would have certainly
been denied on the ground that he is not a party to the case.
On the other hand, certiorari is an extraordinary remedy for the correction of errors
of jurisdiction. It is proper if the court acted without or in grave abuse of discretion
amounting to lack or excess of jurisdiction and there is no appeal or any plain, speedy,
and adequate remedy in law. Given the circumstance that the final decision in Civil
Case No. U-7316 prejudices De Vera’s rights despite the fact that he was not
recognized as a party thereto and was not allowed to assail any portion thereof, De
Vera’s remedy was to annul the trial court proceedings on the ground that it was
conducted with grave abuse of discretion amounting to lack of jurisdiction. With such
annulment, the trial court should hear the case anew with De Vera fully participating
therein.
WHEREFORE, the petition is DENIED. The June 25, 2004 Decision of the Court of
Appeals in CA-G.R. SP No. 80053 and its October 6, 2004 Resolution are AFFIRMED.
Costs against petitioners.
SO ORDERED.
G.R. No. 172293 August 28, 2013
ARACELI J. CABRERA and ARNEL CABRERA and in behalf of the heirs of SEVERINO
CABRERA, Petitioners,
vs.
ANGELA G. FRANCISCO, FELIPE C. GELLA, VICTOR C. CELLA, ELENA LEILANI G. REYES, MA.
RIZALINA G.ILIGAN and DIANA ROSE GELLA, Respondents.
DECISION
DEL CASTILLO, J.:
"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 plaintiffs x x x.
The averments in the Complaint and the character of the relief sought arc the ones to
be consulted. x x x"1
This Petition for Review on Certiorari2 assails the July 6, 2005 Decision3 of the Court of
Appeals (CA) in CA-G.R. CV No. 75126 which dismissed the appeal filed by petitioners
Arceli J. Cabrera (Arceli) and Arnel Cabrera (Arnel), in their own behalf and in behalf
of the heirs of Severino Cabrera (petitioners), and affirmed the Order 4 dated May 2,
2002 of the Regional Trial Court (RTC), Branch 12, San Jose, Antique in Civil Case No.
2001-9-3267. The said RTC Order granted the Motion to Dismiss5 of respondents
Angela G. Francisco, Felipe C. Gella, Victor C. Gella, Elena Leilani G. Reyes, Ma. Rizalina
G. Iligan and Diana Rose Gella (respondents) and dismissed petitioners’ Complaint 6
denominated as Collection of Agents’ Compensation, Commission and Damages.
Likewise assailed is the CA Resolution7 dated April 5, 2006 which denied petitioners’
Motion for Reconsideration.8
Factual Antecedents
On October 25, 1976, respondents’ father, Atty. Lorenzo C. Gella (Atty. Gella),
executed a private document confirming that he has appointed Severino Cabrera
(Severino), husband of Araceli and father of Arnel as administrator of all his real
properties located in San Jose, Antique9 consisting of about 24 hectares of land
described as Lot No. 1782-B and covered by Transfer Certificate of Title No. T-16987.10
When Severino died in 1991, Araceli and Arnel, with the consent of respondents, took
over the administration of the properties. Respondents likewise instructed them to
look for buyers of the properties, allegedly promising them "a commission of five
percent of the total purchase price of the said properties as compensation for their
long and continued administration"11 thereof.
Accordingly, petitioners introduced real estate broker and President of ESV Marketing
and Development Corporation, Erlinda Veñegas (Erlinda), to the respondents who
agreed to have the said properties developed by Erlinda’s company. However, a
conflict arose when respondents appointed Erlinda as the new administratrix of the
properties and terminated Araceli’s and Arnel’s services.
Petitioners, through counsel, wrote respondents and demanded for their five percent
commission and compensation to no avail. Hence, on September 3, 2001, they filed a
Complaint for Collection of Agent’s Compensation, Commission and Damages 12
against respondents before the RTC. Attached to their Complaint is a copy of the tax
declaration for Lot No. 1782-B.13
Ruling of the Regional Trial Court
Petitioners prayed that they be paid (1) commission and compensation in the form of
real property equivalent to five percent of the 24-hectare Lot No. 1782-B, (2) moral
damages of ₱100,000.00, and (3) attorney’s fees and litigation expenses of
₱100,000.00.
Respondents filed a Motion to Dismiss14 based on the following grounds: (1) lack of
jurisdiction, (2) failure to state a cause of action, and (3) lack of legal capacity of Araceli
and Arnel to sue in behalf of the other heirs of Severino.
Respondents argued that for RTCs outside of Metro Manila to take cognizance of a
civil suit, the jurisdictional amount must exceed ₱200,000.00 pursuant to Section 5 of
Republic Act (RA) No. 7691 which amended Section 19 of Batas Pambansa Blg. (BP)
129. And since the total market value of Lot No. 1782-B is ₱3,550,072,15 five percent
thereof is only ₱177,506.60 or less than the said jurisdictional amount, then the RTC
has no jurisdiction over petitioners’ Complaint. Respondents also posited that the
Complaint states no cause of action since petitioners’ supposed right to any
commission remained inchoate as Lot No. 1782-B has not yet been sold; in fact, the
Complaint merely alleged that petitioners introduced a real estate broker to
respondents. Lastly, respondents averred that petitioners have no legal capacity to
sue on behalf of Severino’s other heirs and that the verification and certification of
non-forum shopping attached to the Complaint only mentioned Araceli and Arnel as
plaintiffs.
Araceli’s and Arnel’s authority to file the Complaint for and in behalf of Severino’s
other heirs. In sum, the CA found no error on the part of the RTC in granting
respondents’ Motion to Dismiss. Thus:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us
DISMISSING the appeal filed in this case and AFFIRMING the Order rendered by the
lower court in Civil Case No. 2001-9-3267 with double costs against petitioners.
SO ORDERED.21
Petitioners filed a Motion for Reconsideration22 questioning solely the CA’s affirmance
of the RTC’s finding on lack of jurisdiction. This was, however, also denied in a
Resolution23 dated April 5, 2006.

Finding respondents’ arguments to be well-taken, the RTC, in an Order16 dated May 2,

Hence, the present Petition for Review on Certiorari.
2002 ruled:
Issues
WHEREFORE, premises considered, the respondents’ Motion to Dismiss is granted.
Consequently, this case is hereby DISMISSED. Costs against the petitioners.
Whether the CA erred in affirming the RTC’s findings that it has no jurisdiction over
17
the subject matter of the case; that the Complaint states no cause of action; and that
SO ORDERED.
petitioners Araceli and Arnel have no legal capacity to sue in behalf of the other heirs
of Severino.
Petitioners filed a Notice of Appeal,18 hence, the elevation of the records of the case
to the CA.
The Parties’ Arguments

Ruling of the Court of Appeals

Petitioners averred that their claim is one which is incapable of pecuniary estimation
or one involving interest in real property the assessed value of which exceeds
₱200,000.00. Hence, it falls under the exclusive original jurisdiction of the RTC.
Moreover, they asserted that they are not only claiming for commission but also for
compensation for the services rendered by Severino as well as by Araceli and Arnel for
the administration of respondents’ properties. Citing Section 3, Rule 319 of the Rules
of Court, petitioners justified the inclusion of Severino’s other heirs as plaintiffs in the
Complaint.
In the Decision20 dated July 6, 2005, the CA concluded that the Complaint is mainly for
collection of sum of money and not one which is incapable of pecuniary estimation
since petitioners are claiming five percent of the total purchase price of Lot No. 1782-
B. Neither does it involve an interest over a property since petitioners are merely
claiming payment for their services. The appellate court also ruled that the Complaint
did not state a cause of action since it failed to show the existence of petitioners’ right
that was allegedly violated by respondents. Moreover, it found no evidence of
At the outset, petitioners claim that the RTC did not make its own independent
assessment of the merits of respondents’ Motion to Dismiss but only blindly adopted
the arguments raised therein. This, to them, violates the Court’s pronouncement in
Atty. Osumo v. Judge Serrano24 enjoining judges to be faithful to the law and to
maintain professional competence.
As to the substantial issues, petitioners reiterate the arguments they raised before the
CA. They insist that their Complaint is one which is incapable of pecuniary estimation
or involves interest in real property the assessed value of which exceeds ₱200,000.00
and falls within the RTC’s jurisdiction. At any rate, they emphasize that they likewise
seek to recover damages, the amount of which should have been considered by the
RTC in determining jurisdiction. Moreover, they have a cause of action against the
respondents because an agency under the Civil Code is presumed to be for a
compensation.25 And what they are claiming in their Complaint is such compensation
for the services rendered not only by Severino but also by Araceli and Arnel as
administrators/agents of respondents’ properties. Lastly, they allege that pursuant to
Section 3, Rule 3 of the Rules of Court, the joining of Severino’s other heirs as plaintiffs
in the Complaint, is proper.
On the other hand, respondents assert that petitioners’ Complaint, as correctly found
by the CA, is for a specific sum of money seeking to recover the amount of
₱177,503.60,26 which is below the jurisdictional amount for RTCs outside of Metro
Manila. As to petitioners’ claim for damages, the same is only incidental to the
principal claim for agent’s compensation and therefore should not be included in
computing the total amount of the claim for purposes of determining jurisdiction.
Respondents likewise point out that the CA’s affirmance of the RTC’s findings that the
Complaint states no cause of action and that Araceli and Arnel have no capacity to sue
in behalf of the other heirs can no longer be questioned before this Court as they are
already final and executory since petitioners failed to assail them in their Motion for
Reconsideration with the CA. Be that as it may, no error can be imputed to the CA for
affirming the said findings as they are in accordance with law.
Our Ruling
The Petition lacks merit.
Contrary to petitioners’ claim, the RTC
made an independent assessment of the
merits of respondents’ Motion to
Dismiss.
It cannot be gainsaid that "it is the Court’s bounden duty to assess independently the
merits of a motion x x x."27 In this case, the RTC complied with this duty by making its
own independent assessment of the merits of respondents’ Motion to Dismiss. A
reading of the RTC’s Order will show that in resolving said motion, it judiciously
examined the Complaint and the documents attached thereto as well as the other
pleadings filed in connection with the said motion.28 Based on these, it made an
extensive discussion of its observations and conclusions. This is apparent from the
following portions of the said Order, to wit:
x x x In the instant case, the plaintiffs’ complaint does not even mention specifically
the amount of their demand outside of their claim for damages and attorney’s fees.
They are only demanding the payment of their alleged commission/compensation and
that of the late Severino Cabrera which they fixed at 5% of Lot No. 1782-B allegedly
with an area of 24 hectares. They did not also state the total monetary value of Lot
1782-B neither did they mention the monetary equivalent of 5% of Lot No. 1782-B. In
short, the complaint fails to establish that this Court has jurisdiction over the subject
matter of the claim.
As the tax declaration covering Lot No. 1782-B has been attached to the complaint as
Annex "C" and made an integral part thereof, the court, in its desire to determine
whether it has jurisdiction over the subject matter of plaintiff’s claim computed the
total market value of Lot No. 1782-B, including the value of the trees and the plants
standing thereon, as appearing in said Annex "C". The computation shows the amount
of ₱3,508,370.00. Five percent thereof is ₱175,418.50. It is way below the
jurisdictional amount for the Regional Trial Court outside Metro Manila which is
pegged at more than ₱200,000. Clearly, therefore, this Court has no jurisdiction over
the subject matter of the plaintiff’s complaint as correctly contended by the
defendants.29
xxxx
A careful scrutiny of the complaint in this case reveals that it is bereft of any allegation
that Lot No. 1782-B or any portion thereof has already been sold thru the plaintiffs’
efforts prior to the alleged dismissal as agents or brokers of the defendants. As they
failed to sell Lot No. 1782-B or any portion thereof, then they are not entitled to any
commission, assuming in gratia argumenti that they were promised 5% commission
by defendants should they be able to sell Lot No. 1782-B or any part or parcel of the
said lot.
Besides, the court notices that the appointment of the plaintiffs’ father (Annex "A"-
Complaint) does not state in any manner that he is entitled to a compensation or
commission when it is supposed to be the repository of what had been agreed upon
between him and Atty. Lorenzo C. Gella, relative to his designation as administrator of
Atty. Gella. As such, the plaintiffs cannot claim now that Severino Cabrera is entitled
to any compensation or commission as Annex "A" does not so provide.30
xxxx
An examination of the records of this case reveals that there is nothing in plaintiffs’
complaint showing that they were empowered by the other heirs of the late Severino
Cabrera to take this action on their behalf. x x x31
Clearly, petitioners’ claim that the RTC merely adopted the arguments of respondents
in their Motion to Dismiss when it resolved the same is belied by the above-quoted
disquisition of the RTC on the matter and therefore deserves no credence.
Petitioners’ Complaint is neither one
which is incapable of pecuniary
estimation nor involves interest in a real
property.
Section 19(1) and (2) of BP 12932 as amended by RA 769133 read:
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 (₱20,000.00) or for civil actions in Metro
Manila, where such value exceeds Fifty thousand pesos (₱50,000.00) except
actions for forcible entry into and unlawful detainer of lands or buildings,
original jurisdiction over which is conferred upon the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;
xxxx
Insisting that the RTC has jurisdiction over their Complaint, petitioners contend that
the same is one which is incapable of pecuniary estimation or involves interest in a
real property the assessed value of which exceeds ₱200,000.00.
The Court does not agree. To ascertain the correctness of petitioner’s contention, the
averments in the Complaint and the character of the relief sought in the said
Complaint must be consulted.34 This is because the jurisdiction of the court is
determined by the nature of the action pleaded as appearing from the allegations in
the Complaint.35 Hence, the pertinent portions of petitioners’ Complaint are
hereunder reproduced:
xxxx
2. That on October 25, 1976 the defendants’ father the late Atty. Lorenzo
Gella, x x x designated x x x Severino Cabrera as agent or administrator of all
his real properties located in San Jose, Antique x x x.
3. That said Severino Cabrera immediately assumed his duties and
responsibilities faithfully as agent or administrator until his death in 1991 of
the properties of Lorenzo Gella in San Jose, Antique consisting of about 24
hectares x x x which later became Lot No. 1782-B in the name of the
PRAYER
defendants, covered by T.C.T. No. T-16987, Register of Deeds of Antique x x
x.
WHEREFORE, it is respectfully prayed that after due hearing, judgment be rendered
against defendants jointly and severally in favor of the plaintiffs, as follows:
4. That after the death of said Severino Cabrera in 1991, with the consent of
the defendants, his wife took over his duties and responsibilities as agent or
administratrix of the above-named properties of the defendants in San Jose,
Antique with the help of her son, Arnel Cabrera as ‘encargado’ and the
plaintiffs were also instructed by the defendants to look for buyers of their
properties and plaintiffs were promised by defendants a commission of five
percent of the total purchase price of the said properties as compensation
for their long and continued administration of all the said properties.
5. That sometime in 1994 plaintiffs approached the real estate broker Erlinda
Veñegas to sell the above-described Lot No. 1782-B and the plaintiffs gave
her the addresses of the defendants who at all times live in Metro Manila.
Thereafter defendants agreed to have the said property developed by ESV
Marketing & Development Corporation represented by its President, said
Erlinda Veñegas and defendants also designated said Erlinda Veñegas as
administratrix of said property and at the same time defendants dismissed
plaintiffs as agents or administrators thereof;
6. That on August 1, 2001 plaintiffs, through counsel wrote defendants
demanding payment of their five percent of twenty four hectares properties
under their administration for twenty five years in the form of real estate in
the subdivision of Lot 1782-B as their compensation or commission, but
defendants refused and failed to pay plaintiffs in cash or in kind of what is
due them;
7. That in view of the aforesaid failure and refusal of defendants to pay their
compensation or commission and instead they were dismissed and replaced
by the said Erlinda Veñegas they themselves recommended to defendants,
the plaintiffs have suffered public humiliation, mental anguish, and serious
anxiety for which plaintiffs should be adjudged and entitled to moral
damages in the sum of not less than Php100,000.00 each.
8. That defendants’ ingratitude and unjustified refusal to pay plaintiffs x x x
their compensation or commission for twenty five years service as
administrators and had successfully found a developer of defendants’
property but only to be dismissed, plaintiffs were compelled to institute this
action and incur expenses as well as attorney’s fees in the sum of
Php100,000.00.
 a. To pay plaintiffs their compensation or commission in the form of real confirming Severino’s appointment as administrator of his properties does not provide
estate from Lot No. 1782-B subdivision equivalent to five percent of twenty that the latter’s services would be compensated in the form of real estate or, at the
four hectares properties under their administration; very least, that it was for a compensation. Neither was it alleged in the Complaint that
the five percent commission promised to Araceli and Arnel would be equivalent to
b. To pay plaintiffs moral damages in the amount of not less than such portion of Lot No. 1782-B. What is clear from paragraph 4 thereof is that
Php100,000.00 each; respondents instructed petitioners to look for buyers of their properties and "were
promised by respondents a commission of five percent of the total purchase price of
c. Attorney’s fee and litigation expenses in the amount of not less than the said properties as compensation for their long and continued administration of all
Php100,000.00 each and pay the costs of suit the said properties." Also, petitioners’ allegation in paragraph 6 that respondents
failed to pay them "in cash or in kind" of what is due them negates any agreement
between the parties that they should be paid in the form of real estate. Clearly, the
x x x x36 (Italics and Emphases supplied)
allegations in their Complaint failed to sufficiently show that they have interest of
whatever kind over the properties of respondents. Given these, petitioners’ claim that
The Court in Ungria v. Court of Appeals37 restated the criterion laid down in Singson v.
their action involves interest over a real property is unavailing. Thus, the Court quotes
Isabela Sawmill38 to ascertain if an action is capable or not of pecuniary estimation,
with approval the CA’s ratiocination with respect to the same:
viz:
As to their weak claim of interest over the property, it is apparent that their only
In determining whether an action is one the subject matter of which is not capable of
interest is to be compensated for their long-term administration of the properties.
pecuniary estimation this Court has adopted the criterion of first ascertaining the
They do not claim an interest in the properties themselves but merely payment for
nature of the principal action or remedy sought. If it is primarily for the recovery of a
their services, such payment they compute to be equivalent to five (5%) percent of
sum of money, the claim is considered capable of pecuniary estimation, and whether
the value of the properties. Under Section 1, Rule 4 of the Rules of Court, a real action
jurisdiction is in the municipal courts or in the Courts of First Instance would depend
is an action affecting title to or possession of real property, or interest therein. These
on the amount of the claim. However, where the basic issue is something other than
include partition or condemnation of, or foreclosure of mortgage on, real property.
the right to recover a sum of money, where the money claim is purely incidental to,
Plaintiffs-appellants’ interest is obviously not the one contemplated under the rules
or a consequence of, the principal relief sought, this Court has considered such actions
on jurisdiction.40
as cases where the subject of the litigation may not be estimated in terms of money,
and are cognizable exclusively by Courts of First Instance (now Regional Trial Courts).
Petitioners’ demand is below the
jurisdictional amount required for RTCs
It can be readily seen from the allegations in the Complaint that petitioners’ main
outside of Metro Manila, hence, the RTC
purpose in filing the same is to collect the commission allegedly promised them by
concerned in this case has no
respondents should they be able to sell Lot No. 1782-B, as well as the compensation
jurisdiction over petitioners’ Complaint.
for the services rendered by Severino, Araceli and Arnel for the administration of
respondents’ properties. Captioned as a Complaint for Collection of Agent’s
To determine whether the RTC in this case has jurisdiction over petitioners’ Complaint,
Compensation, Commission and Damages, it is principally for the collection of a sum
respondents correctly argued that the same be considered vis-à-vis Section 19(8) of
of money representing such compensation and commission. Indeed, the payment of
BP 129, which provides:
such money claim is the principal relief sought and not merely incidental to, or a
consequence of another action where the subject of litigation may not be estimated
in terms of money. In fact, petitioners in this case estimated their claim to be SEC. 19. Jurisdiction in Civil Cases. – Regional Trial Courts shall exercise exclusive
equivalent to five percent of the purchase price of Lot No. 1782-B. Therefore, the CA original jurisdiction:
did not err when it ruled that petitioners’ Complaint is not incapable of pecuniary
estimation. xxxx

The Court cannot also give credence to petitioners’ contention that their action (8) In all other cases in which the demand, exclusive of interests, damages of whatever
involves interest in a real property. The October 25, 1976 letter 39 of Atty. Gella kind, attorney’s fees, litigation expenses, and costs or the value of the property
exceeds One hundred thousand pesos (₱100,000.00) or, in such other cases in Metro amended by R.A. No. 7691, applies to cases where the damages are merely incidental
Manila, where the demand, exclusive of the abovementioned items exceeds Two to or a consequence of the main cause of action. However, in cases where the claim
hundred thousand pesos (₱200,000.00). 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.1âwphi1
This jurisdictional amount of exceeding ₱100,000.00 for RTC’s outside of Metro
Manila was adjusted to ₱200,000.00 effective March 20, 1999 in pursuance to Section Here, the moral damages being claimed by petitioners are merely the consequence of
5 of RA 769141 which further provides: respondents’ alleged non-payment of commission and compensation the collection of
which is petitioners’ main cause of action. Thus, the said claim for moral damages
SEC. 5. After five (5) years from the effectivity of this Act, the jurisdictional amounts cannot be included in determining the jurisdictional amount.
mentioned in Sec. 19(3), (4), and (8); and Sec. 33(1) of Batas Pambansa Blg. 129 as
amended by this Act, shall be adjusted to Two hundred thousand pesos (₱200,000.00). In view of the foregoing, the CA did not err in affirming the RTC’s conclusion that it has
Five (5) years thereafter, such jurisdictional amounts shall be adjusted further to Three no jurisdiction over petitioners’ claim.
hundred thousand pesos (₱300,000.00): Provided, however, That in the case of Metro
Manila, the abovementioned jurisdictional amounts shall be adjusted after five (5) The CA’s affirmance of the RTC’s
years from the effectivity of this Act to Four hundred thousand pesos (₱400,000.00). findings that the Complaint states no
cause of action and that Araceli and
Hence, when petitioners filed their Complaint on September 3, 2001, the said Arnel have no authority to sue in behalf
increased jurisdictional amount was already effective. The demand in their Complaint of Severino’s other heirs cannot be
must therefore exceed ₱200,000.00 in order for it to fall under the jurisdiction of the raised in this Petition.
RTC.
As pointed out by respondents, petitioners tailed to question in their Motion for
Petitioners prayed that they be paid five percent of the total purchase price of Lot No. Reconsideration before the CA its affirmance of the RTC's findings that the Complaint
1782-B. However, since the Complaint did not allege that the said property has already states no cause of action and that Araceli and Arne! have no authority to sue in behalf
been sold, as in fact it has not yet been sold as respondents contend, there is no of the other heirs of Severino. Suffice it to say that ''prior to raising these arguments
purchase price which can be used as basis for computing the five percent that before this Court, they should have raised the matter in their Motion for
petitioners are claiming. Nevertheless and as mentioned, petitioners were able to Reconsideration in order to give the appellate court an opportunity to correct its
attach to their Complaint a copy of the tax declaration for Lot No. 1782-B showing a ruling. For them to raise these issues be tore this Court now would be improper, since
total market value of ₱3,550,072.00.42 And since "the fair market value is the price at they failed to do so be tore the CA."44
which a property may be sold by a seller, who is not compelled to sell, and bought by
a buyer, who is not compelled to buy,"43 the RTC correctly computed the amount of WHEREFORE, the Petition for Review on Certiorari is DENIED and the assailed Decision
petitioners’ claim based on the property’s market value. And since five percent of dated July 6, 2005 and the Resolution dated April 5, 2006 of the Court of Appeals in
₱3,550,072.00 is only ₱177,503.60 or below the jurisdictional amount of exceeding CA-G.R. CV No. 75126 are AFFIRMED.
₱200,000.00 set for RTCs outside of Metro Manila, the RTC in this case has no
jurisdiction over petitioners’ claim. SO ORDERED.

There is no merit to petitioners’ averment that their demand for moral damages
should be included in the computation of their total claims. Paragraph 8, Section 19
of BP 129 expressly speaks of demand which is exclusive of damages of whatever kind.
This exclusion was later explained by the Court in Administrative Circular No. 09-94
dated June 14, 1994 as follows:

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

G.R. No. 205753, July 04, 2016
ROSA PAMARAN, SUBSTITUTED BY HER HEIRS, THROUGH THEIR REPRESENTATIVE,
ROSEMARY P. BERNABE, Petitioners, v. BANK OF COMMERCE, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari assails the December 10, 2012 and February 4,
2013 Orders1 of the Regional Trial Court of Olongapo City, Branch 75 (RTC Olongapo)
granting the motion to dismiss by way of affirmative defenses and accordingly
dismissing the Complaint2 in Civil Case No. 29-0-2012 for "Damages and Restitution of
Value of a Residential House Unlawfully Taken."
Factual Antecedents
In the Complaint dated February 27, 2012, Rosa Pamaran (Rosa) alleged that her
children, Rhodora Pamaran (Rhodora), and spouses Rosemary P. Bernabe (Rosemary)
and Leonardo W. Bernabe (spouses Bernabe), owned adjacent lots respectively
covered by (a) Transfer Certificate of Title No. (TCT) 213130, and (b) TCT No. 124149.
These lots correspondingly covered 341 and 366 square meters and are located at
Dona Rosario Bayview Subdivision, Sucat, Muntinlupa City. Purportedly, in 1987, Rosa
built her residential house on these lots with the consent of Rhodora and spouses
Bernabe.
Sometime in 1997 and 1998, Southmarine International Ltd. Co. (Southmarine)
obtained loans from the Bank of Commerce (Bankcom). To secure these loans,
Rhodora and spouses Bernabe constituted real estate mortgages (REM) on their lots.
Rosa claimed that Bankcom neither included her house in determining the loan
amount nor obtained her consent to the REM. She added that Bankcom was aware of
the existence of her house on these lots.
Rosa asserted that eventually, these lots were foreclosed and their ownership was
consolidated in favor of Bankcom. Later, Bankcom filed petitions for issuance of writs
of possession, which were granted3 by the RTC of Muntinlupa City, Branch 206 (RTC
Muntinlupa) on November 22, 2011 and December 21,2011.
Rosa averred that because of these writs, she was dispossessed of her house in
February 2012. Thus, she prayed that Bankcom be ordered to pay her damages
amounting to P3 million for the value of her house, P300,000.00 for its violation of her
right to due process and equal protection of law, and P100,000.00 for attorney's fees.
Bankcom, on its end, raised in its Answer4 with Compulsory Counterclaim the following
affirmative defenses: 1) Rosa has no cause of action against it; 2) the Complaint is a
collateral attack on its title and an interference with the jurisdiction of the RTC
Muntinlupa; 3) Rosa was not deprived of due process; and, 4) the venue was
improperly laid.
Bankcom contended that Rosa has no cause of action because she is not the owner of
the subject lots as well as the improvement thereon; and she was never a party to any
contract between Bankcom, and its mortgagors, Rhodora and spouses Bernabe. It also
argued that this Complaint is a collateral attack on its title because the REM and the
Certificate of Sale indicated that they covered not only the subject lots, but including
the improvement thereon.
In addition, Bankcom insisted that the Complaint interfered with the jurisdiction of
RTC Muntinlupa, which already granted in its favor writs of possession over the
properties. It argued that while the Complaint is captioned as one for "Damages and
Restitution of Value of Residential House Unlawfully Taken," the same is a real action
because it concerns Rosa's claim of ownership over the subject house. It posited that
the Complaint should have been filed before the RTC Muntinlupa where such property
is located.
In her Reply5 with Answer to Counterclaim and Comment6 to Bankcom's Affirmative
Defenses, Rosa argued that she did not authorize her children to encumber her house.
She also stated that the REM was a contract of adhesion, thus, its stipulation that "the
mortgage included all the buildings and improvements [on the land]" pertained to
improvements belonging to the mortgagors, not to third persons.
Moreover, Rosa clarified that she does not question the writs of possession issued by
the RTC Muntinlupa. She, nonetheless, claimed that her Complaint concerns
Bankcom's use of these writs to deprive her of her house. On this, she declared that
this is not a collateral attack on Bankcom's title but a direct attack on its abuse of her
right to due process by arrogating to itself her house, which was not part of the REM.
Finally, Rosa contended that this a personal action because while she cited real
properties situated in Muntinlupa City, she is not asking to be the owner or possessor
thereof but is merely praying that Bankcom be ordered to pay her damages
corresponding to the value of her house. She likewise affirmed that the venue is
proper since she resides in Olongapo City.
Because of Rosa's demise on September 10, 2012, her heirs7 (petitioners) substituted8
her, designating Rosemary as their representative in this case.
Petitioners state that in resolving Bankcom's motion to dismiss (by way of affirmative
defenses) on the ground of lack of cause of action, the RTC Olongapo should have
exclusively considered the averments in the Complaint, which are deemed
hypothetically admitted. They added that RTC Olongapo's inquiry is limited to the
determination of whether these allegations present a case on which the relief may be
granted.
Petitioners insist that the Complaint states a cause of action, which relates to
Bankcom's purported unlawful taking of the house of the late Rosa; and such cause of
action entitles petitioners to recover damages corresponding to the value thereof.
They submit that the RTC Olongapo's conclusion that the REM included the lots and
the improvement thereon, without giving Rosa the opportunity to prove the
allegations in the Complaint is a procedural error tantamount to denial of due process.

On December 10, 2012, the RTC Olongapo issued the first assailed Order granting Finally, petitioners declare that the RTC Olongapo further justified the dismissal of the
Bankcom's motion to dismiss and accordingly, dismissing the Complaint. Complaint on the ground that the Complaint interfered with the jurisdiction of the RTC
Muntinlupa. They stress that the petition for issuance of writ of possession filed with
Thereafter, petitioners filed a Motion for Reconsideration, which was denied by the the RTC Muntinlupa and the instant Complaint for damages are different actions and
RTC Olongapo in the second assailed Order dated On February 4, 2013. the reliefs sought for in them differ from the other.

Issues Respondent's Arguments

Hence, petitioners filed this Petition raising the following issues:
a) Whether x x x the court a quo erred in resolving the issue of lack of cause of action
on the basis of evidence aliunde put forth before it by the movant and not solely on
the basis of the complaint.
b) Whether x x x the court a quo erred in disregarding the jurisprudential rule that a
movant to dismiss on the ground of lack of cause of action is deemed to have
hypothetically admitted plaintiff's factual representation in the complaint.
c) Whether x x x the court a quo committed error in procedure when it resolved a
question of fact in favor of [Bankcom] without first giving [petitioners the opportunity
to present evidence on a controversial fact, and used such conclusion of fact to justify
the dismissal of a complaint on the ground of lack of cause of action.
For its part, Bankcom states that the RTC Olongapo properly dismissed the Complaint
on the ground of lack of cause of action. It reiterates that Rosa was never privy to any
contract between Bankcom and its mortgagors. It also avers that the Complaint is a
collateral attack on its title because if the value of the house is restituted to
petitioners, such grant would diminish its title over the properties subject of the writs
of possession issued by the RTC Muntinlupa.
At the same time, Bankcom alleges that the RTC Olongapo correctly dismissed the
complaint on the ground of improper venue. It maintains that while the Complaint
was denominated as one for damages and restitution of value of a house unlawfully
taken, the action is, in fact, a real action because it is based on Rosa's claim of
ownership over the house built on the subject lots.
Our Ruling

d) Whether x x x the court a quo erred in justifying its dismissal of [petitioners' The Court grants the Petition.
complaint on a thesis that its initiation interfered with the exercise of jurisdiction of a
co-equal court in [e]xparte proceedings for the issuance of writ of possession under Petitioners come directly before the Court, on pure questions of law, essentially
Act 3135.9cralawred raising the issue of whether the RTC Olongapo erred in dismissing the Complaint,
without trial, and only upon motion to dismiss by way of affirmative defenses raised
Petitioners 'Arguments in Bankcom's Answer.
A cause of action is an act or omission by which a person violates the right of another.
Its essential elements are; (1) plaintiff's right, which arises from or is created by
whatever means, and is covered by whatever law; (2) defendant's obligation not to
violate such right; and, (3) defendant's act or omission in violation of the such right
and for which plaintiff's may seek relief from defendant.10ChanRoblesVirtualawlibrary
When an action is filed, the defendant may, nevertheless, raise the issue of want of
cause of action through a proper motion to dismiss, Thus, a distinction must be made
between a motion to dismiss for failure to state a cause of action under Section 1(g) 11
of Rule 16, and the one under Rule 3312 of the Rules of
Court.13ChanRoblesVirtualawlibrary
In the first situation, the motion must be made before a responsive pleading is filed;
and it can be resolved only on the basis of the allegations in the initiatory pleading. On
the other hand, in the second instance, the motion to dismiss must be filed after the
plaintiff rested his case; and it can be determined only on the basis of the evidence
adduced by the plaintiff. In the first case, it is immaterial if the allegations in the
complaint are true or false; however, in the second situation, the judge must
determine the truth or falsity of the allegations based on the evidence
presented.14ChanRoblesVirtualawlibrary
Stated differently, a motion to dismiss under Section 1(g) of Rule 16 is based on
preliminary objections made before the trial while the motion to dismiss under Rule
33 is a demurrer to evidence on the ground of insufficiency of evidence, and is made
only after the plaintiff rested his case.15ChanRoblesVirtualawlibrary
3. The instant suit is a personal action for the recovery of damages by the plaintiff
(Rosa) from the defendant (Bankcom) occasioned by defendant's reckless violation of
the constitutional right of the former not to be deprived of her property without due
process of law. The instant suit is authorized under Article 32 of the Civil Code x x x
x x x x
6. The plaintiff is the owner of a residential house that she ha[d] constructed in 1987,
which x x x has a current market value of at least Php3,000,000.00 constructed on 2
residential lots covered by TCT No. 213130 x x x in the name of Rliodora Pamaran, x x
x and TCT No. 124149 x x x in the name of Spouses Rosemary P. Bernabe and, Leonardo
W. Bernabe x x x Both residential lots are located at Dona Rosario Bayview Subd.,
Sucat, Muntinlupa City. The plaintiff had the residential house constructed xxx with
the express consent of the lot owners, Rhodora Pamaran and the spouses Rosemary
and Leonardo Bernabe; who are her children. The residential house is currently
declared for taxation purposes in the name of the plaintiff x x x
7. Sometime in 1997 and 1998, xxx Southmarine International Ltd. Co, x x x obtained
loans from defendant bank. [T]o secure the said loans, Rhodora Pamaran and Spouses
Rosemary and Leonardo Bernabe constituted real estate mortgages on the residential
lots only.
8. The defendant bank was aware of the existence of [plaintiffs] residential house x x
x [P]laintiff never executed a real estate mortgage over her residential house in favor of
the defendant x x x

Here, Bankcom submitted its motion to dismiss by way of affirmative defenses. 9. [Later], the defendant bank foreclosed on the collateralized residential lots pursuant
Clearly, there had been no presentation of evidence made and Rosa had not yet rested to the real estate mortgages x x x [I]n 1999, the ownership of the residential lots was
her case. As Bankcom's motion was made before trial then, it falls within the first consolidated in favor of the defendants x x x
instance above-discussed.
10. After more than 10 years from the foreclosure sale x x x, the defendant initiated
Moreover, Bankcom's motion to dismiss must be resolved with reference to the ex-parte petitions for issuance of writs of possession over the 2 residential lots xxx
allegations in the Complaint assuming them to be true. The RTC Olongapo does not [T]he RTC of Muntinlupa City xxx issued the writs of possession xxx without any notice
need to inquire on the truthfulness of these allegations and declare them to be false. to the plaintiff whose residential house would be necessarily affected.
If it does, such court would be denying the plaintiff (Rosa) of her right to due process
of law. In other words, in determining whether a complaint states or does not state a 11. By virtue of the[se] writs xxx, the plaintiff xxx was unceremoniously dispossessed [of
cause of action, the court must hypothetically admit the truth of the allegations and her house] by the defendant xxx without any due process of law xxx
determine if it may grant the relief prayed for based on them. The court cannot
consider external factors m determining the presence or the absence of a cause, of x x x x
action other than the allegations in the complaint.16ChanRoblesVirtualawlibrary
16. The invasion or violation by the defendant of the constitutional right of the plaintiff
Here, the pertinent portions of the Complaint read: should entitle the latter to damages x x x

x x x x

17. The defendant cannot just divest the plaintiff of her residential lot without
adequate compensation. Thus, it is only just and right that the defendant, for divesting
the plaintiff of the possession and enjoyment of her residential house, should
compensate the plaintiff or restitute to her the fair market value of her residential
house x x x17 (Emphases supplied)cralawred
In fine, the allegations in the Complaint provide that: Rosa is the owner of a residential
house built on the lots owned by her children; by reason of the foreclosure of these
lots, Bankcom acquired the lots and also appropriated Rosa's house; thus, Rosa seeks
recovery of damages against Bankcom.
Hypothetically admitting these allegations to be true, Rosa's cause of action against
Bancom involves a) her right over her house; b) Bankcom's obligation to respect Rosa's
right to enjoy her house; and c) Bankcom's violation of such right, which gave rise to
this action for damages.
Notably, in granting Bankcom's motion to dismiss, the RTC Olongapo took into
consideration the arguments set forth in the motion, and ignored the assertions in the
Complaint, to wit:
Bankcom acquired title and possession of the subject properties by virtue of the real
estate mortgages executed by Rhodora, Pamaran and Spouses Leonardo and
Rosemary P. Bernabe in favor of defendant (Bankcom), The mortgagors failed to settle
their obligation; hence, defendant foreclosed the properties and was declared the'
highest bidder. The corresponding Certificates of Sale were issued in favor of
defendant. Upon failure of the mortgagors to redeem their respective properties,
Bankcom filed [petitions for issuance of writs of possession over the two parcels of
land owned by the mortgagors, which were granted x x x and [corresponding titles
were issued to Bankcom x x x Likewise, the real estate mortgages clearly provide that
the subject thereof includes not only the parcels of land, but likewise 'all the buildings
and improvements now existing or may hereafter be erected or constructed thereon'.
It is therefore safe to conclude that when the mortgagors executed and signed the
same, they were aware that the mortgage does not pertain to the land only but also to
all the buildings and improvements that may be found therein; otherwise, they should
have refused x x x the contracts.18 (Emphasis supplied)cralawred
Not only did the RTC Olongapo disregard the allegations in the Complaint, it also failed
to consider that the Bankcom's arguments necessitate the examination of the
evidence that can be done through a lull-blown trial. The determination of whether
Rosa has a right over the subject house and of whether Bankcom violated this right
cannot be. addressed in a. mere motion to dismiss. Such determination, requires the
contravention of the allegations In the Complaint and the full adjudication of the
merits of the case based on all the evidence adduced by the
parties.19ChanRoblesVirtualawlibrary
In addition, the RTC supported its dismissal of the Complaint on the ground that the
Complaint interfered with the jurisdiction of the RTC Muntinlupa, which had
previously issued writs of possession to Bankcom. The RTC Olongapo decreed that
since Rosa sought damages corresponding the value of her alleged house, she is, in
effect, asking the invalidation of the writs of possession.
The position of me RTC Olongapo is unjustified.
In the Complaint, and in her Comment to Bankcom's Affirmative Defenses, the late
Rosa made it clear that this is a personal action for damages arising from Bankcom's
violation of her right to due process and equal protection; and her right to enjoy her
house. She clarified that she does not question the writs issued by the RTC
Muntinlupa, but she assails Bankcom's use thereof in depriving her of the right to
enjoy said house. She also stressed that since this is a personal action, then it was
properly filed in RTC Olongapo, as she is a resident of Olongapo.
Section 1, Rule 4 of the Rules of Court, in relation to Section 2 thereof, defines a real
action as one "affecting title to or possession of real property or interest therein;" and,
all other actions are personal actions. A real action must be filed in the proper court
which has jurisdiction over the subject real property, while a personal action may be
filed where the plaintiff or defendant resides, or if the defendant is a non-resident,
where he may be found, at the election of the plaintiff. Personal actions include those
filed for recovery of personal property, or for enforcement of contract or recovery of
damages for its breach, or for the recovery of damages for injury committed to a
person or property.20ChanRoblesVirtualawlibrary
The Complaint (specifically allegations nos. 3 and 16 thereof) stated that this case is
one for recovery of damages relating to the injury committed by Bankcom for violating
Rosa's right to due process, and right to enjoy her house. Rosa repeatedly averred that
she does not seek recovery of its possession or title. Her interest to the house is merely
incidental to the primary purpose for which the action is filed, that is, her claim for
damages.
Clearly, this action involves Rosa's interest in the value of the house but only in so far
as to determine her entitlement to damages. She is not interested in the house itself.
Indeed, the primary objective of the Complaint is to recover damages, and not to
regain ownership or possession of the subject property.21 Hence, this case is a
personal action properly filed in the RTC Olongapo, where Rosa resided.
Finally, this action does not interfere with the jurisdiction of the RTC Muntinlupa. One,
the nature of this action, which is for damages, is different from the petition before
the RTC Muntinlupa, which is for issuance of writs of possession. Two, the laws relied
upon in these actions vary; this damage suit is based on Rosa's reliance on her right
emanating from Article 3222 of the Civil Code; while Bankcom's Petition is pursuant to
Act No. 3135,23 as amended.

Third, this case involves a claim arising from Bankcom's alleged violation of Rosa's right
to due process, and to the enjoyment of her house. On the other hand, the one for
issuance of writs of possession involves Bankcom's application to be placed in
possession of the subject properties. Last, as already discussed, the former is a
personal action while the latter is a real action affecting title to and possession of a
real property.

Given these, the RTC erred in dismissing the Complaint on the grounds of lack of cause
of action, and of improper venue.

WHEREFORE, the Petition is GRANTED. The December 10,2012 and February 4, 2013
Orders of the Regional Trial Court of Olongapo City, Branch 75 in Civil Case No. 29-0-
2012 are REVERSED and SET ASIDE. Accordingly, the Complaint is REINSTATED and this
case is REMANDED to the Regional Trial Court of Olongapo City, Branch 75, which is G.R. No. 178911 September 17, 2014
ordered to resolve the case with dispatch.
EDUARDO D. MONSANTO, DECOROSO D. MONSANTO, SR., and REV. FR. PASCUAL D.
SO ORDERED.chanroblesvirtuallawlibrary MONSANTO, JR., Petitioners,
vs.
LEONCIO LIM and LORENZO DE GUZMAN, Respondents.

DECISION

DEL CASTILLO, J.:

"Filing the appropriate initiatory pleading and the payment of the prescribed docket
fees vest a trial court with jurisdiction over the subject matter."1

Assailed in this Petition for Review on Certiorari2 are the March 12, 2007 Decision3 of
the Court of Appeals (CA) which denied the Petition for Certiorari in CA-G.R. CEB-SP
No. 01343 and its July 6, 2007 Resolution4 denying the herein petitioners' Motion for
Reconsideration.5

Factual Antecedents

In a letter6 dated February 18, 2004, Flordelis B. Menzon, Regional Director of the
Home Development Mutual Fund (Pag-IBIG), requested the intervention of Executive
Judge Sinforiano A. Monsanto (Executive Judge Monsanto) of the Regional Trial Court
(RTC) of Catbalogan, Samar on the alleged anomalous auction sale conducted by
Sheriff IVLorenzo De Guzman (De Guzman). According to Pag-IBIG, De Guzman
previously acceded to its request to move the date of the auction sale to January 20,
2004; however, to its surprise, the sale proceeded as originally scheduled on January
15, 2004. Pag-IBIG also claimed that the winning bid of Leoncio Lim (Leoncio) in the
amount of ₱500,000.00 was grossly disadvantageous to the government considering
that the outstanding loan obligations of the mortgagor, Eduardo Monsanto (Eduardo),
was more than the bid amount. Pag-IBIG thus manifested that –
It is for this reason that we are making this protest. Sheriff de Guzman failed to comply
with our request for deferment despitehis [acquiescence]. We are requesting for your
intervention to nullify the results of the auction sale conducted last January 15, 2004.
This will give our office a chance to be able to participate and recoup our investment.
We trust that you will give thismatter preferential attention.7
Executive Judge Monsantorefrained from acting on the letter considering that
Eduardo is his relative; instead he re-assigned the same to Judge Sibanah E. Usman
(Judge Usman)8 of Branch 28.
In an Order9 dated May 3, 2004 and captioned "In the Matter of the Extrajudicial
Foreclosure of Mortgage Filed by the Home Development Mutual Fund (Pag-IBIG
Fund)," Judge Usman declared that on even date, RTC-Branch 28 conducted a hearing;
that Atty. Cesar Lee argued on behalf of Pag-IBIG; and that Pascual Monsanto (Pascual)
appeared on behalf of Eduardo. However, Judge Usman noted that no formal petition
orcomplaint was actually filed which presents a judicial issue; moreover, the acts
complained of partake of administrative matter. Consequently, Judge Usman referred
the matter to the Office of the Court Administrator (OCA) for further action.
Subsequently, Pascual filed with the OCA, copy furnished the RTCCatbalogan, Samar,
Branches 27 and 28, a Motion to Lift Writ of Execution and Notice to Vacate10 dated
March 13, 2004. Pascual alleged thaton March 5, 2005, De Guzman, Sheriff of Branch
27, issueda Notice to Vacate; that the same is being enforced with grave threats and
harassment; thatthe protest of Pag-IBIG remains pending with and unresolved by OCA;
thatthe trial court did not transmit the records of the case tothe OCA; that the winning
bid of ₱500,000.00 submitted by Leoncio is disadvantangeous to the government; that
Eduardo’s loan with PagIBIG is being proposed for restructuring; and that the writ of
execution and notice to vacate would gravely prejudice their rights. Pascual thus
prayed that:
A. An order be issued lifting the Writ of Execution and the Notice to Vacate;
B. An order be issued enjoining or restraining the subject Sheriff from
enforcing the said Notice to vacate; and
C. Court officials or personnel above mentioned be made to explain
respecting the handling of the above captioned case as cited above, and if
found negligent be so sanctioned in accordance with the law.11
Acting on the aforesaid Motion to Lift Writ of Execution and Notice to Vacate, the OCA,
in a letter12 dated May 9, 2005 directed Judge Usman to –
(1) conduct an investigation on the missing records of ‘Home Development Mutual
Fund (Pag-IBIG) vs. Eduardo Monsanto’ and to report thereon within THIRTY (30) days
from notice; and (2) take action on (a) Items A and B of the ‘Motion to Lift Writ
ofExecution and Notice to Vacate’ and (b) the letter of Home Development Mutual
Fund dated 18 February 2004, a copy of which is annexed to the ‘Motion to Lift Writ
of Execution and Notice to Vacate’, herewith attached.13 Pursuant to the above
directive, Judge Usman notified Pag-IBIG, Eduardo, and Leoncio of a hearing scheduled
on June 14, 2005.14 This time, the case was captioned as "Home Development Mutual
Fund (Pag-IBIG Fund), mortgagee, v. Eduardo Monsanto, mortgagor."
In a Manifestation15 dated June 7, 2005 and filed before Branch 28, PagIBIG informed
the trial court that the loan of Eduardo had been restructured and that Eduardo had
commenced paying monthly amortizations; that as a result of the restructuring, Pag-
IBIG is withdrawing its Petition for Extra-judicial Foreclosure; and that it is no longer
interested in pursuing an administrative action against De Guzman.
Leoncio opposed Pag-IBIG’s manifestation.16
Meanwhile, the record shows that on April 11, 2005, Leoncio filed with Branch 27 a
Manifestation with Ex-Parte Motion for Issuance of Writ of Possession17 claiming that
the reglementary period had elapsed without Eduardo redeeming the subject
property; as such, he is already entitled to the issuance of a writ of possession.
On July 15, 2005, Decoroso D. Monsanto and Pascual moved to intervene in the
case.18 Both claimed that they are co-owners and actual possessors of the subject
property.
Ruling of the Regional Trial Court – Branch 28
In an Order19 dated July 1, 2005, the RTC-Branch 28, Catbalogan, Samar resolved two
pending motions, i.e., (1) the motion for issuance of writ of possession filed by Leoncio
with Branch 27; and (2) the motion to lift writ of execution and notice to vacate filed
by Pascual with the OCA butcopy furnished the RTC Catbalogan, Samar, Branches 27
and 2820 viz:
After careful and judicious scrutiny of the records of thiscase, this Court is highly
convinced that the public auction sale conducted by Mr. De Guzman and Atty. Ma. Luz
Lampasa-Pabilona, Clerk of Court whereby Mr. Leoncio Lim emerged as the highest
bidder and purchaser of the subject property in good faith, and also given a Certificate
of Sale issued by the Sheriff and the same was registered with the Registry of Deeds
on March 5, 2004 are in order. The impugned Sheriff De Guzman had accordingly
performed his functions. Accordingly, there is no showing that hehas abuse[d] his
authority during the conduct of the public auction. Such being the case, this Court is
further convinced that the motion filed by Leoncio Lim through counsel Atty. Labid
being meritorious should be given due course. On the other hand, the motion to lift
writ of execution and notice to vacatefiled by Rev. Fr. Pascual D. Monsanto, Jr. being
devoid of merit should be denied.
Atty. Cesar E. Lee filed a manifestation dated June 7, 2005, praying that an order be
issued directing Lorenzo deGuzman, Sheriff to make the necessary notice to all
concern[ed] of the fact that the mortgagee has restructured his loan with the
mortgagor, and in effect, redeemed his obligation subject matter of this foreclosure
proceeding.
Mr. De Guzman explained that even assuming that there was restructuring of the
[mortgage] loan it is very clear that it was done after the lapse of the one (1) year
redemption period and also there was no notice given to the Office of the Clerk of
Court. Moreover,if there was actual payment the Office of the Clerk of Court was
never x x x informed by Mr. Monsanto. WHEREFORE, premises considered, this Court
finds that the instant motion to lift writ of execution and notice to vacate the
[premises] is devoid of merit, hence denied; likewise the manifestation of Atty. Cesar
Lee dated June 7, 2005 being devoid of merit is also denied. The motion for issuance
of writ of possession filed by Leoncio Lim through counsel Atty. Labid being
meritorious is hereby ordered GRANTED, hence let a writ of possession be issued
immediately in favor of Mr. Leoncio Lim purchaser in good faith.
Let a copy of this order be furnished the Hon. Presbitero J. Velasco, Jr., Court
Administrator for his information and guidance.
SO ORDERED.21
Eduardo, Pascual,and Pag-IBIG filed motions for reconsideration; however, the same
were denied by the trial court in its August 30, 2005 Order.22
Ruling of the Court of Appeals
Petitioners thus filed a Petition for Certiorari23 with the CA, which was docketed as
CA-G.R. CEB SP No. 01343. They claimed that the RTC committed grave abuse of
discretion indenying their Motion to Lift Writ of Execution and Notice to Vacate and
in granting Lim’s Ex ParteMotion for Issuance of Writ of Possession through its July 1,
2005 Order, arguing that Lim’s motion was not made under oath; that there are third
parties in possession of the subject property; that they were not notified of the
confirmation of the sale; that the mere filing of the Certificate of Sale withthe Register
of Deeds without presenting the owner’s duplicate copy is not tantamount to
registration; that since the Certificate of Sale was not registered, then the period to
redeem did not begin to run; that De Guzman’s March 7, 2005 Notice to Vacate was
illegal, since at the time, no writ of possession was yet issued; that De Guzman’s
actions in enforcing the writ of possession on July 8 and 15, 2005 – while their motion
for reconsideration was pending – is inhuman and violated their constitutional rights;
and that out of justice and equity, they should be allowed to redeem the property.
Petitioners prayed for the reversal of the RTC’s July 1, 2005 and August 30, 2005
Orders and for the CA to restore the status quo ante.
On March 12, 2007, the CA issued the assailed Decision finding no grave abuse of
discretion on the part of the RTC and affirming its July 1, 2005 and August 30, 2005
Orders, viz:
ACCORDINGLY, in line with the foregoing disquisitions, the petition is hereby DENIED.
The assailed Orders dated 1 July 2005 and 30 August 2005 are AFFIRMED IN TOTO.
SO ORDERED.24
Petitioners filed their Motion for Reconsideration, which the CA denied in its assailed
July 6, 2007 Resolution.
Hence, the present Petition.
Issues
Petitioners raise the following grounds for the Petition:
1. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN
RULING THAT NO GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE
HONORABLE REGIONAL TRIAL COURT BRANCH 27, EIGHTH JUDICIAL REGION,
CATBALOGAN, SAMAR IN ITS ISSUANCE OF THE WRIT OF POSSESSION AND
ITS ISSUANCE DOES NOT NEED A MOTION FOR THE CONFIRMATION OF SALE
WHICH REQUIRES A HEARING;
2. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN
FINDING THAT THE CERTIFICATE OF SALE WAS REGISTERED OR THAT THE
 MEREFILING WITH THE REGISTER OF DEEDS OF THE SAME IS TANTAMOUNT
TO ITS REGISTRATION, THUS THE REDEMPTION PERIOD HAD STARTED TO
RUN, ON THE COURT’S CONJECTURE THAT P.D. 1529 IMPLIEDLY REPEALED
ACT NO. 3135, PARTICULARLY SECTION 6, THEREOF;
3. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN
AFFIRMING THE COURT A QUO’S FINDINGS THAT ALL THE PETITIONERS
WERE DULY NOTIFIED BUT FAILED TO APPEAR DURING THE HEARING ON THE
MOTION FOR THE ISSUANCE OF THE WRIT OFPOSSESSION. IT ERRED IN
ALLUDING THAT IN THE COURSE OF THE PROCEEDINGS OF THIS INSTANT
CASE, PETITIONERS WERE NOT DENIED DUE PROCESS OF LAW; AND
4. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN
RULING THAT PETITIONERS DECOROSO AND FR. PASCUAL, JR. DO NOT
HOLDTHE FORECLOSED PROPERTY ADVERSELY TO THAT OF THE PETITIONER-
MORTGAGOR, FOR BEING MERE ASSIGNEES, THEYDERIVED THEIR
POSSESSORY RIGHTS FROM PETITIONER-MORTGAGOR.25
Petitioners’ Arguments
Praying that the assailed CA Decision and Resolution be set aside, petitioners reiterate
intheir Petition and Reply26 the points they raised in their CA Petition. Thus, they
argue that the ex partemotion for the issuance of a writ of possession should be under
oath, and requires prior notice and hearing; that the mere filing of the sheriff’s
certificate of sale with the Register of Deeds is not equivalent to registration as
required in order for the one-year redemption period to commence; that Presidential
Decree No. 1529 did not repeal Act No. 3135; that the occupants of the subject
property hold rights adverse to the mortgagor Eduardo; and that the extrajudicial
foreclosure proceedings was attended by numerous irregularities.
Respondent Lim’s Arguments
On the other hand, Leoncio in his Comment27 insists in essence that the mere filing
of the sheriff’s Certificate of Sale with the Samar Register of Deeds on March 5, 2004
was equivalent to the registration thereof; that the Samar Registrar of Deeds assured
him that merereceipt of the Certificate of Sale is tantamount to registration; that he
relied upon this representation and assurance in good faith; and that petitioners’
remedy is to file a separate case for recovery of ownership and possession.
Our Ruling
The Petition is dismissed.
"Filing the appropriate initiatory pleading and the payment of the prescribed docket
fees vest a trial court with jurisdiction over the subject matter."28 Section 5, Rule 1 of
the Rules of Court specifically providesthat "[a] civil action is commenced by the filing
of the original complaint in court." Moreover, "[e]very ordinary civil action must
bebased on a cause of action."29
No proper initiatory pleading was filed before the trial court.
In this case, records show that no formal complaint or petition was filed in court. The
case was supposedly "commenced" through a letter of Pag-IBIG asking the
intervention of Executive Judge Monsanto on the alleged anomalous foreclosure sale
conducted by De Guzman. However, saidletter could not in any way be considered as
a pleading. Section 1, Rule 6 of the Rules of Court defines pleadings as "written
statements of the respective claims and defenses of the parties submitted to the court
for appropriate judgment." To stress, Pag-IBIG’s letter could not be considered as a
formal complaint or petition. First, the parties to the case were not identified pursuant
to Section 1,30 Rule 3 and Section 1,31 Rule 7. Second, the so-called claim or cause of
action was not properly mentioned or specified. Third, the letter miserably failed to
comply with the requirements of Rule 7, Rules of Court. The letter bore no caption; it
was not even assigned a docket number; the parties were not properly identified;the
allegations were not properly set forth; no particular relief issought; in fact, only the
intervention of Executive Judge Monsanto is requested; it was notsigned by a counsel;
and most of all, there is no verification orcertification against forum-shopping.
We have also noted that in its July1, 2005 Order, Judge Usman of Branch 28 resolved
the following incidents: (1) the motion for issuance of writ of possession filed by
Leoncio; and (2) the motion to lift writ of execution and notice to vacate. However,
the said Manifestation with Ex Parte Motion for Issuance of Writ of Possession was
not even filed before Branch28; in fact, it was submitted for consideration of Branch
27. Moreover, the Motion to Lift Writ of Execution and Notice to Vacatewas filed by
Pascual before the OCA; the RTC Branches 27 and 28 of Catbalogan, Samar, were only
furnished copies thereof.
In addition, it is quite unfortunate that Judge Usman proceeded to take cognizance of
the case notwithstanding his prior observation as stated in the May 3, 2004 Order that
no formal petition or complaint was actually filed and which presents a judicial issue.In
fact, Judge Usman even opined that the acts complained of partake of administrative
matter and thus referred the same to the OCA for further action. The May 9, 2005
letter of OCA directing Judge Usman to take action on the Motion to Lift Writ of
Execution and Notice to Vacatecould not be interpreted as vesting Judge Usman with
the authority and jurisdiction to take cognizance of the matter. Nothing to that effect
could be inferred from the tenor of the May 9, 2005 letter ofOCA. Jurisdiction is vested
by law. When OCA directed Judge Usman to take action on the Motion to Lift Writ of
Execution and Notice to Vacate, it did not deprive the latter ofhis discretion to dismiss SO ORDERED.
the matter/case for lack of jurisdiction, if the matter/case so warrants.

In fine, there being no proper initiatory pleading filed, then the RTC Branch 28 did not
acquire jurisdiction over the matter/case.

No payment of docket fees.

We have also noted that no docket feeswere paid before the trial court. Section 1,
Rule 141 of the Rules of Court mandates that "[u]pon the filing of the pleading or other
application which initiates an action or proceeding, the fees prescribed therefor shall
be paid in full." "It is hornbook law that courts acquire jurisdiction over a case only
upon payment of the prescribed docket fee."32

In Far East Bank and Trust Company v. Shemberg Marketing Corporation,33 we ruled G.R. No. 176949 June 27, 2012
thus: A court acquires jurisdiction over a case only upon the payment of the prescribed
fees. The importance of filing fees cannot be gainsaid for these are intended to take ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner,
care of court expenses inthe handling of cases in terms of costs of supplies, use of vs.
equipment, salaries and fringe benefits of personnel, and others, computed as to man- LOURDES K. MENDOZA, Respondent.
hours used in the handling of each case. Hence, the non-payment or insufficient
payment of docket fees can entail tremendous losses to government in general and DECISION
to the judiciary in particular.
DEL CASTILLO, J.:
In fine, since no docket or filing feeswere paid, then the RTC Branch 28 did not acquire
jurisdiction over the matter/case.1âwphi1 It therefore erred in taking cognizance of In civil cases, the party with the most convincing evidence prevails.
the same. Consequently, all the proceedings undertaken by the trial court are null and
void,and without force and effect. In, particular, the July 1, 2005 and August 30, 2005 This Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assails the
Orders of the RTC are null and void. Decision2 dated April 28, 2006 and the Resolution3 dated March 9, 2007 of the Court
of Appeals (CA) in CA-G.R. CV No. 69180.
It is settled jurisprudence that "[a]ny decision rendered without jurisdiction is a total
nullity and may be struck down at any time, even on appeal before this Court."34 Factual Antecedents
Prescinding from the foregoing, we hold that the RTC-Branch 28 did not acquire
jurisdiction over the instant matter/case there being no formal initiatory pleading filed
On January 6, 2000, respondent Lourdes K. Mendoza, sole proprietor of Highett Steel
as well asnon-payment of docket fees. Consequently, all proceedings had before the
Fabricators (Highett), filed before the Regional Trial Court (RTC) of Caloocan City,
RTC Branch 28 were null and void for lack of jurisdiction.
Branch 126, a Complaint4 for a sum of money, docketed as Civil Case No. C-19100,
against petitioner Asian Construction and Development Corporation, a duly registered
WHEREFORE, the Petition is DENIED. The assailedMarch 12, 2007 Decision and July 6, domestic corporation.
2007 Resolution of the Court of Appeals in CA-G.R. CEBSP No. 01343 are ANNULLED
and SET ASIDE. The July 1, 2005 and August 30, 2005 Orders of the Regional Trial Court
In the complaint, respondent alleged that from the period August 7, 1997 to March 4,
of Catbalogan, Samar, Branch 28 are DECLARED NULL and VOID. All proceedings,
1998, petitioner purchased from Highett various fabricated steel materials and
processes and writs emanating therefrom are likewise NULLIFIED and VOIDEDfor lack
supplies amounting to ₱1,206,177.00, exclusive of interests;5 that despite demand,
of jurisdiction.
petitioner failed and/or refused to pay;6 and that due to the failure and/or refusal of
petitioner to pay the said amount, respondent was compelled to engage the services
of counsel.7
Petitioner moved for a bill of particulars on the ground that no copies of the purchase
orders and invoices were attached to the complaint to enable petitioner to prepare a
responsive pleading to the complaint.8 The RTC, however, in an Order dated March 1,
2000, denied the motion.9 Accordingly, petitioner filed its Answer with
Counterclaim10 denying liability for the claims and interposing the defense of lack of
cause of action.11
To prove her case, respondent presented the testimonies of (1) Artemio Tejero
(Tejero), the salesman of Highett who confirmed the delivery of the supplies and
materials to petitioner, and (2) Arvin Cheng, the General Manager of Highett.12
The presentation of evidence for petitioner, however, was deemed waived and
terminated due to the repeated non-appearance of petitioner and its counsel.13
Ruling of the Regional Trial Court
On December 1, 2000, the RTC rendered a Decision14 in favor of respondent, to wit:
WHEREFORE, in view of the foregoing, judgment is hereby rendered ordering the
[petitioner] corporation to pay the [respondent] the following:
a. ₱1,206,177.00, representing the principal amount, which is the purchase
price of the materials and other supplies ordered by and delivered to
[petitioner];
b. ₱244,288.59, representing the accrued interest as of August 31, 1999 plus
xxx additional interest to be computed at the rate of 12% per annum until
the total indebtedness is paid in full;
c. ₱150,000.00 for and as Attorney’s fees; and
d. Cost of suit.
SO ORDERED.15
Ruling of the Court of Appeals
On appeal, the CA affirmed with modification the Decision of the RTC. The decretal
portion of the CA Decision16 reads:
WHEREFORE, the assailed Decision of the RTC [Br. 126, Caloocan City] dated December
1, 2000 is hereby AFFIRMED with the MODIFICATION, in that the reckoning point for
the computation of the 1% monthly interest shall be 30 days from date of each
delivery.
SO ORDERED.17
Petitioner sought reconsideration but the same was unavailing.18
Issues
Hence, this petition raising the following issues:
I. WHETHER X X X THE CHARGE INVOICES ARE ACTIONABLE DOCUMENTS.
II. WHETHER X X X THE DELIVERY OF THE ALLEGED MATERIALS [WAS] DULY
PROVEN.
III. WHETHER X X X RESPONDENT IS ENTITLED TO ATTORNEY’S FEES.19
Petitioner’s Arguments
Petitioner argues that a charge or sales invoice is not an actionable document; thus,
petitioner’s failure to deny under oath its genuineness and due execution does not
constitute an admission thereof.20 Petitioner likewise insists that respondent was not
able to prove her claim as the invoices offered as evidence were not properly
authenticated by her witnesses.21 Lastly, petitioner claims that the CA erred in
affirming the award of attorney’s fees as the RTC Decision failed to expressly state the
basis for the award thereof.22
Respondent’s Arguments
Respondent, in her Comment,23 prays for the dismissal of the petition contending
that the arguments raised by petitioner are a mere rehash of those presented and
already passed upon by the CA.24 She maintains that charge invoices are actionable
documents,25 and that these were properly identified and authenticated by witness
Tejero, who testified that upon delivery of the supplies and materials, the invoices
were stamped received by petitioner’s employee.26 Respondent contends that the
award of attorney’s fees was justified as the basis for the award was clearly established
during the trial.27
Our Ruling
The petition is partly meritorious.
The charge invoices are not actionable documents
Section 7 of Rule 8 of the Rules of Court states:
SEC. 7. Action or defense based on document. – Whenever an action or defense is
based upon a written instrument or document, the substance of such instrument or
document shall be set forth in the pleading, and the original or a copy thereof shall be
attached to the pleading as an exhibit, which shall be deemed to be a part of the
pleading, or said copy may with like effect be set forth in the pleading. (Emphasis
supplied.)
Based on the foregoing provision, a document is actionable when an action or defense
is grounded upon such written instrument or document. In the instant case, the
Charge Invoices28 are not actionable documents per se as these "only provide details
on the alleged transactions."29 These documents need not be attached to or stated
in the complaint as these are evidentiary in nature.30 In fact, respondent’s cause of
action is not based on these documents but on the contract of sale between the
parties.
Delivery of the supplies and materials was duly proved
But although the Charge Invoices are not actionable documents, we find that these,
along with the Purchase Orders,31 are sufficient to prove that petitioner indeed
ordered supplies and materials from Highett and that these were delivered to
petitioner.
Moreover, contrary to the claim of petitioner, the Charge Invoices were properly
identified and authenticated by witness Tejero who was present when the supplies
and materials were delivered to petitioner and when the invoices were stamped
received by petitioner’s employee, Roel Barandon.32
It bears stressing that in civil cases, only a preponderance of evidence or "greater
weight of the evidence" is required.33 In this case, except for a bare denial, no other
evidence was presented by petitioner to refute respondent’s claim. Thus, we agree
with the CA that the evidence preponderates in favor of respondent.
Basis for the award of Attorney’s fees must be stated in the decision
However, with respect to the award of attorney’s fees to respondent, we are
constrained to disallow the same as the rationale for the award was not stated in
the text of the RTC Decision but only in the dispositive portion.34 1âwphi1
WHEREFORE, the petition is hereby PARTLY GRANTED. The assailed Decision dated
April 28, 2006 and the Resolution dated March 9, 2007 of the Court of Appeals in CA-
G.R. CV No. 69180 are hereby AFFIRMED with MODIFICATION. The award of attorney’s
fees in the amount of ₱150,000.00 is hereby DELETED.
SO ORDERED.
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.:
Jurisdiction over the subject matter is conferred by law and is determined by the
material allegations of the complaint.1 Thus, it cannot be acquired through, or waived
by, any act or omission of the parties;2 nor can it be cured by their silence,
acquiescence, or even express consent.3
This Petition for Review on Certiorari4 under Rule 45 of the Rules of Court assails the
Decision5 dated December 4, 2006 of the Court of Appeals (CA) in CA-G.R. CV No.
72845.
Factual Antecedents
Sometime in the 1960's, Telesforo Julao (Telesforo)6 filed before the Department of
Environment and Natural Resources (DENR), Baguio City, two Townsite Sales
Applications (TSA), TSA No. V-2132 and TSA No. V-6667.7 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 ofTELESFORO JULAO
be, as [it is] hereby transferred to the heirs of TELESFORO JULAO, represented by
ANITA VDA. DE ENRIQUEZ, and as thus transferred, the same shall continue to be given
due course. For convenience of easy reference, it is directed that the [pertinent]
records be consolidated in the name of the latter.
SO ORDERED.14
Consequently, on December 21, 1998, Original Certificate of Title (OCT) No. P-2446,15
covering a 641-square meter property, was issued in favor of the heirs of Telesforo.16
On March 2, 1999, petitioners Anita Julao vda. De Enriquez, Sonia J. Tolentino and
Roderick Julao,17 representing themselves to be the heirs of Telesforo, filed before
the Regional Trial Court (RTC), Baguio City, a Complaint or Recovery of Possession of
Real Property,18 docketed as Civil Case No. 4308-R,19 against respondent spouses.
Petitioners alleged that they are the true and lawful owners of a 641-square meter
parcel of land located at Naguilian Road, Baguio City, covered by OCT No. P-2446;20
that the subject property originated from TSA No. V-2132;21 that respondent spouses'
house encroached on 70 square meters of the subject property;22 that on August 4,
1998, petitioners sent a demand letter to respondent spouses asking them to return
the subject property;23 that respondent spouses refused to accede to the demand,
insisting that they acquired the subject property from petitioners' brother, Solito, by
virtue of a Deed of Transfer of Rights;24 that in the Deed of Transfer of Rights, Solito
expressly transferred in favor of respondent spouses his hereditary share in the parcel
of land covered by TSA No. V-6667;25 that TSA No. V-6667 was rejected by the
DENR;26 and that respondent spouses have no valid claim over the subject property
because it is covered by a separate application, TSA No. V-2132.27
Respondent spouses filed a Motion to Dismiss28 on the ground of prescription, which
the RTC denied for lack of merit.29 Thus, they filed an Answer30 contending that they
are the true and lawful owners and possessors of the subject property;31 that they
acquired the said property from petitioners' brother, Solito;32 and that contrary to
the claim of petitioners, TSA No. V-6667 and TSA No. V-2132 pertain to the same
property.33
During the trial, petitioners disputed the validity of the Deed of Transfer of Rights
executed by Solito. They presented evidence to show that Telesforo submitted two
applications, TSA No. V-2132 and TSA No. V-6667.34 The first one, TSA No. V-2132,
resulted in the issuance of OCT No. P-2446 in favor of the heirs ofTelesforo, while the
second one, TSA No. V-6667, was dropped from the records.35 They also presented
evidence to prove that Solito had no hereditary share in the estate of Telesforo
because Solito was not Telesforo's biological son, but his stepson, and that Solito 's
real name was Francisco Bognot.36
After petitioners rested their case, respondent spouses filed a Motion for Leave of
Court to File a Demurrer to Evidence.37 The RTC, however, denied the Motion.38
The heirs of Solito then moved to intervene and filed an Answer-lnlntervention,39
arguing that their father, Solito, is a legitimate son ofTelesforo and that Solito sold his
hereditary share in the estate of his father to respondent spouses by virtue of a Deed
of Transfer of Rights.40
To refute the evidence presented by petitioners, respondent spouses presented two
letters from the DENR: ( 1) a letter dated April 27, 1999 issued by Amando I. Francisco,
the Officer-In-Charge of CENRO-Baguio City, stating that "it can be concluded that TSA
No. V-2132 and TSA No. V-6667 referred to one and the same application covering
one and the same lot;"41 and (2) a letter42 dated September 30, 1998 from the DENR
stating that "the land applied for with assigned number TSA No. V-2132 was
renumbered as TSA No. V-6667 as per 2nd Indorsement dated November 20, 1957 x
x x."43 They also presented two affidavits,44 both dated August 31, 1994, executed
by petitioners Sonia Tolentino and Roderick Julao,45 acknowledging that Solito was
their co-heir and that he was the eldest son of Telesforo.46 Ruling of the Regional Trial
Court
On August 10, 2001, the RTC rendered a Decision47 in favor of petitioners.1âwphi1
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 upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
THE [CA] COMMITTED REVERSIBLE ERROR IN RULING THAT PETITIONERS FAILED TO
PROVE THE IDENTITY OF THE PROPERTY IN QUESTION.
II
THE [CA] COMMITTED REVERSIBLE ERROR IN RULING THAT THE TRIAL COURT DID NOT
ACQUIRE JURISDICTION OVER THE COMPLAINT.57
At this juncture, it must be mentioned that in the Resolution58 dated March 19, 2007,
we required respondent spouses to file their Comment to the Petition which they
failed to comply with. Thus, in the Resolution59 dated March 11, 2013, we dispensed
with the filing of respondent spouses' Comment. At the same time, we required
petitioners to manifest whether they are willing to submit the case for resolution
based on the pleadings filed. To date, petitioners have not done so.
Our Ruling
The Petition lacks merit.
The assessed value must be alleged in the complaint to determine which court has
jurisdiction over the action.
Jurisdiction as we have said is conferred by law and is detennined by the allegations in
the complaint, which contains the concise statement of the ultimate facts of a
plaintiffs cause of action.60
Section 19(2) and Section 33(3) of Batas Pambansa Big. 129, as amended by Republic
Act No. 7691, provide:
SEC. 19. Jurisdiction in Civil Cases. - Regional Trial Courts shall exercise exclusive
original jurisdiction:
xxxx
(2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, where the assessed value of the property involved exceeds twenty
thousand pesos (₱20,000.00) or for civil actions in Metro Manila, where such value
exceeds Fifty thousand pesos (₱50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred
Courts:
xxxx
SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts in Civil Cases. – Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts shall exercise:
x x x x (3) Exclusive original jurisdiction in all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value of the
property or interest therein does not exceed Twenty Thousand Pesos (₱20,000.00) or,
in civil actions in Metro Manila, where such assessed value does not exceed Fifty
Thousand Pesos (₱50,000.00) 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
respondent spouses actually encroached upon the 70-square meter portion of
petitioners' property.68 Failing to prove their allegation, petitioners are not entitled
to the relief prayed for in their Complaint.
All told, we find no error on the part of the CA in dismissing the Complaint for lack of
jurisdiction and for failing to identify the property sought to be recovered.
WHEREFORE, the Petition is hereby DENIED. The Decision dated December 4, 2006 of
the Court of Appeals in CA-G.R. CV No. 72845 is hereby AFFIRMED.
SO ORDERED.

In this case, for the RTC to exercise jurisdiction, the assessed value of the subject
property must exceed ₱20,000.00. Since petitioners failed to allege in their Complaint
the assessed value of the subject property, the CA correctly dismissed the Complaint
as petitioners failed to establish that the RTC had jurisdiction over it. In fact, since the
assessed value of the property was not alleged, it cannot be determined which trial
court had original and exclusive jurisdiction over the case.
G.R. No. 175792 November 21, 2012

Furthermore, contrary to the claim of petitioners, the issue of lack of jurisdiction was
RUBEN C. MAGTOTO and ARTEMIA MAGTOTO, Petitioners,
raised by respondents in their Appellant's Brief62 And the fact that it was raised for
vs.
the first time on appeal is of no moment. Under Section 1,63 Rule 9 of the Revised
COURT OF APPEALS, and LEONILA DELA CRUZ, Respondents.
Rules of Court, defenses not pleaded either in a motion to dismiss or in the answer
are deemed waived, except for lack of jurisdiction, litis pendentia, res judicata, and
DECISION
prescription, which must be apparent from the pleadings or the evidence on record.
In other words, the defense of lack of jurisdiction over the subject matter may be
raised at any stage of the proceedings, even for the first time on appeal.64 In fact, the DEL CASTILLO, J.:
court may motu proprio dismiss a complaint at any time when it appears from the
pleadings or the evidence on record that lack of jurisdiction exists.65 Petitioners’ failure to timely file their Answer was unreasonable and unjustified. The
trial court properly declared them in default. We thus sustain the appellate court’s
In an action to recover, the property must be identified ruling dismissing petitioners’ appeal for lack of merit.

Moreover, Article 434 of the Civil Code states that "[i]n an action to recover, the
property must be identified, and the plaintiff must rely on the strength of his title and
not on the weakness of the defendant's claim." The plaintiff, therefore, is duty-bound
to clearly identify the land sought to be recovered, in accordance with the title on
which he anchors his right of ownership.66 It bears stressing that the failure of the
plaintiff to establish the identity of the property claimed is fatal to his case.67
In this case, petitioners failed to identify the property they seek to recover as they
failed to describe the location, the area, as well as the boundaries thereof. In fact, as
aptly pointed out by the CA, no survey plan was presented by petitioners to prove that
This Petition for Certiorari1 assails the May 31, 2006 Decision2 of the Court of Appeals
(CA) in CA-G.R. CV No. 85286 dismissing for lack of merit the appeal of petitioner
spouses Ruben C. Magtoto and Artemia Magtoto (spouses Magtoto) from the
November 22, 2004 Decision3 of the Regional Trial Court (RTC), Branch 58, Angeles
City, Pampanga in Civil Case No. 10940. Said RTC Decision ordered the spouses
Magtoto to pay respondent Leonila Dela Cruz (Leonila) the amount of P9,497,750.00
representing the former’s unpaid balance for their purchase of three parcels of land
from the latter, and attorney’s fees.
Likewise assailed is the CA’s October 25, 2006 Resolution4 denying spouses Magtoto’s
Motion for Reconsideration.
Factual Antecedents
On May 15, 2003, Leonila filed before the RTC a Complaint5 for Specific Performance
with Damages and prayer for a writ of preliminary injunction against the spouses
Magtoto.
In said Complaint, Leonila alleged that on January 11, 1999, she sold her three parcels
of land situated in Mabalacat, Pampanga to petitioner Ruben C. Magtoto (Ruben) for
P11,952,750.00.6 As payment therefor, Ruben issued several postdated checks.7
After the parties executed the corresponding Deed of Absolute Sale,8 Leonila
delivered the Transfer Certificates of Title (TCTs) of the properties to spouses
Magtoto. From then on, the spouses Magtoto exercised acts of dominion over the said
properties, enjoyed the use thereof, and transferred their titles in the name of Ruben.
Meanwhile, most of the checks that Ruben issued were dishonored. Out of the total
purchase price of P11,952,750.00, the spouses Magtoto were only able to pay the
amount of P2,455,000.00. Despite Leonila’s repeated demands, the balance of
P9,497,750.00 remained unpaid. Hence, the Complaint.
On June 6, 2003, spouses Magtoto were served with summons requiring them to file
an Answer within 15 days from notice.9 The said spouses, however, thrice moved for
extensions of time within which to file the same.10 In an Order11 dated July 25, 2003,
the RTC granted the spouses Magtoto a final extension until August 2, 2003 within
which to file their Answer. On August 4, 2003 or two days after the last day for filing
the Answer, the spouses Magtoto instead filed a Motion to Dismiss.12 In an Order13
dated September 11, 2003, the RTC denied the Motion to Dismiss for lack of merit.
On September 25, 2003, Atty. Noel T. Canlas (Atty. Canlas) filed an Ex-Parte Motion to
Withdraw Appearance as counsel for petitioners.14 The motion was set for hearing
on October 9, 200315 but Atty. Canlas failed to appear.
On January 23, 2004, Leonila filed a Motion to Declare Defendants in Default and to
Render Judgment Based on the Complaint.16 Citing Section 4, Rule 16 of the Rules of
Court, Leonila argued that after the denial of their Motion to Dismiss, spouses
Magtoto should have filed their Answer within the reglementary period. However,
despite the lapse of more than three months from receipt of notice of denial of their
Motion to Dismiss, the spouses Magtoto still failed to file their Answer. Leonila also
cautioned the spouses Magtoto that their counsel’s withdrawal of appearance does
not justify their failure to file an Answer.17
The motion to declare petitioners in default was heard by the RTC on March 18, 2004.
During said hearing, Ruben was present. The court a quo noted that despite the
spouses Magtoto’s counsel’s withdrawal of appearance as early as September 25,
2003, they have not yet engaged the services of another counsel.18 The RTC thus
deemed the motion submitted for resolution.19 Eventually, the RTC declared the
spouses Magtoto in default on March 23, 2004.20 Leonila’s presentation of evidence
ex parte21 and formal offer of evidence followed.22
On June 25, 2004 or almost three months after they were declared in default, the
spouses Magtoto, through their new counsel, filed an Omnibus Motion to Lift Order
of Default and to Admit Attached Answer,23 and their Answer.24 The RTC, however,
denied the said motion,25 viz:
xxxx
From the sequence of events, there is no showing of fraud, accident, mistake or
inexcusable negligence to warrant the grant of the very much belated Omnibus
Motion to Lift Order of Default and admission of the Attached Answer filed by
defendants.
Defendants’ period to file a responsive pleading had long expired on August 2, 2003
and it took them more than ten (10) months before filing their responsive pleading
which has long been overtaken by plaintiff’s Motion to Declare them in Default as early
as March 23, 2004. The Court believes that the Omnibus Motion to Lift Order of
Default is fatally flawed not only that it was filed more than two (2) months from their
receipt of the Order declaring them in default (April 1, 2004) but for the reason that
the Omnibus Motion was not accompanied by an Affidavit of Merit stating therein that
their failure to answer was due to fraud, accident, mistake or excusable negligence
and that they have a good and meritorious defense as required in Rule 9, Section 3 (b)
of the 1997 Rules of Civil Procedure. x x x
WHEREFORE, for lack of merit, the Omnibus Motion to Lift Order of Default and to
Admit Attached Answer is DENIED.
xxxx
SO ORDERED.26
The spouses Magtoto moved for reconsideration but the same was likewise denied by
the said court.27
Ruling of the Regional Trial Court
On November 22, 2004, the RTC issued its Decision28 finding that the spouses
Magtoto failed to comply with their obligation to pay the full amount of
P11,952,750.00 for the purchase of the three parcels of land and ordering them to pay
the balance thereof. The dispositive portion of the said Decision reads:
WHEREFORE, foregoing premises considered, judgment is rendered in favor of
plaintiff Leonila and against defendants spouses Magtoto who are ordered:
1. to pay plaintiff the amount of P9,497,750.00 representing the unpaid
balance of the purchase price of the three (3) parcels of land with interest at
the rate of 6% per annum commencing from the time judicial demand was
made until full payment thereof;
2. to pay the amount equivalent to 10% of the total amount due as
reasonable attorney’s fees;
3. to pay the costs of this suit.
SO ORDERED.29
The spouses Magtoto timely filed a Notice of Appeal30 which was given due course by
the RTC.31
Ruling of the Court of Appeals
Before the CA, spouses Magtoto averred that the trial court erred when it denied their
Omnibus Motion to lift the order of default and to admit their Answer;32 that they
have sufficiently explained the reason behind their failure to timely file their
Answer;33 that they failed to secure the services of a new counsel because the RTC
did not act on the motion for withdrawal of appearance of their former counsel;34
that Leonila was partly to blame for the delay in filing their Answer since the Complaint
was initially dismissed for her lack of interest to prosecute;35 and that the RTC erred
in denying their right to present evidence based on technicality.36
As earlier mentioned, the CA dismissed the appeal for being bereft of merit in its
Decision37 of May 31, 2006. It ratiocinated, thus:
Records on hand reveal that even prior to the initial dismissal of the complaint,
spouses Magtoto were already in delay. It must be noted that instead of filing an
answer, spouses Magtoto’s counsel, on September 25, 2003, lodged a motion to
withdraw appearance because he has lost contact with his clients despite reasonable
efforts to communicate with them. Thus, the principal cause of the delay is no other
than the spouses Magtoto.
In addition to this, it bears stressing that while the withdrawal of appearance was
communicated to the trial court on 25 September 2003; it was only on 12 December
2003, or after more that three (3) months, that the court dismissed the Complaint.
To the mind of this Court, the period of three (3) months is more than sufficient for
the spouses Magtoto to be able to hire a lawyer. x x x The Court cannot help but
conclude that spouses Magtoto were not earnest in finding a counsel. It smacks of bad
faith and clearly abuses the liberality of the trial court. Simply put, spouses Magtoto
are guilty of gross negligence.
Not only that. It must be further noted that despite of [sic] the reinstatement of the
Complaint on 19 February 2004, it was only on 25 June 2004, or after the lapse of
another four (4) months, that spouses Magtotoproffered their answer. x x x
As to the argument of spouses Magtoto that cases must be decided in [sic] the merits
rather than on technicality, suffice it to state that:
xxxx
In the case at bar, spouses Magtoto simply failed to provide persuasive reasons to
warrant the relaxation of the rule. x x x 38
Their Motion for Reconsideration39 having been denied by the CA in its Resolution40
dated October 25, 2006, the spouses Magtoto are now before this Court by way of
this Petition for Certiorari.
Issues
The spouses Magtoto ascribe upon the CA the following errors:
I.
WHETHER X X X THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS
DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF ITS JURISDICTION
WHEN IT ERRONEOUSLY HEAPED ALL THE BLAME UPON THE PETITIONERS
FOR THE SUPPOSED DELAY IN THE FILING OF THEIR ANSWER BEFORE THE
COURT A QUO WHEN THE HONORABLE TRIAL COURT AND THE PRIVATE
RESPONDENT HAVE THEIR MORE THAN SUFFICIENT SHARE OF THE FAULT
THEMSELVES.
 II. appearance since he could no longer effectively defend spouses Magtoto because he
had lost communication with them.
WHETHER X X X THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS
DISCRETION AMOUNTING TO LACK AND/ OR EXCESS OF ITS JURISDICTION After the denial of their Motion to Dismiss on September 11, 2003, petitioners should
WHEN IT ERRONEOUSLY ACCUSED THE PETITIONERS OF DELAYING THE have filed their Answer within the balance of the period prescribed in Rule 11.44
PROCEEDINGS FOR AVAILING OF THEIR RIGHT TO FILE A MOTION TO Instead, they filed their Answer on June 25, 2004 or nine months after the denial of
DISMISS, A RIGHT CLEARLY PROVIDED UNDER THE RULES OF COURT.41 their Motion to Dismiss or three months after they were declared in default. This delay
is unreasonable as well as unjustified.
Our Ruling
In an attempt to pass the blame on the RTC for their failure to timely file an Answer,
The petition lacks merit. the spouses Magtoto aver that it took them a while to secure the services of a new
Petitioners availed of the wrong counsel because they were waiting for the RTC to rule on Atty. Canlas’s motion for
remedy. withdrawal of appearance and for its advice for them to retain a new counsel.

At the outset, it must be pointed out that petitioners’ resort to a Petition for Certiorari
under Rule 65 of the Rules of Court is inappropriate. Petitioners’ remedy from the
adverse Decision of the CA lies in Rule 45 which is a Petition for Review on Certiorari.
As such, this petition should have been dismissed outright for being a wrong mode of
appeal. Even if the petition is to be treated as filed under Rule 45, the same must still
be denied for late filing and there being no reversible error on the part of the CA.
Records show that petitioners received a copy of the CA Resolution denying their
Motion for Reconsideration on October 30, 2006.42 They therefore had 15 days or
until November 14, 2006 within which to file their Petition for Review on Certiorari
before this Court. However, they filed their Petition for Certiorari on December 29,
2006,43 after the period to file a Petition for Review on Certiorari under Rule 45 had
expired. Hence, this Petition for Certiorari under Rule 65 was resorted to as a
substitute for a lost appeal which is not allowed.
The spouses Magtoto’s failure to file a should have manifested before the RTC that Atty. Canlas’s motion for withdrawal
timely Answer was due to their own
fault; the RTC correctly declared them
in default.
We agree with the CA that the RTC correctly declared the spouses Magtoto in default.
The records show that after receipt of the summons, the spouses Magtoto thrice
requested for extensions of time to file their Answer. The RTC granted these requests.
For their final request for extension, the RTC gave the spouses Magtoto until August
2, 2003 within which to file their Answer. But still, no Answer was filed. Instead, on
August 4, 2003, or two days after the deadline for filing their Answer, the spouses
Magtoto filed a Motion to Dismiss the Complaint. Despite its belated filing, the RTC
acted on the motion and resolved the same, albeit not in favor of the said spouses.
Thereafter, Atty. Canlas, petitioners’ former counsel, filed a motion to withdraw his
We are not persuaded. On the contrary, we find the allegations of spouses Magtoto
as part of their desperate efforts to attribute negligence to everybody else but
themselves. It is worth reiterating that the RTC gave spouses Magtoto until August 2,
2003 within which to file their Answer. They did not file their Answer despite the
deadline. Notably, it was only on September 25, 2003 that Atty. Canlas moved to
withdraw his appearance. Clearly, even before Atty. Canlas moved for the withdrawal
of his appearance, the period within which spouses Magtoto should have filed their
Answer had already expired. This means that as early as that time, they had already
compromised their case. Hence, they cannot shift the blame to the RTC for not
resolving Atty. Canlas’s motion to withdraw. Besides, said withdrawal was not
automatic as it was set for hearing on October 9, 2003.45 Atty. Canlas however was
absent during said hearing.
Moreover, if the spouses Magtoto were indeed keen in protecting their cause, they
remains pending for resolution. Interestingly, only Ruben continued to attend the
hearings on Leonila’s motions but did not engage the services of a new lawyer. In fact,
during the hearing on March 18, 2004, the RTC noted the failure of the spouses
Magtoto to secure the services of a new counsel. Yet, the said spouses still chose not
to do anything. It was only long after the issuance of the order of default and the
completion of Leonila’s presentation of evidence ex parte and formal offer of evidence
that the spouses Magtoto, through their new counsel, filed an Omnibus Motion to Lift
Order of Default and to Admit attached Answer and their Answer.
Neither could the spouses Magtoto blame Atty. Canlas for not drafting the Answer.
Atty. Canlas needed to confer with them in order to formulate their counter-
arguments and to rebut the charges brought forward by Leonila in her Complaint.
However, the spouses Magtoto failed to make themselves available to Atty. Canlas
who could not reach them despite earnest efforts exerted. They did not even bother
to offer any explanation as to why they stopped communicating with Atty. Canlas.
Similarly, petitioners should not blame Leonila for their failure to timely file their
Answer. Indeed, on December 12, 2003, the RTC initially dismissed the case due to
Leonila’s lack of interest to prosecute.46 However, by this time, petitioners were
already in delay in filing their Answer. Recall that their Motion to Dismiss was denied
as early as September 11, 2003. Atty. Canlas received the notice of denial on
September 17, 2003.47 Hence, by December 12, 2003, the prescriptive period for
filing the Answer had definitely expired.
It has not also escaped our notice that as early as January 23, 2003 when Leonila
moved to declare petitioners in default, she already intimated that petitioners’
reglementary period to file an Answer had already lapsed. At the same time, she
reminded petitioners not to use their counsel’s withdrawal as justification for not filing
their Answer. Still, petitioners did nothing to remedy their situation. When Leonila’s
motion to declare petitioners in default was heard on March 18, 2004, the RTC
reminded Ruben in open court that after their counsel’s withdrawal of appearance on
September 25, 2003, they have not yet engaged the services of a new lawyer. Again,
petitioners did nothing. It was only on June 25, 2004, or after a lapse of considerable
time that they engaged the services of a new counsel and filed their Answer.
x x x x (Emphasis supplied.)
"Negligence, to be ‘excusable,’ must be one which ordinary diligence and prudence
could not have granted against."48 Certainly, this is not the kind of negligence
committed by the spouses Magtoto in this case. More significantly, a review of the
records does not convince the Court that the spouses Magtoto have a meritorious
defense. At most, the allegations in their Answer49 and the attached Affidavit of
Merit,50 to wit that the agreed purchase price is only P10,000,000.00; that they
provided financial support to Leonila for the settlement of estate of the latter’s
predecessors-in-interest and for the transfer of titles in her name; and that they
already paid the total amount of P4,500,000.00, are mere allegations not supported
by evidence, at the outset, are supposed to present.
All told, we find no reversible error much less grave abuse of discretion on the part of
the CA in rendering its assailed Decision and Resolution.
WHEREFORE, the petition is DISMISSED. The May 31, 2006 Decision and the October
25, 2006 Resolution of the Court of Appeals in CA-G.R. CV No. 85286, are AFFIRMED.
SO ORDERED.

In fine, the belated filing of the Answer is solely attributable to the spouses
Magtoto.1âwphi1 They miserably failed to be vigilant in protecting and defending
their cause.1âwphi1 The RTC thus properly declared them in default.

The spouses Magtoto failed to show

that their failure to file a timely Answer
was due to fraud, accident, mistake or
excusable negligence and that they
have a meritorious defense.

Furthermore, the spouses Magtoto are unable to show that their failure to timely file
an Answer was due to fraud, accident, mistake or excusable negligence and, more
importantly, that they have a meritorious defense pursuant to Section 3(b), Rule 9 of
the Rules of Court, viz:

(b) Relief from order of default. – A party declared in default may at any time after
notice thereof and before judgment file a motion under oath to set aside the order of
default upon proper showing that his failure to answer was due to fraud, accident,
mistake or excusable negligence and that he has a meritorious defense. In such case,
the order of default may be set aside on such terms and conditions as the judge may
impose in the interest of justice.
 Pedro Miranda, namely: Pacita and Oscar Miranda; the heir of Tranquilino Miranda,
Rogelio Miranda; and the spouses respondent Pablo Miranda and Aida Lorenzo.

After trial, the RTC, Branch 256, rendered a Decision 6 dated August 30, 1999, the
dispositive portion of which reads:

WHEREFORE, premises considered, this court resolves:

1. To uphold and sustain the validity of TCT Nos. 186011, 186012, and 186013;

2. Ordering Pablo Miranda to indemnify all other heirs of NUMERIANO MIRANDA the
amount equivalent to 12/13 fair market value of the co-owned residential house,
erected on the lot 826-A-3 covered by TCT No. 186013 corresponding to their shares,
and for the said heirs to divide among themselves the aforesaid amount as follows:

1/13 to CIRILA MIRANDA

G.R. No. 179638 July 8, 2013
1/13 to CORNELIO MIRANDA
HEIRS OF NUMERIANO MIRANDA, SR., namely: CIRILA (deceased), CORNELIO,
NUMERIANO, JR., ERLINDA, LOLITA, RUFINA, DANILO, ALEJANDRO, FELIMON, TERESITA, 1/13 to NUMERIANO MIRANDA, JR.
ELIZABETH and ANALIZA, all surnamed MIRANDA, Petitioners,
vs. 1/13 to ERLINDA MIRANDA
PABLO R. MIRANDA, Respondent.
1/13 to LOLITA MIRANDA
DECISION
1/13 to RUFINA MIRANDA
DEL CASTILLO, J.:
1/13 to DANILO MIRANDA
An action for revival of a judgment cannot modify, alter, or reverse the original
judgment, which is already final and executory.1 1/13 to ALEJANDRO MIRANDA

This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the 1/13 to FELIMON MIRANDA
Decision3 dated June 14, 2007 and the Resolution4 dated September 11, 2007 of the
Court of Appeals (CA) in CA-G.R. SP No. 97350. 1/13 to TERESITA MIRANDA

Factual Antecedents 1/13 to ELIZABETH MIRANDA

In 1994, petitioners Cirila, Cornelio, Numeriano, Jr., Erlinda, Lolita, Rufina, Danilo,
Alejandro, Felimon, Teresita, Elizabeth, and Analiza, all surnamed Miranda,
representing themselves as the heirs of Numeriano Miranda, Sr., filed before the
Regional Trial Court (RTC) of Muntinlupa City, a Complaint5 for Annulment of Titles
and Specific Performance, docketed as Civil Case No. 94-612, against the heirs of
1/13 to ANALIZA MIRANDA
3. Ordering Plaintiffs Lolita Miranda, Alejandro Miranda, Teresita Miranda, Rufina
Miranda and all persons claiming rights under them to immediately vacate the
abovementioned residential house and to jointly and severally pay to the spouses
Pablo and Aida Miranda a monthly rental of ₱2,000.00 from the date of notice of the
promulgation of this judgment up to the time that they have actually vacated the
property;
4. Proclaiming that ROGELIO MIRANDA is not the biological son or child by nature of
TRANQUILINO MIRANDA, and therefore is not entitled to inherit from the latter;
5. Declaring CORNELIO MIRANDA, NUMERIANO MIRANDA, JR., ERLINDA MIRANDA,
LOLITA MIRANDA, RUFINA MIRANDA, DANIL[O] MIRANDA, ALEJANDRO MIRANDA,
FELIMON MIRANDA, TERESITA MIRANDA, ELIZABETH MIRANDA, ANALIZA MIRANDA,
PABLO MIRANDA and PACITA MIRANDA as the lawful legal heirs of the deceased
TRANQUILINO MIRANDA and ordering them to partition among themselves Lot 826-
A-1 covered by TCT No. 186011 registered in the name of TRANQUILINO MIRANDA,
containing an area of 213 square meters, as follows:
6. Ordering all the abovenamed heirs to commission the survey of Lot 826-A-1 or to
authorize in writing, one of them to commission such survey, in order to avoid a
chaotic situation similar to the case at bar. Should they not agree as to what particular
portion shall belong to one another, they may agree that it be allotted to one or two
or several of them, who shall indemnify the others at a price agreed upon by all of
them. Should they not agree as to whom shall the property be allotted, to sell the
property to a third person at a price agreed upon by a majority of all of them, and to
partition the proceeds of the sale in accordance with No. 5 above.
SO ORDERED.7
Petitioners did not file any appeal hence the Decision became final and executory. 8
On December 11, 2001, the RTC issued a Writ of Execution,9 which was not
implemented.10

1/13 aliquot share to Cornelio Miranda On July 8, 2005, respondent filed an Ex-parte Motion11 praying that the RTC issue a
"Break-Open and Demolition Order" in order to compel the petitioners to vacate his
1/13 aliquot share to Numeriano Miranda, Jr. property.12 But since more than five years have elapsed from the time the Writ of
Execution should have been enforced, the RTC denied the Motion in its Order13 dated
1/13 aliquot share to Erlinda Miranda August 16, 2005.

1/13 aliquot share to Lolita Miranda This prompted respondent to file with the RTC a Petition14 for Revival of Judgment,
which was docketed as Civil Case No. 05-131. Petitioners opposed the revival of
1/13 aliquot share to Rufina Miranda judgment assailing, among others, the jurisdiction of the RTC to take cognizance of the
Petition for Revival of Judgment.15
1/13 aliquot share to Danilo Miranda
On June 20, 2006, the RTC rendered a Decision16 granting the Petition. Thus:
1/13 aliquot share to Alejandro Miranda
WHEREFORE, finding the instant petition to be meritorious, the petition is hereby
GRANTED. Pursuant to Rule 39, Section 6 of the Rules of Court, the Decision dated
1/13 aliquot share to Felimon Miranda
August 30, 1999 in Civil Case No. 94-612 is hereby REVIVED.
1/13 aliquot share to Teresita Miranda
SO ORDERED.17
1/13 aliquot share to Elizabeth Miranda
On July 13, 2006, petitioners filed a Notice of Appeal18 via LBC,19 which was opposed
by respondent on the ground that the Decision dated August 30, 1999 has long
1/13 aliquot share to Analiza Miranda
become final and executory.20 Petitioners, in turn, moved for the transmittal of the
original records of the case to the CA, insisting that respondent’s opposition is without
1/13 aliquot share to Pablo Miranda merit.21

1/13 aliquot share to Pacita Miranda Ruling of the Regional Trial Court
Finding the appeal barred by prescription, the RTC denied the Notice of Appeal in its
Order22 dated October 10, 2006, to wit:
WHEREFORE, in view of the foregoing, the notice of appeal herein filed is hereby
DENIED for lack of merit.
SO ORDERED.23
Feeling aggrieved, petitioners filed a Petition for Mandamus24 with the CA praying that
their Notice of Appeal be given due course.25
Ruling of the Court of Appeals
On June 14, 2007, the CA denied the Petition for Mandamus on the ground that the
Notice of Appeal was filed out of time.26 The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the petition is DENIED. The appeal is hereby
DISMISSED for having been filed out of time.
SO ORDERED.27
Petitioners moved for reconsideration but the same was denied by the CA in its
Resolution28 dated September 11, 2007.
Issues
Hence, this recourse, with petitioners raising the following issues:
1. WHETHER X X X THE APPEAL WAS PERFECTED ON TIME?
2. WHETHER X X X THE LATE (ONE DAY) FILING WAS JUSTIFIED?
3. WHETHER X X X AN ACTION FOR REVIVAL OF JUDGMENT IS APPEALABLE?
4. WHETHER THE APPEAL IS MERITORIOUS?
a. Whether the RTC below has exclusive original jurisdiction over an
action for revival of judgment?
b. Whether xxx respondent herein, plaintiff therein, as one of the
judgment creditors can file the said action for revival ALONE?
c. Whether subsequent events or laws have rendered the judgment
sought to be revived modified or altered, or prevent its
enforcement?
d. Whether res judicata or laches has seeped in, other judgment
creditors not suing for any such implementation of the 1999
judgment, ONLY PLAINTIFF ALONE?
e. Whether x x x the Petitioners are entitled to damages?29
Petitioners’ Arguments
Petitioners assert that an action to revive judgment is appealable,30 and that their
appeal was perfected on time.31 They insist that the Notice of Appeal, which they filed
on the 15th day via LBC, was seasonably filed since the law does not require a specific
mode of service for filing a notice of appeal.32
Besides, even if their appeal was belatedly filed, it should still be given due course in
the interest of justice,33 considering that their counsel had to brave the storm and the
floods caused by typhoon "Florita" just to file their Notice of Appeal on time. 34
Petitioners further contend that their appeal is meritorious.35 They insist that it is the
Metropolitan Trial Court (MeTC), not the RTC, which has jurisdiction over the Petition
for Revival of Judgment since the amount in the tax declarations of the properties
involved is less than Fifty Thousand Pesos (₱50,000.00).36 They likewise assail the
Decision dated August 30, 1999, claiming that the deeds and certificates of title
subject of Civil Case No. 94-612 were falsified.37
Respondent’s Arguments
Respondent, on the other hand, maintains that the Notice of Appeal was belatedly
filed,38 and that the revival of judgment is unappealable as it is barred by
prescription.39
Our Ruling
The Petition lacks merit.
The Notice of Appeal was belatedly filed.
It is basic and elementary that a Notice of Appeal should be filed "within fifteen (15)
days from notice of the judgment or final order appealed from."40
Under Section 3,41 Rule 13 of the Rules of Court, pleadings may be filed in court either designated by the statutes which treat of the venue of actions in general."47 In this
personally or by registered mail. In the first case, the date of filing is the date of receipt. case, respondent filed the Petition for Revival of Judgment in the same court which
In the second case, the date of mailing is the date of receipt. rendered the Decision dated August 30, 1999.

In this case, however, the counsel for petitioners filed the Notice of Appeal via a
private courier, a mode of filing not provided in the Rules. Though not prohibited by
the Rules, we cannot consider the filing of petitioners’ Notice of Appeal via LBC timely
filed. It is established jurisprudence that "the date of delivery of pleadings to a private
letter-forwarding agency is not to be considered as the date of filing thereof in court;"
instead, "the date of actual receipt by the court x x x is deemed the date of filing of
that pleading."42 Records show that the Notice of Appeal was mailed on the 15th day
and was received by the court on the 16th day or one day beyond the reglementary
period. Thus, the CA correctly ruled that the Notice of Appeal was filed out of time.
All told, we find no error on the part of the CA in denying the Petition and dismissing
the appeal for having been filed out of time.
WHEREFORE, the Petition is hereby DENIED. The Decision dated June 14, 2007 and
the Resolution dated September 11, 2007 of the Court of Appeals in CA-G.R. SP No.
97350 are hereby AFFIRMED.
SO ORDERED.

Neither can petitioners use typhoon "Florita" as an excuse for the belated filing of the
Notice of Appeal because work in government offices in Metro Manila was not
suspended on July 13, 2006, the day petitioners’ Notice of Appeal was mailed via
G.R. No. 167545 August 17, 2011
LBC.43
ATIKO TRANS, INC. and CHENG LIE NAVIGATION CO., LTD., Petitioners,
And even if we, in the interest of justice, give due course to the appeal despite its late
vs.
filing, the result would still be the same. The appeal would still be denied for lack of
PRUDENTIAL GUARANTEE AND ASSURANCE, INC., Respondent.
merit.
DECISION
The Decision dated August 30, 1999 is already final and executory.
DEL CASTILLO, J.:
An action for revival of judgment is a new and independent action.44 It is different and
distinct from the original judgment sought to be revived or enforced.45 As such, a party
Where service of summons upon the defendant principal is coursed thru its co-
aggrieved by a decision of a court in an action for revival of judgment may appeal the
defendant agent, and the latter happens to be a domestic corporation, the rules on
decision, but only insofar as the merits of the action for revival is concerned. The
service of summons upon a domestic private juridical entity1 must be strictly complied
original judgment, which is already final and executory, may no longer be reversed,
altered, or modified.46 with. Otherwise, the court cannot be said to have acquired jurisdiction over the person
of both defendants. And insofar as the principal is concerned, such jurisdictional flaw
cannot be cured by the agent’s subsequent voluntary appearance.
In this case, petitioners assail the Decision dated August 30, 1999, which is the original
judgment sought to be revived or enforced by respondent.1âwphi1 Considering that
This Petition for Review on Certiorari assails the December 10, 2004 Decision 2 of the
the said Decision had already attained finality, petitioners may no longer question its
Court of Appeals (CA) in CA-G.R. SP No. 82547 which affirmed the April 8, 2003
correctness. As we have said, only the merits of the action for revival may be appealed,
Decision3 of the Regional Trial Court (RTC), Branch 150, Makati City. Said Decision of
not the merits of the original judgment sought to be revived or enforced.
the RTC affirmed the August 6, 2002 Decision4 of the Metropolitan Trial Court (MeTC),
Branch 63, Makati City, which disposed as follows:
RTC has jurisdiction over the Petition for Revival of Judgment
WHEREFORE, judgment is rendered declaring defendants Cheng Lie Navigation Co.,
As to whether the RTC has jurisdiction, we rule in the affirmative. An action for revival
Ltd. and Atiko Trans, Inc. solidarily liable to pay plaintiff Prudential Guarantee &
of judgment may be filed either "in the same court where said judgment was rendered
Assurance, Inc. the following amounts:
or in the place where the plaintiff or defendant resides, or in any other place
 1. ₱205,220.97 as actual damages with interest of 1% per month from 14 2. Defendant Cheng Lie Navigation Co. Ltd., is [a] foreign shipping company
December 1999 until full payment; doing business in the Philippines [thru] its duly authorized shipagent
defendant Atiko Trans Inc. which is a domestic corporation duly established
2. ₱10,000.00 as Attorney’s fees; and and created under the laws of the Philippines with office address at 7th Floor,
Victoria Bldg., United Nation[s] Ave., Ermita, Manila, where both defendants
3. Costs of suit. may be served with summons and other court processes;

SO ORDERED.5 3. At all times material to the cause of action of this complaint, plaintiff was
and still is engaged in, among others, marine insurance business; Whereas
Defendant Cheng Lie Navigation Co. Ltd. was and still is engaged in, among
Likewise assailed is the CA’s Resolution6 dated March 16, 2005 which denied the
others, shipping, transportation and freight/cargo forwarding business, and
Motion for Reconsideration of the said December 10, 2004 Decision.
as such, owned, operated and/or chartered the ocean going vessel M/S
"Katjana" as common carrier to and from any Philippine [port] in
Factual Antecedents
international trade [thru] its duly authorized shipagent defendant Atiko Trans
Inc. (Both defendants are hereinafter referred to as the "CARRIER");
On December 11, 1998, 40 coils of electrolytic tinplates were loaded on board M/S
Katjana in Kaohsiung, Taiwan for shipment to Manila. The shipment was covered by xxxx
Bill of Lading No. KNMNI-151267 issued by petitioner Cheng Lie Navigation Co., Ltd.
(Cheng Lie) with Oriental Tin Can & Metal Sheet Manufacturing Co., Inc. (Oriental) as
9. Plaintiff, as cargo-insurer and upon finding that the consignee’s insurance
the notify party. The cargoes were insured against all risks per Marine Insurance Policy
claim was in order and compensable, paid the latter’s claim in the amount of
No. 20RN-18749/99 issued by respondent Prudential Guarantee and Assurance, Inc.
₱205,220.97 under and by virtue of the aforesaid insurance policy, thereby
(Prudential).
subrogating herein plaintiff to all the rights and causes of action appertaining
to the consignee against the defendants;9
On December 14, 1998, M/S Katjana arrived in the port of Manila. Upon discharge of
the cargoes, it was found that one of the tinplates was damaged, crumpled and dented
On March 20, 2000, Prudential filed a Motion to Declare Defendant in Default,10
on the edges. The sea van in which it was kept during the voyage was also damaged,
alleging among others that on March 1, 2000 a copy of the summons was served upon
presumably while still on board the vessel and during the course of the voyage.
petitioners thru cashier Cristina Figueroa and that despite receipt thereof petitioners
failed to file any responsive pleading. Acting on the motion, the MeTC issued an
Oriental then filed its claim against the policy. Satisfied that Oriental’s claim was
Order11 declaring Cheng Lie and Atiko in default and allowing Prudential to present its
compensable, Prudential paid Oriental ₱205,220.97 representing the amount of
evidence ex-parte.
losses it suffered due to the damaged cargo.
On August 6, 2002, the MeTC rendered its judgment by default. Atiko then filed a
Proceedings before the Metropolitan Trial Court
Notice of Appeal12 dated November 4, 2002.

On December 14, 1999, Prudential filed with the MeTC of Makati City a Complaint8 for
Proceedings before the Regional Trial Court and the Court of Appeals
sum of money against Cheng Lie and Atiko Trans, Inc. (Atiko). In addition to the above
undisputed facts, Prudential alleged that:
In its Memorandum of Appeal,13 Atiko argued that Prudential failed to prove the
material allegations of the complaint. Atiko asserted that Prudential failed to prove by
1. Plaintiff (Prudential) is a domestic insurance corporation duly organized
preponderance of evidence that it is a domestic corporation with legal personality to
and existing under the laws of the Philippines with office address at Coyiuto
file an action; that Cheng Lie is a private foreign juridical entity operating its shipping
House, 119 Carlos Palanca[,] Jr. St., Legaspi Village, Makati City;
business in the Philippines thru Atiko as its shipagent; that Cheng Lie is a common
carrier, which owns and operates M/S Katjana; that Prudential was subrogated to the
rights of Oriental; and, that Atiko can be held solidarily liable with Cheng Lie.
Although assisted by the same counsel, Cheng Lie filed its own Memorandum of
Appeal14 maintaining that the MeTC never acquired jurisdiction over its person.
On April 8, 2003, the RTC rendered its Decision dismissing the appeal and affirming
the Decision of the MeTC. Atiko and Cheng Lie challenged the RTC Decision before the
CA via a Petition for Review15 under Rule 42 of the Rules of Court but the appellate
court affirmed the RTC’s Decision.
Hence, this petition.
Issues
In their Memorandum,16 petitioners raised the following issues:
1. WHETHER X X X THE DECISION OF MAKATI [MeTC] WHICH WAS AFFIRMED BY
MAKATI RTC AND THE COURT OF APPEALS IS NULL AND VOID FOR FAILURE TO
ACQUIRE JURISDICTION OVER THE PERSONS OF THE PETITIONERS-DEFENDANTS
CONSIDERING THAT THE SUMMONS WERE NOT PROPERLY SERVED ON THEM AS
REQUIRED BY RULE 14 OF THE RULES OF COURT.
2. WHETHER X X X THE RESPONDENT-PLAINTIFF IS REQUIRED TO PROVE THE
MATERIAL ALLEGATIONS IN THE COMPLAINT EVEN IN DEFAULT JUDGMENT OR
WHETHER OR NOT IN DEFAULT JUDGMENT, ALL ALLEGATIONS IN THE COMPLAINT
ARE DEEMED CONTROVERTED, HENCE, MUST BE PROVED BY COMPETENT EVIDENCE.
2.1. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE ITS
LEGAL PERSONALITY TO SUE EVEN IN DEFAULT JUDGMENT.
2.2. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE THAT
PETITIONER-DEFENDANT ATIKO IS THE SHIPAGENT OF PETITIONER-
DEFENDANT CHENG LIE EVEN IN DEFAULT JUDGMENT.
2.3. WHETHER X X X THE TESTIMONIES OF THE WITNESSES AND THE
DOCUMENTARY EXHIBITS CAN BE CONSIDERED FOR PURPOSES OTHER THAN
THE PURPOSE FOR WHICH THEY WERE OFFERED.
2.4. WHETHER X X X A MOTION TO DECLARE DEFENDANT IN DEFAULT
ADDRESSED AND SENT TO ONLY ONE OF THE DEFENDANTS WOULD BIND THE
OTHER DEFENDANT TO WHOM THE MOTION WAS NOT ADDRESSED AND
NOT SENT.17
Our Ruling
The petition is partly meritorious. We shall first tackle the factual matters involved in
this case, then proceed with the jurisdictional issues raised.
Petitioners raised factual matters which are not the proper subject of this appeal.
Petitioners contend that the lower courts grievously erred in granting the complaint
because, even if they were declared in default, the respondent still has the burden of
proving the material allegations in the complaint by preponderance of evidence.
Petitioners further argue that respondent miserably failed to discharge this burden
because it failed to present sufficient proof that it is a domestic corporation. Hence,
respondent could not possibly maintain the present action because only natural or
juridical persons or entities authorized by law can be parties to a civil action.
Petitioners also claim that respondent failed to present competent proof that Cheng
Lie is a foreign shipping company doing business in the Philippines thru its duly
authorized shipagent Atiko. Lastly, petitioners assert that respondent failed to prove
that Cheng Lie is a common carrier which owned, operated and/or chartered M/S
Katjana thru its duly authorized shipagent Atiko. Petitioners emphasize that there is
no proof, testimonial or otherwise, which would support the material allegations of
the complaint. They also insist that respondent’s witnesses do not have personal
knowledge of the facts on which they were examined.
Respondent, for its part, assails the propriety of the remedy taken by the petitioners.
It posits that petitioners advanced factual matters which are not the proper subject of
a petition for review on certiorari. Besides, the lower courts consistently held that the
allegations in respondent’s complaint are supported by sufficient evidence.
We agree with respondent.
A cursory reading of the issues raised readily reveals that they involve factual matters
which are not within the province of this Court to look into. Well-settled is the rule
that in petitions for review on certiorari under Rule 45, only questions of law can be
raised. While there are recognized exceptions to this rule, 18 none is present in this
case. "[A]s a matter of x x x procedure, [this] Court defers and accords finality to the
factual findings of trial courts, [especially] when such findings were [affirmed by the
RTC and the CA. These] factual determination[s], as a matter of long and sound
appellate practice, deserve great weight and shall not be disturbed on appeal x x x. [I]t
is not the function of the Court to analyze and weigh all over again the evidence or
premises supportive of the factual holding of the lower courts."19
MeTC properly acquired jurisdiction over the person of Atiko.
Petitioners also argue that the MeTC did not acquire jurisdiction over the person of
Atiko as the summons was received by its cashier, Cristina Figueroa. They maintain
that under Section 11, Rule 14 of the Rules of Court, when the defendant is a domestic
corporation like Atiko, summons may be served only upon its president, general
manager, corporate secretary, treasurer or in-house counsel.
We are not persuaded. True, when the defendant is a domestic corporation, service
of summons may be made only upon the persons enumerated in Section 11, Rule 14
of the Rules of Court.20 However, jurisdiction over the person of the defendant can be
acquired not only by proper service of summons but also by defendant’s voluntary
appearance without expressly objecting to the court’s jurisdiction, as embodied in
Section 20, Rule 14 of the Rules of Court, viz:
SEC. 20. Voluntary appearance. – The defendant’s voluntary appearance in the action
shall be equivalent to service of summons. The inclusion in a motion to dismiss of other
grounds aside from lack of jurisdiction over the person of the defendant shall not be
deemed a voluntary appearance.
In the case at bench, when Atiko filed its Notice of Appeal, 21 Memorandum of
Appeal,22 Motion for Reconsideration23 of the April 8, 2003 Decision of the RTC, and
Petition for Review,24 it never questioned the jurisdiction of the MeTC over its person.
The filing of these pleadings seeking affirmative relief amounted to voluntary
appearance and, hence, rendered the alleged lack of jurisdiction moot. In Palma v.
Galvez,25 this Court reiterated the oft-repeated rule that "the filing of motions seeking
affirmative relief, such as, to admit answer, for additional time to file answer, for
reconsideration of a default judgment, and to lift order of default with motion for
reconsideration, are considered voluntary submission to the jurisdiction of the court."
Moreover, petitioners’ contention is a mere afterthought. It was only in their
Memorandum26 filed with this Court where they claimed, for the first time, that Atiko
was not properly served with summons. In La Naval Drug Corporation v. Court of
Appeals,27 it was held that the issue of jurisdiction over the person of the defendant
must be seasonably raised. Failing to do so, a party who invoked the jurisdiction of a
court to secure an affirmative relief cannot be allowed to disavow such jurisdiction
after unsuccessfully trying to obtain such relief.28
It may not be amiss to state too that in our February 13, 2006 Resolution, 29 we
reminded the parties that they are not allowed to interject new issues in their
memorandum.
MeTC did not acquire jurisdiction over the person of Cheng Lie.
Petitioners likewise challenge the validity of the service of summons upon Cheng Lie,
thru Atiko. They claim that when the defendant is a foreign private juridical entity
which has transacted business in the Philippines, service of summons may be made,
among others, upon its resident agent. In this case, however, there is no proof that
Atiko is the local agent of Cheng Lie.
On this score, we find for the petitioners. Before it was amended by A.M. No. 11-3-6-
SC,30 Section 12 of Rule 14 of the Rules of Court reads:
SEC. 12. Service upon foreign private juridical entity. – When the defendant is a foreign
private juridical entity which has transacted business in the Philippines, service may
be made on its resident agent designated in accordance with law for that purpose, or,
if there be no such agent, on the government official designated by law to that effect,
or on any of its officers or agents within the Philippines.
Elucidating on the above provision of the Rules of Court, this Court declared in Pioneer
International, Ltd. v. Guadiz, Jr.31 that when the defendant is a foreign juridical entity,
service of summons may be made upon:
1. Its resident agent designated in accordance with law for that purpose;
2. The government official designated by law to receive summons if the
corporation does not have a resident agent; or,
3. Any of the corporation’s officers or agents within the Philippines.
In the case at bench, no summons was served upon Cheng Lie in any manner
prescribed above. It should be recalled that Atiko was not properly served with
summons as the person who received it on behalf of Atiko, cashier Cristina Figueroa,
is not one of the corporate officers enumerated in Section 11 of Rule 14 of the Rules
of Court. The MeTC acquired jurisdiction over the person of Atiko not thru valid service
of summons but by the latter’s voluntary appearance. Thus, there being no proper
service of summons upon Atiko to speak of, it follows that the MeTC never acquired
jurisdiction over the person of Cheng Lie. To rule otherwise would create an absurd
situation where service of summons is valid upon the purported principal but not on
the latter’s co-defendant cum putative agent despite the fact that service was coursed
thru said agent. Indeed, in order for the court to acquire jurisdiction over the person
of a defendant foreign private juridical entity under Section 12, Rule 14 of the Rules
of Court, there must be prior valid service of summons upon the agent of such
defendant.1avvphi1
Also, the records of this case is bereft of any showing that cashier Cristina Figueroa is
a government official designated by law to receive summons on behalf of Cheng Lie
or that she is an officer or agent of Cheng Lie within the Philippines. Hence, her receipt
of summons bears no significance insofar as Cheng Lie is concerned. At this point, we
emphasize that the requirements of the rule on summons must be strictly followed,32
lest we ride roughshod on defendant’s right to due process.33

With regard to Cheng Lie’s filing of numerous pleadings, the same cannot be
considered as voluntary appearance. Unlike Atiko, Cheng Lie never sought affirmative
relief other than the dismissal of the complaint on the ground of lack of jurisdiction
over its person. From the very beginning, it has consistently questioned the validity of
the service of summons and the jurisdiction of the MeTC over its person.

It does not escape our attention though that Cheng Lie’s pleadings do not indicate that
the same were filed by way of special appearance. But these, to our mind, are mere
inaccuracies in the title of the pleadings. What is important are the allegations
contained therein which consistently resisted the jurisdiction of the trial court. Thus, G.R. No. 165569 July 29, 2010
Cheng Lie cannot be considered to have submitted itself to the jurisdiction of the
courts.34 UNIVERSITY OF SANTO TOMAS, GLENDA A. VARGAS, MA. SOCORRO S. GUANHING, in
their capacities as Dean and Assistant Dean, respectively, of the College of Nursing of
In fine, since the MeTC never acquired jurisdiction over the person of Cheng Lie, its the University of Santo Tomas, and RODOLFO N. CLAVIO, in his capacity as Registrar of
decision insofar as Cheng Lie is concerned is void.35 the University of Santo Tomas, Petitioners,
vs.
Cheng Lie was improperly declared in default. DANES B. SANCHEZ, Respondent.

Applying the above disquisition, the MeTC likewise erred in declaring Cheng Lie in DECISION
default. Settled is the rule that a defendant cannot be declared in default unless such
declaration is preceded by a valid service of summons.36 DEL CASTILLO, J.:

WHEREFORE, the instant petition is PARTIALLY GRANTED. The assailed December 10,
2004 Decision of the Court of Appeals in CA-G.R. SP No. 82547 is AFFIRMED with the
MODIFICATION that the judgment insofar as Cheng Lie Navigation Co., Ltd. is
concerned is declared VOID for failure to acquire jurisdiction over its person as there
was improper service of summons.
SO ORDERED.
Where a valid cause of action exists, parties may not simply bypass litigation by the
simple expediency of a Motion to Dismiss. Instead of abbreviating the proceedings, it
has had the opposite effect: unnecessary litigation for almost seven years. Here, in
particular, where any resolution of the case will depend on the appreciation of
evidence, a full-blown trial is necessary to unearth all relevant facts and
circumstances.
This petition for review on certiorari assails the Decision1 dated July 20, 2004 of the
Court of Appeals (CA) in CA-G.R. SP No. 79404 which affirmed the denial of petitioners’
motion to dismiss and directed the Regional Trial Court (RTC) of Dinalupihan, Bataan,
Branch 5, to proceed with trial. Also assailed is the Resolution2 dated September 22,
2004 denying the motion for reconsideration.

Factual Antecedents

This case began with a Complaint3 for Damages filed by respondent Danes B. Sanchez
(respondent) against the University of Santo Tomas (UST) and its Board of Directors,
the Dean and the Assistant Dean of the UST College of Nursing, and the University
Registrar for their alleged unjustified refusal to release the respondent’s Transcript of
Records (ToR). The case was raffled to Branch 5 of the RTC of Dinalupihan, Bataan, and
docketed as Civil Case No. DH-788-02.
In his Complaint, respondent alleged that he graduated from UST on April 2, 2002 with
a Bachelor’s Degree of Science in Nursing. He was included in the list of candidates for
graduation and attended graduation ceremonies. On April 18, 2002, respondent
sought to secure a copy of his ToR with the UST Registrar’s Office, paid the required
fees, but was only given a Certificate of Graduation by the Registrar. Despite repeated
attempts by the respondent to secure a copy of his ToR, and submission of his class
cards as proof of his enrolment, UST refused to release his records, making it
impossible for him to take the nursing board examinations, and depriving him of the
opportunity to make a living. The respondent prayed that the RTC order UST to release
his ToR and hold UST liable for actual, moral, and exemplary damages, attorney’s fees,
and the costs of suit.
Instead of filing an Answer, petitioners filed a Motion to Dismiss4 where they claimed
that they refused to release respondent’s ToR because he was not a registered
student, since he had not been enrolled in the university for the last three semesters.
They claimed that the respondent’s graduation, attendance in classes, and
taking/passing of examinations were immaterial because he ceased to be a student
when he failed to enroll during the second semester of school year 2000-2001. They
also sought the dismissal of the case on the ground that the complaint failed to state
a cause of action, as paragraph 10 of the complaint admitted that:
10. On several occasions, [respondent] went to see the [petitioners] to get his ToR,
but all of these were futile for he was not even entertained at the Office of the Dean.
Worst, he was treated like a criminal forcing him to admit the fact that he did not
enroll for the last three (3) semesters of his schooling. [Petitioner] Dean tried to
persuade the [respondent] to give the original copies of the Class Cards which he has
in his possession. These are the only [bits of] evidence on hand to prove that he was
in fact officially enrolled. [Respondent] did not give the said class cards and instead
gave photo copies to the [Petitioner] Dean. The Office of the Dean of Nursing of
[petitioner] UST became very strict in receiving documents from the [respondent].
[They have] to be scrutinized first before the same are received. Receiving, as
[respondent] believes, is merely a ministerial function [of] the [petitioners] and the
documents presented for receiving need not be scrutinized especially so when x x x
they are not illegal. Copies of the class cards are hereto attached as "F" hereof.5
After the parties filed their responsive pleadings,6 petitioners filed a Supplement to
their Motion to Dismiss,7 alleging that respondent sought administrative recourse
before the Commission on Higher Education (CHED) through a letter-complaint dated
January 21, 2003. Thus, petitioners claimed that the CHED had primary jurisdiction to
resolve matters pertaining to school controversies, and the filing of the instant case
was premature.
Ruling of the Regional Trial Court
After another exchange of pleadings,8 the RTC issued an Order9 dated April 1, 2003
denying the Motion to Dismiss on the ground that the issues involved required an
examination of the evidence, which should be threshed out during trial. Petitioners’
Motion for Reconsideration10 was denied in an Order11 dated August 1, 2003, so
petitioners sought recourse before the CA.
Ruling of the Court of Appeals
The CA affirmed the denial of petitioners’ Motion to Dismiss, and directed the RTC to
proceed with trial.
Issues
Petitioners seek recourse before us raising the following issues:
1) The CHED exercises quasi-judicial power over controversies involving
school matters and has primary jurisdiction over respondent’s demand for
the release of his ToR. Thus, respondent failed to exhaust administrative
remedies;
2) Since respondent sought recourse with both the CHED and the RTC,
respondent violated the rule against forum-shopping; and
3) The Complaint failed to state a cause of action, since respondent admitted
that he was not enrolled in UST in the last three semesters prior to
graduation.
Our Ruling
The petition is denied for lack of merit.
The doctrine of exhaustion of administrative remedies does not apply in this case.
The doctrine of exhaustion of administrative remedies requires that where a
remedy before an administrative agency is provided, the administrative agency
concerned must be given the opportunity to decide a matter within its jurisdiction
before an action is brought before the courts.12 Failure to exhaust administrative
remedies is a ground for dismissal of the action.13
In this case, the doctrine does not apply because petitioners failed to demonstrate
that recourse to the CHED is mandatory – or even possible – in an action such as that
brought by the respondent, which is essentially one for mandamus and damages. The
doctrine of exhaustion of administrative remedies admits of numerous exceptions, 14
one of which is where the issues are purely legal and well within the jurisdiction of the
trial court, as in the present case.15 Petitioners’ liability – if any – for damages will have
to be decided by the courts, since any judgment inevitably calls for the application and
the interpretation of the Civil Code.16 As such, exhaustion of administrative remedies
may be dispensed with. As we held in Regino v. Pangasinan Colleges of Science and
Technology:17
x x x exhaustion of administrative remedies is applicable when there is competence
on the part of the administrative body to act upon the matter complained of.
Administrative agencies are not courts; x x x neither [are they] part of the judicial
system, [or] deemed judicial tribunals. Specifically, the CHED does not have the power
to award damages. Hence, petitioner could not have commenced her case before the
Commission. (Emphasis ours)
In addition, the rule on primary jurisdiction applies only where the administrative
agency exercises quasi-judicial or adjudicatory functions.18 Thus, an essential requisite
for this doctrine to apply is the actual existence of quasi-judicial power.19 However,
petitioners have not shown that the CHED possesses any such power to "investigate
facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw
conclusions."20 Indeed, Section 8 of Republic Act No. 772221 otherwise known as the
Higher Education Act of 1994, certainly does not contain any express grant to the
CHED of judicial or quasi-judicial power.
Petitioners also claim that even without any express grant of quasi-judicial power by
the legislature, the CHED is authorized to adjudicate the case filed by respondent on
the strength of the following provisions of the Manual of Regulations of Private
Schools:22
(1) Section 33, which authorizes the CHED to cancel or revoke the graduation of any
student whose records are found to be fraudulent:
Section 33. Authority to Graduate Without Department Approval. One of the benefits
which may be made available for accredited schools of the appropriate level is the
authority to graduate students from accredited courses or programs of study without
prior approval of the Department, the conditions of which are as follows:
a) The school head must furnish the Regional Office of the region where the
school is situated a copy of its certificate of accreditation.
b) Within two weeks after the graduation exercise, the school shall submit to
the Regional Office concerned an alphabetical list of graduates by course,
accompanied by a certification under oath signed by the school registrar
certifying that the students listed (1) have complied with all the requirements
of the Department, (2) were conferred their respective certificates or
degrees on a specific date, (3) have complete scholastic records on file in the
school, and (4) have their Form 137 for high school and Form IX for college,
as the case may be, in the custody of the school. This list shall be sufficient
basis for issuing special orders, if still necessary.
The school will be held fully liable for the veracity of the records without prejudice to
any legal action, including revocation of government recognition, as may be called for
under the circumstances.
The Department reserves the right to cancel or revoke the graduation of any student
whose records are found to be fraudulent.
(2) Section 72, which permits the school to withhold students’ credentials under
certain specified circumstances, and authorizes the CHED to
issue a student’s credentials in case these are unlawfully withheld by the school:
Section 72. Withholding of Credentials. The release of the transfer credentials of any
pupil or student may be withheld for reasons of suspension, expulsion, or non-
payment of financial obligations or property responsibility of the pupil or student to
the school. The credentials shall be released as soon as his obligation shall have been
settled or the penalty of suspension or expulsion lifted.
However, if, after due inquiry, a school is found to have unjustifiably refused to issue
transfer credentials or student records, the Department may issue the same without
prejudice to the imposition of appropriate administrative sanctions against the school
concerned.
The most cursory perusal of these provisions shows that they are inapplicable. Section
33 concerns the conditions and authority of accredited schools to authorize the
graduation of students without the prior authority of the CHED. Corollarily, the CHED
may cancel or revoke the graduation if it is found to be fraudulent. We are not aware
that the CHED has taken any action to revoke the respondent’s graduation, though it
is free to do so.
As regards Section 72, it refers to a school’s right to withhold the release of credentials
due to "suspension, expulsion, or non-payment of financial obligations or property
responsibility." None of these circumstances is present, and there has been no
intimation that respondent’s ToR has been withheld on any of these grounds.
In any event, even if we were to assume that these provisions were applicable, the
CHED remains without authority to adjudicate an action for damages.
Respondent is not guilty of forum shopping
Forum shopping exists when, as a result of an adverse opinion in one
forum, a party seeks a favorable opinion (other than by appeal or certiorari) in
another, or when he institutes two or more actions or proceedings grounded on the
same cause, on the gamble that one or the other court would make a favorable
disposition.23 Here, there can be no forum shopping precisely because the CHED is
without quasi-judicial power, and cannot make any disposition of the case – whether
favorable or otherwise. As we held in Cabarrus, Jr. v. Bernas:24
The courts, tribunal and agencies referred to under Circular No. 28-91, revised Circular
No. 28-91 and Administrative Circular No. 04-94 are those vested with judicial powers
or quasi-judicial powers and those who not only hear and determine controversies
between adverse parties, but to make binding orders or judgments. As succinctly put
by R.A. 157, the NBI is not performing judicial or quasi-judicial functions. The NBI
cannot therefore be among those forums contemplated by the Circular that can
entertain an action or proceeding, or even grant any relief, declaratory or otherwise.
The Complaint states a cause of action
Under Rule 16, Section 1(g) of the Rules of Court, a motion to dismiss may be made
on the ground that the pleading asserting the claim states no cause of action.25 To
clarify the essential test required to sustain dismissal on this ground, we have
explained that "[t]he test of the sufficiency of the facts found in a petition, to
constitute a cause of action, is whether admitting the facts alleged, the court could
render a valid judgment upon the same in accordance with the prayer of the
petition."26 Stated otherwise, a complaint is said to assert a sufficient cause of action
if, admitting what appears solely on its face to be correct, the plaintiff would be
entitled to the relief prayed for.27
The Complaint makes the following essential allegations: that petitioners unjustifiably
refused to release respondent’s ToR despite his having obtained a degree from UST;
that petitioners’ claim that respondent was not officially enrolled is untrue; that as a
result of petitioners’ unlawful actions, respondent has not been able to take the
nursing board exams since 2002; that petitioners’ actions violated Articles 19-21 of
the Civil Code; and that petitioners should be ordered to release respondent’s ToR and
held liable for ₱400,000.00 as moral damages, ₱50,000.00 as exemplary damages,
₱50,000.00 as attorney’s fees and costs of suit, and ₱15,000.00 as actual damages.
Clearly, assuming that the facts alleged in the Complaint are true, the RTC would be
able to render a valid judgment in accordance with the prayer in the Complaint.
Petitioners argue that paragraph 10 of the Complaint contains an admission that
respondent was not officially enrolled at UST. Said paragraph reads:
10. On several occasions, [respondent] went to see the [petitioners] to get his ToR,
but all of these were futile for he was not even entertained at the Office of the Dean.
Worst, he was treated like a criminal forcing him to admit the fact that he did not
enroll for the last three (3) semesters of his schooling. [Petitioner] Dean tried to
persuade the [respondent] to give the original copies of the Class Cards which he has
in his possession. These are the only [bits of] evidence on hand to prove that he was
in fact officially enrolled. [Respondent] did not give the said class cards and instead
gave photo copies to the [Petitioner] Dean. The Office of the Dean of Nursing of
[petitioner] UST became very strict in receiving documents from the [respondent].
[They have] to be scrutinized first before the same are received. Receiving, as
[respondent] believes, is merely a ministerial function [of] the [petitioners] and the
documents presented for receiving need not be scrutinized especially so when x x x
they are not illegal. Copies of the class cards are hereto attached as "F" hereof.28
This statement certainly does not support petitioners’ claim that respondent admitted
that he was not enrolled.1avvphi1 On the contrary, any allegation concerning the use
of force or intimidation by petitioners, if substantiated, can only serve to strengthen
respondent’s complaint for damages.
We fully agree with the RTC’s finding that a resolution of the case requires the
presentation of evidence during trial. Based on the parties’ allegations, the issues in
this case are far from settled. Was respondent enrolled or not? Was his degree
obtained fraudulently? If so, why was he permitted by the petitioners to graduate?
Was there fault or negligence on the part of any of the parties? Clearly, these are
factual matters which can be best ventilated in a full-blown proceeding before the trial
court.
WHEREFORE, the petition is DENIED. The Decision dated July 20, 2004 and the
Resolution dated September 22, 2004 of the Court of Appeals in CA-G.R. SP No. 79404
are AFFIRMED. The Regional Trial Court of Dinalupihan, Bataan, Branch 5, is DIRECTED
to continue the proceedings in Civil Case No. DH-788-02 with all deliberate speed.
Costs against petitioners.
SO ORDERED.
G.R. No. 179257, November 23, 2015
UNITED ALLOY PHILIPPINES CORPORATION, Petitioner, v. UNITED COCONUT PLANTERS
BANK [UCPB] AND/OR PHILIPPINE DEPOSIT INSURANCE CORPORATION [PDIC], JAKOB
VAN DER SLUIS AND ROBERT T.CHUA, Respondent.
DECISION
DEL CASTILLO, J.:
"[T]he dismissal of the principal action x x x [carries] with it the denial, disallowance or
revocation of all reliefs ancillary to the main remedy sought in that action." 1
Challenged in this Petition for Review on Certiorari2 is the August 17, 2007 Decision3
of the Court of Appeals, Cagayan de Oro City Station (CA CDO) in CA-G.R. SP No. 67079
dismissing petitioner United Alloy Philippines Corporation's (UniAlloy) Petition for
Certiorari and Mandamus filed therewith. In said Petition, UniAlloy sought to nullify
the Orders dated September 134 and 14,5 2001 of the Regional Trial Court (RTC),
Branch 40, Cagayan de Oro City in Civil Case No. 2001-219 that dismissed its Complaint
for Annulment and/or Reformation of Contract and Damages with Prayer for A Writ of
Preliminary Injunction or Temporary Restraining Order (TRO) 6 and ordered it to
surrender the possession of the disputed premises to respondent United Coconut
Planters Bank (UCPB).
Factual Antecedents
UniAlloy is a domestic corporation engaged in the business of manufacturing and
trading on wholesale basis of alloy products, such as ferrochrome, ferrosilicon and
ferromanganese. It has its principal office and business address at Phividec Industrial
Area, Tagaloan, Misamis Oriental. Respondent UCPB, on the other hand, is a banking
corporation while respondent Robert T. Chua (Chua) is one of its Vice-Presidents.
Respondent Jakob Van Der Sluis is a Dutch citizen and was the Chairman of UniAlloy.
Respondent Philippine Deposit Insurance Corporation is the assignee-in-interest of
UCPB as regards the loan account of UniAlloy.
On September 10, 1999, UniAlloy and UCPB entered into a Lease Purchase
Agreement7 (LPA) wherein UniAlloy leased from UCPB several parcels of land with a
total area of 156,372 square meters located in Barangay Gracia, Tagoloan, Misamis
Oriental,8 The three-year lease commenced on August 1, 1999 to run until July 31,
2002 for a monthly rent: of P756/700.00. The parties stipulated that upon the
expiration of the lease, UniAlloy shall purchase the leased properties for P300 million
to be paid on staggered basis. UniAlloy also obtained loans from UCPB.
On August 27, 2001, however, UniAlloy filed the aforesaid Complaint9 against
respondents. It claimed that, thru misrepresentation and manipulation, respondent
Jakob Van Der Sluis took foil control of the management and operation of UniAlloy;
that respondents connived with one another to obtain fictitious loans purportedly for
UniAlloy as evidenced by Promissory Note Nos. 8111-00-00110-6, 8111-00-20031-1,
and 8111-01-20005-6 for P6 million, US$10,000.00, and US$320,000.00, respectively;
that UCPB demanded payment of said loans; and, that UCPB unilaterally rescinded the
LPA. UniAlloy prayed that judgment be issued: (i) ordering the annulment and/or
reformation of the three Promissory Notes; (ii) nullifying UCPB's unilateral rescission
of the LPA; (iii) enjoining UCPB from taking possession of the leased premises; and (iv)
ordering respondents to jointly and severally pay nominal and exemplary damages, as
well as attorney's fees of P500,000.00 each. As ancillary relief, UniAlloy prayed for the
issuance of a temporary restraining order and/or writ of preliminary injunction.
On the same day, the Executive Judge of the RTC, Cagayan de Oro City issued a 72-
hour TRO directing UCPB to cease and desist from taking possession of the disputed
premises.10 The following day, respondent Jakob Van Der Sluis filed a Motion to
Dismiss and Opposition to the Application for Injunction or TRO 11 on the grounds of
improper venue, forum-shopping,12 litis pendentia, and for being a harassment suit
under the Interim Rules of Procedure for Intra-Corporate Cases. He argued that the
LPA specifically provides that any legal action aiising therefrom should be brought
exclusively in the proper courts of Makati City. The Complaint did not disclose the
pendency of Civil Case No. 2001-156 entitled "Ernesto Paraiso and United Alloy
Philippines Corporation v. Jakob Van Der Sluis" before Branch 40, as well as CA-G.R. SP
No, 66240 entitled "Jakob Van Der Sluis v. Honorable Epifanio T. Nacaya, et al." He
further averred that what UniAlloy sought to enjoin is already fait accompli.
Respondents UCPB and Chua, on the other hand, filed a Motion to Dismiss & Motion
to Recall Temporary Restraining Order.13 In addition to the ground of improper venue, the dismissal of the Complaint, and (iii) applying the Interim Rules of Procedure for
they raised the issue of lack of authority of the person who verified the Complaint as Intra-corporate Controversies.
no secretary's certificate or a board resolution was attached thereto.
On October 18,2001, the CA Manila issued a TRO. After hearing, the CA Manila issued
During the hearing on the writ of preliminary injunction on August 30, 2001, the RTC a Resolution20 dated February 18, 2002 granting UniAlloy's ancillary prayer for the
directed the parties to maintain the status quo by not disturbing the possession of the issuance of a writ of preliminary injunction upon posting of a bond in the amount of
present occupants of the properties in question pending resolution of respondents' P300,000.00.
motions,
UniAlloy posted the requisite bond.
On September 13, 2001, the RTC, acting as Special Commercial Court, issued an
Order14 granting the motions to dismiss and ordering the dismissal of the case on the However, no writ of preliminary injunction was actually issued by the CA Manila
grounds of improper venue, forum-shopping and for being a harassment suit. The RTC because of this Court's March 18, 2002 Resolution21 in G.R. No. 152238 restraining it
held that venue was improperly laid considering that the Promissory Notes sought to from enforcing its February 18, 2002 Resolution. G.RNo. 152238 is a Petition for
be annulled were issued pursuant to a Credit Agreement which, in turn, stipulates that Certiorari initiated by UCPB assailing said Resolution of CA Manila. And, in deference
any legal action relating thereto shall be initiated exclusively in the proper courts of to this Court, the CA Manila refrained from taking further action in CA-G.R. SP No.
Makati City. It also opined that UniAlloy committed forum-shopping for failing to 67079 until G.R. No. 152238 was resolved.22
disclose in its certificate of non-forum-shopping the pendency of Civil Case No, 2001-
156 which involves the same parties, the same transactions and the same essential On January 28, 2005, this Court rendered its Decision23 in G.R. No. 152238 finding no
facts and circumstances. The cases, as ruled by the RTC, have also identical causes of grave abuse of discretion on the part of the CA in issuing its February 18, 2002
action, subject matter and issues. The dispositive portion of the September 13, 2001 Resolution and, consequently, denying UCPB's petition.
Order reads:chanRoblesvirtualLawlibrary
Thereafter, and since this Court's Decision in G.R. No. 152238 attained finality,
ACCORDINGLY, finding meritorious that the venue is improperly laid and the UniAUoy filed with the CA Manila a Motion to Issue and Implement Writ of Preliminary
complain[an]t engaged in forum-shopping and harassment of defendant Jakob Van Mandatory Injunction.24 In the meantime, the records of CA-G.R. SP No. 67079 were
der Sluis, this case is hereby DISMISSED rendering the prayer issuance of a writ of forwarded to CA CDO pursuant to Republic Act No. 8246. 25cralawred
preliminary injunction moot and academic, and ordering plaintiff to turn over
possession of the subject premises of the properties in question at Barangay Gracia, On May 31, 2006, the CA CDO issued a Resolution26 denying UniAlloy's motion. It
Tagoloan, Misamis Oriental to defendant United Coconut Planters Bank. found that UniAUoy had lost its right to remain in possession of the disputed premises
because it defaulted in the payment of lease rentals and it was duly served with a
SO ORDERED.15ChanRoblesVirtualawlibrary notice of extrajudicial termination of the LPA. Said court also found that UniAUoy
cralawlawlibrary vacated the leased premises and UCPB was already in actual physical possession
thereof as of August 24, 2001, or three days before UniAUoy filed its complaint with
Upon UCPB's motion, the RTC issued another Order 16 dated September 14, 2001 the RTC. Hence, it could no longer avail of the remedy of preliminary injunction to
directing the issuance of a writ of execution to enforce its September 13, 2001 Order. regain possession of the disputed premises.
Accordingly, a Writ of Execution17 was issued directing the Sheriff to put UCPB in
possession of the disputed premises. It was satisfied on September 17, 2001.18 The UniAUoy filed a Motion for Reconsideration,27 which was denied in the CA CDO's
employees of UniAlloy were evicted from the leased premises and UCPB's November 29,2006 Resolution.28
representatives were placed in possession thereof.
On August 17, 2007, the CA CDO issued the assailed Decision denying UniAlloy's
On September 25, 2001, UniAlloy received copies of the RTC Orders.19 And on October petition and affirming the RTC's questioned Orders. It opined inter alia that UniAUoy
9, 2001, it filed with the Court of Appeals, Manila Station (CA Manila) its petition in erred in resorting to a Rule 65 petition because its proper recourse should have been
CA-G.R. SP No. 67079 attributing grave abuse of discretion on the part of the court a to appeal the questioned Orders of the RTC, viz.:chanRoblesvirtualLawlibrary
quo in (i) dismissing its petition on the grounds of improper venue, forum-shopping
and harassment, (ii) ordering the turnover of the property in question to UCPB after
It is plain from the record, though, that Unialloy had lost its right to appeal. The time
to make use of that remedy is gone. It is glaringly obvious that Unialloy resorted to
this extraordinary remedy of certiorari and mandamus as a substitute vehicle for
securing a review and reversal of the questioned order of dismissal which it had, by its
own fault, allowed to lapse into finality. Unfortunately, none of the arguments and
issues raised by Unialloy in its petition can adequately brand the 13 September 2001
Order as void on its face for being jurisdietionaily flawed, nor mask the fact that it
became final and executory by Unialloy's failure to file an appeal on time. And so, even
if the assailed order of dismissal might arguably not have been entirely free from some
errors in substance, or lapses in procedure or in findings of fact or of law, and which
that account could have been reversed or modified on appeal, the indelible fact,
however is that it was never appealed. It had become final and executory. It is now
beyond the power of this Court to modify it.29ChanRoblesVirtualawlibrary
cralawlawlibrary
and to entitle this petition to allowance and the review sought in
this case.30
cralawlawlibrary
Issue
The basic issue to be resolved in this case is whether the CA CDO erred in dismissing
UniAlloy's Petition for Certiorari and Mandamus. For if the said court did not commit
an error then it would be pointless to determine whether UniAlloy is entitled to a writ
of preliminary injunction pursuant to CA Manila's February 18, 2002 Resolution which
was issued as a mere ancillary' remedy in said petition.
Our Ruling

Hence, this Petition raising the following issues for Our resolution:
The Petition is devoid of merit.
1. Whether the Court of Appeals (Cagayan de Oro City) erred, or acted
without, or in excess of jurisdiction, or committed grave abuse of Before delving on the focal issue, the Court shall first pass upon some procedural
discretion arnounting to lack, or excess of jurisdiction in DENYING matters.
United Alloy's Motion to Issue and Implement Writ of Preliminary
Mandatory Injunction in this case, DESPITE the earlier resolution UniAlloy availed of the proper remedy
dated February 18, 2002 issued by the same Court of Appeals in assailing the RTC's September 13, 2001
(Manila) of coordinate and co-equal jurisdiction which granted Order dismissing its Complaint
United Alloy's Motion for Issuance of Preliminary Injunction upon
bond of P300,000.00, and DESPITE this Honorable Court's decision In its Comment,31 UCPB defends the CA CDO in denying due course to UniAlloy's
dated January 28, 2005 in the certiorari case G.R. No. 152238 filed Petition for Certiorari and Mandamus. It posits that UniAlloy should have filed with the
by UCPB to assail the Court of Appeals's Resolution of February 18, RTC a Notice of Appeal from the Order dated September 13, 2001 instead of a Rule 65
2002, which decision sustained the said resolution of February 18, petition before the CA, Respondents Jakob Van der Sluis and Chua echo UCPB's
2002, and DENIED UCPB's petition in said G.R. No. 152238. contention that UniAlloy resorted to a wrong mode of remedy and that the dismissal
of its complaint had become final and executory which, in turn, rendered UniAlloy's
As sub-issue - Whether the Court of Appeals (Cagayan de Oro City) Rule 65 petition before the CA moot and academic.32
disregarded the rule that every court must take cognizance of
decisions the Supreme Court has rendered, because they are proper In its Consolidated Reply,33 UniAlloy counter-argues that it filed a Rule 65 petition with
subjects of mandatory judicial notice. The said decisions more the CA because the remedy of appeal is inadequate as the RTC had already directed
importantly, form part of the legal system, and failure of any court the issuance of a writ of execution and that the RTC Orders are patently illegal.
to apply them shall constitute an abdication of its duty to resolve a
dispute in accordance with law and shall be a ground for UniAlloy availed of the correct remedy. Under Section 1 Rule 16 of the Rules of Court,
administrative action against an inferior court magistrate x x x the following may be raised as grounds in a motion to
dismiss:chanRoblesvirtualLawlibrary
2. Whether x x x the Court of Appeals (Cagayan de Qro City) decided
this case in accord with law and the evidence, and so far departed SECTION 1. Grounds. — Within the time for but before filing the answer to the
from the accepted and usual course of judicial proceedings as to call complaint or pleading asserting a claim, a motion to dismiss may be made on any of
for an exercise of the supervisory power of this Honorable Court, the following grounds:chanRoblesvirtualLawlibrary
 grounds of improper venue, forum-shopping
(a) That the court has no jurisdiction over the person of the defending party; and for being a harassment suit

(b) That the court has no jurisdiction over the subject matter of the claim; The RTC was correct in dismissing UniAlloy's Complaint on the ground of improper
venue. In general, personal actions must be commenced and tried (i) where the
(c) That venue is improperly laid; plaintiff or any of the principal plaintiffs resides, (ii) where the defendant or any of the
principal defendants resides, or (III) in the case of a resident defendant where he may
(d) That the plaintiff has no legal capacity to sue; be found, at the election of the plaintiff.37 Nevertheless, the parties may agree in
writing to limit the venue of future actions between them to a specified place. 38
(e) That there is another action pending between the same parties for the same cause;
(f) That the cause of action is barred by a prior judgment or by the statute of In the case at bench, paragraph 18 of the LPA expressly provides that "[a]ny legal
limitations; action arising out of or in connection with this Agreement shall be brought exclusively
in the proper courts of Makati City, Metro Manila."39 Hence, UniAlloy should have filed
(g) That the pleading asserting the claim states no cause of action; its complaint before the RTC of Makati City, and not with the RTC of Cagayan de Oro
City.
(h) That the claim or demand set forth in the plaintiffs pleading has been paid, waived,
abandoned, or otherwise extinguished; But to justify its choice of venue, UniAlloy insists that the subject matter of its
Complaint in Civil Case No. 2001-219 is not the LPA, but the fictitious loans that
(i) That the claim on which the action is founded is unenforceable under the provisions purportedly matured on April 17, 2001.40
of the statute of frauds; and
UniAlloy's insistence lacks merit. Its Complaint unequivocally sought to declare "as null
(j) That a condition precedent for filing the claim has not been complied and void the unilateral rescission made by defendant UCPB of its subsisting Lease
with.cralawlawlibrary Purchase Agreement with [UniAlloy]."41 What UCPB unilaterally rescinded is the LPA
and without it there can be no unilateral rescission to speak of. Hence, the LPA is the
Except for cases falling under paragraphs (f), (h), or (i), the dismissal of an action based subject matter or at least one of the subject matters of the Complaint. Moreover, and
on the above-enumerated grounds is without prejudice and does not preclude the to paraphrase the aforecited paragraph 18 of the LPA, as long as the controversy arises
refiling of the same action. And, under Section l(g) of Rule 41,34 an order dismissing an out of or is connected therewith, any legal action should be filed exclusively before
action without prejudice is not appealable. The proper remedy therefrom is a special the proper courts of Makati City. Thus, even assuming that the LPA is not the main
civil action for certiorari under Rule 65,35 But, if the reason for the dismissal is based subject matter, considering that what is being sought to be annulled is an act
on paragraphs (f), (h), or (i) (i.e., res judicata, prescription, extinguishment of the claim connected and inseparably related thereto, the Complaint should have been filed
or demand, and unenforceability under the Statute of Frauds) the dismissal, under before the proper courts in Makati City.
Section 5,36 of Rule 16, is with prejudice and the remedy of the aggrieved party is to
appeal the order granting the motion to dismiss. With regard forum-shopping, our review of the records of this case revealed that
UniAlloy did not disclose in the Verification/Certification of the Complaint the
Here, the dismissal of UniAlloy's Complaint was without prejudice. The September 13, pendency of Civil Case No. 2001-156 entitled "Ernesto Paraiso and United Alloy
2001 Order of the RTC dismissing UniAlloy's Complaint was based on the grounds of Philippines Corporation v. Jakob Van Der Sluis." The trial court took judicial notice of
improper venue, forum-shopping and for being a harassment suit, which do not fall its pendency as said case is also assigned and pending before it. Thus, we adopt the
under paragraphs (f), (h), or (i) of Section 1, Rule 16. Stated differently, none of the following unrebutted finding of the RTC:chanRoblesvirtualLawlibrary
grounds for the dismissal of UniAlloy's Complaint is included in Section 5 of Rule 16 of
the Rules of Court. Hence, since the dismissal of its Complaint was without prejudice, These two civil cases have identical causes of action or issues against defendant Jakob
the remedy then available to UniAlloy was a Rule 65 petition. Van Der Sluis for having misrepresented to plaintiff and its stockholders that he can
extend financial assistance in running the operation of the corporation, such that on
CA CDO did not err in affirming the April 6, 2001 plaintiff adopted a Stockholders Resolution making defendant Jakob
dismissal of UniAlloy's Complaint on the chairman of the corporation for having the financial capability to provide the financial
needs of plaintiff and willing to finance the operational needs thereof; that a remedy for and as an incident in the main action.
Memorandum of Agreement was subsequently entered between the parties whereby
defendant Jakob obligated to provide sufficient financial loan to plaintiff to make it The main action for injunction is distinct from the provisional or ancillary remedy of
profitable; that Jakob maliciously and willfiilly reneged [on] his financial commitments preliminary injunction which cannot exist except only as part or an incident of an
to plaintiff prompting the stockholders to call his attention and warned him of avoiding independent action or proceeding. As a matter of course, in an action for injunction,
the said agreement; that defendant who had then complete control of plaintiffs bank the auxiliary remedy of preliminary injunction, whether prohibitory or mandatory,
account with defendant UCPB, through fraudulent machinations and manipulations, may issue. Under the law, the main action for injunction seeks a judgment embodying
was able to maliciously convince David C. Chua to pre-sign several checks; that a final injunction which is distinct from, and should not be confused with, the
defendant Jakob facilitated several huge loans purportedly obtained by plaintiff which provisional remedy of preliminary injunction, the sole object of which is to preserve
defendant himself could not even account and did not even pay the debts of the the status quo until the merits can be heard. A preliminary injunction is granted at any
corporation but instead abused and maliciously manipulated plaintiffs account. stage of an action or proceeding prior to the judgment or final order. It persists until
it is dissolved or until the termination of the action without the court issuing a final
Forum-shopping indeed exists in this case, for both actions involve the same injunction.46cralawlawlibrary
transactions and same essential facts and circumstances as well as identical causes of
action, subject matter and issues, x x x42cralawlawlibrary Based on the foregoing, it is indubitably clear that the August 17, 2007 Decision of CA
CDO dismissing UniAlloy's Petition for Certiorari and Mandamus effectively
The dismissal of UniAlloy's main superseded the February 18, 2002 Resolution of the CA Manila granting UniAUoy's
action carries with it the dissolution of ancillary prayer for the issuance of a writ of preliminary injunction. It wrote finis not
any ancillary relief previously granted only to the main case but also to the ancillary relief of preliminary injunction issued in
therein. the main case.

UniAlloy argues that the CA CDO erred in denying its petition considering that this For the same reason, there is no merit in UniAUoy's contention that the RTC grievously
Court has already sustained with finality the CA Manila's February 18, 2002 Resolution erred in ordering it to turn over the possession of the subject premises to UCPB
granting its prayer for the issuance of a writ of preliminary mandatory injunction. considering that the latter never prayed for it. As borne out by the records of the case,
UCPB was already in actual possession of the litigated premises prior to the filing of
The contention is non sequitur. the Complaint on August 27, 2001. This conforms with the finding of the CA CDO which
pronounced that "an actual turnover of the premises x x x was really effected on
"Provisional remedies [also known as ancillary or auxiliary remedies], are writs and August 24, 2001, prior to the institution of the complaint a quo."47 UniAlloy was able
processes available during the pendency of the action which may be resorted to by a to regain possession of the disputed premises only by virtue of the RTC's 72-hour TRO.
litigant to preserve and protect certain rights and interests pending rendition, and for With the issuance of the RTC's September 13, 2001 Order dismissing the Complaint of
purposes of the ultimate effects, of a final judgment in the case. They are provisional UniAlloy, however, the RTC's 72-hour TRO and August 30, 2001 order to maintain
because they constitute temporary measures availed of during the pendency of the status quo, which are mere incidents of the main action, lost their efficacy. As
action, and they are ancillary because they are mere incidents in and are dependent discussed above, one of the inevitable consequences of the dismissal of the main
upon the result of the main action."43 One of the provisional remedies provided in the action is the dissolution of the ancillary relief granted therein. Besides, the RTC issued
Rules of Court is preliminary injunction, which may be resorted to by a litigant at any the status quo order with the express caveat that the same shall remain in force until
stage of an action or proceeding prior to the judgment or final order to compel a party it has resolved respondents' motions to dismiss, which it subsequently granted.
or a court, agency or a person to refrain from doing a particular act or acts.44 In Consequently, UniAlloy has no more bases to remain in possession of the disputed
Bacolod City Water District v. Hon. Labayen,45 this Court elucidated that the auxiliary premises. It must, therefore, restitute whatever it may have possessed by virtue of the
remedy of preliminary injunction persists only until it is dissolved or until the dissolved provisional remedy, even if the opposing party did not pray for it.
tepnination of the main action without the court issuing a final injunction,
viz.:chanRoblesvirtualLawlibrary The August 17, 2007 Decision neither
violated this Court's January 28, 2005
x x x Injunction is a judicial writ, process or proceeding whereby a party is ordered to Decision in G.R. No. 152238 nor contradicted
do or refrain from doing a certain act, It may be the main action or merely a provisional the CA Manila's February 18, 2002 Resolution.
 dismissal of the case. Hence, we shall limit our discussion to the assailed Resolutions
UniAlloy further argues that in denying its petition, CA CDO contradicted the earlier temporarily stopping the trial court's turnover of the litigated property to
Resolution of a coordinate court, the CA Manila, and the January 28, 2005 Decision of petitioner.49ChanRoblesVirtualawlibrary
this Court in G.R. No. 152238. It insists that no court can interfere with the judgment, cralawlawlibrary
orders or decrees of another court of concurrent or coordinate jurisdiction.
WHEREFORE, the instant petition is hereby DENIED.
We are not persuaded.
SO ORDERED.chanroblesvirtuallawlibrary
True, under the doctrine of judicial stability or non-interference, "no court can
interfere by injunction with the judgments or orders of another court of concurrent
jurisdiction having the power to grant the relief sought by injunction. The rationale for
the rule is founded on the concept of jurisdiction: a court that acquires jurisdiction
over the case and renders judgment therein has jurisdiction over its judgment, to the
exclusion of all other coordinate courts, for its execution and over all its incidents, and
to control, in furtherance of justice,, the conduct of ministerial officers acting in
connection with this judgment."48 But said doctrine is not applicable to this case. Here,
the proceeding in CA CDO is a continuation of the proceeding conducted in CA Manila.
There is only one case as what was resolved by CA CDO is the same case, CA-G.R. SP
No. 67079 earlier filed with and handled by CA Manila. It was referred to CA CDO SECOND DIVISION
pursuant to Republic Act No. 8246 creating three divisions of the CA each in Cebu and
Cagayan de Qro. Section 5 thereof provides:chanRoblesvirtualLawlibrary G.R. No. 202967, August 05, 2015

SECTION 5. Upon the effectivity of this Act, all pending cases, except those which have
ALICIA Y. LAUREL, SUBSTITUTED BY HER SOLE HEIR AND LEGAL REPRESENTATIVE JUAN
been submitted for resolution, shall be referred to the proper division of the Court of
MIGUEL Y. LAUREL, Petitioner, v. FERDINAND M. VARDELEON, Respondent.
Appeals.cralawlawlibrary

In fine, CA CDO did not intrude into an order issued by another co-equal court in a DECISION
different case. Rather, it continued to hear the petition until its termination after the
CA Manila referred the same to it by virtue of a law. DEL CASTILLO, J.:

The fact that said February 18, 2002 Resolution of CA Manila was affirmed by this
Court in its January 28, 2005 Decision in G.R. No. 152238 is likewise of no moment.
Said Resolution of CA Manila only granted UniAlloy's ancillary prayer for injunctive
relief. It did not touch on the issues of improper venue, forum-shopping, and
harassment. Thus, neither did this Court tackle said issues in its January 28, 2005
Decision. In fact, this Court cautiously limited its discussions on the propriety of the
CA's directive temporarily restraining the RTC from placing UCPB in possession of the
disputed premises and deliberately reserved to the CA the determination of whether
the RTC erred in dismissing the main case. Thus:chanRoblesvirtualLawlibrary
The dismissal of Civil Case No. 2001-219 on the grounds of forum-shopping, improper
venue and harassment - although raised, too, by Unialloy in its Petition before the
Court of Appeals - was not passed upon in the assailed interlocutory CA Resolution. As
a consequence, it would be premature and improper for us to pass upon the RTC's
This Petition for Review on Certiorari1 assails: 1) the October 13, 2011 Decision2 of the
Court of Appeals (CA) denying the appeal in CA-G.R. CEB CV No. 01360 and affirming
the October 12, 2005 Order3 of the Regional Trial Court (RTC), 6th Judicial Region,
Kalibo, Aklan, Branch 6 in Civil Case No. 7249; and 2) the CA's June 20, 2012
Resolution4 denying herein petitioner's motion for reconsideration of the herein
assailed Decision.
Factual Antecedents
On July 23, 2004, petitioner Alicia Y. Laurel filed a Complaint5 for recovery of
possession and ownership and/or quieting of title against respondent Ferdinand M.
Vardeleon concerning a 20,306-square meter island in Caticlan, Malay, Aklan. The case
was docketed as Civil Case No. 7249 and assigned to Branch 6 of the RTC of Kalibo,
Aklan.
 in the Order sought to be reconsidered. Said Motion for Reconsideration is also
Respondent denied the material allegations in the complaint, claiming that he bought DENIED.
the island on April 9, 1973 from Avelina Casimero, and that petitioner was guilty of
laches in filing her claim.6redarclaw Called for trial, plaintiff is unable to present anew her evidence. She is asking for the
postponement of the trial. It is significant to take note that when this case was set for
In a July 6, 2005 Pre-Trial Order,7 petitioner was scheduled to present her evidence on trial on September 7, 2005, plaintiff failed to present evidence based on the alleged
three separate dates: September 7, 2005; October 12, 2005; and November 23, 2005. illness of her counsel. And today, plaintiff is not again ready to present evidence.

Previously, on August 1, 2005, respondent moved to correct the Pre-Trial Order, in Defendant opposed the motion, and manifested that he is willing that the
order to reflect therein petitioner's supposed admission made during pre-trial that she counterclaim be dismissed to facilitate the eventual dismissal of this case.
knew of respondent's possession of the subject property since 1975.8 Petitioner
opposed the same.9redarclaw WHEREFORE, plaintiffs verbal motion to postpone the trial is hereby DENIED and the
case is DISMISSED for failure to prosecute. The counterclaim is also DISMISSED.
In an August 19, 2005 Order,10 the trial court denied respondent's motion to correct
the Pre-Trial Order. Respondent filed a motion for reconsideration11 but the trial court SO ORDERED.
did not act on the motion.
Open Court, Kalibo, Aklan.
On September 2, 2005, petitioner's counsel moved to reset the scheduled September October 12, 2005.
7, 2005 hearing to October 12, 2005 or any available date.12 The trial court, in a
September 7, 2005 Order,13 granted the motion provided that petitioner defrays the On November 9, 2005, petitioner filed a motion for reconsideration17 of the trial
transportation expenses as well as the appearance fee of respondent's counsel. court's October 12, 2005 Order, but in a January 31, 2006 Order, 18 the trial court
Petitioner moved to reconsider,14 but the court failed to act on the same. denied the same, stating among others that -

During the scheduled October 12, 2005 hearing, petitioner was present, together with The fact that another trial date was left for her to present evidence cannot be made
substitute counsel Atty. Roy Villa and her first witness. Petitioner moved in open court as a justification because for two settings, i.e., September 7, 2005 and October
to postpone trial on the ground that there are pending motions that have to be 12,2005, she admittedly failed to present evidence. As a matter of fact, on September
resolved, and that the substitute lawyer had yet to confer with the witness, since her 7, 2005, the Court was already inclined to dismiss the case for failure of the plaintiff
true counsel, Atty. De la Vega - who originally interviewed the witness - was not to appear, especially that her motion to postpone the
present. This time, the trial court, in an Order15 of even date, denied: 1) petitioner's
oral motion to postpone trial; 2) her motion for reconsideration of the trial court's hearing failed to comply with the 3-day period to file and serve the motion prior to
September 7, 2005 Order directing her to defray respondent's counsel's the date of the hearing. The motion was filed two (2) days before the date of the
transportation expenses and appearance fees; and 3) respondent's motion for hearing. Nonetheless, the Court had to bend the procedural rules by granting the
reconsideration of the trial court's August 19, 2005 Order denying his motion to motion and set the presentation of plaintiffs evidence on October 12,2005 as
correct the Pre-Trial Order. It likewise dismissed Civil Case No. 7249 on the ground of previously set during the trial. The reason therefor is just to allow the plaintiff to
failure to prosecute on petitioner's part, pursuant to Section 3, Rule 17 of the 1997 present her evidence and decide the case on the merits. Unfortunately, as earlier
Rules of Civil Procedure.16 It decreed, thus:LawlibraryofCRAlaw stated, plaintiff was again unable to present evidence.

Resolving the Motion for Reconsideration filed by the plaintiff, the same is hereby Some pending incidents mentioned by the plaintiff is [sic] not a legal justification for
DENIED. The alleged illness of Atty. Maria Theresa Diaz-dela Vega which allegedly her not to present evidence. The same were already resolved when the Court directed
prevented [sic] from appearing at the initial trial is not supported by a medical plaintiff to proceed with the presentation of her evidence. However, plaintiff refused
certificate that is under oath. (Sec. 4, Rule 30, 1997 Rules of Civil Procedure). to do so.

As regards the Motion for Reconsideration filed by the defendant, the same was just Hence, the dismissal of the complaint for failure to prosecute as mentioned at the
a rehash of the ground mentioned in their [sic] first motion which was amply discussed outset.
 Pre-Trial Order dated July 6, 2005 clearly stated that appellant was set to present her
WHEREFORE, the motion for reconsideration is denied for lack of merit. evidence on the following dates: September 7, 2005, October 12, 2005 and November
23, 2005 at 9:30 in the morning. When appellant's counsel filed a motion to reset the
SO ORDERED.19 hearing, the trial court granted the same.

Riding of the Court of Appeals
Petitioner filed an appeal before the CA, docketed as CA-G.R. CEB CV No. 01360. She
claimed that the trial court should not have dismissed her case since she still had one
more scheduled hearing — November 23, 2005 — for the presentation of her
evidence. Petitioner asserted that she could not begin trial since respondent's motion
for reconsideration of the trial court's August 19, 2005 Order remained unresolved
and was still awaiting resolution. Moreover, her own motion for reconsideration of
the trial court's September 7, 2005 Order directing her to defray the transportation
expenses and appearance fee of respondent's counsel was still pending at the time.
But in an October 13, 2011 Decision, the CA denied the appeal, stating
thus:LawlibraryofCRAlaw
Appellant claims that it was her honest belief that during the hearing on October 12,
2005, the trial court would first hear and resolve appellee's motion for reconsideration
from the Order denying his earlier motion to correct the pre-trial order. She was
caught by surprise when the trial court outrightly denied appellee's motion for
reconsideration and directed her to present her witness. Moreover, under the Pre-
Trial Order, she still had another date to present her evidence, that is, on November
23, 2005.
We are not impressed with appellant's contentions.
Under Section 3, Rule 17 of the Rules of Court, if, for no justifiable cause, the plaintiff
fails to appear on the date of the presentation of his evidence-in-chief on the
complaint, or to prosecute his action for an unreasonable length of time, or to comply
with these Rules or any order of the court, the complaint may be dismissed upon
motion of the defendant or upon the court's own motion, without prejudice to the
right of the defendant to prosecute his counterclaim in the same or in a separate
action. This dismissal shall have the effect of an adjudication upon the merits, unless
otherwise provided by the court.
With due notice of the proceedings, appellant and her counsel were both well aware
that they had to present their evidence on October 12, 2005. This was their chosen
date, but instead of coming prepared, appellant moved for another postponement.
Appellant's justification that her counsel was not yet able to talk to the witness is not
a meritorious ground to defer the hearing of the case. In fact, under Sec. 3, Rule 30 of
the Rules of Court, a motion to postpone a trial on the ground of absence of evidence
can be granted only upon affidavit showing the materiality or relevancy of such
evidence and that due diligence had been utilized to procure it. There was no such
affidavit in this case, nor was there any showing that due diligence had been exerted
to procure the attendance of the intended witness.
The fact that the trial court no longer heard appellee's motion for reconsideration is
of no moment. Appellant's complacent attitude and lack of preparedness [in pursuing]
her case warrants its dismissal for failure to prosecute, xxx [A] plaintiff is duty-bound
to prosecute his action with utmost diligence and with reasonable dispatch in order
to obtain the relief prayed for and, at the same time, minimize the clogging of court
dockets. The expeditious disposition of cases is as much the duty of the plaintiff as the
court's.
The trial court therefore did not err in issuing the assailed Order since it was only
performing its duty in ensuring that litigations are prosecuted and resolved with
dispatch. To allow appellant to postpone the case until such time that she is ready to
present her evidence would only cause unreasonable delay and violate appellee's right
to speedy trial.
Accordingly, We sustain the trial court's dismissal of appellant's complaint for failure
to prosecute.
WHEREFORE, the Appeal is DENIED. The Order dated October 12, 2005 of the Regional
Trial Court, 6th Judicial Region, Branch 6 of Kalibo, Aklan in Civil Case No. 7249 is
AFFIRMED in toto. Costs on plaintiff-appellant.

There is failure to prosecute when the plaintiff, being present, is not ready or is SO ORDERED.20
unwilling to proceed with the scheduled trial or when postponements in the past were
due to the plaintiffs own making, intended to be dilatory or caused substantial Petitioner moved to reconsider, but in its assailed June 20, 2012 Resolution, the CA
prejudice on the part of the defendant. held its ground. Hence, the present Petition.

Appellant could not pretend that she did not know that she would be presenting her Issues
evidence on October 12, 2005. Appellant was duly notified of the hearing dates. The
 Respondent's Arguments
Petitioner submits that -
In his Comment,26 respondent maintains that the CA is correct in affirming the
THE HONORABLE COURT OF APPEALS AND THE COURT A QUO COMMITTED SERIOUS dismissal. He labels petitioner's insistence for the RTC to resolve first the pending
ERROR AND GRAVE ABUSE OF DISCRETION IN DISMISSING PETITIONER'S COMPLAINT motions for reconsideration before trial could commence, and for her to be allowed
FOR SUPPOSED FAILURE TO PROSECUTE DESPITE THE FACT THAT PETITIONER to commence the presentation of evidence on November 23, 2005, as specious and
THROUGH HER COUNSEL HAD ACTIVELY PARTICIPATED IN THE PROCEEDINGS IN THE flimsy. He argues that these claims even constitute glaring proof of petitioner's lack of
COURT A QUO AND DESPITE THE FACT THAT THERE WAS A PENDING UNRESOLVED interest in prosecuting her case; and that if petitioner was keen on pursuing her case,
MOTION INVOLVING THE PRE-TRIAL ORDER. then the substitute counsel (Arty. Villa) should nonetheless have been prepared on
October 12, 2005. He avers that petitioner has exhibited a complacent attitude toward
BOTH THE COURT A QUO AND THE HONORABLE COURT OF APPEALS HAVE CLEARLY her case in violation of his right to speedy trial/ disposition of his case. Finally, he
DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS contends that petitioner has been accorded due process and given ample opportunity
TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION BY THIS HONORABLE to present her case.
COURT.21
Our Ruling
Petitioner's Arguments
The Petition must be granted.
Praying that the assailed CA dispositions be set aside and that Civil Case No. 7249 be
reinstated, petitioner essentially maintains in her Petition and Reply22 that during the This Court has said that "[t]he fundamental test for non prosequitur is whether, under
October 12, 2005 scheduled hearing, her counsel and witness were present but they the circumstances, the plaintiff is chargeable with want of due diligence in failing to
did not commence trial because they honestly believed that the respondent's pending proceed with reasonable promptitude. There must be unwillingness on the part of the
motion for reconsideration of the trial court's August 19, 2005 Order denying his plaintiff to prosecute."27redarclaw
motion to correct/amend the July 6, 2005 Pre-Trial Order needed to be resolved first.
Petitioner insists that said motion for reconsideration had a direct bearing on the To constitute failure to prosecute, his non-appearance must be equated with
course of the trial, thus the necessity of resolving it first. In any case, it was already unwillingness to proceed with the trial as when both plaintiff and counsel made: no
agreed upon during pre-trial and allowed by the trial court in its pre-trial order, that appearance at all, or with the assumption that plaintiff has already lost interest in
she still had one more opportunity to present her evidence on the scheduled hearing prosecuting his action, in the same way that should the ground for dismissal be delay,
on November 23, 2005. Thus, the RTC -instead of dismissing the case - should have this delay or failure to proceed must be for an unreasonable length of time beyond
allowed her to present evidence on said date. Petitioner posits that agreements the reasonable allowance which by judicial leniency
reached at the pre-trial conference and embodied in the pre-trial order control the
course of trial and should not be disturbed unless there would be manifest injustice.23 litigant is normally entitled.28
Since she had one more scheduled hearing available to her, it cannot be concluded
that she has failed to prosecute her case. In addition, petitioner claims that she has a Likewise -
meritorious case since she purchased the property from a seller who has a valid tax
declaration his name, while respondent himself admitted during pre-trial that his While a court can dismiss a case on the ground of non prosequitur, the real test of
supposed predecessor-in-interest Avelina Casimero had no document or tax such power is whether, under the circumstances, plaintiff is chargeable with want of
declaration to support her title to the subject property.24 She points out that the trial due diligence in failing to proceed with reasonable promptitude. In the absence of a
court erred in not giving the parties the opportunity to present their arguments on pattern or a scheme to delay the disposition of the case or a wanton failure to observe
their pending motions for reconsideration, and instead denied them outright on the mandatory requirement of the rules on the part of the plaintiff, x x x courts should
October 12, 2005; and that the power to dismiss the case for failure to prosecute decide to dispense rather than wield their authority to dismiss.29
should be exercised with care, as it may forever bar a litigant from pursuing judicial
relief, and so the circumstances surrounding the case should be considered to the end Finally, in Padua v. Hon. Ericta,30 the following pronouncement was
that technicality shall not take precedence over substantial justice.25redarclaw made:LawlibraryofCRAlaw
... (T)rial courts have ... the duty to dispose of controversies after trial on the merits
whenever possible. It is deemed an abuse of discretion for them, on their own motion,
to enter a dismissal which is not warranted by the circumstances of the case'
(Municipality of Dingras v. Bonoan, 85 Phil. 458-59 [1950]). While it is true that the
dismissal of an action on grounds specified under Section 3, Rule 17 of the Revised Rules
of Court is addressed to their discretion (Flores v. Phil. Alien Property Administrator,
107 Phil. 778 (I960]; Montelibano v. Benares, 103 Phil. 110 [1958]; Adorable v.
Bonifacio, 105 Phil. 1269 [1959]; Inter-Island Gas Service, Inc. v. De la Gerna, L-17631,
October 19, 1966, 18 SCRA 390), such discretion must be exercised soundly with a view
to the circumstances surrounding each particular case (Vernus-Sanciangco v.
Sanciangco, L-12619, April 28, 1962, 4 SCRA 1209). If facts obtain that serve as
mitigating circumstances for the delay, the same should be considered and dismissal
denied or set aside (Rudd v. Rogerson, 15 ALR 2d 672; Cervi v. Greenwood, 147 Colo
190, 362 P. 2d 1050 [1961]), especially where the suit appears to be meritorious and
the plaintiff was not culpably negligent and no injury results to defendant (27 C.J.S. 235-
36; 15 ALR 3rd 680). (Abinales vs. Court of First Instance of Zamboanga City, Br. 1, 70
SCRA 590, 595). (Emphasis supplied)
With the above-cited pronouncements as guides, the Court declares that the trial
court erred in dismissing Civil Case No. 7249, and the appellate court should not have
affirmed such dismissal. Petitioner's actuations indicate that she was not at all
unwilling to prosecute her case; nor can it be said that - as the trial court puts it - she
"refused" to present her evidence. Far from these, she was indeed more than eager
to see her case through. When she instituted Civil Case No. 7249 in 2004, petitioner
was already eighty-one (81) years of age.31 Yet, despite her advanced age, the record
indicates that petitioner attended the scheduled hearing of October 12, 2005,
together with her counsel and the first witness - only that the lawyer who attended
was a mere proxy, and not petitioner's true counsel who previously conferred with the
witness. Moreover, in coming to court that day, petitioner and the substitute counsel
were acting in the honest belief that trial cannot proceed on account of pending
incidents which the trial court has failed to resolve, that is: 1) her motion for
reconsideration of the trial court's September 7, 2005 Order directing her to defray
respondent's counsel's transportation expenses and appearance fees; and 2)
respondent's motion for reconsideration of the trial court's August 19, 2005 Order
denying his motion to correct the Pre-Trial Order. Given the circumstances petitioner
was confronted with at the time, it is understandable that she should seek another
continuance. Given her advanced age, determination, the surrounding circumstances
of the case, and the fact that no prejudice is caused to respondent by further
postponement of trial since petitioner - by prior agreement during pre-trial - is
expected to conclude her case within the agreed three settings, the trial court should
have extended to petitioner the courtesy she deserved by granting a continuance.
Then; is merit in petitioner's argument that since she was granted three scheduled
hearings within which to present her evidence, then she should have been afforded
such opportunity. Thus, it was error for the trial court to summarily dismiss the case
after only the second hearing. Since petitioner and respondent agreed to the three
settings during pre-trial, then petitioner should have been given three opportunities
to present her case, and not merely two. As far as the parties are concerned, an
allocation of time for trial has been made and agreed upon by and between them. So
long as the parties act within schedule, then none of them should complain. Besides,
the delay or failure to prosecute contemplated under Section 3, Rule 17 of the 1997
Rules must be for an "unreasonable length of time." In petitioner's case, the
continuance she sought was not for an unreasonable length of time. It was within the
period expected by and made known to the defendant and the trial court during pre-
trial. In fact, it was only until the next scheduled setting on November 23, 2005, which
was just over one month away. This may not be characterized as delay, as such
scheduled hearing was expected by respondent and could not have come as a surprise
to him. He was expected, as he agreed, to wait until the termination of these three
scheduled hearings. Within such period, he can do nothing but await his turn to
present evidence, unless petitioner terminates it earlier. Moreover, respondent could
not have been prejudiced by the postponement being sought. The trial court even
ordered petitioner to reimburse his counsel's expenses and attorney's fees for the
scheduled September 7, 2005 hearing. Using this as precedent, it could have ordered
the same with respect to the October 12, 2005 setting.
In a number of previous cases, we have consistently warned that courts must ensure
that litigations are prosecuted and resolved with dispatch. We also held 1hat although
the grant or denial of postponements rests entirely on the sound discretion of the
judge, we cautioned that the exercise of that discretion must be reasonably and wisely
exercised. Postponements should not be allowed except on meritorious grounds, in
light of the attendant circumstances. Deferment of the proceedings may be allowed or
tolerated especially where the deferment would cause no substantial prejudice to any
party. 'The desideratum of a speedy disposition of cases should not, if at all possible,
result in the precipitate loss of a party's right to present evidence and either in the
plaintiffs being non-suited or of the defendant's being pronounced liable under an ex-
parte judgment' While a court can dismiss a case on the ground of non-prosequitur,
the real test for the exercise of such power is whether, under the circumstances,
plaintiff is chargeable with want of due diligence in failing to proceed with reasonable
promptitude.32 (Emphasis supplied)
As the Court has ruled in Shimizu Philippines Contractors, Inc. v. Magsalin:33redarclaw
While it is discretionary on the trial court to dismiss cases, dismissals of actions should
be made with care. The repressive or restraining effect of the rule amounting to
adjudication upon the merits may cut short a case even before it is fully litigated; a
ruling of dismissal may forever bar a litigant from pursuing judicial relief under the
same cause of action. Hence, sound discretion demands vigilance in duly recognizing
the circumstances surrounding the case to the end that technicality shall not prevail
over substantial justice.

For its part, the trial court was remiss in its duty to act on the two pending motions
before it. It appears that it did not even grant the parties the opportunity to comment
respectively on these motions, and instead simply summarily denied them in open
court during the October 12,2005 scheduled hearing. The trial court should be
reminded that "the unreasonable delay of a judge in resolving a pending incident is a
violation of the norms of judicial conduct and constitutes a ground for administrative
sanction against the defaulting magistrate."34redarclaw

On respondent's argument that he is entitled to a speedy disposition of his case by

agreeing to grant petitioner three scheduled hearings for the presentation of her
evidence, respondent is expected to honor such agreement and await his turn. So long
as petitioner acts within the period allowed her for the presentation of her evidence,
respondent may not complain; any grumbling on his part would be flimsy, arbitrary,
and unfair. As far as petitioner is concerned, no right of respondent has been violated
by her actions; as elsewhere declared herein, petitioner is not guilty of delay and/or
failure to prosecute her case for an unreasonable length of time.

The foregoing disquisition is consistent with the trial court's exercise of discretion in
deciding how best to administer justice, taking into consideration the rules of G.R. No. 175481 November 21, 2012
procedure, applicable jurisprudence, and the circumstances of the case. In not
assuming a similar stance, the trial court and the CA committed evident error, thus DIONISIO F. AUZA, JR., ADESSA F. OTARRA, and ELVIE JEANJAQUET, Petitioners.
resulting in misguided and unjust dispositions that unnecessarily took the parties all vs.
the way to this Court. MOL PHILIPPINES, INC. and CESAR G. TIUTAN, Respondents.

WHEREFORE, the Petition is GRANTED. The assailed October 13, 2011 Decision and DECISION
June 20, 2012 Resolution of the Court of Appeals in CA-G.R. CEB CV No. 01360 are
REVERSED and SET ASIDE. Civil Case No. 7249 is REINSTATED, and the Regional Trial
DEL CASTILLO, J.:
Court, 6th Judicial Region, Kalibo, Aklan, Branch 6 is ORDERED to forthwith set the case
for the reception of petitioner Alicia Y. Laurel's evidence.
"Justice is in every case for the deserving, to be dispensed in the light of the
SO ORDERED.cralawlawlibrary established facts and the applicable law and doctrine,"1 Although we are committed
to protect the working class, it behooves us to uphold the rights of management too
if only to serve the interest of fair play. As applied in this case, the employees who
voluntarily resigned and executed quitclaims are barred from instituting an action or
claim against their employer.

By this Petition for Review on Certiorari,2 petitioners Dionisio F. Auza, Jr. (Auza),
Adessa F. Otarra (Otarra) and Elvie Jeanjaquet (Jeanjaquet) assail the August 17, 2006
Decision3 and November 15, 2006 Resolution4 of the Court of Appeals (CA) in CA-G.R.
SP No. 01375, which reversed the July 22, 2005 Decision5 and November 30, 2005
Resolution6 of the National Labor Relations Commission (NLRC) and consequently
dismissed their Complaints for illegal dismissal against respondents MOL (Mitsui O.S.K
Lines) Philippines, Inc. (MOL) and Cesar G. Tiutan (Tiutan), in his capacity as its
President.
Factual Antecedents
Respondent MOL is a common carrier engaged in transporting cargoes to and from
the different parts of the world. On October 1, 1997, it employed Auza and Jeanjaquet
as Cebu’s Branch Manager and Administrative Assistant, respectively. It also employed
Otarra as its Accounts Officer on November 1, 1997.
On October 14, 2002, Otarra tendered her resignation7 letter effective November 15,
2002 while Auza and Jeanjaquet submitted their resignation letters8 on October 30,
2002 to take effect on November 30, 2002. Petitioners were then given their
separation pay and the monetary value of leave credits, 13th month pay, MOL
cooperative shares and unused dental/optical benefits as shown in documents
entitled "Remaining Entitlement Computation,"9 which documents were signed by
each of them acknowledging receipt of such benefits. Afterwhich, they executed
Release and Quitclaims10 and then issued Separation Clearances.11
In February 2004 or almost 15 months after their severance from employment,
petitioners filed separate Complaints12 for illegal dismissal before the Arbitration
Branch of the NLRC against respondents and MOL’s Manager for Corporate Services,
George Dolorfino. These complaints were later consolidated.
Proceedings before the Labor Arbiter
In an Order13 dated May 26, 2004, Labor Arbiter Ernesto F. Carreon directed the
parties to submit their respective Position Papers within 10 days from receipt of
notice. Petitioners’ counsel of record, Atty. Narciso C. Boiser (Atty. Boiser), received
the same on June 22, 2004.
In their Position Paper,14 respondents alleged that petitioners were not dismissed but
voluntarily resigned from employment. In fact, separation benefits were paid to them
for which quitclaims were duly executed. Hence, petitioners are effectively barred
from instituting any action or claim in connection with their employment. They
likewise posited that petitioners are guilty of laches by estoppel considering that they
filed their complaints only after the lapse of 15 months from their severance from
employment. To support these allegations, respondents submitted together with the
said Position Paper, documentary evidence, affidavit of witnesses and a formal offer
of exhibits.
Instead of promptly filing their Position Paper, petitioners, on the other hand, wrote
the Labor Arbiter on July 7, 2004 requesting for additional time as they were looking
for another lawyer because Atty. Boiser was frequently out of town.15 They were able
to secure the services of Atty. Amorito V. Cañete (Atty. Cañete), who filed on July 29,
2004 an Entry of Appearance with Motion for Extension of Time to File Complainants’
Position Paper.16 However, in an Order17 of even date, the Labor Arbiter refused to
recognize Atty. Cañete’s appearance without the corresponding withdrawal of
appearance of Atty. Boiser. Nevertheless, petitioners were given 10 days from date to
submit their Position Paper. The next day, Atty. Boiser filed a Manifestation that Atty.
Cañete had been engaged by petitioners as a co-counsel.
Subsequently and notwithstanding the earlier refusal of the Labor Arbiter to recognize
the appearance of Atty. Cañete, petitioners filed on August 11, 2004 a verified Position
Paper18 signed by the said counsel. They averred in said pleading that their consent
to resign was not voluntarily given but was instead obtained through mistake and
fraud. They claimed that they were led to believe that MOL’s Cebu branch would be
downsized into a mere skeletal force due to alleged low productivity and profitability
volume. Pressured into resigning prior to the branch’s closure as they might be denied
separation pay, petitioners were constrained to resign.
Petitioners further averred that their separation from employment amounts to
constructive dismissal due to the shabby treatment they received from Tiutan at the
time they were being compelled to quit employment. Aside from Tiutan’s incessant
imputations that the Cebu branch is overstaffed, manned by incompetent employees,
and is heavily losing money, Auza was stripped of his authority to sign checks for the
branch’s expenditures; his and Otarra’s assigned company cars, cellphones and
landline phones were recalled; representation expenses were cut off; and travel and
hotel expenses were drastically reduced. These were done to them despite the fact
that the Cebu branch had consistently surpassed the performance goal set by the
Manila office as shown by documentary evidence submitted. Later, they discovered
that the planned downsizing of the Cebu branch was a mere malicious scheme to oust
them and to accommodate Tiutan’s own people. This is because after they were
duped to resign, additional employees were hired by the management as their
replacement; they moved to a bigger office; and more telephone lines were installed.
In view of their illegal dismissal, petitioners thus prayed for reinstatement plus
backwages as well as for damages and attorney’s fees.
Petitioners also filed a Supplemental Position Paper19 to show an itemized
computation of backwages due them and to further reiterate that their signatures in
the resignation letters and quitclaims were conditioned upon respondents’
misrepresentation that the Cebu office will eventually be manned by a skeletal force,
which, however, did not take place.
Subsequently, respondents filed a Motion to Expunge and/or Strike Out Position Paper
for Complainants Dated August 9, 2004 Filed by Atty. Amorito V. Cañete.20 They
pointed out the belated filing of petitioners’ Position Paper and the lack of authority
of Atty. Cañete to file and sign the same, among others. The Labor Arbiter granted the
Motion in an Order21 dated November 12, 2004 ratiocinating that a Position Paper
must be filed within the inextendible 10-day period as provided under Section 4, Rule
V of the NLRC Rules of Procedure. In this case, petitioners’ counsel of record, Atty.
Boiser, received on June 22, 2004 the May 26, 2004 Order requiring the parties to file
position papers within 10 days from receipt thereof. However, petitioners were only
able to file their Position Paper on August 11, 2004, way beyond the said 10-day
period. And for being filed late, said pleading must be stricken off the records.
Consequently, the Labor Arbiter dismissed the Complaints without prejudice for
failure to prosecute pursuant to Section 3, Rule 17 of the Rules of Court.
Proceedings before the National Labor Relations Commission
Petitioners appealed to the NLRC22 claiming that the Labor Arbiter defied judicial
pronouncements that the failure to submit a Position Paper on time is not a ground
for dismissing a complaint. Moreover, considering their dilemma at the time when
Atty. Boiser could hardly be reached and the unfortunate non-recognition order by
the Labor Arbiter of their new counsel, Atty. Cañete, petitioners prayed for the
relaxation of the rules to admit their Position Paper which, they contended, was filed
only two days late since they were given an extension of 10 days from July 29, 2004 to
file the same in an Order of even date.
In their Reply,23 respondents countered that petitioners’ Position Paper was filed
more than 60 days late from receipt by Atty. Boiser (who remained petitioners’
counsel of record) of the Labor Arbiter’s May 26, 2004 Order. They insisted that this
inexcusable delay should not be allowed. The Labor Arbiter should have dismissed the
Complaints with prejudice in the first place; a fortiori, the NLRC should also dismiss
the appeal for want of merit. Moreover, petitioners’ appeal deserves outright
dismissal as no appeal may be taken from an order dismissing an action without
prejudice, the remedy being only to revive or re-file the case with the Labor Arbiter.
In its Decision24 dated July 22, 2005, the NLRC set aside the Labor Arbiter’s ruling that
petitioners’ Position Paper was filed late. It held that the 10-day period given to
petitioners for filing their Position Paper should be reckoned from Atty. Cañete’s
receipt on August 9, 2004 of the July 29, 2004 Order of the Labor Arbiter. The filing,
therefore, of petitioners’ Position Paper on August 11, 2004 is well within the allowed
period, hence, there was no basis in dismissing the Complaints for failure to prosecute.
Also, instead of remanding the case to the Labor Arbiter, the NLRC opted to decide
the same on the merits, in consonance with its mandate to speedily dispose of cases.
In so doing, it found that petitioners’ resignation letters and quitclaims are invalid and
were signed under duress. The NLRC noted that contrary to the representations made
to petitioners, the Cebu branch was not actually closed but merely transferred to
another location with a bigger office space and with new employees hired as
petitioners’ replacements. Further, the NLRC noted that under MOL’s employment
manual, an employee who voluntarily resigns shall only be entitled to benefits if
he/she has rendered 10 years of continuous service. Hence, the grant of benefits to
petitioners is questionable considering that each of them rendered only five years of
service. It therefore opined that petitioners’ receipt of benefits is just part of
respondents’ plan to secure their resignations.
The NLRC concluded that petitioners were illegally dismissed and thus granted them
the relief of reinstatement, full backwages computed in accordance with the
computation presented by petitioners in their Supplemental Position Paper, and
attorney’s fees. For Tiutan’s bad faith in pressuring both Auza and Otarra to resign,
moral and exemplary damages were likewise awarded to the two. The dispositive
portion of the NLRC Decision reads:
WHEREFORE, we find respondents guilty of illegally dismissing complainants
consequently they are ordered to reinstate complainants to their positions without
loss of seniority rights with full backwages from the time they were illegally dismissed
until their actual reinstatement, the backwages are computed as of June 30, 2005 as
follows: Dionisio F. Auza, Jr. – P2,106,165.90;
P1,203,705.13 for Adessa F. Otarra and P685,027.68 for Elvie Jeanjaquet, subject to
further recomputation. In addition, respondents are ordered to pay moral and
exemplary damages of P500,000.00 to Dionisio F. Auza, Jr. and P100,000.00 to Adessa
F. Otarra. Further, respondents are ordered to pay complainants equivalent to 10% of
the total amount awarded as attorney’s fees.
SO ORDERED.25
Both parties filed their respective Motions for Reconsideration.26 With respect to
petitioners, they moved that their entitlement to 27 sacks of rice, which was discussed
in the body of the NLRC Decision but omitted in the dispositive portion thereof, be
declared. For their part, respondents alleged that the NLRC has no jurisdiction to
entertain petitioners’ appeal; hence, it usurped the jurisdiction and function of the
Labor Arbiter to hear and decide the case which had been dismissed without
prejudice. Reiterating this argument, respondents also subsequently filed An Urgent
Motion to Dismiss Instant Appeal for Lack of Jurisdiction.27
The NLRC, in its Resolution28 dated November 30, 2005, granted petitioners’ motion
by awarding 27 sacks of rice to each of them in addition to the monetary awards. On
the other hand, it denied respondents’ motions by upholding its jurisdiction to
entertain petitioners’ appeal in line with its authority to correct errors made by the
Labor Arbiter and in order to prevent delays in the disposition of labor cases.
Proceedings before the Court of Appeals
A Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order
(TRO) and/or Writ of Preliminary Injunction29 was filed by respondents with the CA.
In a Resolution30 dated January 13, 2006, the CA issued a temporary restraining order
to prevent the enforcement of the NLRC Decision of July 22, 2005 upon respondents’
posting of a bond. A writ of preliminary Injunction31 was then issued to further
restrain the implementation of the assailed Decision.
On August 17, 2006, the CA rendered its Decision32 annulling and setting aside the
Decision of the NLRC. The CA did not find any element of coercion and force in
petitioners’ separation from employment but rather upheld the voluntary execution
of their resignation letters as gleaned from the tenor thereof. It opined that
petitioners were aware of the consequences of their acts in voluntarily resigning and
executing quitclaims. Notably, however, the CA did not touch upon the issue raised by
respondents regarding the NLRC’s lack of jurisdiction. The dispositive portion of the
CA’s Decision reads:
WHEREFORE, the petition for certiorari filed by the petitioners is hereby GRANTED.
Accordingly, the assailed decision of the public respondent National Labor Relations
Commission (NLRC) 4th Division of Cebu City dated 22 July 2005 in NLRC Case No. V-
000079-2005 (RAB-VII-02-0342-04 and RAB-VII-02-0418-04) as well as the Resolution
of the public respondent Commission dated 30 November 2005 are REVERSED and
SET ASIDE. A new decision is entered dismissing the complaints filed by private
respondents for illegal dismissal against petitioners.
SO ORDERED.33
A motion for reconsideration34 was filed by the petitioners but the same was denied
by the CA in a Resolution35 dated November 15, 2006.
Hence, this petition.
Issues
Petitioners ascribe upon the CA the following errors:
1. THE HONORABLE COURT OF APPEALS ACTED WITHOUT JURISDICTION AND
GRAVELY ERRED WHEN IT REVERSED AND SET ASIDE THE NLRC DECISION
RENDERED ON THE BASIS OF FACTUAL FINDINGS WHICH WERE NOT
CONTROVERTED BY HEREIN PRIVATE RESPONDENTS;
2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT RULING
THAT THE RESPONDENTS CONSTRUCTIVELY DISMISSED PETITIONERS;
3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT
PETITIONERS WERE NOT DISMISSED BUT VOLUNTARILY RESIGNED FROM
THEIR JOBS;
4. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT RULING
THAT THE RELEASES AND QUITCLAIMS WERE INVALID AND THEREFORE NOT
A BAR TO THE FILING OF A COMPLAINT FOR ILLEGAL DISMISSAL;
5. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN CONCLUDING
THAT THE TENOR OF THE LETTERS OF RESIGNATIONS IS PROOF THAT
PETITIONERS WERE NOT FORCED TO RESIGN;
6. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT DISMISSING
THE PETITION FOR CERTIORARI FOR THE FAILURE OF THE PRIVATE
RESPONDENTS TO ATTACH THE PETITIONERS’ POSITION PAPER AND
SUPPLEMENTAL POSITION OR EVEN THE PRO-FORMA COMPLAINTS;
7. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT ORDERING
THE REINSTATEMENT OF PETITIONERS TO THEIR FORMER POSITIONS WITH
FULL BACKWAGES FROMTHE DATES THEY WERE ILLEGALLY DISMISSED UNTIL
THEIR ACTUAL REINSTATEMENT; and
8. THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF
DISCRETION IN NOT AWARDING DAMAGES AND ATTORNEYS FEES.36
Petitioners insist that they were not given any choice but to resign after respondents
informed them of the impending closure of the branch and that they would not
receive any separation pay if the closure would precede their resignation. They claim
that they had no personal reasons to forego their employment from which they were
receiving huge salaries and benefits. Thus, the CA gravely erred in holding that their
resignations were voluntarily made and in not dismissing respondents’ Petition for
Certiorari despite their failure to attach thereto petitioners’ Position Paper and
Supplemental Position Paper.
In their Comment,37 respondents assert that the CA’s finding of petitioners’ voluntary
resignation from employment is based on substantial evidence and is final and
conclusive on this Court. Further, the CA was correct in giving due course to their
petition since they have attached all the pleadings and documents required for
sufficient compliance with the rules. They counter that it is this instant petition which
should be dismissed as its certification of non-forum shopping was signed only by Auza
without authority to sign in behalf of the other petitioners. Finally, respondents ask
this Court to resolve the issue regarding the NLRC’s jurisdiction over petitioners’
appeal filed before it.
Our Ruling
This Court finds no merit in the petition.
On Procedural Issues:
The NLRC has jurisdiction to entertain
petitioners’ appeal filed before it.
To settle the issue of the NLRC’s jurisdiction over petitioners’ appeal, we quote in part
Article 223 of the Labor Code concerning the appellate jurisdiction of the NLRC:
ART. 223. APPEAL.  Decisions, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders. Such appeal may be
entertained only on any of the following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the Labor
Arbiter;
xxxx
and Section 2, Rule VI of the NLRC Rules of Procedure38 which provides:
Section 2. Grounds. – The appeal may be entertained only on any of the following
grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the Labor
Arbiter x x x;
xxxx
Clearly, the NLRC is possessed of power to rectify any abuse of discretion committed
by the Labor Arbiter. Here, the NLRC, in taking cognizance of petitioners’ appeal and
in resolving it on the merits, merely exercised such power. This is because the Labor
Arbiter, in not admitting petitioners’ Position Paper (albeit filed late) and in dismissing
petitioners’ Complaints for failure to prosecute, acted with grave abuse of discretion
as hereinafter explained.
First, "the failure to submit a Position Paper on time is not a ground for striking out
the paper from the records, much less for dismissing a complaint in the case of the
complainant."39 As mandated by law, the Labor Arbiter is enjoined "to use every
reasonable means to ascertain the facts of each case speedily and objectively, without
technicalities of law or procedure, all in the interest of due process."40
Next, the Labor Arbiter committed grave error in dismissing the Complaints on the
ground of failure to prosecute under Section 3, Rule 17 of the Rules of Court.41 Under
this rule, a case may be dismissed on the ground of non-prosequitur, if, under the
circumstances, the "plaintiff is chargeable with want of due diligence in failing to
proceed with reasonable promptitude."42 In the case at bench, no negligence can be
attributed to petitioners in pursuing their case. The records show that petitioners
themselves wrote the Labor Arbiter on July 7, 2004 to request for additional time to
submit a Position Paper since their counsel, Atty. Boiser, was frequently out of town
and so they had to secure the services of an additional counsel to prepare and file
their Position Paper. Unfortunately, the Labor Arbiter refused to recognize the
appearance of their new counsel, Atty. Cañete. Under the circumstances, petitioners
should be given consideration for their vigilance in pursuing their causes. As aptly held
by the NLRC, the delay in the filing of their Position Paper cannot be interpreted as
failure to prosecute on their part. "Failure to prosecute" is akin to lack of interest.43
Here, petitioners did not sleep on their rights and obligations as party litigants.
In view of these, it is clear that the NLRC did not err in entertaining petitioners’ appeal
and in considering their Position Paper in resolving the same. It merely liberally applied
the rules to prevent a miscarriage of justice in accord with the provisions of the Labor
Code. As it is, "technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties."44
Petitioners’ subsequent and substantial
compliance with the rules on verification
and certification of non-forum shopping
calls for the relaxation of technical rules.
Respondents assail this Court’s authority to entertain the instant petition despite the After a careful scrutiny and review of the records of the case, this Court is inclined to
defective verification and certification of non-forum shopping attached to it. affirm the findings of the CA that petitioners voluntarily resigned from MOL.

True, the verification and certification of non-forum shopping was executed and "Resignation is the formal pronouncement or relinquishment of an office."50 The
signed solely by Auza without proof of any authority from his co-petitioners. Thence, overt act of relinquishment should be coupled with an intent to relinquish, which
in a Minute Resolution45 dated February 26, 2007, this Court required petitioners to intent could be inferred from the acts of the employee before and after the alleged
submit such proof of authority. In compliance therewith, petitioners thereafter resignation.51
submitted a Verification and Certification of Non-Forum Shopping46 this time
executed and signed by Auza, Otarra and Jeanjaquet. It appears that petitioners, on their own volition, decided to resign from their positions
after being informed of the management’s decision that the Cebu branch would
Ample jurisprudence provides that subsequent and substantial compliance may call eventually be manned by a mere skeletal force. As proven by the email
for the relaxation of the rules.47 Indeed, "imperfections of form and technicalities of correspondences presented, petitioners were fully aware and had, in fact,
procedure are to be disregarded, except where substantial rights would otherwise be acknowledged that Cebu branch has been incurring losses and was already
prejudiced."48 Due to petitioners’ subsequent and substantial compliance, we thus unprofitable to operate.52 Note that there was evidence produced to prove that
apply the rules liberally in order not to frustrate the ends of justice. indeed the Cebu branch’s productivity had deteriorated as shown in a Profit and Loss
Statement53 for the years 2001 and 2002. Also, there was a substantial reduction of
The CA did not err in giving due course workforce as all of the Cebu branch staff and personnel, except one, were not
to respondents’ petition for certiorari retained. On the other hand, petitioners’ assertions that the Cebu branch was
despite failure to attach petitioners’ performing well are not at all substantiated. What they presented was a document
Position Paper and Supplemental entitled "1999 Performance Standards",54 which only provides for performance
Position Paper. objectives but tells nothing about the branch’s progress. Likewise, the Cebu
Performance Reports55 submitted which showed outstanding company performance
Petitioners deplore the CA’s refusal to dismiss respondents’ Petition for Certiorari for only pertained to the year 1999 and the first quarter of year 2000. No other financial
deliberately failing to attach a copy of petitioners’ Position Paper as well as their documents were submitted to show that such progress continued until year 2002.
Supplemental Position Paper, pleadings which are relevant in rendering a decision.
Contrary to their assertions, petitioners were not lured by any misrepresentation by
This contention fails to impress. respondents.1âwphi1 Instead, they themselves were convinced that their separation
was inevitable and for this, they voluntarily resigned. As aptly observed by the CA, no
element of force can be deduced from their letters of resignation as the same even
It is within the CA’s determination whether the documents attached by a petitioner
contained expressions of gratitude and thus contradicting their allegations that same
are sufficient to make out a prima facie case since the acceptance of a petition as well
were prepared by their employer. In Globe Telecom v. Crisologo,56 we held that
as the grant of due course thereto are addressed to the sound discretion of the
allegations of coercion are belied by words of gratitude coming from an employee who
appellate court. The Rules of Court, aside from the judgment, final order or resolution
is just forced to resign.
being assailed, do not specify the documents, pleadings or parts of the records that
should be appended to the petition but only those that are relevant or pertinent to
such judgment, final order or resolution.49 As such, the CA has discerned to judiciously Petitioners aver that right after receiving their separation pay, they found out that the
resolve the merits of the petition based on what have been submitted by the parties. Cebu branch was not closed but merely transferred to a bigger office and staffed by
At any rate, the subject Position Paper and Supplemental Position Paper were newly hired employees. Notably, however, despite such knowledge, petitioners did
submitted by petitioners themselves in their Comment to the Petition for Certiorari not immediately contest their resignations but waited for more than a year or nearly
and, hence, had also been brought to the attention of the CA. 15 months before contesting them. This negates their claim that they were victims of
deceit.57 Moreover, no adequate proof was presented to show that the planned
downsizing of Cebu branch did not take place. Similarly, petitioners’ allegations of bad
On the Substantive Issues:
faith on the part of respondents are unsupported by records. No proof whatsoever
was advanced to show that there was threat of withholding their separation pay unless
Petitioners voluntarily resigned from employment.
their resignation letters were submitted prior to the actual closure of the Cebu branch
or that they were subjected to ill treatment and unpalatable working conditions
immediately prior to their resignation.

In addition, it is well to note that Auza and Otarra are managerial employees and not
ordinary workers who cannot be easily coerced or intimidated into signing something
against their will.58 As borne out by the records, Auza was the Local Chairman of
International Shipping Lines Association for five years, president of their Homeowner’s
Association and an active member of his community. Otarra, on the other hand, was
officer of various church organizations and a college professor at the University of the
Visayas.59 Their standing in society depicts how highly educated and intelligent
persons they are as to know fully well the consequences of their acts in executing and
signing letters of resignation and quitclaims. Although quitclaims are generally against
public policy, voluntary agreements entered into and represented by a reasonable
settlement are binding on the parties which may not be later disowned simply because
of a change of mind.60 "It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of the settlement are
unconscionable, that the law will step in to bail out the employee."61 Hence, we
uphold the validity of the quitclaims signed by petitioners in exchange for the G.R. No. 192371 January 15, 2014
separation benefits they received from respondents.
LAND BANK OF THE PHILIPPINES, Petitioner,
All told, the Court affirms the finding of the CA that petitioners were not illegally vs.
dismissed from employment but instead voluntarily resigned therefrom. EMMANUEL OÑATE, Respondent.

WHEREFORE, the petition is DENIED. The Decision dated August 17, 2006 and DECISION
Resolution dated November 15, 2006 of the Court of Appeals in CA-G.R. SP No. 01375,
are AFFIRMED. DEL CASTILLO, J.:

SO ORDERED. This Petition for Review on Certiorari1 assails the December 18, 2009 Decision2 of the
Court of Appeals (CA) in CA-G.R. CV No. 89346, which affirmed with modification the
May 31, 2006 Decision3 of the Regional Trial Court (RTC), Branch 141 Makati City. The
RTC dismissed the Complaint4 for Sum of Money, which petitioner Land Bank of the
Philippines (Land Bank) filed against respondent Emmanuel C. Oñate (Oñate), and
ordered Land Bank to return the amount of ₱1,471,416.52 it unilaterally debited from
his accounts. On separate appeals by both parties, the CA affirmed the RTC Decision
with modification that Land Bank was further ordered to pay Oñate the sums of
₱60,663,488.11 and US$3,210,222.85 representing the undocumented withdrawals
and drawings from his trust accounts with 12% per annum interest compounded
annually from June 21, 1991 until fully paid.

Also assailed is the CA’s May 27, 2010 Resolution5 denying Land Bank’s Motion for
Reconsideration.6
Factual Antecedents (b) to pay all costs, expenses and charges incurred in connection
with the administration, preservation, maintenance and protection
Land Bank is a government financial institution created under Republic Act No. 3844.7 of the Fund and to charge the same to the Fund;
From 1978 to 1980, Oñate opened and maintained seven trust accounts with Land
Bank, more particularly described as follows: (c) to vote in person or by proxy on any stocks, bonds or other
securities held by you, for my/our account;
Date Opened Beginning Balance
(d) to borrow money for the Fund (from your banking department
09.07.78 ₱250,000.008 or from others) with or without giving securities from the Fund;

11.16.78 1,312,896.009 (e) to cause any asset of the Fund to be issued, held or registered in
your name or in the name of your nominee, or in such form that title
02.23.79 900,000.0010 will pass by delivery, provided your records shall indicate the true
ownership of such assets;
10.08.79 500,000.0011

10.25.79 200,001.0012 (f) to hold the Fund in cash and to invest the same in fixed income
placements traded and sold by your own Money Market Division;
03.18.80 43.9813 and

03.13.80 188,161.0014
Each trust account was covered by an Investment Management Account (IMA) with
Full Discretion15 and has a corresponding passbook where deposits and withdrawals
were recorded. Pertinent portions common to the IMAs read:
You [Land Bank] are appointed as my agent with full powers and discretion, subject
only to the following provisions:
1. You are authorized to hold, invest and reinvest the Fund and keep the same
invested, in your sole discretion, without distinction between principal and
income, in any assets which you deem advisable, without being restricted to
those of the character authorized for fiduciaries under any present or future
law.
2. You shall have full power and authority:
(a) to treat all the Fund as one aggregate amount for purposes of
investment, and to deposit all or any part thereof with a reputable
bank including your own commercial banking department;
(g) to sign all documents pertinent to the transaction which you will
make in behalf of this Account.
3. All actions taken by you hereunder shall be for my account and risk. Except
for willful default or gross misconduct, you shall not be liable for any loss or
depreciation in the value of the assets of the Fund arising from any cause
whatsoever.
4. You shall maintain accurate records of all investments, receipts,
disbursements and other transactions of the Account. Records relating
thereto shall be open at all reasonable times to inspection and audit by me
either personally or through duly authorized representatives. Statements
consisting of a balance sheet, portfolio analysis, statement of income and
expenses, and summary of investment changes are to be sent to me/us
quarterly.
I/We shall approve such accounting by delivering in writing to you a
statement to that effect or by failure to express objection to such
accounting in writing delivered to you within thirty (30) days from
my receipt of the accounting.

Upon your receipt of a written approval of the accounting, or upon

the passage of said period of time within which objections may be
 filed, without written objections having been delivered to you, such
accounting shall be deemed to be approved, and you shall be
released and discharged as to all items, matters and things set forth
in such accounting as if such accounting had been settled and
allowed by a decree of a court of competent jurisdiction, in an action
or proceeding in which you and I were parties.16 (Emphasis
supplied)
In a letter17 dated October 8, 1981, however, Land Bank demanded
from Oñate the return of ₱4 million it claimed to have been
inadvertently deposited to Trust Account No. 01-125 as his
additional funds but actually represents the total amount of the
checks issued to Land Bank by its corporate borrowers as payment
for their pre-terminated loans. Oñate refused. To settle the matter,
a meeting was held, but the parties failed to reach an agreement.
Since then, the issue of "miscrediting" remained unsettled. Then on
June 21, 1991, Land Bank unilaterally applied the outstanding
balance in all of Oñate’s trust accounts against his resulting
indebtedness by reason of the "miscrediting" of funds. Although it
exhausted the funds in all of Oñate’s trust accounts, Land Bank was
able to debit the amount of ₱1,528,583.48 only.18
Proceedings before the Regional Trial Court
To recoup the remaining balance of Oñate’s indebtedness, Land
Bank filed a Complaint19 for Sum of Money seeking to recover the
amount of ₱8,222,687.8920 plus interest at the legal rate of 12%
per annum computed from May 15, 1992 until fully paid. Pertinent
portions of Land Bank’s Complaint reads:
5. By virtue of the Deeds of Revocable Trust executed on January 9, 198921
[sic] and February 5, 198922 [sic] by Philippine Virginia Tobacco
Administration (PVTA) and Philippine Virginia Tobacco Board (PVTB),
LANDBANK likewise became a Trustee of certain funds belonging to PVTA and
PVTB.
6. As authorized under the [Deeds] of Revocable Trust, on October 10, 1980,
LANDBANK invested ₱4 Million of the trust accounts of PVTA and PVTB,
through a direct lending scheme to the following companies:
(a) Republic Telephone Company, Inc. (RETELCO), under Promissory
Note No. 1145 dated October 10, 1980, for ₱1,021,250.00 with
maturity date on November 24, 1980, subject to automatic roll-over
up to October 10, 1981 at 17% interest per annum.
(b) Philippine Blooming Mills Company, Inc. (PBM), under
Promissory Note (unnumbered) dated October 10, 1980, for
₱1,021,250.00, with maturity date on November 24, 1980, subject
to automatic roll-over up to October 10, 1981, at 17% interest per
annum;
(c) Cheng Ban Yek (CBY), under Promissory Note (unnumbered)
dated October 10, 1980, for ₱1,023,138.89, with maturity date on
November 28, 1980, subject to automatic roll-over up to October
10, 1981, at 17% interest per annum;
(d) Philippine Tobacco Filters Corporation (PHILTOFIL), under
Promissory Note (unnumbered) dated October 10, 1980, for
₱1,021,250.00, with maturity date on November 24, 1980, subject
to automatic roll-over up to October 10, 1981, at 17% interest per
annum.
xxxx
7. Pursuant to such direct loan transactions granted to the aforementioned
companies, LANDBANK issued four (4) cashier’s checks for ₱1 Million each
payable to RETELCO, PBM, CBY, and PHILTOFIL x x x
8. On or about November 24 and 28, 1980, the aforesaid borrowers
(RETELCO, PBM, CBY, AND PHILTOFIL), pre-terminated their corresponding
loans and paid their respective obligations in the form of checks payable to
LANDBANK and delivered by [Oñate’s] representative, Mr. Eduardo Polonio.
9. When the checks were delivered, [Oñate] fraudulently misrepresented to
LANDBANK that they were [Oñate’s] additional capital contribution to his
personal trust account. On the basis of this misrepresentation, LANDBANK
credited the payments made by the aforementioned corporate borrowers to
[Oñate’s] Trust Account No. 01-125.
10. After the payments were credited to his personal trust account, Oñate
proceeded to withdraw the same, to the damage and prejudice of LANDBANK
as the owner thereof.23
In his Answer (With Compulsory Counterclaim),24 Oñate asserted that the setoff was
without legal and factual bases. He specifically denied any knowledge or involvement
in the transaction between Land Bank and its clients Philippine Virginia Tobacco
Administration (PVTA) and Philippine Virginia Tobacco Board (PVTB). He also denied
that he made fraudulent misrepresentation to induce the bank to deposit to his Trust
Account No. 01-125 as his additional capital the payments allegedly tendered by the
bank’s corporate borrowers. He maintained that all the funds in his accounts came
from legitimate sources and that he was totally unaware of and had nothing to do with
the alleged "miscrediting." While Oñate admitted having received the October 8, 1981
demand letter, he argued that he did not acquiesce thereto and, in fact, disputed the
same during a meeting with an officer of Land Bank. He also refuted Land Bank’s claim
that it formally demanded for the return of the disputed amount as the September 3,
1991 letter25 it alluded to is not a demand letter. It was sent in response to his
counsel’s letter requesting for an accounting of his trust accounts.
By way of compulsory counterclaim, Oñate pointed out that per Balance Sheets26 as
of June 30, 1982 the funds in his trust accounts already totaled ₱35,555,464.78. And
as of January 1993, the accumulated balance of his accounts reached
₱229,222,160.25 and $3,472,683.94 computed as follows:
With interest at the rate of eighteen percent (18%) compounded every ninety (90)
days from the third quarter of 1982 to January, 1993, the trustor’s equity of
₱35,555,464.78 has earned interest in the amount of ₱193,666,695.47. Adding the
trustor’s equity to the aforesaid accrued interest thereon, [Oñate’s] peso deposits [in]
his trust accounts with plaintiff bank have an accumulated balance of
₱229,222,160.25 as of January 1993 .
But that is not all. [Oñate’s] dollar deposits to Trust Account No. 01-014 (which is for
an "Undisclosed Principal") from the period July-September, 1980 alone, already
amounted to $1,690,943.78. x x x
With interest at the rate of six percent (6%) compounded every ninety (90) days from
the first quarter of 1981, the said dollar deposits have earned interest of
$1,781,740.16 up to January, 1993. Thus, [Oñate’s] dollar deposits [in] Trust Account
No. 01-014 have an aggregate balance of $3,472,683.94 as of January 1993.27
Hence, even if the amount of ₱8,222,687.89 as of May 15, 1992 is deducted from the
outstanding balance of his trust accounts as of January 1993, the bank still owes him
₱220,999,472.36 on top of his dollar deposits amounting to $3,472,683.94.
Oñate prayed that a judgment be issued dismissing the Complaint and ordering Land
Bank to pay him:
i) The sum of ₱220,999,472.36, representing the outstanding balance on the
peso deposits [of Oñate’s] various trust accounts as of January 1993, with
interest thereon from said date at the rate of eighteen percent (18%)
compounded every ninety (90) days, until the said amount is fully paid;
ii) The sum of $3,472,683.94, representing the aggregate balance as of
January 1993 on [Oñate’s] dollar deposits [in] Trust Account No. 01-014, with
interest thereon from said date at the rate of six percent (6%) compounded
every ninety (90) days, until the said amount is fully paid;
iii) The sum of ₱100,000,000.00 as and by way of moral damages;
iv) The sum of ₱50,000,000.00 as and by way of exemplary damages; and
v) The sum of ₱15,000,000.00, or 20% of all sums collected, whichever is
higher, as and for attorney's fees, the further sum of ₱3,000.00 as
appearance fee for each hearing attended, and such other sums that may be
proved during the trial as litigation expenses.28
Upon Oñate’s motion, the RTC issued an Order29 dated May 27, 1994, creating a
Board of Commissioners (the Board) for the purpose of examining the records of
Oñate’s seven trust accounts, as well as to determine the total amount of deposits,
withdrawals, funds invested, earnings, and expenses incurred. It was composed of
Atty. Engracio M. Escasinas, the Clerk of Court of the RTC of Makati City, as the
Chairman; and, Atty. Ma. Cristina C. Malab and Ms. Adeliza M. Jaranilla representing
Land Bank and Oñate, respectively, as members.
Initially, the Board submitted three reports.30 But for clarity, the trial court ordered31
the Board to reconvene and to submit a consolidated report furnishing copies of the
same to both parties, who were given 10 days from receipt thereof to file their
respective comments thereto. The Board complied and on August 16, 2004 submitted
its consolidated report.32 As summarized by the RTC, the said consolidated report
revealed that there were undocumented and over withdrawals and drawings33 from
Oñate’s trust accounts:
Thus, the Commissioners’ Report showed that the total amount of drawings and
withdrawals from each account without withdrawal slips are as follows:
In Trust Account No. 01-014, there was a total withdrawals [sic] without withdrawal
slips but reflected in the passbook in the amount of ₱45,103,297.33 and this account
showed a negative balance of ₱40,367,342.34. On the dollar deposit under the same
trust account, there was a total [withdrawal] without withdrawal slips but reflected in
the passbook in the amount of $3,210,222.85.
In Trust Account No. 01-017, there was a total withdrawal without withdrawal slips in
the amount of ₱2,682,088.58 and there was an over withdrawal of ₱11,738,470.53
and $30,000.00.
In Trust Account No. 01-024, there was a total withdrawal without withdrawal slips of
₱900,000.00 and over withdrawal of ₱13,310,328.01.
In Trust Account No. 01-075, there was a total withdrawal of ₱500,000.00 without
withdrawal slips and there was a negative balance of ₱33,342,132.64 and $286,399.34
on the dollar account.
In Trust Account No. 01-082, the total amount of withdrawal without withdrawal slips
but reflected in the passbook was ₱1,782,741.86 and there was an over withdrawal of
₱14,031.63.
In Trust Account No. 01-089, there was a total withdrawal without withdrawal slips in
the amount of ₱5,054,809.00 but the report indicated that there was a negative
balance of ₱1,296,441.92.
In Trust Account No. 01-125, there was a total withdrawal without withdrawal slips in
the amount of ₱4,640,551.34 and there was a negative balance of ₱58,327,459.23.34
On even date, the Board also submitted a Manifestation35 informing the RTC that its
findings as to the outstanding balance of each trust account may not be accurate
considering that it was not given ample opportunity to collate and sort out the
documents related to each trust account and that there may have been double take
up of accounts since the documents previously reviewed may have been considered
again in subsequent reports.
In his Comment,36 Oñate asserted that the undocumented withdrawals mentioned in
the consolidated report should not be considered as cash outflows. Rather, they
should be treated as unauthorized transactions and the amounts subject thereof must
be credited back to his accounts.
Land Bank did not file any comment or objection to the Board’s consolidated
comment.
During the pre-trial conference, the parties agreed that they would submit the case
for decision based on the reports of the Board after they have submitted their
respective memoranda. They also stipulated on the following issues for resolution of
the RTC:
1. Whether x x x Oñate could claim on Trust Account Nos. 01-014 and 01-017
which were opened for an undisclosed principal;
2. Whether x x x the undocumented withdrawals and drawings are
considered valid and regular and, conversely, if in the negative, whether x x
x such amounts shall be credited [back] to the accounts.37
In his Memorandum38 filed on July 12, 2005, Oñate reiterated that Land Bank should
be held liable for the undocumented withdrawals and drawings. For its part, Land Bank
posited, inter alia, that Trust Account Nos. 01-014 and 01-017 should be excluded
from the computation of Oñate’s counterclaim considering his allegation that said
accounts are owned by an undisclosed principal whom/which he failed to join as
indispensable party. Land Bank further theorized that Oñate must answer for the
negative balances as revealed by the Board’s reports.39
Thereafter, the case was submitted for decision.
Ruling of the Regional Trial Court
On May 31, 2006, the RTC rendered a Decision40 dismissing Land Bank’s Complaint
for its failure to establish that the amount of ₱4,086,888.89 allegedly "miscredited" to
Oñate’s Trust Account No. 01-125 actually came from the investments of PVTA and
PVTB. Hence, the RTC ordered Land Bank to restore the total amount of ₱1,471,416.52
which the bank unilaterally debited from Oñate’s five trust accounts.41
With regard to Oñate’s counterclaim for the recovery of ₱220,999,472.36, as well as
the alleged US$3,472,683.94 balance of his dollar deposits in Trust Account No. 01-
014, the RTC ruled that under the IMAs, Land Bank had the authority to withdraw
funds (as in fact it was at all times in possession of the passbooks) from Oñate’s
accounts even without a letter of instruction or withdrawal slip coming from Oñate. It
thus gave weight to the entries in the passbooks since the same were made in the
ordinary course of business. The RTC also ruled that Oñate is deemed to have
approved the entries in the statements of account that were sent to him as he never
interposed any objection thereto within the period given him to do so.
Anent Land Bank’s claim for the negative balances, the RTC likewise denied the same
for Land Bank never sought them in its Complaint. Moreover, being the manager of
the funds and keeper of the records, the RTC held that Land Bank should not have
allowed further withdrawals if there were no more funds.
The RTC likewise debunked Land Bank’s argument that Oñate’s counterclaim with
respect to Trust Account Nos. 01-014 and 01-017 should be dismissed for his failure
to join his undisclosed principal. According to the RTC, Land Bank should have earlier
invoked such defense when it filed its answer to the counterclaim. Also, if it is true
that said accounts are not owned by Oñate, then the bank had no right to apply the
funds in said accounts as payment for the alleged personal indebtedness of Oñate.
The dispositive portion of the RTC’s Decision reads:
WHEREFORE, in view of all the foregoing, decision is hereby rendered dismissing the
complaint and ordering [Land Bank] to pay [Oñate] the total amount of ₱1,471,416.52
representing the total amount of funds debited from the five (5) trust accounts of the
defendant with legal rate of interest of 12% per annum, compounded yearly, effective
on 21 June 1991 until fully paid.
No pronouncement as to costs.
SO ORDERED.42
Land Bank filed a Motion for Reconsideration.43 In an Order44 dated July 11, 2006,
however, the RTC denied the same.
Both parties appealed to the CA.
Ruling of the Court of Appeals
In its December 18, 2009 Decision,45 the CA denied Land Bank’s appeal and granted
that of Oñate. The CA affirmed the RTC’s ruling that Land Bank failed to establish the
source of the funds it claimed to have been erroneously credited to Oñate’s account.
With respect to Oñate’s appeal, the CA agreed that he is entitled to the unaccounted
withdrawals which, as found by the Board, stood at ₱60,663,488.11 and
$3,210,222.85.46 The CA’s ruling is anchored on the bank’s failure to observe Sections
X401 and X425 of the Bangko Sentral ng Pilipinas Manual of Regulation for Banks
(MORB) requiring it to give full disclosure of the services it offered and conduct its
dealings with transparency, as well as to render reports that would sufficiently apprise
its clients of the significant developments in the administration of their accounts.
Aside from allowing undocumented withdrawals, the CA likewise noted that Land Bank
failed to keep an accurate record and render an accounting of Oñate’s accounts. For
the CA, the entries in the passbooks are not sufficient because they do not specify
where the funds withdrawn from Oñate’s accounts were invested.
The dispositive portion of the CA’s Decision reads:
WHEREFORE, the appeal of plaintiff-appellant Land Bank is DENIED.
The appeal of defendant-appellant Emmanuel Oñate is hereby partially GRANTED.
Accordingly, the May 31, 2006 Decision of the Regional Trial Court, Branch 141, Makati
City is hereby MODIFIED in that, in addition to the previous grant of ₱1,471,416.52
representing the total amount of funds debited from defendant-appellant Oñate’s
trust accounts, plaintiff-appellant Land Bank is hereby ordered to pay defendant-
appellant Oñate the sum of ₱60,663,488.11 and $3,210,222.85 representing the
undocumented withdrawals it debited from the latter’s trust account with interest at
the rate of 12% per annum, compounded yearly from June 21, 1991 until fully paid.
SO ORDERED.47
Land Bank filed a Motion for Reconsideration.48 In a Resolution49 dated May 27,
2010, however, the CA denied its motion. Hence, Land Bank filed the instant Petition
for Review on
Certiorari based on the following issues:
Issues
1. WHETHER X X X THE ENTRIES IN THE PASSBOOK ISSUED BY LBP IN OÑATE’S
TRUST ACCOUNT (EXPRESS TRUST) COVERED BY AN INVESTMENT
MANAGEMENT AGREEMENT (IMA) WITH FULL DISCRETION ARE SUFFICIENT
TO MEET THE "RULE ON PRESUMPTION OF REGULARITY OF ENTRIES IN THE
COURSE OF BUSINESS" PROVIDED FOR UNDER SECTION 43, RULE 130 OF THE
RULES OF COURT.
2. WHETHER X X X OÑATE IS ENTITLED TO CLAIM FOR ₱1,471,416.52 WHICH
IS NOT PLEADED AS COUNTERCLAIM IN HIS ANSWER PURSUANT TO SECTION
2, RULE 9 OF THE RULES OF COURT.
3. WHETHER X X X OÑATE IS ENTITLED TO THE AWARD OF ₱60,663,488.11
AND $3,210,222.85 REPRESENTING THE ALLEGED UNDOCUMENTED
WITHDRAWALS DEBITED FROM HIS TRUST ACCOUNTS ON THE GROUND OF
LBP’S ALLEGED FAILURE TO MEET THE STANDARDS SET FORTH UNDER THE
2008 MANUAL ON REGULATIONS FOR BANKS (MORB) ISSUED BY BSP.
4. WHETHER X X X OÑATE MAY SUE [ON] TRUST ACCOUNT NOS. 01-014 AND
01-017 OPENED FOR AN UNDISCLOSED PRINCIPAL WITHOUT JOINING HIS
UNDISCLOSED PRINCIPAL.
5. WHETHER X X X THE AWARD OF INTEREST TO OÑATE AT THE RATE OF
TWELVE PERCENT (12%) PER ANNUM, COMPOUNDED YEARLY FROM JUNE
 21, 1991 UNTIL FULLY PAID, IS VIOLATIVE OF ARTICLE 1959 OF THE CIVIL
CODE.50
Land Bank’s Arguments
Land Bank disputes the ruling of both lower courts that it failed to prove the fact of
"miscrediting" the amount of ₱4,086,888.89 to Oñate’s Trust Account No. 01-125 as
the deposit slips pertaining thereto were not presented. Land Bank maintains that in
trust accounts the passbooks are always in the bank’s possession so that it can record
the cash inflows and outflows even without the corresponding deposit or withdrawal
slips. Citing Section 43, Rule 130 of the Rules of Court, it asserts that the entries in the
passbooks must be accepted as proof of the regularity of the transactions reflected in
the trust accounts, including the "miscrediting" of ₱4,086,888.89, for they were made
in the regular course of business. In addition, said entries are supported by demand
letters dated October 8, 198151 and September 3, 1991,52 as well as a Statement of
Account53 as of May 15, 1992. Land Bank avers that Oñate never questioned the
statements of account and the reports it presented to him and, hence, he is deemed
to have approved all of them.
Land Bank also imputes error on the lower courts in ordering the restoration of the
amount of ₱1,471,416.52 it debited from Oñate’s five trust accounts because he never
sought it in his Answer.
Petitioner bank vigorously argues that Oñate is not entitled to the undocumented
withdrawals amounting to ₱60,663,488.11 and $3,210,222.85. According to Land
Bank, in holding it liable for the said amounts, the CA erroneously relied on the 2008
MORB which was not yet in existence at the time the transactions subject of this case
were made or even at the time when Land Bank filed its Complaint. In any case, Land
Bank insists that it made proper accounting and apprised Oñate of the status of his
investments in accordance with the terms of the IMAs. In its demand letter54 dated
September 3, 1991 Land Bank made a full disclosure that the total outstanding balance
of all the trust accounts amounted to ₱1,471,416.52, but that the same was setoff to
recoup the "miscredited" funds. It faults Oñate for not interposing any objection as his
silence constitutes as his approval after 30 days from receipt thereof. Land Bank
asseverates that Oñate could have also inspected and audited the records of his
accounts at any reasonable time. But he never did.
Land Bank likewise faults the CA in treating the undocumented withdrawals as
unauthorized transactions as the Board’s reports do not state anything to that effect.
It claims that the CA’s reliance on the consolidated report in awarding the extremely
huge amounts of ₱60,663,488.11 and $3,210,222.85 is a grievous mistake because
the Board itself already manifested that said report "may not be accurate."
Consequently too, Land Bank asserts that the reports of the Board cannot prevail over
the entries in the passbooks which were made in the regular course of business.
Land Bank further states that as computed by the Board, the amount of negative
balances in Oñate’s accounts reached ₱131,747,487.02 and $818,674.71.55 It thus
proposes that if the CA awarded to Oñate the undocumented withdrawals on the basis
of the Board’s reports, then it should have also awarded to Land Bank said negative
balances or over withdrawals as reflected in the same reports. After all, Oñate
admitted in his Answer that all withdrawals from his trust accounts were done in the
ordinary course of business.
Furthermore, Land Bank claims that it argued before the CA that Oñate cannot sue on
Trust Account Nos. 01-014 and 01-017. While Oñate alleged that said accounts were
opened for an undisclosed principal, he did not, however, join as an indispensable
party said principal in violation of Section 3, Rule 3 of the Rules of Court.56
Unfortunately, the CA sidestepped the issue and proceeded to grant Oñate the
unaccounted withdrawals from said accounts in the aggregate amounts of
₱47,785,385.91 and $3,210,222.85. Following Quilatan v. Heirs of Lorenzo Quilatan,57
Land Bank insists that this case should be remanded to the trial court even if the issue
of failure to implead an indispensable party was raised for the first time in a Motion
for Reconsideration of the trial court’s Decision.
Finally, Land Bank questions the ruling of the CA imposing 12% per annum rate of
interest. It contends that trust accounts are in the nature of "Express Trust" and not
in the nature of a regular deposit account where a debtor-creditor relationship exists
between the bank and its depositor. It was not indebted to Oñate but merely held and
managed his funds. There being no loan or forbearance of money involved, in the
absence of stipulation, the applicable rate of interest is only 6% per annum. Land Bank
claims that the CA further erred when it compounded the 12% interest even in the
absence of any such stipulation.
Oñate’s Arguments
In opposing the Petition, Oñate argues that the issues raised by Land Bank involve
factual matters not proper in a petition for review on certiorari. He posits that the
Petition does not fall under any of the exceptions where this Court could review
factual issues.
As to Land Bank’s allegation that he cannot claim the funds without divulging and
impleading as an indispensable party his undisclosed principal, Oñate points out that
in his Answer (With Compulsory Counterclaim) he alleged that Trust Account Nos. 01-
014 and 01-017 were opened for an "undisclosed principal." Yet Land Bank did not
controvert his allegation. It is, therefore, too late in the day for Land Bank to invoke
non-joinder of principal as an indispensable party. Besides, when he executed the
IMAs, he was acting for himself and on behalf of an undisclosed principal. Hence, he
could claim and recover the amounts owing not only to himself but also to his
undisclosed principal.
Oñate likewise asserts that Land Bank, as uniformly found by both lower courts, failed
to prove by preponderance of evidence the fact of "miscrediting." As to the demand
letters adverted to by Land Bank, Oñate asserts that the lower courts did not consider
the same because they were not formally offered. Land Bank also failed to present
competent and sufficient evidence that he admitted his indebtedness on account of
the "miscrediting" of funds. Since Land Bank failed to prove the fact of "miscrediting"
it had no right to debit any amount from his accounts and must restore whatever
funds it had debited therefrom. Oñate also denies having failed to seek the return of
the funds debited from his account.
Oñate further claims that in 1982 his peso trust accounts had a total balance of
₱35,555,464.78 while the dollar trust accounts had a balance of US$1,690,943.78.
Since then, however, he never received any report or update regarding his accounts
until the bank sent him financial reports dated June 30, 1991 indicating that the
balances of his trust accounts had been unilaterally setoff. According to Oñate, Land
Bank’s failure to keep an accurate record of his accounts and to make proper
accounting violate several circulars of the Central Bank.58 Hence, it is only proper to
require the bank to return the undocumented withdrawals which, as found by the
Board, amount to ₱60,663,488.11 and $3,210,222.82. In addition, Oñate points out
Land Bank’s failure to keep an accurate record of his accounts as shown by the huge
amounts of unsupported withdrawals and drawings which constitutes willful default if
not gross misconduct in violation of the IMAs which, in turn, makes the bank liable for
its actions.
Anent Land Bank’s invocation that the entries in the passbook made in the ordinary
course of business are presumed correct and regular, Oñate argues that such
presumption does not relieve the trustee, Land Bank in this case, from presenting
evidence that the undocumented withdrawals and drawings were authorized. In any
case, the presumption invoked by Land Bank does not lie as one of its elements – that
the entrant must be deceased or unable to testify – is lacking. Land Bank cannot also
excuse itself for failing to regularly submit to him accounting reports as, anyway, he
was free to inspect the records at any reasonable day. Oñate emphasizes that it is the
duty of the bank to keep him updated with significant developments in his accounts.
In refutation of Land Bank’s claim to negative balances and over withdrawals, Oñate
posits that the bank cannot benefit from its own negligence in mismanaging the trust
accounts.
Lastly, Oñate defends the CA’s grant of 12% per annum rate of interest as under BSP
Circular No. 416, said rate shall be applied in cases where money is transferred from
one person to another and the obligation to return the same or a portion thereof is
adjudged. In any event, Land Bank is estopped from disputing said rate for Land Bank
itself applied the same 12% per annum rate of interest when it sought to recover the
amount allegedly "miscredited" to his account. As to the compounding of interest,
Oñate claims that the parties intended that interest income shall be capitalized and
shall form part of the principal.
Our Ruling
We deny the Petition.
The issues raised are factual and do not
involve questions of law.
From the very start the issues involved in this case are factual – the very reason why
the RTC created a Board of Commissioners to assist it in examining the records
pertaining to Oñate’s accounts and determine the respective cash inflows and
outflows in said accounts. Thereafter, the parties agreed to submit the case based on
the Board’s reports. And when the controversy reached the CA, the appellate court
basically conducted an "assiduous assessment of the evidentiary records."59 No
question of law was ever raised for determination of the lower courts. Now, Land Bank
practically beseeches us to assess the probative weight of the documentary evidence
on record to resolve the same basic issues of (i) whether Land Bank "miscredited"
₱4,086,888.89 to Trust Account No. 01-125 and (ii) "whether x x x the undocumented
withdrawals and drawings are considered valid and regular and, conversely, if in the
negative, whether x x x such amounts shall be credited to the accounts."60
These issues could be resolved by consulting the evidence extant on records, such as
the IMAs, the passbooks, the letters of instructions, withdrawal and deposit slips,
statements of account, and the Board’s reports. Land Bank’s heavy reliance on Section
43, Rule 130 of the Rules of Court61 also attests to the factual nature of the issues
involved in this case. "Well-settled is the rule that in petitions for review on certiorari
under Rule 45, only questions of law can be raised."62 In Velayo-Fong v. Spouses
Velayo,63 we defined a question of law as distinguished from a question of fact:
A question of law arises when there is doubt as to what the law is on a certain state of
facts, while there is a question of fact when the doubt arises as to the truth or falsity
of the alleged facts.
For a question to be one of law, the same must not involve an examination of the
probative value of the evidence presented by the litigants or any of them. The
resolution of the issue must rest solely on what the law provides on the given set of
circumstances. Once it is clear that the issue invites a review of the evidence
presented, the question posed is one of fact. Thus, the test of whether a question is
one of law or of fact is not the appellation given to such question by the party raising
the same; rather, it is whether the appellate court can determine the issue raised
without reviewing or evaluating the evidence, in which case, it is a question of law;
otherwise, it is a question of fact. (Italics supplied)
While there are recognized exceptions64 to this rule, none exists in this case.
Anent Land Bank’s contention that the determination of whether the CA erred in
retroactively applying the 2008 MORB poses a legal question, the same deserves scant
consideration. True, the CA included in its ratio decidendi a discussion on the 2008
MORB to give emphasis to the duties of banks to keep an accurate record and regularly
apprise their clients of the status of their accounts. But the issue of whether Land Bank
failed to comply with those duties can be resolved even without the MORB as the
same duties are also imposed on Land Bank by the IMAs, the contract that primarily
governs the parties in this case. "As a general rule, a contract is the law between the
parties. Thus, ‘from the moment the contract is perfected, the parties are bound not
only to the fulfilment of what has been expressly stipulated but also to all
consequences which, according to their nature, may be in keeping with good faith,
usage and law.’ Also, ‘the stipulations of the contract being the law between the
parties, courts have no alternative but to enforce them as they were agreed [upon]
and written’ x x x."65
Based on the factual milieu of this case even without touching on the MORB, we found
that Land Bank still failed to perform its bounden duties to keep accurate records and
render regular accounting. We also found no cogent reason to disturb the other
factual findings of the CA.
Land Bank failed to prove that the
"miscredited" funds came from the
proceeds of the pre-terminated loans of
its corporate borrowers.
Land Bank argues that the entries in the passbooks were made in the regular course
of business and should be accepted as prima facie evidence of the facts stated therein.
But before entries made in the course of business may qualify under the exception to
the hearsay rule and given weight, the party offering them must establish that: (1) the
person who made those entries is dead, outside the country, or unable to testify; (2)
the entries were made at, or near the time of the transaction to which they refer; (3)
the entrant was in a position to know the facts stated therein; (4) the entries were
made in the professional capacity or in the course of duty of the entrant; and, (5) the
entries were made in the ordinary or regular course of business or duty.66
Here, Land Bank has neither identified the persons who made the entries in the
passbooks nor established that they are already dead or unable to testify as required
by Section 43,67 Rule 130 of the Rules of Court. Also, and as correctly opined by the
CA, "[w]hile the deposit entries in the bank’s passbook enjoy a certain degree of
presumption of regularity x x x," the same do "not indicate or explain the source of the
funds being deposited or withdrawn from an individual account."68 They are mere
prima facie proof of what are stated therein – the dates of the transactions, the
amounts deposited or withdrawn, and the outstanding balances. They do not establish
that the total amount of ₱4,086,888.89 deposited in Oñate’s Trust Account No. 01-
125 in November 1980 came from the proceeds of the pre-terminated loans of Land
Bank’s corporate borrowers. It would be too presumptuous to immediately conclude
that said amount came from the checks paid to Land Bank by its corporate borrowers
just because the maturity dates of the loans coincided with the dates said total
amount was deposited. There must be proof showing an unbroken link between the
proceeds of the pre-terminated loans and the amount allegedly "miscredited" to
Oñate’s Trust Account No. 01-125. As a bank and custodian of records, Land Bank
could have easily produced documents showing that its borrowers pre-terminated
their loans, the checks they issued as payment for such loans, and the deposit slips
used in depositing those checks. But it did not.
Land Bank did not also bother to explain how Oñate or his representative, Eduardo
Polonio (Polonio), obtained possession of the checks when, according to it, the
corporate borrowers issued the checks in its name as payment for their loans.69
Under paragraph 8 of its Complaint, Land Bank alleged that its corporate borrowers
"paid their respective obligations in the form of checks payable to LANDBANK x x x".70
If it is true, then why were the checks credited to Oñate’s account? Unless
subsequently endorsed to Oñate, said checks can only be deposited in the account of
the payee appearing therein. We cannot thus lend credence to Land Bank’s excuse
that the proximate cause of the alleged "miscrediting" was the fraudulent
representation of Polonio, for assuming that the latter indeed employed fraudulent
machinations, with the degree of prudence expected of banks, Land Bank and its
tellers could have easily detected that Oñate was not the intended payee. In Traders
Royal Bank v. Radio Philippines Network, Inc.,71 we held that petitioner bank was
remiss in its duty and obligation for accepting and paying a check to a person other
than the payee appearing on the face of the check sans valid endorsement.
Consequently, it was made liable for its own negligence and in disregarding
established banking rules and procedures.
We are also groping in the dark as to the number of checks allegedly deposited by
Polonio to Oñate’s Trust Account No. 01-125. According to Land Bank, the entire
 amount of ₱4,086,888.89 represents the proceeds of the pre-terminated loans of four As a consequence of its failure to prove
of its clients, namely, RETELCO, PBM, CBY and PHILTOFIL. But it could only point to the source of the claimed "miscredited"
two entries made on two separate dates in the passbook as reproduced below: funds, Land Bank had no right to debit
the total amount of ₱1,471,416.52 and
must, therefore, restore the same.
WITHDRAWAL DEPOSIT BALANCE

xxx ₱250,704.60 In view of the above, Land Bank’s argument that the lower courts erred in ordering
the return of the amount of ₱1,471,416.52 it debited from Oñate’s five trust accounts
159,000.00 409,704.60 since he did not seek such relief in his Answer as a counterclaim, falls flat on its face.
The order to restore the debited amount is consistent with the lower courts’ ruling
3,063,750.00CK 3,473,454.60 that Land Bank failed to prove that the amount of ₱4,086,888.89 was "miscredited"
to Oñate’s account and, hence, it had no right to seek reimbursement or debit any
42,000.00 3,431,454.60 amount from his accounts in payment therefor.
275,923.75 CK 3,707,378.35
Without such right, Land Bank should return the amount of ₱1,471,416.52 it debited
1,235,962.00 2,471,416.35 from Oñate’s accounts in its attempt to recoup what it allegedly lost due to
"miscrediting." Moreover, contrary to Land Bank’s assertion, Oñate contested the
193,800.00 CK 2,665,216.35 bank’s application of the balance of his trust accounts in payment for the allegedly
"miscredited" amount in his Answer (With Compulsory Counterclaim) for being
250,000.00 CK 2,915,216.35 "without any factual and legal [bases]."74

2,915,216.35
Land Bank was remiss in performing
2,915,216.35 its duties under the IMAs and as a
banking institution.
321,188.38 CK 3,236,404.73
The contractual relation between Land Bank and Oñate in this case is primarily
1,373,167.00 1,863,237.73 governed by the IMAs. Paragraph 4 thereof expressly imposed on Land Bank the duty
to maintain accurate records of all his investments, receipts, disbursements and other
1,021,250.00 CK 2,884,487.73 transactions relating to his accounts. It also obliged Land Bank to provide Oñate with
quarterly balance sheets, statements of income and expenses, summary of
70,833.33 CK 2,955,321.06
investments, etc. Thus:
919,300.00 2,036,021.06
4. You shall maintain accurate records of all investments, receipts, disbursements and
1,023,138.89 CK 3,059,159.9572 other transactions of the Account. Records relating thereto shall be open at all
reasonable times to inspection and audit by me either personally or through duly
authorized representatives.
Were there only two checks issued as payment for the separate loans of these four
different entities? These hanging questions only confirm the correctness of the lower
courts’ uniform conclusion that Land Bank failed to prove that the amount allegedly Statements consisting of a balance sheet, portfolio analysis, statement of income and
"miscredited" to Oñate’s account came from the proceeds of the pre-terminated loans expenses, and summary of investment changes are to be sent to me/us quarterly.
of its clients. It is worth emphasizing that in civil cases, the party making the allegations
has the burden of proving them by preponderance of evidence. Mere allegation is not I/We shall approve such accounting by delivering in writing to you a statement to that
sufficient.73 effect or by failure to express objections to such accounting in writing delivered to you
within thirty (30) days from my receipt of the accounting.
Upon your receipt of a written approval of the accounting, or upon the passage of said found several undocumented withdrawals and over withdrawals. Thereafter, the
period of time within which objections may be filed, without written objections having Board submitted its consolidated report, to which Land Bank did not file its comment
been delivered to you, such accounting shall be deemed to be approved, and you shall despite having been given the opportunity to do so. It did not question the result of
be released and discharged as to all items, matters and things set forth in such the examinations conducted by the Board, particularly the Board’s computation of the
accounting as if such accounting had been settled and allowed by a decree of a court outstanding balance in each account, the existence of undocumented and over
of competent jurisdiction, in an action or proceeding in which you and I were withdrawals, and how often the bank sent Oñate statements of account. In fact, during
parties.75 (Emphasis supplied) the pre-trial conference, Land Bank agreed to submit the case based on the reports of
the Board.
These are the obligations of Land Bank which it should have faithfully complied with
in good faith.76 Unfortunately, Land Bank failed in its contractual duties to maintain Consequently, we found no cogent reason to deviate from the same course taken by
accurate records of all investments and to regularly furnish Oñate with financial the CA – give weight to the consolidated report of the Board and treat it as competent
statements relating to his accounts. Had Land Bank kept an accurate record there and sufficient evidence of what are stated therein. After all, the dearth of evidentiary
would have been no need for the creation of a Board of Commissioners or at least the documents that could have shed light on the alleged unintended crediting and
latter’s work would have been a lot easier and more accurate. But because of Land unexplained withdrawals was brought about by Land Bank’s failure to maintain
Bank’s inefficient record keeping, the Board performed the tedious task of trying to accurate records as required by the IMAs. In Simex International (Manila), Inc. v. Court
reconcile messy and incomplete records. The lackadaisical attitude of Land Bank in of Appeals,81 we elucidated on the nature of banking business and the responsibility
keeping an updated record of Oñate’s accounts is aggravated by its reluctance to of banks:
accord the Board full and unrestricted access to the records when it was conducting a
review of the accounts upon the orders of the trial court. Thus, in its Manifestation77 The banking system is an indispensable institution in the modern world and plays a
dated August 16, 2004, the Board informed the trial court that its report pertaining to vital role in the economic life of every civilized nation. Whether as mere passive
outstanding balances may not be accurate because "the documents were then in the entities for the safekeeping and saving of money or as active instruments of business
custody of Land Bank and the documents to be reviewed by the Board at a designated and commerce, banks have become an ubiquitous presence among the people, who
hearing depended on what was released by the then handling lawyer of Land Bank." have come to regard them with respect and even gratitude and, most of all,
They were "not given the opportunity to collate/sort-out the documents related to confidence. Thus, even the humble wage-earner has not hesitated to entrust his life’s
each trust account"78 and "the folders being reviewed contained documents related savings to the bank of his choice, knowing that they will be safe in its custody and will
to different trust accounts."79 As a result, "[t]here may have been double take up of even earn some interest for him. The ordinary person, with equal faith, usually
accounts since the documents previously reviewed may have been repeatedly maintains a modest checking account for security and convenience in the settling of
considered in the reports."80 his monthly bills and the payment of ordinary expenses. As for business entities like
the petitioner, the bank is a trusted and active associate that can help in the running
For its failure to faithfully comply with of their affairs, not only in the form of loans when needed but more often in the
its obligations under the IMAs and for conduct of their day-to-day transactions like the issuance or encashment of checks.
having agreed to submit the case on the
basis of the reports of the Board of In every case, the depositor expects the bank to treat his account with the utmost
Commissioners, the latter’s findings are fidelity, whether such account consists only of a few hundred pesos or of millions. The
binding on Land Bank. bank must record every single transaction accurately, down to the last centavo and as
promptly as possible. This has to be done if the account is to reflect at any given time
Because of Land Bank’s failure to keep an updated and accurate record of Oñate’s the amount of money the depositor can dispose of as he sees fit, confident that the
account, it would have been difficult, if not impossible, to determine with some degree bank will deliver it as and to whomever he directs. x x x
of accuracy the outstanding balances in Oñate’s accounts. Indeed, the creation of a
Board of Commissioners was a significant development in this case as it facilitated the The point is that as a business affected with public interest and because of the nature
examination of the records and helped in the determination of the balances in each of its functions, the bank is under obligations to treat the accounts of its depositors
of Oñate’s accounts. In a span of four years, the Board held 60 meetings and scoured with meticulous care, always having in mind the fiduciary nature of their relationship.
the voluminous and scattered records of subject accounts. In the course thereof, it x x x (Emphasis supplied)
As to the conceded inaccuracies in the reports, we cannot allow Land Bank to benefit
therefrom. Time and again, we have cautioned banks to spare no effort in ensuring
the integrity of the records of its clients.82 And in Philippine National Bank v. Court of
Appeals,83 we held that "as between parties where negligence is imputable to one
and not to the other, the former must perforce bear the consequences of its neglect."
In this case, the Board could have submitted a more accurate report had Land Bank
faithfully complied with its duty of maintaining a complete and accurate record of
Oñate’s accounts. But the Board could not find and present the corresponding slips
for the withdrawals reflected in the passbooks. In addition, and as earlier mentioned,
Land Bank was less than cooperative when the Board was examining the records of
Oñate’s accounts. It did not give the Board enough leeway to go over the records
systematically or in orderly fashion. Hence, we cannot allow Land Bank to benefit from
possible inaccuracies in the reports.
Neither does Oñate’s failure to exercise his rights to inspect the records and audit his
accounts excuse the bank from sending the required notices, for under the IMAs it
behooved upon Land Bank to keep him fully informed of the status of his investments
by sending him regular reports and statements. Oñate’s failure to inspect the record
of his accounts should neither be construed as his waiver to be furnished with updates
on his accounts nor authority for the bank to make undocumented withdrawals. As
aptly opined by the CA:
x x x The least that Land Bank could have done was to keep a detailed quarterly report
on [its] file. In this case, Land Bank did away with this procedure that made [its] records
a complete mess of voluminous and meaningless records of numerous folders
containing more than 7,600 leaves/pages and some 90 passbooks, with 1,355
leaves/pages of entries, corresponding to the seven (7) Trust Accounts.
The passbook entries alone are insufficient compliance with Land Bank’s duty to keep
"accurate records of all investments, receipts, disbursements and other transactions
of the Account." These passbooks do not inform what investments were made on the
funds withdrawn. Moreover, these passbook entries do not show if the amounts
purported to have been invested were indeed received by the concerned entity,
facility, or borrower. From these entries alone, Oñate would have no way of knowing
where his money went.84
But Land Bank next postulates that if Oñate is entitled to the undocumented
withdrawals on the basis of the reports of the Board, then it should also be entitled to
the negative balances or over withdrawals as reflected in the same reports.
We cannot agree for a number of reasons. First, as earlier discussed, Land Bank is
guilty of negligence while Oñate (at least insofar as over withdrawals are concerned)
is not. Had Land Bank maintained an accurate record, it would have readily detected
and prevented over withdrawals. But without any qualms, Land Bank asks for the
negative balances, unmindful that such claim is actually detrimental to its cause
because it amounts to an admission that it allowed over withdrawals. As aptly
observed by the CA:
Corollarily, the Court cannot allow Land Bank to recover the negative balances from
Oñate’s trust accounts. Examining the Commissioners’ Report, the Court notes that
the funds of Oñate’s trust accounts became seriously depleted due to the
unaccounted withdrawals that Land Bank charged against his accounts. At any rate,
those negative balances on Oñate’s accounts show Land Bank’s inefficient
performance in managing his trust accounts. Reasonable bank practice and prudence
[dictate] that Land Bank should not have authorized the withdrawal of various sums
from Oñate’s accounts if it would result to overwithdrawals. x x x85
Second, Land Bank never prayed for the recovery of the negative balances in its
Complaint.
It is settled that courts cannot grant a relief not prayed for in the pleadings or in excess
of what is being sought by the party. x x x Due process considerations require that
judgments must conform to and be supported by the pleadings and evidence
presented in court. In Development Bank of the Philippines v. Teston,86 this Court
expounded that:
Due process considerations justify this requirement. It is improper to enter an order
which exceeds the scope of relief sought by the pleadings, absent notice which affords
the opposing party an opportunity to be heard with respect to the proposed relief.
The fundamental purpose of the requirement that allegations of a complaint must
provide the measure of recovery is to prevent surprise to the defendant.87
Last, during the pre-trial conference, the issue of the validity of undocumented
withdrawals was properly put into issue. The parties also agreed, as a collateral issue,
that should it appear that the bank was not authorized to make the undocumented
withdrawals, the next issue for consideration would be whether the amount subject
thereof should be credited back to Oñate’s accounts.88 The case of negative balances
as alluded to by Land Bank, however, is different. It was never put into issue during
the pre-trial conference. In Caltex (Philippines), Inc. v. Court of Appeals,89 we held
that "to obviate the element of surprise, parties are expected to disclose at a pre-trial
conference all issues of law and fact which they intend to raise at the trial, except such
as may involve privileged or impeaching matters. The determination of issues at a pre-
trial conference bars the consideration of other questions on appeal." Land Bank
interposed its claim to the negative balances for the first time only when it filed its
Memorandum with the RTC.
Land Bank knew from the start and days from receipt thereof, it should be recalled that from the time the alleged
admitted during trial that Trust "miscrediting" occurred in November 1980, the first communication coming from
Account Nos. 01-014 and 01-017 do not Land Bank was its letter dated October 8, 1981.93 This, however, was the subject of a
belong to Oñate; hence, it should not failed negotiation between the parties. Besides, said letter can hardly be considered
have debited any amount therefrom to as an statement that would apprise Oñate of the status of his investments. It is not "a
compensate for the alleged personal balance sheet, portfolio analysis, statement of income and expenses or a summary of
indebtedness of Oñate. investment changes" as contemplated in paragraph 4 of the IMAs. It is a demand letter
seeking the return of the alleged "miscredited" amount. The same goes true with Land
Land Bank claims that Oñate cannot sue on Trust Account Nos. 01-014 and 01-017 Bank’s letter dated September 3, 1991. As can be readily seen from its opening
without joining as an indispensable party his undisclosed principal. paragraph, said letter is in response to Oñate’s "demand" for information regarding
the offsetting,94 which Oñate protested and is now one of the issues involved in this
But if anyone in this case is guilty of failing to join an indispensable party, it is Land case. In fine, it cannot be said that Oñate approved and adopted the outstanding
Bank that first committed a violation. The IMAs covering Trust Account Nos. 01-014 balances in his accounts for his failure to object to the contents of those letters within
and 01-017 attached as Annexes "A"90 and "B,"91 respectively, of Land Bank’s the 30-day period allotted to him under the IMAs.
Complaint clearly state that Oñate signed the same "FOR: UNDISCLOSED PRINCIPAL."
As party to the said IMAs, Land Bank knew and ought not to forget that Oñate is merely From what is available on the voluminous records of this case and as borne out by the
an agent and not the owner of the funds in said accounts. Yet Land Bank garnished Board’s consolidated report dated August 16, 2004, the statements which Land Bank
the total amount of ₱792,595.25 from Trust Account Nos. 01-014 and 01-017 to sent to Oñate are only the following:
answer for the alleged personal indebtedness of Oñate. Worse, when Land Bank filed
its Complaint for Sum of Money, it did not implead said undisclosed principal or inform Based on the Annexes95 attached to Oñate’s Answer (With Compulsory Counterclaim)
the trial court thereof. Now that Oñate is seeking the restoration of the amounts
debited and withdrawn without withdrawal slips from said accounts, Land Bank is
ITF No. Balance Sheet Total Liabilities and Trustor’s Equity
invoking the defense of failure to implead an indispensable party. We cannot allow
As of
Land Bank to do this. As aptly observed by the trial court:
01-014 June 30, 1982 ₱1,909,349.80
Under the circumstances obtaining, it is highly unfair, unjust and iniquitous, to dismiss
the suit with respect to the two Trust Accounts after [Land Bank] had garnished 01-017the June 30, 1982 6,003,616.35
balances of said accounts to pay the alleged indebtedness of [Oñate] allegedly
incurred by the erroneous crediting of ₱4 million to x x x Trust Account No. 01-089
01-125 June 30, 1982 551,267.24
which does not appear to be owned by an undisclosed principal. Trust Account No.
01-125 is [Oñate’s] personal trust account with plaintiff. Stated differently, 01-082
[Land June 30, 1982 1,915.28
Bank] having now recognized and admitted that Trust Account Nos. 01-014 and 01-
01-075 June 30, 1982 12,113,262.95
017 were not owned by [Oñate], it has perforce no right, nay unlawful for it, to apply
the funds in said accounts to pay the alleged indebtedness of [Oñate’s] 01-125 personal June 30, 1982 13,595,271.16
account. Equity and justice so demand that the funds be restored to Trust Account
Nos. 01-014 and 01-017.92 01-024 June 30, 1982 1,131,854.20

Oñate protested the contents of the

Based on the Consolidated Report
statements of account at the earliest
opportunity.
ITF No. Report Details Last Date Balances
As to Land Bank’s insistence that Oñate is deemed to have accepted the contents of of Report
the statements of account for his failure to manifest his objection thereto within 30
 Of equal importance is the determination of when the said 12% per annum rate of
Schedule of Money Market Placement 03.31.82 ₱453,140.69
interest should commence.1âwphi1 Recall that both the RTC and the CA reckoned the
Statement of Income and Expenses Balance Sheet 03.31.90 0.00 running of the 12% per annum rate of interest from June 21, 1991, or the day Land
03.31.90 Bank unilaterally applied the outstanding balance in all of Oñate’s trust accounts, until
1,207,501.69
fully paid. The compounding of interest, on the other hand, was based on the provision
Schedule of Money Market Placement Statement of Income and 06.30.91 14,767.20 of the IMAs granting Land Bank "to hold, invest and reinvest the Fund and keep the
Expenses Balance Sheet 06.31.91 3,267.19 same invested, in your sole discretion, without distinction between principal and
06.31.91 20,673.58 income."

Schedule of Investment 06.30.91 38,502.06 While we find sufficient basis for the compounding of interest, we find it necessary
Statement of Income and Expenses Balance Sheet 06.30.91 10,437.22 however to modify the commencement date. In Eastern Shipping,99 it was observed
06.30.91 39,659.56 that the commencement of when the legal interest should start to run varies
depending on the factual circumstances obtaining in each case.100 As a rule of thumb,
Statement of Income and Expenses Balance Sheet 06.30.91 59.75
it was suggested that "where the demand is established with reasonable certainty, the
06.30.91 70.28
interest shall begin to run from the time the claim is made judicially or extrajudicially
Schedule of Investment 06.30.91 44,055.72 (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at
Statement of Income and Expenses Balance Sheet 06.30.91 10,079.16 the time the demand is made, the interest shall begin to run only from the date the
06.30.91 60,920.42 judgment of the court is made101 (at which time the quantification of damages may
be deemed to have been reasonably ascertained)."102

The patent wide gap between the time Land Bank furnished Oñate with Balance
Sheets as of June 30, 1982 and the date it sent him an Statement of Income and
Expenses, as well as a Balance Sheet, on March 31, 1990 is a clear and gross violation
of the IMAs requiring it to furnish him with balance sheet, portfolio analysis, statement
of income and expenses and the like, quarterly. As to the reports dated June 30, 1991
and letters subsequent thereto, it should be noted that during those times Oñate had
already interposed his objections to the outstanding balances of his accounts.96
The proper rate of legal interest.
Land Bank’s argument that the lower courts erred in imposing 12% per annum rate of
interest is likewise devoid of merit. The unilateral offsetting of funds without legal
justification and the undocumented withdrawals are tantamount to forbearance of
money. In the analogous case of Estores v. Supangan,97 we held that "[the]
unwarranted withholding of the money which rightfully pertains to [another] amounts
to forbearance of money which can be considered as an involuntary loan." Following
Eastern Shipping Lines, Inc. v. Court of Appeals,98 therefore, the applicable rate of
interest in this case is 12% per annum. Besides, Land Bank is estopped from assailing
the award of 12% per annum rate of interest. In its Complaint, Land Bank arrived at
₱8,222,687.89 as the outstanding indebtedness of Oñate by using the same 12% per
annum rate of interest. It was only after the lower courts rendered unfavorable
decisions that Land Bank started to insist that the applicable rate of interest is 6% per
annum.
In the case at bench, while Oñate protested the setting off, no proof was presented
that he formally demanded for the return of the amount so debited prior to the filing
of the Complaint. Quite understandably so because at that time he could not
determine with some degree of certainty the outstanding balances of his accounts as
Land Bank neglected on its duty to keep him updated on the status of his accounts.
Land Bank even undertook to furnish him with "the exact computation"103 of what
remains in his accounts after the set off. But this never happened until Land Bank
initiated the Complaint on September 7, 1992. Oñate, on the other hand, filed his
Answer (With Compulsory Counterclaim) on May 26, 1993. In other words, we cannot
reckon the running of the interest prior to the filing of the Complaint or Oñate’s
Counterclaim as no demand prior thereto was made. Neither could the interest
commence to run at the time of filing of any of aforesaid pleadings (as to constitute
judicial demand) since the undocumented withdrawals in the sums of ₱60,663,488.11
and US$3,210,222.85, as well as the amount actually debited from all of Oñate’s
accounts, were determined only after the Board submitted its consolidated report on
August 16, 2004 or more than 10 years after Land Bank and Oñate filed their
Complaint and Answer, respectively. Note too that while Oñate sought to recover the
amount of undocumented withdrawals before the RTC,104 the same was denied in
the latter’s May 31, 2006 Decision. The RTC granted Oñate only the total amount of
funds debited from his trust accounts. It was only when the CA rendered its December
18, 2009 Decision that Oñate was awarded the undocumented withdrawals. Hence,
we find it just and proper to reckon the running of the interest of 12% per annum,
compounded yearly, for the debited amount and undocumented withdrawals on
different dates. The debited amount of ₱1,471,416.52, shall earn interest beginning
May 31, 2006 or the day the RTC rendered its Decision granting said amount to Oñate.
As to the undocumented withdrawals of ₱60,663,488.11 and US 3,210,222.85, the
legal rate of interest should start to run the day the CA promulgated its Decision on
December 18, 2009.

During the pendency of this case, however, the Monetary Board issued Resolution No.
796 dated May 16, 2013, stating that in the absence of express stipulation between
the parties, the rate of interest in loan or forbearance of any money, goods or credits
and the rate allowed in judgments shall be 6% per annum. Said Resolution is embodied
in Bangko Sentral ng Pilipinas Circular No. 799, Series of2013, which took effect on July
1, 2013. Hence, the 12% annual interest mentioned above shall apply only up to June
30, 2013. Thereafter, or starting July 1, 2013, the applicable rate of interest for both
the debited amount and undocumented withdrawals shall be 6% per annum
compounded annually, until fully paid.

WHEREFORE, the Petition is hereby DENIED and the December 18, 2009 Decision of
the Court of Appeals in CA-G.R. CV No. 89346 is AFFIRMED with modification in that
the interest of 12% per annum compounded annually, for the debited amount of
₱1,471,416.52 shall commence to run on May 31, 2006, while the same rate of
interest shall apply to the undocumented withdrawals in the amounts of G.R. No. 175730 July 5, 2010
₱60,663,488.11 and US 3,210,222.85 starting December 18 2009. Beginning July 1,
2013, however, the applicable rate of interest on all amounts awarded shall earn
HERMINIO T. DISINI, Petitioner,
interest at the rate of 6% per annum compounded yearly, until fully paid.
vs.
THE HONORABLE SANDIGANBAYAN, THE REPUBLIC OF THE PHILIPPINES, as represented
SO ORDERED. by the OFFICE OF THE SOLICITOR GENERAL (OSG), and the PRESIDENTIAL COMMISSION
ON GOOD GOVERNMENT (PCGG), Respondents.

DECISION

DEL CASTILLO, J.:

The simultaneous availment of judicial remedies from different fora for exactly the
same ultimate relief and involving the same issue constitutes forum-shopping. It is a
prohibited malpractice, condemned for trifling with the courts and their processes.

The Case

The instant Petition for Certiorari and Prohibition1 under Rule 65 of the Rules of Court
seeks to:
 1. Annul the December 18, 2006 Resolution of the Sandiganbayan
(respondent court), which denied petitioner’s Motion to Lift Default Order
and to Admit Answer, and consequently allowed respondent Republic to
present evidence ex-parte in Civil Case No. 0013 entitled "Republic of the
Philippines v. Herminio T. Disini, et al.;"
2. Annul the orders or declarations made by the Sandiganbayan in open court
during the hearing of December 8, 2006, which prevented petitioner from
commenting ad cautelam on the Republic’s Urgent Manifestation and
Motion (hereinafter the Urgent Manifestation and Motion) to Present
Evidence Ex-Parte;2
3. Prohibit the Sandiganbayan from continuing with the ex-parte proceedings
and rendering a judgment by default;
4. Secure injunctive relief to enjoin the Sandiganbayan from conducting
further proceedings in Civil Case No. 0013 and from rendering judgment on
the basis of the ex-parte proceedings; and
5. Declare null and void all the proceedings conducted as against petitioner
because of lack of jurisdiction over his person, violation of his Constitutional
rights to due process and fair play, and the arbitrary acts of respondent court
which effectively ousted it of jurisdiction to hear the case.3
In sum, petitioner assails the Sandiganbayan’s refusal to set aside its Order of Default
against petitioner, as well as its acts which allegedly reveal its inclination to "railroad"
the proceedings and render a precipitate judgment by default against petitioner.4
Factual Antecedents
On July 23, 1987, the Republic (through the Presidential Commission on Good
Government [PCGG]) filed with the Sandiganbayan a civil complaint for reconveyance,
reversion, accounting, restitution, and damages against petitioner Herminio T. Disini
(Disini), spouses Ferdinand and Imelda Marcos (Marcos spouses) and Rodolfo B. Jacob
(Jacob).5 The same was docketed as Civil Case No. 0013 and assigned to the First
Division of the Sandiganbayan (respondent court). Summons for Disini was issued on
July 29, 1987.6 Per Sheriff’s Return dated September 4, 1987,7 the summons8 was
unserved on the ground that petitioner did not live at the given address, which was
No. 92 Kennedy St., Greenhills, San Juan, Metro Manila. The occupants of said address
were the Roman family.
On August 26, 1987,9 the Complaint was amended10 to include Rafael A. Sison (Sison)
as a party-defendant.11
The Amended Complaint alleged that Disini acted in unlawful concert with his co-
defendants in acquiring and accumulating ill-gotten wealth through the
misappropriation of public funds, plunder of the nation’s wealth, extortion,
embezzlement, and other acts of corruption.12
The Sandiganbayan issued summons on the Amended Complaint on September 3,
1987.13 On September 15, 1987, the Sandiganbayan Deputy Sheriff proceeded to the
same address, No. 92 Kennedy Street, Greenhills, San Juan, Metro Manila. Again, the
summons was returned unserved for the reason that the Roman family occupied the
said residence.14
In the meantime, petitioner’s co-defendants, Sison15 and Jacob,16 filed their respective
answers, while the Marcos spouses were declared in default17 for failure to file their
responsive pleadings despite valid service of summons.18
After the lapse of two years without any progress in the case, Jacob filed an Omnibus
Motion for the Sandiganbayan to either set the case for pre-trial or to dismiss the
same with respect to Jacob for failure to prosecute.19 Jacob argued that there was no
excuse for the delay in prosecuting the case. He reasoned that, if summons could not
be served on his co-defendant Disini within a reasonable time, the prosecution should
have moved to exclude Disini from the complaint so that the case could be disposed
of one way or another instead of being left pending indefinitely.
The Sandiganbayan denied Jacob’s motion.20 It held that the Republic had not lacked
in efforts to ascertain Disini’s whereabouts; hence, there is no basis to rule that it failed
to prosecute the case. Nevertheless, it ordered the Republic to furnish the court with
the correct address of petitioner or to file a motion to show the reasonability of
expecting Disini to be summoned.
In response, the Republic filed a Manifestation that it is still in the process of securing
alias summonses for the unserved defendants and will take steps to serve summons
by publication.21
On October 11, 1990, the Republic moved to drop Jacob as party-defendant
considering that he will testify as a witness for the Republic in its ill-gotten wealth
cases both here and abroad.22 It also sought several times to suspend the pre-trial on
various grounds such as the PCGG’s vacillation regarding the grant of immunity in
favor of Jacob23 and the Republic’s admission that it still could not ascertain Disini’s
whereabouts for purposes of service of summons. The Republic explained that it was
still trying to exhaust all efforts to make a personal or substituted service of summons
through the help of the Philippine consulate office in Austria, where Disini is believed
to be residing.24
On August 4, 1994, the Sandiganbayan resolved to grant the dismissal of the
complaint against Jacob with prejudice and ordered him dropped as party-
defendant.251avvph!1
When it appeared that pre-trial could finally continue in 1995, the Republic again
moved for several resetting of pre-trial for reasons such as looking at the possibility of
granting immunity to petitioner’s other co-defendant, Sison, and the unavailability of
the solicitor assigned to the case.26
After displaying utmost liberality in the past as regards the postponement of the pre-
trial, the Sandiganbayan issued a strongly-worded Order on January 17, 1997, on
which date the Republic was still not ready to submit Sison’s affidavit for the
consideration of the court. The Order reads:
Over the year, the matter of the affidavit [of Sison] remains unresolved. In the end,
this case is sought once more to be reset with no visible product for the effort.
Under the circumstances, should no action be taken thereon with finality on or before
March 14, 1997, the Court will assume that the government is not disposed to
prosecute this matter and will dismiss the case.27
Heeding the Sandiganbayan’s warning, the Office of the Solicitor General filed its
Manifestation and Urgent Motion to Drop Rafael Sison as Party-Defendant on March
14, 1997.28
A year later, on April 8, 1998, the Republic filed an Ex Parte Motion for Leave to Serve
Summons by Publication.29 It stated that resort to service by publication was needed
because they could not ascertain Disini’s whereabouts despite diligent efforts to do
so. While this motion was awaiting resolution five months later, the Republic filed an
Urgent Ex Parte Motion for Issuance of Alias Summons.30 It allegedly received
information that Disini had returned to the Philippines and could be served with
summons at No. 92 Kennedy Street, Greenhills, San Juan, Metro Manila. Alias
summons was issued but was returned unserved on the ground that Disini did not
occupy the said house, which belonged to the Roman family.31 Receiving information
that Disini was often seen at No. 35 Buchanan Street, Greenhills, San Juan, Metro
Manila, the sheriff proceeded to the new address only to find that it belonged to
petitioner’s cousin, Jesus Disini.32
Failing to serve summons personally on Disini, the Republic filed an Urgent Motion to
Resolve Motion for Leave to Serve Summons by Publication on October 3, 2001. 33
While awaiting the resolution of the Urgent Motion, the Republic again received
information that petitioner has been regularly seen at the Wack Wack Golf and
Country Club in Mandaluyong City and at No. 57 Flamingo Street, Greenmeadows
Subdivision, Quezon City. Thus, the Republic sought again the issuance of alias
summons, without prejudice to the resolution of its previous Motion for Leave for
Issuance of Summons by Publication.34 The Sandiganbayan issued an alias summons
for Disini, but it was returned unserved.
On February 6, 2002, the Republic filed a Motion to Resolve (Ex Parte Motion for Leave
to Serve Summons by Publication).35 The same was granted36 and on April 23, 2002,
the summons and the Amended Complaint were published in People’s Tonight, with
a copy sent by registered mail to Disini’s last known address, No. 92 Kennedy Street,
Greenhills, San Juan, Metro Manila.37 By August 27, 2002, petitioner was declared in
default for failure to file his responsive pleading within 60 days from the publication
of the summons.38
Since three of the party-defendants (Ferdinand Marcos, Imelda Marcos, and
petitioner) had been declared in default, while one was dropped to become state
witness (Jacob), Sison remained as the sole defendant who could participate in Civil
Case No. 0013. Given that there was a pending motion to drop Sison also as party-
defendant, the Republic asked the Sandiganbayan to resolve the said motion so that
they could proceed with the ex parte presentation of evidence.39 The said motion was
submitted for resolution on September 20, 2002.40
On February 17, 2003, with the motion to drop Sison as party-defendant still pending,
the Republic asked the Sandiganbayan to hold in abeyance the pre-trial until the said
motion had been resolved.41 On February 27, 2003, the Sandiganbayan clerk of court
sent notice of the cancellation of the pre-trial set for March 4, 2003.42
The records of the Sandiganbayan became silent from the year 2003 to 2006,
revealing an inaction that would only be broken by a foreign court that imposed a
deadline on the freeze orders of the Disini Swiss accounts. This development began
when petitioner Disini’s wife and children filed a petition43 in a Swiss Federal Court to
remove a previously issued freeze order on their Swiss accounts. On August 18, 2006,
the Swiss Federal Court rendered a partial decision 44 ordering the counsel for the
Republic of the Philippines to submit a forfeiture order from a Philippine court with
regard to the assets of Liliana and Herminio Disini not later than December 30, 2006;
otherwise, the Swiss Federal Court would revoke the freeze order on the Disini Swiss
accounts.45
This deadline apparently spurred the Republic (through the PCGG) to file an Urgent
Manifestation and Motion46 with the Sandiganbayan on November 30, 2006. The
Republic prayed for the resolution of its Urgent Motion to Resolve (its motion to drop
Rafael Sison as party-defendant).47 Should the resolution of this pending motion be
favorable to the Republic, it likewise prayed for the setting of the ex parte presentation
of evidence at an early date.
On December 7, 2006, petitioner Disini filed a Motion to Lift Order of Default and for
Leave to File and Admit Attached Answer,48 together with an Answer to Amended
Complaint with Compulsory Counterclaims.49 He maintained that he was unaware of
the civil case pending against him because he never received summons or other
processes from the court, nor any pleadings from the parties of the case. His only fault,
he averred, was that he was ignorant of the proceedings in the case because of the
absence of a proper notice. Petitioner asked the respondent court to look at his
meritorious defenses. He then invoked the liberality of the courts in lifting default
orders to give both parties every opportunity to defend their cases, and pointed out
that the proceedings, being in their pre-trial stage, would not be delayed by
petitioner’s participation therein.
Petitioner’s Answer contained affirmative defenses such as the respondent court’s
failure to acquire jurisdiction over his person through service by publication and the
failure of the Amended Complaint to state a cause of action against him.
With the two motions pending before it, the Sandiganbayan heard the Republic on its
Urgent Manifestation and Motion on December 8, 2006. Petitioner Disini’s lawyers
were present during the hearing but were not allowed to participate therein because
of the prevailing default order against Disini. The Sandiganbayan issued the following
Order at the end of the said hearing:
This morning, the Court heard the arguments of the counsel for [respondent]
regarding the latter’s "Urgent Manifestation and Motion" dated November 29, 2006.
The Court also gave the [respondent] a non-extendible period of three days counted
from today within which to file its comment on the Motion to Lift Order of Default
filed by [petitioner] Disini, and the latter is given a non-extendible period of three days
from December 11, 2006 or until December 14, 2006, within which to file his reply to
the comment of the [respondent], after which the incident shall be considered
submitted for resolution without need of oral arguments. The Court will act on the
[respondent]’s "Urgent Manifestation and Motion" dated November 29, 2006 after
the Court has resolved the Motion to Lift Order of Default.
x x x x50
On December 11, 2006, the Republic filed its Comment/Opposition51 stating that it
exhausted all efforts to ascertain the whereabouts of petitioner Disini. Failing to do so,
the Republic resorted to service of summons by publication. This mode of service is
allowed under Sections 14 and 15 of Rule 14 considering that the forfeiture case is in
rem and the defendant’s address is unknown. The Republic explained that it filed its
Ex Parte Motion for Leave to Serve Summons by Publication because it received
information that petitioner had already gone to Austria. Clearly then, Disini was no
longer a resident of the Philippines. The Republic reiterated that the service of
summons by publication is proper considering that what is involved is a forfeiture case,
an action in rem, under Republic Act No. 1379, in relation to Executive Order (EO) Nos.
1, 2, 14, and 14-A all issued by President Corazon C. Aquino.
As for petitioner’s allegation that the Republic was aware of Disini’s address as shown
by the fact that summons were properly served at his correct address52 in two criminal
cases pending before the same First Division of the Sandiganbayan, the Republic
pointed out that these criminal cases were filed on June 30, 2004, while respondent’s
Ex Parte Motion for Leave to Serve Summons by Publication was filed on April 8, 1998.
Hence, at the time the Republic asked for service by publication, it was not yet aware
of petitioner’s correct address. Since petitioner failed to file his answer to a validly
served Amended Complaint, the motion to lift the order of default is utterly lacking
merit.
Petitioner Disini filed his Reply on December 14, 2006 53 basically expounding on the
arguments he stated in his Motion to Lift.
On December 15, 2006, the Sandiganbayan granted PCGG’s motion to drop Sison as
party-defendant in Civil Case No. 0013,54 leaving only the defaulted defendants (i.e.,
the Marcos spouses and petitioner Disini) as parties to the case.
Ruling of the Sandiganbayan (Assailed Resolution)
On December 18, 2006, the Sandiganbayan resolved to deny55 petitioner’s Motion to
Lift Default Order.
The Sandiganbayan held that the Republic exerted diligence in ascertaining
petitioner’s whereabouts as evidenced by the two motions it filed for the issuance of
alias summons. The Sandiganbayan looked favorably at the Republic’s efforts to
personally serve the summons on petitioner despite the pendency of its Ex Parte
Motion for Leave to Serve Summons by Publication. It held that the Republic’s
determination to serve summons at the places where the petitioner was last heard of
to reside belies the petitioner’s claim that the Republic had intended to mislead the
court into service by publication all along. The Sandiganbayan likewise held that the
rules for a valid service of summons by publication were observed.
The Sandiganbayan did not find any indication that the Republic knew petitioner’s
actual residence when it sought leave to serve summons by publication in 1998 and
2001.
As for the argument that publication is not proper because the action is in personam,
the Sandiganbayan ruled that Civil Case No. 0013 is an action in rem for which service
by publication is proper. The case is in rem because it involves the forfeiture of ill-
gotten wealth based on EO No. 2,56 EO No. 1457 and No. 14-A58 promulgated by former
President Corazon Aquino by virtue of her legislative authority. It cited the case of
Republic v. Sandiganbayan and Marcos59 where the Court ruled that forfeiture
proceedings are civil actions in rem.
Given the validity of the service of summons, the respondent court held that
petitioner’s failure to file a responsive pleading within the allotted period resulted in
his default. The respondent court refused to lift the order of default on the ground
that there was no fraud, accident, mistake or excusable negligence that would justify
such an action.
Petitioner then filed an Extremely Urgent Motion for Reconsideration60 and an
Extremely Urgent Manifestation and Motion61 on December 19, 2006. Aside from
asking for reconsideration, petitioner also prayed that the republic’s ex parte
presentation of evidence be held in abeyance until the resolution of his motion for
reconsideration.
Petitioner’s motions were set for hearing on December 20, 2006 but the said hearing
did not take place. Instead, the Sandiganbayan issued the following orders on
December 19 and 20, 2006 respectively:
Considering the difficulty in obtaining a quorum for the purpose of hearing the
Extremely Urgent Manifestation and Motion dated December 18, 2006 of [petitioner]
Herminio T. Disini, the Court resolves to cancel the hearing on the abovesaid motion
on December 20, 2006, and instead require the [respondent] to file its written
comment on the above-said motion on or before December 22, 2006, after which the
motion shall be deemed submitted for resolution.62
Considering the difficulty in obtaining a quorum for the purpose of hearing the
Extremely Urgent Motion for Reconsideration dated December 19, 2006 of
[petitioner] Herminio T. Disini which was filed at the close of office hours on December
19, 2006, the Court resolves to cancel the hearing on the above-said motion on
December 20, 2006, and instead require the [respondent] to file its written comment
on the above-said motion within a non-extendible period of three (3) days from
receipt thereof, after which the motion shall be deemed submitted for resolution,
unless the parties or the Court will set the matter for hearing anew after the
submission of the above comment.63
The Republic’s ex parte presentation of evidence held before the Sandiganbayan
Executive Clerk of Court began on December 20, 2006 as evidenced by the transcript. 64
While petitioner was not allowed to participate in the said proceedings, he was
notified thereof and his counsels were present to observe the same.
On December 22, 2006, petitioner filed this Petition for Certiorari. On January 2, 2007,
he filed a Supplement to the Petition for Certiorari and Prohibition65 protesting the
continuation of the ex parte proceedings before the Sandiganbayan as a grave abuse
of discretion amounting to lack of jurisdiction. He also filed a Second Supplemental
Petition on January 5, 2007.66
Proceedings before the Sandiganbayan during the pendency of the instant Petition for
Certiorari and Prohibition
On August 7, 2007, the Sandiganbayan issued its Resolution67 denying petitioner’s
Extremely Urgent Motion for Reconsideration for lack of merit.
The Republic presented 10 witnesses.68 It filed its Formal Offer of Evidence dated
October 17, 2008, which offer was admitted in the Resolution dated December 3,
2008.69 On February 11, 2009, the Republic filed its Memorandum.70
On July 7, 2009, despite the pendency of his Petition for Certiorari and Prohibition with
the Supreme Court, petitioner filed with the Sandiganbayan a Second Motion to Lift
the Order of Default71 dated August 27, 2002 – the very same Order which is now at
the heart of the present petition.
On September 8, 2009, petitioner filed with the Sandiganbayan a Motion to Expunge
or Cross-Examine Plaintiff’s Witnesses.72 On September 15, 2009, he also filed a
Motion to Expunge Evidence Presented Before the Clerk of Court.73
On September 23, 2009, petitioner filed with this Court a Motion for Leave to File
Supplemental Memorandum,74 which was denied in a Resolution dated September
30, 2009.75
On October 15, 2009, petitioner filed with the Sandiganbayan a Motion to Expunge
Rolando Gapud’s Deposition taken on October 18-20, 1995.76 On October 19, 2009,
he filed a Motion to Expunge or Cross-Examine Plaintiff’s witnesses.77
On February 18, 2010, petitioner filed with the Sandiganbayan a Supplement to the
Second Motion to Lift the Order of Default dated August 27, 2002 with Motion to Take
Judicial Notice.78 On March 4, 2010, he filed a Motion for Leave to Take Deposition.79
Issues
Petitioner raised the following issues for our consideration:
 1. Whether the Sandiganbayan court gravely abused its discretion in not
lifting its default order against petitioner Disini
2. Whether the Sandiganbayan court gravely abused its discretion when it
allowed the Republic to present its evidence ex-parte while petitioner’s
Motion for Reconsideration [of the stay of the default order] had not yet
been resolved.80
Our Ruling
Issue of Validity of Service of Summons Mooted by Voluntary Appearance
In his Petition, petitioner originally sought the nullification of the proceedings before
the Sandiganbayan on the theory of lack of jurisdiction over his person, premised on
the alleged impropriety in the service of summons.
However, petitioner subsequently filed several motions with the Sandiganbayan
which sought various affirmative reliefs from that court, sans any qualification of the
nature of its appearance and without reserving or reiterating its previous objection on
the ground of lack of jurisdiction over the person. These motions are:
(a) Motion to Expunge Exhibits "A," "B," "C," "D," "E," "XX," "YY," "ZZ," "EE,"
and their Submarkings or Cross-Examine Plaintiff’s Witness,81 which sought
to expunge various affidavits of the Republic’s witnesses;
(b) Motion to Expunge Evidence Presented Before the Clerk of Court,82 which
prayed that all the evidence presented before the clerk of court be stricken
off the records for being taken in violation of the Rules;
(c) Motion to Expunge Gapud’s Deposition taken on 18-20 October 1995,83
which sought to remove from the records the deposition offered by the
Republic;
(d) Motion to Expunge Exhibits "FFF" and "GGG",84 which sought to strike off
the mentioned exhibits of respondents and asked the Sandiganbayan to
permit petitioner to cross-examine witness Jesus Disini;
(e) Motion for Consolidation,85 which prayed that Civil Case No. 0013 be
consolidated with Criminal Case Nos. 28001 and 28001; and
(f) Motion for Leave to Take Deposition based on Section 1 of Rule 23
(Depositions Pending Action or De Benne Esse).86
In regard to the last mentioned Motion for Leave to Take Deposition 87 (which is the
last pleading on record), it is important to note that there are two instances when the
defendant can take depositions under Section 1 of Rule 23: (1) after the court has
acquired jurisdiction over the defendant or the property subject of the action; and (2)
after an answer has been served. Both instances presuppose that the court has
already acquired jurisdiction over the defendant. By seeking the relief contained in
this provision, petitioner is deemed to have voluntarily submitted himself to the
jurisdiction of the Sandiganbayan. Thus, petitioner may be held to have waived his
objections regarding the lack of jurisdiction over his person by seeking affirmative
relief through the said provision.
While petitioner bewailed the mode of service of summons on him and questioned
the Sandiganbayan’s jurisdiction over his person, he has rendered his own arguments
moot by his voluntary appearance or submission to the jurisdiction of the
Sandiganbayan. Jurisprudence holds that an objection based on lack of jurisdiction
over the person is waived when the defendant files a motion or pleading which seeks
affirmative relief other than the dismissal of the case.88
Issue of Non-Lifting of Default Order Dismissed for Forum-shopping
When petitioner filed this Petition on December 22, 2006 assailing the
Sandiganbayan’s December 18, 2006 Resolution, the latter was still the subject of a
pending Extremely Urgent Motion for Reconsideration filed by petitioner with the
Sandiganbayan. The filing of the instant petition before this Court while a motion for
reconsideration was still pending before the Sandiganbayan constitutes, strictly
speaking, forum-shopping,89 which could have warranted the outright dismissal of the
petition. However, in light of the due process issues raised by petitioner and the very
real possibility that he had no other speedy remedy available to him, his Petition was
given due course.
Inexplicably, and in continuing disregard of the rules on forum-shopping and judicial
courtesy, petitioner raised again the same issue (validity of the default order and the
propriety of lifting said default order) in a Second Motion to Lift the Order of Default
dated August 27, 2002 which he filed with the Sandiganbayan after the latter denied
his Extremely Urgent Motion for Reconsideration.
This Second Motion to Lift the Order of Default was filed on July 27, 2009, admittedly
during the pendency of the instant Petition. Both remedies seek from different fora
exactly the same ultimate relief (lifting of the default order issued by the
Sandiganbayan) and raise the same issue (validity of the default order and the
propriety of lifting said default order). In availing himself of these two remedies,
petitioner has engaged in forum-shopping.
There is forum shopping when one party repetitively avails of several judicial remedies
in different courts, simultaneously or successively, all substantially founded on the
same transactions and the same essential facts and circumstances, and all raising
substantially the same issues either pending in, or already resolved adversely, by some
other court.90 Forum shopping is a prohibited malpractice and condemned as trifling
with the courts and their processes.91 It is proscribed because it unnecessarily burdens
the courts with heavy caseloads, and unduly taxes the manpower and financial
resources of the judiciary.92 It is inimical to the orderly administration of justice as it
creates the possibility of conflicting decisions being rendered by two courts, 93 and
opens the system to the possibility of manipulation.94
In filing a Second Motion to Lift the Order of Default with the Sandiganbayan while
the instant Petition is pending with this Court, petitioner has unfairly doubled his
chances of securing the lifting of the default order. "This misdeed amounts to a
wagering on the result of [petitioner’s] twin devious strategies, and shows not only
[his] lack of faith in this Court in its evenhanded administration of law but also [his]
expression of disrespect if not ridicule for our judicial process and orderly
procedure."95
The situation here is strikingly similar to that in People v. Sandiganbayan. 96 In that case,
the petitioner had filed with the Sandiganbayan a motion for consolidation of a bribery
case with a plunder case. The Sandiganbayan refused, leading the petitioner to file a
petition for certiorari with this Court. While the said petition was pending with this
Court, the petitioner filed another motion for consolidation with the Sandiganbayan,
praying anew for the consolidation of the bribery case with a plunder case. The motion
raised the same issues and prayed for the same remedy as the pending petition with
this Court, namely, the consolidation of the bribery case and the plunder case. The
Court held that "such move clearly constitutes forum-shopping."
This is almost exactly what happened in the instant case. Petitioner had filed with the
Sandiganbayan a motion to lift default order. The Sandiganbayan refused, leading
petitioner to file a petition for certiorari with this Court. While the said petition was
pending with this Court, petitioner filed another motion to lift default order with the
Sandiganbayan, praying anew for the lifting of the default order. Thus, following the
ruling in People v. Sandiganbayan, we rule that petitioner’s actuations clearly
constitute forum-shopping.
Because of the forum-shopping committed by petitioner, the Court cannot grant the
relief he prayed for.
Certiorari is an improper remedy
Petitioner imputes grave abuse of discretion on the Sandiganbayan for allegedly
"railroading" the proceedings in violation of his right to due process and fair trial. More
specifically, petitioner points out that when the Sandiganbayan denied his Motion to
Lift Order of Default (December 18, 2006), he immediately filed an Extremely Urgent
Motion for Reconsideration (December 19, 2006). However, before the latter could
be resolved, the Sandiganbayan allowed the ex-parte presentation of evidence to
proceed (December 20, 2006). This prompted petitioner to file the instant Petition
with this Court two days later (December 22, 2006).
While it may have been more convenient if the Sandiganbayan resolved first the
Extremely Urgent Motion for Reconsideration before allowing the ex-parte
presentation of evidence, we cannot say that the course taken by the Sandiganbayan
constitutes grave abuse of discretion. We cannot infer from the Sandiganbayan’s
deliberate speed that it was done to prejudice petitioner. There was adequate
justification for the Sandiganbayan’s resolve to finish the twenty-year old forfeiture
case with dispatch. Aside from the length of time that Civil Case No. 0013 has
stagnated in the dockets, the Republic’s manifestation (that a resolution was
necessary by December 30, 2006 in order to maintain the Swiss Federal Court’s freeze
order on petitioner’s Swiss accounts) is reason enough not to further delay the case
as a matter of public interest. Besides, it should be remembered that when the
Sandiganbayan received evidence ex-parte on December 20, 2006, petitioner was still
in default and his Motion to Lift Default Order has already been denied. The ex-parte
presentation of evidence on December 20, 2006 was simply consistent with
petitioner’s default status as of that time.
Grave abuse of discretion refers to such "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 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. The
actions of the Sandiganbayan were not thus tainted under the circumstances we
described above. Thus, we cannot accept petitioner’s contention that the proceedings
taken below must be nullified because of the alleged "railroading" by the
Sandiganbayan.
Moreover, Rule 65 petitions for certiorari are extraordinary remedies available only
when there is grave abuse of discretion amounting to lack of jurisdiction and the
petitioner has no other plain, speedy, and adequate remedy for correcting such
abuse.97
By filing a Second Motion to Lift the Order of Default and the various motions seeking
the Sandiganbayan’s correction of the perceived errors during the Republic’s ex parte
presentation of evidence, petitioner has revealed his belief that he had adequate
remedies before the Sandiganbayan. A resort to a Rule 65 petition is, under the
premises, improper.
WHEREFORE, the Petition for Certiorari is DISMISSED. Costs against petitioner.
SO ORDERED.
G.R. No. 185145 February 5, 2014
SPOUSES VICENTE AFULUGENCIA and LETICIA AFULUGENCIA, Petitioners,
vs.
METROPOLITAN BANK & TRUST CO. and EMMANUEL L. ORTEGA, Clerk of Court,
Regional Trial Court and Ex-Officio Sheriff, Province of Bulacan, Respondents.
DECISION
DEL CASTILLO, J.:
Section 6,1 Rule 25 of the Rules of Court (Rules) provides that "a party not served with
written interrogatories may not be compelled by the adverse party to give testimony
in open court, or to give a deposition pending appeal." The provision seeks to prevent
fishing expeditions and needless delays. Its goal is to maintain order and facilitate the
conduct of trial.
Assailed in this Petition for Review on Certiorari2 are the April 15, 2008 Decision3 of
the Court of Appeals (CA) in CA-G.R. SP No. 99535 which dismissed petitioners'
Petition for Certiorari for lack of merit and its October 2, 2008 Resolution4 denying
petitioners' Motion for Reconsideration.5
Factual Antecedents
Petitioners, spouses Vicente and Leticia Afulugencia, filed a Complaint6 for
nullification of mortgage, foreclosure, auction sale, certificate of sale and other
documents, with damages, against respondents Metropolitan Bank & Trust Co.
(Metrobank) and Emmanuel L. Ortega (Ortega) before the Regional Trial Court (RTC)
of Malolos City, where it was docketed as Civil Case No. 336-M-2004 and assigned to
Branch 7.
Metrobank is a domestic banking corporation existing under Philippine laws, while
Ortega is the Clerk of Court and Ex-Officio Sheriff of the Malolos RTC.
After the filing of the parties’ pleadings and with the conclusion of pre-trial, petitioners
filed a Motion for Issuance of Subpoena Duces Tecum Ad Testificandum7 to require
Metrobank’s officers8 to appear and testify as the petitioners’ initial witnesses during
the August 31, 2006 hearing for the presentation of their evidence-in-chief, and to
bring the documents relative to their loan with Metrobank, as well as those covering
the extrajudicial foreclosure and sale of petitioners’ 200-square meter land in
Meycauayan, Bulacan covered by Transfer Certificate of Title No. 20411 (M). The
Motion contained a notice of hearing written as follows:
NOTICE
The Branch Clerk of Court
Regional Trial Court
Branch 7, Malolos, Bulacan
Greetings:
Please submit the foregoing motion for the consideration and approval of the Hon.
Court immediately upon receipt hereof.
(signed)
Vicente C. Angeles9
Metrobank filed an Opposition10 arguing that for lack of a proper notice of hearing,
the Motion must be denied; that being a litigated motion, the failure of petitioners to
set a date and time for the hearing renders the Motion ineffective and pro forma; that
pursuant to Sections 1 and 611 of Rule 25 of the Rules, Metrobank’s officers – who
are considered adverse parties – may not be compelled to appear and testify in court
for the petitioners since they were not initially served with written interrogatories;
that petitioners have not shown the materiality and relevance of the documents
sought to be produced in court; and that petitioners were merely fishing for evidence.
Petitioners submitted a Reply12 to Metrobank’s Opposition, stating that the lack of a
proper notice of hearing was cured by the filing of Metrobank’s Opposition; that
applying the principle of liberality, the defect may be ignored; that leave of court is
not necessary for the taking of Metrobank’s officers’ depositions; that for their case,
the issuance of a subpoena is not unreasonable and oppressive, but instead favorable
to Metrobank, since it will present the testimony of these officers just the same during
the presentation of its own evidence; that the documents sought to be produced are
relevant and will prove whether petitioners have paid their obligations to Metrobank
in full, and will settle the issue relative to the validity or invalidity of the foreclosure
proceedings; and that the Rules do not prohibit a party from presenting the adverse
party as its own witness.
Ruling of the Regional Trial Court
On October 19, 2006, the trial court issued an Order13 denying petitioners’ Motion
for Issuance of Subpoena Duces Tecum Ad Testificandum, thus:
The motion lacks merit.
As pointed out by the defendant bank in its opposition, the motion under
consideration is a mere scrap of paper by reason of its failure to comply with the
requirements for a valid notice of hearing as specified in Sections 4 and 5 of Rule 15
of the Revised Rules of Court. Moreover, the defendant bank and its officers are
adverse parties who cannot be summoned to testify unless written interrogatories are
first served upon them, as provided in Sections 1 and 6, Rule 25 of the Revised Rules
of Court.
In view of the foregoing, and for lack of merit, the motion under consideration is
hereby DENIED.
SO ORDERED.14
Petitioners filed a Motion for Reconsideration15 pleading for leniency in the
application of the Rules and claiming that the defective notice was cured by the filing
of Metrobank’s Opposition, which they claim is tantamount to notice. They further
argued that Metrobank’s officers – who are the subject of the subpoena – are not
party-defendants, and thus do not comprise the adverse party; they are individuals
separate and distinct from Metrobank, the defendant corporation being sued in the
case.
In an Opposition16 to the Motion for Reconsideration, Metrobank insisted on the
procedural defect of improper notice of hearing, arguing that the rule relative to
motions and the requirement of a valid notice of hearing are mandatory and must be
strictly observed. It added that the same rigid treatment must be accorded to Rule 25,
in that none of its officers may be summoned to testify for petitioners unless written
interrogatories are first served upon them. Finally, it said that since a corporation may
act only through its officers and employees, they are to be considered as adverse
parties in a case against the corporation itself.
In another Order17 dated April 17, 2007, the trial court denied petitioners’ Motion for
Reconsideration. The trial court held, thus:
Even if the motion is given consideration by relaxing Sections 4 and 5, Rule 15 of the
Rules of Court, no such laxity could be accorded to Sections 1 and 6 of Rule 25 of the
Revised Rules of Court which require prior service of written interrogatories to adverse
parties before any material and relevant facts may be elicited from them more so if
the party is a private corporation who could be represented by its officers as in this
case. In other words, as the persons sought to be subpoenaed by the plaintiffs-
movants are officers of the defendant bank, they are in effect the very persons who
represent the interest of the latter and necessarily fall within the coverage of Sections
1 and 6, Rule 25 of the Revised Rules of Court.
In view of the foregoing, the motion for reconsideration is hereby denied.
SO ORDERED.18
Ruling of the Court of Appeals
Petitioners filed a Petition for Certiorari19 with the CA asserting this time that their
Motion for Issuance of Subpoena Duces Tecum Ad Testificandum is not a litigated
motion; it does not seek relief, but aims for the issuance of a mere process. For these
reasons, the Motion need not be heard. They likewise insisted on liberality, and the
disposition of the case on its merits and not on mere technicalities.20 They added that
Rule 2121 of the Rules requires prior notice and hearing only with respect to the taking
of depositions; since their Motion sought to require Metrobank’s officers to appear
and testify in court and not to obtain their depositions, the requirement of notice and
hearing may be dispensed with. Finally, petitioners claimed that the Rules –
particularly Section 10,22 Rule 132 – do not prohibit a party from presenting the
adverse party as its own witness.
On April 15, 2008, the CA issued the questioned Decision, which contained the
following decretal portion:
WHEREFORE, the petition is DISMISSED for lack of merit. The assailed orders dated
October 19, 2006 and April 17, 2007 in Civil Case No. 336-M-2004 issued by the RTC,
Branch 7, Malolos City, Bulacan, are AFFIRMED. Costs against petitioners.
SO ORDERED.23
The CA held that the trial court did not commit grave abuse of discretion in issuing the
assailed Orders; petitioners’ Motion is a litigated motion, especially as it seeks to
require the adverse party, Metrobank’s officers, to appear and testify in court as
petitioners’ witnesses. It held that a proper notice of hearing, addressed to the parties
and specifying the date and time of the hearing, was required, consistent with Sections
4 and 5,24 Rule 15 of the Rules.
The CA held further that the trial court did not err in denying petitioners’ Motion to
secure a subpoena duces tecum/ad testificandum, ratiocinating that Rule 25 is quite
clear in providing that the consequence of a party’s failure to serve written
interrogatories upon the opposing party is that the latter may not be compelled by
the former to testify in court or to render a deposition pending appeal. By failing to
serve written interrogatories upon Metrobank, petitioners foreclosed their right to
present the bank’s officers as their witnesses.
The CA declared that the justification for the rule laid down in Section 6 is that by
failing to seize the opportunity to inquire upon the facts through means available
under the Rules, petitioners should not be allowed to later on burden Metrobank with
court hearings or other processes. Thus, it held:
x x x Where a party unjustifiedly refuses to elicit facts material and relevant to his case
by addressing written interrogatories to the adverse party to elicit those facts, the
latter may not thereafter be compelled to testify thereon in court or give a deposition
pending appeal. The justification for this is that the party in need of said facts having
foregone the opportunity to inquire into the same from the other party through
means available to him, he should not thereafter be permitted to unduly burden the
latter with courtroom appearances or other cumbersome processes. The sanction
adopted by the Rules is not one of compulsion in the sense that the party is being
directly compelled to avail of the discovery mechanics, but one of negation by
depriving him of evidentiary sources which would otherwise have been accessible to
him.25
Petitioners filed their Motion for Reconsideration,26 which the CA denied in its
assailed October 2, 2008 Resolution. Hence, the present Petition.
Issues
Petitioners now raise the following issues for resolution:
I hearing renders it useless and a mere scrap of paper. It adds that being its officers, the
THE COURT OF APPEALS COMMITTED REVERSIBLE ERRORS IN REQUIRING NOTICE
AND HEARING (SECS. 4 AND 5, RULE 15, RULES OF COURT) FOR A MERE MOTION FOR
SUBPOENA OF RESPONDENT BANK’S OFFICERS WHEN SUCH REQUIREMENTS APPLY
ONLY TO DEPOSITION UNDER SEC. 6, RULE 25, RULES OF COURT.
II
THE COURT OF APPEALS COMMITTED (REVERSIBLE) ERROR IN HOLDING THAT THE
PETITIONERS MUST FIRST SERVE WRITTEN INTERROGATORIES TO RESPONDENT
BANK’S OFFICERS BEFORE THEY CAN BE SUBPOENAED.27
Petitioners’ Arguments
Praying that the assailed CA dispositions be set aside and that the Court allow the
issuance of the subpoena duces tecum/ad testificandum, petitioners assert that the
questioned Motion is not a litigated motion, since it seeks not a relief, but the issuance
of process. They insist that a motion which is subject to notice and hearing under
Sections 4 and 5 of Rule 15 is an application for relief other than a pleading; since no
relief is sought but just the process of subpoena, the hearing and notice requirements
may be done away with. They cite the case of Adorio v. Hon. Bersamin,28 which held
that –
Requests by a party for the issuance of subpoenas do not require notice to other
parties to the action.1âwphi1 No violation of due process results by such lack of notice
since the other parties would have ample opportunity to examine the witnesses and
documents subpoenaed once they are presented in court.29
Petitioners add that the Rules should have been liberally construed in their favor, and
that Metrobank’s filing of its Opposition be considered to have cured whatever defect
the Motion suffered from.
Petitioners likewise persist in the view that Metrobank’s officers – the subject of the
Motion – do not comprise the adverse party covered by the rule; they insist that these
bank officers are mere employees of the bank who may be called to testify for them.
Respondents’ Arguments
Metrobank essentially argues in its Comment30 that the subject Motion for the
issuance of a subpoena duces tecum/ad testificandum is a litigated motion, especially
as it is directed toward its officers, whose testimony and documentary evidence would
affect it as the adverse party in the civil case. Thus, the lack of a proper notice of
persons sought to be called to the stand are themselves adverse parties who may not
be compelled to testify in the absence of prior written interrogatories; they are not
ordinary witnesses whose presence in court may be required by petitioners at any
time and for any reason.
Finally, Metrobank insists on the correctness of the CA Decision, adding that since
petitioners failed up to this time to pay the witnesses’ fees and kilometrage as
required by the Rules,31 the issuance of a subpoena should be denied.
Our Ruling
The Court denies the Petition.
On the procedural issue, it is quite clear that Metrobank was notified of the Motion
for Issuance of Subpoena Duces Tecum Ad Testificandum; in fact, it filed a timely
Opposition thereto. The technical defect of lack of notice of hearing was thus cured
by the filing of the Opposition.32
Nonetheless, contrary to petitioners’ submission, the case of Adorio cannot apply
squarely to this case. In Adorio, the request for subpoena duces tecum was sought
against bank officials who were not parties to the criminal case for violation of Batas
Pambansa Blg. 22. The situation is different here, as officers of the adverse party
Metrobank are being compelled to testify as the calling party’s main witnesses;
likewise, they are tasked to bring with them documents which shall comprise the
petitioners’ principal evidence. This is not without significant consequences that affect
the interests of the adverse party, as will be shown below.
As a rule, in civil cases, the procedure of calling the adverse party to the witness stand
is not allowed, unless written interrogatories are first served upon the latter. This is
embodied in Section 6, Rule 25 of the Rules, which provides –
Sec. 6. Effect of failure to serve written interrogatories.
Unless thereafter allowed by the court for good cause shown and to prevent a failure
of justice, a party not served with written interrogatories may not be compelled by
the adverse party to give testimony in open court, or to give a deposition pending
appeal.
One of the purposes of the above rule is to prevent fishing expeditions and needless
delays; it is there to maintain order and facilitate the conduct of trial. It will be
presumed that a party who does not serve written interrogatories on the adverse
party beforehand will most likely be unable to elicit facts useful to its case if it later
opts to call the adverse party to the witness stand as its witness. Instead, the process
could be treated as a fishing expedition or an attempt at delaying the proceedings; it
produces no significant result that a prior written interrogatories might bring.
Besides, since the calling party is deemed bound by the adverse party’s testimony,33
compelling the adverse party to take the witness stand may result in the calling party
damaging its own case. Otherwise stated, if a party cannot elicit facts or information
useful to its case through the facility of written interrogatories or other mode of
discovery, then the calling of the adverse party to the witness stand could only serve
to weaken its own case as a result of the calling party’s being bound by the adverse
party’s testimony, which may only be worthless and instead detrimental to the calling
party’s cause.
Another reason for the rule is that by requiring prior written interrogatories, the court
may limit the inquiry to what is relevant, and thus prevent the calling party from
straying or harassing the adverse party when it takes the latter to the stand.
Thus, the rule not only protects the adverse party from unwarranted surprises or
harassment; it likewise prevents the calling party from conducting a fishing expedition
or bungling its own case. Using its own judgment and discretion, the court can hold its
own in resolving a dispute, and need not bear witness to the parties perpetrating
unfair court practices such as fishing for evidence, badgering, or altogether ruining
their own cases. Ultimately, such unnecessary processes can only constitute a waste
of the court’s precious time, if not pointless entertainment.
In the present case, petitioners seek to call Metrobank’s officers to the witness stand
as their initial and main witnesses, and to present documents in Metrobank’s
possession as part of their principal documentary evidence. This is improper.
Petitioners may not be allowed, at the incipient phase of the presentation of their
evidence-in-chief at that, to present Metrobank’s officers – who are considered
adverse parties as well, based on the principle that corporations act only through their
officers and duly authorized agents34 – as their main witnesses; nor may they be
allowed to gain access to Metrobank’s documentary evidence for the purpose of
making it their own. This is tantamount to building their whole case from the evidence
of their opponent. The burden of proof and evidence falls on petitioners, not on
Metrobank; if petitioners cannot prove their claim using their own evidence, then the
adverse party Metrobank may not be pressured to hang itself from its own defense.
It is true that under the Rules, a party may, for good cause shown and to prevent a
failure of justice, be compelled to give testimony in court by the adverse party who
has not served written interrogatories. But what petitioners seek goes against the very
principles of justice and fair play; they would want that Metrobank provide the very
evidence with which to prosecute and build their case from the start. This they may
not be allowed to do.

Finally, the Court may not turn a blind eye to the possible consequences of such a
move by petitioners. As one of their causes of action in their Complaint, petitioners
claim that they were not furnished with specific documents relative to their loan
agreement with Metrobank at the time they obtained the loan and while it was
outstanding. If Metrobank were to willingly provide petitioners with these documents
even before petitioners can present evidence to show that indeed they were never
furnished the same, any inferences generated from this would certainly not be useful
for Metrobank. One may be that by providing petitioners with these documents,
Metrobank would be admitting that indeed, it did not furnish petitioners with these
documents prior to the signing of the loan agreement, and while the loan was
outstanding, in violation of the law.

With the view taken of the case, the Court finds it unnecessary to further address the G.R. No. 201427
other issues raised by the parties, which are irrelevant and would not materially alter
the conclusions arrived at. WHEREFORE, the Petition is DENIED. The assailed April 15, TEOFILO B. ADOLFO, Petitioner,
2008 Decision and October 2, 2008 Resolution of the Court of Appeals in CA-G.R. SP vs.
No. 99535 are AFFIRMED. FE T. ADOLFO, Respondent.

SO ORDERED. DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari1 seeks to set aside: 1) the October 6, 2009
Decision2 of the Court of Appeals (CA) in CA-G.R. CV No. 01783 reversing the October
2, 2006 Order3 of the Regional Trial Court, 7th Judicial Region, Mandaue City (RTC
Mandaue), Branch 55 in Civil Case No. MAN-4821; as well as 2) the CA's March 2, 2012
Resolution4 denying petitioner's Motion for Reconsideration5 and Supplement6
thereto.

Civil Case No. MAN-4821

On April 14, 2004, petitioner Teofilo B. Adolfo filed with the RTC Mandaue a Petition7
for judicial separation of property against his estranged wife, respondent Fe Adolfo,
nee Tudtud. Docketed as Civil Case No. MAN-4821 and assigned to Branch 55, the
petition alleged that the parties were married on November 26, 1966; that the union
bore one child; that during the marriage, they acquired through conjugal funds Lot
1087-A-2-E, a 3,652-square meter property in Brgy. Cabancalan, Mandaue City, Cebu
(the subject property) covered by Transfer Certificate of Title No. (TCT) 18368; that
later on, the parties separated due to irreconcilable differences; that since reunion
was no longer feasible, petitioner suggested a separation of the conjugal property, but
respondent adamantly refused; that respondent denied petitioner’s co-ownership of
the subject property, claiming the same as her paraphernal property; that several
earnest efforts to amicably settle the matter between them proved unavailing; and
that a judicial separation of property is proper under the circumstances and pursuant
to Article 135(6) of the Family Code.8 Petitioner thus prayed that judgment be
rendered decreeing a separation of the conjugal property and the subdivision or sale
thereof, to the end of dividing the same or the proceeds thereof; and ordering
respondent to pay petitioner P50,000.00 as attorney’s fees, appearance fees
(P2,000.00 per hearing), and P20,000.00 litigation costs.
In her Answer9 with counterclaim, respondent contended that while she remained
married to petitioner, she is the sole owner of the subject property, the same being
her paraphernal property which she inherited from her mother; that petitioner is a
lazy bum, gambler, drunkard, wife abuser, and neglectful father; that respondent
found all means to support the family even as petitioner neglected it; that respondent
bought on installment a tricycle for the petitioner’s use in business, but he kept the
proceeds thereof to himself and used the same in his gambling and drinking sprees;
that respondent alone took the initiative to support the family and found ways to take
care of the daily needs of her child; that she caused to be built on a portion of her
mother’s land a house even while petitioner was bumming around; that one day,
petitioner destroyed the roof of the house that was then being built; that petitioner
subsequently abandoned her and their child in 1968, and transferred to Davao City
where he took a mistress and begot four children by her; that in 1986, petitioner
returned to Cebu City seeking reconciliation with respondent; that respondent took
petitioner back, but in 1987 they once more separated; that thereafter, respondent
never again saw or heard from petitioner.
Respondent claimed in her Answer that the subject property was a portion of a bigger
lot (mother lot) owned by her mother Petronila Tudtud which was covered by TCT T-
15941. On October 11, 1967, her mother executed a quitclaim deed transferring a
portion of the mother lot – the subject property – to respondent. The mother title TCT
T-15941 was then cancelled and a new one, TCT (17216)- 5415, was issued in
respondent’s name. Respondent then sold the subject property to her brother on
January 19, 1968, and a new TCT (17833)-5515 was issued in her brother’s name. Her
brother then mortgaged the property to Development Bank of the Philippines (DBP),
which foreclosed on the same. TCT 18231 was issued in DBP’s name. DBP then sold
the property to the spouses Antonio and Lucy Garcia (the Garcias), and TCT 18266 was
in turn issued in their name. Finally, on May 25, 1983, the Garcias sold back the subject
property to respondent, and a new title – TCT 1836810 – was then issued in the name
of respondent "FE M. TUDTUD, x x x married to Teofilo Adolfo."
Respondent argued that she is the sole owner of the subject property, the same being
her paraphernal property which she alone redeemed from the Garcias; that the
inclusion of petitioner’s name in TCT 18368 does not make him a co- owner of the
property, but was merely necessary to describe respondent’s civil status; and that
under Article 13511 of the Civil Code, all property brought by the wife to the marriage
as well as all property she acquires during the marriage in accordance with Article
14812 of the same Code constitutes paraphernal property.
Respondent thus prayed that the petition be dismissed. By way of counterclaim, she
sought the payment of moral, exemplary, and nominal damages, attorney’s fees, and
litigation expenses.
Civil Case No. MAN-2683
In 1996, respondent’s sister Florencia Tudtud and her husband Juanito Gingoyon (the
Gingoyons) filed a case for partition with damages against respondent. The case was
docketed as Civil Case No. MAN-2683 and raffled to Branch 55 of the RTC Mandaue.
The Complaint13 therein alleged that in 1988, respondent executed a deed of sale in
favor of the Gingoyons over a 300-square meter portion of the subject property, but
that respondent refused to partition/subdivide the same even after the Gingoyons
paid the taxes, fees and expenses of the sale. For her defense, respondent claimed in
her Answer14 that when the sale to the Gingoyons was made, the subject property
constituted conjugal property of her marriage with petitioner; that as early as 1983,
or when the Garcias executed the deed of sale in her favor, the subject property
became a conjugal asset; since petitioner did not sign the deed of sale in favor of the
Gingoyons as he was in Davao at the time and knew nothing about the sale, the sale
was null and void.
On May 15, 2002, the trial court rendered its Decision15 in Civil Case No. MAN-2683,
declaring that the subject property constituted conjugal property of the marriage. It
thus nullified the 1988 deed of sale executed by respondent in favor of the Gingoyons
for lack of consent on the part of petitioner, citing Article 124 of the Family Code.16
The trial court likewise awarded moral and exemplary damages, attorney's fees and
litigation expenses in favor of the respondent in the total amount of P107,000.00.
The Gingoyons filed an appeal with the CA, which was docketed as CA- G.R. CV No.
78971.
Motion for Judgment Based on the Pleadings in Civil Case No. MAN-4821
Meanwhile, during the pre-trial conference in Civil Case No. MAN-4821, petitioner
submitted as part of his evidence and for marking certified true copies of the
Gingoyons’ Complaint in Civil Case No. MAN-2683, respondent’s Answer thereto, and
the trial court’s May 15, 2002 Decision in said case.
On August 1, 2005, petitioner filed a Request for Admission17 of 1) the genuineness
of the duly marked certified true copies of the Complaint, Answer, and Decision in Civil
Case No. MAN-2683 (Exhibits "F," "G" and "H," respectively); 2) respondent’s
declaration in said Answer that the subject property constituted conjugal property of
the marriage; and 3) the trial court’s pronouncement in said case that the subject
property forms part of the conjugal estate.
Respondent failed to file her answer or response to the request for admission.
On September 5, 2005, petitioner filed a Motion for Judgment Based on the
Pleadings,18 stating that since respondent failed to answer his request for admission,
the matters contained in the request are deemed admitted pursuant to Rule 26,
Section 2 of the 1997 Rules of Civil Procedure19 (1997 Rules); that as a consequence
of the application of the rule, respondent is in effect considered to have admitted that
the subject property is a conjugal asset of their subsisting marriage which may thus be
the subject of his petition for judicial separation of property; and that on account of
said admission, a hearing on the merits becomes unnecessary and, instead, Rule 3420
of the 1997 Rules on judgments on the pleadings should apply. Petitioner thus prayed
that the trial court render judgment in his favor based on the pleadings.
Respondent filed an Opposition.21 In her Opposition to Plaintiff’s Memorandum,22
respondent argued among others that the request for admission was premature
considering that the decision in Civil Case No. MAN-2683 was the subject of an appeal,
and thus not yet final.
In an October 11, 2005 Order,23 the trial court directed the transfer of Civil Case No.
MAN-4821 to Branch 55 of the RTC Mandaue, since it is said court which decided the
closely related Civil Case No. MAN-2683.
On October 2, 2006, Branch 55 issued an Order24 granting petitioner’s motion for
judgment on the pleadings. It held as follows:
This court has painstakingly exerted effort in going over the record and took serious
note of all the pleadings, documents and others on file. After serious consideration,
the court believes and so holds that there is basis in rendering judgment. The Motion
for Judgment Based on the Pleadings though denominated as such but [sic] shall be
treated as a move to seek summary judgment. x x x
xxxx
The court in arriving at this resolution was guided by the following pronouncements
by the Supreme Court in the case of Diman vs. Alumbres, G.R. No. 131466, November
27, 1998, 299 SCRA 459 x x x:
xxxx
In the same case, it was held –
"It is also the law which determines when a summary judgment is proper. It declares
that although the pleadings on their face appear to raise issues of fact – e.g., there are
denials of, or a conflict in, factual allegations – if it is shown by admissions, depositions
or affidavits, that those issues are sham, fictitious, or not genuine, or, in the language
of the Rules, that ‘except as to the amount of damages, there is no genuine issue as
to any material fact and that the moving party is entitled to a judgment as a matter of
law, the Court shall render a summary judgment for the plaintiff or the defendant, as
the case may be. (Italics and underscoring supplied)
On the other hand, in the case of a summary judgment[,] issues apparently exist – i.e..
facts are asserted in the complaint regarding which there is as yet no admission,
disavowal or qualification; or specific denials or affirmative defenses are in truth set
out in the answer – but the issues thus arising from the pleadings are sham, fictitious,
not genuine, as shown by [affidavits], depositions or admissions. In other words, as a
noted authority remarks, a judgment on the pleadings is a judgment on the facts as
pleaded, while a summary judgment is a judgment on the facts as summarily proven
by affidavits, depositions or admissions." (Italics and underscoring supplied)
xxxx
Defendant25 did not file any verified answer or a pleading denying under oath the
genuineness and authenticity of the documents attached to the Request for
Admission and of the other matters therein set forth. This failure has far reaching
implications in that the following are deemed admitted: a) the genuineness of Exhibits
F, G and H, all attached to the Request for Admission; b) that she admitted in
paragraph 10 in her Answer to Civil Case No. MAN-2683 that Lot 1087-A-2-E was no
longer paraphernal property but rather a conjugal property of Spouses Teofilo and Fe
Adolfo and; c) that RTC, Branch 55, Mandaue City, sustained and/or held the view of
defendant (Fe Tudtud) that Lot 1087-A-2-E is a conjugal property of Spouses Teofilo
and Fe Adolfo, thus, dismissed Civil Case No. MAN-2683 and awarded damages to the
defendant.
Judicial admissions may be made in (a) the pleadings filed by the parties,
(b) in the course of the trial either by verbal or written manifestations or stipulations,
or (c) in other stages of the judicial proceeding, as in the pre-trial of the case.
Admissions obtained through depositions, written interrogatories or requests for
admission are also considered judicial admissions." Page 686, Remedial Law
Compendium, Vol. II, 9th Rev. Ed., Regalado
With the admission that Lot 1087-A-2-E is a conjugal property, it follows as its
necessary and logical consequence, that plaintiff26 is entitled to the relief demanded.
xxxx
A DECISION in Civil Case No. MAN-2683 had already been rendered by RTC, Branch 55,
on the 15th day of May 2002 with the court finding that Lot 1087-A-2-E is a conjugal
property x x x –
xxxx
For reason[s] of expediency and convenience, the court may even take judicial notice
of its earlier decision finding Lot 1087-A-2-E as a conjugal property.27
xxxx
Under the circumstances, judicial separation of property is proper. Aware that the
separation has the effect of a dissolution of the conjugal partnership property regime,
the presumptive legitime of Nilo Adolfo (the only common child of the spouses) has
to be delivered in accordance with Article 51 in relation to paragraph (8) Article 127
and Article 137 of the Family Code of the Philippines.
WHEREFORE, premises considered, judgment is hereby rendered directing the
partition of Lot 1087-A-2-E between the plaintiff and the defendant in equal share of
what remains after allocating to Nilo Adolfo a portion of Nine hundred thirteen (913)
square meters representing his presumptive legitime.
The plaintiff is directed to submit to this court the proposed subdivision plan for its
consideration before submitting the same for approval to the Bureau of Lands.
In case of disagreement as to their respective location, the same shall be done through
raffle to be conducted by the sheriff who shall see to it that judgment in this case shall
be fully implemented.
SO ORDERED.28
Respondent instituted an appeal with the CA, which was docketed as CA- G.R. CV No.
01783.
Court of Appeals Decision in CA-G.R. CV No. 78971
Meanwhile, on May 30, 2007, the CA rendered its Decision29 in CA-G.R. CV No. 78971.
It reversed the May 15, 2002 Decision of the trial court in Civil Case No. MAN-2683. It
declared, among others, that the subject property was respondent’s paraphernal
property. Thus, it held:
Proceeding from the foregoing consideration, the finding that Lot No. 1087-A-2-E is a
conjugal property does not have any basis, hence, does not have any merit at all. On
the contrary, plaintiffs-appellants30 sufficiently proved that the aforesaid lot was
defendant-appellee’s31 paraphernal property as the latter even admitted that she
inherited the same from her mother although she claimed it as a conjugal property
based on the TCT’s attached to her answer. Another strong indication that Lot No.
1087-A-2-E is solely owned by defendant-appellee is the fact that in another case (Civil
Case No. MAN-2008) involving the same property and the same parties but for a
different issue (road right of way), defendant-appellee alone signed the compromise
agreement ceding a portion of the subject lot as a right of way perpetually open and
unobstructed for the benefit of plaintiffs-appellants, defendant-appellee, their
respective heirs, assigns and transferees and guests. The same compromise
agreement which became the decision of the case attained finality without defendant-
appellee questioning the absence of her husband’s signature.
xxxx
WHEREFORE, prescinding from the foregoing premises, the appeal is hereby GRANTED
and the Decision of the Regional Trial Court of Mandaue City, Branch 55, dated 15 May
2002, in Civil Case No. MAN-2683 is REVERSED and SET ASIDE.
Let the partition of Lot No. 1087-A-2-E consisting of 300 square meters bought by
plaintiffs-appellants from defendant-appellee be done in accordance to [sic] the
sketch plan executed for that purpose.
SO ORDERED.32
On June 23, 2007, the above CA decision became final and executory.33
Ruling of the Court of Appeals in CA-G.R. CV No. 01783
In CA-G.R. CV No. 01783, respondent filed her Appellant’s Brief,34 where she argued
that the trial court erred in issuing its October 2, 2006 Order directing the partition or
sale of the subject property; that it was error for the trial court to take judicial notice
of its own judgment in Civil Case No. MAN-2683 and thus declare that the subject
property is conjugal, since the issue of whether it constitutes conjugal or paraphernal
property was still pending in the appeal in CA- G.R. CV No. 78971; that since the
proceedings in Civil Case No. MAN-2683 have not been terminated and the issue
regarding the character of the subject property has not been resolved with finality,
then petitioner’s resort to a request for admission and motion for judgment on the
pleadings was premature; and that with the May 30, 2007 Decision in CA-G.R. CV No.
78971, petitioner and the trial court should submit to the finding therein that the
subject property is her paraphernal property.
In his Appellee’s Brief,35 petitioner insisted that the trial court did not err in treating
his motion for judgment on the pleadings as one for summary judgment; that
respondent’s Answer in Civil Case No. MAN-2683 constituted a judicial admission that
the subject property was a conjugal asset, which required no further proof; that
respondent’s failure to reply to his written request for admission also resulted in the
acknowledgment that the subject property is a conjugal asset; that the trial court
correctly took judicial notice of the proceedings in Civil Case No. MAN-2683, as they
were relevant and material to the resolution of Civil Case No. MAN-4821; that since it
was not respondent who appealed the May 15, 2002 decision in Civil Case No. MAN-
2683, then the finding therein that the subject property is conjugal should bind her;
and that the CA’s eventual finding in CA- G.R. CV No. 78971 that the subject lot was
respondent’s paraphernal property cannot bind him because he was not a party to
Civil Case No. MAN-2683.
On October 6, 2009, the CA issued the assailed Decision containing the following
decretal portion:
WHEREFORE, based from the foregoing premises, the Order of the Regional Trial
Court, Branch 55, Mandaue City, in Civil Case No. MAN-4821, is hereby REVERSED and
SET ASIDE and the records of this case are remanded to RTC (Branch 55), Mandaue
City, for further proceedings.
SO ORDERED.36
In arriving at the above conclusion, the CA held that the trial court cannot treat
petitioner’s motion for judgment on the pleadings as one for summary judgment. It
stated that in a proper case for judgment on the pleadings, there are no ostensible
issues at all on account of the defending party’s failure to raise an issue in his answer,
while in a proper case for summary judgment, such issues exist, although they are
sham, fictitious, or not genuine as shown by affidavits, depositions or admissions. In
other words, a judgment on the pleadings is a judgment on the facts as pleaded, while
a summary judgment is a judgment on the facts as summarily proved by affidavits,
depositions, or admissions.37 It added that respondent’s Answer appeared on its face
to tender an issue; it disputed petitioner’s claim that the subject property is their
conjugal property. The next thing to be determined is whether this issue is fictitious
or sham as to justify a summary judgment.
The CA added that although respondent was bound by the resulting admission
prompted by her failure to reply to petitioner’s request for admission, her claims and
documentary exhibits clearly contradict what petitioner sought to be admitted in his
request; that the trial court disregarded the fact that the issue of whether the subject
property is conjugal was still unresolved as CA-G.R. CV No. 78971 was still pending;
and that finally, the trial court should have been guided by the principles that trial
courts have but limited authority to render summary judgments and that summary
judgments should not be rendered hastily.38
Petitioner moved to reconsider, but in a March 2, 2012 Resolution, he was rebuffed.
Hence, the present Petition was filed on April 30, 2012.
In a March 20, 2013 Resolution,39 the Court resolved to give due course to the instant
Petition.1âwphi1
Issue
Petitioner now claims that the Court of Appeals erred in deciding the case on a
question of substance not in accord with law, Rule 26 of the 1997 Rules, and applicable
jurisprudence.40
Petitioner’s Arguments
In his Petition seeking to reverse and set aside the assailed CA dispositions and thus
reinstate the October 2, 2006 Order of the trial court, petitioner insists that
respondent’s failure to reply to his written request for admission resulted in her
admitting that the subject property is a conjugal asset, applying Rule 26, Section 2 of
the 1997 Rules; that the CA grossly erred in disregarding the rule; that with the
resulting admission, there remains no genuine issue to be resolved in Civil Case No.
MAN-4821, such that judgment based on the pleadings is proper. Finally, petitioner
adds that respondent’s trifling with the law and rules of procedure – by conveniently
claiming in one case that the subject property is conjugal, and then in another that it
is paraphernal – should not be countenanced; she should be held to her original
declaration that the subject property is conjugal.
Respondent’s Arguments
In her Comment,41 respondent counters that, as correctly ruled by the CA, petitioner
elected the wrong remedy in filing a motion for judgment on the pleadings when he
should have moved for summary judgment; that in a motion for judgment on the
pleadings, the movant is deemed to admit the truth of all of the opposing party’s
material and relevant allegations, and rest his motion on those allegations taken
together with that of his own as are admitted in the pleadings;42 that the effect of
this is that petitioner is deemed to have admitted that the subject property is
paraphernal, as claimed in her Answer; that with the final and executory May 30, 2007
Decision of the CA in CA-G.R. CV No. 78971, the subject property should now be
considered as her paraphernal property, and petitioner’s case for partition on the
claim that the subject property is conjugal should be dismissed for being moot and
academic.
Our Ruling
The Court denies the Petition.
Judgment on the pleadings is proper "where an answer fails to tender an issue, or
otherwise admits the material allegations of the adverse party’s pleading."43
Summary judgment, on the other hand, will be granted "if the pleadings, supporting
affidavits, depositions, and admissions on file, show that, except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law."44
We have elaborated on the basic distinction between summary judgment and
judgment on the pleadings, thus:
The existence or appearance of ostensible issues in the pleadings, on the one hand,
and their sham or fictitious character, on the other, are what distinguish a proper case
for summary judgment from one for a judgment on the pleadings. In a proper case for
judgment on the pleadings, there is no ostensible issue at all because of the failure of
the defending party’s answer to raise an issue. On the other hand, in the case of a
summary judgment, issues apparently exist-i.e. facts are asserted in the complaint
regarding which there is as yet no admission, disavowal or qualification; or specific
denials or affirmative defenses are in truth set out in the answer-but the issues thus
arising from the pleadings are sham, fictitious or not genuine, as shown by affidavits,
depositions, or admissions.45
An answer would "fail to tender an issue" if it "does not deny the material allegations
in the complaint or admits said material allegations of the adverse party’s pleadings
by confessing the truthfulness thereof and/or omitting to deal with them at all. Now,
if an answer does in fact specifically deny the material averments of the complaint
and/or asserts affirmative defenses (allegations of new matter which, while admitting
the material allegations of the complaint expressly or impliedly, would nevertheless
prevent or bar recovery by the plaintiff), a judgment on the pleadings would naturally
be improper."46
On the other hand, "whether x x x the issues raised by the Answer are genuine is not
the crux of inquiry in a motion for judgment on the pleadings. It is so only in a motion
for summary judgment. In a case for judgment on the pleadings, the Answer is such
that no issue is raised at all. The essential question in such a case is whether there are
issues generated by the pleadings."47 "A ‘genuine issue’ is an issue of fact which
requires the presentation of evidence as distinguished from a sham, fictitious,
contrived or false claim. When the facts as pleaded appear uncontested or
undisputed, then there is no real or genuine issue or question as to the facts, and
summary judgment is called for."48
In rendering summary judgment, the trial court relied on respondent’s failure to reply
to petitioner’s request for admission, her admission in Civil Case No. MAN-2683, as
well as its May 15, 2002 Decision declaring that the subject property is a conjugal
asset. It took judicial notice of the proceedings in said case. While there is nothing
irregular with this – as courts may "take judicial notice of a decision or the facts
prevailing in another case sitting in the same court if (1) the parties present them in
evidence, absent any opposition from the other party; or (2) the court, in its discretion,
resolves to do so"49 – the trial court however disregarded the fact that its decision
was then the subject of a pending appeal in CA-G.R. CV No. 78971. It should have
known that until the appeal is resolved by the appellate court, it would be premature
to render judgment on petitioner’s motion for judgment on the pleadings; that it
would be presumptuous to assume that its own decision would be affirmed on appeal.
One of the issues raised in the appeal is precisely whether the subject property is
conjugal, or a paraphernal asset of the respondent. Thus, instead of resolving
petitioner’s motion for judgment on the pleadings, the trial court should have denied
it or held it in abeyance. It should have guided petitioner to this end, instead of aiding
in the hasty resolution of his case. In the first place, Civil Case No. MAN-4821 was
transferred to it from Branch 56 precisely for the reason that it was the court which
tried the closely related Civil Case No. MAN-2683.
Even if respondent is deemed to have admitted the matters contained in petitioner’s
request for admission by her failure to reply thereto, the trial court should have
considered the pending appeal in CA-G.R. CV No. 78971. It cannot take judicial notice
solely of the proceedings in Civil Case No. MAN-2683, and ignore the appeal in CA-G.R.
CV No. 78971. After all, CA-G.R. CV No. 78971 is merely a continuation of Civil Case
No. MAN-2683; an appeal is deemed a continuation of the same case commenced in
the lower court.50
On the part of petitioner, it must be said that he could not have validly resorted to a
motion for judgment on the pleadings or summary judgment. While it may appear
that under Rules 34 and 35 of the 1997 Rules, he may file a motion for judgment on
the pleadings or summary judgment as a result of the consequent admission by
respondent that the subject property is conjugal, this is not actually the case. Quite
the contrary, by invoking the proceedings and decision in Civil Case No. MAN-2683,
petitioner is precluded from obtaining judgment while the appeal in said case is
pending, because the result thereof determines whether the subject property is
indeed conjugal or paraphernal. He may not preempt the appeal in CA-G.R. CV No.
78971.

While it is true that a judgment cannot bind persons who are not parties to the
action,51 petitioner cannot, after invoking the proceedings in Civil Case No. MAN-
2683 to secure affirmative relief against respondent and thereafter failing to obtain
such relief, be allowed to repudiate or question the CA’s ruling in CA-G.R. CV No.
78971. The principle of estoppel bars him from denying the resultant pronouncement
by the appellate court, which became final and executory, that the subject property is
respondent’s paraphernal property. "In estoppel, a person, who by his deed or
G.R. No. 198139 September 8, 2014
conduct has induced another to act in a particular manner, is barred from adopting an
inconsistent position, attitude or course of conduct that thereby causes loss or injury
to another. It further bars him from denying the truth of a fact which has, in the NATIONAL POWER CORPORATION, Petitioner,
contemplation of law, become settled by the acts and proceeding of judicial or vs.
legislative officers or by the act of the party himself, either by conventional writing or FELICISIMO TARCELO and HEIRS OF COMIA SANTOS, Respondents.
by representations, express or implied or in pais."52
DECISION
Finally, the Court notes that the appellate court overlooked the May 30, 2007 Decision
in CA-G.R. CV No. 78971, which became final and executory on June 23 , 2007. The DEL CASTILLO, J.:
respondent included this development in her appellee's brief, but the CA did not take
it into account. As an unfortunate consequence, the case was not appreciated and Execution must always conform to that decreed in the dispositive part of the decision,
resolved completely. because the only portion thereof that may be the subject of execution is that which is
precisely ordained or decreed in the dispositive portion; whatever is in the body of the
Thus, with the development in Civil Case No. MAN-2683 brought upon by the final and decision can only be considered as part of the reasons or conclusions and serves as a
executory decision in CA-G.R. CV No. 78971 , petitioner's case is left with no leg to guide in determining the ratio decidendi.1
stand on. There being no conjugal property to be divided between the parties, Civil
Case No. MAN-4821 must be dismissed. This Petition for Review on Certiorari2 seeks to set aside the January 20, 2011
Decision3 of the Court of Appeals (CA) and August 9, 2011 Resolution4 in CA-G.R. SP
WHEREFORE, the Petition is DENIED. The October 6, 2009 Decision and March 2, 2012 No. 112054, which denied the herein petitioner's Petition for Certiorari and Motion
Resolution of the Court ofAppeals in CA-G.R. CV No. 01783 are AFFIRMED WITH for Reconsideration, respectively, thus affirming the dispositions of the Regional Trial
MODIFICATION in that Civil Case No. MAN-4821 is ordered DISMISSED. Court of Batangas City, Branch VII (Batangas City RTC) in Civil Case No. 5785.

SO ORDERED. Factual Antecedents

Civil Case No. 5785

Respondents Felicisimo Tarcelo (Tarcelo) and the heirs of Comia Santos (Santos heirs)
are the owners of two lots measuring 4,404 and 2,611 square meters, respectively,
which are situated in Brgy. Tabangao-Ambulong, Batangas City.

Sometime in 2000, petitioner National Power Corporation (NPC) filed Civil Case No.
5785 with the Batangas City RTC, seeking to expropriate portions of Tarcelo and the
Santos heirs’ lots to the extent of 1,595.91 square meters which are affected by the
construction and maintenance of NPC’s 1,200 MW Ilijan Natural Gas Pipeline Project.
In other words, NPC’s natural gas pipeline shall traverse respondents’ lands to such
extent.
On July 29, 2002, the Batangas City RTC issued an order of condemnation, thus
authorizing NPC to take possessionof the subject lots. Thereafter, it appointed three
commissioners who in turn submitted their respective Reports5 and
recommendations on the amount of just compensation to be paid to respondents.
On November 7, 2005, the Batangas City RTC rendered a Decision6 fixing just
compensation for the subject lots at ₱1,000.00 per square meter, thus:
In the Commissioner’s Report filed by Chairman of the Board Emelinda C. Atienza, she
recommended x x x the amount of ₱1,120.00 per square meter as just compensation
for the properties involvedin this case. She based her findings on the following:
Property of Felicisimo Tarcelo7
1. The subject property is classified as agricultural land;
2. It is approximately 420 meters away from Shell Refinery and approximately
40 meters away from the Barangay Road;
3. Adjoining boundary owners property [sic] are also classified as agricultural
lands.
Property of the Heirs of Santos Comia8
1. The subject property is classified as agricultural land;
2. It is approximately 560 meters away from Shell Refinery and approximately
140 meters away from the Barangay Road;
3. Adjoining boundary owners property [sic] are also classified as agricultural
lands.
Commissioners Alberto M. Nuique and Eladio Taupa of the National Power
Corporation (NPC) also submitted their own Commissioner’s Report. They
recommended that the amount of ₱475.00 per square meter be made as the payment
of the affected portion of the subject property which is 10% of the fair market value
pursuant to Republic Act No. 6395 as amended. Commissioners Taupa and Nuique
recommended the amount of ₱475.00 per square meter because only a right-of-way
easement will be acquired. According to the Supreme Court in the case of NPC v.
Manubay Agro Industrial Dev. Corp., G.R. No. 150936, August 18, 2004, even if what
is acquired is only an easement of right of way, still, the plaintiff should pay the full
value of the property and not a mere easement fee.
Based on the foregoing, the court fixes the just compensation for the subject
properties situated in Brgy. Tabangao-Ambulong, Batangas City at ONE THOUSAND
PESOS (₱1,000.00)per square meter.
WHEREFORE, plaintiff National Power Corporation is ordered to pay the defendants
the amount of ₱1,000.00 per square meter.
Upon payment of just compensation to the defendants, subject to the deductions of
the sums due the Government for unpaid real estate taxes and other imposts, the
plaintiff shall have a lawful right to enter, take possession and acquire easement of
right-of-way over the portions of the properties together with the improvements
sought to be expropriated for the purpose stated, free from any and all liens and
encumbrances.
Finally, the plaintiff is directed topay the corresponding Commissioner’s fees per
meeting or the following sums:
Chairman Emelinda C. Atienza - ₱1,000.00
Members Alberto M. Nuique - P 800.00
and Eladio Taupa - P 800.00
SO ORDERED.9
CA-G.R. CV No. 86712
NPC filed an appeal – docketed as CA-G.R. CV No. 86712 – with the CA. On June 26,
2007, the appellate court issued a Decision,10 stating as follows:
At bar, it cannot be gainsaid thatthe construction of underground pipeline is a simple
case ofmere passage of gas pipeline. It will surely cause damage and prejudice to the
agricultural potentials of appellees’ property. Deep excavation will have to be done
whereby plants and trees will be uprooted. A possible leakage could certainly do harm
and adversely restrict the agricultural and economic activity of the land. This is not to
mention that it will create an environmental health hazard dangerous to the
occupant’s life and limb.
Hence, defendants-appellees are entitled for [sic] justcompensation to [sic] the
fullmarket value of their property notjust ten percent (10%) of it.
xxxx
Taking all the consideration [sic] of the subject property, Commissioners Taupa and
Nuique placed the value of the property at ₱475.00 per square meter based on the
Land Bank valuation and Cuervo Appraisers, Inc. and the Provincial/City Appraisal
Committees of Batangas, Laguna and Lipa City, while Commissioner Atienza valued
the property at ₱1,120.00 per square meter, based on the average value per findings
of the Committee composed of the City Assessor, City Treasurer, City Engineer under
Resolution No. 9-99 dated June 18, 1999 that the subject property will cost ₱1,000.00
to ₱1,300.00 per square meter, and the opinion value of her Team’s survey and Report
which revealed that the prevailing price of agricultural land in Tabangao-Ambulong,
Batangas City is NINE HUNDRED THIRTY PESOS (₱930.00) per square meter.
In pronouncing the just compensation in this case, We fix the rate of the subject
property at SEVEN HUNDREDNINETY SEVEN [sic] and FIFTY CENTAVOS (₱797.50) per
square meter by averaging ₱475.00 and ₱1,120.00 of the commissioner’s report. This
is nearest to and in consonance with the ruling that in expropriation proceedings, the
owner of the property condemned is generally entitled to the fair market value, that
is the sum of money which a person desirous but not compelled to buy, and an owner
willing but not compelled to sell.
IN VIEW OF ALL THE FOREGOING, appealed decision dated November 7, 2005 is
AFFIRMEDwith MODIFICATIONthat the just compensation in this case is lowered from
ONE THOUSAND PESOS (₱1,000.00) to SEVEN HUNDRED NINETY SEVEN and FIFTY
CENTAVOS (₱797.50) per square meter. No pronouncement as to costs.
SO ORDERED.11
The above Decision ofthe appellate court became final and executory, and entry of
judgment was done accordingly.12
Respondents moved for execution.13 In a March 6, 2009 Order,14 the Batangas City
RTC granted their respective motions, and a Writ of Execution15 was issued.
On May 14, 2009, a Notice of Garnishment16 was served on the Manager of the Land
Bank of the Philippines, NPC Branch, Quezon City for the satisfaction of the amount of
₱5,594,462.50 representing justcompensation for the wholeof respondents’ 4,404-
and 2,611-square meter lots – or 7,015 square meters – and not merely the
supposedly affected portions thereof totaling 1,595.91 square meters as NPC
originally sought to acquire.
On May 29, 2009, NPC filed an Urgent Omnibus Motion17 seeking to quash the Writ
of Execution and Notice of Garnishment, which it claimed were inconsistent with the
Batangas City RTC’s November 7, 2005 Decision and the CA’s June 26, 2007 Decision
in CA-G.R. CV No. 86712 where just compensation was fixed at ₱1,000.00 per square
meter only for the affected area of 1,591.91 square meters, and not for the whole of
respondents’ respective lots. It argued that the appeal in CA-G.R. CV No. 86712
resolved only the issue of whether respondents should be paid the full marketvalue of
the affected 1,595.91-square meter area or just a 10% easement fee therefor; it did
not decide whether NPC should pay just compensation for the entire area of 7,015
square meters.
On September 24, 2009,the Batangas City RTC issued an Order18 denying
NPC’s Urgent Omnibus Motion, declaring that –
The cases cited by plaintiff are not in point. These cases involved either the
construction and maintenance of electric transmission lines x x x or the widening of
road component x x x. None of the cited cases involved underground natural gas
pipelines, as in this case. It does not take an expert to be able to infer that there is a
world of difference on the probable effects of the two (2) kinds of projects on the
properties upon which these are imposed. In the case of transmission lines, the NPC
imposes a limitation on the property owner’s use of their property in that below said
transmission lines no plant higher than three (3) meters is planted. In the case of
underground pipelines, similar, if not more burdensome restrictions, are imposed for
the reason that the ground under which the natural gas pipelines are located could
not be cultivated in view of the dangers that might result from accidental injury or
damage to the pipelines.
Moreover, there is the possible inestimable damage that an unpredictable natural
disaster such as an earthquake of tectonic origin, the precise date and time of
occurrence of which are yet beyond the powers of man to accurately foretell, could
inflict on the underground natural gas pipelines and consequently, on all things, living
and non-living, that exist in the vicinity of the defendants’ properties.
Moreover, the ruling that just compensation should be paid for the entire area of the
owner’s property and not justthe affected portion thereof is not without precedent.
In NPC vs. Court of Appeals (436 SCRA 195, 201 [August 12, 2001]), the Supreme Court
[noted] that "Pobre’s property suffered permanent injury because of the noise, water,
air, and land pollution generated by NPC’s geothermal plants[; t]he construction and
operation of the geothermal plants drastically changed the topography of the
property making it no longer viable as a resort-subdivision[; and t]he chemicals
emitted by the geothermal plants damaged the natural resources in the property and
endangered the lives of the residents. Accordingly, the Supreme Court held that "NPC
did not only take the 8,311.60 square meter portion of the property but also the
remaining area of the 68,969 square-meter property. NPC had rendered Pobre’s
entire property useless as a resort-subdivision. The property has become useful only
to NPC. NPC must therefore take Pobre’s entire property and pay for it. x x x
In the case at bar, it was not disputed that the subject properties are agricultural lands.
In order to be usefulto its owners, suchagricultural lands must be cultivated to yield a
harvest ofagricultural produce. But when such lands are burdened with an easement
even of the non-apparent kind, but which to all intents and purposes restrict, nay,
preclude the very activity that would render it useful to its owners because the
existence of such easement poses an undeniable danger to the life and limb of the
occupants, then such lands cease to be useful to the property owners and useful only
to the entity that imposed the easement upon the land. The Honorable Court of
Appeals recognized this fact when it declared that:
"At bar, it cannot be gainsaid that the construction of underground pipeline is a simple
case of mere passage of gas pipeline. It will surely causedamage and prejudice to the
agricultural potentials of appellees’ property. Deep excavation will have to be done
whereby plants and trees will be uprooted. A possible leakage could certainly do harm
and adversely restrict the agricultural and economic activityof the land. This is not to
mention that it will create anenvironmental health hazard dangerous to the
occupant’s life and limb.
Hence, defendants-appellees are entitled for [sic] just compensation to the full market
value of their property not just ten percent of it.
Just compensation is defined as the full and fair equivalent of the property taken from
its owner by the expropriator. The measure is not the taker’s gain, but the owner’s
loss." x x x
Thus, the argument of defendant heirs of Santos Comia is well taken that as to them,
the entire area of their property, and not just the affected portion thereof, had
become useless to them. It is [useful only] to plaintiff NPC. The same holds true for
the entire property owned by defendant Felicisimo Tarcelo. Therefore, NPC must pay
for the full market value of the entire properties owned by defendant Felicisimo
Tarcelo and defendant heirs of Santos Comia.
WHEREFORE, the Omnibus Motion is DENIED. As the Writ of Execution dated March
9, 2009 and Notice ofGarnishment dated May 14, 2009 are consistent with the
Decision of the Court of Appeals dated June 28, 2007, this Court’s Sheriff is hereby
ordered to forthwith enforce the Writ of Execution dated March 9, 2009 and Notice
of Garnishment dated May 14, 2009 and to submit immediately a written report on
his proceedings thereon.
SO ORDERED.19
NPC filed a Motion for Reconsideration,20 which was deniedin an October 23, 2009
Order21 on the ground that it did not contain a notice of hearing and was thus a mere
scrap of paper that did not toll the running of the period to appeal and therefore
rendered the Batangas City RTC’s September 24, 2009 Order final and executory.
Ruling of the Court of Appeals
Seeking to set aside the September 24, 2009 and October 23, 2009 Orders of the
Batangas City RTC as well as itsMarch 9, 2009 Writ ofExecution and May 14, 2009
Notice of Garnishment, NPC filed a Petition for Certiorari22 with the CA, which was
docketed as CA-G.R. SP No. 112054. It pleaded liberality in the application of the rule
on motions and insisted that the assailed writ of execution and notice of garnishment
were inconsistent with the CA’s June 26, 2007 Decision in CA-G.R. CV No. 86712 in
which just compensation was fixed at ₱1,000.00 per square meter only for the
affected area of 1,595.91 square meters, and not for the whole of respondents’
respective lots. It reiterated that since the trial court’s dispositions were irregular and
inconsistent with the Decision in CA-G.R. CV No. 86712, justice dictated that the
technical rules on motions should give way to considerations of equity; that in CA-G.R.
CV No. 86712, the only question that had to be resolved was whether NPC should pay
the full market value of the 1,595.91-square meter affectedarea or merely a 10%
easement fee for the use thereof – and not whether it should pay for the entire 7,015
square meters owned by respondents. Finally, it maintained that the inclusion of the
whole property instead of only the affected portions thereof would render the
execution process in Civil Case No. 5785 unjust and inequitable.
On January 20, 2011, the CA rendered the assailed Decision containing the following
decretal portion:
WHEREFORE, the instant petition for certiorari is DENIED. Accordingly, the assailed
Orders of the public respondent Regional Trial Court of Batangas City, in Civil Case No.
5785, STAND. SO ORDERED.23
The CA held that there was nothing in the November 7, 2005 Decision of the Batangas
City RTC to indicate thatNPC was being ordered to pay just compensation only for the
1,595.91-square meter portion ofrespondents’ properties; on the contrary, the trial
court held that –
Based on the foregoing, the court fixes the justcompensation for the subject
propertiessituated in Brgy. Tabangao-Ambulong, Batangas City at ONE THOUSAND
PESOS (₱1,000.00) per square meter.24 (Emphasis supplied)
– which meant that in the fixing of the amount of just compensation, the trial court
did not confine itself to the 1,595.91-square meter portion but ratherto the subject
properties in their entirety and without qualification. It added that the trial court’s
citation of National Power Corporation v. Manubay Agro-Industrial Development
Corporation25 strengthened the view that the trial court intended for respondents to
be paid compensation for the whole of their properties,as it was held in said cited case
that just compensation should be "neither morenor less than the monetary equivalent
of the land;"26 the trial court’s judgment may be clarified by referring to other
portions thereof, and not by reading them separately from the whole decision – in
other words, the "decision should be taken as a whole and considered in its entirety
to get the truemeaning and intent of any particular portion thereof."27
The CA noted that even in the June 26, 2007 Decision inCA-G.R. CV No. 86712, it was
acknowledged that –
At bar, it cannot be gainsaid thatthe construction of underground pipeline is a simple
case of mere passage of gas pipeline. It will surely cause damage and prejudice to the
agricultural potentials of appellees’ property. Deep excavation will have to be done
whereby plants and trees will be uprooted. A possible leakage could certainly do harm
and adversely restrict the agricultural and economic activity of the land. This is not to
mention that it will create an environmental health hazard dangerous to the
occupant’s life and limb.
Hence, defendants-appellees are entitled for [sic] justcompensation to [sic] the
fullmarket value of their property not just ten percent (10%) of it.28
It added that in the September 24, 2009 Order of the BatangasCity RTC, it was made
clear that NPC should pay for the entire area of respondents’ properties, and not just
the affectedportions thereof when it held that –
x x x. In the case of underground pipelines, similar, if not more burdensome
restrictions, are imposed for the reason that the ground under which the natural gas
pipelines are located could not be cultivated in view of the dangers that might result
from accidental injury or damage to the pipelines. Moreover, there is the possible
inestimable damage that an unpredictable natural disaster such as an earthquake of
tectonic origin, the precise date and time of occurrence of which are yet beyond the
powers of man to accurately foretell, could inflict on the underground natural gas
pipelines and consequently, on all things, living and non-living, that exist in the vicinity
of the defendants’ properties.
Moreover, the ruling that just compensation should be paid for the entire area of the
owner’s property and not justthe affected portion thereof is not without precedent.
In NPC vs. Court of Appeals (436 SCRA 195, 201 [August 12, 2001]), the Supreme Court
[noted] that "Pobre’s property suffered permanent injury because of the noise, water,
air, and land pollution generated by NPC’s geothermal plants[; t]he construction and
operation of the geothermal plants drastically changed the topography of the
property making it no longer viable as a resort-subdivision[; and t]he chemicals
emitted by the geothermal plants damaged the natural resources in the property and
endangered the lives of the residents. Accordingly, the Supreme Court held that "NPC
did not only take the 8,311.60 square meter portion of the property but also the
remaining area of the 68,969 square-meter property. NPC had rendered Pobre’s
entire property useless as a resort-subdivision. The property has become useful only
to NPC. NPC must therefore take Pobre’s entire property and pay for it. x x x
In the case at bar, it was not disputed that the subject properties are agricultural lands.
In order to be usefulto its owners, suchagricultural lands must be cultivated to yield a
harvest ofagricultural produce. But when such lands are burdened with an easement
even of the non-apparent kind, but which to all intents and purposes restrict, nay,
preclude the very activity that would render it useful to its owners because the
existence of such easement poses an undeniable danger to the life and limb of the
occupants, then such lands cease to be useful to the property owners and useful only
to the entity that imposed the easement upon the land. The Honorable Court of
Appeals recognized this fact when it declared that:
"At bar, it cannot be gainsaid that the construction of underground pipeline is a simple
case of mere passage of gas pipeline.1âwphi1 It will surely causedamage and prejudice
to the agricultural potentials of appellees’ property. Deep excavation will have to be
done whereby plants and trees will be uprooted. A possible leakage could certainly do
harm and adversely restrict the agricultural and economic activityof the land. This is
not to mention that it will create an environmental health hazard dangerous to the
occupant’s life and limb.
Hence, defendants-appellees are entitled for (sic) just compensation to [sic] the full
market value of their property not just ten percent of it.29
Finally, the CA found nothing wrong with the trial court’s October 23, 2009 Order
denying NPC’s Motion for Reconsideration (of the trial court’s September 24, 2009
Order), since the saidmotion lacked the required notice of hearing; it was properly
treated as a pro formamotion, a mere scrap of paper, and in the absence of merit and
compelling reasons, the Rule pertaining to motions may not be relaxed for NPC’s
benefit.
NPC filed its Motion for Reconsideration,30 which was denied by the appellate court
in an August 9, 2011 Resolution. Hence, the instant Petition.
Issues
The Petition is grounded on the following:
I
THE COURT OF APPEALS ERRED IN UPHOLDING THE TRIAL COURT’S ORDERS
APPROVING THE NOTICE OF GARNISHMENT WHICH DEMANDED PAYMENT OF JUST
COMPENSATION FOR THE ENTIRE PROPERTY OF RESPONDENTS INSTEAD OF THE
AFFECTED PORTIONS ONLY INACCORDANCE WITHTHE COMPLAINT AND THE TRIAL
COURT’S DECISION.
II
THE COURT OF APPEALS ERRED IN UPHOLDING THE ORDER OF THE TRIAL COURT
WHICH DENIEDPETITIONER’S MOTION FOR RECONSIDERATION IN COMPLETE
DISREGARD OF LIBERALITY ENUNCIATED IN SEVERAL DECISIONS OF THIS HONORABLE
COURT.31
Petitioner’s Arguments
In its Petition and Consolidated Reply,32 NPC argues that while there is no dispute as
to its liability torespondents, the Sheriff’s computation as reflected in the Notice of
Garnishment is erroneous inthat it is being made to pay for more than what was
adjudged; justcompensation should be limited to the value of that portion so taken,
and not the entire property of which such portion forms part. It cites cases where the
computation and payment of just compensation was limited to the value of the
affected portions only.33 It continues to plead for liberality in respect to its Motion
for Reconsideration of the trial court’s September 24, 2009 Order, which was denied
via the October 23, 2009 Order for lack of the required notice of hearing.
NPC thus prays that the assailed CA dispositions – together with the September 24,
2009 and October 23, 2009 Orders and the May 14, 2009 Notice of Garnishment – be
set aside. Respondents’ Arguments
Praying that the Petition be denied for lack of merit, the Santos heirs in their
Comment34 restate the assailed CA Decision, and add that while NPC sought a mere
right-of-way for its pipelines, the truth is that their property will be rendered useless
by the toxic fumes and hazardous substances that could beemitted by such pipelines;
that their situation is akin tothat of the landowner in the case of National Power
Corporation v. Manubay Agro-Industrial Development Corporation,35 who was
adjudged to be entitled to the full value of the property, and not a mere easement
fee; and thatNPC cannot claim liberality in the application of the Rule on motions36
because there exist no special or compelling circumstances to warrant the relaxation
of the rule, and NPC’s failure is the result of fault and negligence on itspart, and it has
not shown to the satisfaction of the court that it is entitled to leniency.
On the other hand, respondent Tarcelo argues in his Comment37 that there is no
inconsistency between the trial court’s November 7, 2005 Decision and the June 26,
2007 Decision of the CA inCA-G.R. CV No. 86712 on the one hand, and the trial court’s
September 24, 2009 and October 23, 2009 Orders and the March 9, 2009 Writ of
Execution and May 14, 2009 Notice of Garnishment on the other; that the trial court
and the CA treated respondents’ properties as a whole or in their entirety in resolving
the cases before them; thatNPC already knew beforehand that it is being ordered to
pay just compensation for the entirety of respondents’ properties and not mere
portionsthereof; and finally, that the trial court correctly denied NPC’s Motion for
Reconsideration of the September 24, 2009 Order for lack of a notice of hearing.
Our Ruling
The Court grants the Petition.
The exercise of the right of eminent domain, whether directly by the State or by its
authorized agents, is necessarily in derogation of private rights. It is one of the
harshest proceedings known to the law. x x x The authority to condemn is to be strictly
construed in favor of the owner and against the condemnor. When the power is
granted, the extent to which it may be exercised is limited to the express terms or
clear implication of the statute in which the grant is contained.38
Corollarily, it has been held that trial courts should exercise care and circumspection
in the resolution of just compensation cases, considering that they involve the
expenditure of public funds.39
The above principles were somehow lost on both the trial and appellate courts.
The Commissioners’ Reports in Civil Case No. 5785 indicate that only the affected
areas were intended to beacquired and compensated. Thus, Commissioner Emelinda
C. Atienza’s Report containsthe following recommendation:
IV. Recommendation
Finding x x x that the valuation established herein was reasonable and fair, the
undersigned recommend [sic] thatthe amount of Php1,120.00 per square meter be
adopted to compensate the affected areas on the properties involve [sic] in the above
subject case.40 (Emphasis supplied)
On the other hand, Commissioners Alberto M. Nuique and Eladio R. Taupa’s respective
Reports uniformly state:
III. RECOMMENDATIONS
It is hereby recommended that only easement fee be made as the payment on the
affected portionof the above-mentioned parcel of agricultural land which is 10% of
the fair market value pursuant to Republic Act 6395 as amended x x x41 (Emphasis
supplied)
The trial court itself particularly decreed in its November 7, 2005 Decision that only
the affectedportions of respondents’ properties were to be acquired and
compensated for. In the decretal portion ofits Decision, it thus held as follows:
WHEREFORE, plaintiff National Power Corporation is ordered to pay the defendants
the amount of ₱1,000.00 per square meter.
Upon payment of just compensation to the defendants, subject to the deductions of
the sums due the Government for unpaid real estate taxes and other imposts, the
plaintiff shall have a lawful right to enter, take possession and acquire easement of
right-of-way over the portions of the propertiestogether with the improvements
sought to be expropriated for the purpose stated, free from any and all liens and
encumbrances.42 (Emphasis and underscoring supplied)
The CA therefore patently erred in declaring in its assailed Decision that there is
nothing in the November 7, 2005 Decision of the Batangas City RTC to indicate that
NPC was being ordered to pay just compensation only for the 1,595.91-square meter
portion of respondents’ properties.On the contrary, the evidence is quite clear that
NPC has beenmade liable precisely to such extent only, and not more.
The Court likewise observes that contrary to the CA’s appreciation, the June 26, 2007
Decision in CA-G.R. CV No. 86712 did notparticularly declare that NPC should pay for
the entirearea of respondents’ properties. It merely stated that respondents should
be compensated for the full and fair market value of their property and not merely
paid a 10%easement fee therefor; it did not resolve the issue of whether NPC should
pay just compensation for the entire area of 7,015 square meters. It simply said that
NPC should pay for the full per-square meter value of the affected portions, and not
just a fraction thereof (or 10%). There could be no other interpretation of the June 26,
2007 pronouncement in CAG.R. CV No. 86712 when the CA stated therein that – At
bar, it cannot be gainsaid thatthe construction of underground pipeline is a simple
case of mere passage of gas pipeline. It will surely cause damage and prejudice to the
agricultural potentials of appellees’ property. Deep excavation will have to be done
whereby plants and trees will be uprooted. A possible leakage could certainly do harm
and adversely restrict the agricultural and economic activity of the land. This is not to
mention that it will create an environmental health hazard dangerous to the
occupant’s life and limb.
Hence, defendants-appellees are entitled for (sic) just compensation to (sic) the
fullmarket value of their property notjust ten percent (10%) of it.
xxxx
Taking all the consideration [sic] ofthe subject property, Commissioners Taupa and
Nuique placed the value of the property at ₱475.00 per square meter based on the
Land Bank valuation and Cuervo Appraisers, Inc. and the Provincial/City Appraisal
Committees of Batangas, Laguna and Lipa City, while Commissioner Atienza valued
the property at ₱1,120 per square meter, based on the average value per findings of
the Committee composed of the City Assessor, City Treasurer, City Engineer under
Resolution No. 9-99 dated June 18, 1999 that the subject property will cost ₱1,000.00
to ₱1,300.00 per square meter, and the opinion value of her Team’s surveyand Report
which revealed that the prevailing price of agricultural land inTabangao-Ambulong,
Batangas City is NINE HUNDRED THIRTY PESOS (₱930.00) per square meter.43
(Emphasis in the original; underscoring supplied)
NPC is thus correct in its observation that the issue of whether it should be made to
pay for the whole 7,015-square meter area was not at all raised. Besides, in arriving at
its judgment, the CA took into full consideration the Commissioners’ Reports, which
recommended the payment of just compensation only for the affected portions of
respondents’ properties;if it believed otherwise, the appellate court would have so
indicated, and it would have taken exception to the said reports and arrived at its own
independent consideration of the case.
It has always been the rule that "[t]he only portion of the decision that may be the
subject of execution is that which isordained or decreed in the dispositive portion.
Whatever may be found in the body of the decision can only be considered as part of
the reasons or conclusions of the court and serve only as guides to determine the ratio
decidendi."44 "[W]here there is a conflict between the dispositive portion of the
decision and the body thereof, the dispositive portion controls irrespective of what
appears in the body of the decision. While the body of the decision, order or resolution
might create some ambiguityin the manner of the court’s reasoning preponderates, it
is the dispositive portion thereof that finally invests rights upon the parties,sets
conditions for the exercise of those rights, and imposes corresponding duties or
obligation."45 Thus, with the decretal portion of the trial court’s November 7, 2005
Decision particularly stating that NPC shall have the lawful right to enter, take
possession and acquire easement of right-ofway over the affected portions of
respondents’ properties upon the payment of just compensation, any order executing
the trial court’s Decision should be based on such dispositive portion. "An order of
execution is based on the disposition, not on the body, of the decision."46 Execution
must therefore conform to that ordained or decreed in the dispositive part of the
decision.47 Since there is a disparity between the dispositive portion of the trial
court’s November 7, 2005 Decision asaffirmed with modification by the final and
executory June 26, 2007 Decision of the CA in CA- G.R. CV No. 86712 – which decreed
that respondents be paid just compensation only for the affected portionsof their
properties, totaling 1,595.91 square meters – and the Notice of Garnishment – for the
satisfaction of the amount of ₱5,594,462.50 representing just compensation for the
whole 7,015 square meters – the latter must be declared null and void.
It is a settled general principle that a writ of execution must conform substantially to
every essential particular of the judgment promulgated. Execution not in harmony
with the judgment is bereft of validity. It must conform, more particularly, to that
ordained or decreed in the dispositive portion of the decision.48
In the same manner, the Batangas City RTC’s September 24, 2009 and October 23,
2009 Orders are hereby declared null and void in regard only to the Notice of
Garnishment, as it countermands the decretal portion of the November 7, 2005
Decision and completely changes the tenor thereof by holding NPC liable to pay for
the value of the whole of respondents’ properties; all proceedings held for the
purpose of amending or altering the dispositive portion of the trial court’s November
7, 2005 Decision, as affirmed with modification by the CA’s final and executory June
26, 2007 Decision in CA-G.R. CV No. 86712, are null and void for lack of
jurisdiction.1âwphi1 This is exactly what the Court said in one case:
Moreover, petitioner is correct in saying that impleading her for the purpose of
execution is tantamount to modifying a decision that had long become final and
executory. The falloof the 1997 Decision bythe NLRC only held "respondents Pro
Agency Manila Inc., and Abdul Rahman Al Mahwes to jointly and severally pay
complainants x x x." By holding her liable despite not being ordained as such by the
decision, both the CA and NLRCviolated the doctrine on immutability of judgments.
In PH Credit Corporation v. Court of Appeals, we stressed that "respondent’s
[petitioner’s] obligation is based on the judgment rendered by the trial court. The
dispositive portion or the fallois its decisive resolution and is thus the subject of
execution. x x x. Hence the execution must conform with that which is ordained or
decreed in the dispositive portion of the decision."
In INIMACO v. NLRC, we also held thus:
None of the parties in the case before the Labor Arbiter appealed the Decision dated
March 10, 1987, hence the same became final and executory. It was, therefore,
removed from the jurisdiction of the Labor Arbiter orthe NLRC to further alter or
amend it. Thus, the proceedings held for the purpose of amending or altering the
dispositive portion of the said decision are null and void for lack of jurisdiction. Also,
the Alias Writ of Execution is null and void because it varied the tenor of the judgment
in that it sought to enforce the final judgment against ‘‘Antonio Gonzales/Industrial
Management Development Corp. (INIMACO) and/or Filipinas Carbon and Mining
Corp. and Gerardo Sicat, which makes the liability solidary.
In other words, "[o]nce a decision or order becomes final and executory, it is removed
from the power or jurisdiction of the court which rendered it to further alter or amend
it. It thereby becomes immutable and unalterable and any amendment or alteration
which substantially affects a final and executory judgment is null and void for lack of
jurisdiction, including the entire proceedings heldfor that purpose. An order of
execution which varies the tenor of the judgment or exceeds the terms thereof is a
nullity."49 (Emphasis supplied)
The failure of NPC to include a notice of hearing in its Motion for Reconsideration of
the trial court’s September 24, 2009 Order has been rendered irrelevant considering
our pronouncement that the said Order is null and void on the matter covering the
Notice of Garnishment. "A void judgment or order has no legal and binding effect,
force or efficacy for any purpose. In contemplation of law, it is non-existent.
Suchjudgment or order may be resisted in any action or proceeding whenever it is
involved. It is not even necessary to take any steps to vacate or avoid a void judgment
or final order; itmay simply be ignored."50
WHEREFORE, the Petition is GRANTED. Judgment is hereby rendered as follows:
1. The January 20, 2011Decision and August 9,2011 Resolution of the Court
of Appeals in CA-G.R. SP No. 112054 are PARTIALLY REVERSED and SET ASIDE;
2. The September 24, 2009 and October 23, 2009 Orders of the Regional Trial
Court of Batangas City, Branch VII in Civil Case No. 5785 are declared NULL
and VOID IN PART, in that the Notice of Garnishment is nullified and set aside;
 3. Petitioner National Power Corporation is adjudged liable to PAY JUST
COMPENSATIONto respondents Felicisimo Tarcelo and the Heirs of Comia
Santos for the affected portions of their respective properties totaling
1,595.91 square meters, at ₱797.50 per square meter, subject to interest at
the rate of twelve per cent (12%) per annumfrom July 29, 2002 up to June
30, 2013, and thereafter, six percent (6%) per annumfrom July 1, 2013 until
full satisfaction, pursuant to Bangko Sentral ng Pilipinas-Monetary Board
Circular No. 799, Series of 2013 and applicable jurisprudence;
4. Petitioner National Power Corporation is DIRECTED to pay the
Commissioners' Fees as set forth in the November 7, 2005 Decision of the
Regional Trial Court ofBatangas City, Branch VII in Civil Case No. 5785.
G.R. No. 194169 December 4, 2013
ROMEO R. ARAULLO, Petitioner,
vs.
OFFICE OF THE OMBUDSMAN, HON. MERCEDITAS N. GUTIERREZ, HON. GERARDO C.
NOGRALES, HON. ROMEO L. GO, HON. PERLITA B. VELASCO, and ARDEN S. ANNI,
Respondents.
DECISION
DEL CASTILLO, J.:
A public officer who acts pursuant to the dictates of law and within the limits of
allowable discretion can hardly be considered guilty of misconduct.
This Petition for Certiorari1 seeks to set aside the undated Decision2 of the Office of
the Ombudsman (Ombudsman) in Case No. OMB-C-A-09-0437-H, entitled "Romeo R.
Aruallo, Complainant, versus Gerardo C. Nograles, Romeo L. Go, Perlita B. Velasco, and
Arden S. Anni, Respondents."
Factual Antecedents
Relative to National Labor relations Commission (NLRC), National Capital Region (NCR)
NLRC NCR Case No. 00-01-00581-2001 (the labor case) entitled "Romeo R. Araullo,
Complainant, versus Club Filipino, Inc., Respondent," which is a case for illegal dismissal
with a prayer for the recovery of salaries, benefits, and damages filed by herein
petitioner Romeo R. Araullo against his former employer Club Filipino, Inc. (Club
Filipino) with the Quezon City NCR Office of the NLRC, judgment3 was rendered by the
Court of Appeals (CA), to wit:
WHEREFORE, the instant petition is GRANTED. The Decisions of the NLRC and the
Labor Arbiter are vacated and set aside. Petitioner Araullo’s dismissal is hereby
declared illegal. Accordingly, the respondent Club Filipino is hereby ordered to
reinstate Araullo to his former position without loss of seniority rights and to pay
petitioner full [backwages], inclusive of allowances, including 13th month pay, as well
as other monetary benefits, computed from the time his compensation was withheld
from him to the time of his reinstatement. Should reinstatement be no longer possible
the respondent Club Filipino should instead pay Araullo separation pay equivalent to
one month a day [sic] for every year of service, with the fraction of at least six (6)
months be [sic] considered as one whole year. SO ORDERED.4
The above CA judgment became final and executory after it was affirmed by this Court
via a Decision5 dated November 29, 2006 in G.R. No. 167723. Thus, the labor case was
remanded to the NLRC for computation of petitioner’s actual entitlements. The Labor
Arbiter handling the case, Fedriel Panganiban (Arbiter Panganiban) directed the NLRC
Computation and Examination Unit to compute the liabilities of Club Filipino, after
which the said office submitted a written computation6 granting petitioner the
following:
Backwages ₱1,494,000.00 13th Month Pay 124,500.00 Sick Leave/Vacation Leave
143,652.25 Separation Pay 576,000.00 Total ₱2,338,152.257
On December 13, 2007, Arbiter Panganiban issued an Order8 voluntarily inhibiting
himself from handling the labor case "to obviate any suspicion of partiality." The Order
reads in part:
It was explained to the parties that after the submission of the comment, an order will
be issued by this Arbitration Branch, however, even before the expiration of the ten[-
]day period in which the respondent is to submit the comment, complainant’s counsel
bombarded this office with constant follow-ups insisting for the issuance of the writ
of execution. Complainant’s counsel even hinted that he will be filing a case before
the Ombudsman if the writ of execution will not be issued.9 Club Filipino appealed
Arbiter Panganiban’s Order of inhibition with the NLRC. Meanwhile, the labor case was
raffled to herein respondent Labor Arbiter Arden S. Anni (Arbiter Anni) on January 4,
2008. On January 8, 2008, petitioner filed a 4th
Ex-Parte Manifestation With Very Urgent Prayer For Issuance Of Writ Of Execution.10
On January 21, 2008, Club Filipino filed a Motion to Recompute dated January 10,
2008.11
On January 31, 2008, Arbiter Anni issued an Order12 holding in abeyance any action
on petitioner’s motion for execution and other related motions until Club Filipino’s
appeal with the NLRC relative to Arbiter Panganiban’s inhibition is resolved. In a May
15, 2008 Decision13 which became final and executory, the NLRC dismissed Club
Filipino’s appeal relative to Arbiter Panganiban’s voluntary inhibition, and ordered that
the records of the labor case be immediately forwarded to the branch of origin for
continuation of the execution proceedings. On July 29, 2008, Arbiter Anni issued a
Writ of Execution14 ordering the collection of the ₱2,338,152.25 award as computed
by the NLRC Computation and Examination Unit, as well as execution fees in the
amount of ₱23,380.00. Club Filipino moved to quash the Writ of Execution,15 claiming
that Arbiter Anni improvidently issued the writ without resolving the pending incidents
and issues and in violation of the NLRC rules of procedure – in that it was issued
without the required order approving the computation and without giving notice of
such approval to the parties.16
The motion to quash was set for hearing on August 20, 2008. Even before Club
Filipino’s motion to quash could be heard on its scheduled hearing date, Arbiter Anni
in an August 12, 2008 Order17 quashed the Writ of Execution, enjoined the sheriff
from conducting further execution, and lifted all notices of garnishment issued to the
banks. Then, on August 14, 2008, he issued another Order voluntarily inhibiting
himself from further proceedings in the labor case, on the ground that his "sense of
impartiality may be questioned by any of the parties because of (his) rapport with Atty.
Roberto ‘Obet’ De Leon, President of Club Filipino, and respondent’s counsel, Atty.
Ernesto P. Tabao x x x, who are both (his) fraternity brothers in San Beda College of
Law." 18
On August 22, 2008, petitioner filed with the NLRC a Very Urgent Petition to Set Aside
the Order of Labor Arbiter Arden S. Anni dated 12 August 200819 claiming that the
assailed Order defied the NLRC’s directive to continue with the execution of the case;
that execution of the judgment is ministerial, and the quashing of the writ constitutes
an evasion of a positive duty; that Arbiter Anni’s inhibition was calculated to favor Club
Filipino and his fraternity brothers; that Club Filipino’s motion to quash was a mere
scrap of paper because petitioner’s counsel was not furnished with a copy thereof;
and that the Writ of Execution has been duly implemented and completely satisfied.
However, the Petition was denied for lack of merit in an October 29, 2008
Resolution20 issued by the First Division of the NLRC, composed of the herein
respondent Commissioners – Presiding Commissioner Gerardo C. Nograles and
Commissioners Romeo L. Go, and Perlita B. Velasco. The following was decreed:
WHEREFORE, the petition to set aside the quashal order dated August 12, 2008 is
hereby DENIED for lack of merit and the Motion for the Issuance of Preliminary
Injunction and/or Temporary Restraining Order is DISMISSED for being MOOT and
academic. Let the entire records be immediately forwarded to the Arbitration Branch
of origin for the purpose aforementioned. SO ORDERED.21
In the above-quoted October 29, 2008 Resolution, the respondent Commissioners
noted that in Arbiter Panganiban’s December 13, 2007 Order,22 he committed that
after the parties shall have submitted their comments to the NLRC Computation and
Examination Unit’s written computation, he will issue the corresponding order, either
approving or disapproving the computation; however, the matter was overtaken by
his voluntary inhibition from the case. And when Arbiter Anni took over, he
improvidently issued the Writ of Execution without first approving or disapproving the
NLRC Computation and Examination Unit’s computation or resolving Club Filipino’s
subsequent January 10, 2008 Motion to Recompute, thus circumventing Rule XI,
Section 4 of the 2005 NLRC Revised Rules of Procedure23 (NLRC Rules). The logical
step, then, was to first resolve the pending issues and incidents in accordance with the
NLRC Rules; a remand of the case to the Labor Arbiter was thus in order. Petitioner
moved to reconsider, but in a March 18, 2009 Resolution,24 the respondent
Commissioners resolved to deny his motion for reconsideration.
Ruling of the Ombudsman
On July 28, 2009, petitioner filed a Complaint25 before the Ombudsman against the
respondent Commissioners and Arbiter Anni, for violation of Section 3(e)26 of
Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act, and Article 206 of
the Revised Penal Code.27
The criminal aspect was docketed as OMB-C-C-09-0410-H; it was later dismissed by
the Ombudsman via an undated Resolution.28
On the other hand, the administrative case – docketed as OMB-C-A-09-0437-H – was
based on a charge of grave misconduct. Petitioner charged that Arbiter Anni
entertained Club Filipino’s motion to quash despite the fact that only he – and not his
counsel – was furnished with a copy thereof; that he hastily resolved to quash the Writ
of Execution and lift the notices of garnishment even before the scheduled date of
hearing of Club Filipino’s motion to quash; and that after quashing the Writ of
Execution, he voluntarily inhibited himself from further proceeding with the labor case
to "wash his hands" of the improper quashal of the Writ of Execution. Petitioner
accused Arbiter Anni of conspiring with his fraternity brothers in Club Filipino to delay
the execution of the decision in the labor case, thus giving unwarranted benefits and
advantage to them. On the other hand, petitioner accused the respondent
Commissioners of gross misconduct for improperly affirming and "legitimizing",
through their October 29, 2008 Resolution, Arbiter Anni’s order quashing the Writ of
Execution. In their Counter-Affidavit,29 the respondent Commissioners set up the
defense that they acted lawfully and regularly in the performance of their functions
relative to petitioner’s labor case – specifically the quashing of the Writ of Execution,
which was issued improvidently by Arbiter Anni; that if they allowed the execution to
proceed, Club Filipino’s right to due process would have been violated, and this would
have opened the door to further appeals or proceedings. They added that they did not WHEREFORE, in view of the foregoing, the Motion to Recompute is denied. However,
act with partiality, malice or with deliberate intent to cause damage to petitioner, nor the computation of the backwages and separation pay should be corrected and should
is there evidence to show that they acted in such manner; on the contrary, they acted be limited until 03 October 2007 and the outstanding account of complainant in the
with caution, prudence, good faith, and with due regard for the rules of procedure of amount of ₱186,545.81 should be deducted therefrom. SO ORDERED.32
the NLRC. They maintained that the presumption of regularity should apply to them,
and they should be afforded a wide latitude of discretion, as government officers It likewise appears that a recomputation was made, and the award due to petitioner
possessing the knowledge, expertise, and experience in labor matters. They note was reduced to ₱2,117,002.35; that in an October 8, 2009 Order, Arbiter Cellan
particularly petitioner’s repeated threats to file an administrative case if the labor case approved the new computation and ordered the issuance of a Writ of Execution; and
is not decided in his favor, from Arbiter Panganiban’s December 13, 2007 Order which that on December 10, 2010, petitioner received in full the amount of the judgment
revealed petitioner’s counsel’s threat to file an administrative case if the Writ of award.33
Execution is not granted, to the insinuation that if petitioner’s Very Urgent Petition to
Set Aside the Order of Labor Arbiter Arden S. Anni dated 12 August 2008 is denied, a Meanwhile, in OMB-C-A-09-0437-H, the assailed undated Decision was issued,
complaint with the Ombudsman would be instituted. For his part, Arbiter Anni in his decreeing as follows:
Counter-Affidavit 30 avowed that there is no plot or conspiracy to delay the execution
of the final judgment in the labor case; that he was not influenced by his fraternity
WHEREFORE, the charge of Grave Misconduct against the respondents is hereby
brothers in Club Filipino; that he was compelled to quash the Writ of Execution on
dismissed. SO ORDERED.34
account of pending incidents that had to be resolved first, in conformity with Rule XI,
Section 4 of the NLRC Rules; that when the writ was quashed, garnishment had not
The Ombudsman held that the quashing of the Writ of Execution was done to correct
been effected; that he scheduled the hearing on the motion to quash on August 20,
an error in the proceedings in the labor case; there were pending motions and
2008 only because the motion could not be accommodated in his official calendar –
incidents that remained unresolved – yet the Writ of Execution was issued
thus, in issuing his August 12, 2008 Order quashing the Writ of Execution, he did not
nonetheless. In quashing the writ, the Ombudsman believed that Arbiter Anni was
violate petitioner’s right to due process; that it was necessary to quash the Writ of
motivated by the desire to rectify any violation of the NLRC Rules and prevent further
Execution as it did not conform to Rule XI, Section 4 of the NLRC Rules; that in
contravention thereof, and not by ill motive to delay the case or favor Club Filipino.
inhibiting himself from the case, he had no intention to delay the execution of the
The Ombudsman further assumed that it was necessary for Arbiter Anni to have
judgment therein; and that petitioner should not be allowed to obtain execution and
corrected himself before inhibiting from the labor case. The Ombudsman added that
satisfaction of the judgment at the expense and in violation of the rights of Club
"the writ of execution would have been nullified regardless of the motion to quash
Filipino. In a Consolidated Reply-Affidavit,31 petitioner reiterated that he should have
filed by Club Filipino because there was a need to rectify a lapse in the labor
been heard on the motion to quash before the Writ of Execution was withdrawn; that
proceedings,"35 and that this was "precisely the reason why the respondent
Arbiter Anni’s August 12, 2008 Order quashing the writ was patently void as the
Commissioners sustained the ruling"36 of Arbiter Anni. Finally, the Ombudsman held
motion to quash was still scheduled to be heard on August 20, 2008; that in issuing
that in the absence of a clear and manifest intent to violate the law, or a flagrant
the Writ of Execution on July 29, 2008 ordering the collection of the amount of
₱2,338,152.25, Arbiter Anni is deemed to have approved the said computation of the disregard of established rule, there could be no grave misconduct on the respondents’
part. On the contrary, what respondents did was to "correct an error to avoid any
NLRC Computation and Examination Unit; that because the Writ of Execution was
transgression of the rules of procedure."37
validly issued and the order quashing it is void, the respondent Commissioners are
guilty of misconduct in sustaining the said order, and caused undue injury to the
petitioner as a result of the delay in the execution and unwarranted benefits given by Issue
the respondents to Club Filipino; and that Arbiter Anni is guilty of evident partiality,
causing undue injury to petitioner and delay in the labor case, as well as giving With the dismissal of his charges, petitioner commenced the instant Petition, which
unwarranted benefits and advantage to his fraternity brothers in Club Filipino. raises the sole issue of whether there is substantial evidence to hold respondents
Meanwhile, it appears that the labor case was assigned to Arbiter Fe S. Cellan (Arbiter liable for grave misconduct.
Cellan), who proceeded with the execution. In a September 14, 2009 Order, Arbiter
Cellan corrected the computed award, thus: Petitioner’s Arguments
Essentially, petitioner in his Petition and Consolidated Reply38 reiterates his
arguments in his original charge: that Arbiter Anni entertained Club Filipino’s motion
to quash despite the fact that only he – and not his counsel – was furnished with a
copy thereof; that Arbiter Anni hastily resolved to quash the Writ of Execution and lift
the notices of garnishment even before the motion to quash could be heard; that
Arbiter Anni conspired with his fraternity brothers in Club Filipino to delay the
execution of the decision in the labor case, thus giving unwarranted benefits and
advantage to Club Filipino and causing undue injury to petitioner; and that the
respondent Commissioners improperly affirmed, through their October 29, 2008
Resolution, Arbiter Anni’s order quashing the Writ of Execution. Petitioner concludes
that in view of the foregoing, the Ombudsman committed patent error and grave
abuse of discretion in exonerating the respondents from the charge of grave
misconduct. He likewise takes exception to the fact that the assailed decision is
undated – insinuating that it is an irregular and highly unusual circumstance, and notes
that his counsel of record was not furnished with a copy of the assailed Decision.
Petitioner thus prays that the Court set aside the assailed Decision of the Ombudsman
and declare respondents guilty of grave misconduct.
Respondents’ Arguments
In their Comment39 praying for the dismissal of the Petition, respondent
Commissioners argue that no grave abuse of discretion exists to warrant a reversal of
the Ombudsman’s ruling; that in the absence of evidence that it acted in a capricious,
whimsical and arbitrary manner, its findings are entitled to respect; that the elements
of grave misconduct are not present in their case; that they acted lawfully, regularly,
and with prudence and caution, in the performance of their functions; that in issuing
the October 29, 2008 Resolution, they merely rectified Arbiter Anni’s mistake in
issuing the Writ of Execution without observing the proper procedure under the NLRC
Rules. In his Comment,40 Arbiter Anni maintains his innocence, insisting that he acted
in good faith and under a sense of duty to rectify his mistake in improvidently issuing
the Writ of Execution. He claims that he did not commit grave misconduct, nor did he
act with a clear intent to violate the law or flagrantly disregard the NLRC Rules; that
he favored no one; that in inhibiting from the case, he acted prudently; that in
sustaining his actions, the Ombudsman did not commit grave abuse of discretion, but
was merely acting in accordance with the facts, the law and evidence on record. The
Ombudsman, on the other hand, insists in its Comment41 that there is no substantial
evidence to hold respondents liable for grave misconduct; and in the absence of such
evidence, the instant Petition must necessarily fail as the requisite grave abuse of
discretion is lacking.
Our Ruling
The Petition is dismissed.
During execution proceedings, errors may be committed such that the rights of a party
may be prejudiced, in which case corrective measures are called for. These may
involve instances where –
1) the [W]rit of [E]xecution varies the judgment;
2) there has been a change in the situation of the parties making execution
inequitable or unjust;
3) execution is sought to be enforced against property exempt from
execution;
4) it appears that the controversy has never been subject to the judgment of
the court; 5) the terms of the judgment are not clear enough and there
remains room for interpretation thereof; or
6) x x x the [W]rit of [E]xecution [was] improvidently issued, or x x x is
defective in substance, or [was] issued against the wrong party, or x x x the
judgment debt has been paid or otherwise satisfied, or the writ was issued
without authority.42
In such event, one of the corrective measures that may be taken is the quashing of the
Writ of Execution.43
There is no doubt that Arbiter Anni’s July 29, 2008 Writ of Execution was procedurally
irregular, as it pre-empted the NLRC Rules which require that where further
computation of the award in the decision is necessary during the course of the
execution proceedings, no Writ of Execution shall be issued until after the
computation has been approved by the Labor Arbiter in an order issued after the
parties have been duly notified and heard on the matter. When the writ was issued,
there was as yet no order approving the computation made by the NLRC Computation
and Examination Unit, and there was a pending and unresolved Motion to Recompute
filed by Club Filipino. A cursory examination of the motion reveals that it raised valid
issues that required determination in order to arrive at a just resolution, so that none
of the parties would be unjustly enriched. For example, it appears that petitioner owed
Club Filipino a substantial amount of money which the latter sought to deduct from
the judgment award by way of compensation; if this is true, then the necessary
adjustment in the award may be made to allow Club Filipino to recover what petitioner
owes it, to the extent allowable by law. Since the Writ of Execution was issued in
contravention of the law, it is irregular and defective, and there was no need to further
hear Club Filipino’s motion to quash the writ; Arbiter Anni’s issuance of the August 12,
2008 Order quashing the writ ahead of the scheduled August 20, 2008 hearing is
therefore not improper. "A void judgment or order has no legal and binding effect,
force or efficacy for any purpose. In contemplation of law, it is non-existent. x x x It is
not even necessary to take any steps to vacate or avoid a void judgment or final order;
it may simply be ignored."44
The Court cannot blame the respondents for not treating the Writ of Execution as an
implicit approval of the NLRC Computation and Examination Unit’s computation, or
even as an implied denial of Club Filipino’s Motion to Recompute, because the NLRC
Rules precisely require that the computation must be approved by the Labor Arbiter
in an order issued after the parties have been duly notified and heard. Besides, the
pending motion to recompute was not touched upon in the Writ of Execution. Finally,
given petitioner’s threats of exacting criminal and administrative liability if he did not
have his way, respondents chose to act with extreme caution and took an academic
and literal approach in construing and applying the NLRC Rules. Nor may it be said that
in quashing the Writ of Execution or in inhibiting himself from the labor case, Arbiter
Anni unduly favored Club Filipino. Quite the contrary, Arbiter Anni risked being
dragged to court on a gross ignorance charge by issuing the Writ of Execution in
disregard of the NLRC Rules; if he did not quash the writ, he would likewise have been
perceived as favoring petitioner. Moreover, it could also be said that if Arbiter Anni
favored his fraternity brothers in Club Filipino, he would not have issued the Writ of
Execution in the first place; and he would have stayed on with the case, instead of
inhibiting himself therefrom. On the part of the respondent Commissioners, the Court
detects no irregularity in their actions either. While petitioner accuses them of gross
misconduct for improperly affirming, through their October 29, 2008 Resolution,
Arbiter Anni’s order quashing the Writ of Execution, the Court believes otherwise; they
acted pursuant to the NLRC Rules, and averted further mistake and damage by
affirming the quashing of an otherwise improvident writ. The Court fails to discern any
indication of malice, bad faith, misconduct, or even negligence in the respondents’
actions. Nor are there signs of partiality or attempts to favor a party to the case. All
their actions were aboveboard. Even Arbiter Anni’s subsequent inhibition from the
case is far from questionable; like Arbiter Panganiban, he may have been rendered
uneasy by petitioner’s threats of criminal and administrative sanction if he failed to
expedite the proceedings. Under the 2005 NLRC Rules, a Labor Arbiter may voluntarily
inhibit himself from the resolution of a case and shall so state in writing the legal
justifications therefor. Arbiter Anni was not precluded from voluntarily inhibiting
himself from the case; indeed, his inhibition was warranted under the circumstances
and given his fraternity ties with the President of Club Filipino and its counsel of
record. What may have been placed in question is the timing of his inhibition; one may
wonder why he had to do so just days after he quashed his own Writ of Execution.
Petitioner – given his leaning – understandably interprets this as an attempt to prolong
the execution proceedings.1âwphi1 An objective analysis of the situation, however,
engenders the view that inhibition was a well-considered decision on Arbiter Anni’s
part, who realizing that he committed a procedural misstep by his impetuous issuance
of the Writ of Execution which set him up for a possible administrative case grounded
on gross ignorance or otherwise, quashed his own writ. At the same time, he realized
that his action of quashing the writ would be scrutinized or misinterpreted, given his
fraternity ties with the Club Filipino President and counsel; thus, he took it upon
himself to reveal such relationship, and then recuse himself from the case in order to
avoid a possible administrative case. In short, the events reveal that Arbiter Anni acted
with his interest solely in mind; he had no intentions of favoring any party to the case.
His actions do not betray malice, bad faith, misconduct, or even negligence.
"Misconduct is a transgression of some established and definite rule of action, more
particularly, unlawful behavior or gross negligence by a public officer. x x x [And when]
the elements of corruption, clear intent to violate the law or flagrant disregard of
established rule [are] manifest,"45 the public officer shall be liable for grave
misconduct. Evidently, a public officer who acts pursuant to the dictates of law and
within the limits of allowable discretion can hardly be considered guilty of misconduct.
Finding no irregularity in the acts of respondents, the Ombudsman did not commit
grave abuse of discretion in exonerating them from the administrative charge of grave
misconduct. As a matter of fact, its disposition is correct in every respect. Thus, the
Court’s policy of non-interference with the Ombudsman’s exercise of sound discretion
and judgment stands. Next, petitioner ascribes wrongdoing because the assailed
decision of the Ombudsman is undated, and allegedly his counsel was not furnished
with a copy thereof. In the past, this Court did not pay much attention to the fact that
the assailed decisions or orders brought before it were undated;46 indeed, in many of
those cases, the Court even sustained these undated dispositions. Unless the date
itself was material or constituted the very subject matter of the inquiry, the Court
made short shrift of the defect. On the other hand, it appears that the apparent failure
of petitioner’s counsel to be served with a copy of the assailed decision did not
prejudice petitioner’s rights; it did not prevent him from timely filing this Petition. And
if there were any procedural infirmities attendant or leading to petitioner’s filing of
the instant Petition, they seem to have been ignored or overlooked for petitioner’s
own benefit.
Finally, we wrote that the assailed undated Decision of the Ombudsman in OMB-C-A-
09-0437-H, petitioner went directly to this Court via this Petition for Certiorari. This is
not allowed. It is settled jurisprudence that "appeals from decisions of the Office of
the Ombudsman in administrative disciplinary cases should be taken to the Court of
Appeals under the provisions of Rule 43, in line with the regulatory philiosophy
adopted in appeals from quasi-judicial agencies in the 1997 Revised Rules of Civil
Procedure." 47
WHEREFORE, the Petition is DISMISSED for lack of merit.
SO ORDERED.
 After trial, the Calamba RTC issued a December 9, 2005 Decision7 granting
respondents’ application for registration, decreeing thus:

WHEREFORE, this Court affirms the Order of general default against the whole world
heretofore entered in this case, and judgment is hereby rendered confirming the title
of the applicants spouses Dante Benigno and Lolita Z. Benigno covered by Tax
Declaration No. 0284 and designated as Lot 6489, Cad. Lot No. 450 situated in Brgy.
Batong Malake, of the Municipality of Los Baños, Laguna and ordering the registration
of said title in the name of the said applicants spouses Dante Benigno and Lolita Z.
Benigno.

Once this decision has become final, let an order issued [sic] directing the Land
Registration Authority to issue the corresponding decree of registration.
G.R. No. 205492
SO ORDERED.8
REPUBLIC OF THE PIDLIPPINES, Petitioner,
vs.
Petitioner filed its notice of appeal9 on January 10, 2006. In an April 10, 2006 Order,10
SPOUSES DANTE and LOLITA BENIGNO, Respondents.
the trial court approved the notice of appeal and directed that the entire records of
the case be forwarded to the CA.
DECISION
The appeal was docketed as CA-G.R. CV No. 97995.
DEL CASTILLO, J.:
On March 9, 2010, respondents filed a Motion to Dismiss the Appeal and Issue a Final
This Petition for Review on Certiorari1 seeks to. set aside the! January 22,
Decree of Registration,11 claiming among others that petitioner has abandoned its
appeal. It also filed a Motion to Resolve12 seeking among others the denial of
2013 Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No. 9;7995, which denied petitioner’s appeal on the ground of abandonment. But in a July 2, 2010 Order,13 the
the herein petitioner's Omnibus Motion3 seeking reconsideration of the Calamba RTC denied both motions, stating that it was respondents’ failure to submit
certain required documents – the Affidavit of Publication14 and Certificate of
CA's October 9, 2012 Resolution4 denying petitioner's Motion for Extension5 of time Posting15 – as earlier directed by the court in a March 26, 2010 Order16 which caused
to file its Appellant's Brief. the non-transmittal of the records of the case to the CA, thus delaying the appeal
proceedings. On July 26, 2010, respondents filed a Motion for Reconsideration17 of
Factual Antecedents the said Order.

On November 2, 1995, spouses Dante and Lolita Benigno (respondents, collectively)
filed with the Regional Trial Court of Calamba, Laguria (Calamba RTC) an Application
for Registration6 of title under Presidential DecreeNo. 1529
or the Property Registration Decree. (PD 1529) to a 293-square i:neter lot in Barangay
Batong Malake, Los Baños, Laguna. The case was docketed as LRC Case No. 105-95-C
and assigned to Branch 35 of the Calamba RTC.
Without awaiting the resolution of its July 26, 2010 Motion for Reconsideration of the
July 2, 2010 Order, respondents filed on September 21, 2011 its Compliance18 and
submitted the documents required by the trial court. In a September 26, 2011
Order19 of the trial court, the branch clerk of court was directed to immediately mark
the documents and thereafter forward the records of the case to the CA. Thus, on
December 21, 2011, the acting branch clerk of court of the Calamba RTC forwarded
the entire records of LRC Case No. 105-95-C to the Calamba Office of the Clerk of Court
for transmittal to the CA.
On December 21, 2011, the entire records of LRC Case No. 105-95-C was received by
the CA.20
On February 21, 2012, respondents filed a Motion for Early Resolution21 of the
appeal, seeking dismissal thereof on the ground of alleged inaction and failure to
prosecute on the part of the petitioner.
Respondents then filed with the CA a Manifestation and Motion to Suspend
Proceedings22 dated May 8, 2012.1a\^/phi1 Respondents contended that since its
Motion for Reconsideration of the Calamba RTC’s July 2, 2010 Order and Motion for
Early Resolution of the appeal remained unresolved, the filing of an appellant’s brief
by the petitioner would be premature; thus, the appeal proceedings should be
suspended until the said motions are resolved.
In an April 26, 2012 Notice,23 the CA directed petitioner to file its appellant’s brief
within 45 days from receipt of the notice.
On June 22, 2012, petitioner filed a Motion for Extension24 of time to file its brief. It
sought an extension of 60 days from June 21, 2012, or until August 20, 2012, within
which to file the same.
In a Resolution25 dated June 26, 2012, the CA required petitioner to comment on
respondents’ Manifestation and Motion to Suspend Proceedings. It likewise granted
petitioner’s Motion for Extension.
On July 16, 2012, petitioner filed an Opposition26 to respondent’s Manifestation and
Motion to Suspend Proceedings, with a prayer that the said manifestation and motion
be denied for lack of merit.
On August 13, 2012, the CA issued a Resolution27 stating that with the filing of
petitioner’s Opposition, respondents’ Manifestation and Motion to Suspend
Proceedings are deemed submitted for resolution.
On August 17, 2012, petitioner filed a second Motion for Extension28 of time to file
its appellant’s brief, praying for an extension of 30 days from August 20, 2012, or until
September 19, 2012, within which to file its brief.
However, petitioner did not file its brief within the period stated in its second motion
for extension. Thus, on October 9, 2012, the CA issued another Resolution29 denying
petitioner’s second motion for extension and dismissing its appeal pursuant to Section
1(e), Rule 50 of the 1997 Rules of Civil Procedure (Rules). It held:
For resolution is oppositor-appellant’s motion for extension of time to file the
appellant’s brief, which prays that it be granted an additional period of thirty (30) days
or until September 19, 2012 to file the aforesaid brief.
The records, however, will show the We have already granted oppositor- appellant’s
previous motion for extension of time to file its brief. In our Resolution dated June 26,
2012, We granted oppositor-appellant an additional period of sixty (60) days or until
August 20, 2012 within which to file its brief. However, oppositor-appellant failed to
file its appellant’s brief on or before August 20, 2012. Hence, the instant motion.
Oppositor-appellant should be reminded that the right to appeal is a mere statutory
privilege, and should be exercised only in the manner prescribed by law. The statutory
nature of the right to appeal requires the one who avails of it to strictly comply with
the statutes or rules that are considered indispensable interdictions against needless
delays and for an orderly discharge of judicial business. Since oppositor-appellant has
not been able to file its brief within the proper period, We deem it appropriate to
dismiss its appeal, pursuant to Section 1(e), Rule 50 of the Rules of Civil Procedure, viz:
"SECTION 1. Grounds for dismissal of appeal. – An appeal may be dismissed by the
Court of Appeals, on its own motion or on that of the appellee, on the following
grounds:
xxxx
(e) Failure of the appellant to serve and file the required number of copies of his brief
or memorandum within the time provided by these Rules;
x x x x"
It should also be noted that the appealed Decision was rendered on December 9, 2005
and the court a quo’s Order letting the entire records of the instant case be forwarded
to this Court was issued on April 10, 2006. Thus, We believe that it is high time for the
applicants-appellees, as the prevailing party in the court a quo’s Decision, to enjoy the
fruits of their victory.
WHEREFORE, appellant’s motion for extension of time to file its brief, dated August
16, 2012, is hereby DENIED. Accordingly, the instant appeal is DISMISSED, pursuant to
Section 1(e), Rule 50 of the Rules of Civil Procedure.
Considering the foregoing, applicants-appellees Manifestation and Motion to Suspend
Proceedings, due to Our alleged inaction on its Motion for Early Resolution, is hereby
declared MOOT.
SO ORDERED.30
On October 18, 2012, petitioner filed a third Motion for Extension,31 praying for
another 20 days from October 19, 2012, or until November 8, 2012, within which to
file its appellant’s brief.
On November 5, 2012, petitioner filed its Appellant’s Brief.32 It likewise filed an
Omnibus Motion33 seeking a reconsideration of the CA’s October 9, 2012 Resolution
and, consequently, the admission of its appellant’s brief. Apologizing profusely for the
fiasco, it begged for the appellate court’s leniency, claiming that it cannot be faulted
for the delay in the proceedings on appeal; that in fact, the delay was caused by the
failure to transmit the records of LRC Case No. 105-95-C to the CA, for which the
respondents and Calamba City Office of the Clerk of Court should be faulted; that in
the interest of substantial justice, the CA should instead adopt a relaxed interpretation
of Section 1(e), Rule 50 of the Rules in order to afford the State an opportunity to
present its case fully.
Respondents filed their Comment34 arguing that only petitioner should be faulted for
its failure to prosecute the appeal; that from its repeated motions for extension, it can
be seen that petitioner lacked diligence in pursuing its appeal; and that consequently,
the CA committed no error in issuing its October 9, 2012 Resolution.
Assailed Ruling of the Court of Appeals
On January 22, 2013, the CA issued the assailed Resolution, pronouncing thus:
A careful reading of oppositor-appellant’s motion, however, reveals that it does not
raise any matter of substance that would justify the reconsideration being sought. We,
therefore, find no compelling reason to disturb Our findings and conclusion in Our
aforementioned Resolution.
WHEREFORE, the Omnibus Motion is DENIED. Our Resolution dated October 9, 2012
stands.
SO ORDERED.35
Thus, the instant Petition was filed.
Issue
In an April 23, 2014 Resolution,36 this Court resolved to give due course to the
Petition, which raises the following sole issue:
THE COURT OF APPEALS GRAVELY ERRED ON A QUESTION OF LAW WHEN IT
ORDERED THE DISMISSAL OF THE APPEAL ALTHOUGH THE DELAY IN THE
FILING OF THE APPELLANT’S BRIEF WAS CAUSED BY THE TRIAL COURT AND
THE RESPONDENTS.37
Petitioner’s Arguments
In its Petition and Reply38 seeking the reversal of the assailed CA Resolution as well as
the dismissal of LRC Case No. 105-95-C, petitioner reiterates that it should not be
faulted for the delay in the proceedings on appeal, as it resulted from the Calamba
City Office of the Clerk of Court’s failure to transmit the records of LRC Case No. 105-
95-C to the CA; that it was the ministerial duty of the clerk of court to transmit the
records of the case to the CA, and he has no authority to withhold the records on the
pretext that certain exhibits were lacking; and that the CA should liberally apply
Section 1(e), Rule 50 of the Rules in order to afford the State an opportunity to present
its case fully.
Petitioner further argues, at this stage of the proceedings, that the Calamba RTC’s
December 9, 2005 Decision granting respondents’ application for registration is null
and void for lack of the required certification from the Secretary of the Department of
Environment and Natural Resources (DENR) that the land applied for is alienable and
disposable land of the public domain. It claims that the mere testimony of a special
investigator of the Community Environment and Natural Resources Office (CENRO)
cannot form the basis for the Calamba RTC’s finding that the land applied for is
alienable and disposable, pursuant to the ruling in Republic v. Hanover Worldwide
Trading Corporation;39 respondents should have submitted 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. Petitioner justifies the raising of the issue at this late
stage, arguing that the State may not be estopped by the mistakes of its officers and
agents; and that when the inference made by the CA is based on a misapprehension
of facts, or when its findings of fact are manifestly mistaken, absurd or impossible, as
in this case, its erroneous decision may be reviewed by this Court.40
In its Reply, petitioner further points out that the Calamba RTC’s December 9, 2005
Decision is void for lack of publication;41 in other words, petitioner suggests that
respondents in fact failed to cause the publication and posting of the notice of initial
hearing on its application, and that the subsequent submission through its September
21, 2011 Compliance of an Affidavit of Publication and Certificate of Posting of Notice
of Initial Hearing was a mere fabrication and fraudulent submission.
Respondents’ Arguments
In their Comment,42 respondents insist that the assailed CA disposition is correct in
all respects; that petitioner’s failure to file its brief is not attributable to respondents;
that petitioner filed no less than four motions for extension to file its brief, which is
indicative of its failure to prosecute its appeal with reasonable diligence and despite
having been given by the CA the opportunity to do so; that the CA’s authority to
dismiss an appeal for failure of the appellant to file a brief is a matter of judicial
discretion;43 that the CA exercised its discretion soundly; that Section 1244 of Rule 44
of the Rules states that extensions of time for the filing of briefs will not be allowed
except for good and sufficient cause; that petitioner should not expect that every
motion for extension it files will be granted; and that the rules on appeal are not trivial
technicalities that petitioner can simply disregard at will.
Respondents add that petitioner’s allegations of fraud and fabrication are not
substantiated by the evidence; that the affidavit of publication and certificate of
posting were already presented during the initial hearing and later submitted as part
of their formal offer of evidence; that the Calamba RTC admitted the said exhibits and
in fact mentioned the same in its Decision granting the application; and that with the
ruling in Republic v. Vega,45 it can be said that despite the absence of a certified true
copy of the DENR original land classification, an application for registration could
nonetheless be approved when there has been substantial compliance with the legal
requirements relative to proof that the land applied for is alienable and disposable.
Our Ruling
The Court finds for petitioner.
It is true, as we have held in numerous cases – particularly Beatingo v. Gasis46 – that
the power conferred upon the CA to dismiss an appeal for failure to file an appellant’s
brief is discretionary. We likewise agree with the CA’s application of Section 1(e), Rule
50 of the Rules. Indeed, petitioner took its liberties in the prosecution of its appeal,
filing at least three motions for extension of time before finally turning in its
appellant’s brief, and taking the demeanor consistent with expecting that each motion
for extension of time would be granted.
However, while petitioner, through the Office of the Solicitor General, was admittedly
ornery in the prosecution of its case, it is nonetheless true that "[a]s a matter of
doctrine, illegal acts of government agents do not bind the State," and "the
Government is never estopped from questioning the acts of its officials, more so if
they are erroneous, let alone irregular."47 This principle applies in land registration
cases.48 Certainly, the State will not be allowed to abdicate its authority over lands of
the public domain just because its agents and officers have been negligent in the
performance of their duties. Under the Regalian doctrine, "all lands of the public
domain belong to the State, and the State is the source of any asserted right to
ownership in land and charged with the conservation of such patrimony."49
Applicants for registration of title under PD 152950 must prove: "(1) that the subject
land forms part of the disposable and alienable lands of the public domain; and (2)
that they have been in open, continuous, exclusive and notorious possession and
occupation of the land under a bona fide claim of ownership since 12 June 1945 or
earlier. Section 14(1) of the law requires that the property sought to be registered is
already alienable and disposable at the time the application for registration is filed."51
And, in order to prove that the land subject of the application is alienable and
disposable public land, "the general rule remains: all applications for original
registration under the Property Registration Decree must include both (1) a CENRO or
PENRO52 certification and (2) a certified true copy of the original classification made
by the DENR Secretary."53
A perfunctory appraisal of the records indicates that respondents did not present any
documentary evidence in LRC Case No. 105-95-C to prove that the land applied for is
alienable and disposable public land. Their Exhibits "A" to "N"54 are bereft of the
required documentary proof – particularly, 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, and a CENRO or PENRO certification – to show that the 293-square
meter land applied for registration is alienable and disposable public land.
Respondents do not dispute this; in fact, they sought the application of the exceptional
ruling in Republic v. Vega55 precisely to obtain exemption from the requirement on
the submission of documentary proof showing that the property applied for
constitutes alienable and disposable public land.
Consequently, the December 9, 2005 Decision of the Calamba RTC is rendered null
and void. The trial court had no basis in fact and law to grant respondents’ application
for registration as there was no proof of alienability adduced. As such, it "has no legal
and binding effect, force or efficacy for any purpose. In contemplation of law, it is non-
existent. Such judgment or order may be resisted in any action or proceeding
whenever it is involved. It is not even necessary to take any steps to vacate or avoid a
void judgment or final order; it may simply be ignored. x x x Accordingly, a void
judgment is no judgment at all. It cannot be the source of any right nor of any
obligation. All acts performed pursuant to it and all claims emanating from it have no
legal effect."56
"The well-entrenched rule is that all lands not appearing to be clearly of private
dominion presumably belong to the State. The onus to overturn, by incontrovertible
evidence, the presumption that the land subject of an application for registration is
alienable and disposable rests with the applicant."57 "[P]ublic lands remain part of the
inalienable land of the public domain unless the State is shown to have reclassified or
alienated them to private persons."58 "Unless public land is shown to have been
reclassified or alienated to a private person by the State, it remains part of the
inalienable public domain. Indeed, occupation thereof in the concept of owner, no
matter how long, cannot ripen into ownership and be registered as a title."59

Therefore, even if the Office of the Solicitor General was remiss in the handling of the
State’s appeal, we nevertheless cannot allow respondents’ application for registration
since they failed to prove that the land applied for is alienable and disposable public
land. Respondents cannot invoke Republic v. Vega60 to claim substantial compliance
with the requirement of proof of alienability; there is complete absence of
documentary evidence showing that the land applied for forms part of the alienable
G.R. No. 173038 September 14, 2011
and disposable portion of the public domain. Complete absence of proof is certainly
not equivalent to substantial compliance with the required amount of proof.
ELENA JANE DUARTE, Petitioner,
vs.
Having disposed of the case in the foregoing manner, We find no need to resolve the
MIGUEL SAMUEL A.E. DURAN, Respondent.
other issues raised by the parties, as they have become irrelevant in view of the finding
that respondents failed to prove that the land applied for forms part of the alienable
and disposable portion of the public domain. The only available course of action is to DECISION
dismiss respondents’ application for registration.
DEL CASTILLO, J.:
We are aware that respondents have come to court at great cost and effort. The
application for registration was filed way back in 1995. However, the difficult lesson Preponderance of evidence only requires that evidence be greater or more convincing
that must be realized here is that applicants for registration of public land should come than the opposing evidence.1
to court prepared and complete with the necessary evidence to prove their registrable
title; otherwise, their efforts will be for naught, and they would only have wasted. Assailed in this Petition for Review on Certiorari2 under Rule 45 of the Rules of Court
precious time, resources and energy in advancing a lost cause. are the October 26, 2005 Decision3 and May 22, 2006 Resolution4 of the Court of
Appeals (CA) in CA-G.R. SP No. 84461.
WHEREFORE, the Petition is GRANTED. The October 9, 2012 and January 22, 2013
Resolutions of the Court of Appeals in CA-G.R. CV No. 97995 are REVERSED AND SET Factual Antecedents
ASIDE. The December 9, 2005 Dedsion of the Regional Trial Court of Calamba, Laguna,
Branch 35 in LRC Case No. 105-95-C is likewise SET ASIDE, and LRC Case No. 105-95-C This petition arose from a suit5 for collection of sum of money filed by respondent
is thus ordered DISMISSED. Miguel Samuel A.E. Duran6 against petitioner Elena Jane Duarte with

SO ORDERED. Branch 5 of the Municipal Trial Court in Cities (MTCC), Cebu.

According to respondent, on February 14, 2002, he offered to sell a laptop computer

for the sum of ₱15,000.00 to petitioner thru the help of a common friend, Josephine
Dy (Dy).7 Since petitioner was undecided, respondent left the laptop with petitioner
for two days.8 On February 16, 2002, petitioner told respondent that she was willing
to buy the laptop on installment.9 Respondent agreed; thus, petitioner gave ₱5,000.00
as initial payment and promised to pay ₱3,000.00 on February 18, 2002 and ₱7,000.00
on March 15, 2002.10 On February 18, 2002, petitioner gave her second installment of
₱3,000.00 to Dy, who signed the handwritten receipt 11 allegedly made by petitioner
as proof of payment.12 But when Dy returned to get the remaining balance on March
15, 2002, petitioner offered to pay only ₱2,000.00 claiming that the laptop was only
worth ₱10,000.00.13 Due to the refusal of petitioner to pay the remaining balance,
respondent thru counsel sent petitioner a demand letter dated July 29, 2002.14
Petitioner, however, denied writing the receipt dated February 18, 2002, 15 and
receiving the demand letter dated July 29, 2002.16 Petitioner claimed that there was
no contract of sale.17 Petitioner said that Dy offered to sell respondent’s laptop but
because petitioner was not interested in buying it, Dy asked if petitioner could instead
lend respondent the amount of ₱5,000.00.18 Petitioner agreed and in turn, Dy left the
laptop with petitioner.19 On February 18, 2002, Dy came to get the laptop but
petitioner refused to give it back because the loan was not yet paid. 20 Dy then asked
petitioner to lend an additional amount of ₱3,000.00 to respondent who allegedly was
in dire need of money.21 Petitioner gave the money under agreement that the
amounts she lent to respondent would be considered as partial payments for the
laptop in case she decides to buy it.22 Sometime in the first week of March 2002,
petitioner informed respondent that she has finally decided not to buy the laptop.23
Respondent, however, refused to pay and insisted that petitioner purchase the laptop
instead.24
Ruling of the Municipal Trial Court in Cities
On June 2, 2003, the MTCC rendered a Decision25 in favor of respondent. It found the
receipt dated February 18, 2002 and the testimonies of respondent and his witness,
Dy, sufficient to prove that there was a contract of sale between the parties.26 Thus:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendant ordering the latter to pay plaintiff the following measure of damages:
(a) Actual damages in the amount of Seven Thousand (₱7,000.00) Pesos with
interest thereon at 12% per annum from July 29, 2002 until fully paid;
(b) Attorney’s fees in the amount of Five Thousand (₱5,000.00) Pesos; and
(c) Litigation expenses in the amount of Three Thousand (₱3,000.00) Pesos.
SO ORDERED.27
Ruling of the Regional Trial Court
On appeal,28 the Regional Trial Court (RTC) of Cebu, Branch 12, reversed the MTCC
Decision. Pertinent portions of the Decision,29 including the dispositive portion, read:
xxxx
As shown in the records of the case, this Court finds the alleged receipt issued by the
witness Josephine Dy [in] her own handwriting a mere product of machination,
trickery and self-serving. It shows no proof of conformity or acknowledgment on the
part of the defendant that indeed she agreed on the stipulations. Thus, it cannot be
given any credence and ultimately, did not bind her.
xxxx
WHEREFORE, the assailed Decision is REVERSED and SET ASIDE. The defendant Elena
Jane Duarte is hereby directed to return the computer laptop to plaintiff Miguel
Samuel A.E. Duran and plaintiff is directed to return the money borrowed from
defendant.
SO ORDERED.30
Respondent moved for reconsideration but the same was denied by the RTC in an
Order31 dated May 13, 2004.
Ruling of the Court of Appeals
On June 1, 2004, respondent filed a Petition for Review32 with the CA. Finding the
petition meritorious, the CA reversed the RTC Decision and reinstated the Decision of
the MTCC. The CA said that the RTC erred in not giving weight and credence to the
demand letter dated July 29, 2002 and the receipt dated February 18, 2002.33 The CA
pointed out that petitioner failed to overturn the presumption that the demand letter
dated July 29, 2002 sent by respondent’s counsel by registered mail was received by
her.34 Neither was she able to deny under oath the genuineness and due execution of
the receipt dated February 18, 2002.35 Thus, the fallo of the Decision36 reads:
WHEREFORE, premises considered, the petition for review is hereby GRANTED. The
decision of the Regional Trial Court, Branch 12, Cebu City is REVERSED and the
judgment of Municipal Trial Court in Cities Branch 5, Cebu City is REINSTATED. No
pronouncement as to costs.
SO ORDERED.37
Petitioner filed a Motion for Reconsideration38 which the CA denied in a Resolution39
dated May 22, 2006.
Issues
Hence, the present recourse by petitioner raising five issues, to wit:
I. Whether x x x the [CA] committed grave error in not resolving the issue as
to whether or not the petition for review that respondent filed in the said
court was filed out of time.
II. Whether x x x the [CA] committed grave error when it reinstated the
judgment of the [MTCC], Branch 5, Cebu City which awarded excessive
attorney’s fees and litigation expenses without factual and legal justification
since the awards were merely stated in the dispositive portion of the decision
and the factual and legal bases thereof were not discussed in the text thereof.
III. Whether x x x the [CA] committed grave error in holding that the denial
by the petitioner of a receipt of the demand letter, sent through registered
mail has not overturned the principal presumption of regularity in the
performance of duty.
IV. Whether x x x the [CA] committed grave error in holding that a "receipt"
which does not contain the signature of the petitioner is an actionable
document.
V. Whether x x x the [CA] committed grave error in holding that the evidence
available confirm the existence of a contract of sale.40
Summed up, the issues boil down to: (1) the timeliness of the filing of the Petition for
Review with the CA; (2) the existence of a contract of sale; and (3) respondent’s
entitlement to attorney’s fees and litigation expenses.
Petitioner’s Arguments
Petitioner contends that the filing of the Petition for Review with the CA on June 1,
2004 was beyond the reglementary period.41 Records show that respondent received
a copy of the RTC Decision on March 25, 2004, filed a Motion for Reconsideration on
April 12, 2004 since April 9 and 10 were holidays and April 11, 2004 was a Sunday, and
received a copy of the RTC Order denying his Motion for Reconsideration on May 27,
2004.42 Thus, he only had one day left from May 27, 2004 within which to file a Petition
for Review with the CA.43
Petitioner likewise denies the existence of a contract of sale, insisting that the laptop
was not sold to her but was given as a security for respondent’s debt. To prove that
there was no contract of sale, petitioner calls attention to respondent’s failure to
present a written contract of sale.44 She claims that under the Statute of Frauds, a
contract of sale to be enforceable must be in writing.45 She also imputes error on the
part of the CA in giving weight and credence to the receipt dated February 18, 2002
and the demand letter dated July 29, 2002.46 She claims that the receipt dated
February 18, 2002, which she denies having written, is not an actionable document;
thus, there was no need for her to deny under oath its genuineness and due
execution.47 Furthermore, she claims that her denial of the receipt of the demand
letter dated July 29, 2002 shifted the burden upon respondent to prove that the letter
was indeed received by her.48 As to the attorney’s fees and litigation expenses,
petitioner contends that these were not discussed in the MTCC Decision but were only
stated in the dispositive portion and that the amount of ₱5,000.00 is excessive
considering that it is 70% of the principal amount claimed by respondent.49
Respondent’s Arguments
Respondent, on the other hand, argues that his Petition for Review was timely filed
with the CA because he has 15 days from receipt of the RTC Order dated May 13, 2004
within which to file a Petition for Review with the CA under Section 1 50 of Rule 42 of
the Rules of Court.51 Respondent defends the ruling of the CA by arguing that the
receipt dated February 18, 2002 is an actionable document, and thus, petitioner’s
failure to deny under oath its genuineness and due execution constitutes an admission
thereof.52 In addition, petitioner’s denial of the receipt of the demand letter dated July
29, 2002 cannot overcome the presumption that the said letter was received in the
regular course of mail.53 Respondent likewise points out that the Statute of Frauds
does not apply in the instant case.54 Finally, respondent claims that the award of
attorney’s fees and litigation expenses are not excessive and that the factual and legal
bases of the award were stated in the body of MTCC Decision.55
Our Ruling
The Petition lacks merit.
The Petition for Review was timely filed with the CA
To standardize the appeal periods and afford litigants fair opportunity to appeal their
cases, we ruled in Neypes v. Court of Appeals56 that litigants must be given a fresh
period of 15 days within which to appeal, counted from receipt of the order dismissing
a motion for a new trial or motion for reconsideration under Rules 40, 41, 42, 43 and
45 of the Rules of Court.57 This ruling, as we have said in Fil-Estate Properties, Inc. v.
Homena-Valencia,58 retroactively applies even to cases pending prior to the
promulgation of Neypes on September 14, 2005, there being no vested rights in the
rules of procedure.59
Since the instant case was pending in the CA at the time Neypes was promulgated,
respondent is entitled to a fresh period of 15 days, counted from May 27, 2004, the
date respondent received the RTC Order dated May 13, 2004 denying his motion for
reconsideration of the RTC Decision dated March 19, 2004 or until June 11, 2004,
within which to file his Petition for Review with the CA. Thus, we find that when he
filed the Petition for Review with the CA on June 1, 2004, his period to appeal had not
yet lapsed.
There was a contract of sale between the parties
As to whether there was a contract of sale between the parties, we hold that there
was, and the absence of a written contract of sale does not mean otherwise. A
contract of sale is perfected the moment the parties agree upon the object of the sale,
the price, and the terms of payment.60 Once perfected, the parties are bound by it
whether the contract is verbal or in writing because no form is required.61 Contrary to
the view of petitioner, the Statute of Frauds does not apply in the present case as this
provision applies only to executory, and not to completed, executed or partially
executed contracts.62 In this case, the contract of sale had been partially executed
because the possession of the laptop was already transferred to petitioner and the
partial payments had been made by her. Thus, the absence of a written contract is not
fatal to respondent’s case. Respondent only needed to show by a preponderance of
evidence that there was an oral contract of sale, which he did by submitting in
evidence his own affidavit, the affidavit of his witness Dy, the receipt dated February
18, 2002 and the demand letter dated July 29, 2002.
loan. What adds doubt to her story is the fact that from the first week of March 2002,
the time she allegedly decided not to buy the laptop, up to the time the instant case
was filed against her, she did not exert any effort to recover from respondent the
payment of the alleged loan. Her inaction leads us to conclude that the alleged loan
was a mere afterthought.
All told, no error can be attributed to the CA in finding that there was a contract of
sale between the parties
The award for attorney’s fees and litigation expenses was proper
Neither do we find any error in the award of attorney’s fees and litigation expenses.
Article 220865 of the Civil Code enumerates the legal grounds which justify or warrant
the grant of attorney’s fees and expenses of litigation, among which is when the
defendant’s act or omission has compelled the plaintiff to incur expenses to protect
his interest.66 The reason for the award of attorney’s fees and litigation expenses,
however, must be set forth in the decision of the court and not in the dispositive
portion only.67 In this case, the factual and legal bases for the award were set forth in
the body of the MTCC Decision dated June 2, 2003, to wit:
x x x As the defendant refused to satisfy plaintiff’s just and valid claim, the latter was
compelled to litigate and engage the services of counsel to protect his interest and in
the process, incurred litigation expenses.68 1avvphi1

As regards the receipt dated February 18, 2002, we agree with petitioner that it is not
The award of attorney’s fees in the amount of ₱5,000.00 is also reasonable and not
an actionable document. Hence, there was no need for her to deny its genuineness
excessive considering that this case, a simple collection of a measly sum of ₱7,000.00,
and due execution under oath. Nonetheless, we find no error on the part of the CA in
has dragged for almost a decade and even had to reach this Court only because
giving full weight and credence to it since it corroborates the testimonies of
petitioner refused to pay. The fact that it is 70% of the principal amount claimed is of
respondent and his witness Dy that there was an oral contract of sale between the
no moment as the amount of attorney’s fees is discretionary upon the court as long
parties.
as it is reasonable.69

With regard to petitioner’s denial of the receipt of the demand letter dated July 29,
Finally, although not raised as an issue, we find it necessary to modify the legal interest
2002, we believe that this did not overturn the presumption of regularity that the
rate imposed on the principal amount claimed. Since the claim involves an obligation
letter was delivered and received by the addressee in the regular course of the mail
arising from a contract of sale and not a loan or forbearance of money, the interest
considering that respondent was able to present the postmaster’s certification63
rate should be six percent (6%) per annum of the amount claimed from July 29, 2002.70
stating that the letter was indeed sent to the address of petitioner. Bare denial of
The interest rate of twelve percent (12%) per annum, however, shall apply from the
receipt of a mail cannot prevail over the certification of the postmaster, whose official
finality of judgment until the total amount awarded is fully paid.71
duty is to send notices of registered mail.64
WHEREFORE, the petition is hereby DENIED. The assailed October 26, 2005 Decision
As we see it then, the evidence submitted by respondent weigh more than petitioner’s
and May 22, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 84461 are
bare denials. Other than her denials, no other evidence was submitted by petitioner
hereby AFFIRMED with MODIFICATION as to the legal interest imposed on the
to prove that the laptop was not sold but was only given as security for respondent’s
principal amount claimed. The legal interest shall be at the rate of six percent (6%) per
annum from July 29, 2002 and at the rate of twelve percent (12%) per annum from
the time the judgment of this Court becomes final and executory until the obligation
is fully satisfied.
SO ORDERED.
The Complaint was filed before the Municipal Trial Court (MTC) of La Trinidad,
Benguet.
After trial, the MTC found respondent Monzon guilty of fraud in obtaining an OCT over
petitioner’s property.8 It ordered her to reconvey the said property to petitioner, and
to pay damages and costs of suit.9

Respondents appealed to the Regional Trial Court (RTC) of La Trinidad, Benguet.

After going over the MTC records and the parties’ respective memoranda, the RTC of
G.R. No. 174908 June 17, 2013 La Trinidad, Benguet, Branch 10, through Acting Presiding Judge Fernando P. Cabato
(Judge Cabato), issued its October 22, 2003 Order,10 declaring the MTC without
DARMA MASLAG, Petitioner, jurisdiction over petitioner’s cause of action. It further held that it will take cognizance
vs. of the case pursuant to Section 8, Rule 40 of the Rules of Court, which reads:
ELIZABETH MONZON, WILLIAM GESTON, and REGISTRY OF DEEDS OF BENGUET,
Respondents. SECTION 8. Appeal from orders dismissing case without trial; lack of jurisdiction. – x x
x
DECISION
If the case was tried on the merits by the lower court without jurisdiction over the
DEL CASTILLO, J.: subject matter, the Regional Trial Court on appeal shall not dismiss the case if it has
original jurisdiction thereof, but shall decide the case in accordance with the preceding
section, without prejudice to the admission of amended pleadings and additional
"It is incumbent upon x x x appellants to utilize the correct mode of appeal of the
evidence in the interest of justice. Both parties acknowledged receipt of the October
decisions of trial courts to the appellate courts. In the mistaken choice of their remedy,
22, 2003 Order,11 but neither presented additional evidence before the new judge,
they can blame no one but themselves."1
Edgardo B. Diaz De Rivera, Jr. (Judge Diaz De Rivera).12
This is a Petition for Review on Certiorari2 of the May 31, 2006 Resolution3 of the Court
On May 4, 2004, Judge Diaz De Rivera issued a Resolution13 reversing the MTC
of Appeals (CA) in CA-G.R. CV No. 83365, which dismissed petitioner Darma Maslag's
Decision. The fallo reads as follows:
(petitioner) ordinary appeal to it for being an improper remedy. The Resolution
disposed of the case as follows:
WHEREFORE, the Judgment appealed from the Municipal Trial Court of La Trinidad,
Benguet is set aside. [Petitioner] is ordered to turn over the possession of the 4,415
WHEREFORE, the Motion to Dismiss is GRANTED, and the Appeal is hereby DISMISSED.
square meter land she presently occupies to [Monzon]. This case is remanded to the
court a quo for further proceedings to determine whether [Maslag] is entitled to the
SO ORDERED.4
remedies afforded by law to a builder in good faith for the improvements she
constructed thereon.
The Petition also assails the CA’s September 22, 2006 Resolution5 denying petitioner’s
Motion for Reconsideration.6
No pronouncement as to damages and costs.

Factual Antecedents
SO ORDERED.14

In 1998, petitioner filed a Complaint7 for reconveyance of real property with

Petitioner filed a Notice of Appeal15 from the RTC’s May 4, 2004 Resolution.
declaration of nullity of original certificate of title (OCT) against respondents Elizabeth
Monzon (Monzon), William Geston and the Registry of Deeds of La Trinidad, Benguet.
Petitioner assailed the RTC’s May 4, 2004 Resolution for reversing the MTC’s factual
findings16 and prayed that the MTC Decision be adopted. Her prayer before the CA
reads:
WHEREFORE, premises considered, it is most respectfully prayed that the decision of
the Regional Trial Court, Branch 10 of La Trinidad, Benguet, appealed from be reversed
in toto and that the Honorable Court adopt the decision of the Municipal Trial Court.
Further reliefs just and equitable under the premises are prayed for.17
Respondents moved to dismiss petitioner’s ordinary appeal for being the improper
remedy. They asserted that the proper mode of appeal is a Petition for Review under
Rule 42 because the RTC rendered its May 4, 2004 Resolution in its appellate
jurisdiction.18
Ruling of the Court of Appeals
The CA dismissed petitioner’s appeal. It observed that the RTC’s May 4, 2004
Resolution (the subject matter of the appeal before the CA) set aside an MTC
Judgment; hence, the proper remedy is a Petition for Review under Rule 42, and not
an ordinary appeal.19
Petitioner sought reconsideration.20 She argued, for the first time, that the RTC
rendered its May 4, 2004 Resolution in its original jurisdiction. She cited the earlier
October 22, 2003 Order of the RTC declaring the MTC without jurisdiction over the
case.
The CA denied petitioner’s Motion for Reconsideration in its September 22, 2006
Resolution:21
A perusal of the May 4, 2004 Resolution of the RTC, which is the subject matter of the
appeal, clearly reveals that it took cognizance of the MTC case in the exercise of its
appellate jurisdiction. Consequently, as We have previously enunciated, the proper
remedy, is a petition for review under Rule 42 and not an ordinary appeal under Rule
41.
WHEREFORE, premises considered, the instant Motion for Reconsideration is DENIED.
The May 31, 2006 Resolution of this Court is hereby AFFIRMED in toto.
SO ORDERED.22
Hence this Petition wherein petitioner prays that the CA be ordered to take cognizance
of her appeal.23
Issues
Petitioner set forth the following issues in her Petition:
WHETHER X X X THE COURT OF APPEALS WAS CORRECT IN DISMISSING THE APPEAL
FILED BY THE PETITIONER, CONSIDERING THAT THE REGIONAL TRIAL COURT, BRANCH
10 OF LA TRINIDAD, BENGUET HELD THAT THE ORIGINAL COMPLAINT AS FILED
BEFORE THE MUNICIPAL TRIAL COURT OF LA TRINIDAD, BENGUET WAS DECIDED BY
THE LATTER WITHOUT ANY JURISDICTION AND, IN ORDERING THAT THE CASE SHALL
BE DECIDED PURSUANT TO THE PROVISION OF SECTION 8 OF RULE 40 OF THE RULES
OF COURT, IT DECIDED THE CASE NOT ON ITS APPELLATE JURISDICTION BUT ON ITS
ORIGINAL JURISDICTION WHAT WILL BE THE EFFECT OF THE DECISION OF THE
REGIONAL TRIAL COURT, BRANCH 10 OF LA TRINIDAD, BENGUET, WHEN IT DECIDED
A CASE APPEALED BEFORE IT UNDER THE PROVISION OF SECTION 8, RULE 40 OF THE
RULES OF COURT OF THE PHILIPPINES, AS TO THE COURSE OF REMEDY THAT MAY BE
AVAILED OF BY THE PETITIONER – A PETITION FOR REVIEWUNDER RULE 42 OR AN
ORDINARY APPEAL UNDER RULE 41.24
Our Ruling
In its October 22, 2003 Order, the RTC declared that the MTC has no jurisdiction over
the subject matter of the case based on the supposition that the same is incapable of
pecuniary estimation. Thus, following Section 8, Rule 40 of the Rules of Court, it took
cognizance of the case and directed the parties to adduce further evidence if they so
desire. The parties bowed to this ruling of the RTC and, eventually, submitted the case
for its decision after they had submitted their respective memoranda.
We cannot, however, gloss over this jurisdictional faux pas of the RTC. Since it involves
a question of jurisdiction, we may motu proprio review and pass upon the same even
at this late stage of the proceedings.25
In her Complaint26 for reconveyance of real property with declaration of nullity of OCT,
petitioner claimed that she and her father had been in open, continuous, notorious
and exclusive possession of the disputed property since the 1940’s. She averred:
7. Sometime in the year 1987, Elizabeth Monzon, the owner of the adjacent
parcel of land being occupied by plaintiff [Maslag], informed the plaintiff that
the respective parcels of land being claimed by them can now be titled. A
suggestion was, thereafter made, that those who were interested to have
their lands titled, will contribute to a common fund for the surveying and
subsequent titling of the land;
 8. Since plaintiff had, for so long, yearned for a title to the land she occupies,
she contributed to the amount being requested by Elizabeth Monzon;
9. A subdivision survey was made and in the survey, the respective areas of
the plaintiff and the defendants were defined and delimited – all for purposes
of titling. x x x
10. But alas, despite the assurance of subdivided titles, when the title was
finally issued by the Registry of Deeds, the same was only in the name of
Elizabeth Monzon and WILLIAM GESTON. The name of Darma Maslag was
fraudulently, deliberately and in bad faith omitted. Thus, the title to the
property, to the extent of 18,295 square meters, was titled solely in the name
of ELIZABETH MONZON.
As a relief, petitioner prayed that Monzon be ordered to reconvey the portion of the
property which she claimed was fraudulently included in Monzon’s title. Her primary
relief was to recover ownership of real property. Indubitably, petitioner’s complaint
involves title to real property. An action "involving title to real property," on the other
hand, was defined as an action where "the plaintiff’s cause of action is based on a
claim that she owns such property or that she has the legal rights to have exclusive
control, possession, enjoyment, or disposition of the same."27
Under the present state of the law, in cases involving title to real property, original
and exclusive jurisdiction belongs to either the RTC or the MTC, depending on the
assessed value of the subject property.28 Pertinent provisions of Batas Pambansa Blg.
(BP) 129,29 as amended by Republic Act (RA) No. 7691,30 provides:
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 (₱20,000.00) or for civil actions in Metro
Manila, where x x x the assessed value of the property exceeds Fifty thousand
pesos ([P]50,000.00) except actions for forcible entry into and unlawful
detainer of lands or buildings, original jurisdiction over which is conferred
upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts;
xxxx
SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts in Civil Cases. — Metropolitan Trial Courts, Municipal Trial Courts
and Municipal Circuit Trial Courts shall exercise:
xxxx
(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 (₱20,000.00) or, in civil
actions in Metro Manila, where such assessed value does not exceed Fifty thousand
pesos (₱50,000.00) x x x.
In the case at bench, annexed to the Complaint is a Declaration of Real Property 31
dated November 12, 1991, which was later marked as petitioner’s Exhibit "A",32
showing that the disputed property has an assessed value of ₱12,40033 only. Such
assessed value of the property is well within the jurisdiction of the MTC. In fine, the
RTC, thru Judge Cabato, erred in applying Section 19(1) of BP 129 in determining which
court has jurisdiction over the case and in pronouncing that the MTC is divested of
original and exclusive jurisdiction.
This brings to fore the next issue of whether the CA was correct in dismissing
petitioner’s appeal.
Section 2, Rule 50 of the Rules of Court provides for the dismissal of an improper
appeal:
SECTION 2. Dismissal of improper appeal to the Court of Appeals. – An appeal under
Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only
questions of law shall be dismissed, issues purely of law not being reviewable by said
court. Similarly, an appeal by notice of appeal instead of by petition for review from
the appellate judgment of a Regional Trial Court shall be dismissed.
An appeal erroneously taken to the Court of Appeals shall not be transferred to the
appropriate court but shall be dismissed outright.1âwphi1 (Emphasis supplied)
There are two modes of appealing an RTC decision or resolution on issues of fact and
law.34 The first mode is an ordinary appeal under Rule 41 in cases where the RTC
exercised its original jurisdiction. It is done by filing a Notice of Appeal with the RTC.
The second mode is a petition for review under Rule 42 in cases where the RTC
exercised its appellate jurisdiction over MTC decisions. It is done by filing a Petition for
Review with the CA. Simply put, the distinction between these two modes of appeal
lies in the type of jurisdiction exercised by the RTC in the Order or Decision being
appealed.
As discussed above, the MTC has original and exclusive jurisdiction over the subject RTC should have done in disposing of the case is a question which already involves the
matter of the case; hence, there is no other way the RTC could have taken cognizance merits of the appeal, but we obviously cannot go into that where the mode of appeal
of the case and review the court a quo’s Judgment except in the exercise of its was improper to begin with.
appellate jurisdiction. Besides, the new RTC Judge who penned the May 4, 2004
Resolution, Judge Diaz de Rivera, actually treated the case as an appeal despite the WHEREFORE, premises considered, the Petition for Review is DENIED for lack of merit.
October 22, 2003 Order. He started his Resolution by stating, "This is an appeal from The assailed May 31, 2006 and September 22, 2006 Resolutions of the Court of
the Judgment rendered by the Municipal Trial Court (MTC) of La Trinidad Benguet" 35 Appeals in CA-G.R. CV No. 83365 are AFFIRMED.
and then proceeded to discuss the merits of the "appeal." In the dispositive portion of
said Resolution, he reversed the MTC’s findings and conclusions and remanded SO ORDERED.
residual issues for trial with the MTC. Thus, in fact and in law, the RTC Resolution was
a continuation of the proceedings that originated from the MTC. It was a judgment
issued by the RTC in the exercise of its appellate jurisdiction. With regard to the RTC’s
earlier October 22, 2003 Order, the same should be disregarded for it produces no
effect (other than to confuse the parties whether the RTC was invested with original
or appellate jurisdiction). It cannot be overemphasized that jurisdiction over the
subject matter is conferred only by law and it is "not within the courts, let alone the
parties, to themselves determine or conveniently set aside."37 Neither would the
active participation of the parties nor estoppel operate to confer original and exclusive
jurisdiction where the court or tribunal only wields appellate jurisdiction over the
case.38 Thus, the CA is correct in holding that the proper mode of appeal should have
been a Petition for Review under Rule 42 of the Rules of Court, and not an ordinary
appeal under Rule 41.

Seeing the futility of arguing against what the RTC actually did, petitioner resorts to
arguing for what the RTC should have done. She maintains that the RTC should have
issued its May 4, 2004 Resolution in its original jurisdiction because it had earlier ruled
that the MTC had no jurisdiction over the cause of action.

Petitioner’s argument lacks merit. To reiterate, only statutes can confer jurisdiction.
Court issuances cannot seize or appropriate jurisdiction. It has been repeatedly held
that "any judgment, order or resolution issued without jurisdiction is void and cannot
be given any effect."39 By parity of reasoning, an order issued by a court declaring that
it has original and exclusive jurisdiction over the subject matter of the case when
under the law it has none cannot likewise be given effect. It amounts to usurpation of
jurisdiction which cannot be countenanced. Since BP 129 already apportioned the
jurisdiction of the MTC and the RTC in cases involving title to property, neither the
courts nor the petitioner could alter or disregard the same. Besides, in determining
the proper mode of appeal from an RTC Decision or Resolution, the determinative
factor is the type of jurisdiction actually exercised by the RTC in rendering its Decision
or Resolution. Was it rendered by the RTC in the exercise of its original jurisdiction, or
in the exercise of its appellate jurisdiction? In short, we look at what type of
jurisdiction was actually exercised by the RTC. We do not look into what type of
jurisdiction the RTC should have exercised. This is but logical. Inquiring into what the

G.R. No. 170292 June 22, 2011
HOME DEVELOPMENT MUTUAL FUND (HDMF), Petitioner,
vs.
Spouses FIDEL and FLORINDA R. SEE and Sheriff MANUEL L. ARIMADO, Respondents.
DECISION
DEL CASTILLO, J.:
A party that loses its right to appeal by its own negligence cannot seek refuge in the
remedy of a writ of certiorari.
This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assailing
the August 31, 2005 Decision,2 as well as the October 26, 2005 Resolution,3 of the
Court of Appeals (CA) in CA-G.R. SP No. 70828. The dispositive portion of the assailed
CA Decision reads thus:
WHEREFORE, premises considered, the instant petition is DENIED DUE COURSE and is
accordingly DISMISSED. The assailed Decision of the Regional Trial Court, Branch 6,
Legazpi City dated February 21, 2002 and its Order dated March 15, 2002 are
AFFIRMED.
SO ORDERED.4
Factual Antecedents
Respondent-spouses Fidel and Florinda See (respondent-spouses) were the highest
bidders in the extrajudicial foreclosure sale of a property 5 that was mortgaged to
petitioner Home Development Mutual Fund or Pag-ibig Fund (Pag-ibig). They paid the
bid price of ₱272,000.00 in cash to respondent Sheriff Manuel L. Arimado (Sheriff
Arimado). In turn, respondent-spouses received a Certificate of Sale wherein Sheriff
Arimado acknowledged receipt of the purchase price, and an Official Receipt No.
11496038 dated January 28, 2000 from Atty. Jaime S. Narvaez, the clerk of court with
whom Sheriff Arimado deposited the respondent-spouses’ payment.6
Despite the expiration of the redemption period, Pag-ibig refused to surrender its
certificate of title to the respondent-spouses because it had yet to receive the
respondent-spouses’ payment from Sheriff Arimado7 who failed to remit the same
despite repeated demands.8 It turned out that Sheriff Arimado withdrew from the
clerk of court the ₱272,000.00 paid by respondent-spouses, on the pretense that he
was going to deliver the same to Pag-ibig. The money never reached Pag-ibig and was
spent by Sheriff Arimado for his personal use.9
Considering Pag-ibig’s refusal to recognize their payment, respondent-spouses filed a
complaint for specific performance with damages against Pag-ibig and Sheriff Arimado
before Branch 3 of the Regional Trial Court (RTC) of Legazpi City. The complaint alleged
that the law on foreclosure authorized Sheriff Arimado to receive, on behalf of Pag-
ibig, the respondent-spouses’ payment. Accordingly, the payment made by
respondent-spouses to Pag-ibig’s authorized agent should be deemed as payment to
Pag-ibig.10 It was prayed that Sheriff Arimado be ordered to remit the amount of ₱
272,000.00 to Pag-ibig and that the latter be ordered to release the title to the
auctioned property to respondent-spouses.11
Pag-ibig admitted the factual allegations of the complaint (i.e., the bid of respondent-
spouses,12 their full payment in cash to Sheriff Arimado,13 and the fact that Sheriff
Arimado misappropriated the money14) but maintained that respondent-spouses had
no cause of action against it. Pag-ibig insisted that it has no duty to deliver the
certificate of title to respondent-spouses unless Pag-ibig actually receives the bid
price. Pag-ibig denied that the absconding sheriff was its agent for purposes of the
foreclosure proceedings.15
When the case was called for pre-trial conference, the parties submitted their
Compromise Agreement for the court’s approval. The Compromise Agreement reads:
Undersigned parties, through their respective counsels[,] to this Honorable Court
respectfully submit this Compromise Agreement for their mutual interest and benefit
that this case be amicably settled, the terms and conditions of which are as follows:
1. [Respondent] Manuel L. Arimado, Sheriff IV RTC, Legazpi acknowledges his
obligation to the Home Development Mutual Fund (PAG-IBIG), Regional
Office V, Legazpi City and/or to [respondent-spouses] the amount of
₱300,000.00, representing payment for the bid price and other necessary
expenses incurred by the [respondent-spouses], the latter being the sole
bidder of the property subject matter of the Extrajudicial Foreclosure Sale
conducted by Sheriff Arimado on January 14, 2000, at the Office of the Clerk
of Court, RTC, Legazpi;
xxxx
 3. Respondent Manuel L. Arimado due to urgent financial need
acknowledge[s] that he personally used the money paid to him by
[respondent-spouses] which represents the bid price of the above[-
]mentioned property subject of the foreclosure sale. The [money] should
have been delivered/paid by Respondent Arimado to Home Development
Mutual Fund (PAG-IBIG) as payment and in satisfaction of its mortgage claim.
4. Respondent Manuel L. Arimado obligates himself to pay in cash to
[petitioner] Home Development Mutual Fund (PAG-IBIG) the amount of
₱272,000.00 representing full payment of its claim on or before October 31,
2001 [so] that the title to the property [could] be released by PAG-IBIG to
[respondent-spouses]. An additional amount of ₱28,000.00 shall likewise be
paid by [respondent] Arimado to the [respondent-spouses] as
reimbursement for litigation expenses;
5. [Petitioner] Home Development Mutual Fund (PAG-IBIG) shall upon
receipt of the ₱272,000.00 from [respondent] Manuel L. Arimado release
immediately within a period of three (3) days the certificate of title of the
property above-mentioned to [respondent-spouses] being the rightful buyer
or owner of the property;
6. In the event [respondent] Manuel L. Arimado fails to pay [petitioner] Home
Development Mutual Fund (PAG-IBIG), or, [respondent-spouses] the amount
of ₱272,000.00 on or before October 31, 2001, the [respondent-spouses]
shall be entitled to an immediate writ of execution without further notice to
respondent Manuel L. Arimado and the issue as to whether [petitioner]
Home Development Mutual Fund (PAG-IBIG) shall be liable for the release of
the title to [respondent spouses] under the circumstances or allegations
narrated in the complaint shall continue to be litigated upon in order that the
Honorable Court may resolve the legality of said issue;
7. In the event [respondent] Manuel L. Arimado complies with the payment
as above-stated, the parties mutually agree to withdraw all claims and
counterclaim[s] they may have against each other arising out of the above-
entitled case.16
The trial court approved the compromise agreement and incorporated it in its
Decision dated October 31, 2001. The trial court stressed the implication of paragraph
6 of the approved compromise agreement:
Accordingly, the parties are enjoined to comply strictly with the terms and conditions
of their Compromise Agreement.
In the event that [respondent] Manuel L. Arimado fails to pay [petitioner] HDMF (Pag-
ibig), or [respondent-spouses] the amount of ₱272,000.00 on October 31, 2001, the
Court, upon motion of [respondent-spouses], may issue the necessary writ of
execution.
In this connection, with respect to the issue as to whether or not [petitioner] HDMF
(Pag-ibig) shall be liable for the release of the title of the [respondent-spouses] under
the circumstances narrated in the Complaint which necessitates further litigation in
court, let the hearing of the same be set on December 14, 2001 at 9:00 o’clock in the
morning.
SO ORDERED.17
None of the parties sought a reconsideration of the aforequoted Decision.
When Sheriff Arimado failed to meet his undertaking to pay on or before October 31,
2001, the trial court proceeded to rule on the issue of whether Pag-ibig is liable to
release the title to respondent-spouses despite non-receipt of their payment.18
Ruling of the Regional Trial Court19
The trial court rendered its Decision dated February 21, 2002 in favor of respondent-
spouses, reasoning as follows: Under Article 1240 of the Civil Code, payment is valid
when it is made to a person authorized by law to receive the same. In foreclosure
proceedings, the sheriff is authorized by Act No. 3135 and the Rules of Court to receive
payment of the bid price from the winning bidder. When Pag-ibig invoked the
provisions of these laws by applying for extrajudicial foreclosure, it likewise
constituted the sheriff as its agent in conducting the foreclosure and receiving the
proceeds of the auction. Thus, when the respondent-spouses paid the purchase price
to Sheriff Arimado, a legally authorized representative of Pag-ibig, this payment
effected a discharge of their obligation to Pag-ibig.
The trial court thus ordered Pag-ibig to deliver the documents of ownership to the
respondent-spouses. The dispositive portion reads thus:
WHEREFORE, premises considered, decision is hereby rendered in favor of the
[respondent-spouses] and against the [petitioner] HDMF, ordering said [petitioner] to
execute a Release and/or Discharge of Mortgage, and to deliver the same to the
[respondent-spouses] together with the documents of ownership and the owner’s
copy of Certificate of Title No. T-78070 covering the property sold [to respondent-
spouses] in the auction sale within ten (10) days from the finality of this decision.
Should [petitioner] HDMF fail to execute the Release and/or Discharge of Mortgage
and to deliver the same together with the documents of ownership and TCT No. T-
78070 within ten (10) days from the finality of this decision, the court shall order the
Clerk of Court to execute the said Release and/or Discharge of Mortgage and shall
order the cancellation of TCT No. T-78070 and the issuance of a second owner’s copy
thereof.
SO ORDERED.20
Pag-ibig filed a motion for reconsideration on the sole ground that "[Pag-ibig] should
not be compelled to release the title to x x x [respondent-spouses] See because
Manuel Arimado [has] yet to deliver to [Pag-ibig] the sum of ₱272,000.00."21
The trial court denied the motion on March 15, 2002. It explained that the parties’
compromise agreement duly authorized the court to rule on Pag-ibig’s liability to
respondent-spouses despite Sheriff Arimado’s non-remittance of the proceeds of the
auction.22
Pag-ibig received the denial of its motion for reconsideration on March 22, 2002 23 but
took no further action. Hence, on April 23, 2002, the trial court issued a writ of
execution of its February 21, 2002 Decision.24
On May 24, 2002,25 Pag-ibig filed before the CA a Petition for Certiorari under Rule 65
in order to annul and set aside the February 21, 2002 Decision of the trial court. Pag-
ibig argued that the February 21, 2002 Decision, which ordered Pag-ibig to deliver the
title to respondent-spouses despite its non-receipt of the proceeds of the auction, is
void because it modified the final and executory Decision dated October 31, 2001.26 It
maintained that the October 31, 2001 Decision already held that Pag-ibig will deliver
its title to respondent-spouses only upon receipt of the proceeds of the auction from
Sheriff Arimado. Since Sheriff Arimado did not remit the said amount to Pag-ibig, the
latter has no obligation to deliver the title to the auctioned property to respondent-
spouses.27
Further, Pag-ibig contended that the February 21, 2002 Decision was null and void
because it was issued without affording petitioner the right to trial.28
Ruling of the Court of Appeals29
The CA denied the petition due course. The CA noted that petitioner’s remedy was to
appeal the February 21, 2002 Decision of the trial court and not a petition for certiorari
under Rule 65. At the time the petition was filed, the Decision of the trial court had
already attained finality. The CA then held that the remedy of certiorari was not a
substitute for a lost appeal.30
The CA also ruled that petitioner’s case fails even on the merits. It held that the
February 21, 2002 Decision did not modify the October 31, 2001 Decision of the trial
court. The latter Decision of the trial court expressly declared that in case Sheriff
Arimado fails to pay the ₱272,000.00 to Pag-ibig, the court will resolve the remaining
issue regarding Pag-ibig’s obligation to deliver the title to the respondent-spouses.31
As to the contention that petitioner was denied due process when no trial
was conducted for the reception of evidence, the CA held that there was no need for
the trial court to conduct a full-blown trial given that the facts of the case were already
admitted by Pag-ibig and what was decided in the February 21, 2002 Decision was only
a legal issue.32
Petitioner filed a motion for reconsideration33 which was denied for lack of merit in
the Resolution dated October 26, 2005.34
Issues
Petitioner then raises the following issues for the Court’s consideration:
1. Whether certiorari was the proper remedy;
2. Whether the February 21, 2002 Decision of the trial court modified its
October 31, 2001 Decision based on the compromise agreement;
3. Whether petitioner was entitled to a trial prior to the rendition of the
February 21, 2002 Decision.
Our Ruling
Petitioner argues that the CA erred in denying due course to its petition for certiorari
and maintains that the remedy of certiorari is proper for two reasons: first, the trial
court rendered its February 21, 2002 Decision without the benefit of a trial; and
second, the February 21, 2002 Decision modified the October 31, 2001 Decision,
which has already attained finality. These are allegedly two recognized instances
where certiorari lies to annul the trial court’s Decision because of grave abuse of
discretion amounting to lack of jurisdiction.35
The argument does not impress.
"[C]ertiorari is a limited form of review and is a remedy of last recourse."36 It is proper
only when appeal is not available to the aggrieved party. 37 In the case at bar, the
February 21, 2002 Decision of the trial court was appealable under Rule 41 of the Rules
of Court because it completely disposed of respondent-spouses’ case against Pag-ibig.
Pag-ibig does not explain why it did not resort to an appeal and allowed the trial court’s
decision to attain finality. In fact, the February 21, 2002 Decision was already at the
stage of execution when Pag-ibig belatedly resorted to a Rule 65 Petition for Certiorari.
Clearly, Pag-ibig lost its right to appeal and tried to remedy the situation by resorting
to certiorari. It is settled, however, that certiorari is not a substitute for a lost appeal,
"especially if the [party’s] own negligence or error in [the] choice of remedy
occasioned such loss or lapse."38
Moreover, even assuming arguendo that a Rule 65 certiorari could still be resorted to,
Pag-ibig’s petition would still have to be dismissed for having been filed beyond the
reglementary period of 60 days from notice of the denial of the motion for
reconsideration.39 Pag-ibig admitted receiving the trial court’s Order denying its
Motion for Reconsideration on March 22, 2002;40 it thus had until May 21, 2002 to file
its petition for certiorari. However, Pag-ibig filed its petition only on May 24, 2002,41
which was the 63rd day from its receipt of the trial court’s order and obviously beyond
the reglementary 60-day period.
Pag-ibig stated that its petition for certiorari was filed "within sixty (60) days from
receipt of the copy of the writ of execution by petitioner [Pag-ibig] on 07 May 2002,"
which writ sought to enforce the Decision assailed in the petition.42 This submission is
beside the point. Rule 65, Section 4 is very clear that the reglementary 60-day period
is counted "from notice of the judgment, order or resolution" being assailed, or "from
notice of the denial of the motion [for reconsideration]," and not from receipt of the
writ of execution which seeks to enforce the assailed judgment, order or resolution.
The date of Pag-ibig’s receipt of the copy of the writ of execution is therefore
immaterial for purposes of computing the timeliness of the filing of the petition for
certiorari.1avvphi1
Since Pag-ibig’s petition for certiorari before the CA was an improper remedy and was
filed late, it is not even necessary to look into the other issues raised by Pag-ibig in
assailing the February 21, 2002 Decision of the trial court and the CA’s rulings
sustaining the same. At any rate, Pag-ibig’s arguments on these other issues are
devoid of merit.
As to Pag-ibig’s argument that the February 21, 2002 Decision of the RTC is null and
void for having been issued without a trial, it is a mere afterthought which deserves
scant consideration. The Court notes that Pag-ibig did not object to the absence of a
trial when it sought a reconsideration of the February 21, 2002 Decision. Instead, Pag-
ibig raised the following lone argument in their motion:
3. Consequently, [Pag-ibig] should not be compelled to release the title to other
[respondent-spouses] See because Manuel Arimado [has] yet to deliver to [Pag-ibig]
the sum of ₱ 272,000.00.43
Under the Omnibus Motion Rule embodied in Section 8 of Rule 15 of the Rules of
Court, all available objections that are not included in a party’s motion shall be
deemed waived.
Pag-ibig next argues that the February 21, 2002 Decision of the trial court, in ordering
Pag-ibig to release the title despite Sheriff Arimado’s failure to remit the ₱272,000.00
to Pag-ibig, "modified" the October 31, 2001 Decision. According to Pag-ibig, the
October 31, 2001 Decision allegedly decreed that Pag-ibig would deliver the title to
respondent-spouses only after Sheriff Arimado has paid the ₱272,000.00.44 In other
words, under its theory, Pag-ibig cannot be ordered to release the title if Sheriff
Arimado fails to pay the said amount.
The Court finds no merit in this argument. The October 31, 2001 Decision (as well as
the Compromise Agreement on which it is based) does not provide that Pag-ibig
cannot be ordered to release the title if Sheriff Arimado fails to pay. On the contrary,
what the Order provides is that if Sheriff Arimado fails to pay, the trial court shall
litigate (and, necessarily, resolve) the issue of whether Pag-ibig is obliged to release
the title. This is based on paragraph 6 of the Compromise Agreement which states that
in the event Sheriff Arimado fails to pay, "the [respondent-spouses] shall be entitled
to an immediate writ of execution without further notice to [Sheriff] Arimado and the
issue as to whether [Pag-ibig] shall be liable for the release of the title to [respondent
spouses] under the circumstances or allegations narrated in the complaint shall
continue to be litigated upon in order that the Honorable Court may resolve the
legality of said issue." In fact, the trial court, in its October 31, 2001 Decision, already
set the hearing of the same "on December 14, 2001 at 9:00 o’clock in the morning."45
It is thus clear from both the October 31, 2001 Decision and the Compromise
Agreement that the trial court was authorized to litigate and resolve the issue of
whether Pag-ibig should release the title upon Sheriff Arimado’s failure to pay the
₱272,000.00. As it turned out, the trial court eventually resolved the issue against Pag-
ibig, i.e., it ruled that Pag-ibig is obliged to release the title. In so doing, the trial court
simply exercised the authority provided in the October 31, 2001 Decision (and
stipulated in the Compromise Agreement). The trial court did not thereby "modify"
the October 31, 2001 Decision.
WHEREFORE, premises considered, the petition is DENIED. The assailed August 31,
2005 Decision, as well as the October 26, 2005 Resolution, of the Court of Appeals in
CA-G.R. SP No. 70828 are AFFIRMED.
SO ORDERED.
G.R. No. 176055 March 17, 2014
SPOUSES EDMUNDO DELA CRUZ and AMELIA CONCIO-DELA CRUZ, Petitioners,
vs.
SPOUSES RUFINO R. CAPCO AND MARTY1 C. CAPCO, Respondents.
DECISION
DEL CASTILLO, J.:
This case involves two spouses battling for the material possession of a piece of land.
Assailed in this Petition for Review on Certiorari is the August 18, 2006 Decision2 of
the Court of Appeals (CA) in CA-G.R. SP No. 90736 which (1) granted the petition for
review filed therewith by respondents spouses Rufino R. Capco and Marty C. Capco
(spouses Capco ); (2) set aside the January 20, 2005 Decision3 and June 27, 2005
Omnibus Order4 of the Regional Trial Court (RTC) of Pasig City, Branch 153; and (3)
dismissed the Complaint for Unlawful Detainer filed by petitioners spouses Edmundo
Dela Cruz and Amelia Concio-Dela Cruz (spouses Dela Cruz) against the spouses Capco.
Likewise questioned is the December 21, 2006 Resolution5 which denied the spouses
Dela Cruz' Motion for Reconsideration thereto.
Factual Antecedents
On October 6, 2003, the spouses Dela Cruz filed a Complaint6 for Unlawful Detainer
against the spouses Capco before the Metropolitan Trial Court (MeTC) of Pateros.
They alleged that Teodora T. Concio (Teodora), mother of petitioner Amelia Concio-
Dela Cruz (Amelia), acquired ownership over a piece of land by virtue of a Decision
dated October 3, 1983 rendered by the RTC of Pasig, Branch 151 in Land Registration
Case No. 9511. The said property was eventually registered in her name under
Transfer Certificate of Title (TCT) No. 31873. Teodora, out of neighborliness and blood
relationship, tolerated the spouses Capco’s occupation thereof.
Subsequently, the subject property was conveyed to the spouses Dela Cruz. Intending
to construct a house thereon and utilize the space for their balut and salted eggs
business, the spouses Dela Cruz thus demanded that the spouses Capco vacate the
property. As the spouses Capco refused, the matter was brought before the Barangay
Lupon for conciliation wherein several meetings were held but to no avail.7 Hence,
the said Complaint.
In their Answer, the spouses Capco pointed out that the Complaint is defective for
failing to allege the exact metes and bounds of the property. Neither is a title attached
thereto to show that the spouses Dela Cruz are the owners of the disputed property.
Be that as it may, the spouses Capco asserted that they have all the rights to occupy
the subject property since respondent Rufino Capco (Rufino) is an heir of its true
owner. In fact, they established their balutan business and built their house thereon
as early as 1947. By way of counterclaim, the spouses Capco prayed that the spouses
Dela Cruz be ordered to pay them exemplary damages, attorney’s fees and litigation
expenses.
The exhibits submitted by the spouses Dela Cruz, included, among others, copies of
the (1) RTC Decision dated October 3, 1983 in Land Registration Case No. 9511;8 (2)
TCT No. 31873 in the name of Teodora;9 and, (3) Deed of Extra-Judicial Settlement of
the Estate of Teodora T. Concio wherein her heirs agreed to assign, transfer and
convey the property to Amelia.10 For their part, the spouses Capco presented (1) two
1993 tax declarations covering their house and a camarin which both stand on a lot
owned by Juan E. Cruz (Juan)11 and (2) several receipts evidencing their payment of
real property taxes.12
Ruling of the Metropolitan Trial Court
The MeTC rendered a Decision13 on July 9, 2004. It did not give credence to the
spouses Capco’s assertion that the Complaint did not properly identify the property
and instead found sufficient the identification of the same through the technical
description in TCT No. 31873 submitted by the spouses Dela Cruz.
Anent the conflicting claims of the parties as to their right to possess the subject
property, the MeTC endeavored to ascertain the source of the parties’ claimed rights,
viz:
x x x Plaintiff Amelia Concio-dela Cruz is the daughter of the late Teodora Tulad Concio,
to whom the property subject matter of the instant case and which is covered by TCT
No. 31873 was registered. Prior to the issuance of TCT No. 31873 in the name of
[Amelia’s] mother, the subject property used to form part of one-half of a property
owned by one Juan Cruz, which was previously administered by one Gregorio Reyes,
the grandfather of herein defendant Rufino Capco. This property owned by Juan Cruz
was later involved in a family land dispute upon his death after the son of Gregorio
Reyes, Hermogenes Reyes, instituted an action to have the subject property registered
in the latter’s name. But [the spouses Dela Cruz’] predecessor-in-interest Teodora
Tulad Concio filed her opposition to the application.
In a decision rendered by the said court, one-half of that property was adjudicated in
favor of Hermogenes Reyes, and the other half was awarded to Teodora Tulad Concio
x x x. The subject decision paved the way for the issuance of TCT No. 31873 in the
name of Teodora Tulad Concio x x x and TCT No. 31874 in the name of Hermogenes
Reyes.
Notwithstanding the decision of the Regional Trial Court in the Land Registration
proceedings and the consequent issuance of TCT No. 31873 in favor of Teodora Tulad
Concio, [the spouses Capco] remained in possession of the subject property by reason
of the tolerance extended to them by the Concios.
Upon the death, however, of Teodora Tulad Concio on August 31, 1993, her heirs
including plaintiff Amelia T. Concio, executed a Deed of Extra-Judicial Settlement of
the Estate of Teodora Concio. In that extrajudicial settlement dated May 14, 2002, all
the heirs adjudicated upon themselves the property covered by TCT No. 31783 and
thereafter assigned, transferred and conveyed to plaintiff Amelia T. Concio-Dela Cruz
and her heirs, assigns and successors the said property.14
Based on this, the MeTC rejected the spouses Capco’s claimed right to possess the
subject property as follows:
x x x [T]he [spouses Capco’s] stay in the subject premises was originally lawful as they
based it then from their right as heirs of the lawful possessor thereof, Mr. Hermogenes
Reyes, who initially caused the application of title in his name of that parcel of land
which included the lot now subject matter of this case. That right of the [spouses
Capco], however, ceased when the Land Registration Court in that application for land
title filed by Reyes ruled that only one-half of that property being applied for shall be
titled in his name while the other half, which is now the subject of this complaint shall
be adjudged in favor of Oppositor Teodora Concio Tulad, the [spouses Dela Cruz’]
predecessor-in-interest.
Since title to the property which the [spouses Capco] are now occupying had already
been legally transferred to Teodora Concio Tulad, the right of the former in occupying
the same is deemed to have been anchored from the right of the latter as owner of
the subject land. The court is, therefore, of the considered view that [the spouses
Capco’s] continued stay in the property covered by TCT No. 31783 was truly through
the sheer generosity and tolerance of the registered owner Teodora Concio Tulad
during her lifetime and extended only upon her death by her successor-in-interest,
the [spouses Dela Cruz].15
The MeTC concluded that since the spouses Capco’s possession of the subject
property was by mere tolerance of the spouses Dela Cruz, the latter have the better
right to possess and thus may recover the same upon demand. Hence, the dispositive
portion of its Decision:
VIEWED FROM THE FOREGOING, judgment is hereby rendered in favor of [the spouses
Dela Cruz] and against [the spouses Capco], ordering the latter and all persons
claiming rights under them to vacate the subject land being occupied by them which
is covered by TCT No. 31873 located at Interior P. Herrera St., Pateros, Metro Manila,
and surrender possession thereof to the plaintiffs, and to pay the following:
a. Php500.00 a month as reasonable compensation with legal interest
thereon from September 1, 2003, until the subject property is finally vacated;
b. Php20,000.00, as and by way of attorney’s fees; and,
c. Costs of suit.
SO ORDERED.16
The spouses Capco appealed to the RTC.17
Ruling of the Regional Trial Court
The RTC did not find merit in the spouses Capco’s appeal,18 hence, the dispositive
portion of its January 20, 2005 Decision reads:19
WHEREFORE, foregoing premises duly considered, the appealed decision is affirmed
in toto.
SO ORDERED.20
In view of the Decision of the RTC, the spouses Dela Cruz filed a Motion to Remand
and Direct Court of Origin to Issue a Writ of Execution,21 and later, a Motion to
Withdraw Back Rentals under Judicial Custody.22 The spouses Capco, for their part,
moved for the reconsideration of the RTC Decision.23 These motions were resolved
by the RTC through an Omnibus Order24 dated June 27, 2005, viz:
WHEREFORE, in the light of the foregoing premises, for being pro forma, the motion
for reconsideration is DENIED.
Further, the Motion to Remand is GRANTED and the Motion To Withdraw Back Rentals
is deferred for the consideration of the court of origin.
SO ORDERED.25
Undeterred, the spouses Capco filed a Petition for Review with the CA.
Ruling of the Court of Appeals
The CA found in favor of the spouses Capco in its Decision26 of August 18, 2006.
Citing Go, Jr. v. Court of Appeals27 and Heirs of Demetrio Melchor v. Melchor,28 it
declared that a complaint for unlawful detainer must aver facts showing that the
[MeTC] has jurisdiction to try the case by describing how the defendant’s entry was
effected or how and when dispossession started. It found the Complaint wanting in
this aspect, thus:
In this case, the [spouses Dela Cruz’] complaint merely alleged that the [spouses
Capco’s] possession of the property was by the tolerance of their predecessors-in-
interest and ‘out of neighborliness and blood relationship’. The evidence presented or
adduced before the [MeTC] does not show how the [spouses Capco] came into
possession. x x x29
Moreover, the CA observed that while the spouses Dela Cruz claimed that their
property pertains to half of the land previously belonging to Juan that was later
adjudicated to Teodora by virtue of the judgment in aforementioned land registration
case, it is not clear whether the portion occupied by the spouses Capco lies therein or
in the other half adjudicated in favor of Hermogenes Reyes. In view of this, it opined
that there is a need to physically determine the exact boundaries of the land covered
by TCT No. 31873 which, however, cannot be done in a mere summary proceeding in
an ejectment case but rather in an accion publiciana or accion reindivicatoria before
the RTC.
Hence, the CA disposed of the petition in this wise:
WHEREFORE, the instant petition is GRANTED. The decision dated January 20, 2005
and omnibus order dated June 27, 2005 of the RTC, Branch 153, Pasig City in SCA Case
No. 2695, are SET ASIDE. In lieu thereof, the complaint is DISMISSED for reasons
discussed therein.
SO ORDERED.30
As their Motion for Reconsideration31 was denied in the CA Resolution32 of
December 21, 2006, the spouses Dela Cruz are now before this Court through this
Petition for Review on Certiorari ascribing error upon the CA in setting aside the rulings
of the MeTC and the RTC.
Parties’ Arguments
The spouses Dela Cruz assert that contrary to the CA’s findings, they were able to
describe with particularity the property subject of the case through the technical
description in TCT No. 31873. Besides, the spouses Capco admitted in the Pre-Trial
Conference that the property occupied by them is the same property which is the
subject of the case. The CA likewise erred in not considering as settled the issue of
ownership of the land per the judgment in the land registration case and in not
recognizing their right to posses based thereon.
On the other hand, the spouses Capco reiterate that they are the rightful possessors
of the property as Rufino is an heir of the true owner. They stress that they have been
occupying the same as early as 1947, have established their home and business
thereon, and introduced improvements which are even of higher value than the land
itself. In contrast, the spouses Dela Cruz failed to present before the MeTC any title
showing that they are the owners of the subject property. Also, their Complaint is
fatally defective for failing to allege the exact metes and bounds of the property which
possession they sought to recover. The spouses Capco likewise question TCT No.
31873 of Teodora by contending that the Agreement of Subdivision33 used as basis
for its issuance is spurious. According to them, Teodora could not have executed the
said agreement on June 23, 1998 since she died on August 31, 1993.
Our Ruling
We grant the Petition.
It must be stated at the outset that this Court is not a trier of facts. However, the
conflicting findings of facts of the MeTC and the RTC on one hand, and the CA on the
other, compel us to revisit the records of this case for proper dispensation of justice.34
Contrary to the CA’s pronouncement, the Complaint sufficiently makes out a case for
unlawful detainer.
The CA intimated in its assailed Decision that the MeTC did not acquire jurisdiction
over the spouses Dela Cruz’ Complaint for ejectment since the same failed to describe
how the spouses Capco’s entry to the property was effected or how and when the
dispossession started, as held in Go and Melchor. Such a requirement, however, does
not apply in this case. The Court has already clarified in Delos Reyes v. Odones35 that:
The requirement that the complaint should aver, as jurisdictional facts, when and how
entry into the property was made by the defendants applies only when the issue is the
timeliness of the filing of the complaint before the MTC x x x.
This is because, in forcible entry cases, the prescriptive period is counted from the
date of defendants’ actual entry into the property; whereas, in unlawful detainer
cases, it is counted from date of the last demand to vacate. Hence, to determine
whether the case was filed on time, there is a necessity to ascertain whether the
complaint is one for forcible entry or for unlawful detainer; and since the main
distinction between the two actions is when and how defendant entered the property,
the determinative facts should be alleged in the complaint.36
The timeliness of the filing of the Complaint for unlawful detainer is not an issue in this
case. Hence, the failure of the Complaint to allege when and how the spouses Capco
came into possession of the property does not mean that the MeTC did not acquire
jurisdiction over it. "To give the court jurisdiction to effect the ejectment of an
occupant or deforciant on the land, it is necessary that the complaint should embody
such a statement of facts as brings the party clearly within the class of cases for which
the statutes provide a remedy, as these proceedings are summary in nature. The
complaint must show enough on its face to give the court jurisdiction without resort
to parol testimony."37
A complaint, to sufficiently make out a case for unlawful detainer and fall under the
jurisdiction of the MeTC, must allege that:
1. initially, possession of property by the defendant was by contract with or
by tolerance of the plaintiff;
2. eventually, such possession became illegal upon notice by plaintiff to
defendant of the termination of the latter’s right of possession;
3. thereafter, the defendant remained in possession of the property and
deprived the plaintiff of the enjoyment thereof; and;
4. within one year from the last demand on defendant to vacate the property,
the plaintiff instituted the complaint for ejectment.38
Here, the Complaint alleged that the spouses Dela Cruz’ predecessor-in-interest,
Teodora, is the registered owner of the property per TCT No. 31873 and that she
tolerated the spouses Capco’s occupation of the lot. The spouses Dela Cruz
subsequently acquired the property through conveyance and they extended the same
tolerance to the spouses Capco. The spouses Dela Cruz demanded for the spouses
Capco to vacate the property but to no avail; hence, they sent the latter a formal
demand letter which, per the attached copy to the Complaint, is dated September 1,
2003.39 The Complaint was filed on October 6, 2003 or within one year from the time
the formal demand to vacate was made. Clearly, the Complaint sufficiently established
a case for unlawful detainer as to vest the MeTC jurisdiction over it.
The lot occupied by the spouses Capco and the lot over which the spouses Dela Cruz
claim to have a better right to possess pertain to the same property.
The CA opined that there is a need to determine if the lot occupied by the spouses
Capco really forms part of the property over which the spouses Dela Cruz claim to
have a better right to possess.
The Court, however, thinks otherwise.
One of the three issues defined during the preliminary conference is "whether or not
the [spouses Capco] are occupying the subject property by mere tolerance of the
plaintiffs".40 It is therefore safe to conclude that there is no dispute with respect to
the identity of the property. What was clearly up for resolution before the MeTC was
only the question of whether the spouses Capco are occupying the property by mere
tolerance of the spouses Dela Cruz.
Moreover, the evidence submitted in this case establishes that the lot subject of this
Complaint for ejectment is the same lot being occupied by the spouses Capco. As
mentioned, the spouses Capco submitted tax declarations covering their house and a
camarin as well as the corresponding receipts evidencing their payments of real
property taxes. Notably, the declared owner of the lot on which these properties
stand, as written in the receipts for the years 1995, 1996, 1997 and 1998, is Juan.41
Yet, the receipts for the years 2000, 2001, 2002, and 2003 no longer reflect Juan as
the owner but Teodora.42 This change tends to support the conclusion that the lot
occupied by the spouses Capco, which was previously owned by Juan, is the portion
adjudicated in favor of the spouses Dela Cruz’ predecessor-in-interest, Teodora. This
is further confirmed by the affidavit of the Municipal Assessor of Pateros, Mr.
Emmanuel España.43 Besides, the spouses Capco appear to have acknowledged the
fact that the spouses Dela Cruz owned the lot that they are occupying. As shown by
the records during the first meeting before the Barangay Lupon, respondent Marty C.
Capco asked Amelia if the latter could just sell the lot to them [the spouses Capco] so
that their business built thereon would not suffer.44
It is thus clear that the lot being occupied by the spouses Capco is the same lot over property. As its present owners, they have a right to the possession of the property
which the spouses Dela Cruz claim to have a better right to possess. Contrary therefore which is one of the attributes of ownership.
to the CA’s pronouncement, there is no need to physically determine the extent of the
land covered by T.C.T. No. 31873. WHEREFORE, the Petition is GRANTED. The August 18, 2006 Decision and the
December 21, 2006 Resolution of the Court of Appeals in CA-G.R. No. 90736 are
The spouses Dela Cruz are able to establish by preponderance of evidence that they ANNULLED and SET ASIDE. The January 20, 2005 Decision of the Regional Trial Court
are the rightful possessors of the property. of Pasig City, Branch 153, and the July 9, 2004 Decision of the Metropolitan Trial Court
of Pateros, Branch 73 are REINSTATED and AFFIRMED.
"The only issue in an ejectment case is the physical possession of real property –
possession de facto and not possession de jure."45 But "[w]here the parties to an SO ORDERED.
ejectment case raise the issue of ownership, the courts may pass upon that issue to
determine who between the parties has the better right to possess the property."46
Here, both parties anchor their right to possess based on ownership, i.e., the spouses
Dela Cruz by their own ownership while the spouses Capco by the ownership of Rufino G.R. No. 196875, August 19, 2015
as one of the heirs of the alleged true owner of the property. Thus, the MeTC and the
RTC correctly passed upon the issue of ownership in this case to determine the issue
TEDDY MARAVILLA, Petitioner, v. JOSEPH RIOS, Respondent.
of possession. However, it must be emphasized that "[t]he adjudication of the issue of
ownership is only provisional, and not a bar to an action between the same parties
DECISION
involving title to the property."47

DEL CASTILLO, J.:

The spouses Dela Cruz were able to prove by preponderance of evidence that they are
the owners of the lot. Their allegation that the subject property was adjudicated to
Teodora by virtue of a decision in a land registration case and was later conveyed in This Petition for Review on Certiorari1 seeks to set aside the July 25,2008 Resolution2
their favor, is supported by (1) a copy of the Decision in the said land registration case; of the Court of Appeals (CA) in CA-G.R. CEB SP No. 03594 dismissing herein petitioner's
(2) the title of the land issued to Teodora (TCT No. 31873), and, (3) the Deed of Extra- Petition for Review, as well as the CA's April 4, 2011 Resolution3 denying petitioner's
Judicial Settlement of the Estate of Teodora wherein the latter’s heirs agreed to Motion for Reconsideration.4redarclaw
convey the said property to Amelia.
Factual Antecedents
The spouses Capco, on the other hand, aside from their bare allegation that
In 2:003, respondent Joseph Rios filed a criminal case against petitioner Teddy
respondent Rufino is an heir of the true owners thereof, presented nothing to support
Maravilla for reckless imprudence resulting in serious physical injuries before the
their claim. While they submitted receipts evidencing their payments of the realty
Municipal Trial Court in Cities (MTCC) of Himamaylan City, Negros Occidental,
taxes of their house and the camarin standing in the subject property, the same only
docketed as Criminal Case No. 2168-MTCC. Respondent accused petitioner of
militates against their claim since the latest receipts indicate Teodora as the owner of
recklessly driving his jeep which caused it to collide with the motorcycle he
the land. Moreover, the spouses Capco’s attempt to attack the title of Teodora is
(respondent) was then driving; as a result, respondent was injured and incapacitated
futile. "It has repeatedly been emphasized that when the property is registered under
to work for more than ninety days.
the Torrens system, the registered owner's title to the property is presumed legal and
cannot be collaterally attacked, especially in a mere action for unlawful detainer. It
After trial, the MTCC rendered judgment5 on December 14, 2006, pronouncing as
has even been held that it does not even matter if the party's title to the property is
follows:LawlibraryofCRAlaw
questionable."48
WHEREFORE, premises considered, the Quantum of proof necessary for the
All told, the Court agrees with the MeTC's conclusion, as affirmed by the RTC, that the
conviction of the accused not having been clearly established beyond any reasonable
spouses Dela Cruz are better entitled to the material possession of the subject
doubt, accused Teddy Maravilla is hereby acquitted of the crime charged. However,
as the court finds preponderance of evidence to hold the accused liable in damages
for the injuries sustained by the private complainant as a result of the lack of proof or a. It failed to incorporate a written explanation why the preferred
lack [sic] basis and, as adverted to above, the accused is hereby ordered to pay private personal mode of filing under Section 11, Rule 13, Revised Rules of
complainant the sum of P20,000.00 as temperate damages. Court, was not availed of;chanRoblesvirtualLawlibrary

Other claim for damages is hereby ordered dismissed either for lack of basis and/or b. Some relevant and pertinent pleadings and documents, which are
the same not proper [sic] in this case. necessary for a better understanding and resolution of the instant
petition, were not attached therein, in violation of Section 2(d), Rule
SO ORDERED.6 429 of the Revised Rules of Court, to wit:LawlibraryofCRAlaw

Respondent interposed an appeal before the trial court. On May 19, 2008, the i. Copy of the information filed before the municipal trial
Regional Trial Court of Negros Occidental, 6th Judicial Region, Branch 56 issued its court;
Decision7 in the appealed case - Criminal Case No. 2049 - decreeing as ii. Copy of the appellant's brief filed before the RTC;
follows:LawlibraryofCRAlaw iii. Copy of the appellee's brief, if any;
iv. Other pieces of evidence/documents adduced before the
WHEREFORE, viewed in the light of all the foregoing considerations, the decision of lower court.
the Municipal Trial Court in Cities of Himamaylan City, Negros Occidental dated
December 14, 2006, is hereby modified as follows:LawlibraryofCRAlaw While it is true that litigation is not a game of technicalities and that the rules of
procedure should not be strictly enforced at the cost of substantial justice, this does
1. The award of temperate damages in the amount of P20,000.00 is not mean that the Rules of Court may be ignored at will and at random to the prejudice
hereby deleted; and of the orderly presentation and assessment of the issues and their just resolution.
Justice eschews anarchy.
2. Accused-appellee is hereby held liable to pay private complainant Thus, for failure of the petitioner to comply with pertinent provisions of the Rules, the
Joseph Rios the amount of Two Hundred Fifty Six Thousand Three petition is hereby DISMISSED.
Hundred Eighty Six Pesos and Twenty Five Centavos (P256,386.25)
as actual and compensatory damages;chanRoblesvirtualLawlibrary SO ORDERED.10

3. No award for moral damages and Attorney's Fees and no costs. Petitioner moved for reconsideration, but in its second assailed Resolution, the C A
stood its ground, stating -
SO ORDERED.8
The petitioner subsequently filed a motion for reconsideration of the aforesaid
Ruling of the Court of Appeals Resolution by invoking the rule on liberal application of procedural laws. In trying to
rectify the dearth in his petition, the petitioner attached to his motion certain portions
Petitioner filed a Petition for Review with the CA, docketed as CA-G.R. CEB SP No. of the record of the case in the court a quo.
03594. However, in its assailed July 25, 2008 Resolution, the CA dismissed the Petition,
decreeing thus:LawlibraryofCRAlaw A perusal of petitioner's motion for reconsideration, as well as the attachments
thereto, shows that the petitioners [sic] still failed to comply with Section 2(d), Rule
Filed before Us is a petition for review under Rule 42 filed by the petitioner on June 42 of the Revised Rules of Court. There are allegations in the petition that draw
19, 2008 seeking to reverse/set aside the assailed Decision of the Regional Trial Court, support from the transcripts of stenographic notes, formal offer of evidence by the
Branch 56 of Himamaylan City, Negros Occidental dated 19 May 2008. respondent, and the Order of the trial court that admitted said formal offer of
evidence. The petitioner, however, had not appended the aforesaid documents to the
As viewed, the instant petition is defective in substance:LawlibraryofCRAlaw petition. Thus, with such deficiency, the Court resolves to deny petitioner's motion for
reconsideration.

WHEREFORE, premises considered, the petitioner's motion for reconsideration is

hereby denied.
SO ORDERED.11
Hence, the instant Petition.
Issues
Petitioner raises the following issues for resolution:LawlibraryofCRAlaw
1.
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE PETITION FOR
REVIEW UNDER RULE 42 DUE TO TECHNICALITIES.
2.
PETITIONER HAS A MERITORIOUS CASE AND [THE] PETITION IS NOT FRIVOLOUS AND
DILATORY.12
Petitioner's Arguments
In his Petition and Reply13 seeking reversal of the assailed CA dispositions and a
remand of the case to the CA for consideration on its merits, petitioner argues that
while the CA has discretion to dismiss the appeal, its discretion must be a sound one,
and it must consider the circumstances of the case, the tenets of justice and fair play,
and the fact that an appeal is an essential part of the judicial process, to the end that
technicalities should be avoided.14 Petitioner asserts that the courts must afford every
party litigant the amplest opportunity for the just and proper determination of his case
free from the constraints of technicalities. He claims that Ms failure to submit
pertinent documents required by the CA was due to misapprehension of Section 2(d)
of Rule 42, as the said section mentions only copies of the judgments or orders of the
lower courts, which brought him to the realization that other pleadings or documents
may be submitted later on, as the need arises or as may be necessary. He argues that
the Revised Internal Rules of the CA (Section 3[d], Rule 3) states that when a petition
does not contain the complete annexes of the required number of copies, "the Chief
of the Judicial Records Division shall require the petitioner to complete the annexes
or file the necessary number of copies of the petition before docketing the case;" thus,
the defect was cured when he submitted the required pleadings/documents together
with his motion for reconsideration with the CA. Moreover, he insists that he has a
meritorious case since there is no basis for the trial court's award of actual damages
because respondent failed to prove and testify as to the same -respondent failed to
present actual receipts of his hospital expenses, but merely relied on the hospital's
statement of account (Exhibit "N") containing the amount of expenses allegedly
incurred by him, which does not qualify as proof of actual expenses incurred;
respondent failed to identify the said statement of account at the trial; and finally,
respondent's other exhibits do not prove that he incurred medical expenses.
Respondent's Arguments
In his Comment,16 respondent supports the dismissal of the Petition by the CA. He
contends that while petitioner submitted additional pleadings and documents when
he filed his Motion for Reconsideration, still the same was insufficient. The CA may not
be expected to rule properly on the petition without said pleadings and documents,
since - unlike in an ordinary appeal - the trial court record is not automatically elevated
to the appellate court in a petition for review. Respondent insists that petitioner may
not invoke liberality in the application of the Rules. The cases he cited are not
applicable because the parties complied wholly with their duty to attach all the
relevant pleadings and documents necessary for the consideration of their petition
whereas in his case, there was no complete compliance with the Rules because he
failed to attach all the required pleadings and documents. Besides, petitioner has not
given a valid excuse for failing to complete the required documents. In any case, while
the phrase "of the pleadings and other material portions of the record" in Section 2
(d), Rule 42 -followed by the phrase "as would support the allegations of the petition"
- means that petitioner has the discretion to select the documents that must be
annexed to the petition, it is still the CA that will ultimately determine if the supporting
documents are sufficient to even make out a prima facie case.17 Moreover, there is no
question of law involved in the instant case, which justifies the denial of the petition.
Respondent also avers that petitioner's plea for a re-examination of the evidence to
justify his recourse is not allowed at this stage; and that just the same, respondent has
sufficiently proved his entitlement to actual damages through the various pieces of
evidence submitted and admitted in the court below.
Our Ruling
The Court denies the Petition.
Under Section 2, Rule 42 of the 1997 Rules of Civil Procedure (1997 Rules), a petition
for review shall be accompanied by, among others, copies of the pleadings and other
material portions of the record as would support the allegations of the petition.
Section 3 of the same rule states that failure of the petitioner to comply with any of
the requirements regarding the contents of and the documents which should
accompany the petition shall be sufficient ground for the dismissal thereof.
In Galvez v. Court of Appeals,18 this Court held that there are three guideposts in
determining the necessity of attaching pleadings and portions of the record to
petitions under Rules 42 and 65 of the 1997 Rules, to wit:LawlibraryofCRAlaw
First, not all pleadings and parts of case records are required to be attached to the
petition. Only those which are relevant and pertinent must accompany it. The test of
relevancy is whether the document in question will support the material allegations in
the petition, whether said document will make out a prima facie case of grave abuse
of discretion as to convince the court to give due course to the petition.
Second, even if a document is relevant and pertinent to the petition, it need not be
appended if it is shown that the contents thereof can also [be] found in another
document already attached to the petition. Thus, if the material allegations in a
position paper are summarized in a questioned judgment, it will suffice that only a
certified true copy of the judgment is attached.
Third, a petition lacking an essential pleading or part of the case record may still be
given due course or reinstated (if earlier dismissed) upon showing that petitioner later
submitted the documents required, or that it will serve the higher interest of justice
that the case be decided on the merits.
The guideposts, which equally apply to a petition for review filed in the CA under Rule
42, reflect that the significant determinant of the sufficiency of the attached
documents is whether the accompanying documents support the allegations of the
petition.19 (Emphasis supplied)
It is true that in the case of Spouses Espejo v. Ito,20 which petitioner cites, the
petitioners therein rectified their mistake by submitting the necessary pleading - in
this case a copy of the complaint - to the CA, thus completing the attachments to their
petition for review. The Court in said case held:LawlibraryofCRAlaw
It should be noted that in this case, petitioners immediately acted to rectify their
earlier procedural lapse by submitting, together with their Motion for Reconsideration
of the 19 December 2006 Resolution of the Court of Appeals, a Motion to Admit a
copy of their Complaint for Unlawful Detainer. Submission of a document together
with the motion for reconsideration constitutes substantial compliance with the
requirement that relevant or pertinent documents be submitted along with the
petition, and calls for the relaxation of procedural rules.
Moreover, the Court held in Spouses Lanaria v. Planta that under Section 3(d), Rule 3
of the Revised Internal Rules of the Court of Appeals, the Count of Appeals is with
authority to require the parties to submit additional documents as may be necessary
to promote the interests of substantial justice. Therefore, the appellate court, instead
of dismissing outright the Petition, could just as easily have required petitioners to
submit the necessary document, i.e., a copy of petitioners' Complaint for Unlawful
Detainer filed with the MeTC.21
In petitioner's case, however, while he submitted additional necessary attachments
along with his Motion for Reconsideration, he left out important parts of the record -
excerpts of the transcript of stenographic notes, the respondent's formal offer of
evidence, and the trial court's Order admitting said formal offer of evidence - that
would support his claim that the trial court erred in awarding damages to respondent
since the latter failed to testify as to his hospital expenses and identify particular
exhibits.
Since petitioner was acquitted of the criminal charge, the only issue left in the
appealed case (Criminal Case No. 2049) is the matter of damages. In disposing of this
issue, the trial court held:LawlibraryofCRAlaw
This court, after a considered and exhaustive review and perusal of the records of this
case resolves to disagree with the findings of the lower court. It has concluded that,
indeed, as correctly pointed [out] by herein appellant, prosecution has proffered
competent and [sic] documentary proof sustaining private complainant's plea for an
award of actual and compensatory damages including the basis thereof.
It is evident that in this case prosecution has sufficiently established the injuries
sustained by private complainant consequent to the vehicular mishap. The evidence
on record has shown that Joseph Rios was admitted at the Doctor's Hospital, Inc.,
Bacolod City from October 28, 2001 to February 4, 2002 per Admission and Discharge
Record issued by said hospital (Exh. "F"). He underwent a surgical operation on
October 28, 2001 and was diagnosed for [sic] a) fracture open type II middle femur
left; b) laceration left knee; c) fracture open II, distal tibia, repair of laceration (Exh.
"D"). While being admitted at the hospital, he incurred expenses in the amount of
P203,343.00 per certification (Exh. "E") and the Statement of Account (Exh. "N") issued
by the said hospital in the amount of P256,386.25.
True it is, prosecution in its presentation of evidence failed to identify said exhibit in
court. Nonetheless, said defect had been waived no less by accused-appellee in failing
to seasonably object to its authenticity and its eventual admission in evidence by the
court a quo. In the order dated August 12, 2005, the court a quo admitted in evidence
said Exhibits "E" and "N" formally offered by the prosecution. Said order has already
become final and likewise unassailable as herein accused-appellee never questioned
the admission in evidence of said exhibits. The adverted order thus binds the parties.
It is too late in a [sic] day at this stage for accused-appellee to claim that said exhibits
have not been identified.
The mere fact that private complainant was admitted in the hospital from October 28,
2001 to February 4, 2002 and had undergone a surgical operation provides sufficient
basis for the award of compensatory damages. The amount of the award could hardly
be concluded as proceeding from sheer conjectures and guesswork as the same has
been detailed in the Statement of Account (Exh. "N") issued no less by the hospital
which naturally keeps records of expenses incurred to be made payable by the patient.

While the law and jurisprudence obviously require competent proof for an award of
compensatory damages, such competent proof does not limit itself to the
presentation of receipts. Other documentary proof as in this case the Certification
(Exh. "E") and the Statement of Account (Exh. "N") would suffice as they are the best
evidence to prove hospital expenses. The absence of receipts was duly elucidated and
justified by private complainant as the hospital bill at the time said Statement of
Account was issued, had no[t] been paid and satisfied and still remains the
accountability of private complainant.
To the mind of this court, Exhibits "E" and "N" presented by the private complainant
and clearly unrebutted by the accused-appellee provides the plainest, easiest and
most accurate measure in determining the amount of actual damages with reasonable
certainty. Accordingly, an award in this case for actual damages in the amount of
P256,386.25 as shown in Exh. "N" would surely subserve the ends of justice.22
Nowhere in the trial court's recitations above may be found any reference to the
transcript covering respondent's testimony, which petitioner assails. The same is true
with the MTCC's Decision; a perusal thereof generates the same conclusion. In the
absence of such reference, it was incumbent upon petitioner to attach to his CA
Petition such portions of the evidence and transcript as are relevant to and supportive
of his claim. Without them, the appellate court could not have any factual basis to
resolve the case or, at the very least, make out a prima facie case for him.
Thus, going by the ruling in Galvez, petitioner's failure to attach relevant portions of
the evidence and transcript of stenographic notes - to his Petition, initially, and Motion
for Reconsideration, subsequently - which were not tackled in the decisions of the
courts below, but which are material to his claim that respondent failed to testify as
to and prove actual damages, is fatal to his Petition for Review before the CA. In short,
none of the three guideposts spelled out in Galvez were observed in petitioner's case.
In Magsino v. de Ocampo,23 the Court articulated the reason for requiring -through
Section 2 of Rule 42 - that pleadings and other material portions of the record as would
support the allegations must be attached to the Petition, in the following
manner:LawlibraryofCRAlaw
It is worth mentioning that pursuant to the third guidepost recognized in Galvez the
petitioner could still have submitted the omitted documents at the time he filed his
motion for reconsideration vis-a-vis the first assailed resolution of the CA. Yet, he did
not do so. Instead, he boldly proposed in his motion for reconsideration vis-a-vis the
first assailed resolution that the CA should have bowed to the "greater imperative of
doing substantial justice" by not hampering the appeal "sticking unflaggingly to such
rules," to wit:LawlibraryofCRAlaw
If this Honorable Court would really want to inform itself more, it is submitted that all
that it has to do is to order the elevation of all the records to it. The Rules of Court,
and for that matter all rules of procedure should bow to the greater imperative of
doing substantial justice. Rather, routinely applying a rule of procedure when the
same is not necessary in order to arrive at an intelligent resolution of the issues, it is
submitted, would hamper or repress rather than promote the search for truth.
x x x x
It may be cliche, but it is still true today as when it first found its way into the human
mind, that when technical rules of procedure already serve to hamper justice they
must be left to the dustbin of the legally forgettable, and at the cost of setting them
aside, should unobtrusively pursue the ends of justice and the search for truth.
xxxx
Now must this Honorable Court sacrifice the law for technical rules of procedure?
Must it countenance mediocrity, nay, ignorance, by sticking unflaggingly to such rules?
Can this honorable Court afford to pass up the rare opportunity to decide a
constitutional issue with right of a party to due process of law on the line?
x x x x
ONCE AGAIN, we ask: Is it necessary for this Honorable Court to still pursue those
pleadings when the issues confronting them are legal issues which even lesser legal
intellects can resolve?
This Honorable Court is respectfully reminded the law is made for man, not man for
the law.
We cannot agree with the petitioner's arrogant but unworthy proposition. The CA was
only just in denying his motion for reconsideration through the second assailed
resolution on the following terms, viz[.]:LawlibraryofCRAlaw
A careful perusal of the said provision would reveal that the documents or annexes
therein mentioned are required to be appended to the petition and the mandatory
character of such requirement may be inferred from Section 3 of Rule 42 x x x.
The petitioner's further argument that it is the Court which should get all the records
from the court a quo if it really wants to be more informed of the issues, is not well-
taken. Precisely, the annexes mentioned in Section 2(d) of Rule 42 are required to be
appended to the petition in order to enable this Court to determine even without
consulting the record if the petition is patently without merit or the issues raised therein
are too insubstantial to require consideration, in which case the petition should be
dismissed outright, or whether there is a need to require the respondent to comment
on the petition. In short, the mere fact that a petition for review is filed does not call for
the elevation of the record, which means that until this Court finds that the elevation of
the record is necessary, such record should remain with the trial court during the
pendency of the appeal in accordance with Section 2 of Rule 39, let alone the fact that
in ejectment cases the decision of the RTC is immediately executory pursuant to Section
21 of the Revised Rule on Summary Procedure. Thus, more often than not, this Court
has resolved petitions for review under Rule 42 without unnecessary movement of the
original record of the case which could entail not only undue delay but also the
possibility of the record being lost in transit.
The petitioner urged us to rely on the documents and pleadings he appended in his
petition which merely consisted of the MTC Judgment, the assailed RTC Order, the
Motion for Reconsideration, and the questioned Order dated November 6, 2003
denying his Motion for Reconsideration. None of the aforementioned documents set
out the factual milieu of his claims.
Instead of manifesting that he would submit the additional documentary evidence,
the petitioner remained [adamant] in his stand not to submit the additional pleadings
and other material portions of the record. He maintained that what he has submitted
based on his discretion, are all that are necessary to support his allegations in his
petition. As we have already mentioned, the accompanying documents were
insufficient to support the petition. Also, the petitioner could have easily ended his
debacle by merely attaching the supplemental documents in his Motion for
Reconsideration. Instead, the petitioner stubbornly chose to insist that this Court
direct the elevation of the records of the case if we deem that the relevant documents
were not appended to the petition.
x x x x
It is not disputed that it is petitioner who knows best what pleadings or material
portions of the record of the case would support the allegations in the petition. The
petitioner's discretion in choosing the documents to be attached to the petition is
however not unbridled. The Court has the duty to check the exercise of this discretion,
to see to it that the submission of supporting documents is not merely perfunctory.
The practical aspect of this duty is to enable us to determine at the earliest possible
time the existence of prima facie merit in the petition. Moreover, Section 3 of Rule 42
of the Revised Rules of Court provides that if petitioner fails to comply with the
submission of "documents which should accompany the petition", it "shall be
sufficient ground for the dismissal thereof."
In this case, the insufficiency of the supporting documents coupled with the
unjustified refusal of the petitioner to even attempt to substantially comply with the
attachment requirement justified the dismissal of his petition. (Emphasis supplied)
Thus, even though petitioner exercises the initiative to select what will be attached to
his Petition for Review, it is the CA that ultimately determines the sufficiency of these
attachments. As held in Atillo v. Bombay.24redarclaw
The phrase "of the pleadings and other material portions of the record" in Section 2
(d), Rule 42 x x x followed by the phrase "as would support the allegations of the
petition" clearly contemplates the exercise of discretion on the part of the petitioner
in the selection of documents that are deemed to be relevant to the petition.
However, while it is true that it is petitioner who initially exercises the discretion in
selecting the relevant supporting documents that will be appended to the petition, it
is the CA that will ultimately determine if the supporting documents are sufficient to
even make out a prima facie case. It can be fairly assumed that the CA took pains in
the case at bar to examine the documents attached to the petition so that it could
discern whether on the basis of what have been submitted it could already judiciously
determine the merits of the petition. The crucial issue to consider then is whether x x
x the documents accompanying the petition before the CA sufficiently supported the
allegations therein.
x x x x
As mentioned earlier, it is not disputed that it is petitioner who knows best what
pleadings or material portions of the record of the case would support the allegations
in the petition. Petitioner's discretion in choosing the documents to be attached to
the petition is however not unbridled. The CA has the duty to check the exercise of
this discretion, to see to it that the submission of supporting documents is not merely
perfunctory. The practical aspect of this duty is to enable the CA to determine at the
earliest possible time the existence of prima facie merit in the petition. Moreover,
Section 3 of Rule 42 of the Rules of Court provides that if petitioner fails to comply
with the submission of "documents which should accompany the petition," it "shall be
sufficient ground for the dismissal thereof." In this case, the insufficiency of the
supporting documents combined with the unjustified refusal of petitioner to even
attempt to substantially comply with the attachment requirement justified the
dismissal of [his] petition.
As for petitioner's claim that based on the evidence on record, his case is meritorious,
it must be said that this Court may not consider such claim. In the absence of
recognized exceptional circumstances,25 the Court will not analyze or weigh such
evidence all over again, its jurisdiction being limited to reviewing errors of law that
might have been committed below.
WHEREFORE, the Petition is DENIED. The July 25, 2008 and April 4, 2011 Resolutions
of the Court of Appeals in CA-G.R. CEB SP No. 03594 are AFFIRMED.
 Yuki, Jr., who put up a business therein under the name and style "Supersale Auto
SO ORDERED.cralawlawlibrary Supply." The contract of lease between Mr. Chua and petitioner had a term of five
years but was not reduced into writing. Thereafter, the lease was renewed through a
series of verbal and written agreements,7 the last of which was a written Contract of
Lease8 covering the period of January 1, 2003 to December 31, 2003 at a monthly
rental of ₱7,000.00.

In November 2003, Mr. Chua informed petitioner that he sold the property to
respondent Wellington Co and instructed petitioner to thenceforth pay the rent to the
new owner.

Proceedings before the Metropolitan Trial Court

After the expiration of the lease contract, petitioner refused to vacate and surrender
G.R. No. 178527 November 27, 2009
the leased premises. Thus, respondent filed a Complaint for unlawful detainer9 before
the MeTC of Manila. The material allegations of the complaint read as follows:
JOVEN YUKI, JR., Petitioner,
vs.
xxxx
WELLINGTON CO, Respondent.

3. Plaintiff [herein respondent] is the registered owner of that parcel of land together
DECISION
with the building existing thereon situated at 2051 España St. cor. Instruccion St.,
Sampaloc, Manila. Plaintiff’s title to said property is evidenced by the Transfer
DEL CASTILLO, J.:
Certificate of Title No. 261682 of the Registry of Deeds of Manila, photocopy of which
is attached hereto as Annex "A" and the tax declarations for the lot and improvement
The lessee-petitioner’s attempt to hold on to the property subject of the instant are attached hereto as Annexes "B" and "B-1", respectively;
unlawful detainer case, by resorting to fraudulent machinations such as refusing to
receive the notices to vacate, must not be countenanced. His stubborn refusal to
xxxx
receive the notices to vacate should not prejudice the right of the lessor-respondent,
to use and enjoy the fruits of his property.
5. Prior to the sale of the lot and building by the previous owner to herein plaintiff,
Joseph Chua sent a notice to defendant [herein petitioner] informing him that the
This Petition for Review on Certiorari1 assails the November 23, 2008 Decision2 of the
property is for sale giving the defendant the opportunity to exercise his pre-emptive
Court of Appeals (CA) in CA-G.R. SP No. 89228 granting respondent’s Petition for
right. Copy of said Notice is attached hereto as Annex "D";
Review3 and setting aside the March 7, 2005 Decision4 of the Regional Trial Court
(RTC), Branch 14, Manila. The RTC reversed and set aside the Decision5 dated
6. Defendant waived his right to exercise his pre-emptive right and the real property
September 21, 2004 of the Metropolitan Trial Court (MeTC), Branch 15, Manila,
was eventually sold to herein plaintiff;
granting respondent’s Complaint for unlawful detainer6 and ordering petitioner to
vacate the premises subject matter of this case.
7. Plaintiff, being the new owner of the lot and building, informed defendant that his
Contract of Lease with the former lessor-owner Joseph Chua will no longer be
Factual Antecedents
renewed as per letter dated November 3, 2003, copy of which was left at defendant’s
store, for his refusal to acknowledge the receipt of the same. A copy of said Notice is
Mr. Joseph Chua was the registered owner of a parcel of land, together with a attached hereto and made an integral part hereof as Annex "E";
commercial building erected thereon, situated at the corner of España and Instruccion
Sts., Sampaloc, Manila. In 1981, he leased a portion of the building to petitioner Joven
8. For failure and refusal of the defendant to vacate and surrender the leased unit to 1. to VACATE and surrender the subject property peacefully to plaintiff;
plaintiff, plaintiff’s counsel in turn sent a formal demand upon defendant to vacate
the leased premises within ten (10) days from receipt of the formal demand in view of 2. to PAY the plaintiff reasonable compensation for the use and occupancy of the
the expiration of the contract of lease. Copy of said letter dated January 13, 2004 is subject premises in the amount of eight thousand (₱8,000.00) pesos per month from
attached hereto as Annex "F". A copy was sent by registered mail but defendant failed January 1, 2004 until such time that he and all persons claiming rights under him have
to claim the same as evidenced by the Certification from the Central Post Office, copy fully vacated the premises;
of which is attached hereto as Annex "G". Another copy of the same demand letter
was personally served at defendant’s address as attested by the sworn statement of 3. to PAY the plaintiff thirty thousand (₱30,000.00) pesos as attorney’s fees and
Wilberto Co who served the said formal demand as well as the notice earlier sent by litigation expenses.
plaintiff. Copy of the Affidavit of Wilberto Co is attached hereto as Annex "H";
SO ORDERED.12
xxxx
Proceedings before the Regional Trial Court
Respondent prayed that petitioner’s possession of subject premises be declared
unlawful and that petitioner be ordered to vacate it. He also sought reasonable
In time, petitioner went on appeal to the RTC contending that –
compensation for the use of the property until such time that it is surrendered to him
and for the petitioner to pay him moral damages and attorney’s fees.
A. THE LOWER COURT ERRED WHEN IT RULED THAT THE PLAINTIFF-APPELLEE [herein
respondent] HAD A CAUSE OF ACTION TO EVICT HEREIN DEFENDANT-APPELLANT
In his Answer with Counterclaim,10 petitioner denied having been served with copies
[herein petitioner] FROM THE PREMISES.
of the alleged notice of sale and notice to vacate. By way of affirmative defenses, he
claimed that the complaint should be dismissed for being premature as there was no
B. THE LOWER COURT ERRED WHEN IT RULED THAT THERE WAS NO IMPLIED NEW
allegation therein of prior referral to the barangay. Petitioner also asserted that since
LEASE CREATED BY PLAINTIFF-APPELLEE’S ACCEPTANCE OF THE RENTALS MADE BY
he was not notified by the former owner of the sale, he was deprived of his preemptive
DEFENDANT-APPELLANT.
rights. Moreover, respondent has no cause of action against him because respondent
is not the true owner of the property but merely acts as a representative of persons
whom respondent refused to disclose. Further, petitioner argued that there was an C. THE LOWER COURT ERRED WHEN IT RULED THAT VALID NOTICE [TO] VACATE WAS
implied renewal of lease considering that a) he did not receive a notice to vacate, b) SERVED UPON DEFENDANT-APPELLANT BY THE PLAINTIFF-APPELLEE.
the two months deposit and one month advance payment he gave to Mr. Chua were
never returned to him, and c) respondent accepted his payments for the months of D. THE LOWER COURT GRAVELY ERRED WHEN IT RULED THAT DEFENDANT-
January and February 2004. APPELLANT WAS NOT DENIED HIS PREEMPTIVE RIGHT TO PURCHASE THE PROPERTY
HE HAS BEEN OCCUPYING.
Petitioner also asserted that his property rights would be violated if he is evicted
because he has been operating his business in the premises for more than 20 years E. THE LOWER COURT GRAVELY ERRED WHEN IT DENIED THE MOTION FOR
and has established goodwill in the area. He thus proposed that he be compensated CLARIFICATORY HEARING FILED BY DEFENDANT-APPELLANT AS WELL AS HAVING
the amount of not less than ₱1 million or be allowed to dispose of his stocks within a DENIED THE MOTION FOR VOLUNTARY INHIBITION.
reasonable period of time, before he vacates the premises.
F. THE LOWER COURT ERRED WHEN IT AWARDED ATTORNEY’S FEES AMOUNTING TO
On September 21, 2004, the MeTC-Branch 15 rendered a Decision11 in favor of the THIRTY THOUSAND (₱30,000.00) IN FAVOR OF PLAINTIFF-APPELLEE.
respondent, the dispositive portion of which reads:
On March 7, 2005, the RTC-Branch 14 rendered a Decision13 with the following
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the disposition:
defendant ordering the defendant and all persons claiming right under him:
WHEREFORE, all premises considered, the Court finds and so holds preponderance of
evidence on the part of the defendant-appellant. Accordingly, the Decision appealed
from is hereby REVERSED, and the complaint for Unlawful Detainer is dismissed.
Finally, there is on record a defendant-appellant’s Motion for Reconsideration as
regards the amount of the supersedeas bond. By the dismissal of the case, the
resolution thereof is thereby rendered moot and academic.
SO ORDERED.14
In reversing the ruling of the MeTC, the RTC found no proof on record that petitioner
actually received the notice to vacate, thereby making the Complaint fatally defective.
The RTC likewise opined that the resolution of the case hinges on the existence of
implied new lease, a question which is incapable of pecuniary estimation and,
therefore, beyond the MeTC’s jurisdiction.
Proceedings before the Court of Appeals
Respondent filed with the CA a Petition for Review 15 under Rule 42 of the Rules of
Court assailing the RTC Decision. On November 23, 2006, the CA promulgated the now
assailed Decision16 granting the petition. Its fallo reads:
WHEREFORE, the instant petition is hereby GRANTED. The Decision dated 7 March
2005 rendered by the Regional Trial Court (RTC) of Manila, Branch 14 is SET ASIDE and
the Decision dated 21 September 2004 of the Metropolitan Trial Court (MeTC) of
Manila, Branch 15 is REINSTATED.
SO ORDERED.17
Issues
Petitioner interposed the present recourse imputing upon the CA the following errors:
A. x x x THE COURT OF APPEALS COMMITTED GRAVE ERROR WHEN IT RULED NOT TO
DISMISS THE PETITION INTERPOSED BY RESPONDENT AND INSTEAD PROCEEDED TO
REVERSE THE DECISION DATED MARCH 7, 2005 OF THE REGIONAL TRIAL COURT,
BRANCH 14 DESPITE RESPONDENT (THEN PETITIONER) HAVING FAILED TO COMPLY
WITH THE PROCEDURAL REQUIREMENTS UNDER RULE 42 OF THE 1997 RULES OF CIVIL
PROCEDURE.18
B. THE COURT OF APPEALS ERRED WHEN IT FOUND ERRORS COMMITTED BY THE RTC
IN REVERSING THE DECISION OF THE MTC.19
Our Ruling
The petition lacks merit.
The allegations in respondent’s petition are supported by material portions of the
record.
Petitioner contends that the Petition for Review20 filed by the respondent with the CA
is procedurally infirmed and that the appellate court should have outrightly dismissed
the same. Specifically, petitioner points out that while respondent attached to the
petition the parties’ respective position papers, he failed to attach to said position
papers the annexes thereto. This, petitioner insists, warrants the dismissal of
respondent’s petition per Section 2, Rule 42 of the Rules of Court, 21 in relation to
Section 322 of the same Rule.
We do not agree. Section 2 of Rule 42 does not require that all the pleadings and
documents filed before the lower courts must be attached as annexes to the petition.
Aside from clearly legible duplicate originals or true copies of the judgments or final
orders of both lower courts, it merely requires that the petition be accompanied by
copies of pleadings and other material portions of the record as would support the
allegations of the petition. As to what these pleadings and material portions of the
record are, the Rules grants the petitioner sufficient discretion to determine the same.
This discretion is of course subject to CA’s evaluation whether the supporting
documents are sufficient to make out a prima facie case.23 Thus, Section 3 empowers
the CA to dismiss the petition where the allegations contained therein are utterly
bereft of evidentiary foundation. Since in this case the CA gave due course to
respondent’s Petition for Review and proceeded to decide it on the merits, it can be
fairly assumed that the appellate court is satisfied that respondent has sufficiently
complied with Section 2 of Rule 42.
Besides, our own examination of the CA rollo reveals that the annexes to the position
papers can be found somewhere else in the petition. The annexes to the parties’
respective position papers are the same annexes attached to the Complaint and the
Answer. In fact, Annexes "A" to "H" of the Complaint respectively pertain to the same
documents marked as Annexes "A" to "H" of respondent’s Position Paper. And while
respondent’s Position Paper as attached to the petition does not contain any annexes,
said annexes are nonetheless appended to the Complaint which is also attached to
the petition.
The same is true with Annexes "1" to "6" of petitioner’s Position Paper. Annexes "1",
"2", and "3" are attached to the Petition for Review as Annexes "3", "4", and "5",
respectively, of the Answer. Annex "4" of petitioner’s Position Paper is the Contract of
Lease marked as Annex "C" of the Complaint, while Annexes "5" and "6" are marked
and attached as Annexes "1" and "2", respectively, of the Answer. To our mind, these
are more than substantial compliance with the requirements of the rules. Indeed, if
we are to apply the rules of procedure in a very rigid and technical sense as what the
petitioner suggests in this case, the ends of justice would be defeated. In Lanaria v.
Planta,24 we emphasized that courts should not be so strict about procedural lapses
that do not really impair the proper administration of justice, for rules of procedure
are intended to promote, and not to defeat, substantial justice.25
Allegations of implied new lease or tacita reconduccion cannot oust the MeTC of
jurisdiction over unlawful detainer cases.
Petitioner also contends that the CA grievously erred in reversing the Decision of the
RTC. He maintains that the RTC correctly held that the key issue to be resolved in this
case is the existence of an implied new lease, a matter which is incapable of pecuniary
estimation and, therefore, beyond the MeTC’s jurisdiction.
The argument is bereft of merit. The allegation of existence of implied new lease or
tacita reconduccion will not divest the MeTC of jurisdiction over the ejectment case.
It is an elementary rule that the jurisdiction of the court in ejectment cases is
determined by the allegations pleaded in the complaint26 and cannot be made to
depend upon the defenses set up in the answer or pleadings filed by the defendant.27
This principle holds even if the facts proved during trial do not support the cause of
action alleged in the complaint.28 In connection with this, it is well to note that in
unlawful detainer cases the elements to be proved and resolved are the facts of lease
and expiration or violation of its terms.29
Here, no interpretative exercise is needed to conclude that respondent has complied
with such requirement. In respondent’s Complaint, he specifically alleged that (1) the
former owner, Mr. Chua, and petitioner entered into a contract of lease; (2)
subsequently, respondent purchased the leased premises from Mr. Chua and became
the owner thereof; (3) thereafter, the lease contract between Mr. Chua and petitioner
expired; and (4) petitioner refused to vacate the premises despite the expiration and
non-renewal of the lease.
Besides, we do not agree with the RTC that the MeTC does not have jurisdiction to
resolve the issue of existence of implied new lease in the unlawful detainer case. Tacita
reconduccion refers to the right of the lessee to continue enjoying the material or de
facto possession of the thing leased within a period of time fixed by law. During its
existence, the lessee can prevent the lessor from evicting him from the disputed
premises. On the other hand, it is too well-settled to require a citation that the
question to be resolved in unlawful detainer cases is, who is entitled to de facto
possession. Therefore, since tacita reconduccion is determinative of who between the
parties is entitled to de facto possession, the MeTC has jurisdiction to resolve and pass
upon the issue of implied new lease in unlawful detainer case. In Mid-Pasig Land
Development Corporation v. Court of Appeals,30 we ruled that the MeTC is clothed with
exclusive original jurisdiction over an unlawful detainer case even if the same would
entail compelling the plaintiff therein to recognize an implied lease agreement.
Respondent did not acquiesce to petitioner’s continued possession of subject
premises.
Petitioner likewise claims that the RTC correctly held that there was no sufficient
evidence on record that he received the alleged notice to vacate. While he admits that
a notice to vacate is no longer necessary when the ground for unlawful detainer is the
expiration of the lease, proof that he actually received said notice is still important in
this case in view of his allegation of implied new lease. Citing Article 1670 of the Civil
Code,31 petitioner contends that if at the expiration of the contract of lease the lessee
continued to enjoy the leased property for 15 days with the acquiescence of the
lessor, there is an implied new lease. In this case, the determination of whether or not
his continued stay in the leased premises is with the acquiescence of the lessor hinges
on whether or not he received the notice to vacate. And, as correctly found by the
RTC, he did not receive any notice to vacate.
We are not swayed. Under Article 1670, an implied new lease will set in if it is shown
that: (a) the term of the original contract of lease has expired; (b) the lessor has not
given the lessee a notice to vacate; and (c) the lessee continued enjoying the thing
leased for 15 days with the acquiescence of the lessor. This acquiescence may be
inferred from the failure of the lessor to serve notice to vacate upon the lessee. 32
In the instant case, however, the MeTC and the CA correctly found that there was a
valid demand to vacate. Thus:
Prior to the sale of the property by previous owner Joseph Chua to herein plaintiff,
defendant was formally notified by the previous owner in a letter dated September 1,
2003 (Annex "D" of Complaint, Records, p. 12) of his intention to sell the property but
herein defendant failed to exercise his pre-emptive right to purchase the property.
Thus, the subject premises was sold to plaintiff who became the registered owner
thereof as evidenced by TCT No. 261682 (Annex "A," Complaint, Records, p. 7).
Plaintiff, as new owner/vendee, informed defendant through a letter dated November
3, 2003 (Annex "E," Complaint, Records, p. 13), even prior to the expiration of the
contract that he will be needing the premises thus the contract will not be renewed
or no contract will be executed, and directed defendant to vacate the premises by
January 1, 2004. The said notice was sent by registered mail and by personal service.
The notice sent by registered mail was returned to sender for failure of the defendant
to claim the same at the post office. The unclaimed letter is attached to the plaintiff’s
position paper as Annex "F" (Records, p. 93). Despite notice given to him, defendant
failed to vacate and a formal demand letter dated January 13, 2004 was served to him
personally on January 21, 2004 which he refused to acknowledge that he received the
same. A copy of that same letter was sent by registered mail but defendant refused to
claim the same for which it was returned to sender. The unclaimed letter which was
returned to sender is attached to the plaintiff’s position paper as Annex "G-1"
(Records, p. 96) and the certification from the post office attesting to the fact that
defendant failed to claim the same is attached to the plaintiff’s position paper as
Annex "G" (Records, p. 95). The demand letter dated January 13, 2004 pertains to the
premises presently occupied by defendant. The Contract of Lease (Annex "C," of
Complaint, Records, pp. 10-11) which expired on December 31, 2003 speaks of only
one (1) unit which is the subject matter of this case. Defendant failed to show that the
portion being occupied by him which is the subject matter of this case is covered by
another lease contract.
The Court therefore finds that there was a valid demand to vacate.33
This finding of the MeTC, which was affirmed by the CA, is a factual matter that is not
ordinarily reviewable in a petition for review on certiorari filed under Rule 45 of the
Rules of Court. It is settled that in a petition for review on certiorari, only questions of
law may be raised by the parties and passed upon by this court.1awphi1
Besides, even if we do review the case, there is no cogent reason to disturb the finding
of said courts. Under the rules, if the addressee refuses to accept delivery, service by
registered mail is deemed complete if the addressee fails to claim the mail from the
postal office after five days from the date of first notice of the postmaster.34 Further,
the absence of personal service of notice to vacate in this case could only be attributed
to petitioner’s unexplainable refusal to receive the same. In Co Keng Kian v.
Intermediate Appellate Court,35 we held that "[t]he Court cannot countenance an
unfair situation where the plaintiff in an eviction case suffers further injustice by the
unwarranted delay resulting from the obstinate refusal of the defendant to
acknowledge the existence of a valid demand."
The formal demands to vacate sent to petitioner, coupled with the filing of an
ejectment suit, are categorical acts on the part of respondent showing that he is not
amenable to another renewal of the lease contract. Therefore, petitioner’s contention
that his stay in the subject premises is with the acquiescence of the respondent, has
no leg to stand on.
Petitioner’s alleged preferential right to buy subject premises has no basis.
In view of the above disquisition, petitioner’s claim that he was deprived of his
preemptive rights because he was not notified of the intended sale, likewise crumbles.
Besides, the right of first refusal, also referred to as the preferential right to buy, is
available to lessees only if there is a stipulation thereto in the contract of lease or
where there is a law granting such right to them (i.e., Presidential Decree No. 1517
(1978),36 which vests upon urban poor dwellers37 who merely lease the house where
they have been residing for at least ten years, preferential right to buy the property
located within an area proclaimed as an urban land reform zone). Unlike co-owners
and adjacent lot owners,38 there is no provision in the Civil Code which grants to
lessees preemptive rights. Nonetheless, the parties to a contract of lease may provide
in their contract that the lessee has the right of first refusal.
In this case, there is nothing in the Contract of Lease which grants petitioner
preferential right to buy the subject premises. We are likewise unaware of any
applicable law which vests upon him priority right to buy the commercial building
subject matter of this case. In fact, aside from the sweeping statement that his
preferential right to buy was violated, petitioner failed to cite in his Petition,39 Reply,40
or Memorandum41 any specific provision of a law granting him such right. In other
words, petitioner failed to lay the basis for his claim that he enjoys a preferential right
to buy.
And even assuming that he has, the same will not prevent the ejectment case filed by
the respondent from taking its due course. A contract of sale entered into in violation
of preemptive right is merely rescissible and the remedy of the aggrieved party whose
right was violated is to file an appropriate action to rescind the sale and compel the
owner to execute the necessary deed of sale in his favor. In Wilmon Auto Supply Corp.
v. Court of Appeals,42 we categorically held that an action for unlawful detainer cannot
be abated or suspended by an action filed by the defendant-lesseee to judicially
enforce his right of preemption.
WHEREFORE, the petition is DENIED.
SO ORDERED.

G.R. No. 181182 April 10, 2013
BOARDWALK BUSINESS VENTURES, INC., Petitioner,
vs.
ELVIRA A. VILLAREAL (deceased) substituted by Reynaldo P. Villareal, Jr.-spouse,
Shekinah Marie Villareal-Azugue-daughter, Reynaldo A. Villareal ill-son, Shahani A.
Villareal-daughter, and Billy Ray A. Villareal-son, Respondents.
DECISION
DEL CASTILLO, J.:
"The right to appeal is neither a natural right nor is it a component of due process. It
is a mere statutory privilege, and may be exercised only in the manner and in
accordance with the provisions of law."1
This Petition for Review on Certiorari2 seeks a review of the Court of Appeals' (CA)
April 25, 2007 Resolution3in CA-G.R. SP No. UDK 5711 which dismissed outright
petitioner's Petition. Also assailed is the December 21, 2007 Resolution4 which denied
the Motion for Reconsideration.
Factual Antecedents
Petitioner Boardwalk Business Ventures, Inc. (Boardwalk) is a duly organized and
existing domestic corporation engaged in the selling of ready-to- wear (RTW)
merchandise. Respondent Elvira A. Villareal (Villareal), on the other hand, is one of
Boardwalk’s distributors of RTW merchandise.
On October 20, 2005, Boardwalk filed an Amended Complaint5 for replevin against
Villareal covering a 1995 Toyota Tamaraw FX, for the latter’s alleged failure to pay a
car loan obtained from the former. The case, docketed as Civil Case No. 160116, was
filed with the Metropolitan Trial Court (MeTC) of Manila and was assigned to Branch
27 thereof.
Ruling of the Metropolitan Trial Court
On May 30, 2005, the MeTC rendered its Decision6 favoring Boardwalk, as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
plaintiff and against the defendant adjudging that the former has the right to the
possession of the subject motor vehicle and for the latter to pay the costs of the suit.
SO ORDERED.7
Villareal moved for reconsideration,8 but failed.9
Ruling of the Regional Trial Court (RTC)
She thus appealed10 to the Manila RTC, which court11 issued a Decision12 reversing the
MeTC Decision, thus:
WHEREFORE, the appeal is granted. The assailed judgment of the lower court is
reversed and set aside. Defendant Villareal has the right of possession to and the value
of subject vehicle described in the complaint. Hence, plaintiff is directed to deliver the
subject vehicle to defendant or its value in case delivery cannot be made. The
complaint and counterclaim are both dismissed.
SO ORDERED.13
Boardwalk filed a Motion for Reconsideration,14 but the same was denied by the RTC
in a December 14, 2006 Order,15 which Boardwalk received on January 19, 2007.16 On
February 5, 2007,17 Boardwalk through counsel filed with the Manila RTC a Motion for
Extension of Time to File Petition for Review,18 praying that it be granted 30 days, or
until March 7, 2007, to file its Petition for Review. It paid the docket and other legal
fees therefor at the Office of the Clerk of Court of the Manila RTC.19 On even date,
Boardwalk also filed a Notice of Appeal20 with the RTC which the said court denied for
being a wrong mode of appeal.21
On March 7, 2007, Boardwalk filed through mail22 its Petition for Review23 with the
CA.1âwphi1
Ruling of the Court of Appeals
On April 25, 2007, the CA issued the first assailed Resolution, the dispositive portion
of which reads as follows:
ACCORDINGLY, the Petition for Review is hereby DISMISSED OUTRIGHT.
SO ORDERED.24
In dismissing the Petition for Review, the CA held that Boardwalk erred in filing its
Motion for Extension and paying the docket fees therefor with the RTC. It should have
done so with the CA as required by Section 125 of Rule 42 of the Rules of Court. It held
that as a result of Boardwalk’s erroneous filing and payment of docket fees, it was as
if no Motion for Extension was filed, and the subsequent March 7, 2007 filing of its
Petition with the appellate court was thus late and beyond the reglementary 15-day
period provided for under Rule 42.
The CA added that Boardwalk’s prayer for a 30-day extension in its Motion for
Extension was irregular, because the maximum period that may be granted is only 15
days pursuant to Section 1 of Rule 42. A further extension of 15 days should only be
granted for the most compelling reason which is not obtaining in the present case.
Moreover, it held that Boardwalk’s Petition for Review failed to include a board
resolution or secretary’s certificate showing that its claimed representative, Ma.
Victoria M. Lo (Lo), was authorized to sign the Petition or represent Boardwalk in the
proceedings, which thus rendered defective the Verification and Certification against
forum-shopping. Finally, the CA faulted Boardwalk for its failure to attach to its
Petition copies of the Complaint, Answer, position papers, memoranda and other
relevant pleadings, as required in Sections 2 and 3 26 of Rule 42, thus meriting the
outright dismissal of its Petition for Review.
Boardwalk filed a Motion for Reconsideration27 and Supplemental Motion for
Reconsideration,28 invoking a liberal construction of the Rules in its favor. It further
informed the CA that it had paid the docket fees with the CA Cashier, and submitted
the required secretary’s certificate and additional pleadings in support of its Petition.
In the second assailed December 21, 2007 Resolution subsequently issued, the CA
denied the Motion for Reconsideration and its supplement. It held that despite
curative action, the fact remains that Boardwalk’s Petition was filed beyond the
reglementary 15-day period. Even if technicality were to be set aside and Boardwalk
were to be allowed an extension of 15 days from the filing of the Motion for Extension
on February 5, 2007, or until February 20, 2007, within which to file its Petition, its
actual filing on March 7, 2007 would still be tardy.
Issues
Boardwalk thus filed the instant Petition, raising the following issues for resolution:
PETITIONER IS INVOKING THE LIBERAL CONSTRUCTION OF THE RULES TO EFFECT
SUBSTANTIAL JUSTICE IN ACCORDANCE WITH RULE 1, SECTION 6 OF THE 1997 RULES
OF CIVIL PROCEDURE.
SPECIFICALLY, THE ASSAILED RESOLUTIONS X X X ORDERING THE OUTRIGHT
DISMISSAL OF THE PETITION FOR REVIEW X X X DUE TO PROCEDURAL LAPSES, IN
TOTAL DISREGARD OF THE SUBSTANTIAL ISSUES CLEARLY RAISED THEREAT, ARE
CONTRARY TO EXISTING RULES, LAW, JURISPRUDENCE AND THE PRINCIPLE OF EQUITY
AND SUBSTANTIAL JUSTICE.29
Petitioner's Arguments
In its Petition and Reply,30 Boardwalk invokes the principle that litigations should be
decided on the merits and not on technicalities; that litigants should be afforded the
amplest opportunity for the proper and just disposition of their causes, free from the
constraints of technicalities. It claims that it should not be faulted for the error
committed by its counsel’s clerk in wrongly filing the Motion for Extension and paying
the docket fees with the RTC Clerk of Court. It prays that the Court review the merits
of its case.
As for the defective Verification and Certification of non-forum shopping, Boardwalk
contends that these are formal, not jurisdictional, requisites which could as well be
treated with leniency. Its subsequent submission of the proper secretary’s certificate
should thus have cured the defect. It adds that the same treatment should be
accorded its subsequent payment of the docket fees with the CA Cashier and
submission of the required annexes and pleadings in support of its Petition. It prays
the Court to consider these as substantial compliance with the Rules.
Respondent’s Arguments
In her Comment,31 respondent simply echoes the CA ruling. She insists that
Boardwalk’s reasons for erroneously filing the Motion for Extension and paying the
docket fees in the RTC are flimsy and should not be considered.
Respondent adds that Boardwalk’s Petition raised factual issues relative to the merits
of the case, which may not be the subject of review at this stage.
Our Ruling
The Court denies the Petition.
Petitioner’s case is not unique, and there is no compelling reason to accord it the
privilege it now seeks.
"The right to appeal is neither a natural right nor is it a component of due process. It
is a mere statutory privilege, and may be exercised only in the manner and in
accordance with the provisions of law."32 This being so,
x x x an appealing party must strictly comply with the requisites laid down in the Rules
of Court. Deviations from the Rules cannot be tolerated. The rationale for this strict
attitude is not difficult to appreciate as the Rules are designed to facilitate the orderly
disposition of appealed cases. In an age where courts are bedeviled by clogged
dockets, the Rules need to be followed by appellants with greater fidelity. Their
observance cannot be left to the whims and caprices of appellants. x x x33
In this case, petitioner must comply with the following requirements laid down in Rule
42 of the Rules of Court:
Section 1. How appeal taken; time for filing.
A party desiring to appeal from a decision of the Regional Trial Court rendered in the
exercise of its appellate jurisdiction may file a verified petition for review with the
Court of Appeals, paying at the same time to the clerk of said court the corresponding
docket and other lawful fees, x x x. The petition shall be filed and served within fifteen
(15) days from notice of the decision sought to be reviewed or of the denial of
petitioner’s motion for new trial or reconsideration x x x. Upon proper motion x x x,
the Court of Appeals may grant an additional period of fifteen (15) days only within
which to file the petition for review. No further extension shall be granted except for
the most compelling reason and in no case to exceed fifteen (15) days.
Sec. 2. Form and contents.
The petition shall be x x x accompanied by x x x copies x x x of the pleadings and other
material portions of the record as would support the allegations of the petition.
The petitioner shall also submit together with the petition a certification under oath
that he has not theretofore commenced any other action involving the same issues in
the Supreme Court, the Court of Appeals or different divisions thereof, or any other
tribunal or agency; if there is such other action or proceeding, he must state the status
of the same; and if he should thereafter learn that a similar action or proceeding has
been filed or is pending before the Supreme Court, the Court of Appeals, or different
divisions thereof, or any other tribunal or agency, he undertakes to promptly inform
the aforesaid courts and other tribunal or agency thereof within five (5) days
therefrom.
In addition, the Rules also require that the Petition must be verified or accompanied
by an affidavit by which the affiant attests under oath that he "has read the pleading
and that the allegations therein are true and correct of his personal knowledge or
based on authentic records."34
And finally, Section 3 of Rule 42 provides that non-compliance "with any of the
foregoing requirements regarding the payment of the docket and other lawful fees, x
x x and the contents of and the documents which should accompany the petition shall
be sufficient ground for the dismissal thereof."
Records show that petitioner failed to comply with the foregoing rules.
The Petition must be accompanied by a Verification and Certification against forum
shopping. Copies of the relevant pleadings and other material portions of the record
must likewise be attached to the Petition.
The Rules require that the Petition must be accompanied by a Verification and
Certification against forum shopping. If the petitioner is a juridical entity, as in this
case, it must be shown that the person signing in behalf of the corporation is duly
authorized to represent said corporation. In this case, no special power of attorney or
board resolution was attached to the Petition showing that Lo was authorized to sign
the Petition or represent Boardwalk in the proceedings. In addition, petitioner failed
to attach to the Petition copies of the relevant pleadings and other material portions
of the record.
Petitioner tried to cure these lapses by subsequently submitting a board resolution
showing Lo’s authority to sign and act on behalf of Boardwalk, as well as copies of the
relevant pleadings. Now, it prays that the Court consider these as substantial
compliance with the Rules.
Concededly, this Court in several cases exercised leniency and relaxed the Rules.
However, in this case, petitioner committed multiple violations of the Rules which
should sufficiently militate against its plea for leniency. As will be shown below,
petitioner failed to perfect its appeal by not filing the Petition within the reglementary
period and paying the docket and other lawful fees before the proper court. These
requirements are mandatory and jurisdictional.
Petitioner erroneously paid the docket fees and other lawful fees with the RTC.
Section 1, Rule 42 of the Rules of Court specifically states that payment of the docket
fees and other lawful fees should be made to the clerk of the CA. A plain reading of
the Rules leaves no room for interpretation; it is categorical and explicit. It was thus
grave error on the part of the petitioner to have misinterpreted the same and
consequently mistakenly remitted its payment to the RTC clerk. Petitioner’s
subsequent payment to the clerk of the CA of the docket fees and other lawful fees
did not cure the defect. The payment to the CA was late; it was done long after the
reglementary period to file an appeal had lapsed. It must be stressed that the payment
of the docket fees and other lawful fees must be done within 15 days from receipt of
notice of decision sought to be reviewed or denial of the motion for reconsideration.
In this case, petitioner remitted the payment to the CA clerk long after the lapse of
the reglementary period.
The CA may grant an extension of 15 days only. The grant of another 15-days
extension, or a total of 30-days extension is allowed only for the most compelling
reason.
Petitioner sought an extension of 30 days within which to file its Petition for Review
with the CA. This is not allowed. Section 1 of Rule 42 allows an extension of only 15
days. "No further extension shall be granted except for the most compelling reason x
x x."35 Petitioner never cited any compelling reason.
Thus, even on the assumption that the CA granted Boardwalk a 15-day reprieve from
February 3, 2007, or the expiration of its original reglementary period, 36 it still failed
to file its Petition for Review on or before the February 19, 200737 due date. Records
show that the Petition was actually filed only on March 7, 2007, or way beyond the
allowable February 19, 2007 deadline. The appellate court thus correctly ruled that
this may not simply be brushed aside.
Petitioner’s appeal is not deemed perfected.
More significantly, Section 8 of Rule 42 provides that the appeal is deemed perfected
as to the petitioner "upon the timely filing of a petition for review and the payment of
the corresponding docket and other lawful fees." Undisputably, petitioner’s appeal
was not perfected because of its failure to timely file the Petition and to pay the docket
and other lawful fees before the proper court which is the CA. Consequently, the CA
properly dismissed outright the Petition because it never acquired jurisdiction over
the same. As a result, the RTC’s Decision had long become final and executory.
appeal within the prescribed period, so also does the prevailing party have the
correlative right to enjoy the finality of a decision in his favor.
True it is that in a number of instances, the Court has relaxed the governing periods
of appeal in order to serve substantial justice. But this we have done only in
exceptional cases. Sadly, the instant case is definitely not one of them. 38
At this point, it must be emphasized that since petitioner’s right of appeal is a mere
statutory privilege, it was bound to a strict observance of the periods of appeal, which
requirements are not merely mandatory, but jurisdictional.
Nor may the negligence of Boardwalk’s former counsel be invoked to excuse it from
the adverse effects of the appellate court’s pronouncement. His negligence or mistake
proceeded from carelessness and ignorance of the basic rules of procedure. This does
not constitute excusable negligence that would extricate and excuse Boardwalk from
compliance with the Rules.
Boardwalk's request for the Court to review its case on the merits should be denied
as well. The import of the Court's foregoing pronouncements necessarily renders the
R TC judgment final and unassailable; it became final and executory after the period
to appeal expired without Boardwalk perfecting an appeal. As such, the Court may no
longer review it.
In light of the above conclusions, the Court finds no need to further discuss the other
issues raised by the parties.
WHEREFORE, the Petition is DENIED. The Court of Appeals' April 25, 2007 and
December 21, 2007 Resolutions in CA-G.R. SP No. UDK 5711 are hereby AFFIRMED.
SO ORDERED.

To stress, the right to appeal is statutory and one who seeks to avail of it must comply
with the statute or rules. The requirements for perfecting an appeal within the
reglementary period specified in the law must be strictly followed as they are
considered indispensable interdictions against needless delays. Moreover, the
perfection of an appeal in the manner and within the period set by law is not only
mandatory but jurisdictional as well, hence failure to perfect the same renders the
judgment final and executory. And, just as a losing party has the privilege to file an
 of the parties) with basic monthly salary of €306.00 and other benefits. 6 On January
27, 2008, respondent boarded the vessel.7ChanRoblesVirtualawlibrary

On April 23, 2008, while lifting heavy objects in the course of performing his duties,
respondent experienced low back pain.8 As a result, he was repatriated on June 19,
2008, and was immediately referred to Dr. Benigno A. Agbayani (Dr. Agbayani), the
company-designated doctor.9ChanRoblesVirtualawlibrary

On June 20, 2008, Dr. Agbayani noted that there was no limitation on respondent's
motion but the latter still complained of pain on forward flexion of the lumbar spine.10
On July 7, 2008, respondent's magnetic resonance imaging (MRI) scan revealed that
G.R. No. 204769, June 06, 2016 he was afflicted with "Mild L4-5 disc bulge [but with n]o evidence of a focal disc
herniation."11 As of August 1, 2008, respondent had undergone 13 physical therapy
MAGSAYSAY MARITIME CORP., CSCS BMTERNATIONAL NV AND/OR MARLON* RONO, (PT) sessions. He had shown improvement but still complained of slight but tolerable
Petitioners, v. RODEL A. CRUZ, Respondent. pain upon trunk flexion.12ChanRoblesVirtualawlibrary

DECISION On September 5, 2008, Dr. Agbayani diagnosed respondent with "Discogenic pain
L4/L5; Myofacial pain syndrome erection sprain S/P Provocative Discogram and
DEL CASTILLO, J.: [PJercutaneous Nucleoplasty." He gave respondent an interim disability rating of
Grade 8 for "Moderate rigidity of two thirds loss of motion or lifting power of the
The company-designated doctor is expected to arrive at a definite assessment of the trunk."13ChanRoblesVirtualawlibrary
fitness of the seafarer to work or to determine the degree of his disability within a
period of 120 or 240 days from repatriation, as the case may be. If after the lapse of On September 22, 2008, Dr. Agbayani declared that despite more than 20 PT sessions,
the 120/240-day period the seafarer remains incapacitated and the company- respondent showed little signs of improvement and possible surgical intervention was
designated physician has not yet declared him fit to work or determined his degree of being considered. He noted that respondent would be referred to the Pain
disability, the seafarer is deemed totally and permanently Management Clinic.14ChanRoblesVirtualawlibrary
disabled.1ChanRoblesVirtualawlibrary
On October 2, 2008, Dr. Agbayani reported that the Pain Management Specialist
2
This Petition for Review on Certiorari assails the August 17, 2012 Decision of the Court recommended nucleoplasty, provocative discogram and trigger joint injection on
of Appeals (CA) in CA-GR. SP No. 120464. The CA set aside the March 31, 2011 respondent.15 On November 4, 2008, respondent successfully underwent provocative
Decision3 of the National Labor Relations Commission (NLRC) in NLRC LAC No. 11- discogram and percutaneous nucleoplasty.16 On November 12, 2008, Dr. John Joseph
000944-10, and reinstated the September 27,2010 Decision4 of the Labor Arbiter (LA) O. Laceste (Dr. Laceste), Pain Management Specialist, declared mat respondent's
in NLRC NCR OFW Case No. (M)ll-16203-09 ordering Magsaysay Maritime Corp. "discogenic pain over the L4-5 area has improved by at least 85% to a pain score of 0-
(MMC) and CSCS International NV (CSCS) to jointly and severally pay Rodel A, Cruz 1/10."17ChanRoblesVirtualawlibrary
(respondent) US$39,180.00, as disability compensation, and 10% thereof as attorney's
fees. Also challenged is the December 3,2012 CA Resolution5 denying reconsideration On December 11, 2008, respondent underwent another MRI scan revealing that he
of its August 17,2012 Decision. was suffering from mild degenerative changes in the lumbar spine which remained
unchanged when compared to his July 7, 2008 MRI scan.18 On December 12, 2008, Dr.
Factual Antecedents Agbayani declared that respondent's illness was work-
related.19ChanRoblesVirtualawlibrary
On November 5, 2007, MMC, in behalf of its foreign principal, CSCS, employed
respondent as housekeeping cleaner on board the vessel Costa Fortuna. Respondent's On January 21, 2009, respondent received sickness allowance for 120 days (from June
employment was for eight months (with three months extension upon mutual consent 18,2008 to October 15, 2008) amounting to €1,198.66.20ChanRoblesVirtualawlibrary
On February 12, 2009, Dr. Agbayani reported that respondent's condition had not
improved despite various treatments since April 2008. Nevertheless, he reiterated
that respondent's condition was work-related.21ChanRoblesVirtualawlibrary
On March 10, 2009, respondent's MRI scan showed that there was "small central disc
protrusion with disc desiccation changes at L4-L5 level" but there were no
compression deformities, spondylolisthesis nor spinal canal
stenosis.22ChanRoblesVirtualawlibrary
On June 1, 2009, after almost one year from respondent's repatriation, Dr. Agbayani
gave respondent a disability rating of Grade 8 for "moderate rigidity or two third loss
of motion or lifting power of the trunk."23ChanRoblesVirtualawlibrary
On June 11, 2009, Dr. Laceste noted respondent's slight numbness over his right
buttock and posterior thigh when standing for one to two minutes, and his pain over
the L4-L5 area as well as slight tenderness of his sacro-iliac
joints.24ChanRoblesVirtualawlibrary
Consequently, on November 25, 2009, respondent filed a Complaint25 for permanent
and total disability benefits, sickness allowance, damages and attorney's fees against
MMC, Marlon Rono, its President, and CSCS
(petitioners).26ChanRoblesVirtualawlibrary
On February 5, 2010, respondent's physician-of-choice, Dr. Venancio P. Garduce27 (Dr.
Garduce), opined that it would be impossible for respondent to work as a seaman and
recommended a disability rating of Grade 3.28ChanRoblesVirtualawlibrary
Respondent argued that he is entitled to disability benefits because of the reasonable
connection between his work and his illness. He stressed that before his embarkation
lie was declared fit to work; as such, it can be logically inferred that he acquired his
illness while aboard the vessel and by reason of its harsh working environment. He
added that he is entitled to disability benefits as he already suffered loss and
impairment in his earning capacity. 29ChanRoblesVirtualawlibrary
Respondent denied that he is guilty of medical abandonment and insisted that he did
not cause delay in his treatment.30 According to him, his refusal to undergo surgery
was valid as he previously experienced "pre-operative awareness" which caused post-
traumatic stress disorder. Allegedly, he feared that he would experience the same
trauma if an operation be pursued.31ChanRoblesVirtualawlibrary
For their part, petitioners affirmed that after having been medically repatriated
respondent was diagnosed of mild L4-L5 disc bulge. They, nonetheless, asserted that
respondent underwent PT sessions but in September 2008, he started to malinger and
complained of pain; thus, his attending doctor referred him to a Pain Management
Team. They alleged that respondent abandoned his scheduled nucleoplasty on
October 24, 2008 but admitted that the procedure pushed through on November 4,
2008.32 They also averred that respondent refused to undergo the surgery scheduled
on February 23, 2009.33 They insisted that respondent is estopped from claiming
permanent and total disability benefits because the delay in his treatment is due to
his own fault.34ChanRoblesVirtualawlibrary
Ruling of the Labor Arbiter
On September 27, 2010, the LA rendered his Decision35 ordering MMC and CSCS to
jointly and severally pay respondent disability compensation amounting to
US$39,180.00 or its peso equivalent at the time of payment and 10% thereof as
attorney's fees.
According to the LA, respondent already received siqkness allowance for 120 days
amounting to €1,198.66. Thus, the only remaining issue is whether he is entitled to
disability benefits. On this, the LA gave credence to the fact that respondent was
medically repatriated and that his "lumbajr disc disease (disc desiccation) L4-L5 with
mild disc herniation lumbar" was work-related, as confirmed by the company-
designated doctor himself. Accordingly, the LA awarded disability benefits to
respondent amounting to US$39,180.00 based on the Grade 3 disability rating given
by respondent's physician-of-choice. He also awarded attorney's fees to respondent
as he was compelled to litigate and incur expenses to protect his rights.
Petitioners appealed before the NLRC.
According to petitioners, respondent was guilty of delay and medical abandonment.
They, however, contended that should respondent be entitled to disability benefits,
the same must be pursuant to a Grade 8 disability rating given by the company-
designated doctor. They also posited that the award of attorney's fees was unjustified
as there were valid grounds denying respondent's claim for disability compensation.
Ruling of the National Labor Relations Commission
Oh March 31, 2011, the NLRC modified36 the LA Decision. It found respondent entitled
to partial and permanent disability compensation of Grade 8 amounting to
US$16,795.00.
The NLRC upheld the company-designated physician's Grade 8 disability rating on the
ground that it was supported by medical findings and was arrived at after close
monitoring and treatment of respondent. It also deleted the award of attorney's fees
as petitioners faithfully complied with their duties, including payment! of sickness
allowance.
On May 19, 2011, the NLRC denied37 respondent's Motion for Reconsideration.
Respondent filed a Petition for Certiorari with the CA arguing that the NLRC committed
grave abuse of discretion amounting to lack or excess of jurisdiction when it ruled that
he is not entitled to US$39,180.00 and to attorney's fees.
Ruling of the Court of Appeals
On August 17, 2012, the CA granted38 the Petition and accordingly set aside the March
31, 2011 NLRC Decision. The dispositive portion of the CA Decision reads:
WHEREFORE, premises considered, the petition is GRANTED and the assailed NLRC
Decision dated 31 March 2011 in NLRC LAC No. 11-000944-10 is NULLIFIED and SET
ASIDE. In lieu thereof, the Labor Arbiter's Decision dated 27 September 2010 in NLRC
NCR OFW CASE No. (M)l 1-16203-09 is REINSTATED.39
The CA decreed that while it is a rule that the company-designated physician is tasked
to determine the degree of disability of a seafarer, herein company-designated doctor
assessed respondent's disability as Grade 8 only on June 1, 2009, or almost a year after
his repatriation on June 19, 2008. It also noted that respondent failed to resume
employment even after a year of continuous medical treatment, as he was still under
treatment even until June 11, 2009. Furthermore, the CA held that respondent is
entitled to attorney's fees equivalent to 10% of the total monetary award, pursuant
to Article 220840 of the Civil Code.
On December 3, 2012, the CA denied41 petitioners' Motion for Reconsideration.
Issues
Thus, petitioners filed this Petition raising the following issues:
[CAN] RESPONDENT [BE] PRESUMED TOTALLY AND PERMANENTLY DISABLED
ENTITLING HIM TO MAXIMUM BENEFITS UNDER THE EMPLOYMENT CONTRACT?
AS BETWEEN THE COMPANY-DESIGNATED DOCTORS (WHO ADMINISTERED
TREATMENT AND MONITORED TREATMENT) AND A PRIVATE DOCTOR FROM WHOM
MERELY A 'SECOND' OPINION WAS SOUGHT, WHOSE FINDING MUST
PREVAIL?42cralawred
Petitioners' Arguments
Petitioners posit that credence should be given to the assessment of the company-
designated physician as he regularly monitored and treated respondent. They further
assert that the company-designated doctor gave his declaration on respondent's
condition on the 77th day from his (respondent's) initial referral, and thus within the
240-day period under the prevailing jurisprudence. They likewise maintain that
respondent caused delay in his treatment; as a result he was guilty of medical
abandonment.
Respondent's Argument
Respondent counters that the CA correctly reinstated the LA Decision entitling him to
disability benefits because his earning capacity was impaired by reason of his ailment.
He also claims that he did not cause delay or abandoned his treatment. He stresses
that his refusal to continue with his surgery is justified because it is a normal choice of
a person under normal circumstances. He adds that the brochure given by the
company-designated doctor indicated that the final decision of whether to pursue
surgery or not rests in him. He likewise maintains that he did not malinger since the
feeling of pain is a usual occurrence during an operation.
Our Ruling
The Petition is without merit.
To begin with, there is now no dispute that respondent's illness is work-related, as the
same had been repeatedly confirmed by the company-designated doctor himself. The
remaining issues are: whether respondent is entitled to disability compensation; and,
whether respondent committed medical abandonment, such that, even if he
sustained a disability he is not entitled to any compensation.
Petitioners insist that on the 77th day from respondent's initial referral, the company-
designated doctor gave him a Grade 8 disability assessment, which should have been
given weight and credence. They likewise maintain that respondent committed delay
and medical abandonment since he did not pursue the suggested surgery. As such,
petitioners raise questions of fact, in effect, requiring the Court to re-examine the
probative weight of the evidence adduced.
As a rule, the Court is not a trier of fact and only questions of law are reviewable under
a Rule 45 Petition. This principle applies with greater force in labor cases as questions
of fact are for labor tribunals to resolve. Nonetheless, this rule admits of exceptions
including instances where the findings of the lower courts or tribunals are
contradictory with the other. Here, considering the opposing positions of the LA and
the CA, on one hand, and the NLRC on the other, the Court is compelled to resolve the
factual issues and examine the evidence on record.43ChanRoblesVirtualawlibrary
As above stated, petitioners contend that the company-designated doctor issued his
declaration within the required period; hence, it is this declaration which should have
been the basis of respondent's disability benefits.

The Court is unconvinced.
First, the Court notes that the subject September 5, 2008 Medical Report of the
company-designated doctor was first presented when petitioners appended it to their
Motion for Reconsideration with the CA. It was belatedly adduced even if it appears
to be readily available.
In Misamis Oriental II Electric Service Cooperative v. Cagalawan,44 the Court held that
while strict compliance to technical rules is not required in labor cases, liberal policy
should still be pursuant to equitable principles of law. In this regard, belated
submission of evidence may be allowed only if the delay in its presentation is
sufficiently justified; the evidence adduced is undeniably material to the cause of a
party; and the subject evidence should sufficiently prove the allegations sought to be
established.
In this case, petitioners did not explain the reasons for their failure to present the
September 5, 2008 Medical Report at the earliest opportunity. It was only after an
unfavorable decision was rendered did petitioners present it with the CA. Petitioners'
belated submission of this Report without any explanation casts doubt on its credibility
especially since it does not appear to be a newly discovered
evidence.45ChanRoblesVirtualawlibrary
Second, the September 5, 2008 Report of the company-designated doctor cannot be
considered as material evidence that would support petitioners' position. Neither did
this Report sufficiently prove that respondent is only entitled to a Grade 8 disability
compensation.
Notably, the September 5, 2008 Report provides: "Interim Disability Grade: If a
disability grading will be made today[J our patient falls under 'Moderate rigidity of two
thirds loss of motion or lifting power' - Grade (8) eight."46 Being an interim disability
grade, this declaration is an initial determination of respondent's condition for the
time being. It is only an initial prognosis of the healtli status of respondent because
after its issuance, respondent was still required to return for re-evaluation, and to
continue therapy and medication; as such, it does not fully assess respondent's
condition and cannot provide sufficient basis for the award of disability benefits in his
favor.47ChanRoblesVirtualawlibrary
Moreover, in Carcedo v. Maine Marine Philippines, Inc.,48 the Court did not give
credence to the disability assessment given by the company-designated doctor as the
same was merely interim and not definite. This is because after its issuance, Dario A.
Carcedo (seafarer therein) still continued to require medical attention. Similarly,
herein respondent needed further treatment and physical therapy even after the
Interim Disability Grade was given by the company-designated doctor on September
5, 2008.
Third, we give emphasis to the finding of the CA that Dr. Agbayani in fact issued his
disability rating on June 1, 2009, almost a year from respondent's repatriation.
The company-designated doctor is expected to arrive at a definite assessment of the
seafarer's fitness to work or to determine his disability within a period of 120 or 240
days from repatriation. The 120-day period applies if the duration of the seafarer's
treatment does not exceed 120 days, On the other hand, the 240-day period applies
in case the seafarer requires further medical treatment after the lapse of the initial
120-day period. In case the company-designated doctor failed to issue a declaration
within the given periods, the seafarer is deemed totally and permanently
disabled.49ChanRoblesVirtualawlibrary
Here, it is undisputed that respondent required medical treatment even after the
lapse of 120 days from repatriation. As such, Dr, Agbayani should have made his
definite assessment on respondent's condition within the aforesaid 240-day period.
Unfortunately, Dr. Agbayani failed to timely issue a declaration as he only issued an
assessment on respondent's disability on June 1, 2009, almost one year from the
latter's repatriation. By operation of law, respondent is deemed permanently and
totally disabled and is thus entitled to full disability compensation.
Moreover, by reason of the lapse of the 240-day period, the opinions of the company-
designated physician and of respondent's personal doctor are rendered irrelevant. As
stated, after the lapse of said period, respondent is already deemed totally and
permanently disabled, which entitles him to full disability benefits amounting to
US$60,000.00.50 Notably, in his complaint respondent prayed for total permanent
disability benefits. Also, the medical opinion of his doctor-of-choice was issued only
after the filing of the complaint.
To recapitulate, the company-designated doctor's interim assessment on September
5,2008 is a mere initial finding on respondent's condition; on the other hand, his
disability rating given on June 1, 2009 was issued beyond the 240-day period. Thus,
petitioners' contention - that the disability compensation in favor of respondent must
be based on the disability grading given by the company-designated doctor - is
untenable.
At the same time, the Court observes that while the LA Decision, which the CA
reinstated, decreed that respondent is only entitled to a Grade 3 disability
compensation, the LA repeatedly declared that respondent is in fact entitled to
permanent and total, or to full disability compensation, to wit:
In view of these disputed facts, this Office finds and, so hold, that [petitioners] should
be held liable to [respondent] for total and permanent disability benefits x x x
x x x x
[Respondent] is now in a state of permanent and total disability because of his illness.
He could no longer return to his job as Housekeeping Cleaner, neither can he find any
employment as seaman on board ocean-going vessel. In short, [respondent] is totally
and permanently unfit for sea-service now and in the future.51
Similarly, the CA stressed on respondent's entitlement to permanent and total
disability benefits in this manner:
In arriving at its decision, the NLRC had obviously overlooked the fact that
[respondent's] disability had already rendered him unable to perform his customary
job for more than 120 days - thus making his disability total and permanent, x x x
xxxx
The records show that [respondent] was repatriated to the Philippines on June
19,2008 and had since received continuous medical treatment. It was only a year later,
or on June 1, 2009, that Dr. Agbayani was able to assess [respondent's] disability as
Grade 8. However, even until June 11, 2009, [respondent] was still prescribed
medication and attended to by Dr. Laceste for pain management. Due to his
continuing medical treatment, [respondent] was rendered unable to work or resume
employment for a continuous period of more than 120 days.52
Based on the foregoing, respondent is entitled to permanent and total disability
compensation of US$60,000.00 because of the absence of definite assessment from
the company-designated doctor within the maximum period of 240 days within which
he is allowed to make his declaration; and, by the established fact that respondent is
unable to return to work and had been under continuous treatment even after more
than one year from his repatriation.
Finally, the Court finds no sufficient basis to conclude that respondent is guilty of
medical abandonment.
As discussed, respondent was under continuous treatment from his repatriation on
June 19, 2008 and even until June 11, 2009. Moreover, there is no showing that
surgery was the only way to address respondent's condition as the company-
designated doctor did not inform him of such fact nor warn him of the effects of his
choice. Clearly, respondent did not refuse treatment to address and resolve his
condition.53 In addition, as properly declared by the LA, abandonment cannot be
presumed from the acts of respondent; there must be a deliberate intention on his
part by some overt acts to abandon treatment, which acts are not present
here.54ChanRoblesVirtualawlibrary
In view of the foregoing, the Court holds that respondent is entitled to permanent and
total disability benefits amounting to US$60,000.00.
WHEREFORE, the Petition is DENIED. The August 17, 2012 Decision and December 3,
2012 Resolution of the Court of Appeals in CA-G.R. SP No. 120464 are AFFIRMED with
MODIFICATION that Magsaysay Maritime Corp. and CSCS International NV are ordered
to pay Rodel A. Cruz US$60,000.00 as permanent and total disability benefits, which
shall be paid in its Philippine Peso equivalent at the time of payment.
SO ORDERED.chanroblesvirtuallawlibrary
G.R. No. 206522
DOEHLE-PHILMAN1 MANNING AGENCY INC., DOHLE (IOM) LIMITED AND CAPT.
MANOLO T. GACUTAN, ,Petitioners
vs.
HENRY C. HARO, Respondent.
DECISION
DEL CASTILLO, J.:
"[T]he constitutional policy to provide full protection to labor is not meant to be a
sword to oppress employers. The commitment of this Court to the cause of labor does
not prevent us from sustaining the employer when it is in the right. We should always
be mindful that justice is in every case for the deserving, to be dispensed with in the
light of established facts, the applicable law, and existing Jurisprudence."2
This Petition for Review on Certiorari assails the July 20, 2012 Decision3 of the Court
of Appeals (CA) in CA-GR. SP No. 117988. The CA reversed and set aside the September
28, 20104 and November.30, 20105 Resolutions of the Nation Labor Relations
Commission (NLRC) in NLRC LAC (OFW) No. 04-000295-10 which affirmed the
February 26, 2010 Decision6 of the Labor Arbiter (LA) dismissing the Complaint in
NLRC OFW Case No. 06-09031-09. Accordingly, the CA ordered Doehle-Philman
Manning Agency, Inc. (Doehle-Philman), Dohle (IOM) Limited (Dohle Ltd.) and Capt.
Manolo T. Gacutan (petitioners) to jointly and severally pay respondent Henry C. Haro
permanent and total disability benefits amounting to US$60,000.00 and attorney’s
fees of 10% of the total monetary award. Also assailed is the March 27, 2013 CA
Resolution7 denying petitioners’ Motion for Reconsideration.
Factual Antecedents
On May 30, 2008, Doehle-Philman, in behalf of its foreign principal, Dohle Ltd., hired
respondent as oiler aboard the vessel MV CMA CGM Providencia8 for a period of nine
months with basic monthly salary of US$547.00 and other benefits.9 Before
deployment, respondent underwent pre-employment medical examination (PEME)
and was declared fit for sea duty.10
Respondent stated that on June 1, 2008, he boarded the vessel and assumed his duties
as oiler; however, in November 2008, he experienced heartache and loss of energy
after hammering and lifting a 120-kilogram machine; thereafter, he was confined at a
hospital in Rotterdam where he was informed of having a hole in his heart that needed
medical attention.11
After his repatriation on December 6, 2008, respondent reported to Doehle-Philman
which in turn referred him to Clinico-Med. Respondent claimed that he was confined
for two days in UST12 Hospital and that a heart operation was recommended to him.
He nevertheless admitted that he has not yet undergone any surgery.13 On April 24,
2009, respondent’s personal doctor, Dr. Luminardo M. Ramos (Dr. Ramos), declared
him not fit to work.14
Abesamis declared that respondent’s illness is not work-related, such determination
must prevail.23 They also stressed that the company-designated doctor continuously
treated respondent from his repatriation in December 2008, until April 2009, hence,
her finding that his illness is not work-related must be
respected.24
Finally, petitioners argued that since respondent’s illness is not an occupational
disease, then he must prove that his work caused his illness; because of his failure to
do so, then he is not entitled to disability benefits.25
Ruling of the Labor Arbiter
On February 26, 2010, the LA dismissed26 the case for lack of merit. The LA noted that
Dr. Abesamis declared that respondent’s illness is not work-related; therefore, it is
incumbent upon respondent to prove otherwise. He further held that even
respondent’s personal doctor, Dr. Ramos, did not state that his illness is work-related
as he only declared that respondent is not fit for work.

Consequently, on June 19, 2009, respondent filed a Complaint for disability benefits, Ruling of the National Labor Relations Commission
reimbursement of medical expenses, moral and exemplary damages, and attorney’s
fees against petitioners.15 Respondent claimed that since he was declared fit to work
Respondent interposed an appeal. He maintained that he is entitled to permanent and
before his deployment, this proved that he sustained his illness while in the
total disability benefits because he underwent the PEME and was declared fit to work;
performance of his duties aboard the vessel; that he was unable to work for more than
and his illness transpired while he was in the performance of his duties and during the
120 days; and that he lost his earning capacity to engage in a work he was skilled to
effectivity of his employment contract.
do. Thus, he insisted he is entitled to permanent and total disability benefits.16
On September 28, 2010, the NLRC dismissed27 the appeal. It found no sufficient
For their part, petitioners alleged that respondent boarded the vessel on June 2, 2008;
evidence that respondent’s illness is work-connected. It decreed that instead of
that on or about November 21, 2008, respondent was confined at a hospital in
establishing that the alleged hole in his heart was work-related,
Rotterdam; and that upon repatriation, he was referred to Dr. Leticia Abesamis (Dr.
Abesamis), the company-designated doctor, for treatment.17
respondent focused more on his inability to work for more than 120 days. It also
explained that respondent’s reliance on his PEME is misplaced as the same is neither
Petitioners denied that respondent has a hole in his heart. Instead, they pointed out
rigid nor exploratory. It likewise reiterated the finding of the LA that even respondent’s
that on December 27, 2008, Dr. Abesamis diagnosed him of "aortic regurgitation,
personal doctor did not pronounce his condition as work-connected, and only
moderate" but declared that his condition is not work-related.18 They averred that
declared him unfit to resume sea duty.
despite such declaration, they still continued with respondent’s treatment.19
However, on January 19, 2009, Dr. Abesamis declared that respondent had not
On November 30, 2010, the NLRC denied28 respondent’s Motion for Reconsideration.
reported for follow up despite repeated calls.20 On April 8, 2009, the company-
designated doctor reported that respondent refused surgery.21 And on April 15, 2009,
she reiterated that respondent’s condition is not work-related.22 Ruling of the Court of Appeals

Petitioners insisted that the determination of the fitness or unfitness of a medically

repatriated seafarer rests with the company-designated physician; and since Dr.
Respondent filed a Petition for Certiorari with the CA arguing that the NLRC committed
grave abuse of discretion in finding him not entitled to disability benefits, moral and
exemplary damages, and attorney’s fees.
On July 20, 2012, the CA granted29 the Petition and concomitantly reversed and set
aside the September 28, 2010 and November 30, 2010 NLRC Resolutions. The decretal
portion of the CA Decision reads:
WHEREFORE, the foregoing considered, the present petition is hereby GRANTED and
the assailed Resolutions [dated] 28 September 2010 and 30 November 2010 [are]
REVERSED and SET ASIDE. Accordingly, private respondents are hereby held jointly and
severally liable to pay petitioner permanent and total disability benefits in the sum of
US$60,000.00 and attorney’s fees of ten percent (10%) of the total monetary award,
both at its peso equivalent at the time of actual payment.
SO ORDERED.30
According to the CA, the NLRC committed grave abuse of discretion in affirming the
LA Decision dismissing the Complaint. The CA gave credence to respondent’s
arguments that he acquired his illness during his employment contract with
petitioners; and that his illness has rendered him totally and permanently disabled as
he had not been able to perform his customary work for more than 120 days.
On March 27, 2013, the CA denied31 petitioners’ Motion for Reconsideration.
Thus, petitioners filed this Petition stating that:
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS, REVERSIBLE AND GROSS
ERROR IN LAW BASED ON THE FOLLOWING GROUNDS:
A. In failing to uphold the legal and jurisprudential principle that a writ of
certiorari may be issued only for the correction of errors of jurisdiction or
grave abuse of discretion amounting to lack or excess of jurisdiction which is
absolutely lacking in this case.
B. In utilizing [r]espondent’s alleged inability to work for a period exceeding
120 days as sole basis for entitlement to permanent total disability benefits
in absolute disregard of the provisions of the POEA Standard Employment
Contract making work-relation as a condition sine qua non for compensability
of an illness or injury.
C. In awarding ten percent (10%) attorney’s fees in favor of [r]espondent
solely on the ground that he was constrained to engage the services of
counsel contrary to the well-entrenched principle that attorney’s fees shall
only be awarded upon a showing that the petitioner acted in gross and
evident bad faith.32
Petitioners’ Arguments
Petitioners posit that no abuse of discretion may be imputed against the NLRC because
its findings and conclusions were based on the facts and evidence on record. Thus,
they claim that the CA erred in setting aside the NLRC
Resolutions and in not upholding that a writ of certiorari may be issued only for the
correction of errors of jurisdiction or grave abuse of discretion amounting to lack or
excess of jurisdiction.33
Additionally, petitioners insisted that the CA erred in granting permanent and total
disability benefits in favor of respondent on the sole basis that he was unable to work
for a period exceeding 120 days.34 They argue that since respondent’s illness is not
an occupational disease then there must be causal connection between his work and
his illness. They contend that the burden to prove such connection is upon
respondent. They added that there is no proof that the nature of respondent’s job
increased the risk of his illness.35
Lastly, petitioners reiterate that the company-designated doctor continuously treated
respondent for a period of about four months; that nothing in the records disproves
the finding of company-designated physician that respondent’s condition is not job-
related; that since respondent’s illness is not work-related then, the company-
designated doctor is not obliged to make a declaration on his fitness or unfitness to
work; and, that respondent’s personal doctor merely concluded that respondent is
"not fit" but he did not also make any declaration on whether respondent’s condition
is work-related or not.36
Respondent’s Arguments
Respondent contends that the CA properly ruled that he is entitled to permanent and
total disability benefits.37 He insists that since his illness is not listed as an
occupational disease, he is "relieved of the burden to show the causation [of] his rights
over the disability benefits"38 as his illness is disputably presumed work-related. 39
He maintains that he sustained his illness while employed as oiler and his condition
resulted to the loss of his earning capacity.40
Issue
Is the CA correct in setting aside the NLRC Resolutions denying respondent’s claim for
permanent and total disability benefits?
Our Ruling
The Court finds merit in the Petition.
This Court does not review factual issues as only questions of law can be raised in a
Rule 45 Petition. However, such rule admits of exceptions including a situation where
the factual findings of the tribunals or courts below are conflicting. Here, there being
contrary findings of fact by the LA and NLRC, on one hand, and the CA, on the other,
we deem it necessary to make our own determination and evaluation of the evidence
on record.41
Essentially, petitioners claim that respondent is not entitled to permanent and total
disability benefits on the sole basis that he was unable to work for more than 120 days.
The Court agrees.
The Standard Terms and Conditions Governing the Employment of Filipino Seafarers
On-Board Ocean-Going Vessels (POEA-SEC), particularly Section 20(B) thereof,
provides that the employer is liable for disability benefits when the seafarer suffers
from a work-related injury or illness during the term of his contract. To emphasize, to
be compensable, the injury or illness 1) must be work-related and 2) must have arisen
during the term of the employment contract.42
In Jebsen Maritime, Inc. v. Ravena,43 the Court held that those diseases not listed as
occupational diseases may be compensated if it is shown that they have been caused
or aggravated by the seafarer’s working conditions. The Court stressed that while the
POEA-SEC provides for a disputable presumption of work-relatedness as regards those
not listed as occupational diseases, this presumption does not necessarily result in an
automatic grant of disability compensation. The claimant still has the burden to
present substantial evidence or "such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion"44 that his work conditions caused or at
least increased the risk of contracting the illness.45
In this case, considering that respondent did not suffer from any occupational disease
listed under Section 32-A of the POEA-SEC, then to be entitled to disability benefits,
the respondent has the burden to prove that his illness is work-related. Unfortunately,
he failed to discharge such burden.
Records reveal that respondent was diagnosed of aortic regurgitation, a heart
"condition whereby the aortic valve permits blood ejected from the left ventricle to
leak back into the left ventricle."46 Although this condition manifested while
respondent was aboard the vessel, such circumstance is not sufficient to entitle him
to disability benefits as it is of equal importance to also show that respondent’s illness
is work-related.
In Ayungo v. Beamko Shipmanagement Corporation,47 the Court held that for a
disability to be compensable, the seafarer must prove a reasonable link between his
work and his illness in order for a rational mind to determine that such work
contributed to, or at least aggravated, his illness. It is not enough that the seafarer’s
injury or illness rendered him disabled; it is equally necessary that he establishes a
causal connection between his injury or illness, and the work for which he is
engaged.48
Here, respondent argues that he was unable to work as a seaman for more than 120
days, and that he contracted his illness while under the employ of petitioners.
However, he did not at all describe his work as an oiler, and neither did he specify the
connection of his work and his illness.
In Panganiban v. Tara Trading Shipmanagement, Inc.,49 the Court denied the claim for
disability benefits of a seafarer, who was an oiler like herein respondent. The Court
held that petitioner therein failed to elaborate on the nature of his work or to even
specify his tasks as oiler which rendered it difficult to determine a link between his
position and his illness.
The Court is confronted with a similar situation in this case. Respondent simply relied
on the presumption that his illness is work-related. He did not adduce substantial
evidence that his work conditions caused, or at the least increased the risk of
contracting his illness. Like in Panganiban, herein respondent did not elaborate on the
nature of his work and its connection to his illness. Certainly, he is not entitled to any
disability compensation.
In an attempt to establish work-relatedness, respondent stated in his Memorandum
before the Court that his illness is compensable due to stress.50 Aside from being
belatedly argued, such claim is unmeritorious as it still failed to prove the required
linkage between respondent’s work and his illness to entitle him to disability benefits.
In this regard, we quote with approval the pronouncement of the NLRC as follows:
x x x [Respondent] admitted that he was told by the attending physician that ‘his heart
has a hole somewhere in the left ventricle’ x x x. Instead of showing how a hole in the
heart may be work[-]related, [respondent] argued on his being ‘unable to perform his
customary work for more than 120 days’ x x x. He stressed in his Appeal that
‘probability’ is the ultimate test of proof in compensation proceedings, but he did not
cite any probable circumstance which could have made [a] hole in the heart [w]ork[-
]related.
xxxx
WHEREFORE, the Petition is GRANTED. The July 20, 2012 Decision and March 27, 2013
Resolution of the Court of Appeals in CA-G.R SP No. 117988 are REVERSED and SET
ASIDE. Accordingly, the Complaint is DISMISSED for lack of merit.
SO ORDERED.

x x x [T]o be entitled to compensation and benefits, the seafarer must prove by

substantial evidence that he contracted the illness during the term of his contract and
[that] such infirmity was work-related or at the very least aggravated by the conditions
of the work for which he was engaged. Failing on this aspect, the assertion of
[respondent] that his illness was work-connected is nothing but an empty imputation
of fact without any probative weight.51
G.R. No. 202859, November 11, 2015

Moreover, the company-designated doctor determined that respondent’s condition

NEW FILIPINO MARITIME AGENCIES, INC., TAIYO NIPPON KISEN CO., LTD., AND
is not work-related.
ANGELINA T, RIVERA, Petitioners, v. VINCENT H. D ATAYAN -HEIR OF SIMON VINCENT
H. DATAYAN III,1Respondent.
Section 20(B)(3) of the POEA-SEC provides that the company-designated doctor is
tasked to determine the fitness or the degree of disability of a medically repatriated
DECISION
seafarer.52 In addition, the company-designated doctor was shown to have closely
examined and treated respondent from his repatriation up to four months thereafter.
DEL CASTILLO, J.:
Thus, the LA and the NLRC's reliance on the declaration of the company-designated
doctor that respondent's condition is not work-related is justified. 53
As a rule, the death of a seafarer during the term of his employment makes his
employer liable for death benefits. The employer, may, however, be exempt from
The Court also notes that even respondent's physician of choice made no
liability if it can successfully establish that the seafarer's death was due to a cause
pronouncement whether his condition is work-related or not.1âwphi1 In his one-page
attributable to his own willful act.2
medical report, Dr. Ramos only stated that respondent is not fit for work. He neither
stated that respondent's condition is· not work-related nor did he expound on his
This Petition for Review on Certiorari assails title February 22, 2012 Decision3 of the
conclusion that respondent is not fit for work.
Court of Appeals (CA) in CA-G.R. SP No. 119775. The CA granted the Petition for
Certiorari filed therewith and reversed and set aside the October 28, 2010 Decision 4
Lastly, the Court holds that the fact that respondent passed the PEME is of no moment
and March 15, 2011 Resolution5 of the National Labor Relations Commission (NLRC)
in determining whether he acquired his illness during his employment. The PEME is
in NLRC LAC No. 07-000536-10, which, in turn, affirmed the May 31, 2010 Decision6
not exploratory in nature. It is not intended to be a thorough examination of a person's
of Labor Arbiter Arden S. Anni (LA) dismissing the complaint in NLRC-NCR OFW Case
medical condition, .and is not a conclusive evidence that one is free from any ailment
No. (M)05-07052-09.
before deployment.54 Hence, it does not follow that because respondent was
declared fit to work prior to his deployment, then he necessarily sustained his illness
Likewise challenged is the July 24, 2012 CA Resolution7 denying the motion for
while aboard the vessel.
reconsideration for lack of merit.

Given all these, the Court finds that the CA erred in setting a8ide the NLRC Resolutions,
which affirmed the dismissal of the Complaint. The findings and conclusions arrived at
by the NLRC were not tainted with grave abuse of discretion as respondent's claim for
disability benefits is unsupported by substantial evidence. Indeed, when the evidence
adduced negates compensability, the claim must necessan1y fail. 55
Factual Antecedents
On August 8, 2007, New Filipino Maritime Agencies, Inc. (NFMA), for and on behalf of
St. Paul Maritime Corp. (SPMC), employed Simon Vincent Datayan II (Simon) as deck
cadet on board the vessel Corona Infinity. His employment was for nine months with Petitioners also averred that during a search made on the vessel, a note from Simon
basic monthly salary of US$23 5.00.8 Prior to his deployment, Simon underwent pre- was found.21
employment medical examination (PEME) and was declared fit for sea duties. On
August 17, 2007, he boarded the vessel and assumed his duties as deck cadet. 9 Petitioners argued that respondent had no cause of action against them because
Simon's death was a result of his (Simon's) deliberate act. They insisted that based on
On December 30,2007, at 12:40 a.m., the Master authorized the conduct of an the Philippine Overseas Employment Administration (POEA) Standard Employment
emergency fire drill in which the crew participated. At about 1:25 a.m., he declared Contract (SEC) and CBA, a complainant is not entitled to death benefits when the
that Simon jumped overboard. A futile search-and-rescue operation ensued. After a cause of the seaman's death was the latter's willful act.22 Petitioners added that the
few weeks, Simon was declared missing and was presumed dead.10 Master's Report, Statement of Facts, Marine Note of Protest and Investigation Report
conclusively proved that Simon committed suicide. They stated that this conclusion
Simon's father, Vincent H. Datayan (respondent), alleged that he went to NFMA to was bolstered by the suicide note found on the vessel, signed by Simon himself. 23
claim death benefits but his claim was unheeded.11 On May 11, 2009, he filed a
complaint12 for death benefits and attorney's fees against NFMA, Taiyo Nippon Kisen Ruling of the Labor Arbiter
Co., Ltd.,13 and Angelina T. Rivera (petitioners).
On May 31, 2010, the LA dismissed the complaint.24 The LA held that Simon's suicide
Respondent averred that because Simon died during the term of his employment, the was established by the evidence on record. Specifically, the Master's Report, as
provisions of the collective bargaining agreement (CBA) among All Japan Seamen's corroborated by Simon's suicide note, showed that he voluntarily jumped overboard.
Union, Associated Marine Officers' and Seamen's Union of the Philippines (AMOSUP), The LA stated that ''the signature of the deceased seafarer in said note and in his POEA
and the International Mariners Management Association of Japan, must be applied in Contract would show similarity, if not identity. To say that it was fabricated or
the grant of death benefits and burial assistance in his favor, being the heir of Simon.14 concocted will not lessen the credibility of the suicide note, absent any concrete
evidence to the contrary."25cralawred
Respondent also stated that the fire drill was conducted at 12:40 a.m. where there
was heavy concentration of fishing boats in the area; and during which the water Ruling of the National Labor Relations Commission
temperature was expected to cause hypothermia. He asserted that petitioners were
presumed to be at fault or had acted negligently, unless they could prove that Simon's On appeal, the NLRC affirmed the LA Decision.26 Like the LA, the NLRC gave probative
death was due to causes not legally compensable.15 He declared that there was no weight to the suicide note, the Master's Report, along with other pieces of
evidence that Simon committed suicide and maintained that his death was a result of documentary evidence adduced, to establish that Simon committed suicide. It held
negligence and reckless instruction of the Master.16 that considering that the death of the seafarer was due to his willful act, then his heir
is not entitled to his death benefits.
On the other hand, petitioners alleged that on December 29/2007, the crew, except
those on duty, were in the mess hall for a birthday celebration. They stated that Simon On March 15, 2011, the NLRC denied respondent's motion for reconsideration.27
was invited by the Master to join the party but he refused.17 At about 12:40 a.m. of
December 30, 2007, the Master ordered the conduct of a fire and emergency drill. Ruling of the Court of Appeals
After the drill, a crew meeting was held where the Master reprimanded Simon for his
poor performance. They stated that Simon left even before the meeting was Respondent then filed a Petition for Certiorari with the CA maintaining that there was
concluded. Thus, the Master ordered the crew to search for him. At about 1:25 a.m. no evidence that Simon committed suicide hence his death is compensable.
to 1:30 a.m. of December 30, 2007, Raymond Ocleasa (Ocleasa) saw Simon jump
overboard.18 On February 22, 2012, the CA rendered the assailed Decision,28 finding for respondent,
the decretal portion of which reads:chanRoblesvirtualLawlibrary
Additionally, petitioners declared that they exerted efforts to search, locate and
rescue Simon.19 They alleged that the vessel retraced its course to where he fell. The WHEREFORE, the petition for certiorari is GRANTED. The assailed October 28, 2010
Master also informed the Japan Coast Guard about the incident. In response, the Decision and March 15,2011 Resolution of public respondent are REVERSED and SET
Yokohama Coastguard Patrol conducted a search-and-rescue operation to no avail.20 ASIDE. A new judgment is rendered ordering private respondents New Filipino
Maritime Agencies, Inc. and/or Taiyo Nippon Kisen Co., Ltd. and Angelina T. Rivera to
pay petitioner Vincent H. Datayan as heir of Simon Vincent H. Datayan II, the following:
1. US$50,000.00 or its Philippine currency equivalent as death benefits
in accordance with the 2000 POEA Amended Standard Terms and
Conditions Governing the Employment of Filipino Seafarers on
Board Ocean[-]Going Vessels;
2. US$1,000.00 or is [sic] Philippine currency equivalent as burial
assistance;
3. P50,000.00 as moral damages and P25,000.00 as exemplary
damages;
4. Attorney's fees equivalent to 10% of the total monetary awards; and
5. Legal interest on the foregoing amounts from the date of filing of
the complaint until fully paid.
SO ORDERED.29ChanRoblesVirtualawlibrary
cralawlawlibrary
The CA explained that it was beyond question that Simon died aboard the vessel and
during the effectivity of his contract, thus, respondent is entitled to receive death
benefits arising therefrom. It found that petitioners' evidence failed to prove that
Simon committed suicide; and ruled that the Master who executed and signed the
Master's Report, Marine Note of Protest and Statement of Facts failed to give positive
testimony ascertaining Simon's actual suicide. It further pointed out that the crew
members who signed the Investigation. Report had no personal knowledge of Simon's
suicide. It added that Ocleasa, the alleged witness of the incident, did not sign the
report or issue a sworn statement on the matter.
In addition, the CA stated that Simon underwent PEME and was not declared
emotionally unfit. As such, it gave no probative weight to the alleged suicide note of
Simon.
Finally, the CA reasoned that in computing the death benefits in favor of respondent,
the applicable provisions are those under the POEA SEC not the CBA which covers
disability benefits only; moreover, there was no evidence that Simon was an AMOSUP
member.
On July 24,2012, the CA denied petitioners' motion for reconsideration.30 Hence,
petitioners filed the instant Petition arguing that:chanRoblesvirtualLawlibrary
I. x x x the Court of Appeals committed serious, reversible error of law
in awarding death benefits in favor of respondent Mr. Vincent H.
Datayan II despite the ruling of this Honorable Court in the case of
Reyes vs. Maxim's Tea House, that findings of fact of quasi-judicial
bodies like the NLRC, particularly when they coincide with those of
the Labor Arbiter and if supported by substantial evidence, are
accorded respect and even finality by appellate courts.
II. x x x the Court of Appeals committed serious, reversible error of law
in holding that the death of the deceased seafarer was compensable
as the defense of suicide was not established with substantial
evidence despite the suicide note made by the deceased seafarer
whose authenticity was affirmed by the Labor Arbiter and the First
Division of the NLRC.32
III. x x x the Court of Appeals committed serious, reversible error of law
in awarding damages, attorney's fees and legal interest in favor of
respondent. The award of damages and attorney's fees has no basis
as the denial of respondent's claim for death benefits was done in
good faith. Further, the award of legal interests has no basis in fact
and in law.33
cralawlawlibrary
Petitioners submit that the documentary evidence established that Simon killed
himself, which makes respondent not entitled to death benefits. They contend the LA
and the NLRC found said documents to be authentic and are sufficient proof that the
cause of Simon's death was his willful act of committing suicide.
Petitioners posit that the CA erred in holding that the best evidence to prove Simon's
alleged suicide was his body, which was never found. They added that it would be
unjust to hold that the fact of death was established but its cause was not shown from
the evidence on record. They further aver that to follow this line of reasoning the fact
of death must be established by clear and convincing evidence. As such, according to
petitioners, respondent's cause of action would have accrued only after four years
from the time Simon was presumed dead on December 30, 2007.
Likewise, petitioners state that the Marine Note of Protest, Master's Report,
Statement of Facts and Investigation Report were not hearsay evidence because they
were official documents issued by the Master. Also, they point out that these
documents were notarized and were authenticated by an affidavit signed by the
Master.
Petitioners also explain that the absence of signature of Ocleasa was addressed in the
Investigation Report. The report indicated that Ocleasa had already disembarked
when the investigation was conducted; he, nonetheless, reported to the local agents
and narrated what he witnessed on the vessel.
Petitioners emphasize the finding of the LA that the signatures in the alleged suicide
note and in the POEA contract were the same, if not identical.
Lastly, petitioners allege that damages were improperly awarded in favor of
respondent considering that necessary procedures were undertaken to locate Simon.
They also state that investigation was conducted to gather information from the crew
regarding the circumstances surrounding his death.
For his part, respondent reiterates that there was no evidence that Simon committed
suicide and that his death was a result of the Master's negligence. He insists that the
alleged suicide note could not have been written by Simon considering the proximity
of events, that is, at 12:40 a.m., the fire drill was conducted and at 1:25 a.m., Simon
was said to have jumped overboard. He asserts that he is entitled to compensation for
the death of his son because he had established that he died during the term of his
employment contract with petitioners.
Issue
Is the CA correct in finding that the NLRC committed grave abuse of discretion in
denying respondent's claim for death benefits?
Our Ruling
In labor cases, the review of the Court under Rule 45 of the Rules of Court involves the
determination of the legal correctness of the CA Decision. This means that the Court
must ascertain whether the CA properly determined the presence or absence of grave
abuse of discretion in the NLRC Decision. Simply put, "in testing for legal correctness,
the Court views the CA Decision in the same context that the petition for certiorari it
ruled upon was presented to it."34 It entails a limited review of the acts of the NLRC,
of whether it committed errors of jurisdiction. It does not cover the issue of whether
the NLRC committed any error of judgment, unless there is a showing that its findings
and conclusion were arbitrarily arrived at or were not based on substantial evidence.35
In this case, both the LA and the NLRC ruled that respondent's claim for death benefits
was without basis. They agreed that Simon committed suicide, as principally
established by the Master's Report and Simon's suicide note. The CA ruled otherwise.
It gave no weight to the suicide note because Simon underwent the PEME and was
declared fit to work. The CA also refused to accord probative value to the Master's
Report, among others, because the Master gave no positive testimony on Simon's
actual suicide.
To determine whether the CA correctly found that the NLRC gravely abused its
discretion in finding that there is substantial evidence - or such relevant evidence a
reasonable mind might accept as adequate to support a conclusion 36 - that Simon
committed suicide, it becomes imperative to resolve whether the parties discharged
their respective burdens of proof and the corresponding shift in the burden of
evidence in this case.37
As claimant for death benefits, respondent has the burden to prove by substantial
evidence that his son's death is work-related and that it transpired during the term of
his employment contract. In this respect, respondent has discharged his burden. It is
beyond question that Simon died during the term of his contract. The next question is
whether Simon's death was due to his deliberate act. If such is the case, then
respondent is not entitled to death benefits. That Simon's death was a result of his
willful act is a matter of defense.38 Thus, petitioners have the burden to prove this
circumstance by substantial evidence.
The Court finds that petitioners discharged their burden to prove that Simon
committed suicide. The Master's Report39 clearly described the situation on the vessel
prior to, during and after the time that Simon went overboard, to
wit:chanRoblesvirtualLawlibrary
x x x WE CONDUCTED EMERGENCY FIRE DRILL AT NIGHT TIME 0040LT 30th DECEMBER
2007/ 1540TC 29th DECEMBER 2007. AFTER THE DRILL AT ABOUT 0055LT WE
CONDUCTED MEETING AT CREW MESSHALL FOR MASTER'S EVALUATION AND AT THE
SAME TIME SAFETY MEETING DURING EVALUATION, I STRONGLY MENTIONED ABOUT
HIS (SIMON'S) BEHAVIOUR ON BOARD THE SHIP TO MOTIVATE HIM AND TO IMPROVE
HIS PERFORMANCE SINCE HE IS A DECK CADET AND ABOUT TO BE PROMOTED AS
ORDINARY SEAMAN x x x
x x x AFTER THE MEETING [I] OBSERVED THAT HE WAS NOT AROUND IN THE
MESSHALL. KNOWING THAT HE WAS SLIGHTED I ORDER TO LOOK FOR HIM IN WHICH
THE CREW COMPLIED. ONE OF THE CREW WIPER RAYMOND C. OCLEASA xxx SAW
DECK CADET SIMON VINCENT H. DATAYAN II WAS STANDING [SIC] ON THE FAIRLEAD
PORT QUARTER AND AT THAT POINT HE (WIPER) SAW TORCH LIGHT PASS HIS (DECK
CADET) FACE AND CAUGHT HIS (DECK CADET) ATTENTION THEN WHEN HE
ATTEMPTED TO JUMP, HE (WIPER) CALLED HIS NAME BUT HE (DECK CADET) JUMPED
OVERBOARD. THEN WIPER WENT TO SHIP'S OFFICE AND DIAL 0 FOR PUBLIC ADDRESS
AND SHOUT MANOVERBOARD PORTSIDE. BUT THAT ANNOUNCEMENT WAS NOT
CLEAR ENOUGH. SO WHEN I REACH THE BRIDGE I ASKED SECOND OFFICER WHICH
SIDE HE FELL OVERBOARD BUT SECOND OFFICER ALSO NOT SURE [SIC] WHICH SIDE
HE FELL. IN ORDER TO RETURN I ORDERED HARD STARBOARD TO MANEUVER
WILLIAMSON TURN AND RETURN TO RECIPROCAL COURSE AND DROP LIFEBOUY WITH
BOUYANT SMOKE SIGNAL AND SELF IGNITING LIGHT. TURN ON ALL DECK LIGHTS AND
POSTED LOOKOUTS x x x40ChanRoblesVirtualawlibrary You suffered for not letting myself obey my Master for a drink [sic], of which, he
cralawlawlibrary commenced a drill w/out anyones [sic] idea[.]

At the same time, the Statement of Facts41 submitted by petitioners indicated that Sayonara & God bless.
after the vessel retraced its course to where Simon fell, the incident was reported to
the Japan Coast Guard and to petitioners' local agents in the Philippines. The w/ you always.
Yokohama Coastguard Patrol also conducted search-and-rescue but to no avail. Simon
cralawlawlibrary
Moreover, in their Investigation Report,42 the crew described Simon as a "very silent
person, bright student, [f]ast learner but very sensitive person and will not talk unless The suicide note is informative as to why Simon committed suicide. He declined to join
you x x x question him. No problems with anybody since he embarked the vessel [sic]." the party held prior to the drill and was reprimanded for his poor performance in said
drill. It can, thus, be inferred from the note that he blamed himself for the difficulties
The Master Report and Statement of Facts were executed by the Ship Master Arthur he assumed to have caused his colleagues.
Evangelista, who also subscribed and swore to his statements before a Notary Public.43
As such, to refute petitioners' position that Simon committed suicide, the burden of
In Unicol Management Services, Inc. v. Malipot,44 the Court considered the Master's evidence shifts to respondent. Nonetheless, respondent failed to discharge his
Report and the Investigation Report, among others, in ruling that the seaman's burden. Respondent relies on the alleged negligence of the Master in ordering the
beneficiaries were not entitled to death benefits. It noted that these documents conduct of the drill and argues that Simon could not have written a suicide note
completely detailed the events that transpired prior to and the circumstances leading because of the proximity of the time when the drill was conducted and the time when
to the discovery of his death by suicide. Simon jumped overboard. Respondent presented no proof that said suicide note was
fabricated, as no specimen of Simon's handwriting was submitted to prove that it was
Similarly, in the instant case, the Master's Report as well as the Statement of Facts not written by him.
described the events that occurred prior to, during and after the incident when Simon
went overboard. In particular, Simon declined the Master's invitation for him to join On the contrary, the Court shares the observation of the LA that the signature47 in the
the party; thereafter, the Master reprimanded him because he performed poorly in suicide note and the signature48 of Simon in his employment contract appear to be
the drill; Simon left the meeting and was later seen to jump overboard by Ocleasa. the same.
Added to this narration is the statement of the crew in the Investigation Report that
Simon was a "very sensitive" person. Hence, by substantial evidence, there are adequate reasons and proof that Simon
committed suicide.
Also, the Investigation Report addressed the question on why Ocleasa did not sign said
report. As stated therein, he already disembarked from the vessel when the report Under Section 20(D) of the POEA SEC,49 no compensation or benefits shall arise in case
was executed and was investigated at the (local) office, where he stated that he saw of death of a seafarer resulting from his willful act, provided that the employer could
Simon jump overboard.45 prove that such death is attributable to the seafarer.

More importantly, the fact that Simon committed suicide is bolstered by the suicide Although Simon died during the term of his contract with petitioners, still, respondent
note that he executed. His note46 reads:chanRoblesvirtualLawlibrary is not entitled to receive benefits arising from his death. As clearly established, Simon
died by his willful act of committing suicide and death under that circumstance is not
0100LT Dec. 30, 2007 compensable under the POEA SEC.

Dear loved ones & shipmates, In consideration of the foregoing, the Court finds that the CA erred in setting aside the
NLRC Decision which affirmed the LA Decision dismissing the complaint for lack of
I cannot take it anymore. Sorry for letting you pay for my shortcomings. I ask you to merit.
let me end my life. I cannot bear the shame of letting you all endure all what is due
me. But I happily end my life because I know it is the only [way] I can repay you [sic]. WHEREFORE, the Petition is GRANTED. The February 22, 2012 Decision and July 24,
2012 Resolution of the Court of Appeals in CA-G.R. SP No. 119775 are REVERSED and
SET ASIDE. The October 28, 2010 Decision of the National Labor Relations Commission
in NLRC LAC No. 07-000536-10 is REINSTATED and AFFIRMED. Accordingly, the
complaint in NLRC-NCR OFW Case No. (M)05-07052-09 is DISMISSED.
SO ORDERED.
SECOND DIVISION
G.R. No. 201793, September 16, 2015
PHILIPPINE TRANSMARINE CARRIERS, INC/NORWEGIAN CREW MANAGEMENT,
Petitioners, v. JULIA T. ALIGWAY (AS SUBSTITUTE FOR HER DECEASED HUSBAND,
DEMETRIO ALIGWAY, JR., Respondent.
DECISION
DEL CASTILLO, J.:
1 2
This Petition for Review on Certiorari assails the February 20, 2012 Decision of the
Court of Appeals (CA) in CA-G.R. SP No. 120589. The CA granted the Petition for
Certiorari filed therewith and accordingly, nullified the February 24, 2011 Decision3
and May 11, 2011 Resolution4 of the National Labor Relations Commission (NLRC) in
NLRC LAC No. OFW(M) 12-001028-10 which, in turn, affirmed the August 31, 2010
Decision5 of Labor Arbiter Geobel A. Bartolabac (LA) in NLRC NCR Case No. OFW(M)
01-01214-10 dismissing the Complaint for lack of merit. Also assailed is the May
11,2012 CA Resolution6 which denied the Motion for Reconsideration filed by
Demetrio Aligway, Jr. (Demetrio).
Factual Antecedents
On November 25, 2008, the Philippine Transmarine Carriers, Inc. (PTC), for and in
behalf of its foreign principal, the Norwegian Crew Management (NCM), employed
Demetrio as chief cook on board the vessel Amasis. Demetrio's employment contract
was for nine months with a monthly salary of US$758.00.7
Demetrio alleged that prior to his deployment, he underwent pre-employment
medical examination (PEME) and was declared fit to work. 8 Thereafter, while aboard
the vessel, he suffered from "vomiting, anorexia, weight loss, and palpitations
followed by dizziness and a feeling of lightheadedness."9 As a result, on April 22,
2009,10 he was medically repatriated.
Demetrio claimed that despite medical examinations by the company-designated
physician, his illness persisted beyond 120 days.11 This condition allegedly rendered
him incapacitated to work again as a seafarer but the PTC and the NCM refused to pay
him disability benefits.12
Consequently, Demetrio filed a Complaint13 dated January 22, 2010 for disability
benefits, moral and exemplary damages, and attorney's fees against the PTC, the
NCM, and their officers. He alleged that his work as chief cook, which involved food
intake, contributed to or aggravated his gastric cancer. He claimed that although the
cause of gastric cancer was unknown, there was speculation that smoked food may
be promoting factors.14
Demetrio invoked the presumption laid down in the provision of the POEA15 Standard
Employment Contract (SEC) mat his illness was work-related.16 He also averred that
he passed the PEME;17 and that as such, the PTC, the NCM, and their officers were
estopped from claiming that he was unfit to work prior to his deployment or that he
did not contract his illness aboard the vessel.18 He likewise argued that because the
vessel Amasis was covered by a collective bargaining agreement (CBA), it stands to
reason that he was entitled to the benefits stipulated in that agreement.19
The PTC, the NCM and their officers did confirm that on December 25, 2008, Demetrio
boarded the vessel; that on April 20, 2009, he was brought to the Entabeni Hospital in
Durban due to gastritis; and that eventually, he was repatriated for further
treatment.20
The PTC, the NCM, and their officers however contended that Demetrio was a heavy
smoker, and that he was smoking 12 to 15 cigarette sticks a day;21 that the company-
designated physician Dr. Susannah Ong-Salvador (Dr. Salvador), declared that
Demetrio's condition was not work-related; and that the risk factors in Demetrio's
condition included age, diet rich in saturated fat, fatty acid, linoleic acid, and genetic
predisposition.22
The PTC, the NCM, and their officers also argued that stomach cancer is asymptomatic
- or an illness that has nonspecific symptoms in its early stage and only becomes
apparent when in the advanced stage already; that since Demetrio was only about
four months aboard the vessel when the symptoms of his cancer manifested, then it
could not be inferred that he acquired it during his employment with them;23 and, that
while Demetrio's contract was covered by an AMOSUP24 CBA, this CBA did not include
non-occupational illnessess, such as gastric cancer.25cralawred
In sum, the PTC, the NCM, and their officers maintained that Demetrio's work involved
food preparation and not food intake;26 that the company-designated doctor found
that the cause of his illness was not work-related;27 that there was no evidence to SO ORDERED.34
indicate that his working conditions increased the risk of contracting it; that there was The CA decreed that the LA and the NLRC improperly relied on the findings of the
no evidence that his illness was caused by the food being served on the vessel;28 and, company-designated physician. It held that said doctor merely referred to medical
that no causal connection was established between Demetrio's work as chief cook and literature to explain Demetrio's condition without personally examining him; that Dr.
his gastric or stomach cancer.29 Salvador did not discuss how Demetrio's work and working environment could have
caused or aggravated his illness; that the opinion of Dr. Salvador lacked accuracy and
Ruling of the Labor Arbiter was hypothetical, if not purely academic; and that Dr. Salvador was not Demetrio's
original attending physician.
On August 31, 2010, the LA rendered a Decision30 dismissing the Complaint for lack of
merit. The LA held that the company-designated physician declared that Demetrio's In conclusion, the CA held that the presumption of compensability prevails and that
illness was not work-related; and that because of this, the burden fell on the latter to Demetrio is entitled to full disability benefits pursuant to the CBA.
disprove the finding of the company-designated doctor. The LA ruled that Demetrio
failed to discharge this burden because he adduced no evidence proving that his work On May 11, 2012, the CA denied35 the Motion for Reconsideration. Hence, the PTC
increased the risk of contracting stomach cancer. and the NCM filed this Petition contending that:
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS, REVERSIBLE AND GROSS
Ruling of the National Labor Relations Commission ERROR IN LAW BASED ON THE FOLLOWING GROUNDS:

On appeal, the NLRC affirmed the Decision of the LA.31 It gave credence to the medical A. In ignoring the legal precept that findings of facts of the NLRC are
opinion of the company-designated physician. It opined that aside from bare accorded respect and finality when supported by substantial
allegations, Demetrio adduced no competent evidence to prove that his stomach evidence[.]
cancer was caused or aggravated by the working conditions on the vessel.
B. In ignoring the declaration of the company[-]designated physician
On May 11, 2011, the NLRC denied32 Demetrio's Motion for Reconsideration. finding the illness to be not work[-]related thereby violating the
terms of the POEA contract giving authority to the company[-
Ruling of the Court of Appeals designated] doctor to assess the illness involved.

Demetrio thereafter filed a Petition for Certiorari with the CA imputing grave abuse of
discretion against the NLRC in not granting him full disability benefits despite his
alleged work-related illness that manifested during his last contract with the PTC and
the NCM.
On February 20,2012, the CA rendered the assailed Decision,33 the decretal portion of
which reads:
ACCORDINGLY, the petition is GRANTED. The Decision dated February 24, 2011 and
Resolution dated May 11, 2011 are nullified and [a] new one rendered, directing
private respondents to pay petitioner full disability benefits and attorney's fees
equivalent to 10% thereof.
The Motion for Substitution of Parties dated January 25, 2012, praying that Mrs. Julia
T. Aligway be substituted as petitioner, in lieu of her husband Demetrio Aligway Jr.,
who died on December 26, 2011, is granted. The caption of the case is amended to
reflect the name of Mrs. Julia T. Aligway, as substitute petitioner.
C. In profoundly relying on inapplicable jurisprudence which finds no
parallelism to the instant case.
D. In upholding the applicability of the alleged CBA in awarding USD$
110,000.00 even if its provisions limit the liability of the Employer to
work[-]related accidents only.
E. In awarding attorney's fees without legal and factual basis.36
The PTC and the NCM insist that the medical opinion of the company-designated
physician stood unchallenged since Demetrio did not consult his own physician for a
contrary opinion; that the opinion of the company-designated doctor cannot be
superseded or rescinded by mere speculation that the seafarer's illness was work-
connected; and, that prior to the aforesaid declaration of the company-designated
doctor, Demetrio underwent a series of examinations and treatments, which tended
to show that the declaration of the company-designated physician was not arrived at
capriciously.

The PTC and the NCM moreover fault the CA for holding that Dr. Salvador was not the
original doctor who examined Demetrio; that the medical opinion of the company-
designated doctor should not be taken singly but as the collective opinion of a team
of doctors who worked together in arriving at a declaration regarding the seafarer's
condition; and, that Dr. Salvador merely reported the conclusion reached collectively
by the medical experts in the team.
The PTC and the NCM insist that stomach cancer is often asymptomatic; that since
Demetrio was only about four months aboard the vessel when the symptoms of his
stomach cancer manifested, then it is an open question whether he acquired his illness
on board the vessel; that the burden of proof to establish work-relation is upon the
seafarer; and, that in this case, there is no showing that the nature of Demetrio's work
as well as the working conditions in the vessel increased the risk of his acquiring
stomach cancer.
Finally, the PTC and the NCM take the position that the CBA does not apply here
because its provisions limit the employer's liability to occupational injury as a result of
an accident or to occupational disease suffered by the employee; and, that given that
stomach cancer is not listed as an occupational disease, it would be erroneous to
award disability benefits pursuant to the CBA; hence, the CA improperly awarded
attorney's fees considering that the CA gave no explanation for that award.
For her part, Julia Aligway (Julia), as substitute for her deceased husband Demetrio,
contends that Dr. Salvador did not explain why Demetrio's illness was not work-
related; that there is in fact substantial evidence that Demetrio's illness was work-
related; that environmental factors, which include conditions in oceangoing vessels,
contributed to Demetrio's illness; that Demetrio had passed his PEME and was aboard
the vessel when he suffered from his illness; and, that his work as chief cook was all
about food intake and this circumstance did contribute to and aggravate his stomach
cancer.
Issue
In fine, the core issue before us is whether the CA erred in holding that the NLRC
committed grave abuse of discretion in denying Demetrio's appeal and in affirming
the dismissal of the complaint for lack of merit.
Our Ruling
As a rule, in a petition for review under Rule 45 of the Rules of Court, only questions
of law can be raised and be reviewed by this Court. However, this rule admits of
exceptions and one such exception is where the Court may make its own evaluation
of the evidence adduced by the parties because the factual findings of the tribunals or
courts a quo are in conflict with each other.37 In this case, the LA, as affirmed by the
NLRC, found that Demetrio was not entitled to disability benefits, among other claims,
and dismissed his complaint for lack of merit. The CA ruled otherwise. Thus, because
of the conflicting findings of fact of the LA and NLRC, on one hand, and of the CA, on
the other, this Court has to exercise its mandated authority to examine the evidence
on record.
We stress that entitlement of seafarers to disability benefits is governed by medical
findings, law and contract. Articles 191 to 193 under Chapter VI (Disability Benefits) of
Book IV of the Labor Code set forth the applicable provisions concerning disability
benefits. Also, the POEA-SEC and the CBA bind the seafarer and his employer to each
other.38
In this case, considering that Demetrio did not surfer from an occupational disease -
or such diseases listed under Section 32-A of the 2000 POEA-SEC - it stands to reason
that to be entitled to disability benefits, he must establish that he suffered from a
work-related injury or illness.
Under Section 20(B) of the 2000 POEA SEC, for disability to be compensable, (1) the
seafarer's injury or illness must be work-related; and (2) the work-related injury or
illness must have existed during the term of his employment contract. Hence, the
seafarer must not only show that he suffers from an illness or injury that rendered him
permanently or partially disabled, but he must also prove that there is a causal relation
between his illness or injury and the work for which he had been engaged.39
This Court has held that a person who claims entitlement to the benefits provided by
law must establish his right thereto by substantial evidence or "such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion."40 This Court
cannot grant a claim for disability benefits without such substantial evidence because
to do so would be offensive to due process. Hence, the burden is on the seafarer to
prove that he suffered from a work-related injury or illness during the term of his
contract.41
In this case, Demetrio failed to discharge this burden. He failed to prove the required
causal connection between his stomach cancer and his work as chief cook aboard the
vessel.
In his Position Paper,42 Demetrio admitted that the cause of stomach cancer was
unknown, but stressed that there is speculation that smoked food may be promoting
its development; that his illness is presumed to be work-related; and that since he had
passed the PEME, this estopped the PTC and the NCM from claiming that he was unfit
to work prior to his deployment or that he did not contract his illness on board the
vessel.
Additionally, in the Comment43 to the Petition filed before this Court, Demetrio's 4. Genetic factors (blood group A)
widow, Julia, averred that the company-designated doctor, Dr. Salvador, failed to
explain how or why Demetrio's illness was not work-related; and that the latter's work 5. H. pylori infection
as chief cook was all about food intake and that this contributed to his becoming
afflicted with stomach cancer. 6. Previous gastric surgery

Against this backdrop, the basic issue that clamors for resolution is how Demetrio's
work, as chief cook, contributed to or aggravated his illness; and definitely this was an
issue that was not addressed or explained by both Demetrio and Julia. All we have on
record is the fact that Demetrio died of stomach cancer plus the claim that his work
involved food intake which according to him caused or aggravated his stomach cancer.
Demetrio and later, Julia, issued general statements that we deem self-serving
because they are unproved or uncorroborated allegations that simply raised the
possibility that Demetrio's stomach cancer could have been or might have been work-
related. At any rate, even if the seafarer erects his claim on the probability of work-
connectedness, such claim would still fail. "Probability of work-connection must at
least be anchored on credible information and not on self-serving allegations."44
Thus, this Court agrees with the finding of the NLRC that there is no substantial
evidence to support the allegation that Demetrio's stomach cancer was caused by
work-connected factors.
In addition, Julia cannot point to Demetrio's having successfully passed the PEME as
basis for the conclusion that he acquired his illness on board the vessel. This is a non-
sequitur. The PEME conducted upon a seafarer would not or could not necessarily
reveal or disclose his illness because such examination is not at all fool-proof or
thoroughly exploratory.45
Here, stock can be taken of the fact that the company-designated doctor treated
Demetrio from his repatriation until the time that he was undergoing chemotherapy.
Even then, the company-designated physician categorically stated that Demetrio's
medical condition was not work-related or work-aggravated.
Indeed, in her October 9, 2009 Medical Report,46 Dr. Salvador enumerated the causes
of stomach cancer to wit:
7. Obesity
8. Radiation exposure47
The company-employed physician opined that stomach cancer "[may be] more often
multifactoral in origin involving both inherited predisposition and environmental
factors."48 She concluded that in the case at bench, Demetrio's stomach cancer was
not work-related.
In the absence of a second opinion from Demetrio's own physician of choice, this Court
may not arbitrarily disregard the finding of the company-designated doctor, Dr.
Salvador. If anything, we hew close to the jurisprudential teaching that the seafarer is
not entitled to disability benefits if he does not adduce substantial evidence of a
medically-established connection between his work and his illness.49 This is as it should
be. For, unopposed and uncontradicted by equally credible and trustworthy
countervailing substantial evidence from herein respondents-spouses who, as the
original suitors-at-law in this indemnity-recovery suit, had the onus to establish their
suit by the presentation of such specie of substantial evidence called for by this case:
this Court is not at liberty to reject, with no show of reason, the unopposed and
uncontradicted testimony of the company-designated physician.
All told, this Court finds that the CA erred in setting aside the NLRC Decision which
affirmed the Decision of the LA dismissing the Complaint for lack of merit.
WHEREFORE, the Petition is GRANTED. The Decision dated February 20, 2012 and
Resolution dated May 11,2012 of the Court of Appeals in CA-G.R. SP No. 120589 are
REVERSED and SET ASIDE. Accordingly, the Complaint in NLRC NCR Case No. OFW(M)
01-01214-10 is DISMISSED. Without costs.
SO ORDERED.chanroblesvirtuallawlibrary

1. Diet (nitrates, nitrites, cured or picked foods)

2. Environmental factors (smoke, dust, cigarettes and alcohol)

3. Chronic gastritis (atrophic, hypertrophic gastritis, gastric ulcers,

achlorhydia, pernicious anemia, and prior gastric resection)

G.R. No. 211302, August 12, 2015
PHILIPPINE TRANSMARINE CARRIERS, INC., CARLOS C. SALINAS, AND NORWEGIAN
CREW MANAGEMENT A/S, Petitioners, v. CESAR C. PELAGIO, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated December 21,
2012 and the Resolution3 dated February 17, 2014 of the Court of Appeals (CA) in CA-
G.R. SP No. 122771, which dismissed the certiorari petition of petitioners Philippine
Transmarine Carriers, Inc. (PTCI), Carlos C. Salinas, and Norwegian Crew Management
A/S (petitioners) before the CA on the ground that the issues raised therein had
become moot and academic on account of the compromise agreement between
petitioners and respondent Cesar C. Pelagio (Pelagio).
The Facts
PTCI, for and on behalf of his foreign principal, Norwegian Crew Management A/S,
hired Pelagio as a Motorman on board the vessel MN Drive Mahone for a period of six
(6) months, under a Philippine Overseas Employment Administration (POEA)-
approved employment contract4 dated September 29, 2009, as well as the collective
bargaining agreement5 between Norwegian Crew Management A/S and Associated
Marine Officers' and Seamen's Union of the Philippines (CBA). After being declared fit
for employment, Pelagio boarded M/V Drive Mahone on November 3,
2009.6cralawrednad
Sometime in February 2010, Pelagio experienced difficulty in breathing and pains on
the nape, lower back, and joints while at work. Pelagio was then referred to a port
doctor in Said, Egypt, where he was diagnosed with "Myositis" 7 and declared unfit to
work.8 On March 2, 2010, Pelagio was repatriated back to the Philippines for further
medical treatment, and thereafter, promptly sought the medical attention of the
company-designated physician, Dr. Robert D. Lim (Dr. Lim), at the Metropolitan
Medical Center.9cralawrednad
After a series of medical and laboratory examinations, including chest x-ray,
pulmonary function tests, electroencephalogram, and other related physical
examinations, Pelagio was finally diagnosed to have Carpal Tunnel Syndrome, Bilateral
L5-S1 Radiculopathy, Mild Degenerative Changes, and Lumbosacral Spine10 with an
assessment of disability rating of Grade 11 - "slight loss of lifting power of the
trunk."11cralawrednad
On August 18, 2010, Pelagio sought a second opinion from a private orthopedic
surgeon physician, Dr. Manuel Fidel M. Magtira (Dr. Magtira), who assessed him with
a Grade 8 disability - moderate rigidity or two-thirds loss of motion or lifting power of
the trunk- and declared him "permanently UNFIT TO WORK in any capacity at his
previous occupation."12cralawrednad
Pelagio sought payment of permanent total disability benefits from petitioners, but to
no avail. Hence, he filed a complaint13 for disability benefits, reimbursement of
medical expenses, illness allowance, damages, and attorney's fees against petitioners
before the Arbitration Branch of the National Labor Relations Commission (NLRC),
docketed as NLRC-NCR No. (M) 09-13299-10.14 Essentially, Pelagio contended that his
inability to work for more than 120 days from repatriation entitles him to permanent
total disability benefits.15cralawrednad
For their part,16 petitioners countered that Pelagio is not entitled to permanent total
disability benefits, considering that the independent physician, Dr. Magtira, assessed
him with a Grade 8 impediment. In this relation, petitioners likewise claimed that on
August 5, 2010, the company-designated physician, Dr. Lim, assessed Pelagio with a
Grade 11 disability "slight loss of lifting power of the trunk."17 In view of the conflicting
findings of the company-designated and independent physicians, petitioners
suggested that they seek a third mutually-appointed doctor to comply with the
provisions of the POEA-Standard Employment Contract, but Pelagio refused.18 Finally,
petitioners averred that they offered the amount of US$13,437.00, the amount of
benefit corresponding to a Grade 11 impediment, pursuant to the CBA, but Pelagio
rejected such offer.19cralawrednad
The LA Ruling
In a Decision20 dated April 29, 2011, the LA found that Pelagio was suffering from a
permanent partial disability, and accordingly, ordered petitioners to jointly and
severally pay him the amount of US$13,437.00.21 The LA ruled that Pelagio's mere
inability to work for 120 days from his repatriation did not ipso facto mean that he is
suffering from a permanent total disability, especially in view of the disability
assessments given by both the company-designated and the independent
physicians.22 On this note, the LA gave weight to the findings of the company-
designated physician that Pelagio was suffering from a Grade 11 impediment, and
thus, must only be awarded disability benefits corresponding thereto.23cralawrednad
Dissatisfied, Pelagio appealed to the NLRC.24cralawrednad
The NLRC Ruling
In a Decision25cralawred dated August 24, 2011, the NLRC reversed and set aside the
LA ruling, and accordingly, awarded Pelagio the amount of US$77,000.00 at its peso
equivalent at the time of actual payment representing permanent total disability
benefits and attorney's fees.26cralawrednad
The NLRC found that the records are bereft of anything that would support petitioners'
claim that the company-designated physician indeed gave Grade 11 disability rating,
and thus, deemed that there was no assessment made on him.27 In view thereof, the
NLRC ruled that Pelagio's disability went beyond 240 days without a declaration that
he is fit to resume work or an assessment of disability rating, and as such, he is already
entitled to permanent total disability benefits as stated under the CBA.28cralawrednad
Petitioners moved for reconsideration,29 which was, however, dismissed in a
Resolution30 dated October 4, 2011. Aggrieved, petitioners filed a petition for
certiorari31 before the CA, docketed as CA G.R. SP No. 122771.
During the pendency of the certiorari proceedings before the CA, the parties executed
a Satisfaction of Judgment 32 dated December 21, 2011 stating that petitioners had
already given Pelagio the amount of P3,313,772.00 as full and complete satisfaction
of the NLRC ruling. However, it is likewise stated therein that such satisfaction of
judgment "is without prejudice to [petitioners'] petition for certiorari pending with the
[CA] x x x," and that the same was "being made only to prevent imminent execution
being undertaken by the NLRC and [Pelagio]."33 On even date, Pelagio likewise
executed a Receipt of Paymene34 acknowledging receipt of the aforesaid amount, but
recognizing that such payment is "understood to be without prejudice to the pending
petition for certiorari filed by [petitioners] before the [CA]."35 Pelagio further executed
an Affidavit of Claimant36 stating that he "understand[s] that payment is hereby being
made by the shipowners/manning agents to [him] only to prevent further execution
proceedings that [he has] initiated with the NLRC;" and that he "recognize[s] the
NLRC's jurisdiction on Restitution proceedings, in case of a reversal of judgment by the
Higher Courts x x x."37 On February 10, 2012, the NLRC issued an Order38 approving
the settlement and considered the case closed and terminated.
The CA Ruling
In a Decision39 dated December 21, 2012, the CA dismissed the certiorari petition,
ruling that the Satisfaction of Judgment executed by the parties is in the nature of a
compromise agreement, which was properly approved by the NLRC, as it did not
contravene any law, morals, public policy, or public order.40 In this regard, the CA held
that the issues raised in the petition had already been rendered moot and academic,
and as such, the petition must be dismissed without going into the merits of the
case.41cralawrednad
Petitioners moved for reconsideration42 but was denied in a Resolution43 dated
February 17, 2014; hence, this petition.
The Issue Before the Court
The primordial issue for the Court's resolution is whether or not the CA correctly
dismissed the certiorari petition on the basis of the compromise agreement between
the parties. Otherwise stated, the issue is whether or not the execution of the
Satisfaction of Judgment between the parties rendered the certiorari proceedings
before the CA moot and academic.
The Court's Ruling
The petition is meritorious.
A compromise agreement is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced.44 To be
considered valid and binding between the contracting parties, a compromise
agreement must be: (a) not contrary to law, morals, good customs, public order, and
public policy; (b) freely and intelligently executed by and between the parties; and (c)
compliant with the requisites and principles of contracts.45 Once entered into, it has
the effect and the authority of res judicata upon the parties.46 In other words, a valid
compromise agreement may render a pending case moot and academic. However,
the parties may opt to put therein clauses, conditions, and the like that would prevent
a pending case from becoming moot and academic - such as when the execution of
such agreement is without prejudice to the final disposition of the said case. After all,
a compromise agreement is still a contract by nature, and as such, the parties are free
to insert clauses to modify its legal effects, so long as such modifications are not
contrary to law, morals, good customs, public order, or public policy.47cralawrednad
In the instant case, it is undisputed that the parties had entered into a Satisfaction of
Judgment signifying that petitioners had already given Pelagio the amount of
P3,313,772.00 as full and complete satisfaction of the NLRC ruling. While this
document may be properly deemed as a compromise agreement, it is conditional in
nature, considering that it is without prejudice to the certiorari proceedings pending
before the CA, i.e., it obliges Pelagio to return the aforesaid proceeds to petitioners
should the CA ultimately rule in the latter's favor. In Leonis Navigation Co., Inc. v.
Villamater48 (Leonis Navigation), the Court held that such an agreement will not
render a pending case moot and academic as it does not preclude the employer from
recovering from the employee should the courts ultimately decide in favor of the
former, to wit:cralawlawlibrary
Simply put, the execution of the final and executory decision or resolution of the NLRC
shall proceed despite the pendency of a petition for certiorari, unless it is restrained
by the proper court. In the present case, petitioners already paid Villamater's widow,
Sonia, the amount of P3,649,800.00, representing the total and permanent disability
award plus attorney's fees, pursuant to the Writ of Execution issued by the Labor
Arbiter. Thereafter, an Order was issued declaring the case as "closed and
terminated." However, although there was no motion for reconsideration of this last
Order, Sonia was, nonetheless, estopped from claiming that the controversy had
already reached its end with the issuance of the Order closing and terminating the case.
This is because the Acknowledgment Receipt she signed when she received petitioners'
payment was without prejudice to the final outcome of the petition for certiorari
pending before the CA.49 (Emphasis and underscoring supplied)
However, in Career Philippines Ship Management, Inc. v. Madjus50 (Career Philippines),
the Court made a seemingly contrary ruling from that in Leonis Navigation, holding
that such an agreement is tantamount to an absolute amicable settlement, thus,
rendering the certiorari petition before the CA dismissible for being moot and
academic, viz.:cralawlawlibrary
In effect, while petitioner had the luxury of having other remedies available to it such
as its petition for certiorari pending before the appellate court, and an eventual appeal
to this Court, respondent, on the other hand, could no longer pursue other claims,
including for interests that may accrue during the pendency of the case.
Contrary to petitioner's assertion, it could not, at the time respondent moved for the
execution of the Labor Arbiter's monetary awards, have been compelled to
immediately pay the judgment award, for it had filed with the NLRC an appeal bond,
intended to assure respondent that if he prevailed in the case, he would receive the
money judgment in his favor upon the dismissal of the employer's appeal. The Labor
Arbiter and the appellate court may not thus be faulted for interpreting petitioner's
"conditional settlement" to be tantamount to an amicable settlement of the case
resulting in the mootness of the petition for certiorari.51 (Emphasis supplied,
underscoring in the original)
Fortunately, the Court had the opportunity to reconcile the ostensibly opposing
pronouncements in the Leonis Navigation and Career Philippines cases in Philippine
Transmarine Carriers, Inc. v. Legaspi,52 (Philippine Transmarine) in this
wise:cralawlawlibrary
In Career Philippines, believing that the execution of the LA Decision was imminent
after its petition for injunctive relief was denied, the employer filed before the LA a
pleading embodying a conditional satisfaction of judgment before the CA and,
accordingly, paid the employee the monetary award in the LA decision. In the said
pleading, the employer stated that the conditional satisfaction of the judgment award
was without prejudice to its pending appeal before the CA and that it was being made
only to prevent the imminent execution.
The CA later dismissed the employer's petition for being moot and academic, noting
that the decision of the LA had attained finality with the satisfaction of the judgment
award. This Court affirmed the ruling of the CA, interpreting the "conditional
settlement" to be tantamount to an amicable settlement of the case resulting in the
mootness of the petition for certiorari, considering (i) that the employee could no longer
pursue other claims, and (ii) that the employer could not have been compelled to
immediately pay because it had filed an appeal bond to ensure payment to the
employee.
Stated differently, the Court ruled against the emvlover because the conditional
satisfaction of judgment signed by the parties was highly prejudicial to the employee.
The agreement stated that the payment of the monetary award was without prejudice
to the right of the employer to file a petition for certiorari and appeal, while the
employee agreed that she would no longer file any complaint or prosecute any suit of
action against the employer after receiving the payment.
In contrast, in Leonis Navigation, after the NLRC resolution awarding disability benefits
became final and executory, the employer paid the monetary award to the employee.
The CA dismissed the employer's petition for certiorari, ruling that the final and
executory decisions or resolutions of the NLRC rendered appeals to superior courts
moot and academic. This Court disagreed with the CA and held that final and executed
decisions of the NLRC did not prevent the CA from reviewing the same under Rule 65 of
the Rules of Court. It was further ruled that the employee was estopped from claiming
that the case was closed and terminated, considering that the employee's
Acknowledgment Receipt stated that such was without prejudice to the final outcome
of the petition for certiorari pending before the CA.53 (Emphases and underscoring
supplied)
Ultimately, in Philippine Transmarine, the Court ruled that since the agreement in that
case was fair to the parties in that it provided available remedies to both parties, the
certiorari petition was not rendered moot despite the employer's satisfaction of the
judgment award, as the respondent had obliged himself to return the payment if the
petition would be granted.54cralawrednad
In the instant case, the body of the Satisfaction of Judgment entered into by
petitioners and Pelagio reads:cralawlawlibrary
1. That complainant Cesar C. Pelagio received the sum of Three Million Three Hundred
Thirteen Thousand Seven Hundred [Seventy-Two] Pesos (PHP3,313,772.00), as full
and complete satisfaction of the Decision and Resolution of this Honorable
Commission (Fourth Division) dated 24 August 2011 and 4 October 2011. That
payment is hereby made to complainant only to prevent imminent execution that the
NLRC and the complainant are undertaking.
2. That said payment was made by means of Citibank Check No. 1000006094 dated
21 December 2011 in the sum of Three Million Three Hundred Thirteen Thousand
Seven Hundred (Seventy-Two] Pesos (PHP3,313,772.00) payable to complainant Cesar
C. Pelagio.
3. That by virtue of said payment, which is in full and complete satisfaction of the
judgment award as indicated in the Decision and Resolution of this Honorable
Commission (Fourth Division) dated 24 August 2011 and 4 October 2011 respectively,
herein complainant has no further claims against respondents Philippine Transmarine
Carriers, Inc./Mr. Carlos C. Salinas and/or Norwegian Crew Mangament A/S and will
no longer pursue the execution proceedings he initiated by virtue of the judgment
award of the NLRC.
4. That this Satisfaction of Judgment is without prejudice to herein respondents'
Petition for Certiorari pending with the Court of Appeals docketed as case entitled
"Philippine Transmarine Carriers, Inc./Mr. Carlos C. Salinas and/or Norwegian Crew
Mangament A/S vs. NLRC and Cesar C. Pelagio" and this Satisfaction of Judgment is
being made only to prevent imminent execution being undertaken by the NLRC and
complainant.55
On the other hand, the Receipt for Payment executed by Pelagio
provides:cralawlawlibrary
Received from DEL ROSARIO & DEL ROSARlO Citibank Check No. 1000006094 dated
20 December 2011 in the sum of Three Million Three Hundred Thirteen Thousand
Seven Hundred [Seventy-Two] Pesos (PHP3,313,772.00) payable to Cesar C. Pelagio,
in full and complete payment of the judgment award. That payment is hereby made
to the complainant only to prevent imminent execution of the Decision and the
Resolution of the NLRC (Fourth Division) dated 24 August 2011 and 4 October 2011
docketed as NLRC LAC Case No. M-05-000458-11-M/NLRC NCR Case No. 09-13299-
10-M case entitled "Cesar C. Pelagio vs. Transmarine Carriers, Inc. et al." This payment
is also understood to be without prejudice to the pending Petition for Certiorari filed
by the respondents before the Court of Appeals, case entitled "Philippine Transmarine
Carriers, Inc. and/or Mr. Carlos C. Salinas and Norwegian Crew Management A/S
versus National Labor Relations Commission and Cesar C. Pelagio.
I hereby certify and warrant that if any other person will claim from the vessel, her
Owners, manager, charterers, agents or P & I Club his compensation/damages in
connection with my illness, I shall hold said vessel/persons free and harmless from any
and all claims and liabilities whatsoever.56
Finally, pertinent parts of the Affidavit of Claimant executed by Pelagio
states:cralawlawlibrary
3. That in connection with my claim, I have discussed this matter with my lawyer
(Valmores and Valmores Law Offices-Atty. Romulo P. Valmores/Atty. Christopher Rey
P. Valmores) and Del Rosario & Del Rosario and the manning agents and after
discussion, to my full and complete satisfaction, I have freely and voluntarily agreed
to a full and final payment of all my past, present and future claims against the vessel
MV Drive Mahone her Owners, agents and operators in an amount not exceeding
US$77,000.00 or its equivalent in Philippine currency. That I understand that payment
is hereby being made by the shipowners/manning agents to me only to prevent
further execution proceedings that I have initiated with the NLRC.
4. That I understand that the payment of the judgment awards in the amount of
US$77,000.00 or its equivalent in Philippine currency is without prejudice to the
shipowners'/manning agents' Petition for Certiorari pending with the Court of Appeals
case entitled "Philippine Transmarine Carriers, Inc. and/or Mr. Carlos C. Salinas and
Norwegian Crew Management A/S versus National Labor Relations Commission and
Cesar C. Pelagio";
5. That I understand that in case of reversal and/or modification of the Decision and
the Resolution dated 24 August 2011 and 4 October 2011 of the NLRC by the Court of
Appeals and/or the Supreme Court, I shall return whatever is due and owing to
shipowners/manning agents without need of further demand;
6. That I recognize the NLRC's jurisdiction on Restitution proceedings, in case of a
reversal of judgment by the Higher Courts by virtue of the NLRC 2011 Rules of
Procedure, Rule XI, Section 14 thereof, to wit:cralawlawlibrary
"SECTION 14. EFFECT OF REVERSAL OF EXECUTED JUDGMENT. - Where the executed
judgment is totally or partially reversed or annulled by the Court of Appeals or the
Supreme Court, the Labor Arbiter shall, on motion, issue such orders of restitution of
the executed awards, except wages paid during reinstatement pending appeal."57
A reading of the foregoing documents reveals that: (a) petitioners paid Pelagio
P3,313,772.00 as full and complete satisfaction of the NLRC rulings; (b) such payment
is made in order to prevent imminent execution of such rulings being undertaken by
the NLRC and Pelagio; (c) such payment is without prejudice to the outcome of the
certiorari proceedings before the CA; and (d) in case of partial or complete reversal of
the NLRC judgment by the CA, Pelagio is obliged to reimburse petitioners accordingly.
More importantly, the foregoing documents do not have any clause prohibiting either
of the parties from seeking further redress against each other. Thus, both petitioners
and Pelagio may pursue any of the available legal remedies should any eventuality
arise in their dispute, i.e., when the CA renders a ruling adverse to their respective
interests. It can, therefore, be said that similar to the Philippine Transmarine case
above-cited, the agreement entered into by the petitioners and Pelagio is fair and is
not prejudicial to either party, and thus, such agreement did not render the certiorari
proceedings before the CA moot and academic.
In sum, the CA erred in dismissing the certiorari petition before it on the basis of the
compromise agreement between petitioners and Pelagio. In view of the fact that such
dismissal was not based on the merits, the Court deems it appropriate to remand the
case to the CA for further proceedings.

WHEREFORE, the petition is GRANTED. Accordingly the Decision dated December 21,
2012 and the Resolution dated February 17, 2014 of the Court of Appeals (CA) in CA-
G.R. SP No. 122771 are hereby REVERSED and SET ASIDE. CA-G.R. SP No. 122771 is
REINSTATED and REMANDED to the CA, which is hereby directed to resolve the case
on the merits.

SO ORDERED.chanrobles virtuallawlibrary