Professional Documents
Culture Documents
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 175507
October 8, 2014
Antonio Chings illegitimate child, she and Antonio Ching merely adopted him
and treated him like their own.11
Joseph Cheng and Jaime Cheng, on the other hand, claim to be Antonio
Chings illegitimate children with his housemaid, Mercedes Igne. 12 While
Ramon Ching disputed this,13 both Mercedes and Lucina have not.14
Lucina Santos alleged that when Antonio Ching fell ill sometime in 1996, he
entrusted her with the distribution of his estate to his heirs if something were
to happen to him. She alleged that she handed all the property titles and
business documents to Ramon Ching for safekeeping.15 Fortunately, Antonio
Ching recovered from illness and allegedly demanded that Ramon Ching
return all the titles to the properties and business documents.16
On July 18, 1996, Antonio Ching was murdered.17 Ramon Ching allegedly
induced Mercedes Igne and her children, Joseph Cheng and Jaime Cheng, to
sign an agreement and waiver18 to Antonio Chings estate in consideration
of P22.5 million. Mercedes Ignes children alleged that Ramon Ching never
paid them.19 On October 29, 1996, Ramon Ching allegedly executed an
affidavit of settlement of estate,20 naming himself as the sole heir and
adjudicating upon himself the entirety of Antonio Chings estate.21
Ramon Ching denied these allegationsand insisted that when Antonio Ching
died, the Ching family association, headed by Vicente Cheng, unduly
influenced him to give Mercedes Igne and her children financial aid
considering that they served Antonio Ching for years. It was for this reason
that an agreement and waiver in consideration of 22.5 million was made. He
also alleged that hewas summoned by the family association to execute an
affidavit of settlement of estate declaring him to be Antonio Chings sole
heir.22
After a year of investigating Antonio Chings death, the police found Ramon
Ching to be its primary suspect.23Information24 was filed against him, and a
warrant of arrest25 was issued.
On October 7, 1998, Joseph Cheng, Jaime Cheng, and Mercedes Igne (the
Chengs) filed a complaint for declaration of nullity of titles against Ramon
Ching before the Regional Trial Court of Manila. This case was docketed as
Civil Case No. 98-91046 (the first case).26
On March 22, 1999, the complaint was amended, with leave of court, to
implead additional defendants, including Po Wing Properties, of which Ramon
Ching was a primary stockholder.The amended complaint was for
"Annulment of Agreement, Waiver, Extra-Judicial Settlement of Estate and
the Certificates of Title Issued by Virtue of Said Documents with Prayer for
Temporary Restraining Order and Writ of Preliminary Injunction."27 Sometime
after, Lucina Santos filed a motion for intervention and was allowed to
intervene.28
After the responsive pleadings had been filed, Po Wing Properties filed a
motion to dismiss on the ground of lack of jurisdiction of the subject matter. 29
On November 13, 2001, the Regional Trial Court of Manila, Branch 6, granted
the motion to dismiss on the ground of lack of jurisdiction over the subject
matter.30 Upon motion of the Chengs counsel, however, the Chengs and
Lucina Santos were given fifteen (15) days to file the appropriate pleading.
They did not do so.31
On April 19, 2002, the Chengs and Lucina Santos filed a complaint for
"Annulment of Agreement, Waiver, Extra-Judicial Settlement of Estate and
the Certificates of Title Issued by Virtue of Said Documents with Prayer for
Temporary Restraining Order and Writ of Preliminary Injunction" against
Ramon Ching and Po Wing Properties.32This case was docketed as Civil Case
No. 02-103319 (the second case) and raffled to Branch 20 of the Regional
Trial Court of Manila.33 When Branch 20 was made aware of the first case, it
issued an order transferring the case to Branch 6, considering that the case
before it involved substantially the same parties and causes of action.34
On November 11, 2002, the Chengs and Lucina Santos filed a motion to
dismiss their complaint in the second case, praying that it be dismissed
without prejudice.35
On November 22, 2002, Branch 6 issued an order granting the motion to
dismiss on the basis that the summons had not yet been served on Ramon
Ching and Po Wing Properties, and they had not yet filed any responsive
pleading. The dismissal of the second case was made without prejudice. 36
On December 9, 2002, Ramon Ching and Po Wing Properties filed a motion
for reconsideration of the order dated November 22, 2002. They argue that
the dismissal should have been with prejudice under the "two dismissal rule"
of Rule 17, Section 1 of the 1997 Rules of Civil Procedure, in view of the
previous dismissal of the first case.37
During the pendency of the motion for reconsideration, the Chengs and
Lucina Santos filed a complaint for "Disinheritance and Declaration of Nullity
of Agreement and Waiver, Affidavit of Extra judicial Agreement, Deed of
Absolute Sale, and Transfer Certificates of Title with Prayer for TRO and Writ
of Preliminary Injunction" against Ramon Ching and Po Wing Properties. This
case was docketed as Civil Case No. 02-105251(the third case) and was
eventually raffled to Branch 6.38
On December 10, 2002, Ramon Ching and Po Wing Properties filed their
comment/opposition to the application for temporary restraining order in the
third case. They also filed a motion to dismiss on the ground of res judicata,
litis pendencia, forum-shopping, and failure of the complaint to state a cause
of action. A series of responsive pleadings were filed by both parties.39
On July 30, 2004, Branch 6 issued an omnibus order40 resolving both the
motion for reconsideration in the second case and the motion to dismiss in
the third case. The trial court denied the motion for reconsideration and the
motion to dismiss, holding that the dismissal of the second case was without
prejudice and, hence, would not bar the filing of the third case.41 On October
8, 2004, while their motion for reconsideration in the third case was pending,
Ramon Ching and Po Wing Properties filed a petition for certiorari (the first
certiorari case) with the Court of Appeals, assailing the order dated
November 22,2002 and the portion of the omnibus order dated July 30, 2004,
which upheld the dismissal of the second case.42
On December 28, 2004, the trial court issued an order denying the motion
for reconsideration in the third case. The denial prompted Ramon Ching and
Po Wing Properties to file a petition for certiorari and prohibition with
application for a writ of preliminary injunction or the issuance of a temporary
restraining order (the second certiorari case) with the Court of Appeals. 43
On March 23, 2006, the Court of Appeals rendered the decision44 in the first
certiorari case dismissing the petition. The appellate court ruled that Ramon
Ching and Po Wing Properties reliance on the "two-dismissal rule" was
misplaced since the rule involves two motions for dismissals filed by the
plaintiff only. In this case, it found that the dismissal of the first case was
upon the motion of the defendants, while the dismissal of the second case
was at the instance of the plaintiffs.45
Upon the denial of their motion for reconsideration,46 Ramon Ching and Po
Wing Properties filed this present petition for review47 under Rule 45 of the
Rules of Civil Procedure.
Ramon Ching and Po Wing Properties argue that the dismissal of the second
case was with prejudice since the non-filing of an amended complaint in the
first case operated as a dismissal on the merits.48 They also argue that the
second case should be dismissed on the ground of res judicata since there
was a previous final judgment of the first case involving the same parties,
subject matter, and cause of action.49
Lucina Santos was able to file a comment50 on the petition within the period
required.51 The Chengs, however, did not comply.52 Upon the issuance by this
court of a show cause order on September 24, 2007,53 they eventually filed a
comment with substantially the same allegations and arguments as that of
Lucina Santos.54
In their comment, respondents allege that when the trial court granted the
motion to dismiss, Ramon Chings counsel was notified in open court that the
dismissal was without prejudice. They argue that the trial courts order
became final and executory whenhe failed to file his motion for
reconsideration within the reglementary period.55
Respondents argue that the petition for review should be dismissed on the
ground of forum shopping and litis pendencia since Ramon Ching and Po
Wing Properties are seeking relief simultaneously in two forums by filing the
two petitions for certiorari, which involved the same omnibus order by the
trial court.56 They also argue that the "two-dismissal rule" and res judicata
did not apply since (1) the failure to amend a complaint is not a dismissal,
and (2) they only moved for dismissal once in the second case.57
In their reply,58 petitioners argue that they did not commit forum shopping
since the actions they commenced against respondents stemmed from the
complaints filed against them in the trial courts.59 They reiterate that their
petition for review is only about the second case; it just so happened that the
assailed omnibus order resolved both the second and third cases.60
Upon the filing of the parties respective memoranda,61 the case was
submitted for decision.62
For this courts resolution are the following issues:
SEC. 3. Dismissal due to fault of plaintiff. If, for no justifiable cause, the
plaintiff fails to appear on the date of the presentation of his evidence in
chief on the complaint, or to prosecute his action for an unreasonable length
of time, or to comply with these Rules or any order of the court, the
complaint may be dismissed upon motion of the defendant or upon the
court's own motion, without prejudice to the right of the defendant to
prosecute his counterclaim in the same or in a separate action. This
dismissal shall have the effect of an adjudication upon the merits, unless
otherwise declared by the court. (Emphasis supplied)
The first section of the rule contemplates a situation where a plaintiff
requests the dismissal of the case beforeany responsive pleadings have been
filed by the defendant. It is donethrough notice by the plaintiff and
confirmation by the court. The dismissal is without prejudice unless
otherwise declared by the court.
The second section of the rule contemplates a situation where a
counterclaim has been pleaded by the defendant before the service on him
or her of the plaintiffs motion to dismiss. It requires leave of court, and the
dismissal is generally without prejudice unless otherwise declared by the
court.
The third section contemplates dismissals due to the fault of the plaintiff
such as the failure to prosecute. The case is dismissed either upon motion of
the defendant or by the court motu propio. Generally, the dismissal is with
prejudice unless otherwise declared by the court.
In all instances, Rule 17 governs dismissals at the instance of the plaintiff,
not of the defendant. Dismissals upon the instance of the defendant are
generally governed by Rule 16, which covers motions to dismiss.63
In Insular Veneer, Inc. v. Hon. Plan,64 Consolidated Logging and Lumber Mills
filed a complaint against Insular Veneer to recover some logs the former had
delivered to the latter. It also filed ex partea motion for issuance of a
restraining order. The complaint and motion were filed in a trial court in
Isabela.65
The trial court granted the motion and treated the restraining order as a writ
of preliminary injunction. When Consolidated Logging recovered the logs, it
filed a notice of dismissal under Rule 17, Section 1 of the 1964 Rules of Civil
Procedure.66
While the action on its notice for dismissal was pending, Consolidated
Logging filed the same complaint against Insular Veneer, this time in a trial
court in Manila. It did not mention any previous action pending in the Isabela
court.67
The Manila court eventually dismissed the complaint due to the
nonappearance of Consolidated Loggings counsel during pre-trial.
Consolidated Logging subsequently returned to the Isabela court to revive
the same complaint. The Isabela court apparently treated the filing of the
amended complaint as a withdrawal of its notice of dismissal.68
Insular Veneer also filed in the Isabela court a motion to dismiss, arguing that
the dismissal by the Manila court constituted res judicataover the case. The
Isabela court, presided over by Judge Plan, denied the motion to dismiss. The
dismissal was the subject of the petition for certiorari and mandamus with
this court.69
This court stated that:
In resolving that issue, we are confronted with the unarguable fact that
Consolidated Logging on its volition dismissed its action for damages and
injunction in the Isabela court and refiled substantially the same action in the
Manila court. Then, when the Manila court dismissed its action for failure to
prosecute, it went hack [sic] to the Isabela court and revived its old action by
means of an amended complaint.
Consolidated Logging would liketo forget the Manila case, consign it to
oblivion as if it were a bad dream, and prosecute its amended complaint in
the Isabela court as if nothing had transpired in the Manila court. We hold
that it cannot elude the effects of its conduct in junking the Isabela case and
in giving that case a reincarnation in the Manila court.
Consolidated Logging [sic] filed a new case in Manila at its own risk. Its
lawyer at his peril failed toappear at the pre-trial.70
This court ruled that the filing of the amended complaint in the Isabela court
was barred by the prior dismissal of the Manila court, stating that:
The provision in section 1(e), Rule 16 of the Rules of Court that an action
may be dismissed because "there is another action pending between the
same parties for the same cause" presupposes that two similar actions are
Under Rule 17, Section 3, a defendant may move to dismiss the case if the
plaintiff defaults; it does not contemplate a situation where the dismissal was
due to lack of jurisdiction. Since there was already a dismissal prior to
plaintiffs default, the trial courts instruction to file the appropriate pleading
will not reverse the dismissal. If the plaintiff fails to file the appropriate
pleading, the trial court does not dismiss the case anew; the order dismissing
the case still stands.
The dismissal of the first case was done at the instance of the defendant
under Rule 16, Section 1(b) of the Rules of Civil Procedure, which states:
SECTION 1. Grounds. Within the time for but before filing the answer to the
complaint or pleading asserting a claim, a motion to dismiss may be made
on any of the following grounds:
....
(b) That the court has no jurisdiction over the subject matter of the claim;
....
Under Section 5 of the same rule,75 a party may re-file the same action or
claim subject to certain exceptions.
Thus, when respondents filed the second case, they were merely refiling the
same claim that had been previously dismissed on the basis of lack of
jurisdiction. When they moved to dismiss the second case, the motion to
dismiss can be considered as the first dismissal at the plaintiffs instance.
Petitioners do not deny that the second dismissal was requested by
respondents before the service of any responsive pleadings. Accordingly, the
dismissal at this instance is a matter of right that is not subject to the trial
courts discretion. In O.B. Jovenir Construction and Development Corporation
v. Macamir Realty and Development Corporation:76
[T]he trial court has no discretion or option to deny the motion, since
dismissal by the plaintiff under Section 1, Rule 17 is guaranteed as a matter
of right to the plaintiffs. Even if the motion cites the most ridiculous of
grounds for dismissal, the trial court has no choice but to consider the
complaint as dismissed, since the plaintiff may opt for such dismissal as a
matter of right, regardless of ground.77 (Emphasis supplied)
For this reason, the trial court issued its order dated November 22, 2002
dismissing the case, without prejudice. The order states:
When this Motion was called for hearing, all the plaintiffs namely, Joseph
Cheng, Jaime Cheng, Mercedes Igne and Lucina Santos appeared without
their counsels. That they verbally affirmed the execution of the Motion to
Dismiss, as shown by their signatures over their respective names reflected
thereat. Similarly, none of the defendants appeared, except the counsel for
defendant, Ramon Chang [sic], who manifested that they have not yet filed
their Answer as there was a defect in the address of Ramon Cheng [sic] and
the latter has not yet been served with summons.
Under the circumstances, and further considering that the defendants herein
have not yet filed their Answers nor any pleading, the plaintiffs has [sic] the
right to out rightly [sic] cause the dismissal of the Complaint pursuant to
Section 2, Rule 17 of the 1997 Rules of Civil Procedure without prejudice.
Thereby, and as prayed for, this case is hereby ordered DISMISSED without
prejudice.
SO ORDERED.78 (Emphasis supplied)
When respondents filed the third case on substantially the same claim, there
was already one prior dismissal at the instance of the plaintiffs and one prior
dismissal at the instance of the defendants. While it is true that there were
two previous dismissals on the same claim, it does not necessarily follow that
the re-filing of the claim was barred by Rule 17, Section 1 of the Rules of Civil
Procedure. The circumstances surrounding each dismissal must first be
examined to determine before the rule may apply, as in this case.
Even assuming for the sake of argument that the failure of Atty. Mirardo
Arroyo Obias to file the appropriate pleading in the first case came under the
purview of Rule 17, Section 3 of the Rules of Civil Procedure, the dismissal in
the second case is still considered as one without prejudice. In Gomez v.
Alcantara:79
The dismissal of a case for failure to prosecute has the effect of adjudication
on the merits, and is necessarily understood to be with prejudice to the filing
of another action, unless otherwise provided in the order of dismissal. Stated
differently, the general rule is that dismissal of a case for failure to prosecute
is to be regarded as an adjudication on the merits and with prejudice to the
filing of another action, and the only exception is when the order of dismissal
the order of dismissal was not yet final since it could still be overturned upon
reconsideration, or even on appeal to a higher court.
Moreover, petitioners were not prohibited from filing the motion for
reconsideration. This court has already stated in Narciso v. Garcia83 that a
defendant has the right to file a motion for reconsideration of a trial courts
order denying the motion to dismiss since "[n]o rule prohibits the filing of
such a motion for reconsideration."84 The second case, therefore, was still
pending when the third case was filed.
The prudent thing that respondents could have done was to wait until the
final disposition of the second case before filing the third case. As it stands,
the dismissal of the second case was without prejudice to the re-filing of the
same claim, in accordance with the Rules of Civil Procedure. In their haste to
file the third case, however, they unfortunately transgressed certain
procedural safeguards, among which are the rules on litis pendentiaand res
judicata.
In Yap:
Litis pendentiaas a ground for the dismissal of a civil action refers to that
situation wherein another action is pending between the same parties for the
same cause of action, such that the second action becomes unnecessary and
vexatious. The underlying principle of litis pendentia is the theory that a
party is not allowed to vex another more than once regarding the same
subject matter and for the same cause of action. This theory is founded on
the public policy that the same subject matter should not be the subject of
controversy incourts more than once, in order that possible conflicting
judgments may be avoided for the sake of the stability of the rights and
status of persons.
The requisites of litis pendentiaare: (a) the identity of parties, or at least such
as representing the same interests in both actions; (b) the identity of rights
asserted and relief prayed for, the relief being founded on the same facts;
and (c) the identity of the two cases such that judgment in one, regardless
ofwhich party is successful, would amount to res judicatain the
other.85 (Emphasis supplied)
There is no question that there was an identity of parties, rights, and reliefs
in the second and third cases. While it may be true that the trial court
already dismissed the second case when the third case was filed, it failed to
take into account that a motion for reconsideration was filed in the second
case and, thus, was still pending. Considering that the dismissal of the
second case was the subject of the first certiorari case and this present
petition for review, it can be reasonably concluded that the second case, to
this day, remains pending.
Hence, when respondents filed the third case, they engaged in forum
shopping. Any judgment by this court on the propriety of the dismissal of the
second case will inevitably affect the disposition of the third case.
This, in fact, is the reason why there were two different petitions for certiorari
before the appellate court. The omnibus order dated July 30, 2004 denied
two pending motions by petitioners: (1) the motion for reconsideration in the
second case and (2) the motion to dismiss in the third case. Since petitioners
are barred from filing a second motion for reconsideration of the second
case, the first certiorari case was filed before the appellate court and is now
the subject of this review. The denial of petitioners motion for
reconsideration in the third case, however, could still be the subject of a
separate petition for certiorari. That petition would be based now on the third
case, and not on the second case.
This multiplicity of suits is the veryevil sought to be avoided by the rule on
forum shopping. In Dy v. Mandy Commodities Co., Inc.,86 the rule is that:
Once there is a finding of forum shopping, the penalty is summary dismissal
not only of the petition pending before this Court, but also of the other case
that is pending in a lower court. This is so because twin dismissal is a
punitive measure to those who trifle with the orderly administration of
justice.87 (Emphasis supplied)
The rule originated from the 1986 case of Buan v. Lopez, Jr.88 In Buan,
petitioners filed a petition for prohibition with this court while another
petition for prohibition with preliminary injunction was pending before the
Regional Trial Court of Manila involving the same parties and based on the
same set of facts. This court, in dismissing both actions, stated:
Indeed, the petitioners in both actions . . . have incurred not only the
sanction of dismissal oftheir case before this Court in accordance with Rule
16 of the Rules of Court, but also the punitive measure of dismissal of both
their actions, that in this Court and that in the Regional Trial Court as well.
Quite recently, upon substantially identical factual premises, the Court en
banchad occasion to condemn and penalize the act of litigants of filing the
same suit in different courts, aptly described as "forum shopping[.]" 89
The rule essentially penalizes the forum shopper by dismissing all pending
actions on the same claim filed in any court. Accordingly, the grant of this
petition would inevitably result in the summary dismissal of the third case.
Any action, therefore, which originates from the third case pending with any
court would be barred by res judicata.
Because of the severity of the penalty of the rule, an examination must first
be made on the purpose of the rule. Parties resort to forum shopping when
they file several actions of the same claim in different forums in the hope of
obtaining a favorable result. It is prohibited by the courts as it "trifle[s] with
the orderly administration of justice."90
In this case, however, the dismissal of the first case became final and
executory upon the failure of respondentscounsel to file the appropriate
pleading. They filed the correct pleading the second time around but
eventually sought its dismissal as they"[suspected] that their counsel is not
amply protecting their interests as the case is not moving for almost three
(3) years."91 The filing of the third case, therefore, was not precisely for the
purpose of obtaining a favorable result butonly to get the case moving, in an
attempt to protect their rights.
It appears that the resolution on the merits of the original controversy
between the parties has long beenmired in numerous procedural
entanglements. While it might be more judicially expedient to apply the
"twin-dismissal rule" and disallow the proceedings in the third case to
continue, it would not serve the ends of substantial justice. Courts of justice
must always endeavor to resolve cases on their merits, rather than
summarily dismiss these on technicalities: [C]ases should be determined on
the merits, after all parties have been given full opportunity to ventilate their
causes and defenses, rather than on technicalities or procedural
imperfections. In that way, the ends of justice would be served better. Rules
of procedure are mere tools designed to expedite the decision or resolution
of cases and other matters pending in court. A strict and rigid application of
rules, resulting in technicalities that tend to frustrate rather than promote
Attorney3 (SPA), executed by Rolando Salvador (Rolando) and dated July 24,
1998. On the same day, the parties executed the Contract to Sell4 which
stipulated that for a consideration of P5,000,000.00, Spouses Salvador sold,
transferred and conveyed in favor of Spouses Rabaja the subject property.
Spouses Rabaja made several payments totalling P950,000.00, which were
received by Gonzales pursuant to the SPA provided earlier as evidenced by
the check vouchers signed by Gonzales and the improvised receipts signed
by Herminia.
Sometime in June 1999, however, Spouses Salvador complained to Spouses
Rabaja that they did not receive any payment from Gonzales. This prompted
Spouses Rabaja to suspend further payment of the purchase price; and as a
consequence, they received a notice to vacate the subject property from
Spouses Salvador for non-payment of rentals.
Thereafter, Spouses Salvador instituted an action for ejectment against
Spouses Rabaja. In turn, Spouses Rabaja filed an action for rescission of
contract against Spouses Salvador and Gonzales, the subject matter of the
present petition.
In the action for ejectment, the complaint was filed before the Metropolitan
Trial Court of Mandaluyong City, Branch 60 (MeTC), where it was docketed as
Civil Case No. 17344. In its August 14, 2002 Decision,5 the MeTC ruled in
favor of Spouses Salvador finding that valid grounds existed for the eviction
of Spouses Rabaja from the subject property and ordering them to pay back
rentals. Spouses Salvador were able to garnish the amount of
P593,400.006 from Spouses Rabajas time deposit account pursuant to a writ
of execution issued by the MeTC.7 Spouses Rabaja appealed to the Regional
Trial Court, Branch 212, Mandaluyong City (RTC-Br. 212) which reversed the
MeTC ruling in its March 1, 2005 decision.8 The RTC-Br. 212 found that no
lease agreement existed between the parties. Thereafter, Spouses Salvador
filed an appeal with the CA which was docketed as CA-G.R. SP No. 89259.
On March 31, 2006, the CA ruled in favor of Spouses Salvador
and reinstated the MeTC ruling ejecting Spouses Rabaja.9 Not having been
appealed, the CA decision in CA-G.R. SP No. 89259 became final and
executory on May 12, 2006.10chanroblesvirtuallawlibrary
Meanwhile, the rescission case filed by Spouses Rabaja against Spouses
Salvador and Gonzales and docketed as Civil Case No. MC No. 03-2175 was
also raffled to RTC-Br. 212. In their complaint,11dated July 7, 2003, Spouses
Rabaja demanded the rescission of the contract to sell praying that the
amount of P950,000.00 they previously paid to Spouses Salvador be returned
to them. They likewise prayed that damages be awarded due to the
contractual breach committed by Spouses Salvador.
Spouses Salvador filed their answer with counterclaim and cross-
claim12 contending that there was no meeting of the minds between the
parties and that the SPA in favor of Gonzales was falsified. In fact, they filed
a case for falsification against Gonzales, but it was dismissed because the
original of the alleged falsified SPA could not be produced. They further
averred that they did not receive any payment from Spouses Rabaja through
Gonzales. In her defense, Gonzales filed her answer13 stating that the SPA
was not falsified and that the payments of Spouses Rabaja amounting to
P950,000.00 were all handed over to Spouses Salvador.
The pre-trial conference began but attempts to amicably settle the case were
unsuccessful. It was formally reset to February 4, 2005, but Spouses Salvador
and their counsel failed to attend. Consequently, the RTC issued the pre-trial
order14declaring Spouses Salvador in default and allowing Spouses Rabaja to
present their evidence ex parte against Spouses Salvador and Gonzales to
present evidence in her favor.
A motion for reconsideration,15 dated March 28, 2005, was filed by Spouses
Salvador on the said pre-trial order beseeching the liberality of the court. The
rescission case was then re-raffled to RTC-Br. 214 after the Presiding Judge of
RTC-Br. 212 inhibited herself. In the Order,16 dated October 24, 2005, the RTCBr. 214 denied the motion for reconsideration because Spouses Salvador
provided a flimsy excuse for their non-appearance in the pre-trial conference.
Thereafter, trial proceeded and Spouses Rabaja and Gonzales presented their
respective testimonial and documentary evidence.
RTC Ruling
On March 29, 2007, the RTC-Br. 214 rendered a decision17 in favor of Spouses
Rabaja. It held that the signature of Spouses Salvador affixed in the contract
to sell appeared to be authentic. It also held that the contract, although
denominated as contract to sell, was actually a contract of sale because
Spouses Salvador, as vendors, did not reserve their title to the property until
the vendees had fully paid the purchase price. Since the contract entered
into was a reciprocal contract, it could be validly rescinded by Spouses
Rabaja, and in the process, they could recover the amount of P950,000.00
jointly and severally from Spouses Salvador and Gonzales. The RTC stated
that Gonzales was undoubtedly the attorney-in-fact of Spouses Salvador
absent any taint of irregularity. Spouses Rabaja could not be faulted in
dealing with Gonzales who was duly equipped with the SPA from Spouses
Salvador.
The RTC-Br. 214 then ruled that the amount of P593,400.00 garnished from
the time deposit account of Spouses Rabaja, representing the award of rental
arrearages in the separate ejectment suit, should be returned by Spouses
Salvador.18 The court viewed that such amount was part of the purchase
price of the subject property which must be returned. It also awarded moral
and exemplary damages in favor of Spouses Rabaja and attorneys fees in
favor of Gonzales. The dispositive portion of the said decision reads:
WHEREFORE, this court renders judgment as follows:
a. Ordering the Contract to Sell entered into by the plaintiff and
defendant spouses Rolando and Herminia Salvador on July 24, 1998 as
RESCINDED;
b. Ordering defendant spouses Rolando and Herminia Salvador and
defendant Rosario S. Gonzales jointly and severally liable to pay
plaintiffs:
1. the amount of NINE HUNDRED FIFTY THOUSAND PESOS
(P950,000.00), representing the payments made by the latter for
the purchase of subject property;
2. the amount of TWENTY THOUSAND PESOS (P20,000.00), as
moral damages;
3. the amount of TWENTY THOUSAND PESOS (P20,000.00), as
exemplary damages;
4. the amount of ONE HUNDRED THOUSAND PESOS (P100,000.00),
as attorneys fees;
5. the cost of suit.
CA Ruling
On March 29, 2007, the CA affirmed the decision of the RTC-Br. 114 with
modifications. It ruled that the contract to sell was indeed a contract of
sale and that Gonzales was armed with an SPA and was, in fact, introduced
to Spouses Rabaja by Spouses Salvador as the administrator of the property.
Spouses Rabaja could not be blamed if they had transacted with Gonzales.
The CA then held that Spouses Salvador should return the amount of
P593,400.00 pursuant to a separate ejectment case, reasoning that Spouses
Salvador misled the court because an examination of CA-G.R. SP No.
89260 showed that Spouses Rabaja were not involved in that case. CA-G.R.
SP No. 59260 was an action between Spouses Salvador and Gonzales only
and involved a completely different residential apartment located at 302-C
Jupiter Street, Dreamland Subdivision, Mandaluyong City.
The CA, however, ruled that Gonzales was not solidarily liable with Spouses
Salvador. The agent must expressly bind himself or exceed the limit of his
authority in order to be solidarily liable. It was not shown that Gonzales as
agent of Spouses Salvador exceeded her authority or expressly bound herself
to be solidarily liable. The decretal portion of the CA decision reads:
WHEREFORE, the appeal is PARTLY GRANTED. The assailed Decision dated
March 29, 2007 and the Order dated September 12, 2007, of the Regional
Trial Court, Branch 214, Mandaluyong City, in Civil Case No. MC-03-2175, are
AFFIRMED with MODIFICATION in that Rosario Gonzalez is not jointly and
severally liable to pay Spouses Rabaja the amounts enumerated in
paragraph (b) of the Decision dated March 29, 2007.
SO ORDERED.21
Spouses Salvador filed a motion for reconsideration but it was denied by the
CA in its January 5, 2012 Resolution.
Hence, this petition.
ASSIGNMENT OF ERRORS
I
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE LOWER
COURT GRAVELY ABUSED ITS DISCRETION IN DECLARING
PETITIONERS IN DEFAULT AND IN DEPRIVING THEM OF THE
OPPORTUNITY TO CROSS-EXAMINE RESPONDENTS SPS. RABAJA AS
WELL AS TO PRESENT EVIDENCE FOR AND IN THEIR BEHALF, GIVEN
THE MERITORIOUS DEFENSES RAISED IN THEIR ANSWER THAT
CATEGORICALLY AND DIRECTLY DISPUTE RESPONDENTS SPS.
RABAJAS CAUSE OF ACTION.
II
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE TRIAL
COURT GRAVELY ERRED IN GIVING CREDENCE TO THE TESTIMONY OF
RESPONDENT GONZALES THAT PAYMENTS WERE INDEED REMITTED
TO AND RECEIVED BY PETITIONER HERMINIA SALVADOR EVEN AS THE
IMPROVISED RECEIPTS WERE EVIDENTLY MADE UP AND FALSIFIED BY
RESPONDENT GONZALES.
III
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE TRIAL
COURT GRAVELY ERRED IN RESCINDING THE CONTRACT TO SELL
WHEN THERE IS NOTHING TO RESCIND AS NO VALID CONTRACT TO
SELL WAS ENTERED INTO, AND IN DIRECTING THE REFUND OF THE
AMOUNT OF P950,000.00 WHEN THE EVIDENCE CLEARLY SHOWS
THAT SAID AMOUNT WAS PAID TO AND RECEIVED BY RESPONDENT
GONZALES ALONE WHO MISAPPROPRIATED THE SAME.
IV
THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS
DECISION FOR PETITIONERS TO RETURN THE AMOUNT OF
P543,400.00 REPRESENTING RENTALS IN ARREARS GARNISHED OR
WITHDRAWN BY VIRTUE OF A WRIT OF EXECUTION ISSUED IN AN
EJECTMENT CASE WHICH WAS TRIED AND DECIDED BY ANOTHER
COURT.
V
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE LOWER
COURT GRAVELY ERRED IN AWARDING DAMAGES TO RESPONDENTS
SPS. RABAJA, THERE BEING NO FACTUAL AND LEGAL BASES FOR
SUCH AWARD.
VI
THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE TRIAL
COURT GRAVELY ERRED IN AWARDING P100,000.00 TO RESPONDENT
GONZALES AS ATTORNEYS FEES WHEN RESPONDENT GONZALES, IN
FACT, COMMITTED FORGERY AND FALSIFICATION IN DEALING WITH
THE PROPERTY OF PETITIONERS AND MISAPPROPRIATED THE
MONIES PAID TO HER BY RESPONDENTS SPS. RABAJA, THUS GIVING
PREMIUM TO HER FRAUDULENT ACTS.22
The foregoing can be synthesized into three main issues. First, Spouses
Salvador contend that the order of default must be lifted because reasonable
grounds exist to justify their failure to attend the pre-trial conference on
February 4, 2005. Second, Spouses Salvador raise in issue the veracity of the
receipts given by Gonzales, the SPA and the validity of the contract to sell.
They claim that the improvised receipts should not be given credence
because these were crude and suspicious, measuring only by 2 x 2 inches
which showed that Gonzales misappropriated the payments of Spouses
Rabaja for herself and did not remit the amount of P950,000.00 to them. As
there was no consideration, then no valid contract to sell existed. Third,
Spouses Salvador argue that the ejectment case, from which the amount of
P593,400.00 was garnished, already became final and executory and could
not anymore be disturbed. Lastly, the award of damages in favor of Spouses
Rabaja and Gonzales was improper absent any legal and factual bases.
On January 21, 2013, Spouses Salvador filed their supplemental
petition23 informing the Court that RTC-Br. 213 had rendered a decision in
Civil Case No. MC00-1082, an action for rescission of the SPA. The said
decision held that Spouses Salvador properly revoked the SPA in favor of
Gonzales due to loss of trust and confidence. On September 11, 2013,
Gonzales filed her comment to the supplemental petition,24 contending that
the RTC-Branch 213 decision had no bearing because it had not yet attained
finality. On even date, Spouses Rabaja filed their Comment,25 asserting that
the present petition is a mere rehash of the previous arguments of Spouses
Salvador before the CA. On November 15, 2013, Spouses Salvador replied
that they merely wanted to show that the findings by the RTC-Br. 213 should
be given weight as a full-blown trial was conducted
therein.26chanroblesvirtuallawlibrary
The Courts Ruling
As a general rule, the Courts jurisdiction in a Rule 45 petition is limited to
the review of pure questions of law. A question of law arises when the doubt
or difference exists as to what the law is on a certain state of facts.
Negatively put, Rule 45 does not allow the review of questions of fact. A
question of fact exists when the doubt or difference arises as to the truth or
falsity of the allegations.27chanroblesvirtuallawlibrary
The present petition presents questions of fact because it requires the Court
to examine the veracity of the evidence presented during the trial, such as
the improvised receipts, the SPA given to Gonzales and the contract to sell.
Even the petitioner spouses themselves concede and ask the Court to
consider questions of fact,28 but the Court finds no reason to disturb the
findings of fact of the lower courts absent any compelling reason to the
contrary.
The failure of Spouses Salvador to attend pre-trial conference warrants the
presentation of evidence ex parte by Spouses Rabaja
On the procedural aspect, the Court reiterates the rule that the failure to
attend the pre-trial conference does not result in the default of an absent
party. Under the 1997 Rules of Civil Procedure, a defendant is only declared
in default if he fails to file his Answer within the reglementary period.29On the
other hand, if a defendant fails to attend the pre-trial conference, the plaintiff
can present his evidence ex parte. Sections 4 and 5, Rule 18 of the Rules of
Court provide:
Sec. 4. Appearance of parties.
It shall be the duty of the parties and their counsel to appear at the pre-trial.
The non-appearance of a party may be excused only if a valid cause is shown
therefor or if a representative shall appear in his behalf fully authorized in
writing to enter into an amicable settlement, to submit to alternative modes
of dispute resolution, and to enter into stipulations or admissions of facts and
of documents.
Sec. 5. Effect of failure to appear.
The failure of the plaintiff to appear when so required pursuant to the next
preceding section shall be cause for dismissal of the action. The dismissal
shall be with prejudice, unless otherwise ordered by the court. A similar
failure on the part of the defendant shall be cause to allow the
plaintiff to present his evidence ex parte and the court to render
judgment on the basis thereof.
[Emphasis supplied]
The case of Philippine American Life & General Insurance Company v. Joseph
Enario30 discussed the difference between the non-appearance of a
defendant in a pre-trial conference and the declaration of a defendant in
default in the present Rules of Civil Procedure. The decision instructs:
Prior to the 1997 Revised Rules of Civil Procedure, the phrase "as in default"
was initially included in Rule 20 of the old rules, and which read as follows:
Sec. 2. A party who fails to appear at a pre-trial conference may be nonsuited or considered as in default.
It was, however, amended in the 1997 Revised Rules of Civil Procedure.
Justice Regalado, in his book, REMEDIAL LAW COMPENDIUM, explained the
rationale for the deletion of the phrase "as in default" in the amended
provision, to wit:
1. This is a substantial reproduction of Section 2 of the former Rule 20 with
the change that, instead of defendant being declared "as in default" by
reason of his non-appearance, this section now spells out that the procedure
will be to allow the ex parte presentation of plaintiffs evidence and the
rendition of judgment on the basis thereof. While actually the procedure
remains the same, the purpose is one of semantical propriety or
terminological accuracy as there were criticisms on the use of the word
"default" in the former provision since that term is identified with the failure
to file a required answer, not appearance in court.
Still, in the same book, Justice Regalado clarified that while the order of
default no longer obtained, its effects were retained, thus:
Failure to file a responsive pleading within the reglementary period, and not
failure to appear at the hearing, is the sole ground for an order of default,
except the failure to appear at a pre-trial conference wherein the effects of a
default on the part of the defendant are followed, that is, the plaintiff shall be
allowed to present evidence ex parte and a judgment based thereon may be
rendered against defendant.
From the foregoing, the failure of a party to appear at the pre-trial has indeed
adverse consequences. If the absent party is the plaintiff, then his case shall
be dismissed. If it is the defendant who fails to appear, then the plaintiff is
allowed to present his evidence ex parte and the court shall render judgment
based on the evidence presented. Thus, the plaintiff is given the privilege to
present his evidence without objection from the defendant, the likelihood
being that the court will decide in favor of the plaintiff, the defendant having
forfeited the opportunity to rebut or present its own evidence.31 The stringent
application of the rules on pre-trial is necessitated from the significant role of
the pre-trial stage in the litigation process. Pre-trial is an answer to the
clarion call for the speedy disposition of cases. Although it was discretionary
under the 1940 Rules of Court, it was made mandatory under the 1964 Rules
and the subsequent amendments in 1997.32 The importance of pre-trial in
civil actions cannot be overemphasized.33
There is no dispute that Spouses Salvador and their counsel failed to attend
the pre-trial conference set on February 4, 2005 despite proper notice.
Spouses Salvador aver that their non-attendance was due to the fault of their
counsel as he forgot to update his calendar.34 This excuse smacks of
carelessness, and indifference to the pre-trial stage. It simply cannot be
considered as a justifiable excuse by the Court. As a result of their
inattentiveness, Spouses Salvador could no longer present any evidence in
their favor. Spouses Rabaja, as plaintiffs, were properly allowed by the RTC to
present evidence ex parte against Spouses Salvador as defendants.
Considering that Gonzales as co-defendant was able to attend the pre-trial
conference, she was allowed to present her evidence. The RTC could only
render judgment based on the evidence presented during the trial.
Gonzales, as agent of Spouses Salvador, could validly receive the payments
of Spouses Rabaja
Even on the substantial aspect, the petition does not warrant consideration.
The Court agrees with the courts below in finding that the contract entered
into by the parties was essentially a contract of sale which could be validly
rescinded. Spouses Salvador insist that they did not receive the payments
made by Spouses Rabaja from Gonzales which totalled P950,000.00 and that
Gonzales was not their duly authorized agent. These contentions, however,
must fail in light of the applicable provisions of the New Civil Code which
state:chanRoblesvirtualLawlibrary
Art. 1900. So far as third persons are concerned, an act is deemed to have
been performed within the scope of the agent's authority, if such act is
within the terms of the power of attorney, as written, even if the agent has in
fact exceeded the limits of his authority according to an understanding
between the principal and the agent.
xxxx
Art. 1902. A third person with whom the agent wishes to contract on behalf
of the principal may require the presentation of the power of attorney, or the
instructions as regards the agency. Private or secret orders and instructions
of the principal do not prejudice third persons who have relied upon the
power of attorney or instructions shown them.
xxxx
Art. 1910. The principal must comply with all the obligations which the agent
may have contracted within the scope of his authority.
Persons dealing with an agent must ascertain not only the fact of agency, but
also the nature and extent of the agents authority. A third person with whom
the agent wishes to contract on behalf of the principal may require the
presentation of the power of attorney, or the instructions as regards the
agency. The basis for agency is representation and a person dealing with an
agent is put upon inquiry and must discover on his own peril the authority of
the agent.35chanroblesvirtuallawlibrary
According to Article 1990 of the New Civil Code, insofar as third persons are
concerned, an act is deemed to have been performed within the scope of the
agent's authority, if such act is within the terms of the power of attorney, as
written. In this case, Spouses Rabaja did not recklessly enter into a contract
to sell with Gonzales. They required her presentation of the power of
attorney before they transacted with her principal. And when Gonzales
presented the SPA to Spouses Rabaja, the latter had no reason not to rely on
it.
The law mandates an agent to act within the scope of his authority which
what appears in the written terms of the power of attorney granted upon
him.36 The Court holds that, indeed, Gonzales acted within the scope of her
authority. The SPA precisely stated that she could administer the property,
negotiate the sale and collect any document and all payments related to the
subject property.37 As the agent acted within the scope of his authority, the
principal must comply with all the obligations.38As correctly held by the CA,
considering that it was not shown that Gonzales exceeded her authority or
that she expressly bound herself to be liable, then she could not be
considered personally and solidarily liable with the principal, Spouses
Salvador.39chanroblesvirtuallawlibrary
Perhaps the most significant point which defeats the petition would be the
fact that it was Herminia herself who personally introduced Gonzalez to
Spouses Rabaja as the administrator of the subject property. By their own
ostensible acts, Spouses Salvador made third persons believe that Gonzales
was duly authorized to administer, negotiate and sell the subject property.
This fact was even affirmed by Spouses Salvador themselves in their petition
where they stated that they had authorized Gonzales to look for a buyer of
their property.40 It is already too late in the day for Spouses Salvador to
retract the representation to unjustifiably escape their principal obligation.
As correctly held by the CA and the RTC, considering that there was a valid
SPA, then Spouses Rabaja properly made payments to Gonzales, as agent of
Spouses Salvador; and it was as if they paid to Spouses Salvador. It is of no
moment, insofar as Spouses Rabaja are concerned, whether or not the
payments were actually remitted to Spouses Salvador. Any internal matter,
arrangement, grievance or strife between the principal and the agent is
theirs alone and should not affect third persons. If Spouses Salvador did not
receive the payments or they wish to specifically revoke the SPA, then their
recourse is to institute a separate action against Gonzales. Such action,
however, is not any more covered by the present proceeding.
The amount of P593,400.00 should not be returned by Spouses Salvador
Nevertheless, the assailed decision of the CA must be modified with respect
to the amount of P593,400.00 garnished by Spouses Salvador and ordered
returned to Spouses Rabaja. The RTC ordered the return of the amount
garnished holding that it constituted a part of the purchase price. The CA
ruled that Spouses Salvador misled the Court when they improperly cited CAG.R. SP No. 89260 to prove their entitlement to the said amount. Both courts
erred in their ruling.
First, the garnishment of the amount of P593,400.00 against Spouses Rabaja
was pursuant to the CA decision in CA-G.R. SP No. 89259, an entirely
different case involving an action for ejectment, and it does not concern the
rescission case which is on appeal before this Court. Moreover, the decision
on the ejectment case is final and executory and an entry of judgment has
already been made.41 Nothing is more settled in law than that when a final
judgment is executory, it thereby becomes immutable and unalterable. The
judgment may no longer be modified in any respect, even if the modification
is meant to correct what is perceived to be an erroneous conclusion of fact or
law, and regardless of whether the modification is attempted to be made by
the court which rendered it or by the highest Court of the land. The doctrine
damages in the same way that a clearly unfounded civil action is not among
the grounds for moral damages.53 Article 2220 of the New Civil Code provides
that to award moral damages in a breach of contract, the defendant must act
fraudulently or in bad faith. In this case, Spouses Rabaja failed to sufficiently
show that Spouses Salvador acted in a fraudulent manner or with bad faith
when it breached the contract of sale. Thus, the award of moral damages
cannot be warranted.
As to the award of exemplary damages, Article 2229 of the New Civil Code
provides that exemplary damages may be imposed by way of example or
correction for the public good, in addition to the moral, temperate, liquidated
or compensatory damages.54 The claimant must first establish his right to
moral, temperate, liquidated or compensatory damages. In this case,
considering that Spouses Rabaja failed to prove moral or compensatory
damages, then there could be no award of exemplary damages.
With regard to attorneys fees, neither Spouses Rabaja nor Gonzales is
entitled to the award. The settled rule is that no premium should be placed
on the right to litigate and that not every winning party is entitled to an
automatic grant of attorneys fees.55 The RTC reasoned that Gonzales was
forced to litigate due to the acts of Spouses Salvador. The Court does not
agree. Gonzales, as agent of Spouses Salvador, should have expected that
she would be called to litigation in connection with her fiduciary duties to the
principal.
In view of all the foregoing, the CA decision should be affirmed with the
following modifications:
1. The order requiring defendant Spouses Rolando and Herminia Salvador
to pay plaintiffs the amount of Five Hundred Ninety Three Thousand
(P593,000.00) Pesos, representing the amount garnished from the
Metrobank deposit of plaintiffs as for their back rentals should be
deleted;
2. The award of moral damages in the amount of Twenty Thousand
(P20,000.00) Pesos; exemplary damages in the amount of Twenty
Thousand (P20,000.00) Pesos, and attorneys fees in the amount of
One Hundred Thousand (P100,000.00) Pesos in favor of Spouses
Rabaja should be deleted; and
3. The award of attorneys fees in amount of One Hundred Thousand
(P100,000.00) Pesos in favor of Gonzales should be deleted.
The other amounts awarded are subject to interest at the legal rate of 6%
per annum, to be reckoned from the date of finality of this judgment until
fully paid.
The issue advanced before the Court is whether or not the RTC erred in
dismissing Pulgars motion for intervention as a consequence of the dismissal
of the main case. While acknowledging the RTCs lack of jurisdiction, Pulgar
nonetheless prays that the Court pass upon the correctness of the Municipal
Assessors assessment of QPLs realty taxes, among others.
The Courts Ruling
The petition lacks merit.
Jurisdiction over an intervention is governed by jurisdiction over the main
action.19 Accordingly, an intervention presupposes the pendency of a suit in a
court of competent jurisdiction.20
In this case, Pulgar does not contest the RTC's dismissal of Civil Case No.
0587-M for lack of jurisdiction, but oddly maintains his intervention by asking
in this appeal a review of the correctness of the subject realty tax
assessment. This recourse, the Court, however, finds to be improper since
the RTC's lack of jurisdiction over the main case necessarily resulted in the
dismissal of his intervention.1wphi1 In other words, the cessatiori of the
principal litigation - on jurisdictional grounds at that - means that Pulgar had,
as a matter of course, lost his right to intervene. Verily, it must be borne in
mind that:
[I]ntervention is never an independent action, but is ancillary and
supplemental to the existing litigation. Its purpose is not to obstruct nor x x x
unnecessarily delay the placid operation of the machinery of trial, but merely
to afford one not an original party, yet having a certain right or interest in
the pending case, the opportunity to appear and be joined so he could assert
or protect such right or interests.
Otherwise stated, the right of an intervenor should only be in aid of the right
of the original party. Where the right of the latter has ceased to exist, there is
nothing to aid or fight for; hence, the right of intervention ceases.21
WHEREFORE, the petition is DENIED.
SO ORDERED.
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 pretrial 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, 9thRev. 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 1087A-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.27cralawred
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 respondents paraphernal property. Thus, it held:
Proceeding from the foregoing consideration, the finding that Lot No. 1087-A2-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-appellees31 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 TCTs 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, defendantappellee, 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
husbands 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
cralawlawlibrary
On June 23, 2007, the above CA decision became final and
executory.33cralawred
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 respondents Answer
appeared on its face to tender an issue; it disputed petitioners 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 petitioners 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.38cralawred
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.
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.40cralawred
Petitioners 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 respondents 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 respondents
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.
Respondents 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 partys 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 petitioners 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 partys
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.44cralawred
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 partys 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
ordered DISMISSED.
SO ORDERED.
Carpio, (Acting Chief Justice),* Velasco, Jr.,** Mendoza, and Leonen, JJ., concur.
three years; that therefore, in view of its pleaded cause for reneging on its
rentals (the 1997 Asian financial crisis), the RTC should have ordered the
reception of evidence for this purpose, after which a summary judgment
would then have been proper, not a judgment on the pleadings. After all,
Santos has claimed in its Motion for Summary Judgment that Comglascos
cited cause for pre-termination was fictitious or a sham, whereas in truth
the prevailing business climate which ensued after the 1997 currency crisis
resulted in great difficulty on its part to comply with the terms of the lease
as to be manifestly beyond the contemplation of the parties; thus,
Comglasco should be deemed released from the lease.
Next, Comglasco insists that its advance rentals and deposit totaling
P309,000.00 should be deducted from any sum awarded to Santos while it
also insists that there is no factual and legal basis for the award of damages.
Ruling of the Court
The petition is denied.
The first three issues being related will be discussed together.
Comglasco maintains that the RTC was wrong to rule that its answer to
Santos complaint tendered no issue, or admitted the material allegations
therein; that the court should have heard it out on the reason it invoked to
justify its action to pre-terminate the parties lease; that therefore a
summary judgment would have been the proper recourse, after a hearing.
In Philippine National Construction Corporation v. CA12 (PNCC), which also
involves the termination of a lease of property by the lessee due to
financial, as well as technical, difficulties,13 the Court ruled:
The obligation to pay rentals or deliver the thing in a contract of lease falls
within the prestation to give; hence, it is not covered within the scope of
Article 1266. At any rate, the unforeseen event and causes mentioned by
petitioner are not the legal or physical impossibilities contemplated in said
article. Besides, petitioner failed to state specifically the circumstances
brought about by the abrupt change in the political climate in the country
except the alleged prevailing uncertainties in government policies on
infrastructure projects.
The principle of rebus sic stantibus neither fits in with the facts of the case.
Under this theory, the parties stipulate in the light of certain prevailing
conditions, and once these conditions cease to exist, the contract also
ceases to exist. This theory is said to be the basis of Article 1267 of the Civil
Code, which provides:
supporting evidence to justify its action on the parties lease, but it did not
do so. Section 2 of Rule 35 provides:
Sec. 2. Summary judgment for defending party. - A party against whom a
claim, counterclaim, or cross-claim is asserted or a declaratory relief is
sought may, at any time, move with supporting affidavits, depositions or
admissions for a summary judgment in his favor as to all or any part thereof.
Concerning, now, whether Comglascos alleged rental deposit and advance
rentals of P309,000.00 should be credited to Comglascos account, let it
suffice to state that it never raised this matter in its answer to the complaint,
nor in its appeal to the CA. Certainly, it cannot do so now.
Finally, as to whether attorneys fees may be recovered by Santos, Article
2208(2) of the Civil Code justifies the award thereof, in the absence of
stipulation, where the defendants act or omission has compelled the plaintiff
to incur expenses to protect his interest. The pre-termination of the lease by
Comglasco was not due to any fault of Santos, and Comglasco completely
ignored all four demands of Santos to pay the rentals due from January 16,
2002 to August 15, 2003, thereby compelling Santos to sue to obtain relief.
It is true that the policy of the Court is that no premium should be placed on
the right to litigate,21 but it is also true that attorneys fees are in the nature
of actual damages, the reason being that litigation costs money.22 But the
Court agrees with the CA that the lesser amount of P100,000.00 it awarded
to Santos instead of P200,000.00 adjudged by the RTC, is more reasonable.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
SO ORDERED.
Velasco, Jr., (Chairperson), Peralta, Villarama, Jr., and Jardeleza, JJ., concur.
witness, and in declaring that petitioner had the propensity to delay the
case. The Petition was docketed as CA-G.R. SP No. 82239.
On September 30, 2004, the CA issued its Decision24 in CA-G.R. SP No. 82239
dismissing the petition for certiorari and affirming the trial courts action,
declaring that petitioner adopted a pattern of delay and was guilty of
employing dilatory maneuvers, trifling with respondents right to a speedy
dispensation of justice, abusing the patience of the trial court and wasting its
time, squandering the peoples money, and impeding the administration of
justice. It held further that the trial court acted rightly in its resolution of the
case, treating petitioner with liberality despite its trifling with the expeditious
administration of justice; that petitioners complaint was correctly dismissed
for failure to prosecute after it was given all the opportunity to present its
evidence; that said dismissal operates as an adjudication on the merits; that
petitioners right to due process was not violated; and that petitioners
second motion for reconsideration is not allowed under Section 5, Rule 37 of
the 1997 Rules of Civil Procedure.25 In addition, the appellate court
admonished petitioners counsel, reminding the latter not to delay his case,
but rather to observe the rules of procedure and not misuse them to defeat
the ends of justice.
Petitioner took the matter to this Court, via a petition for review
on certiorari docketed as G.R. No. 166336. However, in a March 7, 2005
Resolution,26 the Petition was denied for failure to submit a verified
statement of material date of filing the motion for reconsideration of the
assailed CA judgment, and for failure to show that the appellate court
committed any reversible error. In several other Resolutions27 of this Court,
petitioners motions for reconsideration and to refer the case to the Court en
banc were denied on the ground, among others, that it failed to sufficiently
show that the CA committed any reversible error.
On January 17, 2006, an Entry of Judgment28 was issued by the Court stating
that on August 16, 2005, its March 7, 2005 Resolution in G.R. No. 166336
became final and executory.
Ruling of the Regional Trial Court
In Civil Case No. Q-02-45865, respondent was allowed to present her
evidence on the counterclaim. As found by the CA, respondents evidence is
as follows:
x x x. She presented the testimony of Rhodora Calinawan, the architect who
conducted a complete inspection of the project first in September 2000, and,
second, in November 2000, after typhoon Seniang. Rhodora Calinawan
narrated her findings and identified the photographs submitted as proofs of
appellants29 substandard work. Among the defects she pointed out were the
sloppily done flooring, the unaligned electrical outlet and switch, dried
cement and paint stained flooring, incorrect colored cement used to fill the
gap between the tiles, need to repair door jamb, sloppily done grouting of
tiles, incorrect luggage compartment doors, bubbles in the varnishing works,
unaligned sanding of parquet flooring, poor termination of shower and
enclosure and bull nose wood moulding, dirty window sill, lack of screws and
rubber on the window, damaged roof panels, need for plashing and
installation of drift edges, and improper installation of asphalt shingles on the
roof. After the typhoon, appellee30 also requested her to make a second
inspection. She prepared another report which listed the following additional
defects: the second floor parquet flooring was wet due to the typhoon
because the windows were not properly sealed, lacked sealant and rubber
protector.
Susan Saulog took the stand on February 15, 2005. She testified on
appellants defective work and the damage caused by typhoon Seniang to
the unfinished work, notwithstanding the fact that she had already paid a
total of P10,592,194.80. She refused to pay appellant the amount of
P851,601.58 because the latter already collected advance payment but had
a lot of unfinished work before it abandoned the project. She made a
counter-demand for P4,600,000.00 that excluded the lost revenue for
unearned rentals, exemplary and moral damages. She was supposed to earn
P160,000.00 per month from rentals starting July 2000. After appellant
abandoned the project, she still spent P3,820,796.21 to rectify and complete
the same. The accounts chargeable to appellant were listed in Exhibit 21, to
wit:
ITEM NO.
A
B
C
D
E
F
G
H
PARTICULARS
Bestbuilt Steel Builders
Sub-Contractor: Fizcon Enterprises
Labor Contracts & Quotations
Cash Advances for Materials by FAJ
Professional Fees
Rectification of Major Defective Works
Other Charges
Other Additional Construction Expenses for
Rectification & Repair Works
GRAND TOTAL AMOUNT
AMOUNT
785,299.12
375,166.17
243,461.40
186,236.62
631,666.46
422,563.77
647,629.71
528,772.96
3,820,796.2
1
The penalty for delay is P12,500.00 per day. From July 30, 2000 up to
November 17, 2000, the total penalty amounted to P1,387,500.00. She
suffered sleepless nights because she started to experience frozen shoulder
and trigger finger that necessitated the services of Dr. Alberto Lu, an
acupuncturist. Exhibits 30-34 comprised five receipts issued by Alberto M.
Lou, evidencing payment of P400 for services rendered. She claimed
should be adjudicated, in accordance with Article 2208 of the New Civil Code.
(7) The Court is also persuaded to grant penalties for delay, as provided for
in the agreement between the parties (Exhs. 11-B-1 and 11-B-2).
(8) The Court, however, is not inclined to grant additional consequential
damages of P1,600,000.00, because this court finds that this claim has not
been properly supported.
(9) Finally, the Court is inclined to grant defendants claim, for lost rentals,
which is properly supported by the testimony of defendant and very
plausible under the circumstances, because one of the duplex apartments
was constructed for rental income purposes and its completion and rental
was very much delayed, because of the fault of plaintiff.
IN VIEW OF ALL THE FOREGOING, plaintiff FAJ Construction & Development
Corporation is hereby ordered to pay defendant Susan Saulog, the following
amounts:
(1)
(2)
(3)
(4)
(5)
(6)
modification the January 30, 2006 Decision of the trial court, pronouncing
thus:
Appellant35 now questions anew the propriety of the dismissal of the
complaint on ground of failure to prosecute. Appellant argues that it should
not be made to suffer the consequences of the negligence or mistakes of its
counsel.
This Court finds that any disquisition on this issue is improper for being
barred by res judicata. x x x
More, appellants case was dismissed for failure to prosecute because of the
numerous delays caused by its counsel. Appellant cannot be excused from
the actions of its counsel since it is likewise a settled rule that mistake[s] of
counsel binds the client. It is only in case of gross or palpable negligence of
counsel when courts must step in and accord relief to a client who suffered
thereby. x x x
The next issue is: did appellee36 adequately prove her right to actual
damages for rectification of appellants defective work? Article 1715 of the
Civil Code provides:
Article 1715. The contractor shall execute the work in such a manner that it
has the qualities agreed upon and has no defects which destroy or lessen its
value or fitness for its ordinary or stipulated use. Should the work be not of
such quality, the employer may require that the contractor remove the
defect or execute another work. If the contractor fails or refuses to comply
with this obligation, the employer may have the defect removed or another
work executed, at the contractors cost.
Evidently, Article 1715 gives the employer the options to require the removal
of the work, to rectify the flaws in their work, or to have the work done at the
expense of the contractor.
Here, the defective workmanship was amply proven by Architect Rhodora
Calinawans testimony and documentary evidence i.e., photographs,
receipts, and list of the expenses needed to rectify appellants poorly crafted
work. Hence, We sustain the award of actual damages based on these
testimonial and documentary evidence.
Regarding the penalty for delay in the amount of One Million Three Hundred
Eighty Seven Thousand Five Hundred Pesos (P1,387,500.00), the same
should also be sustained. A contract is the law between the parties, and
they are bound by its stipulations so long as they are not contrary to law,
customs, public policy and public morals. The penalty for delay is agreed
upon by the parties themselves. The fact that appellant was already delayed
lost rental is purely speculative. In the same way that one could speculate
that the unit will be rented out, a person cannot be precluded from
speculating that the other unit may be occupied by a close relative for free.
The court must rely on competent evidence and must avoid any speculation
or give premium to self-serving allegations. As stated, the award of
P5,391,456.00 is in the nature of actual damages. To be recoverable, actual
damages must not only be capable of proof, but must actually be proved
with a reasonable degree of certainty. Courts cannot simply rely on
speculation, conjecture, or guesswork in determining the fact and amount of
damages. To justify an award of actual damages, there must be competent
proof of the actual amount of loss. Credence can be given only to claims
which are duly supported by receipts x x x. These are not present in the
case at bar.
As for attorneys fees, it is well settled that the law allows judicial discretion
to determine whether or not attorneys fees are appropriate. The surrounding
circumstances of each case are to be considered. Here, We resolve to delete
the award of attorneys fees since the trial court did not make any particular
finding that any of the instances enumerated in Art. 2208 of the Civil Code
exists. More, it is settled that the award of attorneys fees is the exception
rather than the general rule. Counsels fees are not awarded every time a
party prevails in a suit because of the policy that no premium should be
placed on the right to litigate.
The trial court correctly imposed 6% interest on all awarded amounts
commencing from the date of the filing of the complaint. When an
obligation, not constituting a loan or forbearance of money, is breached,
interest on the amount of damages awarded may be imposed at the
discretion of the court at 6% per annum.
ACCORDINGLY, the appealed decision is AFFIRMED WITH MODIFICATION,
deleting the award of lost rentals, moral damages, exemplary damages, and
attorneys fees, including appearance fee.
SO ORDERED.37
Petitioner filed a Partial Motion for Reconsideration, but in a February 24,
2012 Resolution, the CA denied the same. Hence, the present Petition.
Issues
In a January 28, 2013 Resolution,38 this Court resolved to give due course to
the Petition, which raises the following assignment of errors:
I.
received by the latter on April 9, 2008. They had 60 days from receipt
thereof to file the petition for certiorari with the CA. The last day to file the
petition fell on June 8, 2008, a Sunday, while June 9 was declared a holiday,
hence, the filing of the petition on the next working day which was June 10,
2008 was still on time.
Going now on the merits, petitioners claim that they did not violate the rule
on judicial stability as the parties in the instant case and the earlier decided
Civil Case No. 2410 of the RTC Lanao del Sur, Branch 9, are entirely different
and petitioners were not parties in the latter case. There is no absolute
identity of causes of action and the issues involved are not similar. The main
issue in Civil Case No. 2410 was which of the two deeds of sale appeared to
have been executed by Cota Dimaampao, i.e., one in favor of Sheik
Pangandaman Daromimbang (Timbangs brother) and the other one in favor
of Alug, Balt and Pangarungan, now herein respondents, was really signed
and executed by him. On the other hand, the main issue in the instant case
is whether or not the subject land was given by Cota as a dowry to his exwife Timbang, if so, the land exclusively belongs to petitioners as compulsory
heirs of Timbang and the sale made by Cota to respondents was void. In the
alternative, even assuming that the subject land was not given as a dowry
but acquired by the spouses Cota and Timbang during their marriage,
petitioners contend that the subject land is a conjugal property to which
Timbang is entitled to a share thereof which Cota had no right to sell.
Petitioners insist that respondents are buyers in bad faith as they were aware
of the former's possession of the subject land at the time it was sold to them
by Cota. These issues, as petitioners claim, are factual which can only be
determined after a full blown trial.
We are not persuaded.
We find no error committed by the CA in ruling that the RTC committed a
grave abuse of discretion in not dismissing petitioners' complaint on the
ground that the issue of ownership and possession of the subject land had
already been previously decided in Civil Case No. 2410 which had attained
finality. We agree with the CA that res judicata is applicable in the instant
case.
Under the rule of res judicata, a final judgment or order on the merits,
rendered by a court having jurisdiction of the subject matter and of the
parties, is conclusive in a subsequent case between the same parties and
their successors-in-interest by title subsequent to the commencement of the
action or special proceeding litigating for the same thing and under the same
title and in the same capacity.18 To state simply, a final judgment or decree
on the merits by a court of competent jurisdiction is conclusive of the rights
of the parties or their privies in all later suits on all points and matters
determined in the former suit.19
The requisite essential of res judicata are: (1) the judgment sought to bar the
new action must be final; (2) the decision must have been rendered by a
court having jurisdiction over the subject matter and the parties; (3) the
disposition of the case must be a judgment on the merits; and (4) there must
be as between the first and second action, identity of parties, subject matter,
and causes of action. Should identity of parties, subject matter, and causes
of action be shown in the two cases, then res judicata in its aspect as a bar
by prior judgment would apply. If as between the two cases, only identity of
parties can be shown, but not identical causes of action, then res judicata as
conclusiveness of judgment applies.20
It is not disputed that the RTC Lanao del Sur, Branch 9, had jurisdiction over
the subject matter and parties in Civil Case No. 2410 and its Decision dated
November 21, 2000 was a judgment on the merits, i.e., one rendered after
the presentation of the parties' evidence during the trial of the case; and that
such decision had already become final and executory and an entry of
judgment had been made.21
Petitioners, however, claim that there is no identity of parties as they were
not parties in Civil Case No. 2410. Petitioners are grandchildren of both Cota
and Timbang Dimaampao, and as heirs, they are deemed in privity with their
grandparents as to the property they would acquire by inheritance. Notably,
Cota and Timbang's two daughters had never intervened during their lifetime
to claim that the subject land was given as a dowry to their mother Timbang
and that Cota had no right to sell the same and it was only now that
petitioners as grandchildren who are claiming such. Since the decision in
Civil Case No. 2410 had already ruled that Cota was the owner of the subject
land and could validly convey the same to herein respondents, petitioners'
claim of Timbang's ownership of the subject lot is already barred.
Petitioners further allege that there is no identity of causes of action between
Civil Case No. 2410 and the instant case. One test of identity of causes of
action is whether or not the judgment sought in a subsequent case will be
inconsistent with the prior judgment. If no inconsistency will result, the prior
judgment cannot be held to be a bar.22
Petitioners, in the instant case, raise the issue of Cota's ownership and
possession of the subject land and the invalidity of respondents' deed of sale
dated April 10, 1978. Notably, these issues were already resolved by RTC
Lanao del Sur, Branch 9, in Civil Case No. 2410 where it declared that
plaintiffs, Cota and herein respondents, are the true and lawful owners of the
subject land. Such decision was affirmed by the CA on July 8, 200323 which
made the following disquisition, among others, to
wit:chanRoblesvirtualLawlibrary
Since (Cota) Dimaampao is still the owner of the subject land, he could
validly convey the same to his co-plaintiffs below (herein respondents).
Dimaampao's ownership of the land in question coupled with his right to
alienate the same necessarily renders moot and academic the issue of
whether plaintiffs-appellees Alug, Pangarungan and Balt (herein
respondents) are buyers in bad faith.
In any event, the purported bad faith of Alug, Pangarungan and Balt (herein
respondents) is negated by the diligence they exercised in ascertaining
Dimaampao's ownership of the disputed land at the time it was offered to
them for sale. As testified to by Alug, he verified OCT No. RP-355 with the
Register of Deeds and found out that the subject land is registered in the
name of Dimaampao but encumbered by way of mortgage in favor of Luna.
No other encumbrance or transfer is annotated on OCT No. RP-355. When
Alug inspected the subject parcel of land, it was being cultivated by Soliman
Bilao, the tenant of Dimaampao. Thus, he and Pangarungan and Balt
concluded the sale with Dimaampao. x x x
Finally contrary to the contention of defendants-appellants, plaintiffsappellees (herein respondents) are under no obligation to check the status of
the subject property with (Sheik) Daromimbang, it being sufficient that they
verified the title thereof with the Register of Deeds of Marawi City and
conducted an ocular inspection thereon. The investigation they had diligently
pursued to confirm the validity of Dimaampao's title effectively negates any
bad faith in their purchase of the property.24 (Emphasis supplied )
The CA decision became final with our denial of the petition for review
on certiorari in G.R. No. 161438 on February 23, 2004 and an Entry of
Judgment was made on April 22, 2004.25 Consequently, the issue of Cota's
ownership and possession of the subject land as well as the validity of the
1978 deed of sale between Cota and herein respondents are already settled
issues which could not be relitigated anew. When a right or fact has been
judicially tried and determined by a court of competent jurisdiction, so long
as it remains unreversed, it should be conclusive upon the parties and those
in privity with them in law or estate.26cralawlawlibrary
The validity of the 1978 deed of sale in respondents' favor had already been
declared with finality, and if affirmative relief is granted to petitioners in the
instant case, i.e., by the annulment of the deed of sale, then the decision will
necessarily be inconsistent with the prior judgment, substantial identity of
causes of action is present.
We also agree with the CA's finding that petitioners' action had already
prescribed. The subject land was bought by respondents from Cota as
evidenced by a Deed of Sale dated April 10, 1978. Cota executed an
Affidavit27 of adverse claim attaching thereto the deed of sale and such
affidavit was registered and annotated in OCT No. RP-335 on April 11, 1978.
Article 1144 (1) of the Civil Code provides that an action upon a written
contract must be brought within ten years from the time the right of action
accrues. Here, the period of prescription should be counted from the time of
the registration of sale which was a notice to all the world. The affidavit of
adverse claim was annotated on OCT No. RP-335 on April 11, 1978,28 thus
petitioners' complaint filed only in 2005 is indeed beyond the prescriptive
period to do so.
WHEREFORE, the petition for review is DENIED. The Decision dated July 2,
2010 and the Resolution dated July 27, 2011 issued by the Court of Appeals
in CA -G.R. SP No. 02376-MIN are hereby AFFIRMED.
SO ORDERED.
Velasco, Jr., (Chairperson), Del Castillo,* Villarama, Jr., and Reyes, JJ., concur.
documents are submitted. The presiding judge of Branch 39 shall monitor the
strict enforcement of this Decision.3
Now before us are the following submissions of the intervenor oil companies,
to wit: (1) Motion for Reconsideration4 of the Decision dated 25 November
2014 filed by intervenor Pilipinas Shell Petroleum Corporation (Shell); (2)
Motion for Clarification5 filed by intervenor Chevron Philippines, Inc.
(Chevron); and (3) Manifestation of Understanding of the Dispositive Portion
of the Decision of 15 December 20146 (the correct date of promulgation is 25
November 2014) filed by intervenor Petron Corporation (Petron).
I
Shell seeks reconsideration of the Decision based on the following grounds:
1. Erroneous reliance on the factual pronouncements in G.R. No. 156052
entitled Social Justice Society v. Atienza, which, it argues, were
completely unsupported by competent evidence;
2. Adoption of imagined fears, causes, surmises and conjectures
interposed by the petitioners, which it also raises as totally
unsupported by evidence because the petitions, which involve factual
issues, were wrongfully filed with this Court;
3. Conclusion that there is no substantial difference between the
conditions in 2001 and the present setup with respect to the oil depots
operations; and
4. Failure to dismiss the petitions despite the enactment of Ordinance No.
8187, which, it maintains, has rendered the cases moot and academic. 7
The Motion for Reconsideration must be denied.
It bears stressing that these cases were called in session several times to
give the members of the Court time to study and present their respective
positions. Before the Decision was finally promulgated, the Court had
thoroughly deliberated on the arguments of the parties, including the basic
issues herein raised the rationale for upholding the position of the Court in
G.R. No. 156052, on one hand, and the safety measures adopted by the
intervenors, including the alleged imagined fears, causes, surmises and
conjectures interposed by the petitioners, on the other; the argument of
whether or not the petition should have been filed with the trial court or at
least referred to the Court of Appeals to receive evidence; and the issue on
whether or not the enactment of Ordinance No. 8283 has rendered the
instant petitions moot and academic. And for failure to reconcile diverse
views on several issues, a Concurring and Dissenting Opinion was written.
The grounds relied on being mere reiterations of the issues already passed
upon by the Court, there is no need to cut and paste pertinent portions of
the Decision or re-write the ponencia in accordance with the outline of the
instant motion.
As succinctly put by then Chief Justice Andres R. Narvasa in Ortigas and Co.
Ltd. Partnership v. Judge Velasco8 on the effect and disposition of a motion
for reconsideration
The filing of a motion for reconsideration, authorized by Rule 52 of the Rules
of Court, does not impose on the Court the obligation to deal individually and
specifically with the grounds relied upon therefor, in much the same way that
the Court does in its judgment or final order as regards the issues raised and
submitted for decision. This would be a useless formality or ritual invariably
involving merely a reiteration of the reasons already set forth in the
judgment or final order for rejecting the arguments advanced by the movant;
and it would be a needless act, too, with respect to issues raised for the first
time, these being, as above stated, deemed waived because not asserted at
the first opportunity. It suffices for the Court to deal generally and summarily
with the motion for reconsideration, and merely state a legal ground for its
denial (Sec. 14, Art. VIII, Constitution); i.e., the motion contains merely a
reiteration or rehash of arguments already submitted to and pronounced
without merit by the Court in its judgment, or the basic issues have already
been passed upon, or the motion discloses no substantial argument or
cogent reason to warrant reconsideration or modification of the judgment or
final order; or the arguments in the motion are too unsubstantial to require
consideration, etc.9
II
Chevron, in its Motion for Clarification,10 manifests that it has already ceased
using the Pandacan terminals since June 2014. However, the Pandacan Depot
Services, Inc. (PDSI), an incorporated joint venture of Chevron, Petron and
Shell, and of which Chevron continues to be a shareholder, still maintains the
operations through Petron and Shell. Thus:
2. At the outset, CHEVRON respectfully manifests that it has already
completed the relocation of its depot and terminal operations from the
Pandacan area, as it ceased using the Pandacan terminals for its fuel and
lubricants operations last June 2014. CHEVRON currently has zero volume of
lubricants and fuel products for commercial use stored at the Pandacan
terminals and the supply requirements of its customers are being withdrawn
from the other supply facilities available to CHEVRON.
3. While CHEVRON has ceased using the Pandacan terminals, it continues to
be a shareholder as well as hold a governance role in Pandacan Depot
Services Inc. (PDSI), the operator of the Pandacan terminals for fuels
products operations. PDSI is an incorporated joint venture established
pursuant to the joint venture agreements between CHEVRON, Petron and
a period of six (6) months from the date of its effectivity within which to
cease and desist from the operations of businesses.20
However, in the Decision dated 7 March 2007 in G.R. No. 156052, the Court
granted the petition21which sought the enforcement of Ordinance No. 8027
and the immediate removal of the terminalsof the oil companies. By so
granting the petition, it necessarily follows that the relocation and transfer it
ordered contemplates the complete removal of the facilities.
These cases being a mere sequel to the earlier petition, we so hold that the
relocation and transfer contemplated therein include the removal of the
facilities, especially so when the city plans on building commercial
establishments to replace the Pandacan terminals and provide a source of
employment for displaced employees. Accordingly, the comprehensive plan
to be submitted within forty-five (45) days from receipt of the Decision shall
also include the removal of the facilities.
On the matter of the enforcement of the assailed Decision in these cases,
Petron further posits that its first theory, that is, that the removal of the
facilities is excluded from the comprehensive plan to be submitted to the
Regional Trial Court, would be in accord with its Manifestation dated 30
November 2010, which it emphasized, the Court noted in the Decision and
quoted as follows:
2. Without prejudice to its position in the instant case as elucidated in its
Memorandum, Petron files this Manifestation to inform this Honorable Court
that in accordance with its agreement with and to honor its commitment to
the City of Manila, Petron has decided to cease operation of its petroleum
product storage facilities in Pandacan, Manila within five (5) years or not later
than January 2016 for the following reasons, x x x.22(Emphasis in the
Manifestation of Understanding x x x)
Let Petron be reminded that the Court did not, by noting its Manifestation
dated 30 November 2010, consent to consider January 2016 as a separate
deadline for compliance with our Decision, which, to repeat, includes the
removal of facilities after cessation of operations. The timelines prescribed in
the assailed Decision shall be observed to the letter.
WHEREFORE, the Court hereby resolves to:
1. DENY Shells Motion for Reconsideration of the Decision dated 25
November 2014;chanrobleslaw
2. DENY the prayers in the Motion for Clarification of Chevron that: a) the
wordings the very nature of the depots where millions of liter[s] of highly
flammable and highly volatile products x x x [have] no place in a densely
populated area be removed from the Decision dated 25 November 2014;
and b) the submission of an updated comprehensive plan and relocation
schedule, including the period for relocation, be deferred until after the
Motion is resolved with finality;
3. CLARIFY that the relocation and transfer necessarily include the complete
removal of the facilities from the Pandacan terminals and should be made
part of the required comprehensive plan and relocation schedule; and
4. REMIND Petron that the Court did not, by noting its Manifestation dated
30 November 2010, consent to consider January 2016 as a separate deadline
for compliance with our Decision, which, to repeat, includes the removal of
facilities after cessation of operations. The timelines prescribed in the
assailed Decision shall be observed to the letter.
In anticipation of further attempts to delay the enforcement of this Courts
Decision dated 25 November 2014, the parties to these cases are
hereby REMINDED of the pronouncements in Ortigas and Co. Ltd.
Partnership v. Judge Velasco23 on the import of the denial of a motion for
reconsideration. Thus:
The denial of a motion for reconsideration signifies that the grounds relied
upon have been found, upon due deliberation, to be without merit, as not
being of sufficient weight to warrant a modification of the judgment or final
order. It means not only that the grounds relied upon are lacking in merit but
also that any other, not so raised, is deemed waived and may no longer be
set up in a subsequent motion or application to overturn the judgment; and
this is true, whatever may be the title given to such motion or application,
whether it be second motion for reconsideration or motion for
clarification or plea for due process or prayer for a second
look, or motion to defer, or set aside, entry of judgment, or x x x,
etc..24 (Emphasis supplied)
This Resolution is final. Under pain of contempt, no further pleadings,
motions or papers in the guise of the above-enumerated submissions shall,
thus, be entertained in these cases.
SO ORDERED.
On May 20, 1981, the respondent wrote a letter and went to the petitioner
bank directing the latters manager not to release the loan to Calinico. The
respondent handed a copy of the letter to the bank on the same day. On the
next day, the respondent again went to the petitioner bank, but was
informed that the loaned amount ofP50,000.00 had already been given to
Calinico earlier that morning. The respondent thereafter learned that the
petitioner released another P50,000.00 as loan to Calinico.
That petitioner bank subsequently extrajudicially foreclosed the mortgage
due to the Ilogon spouses failure to pay the loan. On January 9, 1989, the
Provincial Sheriff sold the mortgaged property at public auction to the
petitioner bank as the highest bidder. On October 31, 1989, the Provincial
Sheriff issued a Certificate of Sale in favor of the petitioner bank.
For the mortgagors failure to redeem the mortgaged property within the
period prescribed by law, the title to the property was consolidated in the
petitioner bank's name. Consequently, Original Certificate of Title (OCT) No.
P-20348 was cancelled and Transfer Certificate of Title (TCT) No. T-63331 9 was
issued in the petitioner bank's name.
The RTC and the CA Rulings
In its decision dated September 13, 1993, the RTC dismissed the complaint
for lack of merit. It held that the petitioner bank was not aware of the
agreement between the respondent and the Ilogon spouses, and that the
respondent failed to present any evidence as basis to annul the mortgage
contract. To quote the RTC ruling:
xxxx
Plaintiff has not presented any evidence to be a basis for the annulment of
the real estate mortgage, the banks certificate of title, as well as justification
for an order from this court to return the possession of the lot to the plaintiff.
The agreement between plaintiff and defendant Ilogon spouses about the
purpose(s) of the loan and how they would dispose of it had until the filing of
this case, been unknown to the bank. The latter has been a lender in good
faith, later a buyer in good faith.
The court finds that plaintiff has failed to prove his allegations, and that the
preponderance of evidence has been in favor of the bank. 10
xxxx
The respondent moved to reconsider this decision,11 but the RTC denied his
motion for having been filed out of time. Accordingly, the RTC declared its
September 13, 1993 decision final and executory.
The respondent filed a petition for relief from judgment12 before the RTC,
claiming that he had been prevented from moving for the timely
reconsideration of the trial courts decision or to appeal this decision on time
due to the excusable negligence arising from the death of his wife on
September 13, 1993.
He explained that his counsel, Atty. Bienvenido Valmorida, only informed him
of the trial courts adverse decision thirty-seven (37) days from his counsel's
receipt of the decision. The respondent also claimed that the petitioner bank
was not a lender in good faith since it knew that the Ilogon spouses did not
own the mortgaged property.
In its order13 dated July 1, 1994, the RTC denied the respondents petition for
relief from judgment for lack of merit.
The respondent appealed to the CAand the appeal was docketed as CA-G.R.
CV No. 47053. In its decision of May 4, 2004, the CA set aside the RTCs July
1, 1994 order,and declared the real estate mortgage null and void. It also
ordered the petitioner bank to reconvey the land covered by TCT No. T-63331
to the respondent within sixty (60) days from entry of judgment.
It further directed the petitioner bank to pay the equivalent monetary value
of the land based on the price of the property at the public auction, with 6%
interest per annum from the date of the sheriffs auction sale or the amount
of the sale of the lot by the bank to third persons plus 6% interest per
annum, in the event that the property had already been conveyed by the
petitioner bank to third persons.
The CA held that while the respondent was late in filing his motion for
reconsideration, the rules of procedure should be relaxed since the matters
he raised in his petition were meritorious.
It disagreed with the RTCs ruling that the respondent did not present any
evidence that the petitioner bank had knowledge of the defect in Calinicos
title to the mortgaged land. According to the CA, the petitioner bank knew
that there wereconflicting claimsover the land, and that the OCT of this land
carried a prohibition of any encumbrance on the lot for five (5) years. It
added that the petitioner bank failed to exercise diligence in ascertaining the
ownership of the land, and ignored the respondents representations
thatCalinicos title was defective and was only for loan purposes.
The Ilogon spouses and the petitioner bank moved to reconsider this
decision, but the CA denied their motion in its resolution dated May 26, 2006.
The Petition for Review on Certiorari
In the present petition, the petitioner bank alleged that the respondents
petition for relief from judgment is unmeritorious as it was filed only after the
lapse of ninety-one (91) days from his (respondents) notice of the adverse
judgment. The bank also claimed that the failure of the respondents counsel
to file a timely motion for reconsideration from the RTCs judgment did not
constituteexcusable negligence so as to warrant the granting of the
respondents petition.
The petitioner bank further maintained that the real estate mortgage over
the land was valid because: (1) its validity was never raised as an issue
before the trial court; and (2) the petitioner bank is exempted from the 5year prohibitoryperiod since it is a Government branch, unit or institution.
In his comment, the respondent,14 represented by his heirs, maintained that
his counsels negligence was excusable, and that the petitioner bank was a
mortgagee in bad faith.
Our Ruling
After due consideration, we resolve to grant the petition.
RTC judgment already final and executory
We note at the outset that the RTCs September 13, 1993 decision which
dismissed the respondents complaint for annulment of real estate mortgage,
cancellation of original certificate of title, reconveyance, recovery of
possession and damageshad already become final and executory due to the
failure of his counsel to file a timely motion for reconsideration. This fact was
admitted by the respondent himself in his various pleadings before the lower
and appellate courts, as well as in his comment before this Court.
Both the law and jurisprudence hold that the perfection of an appeal in the
manner and within the period prescribed by law is mandatory. Failure to
conform tothe rules on appeal renders the judgment final, executory and
unappealable. Finality means that the decision can no longer be disturbed or
reopened no matter how erroneous the ruling might have been. The decision
fully binds, and should be complied with by the parties and their successors
in interest.
The Petition for Relief was filed out of time
We sustain the trial courts denial of the respondents petition for relief from
judgment to challenge its final and executory decision.
Section 3, Rule 38 of the 1997 Rules of Civil Procedure lays down the
requirements for a petition for relief from judgment, thus:
Section 3. Time for filing petition; contents and verification. - A petition
provided for in either ofthe preceding sections of this Rule must be verified,
filed within sixty (60) days after the petitioner learns of the judgment, final
order, or other proceeding to be set aside, and not more than six (6) months
after such judgment or final order was entered, or such proceeding was
taken; and must be accompanied with affidavits showing the fraud, accident,
mistake,or excusable negligence relied upon, and the facts constituting the
petitioner's good and substantial cause of action ordefense, as the case may
be.
A party filing a petition for relieffrom judgment must strictly comply with two
(2) reglementary periods: first, the petition must be filed within sixty (60)
days from knowledge of the judgment, order or other proceeding to be set
aside; and second, within a fixed period of six (6) months from entry of such
judgment, order or other proceeding.
Strict compliance with these periods is required because a petition for relief
from judgment is a final actof liberality on the part of the State, which
remedy cannot be allowed to erode any further the fundamental principle
that a judgment, order or proceeding must, at some definite time, attain
finality in order to put an end to litigation.15
In the present case, the respondents counsel received a copy of the RTCs
decision dated September 13, 1993 on September 15, 1993. Thus, the
petition for relief from judgment should have been filed on or before
November 14, 1993. However, the records showed that the petition was filed
only on December 15,1993, or ninety-one (91) days later.
Strict compliance with the periods stated under Rule 38 stems from the
equitable characterand nature of the petition for relief. Indeed, relief is
allowed only in exceptional cases such as when there is no other available or
adequate remedy. Asa petition for relief is actually the "last chance" given by
law to litigants to question a final judgment or order, the failure to avail of
thisfinal chance within the grace period fixed by the Rules is fatal.16
The respondents cited circumstances are not the proper subject of a petition
for relief from the judgment
Section 1, Rule 38 of the 1997 Rules of Civil Procedure provides that [w]hen a
judgment or final order is entered, or any other proceeding is thereafter
taken against a party inany court through fraud, accident, mistake, or
excusable negligence, he may file a petition in the same court and in the
same case praying that the judgment, order or proceeding be set aside.
Relief from judgment is a remedy provided by law to any person against
whom a decision or order is entered through fraud, accident, mistake, or
excusable negligence. It is a remedy, equitable in character, that is allowed
only in exceptional caseswhen there is no other available or adequate
remedy. When a party has another remedy available to him, which may
either be a motion for new trial or appeal from an adverse decision of the
trial court, and he was not prevented by fraud, accident, mistake, or
excusable negligence from filing such motion or taking such appeal, he
cannot avail of the remedy of petition for relief.17
In the present case, the respondent alleged that he had been prevented from
moving for the timely reconsideration of the trial courts decision or to
appeal this decision on time due to the death of his wife on September 13,
1993. He explained that his counsel,Atty. Valmorida, was the brother of his
deceased wife, and could not bear totell him that he had lost his case in the
RTC given the circumstances. Atty. Valmorida only informed him of the
courts adverse decision thirty-seven (37) days after his (Atty. Valmoria's)
receipt of the adverse decision. This circumstance, according to the
respondent, was a clear case of excusable negligence on the part of his
counsel, warranting relief from judgment.
We do not find this explanation persuasive.
errors that the court might have committed. Such judicial errors may be
corrected by means of an appeal. To recall, the respondent already raised
these grounds in his complaint for annulment of real estate mortgage,
cancellation of original certificate of title, reconveyance, recovery
ofpossession and damagesbefore the RTC. Indeed, relief will not be granted
toa party who seeks avoidance from the effects of the judgment when the
loss of the remedy at law was due to his own (or that of his counsels)
negligence; otherwise, the petition for relief can be used to revive the right
to appeal which had been lost through inexcusable negligence.18
At any rate, the grounds raised by the respondent are unmeritorious.
We are aware of the rule that banksare expected to exercise more care and
prudence than private individuals in their dealings, even those involving
registered lands, since their business is impressed with public interest. The
rule that persons dealing with registered lands can rely solely on the
certificate of title does not apply to banks.19Simply put, the ascertainment of
the status or condition of a property offered to it as security for a loan must
be a standard and indispensable part of a banks operations.20
In the present case, however, nothing in the documents presented by
Calinico would arouse the suspicion of the petitioner bank to prompt a more
extensive inquiry. When the Ilogon spouses applied for a loan, they
presented as collateral a parcel of land evidenced by OCT No. P-2034 issued
by the Office of the Register of Deeds of Cagayan de Oro, and registered in
the name of Calinico. This document did not contain any inscription or
annotation indicating that the respondent was the owner or that he has any
interest in the subject land. In fact, the respondent admitted that there was
no encumbrance annotated on Calinicos title at the time of the lattersloan
application. Any private arrangement between Calinico and the respondent
regarding the proceeds of the loan was not the concern of the petitioner
bank, as it was not a privy to this agreement. If Calinico violated the terms of
his agreement with the respondent on the turn-over of the proceeds of the
loan, then the latter's proper recourse was to file the appropriate criminal
action in court.
The respondent also failed to prove its allegation that the petitioner bank
knew, thru a letter sent by the formers lawyer, Atty. Crisanto Mutya, Jr., that
the sale of the subject land between him and Calinico was made only for loan
purposes, and that failure of Calinico to turn over the proceeds of the loan
will invalidate the sale. In his November 6, 1991 testimony, the respondent
admitted that it was his son who gave the letter to the manager of the
petitioner bank, thus: ATTY. REYNALDO LLEGO:
Q: Mr. Contreras, may I just show to you Exhibit C, the letter addressed to
Amanah Bank. You said that, this letter Exhibit C was received by the
Manager of the bank. May I know from you the name of the Manager at that
time?
EVANGELISTA CONTRERAS:
A: I did not know the name ofthe Manager at that time. Because it was my
son who brought this Exhibit C to the bank, and according to him it was the
personnel of the bank who received Exhibit C.
Q: And this was received on what date?
A: May 20, 1981.
Q: Directing your attention to Exhibit B which is the supposed counter
agreement. You will of course agree with me that the bank has no knowledge
of the execution of that agreement, is that correct?
A: When my lawyer wrote a letter to the bank at that time, he attached one
of the Xerox copy of this Exhibit B.
xxxx
Q: The title of the land was already in the name of the spouses Ilogon. There
was no encumbrance at the time it was offered for loan.
A: When Mr. Ilogon got the title, I did not see anymore because I trust him
already.21
(Emphasis ours)
Clearly, the respondent testified on matters not of his own personal
knowledge, hence hearsay. Corollarily, the respondents son was never
presented in court. Even assuming, for the sake of argument, that the
petitioner bank received a copy of Atty. Mutyas letter,22 it was still wellwithin its discretion to grant or deny the loan application after evaluating the
documents submitted for loan applicant. As earlier stated, OCT No. P-2034
issued in Calinicos favor was free from any encumbrances. The petitioner
bank is not anymore privy to whatever arrangements the owner entered into
regarding the proceeds of the loan.
Finally, we point out that the petitioner bank is a government owned or
controlled corporation.1wphi1 While OCT No. P-2034 (issued in favor of
Calinico by virtue of the deed of confirmation of sale) contained a prohibition
against the alienation and encumbrance of the subject land within five (5)
years from the date of the patent, the CA failed to mention that by the
express wordings of the OCT itself, the prohibition does not cover the
alienation and encumbrance "in favor of the Government or any of its
branches, units or institutions."23
WHEREFORE, in light of all the foregoing, we GRANT the present petition, and
SET ASIDE the decision and resolution of the Court of Appeals dated May 4,
2004 and May 26, 2006, respectively, in CA-G.R. CV No. 47053. Accordingly,
the decision of the Regional Trial Court, Branch 19, Cagayan de Oro City
dated September 13, 1993 is REINSTATED.
SO ORDERED.
October 1, 2014
Before this Court is a petition for review on certiorari1 under Rule 45 of the
Rules of Court seeking to annul and set aside the Decision2 dated July 2,
2009 and Resolution3 dated January 27, 2010 issued by the Court of Appeals
(CA) in CA-G.R. SP No. 106064, which affirmed the Decision 4 dated
September 3, 2008 of the Regional Trial Court (RTC) of Binangonan, Rizal,
Branch 69, in SCA Case No. 08-014.
The Facts
On August 28, 1996, Bernardino U. Dionisio (Dionisio) filed a complaint5 for
forcible entry with the Municipal Trial Court (MTC) of Cardona, Rizal, docketed
as Civil Case No. 96-0031 (forcible entry case), against Mario Ocampo (Mario)
and Felix Ocampo (Felix). Dionisio sought to recover the possession of a
portion ofhis property, covered by Original Certificate of Title (OCT) No. M4559, situated in Dalig, Cardona, Rizal, alleging that Mario and Felix built a
piggery thereon without his consent. In his answer,6 Mario denied Dionisios
allegation, claiming that the disputed parcel of land is owned by his wife,
Carmelita Ocampo (Carmelita), who inherited the same from her father.
Mario further claimed that they have been in possession of the said parcel of
land since 1969.
On September 12, 1997, the MTC rendered a decision,7 which dismissed the
complaint for forcible entry filed by Dionisio. The MTC opined that Dionisio
failed to establish his prior possession of the disputed parcel of land.
Dionisios notice of appeal was denied by the MTC in its Order8 dated January
26, 1998 for having been filed beyond the reglementary period. Dionisio died
on September 27, 1997.Consequently, on July 3, 1998, the heirs of Dionisio
(respondents), filed a complaint9 for recovery of possession with the MTC,
docketed as Civil Case No. 98-0006 (recovery of possession case), against
the spouses Mario and Carmelita (petitioners). The respondents sought to
recover the same portion of the parcel of land subject of Civil Case No. 960031.
The respondents averred that the subject property was acquired by Dionisio
on February 10, 1945 when he purchased the same from Isabelo Capistrano.
That Dionisio thereafter took possession of the subject property and was able
to obtain a free patent covering the subject property. OCT No. M-4559 was
subsequently issued in the name of Dionisio on December 22, 1987. The
respondents further claimed that sometime in 1995, Mario constructed a
piggery on a portion of the subject property without their consent.10
In their answer,11 the petitioners maintained that the subject parcel of land is
owned by Carmelita, having acquired the same through inheritance and that
they have been in possession thereof since 1969. Additionally, the
petitioners claimed that the respondents complaint for recovery of
possession of the subject property is barred by res judicatain the light of the
finality of the decision in the forcible entry case.
On February 18, 2008, the MTC rendered a decision12 dismissing the
complaint for recovery ofpossession filed by the respondents on the ground
of res judicata. Thus:
The Court has taken cognizance of the fact that the earlier case for forcible
entry docketed as Civil Case No. 96-0031 was filed by Bernardino U. Dionisio
against the same defendant Mario Ocampo before this Court on August 28,
1996, and a decision based on the merit was rendered on September 12,
1997 where this Court ruled to dismiss the complaint for failure on the part of
the plaintiff to establish their prior possession of the land and sufficient
evidence to establish cause of action by preponderance of evidence.
xxxx
Hence, the present complaint must be dismissed on ground of res judicata.
The material fact or question in issue in the forcible entry is for recovery of
possession which was conclusively settled in the decision dated September
12, 1997, such fact or question may not again be litigated in the present
action for accion publiciana, although covered by ordinary civil proceeding,
but technically has the same purpose, a suit for recovery of the right to
possess.13
On appeal, the RTC rendered a Decision14 on September 3, 2008, the decretal
portion of which reads:
WHEREFORE, premises considered, the appealed decision of Municipal Trial
Court of Cardona, Rizal, dated February 8, 2008, is hereby REVERSED and
SET ASIDE and a new one rendered in favor of the plaintiffs-appellants as
follows:
1. Declaring plaintiffs-appellants as entitled to possession for being the
lawful owners of the lands described under paragraph II of the
complaint and covered by Original Certificate of Title No. M-4559.
(b) In other cases, the judgment orfinal order is, with respect to the
matter directly adjudged or as to any other matter that could have
been raised in relation thereto, conclusive between the parties and
their successors in interest by title subsequent to the commencement
of the action or special proceeding, litigating for the same thing and
under the same title and in the same capacity; and
(c) In any other litigation between the same parties of their successors
in interest, that only is deemed to have been adjudged in a former
judgment or final order which appears upon its faceto have been so
adjudged, or which was actually and necessarily included therein or
necessary thereto.
This provision comprehends two distinct concepts of res judicata: (1) bar by
former judgmentand (2) conclusiveness of judgment.18 In Judge Abelita III v.
P/Supt. Doria, et al.,19 the Court explained the two aspects of res judicata,
thus:
There is "bar by prior judgment" when, as between the first case where the
judgment was rendered and the second case that is sought to be barred,
there is identity of parties, subject matter, and causes of action. In this
instance, the judgment in the first case constitutes an absolute bar to the
second action. Otherwise put, the judgment or decree of the court of
competent jurisdiction on the merits concludes the litigation between the
parties, as well as their privies, and constitutes a bar to a new action or suit
involving the same cause of action before the same or other tribunal.
But where there is identity of parties in the first and second cases, but no
identity of causes of action, the first judgment is conclusive only as to those
matters actually and directly controverted and determined and not as to
matters merely involved therein. This is the concept of res judicata known as
"conclusiveness of judgment." Stated differently, any right, fact or matter in
issue directly adjudicated or necessarily involved in the determination of an
action before a competent court in which judgment is rendered on the merits
is conclusivelysettled by the judgment therein and cannot again be litigated
between the parties and their privies whether or not the claim, demand,
purpose, or subject matter of the two actions is the same.20
For res judicataunder the first concept, bar by prior judgment, to apply, the
following requisites must concur, viz: (a) finality of the former judgment; (b)
the court which rendered it had jurisdiction over the subject matter and the
parties; (c) it must bea judgment on the merits; and (d) there must be,
between the first and second actions, identity of parties, subject matter and
causes of action.21
The first three requisites are present in this case. The Decision dated
September 12, 1997 in the forcible entry case rendered by the MTC, a court
which has jurisdiction over the subjectproperty and the parties, had long
become final. The said MTC decision is an adjudication on the merits.
However, the fourth requisite is not present. Although there is identity of
parties and subject matter as between the forcible entry case and recovery
of possession case, there is no identity of causes of action.
As correctly found by the RTC and the CA, the forcible entry case only
involves the issue of possession over the subject property while the recovery
of possession case puts in issue the ownership of the subject property and
the concomitant right to possess the same as an attribute of ownership.
In an action for forcible entry and detainer, the only issue is possession in
fact, or physical possession of real property, independently of any claim of
ownership that either party may put forth in his pleading. If plaintiff can
prove prior physical possession in himself, he may recover such possession
even from the owner, but, on the other hand, if he cannot prove such prior
physical possession, he has no right of action for forcible entry and detainer
even if he should be the owner of the property.22
Thus, even the MTC, in its Decision dated September 12, 1997 in the forcible
entry case, stressed that its determination is only limited to the issue of who
has "actual prior possession" of the subject property regardless of the
ownership of the same.23
On the other hand, the recovery of possession case is actually an accion
reinvindicatoria or a suit to recover possession of a parcel of land as an
element of ownership. A perusal of the complaint filed by the respondents in
the recoveryof possession case shows that the respondents, as successorsin-interest of Dionisio, are asserting ownership of the subject property and
are seeking the recovery of possession thereof.
A judgment rendered in a forcible entry case will not bar an action between
the same parties respecting title or ownership because between a case for
forcible entry and an accion reinvindicatoria, there is no identity of causes of
action.24 Such determination does not bind the title or affect the ownership of
the land; neither is it conclusive of the facts therein found in a case between
the same parties upon a different cause of action involving possession.
The decision in the forcible entry case is conclusive only as to the MTCs
determination that the petitioners are not liable for forcible entry since the
respondents failed to prove their prior physical possession; it is not
conclusive as to the ownership of the subject property. Besides, Section 18,
Rule 70 of the Rules of Court expressly provides that a "judgment rendered in
an action for forcible entry or detainer shall be conclusive with respect to the
possession only and shall in no wise bind the title or affect the ownership of
the land."
Second Issue: Ownership of the Subject Property
The respondents were able to prove that they have a superior right over the
subject property as against the petitioners. It is undisputed that the subject
property is indeed covered by OCT No. M-4559, which is registered in the
name of Dionisio, the respondents predecessor-in-interest. Between the
petitioners unsubstantiated and self-serving claim that the subject property
was inherited byCarmelita from her father and OCT No. M-4559 registered in
Dionisios name, the latter must prevail. The respondents title over the
subject property is evidence of their ownership thereof. That a certificate of
title serves as evidence of an indefeasible and incontrovertible title to the
property in favor of the person whose name appears therein and that a
person who has a Torrens title over a land is entitled to the possession
thereof are fundamental principles observed in this jurisdiction.25
Further, it is settled that a Torrens Certificate of Title is indefeasible and
binding upon the whole world unless and until it has been nullified by a court
of competent jurisdiction. Under existing statutory and decisional law, the
power to pass upon the validity of such certificate of title at the first instance
properly belongs to the Regional Trial Courts in a direct proceeding for
cancellation of title.26 Accordingly, the petitioners may not assail the validity
of the issuance of OCT No. M-4559 in the name of Dionisio in their answer to
the complaint filed by the respondents for recovery of possession of the
subject property; it is a collateral attack to the validity of OCT No. M-4559,
which the RTC and the CA aptly disregarded.
Third Issue: Laches
Respondents filed a petition for certiorari and prohibition before the CA,
docketed as CA-G.R. SP No. 70236, to assail the issuance of the aforesaid
injunctive writ. On July 24, 2002, the CA rendered a Decision holding that the
RTC committed grave abuse of discretion in issuing the writ absent a clear
legal right thereto on the part of NSSC and Orimaco. Consequently, the
April 2, 2002 Writ of Preliminary Injunction issued by the RTC was
ordered dissolved.9
On May 27, 2004, respondents filed an application for damages against the
injunction bond issued by CGAC in the amount of P1,000,000.00. 10
The RTC Ruling
On October 31, 2007, the RTC rendered a Decision11 dismissing the complaint
for breach of contract with damages for lack of merit.12
It further ruled that respondents were entitled to recover damages against
the injunction bond following the CAs pronouncement in CA-G.R. SP No.
70236, i.e., that NSSC and Orimaco had no clear legal right to justify the
issuance of the April 2, 2002 Writ of Preliminary Injunction, warranting its
dissolution.13
Accordingly, the RTC ordered NSSC, Orimaco, and CGAC to jointly and
severally pay respondents the following amounts: actual damages and lost
opportunities suffered by UMC in the amounts of P928,913.68 and
P14,271,266.00, respectively; P50,000.00 as attorneys fees and
P500,000.00 as lost income in favor of NCOD, Rolida, and Yap; and exemplary
damages of P300,000.00 for each of the respondents.14
Upon respondents motion,15 the RTC granted Execution Pending Appeal of its
October 31, 2007 Decision through an Order16dated January 16, 2008. It
ruled that there exists good reasons to justify the immediate
execution of the Decision, namely: (a) that NSSC is in imminent danger of
insolvency being admittedly in a state of rehabilitation under the supervision
of the Regional Trial Court of Misamis Oriental, Branch 40 through Special
Proceeding No. 2002-095; (b) that it has ceased its business operation as the
authorized dealer of Nissan Motor Philippines, Inc.; (c) that Orimaco, NSSCs
President and General Manager, has migrated abroad with his family; and (d)
that NSSC failed to file the necessary supersedeas bond to forestall the
immediate execution of the Decision pending appeal.17 The RTC thereupon
issued the corresponding writ.18c
CGAC assailed the RTCs January 16, 2008 Order before the CA through a
petition for certiorari,docketed as CA-G.R. SP No. 02459-MIN, questioning the
existence of good reasons to warrant the grant of execution pending appeal
and the propriety of enforcing it against one which is not the losing party in
the case but a mere bondsman whose liability is limited to the surety bond it
issued.
The CA Ruling
In a Decision19 dated February 25, 2009, the CA affirmed in part the assailed
order by allowing the execution pending appeal of the RTCs October 31,
2007 Decision but limiting the amount of CGACs liability to only
P1,000,000.00.20cralawlawlibrary
It upheld the trial courts findings that there are good reasons warranting the
execution of the latters Decision pending appeal, not only against NSSC and
Orimaco, but also against CGAC whose liability, however, was declared to be
limited only to the extent of the amount of the bond it issued in favor of its
principals, NSSC and Orimaco.21cralawlawlibrary
Aggrieved, CGAC filed a motion for reconsideration22 which was, however,
denied in a Resolution23dated August 14, 2009, hence, this petition.
The Issues Before the Court
The central issues in this case are: (a)whether or not good reasons exist to
justify execution pending appeal against CGAC which is a mere surety; and
(b) whether or not CGACs liability on the bond should be limited to
P500,000.00.
The Courts Ruling
The petition is unmeritorious.
The execution of a judgment pending appeal is an exception to the general
rule that only a final judgment may be executed; hence, under Section 2,
Rule 39 of the Rules of Court (Rules), the existence of good reasons for the
immediate execution of a judgment is an indispensable requirement as this is
what confers discretionary power on a court to issue a writ of execution
pending appeal.24 Good reasons consist of compelling circumstances
justifying immediate execution, lest judgment becomes illusory, 25 that is, the
prevailing partys chances for recovery on execution from the judgment
debtor are altogether nullified. The good reason yardstick imports a
superior circumstance demanding urgency that will outweigh injury or
damage to the adverse party26and one such good reason that has
been held to justify discretionary execution is the imminent danger
of insolvency of the defeated party.27
The factual findings that NSSC is under a state of rehabilitation and had
ceased business operations, taken together with the information that NSSC
President and General Manager Orimaco had permanently left the country
with his family, constitute such superior circumstances that demand urgency
in the execution of the October 31, 2007 Decision because respondents now
run the risk of its non-satisfaction by the time the appeal is decided with
finality. Notably, as early as April 22, 2008, the rehabilitation receiver had
manifested before the rehabilitation court the futility of rehabilitating NSSC
because of the latters insincerity in the implementation of the rehabilitation
process.28 Clearly, respondents diminishing chances of recovery
from the favorable Decision is a good reason to justify immediate
execution; hence, it would be improper to set aside the order
granting execution pending appeal.
That CGACs financial standing differs from that of NSSC does not negate the
order of execution pending appeal. As the latters surety, CGAC is considered
by law as being the same party as the debtor in relation to whatever is
adjudged touching the obligation of the latter, and their liabilities are
interwoven as to be inseparable.29 Verily,in a contract of suretyship, one
lends his credit by joining in the principal debtors obligation so as to render
himself directly and primarily responsible with him, and without reference to
the solvency of the principal.30 Thus, execution pending appeal against NSSC
means that the same course of action is warranted against its surety, CGAC.
The same reason stands for CGACs other principal, Orimaco, who was
determined to have permanently left the country with his family to evade
execution of any judgment against him.
Now, going to the second issue as above-stated, the Court resolves that
CGACs liability should as the CA correctly ruled be confined to the
amount of P1,000,000.00, and not P500,000.00 as the latter purports.
Section 4(b), Rule 58 of the Rules provides that the injunction bond is
answerable for all damages that may be occasioned by the improper
issuance of a writ of preliminary injunction.31 The Court has held
in Paramount Insurance Corp. v. CA32 that:
The bond insures with all practicable certainty that the defendant may
sustain no ultimate loss in the event that the injunction could finally be
dissolved. Consequently, the bond may obligate the bondsmen to account to
the defendant in the injunction suit for all: (1) such damages; (2) costs and
damages; (3) costs, damages and reasonable attorneys fees as shall be
incurred or sustained by the person enjoined in case it is determined that the
injunction was wrongfully issued.33
In this case, the RTC, in view of the improvident issuance of the April 2, 2002
Writ of Preliminary Injunction,adjudged CGACs principals, NSSC and
Orimaco, liable not only for damages as against NCOD, Rolida, and Yap but
withdrawn from the trading list; (b) conversion of the stock portfolio; (c)
fraud, as ATHONA had never intended to abide by the provisions of its
promissory note when they signed it; and (d) acting in concert as a common
enterprise or in the alternative, that ATHONA was the alter ego of PHILSEC
and AIFL. The suit was docketed as Civil Action No. H-86-440 before the U.S.
District Court.
PHILSEC, AIFL, and ATHONA filed counterclaims against 1488, Inc., Daic,
Craig, Ducat, and respondent, for the recovery of damages and excess
payment or, in the alternative, the rescission of the sale of the Harris County
property, alleging fraud, negligence, and conspiracy on the part of counterdefendants who knew or should have known that the value of said property
was less than the appraisal value assigned to it by Craig.
Before the referral of the case to the jury for verdict, the U.S. District Court
dropped respondent as counter-defendant for lack of evidence to support the
allegations against him. Respondent then moved in open court to sanction
petitioner (formerly PHILSEC), AIFL, and ATHONA based on Rule 11 of the U.S.
Federal Rules of Civil Procedure.7
In its Order dated March 13, 1990, the U.S. District Court stated that on
February 14, 1990, after trial, the jury returned a verdict for 1488, Inc. In the
same Order, the U.S. District Court ruled favorably on respondents pending
motion for sanction, thus:
During the course of the trial, the Court was required to review plaintiffs
Exhibit No. 91 to determine whether the exhibit should be admitted. After
reviewing the exhibit and hearing the evidence, the Court concluded that the
defendants counterclaims against Edgardo V. Guevara are frivolous and
brought against him simply to humiliate and embarrass him. It is the opinion
of the Court that the defendants, Philsec Investment Corporation, A/K/A BPI
Securities, Inc., and Ayala International Finance Limited, should be
sanctioned appropriately based on Fed. R. Civ. P. 11 and the Courts inherent
powers to punish unconscionable conduct. Based upon the motion and
affidavit of Edgardo V. Guevara, the Court finds that $49,450 is reasonable
punishment.
ORDERED that defendants, Philsec Investment Corporation A/K/A BPI
Securities, Inc., and Ayala International Finance Limited, jointly and severally,
shall pay to Edgardo V. Guevara $49,450 within 30 days of the entry of this
order.8
Petitioner, AIFL, and ATHONA appealed the jury verdict, as well as the
aforementioned order of the U.S. District Court for them to pay respondent
US$49,450.00; while 1488, Inc. appealed a post-judgment decision of the
U.S. District Court to amend the amount of attorneys fees awarded. The
appeals were docketed as Case No. 90-2370 before the U.S. Court of
Appeals, Fifth Circuit.
The U.S. Court of Appeals rendered its Decision on September 3, 1991
affirming the verdict in favor of 1488, Inc. The U.S. Court of Appeals found
no basis for the allegations of fraud made by petitioner, AIFL, and ATHONA
against 1488, Inc., Daic, Craig, and Ducat:
[2] To state a cause of action for fraud under Texas law, a plaintiff must
allege sufficient facts to show:
(1)
(2)
(3)
(4)
(5)
(6)
Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183, 185 (Tex.1977). We agree
with the district courts decision to grant a directed verdict against the
defendants. The defendants failed to allege sufficient facts to establish the
elements necessary to demonstrate fraud. In particular, the defendants
have failed to allege any facts that would tend to show that the plaintiff or
any of the third party defendants made a false representation or a
representation with reckless disregard as to its truth.
The Houston real estate market was extremely volatile during the late 1970s
and the early 1980s. Like a stream of hot air, property values rose rapidly
as the heat and fury generated by speculation and construction plans
mounted, but, just as rapidly, the climate cooled and the high-flying market
came crashing to an all time low. The real estate transaction involved in this
case was certainly affected by this environment of capriciousness.
Moreover, a number of additional variables may have contributed to the
uncertainty of its value. For instance, the land abutted a two-lane asphalt
road that had been targeted by the state for conversion into a major multilane divided highway. Water and sewage treatment facilities were located
near the boundary lines of the property. In addition, Houstons lack of
conventional zoning ordinances meant that the value of the property could
fluctuate depending upon the use (commercial or residential) for which the
property would ultimately be used.
[3] The fact that the defendants were unable to sell the property at the price
for which it had been appraised does not demonstrate that the plaintiff or the
third party defendants knew that the value of the property was less than the
appraised value, nor does it establish that the opposing parties were guilty of
negligent misrepresentation or negligence.
[4] In support of their allegation of fraud, the defendants rely heavily on a
loan application completed by 1488 shortly before the subject property was
transferred to Athona. See Defendants Exhibit 29. At the time, 1488 still
owed approximately $300,000 to Republic of Texas Savings Association on its
original loan for the subject property. The debt had matured and 1488 was
planning to move the loan to Home Savings Association of Houston, that is,
take out a loan from Home Savings to pay off the debt to Republic. 1488 had
planned to borrow $350,000 for that purpose. A line item on the Home
Savings loan application form asked for the amount of the loan as a
percentage of the appraised value of the land. A figure of thirty-nine percent
was typed into that space, and the defendants suggest that this proves that
the plaintiff knew Craigs appraisal was erroneous. The defendants reason
that if the $350,000 loan amount was only thirty-nine percent of the lands
appraised value, then the real estate must have been worth approximately
$897,436.
Although their analysis is sound, the conclusion reached by the defendants
cannot withstand additional scrutiny. At the time that the loan application
was completed, 1488 did not request to have a new appraisal done for the
property. Instead, 1488 planned to use the numbers that had been
generated for a quasi-appraisal done in 1977. The 1977 report purported
only to supplement an earlier appraisal that had been conducted in 1974,
and the supplement described its function as estimating market value for
mortgage loan purposes only. See Defendants Trial Exhibit 4. The two page
supplement was based on such old information that even the Home Savings
Association would not accept it without additional collateral as security for
the loan. See Record on Appeal, Vol. 17 at 5-29 to 5-30. The loan, however,
was never made because the property was transferred to Athona, and the
outstanding loan to Republic was paid off as part of that transaction. In
addition, the loan application itself was never signed by anyone affiliated
with 1488. The district court was correct in dismissing this argument in
support of the defendants fraud allegations.
[5] The defendants also allege that the plaintiff and counter defendants knew
that Craigs appraisal was fraudulent because the purchasers statement
signed by their own representative, and the sellers statement, signed by the
plaintiff, as well as the title insurance policy all recited a purchase price of
$643,416.12. Robert Higgs, general counsel for 1488, explained that
because of the nature of the transaction, 1488, for tax purposes, wanted the
purchase price on the closing statement to reflect only that amount of cash
actually exchanged at the closing as well as the promissory note given at the
closing. See Record on Appeal, Vol. 17 at 5-127. Although the closing
documents recite a purchase price well under the actual sales price, nothing
indicates that any of the parties actually believed the property to be worth
less than the sales amount.
The defendants also assert that it was error for the district court to deny
them permission to designate O. Frank McPherson, a Houston appraiser, as
an expert witness after the cutoff date established by a pretrial order for
such designations. The defendants contend that the error prevented them
from presenting facts that would support their fraud allegations. Although
the defendants were allowed to present the testimony of another expert
witness on the subject of valuation, they argue that McPhersons testimony
was critical because he had performed an appraisal of the property for the
Texas Highway Department close to the time period during which Craig had
made his appraisal. McPhersons appraisal was performed as part of the
States condemnation proceedings that preceded the planned highway
expansion next to the subject property.
xxxx
[9] In their briefs, the defendants fail to provide an adequate explanation for
their failure to identify their expert witness in accordance with the district
courts pretrial order. This law suit was initiated in 1985, and the defendants
had until November of 1988 to designate their expert witnesses. The
defendants were aware of the condemnation proceedings, and they,
therefore, had approximately three years to determine the identity of any
appraiser used by the state. The defendants simply failed to make this
inquiry.
Enforcement of the district courts pretrial order did not leave the defendants
without an expert witness on the issue of valuation, and the available expert
had also conducted appraisals for the Texas Highway Department in the area
surrounding the subject property. x x x
Although the degree of prejudice suffered by the plaintiff due to the late
designation of an expert would not have been great, a district court still has
the discretion to control pretrial discovery and sanction a partys failure to
follow a scheduling order. See id. at 791. Such action is particularly
appropriate here, where the defendants have failed to provide an adequate
explanation for their failure to identify their expert within the designated
timetable.
xxxx
The defendants failed to produce enough evidence from which fraud could be
inferred to justify the submission of the issue to a jury. Conclusional
allegations or speculation regarding what the plaintiff knew or did not know
favor of respondent and against petitioner, AIFL, and ATHONA for being
rendered without due process, and remanded the issue to the U.S. District
Court:
[18-20] The Rule 11 motion was first made by Guevara on February 14, 1990,
and the court immediately ruled on the issue without giving the defendants
an opportunity to prepare a written response. See Record on Appeal, Vol. 22
at 10-25 to 10-37. Although, the defendants were given an opportunity to
speak, we conclude that the hearing failed to comport with the requirements
of due process, which demand that the defendants be provided with
adequate notice and an opportunity to prepare a response. See Henderson
v. Department of Public Safety and Corrections, 901 F.2d 1288, 1293-94 (5th
Cir.1990). Providing specific notice and an opportunity to respond is
particularly important in cases, such as the one before us, in which the
sanctions have been imposed on the clients and not the attorneys. See
Donaldson v. Clark, 819 F.2d 1551, 1560 (11th Cir.1987) (If sanctions are
proposed to be imposed on the client, due process will demand more specific
notice because the client is likely unaware of the existence of Rule 11 and
should be given the opportunity to prepare a defense.). A separate hearing
is not a prerequisite to the imposition of Rule 11 sanctions, see Donaldson,
819 F.2d at 1560 n. 12, but the defendants in this case, should have been
given more of an opportunity to respond to the motion than that provided at
the hearing in which the motion was first raised. Providing the defendant
with an opportunity to mount a defense on the spot does not comport with
due process. Given that the defendants were not provided with adequate
notice or an opportunity to be heard, we vacate the award of sanctions and
remand so that the district court can provide the defendants with an
adequate opportunity to be heard.11
Finally, the U.S. Court of Appeals similarly vacated the award of attorneys
fees and remanded the matter to the U.S. District Court for recalculation to
conform with the requirements provided in the promissory note.
In accordance with the Decision dated September 3, 1991 of the U.S. Court
of Appeals, the U.S. District Court issued an Order12 dated October 28, 1991
giving petitioner, AIFL, and ATHONA 20 days to formally respond to
respondents motion for Rule 11 sanctions. Petitioner, AIFL, and ATHONA
jointly filed before the U.S. District Court their opposition to respondents
motion for Rule 11 sanctions.13 Respondent filed his reply to the opposition,
to which petitioner, AIFL, and ATHONA, in turn, filed a reply-brief.14
In an Order15 dated December 31, 1991, the U.S. District Court still found
respondents motion for Rule 11 sanctions meritorious and reinstated its
Order dated March 13, 1990:
The basis of the Courts prior decision as well as now is the fact that the
defendants filed suit against Guevara with knowledge that the basis of the
suit was unfounded. In the defendants file was an appraisal from an
international appraisal firm, which the defendants refused to disclose during
discovery and was only discovered at a bench conference during a discussion
about appraisers. Based on the defendants own appraisers, no basis existed
for a suit by the defendants against their employee.
The previous judgment entered by this Court is REINSTATED.
The above-quoted Order of the U.S. District Court attained finality as it was
no longer appealed by petitioner, AIFL, and ATHONA.
Through a letter dated February 18, 1992, respondent demanded that
petitioner pay the amount of US$49,450.00 awarded by the U.S. District
Court in its Order dated March 13, 1990. Given the continuous failure and/or
refusal of petitioner to comply with the said Order of the U.S. District Court,
respondent instituted an action for the enforcement of the same, which was
docketed as Civil Case No. 92-1445 and raffled to the RTC of Makati City,
Branch 57.
Civil Case No. 92-1445 before
Branch 57 of the RTC of Makati City
In his Complaint for the enforcement of the Order dated March 13, 1990 of
the U.S. District Court in Civil Action No. H-86-440, respondent prayed that
petitioner be ordered to pay:
1. The sum of US$49,450.00 or its equivalent in Philippine Pesos x x x
with interest from date of demand;
2. Attorneys fees and litigation expenses in the sum of P250,000.00;
3. Exemplary damages of P200,000.00; and
4. Costs of the suit.16
In its Amended Answer Ad Cautelam,17 petitioner opposed the enforcement
of the Order dated March 13, 1990 of the U.S. District Court on the grounds
that it was rendered upon a clear mistake of law or fact and/or in violation of
its right to due process.
In the course of the pre-trial and scheduled trial proceedings, the parties
respectively manifested before the court that they were dispensing with the
presentation of their witnesses since the subject matter of their testimonies
B. The trial court erred in not utilizing the standard for determining the
enforceability of the foreign award that was agreed upon by the parties
to this case during the pre-trial, namely, did the defendants in the
Houston case (PHILSEC, AIFL, AND ATHONA) have reasonable grounds
to implead [respondent] in the Houston case based upon the body of
the evidence submitted therein. Thus, whether or not PHILSEC, AIFL
and ATHONA ultimately prevailed against [respondent] was immaterial
or irrelevant; the question only was whether they had reasonable
grounds to proceed against him, for if they had, then there was
admittedly no basis for the Rule 11 award against them by the Houston
Court.
xxxx
C. In the light of its ruling, the trial court failed to pass upon and resolve
the other issues and/or defenses expressly raised by [petitioner],
including the defense that PHILSEC, AIFL, and ATHONA were deprived
of their right to defend themselves against the Rule 11 sanction and
the main decision because of the prohibitive cost of legal
representation in the us and also because of the gross negligence of its
US counsel. x x x.28
In its Decision dated December 19, 2003, the Fifth Division of the Court of
Appeals decreed:
WHEREFORE, the Decision dated 11 September 2000 in Civil Case No. 921445 of the Regional Trial Court of Makati, Branch 57, is
hereby AFFIRMED in all respect with costs against [petitioner].29
In its Motion for Reconsideration,30 petitioner lamented that the Fifth Division
of the Court of Appeals failed to resolve on its own petitioners appeal as the
Decision dated December 19, 2003 of the said Division was copied
almost verbatim from respondents brief. Thus, petitioner prayed that the
Fifth Division of the Court of Appeals recuse itself from deciding petitioners
Motion for Reconsideration and that the case be re-raffled to another
division.
The Fifth Division of the Court of Appeals maintained in its Resolution dated
May 25, 2004 that the issues and contentions of the parties were all duly
passed upon and that the case was decided according to its merits. The said
Division, nonetheless, abstained from resolving petitioners Motion for
Reconsideration and directed the re-raffle of the case.31
Petitioners Motion for Reconsideration was re-raffled to and subsequently
resolved by the Tenth Division of the Court of Appeals. In its Resolution
dated February 9, 2005, the Tenth Division of the appellate court denied the
said Motion for lack of merit.32
Hence, petitioner seeks recourse from this Court via the instant Petition for
Review, insisting that the Court of Appeals erred in affirming the RTC
judgment which enforced the Order dated March 13, 1990 of the U.S. District
Court in Civil Action No. H-86-440.
Petitioner contends that it was not accorded by the Court of Appeals the right
to refute the foreign judgment pursuant to Rule 39, Section 48 of the Rules of
Court because the appellate court gave the effect of res judicata to the said
foreign judgment. The Court of Appeals copied wholesale orverbatim the
respondents brief without addressing the body of evidence adduced by
petitioner showing that it had reasonable grounds to implead respondent in
Civil Action No. H-86-440.
Petitioner asserts that the U.S. District Court committed a clear mistake of
law and fact in its issuance of the Order dated March 13, 1990, thus, said
Order is unenforceable in this jurisdiction. Petitioner discusses in detail its
evidence proving that respondent, together with 1488, Inc., Ducat, Craig,
and Daic, induced petitioner to agree to a fraudulent deal. Petitioner points
out that respondent had the duty of looking for an independent and
competent appraiser of the market value of the Harris County property; that
instead of choosing an unbiased and skilled appraiser, respondent connived
with 1488, Inc., Ducat, and Daic in selecting Craig, who turned out to be the
former owner of the Harris County property and a close associate of 1488,
Inc. and Daic; and that respondent endorsed to petitioner Craigs appraisal of
the market value of the Harris County property, which was overvalued by
more than 400%.
According to petitioner, it had reasonable grounds to implead respondent in
Civil Action No. H-86-440 so the sanction imposed upon it under Rule 11 of
the U.S. Federal Rules of Civil Procedure was unjustified. Petitioner
additionally argues that there is no basis for the U.S. District Court to impose
upon it the Rule 11 sanction as there is nothing in the said provision which
allows the imposition of sanctions for simply bringing a meritless lawsuit.
If the Rule 11 sanction was imposed upon petitioner as punishment for
impleading a party (when it had reasonable basis for doing so) and not
prevailing against said party, then, petitioner claims that such a sanction is
against Philippine public policy and should not be enforced in this
jurisdiction. Settled in this jurisdiction that there should be no premium
attached to the right to litigate, otherwise parties would be very hesitant to
assert a claim in court.
Petitioner further alleges that it was denied due process in Civil Action No H86-440 because: (1) the U.S. District Court imposed the Rule 11 sanction on
the basis of a single document, i.e., the letter dated September 26, 1983 of
Bruce C. Bossom, a partner at Jones Lang Wooton, a firm of chartered
surveyors and international real estate consultants, addressed to a Mr. Senen
L. Matoto of AIFL (marked as Exhibit 91 before the U.S. District Court), which
was never admitted into evidence; (2) in said letter, Jones Lang Wooton was
soliciting a listing agreement and in which the said firm unilaterally,
without being asked as to the value of the [Harris County] property, indicated
a value for the [same] which approximate[d] with the value given in the
Craig appraisal, hence, it cannot be used as basis to conclude that
petitioner, AIFL, and ATHONA assented to Craigs appraisal of the Harris
County property; (3) the counsel who represented petitioner, AIFL, and
ATHONA in Civil Action No. H-86-440 before the U.S. District Court was
grossly ignorant and/or negligent in the prosecution of their counterclaims
and/or in proving their defenses, such as when said counsel failed to present
an expert witness who could have testified as to the actual market value of
the Harris County property or when said counsel failed to discredit
respondents credibility despite the availability of evidence that respondent
had been previously fined by the Philippine Securities and Exchange
Commission for stock manipulation; and (4) the excessive and
unconscionable legal fees charged by their U.S. counsel effectively prevented
them from making further appeal.
The Court finds the Petition bereft of merit.
In Mijares v. Raada,33 the Court extensively discussed the underlying
principles for the recognition and enforcement of foreign judgments in
Philippine jurisdiction:
There is no obligatory rule derived from treaties or conventions that requires
the Philippines to recognize foreign judgments, or allow a procedure for the
enforcement thereof. However, generally accepted principles of international
law, by virtue of the incorporation clause of the Constitution, form part of the
laws of the land even if they do not derive from treaty obligations. The
classical formulation in international law sees those customary rules
accepted as binding result from the combination two elements: the
established, widespread, and consistent practice on the part of States; and a
psychological element known as the opinion juris sive necessitates (opinion
as to law or necessity). Implicit in the latter element is a belief that the
practice in question is rendered obligatory by the existence of a rule of law
requiring it.
While the definite conceptual parameters of the recognition and enforcement
of foreign judgments have not been authoritatively established, the Court
can assert with certainty that such an undertaking is among those generally
accepted principles of international law. As earlier demonstrated, there is a
widespread practice among states accepting in principle the need for such
arising from the enforcement of a foreign judgment, and that arising from the
facts or allegations that occasioned the foreign judgment. They may pertain
to the same set of facts, but there is an essential difference in the right-duty
correlatives that are sought to be vindicated. For example, in a complaint for
damages against a tortfeasor, the cause of action emanates from the
violation of the right of the complainant through the act or omission of the
respondent. On the other hand, in a complaint for the enforcement of a
foreign judgment awarding damages from the same tortfeasor, for
the violation of the same right through the same manner of action,
the cause of action derives not from the tortious act but from the
foreign judgment itself.
More importantly, the matters for proof are different. Using the above
example, the complainant will have to establish before the court the tortious
act or omission committed by the tortfeasor, who in turn is allowed to rebut
these factual allegations or prove extenuating circumstances. Extensive
litigation is thus conducted on the facts, and from there the right to and
amount of damages are assessed. On the other hand,in an action to
enforce a foreign judgment, the matter left for proof is the foreign
judgment itself, and not the facts from which it prescinds.
As stated in Section 48, Rule 39, the actionable issues are generally
restricted to a review of jurisdiction of the foreign court, the service
of personal notice, collusion, fraud, or mistake of fact or law. The
limitations on review [are] in consonance with a strong and
pervasive policy in all legal systems to limit repetitive litigation on
claims and issues. Otherwise known as the policy of preclusion, it
seeks to protect party expectations resulting from previous
litigation, to safeguard against the harassment of defendants, to
insure that the task of courts not be increased by never-ending
litigation of the same disputes, and in a larger sense to promote
what Lord Coke in the Ferrers Case of 1599 stated to be the goal of
all law: rest and quietness. If every judgment of a foreign court
were reviewable on the merits, the plaintiff would be forced back on
his/her original cause of action, rendering immaterial the previously
concluded litigation.36 (Emphases supplied, citations omitted.)
Also relevant herein are the following pronouncements of the Court in Minoru
Fujiki v. Marinay37:
A petition to recognize a foreign judgment declaring a marriage void does
not require relitigation under a Philippine court of the case as if it were a new
petition for declaration of nullity of marriage. Philippine courts cannot
presume to know the foreign laws under which the foreign judgment
was rendered. They cannot substitute their judgment on the status,
condition and legal capacity of the foreign citizen who is under the
THE COURT
xxxx
I am disturbed about that. I dont see any evidence at all in this case, after
listening to all of this evidence, that there ever was a lawsuit that could have
been brought against Guevara, and even after all of the discovery was done,
there was still no evidence of a conspiracy. There is no evidence of any
conspiracy to this good day that he could have been, but there is no proof of
it, and thats what we base these lawsuits on. Thats what the Rule 11 is
designed to do, to deal with the circumstance.
So, I brought it up to Mr. Guevara because I know the frustration, and
irrespective as to whether or not he brought it up, it would have been my
position, my own position as an officer of this Court to sanction the
defendants in this case. That is my opinion, that they are to be sanctioned
because they have brought all of the power that they have in the Philippines
to bear and put pressure on this man so that he would have to come over
10,000 miles to defend himself or to hire lawyers to defend himself against a
totally frivolous claim.39 (Emphases supplied.)
As for petitioners contention that the Fifth Division of the Court of Appeals,
in its Decision dated December 19, 2003, copied verbatim or wholesale from
respondents brief, the Court refers to its ruling in Halley v. Printwell,
Inc.,40 thus:
It is noted that the petition for review merely generally alleges that starting
from its page 5, the decision of the RTC copied verbatim the allegations of
herein Respondents in its Memorandum before the said court, as if the
Memorandum was the draft of the Decision of the Regional Trial Court of
Pasig, but fails to specify either the portions allegedly lifted verbatim from
the memorandum, or why she regards the decision as copied. The omission
renders the petition for review insufficient to support her contention,
considering that the mere similarity in language or thought between
Printwells memorandum and the trial courts decision did not necessarily
justify the conclusion that the RTC simply lifted verbatim or copied from the
memorandum.
It is to be observed in this connection that a trial or appellate judge may
occasionally view a partys memorandum or brief as worthy of due
consideration either entirely or partly. When he does so, the judge may adopt
and incorporate in his adjudication the memorandum or the parts of it he
deems suitable, and yet not be guilty of the accusation of lifting or copying
from the memorandum. This is because of the avowed objective of the
memorandum to contribute in the proper illumination and correct
determination of the controversy. Nor is there anything untoward in the
congruence of ideas and views about the legal issues between himself and
the party drafting the memorandum. The frequency of similarities in
argumentation, phraseology, expression, and citation of authorities between
the decisions of the courts and the memoranda of the parties, which may be
great or small, can be fairly attributable to the adherence by our courts of
law and the legal profession to widely know nor universally accepted
precedents set in earlier judicial actions with identical factual milieus or
posing related judicial dilemmas. (Citations omitted.)
The Court is unmoved by petitioners allegations of denial of due process
because of its U.S. counsels exorbitant fees and negligence. As aptly
pointed out by respondent in his Memorandum:
On the specific claim that petitioner has been denied legal representation in
the United States in view of the exorbitant legal fees of US counsel,
petitioner is now estopped from asserting that the costs of litigation resulted
in a denial of due process because it was petitioner which impleaded
Guevara. If petitioner cannot prosecute a case to its final stages, then it
should not have filed a counterclaim against Guevara in the first place.
Moreover, there is no showing that petitioner could not find a less expensive
counsel. Surely, petitioner could have secured the services of another
counsel whose fees were more affordable.41
Moreover, petitioner is bound by the negligence of its counsel. The
declarations of the Court inGotesco Properties, Inc. v. Moral42 is applicable to
petitioner:
The general rule is that a client is bound by the acts, even mistakes, of his
counsel in the realm of procedural technique. The basis is the tenet that an
act performed by counsel within the scope of a general or implied authority
is regarded as an act of the client. While the application of this general rule
certainly depends upon the surrounding circumstances of a given case, there
are exceptions recognized by this Court: (1) where reckless or gross
negligence of counsel deprives the client of due process of law; (2) when its
application will result in outright deprivation of the clients liberty or
property; or (3) where the interests of justice so require.
The present case does not fall under the said exceptions. In Amil v. Court of
Appeals,the Court held that to fall within the exceptional circumstance
relied upon x x x, it must be shown that the negligence of counsel must be
so gross that the client is deprived of his day in court. Thus, where a party
was given the opportunity to defend [its] interests in due course, [it] cannot
be said to have been denied due process of law, for this opportunity to be
heard is the very essence of due process. To properly claim gross
negligence on the part of the counsel, the petitioner must show that the
Consequently, the petitioner filed its petition for money claim in the COA.5 On
November 15, 2012, the COA issued its decision denying the
petition,6 holding that under Section 447 and Section 458 of theLocal
Government Code only municipal or city governments are expressly vested
with the power to secure group insurance coverage for barangay workers;
and noting the LGUs failure to comply with the requirement of publication
under Section 21 of Republic Act No. 9184 (Government Procurement
Reform Act).
The petitioner received a copy of the COA decision on December 14,
2012,7 and filed its motion for reconsideration on January 14,
2013.8 However, the COA denied the motion,9 the denial being received by
the petitioner on July 14, 2014.10
Hence, the petitioner filed the petition for certiorari on August 12, 2014, but
the petition for certiorariwas dismissed as earlier stated through the
resolution promulgated on August 19, 2014 for (a) the late filing of the
petition; (b) the non-submission of the proof of service and verified
declaration; and (c) the failure to show grave abuse of discretion on the part
of the respondents.
Issues
In its motion for reconsideration, the petitioner submits that it filed the
petition for certiorari within the reglementary period following the fresh
period rule enunciated in Neypes v. Court of Appeals;11 and that the petition
for certiorari included an affidavit of service in compliance with Section 3,
Rule 13 of the Rules of Court. It admits having overlooked the submission of
a verified declaration; and prays that the declaration attached to the motion
for reconsideration be admitted by virtue of its substantial compliance with
the Efficient Use of Paper Rule12 by previously submitting a compact disc
(CD) containing the petition for certiorari and its annexes. It disagrees with
the Court, insisting that it showed and proved grave abuse of discretion on
the part of the COA in issuing the assailed decision.
Ruling
We deny the motion for reconsideration for being without merit.
I
Petitioner did not comply with
the rule on proof of service
The petitioner claims that the affidavit of service attached to the petition
for certiorari complied with the requirement on proof of service.
The claim is unwarranted. The petitioner obviously ignores that Section 13,
Rule 13 of the Rules of Court concerns two types of proof of service, namely:
the affidavit and the registry receipt, viz:
Section 13. Proof of Service. x x x. If service is made by registered mail,
proof shall be made by such affidavit and the registry receipt issued by
the mailing office. The registry return card shall be filed immediately upon its
receipt by the sender, or in lieu thereof the unclaimed letter together with
the certified or sworn copy of the notice given by the postmaster to the
addressee.
Section 13 thus requires that if the service is done by registered mail, proof
of service shall consist of the affidavit of the person effecting the
mailing and the registry receipt, both of which must be appended to the
paper being served. A compliance with the rule is mandatory, such that
there is no proof of service if either or both are not
submitted.13chanRoblesvirtualLawlibrary
Here, the petition for certiorari only carried the affidavit of service executed
by one Marcelino T. Pascua, Jr., who declared that he had served copies of the
petition by registered mail under Registry Receipt Nos. 70449, 70453,
70458, 70498 and 70524 attached to the appropriate spaces found on pages
64-65 of the petition.14 The petition only bore, however, the cut print-outs of
what appeared to be the registry receipt numbers of the registered matters,
not the registry receipts themselves. The rule requires to be appended the
registry receipts, not their reproductions. Hence, the cut print-outs did not
substantially comply with the rule. This was the reason why the Court held in
the resolution of August 19, 2014 that the petitioner did not comply with the
requirement of proof of service.15
II
Fresh Period Rule under Neypes
did not apply to the petition for certiorari
under Rule 64 of the Rules of Court
The petitioner posits that the fresh period rule applies because its Rule 64
petition is akin to a petition for review brought under Rule 42 of the Rules of
Court; hence, conformably with the fresh period rule, the period to file a Rule
64 petition should also be reckoned from the receipt of the order denying the
motion for reconsideration or the motion for new
trial.16chanRoblesvirtualLawlibrary
The petitioners position cannot be sustained.
There is no parity between the petition for review under Rule 42 and the
petition for certiorari under Rule 64.
The petitioner filed its motion for reconsideration on January 14, 2013, which
was 31 days after receiving the assailed decision of the COA on December
14, 2012.21 Pursuant to Section 3 of Rule 64, it had only five days from
receipt of the denial of its motion for reconsideration to file the petition.
Considering that it received the notice of the denial on July 14, 2014, it had
only until July 19, 2014 to file the petition. However, it filed the petition on
August 13, 2014, which was 25 days too late.
We ruled in Pates v. Commission on Elections22 that the belated filing of the
petition for certiorari under Rule 64 on the belief that the fresh period
rule should apply was fatal to the recourse. As such, the petitioner herein
should suffer the same fate for having wrongly assumed that the fresh
period rule under Neypes23 applied. Rules of procedure may be relaxed only
to relieve a litigant of an injustice that is not commensurate with the degree
of his thoughtlessness in not complying with the prescribed
procedure.24 Absent this reason for liberality, the petition cannot be allowed
to prosper.
III
Petition for certiorari further lacked merit
The petition for certiorari is also dismissible for its lack of merit.
The petitioner insists on having fully shown that the COA committed grave
abuse of discretion, to wit: (1) the challenged decision was rendered by a
divided COA proper; (2) the COA took almost a year before promulgating its
decision, and more than a year in resolving the motion for reconsideration,
in contravention of the express mandate of the Constitution; (3) the
resolution denying the motion for reconsideration was made up of only two
sentences; (4) the matter involved a novel issue that called for an
interpretation of the pertinent provisions of the Local Government Code; and
(5) in issuing the resolution, COA Commissioners Grace Pulido-Tan and Heidi
L. Mendoza made it appear that they knew the Local Government
Code better than former Senator Aquilino Pimentel who offered an opinion on
the matter.25chanRoblesvirtualLawlibrary
Grave abuse of discretion implies such capricious and whimsical exercise of
judgment as to be equivalent to lack or excess of jurisdiction; in other words,
power is exercised in an arbitrary or despotic manner by reason of passion,
prejudice, or personal hostility; and such exercise is so patent or so gross as
to amount to an evasion of a positive duty or to a virtual refusal either to
perform the duty enjoined or to act at all in contemplation of
law.26chanRoblesvirtualLawlibrary
A close look indicates that the petition for certiorari did not sufficiently
disclose how the COA committed grave abuse of its discretion. For sure, the
bases cited by the petitioner did not approximate grave abuse of discretion.
To start with, the supposed delays taken by the COA in deciding the appeal
were neither arbitrary nor whimsical on its part. Secondly, the mere
terseness of the denial of the motion for reconsideration was not a factor in
demonstrating an abuse of discretion. And, lastly, the fact that Senator
Pimentel, even if he had been the main proponent of the Local Government
Code in the Legislature, expressed an opinion on the issues different from the
COA Commissioners own did not matter, for it was the latters adjudication
that had any value and decisiveness on the issues by virtue of their being
the Constitutionally officials entrusted with the authority for that purpose.
It is equally relevant to note that the COA denied the money claim of the
petitioner for the further reason of lack of sufficient publication as required
by the Government Procurement Act. In that light, the COA acted well within
its authority in denying the petitioners claim.
IV
Petitioner and its counsel
WHEREFORE, the Court DENIES the Motion for Reconsideration for its lack
of merit; ORDERS the petitioner and its counsel, Atty. Eduardo S. Fortaleza,
to show cause in writing within ten (10) days from notice why they should
not be punished for indirect contempt of court; and FURTHER DIRECTS Atty.
Fortaleza to show cause in the same period why he should not be disbarred.
SO ORDERED.
Only appellant was arrested. Reynaldo, Jay and Ronnie remain at-large to
date. During arraignment, appellantentered a plea of "not guilty".5 After the
termination of the pre-trial conference, trial ensued.6
Version of the Prosecution
The prosecution presented as eyewitnesses Eduardo Umali (Umali), a
butcher, and MerlitoMacapar (Macapar), a cigarette vendor. Also presented
were Dr. Romeo T. Salen (Dr. Salen), who testified on the cause of death of
Espino. From their testimonies,7 the following facts emerged:
At around 10:00 p.m. of September 21,2001, Espino was driving his car along
C.M. Recto Avenue in Divisoria, Manila when Ronnie suddenly blocked his
path. Espino alighted from his vehicle and approached Ronnie, who tried to
grab his belt-bag. Espino resisted and struggled with Ronnie for the
possession of his belt-bag but the latters brothers, Jay, Rey, appellant, and
an unidentified companion suddenly appeared. With all of them brandishing
bladed weapons, appellant and his brothers took turns in stabbing Espino in
different parts of his body while the unidentified companion held him by the
neck. When Espino was already sprawled on the ground, they took his beltbag, wallet and jewelries and immediately fled.
Espino was rushed to the hospital butwas pronounced dead on arrival. In his
Medico-Legal Report No. W-658-2001,8 Dr. Salen concluded that Espino died
of multiple stab wounds caused by sharp bladedinstruments. The back
portion of his head bore two stab wounds while his body suffered four stab
wounds which proved fatal. Considering the number and varying
measurements of the wounds, Dr. Salen opined that there weremore than
one assailant.
To prove the civil aspect of the case, Espinos daughter, Winnie EspinoFajardo
(Winnie) testified that the pieces of jewelry stolen from her father consisted
of a necklace worth P35,000.00, bracelet worth P15,000.00, wristwatch
worth P10,000.00 and two rings worth P10,000.00 each. As for their
expenses, Winnie said that P25,000.00 was spent for the burial lot
and P37,000.00 for the funeral services. She stated further that Espino was
51 years old at the time of his death and was earning P3,000.00 a day asa
meat vendor.9
Version of the Defense
Appellant denied any participation in the crime. He testified that at around
10:00 p.m. of September 21, 2001, he was with his girlfriend, Merlita Hilario
(Merlita). They proceeded to the house oftheir friend, Marilou Garcia
(Marilou), in Villaruel, Tayuman, Manila where they had a drinking session
which lasted until they fell asleep. They did not leave their friends house
until the following morning when they went home. Thereupon, he was told
that policemen were looking for him because his brothers got involved in an
altercation that resulted in the death of someone.10 Merlita and Marilou
corroborated appellants alibi in their respective testimonies.11
From the testimony of another defense witness, Jorna Yabut-Torres (Jorna),
wife of Ronnie, the defenses version of the incidentemerged as follows:
In the evening of September 21, 2001, Jorna and Ronnie were sharing jokes
with other vendors in Divisoria when a car stopped a few meters from their
stall. The driver alighted and asked why they were laughing. Ronnie replied
that it had nothing to do with him. The driver seemed drunk since he walked
back to his vehicle in an unsteady manner. Moments later, the driver
returned and stabbed Ronnie on the wrist with a knife. Jay saw the assault on
his brother, Ronnie, and got a bolo which he used to hack the driver
repeatedly. Thereafter, Ronnie and Jay fled.12 Ditas Biescas-Mangilya, a
vegetable vendor in Divisoria, corroborated Jornas version of the incident in
her testimony.13
Ruling of the Regional Trial Court
In its December 5, 2006 Decision,14 the RTC held that appellant could not
have committed robbery. It ratiocinated, viz:
Prosecution witness Merlito D. Macapar testified that Ronnie took the belt
bag of the deceased while Bobby and the rest took his wristwatch, ring and
necklace. However, on cross-examination, witness admitted that he did not
see who took the ring, wristwatch and necklace because as soon as the
deceased fell on the ground, accused and companions surrounded him.
Merlitos testimony was contradicted by Eduardo Umali on a vital point. Thus,
Merlito testified that there was an exchange of heated words. There was no
intimation whatsoever what the altercation was about. He was ten meters
away. No such altercation, however, took place according to Eduardo who
was barely five meters away. This tainted the testimony of Merlitoand
Eduardo with suspicion. When material witnesses contradict themselves on
vital points, the element of doubt is injected and cannot be lightly
disregarded. That was not all though. Merlito testified [that] several people
witnessed the incident. The stall of the victims daughter was about ten
meters from the crime scene, which was a few meters from the stall of
Ronnie. They both had been in their respective stalls for quite sometime. The
principal prosecution witnesses are familiar with the deceased and the
accused except for the unidentified companion as they often see them at the
vicinity. Thus, in all likelihood, accused and the victim are familiar if not know
each other very well. The perpetration of robbery at the place was thus
unlikely.
Even granting that the element of taking is present, still, accused cannot be
held liable for the complex crime of robbery with homicide for the reason
that it was not indubitably shown that the mainpurpose of the accused was
to rob the victim. To the mind of the Court, this is precisely the reason why
the prosecution skipped the utterances made by the protagonist[s] during
the attack. To sustain a [conviction] for the special complex crime of robbery
with homicide, the original criminal design of the culprit must be robbery and
the homicide is perpetrated with a view to the consummation of the robbery,
or by reason or on the occasion of the robbery (People vs. Ponciano, 204
SCRA 627).
xxxx
The crime of robbery not having been indubitably established, the accused
cannot be convicted of the special complex crime of robbery with homicide. 15
The RTC thus concluded that appellant can only be liable for the killing of
Espino. It held him guilty of murder after it found the qualifying circumstance
of abuse of superior strength, which was alleged in the Information and duly
established by the prosecution. Moreover, the RTC ruled that conspiracy
among the accused attended the crime.
Anent the civil aspect of the case, the RTC granted civil indemnity, actual and
moral damages to the heirs of Espino,but denied the claim for loss of earning
capacity for lack of documentary evidence.
The dispositive portion of the RTC Decision reads:
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Court finds accused
Bobby Torres y Nava, "Guilty" beyond reasonable doubt of the crime of
Murder as the qualifying circumstance of abuse of superior strength attended
the commission of the crime and hereby sentences him to suffer the penalty
of Reclusion Perpetua, to indemnify the heirs of the victim the sum
of P50,000.00, the additional sum of P50,000.00 as moral damages, actual
damages in the amount of P62,000.00 and to pay the costs.
Let alias warrant of arrest issue against accused Reynaldo Torres, Jay Torres
and Ronnie Torres.
SO ORDERED.16
Appellant filed a Motion for Reconsideration17which was denied in an
Order18 dated April 10, 2007.
Hence, appellant appealed to the CA.19
Appellant maintains thatthe CA erred in finding him liable for robbery with
homicide as charged in the Amended Information. He argues that his appeal
to the CA was limited to his conviction for murder and excluded his acquittal
for robbery. And by appealing his conviction for murder, he does not waive
his constitutional right not to be subject to double jeopardy for the crime of
robbery. He claims that even assuming that the RTC erred in acquitting him
of the robbery charge, such error can no longer be questioned on appeal.
We cannot give credence to appellants contentions. "An appeal in [a]
criminal case opens the entire case for review on any question including one
not raised by the parties."26 "[W]hen an accused appeals from the sentence
of the trial court, he waives the constitutional safeguard against double
jeopardy and throws the whole case open to the review of the appellate
court, which is then called upon to render such judgment as law and justice
dictate, whether favorable or unfavorable to the appellant."27 In other words,
when appellant appealed the RTCs judgment of conviction for murder, he is
deemed to have abandoned his right to invoke the prohibition on double
jeopardy since it became the duty of the appellate court to correct errors as
may be found in the appealed judgment. Thus, appellant could not have
been placed twice in jeopardy when the CA modified the ruling of the RTC by
finding him guilty of robbery with homicide as charged in the Information
instead of murder.
Appellant is guilty of the crime of robbery with homicide.
"Robbery with homicide exists when a homicide is committed either by
reason, or on occasion, of the robbery. To sustain a conviction for robbery
with homicide, the prosecution must prove the following elements: (1) the
taking of personal property belonging to another; (2) with intent togain; (3)
with the use of violence or intimidation against a person; and (4) on the
occasion or by reason of the robbery, the crime of homicide, as usedin its
generic sense, was committed. A conviction requires certitude that the
robbery is the main purpose and objective of the malefactor and the killing
ismerely incidental to the robbery. The intent to rob must precede the taking
of human life but the killing may occur before, during or after the robbery."28
In this case, the prosecution adduced proof beyond reasonable doubt that
the primary intention of appellant and his companions was to rob Espino.
Umali and Macapar, the eyewitnesses presented by the prosecution, testified
that at around 10:00 p.m. of September 21, 2001, appellants brother and
co-accused, Ronnie, blocked Espinos car at the corner of C.M. Recto Avenue
and Ylaya Street. When Espino alighted from his vehicle, Ronnie attempted
to grab his beltbag. A struggle for possession of the belt-bag ensued. It was
at this juncture that appellant and the other co-accused joined the fray and
stabbed Espino several times in the head and body. When Espino fell to the
pavement from his stab wounds, appellant, Ronnie and their cohorts got hold
of the victims wallet, beltbag, wristwatch and jewelry then fled together.29
From the foregoing, it is clear that the primordial intention of appellant and
his companions was to rob Espino. Had they primarily intended to kill Espino,
they would have immediately stabbed him to death. However, the fact that
Ronnie initially wrestled with appellant for possession of the belt-bag clearly
shows that the central aim was to commit robbery against Espino.This
intention was confirmed by the accuseds taking of Espinos belt-bag, wallet,
wrist-watch and jewelries after he was stabbed to death. The killing was
therefore merely incidental, resulting by reason oron occasion of the robbery.
The testimonies of the prosecution eyewitnesses are worthy of credence.
Appellant attempts to discredit Umali and Macapar by asserting that there
are glaring contradictions in their testimonies. He calls attention to the RTCs
observation that Macapar gave conflicting testimonies on whether he
actually witnessed who among appellant and his cohorts took Espinos
valuables after he fell to the ground. Appellant asserts further that Umalis
testimony that an altercation did not precede the commission of the crime
contradicts the testimony of Macapar that a heated exchange of words
occurred prior to the incident. He also claims that it is contrary to human
nature for Espino to alight from his car at 10:00 p.m. while in possession of a
large amount of money without fear of an impending hold-up.
We are not persuaded. The inconsistencies attributed to the prosecutions
eyewitnesses involve minor details, too trivial to adversely affect their
credibility. Said inconsistencies do not depart from the fact that these
eyewitnesses saw the robbery and the fatal stabbing of Espino by appellant
and his cohorts. "[T]o the extent that inconsistencies were in fact shown,
they appear to the Court to relate to details of peripheral significance which
do not negate or dissolve the positive identification by [Umali and Macapar
of appellant] as the perpetrator of the crime."30 "Inaccuracies may in fact
suggest that the witnesses are telling the truth and have not been
rehearsed. Witnesses are not expected to remember every single detail of an
incident with perfect or total recall."31
Moreover, it is unlikely that Espino feared alighting from his vehicle at a late
hour while in possessionof a huge amount of money since he was a vendor
doing business in the vicinity where the incident occurred. He was familiar
with the people and their activities in the premises. In view of the above, the
Court finds that the CA properly lent full credence to the testimonies of Umali
and Macapar.
The weapons are not the corpus delicti.
Appellant contends that the evidence is insufficient for his conviction since
the weapons used in the stabbing of Espino were not presented. In other
words, he asserts that it was improper to convict him because the corpus
delictihad not been established.
We disagree. "[C]orpus delictirefers to the fact of the commission of the
crime charged or to the body or substance of the crime. In its legal sense, it
does not refer to the ransom money in the crime of kidnapping for ransom or
to the body of the person murdered or, in this case, [the weapons used in
the commission of robbery with homicide]. Since the corpus delictiis the fact
of the commission of the crime, this Court has ruled that even a single
witness uncorroborated testimony, if credible may suffice to prove it and
warrant a conviction therefor. Corpus delictimay even be established by
circumstantial evidence."32
In this case, the corpus delictiwas established by the evidence on record. The
prosecution eyewitnesses testified that appellant and his cohorts used knives
to perpetrate the crime. Their testimonies on the existence and use of
weapons in committing the offense was supported by the medical findings of
Dr. Salen who conducted the post-mortem examination. Dr. Salen found that
Espino sustained several stab wounds with varying measurements which
were caused by sharp bladed instruments. Appellant is therefore mistaken in
arguing that the failure to present the weapons used in killing Espino was
fatal to the cause of the prosecution.
The defenses of denial and alibi cannot prosper.
We are in complete agreement with the RTC and the CA in finding lack of
merit in appellants defenses of denialand alibi.
Appellant claims that he was in a drinking session in his friends house in
Villaruel, Tayuman,Manila, from 10:00 p.m. of September 21, 2001 until 1:00
a.m. of the following day. He alleges to have slept atthe place and went
home at around 7:00 a.m. of September 22, 2001. According to appellant, he
did not depart from his friends house from the time they started drinking
until he went home the following morning.
Appellants alibi is unworthy of credence. Appellant himself testified that
Villaruel is less than two kilometers awayfrom Divisoria and that it would only
take a few minutes to go toDivisoria from Villaruel.33 Clearly, it was not
impossible for appellant to be physicallypresent at the crime scene during its
commission. "For alibi to prosper, it muststrictly meet the requirements of
time and place. It is not enough to prove that the accused was somewhere
else when the crime was committed, but it must also be demonstrated that it
was physically impossible for him to have been at the crime scene at the
time the crime was committed."34
The fact that appellant presented witnesses to corroborate his alibi deserves
scant consideration. Their testimonies are viewed with skepticism due to the
very nature of alibi the witnesses affirm.35 Appellant can easily fabricate an
alibi and ask relatives and friends to corroborate it.36
We have always ruled that alibi and denial are inherently weak defenses and
must be brushed aside when the prosecution has sufficiently and positively
ascertained the identity of the accused. Moreover, it is only axiomatic
thatpositive testimony prevails over negative testimony.37
The evidence was sufficient to establish the presence of abuse of superior
strength.
Appellant argues that mere superiority in numbers does not indicate the
presence of abuse of superior strength. In the samemanner, appellant claims
that the number of wounds inflicted on the victim is not the criterion for the
appreciation of this circumstance.
"There is abuse of superior strength when the offenders took advantage of
their combined strength in order to consummate the offense."38 Here,
appellant and his four companions not only took advantage of their
numerical superiority, they were also armed with knives. Espino, on the other
hand, was unarmed and defenseless. While Ronnie was wrestling with
Espino, appellant and his coaccused simultaneously assaulted the latter. The
unidentified companion locked his arm around the neck of Espino while
appellant and his co-accused stabbed and hacked him several times. While
Espino was lying defenseless on the ground, they divested him of all his
valuables. Thereafter, they immediately fled the scene of the crime.39 It is
clear that they executed the criminal act by employing physical
superiorityover Espino.
SO ORDERED.
the Office of the City Treasurer of Caloocan City sold at public auction Lot No.
13-B-1, in which private respondent emerged as the highest bidder.
The Office of the City Treasurer, through the City Treasurer of Caloocan,
Evelina M. Garma (respondent Garma), issued on 15 October 2009, a
Certificate of Sale of Delinquent Property to Purchaser9 and on 21 January
2011, a Final Deed of Conveyance10 over Lot 13-B-1 in favor of private
respondent.
Petitioner was not made aware of any of the proceedings before the Office of
the City Treasurer, as the Notice of Levy11 and Warrant of Levy12 issued by the
Office of the City Treasurer, through respondent Garma, were sent to
petitioner at an inexistent office in Tondo, Manila and were, thus, returned
unserved.13
By virtue of the above-mentioned final deed of conveyance, private
respondent on 4 May 2011 filed LRC-Case No. C-5748 with the RTC Caloocan
praying for the consolidation of the ownership of the property covered by
TCT No. 33341, the cancellation of the same TCT in the name of petitioner,
and the issuance of a new titlein the name of private respondent,
notwithstanding the fact that the delinquency sale involved only Lot No. 13B-1.14
The RTC issued an Order on 13 June 2011 setting the initial hearing on the
Petition, and directing that copiesof the said order be posted at the subject
premises and furnished petitioner.However, the records of the case,
particularly the Certificate of Posting15 dated 16 July 2011 and the Process
Server's Returns dated 13 and 16 July 201116 executed by respondent Jimmy
T. Soro (respondent Soro), the Process Server of RTC Caloocan, will show that
the order was not posted at the subject premises, and that petitioner did not
receive any such copies of the Order, as respondent Soro sought to serve the
same at the inexistent offices.
On 31 August 2011, after private respondent adduced its evidence, the RTC
Caloocan issued an Order17 granting private respondent's petition. Inasmuch
as petitioner was unaware ofthe proceedings, the same order became final
and executory. Thereafter, RTC Caloocan, upon motion18 of private
respondent, issued another Order dated 26 April 2012 directing the issuance
of a Writ of Possession in favor of private respondent. The said writ, 19 signed
by the Branch Clerk of the RTC Caloocan, respondent Emily P. Dizon
(respondent Dizon), was issued on 27 April 2012.
Petitioner learned of the auction saleonly after 9 May 2012, when the Sheriff
of the RTC Caloocan, respondent Renebert B. Baloloy (respondent Baloloy),
left a Notice to Vacate20 in the subject premises. Petitioner claimed that it
was very much surprised at the auction sale of Lot 13-B-1 because it had
been religiously paying its real property taxes thereon up to 2012. In fact, it
had in its possession a Certification21 dated 19 September 2011 issued by
the Office of the City Treasurer of Caloocan, through its OIC Land Tax
Division, respondent PhillipL. Yam (respondent Yam), stating that the real
property taxes due on Lots 1-A and 13-B-1, with a combined assessed value
of P8,697,870.00, up to the 4th quarter of 2011, have been duly paid by
petitioner.
Notwithstanding the representations made by petitioner with the RTC
Caloocan22 and Office of the City Treasurer, Baloloy, proceeded to implement
the Writ of Possession on 15May 2012 over both Lots Nos. 1-A and 13-B-1
and their improvements. As a result thereof, private respondent wrested
physical possession of the entire property covered by TCT No. 33341 from
petitioner.
Feeling aggrieved, petitioner filed with the CA a Petition for Certiorari23 under
Rule 65 of the Rules ofCourt, but later withdrew24 the same, reasoning that
the withdrawal would enable it to comply with the rules on forum shopping.
The CA granted petitioners prayer to withdraw.25
On 14 January 2013, petitioner, filed with the CA a Petition for Annulment of
Judgment praying, among others, for the annulment and setting aside of the
Orders dated 31 August 2011 and 26 April 2012 and the Writ of Possession
issued by the RTC Caloocan. Petitioner likewise prayed that the CA direct
private respondentto vacate the property and surrender possession thereof
to petitioner.
Ruling of the Court of Appeals
On 27 February 2013, the CA issued a Resolution26 dismissing CA G.R. SP No.
128187 on the ground that the Petition for Annulment of Judgment that
petitioner filed is not the proper remedy, as it had other available remedies
to question the Orders of the RTC Caloocan. Citing Estate of the late
Mercedes Jacob v. Court of Appeals27 the CA, stated that where the land
subject of the case was already registered in the name of the buyer in the
auction sale, the proper remedy to annul said transfer was to file an action
for reconveyance on the ground of fraud. The CA added that the Petition for
Certioraripetitioner had earlier filed but later withdrew showed that other
remedies were available to petitioner. The CA, likewise, denied petitioner's
motion for reconsideration.28
Hence, this Petition.
Our Ruling
Petitioner questions the dismissal by the CA in CA-G.R. SP No. 128187, and
contends that:
a. Under the particular factual circumstances surrounding this case, a
petition for annulment of judgment is the only and appropriate remedy
of petitioner to question the Orders of the RTC Caloocan, which allowed
private respondent to consolidate ownership and take possession of
the property covered by TCT No. 33341; and
b. All the requisite elements for the filing of a petition for annulment of
judgment on the groundsof extrinsic fraud, lack of jurisdiction, and
want of due process, are present in this case.
We grant the Petition.
We first tackle the procedural issue. Based on the records of this case, it is
undisputed that the Order of the RTC Caloocan dated 31 August 2011
became final and executory on 11 October 2011, when the latter issued an
Entry of Judgment for the same. The general rule isthat a final and executory
judgment can no longer be disturbed, altered, or modified in any respect,
and that nothing further can be done but to execute it. A final and executory
decision may, however, be invalidated via a Petition for Relief or a Petition to
Annul the same under Rules 38 or 47, respectively, of the Rules of Court.29
Under Rule 38, when a judgment or final order is entered, or any other
proceeding is thereafter taken against a party in any court through fraud,
accident, mistake, or excusable negligence, he may file a petition in such
court and in the same case praying thatthe judgment, order or proceeding be
set aside. The verified petition must be filed within sixty (60) days after the
petitioner learns of the judgment, final order, or other proceeding to be set
aside, and not more than six (6) months after such judgment or final order
was entered. However, it is uncontested that petitioner learned about the
proceedings in LRC-Case No. C-5748 more than six (6) months after the
Order dated 31 August 2011 had become final and executory on 11 October
2011. Thus, this remedy under Rule 38 of the Rules of Court was clearly
unavailing.
Thus, the only remedy leftto petitioner in this case is a petition for annulment
of judgment under Rule 47, which it, in fact, filed.
The principle we laid down in Estate of the late Mercedes Jacob v. Court of
Appeals is not applicable. We disagree with the reasoning of the CA and
respondents that petitioner in this particular case should have filed either an
action for reconveyance or annulment of the auction sale, because to do so
would have required the court hearing the action to modify or interfere with
the judgment or order of another co-equal court, especially in this case
where the said judgment ororder had attained finality. Wellentrenched in our
jurisdiction is the doctrine that a court has no power to do so, as that action
may lead to confusion and seriously hinder the administration of justice.30
We have repeatedly ruled that a Petition for Annulment of Judgment under
Rule 47 of the Rules of Court is a remedy granted only under exceptional
circumstances where a party,without fault on his part, has failed to avail of
the ordinary remedies of new trial, appeal, petition for relief or other
appropriate remedies. The same petition is not available as a substitute for a
remedy which was lost due to the partys own neglect in promptly availing of
the same.31 There is here no attempted substitution; annulment of judgment
is the only remedy available to petitioner.
Regarding the previous filing of a Petition for Certiorariunder Rule 65 such is
of no moment as petitioner timely withdrew the same before any relief could
be afforded by the CA.
We now proceed to the substantive and more pressing issue.1wphi1 We
agree with the position of petitioner thatall the requisite elements for the
filing of a petition for annulment of judgment on the grounds of extrinsic
fraud, lack of jurisdiction, and want of due process, are present in this case.
It should be stressed that petitioner instituted the case before the CA
precisely to seek relief from the declaration of nullity of TCT No. 33341,
which had been issued without first giving petitioner an opportunity to be
heard.
he shall file his Comment in the event that we give due course to the
petition.
Indeed, it is evident that respondents have chosen, by their complete and
palpable silence on the substantive matter, to merely rely on the
presumption of regularity in the performance of official duties.42
As a general rule, we have time and again stated that we are not a trier of
facts. However, such rule is subject to several recognized exceptions:43
(1) When the findings are grounded entirely on speculation, surmises
and conjectures;
(2) When the inference made is manifestly mistaken, absurd or
impossible;
(3) When there is a grave abuse of discretion;
(4) When the judgment is based on a misapprehension of facts;
(5) When the findings of fact are conflicting;
(6) When in making its findings the Court of Appeals went beyond the
issues of the case, or its findings are contrary to the admissions of both
appellant and appellee;
(7) When the findings are contraryto those of the trial court;
(8) When the findings of fact are conclusions without citation of specific
evidence on which they are based;
(9) When the facts set forth in the petition as well as in the petitioners
main and reply briefs are not disputed by the respondents; and
(10) When the findings of fact of the Court of Appeals are premised on
the supposed absence of evidence and contradicted by the evidence
on record.
(11) When the Court ofAppeals manifestly overlooked certain relevant
facts not disputed by the parties,which, if properly considered, would
justify a different conclusion. (Emphasis and underscoring supplied)
In this case, we stress that the factual allegations in the petition, showing
that petitioner fully paid its real property taxes on Lot No. 13-B-1 until 2011,
were not refuted by any of the respondents. Further, petitioner presented
more than sufficient evidence to support the said factual allegations. This
failure of respondents to refute such claim affords us the opportunity to go
over the factual antecedents to aid us in the resolution of this case. In the
face of overwhelming evidence, respondents reliance on the presumption of
regularity in the performance by publicrespondents of their official duties
must fail. The presumption of regularity is a disputable presumption under
Rule 131 of the Rules of Court, which may be rebutted by affirmative
evidence.44
As mentioned above, the Notice of Levy and Warrant of Levy, were sent to an
inexistent office of petitioner at Tondo, Manila and were, thus, returned
unserved. Further, the Order dated 13 June 2011, setting the initial hearing
on the petition, was neither posted nor properly served upon petitioner.
Clearly, petitioner was deprived of its property without due process of law.
Inasmuch as it had sufficiently shown that it fully paid its real estate taxes up
to 2011, there was no basis to collect any tax liability, and no obligation
arose on the part of petitioner to pay the amount of real property taxes
sought to be collected. Consequently, petitioner should not have been
declared delinquent in the payment of the said taxes to Caloocan City, and
the latter did not acquire any right to sell Lot 13-B-1 in a public auction.
Besides, it appears that private respondent acted hastily in filing LRC-Case
No. C-5748 by failing to ascertain the actual principal office of petitioner to
enable the RTC Caloocan to properly acquire jurisdiction over the person of
petitioner.
Considering the foregoing, private respon~ent did not acquire any valid right
to petition the RTC Caloocan for the cancellation of TCT No. 33341 and, more
importantly, take possession of Lot 13-B-1, much less Lot 1-A. We reiterate
the principle that strict adherence to the statutes governing tax sales is
imperative, not only for the protection of the taxpayers, but also to allay any
possible suspicion of collusion between the buyer and the public officials
called upon to enforce the laws.45
WHEREFORE, the petition is GRANTED. The Resolutions of the Court of
Appeals dated 27 February 2013 and 30 May 2013 in CA-G.R. SP No. 128187
are SET ASIDE. Necessarily, the Orders dated 31 August 2011, 26 April 2012
and 19 November 2012, and the Writ of Possession dated 27 April 2012 in
LRC Case No. C-5748, are all vacated.
SO ORDERED.