SECOND DIVISION ground of the latters sexual infidelity; the dissolution of their
conjugal property relations and the division of the net
[G.R. No. 132592. January 23, 2002]
AIDA P. BAEZ, petitioner, vs. GABRIEL B.
BAEZ, respondent.
[G.R. No. 133628. January 23, 2002]
AIDA P. BAEZ, petitioner, vs. GABRIEL B.
BAEZ, respondent.
DECISION
QUISUMBING, J.:
These two petitions stem from the decision[1] dated
September 23, 1996 of the Regional Trial Court of Cebu,
Branch 20, in Civil Case No. CEB-16765. The first[2] seeks the
reversal of the Court of Appeals decision dated March 21,
1997, setting aside the orders dated October 1 and
November 22, 1996 of the Regional Trial Court. The
second[3] prays for the reversal of the resolution dated
February 10, 1998, of the Court of Appeals in CA-G.R. No.
CV-56265, denying the motion to dismiss.
The antecedent facts, as gathered from the parties
pleadings, are as follows:
On September 23, 1996, the Regional Trial Court of
Cebu, Branch 20, decided Civil Case No. CEB-16765,
decreeing among others the legal separation between
petitioner Aida Baez and respondent Gabriel Baez on the
conjugal assets; the forfeiture of respondents one-half share
in the net conjugal assets in favor of the common children;
the payment to petitioners counsel of the sum of P100,000
as attorneys fees to be taken from petitioners share in the
net assets; and the surrender by respondent of the use and
possession of a Mazda motor vehicle and the smaller
residential house located at Maria Luisa Estate Park
Subdivision to petitioner and the common children within 15
days from receipt of the decision.
Thereafter, petitioner filed an urgent ex-parte motion to
modify said decision, while respondent filed a Notice of
Appeal.
The trial court granted petitioner Aida Banez urgent ex-
parte motion to modify the decision on October 1, 1996 by
approving the Commitment of Fees dated December 22,
1994; obliging petitioner to pay as attorneys fees the
equivalent of 5% of the total value of respondents ideal
share in the net conjugal assets; and ordering the
administrator to pay petitioners counsel, Atty. Adelino B.
Sitoy, the sum of P100,000 as advance attorneys fees
chargeable against the aforecited 5%.[4]
In another motion to modify the decision, petitioner
Aida Baez sought moral and exemplary damages, as well as
litigation expenses. On October 9, 1996, she filed a motion
for execution pending appeal. Respondent Gabriel Baez filed
a consolidated written opposition to the two motions, and
also prayed for the reconsideration of the October 1, 1996
order.
 On November 22, 1996, the trial court denied Aidas
motion for moral and exemplary damages and litigation
expenses but gave due course to the execution pending
appeal. Thus:
WHEREFORE, in view of all the foregoing premises, the
petitioners motion to modify decision is hereby ordered
denied. But, petitioners motion for execution of decision
pending appeal is hereby granted. Consequently, let a writ
of execution be issued in this case to enforce the decision
for (1) respondent to vacate the premises of the small
residential house situated in Maria Luisa Estate Park
Subdivision, Lahug, Cebu City and for (2) respondent to
surrender the use and possession of said Mazda motor
vehicle together with its keys and accessories thereof to
petitioner.
Atty. Edgar Gica, the Special Administrator, appointed in this
case, is hereby ordered to make the necessary computation
of the value of the one-half (1/2) share of petitioner in the
net remaining conjugal assets of the spouses within 10 days
from receipt of this order.
The petitioner is hereby ordered to post a bond in the
amount of P1,500,000.00 to answer for all the damages that
respondent may suffer arising from the issuance of said writ
of execution pending appeal and to further answer for all the
advances that petitioner may have received from the
Special Administrator in this case pending final termination
of this present case.[5]
In turn, in a petition for certiorari, Gabriel Baez elevated
the case to the Court of Appeals. On March 21, 1997, the
appellate court rendered its decision, thus:
WHEREFORE, the Order dated October 1, 1996 and the
Omnibus Order dated November 22, 1996, insofar as (1) it
authorized the release of the sum of P100,000.00 to private
respondents counsel as the advanced share of private
respondent [Aida Baez] in the net remaining conjugal
assets, and (2) granted the motion for execution pending
appeal by ordering petitioner [Gabriel Baez] to vacate the
premises of the small residential house situated in Maria
Luisa Estate Park Subdivision, Lahug, Cebu City, and to
surrender the use and possession of the Mazda Motor
vehicle to private respondent are hereby SET ASIDE. The
writ of execution dated December 2, 1996 and the Order
dated December 10, 1996 granting the motion filed by the
sheriff to make symbolic delivery of the subject house and
motor vehicle to the administrator of the partnership are
also SET ASIDE.
As prayed for by petitioner, the Administrator of the
conjugal partnership is hereby ordered to cause the
reimbursement by counsel for the private respondent [Aida
Baez] of the amount of P100,000.00 released to him as
advance payment of attorneys fees.
SO ORDERED.[6]
On February 10, 1998, the Court of Appeals denied
Aidas motion for reconsideration. Hence, the petition in G.R.
No. 132592, filed by herein petitioner.
In the meantime, the trial court gave due course to
Gabriels Notice of Appeal and elevated on April 15, 1997 the
entire case records to the Court of Appeals. Aida filed with
the Court of Appeals a motion to dismiss the appeal on the
ground that Gabriel had failed to file with the appellate court
a Record on Appeal. On February 10, 1998, the Court of
Appeals decided the motion, thus:
WHEREFORE, premises considered, the petitionerappellants
motion to dismiss filed on November 3, 1997 is hereby
DENIED. The appointment of the petitioner-appellee as
administratix of the conjugal properties is hereby AFFIRMED.
In view of petitioners Motion to Withdraw her own appeal
filed on November 27, 1997, and for failing to pay the
required docket fee within the prescribed period under Rule
41, Section 4 of the 1997 Rules of Civil Procedure, the
appeal instituted by the petitioner Aida P. Baez is hereby
DISMISSED.
In continuance of the appeal of respondent-appellant
[Gabriel Baez], he is hereby ordered to file his brief with the
court within 45 days from receipt of this resolution. The
petitioner-appellee [Aida Baez] shall file her own brief with
the court within 45 days from receipt of the petitioner-
appellants [Gabriel Baez] brief.
SO ORDERED.[7]
The appellate court also denied herein petitioners motion for
reconsideration, hence, the petition in G.R. No. 133628.
On January 19, 2000, we consolidated the two petitions.
Petitioner Aida Baez now avers that the Court of Appeals
erred:
I. G.R. No. 132592
... IN SETTING ASIDE THE GRANT OF EXECUTION PENDING
APPEAL BY THE TRIAL COURT OF THE PORTIONS OF ITS
DECISION ORDERING RESPONDENT TO VACATE THE
SMALLER RESIDENTIAL HOUSE LOCATED AT THE MARIA
LUISA ESTATE PARK SUBDIVISION, CEBU CITY, AND TO PAY
P100,000.00 TO PETITIONERS COUNSEL AS ATTORNEYS
FEES TO BE TAKEN FROM HER SHARE IN THE NET CONJUGAL
ASSETS.[8]
II. G.R. No. 133628:
... IN NOT GRANTING PETITIONERS MOTION TO DISMISS
RESPONDENTS ORDINARY APPEAL AND/OR NOT RETURNING
THE RECORDS OF CIVIL CASE NO. CEB-16765 TO THE
REGIONAL TRIAL COURT OF CEBU.[9]
In G.R. No. 132592, petitioner manifested that she no
longer questions the Court of Appeals decision on the Mazda
vehicle because respondent repossessed it. As to the
residential house, she claimed that being conjugal in nature,
justice requires that she and her children be allowed to
occupy and enjoy the house considering that during the
entire proceedings before the trial court, she did not have
the chance to occupy it. Further, she posted a bond
of P1,500,000 for the damages which respondent may
suffer.[10] For these reasons, she asked for execution pending
appeal. The amount of P100,000 as advance payment to her
counsel was a drop in the bucket compared to the bond she
posted, according to her. She also suggested as an
alternative that she simply be required to put up an
additional bond. She also agreed to submit to an accounting
as regular administratrix and the advance attorneys fees be
charged to her share in the net conjugal assets.
 In his comment, respondent denied petitioners
allegation that she did not have the chance to occupy the
residential house. He averred that she could have, had she
chosen to. According to him, as the inventory of the couples
properties showed, petitioner owned two houses and lots
and two motor vehicles in the United States, where she is a
permanent resident. Respondent contended that there was
no compelling reason for petitioner to have the judgment
executed pending appeal.
Essentially, the core issue in G.R. No. 132592 is whether
execution of judgment pending appeal was justified.
As held in Echaus vs. Court of Appeals, 199 SCRA 381,
386 (1991), execution pending appeal is allowed when
superior circumstances demanding urgency outweigh the
damages that may result from the issuance of the writ.
Otherwise, instead of being an instrument of solicitude and
justice, the writ may well become a tool of oppression and
inequity.[11]
In this case, considering the reasons cited by petitioner,
we are of the view that there is no superior or urgent
circumstance that outweighs the damage which respondent
would suffer if he were ordered to vacate the house. We
note that petitioner did not refute respondents allegations
that she did not intend to use said house, and that she has
two (2) other houses in the United States where she is a
permanent resident, while he had none at all. Merely putting
up a bond is not sufficient reason to justify her plea for
execution pending appeal. To do so would make execution
routinary, the rule rather than the exception.[12]
Similarly, we are not persuaded that the P100,000
advance payment to petitioners counsel was properly
granted. We see no justification to pre-empt the judgment
by the Court of Appeals concerning said amount of P100,000
at the time that the trial courts judgment was already on
appeal.
In G.R. No. 133628, petitioner Aida Baez contends that
an action for legal separation is among the cases where
multiple appeals may be taken. According to her, the filing
of a record on appeal, pursuant to Section 2(a), Rule 41 of
the Rules of Court,[13] is required in this case. She concludes
that respondents appeal should have been dismissed for his
failure to file the record on appeal within the reglementary
period, as provided under Section 1-b, Rule 50 of the Rules
of Court.[14]
Petitioner likewise prays that, in the event that we do
not dismiss Gabriel Baez appeal, we should direct the
appellate court to return the records of the case to the RTC
of Cebu.Thereafter, according to her, respondent should file
his record on appeal for approval and transmittal to the
Court of Appeals. In the alternative, she prays that the
appellate court retain only the pleadings and evidence
necessary to resolve respondents appeal pursuant to
Section 6, Rule 44[15] and Section 6, Rule 135[16] of the Rules
of Court, and return the rest of the case records to the RTC.
In turn, respondent argues that Section 39 of B.P.
129[17] expressly abolished the requirement of a record on
appeal, except in appeals in special proceedings in
accordance with Rule 109,[18] and other cases wherein
multiple appeals are allowed. An action for legal separation,
he avers, is neither a special proceeding nor one where
multiple appeals are allowed.
 Now, is an action for legal separation one where
multiple appeals are allowed? We do not think so.
In Roman Catholic Archbishop of Manila v. Court of
Appeals, 258 SCRA 186, 194 (1996), this Court held:
xxx Multiple appeals are allowed in special proceedings, in
actions for recovery of property with accounting, in actions
for partition of property with accounting, in the special civil
actions of eminent domain and foreclosure of mortgage. The
rationale behind allowing more than one appeal in the same
case is to enable the rest of the case to proceed in the event
that a separate and distinct issue is resolved by the court
and held to be final.
In said case, the two issues raised by therein petitioner
that may allegedly be the subject of multiple appeals arose
from the same cause of action, and the subject matter
pertains to the same lessor-lessee relationship between the
parties. Hence, splitting the appeals in that case would only
be violative of the rule against multiplicity of appeals.
The same holds true in an action for legal
separation. The issues involved in the case will necessarily
relate to the same marital relationship between the
parties. The effects of legal separation, such as entitlement
to live separately, dissolution and liquidation of the absolute
community or conjugal partnership, and custody of the
minor children, follow from the decree of legal separation.
[19]
They are not separate or distinct matters that may be
resolved by the court and become final prior to or apart
from the decree of legal separation. Rather, they are mere
incidents of legal separation.[20] Thus, they may not be
subject to multiple appeals.
Petitioners alternative prayers that in case we do not
dismiss the appeal, we return the records to the trial court
and require respondent to file a record on appeal, or we
return the records to the trial court and retain only the
pleadings and orders relevant to the appeal, are untenable.
If we grant the first, we are effectively saying that the
instant case is one involving multiple appeals, which it is
not. If we allow the second, we are effectively applying by
analogy, Section 6, Rule 44 and Section 6, Rule 135 of the
Rules of Court, without petitioner showing support therefor
in law or jurisprudence.[21]
WHEREFORE, the instant petitions are DENIED for lack
of merit. The decision and resolution of the Court of Appeals
in CA-G.R. SP No. 42663 and CA-G.R. No. CV-56265,
respectively, are hereby AFFIRMED, so that the Order dated
October 1, 1996, of the Regional Trial Court authorizing the
release of P100,000 to petitioners counsel; the Omnibus
Order dated November 22, 1996 granting the motion
pending appeal; the writ of execution dated December 2,
1996; and the Order dated December 10, 1996 granting the
motion by the sheriff to make symbolic delivery of the house
and vehicle are SET ASIDE. Further, the Administrator of the
conjugal partnership is ORDERED to cause the
reimbursement by petitioners counsel of the released
amount of P100,000. The Court of Appeals is hereby
DIRECTED to give due course to respondents appeal, and
the Division Clerk of Court of this Court is likewise DIRECTED
to promptly remand the record of these cases to the Court
of Appeals.
Costs against petitioner.
SO ORDERED.
 Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Complainant, who is one of the plaintiffs in [Civil Case No.
Jr., JJ., concur. MTCC-2266 entitled Spouses Fernando Fajardo and
Evangeline Perez vs. Maria Datuin], alleged that the
complaint for ejectment which they filed on July 17, 1997
was finally decided on July 29, 1999 against the defendant.
THIRD DIVISION The decision was appealed to the Regional Trial Court but it
was dismissed on November 29, 1999, and the decision
[A.M. No. P-02-1535. March 28, 2003] became final and executory. His lawyer filed a Motion for
Execution, and on March 7, 2000, the Court issued a Writ of
FERNANDO FAJARDO, complainant, vs. Sherif Execution which was brought by the respondent Sheriff to
RODOLFO V. QUITALIG, Municipal Trial Court in the defendant Maria Datuin on March 9, 2000.
Cities, San Carlos City,
Pangasinan, respondent. Complainant claimed that after the Writ of Execution was
served, defendant asked for a period of two (2) weeks for
DECISION her to remove her personal properties on the land. After two
(2) weeks he went to Sheriff Quitalig so that the Writ of
PANGANIBAN, J.: Execution may be implemented but he was told that a
restraining order was issued, but when he asked for it, the
As frontline officials of the justice system, sheriffs must respondent told him that he left it in the office.
always strive to maintain public trust in the performance of
their duties. Hence, they must see to it that the final stage Complainant stated that on March 24, 2000, he and his
in the litigation process is completed without unnecessary lawyer went to the court to verify whether a restraining
delay. order has really been issued but they found out that there
was none; so he told the respondent to implement the Writ
The Case and the Facts of Execution. Respondent, accompanied by a policeman and
the barangay captain went to the place where the Writ of
In a Sworn Complaint[1] dated April 11, 2000, Sheriff Execution is to be implemented at 10:00 that morning but
Rodolfo V. Quitalig of the Municipal Trial Court in Cities when they reached the place, respondent did not do
(MTCC) of San Carlos City was charged by Reverend anything except to ask the defendant to bring out her
Fernando Fajardo with conduct prejudicial to the best personal properties. His reason is that an employee of the
interest of the service and/or dereliction of duty. Probation Office, Mr. Leonardo Martinez, talked to him. At
5:30 p.m., the restraining order was brought to the place,
and the respondent told him that the writ of execution can
The factual antecedents of the case are summarized by
no longer be implemented.
the Office of the Court Administrator (OCA) as follows:
Complainant asserted that respondent favored, or showed
partiality in favor of the defendant to his prejudice.[2]
In his Comment[3] dated October 3, 2000, respondent
denied the charge. He asked for the dismissal of the case,
because he had already implemented the Writ on August 24,
2000 as evidenced by his August 25, 2000 Report of
Service.[4] He also pointed out that he had made an
inventory of the personal properties recovered from the
subject premises. That he had done so was attested to by
defendants mother, Rufina Datuin, and witnessed by the
barangay captain and two councilors.
The OCAs Finding and Recommendation
In its October 29, 2001 Report, [5] the OCA found
respondent to have been negligent in the performance of his
duty as a sheriff. It said thus:
Respondent was negligent in the performance of his duty as
sheriff. The Writ of Execution was issued on March 7, 2000,
and was served on the judgment obligor on March 9, 2000.
Respondent admitted that the judgment obligor promised to
vacate the premises on March 29, 2000, but he was not able
to implement the Writ of Execution because on March 24,
2000, RTC, Branch 56, San Carlos, Pangasinan issued a
Temporary Restraining Order. The Temporary Restraining
Order did not ripen into an injunction so it lapsed after
twenty (20) days from the date it was issued, but the Writ of
Execution was implemented only [on] August 24, 2000
which is more than four (4) months from the date the
restraining order lapsed. It is the duty of the sheriff to
enforce a writ of execution without delay once it is given to
him unless restrained.
The Writ of Execution was finally and/or implemented only
on August 24, 2000, as shown in the Report submitted by
the respondent in court. Complainant claimed that the
respondent was reluctant to implement the Writ of
Execution because a certain Leonardo Martinez intervened.
This allegation of the complainant was not denied by the
respondent in his Comment. Respondent just stated in his
Comment that he implemented the Writ of Execution on
August 24, 2000, and made inventory of the personal
properties pulled out from the building and signed by
defendants mother and Barangay Captain Nestor Poquiz.
Respondents deliberate refusal to traverse or refute the
charges is an admission that the allegations are true and he
cannot deny them.[6] (Citation omitted)
The OCA recommended that respondent be ordered to
pay a fine of P5,000 and warned that a repetition of the
same or a similar offense would be dealt with more severely.
[7]
This Courts Ruling
We agree with the OCAs findings and recommendation.
Respondents Administrative Liability
As frontline officials of the justice system, sheriffs must
always strive to maintain public trust in the performance of
their duties. Having the forsworn duty to uphold the majesty
of the law, they must see to it that the final stage in the
litigation process is carried out without unnecessary delay. [8]
A review of the records of this case reveals that
respondent enforced the Writ of Execution dated March 7,
2000 only on August 24, 2000, as shown by his August 25,
2000 Report of Service. Within 30 days from receipt thereof
and every 30 days thereafter until the judgment is fully
satisfied, a sheriff is required by the Rules of Court to render
a report on the action taken on a writ of execution. Section
14 of Rule 39 of the Rules provides the manner in which the
execution is to be implemented, as follows:
SEC. 14. Return of Writ of Execution. The writ of execution
shall be returnable to the court issuing it immediately after
the judgment has been satisfied in part or in full. If the
judgment cannot be satisfied in full within thirty days (30)
days after his receipt of the writ, the officer shall report to
the court and state the reason therefore. Such writ shall
continue in effect during the period within which the
judgment may be enforced by motion. The officer shall
make a report to the court every thirty (30) days on the
proceedings taken thereon until the judgment is satisfied in
full, or its effectivity expires. The returns or periodic reports
shall set forth the whole of the proceedings taken, and shall
be filed with the court and copies thereof promptly furnished
the parties.
Evidently, respondent was not only remiss in his
implementation of the Writ, but likewise derelict in
his submission of the returns thereof.
Respondent should have immediately implemented and
made a return of the Writ after duly serving it upon the
defendant on March 9, 2000. Nonetheless, because of the
request of the defendant and her promise that she would
vacate the premises on March 23, 2000, he allowed her to
remain there. However, when he came back on March 24,
2000, he was unable to enforce the Writ because of a TRO
issued by the RTC of San Carlos, Pangasinan. He averred
that he was finally able to execute the Writ on August 24,
2000 and to submit his Return thereof on the next day.
We find respondents explanation to be utterly wanting.
He is guilty of dereliction of his duty as a sheriff, because he
failed to (1) execute the Writ within 30 days from his receipt
thereof, (2) submit his Report of Service within the same
period, (3) make periodic reports to the MTCC until the
judgment was fully satisfied, and (4) furnish the parties with
copies of the Reports.
By his own words, respondent admitted his dereliction
of duty. First, as we have said earlier, he should have
immediately executed the Writ when he served it upon the
defendant on March 9, 2000.
Second, he should have immediately reported to the
MTCC that he was unable to enforce the Writ because
another court had issued a TRO enjoining him from doing
so. Third, he should have informed the parties, particularly
the plaintiff or his counsel, about his inability to enforce the
Writ. Fourth, he should have immediately enforced it twenty
days after its issuance.
Fifth, he should have made periodic Reports to the
MTCC until the judgment was fully satisfied and the parties
furnished a copy thereof. Sixth, within thirty days from his
receipt of the Writ, he should have promptly made his
Return, a copy of which he should have immediately
furnished the parties.
Clearly, the actuations of respondent constitute
disrespect, if not outright defiance, of the MTCCs authority.
In the absence of instructions to the contrary, a sheriff has
the duty to execute a Writ with reasonable celerity and
promptness in accordance with its mandate.
In several cases,[9] the Court has said that the failure to
make a return of a writ within the required period is
nonfeasance. In Bautista v. De Castro,[10] the provincial
sheriff of Zambales and his deputy were suspended without
pay for 30 and 15 days, respectively, for dereliction of
duty. In Barola v. Abogatal,[11] a sheriff who had received a
writ of execution on January 15, 1978, but made a return
thereof only on May 22, 1978, was fined a months salary.
In Lapea v. Pamarang,[12] a sheriff whose Return was four
days late was fined P2,000.
Casal v. Concepcion Jr.[13] ordered the dismissal of
respondent sheriff from the service and the forfeiture of all
his benefits, with prejudice to his reemployment in any
branch or service of the government including government-
owned and controlled corporations. After the lapse of two
years from the issuance of the original Writ in a simple
ejectment case, he not only failed to exert reasonable
efforts to fully implement its subsequent issuances, but
likewise failed to account for the amounts he got from
complainant. Furthermore, he abandoned his work during
the time that the charges against him were being
investigated.
In Concerned Citizen v. Torio,[14] the respondent therein
was suspended for a year without pay when he failed to act
promptly on the Writs of Execution issued from 1998-
2001. And in Lumbre v. Dela Cruz,[15] respondent, after being
found guilty of an inexcusable seven-month delay in
carrying out a lawful Writ of Execution was
fined P5,000. Justifying the penalty, the Court said:
When a writ of execution is placed in the hands of a sheriff,
it is his duty, in the absence of contrary instructions, to have
it implemented forthwith. The sheriff is primarily responsible
for the speedy and efficient service of all court processes
and writs originating from the court and its branches,
including such as may be properly delegated to him by
other courts. The delay of more than seven months, from
the time the writ of execution was issued by the court on 07
August 1998 to the time when respondent sheriff posted the
notice of sale or levy on 23 March 1999, is an inordinately
long period for respondent to act thereon. The importance of
the role played by all court personnel in the administration
of justice is never to be taken lightly. It is the sheriffs
particularly who are depended on, and who must properly
attend to, the proper implementation of court decrees and
orders, and they are expected to do so with utmost diligence
and dispatch.[16]
WHEREFORE, Sheriff Rodolfo V. Quitalig is found guilty
of dereliction of duty and is ORDERED to pay a FINE of five
thousand pesos (P5,000). Considering that he has already
retired from the service, this amount is hereby ordered
deducted from his retirement benefits.
SO ORDERED.
Puno, (Chairman), Sandoval-Gutierrez,
Corona, and Carpio-Morales, JJ., concur.
EN BANC
JEFFREY L. SANTOS, G.R. No. 164439
 Petitioner,
- versus -
COMMISSION ON ELECTIONS Promulgated:
and MACARIO E. ASISTIO III,
Respondents. January 23, 2006
x--------------------------------------------
------x
DECISION
CARPIO, J.:
The Case
[1]
Before this Court is a petition for certiorari assailing
the Resolution[2] of the Commission on Elections (COMELEC)
First Division in SPC No. 04-233 and Resolution No. 7257 [3] of
the COMELEC En Banc. The COMELEC promulgated the two
Resolutions on 29 June 2004.
The Antecedent Facts
Jeffrey L. Santos (Santos) and Macario E. Asistio III (Asistio)
were candidates for the position of Councilor for the Second
District of Caloocan City in the 10 May 2004 Elections. On 18
May 2004, the City Board of Canvassers proclaimed Asistio
as councilor-elect for the Second District of Caloocan City.
Based on the Canvass of Election Returns and the Statement
of Votes, Asistio garnered 45,163 votes and secured the
sixth and last slot for the position of Councilor while Santos
placed seventh with 44,558 votes.
On 28 May 2004, Santos filed with the COMELEC a Petition,
docketed SPC No. 04-233, for Annulment of Proclamation on
the Basis of Erroneous Canvass/Tallies of Votes. Santos
alleged that he was a victim of dagdag-bawas and that his
votes were reduced in the Statement of Votes while Asistios
votes were increased. Santos further alleged that based on
the certified true copies of the NAMFRELs [4] election returns
as well as the Certificates of Votes submitted by the poll
watchers in the Second District of Caloocan City, he
obtained 46,361 votes while Asistio garnered only 45,514
votes. Santos prayed for the nullification of the proclamation
of Asistio and for his declaration as the duly elected
Councilor of the Second District of Caloocan City.
The Ruling of the COMELEC First Division
In a Resolution promulgated on 29 June 2004, the COMELEC
First Division dismissed SPC No. 04-233 for lack of merit.
The COMELEC First Division ruled that: (1) Santos
lack of watchers and counsel during the early stages of the
canvassing proceedings is not a proper ground for the
annulment of Asistios proclamation; (2) the documents
submitted by Santos, consisting of a compilation and
tabulation of votes which he himself prepared, and which he
based on certified true copies of NAMFRELs election returns
and the originals of various Certificates of Votes submitted
by the poll watchers, are not admissible in evidence; and (3)
Santos should have assailed the proceedings via a pre-
proclamation controversy, or through an election protest
within ten days after the proclamation of Asistio, instead of
a petition for annulment of proclamation.
On 29 June 2004, or on the same date of the promulgation
of the Resolution by the COMELEC First Division, the
COMELEC En Banc promulgated Resolution No. 7257, as
follows:
RESOLUTION NO. 7257
 (OMNIBUS RESOLUTION ON PENDING
CASES)
WHEREAS, in connnection with the May 10, 2004
National and Local Elections, various petitions
docketed as Special Actions, Special Cases and
Special Proceeding Cases and other contentious
cases were filed with the Office of the Clerk of the
Commission;
WHEREAS, the second paragraph of Sec. 16,
Republic Act No. 7166, provides:
All pre-proclamation cases pending before the
Commission shall be deemed terminated at
the beginning of the term of office involved
and the rulings of the boards of canvassers
concerned shall be deemed affirmed, without
prejudice to the filing of a regular election
protest by the aggrieved party. However,
proceedings may continue when on the basis
of the evidence thus far presented, the
Commission determines that the petition
appears meritorious and accordingly issues
an order for the proceeding to continue or
when appropriate order has been issued by
the Supreme Court in a petition for certiorari.
WHEREAS, the Commission has disposed of the pre-
proclamation and other cases brought before it for
adjudication, except those whose disposition requires
proceedings extending beyond 30 June 2001;
NOW, THEREFORE, by virtue of its powers under
the Constitution, the Omnibus Election Code, Batas
Pambansa Blg. 881, Republic Act Nos. 6646 and
7166, and other election laws, the
Commission RESOLVED, as it hereby RESOLVES:
1. All cases which were filed by private
parties without timely payment of the proper
filing fee are hereby dismissed;
2. All cases which were filed beyond the
reglementary period or not in the form
prescribed under appropriate provisions of the
Omnibus Election Code, Republic Act Nos.
6646 and 7166 are hereby likewise dismissed;
3. All other pre-proclamation cases which
do not fall within the class of cases specified
under paragraphs (1) and (2) immediately
preceding shall be deemed terminated
pursuant to Section 16, R.A. 7166 except
those mentioned in paragraph (4). Hence, all
the rulings of boards of canvassers concerned
are deemed affirmed. Such boards of
canvassers are directed to reconvene
forthwith, continue their respective canvass
and proclaim the winning candidates
accordingly, if the proceedings were
suspended by virtue of pending pre-
proclamation cases;
4. All remaining pre-proclamation cases,
which on the basis of the evidence thus far
presented, appear meritorious and/or are
subject of orders by the Supreme Court or this
Commission in petitions for certiorari brought
respectively to them shall likewise remain
active cases, thereby requiring the
proceedings therein to continue beyond 30
June 2004, until they are finally resolved; and
5. All petitions for disqualification, failure
of elections or analogous cases, not being
pre-proclamation controversies and, therefore,
not governed by Sections 17, 18, 19, 20, 21,
and particularly, by the second paragraph of
Sec. 6, Republic Act No. 7166, shall remain
active cases, the proceedings to continue
beyond June 30, 2004, until the issues therein
are finally resolved by the Commission;
ACCORDINGLY, it is hereby ordered that the
proceedings in the cases appearing on the list
annexed and made an integral part hereof, be
continued to be heard and disposed of by the
Commission.
This resolution shall take effect immediately.[5]
Annexed to Resolution No. 7257 is a list of cases [6] that shall
remain active before the COMELEC until their final
resolution. SPC No. 04-233 is not included in the list.
On 9 July 2004, Santos filed with the COMELEC En Banc a
motion for the reconsideration assailing the COMELEC First
Divisions Resolution.
On 30 August 2004, Santos filed before this Court a petition
for certiorari assailing the 29 June 2004 Resolution of the
COMELEC First Division and Resolution No. 7257 of the
COMELEC En Banc.
In his Comment on the petition, Asistio accused Santos of
forum shopping. Asistio informed the Court that the
COMELEC En Banc only disposed of Santos motion for
reconsideration in its Order of 15 September 2004 when it
affirmed the 29 June 2004 Resolution of the COMELEC First
Division. Hence, at the time of the filing of the petition
for certiorari before this Court, Santos motion for
reconsideration was still pending before the COMELEC En
Banc.
Santos, in his Reply to Asistios Comment, maintains that he
is not guilty of forum shopping because the petition before
the Supreme Court only challenges Resolution No. 7257
and not the 29 June 2004 Resolution of the COMELEC First
Division. Santos further argues that by excluding SPC No.
04-233 from the list of cases annexed to Resolution No.
7257, the COMELEC En Banc effectively terminated the case
to its finality. Santos claims that he only learned on 22 July
2004 of the exclusion of SPC No. 04-233 from the list of
cases, after the petition before this Court had been filed.
However, he admits that Resolution No. 7257 was published
in the Philippine Daily Inquirer on 30 June 2004.
The Issues
The issues for resolution of this Court are:
1. Whether Santos is guilty forum shopping;
2. Whether the COMELEC First Division committed
grave abuse of discretion in dismissing SPC No. 04-
233;
3. Whether the COMELEC En Banc committed grave
abuse of discretion in excluding SPC No. 04-233 from
the list of cases annexed to Resolution No. 7257.
The Ruling of This Court
The petition has no merit.
Santos is Guilty of Forum-Shopping
Forum shopping is an act of a party, against whom
an adverse judgment or order has been rendered in one
forum, of seeking and possibly securing a favorable opinion
in another forum, other than by appeal or special civil action
for certiorari.[7] It may also be the institution of two or more
actions or proceedings grounded on the same cause on the
supposition that one or the other court would make a
favorable disposition.[8]
In this case, Santos filed the petition for certiorari before this
Court during the pendency of his motion for reconsideration
with the COMELEC En Banc. The petition clearly states that
he is questioning the two Resolutions issued by the
COMELEC: the 29 June 2004 Resolution of the COMELEC First
Division in SPC No. 04-233 and the COMELEC En Banc
Resolution No. 7257.[9] It was only when Asistio, in his
Comment, called the Courts attention that Santos now
belatedly asserts that he only seeks to challenge COMELEC
Resolution No. 7257 and not the Resolution of the COMELEC
First Division.[10]
Santos stated in his petition before this Court that on
9 July 2004, he filed a motion for reconsideration of the
COMELEC First Divisions Resolution. However, he did not
disclose that at the time of the filing of his petition, his
motion for reconsideration was still pending before the
COMELEC En Banc. Santos did not also bother to inform the
Court of the denial of his motion for reconsideration by the
COMELEC En Banc. Had Asistio not called this Courts
attention, we would have ruled on whether the COMELEC
First Division committed grave abuse of discretion in
dismissing SPC No. 04-233, which is one of the issues raised
by Santos in this petition. This act of Santos alone
constitutes a ground for this Courts summary dismissal of
his petition.
The Resolution of the COMELEC First Division has
attained Finality
Had this Court been apprised at the outset of the pendency
of Santos motion for reconsideration before the COMELEC En
Banc, it would have dismissed the petition outright for
premature filing. When the COMELEC En Banc finally
resolved the motion for reconsideration, Santos no longer
elevated the denial of his motion before this Court. He could
no longer do that without exposing his act of forum
shopping. Thus, by Santos inaction, the Order of the
COMELEC En Banc is now final and executory.
The Exclusion of SPC No. 04-233 in the List of Cases
Annexed To Resolution No. 7257 has become Moot
Contrary to Santos claim, the COMELEC En Banc did not
dismiss outright SPC No. 04-233 even though the case was
excluded in the list annexed to Resolution No. 7257. The
COMELEC First Division in fact resolved SPC No. 04-233.
When Santos filed a motion for reconsideration, the
COMELEC En Banc accepted, considered and disposed of the
motion. Hence, the issue of whether the COMELEC En Banc
committed grave abuse of discretion in excluding SPC No.
04-233 in the list of cases annexed to Resolution No. 7257 is
now moot since the COMELEC in fact accepted, considered
and disposed of SPC No. 04-233.
WHEREFORE, we DISMISS the petition.
SO ORDERED.
SECOND DIVISION
[G.R. No. 152878. May 5, 2003]
RIZAL COMMERCIAL
BANKING CORPORATION, petitioner, vs. MAGWIN
MARKETING CORPORATION, NELSON TIU, BENITO SY
and ANDERSON UY, respondents.
DECISION
BELLOSILLO, J.:
WE ARE PERTURBED that this case should drag this
Court in the banal attempts to decipher the hazy and
confused intent of the trial court in proceeding with what
would have been a simple, straightforward and hardly
arguable collection case. Whether the dismissal without
prejudice for failure to prosecute was unconditionally
reconsidered, reversed and set aside to reinstate the civil
case and have it ready for pre-trial are matters which should
have been clarified and resolved in the first instance by the
court a quo. Unfortunately, this feckless imprecision of the
trial court became the soup stock of the parties and their
lawyers to further delay the case below when they could
have otherwise put things in proper order efficiently and
effectively.
On 4 March 1999 petitioner Rizal Commercial Banking
Corporation (RCBC) filed a complaint for recovery of a sum
of money with prayer for a writ of preliminary attachment
against respondents Magwin Marketing Corporation, Nelson
Tiu, Benito Sy and Anderson Uy.[1] On 26 April 1999, the trial
court issued a writ of attachment. [2] On 4 June 1999 the writ
was returned partially satisfied since only a parcel of land
purportedly owned by defendant Benito Sy was attached.
[3]
In the meantime, summons was served on each of the
defendants, respondents herein, who filed their respective
answers, except for defendant Gabriel Cheng who was
dropped without prejudice as party-defendant as his
whereabouts could not be located.[4] On 21 September 1999
petitioner moved for an alias writ of attachment which on 18
January 2000 the court a quo denied.[5]
Petitioner did not cause the case to be set for pre-trial.
[6]
For about six (6) months thereafter, discussions between
petitioner and respondents Magwin Marketing Corporation,
Nelson Tiu, Benito Sy and Anderson Uy, as parties in Civil
Case No. 99-518, were undertaken to restructure the
indebtedness of respondent Magwin Marketing Corporation.
[7]
On 9 May 2000 petitioner approved a debt payment
scheme for the corporation which on 15 May 2000 was
communicated to the latter by means of a letter dated 10
May 2000 for the conformity of its officers, i.e., respondent
Nelson Tiu as President/General Manager of Magwin
Marketing Corporation and respondent Benito Sy as Director
thereof.[8] Only respondent Nelson Tiu affixed his signature
on the letter to signify his agreement to the terms and
conditions of the restructuring.[9]
On 20 July 2000 the RTC of Makati City, on its own
initiative, issued an Order dismissing without prejudice Civil
Case No. 99-518 for failure of petitioner as plaintiff therein
to prosecute its action for an unreasonable length of time x
x x.[10] On 31 July 2000 petitioner moved for reconsideration
of the Order by informing the trial court of
respondents unremitting desire to settle the case amicably
through a loan restructuring program. [11] On 22 August 2000
petitioner notified the trial court of the acquiescence thereto
of respondent Nelson Tiu as an officer of Magwin Marketing
Corporation and defendant in the civil case.[12]
On 8 September 2000 the court a quo issued
an Order reconsidering the dismissal without prejudice of
Civil Case No. 99-518
Acting on plaintiffs Motion for Reconsideration of the Order
dated 20 July 2000 dismissing this case for failure to
prosecute, it appearing that there was already conformity to
the restructuring of defendants indebtedness with plaintiff
by defendant Nelson Tiu, President of defendant corporation
per Manifestation and Motion filed by plaintiff on 22 August
2000, there being probability of settlement among the
parties, as prayed for, the Order dated 20 July 2000 is
hereby set aside.
Plaintiff is directed to submit the compromise agreement
within 15 days from receipt hereof. Failure on the part of
plaintiff to submit the said agreement shall cause the
imposition of payment of the required docket fees for re-
filing of this case.[13]
On 27 July 2000 petitioner filed in Civil Case No. 99-518
a Manifestation and Motion to Set Case for Pre-Trial
Conference alleging that [t]o date, only defendant Nelson
Tiu had affixed his signature on the May 10, 2000 letter
which informed the defendants that plaintiff [herein
petitioner] already approved defendant Magwin Marketing
Corporations request for restructuring of its loan obligations
to plaintiff but subject to the terms and conditions specified
in said letter.[14] This motion was followed on 5 October 2000
by petitioners Supplemental Motion to Plaintiffs
Manifestation and Motion to Set Case for Pre-Trial
Conference affirming that petitioner could not submit a
compromise agreement because only defendant Nelson Tiu
had affixed his signature on the May 10, 2000 letter x x x.
[15]
Respondent Anderson Uy opposed the foregoing
submissions of petitioner while respondents Magwin
Marketing Corporation, Nelson Tiu and Benito Sy neither
contested nor supported them.[16]
The trial court, in an undated Order (although a date
was later inserted in the Order), denied petitioners motion
to calendar Civil Case No. 99-518 for pre-trial stating that -
Acting on plaintiffs [herein petitioner] Manifestation and
Motion to Set Case for Pre-Trial Conference, the Opposition
filed by defendant Uy and the subsequent Supplemental
Motion filed by plaintiff; defendant Uys Opposition, and
plaintiffs Reply; for failure of the plaintiff to submit a
compromise agreement pursuant to the Order dated 8
September 2000 plaintiffs motion to set case for pre-trial
conference is hereby denied.[17]
On 15 November 2000 petitioner filed its Notice of
Appeal from the 8 September 2000 Order of the trial court
as well as its undated Order in Civil Case No. 99-518. On 16
November 2000 the trial court issued two (2) Orders, one of
which inserted the date 6 November 2000 in the
undated Order rejecting petitioners motion for pre-trial in
the civil case, and the other denying due course to
the Notice of Appeal on the ground that the Orders dated 8
September 2000 and 6 November 2000 are interlocutory
orders and therefore, no appeal may be taken x x x.[18]
On 7 December 2000 petitioner elevated
the Orders dated 8 September 2000, 6 November 2000 and
16 November 2000 of the trial court to the Court of Appeals
in a petition for certiorari under Rule 65 of the Rules of Civil
Procedure.[19] In the main, petitioner argued that the court a
quo had no authority to compel the parties in Civil Case No.
99-518 to enter into an amicable settlement nor to deny the
holding of a pre-trial conference on the ground that no
compromise agreement was turned over to the court a quo.
[20]
On 28 September 2001 the appellate court promulgated
its Decision dismissing the petition for lack of merit and
affirming the assailed Orders of the trial court[21] holding that
-
x x x although the language of the September 8, 2000 Order
may not be clear, yet, a careful reading of the same would
clearly show that the setting aside of the Order dated July
20, 2000 which dismissed petitioners complaint x x x for
failure to prosecute its action for an unreasonable length of
time is dependent on the following conditions, to wit: a) The
submission of the compromise agreement by petitioner
within fifteen (15) days from notice; and b) Failure of
petitioner to submit the said compromise agreement shall
cause the imposition of the payment of the required docket
fees for the re-filing of the case; so much so that the non-
compliance by petitioner of condition no. 1 would make
condition no. 2 effective, especially that petitioners
manifestation and motion to set case for pre-trial conference
and supplemental motion x x x [were] denied by the
respondent judge in his Order dated November 6, 2000,
which in effect means that the Order dated July 20, 2000
was ultimately not set aside considering that a party need
not pay docket fees for the re-filing of a case if the original
case has been revived and reinstated.[22]
On 2 April 2002 reconsideration of the Decision was
denied; hence, this petition.
In the instant case, petitioner maintains that the trial
court cannot coerce the parties in Civil Case No. 99-518 to
execute a compromise agreement and penalize their failure
to do so by refusing to go forward with the pre-trial
conference. To hold otherwise, so petitioner avers, would
violate Art. 2029 of the Civil Code which provides that [t]he
court shall endeavor to persuade the litigants in a civil case
to agree upon some fair compromise, and this Courts ruling
in Goldloop Properties, Inc. v. Court of Appeals [23] where it
was held that the trial court cannot dismiss a complaint for
failure of the parties to submit a compromise agreement.
On the other hand, respondent Anderson Uy filed his
comment after several extensions asserting that there are
no special and important reasons for undertaking this
review. He also alleges that petitioners attack is limited to
the Order dated 8 September 2000 as to whether it is
conditional as the Court of Appeals so found and the
applicability to this case of the ruling in Goldloop Properties,
Inc. v. Court of Appeals. Respondent Uy claims that
the Order reconsidering the dismissal of Civil Case No. 99-
518 without prejudice is on its face contingent upon the
submission of the compromise agreement which in the first
place was the principal reason of petitioner to justify the
withdrawal of the Order declaring his failure to prosecute
the civil case.He further contends that the trial court did not
force the parties in the civil case to execute a compromise
agreement, the truth being that it dismissed the complaint
therein for petitioners dereliction.
Finally, respondent Uy contests the relevance
of Goldloop Properties, Inc. v. Court of Appeals, and refers to
its incongruence with the instant case, i.e., that the
complaint of petitioner was dismissed for failure to
prosecute and not for its reckless disregard to present an
amicable settlement as was the situation in Goldloop
Properties, Inc., and that the dismissal was without
prejudice, in contrast with the dismissal with prejudice
ordered in the cited case. For their part, respondents
Magwin Marketing Corporation, Nelson Tiu and Benito Sy
waived their right to file a comment on the instant petition
and submitted the same for resolution of this Court. [24]
The petition of Rizal Commercial Banking Corporation is
meritorious. It directs our attention to questions of
substance decided by the courts a quo plainly in a way not
in accord with applicable precedents as well as the accepted
and usual course of judicial proceedings; it offers special
and important reasons that demand the exercise of our
power of supervision and review. Furthermore, petitioners
objections to the proceedings below encompass not only
the Order of 8 September 2000 but include the
cognate Orders of the trial court of 6 and 16 November
2000. This is evident from the prayer of the instant petition
which seeks to reverse and set aside the Decision of the
appellate court and to direct the trial court to proceed with
the pre-trial conference in Civil Case No. 99-518. Evidently,
the substantive issue involved herein is whether the
proceedings in the civil case should progress, a question
which at bottom embroils all the Orders affirmed by the
Court of Appeals.
On the task at hand, we see no reason why RTC-Br. 135
of Makati City should stop short of hearing the civil case on
the merits. There is no substantial policy worth pursuing by
requiring petitioner to pay again the docket fees when it has
already discharged this obligation simultaneously with the
filing of the complaint for collection of a sum of money. The
procedure for dismissed cases when re-filed is the same as
though it was initially lodged, i.e., the filing of answer, reply,
answer to counter-claim, including other foot-dragging
maneuvers, except for the rigmarole of raffling cases which
is dispensed with since the re-filed complaint is
automatically assigned to the branch to which the original
case pertained.[25] A complaint that is re-filed leads to the re-
enactment of past proceedings with the concomitant full
attention of the same trial court exercising an immaculate
slew of jurisdiction and control over the case that was
previously dismissed,[26] which in the context of the instant
case is a waste of judicial time, capital and energy.
What judicial benefit do we derive from starting the civil
case all over again, especially where three (3) of the four (4)
defendants, i.e., Magwin Marketing Corporation, Nelson Tiu
and Benito Sy, have not contested petitioners plea before
this Court and the courts a quo to advance to pre-trial
conference? Indeed, to continue hereafter with the
resolution of petitioners complaint without the usual
procedure for the re-filing thereof, we will save the court a
quo invaluable time and other resources far outweighing the
docket fees that petitioner would be forfeiting should we
rule otherwise.
Going over the specifics of this petition and the
arguments of respondent Anderson Uy, we rule that
the Order of 8 September 2000 did not reserve conditions
on the reconsideration and reversal of the Order dismissing
without prejudice Civil Case No. 99-518. This is quite evident
from its text which does not use words to signal an intent to
impose riders on the dispositive portion -
Acting on plaintiffs Motion for Reconsideration of the Order
dated 20 July 2000 dismissing this case for failure to
prosecute, it appearing that there was already conformity to
the restructuring of defendants indebtedness with plaintiff
by defendant Nelson Tiu, President of defendant corporation
per Manifestation and Motion filed by plaintiff on 22 August
2000, there being probability of settlement among the
parties, as prayed for, the Order dated 20 July 2000 is
hereby set aside.
Plaintiff is directed to submit the compromise agreement
within 15 days from receipt hereof. Failure on the part of
plaintiff to submit the said agreement shall cause the
imposition of payment of the required docket fees for re-
filing of this case.[27]
Contrary to respondent Uys asseverations, the impact of
the second paragraph upon the first is simply to illustrate
what the trial court would do after setting aside the
dismissal without prejudice: submission of the compromise
agreement for the consideration of the trial court. Nothing in
the second paragraph do we read that the reconsideration is
subject to two (2) qualifications. Certainly far from it, for
in Goldloop Properties, Inc. v. Court of Appeals [28] a similar
directive, i.e., [t]he parties are given a period of fifteen (15)
days from today within which to submit a Compromise
Agreement, was held to mean that should the parties fail in
their negotiations the proceedings would continue from
where they left off. Goldloop Properties, Inc.further said that
its order, or a specie of it, did not constitute an agreement
or even an expectation of the parties that should they fail
to settle their differences within the stipulated number of
days their case would be dismissed.
The addition of the second sentence in the second
paragraph does not change the absolute nullification of the
dismissal without prejudice decreed in the first
paragraph. The sentence [f]ailure on the part of plaintiff to
submit the said agreement shall cause the imposition of
payment of the required docket fees for re-filing of this case
is not a directive to pay docket fees but only a statement of
the event that may result in its imposition. The reason for
this is that the trial court could not have possibly made such
payment obligatory in the same civil case, i.e., Civil Case
No. 99-518, since docket fees are defrayed only after the
dismissal becomes final and executory and when the civil
case is re-filed.
It must be emphasized however that once the dismissal
attains the attribute of finality, the trial court cannot impose
legal fees anew because a final and executory dismissal
although without prejudice divests the trial court of
jurisdiction over the civil case as well as any residual power
to order anything relative to the dismissed case; it would
have to wait until the complaint is docketed once again.
[29]
On the other hand, if we are to concede that the trial
court retains jurisdiction over Civil Case No. 99-518 for it to
issue the assailed Orders, a continuation of the hearing
thereon would not trigger a disbursement for docket fees on
the part of petitioner as this would obviously imply the
setting aside of the order of dismissal and the reinstatement
of the complaint.
Indubitably, it is speculative to reckon the effectivity of
the Order of dismissal without prejudice to the presentation
of the compromise agreement. If we are to admit that the
efficacy of the invalidation of the Order of dismissal is
dependent upon this condition, then we must inquire: from
what date do we count the fifteen (15)-day reglementary
period within which the alleged revival of the order of
dismissal began to run? Did it commence from the lapse of
the fifteen (15) days provided for in the Order of 8
September 2000? Or do we count it from the 6 November
2000 Order when the trial court denied the holding of a pre-
trial conference? Or must it be upon petitioners receipt of
the 16 November 2000 Order denying due course to
its Notice of Appeal? The court a quo could not have
instituted an Order that marked the proceedings before it
with a shadow of instability and chaos rather than a
semblance of constancy and firmness.
The subsequent actions of the trial court also belie an
intention to revive the Order of dismissal without prejudice
in the event that petitioner fails to submit a compromise
agreement.The Orders of 6 and 16 November 2000 plainly
manifest that it was retaining jurisdiction over the civil case,
a fact which would not have been possible had the dismissal
without prejudice been resuscitated. Surely, the court a
quo could not have denied on 6 November 2000 petitioners
motion to calendar Civil Case No. 99-518 for pre-trial if the
dismissal had been restored to life in the meantime. By then
the dismissal without prejudice would have already become
final and executory so as to effectively remove the civil case
from the docket of the trial court.
The same is true with the Order of 16 November 2000
denying due course to petitioners Notice of Appeal. There
would have been no basis for such exercise of discretion
because the jurisdiction of the court a quo over the civil
case would have been discharged and terminated by the
presumed dismissal thereof. Moreover, we note the ground
for denying due course to the appeal: the Orders dated 8
September 2000 and 6 November 2000 are interlocutory
orders and therefore, no appeal may be taken from x x x.
[30]
This declaration strongly suggests that something more
was to be accomplished in the civil case, thus negating the
claim that the Order of dismissal without prejudice was
resurrected upon the parties failure to yield a compromise
agreement. A final order issued by a court has been defined
as one which disposes of the subject matter in its entirety or
terminates a particular proceeding or action, leaving nothing
else to be done but to enforce by execution what has been
determined by the court, while an interlocutory order is one
which does not dispose of a case completely but leaves
something more to be decided upon.[31]
Besides the semantic and consequential improbabilities
of respondent Uys argument, our ruling in Goldloop
Properties, Inc., is decisive of the instant case. In Goldloop
Properties, Inc., we reversed the action of the trial court in
dismissing the complaint for failure of the plaintiff to
prosecute its case, which was in turn based on its inability to
forge a compromise with the other parties within fifteen (15)
days from notice of the order to do so and held -
Since there is nothing in the Rules that imposes the sanction
of dismissal for failing to submit a compromise agreement,
then it is obvious that the dismissal of the complaint on the
basis thereof amounts no less to a gross procedural infirmity
assailable by certiorari. For such submission could at most
be directory and could not result in throwing out the case for
failure to effect a compromise. While a compromise is
encouraged, very strongly in fact, failure to consummate
one does not warrant any procedural sanction, much less an
authority to jettison a civil complaint worth P4,000,000.00 x
x x Plainly, submission of a compromise agreement is never
mandatory, nor is it required by any rule.[32]
As also explained therein, the proper course of action
that should have been taken by the court a quo, upon
manifestation of the parties of their willingness to discuss a
settlement, was to suspend the proceedings and allow them
reasonable time to come to terms (a) If willingness to
discuss a possible compromise is expressed by one or both
parties; or (b) If it appears that one of the parties, before the
commencement of the action or proceeding, offered to
discuss a possible compromise but the other party refused
the offer, pursuant to Art. 2030 of the Civil Code. If despite
efforts exerted by the trial court and the parties the
negotiations still fail, only then should the action continue as
if no suspension had taken place.[33]
Ostensibly, while the rules allow the trial court to
suspend its proceedings consistent with the policy to
encourage the use of alternative mechanisms of dispute
resolution, in the instant case, the trial court only gave the
parties fifteen (15) days to conclude a deal. This was, to say
the least, a passive and paltry attempt of the court a quo in
its task of persuading litigants to agree upon a reasonable
concession.[34] Hence, if only to inspire confidence in the
pursuit of a middle ground between petitioner and
respondents, we must not interpret the trial courts Orders as
dismissing the action on its own motion because the parties,
specifically petitioner, were anxious to litigate their case as
exhibited in their several manifestations and motions.
We reject respondent Uys contention that Goldloop
Properties, Inc. v. Court of Appeals is irrelevant to the case
at bar on the dubious reasoning that the complaint of
petitioner was dismissed for failure to prosecute and not for
the non-submission of a compromise agreement which was
the bone of contention in that case, and that the dismissal
imposed in the instant case was without prejudice, in
contrast to the dismissal with prejudice decreed in the cited
case. To begin with, whether the dismissal is with or without
prejudice if grievously erroneous is detrimental to the cause
of the affected party; Goldloop Properties, Inc. does not
tolerate a wrongful dismissal just because it was without
prejudice. More importantly, the facts in Goldloop
Properties, Inc. involve, as in the instant case, a dismissal
for failure to prosecute on the ground of the parties inability
to come up with a compromise agreement within fifteen (15)
days from notice of the courts order therein. All told, the
parallelism between them is unmistakable.
Even if we are to accept on face value respondents
understanding of Goldloop Properties, Inc. as solely about
the failure to submit a compromise agreement, it is
apparent that the present case confronts a similar
problem. Perhaps initially the issue was one of failure to
prosecute, as can be observed from the Order dated 20 July
2000, although later reversed and set aside. But thereafter,
in the Order of 6 November 2000, the trial court refused to
proceed to pre-trial owing to the failure of the plaintiff to
submit a compromise agreement pursuant to the
Order dated 8 September 2000. When the civil case was
stalled on account of the trial courts refusal to call the
parties to a pre-trial conference, the reason or basis therefor
was the absence of a negotiated settlement - a
circumstance that takes the case at bar within the plain
ambit of Goldloop Properties, Inc. In any event, given that
the instant case merely revolves around the search for a
reasonable interpretation of the several Orders of the trial
court, i.e., as to whether the dismissal without prejudice was
revived upon petitioners helplessness to perfect an out-of-
court arrangement, with more reason must we employ the
ruling in Goldloop Properties, Inc. to resolve the parties
differences of opinion.
We also find nothing in the record to support respondent
Uys conclusion that petitioner has been mercilessly delaying
the prosecution of Civil Case No. 99-518 to warrant its
dismissal.A complaint may be dismissed due to plaintiffs
fault: (a) if he fails to appear during a scheduled trial,
especially on the date for the presentation of his evidence in
chief, or when so required at the pre-trial; (b) if he neglects
to prosecute his action for an unreasonable length of time;
or (c) if he does not comply with the rules or any order of
the court. None of these was obtaining in the civil case.
While there was a lull of about six (6) months in the
prosecution of Civil Case No. 99-518, it must be
remembered that respondents themselves contributed
largely to this delay. They repeatedly asked petitioner to
consider re-structuring the debt of respondent Magwin
Marketing Corporation to which petitioner graciously
acceded. Petitioner approved a new debt payment scheme
that was sought by respondents, which it then
communicated to respondent Corporation through a letter
for the conformity of the latters officers, i.e., respondent
Nelson Tiu as President/General Manager and respondent
Benito Sy as Director thereof. Regrettably, only respondent
Nelson Tiu affixed his signature on the letter to signify his
concurrence with the terms and conditions of the
arrangement. The momentary lag in the civil case was
aggravated when respondent Benito Sy for unknown and
unexplained reasons paid no heed to the adjustments in the
indebtedness although curiously he has not opposed before
this Court or the courts a quo petitioners desire to go ahead
with the pre-trial conference.
Admittedly, delay took place in this case but it was not
an interruption that should have entailed the dismissal of
the complaint even if such was designated as without
prejudice. To constitute a sufficient ground for dismissal, the
inattention of plaintiff to pursue his cause must not only be
prolonged but also be unnecessary and dilatory resulting in
the trifling of judicial processes. In the instant case, the
adjournment was not only fleeting as it lasted less than six
(6) months but was also done in good faith to accommodate
respondents incessant pleas to negotiate. Although the
dismissal of a case for failure to prosecute is a matter
addressed to the sound discretion of the court, that
judgment however must not be abused. The availability of
this recourse must be determined according to the
procedural history of each case, the situation at the time of
the dismissal, and the diligence of plaintiff to proceed
therein.[35] Stress must also be laid upon the official directive
that courts must endeavor to convince parties in a civil case
to consummate a fair settlement,[36] and to mitigate
damages to be paid by the losing party who has shown a
sincere desire for such give-and-take.[37] All things
considered, we see no compelling circumstances to uphold
the dismissal of petitioners complaint regardless of its
characterization as being without prejudice.
In fine, petitioner cannot be said to have lost interest in
fighting the civil case to the end. A court may dismiss a case
on the ground of non prosequitur but the real test of the
judicious exercise of such power is whether under the
circumstances plaintiff is chargeable with want of fitting
assiduousness in not acting on his complaint with
reasonable promptitude. Unless a partys conduct is so
indifferent, irresponsible, contumacious or slothful as to
provide substantial grounds for dismissal, i.e., equivalent to
default or non-appearance in the case, the courts should
consider lesser sanctions which would still amount to
achieving the desired end.[38] In the absence of a pattern or
scheme to delay the disposition of the case or of a wanton
failure to observe the mandatory requirement of the rules
on the part of the plaintiff, as in the case at bar, courts
should decide to dispense rather than wield their authority
to dismiss.[39]
Clearly, another creative remedy was available to the
court a quo to attain a speedy disposition of Civil Case No.
99-518 without sacrificing the course of justice. Since the
failure of petitioner to submit a compromise agreement was
the refusal of just one of herein respondents, i.e., Benito Sy,
to sign his name on the conforme of the loan restructure
documents, and the common concern of the courts a
quo was dispatch in the proceedings, the holding of a pre-
trial conference was the best-suited solution to the problem
as this stage in a civil action is where issues are simplified
and the dispute quickly and genuinely reconciled. By means
of pre-trial, the trial court is fully empowered to sway the
litigants to agree upon some fair compromise.
Dismissing the civil case and compelling petitioner to
re-file its complaint is a dangerous, costly and circuitous
route that may end up aggravating, not resolving, the
disagreement. This case management strategy
frighteningly deceptive because it does so at the expense of
petitioner whose cause of action, perhaps, may have
already been admitted by its adverse parties as shown by
three (3) of four (4) defendants not willing to contest
petitioners allegations, and more critically, since this
approach promotes the useless and thankless duplication of
hard work already undertaken by the trial court. As we have
aptly observed, [i]nconsiderate dismissals, even if without
prejudice, do not constitute a panacea nor a solution to the
congestion of court dockets. While they lend a deceptive
aura of efficiency to records of individual judges, they
merely postpone the ultimate reckoning between the
parties. In the absence of clear lack of merit or intention to
delay, justice is better served by a brief continuance, trial on
the merits, and final disposition of the cases before the
court.[40]
WHEREFORE, the Petition for
Review is GRANTED. The Decision dated 28 September 2001
and Resolution dated 2 April 2002 of the Court of Appeals in
CA-G.R. SP No. 62102 are REVERSED and SET ASIDE.
The Orders dated 8 September 2000, 6 November 2000
and 16 November 2000 of the Regional Trial Court, Branch
135, of Makati City, docketed as Civil Case No. 99-518, are
also REVERSED and SET ASIDE insofar as these Orders are
interpreted to impose upon and collect anew from petitioner
RIZAL COMMERCIAL BANKING CORPORATION docket or legal
fees for its complaint, or to dismiss without prejudice Civil
Case No. 99-518, or to preclude the trial court from calling
the parties therein to pre-trial conference, or from
proceeding thereafter with dispatch to resolve the civil case.
is Civil Case No. 99-518 is deemed REINSTATED in, as it
was never taken out from, the dockets of the Regional Trial
Court, Branch 135, of Makati City. The trial court is
ORDERED to exercise its jurisdiction over Civil Case No. 99-
518, to CONDUCT the pre-trial conference therein with
dispatch, and to UNDERTAKE thereafter such other
proceedings as may be relevant, without petitioner being
charged anew docket or other legal fees in connection with
its reinstatement. Costs against respondents.
SO ORDERED.
Quisumbing, Austria-Martinez, and Callejo, Sr.,
JJ., concur.
FIRST DIVISION
[G.R. No. 136726. September 24, 2003]
PANFILO V. VILLARUEL, JR., petitioner, vs. REYNALDO
D. FERNANDO, MODESTO ABARCA, JR. and
MARILOU M. CLEOFAS, respondents.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari[1] seeks to reverse
the Decision[2] of the Court of Appeals in CA-G.R. SP No.
48233[3] dated 30 September 1998 denying due course to
the petition for certiorari[4] filed by Panfilo V. Villaruel, Jr. and
the Resolution dated 3 December 1998 denying the motion
for reconsideration.
The Facts
Petitioner Panfilo V. Villaruel, Jr. (petitioner) is the former
Assistant Secretary of the Air Transportation Office (ATO),
Department of Transportation and Communication
(DOTC).Respondents Reynaldo D. Fernando, Modesto E.
Abarca, Jr. (Abarca), and Marilou M. Cleofas are the Chief,
Chief Administrative Assistant, and Administrative Assistant,
respectively, of the Civil Aviation Training Center (CATC). The
CATC is an adjunct agency of the ATO tasked to train air
traffic controllers, airway communicators and related civil
aviation personnel for the local aviation industry as well as
for the Southeast Asian and Pacific region.
Petitioner issued a memorandum dated 27 April 1995
addressed to the respondents, detailing them to the Office
of DOTC Undersecretary Primitivo C. Cal effective 2 May
1995.
On 29 April 1995, respondents wrote to DOTC Secretary
Jesus B. Garcia and Undersecretary Josefina T. Lichauco
through petitioner requesting for reconsideration of the
detail order.
On 7 May 1995, in compliance with the detail order,
respondents reported to the Office of Undersecretary Cal at
DOTC.
Without acting on respondents request for
reconsideration, petitioner issued a memorandum on 19 July
1995 addressed to Abarca placing him under preventive
suspension for 90 days without pay pending investigation
for alleged grave misconduct.
On 10 August 1995, respondents requested Secretary
Garcia to lift the detail order and to order their return to
their mother unit since more than 90 days had already
lapsed. Respondents also sought the intervention of the
Ombudsman in their case. As a result, the Ombudsman
inquired from Secretary Garcia the action taken on
respondents request for reconsideration of the detail order.
On 22 November 1995, Secretary Garcia replied to the
Ombudsman that he had issued a memorandum dated 9
November 1995 directing petitioner to recall respondents to
their mother unit. Secretary Garcia declared that the law
does not sanction the continuous detail of respondents.
Despite repeated demands by respondents, petitioner
failed and refused to reinstate respondents to their mother
unit.
On 24 January 1996, respondents filed a Petition for
Mandamus and Damages with Prayer for a Preliminary
Mandatory Injunction against petitioner with the Regional
Trial Court of Pasay City docketed as Civil Case No. 96-
0139. Respondents prayed for the following:
PRAYER
WHEREFORE, premises considered, petitioners herein
respectfully pray of this Honorable Court that:
1. Pending the determination of the merits of this petition, a
writ of preliminary mandatory injunction be issued ex-
parte directing respondent Panfilo V. Villaruel, Jr., to recall
the petitioners herein within twenty four (24) hours from
receipt hereof to their mother unit, the Civil Aviation Training
Center, Air Transportation Office, DOTC, and to forthwith
allow them to assume, perform and discharge the functions,
duties and responsibilities inherent, appurtenant and
incident to their respective offices.
2. After hearing on the merits, judgment be rendered
confirming the writ of preliminary mandatory injunction
earlier issued by this Honorable Court and declaring the
same permanent, and ordering the respondent Panfilo
Villaruel, Jr., to pay petitioners herein the following damages,
to wit:
a) to pay petitioner Reynaldo D. Fernando the amount
of P50,000 as actual and compensatory damages;
b) to pay petitioners herein moral, exemplary and temperate
damages, in such amounts as may hereafter be proven in
the course of trial, which petitioners herein are leaving to
the sound discretion of this Honorable Court to determine
and adjudge;
c) to pay petitioners herein attorneys fees in the amount
of P100,000;
d) to pay petitioners herein the costs of suit.
Petitioners herein pray for such other and further relief as
may be just and equitable in the premises.[5]
On 23 February 1996, the trial court granted
respondents prayer for a preliminary mandatory injunction.
Meanwhile, Judge Aurora Navarette-Recia of the trial
court was appointed Chairman of the Commission on Human
Rights. Consequently, the case was re-raffled and assigned
to Branch 231 of the Regional Trial Court, Pasay City.[6]
On 12 April 1996, the trial court issued an order
modifying the 23 February 1996 order of Judge Recia. The
trial court issued a writ of preliminary mandatory injunction
ordering petitioner to comply with the 9 November 1995
order of Secretary Garcia directing petitioner to recall
respondents to their mother unit until further orders by the
trial court.
For petitioners continued failure to comply with the writ
of preliminary injunction, respondents moved to cite
petitioner in contempt. Respondents also moved to declare
petitioner in default for not filing an answer within the
period prescribed in the trial courts order of 26 January
1996.
On 28 May 1996, the trial court granted the motion and
declared petitioner guilty of indirect contempt. The trial
court issued a bench warrant against petitioner.
Petitioner, through the Office of the Solicitor General
(OSG), filed a special civil action for certiorari with the Court
of Appeals[7] assailing the trial courts order finding petitioner
guilty of indirect contempt. The case was docketed as CA-
G.R. SP No. 41263.
 Meanwhile, the trial court declared petitioner in default
for his failure to file an answer to the petition for mandamus
and damages. Accordingly, respondents adduced their
evidence ex-parte before the Clerk of Court.
On 11 July 1996, the trial court rendered a Decision the
dispositive portion of which reads:
Wherefore, considering the foregoing premises, judgment is
hereby rendered in favor of the petitioners and against the
respondent declaring mandamus permanent and thereby
ordering respondent Panfilo V. Villaruel, Jr., to pay the
following:
(1) One hundred thousand pesos (P100,000.00) each as
moral damages;
(2) Twenty five thousand pesos (P25,000.00) each as
exemplary damages;
(3) Twenty five thousand pesos (P25,000.00) each as
temperate damages, and;
(4) Fifty thousand pesos (P50,000.00) as attorneys fees.
SO ORDERED. [8]
Aggrieved, petitioner, represented by the OSG,
appealed to the Court of Appeals. The appeal was docketed
as CA-G.R. SP No. 42447.[9] With the filing of the appeal, the
Court of Appeals granted respondents motion for the
dismissal of the petition for certiorari in CA-G.R. SP No.
41263 for being moot and academic.
The Court of Appeals granted the OSG a non-extendible
extension until 13 December 1996 within which to file
petitioners memorandum. However, the OSG failed to file
the memorandum. Subsequently, Solicitor Restituto Tuando,
Jr. who was handling the case was appointed Regional Trial
Court judge of Dumaguete City. The case was re-assigned to
Assistant Solicitor Luciano Joson, Jr. On 13 March 1997, the
Court of Appeals issued a Resolution dismissing petitioners
appeal for failure to file the required memorandum. The
OSG, through Assistant Solicitor Luciano Joson, Jr., filed a
Motion for Reconsideration, but the Court of Appeals denied
the same. The Resolution became final and executory on 14
June 1997.
Consequently, the respondents filed a Motion for
Execution with the trial court. Although served a copy of the
motion for execution, the OSG did not file any opposition.
Acting on the motion for execution, the trial court issued
a Writ of Execution on 22 September 1997. On 3 February
1998, the Sheriff issued a Notice of Sheriffs Sale setting on
23 February 1998 the sale of petitioners real property
covered by Transfer Certificate of Title No. 83030.
On 17 February 1998, petitioner, through his new
counsel,[10] filed a Motion to Quash the Writ of Execution and
to Suspend Sheriffs Sale. In his motion, petitioner alleged
that the trial courts decision never became final and
executory as the trial court deprived him of his right to due
process. Petitioner claimed that the OSG failed to file
petitioners memorandum in CA-G.R. SP No. 42447 resulting
in the dismissal of his appeal. Furthermore, petitioner
alleged that the OSG failed to inform him of the dismissal of
his appeal and of the trial courts order granting respondents
motion for execution. Petitioner further asserted that the
Resolution of the Ombudsman in OMB-ADM 0-96-
0090[11] superseded the decision of the trial court. The
Ombudsmans Resolution approved the following
recommendation of the reviewing Assistant Ombudsman:
PREMISES CONSIDERED, respondent MODESTO ABARCA, JR.,
is hereby found GUILTY of violation of Section 7(d) of
Republic Act 6713, for which the penalty of Suspension
Without Pay for Six (6) Months is hereby recommended
pursuant to Section 10(b), Rule III of Administrative Order
No. 07, in relation to Section 25(2) of Republic Act No. 6770.
It is also respectfully recommended that the charge against
respondents REYNALDO FERNANDO and MARY LOU CLEOFAS
be DISMISSED.[12]
On 23 February 1998, the trial court issued an Order
quashing the Writ of Execution because the Sheriff failed to
follow Section 9, Rule 39 of the Rules of Court. The trial
court, however, issued an Alias Writ of Execution. Petitioner
filed a Motion for Reconsideration but the trial court denied
the same on 28 April 1998.
Dissatisfied with the trial courts orders, petitioner filed a
special civil action for certiorari with the Court of Appeals
docketed as CA-G.R. SP No. 48233 assailing the execution of
the trial courts decision of 11 July 1996. The Court of
Appeals denied due course to the petition for certiorari and
dismissed the same in the Decision dated 30 September
1998. Petitioner moved for reconsideration but the appellate
court denied the motion in a Resolution of 3 December
1998.
Hence, the instant petition.
The Ruling of the Court of Appeals
Petitioner raised before the Court of Appeals the
following issues:
1. THE TRIAL COURTS DECISION DATED JULY 11, 1996 IS
VOID FOR LACK OF DUE PROCESS AND COULD NOT
HAVE BECOME FINAL AND EXECUTORY.
2. SUPERVENING FACTS AND CIRCUMSTANCES HAVE
TRANSPIRED WHICH RENDERED EXECUTION OF THE
JUDGMENT UNJUST AND INEQUITABLE.[13]
On the first issue, the Court of Appeals ruled that the
negligence of the OSG could not relieve petitioner of the
effects of such negligence and prevent the decision of the
trial court from becoming final and executory. In short, the
OSGs negligence binds petitioner.
The Court of Appeals admonished petitioner for his
failure to ascertain periodically from the OSG or from the
Court of Appeals the status of his appeal. The appellate
court cited Reyes v. Court of Appeals,[14] which held that
it is the duty of a party litigant to make inquiries to his
counsel on matters concerning his case. A party litigant
bears the responsibility of contacting his lawyer periodically
to apprise himself of the progress of the case. A lawyers
negligence binds a party litigant who must suffer the
consequences of such negligence. The Court of Appeals
further held that there was no proof that the OSG failed to
inform petitioner of the dismissal of his appeal.
On the second issue, the Court of Appeals concurred
with the trial courts ruling that the nature of the case before
the Ombudsman is different from the case before the trial
court. The former deals with a violation of Republic Act No.
6713 (RA 6713)[15] punished with suspension from office
while the latter deals with an ultra vires act punished with
damages. The appellate court ruled that the findings of the
Ombudsman had nothing to do with the findings of the trial
court, as the two forums are separate and distinct from each
other.
Moreover, the Court of Appeals opined that petitioner
failed to prove that the trial court committed grave abuse of
discretion to warrant the writ of certiorari. The appellate
court ruled that the trial court acted in accord with law and
prevailing jurisprudence in issuing the questioned orders.
The Issues
Petitioner presents the following issues for resolution of
this Court:[16]
1. Whether the award of moral, exemplary and
temperate damages to respondents has legal basis.
2. Whether the trial court correctly ruled that the
negligence of the OSG could not relieve petitioner of
the effects of such negligence and prevent the
decision of the trial court from becoming final and
executory.
3. Whether petitioner was denied of his right to due
process when the appellate court dismissed his
appeal for failure of the OSG to file the
memorandum.
4. Whether the resolution of the Ombudsman finding
Modesto Abarca, Jr. guilty of violating Section 7 of RA
6713 rendered the execution of the trial courts
decision unjust and inequitable.
The main issue to resolve is whether the Court of
Appeals erred in dismissing the petition
for certiorari assailing the trial courts orders dated 23
February 1998 and 28 April 1998.Resolving this issue
necessarily determines the validity of the questioned
orders. This in turn resolves the questions of whether the
trial court denied petitioner of his right to due process and
whether the Ombudsmans resolution rendered the execution
of the trial courts decision unjust and inequitable.
We can no longer resolve the issue regarding the
validity and reasonableness of the award of damages for
three reasons. First, the decision of the trial court dated 11
July 1996 is already final and executory. Second, the petition
for certiorari filed by petitioner was simply a direct
consequence of the trial courts issuance of the writ of
execution and notice of sheriffs sale. In other words,
petitioner merely questioned the execution of the trial
courts decision in his petition for certiorari. Third, petitioner
did not raise the issue of the validity and reasonableness of
the award of damages before the Court of Appeals.[17]
The Courts Ruling
The petition has no merit.
We begin by pointing out that petitioner failed to allege
the essential requisites under Section 1, Rule 65 of the Rules
of Court for a petition for certiorari to prosper. Specifically,
petitioner never alleged that the trial court acted without or
in excess of its jurisdiction in issuing the questioned
orders. Neither did petitioner allege that the trial court
gravely abused its discretion amounting to lack or excess of
jurisdiction, and there is no appeal, or any plain, speedy,
and adequate remedy in the ordinary course of law. In other
words, there is no issue that the trial court committed grave
abuse of discretion amounting to lack or excess of
jurisdiction in handing down the questioned orders. On this
score alone, the dismissal of the petition for certiorari before
the Court of Appeals is in order. However, in disposing of the
instant case, we shall still resolve the principal issues raised
by petitioner.
No Denial of Petitioners Right to Due Process
Petitioner essentially contends that the judgment of the
trial court in Civil Case No. 96-0139 is void for lack of due
process. Petitioner alleges that the trial court never gave
him the chance to be heard and to submit his evidence.
Petitioner, formerly represented by the OSG, failed to file an
answer to respondents petition for mandamus and
damages. Consequently, the trial court declared petitioner
in default. While the OSG filed a notice of appeal of the
judgment by default, it failed to file with the Court of
Appeals the required memorandum resulting in the
dismissal of the appeal. In petitioners words, the OSG
virtually abandoned[18] his case. Petitioner argues that the
inexcusable negligence of the OSG did not bind him and
prevented the decision of the trial court from becoming final
and executory.
We do not agree.
Due process, in essence, is simply an opportunity to be
heard[19] and this opportunity was not denied
petitioner. Throughout the proceedings in the trial court as
well as in the Court of Appeals, petitioner had the
opportunity to present his side but he failed to do
so. Clearly, petitioners former counsel, the OSG, was
negligent. This negligence, however, binds petitioner. The
trial and appellate courts correctly ruled that the negligence
of the OSG could not relieve petitioner of the effects such
negligence[20] and prevent the decision of the trial court from
becoming final and executory.
In Villa Rhecar Bus v. De la Cruz,[21] which petitioner
himself cited, the Court ruled:
It is unfortunate that the lawyer of the petitioner neglected
his responsibilities to his client. This negligence ultimately
resulted in a judgment adverse to the client. Be that as it
may, such mistake binds the client, the herein petitioner. As
a general rule, a client is bound by the mistakes of
his counsel. Only when the application of the general
rule would result in serious injustice should an
exception thereto be called for. Under the
circumstances obtaining in this case, no undue prejudice
against the petitioner has been satisfactorily
demonstrated. At most, there is only an unsupported claim
that the petitioner had been prejudiced by the negligence of
its counsel, without an explanation to that effect. (Emphasis
supplied)
In the present case, there was no proof that petitioner
suffered serious injustice to exempt him from the general
rule that the negligence of the counsel binds the
client. Petitioner did not even attempt to refute the
respondents allegations in the petition for mandamus and
damages.
Moreover, petitioner is not entirely blameless for the
dismissal of his appeal. After the OSGs failure to file the
answer to the petition for mandamus and damages and to
have the order declaring petitioner in default lifted,
petitioner should have already replaced the OSG with
another lawyer. However, petitioner still retained the
services of the OSG, despite its apparent lack of interest in
petitioners case, until the trial courts decision became
final. In Salva v. Court of Appeals,[22] the Court declared:
Respondents reliance on Legarda is inapropos. Notably, the
decision in said case was not yet final in 1991. The private
respondent therein then filed a timely motion for
reconsideration. In granting the motion for reconsideration,
the Court en banc held:
Neither Cathay nor Cabrera should be made to suffer for the
gross negligence of Legardas counsel. If she may be said to
be innocent because she was ignorant of the acts of
negligence of her counsel, with more reason are
respondents truly innocent. xxx In this case, it was not
respondents, but Legarda, who misjudged and hired the
services of the lawyer who practically abandoned her case
and who continued to retain him even after his proven
apathy and negligence.
At any rate, we find that respondent Governor Sato, as well
as the Province of Occidental Mindoro which she represents,
were not denied their day in court. Responsive pleadings
were filed before the lower courts, and respondent was
given all the opportunities to prove her case. Her chosen
counsel did not diligently exhaust all legal remedies
to advance respondents cause, yet respondent did
not terminate his services. She was aware of the
repeated negligence of her counsel and cannot now
complain of counsels errors. Hence, there is no
justifiable reason to exempt her from the general
rule that clients should suffer the consequences of
the negligence, mistake or lack of competence of the
counsel whom they themselves hired and had the full
authority to fire at any time and replace with another
even without justifiable reason. (Emphasis supplied)
Furthermore, petitioner cannot now complain of the
OSGs errors. Petitioner should have taken the initiative of
making periodic inquiries from the OSG and the appellate
court about the status of his case. [23] Litigants represented
by counsel should not expect that all they need to do is sit
back, relax and await the outcome of their case. [24] To agree
with petitioners stance would enable every party to render
inutile any adverse order or decision through the simple
expedient of alleging negligence on the part of his counsel.
[25]
The Court will not countenance such ill-founded
argument which contradicts long-settled doctrines of trial
and procedure.[26]
The Ombudsmans Resolution Does Not Render the
Execution of the Trial Courts Decision Unjust and
Inequitable
Petitioner contends that the Ombudsmans Resolution
finding Abarca guilty of violating Section 7(d) of RA 6713
superseded the trial courts decision finding petitioner liable
for damages.Petitioner insists that the Ombudsmans
resolution rendered the execution of the trial courts decision
unjust and inequitable.
 We are not persuaded.
Settled is the rule that a judgment that has acquired
finality becomes immutable and unalterable and may no
longer be modified in any respect except only to correct
clerical errors or mistakes.[27] True, this rule admits of certain
exceptions. One of these exceptions is whenever
circumstances transpire after the finality of the decision
rendering its execution unjust and inequitable. [28] This,
however, is not the case here. In the present case, the
Ombudsman issued his Resolution prior to the finality of the
trial courts decision. The Ombudsman issued his Resolution
on 22 January 1997 while the trial courts decision became
final and executory on 14 June 1997. Therefore, the
resolution of the Ombudsman is not a supervening event to
warrant the stay of the execution of the decision of the trial
court.
Furthermore, the resolution of the Ombudsman finding
Abarca guilty of violating Section 7(d) of RA 6713 did not
and could not supersede the decision of the trial court
holding petitioner liable for damages. The action filed by the
petitioner before the Ombudsman is completely different
from the action instituted by respondents before the trial
court. The two actions, which are clearly separate and
distinct from each other, presented two different causes of
action. Petitioners cause of action arose from respondents
alleged violation of certain provisions of RA 6713 whereas
respondents cause of action resulted from petitioners refusal
to recall respondents to their mother unit at CATC. In the
administrative case before the Ombudsman, the issue was
whether respondents were guilty of violating RA 6713. In
contrast, the issue in the civil action before the trial court
was whether respondents were entitled to the issuance of
the writ of mandamus and damages.
The findings of the Ombudsman did not render the
execution of the trial courts decision unjust and
inequitable. The resolution of the Ombudsman finding
Abarca guilty of violating Section 7(d) of RA 6713 did not
state that petitioner had a valid reason to detail respondents
to the Office of Undersecretary Cal. In fact, the Ombudsman
dismissed the charges against Reynaldo Fernando and Mary
Lou Cleofas. Thus, the trial court correctly awarded damages
to respondents. Contrary to petitioners contention, awarding
damages to respondents does not amount to rewarding
respondents for their alleged wrongdoing. The award merely
compensates respondents for petitioners own unlawful
acts. Clearly illegal were petitioners acts of unjustifiably
detailing respondents to the office of DOTC Undersecretary
Cal and refusing to comply with the 9 November 1995
directive of Secretary Garcia to recall immediately
respondents to their mother unit.
WHEREFORE, we DENY the instant petition. The
Decision of the Court of Appeals in CA G.R. SP No. 48233
dated 30 September 1998 and the Resolution dated 3
December 1998 are AFFIRMED. No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, and Ynares-Santiago,
JJ., concur.
Azcuna, J., on leave.
THIRD DIVISION
 [G.R. No. 145260. July 31, 2003]
CITY OF ILIGAN, Represented by Hon. FRANKLIN M.
QUIJANO in His Capacity as City
Mayor, petitioner, vs. PRINCIPAL MANAGEMENT
GROUP, INC. (PMGI), Represented by Its
President & Chief Executive Officer, FERNANDO
M. SOPOT, respondent.
DECISION
PANGANIBAN, J.:
The ascertainment of good reasons for execution
pending appeal lies within the sound discretion of the trial
court. Normally, its finding will not be disturbed by a
reviewing court, in the absence of grave abuse of discretion.
The Case
Before this Court is a Petition[1] for Review under Rule 45
of the Rules of Court, assailing the May 4, 2000
Decision[2] and the July 14, 2000 Resolution[3] of the Court of
Appeals (CA) in CA-GR CV No. 56952. The decretal portion of
the Decision reads as follows:
WHEREFORE, the Petition for Certiorari is hereby
DISMISSED.[4]
The assailed Resolution denied petitioners Motion for
Reconsideration.
The Facts
The facts of the case are summarized by the CA in this
wise:
On October 19, 1998, Mayor Franklin M. Quijano, acting for
and in behalf of [petitioner] City of Iligan, requested from
the Sangguniang Panlungsod for: (a) Resolution authorizing
him to open a domestic Standby Letter of Credit (SLC) in the
amount of P14,000,000.00 in favor of the Land Bank Realty
Development Corporation and/or PNCC with the Principal
Management Group, Inc. (herein private respondent) as the
funder/financial managers in connection with the
development of a project on a turn-key basis; and (b)
Resolution authorizing him to open a high yielding
depository account with the Land Bank of the Philippines in
the amount of P14,000,000.00 as a hold-out collateral for
the domestic SLC.
The City Council approved Mayor Quijanos requests and
passed Resolutions Nos. 1050 and 1051 series of 1998 on
October 20, 1998.
On December 29, 1998, a Memorandum of Agreement
(MOA) on a turn-key arrangement was drawn by Mayor
Quijano, representing the City of Iligan, with Land Bank
Realty Development Corporation (LBRDC) as General
Contractor and Principal Management Group, Inc. (PMGI) as
Developer - Financing Manager. The project to be
undertaken was the construction of a Sports Complex which
upon completion shall be turned over to Iligan City for
acceptance and the issuance of Certificate of Acceptance
and Authority to Pay to enable Land Bank Realty-PMGI to call
on the SLC.
The project started on November 26, 1998 despite the fact
that some drawings had not yet been completed, since the
MOA provides for a construction period of one hundred
twenty days from the date of the signing.
The construction site of the Sports Complex was donated by
San Miguel (Iligan) Enterprises, Inc. wherein the City of
Iligan as donee was bound to provide for all expenses for
the transfer of the occupants therein.
On or about January 1999, the work on the project stopped
due to the refusal of some of the occupants to vacate the
premises claiming that they have not been paid x x x their
disturbance compensation. By then, PMGI had already
accomplished 78.27% of the contracted project equivalent
to P10,957,800.00 of the total project cost
of P14,000,000.00.
On February 24, 1999, PMGI requested from the City of
Iligan for a deductive change order to enable it to collect the
above-stated amount based on the 78.27% accomplishment
of the project. The City of Iligan, however, claimed that
PMGIs accomplishment was only 52.89% or equivalent only
to P6,958,861.59 based on the Accomplishment Report as of
February 9, 1999.
The City of Iligan refused to pay for the reason that the
mutually agreed price of P14 Million shall only be paid after
the completion of the project and acceptance by it and since
the project is not yet complete, no payment can be paid.
The problem on the payment of the affected occupant,
which was the cause of the work stoppage, was accordingly
brought to the attention of the Sangguniang Panlungsod
which favorably acted on it through Resolution No. 99-765
dated June 8, 1999 authorizing the payment of the affected
occupants in the project site.
On November 8, 1999, PMGI filed a complaint against the
City of Iligan for rescission of the MOA and damages. After
the filing of City of Iligans Answer, a Motion for Partial
Summary Judgment was filed by PMGI which claimed that
there was no genuine issue as to the fact of the obligation of
the City of Iligan since it admitted the accomplishment of
52.89% or equivalent to P6,958,861.59 of PMGI and that the
City of Iligan had not specifically denied under oath the
genuineness of the Letter of Credit and Memorandum of
Agreement.
An Opposition to the Motion for Partial Summary Judgment
was filed by the City of Iligan on December 7, 1999 which
stated that: it never admitted that PMGI made any
accomplishment at all but merely stated that with respect to
the work accomplishment, it was only 52.89% based on the
report of Engr. Maatas team; the MOA or the contract for the
construction of the sports complex is between the City of
Iligan, as owner, and the Land Bank Realty Development
Corporation as General Contractor, PMGI only entered into
the picture to support LBRDC in accordance with their own
separate agreement; the grounds of lack of cause of action
and jurisdiction raised in the Answer should be set for
hearing; LBRDC as an indispensable party should be
impleaded; and the court does not have jurisdiction over the
case in view of Sec. 4 of Executive Order No. 1008 which
vests exclusive jurisdiction over construction disputes to
Construction Industry Arbitration Commission (CIAC).
In private respondents Rejoinder to Opposition, it was
alleged that PMGI and LBRDC are solidary creditors, hence,
there was no need to implead the latter since the suit
redounds to the benefit of LBRDC, there was no
disagreement or dispute as to the accomplishment of
52.89% or equivalent to P6,958,861.59, hence, there was no
need to resort to arbitration; and the turn-key provision in
the MOA is not applicable since the 120-day construction
period lapsed due to the failure of the City of Iligan to
perform its obligation.
In the Order dated December 20, 1999, the trial court
granted the Motion for Partial Summary Judgment and
rendered the following judgment/order:
WHEREFORE, foregoing premises considered, [respondents]
motion is GRANTED.
Partial summary judgment is hereby issued in favor of
[respondent] in the amount of Six Million Nine Hundred Fifty-
eight Thousand Eight Hundred Sixty one & 59/100
(P6,958,861.59) Pesos Only.
The Manager of the LAND BANK OF THE PHILIPPINES (Iligan
City Branch), or his authorized representative, or any
competent officer of said bank is hereby ORDERED to pay
the amount of P6,958,861.59 out of LC NO. 98003/D to Mr.
Fernando M. Sopot, President and CEO of [respondent].
In the event said LC NO. 98003/D is insufficient or has
expired, the Manager and/or any competent officer of said
LAND BANK OF THE PHILIPPINES (Iligan City Branch) is
hereby ORDERED to pay to said Mr. Fernando M. Sopot the
amount of P6,958,861.59 out of any accounts or moneys of
[petitioner].
SO ORDERED.
The Motion for Reconsideration filed by the City of Iligan to
the December 20, 1999 Order was denied in the Resolution
dated January 17, 2000.
A Notice of Appeal was filed by the City of Iligan on January
26, 2000.
A Motion for Execution Pending Appeal x x x filed on January
18, 2000 by PMGI which alleged that when the appeal is
clearly dilatory, order for execution upon good reasons may
be issued with the discretion of the court, was granted on
January 24, 2000 over the opposition of the City of Iligan, to
justify the same, the dispositive portion of which was earlier
quoted. The trial court further stated that:
The Court is convinced that there are good reasons to allow
the immediate execution pending appeal. Its adjudication is
based on [petitioners] own admission hence, any appeal
would be unmeritorious and would only serve to delay
execution of the final order subject of the instant
motion. The fact that an appeal in this case if taken by
[petitioner] will be a merely dilatory tactic has been
declared by the Supreme Court as a good and sufficient
reason upon which to issue execution of the order under
Section 2, Rule 39 of the Revised Rules of Court.
A Demand Letter and Notice of Garnishment, both dated
January 26, 2000, were served on even date by Sheriff
Montoy B. Lomondot to herein petitioner. [5] (Citations
omitted)
Ruling of the Court of Appeals
 The CA held that the trial court did not commit grave
abuse of discretion in granting the execution pending appeal
since the appeal filed by petitioner was a dilatory tactic and
is not allowed in the first place. [6] Ruling that the trial court
could grant executions pending appeal, provided that a
good reason therefor was stated in a special order, the
appellate court upheld dilatory tactic as one such good
reason.
The appellate court also ruled that certiorari would not
be allowed in this case, because there were other remedies
still available to petitioner, like the filing of a supersedeas
bond to stay the execution or the filing of a motion for
reconsideration.
Hence, this Petition.[7]
The Issues
Petitioner raises the following issues for
consideration:
A Executions pending appeal are governed by Section 2 of
Whether or not the Honorable Court of Appeals erred in
affirming the Order of the trial court granting a Writ of
Execution Pending Appeal to implement its previous Order
dated December 20, 1999 approving respondents Motion for
Partial Summary Judgment;
B case and is in possession of either the original record or the
Whether or not the Honorable Court of Appeals erred in
affirming the Order of the trial court that there were good
reasons to allow the immediate execution pending appeal;
and
C
Whether or not the Honorable Court of Appeals erred in
affirming the Order of the trial court in spite of the latters
failure to take into consideration the provision in paragraph
8 of the Memorandum of Agreement entered into by the
herein parties.[8] (Citations omitted)
Simply put, the main issue is whether the Order
granting execution pending appeal was proper.
The Courts Ruling
The Petition has no merit.
Main Issue:
our
Propriety of Execution Pending Appeal
Rule 39 of the Rules of Court, which reads:
SEC. 2. Discretionary execution.--
(a) Execution of a judgment or a final order pending appeal.
On motion of the prevailing party with notice to the adverse
party filed in the trial court while it has jurisdiction over the
record on appeal, as the case may be, at the time of the
filing of such motion, said court may, in its discretion, order
execution of a judgment or final order even before the
expiration of the period to appeal.
After the trial court has lost jurisdiction, the motion for
execution pending appeal may be filed in the appellate
court.
Discretionary execution may only issue upon good reasons
to be stated in a special order after due hearing.
There are three requisites for the execution of a
judgment pending appeal: a) a motion must be filed by the
prevailing party with notice to the adverse party; b) there
must be good reasons for execution pending appeal; and c)
the good reasons must be stated in a special order.[9]
Execution pending appeal is, of course, the exception to
the general rule.[10] Normally, execution cannot be obtained
until and unless (a) the judgment has become final and
executory; (b) the right of appeal has been renounced or
waived; (c) the period for appeal has lapsed without an
appeal having been filed; or (d) having been filed, the
appeal has been resolved and the records of the case have
been returned to the court of origin -- in which case,
execution shall issue as a matter of right.[11]
On the other hand, when the period of appeal has not
yet expired, the execution of a judgment should not be
allowed except if, in the courts discretion, there are good
reasons therefor.[12]
Since the execution of a judgment pending appeal is an
exception to the general rule, the existence of good reasons
is essential. These reasons must be stated in a special order,
because unless these are divulged, it will be difficult to
determine on appeal whether judicial discretion has been
properly exercised by the lower court.[13]
Good reasons consist of compelling circumstances that
justify the immediate execution of a judgment, lest it
become illusory; or the prevailing party be unable to enjoy it
after the lapse of time, considering the tactics of the
adverse party who may have no recourse but to delay.[14]
In the present case, the good reason relied upon by
both the trial and the appellate courts was that the partial
adjudication of the case was based on petitioners own
admission; hence, any appeal based on that point would be
unmeritorious and merely dilatory. Indeed, both courts ruled
that an appeal by petitioner would only serve as a good and
sufficient reason upon which to issue execution.[15]
The ascertainment of good reasons for execution
pending appeal lies within the sound discretion of the trial
court, and the appellate court will not normally disturb such
finding.Intervention by the latter may be proper, if it is
shown that there has been an abuse of discretion.[16]
Like the CA, we find no abuse of discretion in the trial
courts grant of execution pending appeal. Indeed, this Court
has held that a good and sufficient reason upon which to
authorize immediate execution is when an appeal is clearly
dilatory.[17]
Normally, the trial court is not allowed to assess its own
judgment and to hold that an appeal may not prosper, or
that it would merely be dilatory. In the present case,
however, there are circumstances that undisputedly serve
as cogent bases for arriving at such a conclusion.
First, it is not seriously disputed that the judgment is
anchored upon material facts as follows: (1) there is a
Memorandum of Agreement (MOA) for the site development
of Sports Complex Project No. 1 signed by the parties; (2)
petitioner failed to pay the occupants of the project site on
time, thereby preventing respondent from fully complying
with its obligation under the MOA; (3) respondent admitted
that the work accomplished was 52.89 percent, which was
equivalent to P6,958,861.59. Obviously, there is no genuine
issue as to any material fact on this point.
upheld by the CA, which found that the appeal filed by the
petitioner was a dilatory tactic and was not allowed in the
first place. Consequently, the appellate court did not err in
refusing to attribute grave abuse of discretion to the trial
courts Order granting execution pending appeal.
WHEREFORE, the Petition is DENIED and the assailed
Decision and Resolution AFFIRMED. Costs against petitioner.
SO ORDERED.
Puno, (Chairman), Corona, and Carpio-Morales,
JJ., concur.

Second, Article 1191 of the Civil Code states: Sandoval-Gutierrez, J., on official leave.

The power to rescind obligations is implied in reciprocal

ones, in case one of the obligors should not comply with
what is incumbent upon him. THIRD DIVISION

The injured party may choose between the fulfillment and [A.M. No. MTJ-03-1513. November 12, 2003]
the rescission of the obligation, with the payment of
damages in either case. x x x. Spouses JAIME and PURIFICACION
MORTA, complainants vs. Judge ANTONIO C.
By failing to pay the occupants of the project site within BAGAGAN, Municipal Trial
the time required for the completion of the project, Court, Guinobatan, Albay; and Sherif DANILO
petitioner did not comply with what was incumbent upon O. MATIAS, Regional Trial Court, Branch
it. Applying the law to the undisputed facts, the trial court 14, Ligao, Albay, respondents.
had prima facie bases for rendering its partial summary
judgment holding that respondent was entitled to rescission DECISION
and to the payment of P6,958,861.59.
PANGANIBAN, J.:
Verily, the trial court committed no abuse of discretion
in granting execution pending appeal. Its conclusion was
 Unreasonable delay in resolving motions opens a judge
to administrative sanctions. Likewise, a sheriff is
administratively liable for delayed implementation of a writ
of execution and failure to render the required reports
thereon. These are necessary lessons from the time-honored
principle that justice delayed is justice denied.
The Case and the Facts
In their Administrative Complaint[1] dated July 26, 2001,
Spouses Jaime and Purificacion Morta Sr. charged Judge
Antonio C. Bagagan of the Municipal Trial Court (MTC)
of Guinobatan, Albay with gross ignorance of the law,
incompetence, bias and delay. They also indicted
Sheriff Danilo O. Matias of the Regional Trial Court (RTC)
of Ligao, Albay (Branch 14) with gross ignorance of the law,
negligence and connivance with the defendants in Civil Case
Nos. 481 and 482 (MTC, Guinobatan, Albay). The Office of
the Court Administrator (OCA) summarized the factual
antecedents as follows:
x x x [In] a Complaint-Affidavit dated July 26, 2001 (with
enclosures), x x x [Spouses] Jaime and Purificacion Morta[,]
through their counsel[,] Atty. Rodolfo R. Paulino[,] charg[ed]
[Respondent] Judge Antonio C. Bagagan and
Sheriff Danilo O. Matias with gross ignorance of the law and
procedure, incompetence, bias and delay in the disposition
of Civil Case No. 481, entitled Jaime Morta, Sr.
and Purficacion Padilla vs. Jamie Occidental and Atty.
Mariano Baranda, Jr., for Damages with Prayer for a Writ of
Preliminary Injunction, and Civil Case No. 482 entitled
Jaime Morta, Sr. and PurficacionPadilla vs. Jamie Occidental,
Atty. Mariano Baranda, Jr. and Daniel Corral, for Damages
with Prayer for a Writ of Preliminary Injunction.
Complainants, who are the plaintiffs in the aforementioned
civil cases, allege[d] that on March 29, 1994[,] the Municipal
Trial Court [of] Guinobatan, Albay rendered a decision in
their favor. The decretal portion of the decision reads:
WHEREFORE, in view of the foregoing considerations,
judgment is rendered in favor of the plaintiffs and against
the defendants in both cases as follows:
1) Ordering the defendants not to molest and disturb the
peaceful possession of the plaintiffs in the lands in question
situated at San Rafael, Guinobatan;
2) Condemning the defendants in Civil Case No. 481 to
jointly and severally pay the plaintiffs the total amount
of P8,130.00 representing the value of the
coconuts, pili nuts and anahaw leaves and for the destroyed
plants;
3) Ordering the defendants in Civil Case No. 481 jointly and
severally to reimburse the plaintiffs the amount of P202.00
as legal expenses incurred in filing their suit;
4) Condemning the defendants in Civil Case No. 482 jointly
and severally to pay the plaintiffs the total amount
of P9,950.00 representing the value of the coconuts
and anahaw leaves;
5) Ordering the said defendants in Civil Case No. 482 to
jointly and severally reimburse the plaintiffs the sum
of P202.00 as legal expenses in filing this suit.
The defendants appealed to the Regional Trial Court
[of] Ligao, Albay. In its decision dated August 10, 1994, the
Regional Trial Court [RTC] dismissed the aforesaid cases on
the ground that the claims for damages are tenancy-related
problems which fall under the original and exclusive
jurisdiction of the Department of Agrarian Reform
Adjudicatory Board (DARAB). On September 9, 1994, the
plaintiffs filed a petition for review with the Court of Appeals
assailing the decision of the RTC. However, in its decision
dated May 31, 1995, the Court of Appeals affirmed the lower
courts ruling that the cases fall within the original and
exclusive jurisdiction of DARAB. Thereafter, the First Division
of this Court, acting on the petition for review on certiorari
filed by the plaintiffs, rendered its decision dated June 10,
1999 in G.R. No. 123417 affirming the decision of the
Municipal Trial Court, Guinobatan, Albay in Civil Case Nos.
481 and 482 and thereby setting aside the decision of the
Court of Appeals in CA-GR SP No. 35300 and that of the
Regional Trial Court in Civil Cases Nos. 1751 and 1752.
They now complain that despite the fact that the decision of
the Supreme Court in the aforesaid case had already
become final and executory, the respondent Judge still
refused to issue a writ of possession in their favor.
Complainants further allege that on June 6, 2000 they filed a
motion to cite Jaime Occidental for contempt of
court. Although more than one (1) year had already elapsed
since the motion was filed in the respondent Judges sala, the
same had remained unresolved up to the filing of the instant
complaint.
As against the respondent Sheriff, the complainants
aver[red] that through his ignorance, negligence and
connivance with the defendants, he failed to execute in full
the writ of execution that had been previously issued by the
court in Civil Case Nos. 481 and 482. Moreover, it took
respondent Sheriff a long time before he finally submitted
his Sheriff's Return of Service on the Writ of Execution. [2]
In his Answer/Comment[3] dated April 2, 2002,
respondent judge explained that he had denied
complainants Motion for the issuance of a writ of possession
because, by the time Civil Case Nos. 481 and 482 were
finally decided by this Court on June 10, 1999, they had
already been ousted from the lots in question pursuant to
the Decisions in DARAB Case No. 2413 and Civil Case No.
1920. In Civil Case No. 1920, respondent judge ordered
complainants to vacate the disputed lots. A Writ of
Execution/Demolition was thereafter issued on January 29,
1998. On the other hand, the DARAB Decision, which
became final and executory on October 27, 1998, directed
them to cease and desist from disturbing the peaceful
possession of therein Petitioner Jaime Occidental.
Regarding the alleged delay in the resolution of the
Motion for Contempt filed by complainants, respondent
judge contended that an ocular inspection and a hearing
had been conducted by his court as early as June 16, 2000,
to determine if their Motion had any basis. With the consent
of their counsel, the hearing had to be deferred, however,
pending receipt of the Sheriffs Report in Civil Case No. 1920.
For his part, Respondent Sheriff Matias admitted in his
Comment[4] dated April 18, 2002, that there was delay in the
full implementation of the Writ of Execution in Civil Case
Nos. 481 and 482. Explaining that the delay was due to his
heavy workload and thus unintentional, he begged for
compassion from this Court.
Evaluation and Recommendation of the OCA
 The OCA found that the explanation of respondent judge
for not granting the Motion for Execution, filed by
complainants, was sufficient. According to the court
administrator, the records showed that they had indeed
been evicted from the lots they were claiming when Civil
Case Nos. 481 and 482 were finally decided by the Supreme
Court on June 10, 1999.[5] Moreover, it emphasized that this
Court had merely affirmed the Decision of the MTC insofar
as the award of damages was concerned.
As to complainants Motion to cite Occidental in
contempt, the OCA held that the delay was due primarily to
the need of the court to clarify some important matters, not
to the negligence or partiality of respondent. Accordingly, it
recommended that the charges against him be dismissed for
lack of merit.
On the other hand, the OCA found that
Sheriff Matias had failed to implement the Writ of Execution
promptly and efficiently. It recommended that he be ordered
to pay a fine of P1,000, with a warning that a repetition of
the same or a similar act in the future would be dealt with
more severely.
The Courts Ruling
We modify the OCAs findings and recommended
penalties, consistent with Rule 140 of the Revised Rules of
Court and the Revised Uniform Rules on Administrative
Cases in the Civil Service.
Administrative Liability
We agree with the OCA that respondent judge acted
correctly in not issuing a writ of execution/possession. His
action was consistent with the Decision of this Court in GR
No. 123417 affirming that of the MTC as to
damages. Besides, the latters Order directing defendants
not to molest complainants in their peaceful possession was
rendered moot when they were ousted from the disputed
lots by virtue of the final and executory judgments in Civil
Case No. 1920 and DARAB Case No. 2413. Indeed, the
execution of a final judgment may be refused, as in this
case, when there has been a change in the situation of the
parties that would make its execution inequitable.[6]
The delay in the resolution of complainants Motion,
however, is an altogether different matter. The Code of
Judicial Conduct enjoins trial court judges, as paragons of
justice in the first instance, to dispose of the courts business
promptly[7] and to decide cases and motions within the
required periods.[8] Section 15(1) of Article VIII of the
Constitution mandates them to do so within three months
from the date of submission for decision or final
resolution. This Court, through Administrative Circular No. 1,
[9]
also specifically requires all of them to act promptly on all
motions and interlocutory matters pending before their
courts.[10]
Hence, it is well-settled that the unexplained failure of
judges to decide cases and resolve motions and incidents
within the reglementary period of 90 days, which is fixed by
the Constitution and the law, renders them administratively
liable.[11] We have stressed often enough that delay in the
administration of justice undermines the faith of the people
in the judiciary, which is expected to hear their supplications
promptly. Delay reinforces in the mind of litigants the
impression that the wheels of justice grind ever so slowly.
[12]
As the time-honored principle goes, justice delayed is
justice denied.
In this case, respondent judge never resolved the
Motion, filed on June 6, 2000, to cite Defendant Occidental
for contempt. While it is true that the former immediately
conducted an ocular inspection of the area to determine if
the Motion had any basis, this act served only to mitigate
his infraction, but not absolve him from it. The Sheriffs
Return of Service of the Writ of Demolition issued in Civil
Case No. 1920 would have clarified whether or not
Occidental had already been fully restored in possession.
But while its absence was a valid reason to defer action on
the contempt Motion at the outset, it was certainly not an
excuse for the prolonged inaction.
Had respondent judge been so minded, he would have
requested a copy of the Sheriffs Report, so that he could
rule on the Motion with dispatch. He has not satisfactorily
explained his failure to do so, considering that the Writ of
Demolition issued in Civil Case No. 1920 had been fully
executed as early as February 25, 1998, and the return
thereon made on March 17, 1998.[13]
With respect to the charges against respondent sheriff,
we agree with the OCA that he was remiss in his duty to
implement the Writ fully in Civil Case Nos. 481 and 482.
Time and time again, we have impressed upon those tasked
to implement court orders and processes to see to it that
the final stage in the litigation process -- the execution of
judgment -- be carried out promptly. They should exert
every effort and indeed consider it their bounden duty to do
so, in order to ensure the speedy and efficient
administration of justice.[14] A decision that is left
unexecuted or delayed indefinitely because of the sheriffs
inefficiency or negligence remains an empty victory on the
part of the prevailing party.[15] For this reason, any inordinate
delay in the execution of judgment is truly deplorable and
cannot be countenanced by the Court.
There is no mistaking the mandatory character of the
period prescribed under Section 14 of Rule 39 of the Revised
Rules of Court on the Return of a Writ of Execution, which
reads:
SEC. 14. Return of writ of execution. The writ of execution
shall be returnable to the court issuing it immediately after
the judgment has been satisfied in part or in full. If the
judgment cannot be satisfied in full within thirty (30) days
after his receipt of the writ, the officer shall report to the
court and state the reason therefor. Such writ shall continue
in effect during the period within which the judgment may
be enforced by motion. The officer shall make a report to the
court every thirty (30) days on the proceedings taken
thereon until the judgment is satisfied in full, or
its effectivity expires. The returns or periodic reports shall
set forth the whole of the proceedings taken, and shall be
filed with the court and copies thereof promptly furnished
the parties.
A similar rule is stated in Administrative Circular No. 12
dated October 1, 1985, and incorporated in the Manual for
Clerks of Court.[16] According to this Circular, all sheriffs and
deputy sheriffs shall submit to the judge concerned a report
on actions taken on all writs and processes assigned to them
within 10 days from receipt.
Per the records of this case, a Writ of Execution was
issued on November 22, 1999 in Civil Case Nos. 481 and
482.[17] Respondent Sheriffs Return of Service [18] of that Writ
was filed only on May 25, 2000, however, or six months
thereafter. There is nothing in the records showing that he
submitted before then a periodic report on the actions he
had taken on the Writ every 30 days from the date of receipt
as required. On the contrary, the Report indicates that the
Writ was partially executed on December 15-28,
1999 and January 11, 2000; and that the damages adjudged
were partly paid in the amount of P3,500 plus one unit of
Karaoke machine. But it was only on May 25, 2000, that this
matter was reported to the trial court.
The excuse proffered by respondent sheriff -- heavy
workload -- cannot absolve him from administrative
sanctions.[19] As an officer of the court, he should at all times
show a high degree of professionalism in the performance of
his duties.[20] He has failed to observe that degree of
dedication required of him as a sheriff. The charge of
connivance is, however, dismissed for lack of basis.
Although the OCA recommended that Respondent
Judge Bagagan be absolved of all charges, we find him
guilty of undue delay[21] in resolving a pending motion, an
infraction that also constitutes a violation of a Court circular.
[22]
Under Section 11(B) of Rule 140 of the Revised Rules of
Court, this less serious charge [23] may be sanctioned by a
fine of more than P10,000, but not exceeding P20,000.
As to Sheriff Matias, we find him guilty of simple neglect
of duty,[24] a less grave offense under the Revised Uniform
Rules on Administrative Cases in the Civil Service. This
infraction is punishable by a suspension of one month and
one day to six months.[25] But under the circumstances, we
find it inadvisable to suspend respondent sheriff,
considering that his work would be left unattended in his
absence. Instead, we adopt our previous ruling
in Aquino v. Lavadia [26] imposing a fine equivalent to his
one-month salary, so that he can finally implement the
subject Writ and perform his other duties.
WHEREFORE, Judge Antonio C. Bagagan of the
Municipal Trial Court of Guinobatan, Albay, is found guilty of
unreasonable delay and is FINED P11,000 with a stern
warning that a repetition of the same or a similar act in the
future shall be dealt with more severely. On the other hand,
Sheriff Danilo O. Matias of the Regional Trial Court
of Ligao, Albay (Branch 14), is ordered to pay a fine
equivalent to his one-month salary, with a similar warning of
stiffer sanctions for the same or a similar act.
SO ORDERED.
Puno, (Chairman), Sandoval-
Gutierrez, Corona, and Carpio-Morales, JJ., concur.
SECOND DIVISION
[G.R. No. 133883. December 10, 2003]
SPOUSES ARTURO AND NICETA SERRANO, petitioners,
vs. COURT OF APPEALS AND HEIRS OF EMILIO
S. GELI, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under
Rule 45 of the Rules of Court of the Decision[1] of the Court of
Appeals (CA) in CA-G.R. SP No. 45573 setting aside the
Order of the Regional Trial Court of Quezon City in Civil Case
No. Q-24790 with motion of herein petitioners, Spouses
Arturo and Niceta Serrano, for the issuance of an alias writ
of execution.[2]
The Antecedents
The Spouses Serrano were the owners of a parcel of
land as well as the house constructed thereon located at
Road 4, Project 6, Diliman, Quezon City, covered by Transfer
Certificate of Title No. 80384, and a parcel of land located
in Caloocan City, covered by Transfer Certificate of Title No.
15191. The couple mortgaged the said properties in favor of
the Government Service Insurance System (GSIS) as
security for a loan of P50,000. By June 1969, the couple was
able to pay only the amount of P18,000.
On June 23, 1969, the Spouses Serrano, as vendors, and
Spouses Emilio and Evelyn Geli, as vendees, executed a
deed of absolute sale with partial assumption of mortgage
over the parcel of land covered by TCT No. 80384 and the
house thereon for the price of P70,000. The Spouses Geli
paid the amount of P38,000 in partial payment of the
property, the balance of P32,000 to be paid by them to the
GSIS for the account of the Spouses Serrano. The Spouses
Geli thereafter took possession of the property. In the
meantime, Evelyn Geli died intestate and was survived by
her husband Emilio Geli and their children.
However, Emilio Geli and his children failed to settle the
amount of P32,000 to the GSIS. The latter forthwith filed a
complaint against Emilio Geli and his children with the
Regional Trial Court of Quezon City for the rescission of the
deed of absolute sale with partial assumption of
mortgage. The defendants therein alleged, by way of special
defense, that the plaintiffs Spouses Serrano failed to furnish
them with a detailed statement of the account due from the
GSIS, thus accounting for their failure to remit the balance of
the loan to the GSIS. On September 6, 1984, the trial court
rendered judgment ordering the rescission of the said deed,
the decretal portion of which reads:
WHEREFORE, judgment is hereby rendered: a) ordering the
rescission of the Deed of Absolute Sale with Assumption of
Mortgage, dated June 23, 1969; b) ordering defendant Emilio
S. Geli and all persons claiming under him, including the
other defendants Oswaldo, Eugenia, Marilyn, Cristopher and
Ray, all surnamed Geli, to vacate the house and lot located
at No. 110 A-1, Road 4, Project 6, Quezon City, and to turn
over the peaceful possession of the premises to plaintiffs
Arturo Serrano and Niceta M. Serrano; c) ordering defendant
Emilio S. Geli to pay plaintiffs the amount of P1,000.00 a
month representing reasonable compensation for the use
and occupancy of the premises starting June 23, 1969 up to
the time the defendant Geli and all other persons claiming
under them including the other defendants, shall have
completely vacated the property, deducting therefrom the
sum of P38,000.00 paid by defendant Geli to plaintiffs as
part of the aforesaid compensation; and, d) ordering
defendant Emilio S. Geli to pay plaintiffs the sum
of P10,000.00 representing exemplary damages. Costs
against defendant Emilio S. Geli.[3]
 Emilio Geli and his children appealed the decision to the
CA on October 19, 1984. During the pendency of the appeal,
the GSIS foreclosed the real estate mortgage over the
property for non-payment of the P50,000 loan secured by
the said property. At the sale on public auction, the GSIS was
the highest bidder. A certificate of sale over the property
was thereby issued by the sheriff in its favor on August 30,
1986. On October 30, 1987 and November 3, 1987, Emilio
Geli paid the redemption price of P67,701.84[4] to the
GSIS. Official Receipts Nos. 905401 and 901685 for the said
amount with the notation for the account of Arturo Serrano
were issued. Accordingly, on February 22, 1988, the GSIS
executed a certificate of redemption[5] and turned over to
Emilio Geli the owners copy of TCT No. 80384 in the names
of the Spouses Serrano. Emilio Geli did not inform the
Spouses Serrano and the CA that he had paid the
redemption price to the GSIS.
On January 8, 1991, the CA dismissed the appeal of
Emilio Geli and his children on the ground that the
appellants failed to pay the requisite docket fees despite
notices from the appellate court. No motion for the
reconsideration of the resolution was filed. Thus, the said
dismissal of the appeal became final and executory. The
Court of Appeals forthwith issued an Entry of Judgment
on February 27, 1991.
After the remand of the records, the Spouses Serrano
filed with the RTC on January 14, 1994 a motion for the
execution of the trial courts September 6, 1984
Decision. On February 15, 1994, the trial court issued an
order granting the motion and forthwith issued a writ of
execution. The writ, however, was not implemented as the
Spouses Serrano were then in the United States. On August
1, 1995, the trial court issued an alias writ of execution on
motion of the plaintiffs. This, too, was not implemented,
because of the defendants change of address.On May 9,
1996, the trial court issued an order granting the motion of
the plaintiffs for a second alias writ of execution. On
September 6, 1996, the defendants filed a motion to quash
the same claiming, for the first time, that defendant Emilio
Geli had already redeemed the subject property in 1988
from the GSIS. According to the defendants, this constituted
a supervening event that would make the execution of the
trial courts decision unjust and inequitable.
On May 19, 1997, the trial court issued an order
denying the aforesaid motion of the defendants. It noted
that the payment by defendant Emilio Geli of the
redemption price to the GSIS took place before the CA
dismissed the appeal and before the decision of the RTC
became final and executory; hence, it did not constitute a
supervening event warranting a quashal of the writ of
execution. The trial court cited the ruling of this Court in Lim
v. Jabalde.[6]
On September 18, 1997, the trial court issued an order
granting the motion for the issuance of another alias writ of
execution filed by the Spouses Serrano, to wit:
The Motion to Quash Writ of Execution, filed by defendants
having been earlier denied and, it being explicit under the
New Rules of Civil Procedure (1997) that no appeals may be
taken from orders of execution, instead of giving due course
to the appeal interposed by defendant, the court resolves to
grant the motion for the issuance of an Alias Writ of
Execution.[7]
 On September 26, 1997, the trial court issued an Alias
Writ of Execution.[8] Conformably with said writ, the sheriff
served a Sheriffs Notice to Vacate [9] on the defendants. In
the meantime, Emilio Geli died intestate and was survived
by his children.
On October 10, 1997, the heirs of Emilio Geli filed with
the Court of Appeals a petition for certiorari and/or
prohibition praying for the nullification of the May 19,
1997 and September 18, 1997 Orders of the trial court. They
alleged inter alia that when their father Emilio Geli paid the
redemption price to the GSIS on October 30,
1987 and November 3, 1987, their appeal of the September
6, 1984 Decision of the RTC in Civil Case No. Q-24790 before
the CA was still pending resolution. Consequently, under the
terms of the deed of absolute sale with assumption of
mortgage which was still subsisting at that time, they
were ipso facto subrogated to the rights of the Spouses
Serrano as mortgagors of the property; hence, they became
the owners of the property and were entitled to the
possession thereof. The petitioners therein further posited
that since they acquired ownership of the property before
the CA dismissed their appeal and before the September 6,
1984 Decision of the RTC became final and executory, the
execution of the decision against them was unjust and
unfair. They then prayed for the following relief:
WHEREFORE, premises considered, it is respectfully prayed
that the order of public respondent Judge, dated 18
September 1997 and the Notice to Vacate issued by public
respondent Sheriff, dated 26 September 1997 be set
aside. Likewise, to declare execution of judgment in Civil
Case No. Q-24790 to have been rendered impossible, as
execution hereof would result to injustice. In the meantime
to obviate irreversible damage on the part of petitioners, a
writ of PRELIMINARY INJUNCTION be granted after due
hearing, ORDERING public respondent Judge and public
respondent Sheriff to desist or refrain from implementing
the September 18, 1997 order.
Other remedies available in law and equity are likewise
prayed for.[10]
On January 5, 1998, the appellate court issued an order
restraining the implementation of the alias writ of execution
and the notice to vacate issued by the trial court. [11] On May
12, 1998, the CA rendered the assailed decision in favor of
the heirs of Emilio Geli, the decretal portion of which reads:
WHEREFORE, the foregoing considered, the petition is
hereby GRANTED, and the writ of certiorari issued. The
respondent court is hereby PERPETUALLY ENJOINED from
issuing any order or writ which would disturb the petitioners
in their lawful ownership and possession of the property
subject matter of the instant case.[12]
The appellate court ruled that since Emilio Geli paid the
redemption price for the property to the GSIS in 1987 while
his appeal was pending in the CA, the said redemption was
a supervening event which rendered the enforcement of the
writ of execution issued by the trial court against them
unjust and inequitable.
The Spouses Serrano filed the instant petition and
assigned to the CA the following errors:
I
THE COURT A QUO COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN IT PERMANENTLY ENJOINED THE TRIAL
COURT FROM DISTURBING THE RESPONDENTS IN THEIR
LAWFUL OWNERSHIP AND POSSESSION OF THE SAID
PROPERTY, IT BEING CLEAR THAT THEIR REDEMPTION WAS
EFFECTED FOR AND ON BEHALF OF PETITIONER ARTURO V.
SERRANO.
II
THE COURT A QUO COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN IT HELD THAT THE REDEMPTION
CONSTITUTED A SUPERVENING EVENT WHICH CHANGE THE
RELATIONS OF THE PARTIES, THUS RENDERING EXECUTION
INEQUITABLE UNDER THE PREMISES.[13]
The petitioners contend that the payment of the
redemption price made by Emilio Geli in 1987 during the
pendency of the appeal in the CA was ineffective because,
subsequently, when the respondents appeal was dismissed
by the CA, the summary decision of the RTC declaring the
deed of absolute sale with partial assumption of mortgage
rescinded had become final and executory. The deed of
absolute sale with partial assumption of mortgage executed
by the petitioners and the Spouses Geli had ceased to exist
with its rescission as decreed by the RTC. According to the
petitioners, the payment of the redemption price was
conditioned upon the perfection and outcome of the
appeal. Since the appeal of the respondents was dismissed
by their failure to pay the requisite docket fees, they must
suffer the consequences thereof. The petitioners assert that
the redemption of a property is a right belonging to the
mortgagor-debtor, and since the deed of absolute sale with
partial assumption of mortgage had been rescinded by final
judgment of the RTC, Emilio Geli was no longer a mortgagor
or the successor-in-interest of the mortgagors; hence, he
could not redeem the property on behalf of the mortgagors
without the latters knowledge and consent.
For their part, the respondents echo the ruling of the CA
that although the issuance by the trial court of a writ of
execution is ministerial upon the finality of its decision, the
same is subject to the onset of a supervening event which
may, as in this case, render the same unwarranted, unjust
and inequitable.
The respondents contend that the petitioners lost their
ownership over the property when they failed to redeem the
property within one year from the sale thereof at public
auction to the GSIS. Although the GSIS executed a
Certificate of Redemption in favor of Emilio Geli on February
22, 1988, the deed was, in fact, a deed of conveyance
because, by then, the one-year period to redeem the
property had already lapsed and the GSIS in the meantime
had become the owner of the property. Thus, the Spouses
Geli acquired ownership thereof when they purchased the
same from the GSIS in 1988 for P67,701.84. The GSIS in
effect sold the property to Emilio Geli and did not merely
allow him to redeem it. Departing from their submission
before the CA, the respondents now posit that their claim of
ownership over the subject property was after all not
anchored on the deed of sale with assumption of mortgage,
as it had been admittedly rescinded by virtue of the finality
of the trial courts September 6, 1984 Decision. Their claim
of ownership rests on the fact that they had acquired the
property from the GSIS, the purchaser at public auction. As
owners of the property, they cannot now be evicted
therefrom.
 We find the petition to be meritorious.
Generally, the execution upon a final judgment is a
matter of right on the part of the prevailing party. It is the
ministerial and mandatory duty of the trial court to enforce
its own judgment once it becomes final and executory. It
may happen, however, that new facts and circumstances
may develop or occur after a judgment had been rendered
and while an appeal therefrom is pending; or new matters
had developed after the appeal has been dismissed and the
appealed judgment had become final and executory, which
the parties were not aware of and could not have been
aware of prior to or during the trial or during the appeal, as
they were not yet in existence at that time. In the first
situation, any attempt to frustrate or put off the
enforcement of an executory decision must fail. Once a
judgment has become final and executory, the only remedy
left for material attention thereof is that provided for in Rule
38 of the Rules of Court, as amended. There is no other
prerequisite mode of thwarting the execution of the
judgment on equitable grounds predicated on facts
occurring before the finality of judgment.[14] In the second
situation, the execution may be stayed, notwithstanding the
affirmance of the appealed judgment by this Court. [15] It is
required, however, that the supervening facts and
circumstances must either have a direct effect upon the
matter already litigated and settled or create a substantial
change in the rights or relations of the parties therein which
would render execution of a final judgment unjust,
impossible or inequitable or when it becomes imperative in
the interest of justice.[16] The interested party may file a
motion to quash a writ of execution issued by the trial court,
or ask the court to modify or alter the judgment to
harmonize the same with justice and further supervening
facts.[17] Evidence may be adduced by the parties on such
supervening facts or circumstances.[18]
In this case, the payment by Emilio Geli of the amount
of P67,701.84 on October 30 and November 3, 1987 to the
GSIS for the account of the petitioners was made while the
appeal of the private respondents from the summary
judgment of the RTC was pending. The summary judgment
of the RTC had not yet become final and executory. It
behooved the said respondents to prosecute their appeal
and file their brief, where they should have invoked the
payment of the redemption price as a ground for the
reversal of the trial courts summary judgment in their
favor. The respondents failed to do so, and even concealed
the payment of the loan for the account of the
petitioners. Worse, the respondents did not pay the requisite
docket fees for their appeal, which resulted in its
dismissal. The respondents even opted not to file any
motion for the reconsideration of the resolution of the CA
dismissing their appeal. In sum, the respondents allowed the
decision of the trial court to become final and
executory. Consequently, the enforcement of the summary
judgment of the trial court can no longer be frustrated by
the respondents payment, through Emilio Geli, of the
amount of P67,701.84 to the GSIS in 1987.
Irrefragably, the Spouses Geli, as vendees-mortgagors
under the deed of absolute sale with partial assumption of
mortgage, would have been subrogated to the rights and
obligations of the petitioners under the said deed, including
the right to redeem the property from the GSIS.[19] However,
the CA dismissed their appeal for failure to pay the requisite
docket fees, and such dismissal became final and
executory. Hence, the summary judgment of the trial court
declaring the deed of absolute sale with partial assumption
of mortgage rescinded had also become final and executory.
Generally, the rule is that to rescind a contract is not
merely to terminate it, but to abrogate and undo it from the
beginning; that is, not merely to release the parties from
further obligations to each other in respect to the subject of
the contract, but to annul the contract and restore the
parties to the relative positions which they would have
occupied if no such contract had ever been
made. Rescission necessarily involves a repudiation of the
contract and a refusal of the moving party to be further
bound by it.[20] With the rescission of the deed of sale, etc.,
the rights of Emilio Geli under the said deed to redeem the
property had been extinguished. The petitioners cannot
even be compelled to subrogate the respondents to their
rights under the real estate mortgage over the property
which the petitioners executed in favor of the GSIS since the
payment of the P67,701.84 redemption price was made
without the knowledge of the petitioners. [21] The
respondents, however, are entitled to be reimbursed by the
petitioners to the extent that the latter were benefited.[22]
Neither did the respondents acquire title to the property
under the certificate of redemption executed by the GSIS
on February 10, 1998.
First. In the certificate of redemption, the mortgagor-
debtor in whose favor the certificate was executed was the
petitioner Arturo Serrano and not Emilio Geli and/or the
respondents:
NOW, THEREFORE, for and in consideration of the foregoing
premises and the sum of SIXTY-SEVEN THOUSAND SEVEN
HUNDRED ONE & 84/100 (P67,701.84) PESOS, Philippine
Currency, herein paid by EMILIO S. GELI, of legal age,
married, Filipino, with residence and postal address at 110
A-1, Road 4, Project 6, Quezon City, do hereby resell,
retransfer and reconvey by way of Certificate of Redemption
in favor of ARTURO V. SERRANO, the above-described
parcel/s of land, together with the building/s and
improvements existing thereon.
IN WITNESS WHEREOF, the GOVERNMENT SERVICE
INSURANCE SYSTEM has caused this instrument to be
executed by its Director, Atty. Roque M. Fernando, Jr., at the
City of Manila, Philippines, this _______ day of ______, 19__.
GOVERNMENT SERVICE INSURANCE SYSTEM
Mortgagee-Purchaser
By: Sgd.
ROQUE M. FERNANDO, JR.
in his capacity as Director[23]
Second. Case law has it that the one-year period within
which the mortgagor-debtor or his successor-in-interest may
redeem the property should be counted from the time the
certificate of sale was registered with the Register of Deeds.
[24]
Upon the lapse of the one-year period, the right to
redeem becomes functus officio on the date of its expiry.
[25]
The rule on redemption is actually liberally construed in
favor of the original owner of the property. The purpose of
the law is to aid rather than to defeat him in the exercise of
his right of redemption.[26] Before the lapse of the one-year
period, the mortgagor-debtor remains the owner of the
property. The right acquired by the purchaser at public
auction is merely inchoate until the period of redemption
has expired without the right being exercised by the
redemptioner.[27] Such right becomes absolute only after the
expiration of the redemption period without the right of
redemption having been exercised. [28] The purchaser is
entitled as a matter of right to consolidation of title and to
the possession of the property.[29] Where redemption is
seasonably exercised by the mortgagor-debtor, what is
actually effected is not the recovery of ownership of his
land, which ownership he never lost, but the elimination
from his title thereto of the lien created by the registration
of a mortgage thereon.[30]
Upon the expiry of the redemption period without the
mortgagor-debtor being able to redeem the property, the
purchaser can no longer be compelled to allow the former to
redeem the property or to resell the property; and if he
agrees to sell the property, it may be for a price higher than
that for which he purchased the property at public auction.
[31]
In this case, there is no showing in the records that the
sheriffs certificate of sale in favor of the GSIS had been
registered in the Office of the Register of Deeds of Quezon
City and if so, when it was in fact registered in the said
office. It cannot thus be argued that when Emilio Geli
remitted the amount of P67,701.84 to the GSIS in full
payment of the account of the petitioners, the one-year
period to redeem the property had by then lapsed. Hence,
the petitioners remained the owners of the property. The
GSIS never acquired title over the property and could not
have conveyed and transferred ownership over the same
when it executed the certificate of redemption to and in the
name of the petitioner Arturo Serrano. As the Latin maxim
goes: NEMO DAT QUOD NON HABET.
We are not convinced by the ratiocination of the
respondents that the enforcement of the summary decision
of the trial court and the alias writ of execution against them
is unjust and unreasonable.
The Spouses Geli and the respondents, as heirs and
successors-in-interest of the said spouses, were obliged
under the deed of absolute sale with partial assumption of
mortgage to pay to the GSIS the balance of the petitioners
account. The Spouses Geli reneged on their
undertaking. The petitioners were impelled to secure the
services of counsel and sue the Spouses Geli with the RTC
for the rescission of the said deed with damages. The
respondent spouses nevertheless remained adamant and
refused to pay the petitioners account with the GSIS which
impelled the latter to foreclose the real estate mortgage and
sell the property at public auction. Emilio Geli and the
respondents did not inform the CA and the petitioners that
Emilio Geli had paid the amount of P67,701.84 for the
account of the petitioners. The respondents even allowed
their appeal to be dismissed by the CA, and the dismissal to
become final and executory. The petitioners were impelled
to spend money for their counsel and for sheriffs fees for the
implementation of the writ of execution and the alias writ of
execution issued by the trial court. In the meantime, the
respondents remained in possession of the property from
1969, when the said deed of absolute sale with partial
assumption of mortgage was executed, up to the present, or
for a period of 34 years without paying a single centavo. For
the Court to allow the respondents to benefit from their own
wrong would run counter to the maxim: Ex Dolo Malo Non
Oritur Actio (No man can be allowed to found a claim upon
his own wrongdoing).[32] Equity is applied only in the
absence of and never against statutory law or judicial rules
of procedure.[33] We reiterate our ruling that:
Justice is done according to law. As a rule, equity follows the
law. There may be a moral obligation, often regarded as an
equitable consideration (meaning compassion), but if there
is no enforceable legal duty, the action must fail although
the disadvantaged party deserves commiseration or
sympathy.
The choice between what is legally just and what is morally
just, when these two options do not coincide, is explained by
Justice Moreland in Vales v. Villa, 35 Phil. 769, 788 where he
said:
Courts operate not because one person has been defeated
or overcome by another, but because he has been defeated
or overcome illegally. Men may do foolish things, make
ridiculous contracts, use miserable judgment, and lose
money by themindeed, all they have in the world; but not
for that alone can the law intervene and restore. There must
be in addition, a violation of law, the commission of what the
law knows as an actionable wrong before the courts are
authorized to lay hold of the situation and remedy it. (Rural
Bank of Paraaque, Inc. v. Remolado, 62051, March 18, 1985)
(135 SCRA 409, 412).[34]
In sum then, the respondents, as heirs of Emilio Geli,
are obliged to vacate the subject property. However, since
the petitioners were benefited to the extent of P67,701.84
which was the total amount paid by Emilio Geli to the GSIS
as redemption price for the foreclosed property, the
petitioners are obliged to refund the said amount to the
respondents.
IN LIGHT OF ALL THE FOREGOING, the petition is
GRANTED. The assailed decision of the Court of Appeals
dated May 12, 1998 in CA-G.R. SP No. 45573 is SET ASIDE
AND REVERSED. The petitioners Spouses Serrano are
obliged to refund to the respondents, as heirs of Emilio S.
Geli, the amount of P67,701.84 to be deducted from the
amount due to the petitioners under the September 6, 1984
Decision of the Regional Trial Court, Quezon City, in Civil
Case No. Q-24790.
SO ORDERED.
Puno, (Chairman), Quisumbing, Austria-
Martinez, and Tinga, JJ., concur.
THIRD DIVISION
[G.R. No. 151325. June 27, 2005]
D ARMOURED SECURITY AND INVESTIGATION AGENCY,
INC., petitioner, vs. ARNULFO ORPIA,
respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
For resolution is a petition for review on certiorari under
Rule 45 of the 1997 Rules of Civil Procedure, as amended,
assailing the Decision[1] dated December 18, 2001 rendered
by the Court of Appeals in CA-G.R. SP No. 61799,
entitled DArmoured Security and Investigation Agency, Inc.
vs. National Labor Relations Commission, Arbiter Ariel C.
Santos, NLRC Sheriff Ricardo Perona, Arnulfo Orpia,
Ludovico Abucejo, Rowel Aguro, Efren Almoete, Romeo
Amista, Warlito Balgosa, Romeo Balingbing, Ramon Barroa,
Monteclaro Batawil, Arnel Bon, Ricardo Capentes, Danilo
Dada, Joel dela Cruz, Hernando delos Reyes, Florentino
delos Trino, Rogelio Duerme, Nonito Estrellado, Joseph
Falceso, Isidro Flores, Victor Gungon, Sonny Julba, Patricio
Lacana, Jr., Felix Lascona, Juanito Luna, Raul Lozadas,
Rommel Magbanua, Rogelio Maribung, Nicolas Mendoza,
Ezvener Ogana, Ricky Orano, Reynaldo Ozaraga, Samuel
Padilla, Edwin Parreno, Ireneo Partolan, Juan Pigtuan,
Guillermo Pusing, Rodel Sibal, Silvestre Soledad, Jovener
Tever, Virgilio Timajo, Emilio Tomarong, Jr., Virgilio Verdeflor
and Joerex Victorino.
On February 9, 1995, the above-named respondents,
who were employed as security guards by DArmoured
Security and Investigation Agency, Inc., petitioner, and
assigned to Fortune Tobacco, Inc. (Fortune Tobacco), filed
with the Labor Arbiter a complaint for illegal dismissal and
various monetary claims against petitioner and Fortune
Tobacco, docketed as NLRC-NCR Case No. 00-02-01148-95.
On June 11, 1998, the Labor Arbiter rendered a
Decision, the dispositive portion of which reads:
WHEREFORE, premises considered, all the respondents
except Antonio Cabangon Chua are jointly and severally
liable to pay complainants the total sum of ONE MILLION
SEVENTY SEVEN THOUSAND ONE HUNDRED TWENTY FOUR
AND TWENTY NINE CENTAVOS (P1,077,124.29) for
underpayment, overtime pay, legal holiday pay, service
incentive leave pay, 13th month pay, illegal deduction and
refund of firearms bond, as indicated in Annex A.
Finally, ten (10%) percent of all sums owing to complainants
is hereby awarded as attorneys fees.
SO ORDERED.
From the said Decision, Fortune Tobacco interposed an
appeal to the National Labor Relations Commission (NLRC).
Petitioner did not appeal. On March 26, 1999, the NLRC
rendered its Decision affirming with modification the
assailed Arbiters Decision in the sense that the complaint
against Fortune Tobacco was dismissed. This Decision
became final and executory. Thus, the award specified in the
Decision of the Arbiter became the sole liability of petitioner.
The records were then remanded to the Arbiter for
execution.
Upon respondents motion, the Arbiter issued a writ of
execution. Eventually, the sheriff served a writ of
garnishment upon the Chief Accountant of Foremost Farms,
Inc., a corporation with whom petitioner has an existing
services agreement. Thus, petitioners receivables with
Foremost were garnished.
Petitioner filed with the NLRC a Motion to Quash/Recall
Writ of Execution and Garnishment which was opposed by
respondents.
 On March 10, 2000, the Arbiter issued an Order denying
the motion and directing the sheriff to release the garnished
sum of money to respondents pro rata.
Petitioners motion for reconsideration was denied,
hence, it interposed an appeal to the NLRC.
In a Resolution dated July 27, 2000, the NLRC dismissed
the appeal for petitioners failure to post a bond within the
reglementary period. Its motion for reconsideration was
denied in a Resolution dated September 25, 2000.
Forthwith, petitioner filed with the Court of Appeals a
petition for certiorari and prohibition with prayer for
issuance of a writ of preliminary injunction.
In a Decision dated December 18, 2001, the Court of
Appeals dismissed the petition.
Hence, this petition for review on certiorari.
In this petition, the issue posed is whether the Court of
Appeals erred in holding that petitioners monthly
receivables from the Foremost Farms, Inc. (garnishee) are
not exempt from execution.
The petition lacks merit. We have ruled that an order
of execution of a final and executory judgment, as in
this case, is not appealable, otherwise, there would
be no end to litigation. [2] On this ground alone, the
instant petition is dismissible.
Assuming that an appeal is proper, still we have to deny
the instant petition. Section 1, Rule IV of the NLRC Manual
on Execution of Judgment provides:
Rule IV
EXECUTION
SECTION 1. Properties exempt from execution. Only the
properties of the losing party shall be the subject of
execution, except:
(a) The losing partys family home constituted in accordance
with the Civil Code or Family Code or as may be provided for
by law or in the absence thereof, the homestead in which he
resides, and land necessarily used in connection therewith,
subject to the limits fixed by law;
(b) His necessary clothing, and that of his family;
(c) Household furniture and utensils necessary for
housekeeping, and used for that purpose by the losing party
such as he may select, of a value not exceeding the amount
fixed by law;
(d) Provisions for individual or family use sufficient for three
(3) months;
(e) The professional libraries of attorneys, judges,
physicians, pharmacists, dentists, engineers, surveyors,
clergymen, teachers, and other professionals, not exceeding
the amount fixed by law;
(f) So much of the earnings of the losing party for his
personal services within the month preceding the levy as
are necessary for the support of his family;
(g) All monies, benefits, privileges, or annuities accruing or
in any manner growing out of any life insurance;
(h) Tools and instruments necessarily used by him in his
trade or employment of a value not exceeding three
thousand (P3,000.00) pesos;
(i) Other properties especially exempted by law.
The above Rule clearly enumerates what properties are
exempt from execution. It is apparent that the exemption
pertains only to natural persons and not to juridical entities.
On this point, the Court of Appeals correctly ruled that
petitioner, being a corporate entity, does not fall within the
exemption, thus:
We cannot accede to petitioners position that the garnished
amount is exempt from execution.
Section 13 of Rule 39 of the Rules of Court is plain and clear
on what properties are exempt from execution. Section 13
(i) of the Rules pertinently reads:
SECTION 13. Property exempt from execution. Except as
otherwise expressly provided by law, the following property,
and no other, shall be exempt from execution:
(i) So much of the salaries, wages or earnings of the
judgment obligor for his personal services within the four
months preceding the levy as are necessary for the support
of his family.
The exemption under this procedural rule should be read in
conjunction with the Civil Code, the substantive law which
proscribes the execution of employees wages, thus:
ART. 1708. The laborers wage shall not be subject to
execution or attachment, except for debts incurred for food,
shelter, clothing and medical attendance.
Obviously, the exemption under Rule 39 of the Rules of
Court and Article 1708 of the New Civil Code is meant to
favor only laboring men or women whose works are manual.
Persons belonging to this class usually look to the reward of
a days labor for immediate or present support, and such
persons are more in need of the exemption than any other
[Gaa vs. Court of Appeals, 140 SCRA 304 (1985)].
In this context, exemptions under this rule are confined only
to natural persons and not to juridical entities such as
petitioner. Thus, the rule speaks of salaries, wages and
earning from the personal services rendered by the
judgment obligor. The rule further requires that such
earnings be intended for the support of the judgment
debtors family.
Necessarily, petitioner which is a corporate entity, does not
fall under the exemption. If at all, the exemption refers to
petitioners individual employees and not to petitioner as a
corporation.
x x x. Parenthetically, in a parallel case where a security
agency claimed that the guns it gives to its guards are tools
and implements exempt from execution, the Supreme Court
had the occasion to rule that the exemption pertains only to
natural and not to juridical persons, thus:
However, it would appear that the exemption contemplated
by the provision involved is personal, available only to a
natural person, such as a dentists dental chair and electric
fan (Belen v. de Leon, G.R. No. L-15612, 30 Nov. 1962). As
pointed out by the Solicitor General, if properties used in
business are exempt from execution, there can hardly be an
instance when a judgment claim can be enforced against
the business entity [Pentagon Security and Investigation
Agency vs. Jimenez, 192 SCRA 492 (1990)].
It stands to reason that only natural persons whose salaries,
wages and earnings are indispensable for his own and that
of his familys support are exempted under Section 13 (i) of
Rule 39 of the Rules of Court. Undeniably, a corporate entity
such as petitioner security agency is not covered by the
exemption.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
WHEREFORE, the petition is DENIED. The assailed
Decision dated December 18, 2001 of the Court of Appeals
in CA-G.R. SP No. 61799 is AFFIRMED IN TOTO. Costs against
petitioner.
SO ORDERED.
Panganiban, (Chairman), Corona, Carpio-
Morales, and Garcia, JJ., concur.
SECOND DIVISION
[G.R. No. 157616. July 22, 2005]
ISIDRO PEREZ and NARCISO A. RAGUA, petitioners,
vs. HON. COURT OF APPEALS, , respondents.
DECISION
CALLEJO, SR., J.:
The spouses Gaudencio Digos, Jr. and Rhodora Digos
secured a loan of P5,800,000.00 from the International
Exchange Bank in December 1996, to finance their project
for the construction of townhouses on their property covered
by Transfer Certificate of Title (TCT) No. 168790 located in
Tandang Sora, Quezon City. To secure the payment of the
loan, the spouses Digos executed a Real Estate Mortgage
over the said property. However, the completion of their
project was delayed, partly because some homeowners in
the Pillarville Subdivision (which abutted the subject
property) refused to allow them to build an access road
through the subdivision to the property. Thus, the equipment
to be used for the project could not pass through the
Pillarville Subdivision.
Because of the spouses Digos failure to pay the
amortizations on their loan, the bank caused the
extrajudicial foreclosure of their real estate mortgage.
Consequently, the property was sold at public auction, with
the bank as the highest bidder at P4,500,000.00, which
appeared to be the account of the spouses Digos at the
time. The Certificate of Sale executed by the sheriff was,
thereafter, registered at the Office of the Register of Deeds
on September 7, 1998.[1]
In the meantime, the spouses Digos referred the matter
of the right of way to the barangay captain for settlement.
Due to the vehement objections of some Pillarville
Subdivision homeowners, the barangay captain failed to
resolve the matter.[2]
On July 2, 1999, the spouses Digos wrote the bank,
requesting for a period of six (6) months from September 7,
1999 within which to redeem the property. [3] However, the
bank denied the request. On August 3, 1999, the spouses
again wrote to the bank, pleading for an extension of at
least three (3) months to redeem the property. [4] In a
Letter[5] to the spouses dated August 30, 1999, the bank
granted the spouses Digos a period of one month from
September 8, 1999 (or until October 8, 1999) within which
to redeem the property. However, the bank consolidated its
title over the property, and on September 19, 1999, the
Register of Deeds issued TCT No. 206979 in the name of the
bank.
Instead of repurchasing the property on or before
October 8, 1999, the spouses Digos filed
Complaint[6] against the bank on October 7, 1999 with the
Regional Trial Court (RTC) of Quezon City, for the nullification
of the extrajudicial foreclosure of the real estate mortgage
and sale at public auction and/or redemption of the
property, with a prayer for a temporary restraining order
and a writ of preliminary injunction to enjoin the bank from
consolidating its title over the property. The spouses Digos
also sought judgment for damages.
In their complaint, the spouses Digos alleged, inter alia,
that they were denied their right to due process because the
foreclosure of the real estate mortgage was extrajudicial;
the sale of their property at public auction was without prior
notice to them; the property was sold for
only P4,500,000.00, the balance of their account with the
bank, but about 400% lower than the prevailing price of the
property; the bank rejected their plea for a five-month
extension to redeem, and their offer of P1,000,000.00 in
partial payment of their loan account to reduce the same
to P3,500,000.00, but the bank granted them an extension
of only one month to redeem the property, designed to
divest them of the same and enrich some characters at their
expense; because of the foregoing acts of the bank, they
suffered sleepless nights, nervous tension and the rise in
their blood pressure for which they were entitled to moral
damages in the amount of P500,000.00, aside from the
exemplary damages they were entitled to in the amount
of P100,000.00.
The spouses Digos prayed for a temporary restraining
order to enjoin the bank from consolidating its title over the
property, and that judgment be rendered in their favor, thus:
2. Ordering the defendant Bank to allow plaintiffs to
a redeem their property;
3. Making the writ of injunction permanent;
4. Ordering the defendant Bank to pay moral
damages of P500,000.00;
5. Ordering defendant Bank to pay exemplary
damages of P200,000.00;
 6. Ordering defendant Bank to pay attorneys fee
of P30,000.00 plus P2,000.00 for every
appearance in Court;
Plaintiffs further pray for such other reliefs and remedies
available within the premises.[7]
The case (first complaint, for brevity) was docketed as
Civil Case No. Q-99-38941. The spouses Digos caused the
annotation of a notice of lis pendens at the dorsal portion of
TCT No. 206979. The trial court, however, did not issue a
temporary restraining order or writ of preliminary injunction.
Meanwhile, the bank filed a motion to dismiss the
complaint and for the cancellation of the notice of lis
pendens on the following grounds:
1. The action for injunction has already been
rendered moot and academic, title to the
foreclosed property having been consolidated in
iBanks name;
2. Assuming arguendo that title to the foreclosed
property has not yet been consolidated, still
plaintiffs have no cause of action for injunction
against iBank.[8]
The spouses Digos opposed the motion. The bank filed a
reply, appending thereto a copy of TCT No. 206979 in its
name.
In an Order dated December 9, 1999, the trial court
granted the motion and dismissed the complaint. It found
that the spouses Digos admitted in their complaint that the
period for the redemption of the property was about to
expire, and that they were given up to October 8, 1999
within which to do so. The court held that it had no authority
to extend the period for redemption, and since it had
already expired, the spouses had no more right to redeem
the property; as such, the defendant had the right to
consolidate its title over the property, and had, in fact, been
issued TCT No. 206979. The court also declared that the
spouses Digos had no right to demand that they be allowed
to redeem the property.
Finally, since the act sought to be enjoined the
consolidation of the banks title was already fait accompli,
the spouses Digos had no cause of action for injunction.
[9]
The trial court ruled that a writ of injunction cannot issue
to enjoin a consummated act.[10] It, thus, ordered the
cancellation of the notice of lis pendens annotated at the
dorsal portion of TCT No. 206979.
The spouses Digos failed to appeal the order; instead,
they filed a petition for certiorari with the Court of Appeals
(CA), assailing the Order of the RTC. The CA dismissed the
petition because it was filed out of time. The petitioners
then filed a motion for reconsideration thereof, which they
later withdrew via a motion. The CA then resolved to grant
the motion; hence, the CA resolution dismissing the petition
became final and executory on May 7, 2001. Entry of
judgment was made of record.[11]
Meanwhile, the bank sold the property to Isidro Perez
and Narciso Ragua to whom the Register of Deeds issued
TCT No. 211888. The vendees caused the subdivision of the
property into eighteen (18) lots. The Register of Deeds
issued titles for each subdivision lot in favor of Perez and
Ragua.[12]
 On June 4, 2001, the spouses Digos filed a
Complaint[13] with the RTC of Quezon City, this time, against
the bank, Perez and Ragua, for the cancellation and
annulment of the extrajudicial foreclosure of the real estate
mortgage executed by them in favor of the bank, the sale at
public auction as well as the certificate of sale executed by
the sheriff, and the Torrens title issued to them. The spouses
Digos prayed for a writ of preliminary injunction and a
temporary restraining order. The petitory portion of the
complaint reads:
WHEREFORE, premises considered, it is most respectfully
prayed of this Honorable Court that immediately upon the
filing of the instant complaint, a temporary restraining order
be issued, and after hearing, a writ of preliminary injunction
issue, enjoining defendants PEREZ and RAGUA from further
disposing of the subject property.
Likewise, it is most respectfully prayed of this Honorable
Court that, after due hearing, judgment be rendered
ordering the CANCELLATION and ANNULMENT of the
extrajudicial foreclosure of sale, the Sheriffs Certificate of
Sale and the consolidated title under the name of defendant
bank, as well as the transfer certificate/s of title issued or
under the name of defendants iBANK, PEREZ and RAGUA;
Further, it is most respectfully prayed also that judgment be
rendered ordering the defendants:
1. to pay plaintiffs the amount of FIVE HUNDRED THOUSAND
[PESOS] (P500,000.00), as and by way of actual expenses:
2. to pay plaintiffs the amount of ONE MILLION AND FIVE
HUNDRED THOUSAND PESOS (P1,500,000.00), as and by
way of moral damages;
3. to pay plaintiffs the amount of ONE HUNDRED THOUSAND
PESOS (P100,000.00), as and by way of exemplary
damages;
4. to pay plaintiffs the amount of FIVE HUNDRED THOUSAND
PESOS (P500,000.00), as and by way of attorneys fees; and,
5. to pay the expenses of litigation and costs of suit.
Plaintiffs further pray for other reliefs, just and equitable,
under the circumstances.[14]
The spouses Digos reiterated the allegations in their
complaint in Civil Case No. Q-99-38941 that they were not
notified of the sale at public auction, and that the
banks P4,500,000.00 bid for the property was
unconscionably low compared to the prevailing market price
of P25,000,000.00. They also admitted their failure to pay
their amortization on their loans. However, they alleged this
time that the extrajudicial foreclosure of the real estate
mortgage and the sale at public auction
were illegal because the bank charged much more than the
amount due on their loan account, to wit: interest of 26%
per annum on the loan account covering January 2, 1998,
whereas under the promissory note executed in favor of the
bank, the new interest rate should commence only on March
4, 1993; penalty charges of 26% of the account, and 5%
penalty charges on top of the 26% interest per annum, as
shown by the banks statement of account. The spouses
Digos also averred that although they pleaded for a
restructuring of their loan account and a moratorium on the
payment of their account, they were unaware of the
erroneous computation of the balance of their loan account.
They maintained that the banks consolidation of its title
over the property on September 19, 1999 was premature
because they were given until October 8, 1999 to redeem
the property.
The spouses Digos also alleged that as a consequence
of the banks acts, they incurred actual damages
of P500,000.00, sustained moral damages of P1,500,000.00,
and were entitled to exemplary damages for P100,000.00.[15]
The case was docketed as Civil Case No. Q-01-44227.
The defendant bank filed a motion to dismiss the complaint
on the following grounds:
A. THE PLAINTIFFS HAVE NO CAUSE OF ACTION
AGAINST DEFENDANTS, THEY BEING ESTOPPED
FROM QUESTIONING THE REGULARITY OF THE
EXTRAJUDICIAL FORECLOSURE SALE.
B. PLAINTIFFS HAVE VIOLATED THE RULE AGAINST
SPLITTING A SINGLE CAUSE OF ACTION UNDER
SECTION 4, RULE 2 OF THE RULES OF COURT IN
INSTITUTING THE INSTANT CASE.
C. PLAINTIFFS ARE GUILTY OF FORUM SHOPPING.
D. PLAINTIFFS ARE GUILTY OF FALSE CERTIFICATION
AGAINST FORUM SHOPPING, IN VIOLATION OF
SECTION 5, RULE 7 OF THE RULES OF COURT.
[16]
The bank alleged that the spouses Digos admitted in
their complaint that, after the extrajudicial foreclosure of the
real estate mortgage and the sale of the property at public
auction, they pleaded to redeem the property but failed to
do so and were granted a one-month extension. The bank
averred that, based on the said allegations, the spouses
were estopped from assailing the extrajudicial foreclosure of
the real estate mortgage, the sale at public auction and the
Torrens title issued to it; hence, they had no cause of action.
It further alleged that the spouses Digos already assailed
the extrajudicial foreclosure of the real estate mortgage and
the sale of the property at public auction on account of lack
of due process and arbitrary abuse in their first complaint;
they again sought to do so in this case, this time grounded
on the invalid foreclosure of the real estate mortgage, and
the sale at public auction of the property for an amount in
excess of the balance of the loan account. The bank argued
that, in so doing, the spouses Digos were guilty of splitting a
single cause of action which is proscribed by Rule 2, Section
4 of the Rules of Court; they were, likewise, barred by res
judicata from filing the second complaint for the same
causes of action, even if additional defendants were
impleaded. Consequently, the spouses Digos were also
guilty of forum shopping.[17]
Perez and Ragua filed a motion to dismiss on similar
grounds of res judicata, splitting of a single cause of action
and forum shopping.[18]
On June 29, 2001, the trial court issued an
Order[19] denying the motion, ruling that there was no
identity of issue in the two actions because, in the second
complaint (docketed as Civil Case No. Q-01-44227), the
spouses Digos assailed the legality of the extrajudicial
foreclosure, on the sole ground that the bank had unlawfully
increased their obligation, contrary to the terms and
conditions of the loan contract. The court held that the
causes of action in the two complaints were not identical: in
the first case, it was for the redemption of the mortgaged
property, distinct and separate from their cause of action in
the second case which is rooted on the erroneous
computation of the balance of their loan account with the
bank. The court also declared that in the first complaint, the
spouses Digos assailed the validity or regularity of the
extrajudicial foreclosure of the real estate mortgage and the
sale at public auction. Consequently, the court concluded,
the complaint was not barred by res judicata; nor are they
guilty of forum shopping.
The trial court denied the defendants motion for
reconsideration in its Order[20] dated December 6, 2001;
hence, they filed a petition[21] for certiorari, prohibition and
mandamus with the CA, alleging therein that the respondent
judge committed a grave abuse of his discretion amounting
to excess or lack of jurisdiction in denying their motion to
dismiss the complaint.
On November 25, 2002, the CA rendered judgment
dismissing the petition and affirming the assailed orders.
The appellate court declared that there was no identity of
causes of action in the two cases because the first action
was one for injunction and redemption of the property,
whereas the second action was for the nullification of the
extrajudicial foreclosure of the real estate mortgage and the
sale at public auction due to the erroneous computation of
the balance on the respondents account with the bank;
hence, the spouses Digos were not estopped from filing their
second action.[22] The petitioners filed a motion for a
reconsideration of the said decision, which the appellate
court denied.[23]
Petitioners Isidro Perez and Narciso Ragua forthwith filed
the instant petition for review on certiorari, raising the
following issues:
WHETHER OR NOT THE JUDGMENT IN CIVIL CASE NO. Q-99-
[38941] (REDEMPTION OF MORTGAGE) IS RES JUDICATA TO
CIVIL CASE NO. Q-01-44227 (CANCELLATION AND
ANNULMENT OF FORECLOSURE SALE)?
WHETHER OR NOT THE PRIVATE RESPONDENTS ARE
ALREADY ESTOPPED FROM ATTACKING THE VALIDITY OF THE
FORECLOSURE SALE?[24]
It is the contention of the petitioners that the private
respondents (the plaintiffs in both actions in the RTC) are
guilty of splitting their cause of action. The petitioners point
out that the private respondents failed to pray for the
nullification of the extrajudicial foreclosure and sale at public
auction in their first action, and did so only in their second
complaint. For such failure, the second action was barred
by res judicata, conformably with Section 4, Rule 2 of the
Rules of Court. The petitioners point out that the issue of the
computation of the respondents balance on their loan
account had already been passed upon and resolved by the
court in the first case, and, as such, can no longer be
assailed in the second case. The petitioners likewise
maintain that the validity of the foreclosure of the real
estate mortgage and sale at public auction was raised and
resolved in the first case. The petitioners insist that the
private respondents were barred from assailing the
extrajudicial foreclosure of the real estate mortgage and the
sale at public auction of the property in favor of the bank.
They further point out that the private respondents
repeatedly requested the bank for extensions to redeem the
property; such requests were eventually granted but the
private respondents still failed to redeem the property.
For their part, the private respondents aver that their
action in the first case was for the grant of an extension to
redeem the property and avert the banks act of
consolidating its title over the property, while their action in
the second case was for the nullification of the extrajudicial
foreclosure of the real estate mortgage and the sale of the
property at public auction on account of the arbitrary,
unlawful and baseless imposition of unconscionable re-
priced interest rates on their loan account. They aver that
there can be no conclusiveness of judgment in the first
action because the issues in the two cases are not identical.
They insist that the issues in the first case are not being
relitigated in the second case; hence, their second action is
not barred by res judicata, nor did they split their cause of
action.
The Ruling of the Court
Splitting a single cause of action consists in dividing a
single or indivisible cause of action into several parts or
claims and instituting two or more actions therein. [25] A
single cause of action or entire claim or demand cannot be
split up or divided so as to be made the subject of two or
more different actions.[26]
A single act or omission may be violative of various
rights at the same time, such as when the act constitutes a
violation of separate and distinct legal obligations. [27] The
violation of each of these rights is a cause of action in itself.
However, if only one right may be violated by several acts or
omissions, there would only be one cause of action.
Otherwise stated, if two separate and distinct primary rights
are violated by one and the same wrong; or if the single
primary right should be violated by two distinct and
separate legal wrongs; or when the two primary rights are
each broken by a separate and distinct wrongs; in either
case, two causes of action would result. [28] Causes of action
which are distinct and independent, although arising out of
the same contract, transaction or state of fact may be sued
separately, recovery on one being no bar to subsequent
actions on the others.
The mere fact that the same relief is sought in the
subsequent action will not render the judgment in the prior
action as res judicata.[29] Causes of action are not
distinguishable for purposes of res judicata by difference in
the claims for relief.[30]
Comparing the material averments of the two
complaints, it would appear that separate primary rights of
the respondents were violated by the banks institution of a
petition for extrajudicial foreclosure of the real estate
mortgage and the sale at public auction; hence, the
respondents had separate and independent causes of action
against the bank, to wit: (a) the first complaint relates to the
violation by the bank of the right to a judicial, not
extrajudicial, foreclosure of the real estate mortgage and for
an extension of the period for the respondents to redeem
the property with damages; (b) the second complaint relates
to the breach by the bank of its loan contract with the
respondents by causing the extrajudicial foreclosure of the
real estate mortgage for P4,500,000.00 which was in excess
of their unpaid account with the bank.
However, we are convinced that the institution by the
respondents of their second complaint anchored on their
claim that the bank breached its loan contracts with them
by erroneously computing the actual and correct balance of
their account when the petition for extrajudicial foreclosure
of the real estate mortgage was filed by it designed to avert
the dismissal of their complaint due to splitting causes of
action and res judicata, following the dismissal of their first
complaint and the dismissal of their appeal through their
negligence. The Court is constrained to conclude that this
was a last-ditch attempt to resuscitate their lost cause, a
brazen violation of the principle of res judicata.
Section 49(b)(c), Rule 39 of the Rules of Court provides
in part:
SEC. 49. Effect of judgments. The effect of a judgment or
final order rendered by a court or judge of the Philippines,
having jurisdiction to pronounce the judgment or order, may
be as follows:
(b) In other cases the judgment or 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.
(c) In any other litigation between the same parties or their
successors in interest, that only is deemed to have been
adjudged in a former judgment which appears upon its face
to have been so adjudged, or which was actually and
necessarily included therein or necessary thereto.
Section 49(b) enunciates the first concept of res
judicata, known as bar by prior judgment or estoppel by
judgment, which refers to a theory or matter that has been
definitely and finally settled on its merits by a court of
competent jurisdiction without fraud or collusion.
There are four (4) essential requisites which must
concur for the application of this doctrine:
(a) finality of the former judgment;
(b) the court which rendered it had jurisdiction over the
subject matter and the parties;
(c) it must be a judgment on the merits; and
(d) there must be, between the first and second actions,
identity of parties, subject matter and causes of
action.[31]
A judgment or order is on the merits of the case when it
determines the rights and liabilities of the parties based on
the ultimate facts as disclosed by the pleadings or issues
presented for trial. It is not necessary that a trial, actual
hearing or argument on the facts of the case ensued. For as
long as the parties had the full legal opportunity to be heard
on their respective claims and contentions, the judgment or
order is on the merits. [32] An order of the trial court on the
ground that the complaint does not state a cause of action
is a determination of the case on its merits. [33] Such order
whether right or wrong bars another action based upon the
same cause of action.[34] The operation of the order as res
judicata is not affected by a mere right of appeal where the
appeal has not been taken or by an appeal which never has
been perfected.[35]
Indeed, absolute identity of parties is not a
condition sine qua non for the application of res judicata. It
is sufficient that there is a shared identity of interest. [36] The
rule is that, even if new parties are found in the second
action, res judicata still applies if the party against whom
the judgment is offered in evidence was a party in the first
action; otherwise, a case can always be renewed by the
mere expedience of joining new parties in the new suit. [37]
The ultimate test to ascertain identity of causes of
action is whether or not the same evidence fully supports
and establishes both the first and second cases. The
application of the doctrine of res judicata cannot be excused
by merely varying the form of the action or engaging a
different method of presenting the issue.[38]
Section 49(c) of Rule 39 enumerates the concept of
conclusiveness of judgment. This is the second branch,
otherwise known as collateral estoppel or estoppel by
verdict. This applies where, between the first case wherein
judgment is rendered and the second case wherein such
judgment is involved, there is no identity of causes of
action. As explained by this Court:
It has been held that in order that a judgment in one action
can be conclusive as to a particular matter in another action
between the same parties or their privies, it is essential that
the issues be identical. If a particular point or question is in
issue in the second action, and the judgment will depend on
the determination of that particular point or question, a
former judgment between the same parties will be final and
conclusive in the second if that same point or question was
in issue and adjudicated in the first suit; but the adjudication
of an issue in the first case is not conclusive of an entirely
different and distinct issue arising in the second. In order
that this rule may be applied, it must clearly and positively
appear, either from the record itself or by the aid of
competent extrinsic evidence that the precise point or
question in issue in the second suit was involved and
decided in the first. And in determining whether a given
question was an issue in the prior action, it is proper to look
behind the judgment to ascertain whether the evidence
necessary to sustain a judgment in the second action would
have authorized a judgment for the same party in the first
action.[39]
In the present case, before the private respondents filed
their first complaint, they already knew that the balance of
their account with the bank was P4,500,000.00. They even
offered to make a P1,000,000.00 partial payment of their
loan to reduce their account to P3,500,000.00. These are
gleaned from the averments in the first complaint:
7. That the long process of negotiation for the right-of-way
has unnecessarily delayed the project of the plaintiffs and
has nearly caused the foreclosure of the mortgage property
by the private defendant Bank, however, the said
foreclosure was held in abeyance when plaintiffs offered to
pay the additional amount of P1,000,000.00 which should
leave a balance of the loan in the amount of P3,500,000.00;
[40]
10. That as the auction sale was highly irregular, obviously,
the only bidder is the defendant Bank for the price limited to
the remaining balance of the loan in the amount
of P4,500,000.00, no more, no less;[41]
 More telling is the private respondents failure to object
to the extrajudicial foreclosure of the real estate mortgage
and the sale at public auction; they even pleaded to be
allowed to redeem the property after it had already been
sold at public auction. Patently then, the respondents were
proscribed from claiming that the foreclosure of the real
estate mortgage was for an amount in excess of the balance
of their account and that the sale at public auction was
irregular/illegal. As the Court held in Aclon v. Court of
Appeals:[42]
In the absence of evidence proving that a judgment debtor
was merely trying to protect himself or save his property,
and that no reliance could or should have been placed upon
his action in so doing, an attempt to redeem from an
execution sale has been construed as a waiver of defects or
irregularities therein, precluding him from relying upon them
for the purpose of challenging its validity. When Aclon
sought to redeem his property from PNB he never made any
reservation with respect to his right to question the validity
of the auction sale and to seek alternative relief before the
courts. In other words, there was no indication whatsoever
that he does not recognize the validity of the sale. If
petitioner indeed felt that the assailed foreclosure
proceedings were attended with any irregularity he should
have filed the appropriate action with the court. Instead, he
offered to repurchase the subject properties without any
condition or reservation. Nevertheless, Aclon failed to
comply with his undertaking and instead defaulted in his
subsequent payments.
Redemption is inconsistent with the claim of invalidity of
the sale. Redemption is an implied admission of the
regularity of the sale and would estop the respondents from
later impugning its validity on that ground. [43] Thus, the
private respondents pleas for extensions of time to redeem
the subject property are of the same genre.
The private respondents admitted in their complaint in
the first case that the bank only gave a one-month
extension to redeem the property. Indeed, they made this
declaration in their letter to the bank, dated July 2, 1999,
copy of which was appended to their complaint (and thus
made an integral part thereof), to wit:
Mr. Sonny Justiniano
Acquired Assets
International Exchange Bank
Salcedo Tower
169 H.V. De la Costa St.,
Salcedo Village, Makati City
Dear Sir:
Your deadline of September 7, 1999 is already fast
approaching. Our action program to redeem the property
has been stalled due to the infighting of the homeowners
association members. We were not permitted to build
access road to the property. They wont allow our equipment
to pass and start work unless we get the approval of all the
members. At present, there are two factions and they are at
odds with each. Either side does not recognize the existence
of the other. Our only option at the moment is to go to court
and you know very well that this takes time.
Our interested buyers wont budge unless they see
improvements in the property like in place drainage system
and access road. We are ready to start work, however, the
association has prevented us based on [the] above-stated
reasons.
We have no other alternative but to once again appeal to
you. We respectfully request for an extension of six months
from September 7, 1999 to enable us to sort the association
problem by court proceedings and place in motion our
action program to redeem the property.
We pray that your kind heart will once again grant our
request.
Thank you very much.
Very truly yours,
(Sgd.)
GAUDENCIO DIGOS[44]
If indeed the bank made an erroneous computation of
the balance of their account as claimed by the private
respondents in their second complaint, this should have
been alleged in the first complaint as one of their causes of
action. They failed to do so. The private respondents
unequivocably admitted in their first complaint that the
balance of their account with the bank was P4,500,000.00
which was the precise amount for which the bank sought
the foreclosure of the real estate mortgage and the sale of
the property at public auction; they even sought judicial
recourse to enable them to redeem the property despite the
lapse of the one-year period therefor.
Relying on these admissions on the part of the private
respondents, and the fact that the bank has already
consolidated its title over the property, the Court thus
dismissed their first complaint. The Order of the Court
dismissing the first complaint is a judgment of the case on
the merits.
The attempt of the respondents in their second
complaint to avoid the application of the principle of res
judicata by claiming the nature of their account on the
ground therefor and their legal theory cannot prosper. Case
law has it that where a right, question or fact is distinctly put
in issue and directly determined by a court of competent
jurisdiction in a first case, between the same parties or their
privies, the former adjudication of that fact, right or question
is binding on the parties or their privies in a second suit
irrespective of whether the causes of action are the same.
[45]
The ruling of the CA that the action of the private
respondents and their legal theory in their second complaint
were different from their causes of action and legal theory in
the first complaint is not correct. A different cause of action
is one that proceeds not only on a sufficiently different legal
theory, but also on a different factual footing as not to
require the trial of facts material to the former suit; that is,
an action that can be maintained even if all disputed factual
issues raised in the plaintiffs original complaint are
concluded in defendants favor.[46]
In this case, the private respondents second complaint
cannot be maintained without trying the facts material to
the first case, and the second case cannot be maintained if
all the disputed factual issues raised in the first complaint
are considered in favor of the bank.
The principle of res judicata applies when the
opportunity to raise an issue in the first complaint exists but
the plaintiff failed to do so. Indeed, if the pleading of a
different legal theory would have convinced the trial court to
decide a particular issue in the first action which, with the
use of diligence the plaintiffs could have raised therein but
failed to do so, they are barred by res judicata.[47] Nor do
legal theories operate to constitute a cause of action. New
legal theories do not amount to a new cause of action so as
to defeat the application of the principle of res judicata.[48]
Indeed, in Siegel v. Knott,[49] it was held that the
statement of a different form of liability is not a different
cause of action, provided it grows out of the same
transaction or act and seeks redress for the wrong. Two
actions are not necessarily for different causes of action
simply because the theory of the second would not have
been open under the pleadings in the first. A party cannot
preserve the right to bring a second action after the loss of
the first, merely by having circumscribed and limited
theories of recovery opened by the pleadings in the first.[50]
It bears stressing that a party cannot divide the grounds
for recovery.[51] A plaintiff is mandated to place in issue in his
pleading, all the issues existing when the suit began. A
lawsuit cannot be tried piecemeal.[52] The plaintiff is bound
to set forth in his first action every ground for relief which he
claims to exist and upon which he relied, and cannot be
permitted to rely upon them by piecemeal in successive
action to recover for the same wrong or injury. [53]
A party seeking to enforce a claim, legal or equitable,
must present to the court, either by the pleadings or proofs,
or both, on the grounds upon which to expect a judgment in
his favor. He is not at liberty to split up his demands, and
prosecute it by piecemeal or present only a portion of the
grounds upon which a special relief is sought and leave the
rest to the presentment in a second suit if the first fails.
There would be no end to litigation if such piecemeal
presentation is allowed.[54]
IN LIGHT OF ALL THE FOREGOING, the petition is
GRANTED. The Decision and Resolution of the Court of
Appeals and the assailed Order of the RTC are SET ASIDE.
The Regional Trial Court is ORDERED to dismiss the
complaint in Civil Case No. Q-01-44227.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-
Nazario, JJ., concur.
FIRST DIVISION
FAR EAST BANK AND TRUST GR No. 129130
COMPANY,
Petitioner,
- versus
COURT OF APPEALS, COURT OF
TAX APPEALS and COMMISSIONER OF INTERNAL REVENUE,
Respondents.
x
------------------------------------------------------------------------------------
---- x
 DECISION
AZCUNA, J.:
This is a Petition for Review on Certiorari assailing the
decision of the Court of Appeals (CA) dated May 7, 1997 in
CA-G.R. SP No. 41666.
The CA affirmed in toto the decision of the Court of
Tax Appeals (CTA) dated January 24, 1996 and its resolution
of July 31, 1996, dismissing petitioner Far East Bank and
Trust Companys claim for refund of excess creditable
withholding taxes in the aggregate amount of Seven
Hundred Fifty-Five Thousand Seven Hundred and Fifteen
Pesos (P755,715) allegedly paid and remitted to the Bureau
of Internal Revenue (BIR) sometime in 1990 and 1991.
The antecedent facts are as follows:
Petitioner is a domestic banking corporation duly
organized and existing under and by virtue of
Philippine laws. In the early part of 1992, the Cavite
Development Bank [CDB], also a domestic banking
corporation, was merged with Petitioner with the
latter as its surviving entity [under] the merger.
Petitioner being the surviving entity[, it] acquired all
[the] assets of CDB.
During the period from 1990 to 1991, CDB sold some
acquired assets in the course of which it allegedly
withheld the creditable tax from the sales proceeds
which amounted to P755,715.00.
In said years, CDB filed income tax returns which
reflected that CDB incurred negative taxable income
or losses for both years. Since there was no tax
against which to credit or offset the taxes withheld
by CDB, the result was that CDB, according to
petitioner, had excess creditable withholding tax.
Thus, petitioner, being the surviving entity of the
merger, filed this Petition for Review after its
administrative claim for refund was not acted upon.[1]
In denying petitioners claim, the CA held that the
evidence presented by petitioner consisting of (1)
confirmation receipts, payment orders, and official receipts
issued by the Central Bank and the BIR with CDB as the
payor; [2] (2) Income Tax Returns for 1990 and 1991 with
attached financial statements filed by petitioner with the
BIR;[3] and, (3) a list prepared by the Accounting Department
of petitioner purportedly showing the CDB schedule of
creditable withholding tax applied for refund for 1990 and
1991,[4] all failed to clearly establish that the taxes arising
from the sale of its acquired assets sometime in 1990 and
1991 were properly withheld and remitted to the BIR. The
CA likewise ruled that it was incumbent upon petitioner to
present BIR Form No. 1743.1 as required under Revenue
Regulation 6-85 to conclusively prove its right to the refund.
It held that petitioners failure to do so was fatal to its cause.
Hence, this Petition.
Petitioner anchors its arguments on the following
grounds:
1. THE DECISION OF MAY 7,1997 WHEREBY
RESPONDENT CA DISMISSED PETITIONERS APPEAL,
AND RESPONDENT CTAS DECISION DATED JANUARY
24, 1996 AND RESOLUTION OF JULY 31,1996, ARE
NOT BASED ON THE FACTS AND THE LAW.
2. PETITIONER HAS ADDUCED EVIDENCE A
QUO WHICH SUFFICIENTLY AND SUBSTANTIALLY
ESTABLISH[ES] THE FACT THAT THE CREDITABLE
WITHHOLDING TAX ON THE SALE OF ACQUIRED
ASSETS WAS WITHHELD AND THEN REMITTED TO
THE BUREAU OF INTERNAL REVENUE; AND,
3. THE DISMISSAL OF THE CLAIM FOR REFUND
BEFORE RESPONDENT CTA ARISES FROM AN UNDULY
STRICT APPLICATION OF THE REGULATIONS WHICH IS
NOT WARRANTED IN VIEW OF THE CLEAR PROOFS
ADDUCED BY PETITIONER WHICH ESTABLISH THE
BASIS FOR THE RELIEFS SOUGHT.[5]
Petitioner contends that the confirmation receipts
presented by it constitute competent and irrefutable proof of
the fact that taxes were withheld and remitted to the BIR.
[6]
It is admitted that the taxes reflected on the confirmation
receipts as well as on the payment orders and official
receipts issued by the BIR were withheld by CDB. Petitioner
maintains that these pertained to the proceeds of the sale of
its acquired assets in 1990 and 1991. According to
petitioner, CDB took the initiative of paying the withholding
tax accruing thereon notwithstanding the fact that it was the
recipient of the income, to ensure that the correct taxes
were remitted to the BIR. Petitioner further argues that the
list prepared by its Accounting Department identifying the
persons to whom the various sales were made and
indicating the amount of taxes withheld for each transaction
should have been given more weight by the court a quo as
this document, when taken with the tax withholding forms,
indubitably establishes the fact of withholding and the basis
for the claims for refund. [7] Considering, therefore, that
petitioner had adequately established by other evidence the
basis for the grant of the claim for tax refund, petitioner
asserts that its failure to submit BIR Form No. 1743.1 is not
fatal to its cause.
The crucial issue in this case turns on a question of
fact, that is, whether petitioner adduced sufficient evidence
to prove its entitlement to a refund.
The findings of fact of the CTA, a special court
exercising particular expertise on the subject of tax, are
generally regarded as final, binding and conclusive [8] upon
this Court, especially if these are substantially similar to the
findings of the CA which is normally the final arbiter of
questions of fact.[9] The findings shall not be reviewed nor
disturbed on appeal[10] unless a party can show that these
are not supported by evidence, [11] or when the judgment is
premised on a misapprehension of facts, or when the lower
courts failed to notice certain relevant facts which if
considered would justify a different conclusion.[12]
Petitioner has not sufficiently presented a case for
the application of an exception from the rule.
Firstly, the CA cannot be faulted for not lending
credence to petitioners contention that it withheld, for its
own account, the creditable withholding taxes on the sale
of its acquired assets. In our withholding tax system,
possession of the amount that is used to settle the tax
liability is acquired by the payor as the withholding agent of
the government.[13] For this reason, the Tax Code imposes,
among others, certain obligations upon the withholding
agent to monitor its compliance with this duty. These include
the filing of the quarterly withholding tax returns,[14] the
submission to the payee, in respect of his or its receipts
during the calendar quarter or year, of a written statement
showing the income or other payments made by the
withholding agent during such quarter or year and the
amount of the tax deducted and withheld therefrom, [15] and
the filing with the BIR of a reconciliation statement of
quarterly payments and a list of payees and income
payments.[16] Codal provisions on withholding tax are
mandatory and must be complied with by the withholding
agent. This is significant in that a taxpayer cannot be
compelled to answer for the non-performance by the
withholding agent of its legal duty to withhold unless there
is collusion or bad faith. In addition, the former could not be
deemed to have evaded the tax had the withholding agent
performed its duty. [17]
On the other hand, it is incumbent upon the payee to
reflect in his or its own return the income upon which any
creditable tax is required to be withheld at the source. Only
when there is an excess of the amount of tax so withheld
over the tax due on the payees return can a refund become
possible.
A taxpayer must thus do two things to be able to
successfully make a claim for the tax refund: (a) declare the
income payments it received as part of its gross income and
(b) establish the fact of withholding. [18] On this score, the
relevant revenue regulation provides as follows:
Section 10. Claims for tax credit or refund. -- Claims
for tax credit or refund of income tax deducted and
withheld on income payments shall be given due
course only when it is shown on the return that the
income payment received was declared as part of
the gross income and the fact of withholding is
established by a copy of the statement duly issued
by the payor to the payee (BIR Form No. 1743.1)
showing the amount paid and the amount of tax
withheld therefrom.[19]
As mentioned, petitioner relies heavily on the
confirmation receipts with the corresponding official receipts
and payment orders to support its case. Standing alone,
however, these documents only establish that CDB withheld
certain amounts in 1990 and 1991. It does not follow that
the payments reflected in the confirmation receipts relate to
the creditable withholding taxes arising from the sale of the
acquired properties. The claim that CDB had excess
creditable withholding taxes can only be upheld if it were
clearly and positively shown that the amounts on the
various confirmation receipts were the amounts withheld by
virtue of the sale of the acquired assets. On this point, the
CA correctly pronounced:
The confirmation receipts alone, by themselves, will
not suffice to prove that the taxes reflected in the
income tax returns are the same taxes withheld
from CDBs income payments from the sale of its
acquired assets. This is because a cursory
examination of the said Confirmation Receipts,
Payment Orders and Official Receipts will show that
what are reflected therein are merely the names of
the payors and the amount of tax. The nature of
the tax paid, or at the very least, the income
payments from which the taxes paid were withheld
are not reflected therein. If these are the only
entries that are found on these proferred
documents, We cannot begrudge the Respondent
Court from nurturing veritable doubts on the nature
and identity of the taxes withheld, when it
declared, in part, in its Decision (Annex A of the
Petition) that, It can not well be said that the
amounts paid and remitted to the BIR were for
CDBs account and not for the other possible payees
of withholding taxes which CDB may also be liable
to remit as a withholding agent x x x . [20]
Petitioner, apparently aware of the foregoing
deficiency, offered into evidence a CDB Schedule of
Creditable Withholding Tax for the period 1990 to
1991[21] prepared by petitioners representative to show that
the taxes CDB withheld did, indeed, pertain to the taxes
accruing on the sale of the acquired assets. The CA,
however, found the same to be self-serving and unverifiable
and therefore barren of evidentiary weight. [22] We accord this
finding on an issue of fact the highest respect and we will
not set it aside lightly.
It bears emphasis that questions on whether certain
items of evidence should be accorded probative value or
weight, or rejected as feeble or spurious, or whether the
proofs on one side or the other are clear and convincing and
adequate to establish a proposition in issue, are without
doubt questions of fact. This is true regardless of whether
the body of proofs presented by a party, weighed and
analyzed in relation to contrary evidence submitted by the
adverse party, may be said to be strong, clear and
convincing. Whether certain documents presented by one
side should be accorded full faith and credit in the face of
protests as to their spurious character by the other side;
whether inconsistencies in the body of proofs of a party are
of such gravity as to justify refusing to give said proofs
weightall these are issues of fact. Questions like these are
not reviewable by us. As a rule, we confine our review of
cases decided by the CA only to questions of law raised in
the petition and therein distinctly set forth. [23] We note that
without the CDB Schedule, no evidence links the
Confirmation Receipts, Payment Orders and Official Receipts
to the taxes allegedly withheld by CDB on the sale of the
acquired assets.
As to the annual income tax returns for 1990 and
1991 [24] presented by petitioner, we must stress that the
mere admission into the records of these returns does not
automatically make their contents or entries undisputed and
binding facts. Mere allegations by petitioner of the figures in
its returns are not a sufficient proof of the amount of its
refund entitlement. They do not even constitute
evidence adverse to respondent, against whom these are
being presented.[25]
Furthermore, we note that in the proceedings below,
respondent Commissioner of Internal Revenue (CIR) raised
the fact that there was a discrepancy in the excess
creditable withholding tax reflected in the returns with the
amounts sought to be refunded by petitioner. Whereas the
1990 and 1991 Income Tax Returns indicated that CDB had
excess creditable withholding tax in the amounts
of P535,310 and P357,511, respectively, the amounts
claimed by petitioner as indicated in the CDB Schedule
were P512,940.50 for 1990 and P242,774.50 for 1991.
[26]
The records are bereft of any explanation for such
discrepancy. This further undermines petitioners
contentions, and its reliance on the CDB Schedule.
Petitioner also asserts that the confusion or difficulty
in the implementation of Revenue Memorandum Circular 7-
90[27] was the reason why CDB took upon itself the task of
withholding the taxes arising from the sale, to ensure
accuracy. Assuming this were true, CDB should have,
nevertheless, accomplished the necessary returns to clearly
identify the nature of the payments made and file the same
with the BIR. Section 2 of the circular clearly provides that
the amount of withholding tax paid by a corporation to the
BIR during the quarter on sales or exchanges of property
and which are creditable against the corporations tax
liability are evidenced by Confirmation/Official Receipts and
covered by BIR Form Nos. 1743W and 1743-B. On the other
hand, Revenue Regulation 6-85 states that BIR Form No.
1743.1 establishes the fact of withholding. Since no
competent evidence was adduced by petitioner, the failure
to offer these returns as evidence of the amount of
petitioners entitlement during the trial phase of this case is
fatal to its cause. For its negligence, petitioner cannot be
allowed to seek refuge in a liberal application of the [r]ules.
[28]
The liberal interpretation and application of rules apply
only in proper cases of demonstrable merit and under
justifiable causes and circumstances.[29]
We must emphasize that tax refunds, like tax
exemptions, are construed strictly against the taxpayer and
liberally in favor of the taxing authority. [30] In the event,
petitioner has not met its burden of proof in establishing the
factual basis for its claim for refund and we find no reason to
disturb the ruling of the lower courts.
WHEREFORE, the petition is DENIED and the
Decision of the Court of Appeals dated May 7, 1997 in CA-
G.R. SP No. 41666 is AFFIRMED. No pronouncement as to
costs.
SO ORDERED.
FIRST DIVISION
 ROGELIO (ROGER) PANOTES (thru G.R. No. 154739
ARACELI BUMATAY, as successor-in-
interest),Petitioner,
- versus -
CITY TOWNHOUSE DEVELOPMENT
CORPORATION,
Respondent.
x --------------------------------------------------------------------------------------x Considering that PROSECOR did not appeal from the NHA
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Review on
Certiorari assailing the Decision[1] of the Court of Appeals
dated January 29, 2002 in CA-G.R. SP No. 52621 and its
Resolution[2] dated August 5, 2002 denying the motion for
reconsideration.
This case stemmed from a complaint filed with the National
Housing Authority (NHA) in April 1979 by Rogelio
(Roger) Panotes, petitioner, then president of the Provident
Village Homeowners Association, Inc., against Provident
Securities Corporation (PROSECOR), owner-developer of
the Provident Village in Marikina City. The
docketed as NHA Case No. 4175, alleges that PROSECOR
violated Sections 19, 20, 21, 38, and 39 of Presidential
Decree (P.D.) No. 957.[3] One of the violations complained of
was its failure to provide an open space in the said
subdivision.
During the proceedings before the NHA, an ocular inspection
showed that the subdivision has no open space. The NHA
found, however, that Block 40, with an area of 22,916
square meters, could be utilized as open space. Thus, in its
Resolution dated August 14, 1980, the NHA directed
PROSECOR to provide the Provident Village an open space
which is Block 40.
In a letter of the same date, then NHA Acting General
Manager Antonio A. Fernando ordered PROSECOR to provide
Block 40 of the subdivision as open space.
PROSECOR was served copies of the NHA Resolution and the
letter on August 22, 1980.
Resolution, it became final and executory.
When Panotes filed a motion for execution of the NHA
Resolution, it was found that the records of the case were
mysteriously missing. Hence, his motion was provisionally
dismissed without prejudice.
Meanwhile, PROSECOR sold to City Townhouse Development
Corporation (CTDC), respondent, several lots in the
subdivision. Among the lots sold were those comprising
Block 40. CTDC was unaware of the NHA Resolution ordering
PROSECOR to have Block 40 utilized as open space
of Provident Village.
Eventually, Panotes was succeeded by Araceli Bumatay as
president of the Provident Village Homeowners Association,
Inc. On July 17, 1990, she filed with the Housing and Land
complaint, Use Regulatory Board (HLURB) a complaint for revival of the
NHA Resolution dated August 14, 1980. Impleaded therein
as defendant was CTDC, whom she alleged as successor-in-
interest of PROSECOR.
In its answer, CTDC averred, among others, that
(1) Araceli Bumatay has no legal personality to file the
action for revival of judgment; (2) there is a pending
litigation between CTDC and PROSECOR involving Block 40;
and (3) other entities like the Bangko Sentral Ng Pilipinas
and Provident Savings Bank have existing liens over Block
40.
On October 15, 1991, the HLURB, through Housing and Land
Use Arbiter Charito M. Bunagan, rendered its Decision in
favor of Bumatay, reviving the NHA Resolution and declaring
Block 40 of the Provident Village as open space for the said
subdivision, thus:
WHEREFORE, premises considered, judgment
is hereby rendered declaring Block 40 (with
an area of 22,916 square meters) of the
Subdivision Plan Pcs-5683 of the Provident
Villages located at Marikina, Metro Manila as
the legally mandated open space for said
subdivision project; and the Register of
Deeds for Marikina is hereby directed to
cause the annotation of this fact on the
corresponding Torrens Title which describes
and covers said open space; said area to be
reserved and utilized exclusively in the
manner and for the purposes provided for
under P.D. N0. 957 and P.D. No. 1216.[4]
Furthermore, let a Cease and Desist Order
be, as it is hereby, issued against respondent
Provident Securities Corp. and City
Townhouse Development Corporation,
restraining said respondents, and all persons,
agents, or other associations or corporate
entities acting on their behalf, from asserting
or perpetrating any or further acts of
dominion or claim over said Block 40, Pcs-
5683, the open space allocated and reserved
for the Provident Villages in Marikina, Metro
Manila.
IT IS SO ORDERED.
On appeal to the HLURB Board of Commissioners,
Arbiter Bunagans Decision was affirmed with modification in
the sense that CTDC has the right to recover from
PROSECORwhat it has lost.
After its motion for reconsideration was denied, CTDC then
interposed an appeal to the Office of the President (OP).
On February 10, 1999, the OP rendered its Decision
affirming in toto the judgment of the HLURB Board of
Commissioners. CTDC filed a motion for reconsideration, but
it was denied in a Resolution dated April 14, 1999.
CTDC then filed with the Court of Appeals a petition for
review under Rule 43 of the 1997 Rules of Procedure, as
amended, docketed therein as CA-G.R. SP No. 52621.
In a Resolution[5] dated May 10, 1999, the Court of Appeals
dismissed CTDCs petition for its failure to attach thereto a
certification against forum shopping. The Court of Appeals
also found that the petition was not supported by certified
true copies of such material portions of the records and
other pertinent papers referred to in the petition.
CTDC filed a motion for reconsideration which was opposed
by Bumatay.
On June 10, 1999, CTDC submitted to the Court of Appeals a
certification of non-forum shopping as well as the pleadings
mentioned in its Resolution.
On July 27, 1999, the Court of Appeals issued a Resolution
granting CTDCs motion for reconsideration and reinstated its
petition.
On January 29, 2002, the appellate court rendered its
Decision reversing the Decision of the OP and dismissing the
complaint for revival of judgment, thus:
IN VIEW OF ALL THE FOREGOING, finding
merit in this petition for review, the assailed
Decision of the Office of the President dated
February 10, 1999, together with its
Resolution dated February 14, 1999 are
REVERSED and SET ASIDE, and a new one
 entered dismissing HLRB Case No. REM-
071790-4052 (NHA Case No. 4175; HLRB
Case No. REM-A-1089). Costs against the
respondent.
SO ORDERED.
The basic issue for our resolution is whether the NHA
Resolution dated August 14, 1980 may be enforced against
CTDC.
An action for revival of judgment is no more than a
procedural means of securing the execution of a previous
judgment which has become dormant after the passage of
five years without it being executed upon motion of the
prevailing party. It is not intended to re-open any issue
affecting the merits of the judgment debtors case nor the
propriety or correctness of the first judgment.[6]
Here, the original judgment or the NHA Resolution sought to
be revived was between Rogelio Panotes and PROSECOR,
not between petitioner Araceli Bumatay and respondent
CTDC.
In maintaining that CTDC is bound by the NHA Resolution,
petitioner claims that CTDC is the successor-in-interest of
PROSECOR and, therefore, assumed the obligations of the
latter to provide an open space for Provident Village.
CTDC purchased from PROSECOR Block 40 in the said
village, not as an owner-developer like PROSECOR, but as an
ordinary buyer of lots. Even after the sale, CTDC did not
become an owner-developer. The Deed of Sale executed by
CTDC, as buyer, and PROSECOR, as seller, shows that the
subject matter of the sale is the unsold lots comprising
Block 40 within the subdivision to CTDC. The contract does
not include the transfer of rights of PROSECOR as owner-
developer of the said subdivision. Clearly, there is no basis
to conclude that CTDC is the successor-in-interest of
PROSECOR.
It bears stressing that when CTDC bought Block 40, there
was no annotation on PROSECORs title showing that the
property is encumbered. In fact, the NHA Resolution was not
annotated thereon. CTDC is thus a buyer in good faith and
for value, and as such, may not be deprived of the
ownership of Block 40. Verily, the NHA Resolution may not
be enforced against CTDC.
Section 2 of P.D. No. 1216 provides:
Section 2. Section 31 of Presidential Decree
No. 957 is hereby amended to read as follows:
Section 31. Roads, Alleys, Sidewalks and
Open Spaces. The owner or developer of a
subdivision shall provide adequate roads,
alleys and sidewalks. For subdivision projects
of one (1) hectare or more, the owner shall
reserve thirty percent (30%) of the gross area
for open space.
Clearly, providing an open space within the
subdivision remains to be the obligation of PROSECOR, the
owner-developer and the real party-in-interest in the case
for revival of judgment. As aptly held by the Court of
Appeals:
Quintessentially, the real party-in-interest in the
revival of NHA Case No. 4175 is PROSECOR and not
CTDC. PROSECOR was the lone defendant or
respondent in that case against whom judgment was
rendered. To insist that CTDC is a successor-in-
interest of PROSECOR may have some truth if we
are talking about the ownership of the lots sold by
PROSECOR in favor of CTDC as a result of a civil
action between the two. But then, to hold CTDC as
the successor-in-interest of PROSECOR as the
developer of the subdivision, is far from realty. CTDC
is simply on the same footing as any lot buyer-
member of PVHIA. x x x.
Furthermore, strangers to a case, like CTDC, are not bound
by the judgment rendered by a court. It will not divest the Emerita Garon (Garon) filed an action for sum of money
rights of a party who has not and never been a party to a docketed as Civil Case No. 99-1051 against Project Movers
litigation. Execution of a judgment can be issued only Realty and Development Corporation (Project Movers) and
against a party to the action and not against one who did Stronghold Insurance Company, Inc. (Stronghold
not have his day in court.[7] Insurance). In an Order[3] dated 19 September 2000, the
Regional Trial Court of Makati City, Branch 56[4] (trial court)
WHEREFORE, we DENY the petition and AFFIRM the granted Garons motion for summary judgment. The trial
assailed Decision and Resolution of the Court of Appeals in court rendered judgment in favor of Garon, as follows:
CA-G.R. SP No. 52621. Costs against petitioner.
1. Defendant Project Movers Realty and
SO ORDERED. Development Corporation is hereby
directed to pay plaintiff as follows:

THIRD DIVISION On Promissory Note No. PMRDC 97-12-332:

(A) The sum of PESOS: Six Million Eighty Eight

STRONGHOLD INSURANCE G.R. No. 148090 Thousand Seven Hundred Eighty Three and 68/100
COMPANY, INC., (P6,088,783.68) under PMRDC-97-12-332;
Petitioner,
VS. (B) Interest thereon at 36% per annum computed
HONORABLE NEMESIO S. FELIX and from 19 December 1997 until fully paid;
EMERITA GARON,
Respondents. November 28, 2006 (C) A penalty of 3% per month computed from 03
November 1998 until full payment on all unpaid
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - amounts consisting of the principal and interest.
-----------
DECISION On Promissory Note No. PMRDC No. 97-12-
333:

CARPIO, J.: (A) The peso equivalent of the sum of DOLLARS: One
Hundred Eighty Nine Thousand Four Hundred
Eighteen and 75/100 (US$189,418.75) under PMRDC-
The Case 97-12-333;
Before the Court is a petition for review [1] assailing the 4
May 2001 Decision[2] of the Court of Appeals in CA-G.R. SP (B) Interest thereon at the stipulated rate of 17% per
No. 63334. annum computed from 31 December 1997;

The Antecedent Facts

(C) A penalty of 3% per month computed from 03
November 1998 until full payment on all unpaid
amounts consisting of the principal and interest.
2. Defendant Stronghold Insurance Company, Inc.
is hereby held jointly and solidarily liable to plaintiff
Mrs. Garon in the amount of PESOS: TWELVE MILLION
SEVEN HUNDRED
FIFTY FIVE THOUSAND ONE HUNDRED THIRTY
NINE AND EIGHTY FIVE CENTAVOS (P12,755,139.85).
3. Defendants Project Movers Realty
and Development Corporation and Stronghold
Insurance Company, Inc.
are also ordered to pay plaintiff Mrs. Garon jointly
and severally the sum of PESOS: TWO HUNDRED
THOUSAND as attorneys fees plus costs of suit.
All other claims and counter-claims of the parties are
hereby ordered dismissed.
SO ORDERED.[5]
On 6 October 2000, Garon filed a motion for execution
pending appeal. On 10 October 2000, Stronghold Insurance
moved for the reconsideration of the 19 September
2000 Order of the trial court.
In an Order[6] dated 23 January 2001, the trial court denied
Stronghold Insurances motion for reconsideration for lack of
merit.
In an Order[7] dated 8 February 2001, the trial court
granted Garons motion for execution pending appeal. The
trial court ordered Garon to post a bond of P20 million to
answer for any damage that Project Movers and Stronghold
Insurance may sustain by reason of the execution pending
appeal. On 14 February 2001, Branch Clerk of Court Richard
C. Jamora (Jamora) issued a writ of execution pending
appeal.
On 16 February 2001, Stronghold Insurance filed a notice of
appeal.
Stronghold Insurance also filed a petition for certiorari
before the Court of Appeals to assail the trial courts 8
February 2001 Order and the writ of execution pending
appeal. In its Resolution[8] of 23 February 2001, the Court of
Appeals enjoined the trial court, Jamora and Garon from
enforcing the 8 February 2001 Order. However, it turned out
that notices of garnishment had been served before the
Court of Appeals issued the temporary restraining order
(TRO). In its Order[9] dated 7 March 2001, the trial court
denied Stronghold Insurances Urgent Motion for the recall of
the notices of garnishment.
The Ruling of the Court of Appeals
In its 4 May 2001 Decision, the Court of Appeals dismissed
the petition of Stronghold Insurance and lifted the TRO it
issued.
The Court of Appeals sustained the trial court in issuing the
writ of execution pending appeal on the ground of illness
of Garons husband. Citing Articles 68[10] and 195[11] of the
Family Code, the Court of Appeals held that while it was
not Garon who was ill, Garon needed the money to support
her husbands medical expenses and to support her family.
Stronghold Insurance alleged that its liability is limited only
to P12,755,139.85 in accordance with its surety bond
with Project Movers, plus attorneys fees of P200,000 as
awarded by the trial court. However, the amount in the writ
of execution pending appeal and notices of garnishment
is P56 million. Nevertheless, the Court of Appeals ruled that
Stronghold Insurance failed to show that more
than P12,755,139.85 had been garnished.
Hence, the petition before this Court.
In its Resolution[12] dated 8 August 2001, this Court issued a
TRO to restrain and enjoin the enforcement of the 8
February 2001 Order and the writ of execution pending
appeal until further orders from this Court.
The Issue
The sole issue is whether there are good reasons to
justify execution pending appeal.
The Ruling of This Court
The petition has merit.
Requisites of Execution Pending Appeal
Execution pending appeal is governed by paragraph (a),
Section 2, Rule 39 of the 1997 Rules of Civil Procedure
(Rules) which provides:
SEC. 2. Discretionary execution. -
(a) Execution of a judgment or final order pending
appeal. - On motion of the prevailing party with
notice to the adverse party filed in the trial court
while it has jurisdiction over the case and is in
possession of either the original record or the record
on appeal, as the case may be, at the time of the
filing of such motion, said court may, in its discretion,
order execution of a judgment or final order even
before the expiration of the period to appeal.
After the trial court has lost jurisdiction, the motion
for execution pending appeal may be filed in the
appellate court.
Discretionary execution may only issue upon good
reasons to be stated in a special order after due
hearing.
Execution pending appeal is an exception to the general
rule. The Court explained the nature of execution pending
appeal as follows:
Execution pending appeal is an extraordinary
remedy, being more of the exception rather
than the rule. This rule is strictly construed
against the movant because courts look with
disfavor upon any attempt to execute a
judgment which has not acquired finality. Such
execution affects the rights of the parties
which are yet to be ascertained on appeal.[13]
The requisites for the grant of an execution of a judgment
pending appeal are the following:
(a) there must be a motion by the prevailing party with
notice to the adverse party;
(b) there must be good reasons for execution pending
appeal;
(c) the good reasons must be stated in the special order.[14]
As a discretionary execution, execution pending appeal is
permissible only when good reasons exist for immediately
executing the judgment before finality or pending appeal or
even before the expiration of the period to appeal. [15] Good
reasons, special, important, pressing reasons must exist to
justify execution pending appeal; otherwise, instead of an
instrument of solicitude and justice, it may well become a
tool of oppression and inequality. [16] Good reasons consist of
exceptional circumstances of such urgency as to outweigh
the injury or damage that the losing party may suffer should
the appealed judgment be reversed later.[17]
Existence of Good Grounds to Justify Execution
Pending Appeal
In this case, Garon anchors the motion for execution
pending appeal on the following grounds:
(a) any appeal which Project Movers and Stronghold
Insurance may take from the summary judgment would be
patently dilatory;
(b) the ill health of Garons spouse and the spouses urgent
need for the funds owed to them by Project Movers and
Stronghold Insurance constitute good reasons for execution
pending appeal; and
(c) Garon is ready and willing to post a bond to answer for
any damage Project Movers and Stronghold Insurance may
suffer should the trial courts decision be reversed on appeal.
[18]
In granting the motion for execution pending appeal, the
trial court ruled:
A perusal of [t]he records of the instant case will
sustain plaintiffs claim that defendants raised no
valid or meritorious defenses against the claims of
plaintiff. The Court notes with interest the fact that
defendants admitted the genuineness and due
execution of the Promissory Notes and Surety
Agreement sued upon in this case.
The instant case simply turns on the issues of (i)
whether or not there was a valid, due and
demandable obligation and (ii) whether or not the
obligation had been extinguished in the manner
provided for under our laws. The Answers of
defendants contained admissions that the obligation
was valid and subsisting and that the same was due
and unpaid. Founded as it is on Promissory Notes and
Surety Agreements, the authenticity and due
execution of which had been admitted, the Court is
convinced that plaintiff is entitled to a judgment in
her favor and that any appeal therefrom will
obviously be a ploy to delay the proceedings (See
Home Insurance Company vs. Court of Appeals, 184
SCRA 318).
The second ground relied upon by plaintiff is also
impressed with merit. In Ma-ao Sugar Central
vs. Canete, 19 SCRA 646, the Supreme Court held
that the movant was entitled to execution pending
appeal of an award of compensation, ruling that his ill
health and urgent need for the funds so awarded
were considered good reasons to justify execution
pending appeal (See also De Leon vs. Soriano, 95
Phil. 806).
It is established that plaintiffs spouse, Mr.
Robert Garon, suffers from coronary artery disease,
benign Prostatic Hyperplasia and hyperlipidemia. He
is undergoing continuous treatment for the foregoing
ailments and has been constrained to make serious
lifestyle changes, that he can no longer actively earn
a living. As shown in plaintiffs verified motion, she
has urgent need of the funds owed to her by
defendants in order to answer for her husbands
medical expenses and for the day-to-day support of
the family considering her husbands ill health. The
Court therefore finds and holds that there exists good
reasons warranting an execution pending appeal.[19]
The trial court ruled that an appeal from its 19 September
2000 Order is only a ploy to delay the proceedings of the
case. However, the authority to determine whether an
appeal is dilatory lies with the appellate court. [20] The trial
courts assumption that the appeal is dilatory prematurely
judges the merits of the main case on appeal.[21] Thus:
Well-settled is the rule that it is not for the trial court
to determine the merit of a decision it rendered as
this is the role of the appellate Court. Hence, it is not
within the competence of the trial court, in resolving
the motion for execution pending appeal, to rule that
the appeal is patently dilatory and to rely on the
same as the basis for finding good reason to grant
the motion.[22]
In a Decision[23] promulgated on 7 May 2004 in CA-G.R. CV
No. 69962 entitled Emerita Garon v. Project Movers Realty
and Development Corporation, et al., the Court of Appeals
sustained the trial court in rendering the summary judgment
in Civil Case No. 99-1051. However, the Court of Appeals
ruled that Stronghold Insurance could not be
held solidarily liable with Project Movers. The Court of
Appeals ruled that the surety bond between Project Movers
and Stronghold Insurance expired on 7 November 1998
before the maturity of Project Movers loans on 17 December
1998 and 31 December 1998, respectively. Hence, when the
loans matured, the liability of Stronghold Insurance had long
ceased. The Court of Appeals affirmed the trial courts 19
September 2000 Order with modification by ruling that
Stronghold Insurance is not liable to Garon.
The 7 May 2004 Decision of the Court of Appeals is not yet
final. It is the subject of a petition for review filed
by Garon before this Court. The case, docketed as G.R. No.
166058, is still pending with this Court. While this Court may
either affirm or reverse the 7 May 2004 Decision of the
Court of Appeals, the fact that the Court of Appeals absolved
Stronghold Insurance from liability to Garon shows that the
appeal from the 19 September 2000 Order is not dilatory on
the part of Stronghold Insurance.
We agree with Stronghold Insurance that Garon failed to
present good reasons to justify execution pending
appeal. The situations in the cases cited by the trial court
are not similar to this case. In Ma-Ao Sugar Central Co., Inc.
v. Caete,[24] Caete filed an action for compensation for his
illness. The Workmens Compensation Commission found the
illness compensable. Considering Caetes physical condition
and the Courts finding that he was in constant danger of
death, the Court allowed execution pending appeal. In De
Leon, et al. v. Soriano, et al.,[25] De Leon, et al. defaulted on
an agreement that was peculiarly personal to Asuncion. The
agreement was valid only during Asuncions lifetime.The
Court considered that Sorianos health was delicate and she
was 75 years old at that time. Hence, execution pending
appeal was justified. In this case, it was not Garon, but her
husband, who was ill.
The posting of a bond, standing alone and absent the good
reasons required under Section 2, Rule 39 of the Rules, is
not enough to allow execution pending appeal. The mere
filing of a bond by a successful party is not a good reason to
justify execution pending appeal as a combination of
circumstances is the dominant consideration which impels
the grant of immediate execution.[26] The bond is only an
additional factor for the protection of the defendants
creditor.[27]
The exercise of the power to grant or deny a motion for
execution pending appeal is addressed to the sound
discretion of the trial court.[28] However, the existence of
good reasons is indispensable to the grant of execution
pending appeal.[29] Here, Garon failed to advance good
reasons that would justify the execution pending appeal.
Execution Pending Appeal against Stronghold
Insurance Exceeds its Liability under the Trial Courts
Order
The dispositive portion of the trial courts 19 September
2000 Order states:
WHEREFORE, premises considered[,] this Court
hereby renders judgment in favor of the plaintiff
Mrs. Emerita I. Garon as follows:
2. Defendant Stronghold Insurance Company, Inc. is
hereby held jointly and solidarily liable to plaintiff
Mrs. Garon in the amount of PESOS: TWELVE MILLION
SEVEN HUNDRED FIFTY FIVE THOUSAND ONE
HUNDRED THIRTY NINE AND EIGHTY FIVE CENTAVOS
(P12,755,139.85).
3. Defendants Project Movers Realty and SO ORDERED.
Development Corporation and Stronghold Insurance
Company, Inc. are also ordered to pay plaintiff
Mrs. Garon jointly and severally the sum of Republic of the Philippines
PESOS: TWO HUNDRED THOUSAND as attorneys fees SUPREME COURT
plus costs of suit. Manila

The writ of execution pending appeal issued against Project

SECOND DIVISION
Movers and Stronghold Insurance is for P56 million.
[31]
However, the Court of Appeals ruled that Stronghold
Insurance failed to show that more than P12,755,139.85 had G.R. No. 196049 June 26, 2013
been garnished. The ruling of the Court of Appeals unduly
burdens Stronghold Insurance because the amount MINORU FUJIKI, PETITIONER,
garnished could exceed its liability. It gives the sheriff the vs.
discretion to garnish more than P12,755,139.85 from the
MARIA PAZ GALELA MARINAY, RESPONDENTS.
accounts of Stronghold Insurance. The amount for
garnishment is no longer ministerial on the part of the
sheriff. This is not allowed. Thus: DECISION

Leaving to the Sheriff, as held by the Court of CARPIO, J.:

Appeals, the determination of the exact amount due
under the Writ would be tantamount to vesting such
officer with judicial powers. He would have to receive
evidence to determine the exact amount owing. In
his hands would be placed a broad discretion that
can only lead to delay and open the door to possible
abuse. The orderly administration of justice requires
that the amount on execution be determined
judicially and the duties of the Sheriff confined to
purely ministerial ones.[32]
WHEREFORE, we SET ASIDE the 4 May 2001 Decision of
the Court of Appeals in CA-G.R. SP No. 63334. We also SET
ASIDE the 8 February 2001 Order of the Regional Trial Court
of Makati City, Branch 56 and the writ of execution pending
appeal issued on 14 February 2001. We make permanent
the temporary restraining order we issued on 8 August
2001.
The Case
This is a direct recourse to this Court from the Regional Trial
Court (RTC), Branch 107, Quezon City, through a petition for
review on certiorari under Rule 45 of the Rules of Court on a
pure question of law. The petition assails the Order1 dated
31 January 2011 of the RTC in Civil Case No. Q-11-68582 and
its Resolution dated 2 March 2011 denying petitioners
Motion for Reconsideration. The RTC dismissed the petition
for "Judicial Recognition of Foreign Judgment (or Decree of
Absolute Nullity of Marriage)" based on improper venue and
the lack of personality of petitioner, Minoru Fujiki, to file the
petition.
The Facts
Petitioner Minoru Fujiki (Fujiki) is a Japanese national who
married respondent Maria Paz Galela Marinay (Marinay) in
the Philippines2 on 23 January 2004. The marriage did not sit
well with petitioners parents. Thus, Fujiki could not bring his
wife to Japan where he resides. Eventually, they lost contact
with each other.
In 2008, Marinay met another Japanese, Shinichi Maekara
(Maekara). Without the first marriage being dissolved,
Marinay and Maekara were married on 15 May 2008 in
Quezon City, Philippines. Maekara brought Marinay to Japan.
However, Marinay allegedly suffered physical abuse from
Maekara. She left Maekara and started to contact Fujiki.3
Fujiki and Marinay met in Japan and they were able to
reestablish their relationship. In 2010, Fujiki helped Marinay
obtain a judgment from a family court in Japan which
declared the marriage between Marinay and Maekara void
on the ground of bigamy.4 On 14 January 2011, Fujiki filed a
petition in the RTC entitled: "Judicial Recognition of Foreign
Judgment (or Decree of Absolute Nullity of Marriage)." Fujiki
prayed that (1) the Japanese Family Court judgment be
recognized; (2) that the bigamous marriage between
Marinay and Maekara be declared void ab initio under
Articles 35(4) and 41 of the Family Code of the
Philippines;5 and (3) for the RTC to direct the Local Civil
Registrar of Quezon City to annotate the Japanese Family
Court judgment on the Certificate of Marriage between
Marinay and Maekara and to endorse such annotation to the
Office of the Administrator and Civil Registrar General in the
National Statistics Office (NSO).6
The Ruling of the Regional Trial Court
A few days after the filing of the petition, the RTC
immediately issued an Order dismissing the petition and
withdrawing the case from its active civil docket.7 The RTC
cited the following provisions of the Rule on Declaration of
Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages (A.M. No. 02-11-10-SC):
Sec. 2. Petition for declaration of absolute nullity of void
marriages.
(a) Who may file. A petition for declaration of absolute
nullity of void marriage may be filed solely by the husband
or the wife.
Sec. 4. Venue. The petition shall be filed in the Family
Court of the province or city where the petitioner or the
respondent has been residing for at least six months prior to
the date of filing, or in the case of a non-resident
respondent, where he may be found in the Philippines, at
the election of the petitioner. x x x
The RTC ruled, without further explanation, that the petition
was in "gross violation" of the above provisions. The trial
court based its dismissal on Section 5(4) of A.M. No. 02-11-
10-SC which provides that "[f]ailure to comply with any of
the preceding requirements may be a ground for immediate
dismissal of the petition."8 Apparently, the RTC took the view
that only "the husband or the wife," in this case either
Maekara or Marinay, can file the petition to declare their
marriage void, and not Fujiki.
Fujiki moved that the Order be reconsidered. He argued that
A.M. No. 02-11-10-SC contemplated ordinary civil actions for
declaration of nullity and annulment of marriage. Thus, A.M.
No. 02-11-10-SC does not apply. A petition for recognition of
foreign judgment is a special proceeding, which "seeks to
establish a status, a right or a particular fact," 9 and not a
civil action which is "for the enforcement or protection of a
right, or the prevention or redress of a wrong." 10 In other
words, the petition in the RTC sought to establish (1) the
status and concomitant rights of Fujiki and Marinay as
husband and wife and (2) the fact of the rendition of the
Japanese Family Court judgment declaring the marriage
between Marinay and Maekara as void on the ground of
bigamy. The petitioner contended that the Japanese
judgment was consistent with Article 35(4) of the Family
Code of the Philippines11on bigamy and was therefore
entitled to recognition by Philippine courts.12
In any case, it was also Fujikis view that A.M. No. 02-11-10-
SC applied only to void marriages under Article 36 of the
Family Code on the ground of psychological
incapacity.13 Thus, Section 2(a) of A.M. No. 02-11-10-SC
provides that "a petition for declaration of absolute nullity of
void marriages may be filed solely by the husband or the
wife." To apply Section 2(a) in bigamy would be absurd
because only the guilty parties would be permitted to sue. In
the words of Fujiki, "[i]t is not, of course, difficult to realize
that the party interested in having a bigamous marriage
declared a nullity would be the husband in the prior, pre-
existing marriage."14 Fujiki had material interest and
therefore the personality to nullify a bigamous marriage.
Fujiki argued that Rule 108 (Cancellation or Correction of
Entries in the Civil Registry) of the Rules of Court is
applicable. Rule 108 is the "procedural implementation" of
the Civil Register Law (Act No. 3753)15 in relation to Article
413 of the Civil Code.16 The Civil Register Law imposes a
duty on the "successful petitioner for divorce or annulment
of marriage to send a copy of the final decree of the court to
the local registrar of the municipality where the dissolved or
annulled marriage was solemnized."17 Section 2 of Rule 108
provides that entries in the civil registry relating to
"marriages," "judgments of annulments of marriage" and
"judgments declaring marriages void from the beginning"
are subject to cancellation or correction.18 The petition in the
RTC sought (among others) to annotate the judgment of the
Japanese Family Court on the certificate of marriage
between Marinay and Maekara.
Fujikis motion for reconsideration in the RTC also asserted
that the trial court "gravely erred" when, on its own, it
dismissed the petition based on improper venue. Fujiki
stated that the RTC may be confusing the concept of venue
with the concept of jurisdiction, because it is lack of
jurisdiction which allows a court to dismiss a case on its
own. Fujiki cited Dacoycoy v. Intermediate Appellate
Court19 which held that the "trial court cannot pre-empt the
defendants prerogative to object to the improper laying of
the venue by motu proprio dismissing the case."20Moreover,
petitioner alleged that the trial court should not have
"immediately dismissed" the petition under Section 5 of A.M.
No. 02-11-10-SC because he substantially complied with the
provision.
On 2 March 2011, the RTC resolved to deny petitioners
motion for reconsideration. In its Resolution, the RTC stated
that A.M. No. 02-11-10-SC applies because the petitioner, in
effect, prays for a decree of absolute nullity of
marriage.21 The trial court reiterated its two grounds for
dismissal, i.e. lack of personality to sue and improper venue
under Sections 2(a) and 4 of A.M. No. 02-11-10-SC. The RTC
considered Fujiki as a "third person"22 in the proceeding
because he "is not the husband in the decree of divorce
issued by the Japanese Family Court, which he now seeks to
be judicially recognized, x x x."23 On the other hand, the RTC
did not explain its ground of impropriety of venue. It only
said that "[a]lthough the Court cited Sec. 4 (Venue) x x x as
a ground for dismissal of this case[,] it should be taken
together with the other ground cited by the Court x x x
which is Sec. 2(a) x x x."24
The RTC further justified its motu proprio dismissal of the
petition based on Braza v. The City Civil Registrar of
Himamaylan City, Negros Occidental.25 The Court in Braza
ruled that "[i]n a special proceeding for correction of entry
under Rule 108 (Cancellation or Correction of Entries in the
Original Registry), the trial court has no jurisdiction to nullify
marriages x x x."26 Braza emphasized that the "validity of
marriages as well as legitimacy and filiation can be
questioned only in a direct action seasonably filed by the
proper party, and not through a collateral attack such as [a]
petition [for correction of entry] x x x."27
The RTC considered the petition as a collateral attack on the
validity of marriage between Marinay and Maekara. The trial
court held that this is a "jurisdictional ground" to dismiss the
petition.28 Moreover, the verification and certification against
forum shopping of the petition was not authenticated as
required under Section 529 of A.M. No. 02-11-10-SC. Hence,
this also warranted the "immediate dismissal" of the petition
under the same provision.
The Manifestation and Motion of the Office of the
Solicitor General and the Letters of Marinay and
Maekara
On 30 May 2011, the Court required respondents to file their
comment on the petition for review.30 The public
respondents, the Local Civil Registrar of Quezon City and the
Administrator and Civil Registrar General of the NSO,
participated through the Office of the Solicitor General.
Instead of a comment, the Solicitor General filed a
Manifestation and Motion.31
The Solicitor General agreed with the petition. He prayed
that the RTCs "pronouncement that the petitioner failed to
comply with x x x A.M. No. 02-11-10-SC x x x be set aside"
and that the case be reinstated in the trial court for further
proceedings.32 The Solicitor General argued that Fujiki, as
the spouse of the first marriage, is an injured party who can
sue to declare the bigamous marriage between Marinay and
Maekara void. The Solicitor General cited Juliano-Llave v.
Republic33 which held that Section 2(a) of A.M. No. 02-11-10-
SC does not apply in cases of bigamy. In Juliano-Llave, this
Court explained:
[t]he subsequent spouse may only be expected to take
action if he or she had only discovered during the connubial
period that the marriage was bigamous, and especially if the
conjugal bliss had already vanished. Should parties in a
subsequent marriage benefit from the bigamous marriage, it
would not be expected that they would file an action to
declare the marriage void and thus, in such circumstance,
the "injured spouse" who should be given a legal remedy is
the one in a subsisting previous marriage. The latter is
clearly the aggrieved party as the bigamous marriage not
only threatens the financial and the property ownership
aspect of the prior marriage but most of all, it causes an
emotional burden to the prior spouse. The subsequent
marriage will always be a reminder of the infidelity of the
spouse and the disregard of the prior marriage which
sanctity is protected by the Constitution.34
The Solicitor General contended that the petition to
recognize the Japanese Family Court judgment may be made
in a Rule 108 proceeding.35 In Corpuz v. Santo Tomas,36 this
Court held that "[t]he recognition of the foreign divorce
decree may be made in a Rule 108 proceeding itself, as the
object of special proceedings (such as that in Rule 108 of
the Rules of Court) is precisely to establish the status or
right of a party or a particular
fact."37 While Corpuz concerned a foreign divorce decree, in
the present case the Japanese Family Court judgment also
affected the civil status of the parties, especially Marinay,
who is a Filipino citizen.
The Solicitor General asserted that Rule 108 of the Rules of
Court is the procedure to record "[a]cts, events and judicial
decrees concerning the civil status of persons" in the civil
registry as required by Article 407 of the Civil Code. In other
words, "[t]he law requires the entry in the civil registry of
judicial decrees that produce legal consequences upon a
persons legal capacity and status x x x."38 The Japanese
Family Court judgment directly bears on the civil status of a
Filipino citizen and should therefore be proven as a fact in a
Rule 108 proceeding.
Moreover, the Solicitor General argued that there is no
jurisdictional infirmity in assailing a void marriage under
Rule 108, citing De Castro v. De Castro39 and Nial v.
Bayadog40 which declared that "[t]he validity of a void
marriage may be collaterally attacked."41
Marinay and Maekara individually sent letters to the Court to
comply with the directive for them to comment on the
petition.42 Maekara wrote that Marinay concealed from him
the fact that she was previously married to Fujiki.43Maekara
also denied that he inflicted any form of violence on
Marinay.44 On the other hand, Marinay wrote that she had no
reason to oppose the petition.45 She would like to maintain
her silence for fear that anything she say might cause
misunderstanding between her and Fujiki.46
The Issues
Petitioner raises the following legal issues:
(1) Whether the Rule on Declaration of Absolute Nullity of
Void Marriages and Annulment of Voidable Marriages (A.M.
No. 02-11-10-SC) is applicable.
(2) Whether a husband or wife of a prior marriage can file a
petition to recognize a foreign judgment nullifying the
subsequent marriage between his or her spouse and a
foreign citizen on the ground of bigamy.
(3) Whether the Regional Trial Court can recognize the
foreign judgment in a proceeding for cancellation or
correction of entries in the Civil Registry under Rule 108 of
the Rules of Court.
The Ruling of the Court
We grant the petition.
The Rule on Declaration of Absolute Nullity of Void Marriages
and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC)
does not apply in a petition to recognize a foreign judgment
relating to the status of a marriage where one of the parties
is a citizen of a foreign country. Moreover, in Juliano-Llave v.
Republic,47 this Court held that the rule in A.M. No. 02-11-10-
SC that only the husband or wife can file a declaration of
nullity or annulment of marriage "does not apply if the
reason behind the petition is bigamy."48
I.
For Philippine courts to recognize a foreign judgment
relating to the status of a marriage where one of the parties
is a citizen of a foreign country, the petitioner only needs to
prove the foreign judgment as a fact under the Rules of
Court. To be more specific, a copy of the foreign judgment
may be admitted in evidence and proven as a fact under
Rule 132, Sections 24 and 25, in relation to Rule 39, Section
48(b) of the Rules of Court.49 Petitioner may prove the
Japanese Family Court judgment through (1) an official
publication or (2) a certification or copy attested by the
officer who has custody of the judgment. If the office which
has custody is in a foreign country such as Japan, the
certification may be made by the proper diplomatic or
consular officer of the Philippine foreign service in Japan and
authenticated by the seal of office.50
To hold that A.M. No. 02-11-10-SC applies to a petition for
recognition of foreign judgment would mean that the trial
court and the parties should follow its provisions, including
the form and contents of the petition,51 the service of
summons,52 the investigation of the public prosecutor, 53 the
setting of pre-trial,54 the trial55 and the judgment of the trial
court.56 This is absurd because it will litigate the case anew.
It will defeat the purpose of recognizing foreign judgments,
which is "to limit repetitive litigation on claims and
issues."57 The interpretation of the RTC is tantamount to
relitigating the case on the merits. In Mijares v.
Raada,58 this Court explained that "[i]f 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."59
A foreign judgment relating to the status of a marriage
affects the civil status, condition and legal capacity of its
parties. However, the effect of a foreign judgment is not
automatic. To extend the effect of a foreign judgment in the
Philippines, Philippine courts must determine if the foreign
judgment is consistent with domestic public policy and other
mandatory laws.60 Article 15 of the Civil Code provides that
"[l]aws relating to family rights and duties, or to the status,
condition and legal capacity of persons are binding upon
citizens of the Philippines, even though living abroad." This
is the rule of lex nationalii in private international law. Thus,
the Philippine State may require, for effectivity in the
Philippines, recognition by Philippine courts of a foreign
judgment affecting its citizen, over whom it exercises
personal jurisdiction relating to the status, condition and
legal capacity of such citizen.
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 jurisdiction of another state. Thus,
Philippine courts can only recognize the foreign judgment as
a fact according to the rules of evidence.
Section 48(b), Rule 39 of the Rules of Court provides that a
foreign judgment or final order against a person creates a
"presumptive evidence of a right as between the parties and
their successors in interest by a subsequent title." Moreover,
Section 48 of the Rules of Court states that "the judgment or
final order may be repelled by evidence of a want of
jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law or fact." Thus, Philippine courts exercise
limited review on foreign judgments. Courts are not allowed
to delve into the merits of a foreign judgment. Once a
foreign judgment is admitted and proven in a Philippine
court, it can only be repelled on grounds external to its
merits, i.e. , "want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact." The
rule on limited review embodies the policy of efficiency and
the protection of party expectations,61 as well as respecting
the jurisdiction of other states.62
Since 1922 in Adong v. Cheong Seng Gee,63 Philippine courts
have recognized foreign divorce decrees between a Filipino
and a foreign citizen if they are successfully proven under
the rules of evidence.64 Divorce involves the dissolution of a
marriage, but the recognition of a foreign divorce decree
does not involve the extended procedure under A.M. No. 02-
11-10-SC or the rules of ordinary trial. While the Philippines
does not have a divorce law, Philippine courts may,
however, recognize a foreign divorce decree under the
second paragraph of Article 26 of the Family Code, to
capacitate a Filipino citizen to remarry when his or her
foreign spouse obtained a divorce decree abroad.65
There is therefore no reason to disallow Fujiki to simply
prove as a fact the Japanese Family Court judgment
nullifying the marriage between Marinay and Maekara on
the ground of bigamy. While the Philippines has no divorce
law, the Japanese Family Court judgment is fully consistent
with Philippine public policy, as bigamous marriages are
declared void from the beginning under Article 35(4) of the
Family Code. Bigamy is a crime under Article 349 of the
Revised Penal Code. Thus, Fujiki can prove the existence of
the Japanese Family Court judgment in accordance with Rule
132, Sections 24 and 25, in relation to Rule 39, Section 48(b)
of the Rules of Court.
II.
Since the recognition of a foreign judgment only requires
proof of fact of the judgment, it may be made in a special
proceeding for cancellation or correction of entries in the
civil registry under Rule 108 of the Rules of Court. Rule 1,
Section 3 of the Rules of Court provides that "[a] special
proceeding is a remedy by which a party seeks to establish
a status, a right, or a particular fact." Rule 108 creates a
remedy to rectify facts of a persons life which are recorded
by the State pursuant to the Civil Register Law or Act No.
3753. These are facts of public consequence such as birth,
death or marriage,66 which the State has an interest in
recording. As noted by the Solicitor General, in Corpuz v.
Sto. Tomas this Court declared that "[t]he recognition of the
foreign divorce decree may be made in a Rule 108
proceeding itself, as the object of special proceedings (such
as that in Rule 108 of the Rules of Court) is precisely to
establish the status or right of a party or a particular fact."67
Rule 108, Section 1 of the Rules of Court states:
Sec. 1. Who may file petition. Any person interested in
any act, event, order or decree concerning the civil
status of persons which has been recorded in the civil
register, may file a verified petition for the cancellation or
correction of any entry relating thereto, with the Regional
Trial Court of the province where the corresponding civil
registry is located. (Emphasis supplied)
Fujiki has the personality to file a petition to recognize the
Japanese Family Court judgment nullifying the marriage
between Marinay and Maekara on the ground of bigamy
because the judgment concerns his civil status as married to
Marinay. For the same reason he has the personality to file a
petition under Rule 108 to cancel the entry of marriage
between Marinay and Maekara in the civil registry on the
basis of the decree of the Japanese Family Court.
There is no doubt that the prior spouse has a personal and
material interest in maintaining the integrity of the marriage
he contracted and the property relations arising from it.
There is also no doubt that he is interested in the
cancellation of an entry of a bigamous marriage in the civil
registry, which compromises the public record of his
marriage. The interest derives from the substantive right of
the spouse not only to preserve (or dissolve, in limited
instances68) his most intimate human relation, but also to
protect his property interests that arise by operation of law
the moment he contracts marriage.69 These property
interests in marriage include the right to be supported "in
keeping with the financial capacity of the family"70 and
preserving the property regime of the marriage.71
Property rights are already substantive rights protected by
the Constitution,72 but a spouses right in a marriage
extends further to relational rights recognized under Title III
("Rights and Obligations between Husband and Wife") of the
Family Code.73 A.M. No. 02-11-10-SC cannot "diminish,
increase, or modify" the substantive right of the spouse to
maintain the integrity of his marriage.74 In any case, Section
2(a) of A.M. No. 02-11-10-SC preserves this substantive right
by limiting the personality to sue to the husband or the wife
of the union recognized by law.
Section 2(a) of A.M. No. 02-11-10-SC does not preclude a
spouse of a subsisting marriage to question the validity of a
subsequent marriage on the ground of bigamy. On the
contrary, when Section 2(a) states that "[a] petition for
declaration of absolute nullity of void marriage may be
filed solely by the husband or the wife"75it refers to
the husband or the wife of the subsisting marriage. Under
Article 35(4) of the Family Code, bigamous marriages are
void from the beginning. Thus, the parties in a bigamous
marriage are neither the husband nor the wife under the
law. The husband or the wife of the prior subsisting marriage
is the one who has the personality to file a petition for
declaration of absolute nullity of void marriage under
Section 2(a) of A.M. No. 02-11-10-SC.
Article 35(4) of the Family Code, which declares bigamous
marriages void from the beginning, is the civil aspect of
Article 349 of the Revised Penal Code,76 which penalizes
bigamy. Bigamy is a public crime. Thus, anyone can initiate
prosecution for bigamy because any citizen has an interest
in the prosecution and prevention of crimes.77If anyone can
file a criminal action which leads to the declaration of nullity
of a bigamous marriage,78 there is more reason to confer
personality to sue on the husband or the wife of a subsisting
marriage. The prior spouse does not only share in the public
interest of prosecuting and preventing crimes, he is also
personally interested in the purely civil aspect of protecting
his marriage.
When the right of the spouse to protect his marriage is
violated, the spouse is clearly an injured party and is
therefore interested in the judgment of the suit.79 Juliano-
Llave ruled that the prior spouse "is clearly the aggrieved
party as the bigamous marriage not only threatens the
financial and the property ownership aspect of the prior
marriage but most of all, it causes an emotional burden to
the prior spouse."80 Being a real party in interest, the prior
spouse is entitled to sue in order to declare a bigamous
marriage void. For this purpose, he can petition a court to
recognize a foreign judgment nullifying the bigamous
marriage and judicially declare as a fact that such judgment
is effective in the Philippines. Once established, there should
be no more impediment to cancel the entry of the bigamous
marriage in the civil registry.
III.
In Braza v. The City Civil Registrar of Himamaylan City,
Negros Occidental, this Court held that a "trial court has no
jurisdiction to nullify marriages" in a special proceeding for
cancellation or correction of entry under Rule 108 of the
Rules of Court.81 Thus, the "validity of marriage[] x x x can
be questioned only in a direct action" to nullify the
marriage.82 The RTC relied on Braza in dismissing the
petition for recognition of foreign judgment as a collateral
attack on the marriage between Marinay and Maekara.
Braza is not applicable because Braza does not involve a
recognition of a foreign judgment nullifying a bigamous
marriage where one of the parties is a citizen of the foreign
country.
To be sure, a petition for correction or cancellation of an
entry in the civil registry cannot substitute for an action to
invalidate a marriage. A direct action is necessary to
prevent circumvention of the substantive and procedural
safeguards of marriage under the Family Code, A.M. No. 02-
11-10-SC and other related laws. Among these safeguards
are the requirement of proving the limited grounds for the
dissolution of marriage,83 support pendente lite of the
spouses and children,84 the liquidation, partition and
distribution of the properties of the spouses,85 and the
investigation of the public prosecutor to determine
collusion.86 A direct action for declaration of nullity or
annulment of marriage is also necessary to prevent
circumvention of the jurisdiction of the Family Courts under
the Family Courts Act of 1997 (Republic Act No. 8369), as a
petition for cancellation or correction of entries in the civil
registry may be filed in the Regional Trial Court "where the
corresponding civil registry is located."87 In other words, a
Filipino citizen cannot dissolve his marriage by the mere
expedient of changing his entry of marriage in the civil
registry.
However, this does not apply in a petition for correction or
cancellation of a civil registry entry based on the recognition
of a foreign judgment annulling a marriage where one of the
parties is a citizen of the foreign country. There is neither
circumvention of the substantive and procedural safeguards
of marriage under Philippine law, nor of the jurisdiction of
Family Courts under R.A. No. 8369. A recognition of a foreign
judgment is not an action to nullify a marriage. It is an
action for Philippine courts to recognize the effectivity of a
foreign judgment, which presupposes a case which was
already tried and decided under foreign law. The
procedure in A.M. No. 02-11-10-SC does not apply in a
petition to recognize a foreign judgment annulling a
bigamous marriage where one of the parties is a citizen of
the foreign country. Neither can R.A. No. 8369 define the
jurisdiction of the foreign court.
Article 26 of the Family Code confers jurisdiction on
Philippine courts to extend the effect of a foreign divorce
decree to a Filipino spouse without undergoing trial to
determine the validity of the dissolution of the marriage.
The second paragraph of Article 26 of the Family Code
provides that "[w]here a marriage between a Filipino citizen
and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse
capacitating him or her to remarry, the Filipino spouse shall
have capacity to remarry under Philippine law." In Republic
v. Orbecido,88 this Court recognized the legislative intent of
the second paragraph of Article 26 which is "to avoid the
absurd situation where the Filipino spouse remains married
to the alien spouse who, after obtaining a divorce, is no
longer married to the Filipino spouse"89 under the laws of his
or her country. The second paragraph of Article 26 of the
Family Code only authorizes Philippine courts to adopt the
effects of a foreign divorce decree precisely because the
Philippines does not allow divorce. Philippine courts cannot
try the case on the merits because it is tantamount to trying
a case for divorce.
The second paragraph of Article 26 is only a corrective
measure to address the anomaly that results from a
marriage between a Filipino, whose laws do not allow
divorce, and a foreign citizen, whose laws allow divorce. The
anomaly consists in the Filipino spouse being tied to the
marriage while the foreign spouse is free to marry under the
laws of his or her country. The correction is made by
extending in the Philippines the effect of the foreign divorce
decree, which is already effective in the country where it
was rendered. The second paragraph of Article 26 of the
Family Code is based on this Courts decision in Van Dorn v.
Romillo90 which declared that the Filipino spouse "should not
be discriminated against in her own country if the ends of
justice are to be served."91
The principle in Article 26 of the Family Code applies in a
marriage between a Filipino and a foreign citizen who
obtains a foreign judgment nullifying the marriage on the
ground of bigamy. The Filipino spouse may file a petition
abroad to declare the marriage void on the ground of
bigamy. The principle in the second paragraph of Article 26
of the Family Code applies because the foreign spouse, after
the foreign judgment nullifying the marriage, is capacitated
to remarry under the laws of his or her country. If the foreign
judgment is not recognized in the Philippines, the Filipino
spouse will be discriminatedthe foreign spouse can
remarry while the Filipino spouse cannot remarry.
Under the second paragraph of Article 26 of the Family
Code, Philippine courts are empowered to correct a situation
where the Filipino spouse is still tied to the marriage while
the foreign spouse is free to marry. Moreover,
notwithstanding Article 26 of the Family Code, Philippine
courts already have jurisdiction to extend the effect of a
foreign judgment in the Philippines to the extent that the
foreign judgment does not contravene domestic public
policy. A critical difference between the case of a foreign
divorce decree and a foreign judgment nullifying a bigamous
marriage is that bigamy, as a ground for the nullity of
marriage, is fully consistent with Philippine public policy as
expressed in Article 35(4) of the Family Code and Article 349
of the Revised Penal Code. The Filipino spouse has the
option to undergo full trial by filing a petition for declaration
of nullity of marriage under A.M. No. 02-11-10-SC, but this is
not the only remedy available to him or her. Philippine
courts have jurisdiction to recognize a foreign judgment
nullifying a bigamous marriage, without prejudice to a
criminal prosecution for bigamy.
In the recognition of foreign judgments, Philippine courts are
incompetent to substitute their judgment on how a case was
decided under foreign law. They cannot decide on the
"family rights and duties, or on the status, condition and
legal capacity" of the foreign citizen who is a party to the
foreign judgment. Thus, Philippine courts are limited to the
question of whether to extend the effect of a foreign
judgment in the Philippines. In a foreign judgment relating
to the status of a marriage involving a citizen of a foreign
country, Philippine courts only decide whether to extend its
effect to the Filipino party, under the rule of lex
nationalii expressed in Article 15 of the Civil Code.
For this purpose, Philippine courts will only determine (1)
whether the foreign judgment is inconsistent with an
overriding public policy in the Philippines; and (2) whether
any alleging party is able to prove an extrinsic ground to
repel the foreign judgment, i.e. want of jurisdiction, want of
notice to the party, collusion, fraud, or clear mistake of law
or fact. If there is neither inconsistency with public policy
nor adequate proof to repel the judgment, Philippine courts
should, by default, recognize the foreign judgment as part of
the comity of nations. Section 48(b), Rule 39 of the Rules of
Court states that the foreign judgment is already
"presumptive evidence of a right between the parties." Upon
recognition of the foreign judgment, this right becomes
conclusive and the judgment serves as the basis for the
correction or cancellation of entry in the civil registry. The
recognition of the foreign judgment nullifying a bigamous
marriage is a subsequent event that establishes a new
status, right and fact92 that needs to be reflected in the civil
registry. Otherwise, there will be an inconsistency between
the recognition of the effectivity of the foreign judgment and
the public records in the Philippines.1wphi1
However, the recognition of a foreign judgment nullifying a
bigamous marriage is without prejudice to prosecution for
bigamy under Article 349 of the Revised Penal Code.93 The
recognition of a foreign judgment nullifying a bigamous
marriage is not a ground for extinction of criminal liability
under Articles 89 and 94 of the Revised Penal Code.
Moreover, under Article 91 of the Revised Penal Code, "[t]he
term of prescription [of the crime of bigamy] shall not run
when the offender is absent from the Philippine
archipelago."
Since A.M. No. 02-11-10-SC is inapplicable, the Court no
longer sees the need to address the questions on venue and
the contents and form of the petition under Sections 4 and
5, respectively, of A.M. No. 02-11-10-SC.
WHEREFORE, we GRANT the petition. The Order dated 31
January 2011 and the Resolution dated 2 March 2011 of the
Regional Trial Court, Branch 107, Quezon City, in Civil Case
No. Q-11-68582 are REVERSED and SET ASIDE. The
Regional Trial Court is ORDERED to REINSTATE the petition
for further proceedings in accordance with this Decision.
SO ORDERED.
Brion, Del Castillo, Perez, and Perlas-Bernabe, JJ.,
concur.
 Republic of the Philippines (property) within 10 years from the signing of the Contract
SUPREME COURT of Lease with Option to Buy.
Manila
On 4 September 1984, RCBC informed Serra of its decision
SECOND DIVISION to exercise its option to buy the property. However, Serra
replied that he was no longer interested in selling the
G.R. No. 203241 July 10, 2013 property. On 14 March 1985, RCBC filed a Complaint for
Specific Performance and Damages against Serra (Specific
RIZAL COMMERCIAL BANKING Performance case) in the RTC Makati. The RTC Makati
CORPORATION, PETITIONER, initially dismissed the complaint. However, in an Order
vs. dated 5 January 1989, the RTC Makati reversed itself and
FEDERICO A. SERRA, RESPONDENT. ordered Serra to execute and deliver the proper deed of sale
in favor of RCBC.4
DECISION
Serra appealed to the Court of Appeals (CA). On 18 May
CARPIO, J.: 1989, Serra donated the property to his mother, Leonida
Ablao (Ablao). On 20 April 1992, Ablao sold the property to
The Case Hermanito Liok (Liok). A new land title was issued in favor of
Liok. Thus, RCBC filed a Complaint for Nullification of Deed
This Petition for Review on Certiorari1 with prayer for the of Donation and Deed of Sale with Reconveyance and
issuance of a Writ of Preliminary Injunction and/or Temporary Damages against Liok, Ablao and Serra (Annulment case)
Restraining Order assails the 16 February 20122 and 26 July before the RTC of Masbate City (RTC Masbate).
20123 Orders of the Regional Trial Court of Makati City,
Branch 134 (RTC Makati). Meanwhile, the CA, and later the Supreme Court, affirmed
the order of the RTC Makati in the Specific Performance
The Facts case. In a Decision dated 4 January 1994, this Court
declared that the Contract of Lease with Option to Buy was
Respondent Federico A. Serra (Serra) is the owner of a 374 valid, effective, and enforceable. On 15 April 1994, the
square meter parcel of land located along Quezon Street, decision in the Specific Performance case became final and
Masbate, Masbate. On 20 May 1975, Serra and petitioner executory upon entry of judgment.5
Rizal Commercial Banking Corporation (RCBC) entered into a
Contract of Lease with Option to Buy, wherein Serra agreed On 22 October 2001, the RTC Masbate ruled in favor of
to lease his land to RCBC for 25 years. Serra further granted RCBC, declaring the donation in favor of Ablao and the
RCBC the option to buy the land and improvement subsequent sale to Liok null and void.6 In a Decision dated
28 September 2007, the CA affirmed the RTC Masbate
decision. The CA held that the donation to Ablao was
simulated and was done solely to evade Serras obligation to
RCBC. Since Ablao had no right to transfer the property and
Liok was not a buyer in good faith, the subsequent sale to
Liok was likewise null and void.
Thus, Liok filed a Petition for Review on Certiorari, docketed
as G.R. No. 182478, while Serra and Ablao filed a Petition for
Certiorari, docketed as G.R. No. 182664, before this Court. In
separate Resolutions dated 30 June 2008 and 22 October
2008, which became final and executory on 27 August
20087 and 3 March 2009,8respectively, this Court found
neither reversible error nor grave abuse of discretion on the
CAs part.
On 25 August 2011, RCBC moved for the execution of the
decision in the Specific Performance case. RCBC alleged that
it was legally impossible to ask for the execution of the
decision prior to the annulment of the fraudulent transfers
made by Serra. Thus, the period to execute by motion was
suspended during the pendency of the Annulment case. On
22 September 2011, Serra filed his comment and opposition
to the motion. Serra insisted that the motion for execution
was already barred by prescription and laches, and that
RCBC was at fault for failing to register as lien in the original
title the Contract of Lease with Option to Buy.
In an Order dated 16 February 2012, the RTC Makati denied
RCBCs motion for execution. The RTC Makati opined that
"[RCBC] should have asked for the execution of the deed of
sale and have the same registered with the Registry of
Deeds, so that even if [Serra] sold or transferred the subject
property to any person the principle of caveat emptor would
set in."9
In an Order dated 26 July 2012, the RTC Makati denied
RCBCs motion for reconsideration. Thus, RCBC filed this
petition.
In a Resolution dated 3 December 2012, this Court granted
RCBCs Temporary Restraining Order against the
implementation of the questioned Orders upon RCBCs filing
of a bond.
The Issue
RCBC raises this sole issue for resolution:
WHETHER OR NOT THE COURT A QUO ERRED IN HOLDING
THAT PETITIONER RCBC IS BARRED FROM HAVING ITS 05
JANUARY 1989 DECISION EXECUTED THROUGH MOTION,
CONSIDERING THAT UNDER THE CIRCUMSTANCES
OBTAINING IN THIS CASE, RCBC WAS UNLAWFULLY
PREVENTED BY THE RESPONDENT FROM ENFORCING THE
SAID DECISION.10
The Ruling of the Court
The petition has merit.
The Rules of Court provide that a final and executory
judgment may be executed by motion within five years from
the date of its entry or by an action after the lapse of five
years and before prescription sets in.11 This Court, however,
allows exceptions when execution may be made by motion
even after the lapse of five years. These exceptions have
one common denominator: the delay is caused or
occasioned by actions of the judgment obligor and/or is
incurred for his benefit or advantage.12
In Camacho v. Court of Appeals,13 we held that where the WHEREFORE, we GRANT the petition. We SET ASIDE the
delays were occasioned by the judgment debtors own assailed Orders of the Regional Trial Court of Makati City
initiatives and for her advantage as well as beyond the dated 16 February 2012 and 26 July 2012. The Temporary
judgment creditors control, the five-year period allowed for Restraining Order issued by this Court on 3 December 2012
enforcement of the judgment by motion is deemed to have is made permanent. The Regional Trial Court of Makati City
been effectively interrupted or suspended. is DIRECTED to issue the writ of execution in Civil Case No.
10054 for the enforcement of the decision therein. Costs
In the present case, there is no dispute that RCBC seeks to against petitioner.
enforce the decision which became final and executory on
15 April 1994. This decision orders Serra to execute and SO ORDERED.
deliver the proper deed of sale in favor of RCBC. However, to
evade his obligation to RCBC, Serra transferred the property Perez, Mendoza,* and Perlas-Bernabe, JJ., concur.
to his mother Ablao, who then transferred it to Liok. Serras
action prompted RCBC to file the Annulment case. Clearly, Republic of the Philippines
the delay in the execution of the decision was caused by SUPREME COURT
Serra for his own advantage. Thus, the pendency of the Manila
Annulment case effectively suspended the five-year period
to enforce through a motion the decision in the Specific SECOND DIVISION
Performance case. Since the decision in the Annulment case
attained finality on 3 March 2009 and RCBCs motion for G.R. No. 198680 July 8, 2013
execution was filed on 25 August 2011, RCBCs motion is
deemed filed within the five-year period for enforcement of HEIRS OF MAGDALENO YPON, NAMELY, ALVARO YPON,
a decision through a motion. ERUDITA Y. BARON, CICERO YPON, WILSON YPON,
VICTOR YPON, AND HINIDINO Y.
This Court has reiterated that the purpose of prescribing PEALOSA, PETITIONERS,
time limitations for enforcing judgments is to prevent parties vs.
from sleeping on their rights.14 Far from sleeping on its GAUDIOSO PONTERAS RICAFORTE A.K.A. "GAUDIOSO
rights, RCBC has pursued persistently its action against E. YPON," AND THE REGISTER OF DEEDS OF TOLEDO
Serra in accordance with law. On the other hand, Serra has CITY, RESPONDENTS.
continued to evade his obligation by raising issues of
technicality. While strict compliance with the rules of RESOLUTION
procedure is desired, liberal interpretation is warranted in
cases where a strict enforcement of the rules will not serve PERLAS-BERNABE, J.:
the ends of justice.15
This is a direct recourse to the Court from the Regional Trial
Court of Toledo City, Branch 59 (RTC), through a petition for
review on certiorari1 under Rule 45 of the Rules of Court,
raising a pure question of law. In particular, petitioners assail
the July 27, 20112 and August 31, 20113 Orders of the RTC,
dismissing Civil Case No. T-2246 for lack of cause of action.
The Facts
On July 29, 2010, petitioners, together with some of their
cousins,4 filed a complaint for Cancellation of Title and
Reconveyance with Damages (subject complaint) against
respondent Gaudioso Ponteras Ricaforte a.k.a. "Gaudioso E.
Ypon" (Gaudioso), docketed as Civil Case No. T-2246.5 In
their complaint, they alleged that Magdaleno Ypon
(Magdaleno) died intestate and childless on June 28, 1968,
leaving behind Lot Nos. 2-AA, 2-C, 2-F, and 2-J which were
then covered by Transfer Certificates of Title (TCT) Nos. T-44
and T-77-A.6 Claiming to be the sole heir of Magdaleno,
Gaudioso executed an Affidavit of Self-Adjudication and
caused the cancellation of the aforementioned certificates of
title, leading to their subsequent transfer in his name under
TCT Nos. T-2637 and T-2638,7 to the prejudice of petitioners
who are Magdalenos collateral relatives and successors-in-
interest.8
In his Answer, Gaudioso alleged that he is the lawful son of
Magdaleno as evidenced by: (a) his certificate of Live Birth;
(b) two (2) letters from Polytechnic School; and (c) a
certified true copy of his passport.9 Further, by way of
affirmative defense, he claimed that: (a) petitioners have no
cause of action against him; (b) the complaint fails to state a
cause of action; and (c) the case is not prosecuted by the
real parties-in-interest, as there is no showing that the
petitioners have been judicially declared as Magdalenos
lawful heirs.10
The RTC Ruling
On July 27, 2011, the RTC issued the assailed July 27, 2011
Order,11 finding that the subject complaint failed to state a
cause of action against Gaudioso. It observed that while the
plaintiffs therein had established their relationship with
Magdaleno in a previous special proceeding for the issuance
of letters of administration,12 this did not mean that they
could already be considered as the decedents compulsory
heirs. Quite the contrary, Gaudioso satisfactorily established
the fact that he is Magdalenos son and hence, his
compulsory heir through the documentary evidence he
submitted which consisted of: (a) a marriage contract
between Magdaleno and Epegenia Evangelista; (b) a
Certificate of Live Birth; (c) a Letter dated February 19,
1960; and (d) a passport.13
The plaintiffs therein filed a motion for reconsideration
which was, however, denied on August 31, 2011 due to the
counsels failure to state the date on which his Mandatory
Continuing Legal Education Certificate of Compliance was
issued.14
Aggrieved, petitioners, who were among the plaintiffs in
Civil Case No. T-2246,15 sought direct recourse to the Court
through the instant petition.
The Issue Before the Court
The core of the present controversy revolves around the
issue of whether or not the RTCs dismissal of the case on
the ground that the subject complaint failed to state a cause
of action was proper.
The Courts Ruling
The petition has no merit.
Cause of action is defined as the act or omission by which a
party violates a right of another.16 It is well-settled that the
existence of a cause of action is determined by the
allegations in the complaint.17 In this relation, a complaint is
said to assert a sufficient cause of action if, admitting what
appears solely on its face to be correct, the plaintiff would
be entitled to the relief prayed for.18Accordingly, if the
allegations furnish sufficient basis by which the complaint
can be maintained, the same should not be dismissed,
regardless of the defenses that may be averred by the
defendants.19
As stated in the subject complaint, petitioners, who were
among the plaintiffs therein, alleged that they are the lawful
heirs of Magdaleno and based on the same, prayed that the
Affidavit of Self-Adjudication executed by Gaudioso be
declared null and void and that the transfer certificates of
title issued in the latters favor be cancelled. While the
foregoing allegations, if admitted to be true, would
consequently warrant the reliefs sought for in the said
complaint, the rule that the determination of a decedents
lawful heirs should be made in the corresponding special
proceeding20 precludes the RTC, in an ordinary action for
cancellation of title and reconveyance, from granting the
same. In the case of Heirs of Teofilo Gabatan v. CA,21 the
Court, citing several other precedents, held that the
determination of who are the decedents lawful heirs must
be made in the proper special proceeding for such purpose,
and not in an ordinary suit for recovery of ownership and/or
possession, as in this case:
Jurisprudence dictates that the determination of who are the
legal heirs of the deceased must be made in the proper
special proceedings in court, and not in an ordinary suit for
recovery of ownership and possession of
property.1wphi1 This must take precedence over the action
for recovery of possession and ownership. The Court has
consistently ruled that the trial court cannot make a
declaration of heirship in the civil action for the reason that
such a declaration can only be made in a special
proceeding. Under Section 3, Rule 1 of the 1997 Revised
Rules of Court, a civil action is defined as one by which a
party sues another for the enforcement or protection of a
right, or the prevention or redress of a wrong while a special
proceeding is a remedy by which a party seeks to establish
a status, a right, or a particular fact. It is then decisively
clear that the declaration of heirship can be made only in a
special proceeding inasmuch as the petitioners here are
seeking the establishment of a status or right.
In the early case of Litam, et al. v. Rivera, this Court ruled
that the declaration of heirship must be made in a special
proceeding, and not in an independent civil action. This
doctrine was reiterated in Solivio v. Court of Appeals x x x:
In the more recent case of Milagros Joaquino v. Lourdes
Reyes, the Court reiterated its ruling that matters relating to
the rights of filiation and heirship must be ventilated in the
proper probate court in a special proceeding instituted
precisely for the purpose of determining such rights. Citing
the case of Agapay v. Palang, this Court held that the status
of an illegitimate child who claimed to be an heir to a
decedent's estate could not be adjudicated in an ordinary
civil action which, as in this case, was for the recovery of
property.22 (Emphasis and underscoring supplied; citations
omitted)
By way of exception, the need to institute a separate special
proceeding for the determination of heirship may be
dispensed with for the sake of practicality, as when the
parties in the civil case had voluntarily submitted the issue
to the trial court and already presented their evidence
regarding the issue of heirship, and the RTC had
consequently rendered judgment thereon,23 or when a
special proceeding had been instituted but had been finally
closed and terminated, and hence, cannot be re-opened.24
In this case, none of the foregoing exceptions, or those of
similar nature, appear to exist. Hence, there lies the need to
institute the proper special proceeding in order to determine
the heirship of the parties involved, ultimately resulting to
the dismissal of Civil Case No. T-2246.
Verily, while a court usually focuses on the complaint in
determining whether the same fails to state a cause of
action, a court cannot disregard decisions material to the
proper appreciation of the questions before it.25 Thus,
concordant with applicable jurisprudence, since a
determination of heirship cannot be made in an ordinary
action for recovery of ownership and/or possession, the
dismissal of Civil Case No. T-2246 was altogether proper. In
this light, it must be pointed out that the RTC erred in ruling
on Gaudiosos heirship which should, as herein discussed,
be threshed out and determined in the proper special
proceeding. As such, the foregoing pronouncement should
therefore be devoid of any legal effect.
WHEREFORE, the petition is DENIED. The dismissal of Civil
Case No. T-2246 is hereby AFFIRMED, without prejudice to
any subsequent proceeding to determine the lawful heirs of
the late Magdaleno Ypon and the rights concomitant
therewith.
SO ORDERED.
Carpio, (Chairperson), Del Castillo, Perez, and
Mendoza,* JJ., concur.
FIRST DIVISION
G.R. No. 167052, March 11, 2015
BANK OF THE PHILIPPINE ISLANDS SECURITIES
CORPORATION, Petitioner, v. EDGARDO V.
GUEVARA, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Before the Court is a Petition for Review under Rule 45 of the
Rules of Court seeking the reversal and setting aside of the
Decision1 dated December 19, 2003 and Resolution2 dated
February 9, 2005 of the Court Appeals in CA-G.R. CV No.
69348, affirming the Decision3 dated September 11, 2000 of
the Regional Trial Court (RTC) of Makati City, Branch 57 in
Civil Case No. 92-1445. The RTC acted favorably on the
action instituted by respondent Edgardo V. Guevara for the
enforcement of a foreign judgment, particularly, the
Order4 dated March 13, 1990 of the United States (U.S.)
District Court for the Southern District of Texas, Houston
Division (U.S. District Court), in Civil Action No. H-86-440,
and ordered petitioner Bank of the Philippine Islands (BPI)
Securities Corporation to pay respondent (a) the sum of
US$49,500.00 with legal interest; (b) P250,000.00 attorneys
fees and litigation expenses; and (c) costs of suit.
The facts are culled from the records of the case.
Ayala Corporation, a holding company, and its subsidiaries
are engaged in a wide array of businesses including real
estate, financial services, telecommunications, water and
used water, electronics manufacturing services, automotive
dealership and distributorship, business process
outsourcing, power, renewable energy, and transport
infrastructure.5
In the 1980s, Ayala Corporation was the majority
stockholder of Ayala Investment and Development
Corporation (AIDC). AIDC, in turn, wholly owned Philsec
Investment Corporation (PHILSEC), a domestic stock
brokerage firm, which was subsequently bought by
petitioner; and Ayala International Finance Limited (AIFL), a
Hong Kong deposit-taking corporation, which eventually
became BPI International Finance Limited (BPI-IFL). PHILSEC
was a member of the Makati Stock Exchange and the rules
of the said organization required that a stockbroker maintain
an amount of security equal to at least 50% of a clients
outstanding debt.
Respondent was hired by Ayala Corporation in 1958.
Respondent later became the Head of the Legal Department
of Ayala Corporation and then the President of PHILSEC from
September 1, 1980 to December 31, 1983. Thereafter,
respondent served as Vice-President of Ayala Corporation
until his retirement on August 31, 1997.
While PHILSEC President, one of respondents obligations
was to resolve the outstanding loans of Ventura O. Ducat
(Ducat), which the latter obtained separately from PHILSEC
and AIFL. Although Ducat constituted a pledge of his stock
portfolio valued at approximately US$1.4 million, Ducats
loans already amounted to US$3.1 million. Because the
security for Ducats debts fell below the 50% requirement of
the Makati Stock Exchange, the trading privileges of
PHILSEC was in peril of being suspended.
Ducat proposed to settle his debts by an exchange of
assets. Ducat owned several pieces of real estate in
Houston, Texas, in partnership with Drago Daic (Daic),
President of 1488, Inc., a U.S.-based corporation.
Respondent relayed Ducats proposal to Enrique Zobel
(Zobel), the Chief Executive Officer of Ayala Corporation.
Zobel was amenable to Ducats proposal but advised
respondent to send Thomas Gomez (Gomez), an AIFL
employee who traveled often to the U.S., to evaluate
Ducats properties.
In December of 1982, Gomez examined several parcels of
real estate that were being offered by Ducat and 1488, Inc.
for the exchange. Gomez, in a telex to respondent,
recommended the acceptance of a parcel of land in Harris
County, Texas (Harris County property), which was believed
to be worth around US$2.9 million. Gomez further opined
that the swap would be fair and reasonable and that it
would be better to take this opportunity rather than pursue
a prolonged legal battle with Ducat. Gomezs
recommendation was brought to Zobels attention. The
property-for-debt exchange was subsequently approved by
the AIFL Board of Directors even without a prior appraisal of
the Harris County property. However, before the exchange
actually closed, an AIFL director asked respondent to obtain
such an appraisal.
William Craig (Craig), a former owner of the Harris County
property, conducted the appraisal of the market value of the
said property. In his January 1983 appraisal, Craig
estimated the fair market value of the Harris County
property at US$3,365,000.
Negotiations finally culminated in an Agreement,6 executed
on January 27, 1983 in Makati City, Philippines, among 1488,
Inc., represented by Daic; Ducat, represented by Precioso
Perlas (Perlas); AIFL, represented by Joselito Gallardo
(Gallardo); and PHILSEC and Athona Holdings, N. V.
(ATHONA), both represented by respondent. Under the
Agreement, the total amount of Ducats debts was reduced
from US$3.1 million to US$2.5 million; ATHONA, a company
wholly owned by PHILSEC and AIFL, would buy the Harris
County property from 1488, Inc. for the price of
US$2,807,209.02; PHILSEC and AIFL would grant ATHONA a
loan of US$2.5 million, which ATHONA would entirely use as
initial payment for the purchase price of the Harris County
property; ATHONA would execute a promissory note in favor
of 1488, Inc. in the sum of US$307,209.02 to cover the
balance of the purchase price for the Harris County
property; upon its receipt of the initial payment of US$2.5
million from ATHONA, 1488, Inc. would then fully pay
Ducats debts to PHILSEC and AIFL in the same amount; for
their part, PHILSEC and AIFL would release and transfer
possession of Ducats pledged stock portfolio to 1488, Inc.;
and 1488, Inc. would become the new creditor of Ducat,
subject to such other terms as they might agree upon.
The series of transactions per the Agreement was eventually
executed. However, after acquiring the Harris County
property, ATHONA had difficulty selling the same. Despite
repeated demands by 1488, Inc., ATHONA failed to pay its
promissory note for the balance of the purchase price for
the Harris County property, and PHILSEC and AIFL refused to
release the remainder of Ducats stock portfolio, claiming
that they were defrauded into believing that the said
property had a fair market value higher than it actually had.
Civil Action No. H-86-440 before the U.S. District
Court of Southern District of Texas, Houston Division
On October 17, 1985, 1488, Inc. instituted a suit against
PHILSEC, AIFL, and ATHONA for (a) misrepresenting that an
active market existed for two shares of stock included in
Ducats portfolio when, in fact, said shares were to be
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 counter-defendants 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. defendants have failed to allege any facts that would tend
to show that the plaintiff or any of the third party
ORDERED that defendants, Philsec Investment Corporation defendants made a false representation or a representation
A/K/A BPI Securities, Inc., and Ayala International Finance with reckless disregard as to its truth.
Limited, jointly and severally, shall pay to Edgardo V.
Guevara $49,450 within 30 days of the entry of this order.8 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
Petitioner, AIFL, and ATHONA appealed the jury verdict, as
generated by speculation and construction plans mounted,
well as the aforementioned order of the U.S. District Court
but, just as rapidly, the climate cooled and the high-flying
for them to pay respondent US$49,450.00; while 1488, Inc.
market came crashing to an all time low. The real estate
appealed a post-judgment decision of the U.S. District Court
transaction involved in this case was certainly affected by
to amend the amount of attorneys fees awarded. The
this environment of capriciousness. Moreover, a number of
appeals were docketed as Case No. 90-2370 before the U.S.
additional variables may have contributed to the uncertainty
Court of Appeals, Fifth Circuit.
of its value. For instance, the land abutted a two-lane
asphalt road that had been targeted by the state for
The U.S. Court of Appeals rendered its Decision on
conversion into a major multi-lane divided highway. Water
September 3, 1991 affirming the verdict in favor of 1488,
and sewage treatment facilities were located near the
Inc. The U.S. Court of Appeals found no basis for the
boundary lines of the property. In addition, Houstons lack
allegations of fraud made by petitioner, AIFL, and ATHONA
of conventional zoning ordinances meant that the value of
against 1488, Inc., Daic, Craig, and Ducat:
the property could fluctuate depending upon the use
(commercial or residential) for which the property would
[2] To state a cause of action for fraud under Texas law, a
ultimately be used.
plaintiff must allege sufficient facts to show:
[3] The fact that the defendants were unable to sell the
(1) that a material representation was made;
property at the price for which it had been appraised does
(2) that it was false;
not demonstrate that the plaintiff or the third party
(3) that when the speaker made it he knew that it was
defendants knew that the value of the property was less
false or made it recklessly without any knowledge of
than the appraised value, nor does it establish that the
the truth and as a positive assertion;
opposing parties were guilty of negligent misrepresentation
(4) that he made it with the intention that it should be
or negligence.
acted on by the party;
(5) that the party acted in reliance upon it;
[4] In support of their allegation of fraud, the defendants
(6) that he thereby suffered injury.
rely heavily on a loan application completed by 1488 shortly
before the subject property was transferred to Athona. See
Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183, 185
Defendants Exhibit 29. At the time, 1488 still owed
(Tex.1977). We agree with the district courts decision to
approximately $300,000 to Republic of Texas Savings
grant a directed verdict against the defendants. The
Association on its original loan for the subject property. The
defendants failed to allege sufficient facts to establish the
debt had matured and 1488 was planning to move the loan
elements necessary to demonstrate fraud. In particular, the
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.
[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.

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.
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
concerning the value of the subject property are insufficient
to withstand a motion for a directed verdict. The district
court committed no error in granting the motion.
Since the defendants failed to present the district court with
any facts that would tend to show that the plaintiffs
committed a fraud against them, their claim of a conspiracy
to commit fraud must also fail.9
The U.S. Court of Appeals likewise adjudged that petitioner,
AIFL, and ATHONA failed to prove negligence on the part of
1488, Inc., Daic, Craig, and Ducat in the appraisal of the
market value of the said property:
[10, 11] The defendants have likewise failed to present any
facts that would tend to support their claim of negligent
misrepresentation or negligence. The defendants rely on
assumptions and unsupportable conclusions of law in
establishing their case for negligence: Assuming the
Propertys true value is less than $800,000, it is reasonable
to assume that the counter defendants failed to exercise
reasonable care or competence . . . Brief for Athona at 45-
46 x x x. A party may not rely on assumptions of fact to
carry their case forward. The defendants have presented no
facts to suggest that the plaintiff was negligent in acquiring
its appraisal. The plaintiff hired Craig, a real estate broker,
to perform the appraisal after the defendants had already
given their initial approval for the transaction. Craig had
performed real estate appraisals in the past, and Texas law
permits real estate brokers to conduct such appraisals, see
Tex.Rev.Civ.Stat.Ann. art. 6573a, 2(2)(E) (Vernon Supp.
1988) (Original version at Tex.Rev.Civ.Stat.Ann. art. 6573a,
4(1)(e) (Vernon 1969). These facts do not support a claim
of negligence.
For the foregoing reasons the district court committed no
error in granting a directed verdict against the
counterclaims advanced by the defendants.10
The U.S. Court of Appeals, however, vacated the award of
exemplary damages in favor of 1488, Inc. for the fraudulent
misrepresentation regarding the marketability of the two
shares of stock in Ducats portfolio. Under Texas law, a jury
may not award damages unless it was determined that the
plaintiff had also sustained actual damages. The U.S. Court
of Appeals agreed with petitioner, AIFL, and ATHONA that
1488, Inc. brought its suit alleging fraudulent
misrepresentation after the two-year statute of limitation
had expired. The misrepresentation issue should never
have gone to the jury. Therefore, the jurys finding of actual
damages is nullified; and since the jury verdict is left without
a specific finding of actual damages, the award of
exemplary damages must be vacated.
The U.S. Court of Appeals also vacated the award of Rule 11
sanctions in 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
had already been stipulated upon.18
Thereafter, the parties formally offered their respective
evidence which entirely consisted of documentary exhibits.
Respondent submitted authenticated and certified true
copies of Rule 11 of the U.S. Federal Rules of Civil
Procedure;19 the Orders dated March 13, 1990, October 28,
1991, and December 31, 1991 of the U.S. District Court in
Civil Action No. H-86-440;20 the Decision dated September 3,
1991 of the U.S. Court of Appeals in Case No. 90-2370; 21 and
the opposition to respondents motion for Rule 11 sanctions
and reply-brief filed by PHILSEC, AIFL, and ATHONA before
the U.S. District Court.22 Petitioner presented photocopies of
pleadings, documents, and transcripts of stenographic notes
in Civil Action No. H-86-440 before the U.S. District
Court;23 the pleadings filed in other cases related to Civil
Case No. 92-1440;24 and a summary of lawyers fees
incurred by petitioner in the U.S.25 The RTC admitted in
evidence the documentary exhibits of the parties in its
Orders dated September 21, 1998 and February 8,
1999,26 and then deemed the case submitted for decision.
The RTC rendered a Decision on September 11, 2000 with
the following dispositive portion:
WHEREFORE, judgment is hereby rendered in favor of
[respondent] Edgardo V. Guevara ordering [petitioner] BPI
Securities Corporation to pay [respondent] the following:
1. the sum of US$49,500.00 with legal interest from the
filing of this case until fully paid;
2. the sum of P250,000.00 as attorneys fees and
litigation expenses; and
3. the costs of suit.
An award of exemplary damages for P200,000.00 is denied
for being speculative.27
Petitioner appealed to the Court of Appeals, assigning the
following errors on the part of the RTC:
A. The trial court erred in not passing upon the merit or
validity of [petitioners] defenses against the
enforcement of the foreign judgment in the
Philippines.
Had the trial court considered [petitioners] defenses,
it would have concluded that the foreign judgment
was not enforceable because it was made upon a
clear mistake of law or fact and/or was made in
violation of the [petitioners] right to due process.
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.
 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. 92-1445 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
or verbatim 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 H-86-440 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 recognition and
enforcement, albeit subject to limitations of varying
degrees. The fact that there is no binding universal treaty
governing the practice is not indicative of a widespread
rejection of the principle, but only a disagreement as to the
imposable specific rules governing the procedure for
recognition and enforcement.
Aside from the widespread practice, it is indubitable that the
procedure for recognition and enforcement is embodied in
the rules of law, whether statutory or jurisprudential,
adopted in various foreign jurisdictions. In the Philippines,
this is evidenced primarily by Section 48, Rule 39 of the
Rules of Court which has existed in its current form since the
early 1900s. Certainly, the Philippine legal system has long
ago accepted into its jurisprudence and procedural rules the
viability of an action for enforcement of foreign judgment, as
well as the requisites for such valid enforcement, as derived
from internationally accepted doctrines. Again, there may
be distinctions as to the rules adopted by each particular
state, but they all prescind from the premise that there is a
rule of law obliging states to allow for, however generally,
the recognition and enforcement of a foreign judgment. The
bare principle, to our mind, has attained the status of opinio
juris in international practice.
This is a significant proposition, as it acknowledges that the
procedure and requisites outlined in Section 48, Rule 39
derive their efficacy not merely from the procedural rule, but
by virtue of the incorporation clause of the Constitution.
Rules of procedure are promulgated by the Supreme Court,
and could very well be abrogated or revised by the high
court itself. Yet the Supreme Court is obliged, as are all
State components, to obey the laws of the land, including
generally accepted principles of international law which
form part thereof, such as those ensuring the qualified
recognition and enforcement of foreign judgments.
(Citations omitted.)
It is an established international legal principle that final
judgments of foreign courts of competent jurisdiction are
reciprocally respected and rendered efficacious subject to
certain conditions that vary in different countries.34 In the
Philippines, a judgment or final order of a foreign tribunal
cannot be enforced simply by execution. Such judgment or
order merely creates a right of action, and its non-
satisfaction is the cause of action by which a suit can be
brought upon for its enforcement.35 An action for the
enforcement of a foreign judgment or final order in this
jurisdiction is governed by Rule 39, Section 48 of the Rules
of Court, which provides:
SEC. 48. Effect of foreign judgments or final orders. The
effect of a judgment or final order of a tribunal of a foreign
country, having jurisdiction to render the judgment or final
order is as follows:
(a) In case of a judgment or final order upon a specific
thing, the judgment or final order is conclusive upon the title
to the thing; and
(b) In case of a judgment or final order against a person,
the judgment or final order is presumptive evidence of a
right as between the parties and their successors in interest
by a subsequent title.
In either case, the judgment or final order may be repelled
by evidence of a want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.
The Court expounded in Mijares on the application of the
aforequoted provision:
There is an evident distinction between a foreign judgment
in an action in rem and one in personam. For an action in
rem, the foreign judgment is deemed conclusive upon the
title to the thing, while in an action in personam, the foreign
judgment is presumptive, and not conclusive, of a right as
between the parties and their successors in interest by a
subsequent title. However, in both cases, the foreign
judgment is susceptible to impeachment in our local courts
on the grounds of want of jurisdiction or notice to the party,
collusion, fraud, or clear mistake of law or fact. Thus, the
party aggrieved by the foreign judgment is entitled to
defend against the enforcement of such decision in the local
forum. It is essential that there should be an opportunity to
challenge the foreign judgment, in order for the court in this
jurisdiction to properly determine its efficacy.
It is clear then that it is usually necessary for an action
to be filed in order to enforce a foreign judgment,
even if such judgment has conclusive efect as in the
case of in rem actions, if only for the purpose of
allowing the losing party an opportunity to challenge
the foreign judgment, and in order for the court to
properly determine its efficacy. Consequently, the
party attacking a foreign judgment has the burden of
overcoming the presumption of its validity.
The rules are silent as to what initiatory procedure must be
undertaken in order to enforce a foreign judgment in the
Philippines. But there is no question that the filing of a civil
complaint is an appropriate measure for such purpose. A
civil action is one by which a party sues another for the
enforcement or protection of a right, and clearly an action to
enforce a foreign judgment is in essence a vindication of a
right prescinding either from a conclusive judgment upon
title or the presumptive evidence of a right. Absent
perhaps a statutory grant of jurisdiction to a quasi-judicial
body, the claim for enforcement of judgment must be
brought before the regular courts.
There are distinctions, nuanced but discernible, between the
cause of action 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 plaintif 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 jurisdiction of
another state. Thus, Philippine courts can only
recognize the foreign judgment as a fact according to
the rules of evidence.
Section 48(b), Rule 39 of the Rules of Court provides that a
foreign judgment or final order against a person creates a
presumptive evidence of a right as between the parties and
their successors in interest by a subsequent title.
Moreover, Section 48 of the Rules of Court states that the
judgment or final order may be repelled by evidence of a
want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact. Thus, Philippine
courts exercise limited review on foreign judgments.
Courts are not allowed to delve into the merits of a
foreign judgment. Once a foreign judgment is
admitted and proven in a Philippine court, it can only
be repelled on grounds external to its merits, i.e.,
want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact. The
rule on limited review embodies the policy of
efficiency and the protection of party expectations,
as well as respecting the jurisdiction of other
states. (Emphases supplied, citations omitted.)
As the foregoing jurisprudence had established, recognition
and enforcement of a foreign judgment or final order
requires only proof of fact of the said judgment or final
order. In an action in personam, as in the case at bar, the
foreign judgment or final order enjoys the disputable
presumption of validity. It is the party attacking the foreign
judgment or final order that is tasked with the burden of
overcoming its presumptive validity.38 A foreign judgment or
final order may only be repelled on grounds external to its
merits, particularly, want of jurisdiction, want of notice to
the party, collusion, fraud, or clear mistake of law or fact.
The fact of a foreign final order in this case is not disputed.
It was duly established by evidence submitted to the RTC
that the U.S. District Court issued an Order on March 13,
1990 in Civil Action No. H-86-440 ordering petitioner, AIFL,
and ATHONA, to pay respondent the sum of US$49,450.00
as sanction for filing a frivolous suit against respondent, in
violation of Rule 11 of the U.S. Federal Rules of Civil
Procedure. The said Order became final when its
reinstatement in the Order dated December 31, 1991 of the
U.S. District Court was no longer appealed by petitioner,
AIFL, and/or ATHONA.
The Order dated March 13, 1990 of the U.S. District Court in
Civil Action No. H-86-440 is presumptive evidence of the
right of respondent to demand from petitioner the payment
of US$49,450.00 even in this jurisdiction. The next question
then is whether petitioner was able to discharge the burden
of overcoming the presumptive validity of said Order.
The Court rules in the negative.
In complete disregard of the limited review by Philippine
courts of foreign judgments or final orders, petitioner
opposes the enforcement of the Order dated March 13, 1990
of the U.S. District Court on the very same allegations,
arguments, and evidence presented before and considered
by the U.S. District Court when it rendered its verdict
imposing the Rule 11 sanction against petitioner. Petitioner
attempts to convince the Court that it is necessary to look
into the merits of the Order dated March 13, 1990 because
the U.S. District Court committed clear mistake of law and
fact in issuing the same. The Court, however, is not
convinced. A Philippine court will not substitute its own
interpretation of any provision of the law or rules of
procedure of another country, nor review and pronounce its
own judgment on the sufficiency of evidence presented
before a competent court of another jurisdiction. Any
purported mistake petitioner attributes to the U.S. District
Court in the latters issuance of the Order dated March 13,
1990 would merely constitute an error of judgment in the
exercise of its legitimate jurisdiction, which could have been
corrected by a timely appeal before the U.S. Court of
Appeals.
Petitioner cannot insist that the RTC and the Court of
Appeals resolve the issue of whether or not petitioner, AIFL,
and ATHONA had reasonable grounds to implead respondent
as a counter-defendant in Civil Action No. H-86-440.
Although petitioner submitted such an issue for resolution
by the RTC in its Pre-Trial Brief, the RTC did not issue any
pre-trial order actually adopting the same. In addition,
petitioner was also unable to lay the basis, whether in U.S.
or Philippine jurisdiction, for the use of the reasonable
grounds standard for determining a partys liability for or
exemption from the sanctions imposed for violations of Rule
11 of the U.S. Federal Rules of Civil Procedure. Equally
baseless is petitioners assertion that the Rule 11 sanction is
contrary to public policy and in effect, puts a premium on
the right to litigate. It bears to stress that the U.S. District
Court imposed the Rule 11 sanction upon petitioner, AIFL,
and ATHONA for their frivolous counterclaims against
respondent intended to simply humiliate and embarrass
respondent; and not because petitioner, AIFL, and ATHONA
impleaded but lost to respondent.
Contrary to the claims of petitioner, both the RTC and the
Court of Appeals carefully considered the allegations,
arguments, and evidence presented by petitioner to repel
the Order dated March 13, 1990 of the U.S. District Court in
Civil Action No. H-86-440. Worthy of reproducing herein are
the following portions of the RTC judgment:
[Petitioners] contention that the judgment sought to be
enforced herein is violative of its right to due process and
contrary to public policy because the Houston Court relied
upon Exhibit 91 (which is [petitioner BPI Securities] Exh. 1
in this case) and the US Court disregarded the evidence on
record in the Houston Action is unavailing. Whether or not
said Exhibit 91 (petitioners Exh. 1) is inadmissible
or is not entitled to any weight is a question which
should have been addressed to the US of Court of
Appeals by [petitioner]. To ask a Philippine court to
pass upon the admissibility or weight of Exh. 91 is
violative of our public policy not to substitute our
judgment for that of a competent court of another
jurisdiction.
[Petitioner] does not deny the fact that the judgment
awarding sanctions based on [Rule 11 of the U.S.] Federal
Rules of Civil Procedure was elevated to the United States
Court of Appeals for the Fifth Circuit which remanded the
case to the District Court precisely to give [petitioner] a
reasonable opportunity to be heard. After remand, the
District Court ordered [petitioner] to file its response to the
motion of [respondent] for sanctions and after the filing of
their respective briefs, the District Court reinstated the
former judgment.
Certainly, under these circumstances, the claim of violation
of due process cannot be sustained since [petitioner] was
given reasonable opportunity to present its side before the
imposition of sanctions.
[Petitioner] likewise argued that the US District Court
committed a clear mistake of law or fact and in support
thereof presented Exhibits 10 to 18 to establish that the
fair market value of the Houston property in January 1983
was no longer US$800,000.00 by the admissions against
interest of 1488 itself, of Craig who submitted the fraudulent
appraisal, and by the previous owners of the said property
and to show that [respondent] Guevara was either directly
involved in the conspiracy against the Houston defendants
in submitting to the latter a fraudulent appraisal of W. Craig
(or was at least responsible to the Houston defendants for
the injury that they suffered) and that the Houston
defendants had reasonable basis to implead him as a
defendant in the Houston Case on account of his
participation in the conspiracy or his fault of responsibility
for the injury suffered by them.
However, none of these documents show that [respondent]
had any participation nor knowledge in the execution,
custody or other intervention with respect to the
said. Thus, said Exhibits 10 to 18 are irrelevant
and immaterial to the issue of the enforceability of a
foreign judgment. It must be emphasized that the
imposition of the sanctions under [Rule 11 of the
U.S.] Federal Rules of Civil Procedure did not flow
from the merits of the civil case in the US District
Court but from the lack of even an iota of evidence
against [respondent] Guevara. To quote the US District
Court:
THE COURT
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 in Gotesco
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
counsel was guilty of nothing short of a clear abandonment
of the clients cause. (Citations omitted.)
Finally, it is without question that the U.S. District Court, in
its Order dated March 13, 1990 in Civil Action No. H-86-440,
ordered petitioner, AIFL, and ATHONA to pay respondent
US$49,450.00 as sanction for violating Rule 11 of the U.S.
Federal Rules of Civil Procedure. The Court noticed that
throughout its Decision dated September 11, 2000 in Civil
Case No. 92-1445, the RTC variably mentioned the amount
of Rule 11 sanction imposed by the U.S. District Court as
US$49,450.00 and US$49,500.00, the latter obviously being
a typographical error. In the dispositive portion, though, the
RTC ordered petitioner to pay respondent US$49,500.00,
which the Court hereby corrects motu proprio to
US$49,450.00 in conformity with the U.S. District Court
Order being enforced.

The Court notes that during the pendency of the instant
Petition before this Court, respondent passed away on
August 17, 2007, and is survived and substituted by his
heirs, namely: Ofelia B. Guevara, Ma. Leticia G. Allado, Jose
Edgardo B. Guevara, Jose Emmanuel B. Guevara, and Ma.
Joselina G. Gepuela.
WHEREFORE, the instant Petition is hereby DENIED for
lack of merit. The Decision dated December 19, 2003 and
Resolution dated February 9, 2005 of the Court Appeals in
CA-G.R. CV No. 69348, affirming the Decision dated
September 11, 2000 of the Regional Trial Court of Makati
City, Branch 57 in Civil Case No. 92-1445, is
hereby AFFIRMED with MODIFICATION that petitioner BPI
Securities Corporation is ordered to pay respondent Edgardo
V. Guevara the sum of US$49,450.00 or its equivalent in
Philippine Peso, with interest at six percent (6%) per annum
from the filing of the case before the trial court on May 28,
1992 until fully paid.43
SO ORDERED.
Sereno, C.J., (Chairperson), Bersamin, Perez, and Perlas-
Bernabe, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 150276 February 12, 2008
CECILIA B. ESTINOZO, petitioner,
vs.
COURT OF APPEALS, FORMER SIXTEENTH DIVISION,
and PEOPLE OF THE PHILIPPINES, respondents.
DECISION
NACHURA, J.:
Assailed before the Court via a petition for certiorari under
Rule 65 are the following issuances of the Court of Appeals
(CA): (1) the April 30, 2001 Decision1 in CA-G.R. CR No.
18387 affirming the November 9, 1994 Decision 2 of the
Regional Trial Court, Branch 24 of Maasin, Southern Leyte in
Criminal Case Nos. 1261, 1262, 1263, 1264, 1265, 1267 and
1269; (2) the June 28, 2001 Resolution3 denying petitioners
Motion for Extension of Time to File a Motion for
Reconsideration;4 and (3) the August 17, 2001
Resolution5 denying petitioners Motion for
Reconsideration6 of the June 28, 2001 Resolution.
Records reveal the following antecedent facts:
Sometime in February and March 1986, petitioner, while in
Sogod, Southern Leyte, represented to private complainants
Gaudencio Ang, Rogelio Ceniza, Nilo Cabardo, Salvacion
Nueve, Virgilio Maunes, Apolinaria Olayvar, and Mariza
Florendo that she was one of the owners of Golden Overseas
Employment7 and that she was recruiting workers to be sent
abroad.8 She then asked from the said complainants the
payment of placement and processing fees
totaling P15,000.00.9 Viewing this as a golden opportunity
for the amelioration of their lives, the private complainants
paid the fees, went with petitioner to Manila, relying on her
promise that they would be deployed by July 1986.10 On the
promised date of their departure, however, private
complainants never left the country. They were then
informed by petitioner that there were no available plane
tickets and that they would leave by September of that year.
Came November 1986 and still they were not deployed. This
prompted private complainants to suspect that something
was amiss, and they demanded the return of their money.
Petitioner assured them refund of the fees and even
executed promissory notes11 to several of the complainants; MONTHS and TWENTY (20) DAYS of prision mayor, as
but, as before, her assurances were mere pretenses.12 maximum, and to pay the costs.

In the early months of 1987, complainants then initiated The accused is also ordered to reimburse to the private
formal charges for estafa against petitioner. After complainants the following amounts proved during the trial:
preliminary investigation, the Provincial Prosecutor filed with
the Regional Trial Court (RTC) of Maasin, Southern Leyte 1. Gaudencio Ang -----------------
seven (7) separate Informations13 for Estafa, defined and
penalized under Article 315, par. 2(a) of the Revised Penal P15,000.00
Code (RPC). On request of petitioner, the cases were
consolidated and jointly heard by the trial court.14 2. Virgilio Maunes -----------------
P15,000.00
During the trial, in her defense, petitioner testified, among
others, that she was an employee of the Commission on
Audit who worked as a part-time secretary at FCR 3. Rogelio Ceniza -----------------
Recruitment Agency owned by Fe Corazon Ramirez; that she P11,500.00
received the amounts claimed by the complainants and
remitted the same to Ramirez;15 that complainants actually
4. Nilo Cabardo -------------------
transacted with Ramirez and not with her;16 and that she
was only forced to execute the promissory notes.17 P15,000.00

On November 9, 1994, the RTC rendered its 5. Mariza Florendo -----------------

Decision18 finding petitioner guilty beyond reasonable doubt P15,000.00
of the charges of estafa. The dispositive portion of the trial
courts decision reads:
6. Salvacion Nueve -----------------
WHEREFORE, FOREGOING CONSIDERED, the Court hereby P15,000.00
renders judgment finding the accused Cecilia Dejarme
Estinozo GUILTY beyond reasonable doubt of seven (7)
7. Salvador Olayvar ----------------
counts of the crime of Estafa through false pretenses as
defined and penalized under Article 315(2)(a) of the Revised P13,500.00
Penal Code under Criminal Cases Nos. 1261, 1262, 1263,
1264, 1265, 1267 and 1269, and applying the Indeterminate
Sentence Law, with no modifying circumstances to consider with interest at the legal rate from the date of the filing of
for or against her, hereby sentences the said accused, for the respective informations in each case of every private
EACH of the seven (7) counts of Estafa in the criminal cases complainant until the amount shall have been fully paid.
aforementioned, to an indeterminate penalty of TWO (2)
YEARS, ELEVEN (11) MONTHS and TEN (10) DAYS of prision
SO ORDERED.19
correccional, as minimum, to SIX (6) YEARS, EIGHT (8)
Aggrieved, petitioner appealed the case to the CA (docketed
as CA-G.R. CR No. 18387). As aforesaid, the appellate court,
in the assailed April 30, 2001 Decision,20 affirmed the ruling
of the trial court. The CA ruled that the complainants
positively identified petitioner, their townmate, as the one
who falsely presented herself as possessing a license to
recruit persons for overseas employment. The seven (7)
complainants relied on that representation when they paid
the amount she required as a condition for their being
employed abroad. Petitioner even admitted receiving the
said fees.21 The prosecution had then satisfactorily proved
that she committed the offense of Estafa under Article 315,
par. 2 (a) of the RPC.22 Her defense that she was merely an
agent of the real recruiter was deemed as merely a last-
ditch effort to absolve herself of authorship of the crime.
The CA noted that Ramirez was never mentioned when
petitioner conducted her recruitment activities, and no
evidence was further introduced to show that petitioner
remitted the said fees to Ramirez.23
On May 30, 2001, within the 15-day reglementary period to
file a motion for reconsideration or a petition for
review,24 petitioner filed with the appellate court a Motion
for Extension of Time to File a Motion for
Reconsideration.25 On June 28, 2001, the CA, in the
challenged Resolution,26 denied the said motion pursuant to
Rule 52, Section 1 of the Rules of Court and Rule 9, Section
2 of the Revised Internal Rules of the Court of Appeals
(RIRCA).
Petitioner then filed a Motion for Reconsideration27 of the
June 28, 2001 Resolution of the CA. The appellate court
denied the same, on August 17, 2001, in the other assailed
Resolution.28
Displeased with this series of denials, petitioner instituted
the instant Petition for Certiorari29 under Rule 65, arguing,
among others, that: (1) her previous counsel, by filing a
prohibited pleading, foreclosed her right to file a motion for
reconsideration of the CAs decision, and consequently an
appeal therefrom;30 (2) she should not be bound by the
mistake of her previous counsel especially when the latters
negligence and mistake would prejudice her substantial
rights and would affect her life and liberty;31 (3) the
appellate court gravely abused its discretion when it
affirmed petitioners conviction for the other four (4)
criminal casesCriminal Cases Nos. 1264, 1265, 1267 and
1269absent any direct testimony from the complainants in
those cases;32 (4) she was deprived of her constitutional
right to cross-examine the complainants in the
aforementioned 4 cases;33 and (5) she presented sufficient
evidence to cast reasonable doubt as to her guilt in all the
seven (7) criminal cases.34
The Court rules to dismiss the petition.
Immediately apparent is that the petition is the wrong
remedy to question the appellate courts issuances. Section
1 of Rule 45 of the Rules of Court expressly provides that a
party desiring to appeal by certiorari from a judgment or
final order or resolution of the CA may file a verified petition
for review on certiorari.35 Considering that, in this case,
appeal by certiorari was available to petitioner, she
effectively foreclosed her right to resort to a special civil
action for certiorari, a limited form of review and a remedy
of last recourse, which lies only where there is no appeal or
plain, speedy and adequate remedy in the ordinary course
of law.36
A petition for review on certiorari under Rule 45 and a
petition for certiorari under Rule 65 are mutually exclusive
remedies. Certiorari cannot co-exist with an appeal or any
other adequate remedy.37 The nature of the questions of law
intended to be raised on appeal is of no consequence. It
may well be that those questions of law will treat exclusively
of whether or not the judgment or final order was rendered
without or in excess of jurisdiction, or with grave abuse of
discretion. This is immaterial. The remedy is appeal,
not certiorari as a special civil action.38
Even granting arguendo that the instant certiorari petition is
an appropriate remedy, still this Court cannot grant the writ
prayed for because we find no grave abuse of discretion
committed by the CA in the challenged issuances. The rule,
as it stands now without exception, is that the 15-day
reglementary period for appealing or filing a motion for
reconsideration or new trial cannot be extended, except in
cases before this Court, as one of last resort, which may, in
its sound discretion grant the extension requested. 39 This
rule also applies even if the motion is filed before the
expiration of the period sought to be extended.40 Thus, the
appellate court correctly denied petitioners Motion for
Extension of Time to File a Motion for Reconsideration.
It is well to point out that with petitioners erroneous filing of
a motion for extension of time and with her non-filing of a
motion for reconsideration or a petition for review from the
CAs decision, the challenged decision has already attained
finality and may no longer be reviewed by this Court. The
instant Rule 65 petition cannot even substitute for the lost
appeal41certiorari is not a procedural device to deprive the
winning party of the fruits of the judgment in his or her
favor.42 When a decision becomes final and executory, the
court loses jurisdiction over the case and not even an
appellate court will have the power to review the said
judgment. Otherwise, there will be no end to litigation and
this will set to naught the main role of courts of justice to
assist in the enforcement of the rule of law and the
maintenance of peace and order by settling justiciable
controversies with finality.43
We reiterate what we stated in Amatorio v. People44 that
relief will not be granted to a party who seeks to be relieved
from the effects of the judgment when the loss of the
remedy at law was due to his own negligence, or to a
mistaken mode of procedure.
As a final note, we remind party-litigants and their lawyers
to refrain from filing frivolous petitions for certiorari. The
2nd and 3rd paragraphs of Section 8 of Rule 65, as amended
by A.M. No. 07-7-12-SC, now provide that:
xxx
However, the court may dismiss the petition if it finds
the same patently without merit or prosecuted
manifestly for delay, or if the questions raised therein
are too unsubstantial to require consideration. In
such event, the court may award in favor of the
respondent treble costs solidarily against the
petitioner and counsel, in addition to subjecting
counsel to administrative sanctions under Rules 139
and 139-B of the Rules of Court.
The Court may impose motu propio, based on res
ipsa loquitor, other disciplinary sanctions or
measures on erring lawyers for patently dilatory and
unmeritorious petitions for certiorari.
WHEREFORE, premises considered, the petition
for certiorari is DISMISSED.
SO ORDERED.
Republic of the Philippines
Supreme Court
Manila
FIRST DIVISION
HEIRS OF SPOUSES TEOFILO M. G.R. No. 159941
RETERTA and ELISA RETERTA, namely:
 EDUARDO M. RETERTA, CONSUELO M.
RETERTA, and AVELINA M. RETERTA,
- versus -
SPOUSES LORENZO MORES and
VIRGINIA LOPEZ,
Respondents.
x----------------------------------------------------------------------------------
-------x
DECISION
BERSAMIN, J.:
The original and exclusive jurisdiction over a
complaint for quieting of title and reconveyance involving
friar land belongs to either the Regional Trial Court (RTC) or
the Municipal Trial Court (MTC). Hence, the dismissal of such
a complaint on the ground of lack of jurisdiction due to the
land in litis being friar land under the exclusive jurisdiction
of the Land Management Bureau (LMB) amounts to manifest
grave abuse of discretion that can be corrected
through certiorari.
The petitioners, whose complaint for quieting of title
and reconveyance the RTC had dismissed, had challenged
the dismissal by petition for certiorari, but the Court of
Appeals (CA) dismissed their petition on the ground
that certiorari was not a substitute for an appeal, the proper
recourse against the dismissal. They now appeal that ruling
of the CA promulgated on April 25, 2003.[1]
Antecedents
On May 2, 2000, the petitioners commenced an
action for quieting of title and reconveyance in the RTC in
Trece Martires City (Civil Case No. TM-983),[2] averring that
they were the true and real owners of the parcel of land (the
land) situated in Trez Cruzes, Tanza, Cavite, containing an
area of 47,708 square meters, having inherited the land
from their father who had died on July 11, 1983; that their
late father had been the grantee of the land by virtue of his
occupation and cultivation; that their late father and his
predecessors in interest had been in open, exclusive,
notorious, and continuous possession of the land for more
than 30 years; that they had discovered in 1999 an affidavit
dated March 1, 1966 that their father had purportedly
executed whereby he had waived his rights, interests, and
participation in the land; that by virtue of the affidavit, Sales
Certificate No. V-769 had been issued in favor of respondent
Lorenzo Mores by the then Department of Agriculture and
Natural Resources; and that Transfer Certificate of Title No.
T-64071 had later issued to the respondents.
On August 1, 2000, the respondents, as defendants,
filed a motion to dismiss, insisting that the RTC had no
jurisdiction to take cognizance of Civil Case No. TM-983 due
to the land being friar land, and that the petitioners had no
legal personality to commence Civil Case No. TM-983.
On October 29, 2001, the RTC granted the motion to
dismiss, holding:[3]
Considering that plaintiffs in this case sought the review of
the propriety of the grant of lot 2938 of the Sta. Cruz de
Malabon Friar Lands Estate by the Lands Management
Bureau of the defendant Lorenzo Mores through the use of
the forged Affidavit and Sales Certificate No. V-769 which
eventually led to the issuance of T.C.T. No. T-64071 to
defendant Lorenzo Mores and wife Virginia Mores, and
considering further that the land subject of this case is a
friar land and not land of the public domain, consequently
Act No. 1120 is the law prevailing on the matter which
gives to the Director of Lands the exclusive administration
and disposition of Friar Lands. More so, the determination
whether or not fraud had been committed in the
procurement of the sales certificate rests to the exclusive
power of the Director of Lands. Hence this Court is of the
opinion that it has no jurisdiction over the nature of this
action. On the second ground relied upon by the defendants
in their Motion To Dismiss, suffice it to state that the Court
deemed not to discuss the same.
Petitioners filed this petition for certiorari on May 15,
2002. Certiorari, however cannot be used as a
substitute for the lost remedy of appeal.
In Bernardo vs. Court of Appeals, 275 SCRA 423, the
Supreme Court had the following to say:

IN VIEW OF THE FOREGOING, let this instant case be We have time and again reminded members of
dismissed as it is hereby dismissed. SO ORDERED the bench and bar that a special civil action
for certiorari under Rule 65 lies only when there is
The petitioners then timely filed a motion for no appeal nor plain, speedy and adequate
reconsideration, but the RTC denied their motion for remedy in the ordinary course of
reconsideration on February 21, 2002.[4] law. Certiorari cannot be allowed when a party to
a case fails to appeal a judgment despite the
On May 15, 2002, therefore, the petitioners assailed the availability of that remedy, certiorari not being a
dismissal via petition for certiorari, but the CA dismissed the substitute for lost appeal. The remedies of appeal
petition on April 25, 2003, holding: [5] and certiorari are mutually exclusive and not
alternative or successive.
Thus, the basic requisite for the special civil action
of certiorari to lie is that there is no appeal, nor any WHEREFORE, in view of the foregoing, the instant
plain, speedy and adequate remedy in the ordinary petition is hereby DISMISSED.\
course of law.
SO ORDERED.
In the case at bench, when the court rendered the
assailed decision, the remedy of the petitioners was On September 9, 2003, the CA denied the
to have appealed the same to this Court. But petitioners motion for reconsideration.[6]
petitioners did not. Instead they filed the present
special civil action for certiorari on May 15, 2002 Hence, this appeal.
after the decision of the court a quo has become
final. Issues

The petitioners submit that:

The Order dismissing the case was issued by the
court a quo on 29 October 2001, which Order was
received by the petitioners on November 16, 2001. I.
Petitioners filed a motion for reconsideration dated
November 26, 2001 but the same was denied by the IT IS REVERSIBLE ERROR OF THE HONORABLE COURT
court a quo on 21 February 2002. The Order denying OF APPEALS TO DISREGARD THE PROVISIONS OF
the motion for reconsideration was received by the SECTION 1, RULE 41, SECOND PARAGRAPH,
petitioners on 20 March 2002.
SUBPARAGRAPH (a), AND SECTION 9, RULE 37, 1997
RULES OF COURT;
II.
IT IS REVERSIBLE ERROR FOR THE HONORABLE
COURT OF APPEALS TO APPLY THE RULING IN THE
CASE OF ROSETE vs. COURT OF APPEALS, 339 SCRA
193, 199,NOTWITHSTANDING THE FACT THAT THE
1997 RULES OF CIVIL PROCEDURE ALREADY TOOK
EFFECT ON JULY 1, 1997.
III.
IT IS REVERSIBLE ERROR FOR THE HONORABLE
COURT OF APPEALS IN NOT FINDING THAT THE TRIAL
JUDGE GRAVELY ABUSED ITS DISCRETION WHEN IT
DISMISSED THE COMPLAINT RULING THAT IT HAS NO
JURISDICTION OVER THE NATURE OF THE ACTION,
AND IN NOT FINDING THAT THE TRIAL JUDGE HAS
JURISDICTION OVER THE SAME.[7]
Briefly stated, the issue is whether or not the CA
erred in dismissing the petition for certiorari.
Ruling
The appeal is meritorious.
1.
Propriety of certiorari as remedy against dismissal of
the action
The CA seems to be correct in dismissing the petition
for certiorari, considering that the order granting the
respondents motion to dismiss was a final, as distinguished
from an interlocutory, order against which the proper
remedy was an appeal in due course. Certiorari, as an
extraordinary remedy, is not substitute for appeal due to its
being availed of only when there is no appeal, or plain,
speedy and adequate remedy in the ordinary course of law.
[8]
Nonetheless, the petitioners posit that a special civil
action for certiorari was their proper remedy to assail the
order of dismissal in light of certain rules of
procedure,specifically pointing out that the second
paragraph of Section 1 of Rule 37 of the Rules of Court (An
order denying a motion for new trial or reconsideration is
not appealable, the remedy being an appeal from the
judgment or final order) prohibited an appeal of a denial of
the motion for reconsideration, and that the second
paragraph of Section 1 of Rule 41 of the Rules of Court
( No appeal may be taken from: xxx An order denying a
motion for new trial or reconsideration) expressly declared
that an order denying a motion for reconsideration was not
appealable. They remind that the third paragraph of Section
1 of Rule 41 expressly provided that in the instances where
the judgment or final order is not appealable, the aggrieved
party may file an appropriate special civil action under Rule
65.
The petitioners position has no basis.
 For one, the order that the petitioners really wanted
to obtain relief from was the order granting the
respondents motion to dismiss, not the denial of the motion
for reconsideration. The fact that the order granting
the motion to dismiss was a final order for thereby
completely disposing of the case, leaving nothing more for
the trial court to do in the action, truly called for an appeal,
instead of certiorari, as the correct remedy.
The fundamental distinction between a final
judgment or order, on one hand, and an interlocutory order,
on the other hand, has been outlined in Investments, Inc. v.
Court of Appeals,[9] viz:
The concept of final judgment, as distinguished from one
which has become final (or executory as of right [final and
executory]), is definite and settled. A final judgment or
order is one that finally disposes of a case, leaving
nothing more to be done by the Court in respect
thereto, e.g., an adjudication on the merits which, on
the basis of the evidence presented at the trial
declares categorically what the rights and obligations
of the parties are and which party is in the right; or a
judgment or order that dismisses an action on the
ground, for instance, of res judicata or prescription.
Once rendered, the task of the Court is ended, as far
as deciding the controversy or determining the rights
and liabilities of the litigants is concerned. Nothing
more remains to be done by the Court except to await
the parties next move (which among others, may consist of
the filing of a motion for new trial or reconsideration, or the
taking of an appeal) and ultimately, of course, to cause the
execution of the judgment once it becomes final or, to use
the established and more distinctive term, final and
executory.
Conversely, an order that does not finally
dispose of the case, and does not end the
Courts task of adjudicating the parties
contentions and determining their rights and
liabilities as regards each other, but obviously
indicates that other things remain to be done
by the Court, is interlocutory, e.g., an order
denying a motion to dismiss under Rule 16 of the
Rules, or granting a motion for extension of time to
file a pleading, or authorizing amendment thereof, or
granting or denying applications for postponement,
or production or inspection of documents or
things, etc. Unlike a final judgment or order,
which is appealable, as above pointed out, an
interlocutory order may not be questioned on
appeal except only as part of an appeal that
may eventually be taken from the final
judgment rendered in the case.
Moreover, even Section 9 of Rule 37 of the Rules of
Court, cited by the petitioners, indicates that the proper
remedy against the denial of the petitioners motion for
reconsideration was an appeal from the final order
dismissing the action upon the respondents motion to
dismiss. The said rule explicitly states thusly:
Section 9. Remedy against order denying a motion for new
trial or reconsideration. An order denying a motion for new
trial or reconsideration is not appealable, the remedy
being an appeal from the judgment or final order.
The restriction against an appeal of a denial of
a motion for reconsideration independently of a judgment or
final order is logical and reasonable. A motion for
reconsideration is not putting forward a new issue, or
presenting new evidence, or changing the theory of the
case, but is only seeking a reconsideration of the judgment
or final order based on the same issues, contentions, and
evidence either because: (a) the damages awarded are
excessive; or (b) the evidence is insufficient to justify the
decision or final order; or (c) the decision or final order is
contrary to law.[10] By denying a motion for reconsideration,
or by granting it only partially, therefore, a trial court finds
no reason either to reverse or to modify its judgment or final
order, and leaves the judgment or final order to stand. The
remedy from the denial is to assail the denial in the course
of an appeal of the judgment or final order itself.
The enumeration of the orders that were not
appealable made in the 1997 version of Section 1, Rule 41
of the Rules of Court the version in force at the time when
the CA rendered its assailed decision on May 15, 2002
included an order denying a motion for new trial or motion
for reconsideration, to wit:
Section 1. Subject of appeal. An appeal may be taken from a
judgment or final order that completely disposes of the
case, or of a particular matter therein when declared by
these Rules to be appealable.
No appeal may be taken from:
(a) An order denying a motion for new trial or
reconsideration;
(b) An order denying a petition for relief or any
similar motion seeking relief from judgment;
(c) An interlocutory order;
(d) An order disallowing or dismissing an appeal;
(e) An order denying a motion to set aside a
judgment by consent, confession or compromise on
the ground of fraud, mistake or duress, or any other
ground vitiating consent;
(f) An order of execution
(g) A judgment or final order for or against one or
more of several parties or in separate claims,
counterclaims, cross-claims and third-party
complaints, while the main case is pending, unless
the court allows an appeal therefrom; and
(h) An order dismissing an action without prejudice.
In all the above instances where the judgment or
final order is not appealable, the aggrieved party
may file an appropriate special civil action under Rule
65. (n)
It is true that Administrative Matter No. 07-7-12-SC,
effective December 27, 2007, has since amended
Section 1, Rule 41, supra, by deleting an order
denying a motion for new trial or motion for
reconsideration from the enumeration of non-
appealable orders, and that such a revision of a
procedural rule may be retroactively applied.
However, to reverse the CA on that basis would not
be right and proper, simply because the CA correctly
applied the rule of procedure in force at the time
when it issued its assailed final order.
2.
RTC or MTC has jurisdiction over the action
The settled rule precluding certiorari as a remedy against
the final order when appeal is available notwithstanding, the
Court rules that the CA should have given due course to and
granted the petition for certiorari for two exceptional
reasons, namely: (a) the broader interest of justice
demanded that certiorari be given due course to avoid the
undeserved grossly unjust result that would befall the
petitioners otherwise; and (b) the order of the RTC granting
the motion to dismiss on ground of lack of jurisdiction over
the subject matter evidently constituted grave abuse of
discretion amounting to excess of jurisdiction.
On occasion, the Court has considered certiorari as
the proper remedy despite the availability of appeal, or
other remedy in the ordinary course of law. In Francisco
Motors Corporation v. Court of Appeals,[11] the
Court has declared that the requirement that there must be
no appeal, or any plain speedy and adequate remedy in the
ordinary course of law admits of exceptions, such as: (a)
when it is necessary to prevent irreparable damages and
injury to a party; (b) where the trial judge capriciously and
whimsically exercised his judgment; (c) where there may be
danger of a failure of justice; (d) where an appeal would be
slow, inadequate, and insufficient; (e) where the issue raised
is one purely of law; (f) where public interest is involved; and
(g) in case of urgency.
Specifically, the Court has held that the availability of
appeal as a remedy does not constitute sufficient ground to
prevent or preclude a party from making use of certiorariif
appeal is not an adequate remedy, or an equally beneficial,
or speedy remedy. It is inadequacy, not the mere absence of
all other legal remedies and the danger of failure of justice
without the writ, that must usually determine the propriety
of certiorari.[12] A remedy is plain, speedy and adequate if it
will promptly relieve the petitioner from the injurious effects
of the judgment, order, or resolution of the lower court or
agency.[13] It is understood, then, that a litigant need not
mark time by resorting to the less speedy remedy of appeal
in order to have an order annulled and set aside for being
patently void for failure of the trial court to comply with
the Rules of Court.[14]
Nor should the petitioner be denied the
recourse despite certiorari not being available as a proper
remedy against an assailed order, because it is better on
balance to look beyond procedural requirements and to
overcome the ordinary disinclination to exercise supervisory
powers in order that a void order of a lower court may be
controlled to make it conformable to law and justice.
[15]
Verily, the instances in which certiorari will issue cannot
be defined, because to do so is to destroy the
comprehensiveness and usefulness of the extraordinary
writ. The wide breadth and range of the discretion of the
court are such that authority is not wanting to show
that certiorari is more discretionary than either prohibition
or mandamus, and that in the exercise of superintending
control over inferior courts, a superior court is to be guided
by all the circumstances of each particular case as the ends
of justice may require. Thus, the writ will be
granted whenever necessary to prevent a substantial wrong
or to do substantial justice.[16]
The petitioners complaint self-styled as being for
the quieting of title and reconveyance, declaration of nullity
of affidavit & Sales Certificate, reconveyance and
damageswould challenge the efficacy of the respondents
certificate of title under the theory that there had been no
valid transfer or assignment from the petitioners
predecessor in interest to the respondents of the rights or
interests in the land due to the affidavit assigning such
rights and interests being a forgery and procured by fraud.
The petitioners cause of action for reconveyance has
support in jurisprudence bearing upon the manner by which
to establish a right in a piece of friar land. According
to Arayata v. Joya,[17] in order that a transfer of the rights of
a holder of a certificate of sale of friar lands may be legally
effective, it is necessary that a formal certificate of transfer
be drawn up and submitted to the Chief of the Bureau of
Public Lands for his approval and registration. The law
authorizes no other way of transferring the rights of a holder
of a certificate of sale of friar lands. In other words, where a
person considered as a grantee of a piece of friar land
transfers his rights thereon, such transfer must conform to
certain requirements of the law. Under Director of Lands v.
Rizal,[18] the purchaser in the sale of friar lands under Act No.
1120 is already treated by law as the actual owner of the lot
purchased even before the payment of the full payment
price and before the execution of the final deed
of conveyance, subject to the obligation to pay in full the
purchase price, the role or position of the Government
becoming that of a mere lien holder or mortgagee.[19]
Thus, pursuant to Section 16 of Act No. 1120, [20] had
grantee Teofilo Reterta perfected his title, the petitioners as
his heirs would have succeeded him and taken title from him
upon his death. By law, therefore, should the execution of
the deed in favor of the respondents be held invalid, the
interests of Teofilo Reterta should descend to the petitioners
and the deed should issue in their favor. Adding significance
to the petitioners claim was their allegation in the complaint
that they were in possession of the land. Moreover, as
alleged in the petitioners opposition to the motion to
dismiss of the respondents, Teofilo Reterta had partially paid
the price of the land.[21]
Given the foregoing, the petitioners complaint made
out a good case for reconveyance or reversion, and its
allegations, if duly established, might well warrant the
reconveyance of the land from the respondents to the
petitioners. It did not matter that the respondents already
held a certificate of title in their names. In essence, an
action for reconveyance respects the incontrovertibility of
the decree of registration but seeks the transfer of the
property to its rightful and legal owner on the ground of its
having been fraudulently or mistakenly registered in another
persons name. There is no special ground for an action for
reconveyance, for it is enough that the aggrieved party
asserts a legal claim in the property superior to the claim of
the registered owner, and that the property has not yet
passed to the hands of an innocent purchaser for value.
[22]
On this score, it is also worthy to stress that the title of a
piece of a friar land obtained by a grantee from the
Government without conforming with the requirements set
by the law may be assailed and nullified
Was the petitioners action for reconveyance within
the jurisdiction of the regular court?
We answer the query in the affirmative.
The law governing jurisdiction is Section 19 (2)
of Batas Pambansa Blg. 129,[23] as amended by Republic Act
No. 7691,[24] which provides:
Section 19. Jurisdiction in Civil Cases. Regional Trial
Courts shall exercise exclusive original
jurisdiction: xxx
(2) In all civil actions which involve the title to,
or possession of, real property, or any interest
therein, where the assessed value of the property
involved exceeds Twenty thousand pesos
(P20,000.00) or for civil actions in Metro Manila,
where such value exceeds Fifty thousand pesos
(P50,000.00) except actions for forcible entry into
and unlawful detainer of lands or buildings, original
jurisdiction over which is conferred upon the
Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts;
Conformably with the provision, because an action
for reconveyance or to remove a cloud on ones title involves
the title to, or possession of, real property, or any interest
therein, exclusive original jurisdiction over such action
pertained to the RTC, unless the assessed value of the
property did not exceed P20,000.00 (in which instance the
MTC having territorial jurisdiction would have exclusive
original jurisdiction). Determinative of which regular court
had jurisdiction would be the allegations of the complaint
(on the assessed value of the property) and the principal
relief thereby sought.[25]
The respondents reliance on Section 12 and Section
18 of Act No. 1120 to sustain their position that the Bureau
of Public Lands (now LMB) instead had exclusive jurisdiction
was without basis. The provisions read:
Section 12. xxx the Chief of the Bureau of Public Lands shall
give the said settler and occupant a certificate which shall
set forth in detail that the Government has agreed to sell to
such settler and occupant the amount of land so held by
him, at the price so fixed, payable as provided in this Act at
the office of the Chief of Bureau of Public Lands xxx and that
upon the payment of the final installment together with all
accrued interest the Government will convey to such settler
and occupant the said land so held by him by proper
instrument of conveyance, which shall be issued and
become effective in the manner provided in section one
hundred and twenty-two of the Land Registration Act xxx.
Section 18. No lease or sale made by Chief of the
Bureau of Public Lands under the provisions of this
Act shall be valid until approved by the Secretary of
the Interior.
the task of the remedy was to do justice to the unjustly
aggrieved.[28]
WHEREFORE, the Court grants the petition
for certiorari; sets aside the decision the Court of Appeals
promulgated on April 25, 2003; and directs Branch 23 of the
Regional Trial Court in Trece Martires City to resume the
proceedings in Civil Case No. TM-983 with dispatch.

As the provisions indicate, the authority of LMB under The respondents shall pay the costs of suit.
Act No. 1120, being limited to the administration and
disposition of friar lands, did not include the
petitioners action for reconveyance. LMB ceases to
SO ORDERED.
have jurisdiction once the friar land is disposed of in
favor of a private person and title duly issues in the
latters name. By ignoring the petitioners showing of Republic of the Philippines
its plain error in dismissing Civil Case No. TM-983,
and by disregarding the allegations of the Supreme Court
complaint, the RTC acted whimsically and
capriciously.
Manila
Given all the foregoing, the RTC committed grave
abuse of discretion amounting to lack of jurisdiction. The
term grave abuse of discretion connotes whimsical and
capricious exercise of judgment as is equivalent to excess,
or lack of jurisdiction.[26] The abuse must be so patent and
gross as to amount to an evasion of a positive duty or to a
virtual refusal to perform a duty enjoined by law, or to act at FIRST DIVISION
all in contemplation of law as where the power is exercised
in an arbitrary and despotic manner by reason of passion or
hostility.[27]

The dismissal of Civil Case No. TM-983, unless

undone, would leave the petitioners bereft of any remedy to
protect their substantial rights or interests in the land. As ERMELINDA C. MANALOTO, AURORA
such, they would suffer grave injustice and J. CIFRA, FLORDELIZA J. ARCILLA, G.R. No. 171365
irreparable damage. In that situation, LOURDES J. CATALAN, ETHELINDA J.
the RTCs dismissal should be annulled through certiorari, for HOLT, BIENVENIDO R. JONGCO,
 ARTEMIO R. JONGCO, JR. and JOEL This case is an off-shoot of an unlawful detainer case
JONGCO filed by [herein petitioners] Ermelinda C. Manaloto,
Aurora J. Cifra, Flordeliza J. Arcilla, Lourdes J. Catalan,
- versus Ethelinda J. Holt, Bienvenido R. Jongco, Artemio R.
Jongco, Jr. and Joel Jongco against [herein
ISMAEL VELOSO III, respondent]. In said complaint for unlawful detainer,
it was alleged that they are the lessors of a
Respondent. residential house located at No. 42 Big Horseshoe
Drive, Horseshoe Village, Quezon City [subject
property] which was leased to [respondent] at a
monthly rental of P17,000.00. The action was
instituted on the ground of [respondents] failure to
pay rentals from May 23, 1997 to December 22, 1998
despite repeated demands. [Respondent] denied the
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - non-payment of rentals and alleged that he made an
- - - - - - -x advance payment of P825,000.00 when he paid for
the repairs done on the leased property.
DECISION
LEONARDO-DE CASTRO, J.: After trial, the Metropolitan Trial Court (MeTC)
decided in favor of [petitioners] by ordering
[respondent] to (a) vacate the premises at No. 42 Big
Before Us is a Petition for Review on Certiorari of the
Horseshoe Drive, Horseshoe Village, Quezon City; (b)
Decision[1] dated January 31, 2006 of the Court Appeals in pay [petitioners] the sum of P306,000.00
CA-G.R. CV No. 82610, which affirmed with modification the corresponding to the rentals due from May 23, 1997
Resolution[2] dated September 2, 2003 of Branch 227 of the to November 22, 1998, and the sum of P17,000.00 a
Regional Trial Court (RTC-Branch 227) of Quezon City in Civil month thereafter until [respondent] vacates the
Case No. Q-02-48341. premises; and (c) pay [petitioners] the sum
of P5,000.00 as attorneys fees.

On appeal to the Regional Trial Court (RTC) [Branch

88, Quezon City], the MeTC decision was
reversed. [Respondent] was ordered to pay
arrearages from May 23, 1997 up to the date of the
We partly reproduce below the facts of the case as decision but he was also given an option to choose
between staying in the leased property or vacating
culled by the Court of Appeals from the records:
the same, subject to the reimbursement by
[petitioners] of one-half of the value of the
improvements which it found to be in the amount
of P120,000.00. [Respondent] was also given the
right to remove said improvements pursuant to
Article 1678 of the Civil Code, should [petitioners] against the [herein petitioners] and in favor of the
refuse to pay P60,000.00. [herein respondent] by

When both parties moved for the reconsideration of 1. Ordering [petitioners] to pay [respondent] the
the RTC decision, the RTC issued an Order dated
following amounts:
February 23, 2001 modifying its previous ruling by
increasing the value of the improvements
from P120,000.00 to P800,000.00. a) P1,500,000.00 as moral damages and
consequential damages;
After successive appeals to the Court of Appeals and
the Supreme Court, the decision of the RTC dated b) P500,000.00 as exemplary damages;
November 29, 2000 which reversed the decision of
the MeTC, became final and executory.[3] c) P425,000.00 representing the difference of the
expenses of the improvements of P825,000.00
Whilst respondents appeal of the Metropolitan Trial and P400,000.00 pursuant to Art. 1678 of the Civil
Court (MeTC) judgment in the unlawful detainer case Code;
was pending before the RTC-Branch 88, respondent
filed before the RTC-Branch 227 on November 26, d) P594,000.00 representing interest for three (3)
2002 a Complaint for Breach of Contract and years from 1998 to 2000 on the P825,000.00
Damages[4] against the petitioners, docketed as Civil advanced by the [respondent] at the rate of 24% per
Case No. Q-02-48341. The said complaint alleged two annum;
causes of action. The first cause of action was for
e) P250,000.00 as compensation for the
damages because the respondent supposedly
[respondents] labor and efforts in overseeing and
suffered embarrassment and humiliation when
attending the needs of contractors the
petitioners distributed copies of the above-
repair/renovation of the leased premises;
mentioned MeTC decision in the unlawful detainer
case to the homeowners of Horseshoe Village while f) P250,000.00, plus 20% of all recoveries from
respondents appeal was still pending before the [petitioners] and P2,500.00 per hearing as attorneys
Quezon City RTC-Branch 88. The second cause of fees;
action was for breach of contract since petitioners, as
lessors, failed to make continuing repairs on the g) Cost of suit
subject property to preserve and keep it
tenantable. Thus, respondent sought the following [Respondent] further prays for such other reliefs and
from the court a quo: remedies which are just and equitable under the
premises.[5]

The petitioners filed an Omnibus Motion[6] on

PRAYER February 18, 2003 praying for, among other reliefs,
WHEREFORE, premises considered, it is respectfully the dismissal of respondents complaint in Civil Case
prayed that after hearing the court render a decision No. Q-02-48341.Petitioners argued that respondent
had no cause of action against them because the
MeTC decision in the unlawful detainer case was a
matter of public record and its disclosure to the
public violated no law or any legal right of the
respondent. Moreover, petitioners averred that the
respondents present Complaint for Breach of
Contract and Damages was barred by prior judgment
since it was a mere replication of respondents
Answer with Compulsory Counterclaim in the
unlawful detainer case before the MeTC. The said
unlawful detainer case was already judicially decided
with finality.
On September 2, 2003, the RTC-Branch 227 issued a
Resolution dismissing respondents complaint in Civil
Case No. Q-02-48341 for violating the rule against
splitting of cause of action, lack of jurisdiction, and
failure to disclose the pendency of a related
case. The RTC-Branch 227 adjudged that Civil Case
No. Q-02-48341 involved the same facts, parties, and
causes of action as those in the unlawful detainer
case, and the MeTC had already properly taken
cognizance of the latter case.
Respondent received a copy of the RTC-Branch 227 decision
in Civil Case No. Q-02-48341 on September 26, 2003. He
filed a Motion for Reconsideration[7] of said judgment on
October 10, 2003, which RTC-Branch 227 denied in an
Order[8] dated December 30, 2003.
Respondent received a copy of the RTC-Branch 227 order
denying his Motion for Reconsideration on February 20,
2004, and he filed his Notice of Appeal [9] on March 1,
2004. However, the RTC-Branch 227, in an Order[10] dated
March 23, 2004, dismissed respondents appeal for being
filed out of time.
Respondent received a copy of the RTC-Branch 27
order dismissing his appeal on April 30, 2004 and he filed a
Motion for Reconsideration[11] of the same on May 3,
2004. The RTC-Branch 227, in another Order [12] dated May
31, 2004, granted respondents latest motion because it was
convinced that it is but appropriate and fair to both parties
that this matter of whether or not the Appeal was filed on
time, be resolved by the appellate court rather than by this
Court. The RTC-Branch 227 then ordered that the records of
the case be forwarded as soon as possible to the Court of
Appeals for further proceedings.
The Court of Appeals, in a Resolution[13] dated
February 8, 2005, resolved to give due course to
respondents appeal. Said appeal was docketed as CA-G.R.
CV No. 82610.
On January 31, 2006, the Court of Appeals rendered
its Decision in CA-G.R. CV No. 82610. The Court of Appeals
fully agreed with the RTC-Branch 227 in dismissing
respondents second cause of action (i.e., breach of contract)
in Civil Case No. Q-02-48341. The appellate court, however,
held that RTC-Branch 227 should have proceeded with the
trial on the merits of the first cause of action (i.e., damages)
in Civil Case No. Q-02-48341, because [a]lthough [herein
respondent] may have stated the same factual antecedents
that transpired in the unlawful detainer case, such
allegations were necessary to give an overview of the facts
leading to the institution of another case between the
parties before the RTC acting in its original jurisdiction. [14]
The Court of Appeals then went on to find that
petitioners were indeed liable to respondent for damages:
No doubt, distributing the copies was primarily
intended to embarrass [herein respondent] in the
community he mingled in. We are not unmindful of
the fact that court decisions are public documents
and the general public is allowed access thereto to
make inquiries thereon or to secure a copy
thereof. Nevertheless, under the circumstances of
this case, although court decisions are public
documents, distribution of the same during the
pendency of an appeal was clearly intended to cause
[respondent] some form of harassment and/or
humiliation so that [respondent] would be ostracized
by his neighbors. The appeal may have delayed the
attainment of finality of the determination of the
rights of the parties and the execution in the unlawful
detainer case but it did not justify [herein petitioners]
pre-emption of the outcome of the appeal. By
distributing copies of the MeTC decision, [petitioners]
appeared to have assumed that the MeTC decision
would simply be affirmed and therefore they tried to
cause the early ouster of [respondent] thinking that a
humiliated [respondent] would scurry out of the
leased premises.Clearly, there was evident bad faith
intended to mock [respondents] right to appeal
which is a statutory remedy to correct errors which
might have been committed by the lower court.
Thus, moral damages may be awarded since
[petitioners] acted in bad faith. Bad faith does not
simply connote bad judgment or negligence, it
imports a dishonest purpose or some moral obliquity
and conscious doing of a wrong, a breach of known
duty through some motive or interest or ill will that
partakes of the nature of fraud. However, an award
of moral damages would require certain conditions to
be met, to wit: (1) first, there must be an injury,
whether physical, mental or psychological, clearly
sustained by the claimant; (2) second, there must be
culpable act or omission factually established; (3)
third, the wrongful act or omission of the defendant
is the proximate cause of the injury sustained by the
claimant; and (4) fourth, the award of damages is
predicated on any of the cases stated in Article 2219
of the Civil Code.
But it must again be stressed that moral damages
are emphatically not intended to enrich a plaintiff at
the expense of the defendant. When awarded, moral
damages must not be palpably and scandalously
excessive as to indicate that it was the result of
passion, prejudice or corruption on the part of the
trial court judge. For this reason, this Court finds an
award of P30,000.00 moral damages sufficient under
the circumstances.
On the other hand, to warrant the award of
exemplary damages, the wrongful act must be
accompanied by bad faith, and an award of damages
would be allowed only if the guilty party acted in a
wanton, fraudulent, reckless or malevolent
manner. Accordingly, exemplary damages in the
amount of P10,000.00 is appropriate.[15]
In the end, the Court of Appeals decreed:
WHEREFORE, the decision of the Regional Trial Court
is AFFIRMED with the MODIFICATION that the case is
dismissed only as to the second cause of action. As
to the first cause of action, [herein petitioners] are
ordered to pay [herein respondent] moral damages
of P30,000.00 and exemplary damages
of P10,000.00. [16]
Hence, the instant Petition for Review.
Petitioners assert that respondents appeal of the
RTC-Branch 227 Resolution dated September 2, 2003, which
dismissed the latters complaint in Civil Case No. Q-02-
48341, was filed out of time. Respondent received a copy of
the said resolution on September 26, 2003, and he only
had 15 days from such date to file his appeal, or
until October 11, 2003. Respondent, instead, filed a
Motion for Reconsideration of the resolution on October 10,
2003, which left him with only one more day to file his
appeal. The RTC-Branch 227 subsequently denied
respondents Motion for Reconsideration in an Order dated
December 30, 2003, which the respondent received
on February 20, 2004.Respondent only had until the
following day, February 21, 2004, to file the
appeal. However, respondent filed his Notice of Appeal only
on March 1, 2004. Hence, petitioners conclude that the
dismissal of respondents complaint in Civil Case No. Q-02-
48341 already attained finality.
Petitioners argue in the alternative that the award of
damages in respondents favor has no factual and legal
bases. They contend that the Court of Appeals erred in
awarding moral and exemplary damages to respondent
based on the bare and unproven allegations in the latters
complaint and without the benefit of any hearing or
trial. While the appellate court declared that RTC-Branch 227
should have proceeded with the trial on the merits involving
the action for damages, it surprisingly went ahead and ruled
on petitioners liability for said damages even without
trial. Even assuming for the sake of argument that
respondents allegations in his complaint are true, he still has
no cause of action for damages against petitioners, for the
disclosure of a court decision, which is part of public record,
did not cause any legal and compensable injury to
respondent.
 Respondent, on the other hand, maintains that his
appeal of the September 2, 2003 Resolution of the RTC-
Branch 227 to the Court of Appeals was timely filed and that
the same was aptly given due course. In addition,
respondent asserts that the appellate court was correct in
holding petitioners liable for damages even without any
hearing or trial since petitioners, in filing their omnibus
motion praying for the dismissal of respondents complaint
on the ground of no cause of action, were deemed to have
hypothetically admitted as true the allegations in said
complaint.
The petition is partly meritorious.
We note, at the outset, that the propriety of the
dismissal by the RTC-Branch 227 of respondents second
cause of action against petitioners (e.g., for breach of
contract) was no longer disputed by the parties. Thus, the
present appeal pertains only to respondents first cause of
action (e.g., for damages), and in connection therewith, we
are called upon to resolve the following issues: (1) whether
respondent timely filed his appeal of the Resolution dated
September 2, 2003 of the RTC-Branch 227 before the Court
of Appeals; and (2) whether respondent is entitled to the
award of moral and exemplary damages.
We answer the first issue on the timeliness of
respondents appeal affirmatively.
Jurisprudence has settled the fresh period rule,
according to which, an ordinary appeal from the RTC to the
Court of Appeals, under Section 3 of Rule 41 of the Rules of
Court, shall be taken within fifteen (15) days either from
receipt of the original judgment of the trial court or from
receipt of the final order of the trial court dismissing or
denying the motion for new trial or motion for
reconsideration. In Sumiran v. Damaso,[17] we presented a
survey of the cases applying the fresh period rule:
As early as 2005, the Court categorically declared
in Neypes v. Court of Appeals that by virtue of the
power of the Supreme Court to amend, repeal and
create new procedural rules in all courts, the Court is
allowing a fresh period of 15 days within which
to file a notice of appeal in the RTC, counted
from receipt of the order dismissing or denying
a motion for new trial or motion for
reconsideration. This would standardize the appeal
periods provided in the Rules and do away with the
confusion as to when the 15-day appeal period
should be counted. Thus, the Court stated:
To recapitulate, a party-litigant may either file
his notice of appeal within 15 days from receipt
of the Regional Trial Court's decision or file it
within 15 days from receipt of the order (the
"final order") denying his motion for new trial
or motion for reconsideration. Obviously, the
new 15-day period may be availed of only if
either motion is filed; otherwise, the decision
becomes final and executory after the lapse of
the original appeal period provided in Rule 41,
Section 3.
The foregoing ruling of the Court was reiterated
in Makati Insurance Co., Inc. v. Reyes, to wit:
Propitious to petitioner is Neypes v. Court of Appeals,
promulgated on 14 September 2005 while the
present Petition was already pending before us. x
With the advent of the "fresh period
rule" parties who availed themselves of
the remedy of motion for
reconsideration are now allowed to file a
notice of appeal within fifteen days from
the denial of that motion.
The "fresh period rule" is not inconsistent
with Rule 41, Section 3 of the Revised Rules
of Court which states that the appeal shall be
taken "within fifteen (15) days from notice of
judgment or final order appealed from." The
use of the disjunctive word "or" signifies
disassociation and independence of one thing
from another. It should, as a rule, be
construed in the sense which it ordinarily
implies. Hence, the use of "or" in the
above provision supposes that the notice
of appeal may be filed within 15 days
from the notice of judgment or within 15
days from notice of the "final order," x x
x.
The "fresh period rule" finally eradicates the
confusion as to when the 15-day appeal
period should be counted from receipt of
notice of judgment or from receipt of notice of
"final order" appealed from
Taking our bearings from Neypes, in Sumaway
v. Urban Bank, Inc., we set aside the denial of
a notice of appeal which was purportedly filed
five days late. With the fresh period rule, the
15-day period within which to file the notice of
appeal was counted from notice of the denial
of the therein petitioner's motion for
reconsideration.
We followed suit in Elbia v. Ceniza, wherein we
applied the principle granting a fresh period of
15 days within which to file the notice of
appeal, counted from receipt of the order
dismissing a motion for new trial or motion for
reconsideration or any final order or
resolution.
Thereafter, in First Aqua Sugar Traders, Inc. v.
Bank of the Philippine Islands, we held that a
party-litigant may now file his notice of appeal
either within fifteen days from receipt of the
original decision or within fifteen days from
the receipt of the order denying the motion
for reconsideration.
In De los Santos v. Vda. de Mangubat, we
applied the same principle of "fresh period
rule," expostulating that procedural law refers
to the adjective law which prescribes rules
and forms of procedure in order that courts
may be able to administer justice. Procedural
laws do not come within the legal conception
of a retroactive law, or the general rule
against the retroactive operation of
statutes. The "fresh period rule" is irrefragably
procedural, prescribing the manner in which
the appropriate period for appeal is to be
computed or determined and, therefore, can
be made applicable to actions pending upon
its effectivity, such as the present case,
without danger of violating anyone else's
rights.[18] (Emphases supplied.)
Also in Sumiran, we recognized the Order dated December 30, 2003, which the
retroactive application of the fresh period rule respondent received on February 20,
to cases pending and undetermined upon its 2004. On March 1, 2004, just after nine
effectivity:
daysfrom receipt of the order denying his
The retroactivity of the Neypes rule in cases Motion for Reconsideration, respondent
where the period for appeal had lapsed prior already filed his Notice of Appeal. Clearly,
to the date of promulgation of Neypes under the fresh period rule, respondent was
on September 14, 2005, was clearly able to file his appeal well-within the
explained by the Court in Fil-Estate prescriptive period of 15 days, and the Court
Properties, Inc. v. Homena-
of Appeals did not err in giving due course to
Valencia, stating thus:
said appeal in CA-G.R. CV No. 82610.
The determinative issue is whether the "fresh period"
rule announced in Neypes could retroactively apply
in cases where the period for appeal had lapsed prior
to 14 September 2005 when Neypes was
We likewise agree with the Court of Appeals that the
promulgated. That question may be answered
with the guidance of the general rule that RTC-Branch 227 should not have dismissed respondents
procedural laws may be given retroactive complaint for damages on the ground of failure to state a
efect to actions pending and undetermined at cause of action.
the time of their passage, there being no
vested rights in the rules of
procedure. Amendments to procedural rules are
procedural or remedial in character as they do not
According to Rule 2, Section 2 of the Rules of Court, a
create new or remove vested rights, but only operate
in furtherance of the remedy or confirmation of rights cause of action is the act or omission by which a party
already existing.[19] (Emphases supplied.) violates a right of another.

In the case before us, respondent received a

copy of the Resolution dated September 2,
2003 of the RTC-Branch 227 dismissing his
complaint in Civil Case No. Q-02-48341
on September 26, 2003. Fourteen days
thereafter, on October 10, 2003, respondent
filed a Motion for Reconsideration of said
resolution. The RTC-Branch 227 denied
respondents Motion for Reconsideration in an
When the ground for dismissal is that the complaint
states no cause of action, such fact can be determined only
from the facts alleged in the complaint and from no other,
and the court cannot consider other matters aliunde. The
test, therefore, is whether, assuming the allegations of fact
in the complaint to be true, a valid judgment could be
rendered in accordance with the prayer stated therein.[20]

Respondent made the following allegations
support of his claim for damages against petitioners:
FIRST CAUSE OF ACTION
28. After the promulgation of the Metropolitan Trial
Court of its Decision dated August 3, 1999, ordering
the [herein respondent] and all person claiming
rights under him to
(a) Vacate the leased premises;
(b) pay the [herein petitioners] the sum
of P306,000.00 as unpaid rentals from May 23, 1997
to November 22, 1998; and
(c) pay the sum of P5,000.00 as attorneys
fees;
But while said Decision was still pending appeal with
the Regional Trial Court, the [petitioners], through
[petitioner] Manaloto, already distributed copies of
said Decision to some of the homeowners of
Horseshoe Village, who personally know the
[respondent]. This act is a direct assault or character
assassination on the part of the [respondent]
in because as stated in the said decision, [respondent]
has been staying in the premises but did not or
refused to pay his monthly rentals for a long period
of time when in truth and in fact was untrue.
29. That from the time the said decision was
distributed to said members homeowners, the
[respondent] became the subject of conversation or
talk of the town and by virtue of which [respondents]
good name within the community or society where
he belongs was greatly damaged; his reputation was
besmirched; [respondent] suffered sleepless night
and serious anxiety.[Respondent], who is the
grandson of the late Senator Jose Veloso and
Congressman Ismael Veloso, was deprived of political
career and to start with was to run as candidate for
Barangay Chairman within their area which was
being offered to him by the homeowners but this
offer has started to fade and ultimately totally
vanished after the distribution of said
Decision. Damages to his good names and
reputations and other damages which he suffered as
a consequence thereof, may be reasonably
compensated for at least P1,500,000.00 as moral and
consequential damages.
30. In order to deter [petitioners] and others from
doing as abovementioned, [petitioners] should
likewise be assessed exemplary damages in the
amount of P500,000.00.[21]
A cause of action (for damages) exists if the following
elements are present: (1) a right in favor of the
plaintiff by whatever means and under whatever law
it arises or is created; (2) an obligation on the part of
the named defendant to respect or not to violate
such right; and (3) an act or omission on the part of
such defendant violative of the right of the plaintiff or
constituting a breach of the obligation of defendant
to the plaintiff for which the latter may maintain an
action for recovery of damages.[22] We find that all
three elements exist in the case at bar. Respondent
may not have specifically identified each element,
but it may be sufficiently determined from the
allegations in his complaint.
First, respondent filed the complaint to protect his
good character, name, and reputation. Every man has a
right to build, keep, and be favored with a good name. This
right is protected by law with the recognition of slander and
libel as actionable wrongs, whether as criminal offenses or
tortuous conduct.[23]
Second, petitioners are obliged to respect
respondents good name even though they are opposing
parties in the unlawful detainer case. As Article 19 of the
Civil Code requires, [e]very person must, in the exercise of
his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and
good faith. A violation of such principle constitutes an abuse
of rights, a tortuous conduct. We expounded in Sea
Commercial Company, Inc. v. Court of Appeals[24] that:
The principle of abuse of rights stated in the above
article, departs from the classical theory that he who
uses a right injures no one. The modern tendency is
to depart from the classical and traditional theory,
and to grant indemnity for damages in cases where
there is an abuse of rights, even when the act is not
illicit.
Article 19 was intended to expand the concept of
torts by granting adequate legal remedy for the
untold number of moral wrongs which is impossible
for human foresight to provide specifically in
statutory law. If mere fault or negligence in ones acts
can make him liable for damages for injury caused
thereby, with more reason should abuse or bad faith
make him liable. The absence of good faith is
essential to abuse of right. Good faith is an honest
intention to abstain from taking any unconscientious
advantage of another, even through the forms or
technicalities of the law, together with an absence of
all information or belief of fact which would render
the transaction unconscientious. In business
relations, it means good faith as understood by men
of affairs.
While Article 19 may have been intended as a mere
declaration of principle, the cardinal law on human
conduct expressed in said article has given rise to
certain rules, e.g. that where a person exercises his
rights but does so arbitrarily or unjustly or performs
his duties in a manner that is not in keeping with
honesty and good faith, he opens himself to liability.
The elements of an abuse of rights under Article 19
are: (1) there is a legal right or duty; (2) which is
exercised in bad faith; (3) for the sole intent of
prejudicing or injuring another.[25]
Petitioners are also expected to respect respondents
dignity, personality, privacy and peace of mind under Article
26 of the Civil Code, which provides:
ART. 26. Every person shall respect the dignity,
personality, privacy and peace of mind of his
neighbors and other persons. The following and
similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for
damages, prevention and other relief:
(1) Prying into the privacy of anothers
residence;
(2) Meddling with or disturbing the private
life or family relations of another;
(3) Intriguing to cause another to be
alienated from his friends;
(4) Vexing or humiliating another on account
of his religious beliefs, lowly station in life, place of
birth, physical defect, or other personal condition.
Thus, Article 2219(10) of the Civil Code allows the
recovery of moral damages for acts and actions referred to
in Article 26, among other provisions, of the Civil Code.
In Concepcion v. Court of Appeals,[26] we explained that:
The philosophy behind Art. 26 underscores the
necessity for its inclusion in our civil law. The Code
Commission stressed in no uncertain terms that the
human personality must be exalted. The sacredness
of human personality is a concomitant consideration
of every plan for human amelioration. The
touchstone of every system of law, of the culture and
civilization of every country, is how far it dignifies
man. If the statutes insufficiently protect a person
from being unjustly humiliated, in short, if human
personality is not exalted - then the laws are indeed
defective. Thus, under this article, the rights of
persons are amply protected, and damages are
provided for violations of a persons dignity,
personality, privacy and peace of mind.
It is petitioners position that the act imputed to him
does not constitute any of those enumerated in Arts.
26 and 2219. In this respect, the law is clear. The
violations mentioned in the codal provisions are not
exclusive but are merely examples and do not
preclude other similar or analogous acts. Damages
therefore are allowable for actions against a persons
dignity, such as profane, insulting, humiliating,
scandalous or abusive language. Under Art. 2217 of
the Civil Code, moral damages which include physical
suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar injury, although
incapable of pecuniary computation, may be
recovered if they are the proximate result of the
defendants wrongful act or omission.[27]
And third, respondent alleged that the distribution by
petitioners to Horseshoe Village homeowners of
copies of the MeTC decision in the unlawful detainer
case, which was adverse to respondent and still on
appeal before the RTC-Branch 88, had no apparent
lawful or just purpose except to humiliate respondent
or assault his character. As a result, respondent
suffered damages becoming the talk of the town and
being deprived of his political career.
Petitioners reason that respondent has no cause of
action against them since the MeTC decision in the unlawful
detainer case was part of public records.
It is already settled that the public has a right to see
and copy judicial records and documents. [28] However, this is
not a case of the public seeking and being denied access to
judicial records and documents. The controversy is rooted in
the dissemination by petitioners of the MeTC judgment
against respondent to Horseshoe Village homeowners, who
were not involved at all in the unlawful detainer case, thus,
purportedly affecting negatively respondents good name
and reputation among said homeowners. The unlawful
detainer case was a private dispute between petitioners and
respondent, and the MeTC decision against respondent was
then still pending appeal before the RTC-Branch 88,
rendering suspect petitioners intentions for distributing
copies of said MeTC decision to non-parties in the
case. While petitioners were free to copy and distribute such
copies of the MeTC judgment to the public, the question is
whether they did so with the intent of humiliating
respondent and destroying the latters good name and
reputation in the community.
Nevertheless, we further declare that the Court of
Appeals erred in already awarding moral and exemplary
damages in respondents favor when the parties have not
yet had the chance to present any evidence before the RTC-
Branch 227. In civil cases, he who alleges a fact has the
burden of proving it by a preponderance of evidence. It is
incumbent upon the party claiming affirmative relief from
the court to convincingly prove its claim. Bare allegations,
unsubstantiated by evidence are not equivalent to proof
under our Rules. In short, mere allegations are not evidence.
[29]
 At this point, the finding of the Court of Appeals of
bad faith and malice on the part of petitioners has no factual
basis. Good faith is presumed and he who alleges bad faith
has the duty to prove the same. Good faith refers to the
state of the mind which is manifested by the acts of the
individual concerned. It consists of the intention to abstain
from taking an unconscionable and unscrupulous advantage
of another. Bad faith, on the other hand, does not simply
connote bad judgment to simple negligence. It imports a
dishonest purpose or some moral obliquity and conscious
doing of a wrong, a breach of known duty due to some
motive or interest or ill will that partakes of the nature of
fraud. Malice connotes ill will or spite and speaks not in
response to duty. It implies an intention to do ulterior and
unjustifiable harm.[30]
WHEREFORE, in view of all the foregoing, the
petition is PARTIALLY GRANTED. The Decision dated
January 31, 2006 of the Court of Appeals in CA-G.R. CV No.
82610 is AFFIRMED WITH MODIFICATIONS. The award of
moral and exemplary damages made by the Court of
Appeals in favor of respondent Ismael Veloso III
is DELETED. The complaint of respondent Ismael Veloso III
in Civil Case No. Q-02-48341 is hereby REINSTATED before
Branch 227 of the Regional Trial Court of Quezon City only in
so far as the first cause of action is concerned. The said
court is DIRECTED to hear and dispose of the case with
dispatch.
SO ORDERED.

Republic of the Philippines

We cannot subscribe to respondents argument that Supreme Court
there is no more need for the presentation of evidence by Manila
the parties since petitioners, in moving for the dismissal of THIRD DIVISION
respondents complaint for damages, hypothetically GENEROSA ALMEDA LATORRE,
admitted respondents allegations. The hypothetical Petitioner, G.R. No. 183926
admission of respondents allegations in the complaint only - versus - Present:
goes so far as determining whether said complaint should LUIS ESTEBAN LATORRE,
be dismissed on the ground of failure to state a cause of Respondent.
action. A finding that the complaint sufficiently states a
x-----------------------------------------------------------------------------------x
cause of action does not necessarily mean that the RESOLUTION
complaint is meritorious; it shall only result in the NACHURA, J.:
reinstatement of the complaint and the hearing of the case Before this Court is a Petition for Review
for presentation of evidence by the parties. on Certiorari[1] under Rule 45, in relation to Rule 41, of the
Rules of Civil Procedure, assailing the decision [2] of the
Regional Trial Court (RTC) of Muntinlupa City, Branch 256,
dated April 29, 2008.

The facts of the case are as follows:
In October 2000, petitioner Generosa Almeda Latorre
(petitioner) filed before the RTC of Muntinlupa City a
Complaint[3] for Collection and Declaration of Nullity of Deed
of Absolute Sale with application for Injunction against her
own son, herein respondent Luis Esteban Latorre
(respondent), and one Ifzal Ali (Ifzal).
Petitioner averred that, on September 28, 1999, respondent
and Ifzal entered into a Contract of Lease [4] over a 1,244-
square meter real property, situated at No. 1366 Caballero
St., Dasmarias Village, Makati City (subject property). Under
the said contract, respondent, as lessor, declared that he
was the absolute and registered owner of the subject
property. Petitioner alleged that respondent's declaration
therein was erroneous because she and respondent were
co-owners of the subject property in equal shares.
Petitioner narrated that, on March 14, 1989, she and
respondent executed their respective Deeds of Donation,
conveying the subject property in favor of The Porfirio D.
Latorre Memorial & Fr. Luis Esteban Latorre Foundation, Inc.
(the Foundation). Thus, Transfer Certificate of Title (TCT) No.
161963[5] was issued in the name of the Foundation.
Subsequently, on September 2, 1994, petitioner and
respondent executed separate Deeds of Revocation of
Donation and Reconveyance of the subject property,
consented to by the Foundation, through the issuance of
appropriate corporate resolutions. However, the Deeds of
Revocation were not registered; hence, the subject property
remained in the name of the Foundation. Petitioner insisted,
however, that respondent was fully aware that the subject
property was owned in common by both of them. To protect
her rights as co-owner, petitioner formally demanded from
Ifzal the payment of her share of the rentals, which the
latter, however, refused to heed.
Moreover, petitioner averred that, on or about August 16,
2000, she discovered that respondent caused the
annotation of an adverse claim on the TCT of the subject
property, claiming full ownership over the same by virtue of
a Deed of Absolute Sale[6] dated March 21, 2000, allegedly
executed by petitioner in favor of respondent. Petitioner
claimed that the deed was a falsified document; that her
signature thereon was forged by respondent; and that she
never received P21 Million or any other amount as
consideration for her share of the subject property. Thus,
petitioner prayed that Ifzal be enjoined from paying the
rentals to respondent, and the latter from receiving said
rentals; that both Ifzal and respondent be ordered to pay
petitioner her share of the rentals; and that respondent be
enjoined from asserting full ownership over the subject
property and from committing any other act in derogation of
petitioner's interests therein. Petitioner also prayed for the
payment of moral and exemplary damages, litigation
expenses, and costs of the suit.
Respondent immediately filed a Motion to Dismiss[7] on the
sole ground that the venue of the case was improperly laid.
He stressed that while the complaint was denominated as
one for Collection and Declaration of Nullity of Deed of
Absolute Sale with application for Injunction, in truth the
case was a real action affecting title to and interest over the
subject property. Respondent insisted that all of petitioner's
claims were anchored on her claim of ownership over one-
half () portion of the subject property. Since the subject
property is located in Makati City, respondent argued that
petitioner should have filed the case before the RTC of
Makati City and not of Muntinlupa City.
Ifzal also filed his motion to dismiss on the ground of want
of jurisdiction, asserting that he was immune from suit
because he was an officer of the Asian Development Bank,
an international organization.
The RTC issued a Temporary Restraining Order dated
November 6, 2000, restraining Ifzal from paying his rentals
to respondent and enjoining the latter from receiving from
the former the aforesaid rentals. The RTC also directed both
Ifzal and respondent to pay petitioner her share of the
rentals, with the corresponding order against respondent
not to commit any act in derogation of petitioner's interest
over the subject property.
In its Order dated January 2, 2001, the RTC denied
respondent's motion to dismiss. The RTC ruled that the
nature of an action whether real or personal was
determined by the allegations in the complaint, irrespective
of whether or not the plaintiff was entitled to recover upon
the claims asserted - a matter resolved only after, and as a
result of, a trial. Thus, trial on the merits ensued.
Undaunted, respondent filed an Answer Ad
Cautelam[8] dated March 19, 2001, insisting, among others,
that the case was a real action and that the venue was
improperly laid.[9]Respondent narrated that he was a former
Opus Dei priest but he left the congregation in 1987 after he
was maltreated by his Spanish superiors. Respondent
alleged that petitioner lived with him and his family from
1988 to 2000, and that he provided for petitioner's needs.
Respondent also alleged that, for almost 20 years, the Opus
Dei divested the Latorre family of several real properties.
Thus, in order to spare the subject property from the Opus
Dei, both petitioner and respondent agreed to donate it to
the Foundation. In 1994, when respondent got married and
sired a son, both petitioner and respondent decided to
revoke the said donation. The Foundation consented to the
revocation. However, due to lack of funds, the title was
never transferred but remained in the name of the
Foundation.
Respondent asseverated that he and his wife took good
care of petitioner and that they provided for her needs,
spending a substantial amount of money for these needs;
that because of this, and the fact that the rentals paid for
the use of the subject property went to petitioner, both
parties agreed that petitioner would convey her share over
the subject property to respondent; and that, on March 21,
2000, petitioner executed a Deed of Absolute Sale in favor
of respondent.
Respondent further alleged that sometime in March to May
2000, the relationship of the parties, as mother and son,
deteriorated. Petitioner left respondent's house because he
and his wife allegedly ignored, disrespected, and insulted
her.[10] Respondent claimed, however, that petitioner left
because she detested his act of firing their driver. [11] It was
then that this case was filed against him by petitioner.
In the meantime, in its Order dated May 15, 2003, the RTC
dismissed petitioner's claim against Ifzal because the
dispute was clearly between petitioner and respondent.
On April 29, 2008, the RTC ruled in favor of respondent,
disposing of the case in this wise:
While the case herein filed by the plaintiff involves recovery
of possession of a real property situated at 1366 Caballero
St., Dasmarias Village, Makati City, the same should have
been filed and tried in the Regional Trial Court of Makati City
who, undoubtedly, has jurisdiction to hear the matter as
aforementioned the same being clearly a real action.
WHEREFORE, in view of the foregoing, the above-
entitled case is hereby DISMISSED for want of
jurisdiction, all in pursuance to the above-cited
jurisprudence and Rule 4 of the Rules of Court.
SO ORDERED.[12]
Aggrieved, petitioner filed her Motion for Reconsideration,
[13]
which the RTC denied in its Order[14] dated July 24, 2008
for lack of merit.
Hence, this Petition, claiming that the RTC erred in treating
the venue as jurisdiction and in treating petitioner's
complaint as a real action.
While the instant case was pending resolution before this
Court, petitioner passed away on November 14, 2009. Thus,
petitioner's counsel prayed that, pending the appointment
of a representative of petitioner's estate, notices of the
proceedings herein be sent to petitioners other son, Father
Roberto A. Latorre.[15]
As early as the filing of the complaint, this case had been
marred by numerous procedural infractions committed by
petitioner, by respondent, and even by the RTC, all of which
cannot be disregarded by this Court.
First. Petitioner filed her complaint with the RTC of
Muntinlupa City instead of the RTC of Makati City, the latter
being the proper venue in this case.
Sections 1 and 2, Rule 4 of the 1997 Rules of Civil Procedure
provide an answer to the issue of venue. [16] Actions affecting
title to or possession of real property or an interest therein
(real actions) shall be commenced and tried in the proper
court that has territorial jurisdiction over the area where the
real property is situated. On the other hand, all other
actions (personal actions) shall be commenced and tried in
the proper courts where the plaintiff or any of the principal
plaintiffs resides or where the defendant or any of the
principal defendants resides.[17] The action in the RTC, other
than for Collection, was for the Declaration of Nullity of the
Deed of Absolute Sale involving the subject property, which
is located at No. 1366 Caballero
St., Dasmarias Village, Makati City. The venue for such
action is unquestionably the proper court of Makati City,
where the real property or part thereof lies, not the RTC of
Muntinlupa City.[18]
In this jurisdiction, we adhere to the principle that the
nature of an action is determined by the allegations in the
Complaint itself, rather than by its title or heading. [19] It is
also a settled rule that what determines the venue of a case
is the primary objective for the filing of the case. [20] In her
Complaint, petitioner sought the nullification of the Deed of
Absolute Sale on the strength of two basic claims that (1)
she did not execute the deed in favor of respondent; and (2)
thus, she still owned one half () of the subject property.
Indubitably, petitioner's complaint is a real action involving
the recovery of the subject property on the basis of her co-
ownership thereof.
Second. The RTC also committed a procedural blunder when
it denied respondent's motion to dismiss on the ground of
improper venue.
The RTC insisted that trial on the merits be conducted even
when it was awfully glaring that the venue was improperly
laid, as pointed out by respondent in his motion to dismiss.
After trial, the RTC eventually dismissed the case on the
ground of lack of jurisdiction, even as it invoked, as
justification, the rules and jurisprudence on venue. Despite
the conduct of trial, the RTC failed to adjudicate this case on
the merits.
Third. Respondent also did not do very well, procedurally.
When the RTC denied his Motion to Dismiss, respondent
could have filed a petition for certiorari and/or prohibition
inasmuch as the denial of the motion was done without
jurisdiction or in excess of jurisdiction or with grave abuse
of discretion amounting to lack of jurisdiction. [21] However,
despite this lapse, it is clear that respondent did not waive
his objections to the fact of improper venue, contrary to
petitioner's assertion. Notably, after his motion to dismiss
was denied, respondent filed a Motion for Reconsideration
to contest such denial. Even in his Answer Ad Cautelam,
respondent stood his ground that the case ought to be
dismissed on the basis of improper venue.
Finally, petitioner came directly to this Court on a Petition
for Review on Certiorari under Rule 45, in relation to Rule
41, of the Rules of Civil Procedure on alleged pure questions
of law. In Murillo v. Consul,[22] we laid down a doctrine that
was later adopted by the 1997 Revised Rules of Civil
Procedure. In that case, this Court had the occasion to
clarify the three (3) modes of appeal from decisions of the
RTC, namely: (1) ordinary appeal or appeal by writ of error,
where judgment was rendered in a civil or criminal action by
the RTC in the exercise of its original jurisdiction; (2) petition
for review, where judgment was rendered by the RTC in the
exercise of its appellate jurisdiction; and (3) petition for
review to the Supreme Court.
The first mode of appeal, governed by Rule 41, is brought to
the Court of Appeals (CA) on questions of fact or mixed
questions of fact and law. The second mode of appeal,
covered by Rule 42, is brought to the CA on questions of
fact, of law, or mixed questions of fact and law. The third
mode of appeal, provided in Rule 45, is filed with the
Supreme Court only on questions of law.
A question of law arises when there is doubt as to what the
law is on a certain state of facts, while there is a question of
fact when the doubt arises as to the truth or falsity of the
alleged facts.[23] Our ruling in Velayo-Fong v. Velayo[24] is
instructive:
A question of law arises when there is doubt as to what the
law is on a certain state of facts, while there is a question of
fact when the doubt arises as to the truth or falsity of the
alleged facts. For a question to be one of law, the same
must not involve an examination of the probative value of
the evidence presented by the litigants or any of them. The
resolution of the issue must rest solely on what the law
provides on the given set of circumstances. Once it is clear
that the issue invites a review of the evidence presented,
the question posed is one of fact. Thus, the test of whether
a question is one of law or of fact is not the appellation
given to such question by the party raising the same;
rather, it is whether the appellate court can determine the
issue raised without reviewing or evaluating the evidence,
in which case, it is a question of law; otherwise it is a
question of fact.[25]
In her Reply to respondents Comment,[26] petitioner prayed
that this Court decide the case on the merits. To do so,
however, would require the examination by this Court of the
probative value of the evidence presented,
taking into account the fact that the RTC failed to adjudicate
this controversy on the merits. This, unfortunately, we
cannot do. It thus becomes exceedingly clear that the filing
of the case directly with this Court ran afoul of the doctrine
of hierarchy of courts. Pursuant to this doctrine, direct
resort from the lower courts to the Supreme Court will not
be entertained unless the appropriate remedy sought
cannot be obtained in the lower tribunals. This Court is a
court of last resort, and must so remain if it is to
satisfactorily perform the functions assigned to it by the
Constitution and by immemorial tradition.[27]
Accordingly, we find no merit in the instant petition. Neither
do we find any reversible error in the trial courts dismissal
of the case ostensibly for want of jurisdiction, although the
trial court obviously meant to dismiss the case on the
ground of improper venue.
WHEREFORE, the instant Petition is DENIED. No costs.
SO ORDERED.
SECOND DIVISION
[G.R. No. 158002. February 28, 2005]
SPOUSES AURORA N. DE PEDRO and ELPIDIO DE
PEDRO, petitioners, vs. ROMASAN
DEVELOPMENT CORPORATION and MANUEL
KO, respondents.
DECISION
CALLEJO, SR., J.:
 This is a petition for review on certiorari of the Court of
Appeals Decision[1] in CA-G.R. CV No. 68424 dated
November 29, 2002, as well as its Resolution dated April 11,
2003 denying the motion for reconsideration thereof. The
assailed decision affirmed the trial courts order dismissing
the petitioners complaint for damages.
This case proceeded from the following antecedents:
On December 1, 1997, petitioner spouses Aurora and
Elpidio de Pedro filed a Complaint for Damages with Prayer
for Preliminary Injunction against respondents Romasan
Development Corporation and Manuel Ko. The complaint
stated, inter alia, that the spouses De Pedro were the
registered owners of a parcel of land in Barangay San Isidro,
now Barangay Inarawan, Antipolo, Rizal, with an area of
50,000 square meters, covered and described in Original
Certificate of Title (OCT) No. P-691, issued by the Register of
Deeds of Marikina City, Metro Manila on March 26, 1992;
that they had been continuously paying the real estate
taxes on the said property; that sometime in January 1997,
the respondents started putting up a barbed-wire fence on
the perimeter of the adjacent property; and that in the
course of such construction, the petitioners farm house was
destroyed and bamboos and other trees were cut.[2]
The complaint further alleged that the respondents
made claims that the petitioners farm house and the trees
were built and planted on a portion of the adjacent property
owned by the respondents. The respondents then prevented
and refused to allow the petitioners and their families to
enter the property, through security guards. The
respondents, likewise, threatened to clear the trees and
scrape the area owned by the petitioners with the use of a
bulldozer. The petitioners also alleged that as a
consequence of the illegal and wrongful acts of the
respondents, they suffered actual damages and incurred
expenses; as such, they were entitled to moral and
exemplary damages, and expenses of litigation and
attorneys fees.[3]
On June 16, 1998, the respondents filed their Answer to
the complaint, alleging therein that the respondent
corporation was the owner of the land as evidenced by
Transfer Certificate of Title (TCT) No. 236044 which was
issued by the Register of Deeds on March 5, 1993. By
fencing the property in order to determine its metes and
bounds, the respondent corporation merely exercised its
rights of ownership over the property. The respondents
further maintained that the petitioners failed to establish
the metes and bounds of the property which was claimed to
have been usurped by them. A counterclaim for damages
was, likewise, interposed against the petitioners.
On September 18, 1998, the trial court issued an Order
granting the joint motion of the parties to have a relocation
survey on the property in order to verify its location. [4] The
survey team consisted of Robert Pangyarihan, Chief of the
Department of Environment and Natural Resources (DENR),
Region IV, Surveys Division as Chairman of the Survey Team;
[5]
Engr. Avelino L. San Buenaventura, representing the
petitioners; and Engr. Patricio Cabalo, representing the
respondents.
On January 30, 1999, the survey team issued a Report
on the relocation survey with the following recommendation:
WHEREFORE, this Commission finds that OCT No. P-691 of
the plaintiff overlaps TCT No. 236044 of parcel H-162341 of
the defendant but finds on the contrary that this land is not
the actual area that is being claimed and occupied by the
plaintiff but another parcel instead, namely H-164008. The
overlapping of titles was brought about by the double
issuance of title for H-162341 but the technical descriptions
of OCT No. P-691 describing a land different from the actual
occupation of the plaintiff was a result of the defective
survey.[6]
The survey team made the following findings: (1) TCT
No. 236044 originated from OCT No. 438 in the name of
Marcelino Santos, which was based on a Homestead Patent.
The said OCT was, in turn, based on Plan H-162341
surveyed on March 8, 1935 and approved on June 30, 1937;
(2) under the Cadastral Map Sheet of the Lungsod
Silangan Cadastre or CM 14-38 N., 121-12 E on file with the
Records Division of the DENR, Region IV, H-162341, the land
covered by the said OCT was reflected as Lot 10455; (3)
OCT No. P-691, under the name of petitioner Aurora de
Pedro, was based on Plan Cad. 04-0097-63-D which was a
subdivision survey of Lot 10455 of the Lungsod
Silangan Cadastre; (4) Lot 10455 was subdivided into Lots
10455-A to 10455-G; (5) Lot 10455-G was the subject of the
petitioners application for a Free Patent; and (6) the land
occupied by petitioner Aurora de Pedro is actually a portion
of Lot 10454/H-164008 originally registered on July 2, 1965
under OCT No. 468 based on Homestead Patent No. 99480
under the name of Isidro Benitez.[7] The survey team further
declared that:
The nature of this case, however, is one of overlapping titles
even if the erroneous technical descriptions rectified
because even while it may not fall inside the titled H-
162341, the lot of Mrs. de Pedro, et al. given the correct
description of the boundary, falls inside another titled parcel
under H-164008. Both H-162341 and H-164008 are
presently registered in the name of Romasan Development
Corporation, the defendant.
The granting of Free Patent to Mrs. de Pedro, et al. over a
previously titled property is unwarranted or can be
unwittingly an act resulting in double titling by the CENRO,
DENR in Antipolo City.[8]
Based on the report, the respondents filed a
Manifestation/Motion to Dismiss, averring that there was no
legal or factual basis for the complaint as shown by the
findings of the survey team; hence, the petitioners had no
cause of action against them.[9] The petitioners did not file
any opposition to the motion. Thus, on December 22, 1999,
the trial court issued an Order granting the motion and
ordering the dismissal of the complaint on the ground that
the petitioners had no cause of action.[10]
The petitioners filed a motion for reconsideration of the
order, contending that (1) the findings and conclusions of
the survey team were unreliable; (2) the chairman of the
team was facing criminal and administrative charges in
connection with the performance of his duties; (3) the
technical description of the property contained in OCT No. P-
691 was conclusive and should prevail over the findings of
the team; and (4) the petitioners had a cause of action for
damages against the respondents. According to the
petitioners, it was premature for the court to dismiss the
complaint without affording them the right to adduce their
evidence on their claim for damages.[11]
The petitioners appended to their motion the counter-
affidavit of Jesus Pampellona, Deputy Land Inspector, Office
of the Community Environment and Natural Resources Office
in Antipolo City. Pampellona alleged that subsequent to the
application for a free patent filed by petitioner Aurora de
Pedro over Lots 10455-F and 10455-G, he conducted the
required ocular inspections to determine the truth of her
claim of actual possession over the properties subject of her
application. He found out that she was in actual, public,
adverse and continuous possession of the lots applied for by
her, and that they were with several improvements, like
petitioner Aurora de Pedros house and several fruit-bearing
trees with an average age of 20 to 25 years. He averred
that, as evidence of her ownership and possession over the
lots, petitioner Aurora de Pedro also submitted an
Extrajudicial Partition with Waiver of Rights dated May 10,
1991, executed by the heirs of Marcelino Santos, and an
Affidavit of Waiver of Rights dated June 6, 1991, which she
herself executed. Pampellona declared that there was no
overlapping of claims or rights over the subject lot based on
a certification from the Lands Management Bureau of the
DENR in Manila, and that there was no existing record of a
previous Homestead Application applied for by Marcelino
Santos. He asserted that he secured another Certification
dated January 17, 1991 to the effect that Lot No. 10455,
Mcad-585 located in San Isidro, Antipolo, Rizal, was not
covered by any public land application and there was no
record of the alleged Homestead Application 162341 under
the name of Marcelino Santos. Pampellona, likewise, alleged
that respondent corporation was the ninth (9th) transferee
from the alleged original registered owner, Marcelino
Santos, in whose favor OCT No. 438 Homestead Patent was
issued on August 30, 1937.[12]
Also appended to the said motion for reconsideration
were Certifications from the Lands Management Bureau,
stating that Plan H-164008 was not available on file despite
diligent efforts in locating the same, and that H-164008 was
not listed in the EDP listing; and Certifications from the
Register of Deeds of Rizal and Marikina City that OCT No.
468 issued on July 2, 1965 was not among the records on
file with them.[13]
The respondents opposed the petitioners motion,
claiming that the petitioners failed to oppose the
appointment of the chairman of the team before the
relocation survey. Moreover, since according to the report,
the land claimed by the petitioners was covered by the title
under the name of respondent corporation, the petitioners
claim for damages had no leg to stand on.[14]
On July 11, 2000, the trial court issued an Order denying
the petitioners motion for reconsideration, without prejudice
to the filing of an appropriate action for the correction or
alteration of the technical description of the property
covered by OCT No. P-691.[15]
The petitioners appealed the order to the Court of
Appeals (CA). On November 29, 2002, the CA rendered a
Decision affirming the assailed orders. The CA ruled that the
result of the relocation survey has the presumption of
regularity, such that it must be respected absent any clear
showing that it had been irregularly conducted by the
survey team. The CA held that the petitioners had every
opportunity to question and object to the composition of the
survey team before the trial court; since they failed to do so,
they cannot now be allowed to do the same on appeal.
According to the CA, it could not take judicial notice of the
alleged cases filed against the chairman of the survey team
since this was not one of the matters which the courts could
take judicial notice of, whether mandatory or directory. [16]
 Finally, the CA ruled that the respondents could not be
adjudged liable for the damages allegedly sustained by the
petitioners as a consequence of a valid and justified exercise
of ownership over the disputed property. The CA reiterated
the trial courts holding that the petitioners were not barred
from filing the appropriate action where they may seek to
correct whatever mistake or irregularity that their title had.
[17]
On April 11, 2003, the CA issued a Resolution denying
the motion for reconsideration filed by the petitioners;
hence, this petition for review.
The petitioners rely upon the following grounds in
support of their petition:
I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED
AND DECIDED THE ISSUES IN THE INSTANT CASE IN A
MANNER CONTRARY TO ESTABLISHED LAW AND
JURISPRUDENCE BY HOLDING THAT THE INSTANT CASE
IS A SIMPLE CASE FOR DAMAGES.
II. THE HONORABLE COURT OF APPEALS GRAVELY
ERRED AND DECIDED THE ISSUES IN THE INSTANT CASE
IN A MANNER CONTRARY TO ESTABLISHED LAW AND
JURISPRUDENCE BY HOLDING THAT THE RESULTS OF
THE PRIOR RELOCATION SURVEY ENJOYS THE
PRESUMPTION OF REGULARITY THEREBY
DISPOSSESSING PETITIONERS OF THEIR OWNERSHIP
OVER THE DISPUTED PROPERTY DESPITE CLEAR AND
CONVINCING EVIDENCE THAT:
A. THE TITLE OF PETITIONER AURORA N. DE PEDRO IS
VALID AND INDEFEASIBLE; AND
B. THE TITLE OF RESPONDENT ROMASAN DEVELOPMENT
CORPORATION IS DEFECTIVE.
III. THE HONORABLE COURT OF APPEALS GRAVELY
ERRED AND DECIDED THE ISSUES IN THE INSTANT CASE
IN A MANNER CONTRARY TO ESTABLISHED LAW AND
JURISPRUDENCE IN NOT RULING THAT PETITIONERS HAD
BEEN DEPRIVED OF THEIR CONSTITUTIONAL RIGHT TO
COUNSEL.[18]
The petitioners maintain that petitioner Aurora de Pedro
is the registered owner of the subject property as evidenced
by OCT No. P-961, and that this title is conclusive of their
ownership over the same.[19] They aver that their title cannot
be the subject of a collateral attack.[20]
The petitioners contend that in contrast to their title,
the title of the respondents is defective. This can be gleaned
from the certifications issued by the Lands Management
Bureau attesting to the fact that Survey Plan H-164008,
under the name of the respondents does not exist and that
its verification is not listed in the EDP listing, as well as the
certifications from the Register of Deeds of Rizal and
Marikina that OCT No. 468, upon which the respondents title
was allegedly based, does not exist.[21]
The petitioners further posit that the relocation survey
report cannot prevail over the technical description of the
property in their title. They likewise assail the relocation
survey report by alleging that Pangyarihan, the chairman of
the survey team, is the respondent in a number of criminal
and administrative cases relating to the performance of his
duties.[22]
 The petitioners also claim that the CA mischaracterized
their complaint as a complaint for damages. They submit
that their complaint is not a simple case for damages but
one for the recovery of possession over the disputed
property on the strength of their ownership over the same.
They blame the ambiguity of the complaint on the
inadequacies of their former counsel.[23]
Finally, the petitioners assert that they were deprived of
their right to due process because their previous counsel did
not adequately defend them. They aver that their rights
were prejudiced by their former counsels negligence; hence,
such negligent acts should not be binding on them.[24]
On the other hand, the respondents submit that the
petitioners are now in estoppel to assail the veracity and
validity of the relocation survey report since they actively
participated in its preparation.[25] They assert that the survey
report is entitled to full faith and credence as it was
prepared and made by competent persons who were
appointed by the trial court, represented the parties, and
were qualified to exact a report based on their expertise.
[26]
They maintain that the petitioners objection to the
appointment of Pangyarihan as chairman of the survey team
is a mere afterthought and they should have objected to it
from the very start.[27]
The respondents aver that since the survey report
revealed that there was error in the technical description of
the petitioners property and that it was the petitioners who
usurped the respondents property, the claim for damages
can no longer be sustained.[28] The private respondents also
assert that the fact that the plan and the verification of the
survey plan of H-164008 do not exist in the records of the
Register of Deeds is not sufficient proof that their title is
defective.[29]
Further, the respondents submit that the dismissal of
the complaint was not due to the negligence of the
petitioners former counsel but was based on the result of
the survey, the conduct of which was agreed upon by the
parties. Even if the former counsel of the petitioners made a
mistake on how to proceed with the case, such mistake is
not so gross and is still binding on the client. [30] The
respondents added that the failure to oppose the
Manifestation/Motion to Dismiss was not solely the former
counsels fault, since at the time the new counsel entered his
appearance, such motion had not yet been resolved by the
trial court and the new counsel had still ample time to
oppose it.[31]
The pivotal issue between the parties in the trial court is
whether or not, as claimed by the petitioners in their
complaint, the subject property is a portion of the property
covered by OCT No. P-691; or, as claimed by the
respondents in their answer to the complaint, whether the
subject property is a portion of the property covered by TCT
No. 236044, which appears to be a portion of that property
originally registered in 1937 as gleaned from TCT No.
236044.
 In contrast to the apposite claims of the parties, the
Survey Team found that the subject property, which is part
of the lot actually occupied by the petitioners, is a portion of
Lot 10454/H-164008 which was originally covered by OCT
No. 468 issued to Isidro Benitez, whereas the technical
description of Lot 10455-G covered by OCT No. P-691 was
erroneous for being the result of a defective survey.
The resolution of the issue will involve the alteration,
correction or modification either of OCT No. P-691 under the
name of petitioner Aurora de Pedro, or TCT No. 236044
under the name of respondent corporation. If the subject
property is found to be a portion of the property covered by
OCT No. P-691 but is included in the technical description of
the property covered by TCT No. 236044, the latter would
have to be corrected. On the other hand, if the subject
property is found to be a portion of the property covered by
TCT No. 236044 but is included in the property covered by
OCT No. P-691, then the latter title must be rectified.
However, the rectification of either title may be made
only via an action filed for the said purpose, [32]conformably
with Section 48 of Act No. 496, which provides:
SEC. 48. Certificate not subject to collateral attack. A
certificate of title shall not be subject to collateral attack. It
cannot be altered, modified, or cancelled except in a direct
proceeding in accordance with law.
It has been held that a certificate of title, once
registered, should not thereafter be impugned, altered,
changed, modified, enlarged or diminished except in a direct
proceeding permitted by law.[33] The resolution of the issue
is, thus, not dependent on the report of the survey team
filed in the trial court.
The action of the petitioners against the respondents,
based on the material allegations of the complaint, is one
for recovery of possession of the subject property and
damages. However, such action is not a direct, but a
collateral attack of TCT No. 236044. [34] Neither did the
respondents directly attack OCT No. P-691 in their answer to
the complaint. Although the respondents averred in said
answer, by way of special and affirmative defenses, that the
subject property is covered by TCT No. 236044 issued in the
name of the respondent corporation, and as such the said
respondent is entitled to the possession thereof to the
exclusion of the petitioners, such allegation does not
constitute a direct attack on OCT No. P-691, but is likewise a
collateral attack thereon. Indeed, in Ybanez v. Intermediate
Appellate Court,[35] we held that:
It was erroneous for petitioners to question the Torrens
Original Certificate of Title issued to private respondent over
Lot No. 986 in Civil Case No. 671, an ordinary civil action for
recovery of possession filed by the registered owner of the
said lot, by invoking as affirmative defense in their answer
the Order of the Bureau of Lands, dated July 19, 1978,
issued pursuant to the investigatory power of the Director of
Lands under Section 91 of Public Land Law (C.A. 141 as
amended). Such a defense partakes of the nature of a
collateral attack against a certificate of title brought under
the operation of the Torrens system of registration pursuant
to Section 122 of the Land Registration Act, now Section 103
of P.D. 1259. The case law on the matter does not allow a
collateral attack on the Torrens certificate of title on the
ground of actual fraud. The rule now finds expression in
Section 48 of P.D. 1529 otherwise known as the Property
Registration Decree.[36]
 Thus, the court a quo had no jurisdiction to resolve the
decisive issue raised by the parties in the trial court; hence,
it behooved the trial court to order the dismissal of the
complaint on that ground.
The petitioners anchor their claim of lawful possession
of the subject property on their allegation that said property
is a portion of the property covered by OCT No. P-691 in the
name of petitioner Aurora de Pedro. The petitioners were
burdened to prove not only their ownership over the
property covered by OCT No. P-691 but also that the subject
property is a portion of the property covered by the said title
and, if they fail to do so, the complaint must be dismissed.
We agree with the petitioners that, generally, a
certificate of title shall be conclusive as to all matters
contained therein and conclusive evidence of the ownership
of the land referred to therein. However, it bears stressing
that while certificates of title are indefeasible, unassailable
and binding against the whole world, including the
government itself, they do not create or vest title. [37] They
merely confirm or record title already existing and vested.
They cannot be used to protect a usurper from the true
owner, nor can they be used as a shield for the commission
of fraud; neither do they permit one to enrich himself at the
expense of others.[38]
As we had the occasion to state in Metropolitan
Waterworks and Sewerage System v. Court of Appeals:[39]
It must be observed that the title of petitioner MWSS was a
transfer from TCT No. 36957 which was derived from OCT
No. 994 registered on May 3, 1917. Upon the other hand,
private respondents title was derived from the same OCT
No. 994 but dated April 19, 1917. Where two certificates (of
title) purport to include the same land, the earlier in date
prevails. x x x. In successive registrations, where more than
one certificate is issued in respect of a particular estate or
interest in land, the person claiming under the prior
certificate is entitled to the estate or interest; and the
person is deemed to hold under the prior certificate who is
the holder of, or whose claim is derived, directly or
indirectly, from the person who was the holder of the
earliest certificate issued in respect thereof. Hence, in point
of priority issuance, private respondents title prevails over
that of petitioner MWSS.
Lastly, a certificate is not conclusive evidence of title if it is
shown that the same land had already been registered and
an earlier certificate for the same is in existence. Since the
land in question has already been registered under OCT No.
994 dated April 19, 1917, the subsequent registration of the
same land on May 3, 1917 is null and void.[40]
While it is true that the petitioners claimed damages
against the respondents on account of the latters alleged
trespass on the subject property and the alleged destruction
of the petitioners property, the resolution by the court a
quo of the claim for damages against the petitioners is
riveted to its resolution of the issue of whether the subject
property is a portion of the petitioners property covered by
OCT No. P-691 or the respondents property covered by TCT
No. 236044.
IN LIGHT OF ALL THE FOREGOING, the petition is
DENIED for lack of merit. The Decision of the Court of
Appeals in CA-G.R. CV No. 68424 affirming the assailed
Orders of the Regional Trial Court is AFFIRMED. The
complaint is DISMISSED without prejudice. No costs.
 SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-
Nazario, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 206653 February 25, 2015
YUK LING ONG, Petitioner,
vs.
BENJAMIN T. CO, Respondent.
DECISION
MENDOZA, J.:
In court proceedings, there is no right more cherished than
the right of every litigant to be given an opportunity to be
heard. This right begins at the very moment that summons
is served on the defendant. The Rules of Court places
utmost importance in ensuring that the defendant
personally grasp the weight of responsibility that will befall
him. Thus, it is only in exceptional circumstances that
constructive notification, or substituted service of summons,
is allowed. If the server falls short of the rigorous
requirements for substituted service of summons, then the
Court has no other option but to strike down a void
judgment, regardless of the consequences. This is a petition
for review on certiorari seeking to reverse and set aside the
June 27, 2012 Decision1 and the March 26, 2013
Resolution2 of the Court of Appeals (CA)in CA-G.R. SP No.
106271, which denied the petition for annulment of
judgment.
The Facts
Petitioner Yuk Ling Ong (petitioner), a British-Hong Kong
national, and respondent Benjamin Co (respondent), a
Filipino citizen, were married on October 3, 1982 at
Ellinwood-Malate Church.3
Sometime in November 2008, petitioner received a
subpoena from the Bureau of Immigration and Deportation
(BID)directing her to appear before the said agency because
her permanent residence visa was being subjected to
cancellation proceedings. Reportedly, her marriage with
respondent was nullified by the court.
When petitioner appeared before the BID, she was furnished
with the copies of the following documents: (1) petition for
declaration of nullity of marriage filed as Civil Case No. CV-
01-0177; (2) petition for declaration of nullity of marriage
docketed as Civil Case No. 02-0306; (3) Decision, 4 dated
December 11, 2002, in Civil Case No. 02-0306 of the
Regional Trial Court, Branch 260 (RTC), Paraaque City,
declaring the marriage between petitioner and respondent
as void ab initio; and (4) their marriage contract 5 with the
subject decision annotated thereon. Petitioner was
perplexed that her marriage with respondent had been
declared void ab initio. The above documents showed that
on April 26, 2001, respondent filed a petition for declaration
of nullity6 on the ground of psychological incapacity before
the RTC, which was docketed as Civil Case No. CV-01-0177.
Respondent stated that petitioners address was 600 Elcano
St., Binondo, Manila. There was no showing of its status,
whether pending, withdrawn or terminated. On July 19,
2002, respondent filed another petition for declaration of
Nullity7 on the ground of psychological incapacity before the
RTC, docketed as Civil Case No. 02-0306. Respondent
indicated that petitioners address was 23 Sta. Rosa Street,
Unit B-2 Manresa Garden Homes, Quezon City. On July 29,
2002, the RTC issued summons.8 In his Servers
Return,9 process server Rodolfo Torres, Jr. stated that, on
August 1, 2002, substituted service of summons with the
copy of the petition was effected after several futile
attempts to serve the same personally on petitioner. The
said documents were received by Mr. Roly Espinosa, a
security officer.
On December 11, 2002, the RTC rendered a decision10 in
Civil Case No. 02-0306 finding respondents marriage with
petitioner as void ab initio on the ground of psychological
incapacity under Article 36 of the Family Code. It stated that
summons was served on petitioner on August 1, 2002, but
she failed to file her responsive pleading within the
reglementary period. The public prosecutor also stated that
there were no indicative facts to manifest collusion. Thus,
the RTC concluded that petitioner was psychologically
incapacitated to perform her essential marital obligations.
Consequently, petitioner filed a petition for annulment of
judgment11 under Rule 47 of the Rules of Court before the
CA on November 24, 2008, claiming that she was never
notified of the cases filed against her. She prayed that the
RTC decision, dated December 11, 2002, in Civil Case No.
02-0306, be nullified on the grounds of extrinsic fraud and
lack of jurisdiction. Petitioner alleged that first, respondent
committed extrinsic fraud because, as seen in Civil Case No.
CV-01-0177, he deliberately indicated a wrong address to
prevent her from participating in the trial; second,
jurisdiction over her person was not acquired in Civil Case
No. 02-0306 because of an invalid substituted service of
summons as no sufficient explanation, showing impossibility
of personal service, was stated before resorting to
substituted service of summons; third, the alleged
substituted service was made on a security guard of their
townhouse and not on a member of her household; and
fourth, she was not psychologically incapacitated to perform
her marital obligations.12
Ruling of the Court of Appeals
On June 27, 2012, the CA rendered the assailed decision
finding the petition for annulment of judgment to be devoid
of merit. It held that there was no sufficient proof to
establish that respondent employed fraud to insure
petitioners non-participation in the trial of Civil Case No. CV-
01-0177.
Relying on Robinson v. Miralles,13 the CA further ruled that
the substituted service of summons in Civil Case No. 02-
0306 was valid. It found that there was a customary practice
in petitioners townhouse that the security guard would first
entertain any visitors and receive any communication in
behalf of the homeowners. With this set-up, it was obviously
impossible for the process server to personally serve the
summons upon petitioner. It also declared that the process
servers return carries with it the presumption of regularity
in the discharge of a public officers duties and functions.
Petitioner moved for reconsideration, but her motion was
denied by the CA in its Resolution,14 dated March 26, 2013.
Hence, this petition, anchored on the following
ISSUES
1. Whether or not the Trial Court in Civil Case No. 02-0306
validly acquired jurisdiction over the person of the
petitioner.
2. Whether or not the facts proven by the petitioner
constitute extrinsic fraud within the purview of Rule 47 of
the Rules of Court.15
Petitioner argues that there was an invalid substituted
service of summons.1wphi1 The process servers return
only contained a general statement that substituted service
was resorted to "after several futile attempts to serve the
same personally,"16 without stating the dates and reasons of
the failed attempts. Petitioner also reiterates her argument
that extrinsic fraud was employed.
In his Comment,17 filed on July 9, 2014, respondent
contended that the servers return satisfactorily stated the
reason for the resort to a substituted service of summons on
August 1, 2002; and it was improbable that petitioner failed
to receive the summons because it was sent to the same
address which she declared in this present petition.
Petitioner filed her Reply18 on October 8, 2014 reiterating
her previous arguments.
The Courts Ruling
The Court finds merit in the petition.
Annulment of judgment is a recourse equitable in character,
allowed only in exceptional cases as where there is no
available or other adequate remedy. Rule 47 of the 1997
Rules of Civil Procedure, as amended, governs actions for
annulment of judgments or final orders and resolutions, and
Section 2 thereof explicitly provides only two grounds for
annulment of judgment, that is, extrinsic fraud and lack of
jurisdiction.19 Annulment of judgment is an equitable
principle not because it allows a party-litigant another
opportunity to reopen a judgment that has long lapsed into
finality but because it enables him to be discharged from
the burden of being bound to a judgment that is an absolute
nullity to begin with.20
Petitioner raises two grounds to support her claim for
annulment of judgment: (1) extrinsic fraud and (2) lack of
jurisdiction. Her contention on the existence of extrinsic
fraud, however, is too unsubstantial to warrant
consideration. The discussion shall then focus on the ground
of lack of jurisdiction.
Lack of jurisdiction on the part of the trial court in rendering
the judgment or final order is either lack of jurisdiction over
the subject matter or nature of the action, or lack of
jurisdiction over the person of the petitioner. The former is a
matter of substantive law because statutory law defines the
jurisdiction of the courts over the subject matter or nature of
the action. The latter is a matter of procedural law, for it
involves the service of summons or other processes on the
petitioner.21
In the present case, petitioner contends that there was lack
of jurisdiction over her person because there was an invalid
substituted service of summons. Jurisdiction over the
defendant is acquired either upon a valid service of
summons or the defendant's voluntary appearance in
court.22 If the defendant does not voluntarily appear in
court, jurisdiction can be acquired by personal or substituted
service of summons as laid out under Sections 6 and 7 of
Rule 14 of the Rules of Court, which state:
Sec. 6. Service in person on defendant. - Whenever
practicable, the summons shall be served by handing a copy
thereof to the defendant in person, or, if he refuses to
receive and sign for it, by tendering it to him.
Sec. 7. Substituted Service. - If, for justifiable causes, the
defendant cannot be served within a reasonable time as
provided in the preceding section, service may be effected
(a) by leaving copies of the summons at the defendant's
residence with some person of suitable age and discretion
then residing therein, or (b) by leaving the copies at
defendant's office or regular place of business with some
competent person in charge thereof.
The landmark case of Manotoc v. CA (Manotoc)23 thoroughly
discussed the rigorous requirements of a substituted service
of summons, to wit: xxx
(1) Impossibility of Prompt Personal Service
For substituted service of summons to be available, there
must be several attempts by the sheriff to personally serve
the summons within a reasonable period of one month
which eventually resulted in failure to prove impossibility of
prompt service. "Several attempts" means at least three (3)
tries, preferably on at least two different dates. In addition,
the sheriff must cite why such efforts were unsuccessful. It
is only then that impossibility of service can be confirmed or
accepted.
(2) Specific Details in the Return
The sheriff must describe in the Return of Summons the
facts and circumstances surrounding the attempted
personal service. The efforts made to find the defendant and
the reasons behind the failure must be clearly narrated in
detail in the Return. The date and time of the attempts on
personal service, the inquiries made to locate the
defendant, the name/s of the occupants of the alleged
residence or house of defendant and all other acts done,
though futile, to serve the summons on defendant must be
specified in the Return to justify substituted service.
(2) A Person of Suitable Age and Discretion
The sheriff must therefore determine if the person found in
the alleged dwelling or residence of defendant is of legal
age, what the recipient's relationship with the defendant is,
and whether said person comprehends the significance of
the receipt of the summons and his duty to immediately
deliver it to the defendant or at least notify the defendant of
said receipt of summons. These matters must be clearly and
specifically described in the Return of Summons. (Emphases
and underscoring supplied)
The pronouncements of the Court in Manotoc have been
applied to several succeeding cases. In Pascual v.
Pascual,24 the return of summons did not show or indicate
the actual exertion or positive steps taken by the officer or
process server in serving the summons personally to the
defendant. Similarly, in Spouses Afdal v. Carlos,25 the
process servers indorsements therein failed to state that
the personal service on the defendants was rendered
impossible and that efforts were made to find them
personally. In both those cases, the Court ruled that the
meticulous requirements for substituted service of summons
were not met.
There are cases, however, in which Manotoc was applied,
but, nevertheless, it was ruled that there was no lack of
jurisdiction over the person of the defendant. In Sagana v.
Francisco,26 the diligent efforts exerted by the sheriff to
locate the respondent were determined, not only based on
the sheriff's return, but also on the process server's notation
and case records. In the case of Wong v. Factor-Koyama,27 on
the other hand, even if the sheriff performed an invalid
substituted service of summons, jurisdiction over the person
of defendant was obtained because the latter had actively
participated in trial, amounting to a voluntary appearance
under Section 20 of Rule 14.28
In the case at bench, the summons in Civil Case No. 02-
030629 was issued on July 29, 2002. In his servers
return,30 the process server resorted to substituted service
of summons on August 1, 2002. Surprisingly, the process
server immediately opted for substituted service of
summons after only two (2) days from the issuance of the
summons. The servers return stated the following:
SERVERS RETURN
THIS IS TO CERTIFY THAT on August 1, 2002, substituted
service of summons with copy of petition, were effected to
respondent, Yuk Ling H. Ong, at the Unit B-2, No. 23 Sta.
Rosa St., Manresa Garden Homes, Manresa Garden City,
Quezon City, after several futile attempts to serve the same
personally. The said documents were received by Mr. Roly
Espinosa of sufficient age and discretion, the Security Officer
thereat.
Therefore, respectfully returning to Court, original copy of
summons, Duly Served, this 2nd day of August, 2002.
RODOLFO P. TORRES, JR.
Process Server
(Emphasis supplied)
The servers return utterly lacks sufficient detail of the
attempts undertaken by the process server to personally
serve the summons on petitioner. The server simply made a
general statement that summons was effected after several
futile attempts to serve the same personally. The server did
not state the specific number of attempts made to perform
the personal service of summons; the dates and the
corresponding time the attempts were made; and the
underlying reason for each unsuccessful service. He did not
explain either if there were inquiries made to locate the
petitioner, who was the defendant in the case. These
important acts to serve the summons on petitioner, though
futile, must be specified in the return to justify substituted
service.
The servers return did not describe in detail the person who
received the summons, on behalf of petitioner. It simply
stated that the summons was received "by Mr. Roly Espinosa
of sufficient age and discretion, the Security Officer thereat."
It did not expound on the competence of the security officer
to receive the summons.
Also, aside from the servers return, respondent failed to
indicate any portion of the records which would describe the
specific attempts to personally serve the summons.
Respondent did not even claim that petitioner made any
voluntary appearance and actively participated in Civil Case
No. 02-0306.
The case of Robinson v. Miralles, cited by the CA, is not
applicable. In that case, the return described in thorough
detail how the security guard refused the sheriffs entry
despite several attempts. The defendant in the said case
specifically instructed the guard to prevent anybody to
proceed to her residence. In the present case, the attempts
made by the process server were stated in a broad and
ambiguous statement.
The CA likewise erred in ruling that the presumption of
regularity in the performance of official duty could be
applied in the case at bench. This p resumption of regularity,
however, was never intended to be applied even in cases
where there are no showing of substantial compliance with
the requirements of the rules of procedure. Such
presumption does not apply where it is patent that the
sheriff's or server's return is defective.31 As earlier
explained, the server's return did not comply with the
stringent requirements of substituted service of summons.
Given that the meticulous requirements in Manotoc were not
met, the Court is not inclined to uphold the CA's denial of
the petition for annulment of judgment for lack of
jurisdiction over the person of petitioner because there was
an invalid substituted service of summons. Accordingly, the
decision in Civil Case No. 02-0306 must be declared null and
void.
The stricter rule in substituted service of summons was
meant to address "[t]he numerous claims of irregularities in
substituted service which have spawned the filing of a great
number of unnecessary special civil actions of certiorari and
appeals to higher courts, resulting in prolonged litigation
and wasteful legal expenses."32
Although the decision in Civil Case No. 02-0306 was
promulgated as early as December 11, 2002, the Court must
strike it down for lack of jurisdiction over the person of
petitioner. The favorable judgment enjoyed by respondent
cannot be categorized as a genuine victory because it was
fought against an adversary, who was ignorant of the
existing dispute. Whatever prize bestowed upon the victor in
such a void decision must also be undone. Respondent, if he
wishes to pursue, must start from scratch and institute his
action for declaration of nullity again; this time with
petitioner fully aware and ready for litigation.
WHEREFORE, the petition is GRANTED. The June 27, 2012
Decision and the March 26, 2013 Resolution of the Court of
Appeals in CAG.R. SP No. 106271 are hereby REVERSED and
SET ASIDE. The December 11, 2002 Decision of the Regional
Trial Court, Branch 260, Paraaque City is hereby declared
VOID.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
FIRST DIVISION
[G.R. No. 144225. June 17, 2003]
SPOUSES GODOFREDO ALFREDO and CARMEN LIMON
ALFREDO, SPOUSES ARNULFO SAVELLANO and
EDITHA B. SAVELLANO, DANTON D. MATAWARAN,
SPOUSES DELFIN F. ESPIRITU, JR. and ESTELA S.
ESPIRITU and ELIZABETH TUAZON, petitioners,
vs. SPOUSES ARMANDO BORRAS and ADELIA
LOBATON BORRAS, respondents.
DECISION
CARPIO, J.:
The Case
Before us is a petition for review assailing the
Decision[1] of the Court of Appeals dated 26 November 1999
affirming the decision[2] of the Regional Trial Court of Bataan,
Branch 4, in Civil Case No. DH-256-94. Petitioners also
question the Resolution of the Court of Appeals dated 26
July 2000 denying petitioners motion for reconsideration.
The Antecedent Facts
A parcel of land measuring 81,524 square meters
(Subject Land) in Barrio Culis, Mabiga, Hermosa, Bataan is
the subject of controversy in this case. The registered
owners of the Subject Land were petitioner spouses,
Godofredo Alfredo (Godofredo) and Carmen Limon Alfredo
(Carmen). The Subject Land is covered by Original
Certificate of Title No. 284 (OCT No. 284) issued to
Godofredo and Carmen under Homestead Patent No. V-
69196.
On 7 March 1994, the private respondents, spouses
Armando Borras (Armando) and Adelia Lobaton Borras
(Adelia), filed a complaint for specific performance against
Godofredo and Carmen before the Regional Trial Court of
Bataan, Branch 4. The case was docketed as Civil Case No.
DH-256-94.
Armando and Adelia alleged in their complaint that
Godofredo and Carmen mortgaged the Subject Land
for P7,000.00 with the Development Bank of the Philippines
(DBP). To pay the debt, Carmen and Godofredo sold the
Subject Land to Armando and Adelia for P15,000.00, the
buyers to pay the DBP loan and its accumulated interest,
and the balance to be paid in cash to the sellers.
Armando and Adelia gave Godofredo and Carmen the
money to pay the loan to DBP which signed the release of
mortgage and returned the owners duplicate copy of OCT
No. 284 to Godofredo and Carmen. Armando and Adelia
subsequently paid the balance of the purchase price of the
Subject Land for which Carmen issued a receipt dated 11
March 1970. Godofredo and Carmen then delivered to Adelia
the owners duplicate copy of OCT No. 284, with the
document of cancellation of mortgage, official receipts of
realty tax payments, and tax declaration in the name of
Godofredo. Godofredo and Carmen introduced Armando and
Adelia, as the new owners of the Subject Land, to the
Natanawans, the old tenants of the Subject Land.Armando
and Adelia then took possession of the Subject Land.
In January 1994, Armando and Adelia learned that hired
persons had entered the Subject Land and were cutting
trees under instructions of allegedly new owners of the
Subject Land.Subsequently, Armando and Adelia discovered
that Godofredo and Carmen had re-sold portions of the
Subject Land to several persons.
On 8 February 1994, Armando and Adelia filed an
adverse claim with the Register of Deeds of
Bataan. Armando and Adelia discovered that Godofredo and
Carmen had secured an owners duplicate copy of OCT No.
284 after filing a petition in court for the issuance of a new
copy. Godofredo and Carmen claimed in their petition that
they lost their owners duplicate copy. Armando and Adelia
wrote Godofredo and Carmen complaining about their acts,
but the latter did not reply. Thus, Armando and Adelia filed a
complaint for specific performance.
On 28 March 1994, Armando and Adelia amended their
complaint to include the following persons as additional
defendants: the spouses Arnulfo Savellano and Editha B.
Savellano, Danton D. Matawaran, the spouses Delfin F.
Espiritu, Jr. and Estela S. Espiritu, and Elizabeth Tuazon
(Subsequent Buyers). The Subsequent Buyers, who are also
petitioners in this case, purchased from Godofredo and
Carmen the subdivided portions of the Subject Land. The
Register of Deeds of Bataan issued to the Subsequent
Buyers transfer certificates of title to the lots they
purchased.
In their answer, Godofredo and Carmen and the
Subsequent Buyers (collectively petitioners) argued that the
action is unenforceable under the Statute of
Frauds. Petitioners pointed out that there is no written
instrument evidencing the alleged contract of sale over the
Subject Land in favor of Armando and Adelia. Petitioners
objected to whatever parole evidence Armando and Adelia
introduced or offered on the alleged sale unless the same
was in writing and subscribed by Godofredo. Petitioners
asserted that the Subsequent Buyers were buyers in good
faith and for value. As counterclaim, petitioners sought
payment of attorneys fees and incidental expenses.
Trial then followed. Armando and Adelia presented the
following witnesses: Adelia, Jesus Lobaton, Roberto Lopez,
Apolinario Natanawan, Rolando Natanawan, Tomas
Natanawan, and Mildred Lobaton. Petitioners presented two
witnesses, Godofredo and Constancia Calonso.
On 7 June 1996, the trial court rendered its decision in
favor of Armando and Adelia. The dispositive portion of the
decision reads:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of plaintiffs, the spouses Adelia Lobaton
Borras and Armando F. Borras, and against the defendant-
spouses Godofredo Alfredo and Carmen Limon Alfredo,
spouses Arnulfo Sabellano and Editha B. Sabellano, spouses
Delfin F. Espiritu, Jr. and Estela S. Espiritu, Danton D.
Matawaran and Elizabeth Tuazon, as follows:
1. Declaring the Deeds of Absolute Sale of the disputed
parcel of land (covered by OCT No. 284) executed by the
spouses Godofredo Alfredo and Camen Limon Alfredo in
favor of spouses Arnulfo Sabellano and Editha B. Sabellano,
spouses Delfin F. Espiritu, Danton D. Matawaran and
Elizabeth Tuazon, as null and void;
2. Declaring the Transfer Certificates of Title Nos. T-163266
and T-163267 in the names of spouses Arnulfo Sabellano
and Editha B. Sabellano; Transfer Certificates of Title Nos. T-
163268 and 163272 in the names of spouses Delfin F.
Espiritu, Jr. and Estela S. Espiritu; Transfer Certificates of
Title Nos. T-163269 and T-163271 in the name of Danton D.
Matawaran; and Transfer Certificate of Title No. T-163270 in
the name of Elizabeth Tuazon, as null and void and that the
Register of Deeds of Bataan is hereby ordered to cancel said
titles;
3. Ordering the defendant-spouses Godofredo Alfredo and
Carmen Limon Alfredo to execute and deliver a good and
valid Deed of Absolute Sale of the disputed parcel of land
(covered by OCT No. 284) in favor of the spouses Adelia
Lobaton Borras and Armando F. Borras within a period of ten
(10) days from the finality of this decision;
4. Ordering defendant-spouses Godofredo Alfredo and
Carmen Limon Alfredo to surrender their owners duplicate
copy of OCT No. 284 issued to them by virtue of the Order
dated May 20, 1992 of the Regional Trial Court of Bataan,
Dinalupihan Branch, to the Registry of Deeds of Bataan
within ten (10) days from the finality of this decision, who, in
turn, is directed to cancel the same as there exists in the
possession of herein plaintiffs of the owners duplicate copy
of said OCT No. 284 and, to restore and/or reinstate OCT No.
284 of the Register of Deeds of Bataan to its full force and
effect;
5. Ordering the defendant-spouses Godofredo Alfredo and
Carmen Limon Alfredo to restitute and/or return the amount
of the respective purchase prices and/or consideration of
sale of the disputed parcels of land they sold to their co-
defendants within ten (10) days from the finality of this
decision with legal interest thereon from date of the sale;
6. Ordering the defendants, jointly and severally, to pay
plaintiff-spouses the sum of P20,000.00 as and for attorneys
fees and litigation expenses; and
7. Ordering defendants to pay the costs of suit.
Defendants counterclaims are hereby dismissed for lack of
merit.
SO ORDERED.[3]
Petitioners appealed to the Court of Appeals.
On 26 November 1999, the Court of Appeals issued its
Decision affirming the decision of the trial court, thus:
WHEREFORE, premises considered, the appealed decision in
Civil Case No. DH-256-94 is hereby AFFIRMED in its
entirety. Treble costs against the defendants-appellants.
SO ORDERED.[4]
On 26 July 2000, the Court of Appeals denied petitioners
motion for reconsideration.
The Ruling of the Trial Court
The trial court ruled that there was a perfected contract
of sale between the spouses Godofredo and Carmen and the
spouses Armando and Adelia. The trial court found that all
the elements of a contract of sale were present in this
case. The object of the sale was specifically identified as the
81,524-square meter lot in Barrio Culis, Mabigas, Hermosa,
Bataan, covered by OCT No. 284 issued by the Registry of
Deeds of Bataan. The purchase price was fixed
at P15,000.00, with the buyers assuming to pay the
sellers P7,000.00 DBP mortgage loan including its
accumulated interest. The balance of the purchase price
was to be paid in cash to the sellers. The last payment
of P2,524.00 constituted the full settlement of the purchase
price and this was paid on 11 March 1970 as evidenced by
the receipt issued by Carmen.
The trial court found the following facts as proof of a
perfected contract of sale: (1) Godofredo and Carmen
delivered to Armando and Adelia the Subject Land; (2)
Armando and Adelia treated as their own tenants the
tenants of Godofredo and Carmen; (3) Godofredo and
Carmen turned over to Armando and Adelia documents such
as the owners duplicate copy of the title of the Subject Land,
tax declaration, and the receipts of realty tax payments in
the name of Godofredo; and (4) the DBP cancelled the
mortgage on the Subject Property upon payment of the loan
of Godofredo and Carmen. Moreover, the receipt of payment
issued by Carmen served as an acknowledgment, if not a
ratification, of the verbal sale between the sellers and the
buyers. The trial court ruled that the Statute of Frauds is not
applicable because in this case the sale was perfected.
The trial court concluded that the Subsequent Buyers
were not innocent purchasers. Not one of the Subsequent
Buyers testified in court on how they purchased their
respective lots.The Subsequent Buyers totally depended on
the testimony of Constancia Calonso (Calonso) to explain
the subsequent sale. Calonso, a broker, negotiated with
Godofredo and Carmen the sale of the Subject Land which
Godofredo and Carmen subdivided so they could sell anew
portions to the Subsequent Buyers.
Calonso admitted that the Subject Land was adjacent to
her own lot. The trial court pointed out that Calonso did not
inquire on the nature of the tenancy of the Natanawans and
on who owned the Subject Land. Instead, she bought out the
tenants for P150,000.00. The buy out was embodied in
a Kasunduan. Apolinario Natanawan (Apolinario) testified
that he and his wife accepted the money and signed
the Kasunduan because Calonso and the Subsequent Buyers
threatened them with forcible ejectment. Calonso brought
Apolinario to the Agrarian Reform Office where he was asked
to produce the documents showing that Adelia is the owner
of the Subject Land. Since Apolinario could not produce the
documents, the agrarian officer told him that he would lose
the case. Thus, Apolinario was constrained to sign
the Kasunduan and accept the P150,000.00.
Another indication of Calonsos bad faith was her own
admission that she saw an adverse claim on the title of the
Subject Land when she registered the deeds of sale in the
names of the Subsequent Buyers. Calonso ignored the
adverse claim and proceeded with the registration of the
deeds of sale.
The trial court awarded P20,000.00 as attorneys fees to
Armando and Adelia. In justifying the award of attorneys
fees, the trial court invoked Article 2208 (2) of the Civil Code
which allows a court to award attorneys fees, including
litigation expenses, when it is just and equitable to award
the same. The trial court ruled that Armando and Adelia are
entitled to attorneys fees since they were compelled to file
this case due to petitioners refusal to heed their just and
valid demand.
The Ruling of the Court of Appeals
The Court of Appeals found the factual findings of the
trial court well supported by the evidence. Based on these
findings, the Court of Appeals also concluded that there was
a perfected contract of sale and the Subsequent Buyers
were not innocent purchasers.
The Court of Appeals ruled that the handwritten receipt
dated 11 March 1970 is sufficient proof that Godofredo and
Carmen sold the Subject Land to Armando and Adelia upon
payment of the balance of the purchase price. The Court of
Appeals found the recitals in the receipt as sufficient to
serve as the memorandum or note as a writing under the
Statute of Frauds.[5] The Court of Appeals then reiterated the
ruling of the trial court that the Statute of Frauds does not
apply in this case.
The Court of Appeals gave credence to the testimony of
a witness of Armando and Adelia, Mildred Lobaton, who
explained why the title to the Subject Land was not in the
name of Armando and Adelia. Lobaton testified that
Godofredo was then busy preparing to leave for
Davao. Godofredo promised that he would sign all the
papers once they were ready. Since Armando and Adelia
were close to the family of Carmen, they trusted Godofredo
and Carmen to honor their commitment. Armando and
Adelia had no reason to believe that their contract of sale
was not perfected or validly executed considering that they
had received the duplicate copy of OCT No. 284 and other
relevant documents. Moreover, they had taken physical
possession of the Subject Land.
The Court of Appeals held that the contract of sale is
not void even if only Carmen signed the receipt dated 11
March 1970. Citing Felipe v. Heirs of Maximo Aldon,
[6]
the appellate court ruled that a contract of sale made by
the wife without the husbands consent is not void but
merely voidable. The Court of Appeals further declared that
the sale in this case binds the conjugal partnership even if
only the wife signed the receipt because the proceeds of the
sale were used for the benefit of the conjugal
partnership. The appellate court based this conclusion on
Article 161[7] of the Civil Code.
 The Subsequent Buyers of the Subject Land cannot
claim that they are buyers in good faith because they had
constructive notice of the adverse claim of Armando and
Adelia. Calonso, who brokered the subsequent sale, testified
that when she registered the subsequent deeds of sale, the
adverse claim of Armando and Adelia was already annotated
on the title of the Subject Land. The Court of Appeals
believed that the act of Calonso and the Subsequent Buyers
in forcibly ejecting the Natanawans from the Subject Land
buttresses the conclusion that the second sale was tainted
with bad faith from the very beginning.
Finally, the Court of Appeals noted that the issue of
prescription was not raised in the Answer. Nonetheless, the
appellate court explained that since this action is actually
based on fraud, the prescriptive period is four years, with
the period starting to run only from the date of the
discovery of the fraud. Armando and Adelia discovered the
fraudulent sale of the Subject Land only in January
1994. Armando and Adelia lost no time in writing a letter to
Godofredo and Carmen on 2 February 1994 and filed this
case on 7 March 1994. Plainly, Armando and Adelia did not
sleep on their rights or lose their rights by prescription.
The Court of Appeals sustained the award of attorneys
fees and imposed treble costs on petitioners.
The Issues
Petitioners raise the following issues:
I In a petition for review on certiorari under Rule 45, this
Whether the alleged sale of the Subject Land in favor of
Armando and Adelia is valid and enforceable, where (1) it
was orally entered into and not in writing; (2) Carmen did
not obtain the consent and authority of her husband,
Godofredo, who was the sole owner of the Subject Land in
whose name the title thereto (OCT No. 284) was issued; and
(3) it was entered into during the 25-year prohibitive period
for alienating the Subject Land without the approval of the
Secretary of Agriculture and Natural Resources.
II
Whether the action to enforce the alleged oral contract of
sale brought after 24 years from its alleged perfection had
been barred by prescription and by laches.
III
Whether the deeds of absolute sale and the transfer
certificates of title over the portions of the Subject Land
issued to the Subsequent Buyers, innocent purchasers in
good faith and for value whose individual titles to their
respective lots are absolute and indefeasible, are valid.
IV
Whether petitioners are liable to pay Armando and
Adelia P20,0000.00 as attorneys fees and litigation
expenses and the treble costs, where the claim of Armando
and Adelia is clearly unfounded and baseless.
V
Whether petitioners are entitled to the counterclaim for
attorneys fees and litigation expenses, where they have
sustained such expenses by reason of institution of a clearly
malicious and unfounded action by Armando and Adelia.[8]
The Courts Ruling
The petition is without merit.
Court reviews only errors of law and not errors of facts.
[9]
The factual findings of the appellate court are generally
binding on this Court.[10] This applies with greater force when
both the trial court and the Court of Appeals are in complete
agreement on their factual findings. [11] In this case, there is
no reason to deviate from the findings of the lower
courts. The facts relied upon by the trial and appellate
courts are borne out by the record. We agree with the
conclusions drawn by the lower courts from these facts.
 Validity and Enforceability of the Sale
The contract of sale between the spouses Godofredo
and Carmen and the spouses Armando and Adelia was a
perfected contract. A contract is perfected once there is
consent of the contracting parties on the object certain and
on the cause of the obligation. [12] In the instant case, the
object of the sale is the Subject Land, and the price certain
is P15,000.00. The trial and appellate courts found that
there was a meeting of the minds on the sale of the Subject
Land and on the purchase price of P15,000.00. This is a
finding of fact that is binding on this Court.We find no reason
to disturb this finding since it is supported by substantial
evidence.
The contract of sale of the Subject Land has also been
consummated because the sellers and buyers have
performed their respective obligations under the contract. In
a contract of sale, the seller obligates himself to transfer the
ownership of the determinate thing sold, and to deliver the
same, to the buyer who obligates himself to pay a price
certain to the seller.[13] In the instant case, Godofredo and
Carmen delivered the Subject Land to Armando and Adelia,
placing the latter in actual physical possession of the
Subject Land. This physical delivery of the Subject Land also
constituted a transfer of ownership of the Subject Land to
Armando and Adelia.[14] Ownership of the thing sold is
transferred to the vendee upon its actual or constructive
delivery.[15] Godofredo and Carmen also turned over to
Armando and Adelia the documents of ownership to the
Subject Land, namely the owners duplicate copy of OCT No.
284, the tax declaration and the receipts of realty tax
payments.
On the other hand, Armando and Adelia paid the full
purchase price as evidenced by the receipt dated 11 March
1970 issued by Carmen. Armando and Adelia fulfilled their
obligation to provide the P7,000.00 to pay the DBP loan of
Godofredo and Carmen, and to pay the latter the balance
of P8,000.00 in cash. The P2,524.00 paid under the receipt
dated 11 March 1970 was the last installment to settle fully
the purchase price. Indeed, upon payment to DBP of
the P7,000.00 and the accumulated interests, the DBP
cancelled the mortgage on the Subject Land and returned
the owners duplicate copy of OCT No. 284 to Godofredo and
Carmen.
The trial and appellate courts correctly refused to apply
the Statute of Frauds to this case. The Statute of
Frauds[16] provides that a contract for the sale of real
property shall be unenforceable unless the contract or some
note or memorandum of the sale is in writing and
subscribed by the party charged or his agent. The existence
of the receipt dated 11 March 1970, which is a
memorandum of the sale, removes the transaction from the
provisions of the Statute of Frauds.
The Statute of Frauds applies only to executory
contracts and not to contracts either partially or totally
performed.[17] Thus, where one party has performed ones
obligation, oral evidence will be admitted to prove the
agreement.[18] In the instant case, the parties have
consummated the sale of the Subject Land, with both sellers
and buyers performing their respective obligations under
the contract of sale. In addition, a contract that violates the
Statute of Frauds is ratified by the acceptance of benefits
under the contract.[19] Godofredo and Carmen benefited
from the contract because they paid their DBP loan and
secured the cancellation of their mortgage using the money
given by Armando and Adelia. Godofredo and Carmen also
accepted payment of the balance of the purchase price.
Godofredo and Carmen cannot invoke the Statute of
Frauds to deny the existence of the verbal contract of sale
because they have performed their obligations, and have
accepted benefits, under the verbal contract. [20] Armando
and Adelia have also performed their obligations under the
verbal contract. Clearly, both the sellers and the buyers
have consummated the verbal contract of sale of the
Subject Land. The Statute of Frauds was enacted to prevent
fraud.[21] This law cannot be used to advance the very evil
the law seeks to prevent.
Godofredo and Carmen also claim that the sale of the
Subject Land to Armando and Adelia is void on two
grounds. First, Carmen sold the Subject Land without the
marital consent of Godofredo. Second, the sale was made
during the 25-year period that the law prohibits the
alienation of land grants without the approval of the
Secretary of Agriculture and Natural Resources.
These arguments are without basis.
The Family Code, which took effect on 3 August 1988,
provides that any alienation or encumbrance made by the
husband of the conjugal partnership property without the
consent of the wife is void. However, when the sale is made
before the effectivity of the Family Code, the applicable law
is the Civil Code.[22]
Article 173 of the Civil Code provides that the
disposition of conjugal property without the wifes consent is
not void but merely voidable. Article 173 reads:
The wife may, during the marriage, and within ten years
from the transaction questioned, ask the courts for the
annulment of any contract of the husband entered into
without her consent, when such consent is required, or any
act or contract of the husband which tends to defraud her or
impair her interest in the conjugal partnership
property. Should the wife fail to exercise this right, she or
her heirs, after the dissolution of the marriage, may demand
the value of property fraudulently alienated by the husband.
In Felipe v. Aldon,[23] we applied Article 173 in a case
where the wife sold some parcels of land belonging to the
conjugal partnership without the consent of the
husband. We ruled that the contract of sale was voidable
subject to annulment by the husband. Following petitioners
argument that Carmen sold the land to Armando and Adelia
without the consent of Carmens husband, the sale would
only be voidable and not void.
However, Godofredo can no longer question the sale.
Voidable contracts are susceptible of ratification.
[24]
Godofredo ratified the sale when he introduced Armando
and Adelia to his tenants as the new owners of the Subject
Land. The trial court noted that Godofredo failed to deny
categorically on the witness stand the claim of the
complainants witnesses that Godofredo introduced Armando
and Adelia as the new landlords of the tenants. [25] That
Godofredo and Carmen allowed Armando and Adelia to
enjoy possession of the Subject Land for 24 years is
formidable proof of Godofredos acquiescence to the sale. If
the sale was truly unauthorized, then Godofredo should
have filed an action to annul the sale. He did not. The
prescriptive period to annul the sale has long
lapsed. Godofredos conduct belies his claim that his wife
sold the Subject Land without his consent.
Moreover, Godofredo and Carmen used most of the
proceeds of the sale to pay their debt with the DBP. We
agree with the Court of Appeals that the sale redounded to
the benefit of the conjugal partnership. Article 161 of the
Civil Code provides that the conjugal partnership shall be
liable for debts and obligations contracted by the wife for
the benefit of the conjugal partnership. Hence, even if
Carmen sold the land without the consent of her husband,
the sale still binds the conjugal partnership.
Petitioners contend that Godofredo and Carmen did not
deliver the title of the Subject Land to Armando and Adelia
as shown by this portion of Adelias testimony on cross-
examination:
 Q -- No title was delivered to you by Godofredo
Alfredo?
A -- I got the title from Julie Limon because my
sister told me.[26]
Petitioners raise this factual issue for the first time. The
Court of Appeals could have passed upon this issue had
petitioners raised this earlier. At any rate, the cited
testimony of Adelia does not convincingly prove that
Godofredo and Carmen did not deliver the Subject Land to
Armando and Adelia. Adelias cited testimony must be
examined in context not only with her entire testimony but
also with the other circumstances.
Adelia stated during cross-examination that she
obtained the title of the Subject Land from Julie Limon
(Julie), her classmate in college and the sister of
Carmen. Earlier, Adelias own sister had secured the title
from the father of Carmen. However, Adelias sister, who was
about to leave for the United States, gave the title to Julie
because of the absence of the other documents. Adelias
sister told Adelia to secure the title from Julie, and this was
how Adelia obtained the title from Julie.
It is not necessary that the seller himself deliver the title
of the property to the buyer because the thing sold is
understood as delivered when it is placed in the control and
possession of the vendee.[27] To repeat, Godofredo and
Carmen themselves introduced the Natanawans, their
tenants, to Armando and Adelia as the new owners of the
Subject Land. From then on, Armando and Adelia acted as
the landlords of the Natanawans. Obviously, Godofredo and
Carmen themselves placed control and possession of the
Subject Land in the hands of Armando and Adelia.
Petitioners invoke the absence of approval of the sale
by the Secretary of Agriculture and Natural Resources to
nullify the sale. Petitioners never raised this issue before the
trial court or the Court of Appeals. Litigants cannot raise an
issue for the first time on appeal, as this would contravene
the basic rules of fair play, justice and due process.
[28]
However, we will address this new issue to finally put an
end to this case.
The sale of the Subject Land cannot be annulled on the
ground that the Secretary did not approve the sale, which
was made within 25 years from the issuance of the
homestead title.Section 118 of the Public Land Act
(Commonwealth Act No. 141) reads as follows:
SEC. 118. Except in favor of the Government or any of its
branches, units, or institutions or legally constituted banking
corporation, lands acquired under free patent or homestead
provisions shall not be subject to encumbrance or alienation
from the date of the approval of the application and for a
term of five years from and after the date of the issuance of
the patent or grant.
xxx
No alienation, transfer, or conveyance of any homestead
after 5 years and before twenty-five years after the issuance
of title shall be valid without the approval of the Secretary of
Agriculture and Commerce, which approval shall not be
denied except on constitutional and legal grounds.
A grantee or homesteader is prohibited from alienating
to a private individual a land grant within five years from the
time that the patent or grant is issued. [29] A violation of this
prohibition renders a sale void.[30] This prohibition, however,
expires on the fifth year. From then on until the next 20
years[31] the land grant may be alienated provided the
Secretary of Agriculture and Natural Resources approves the
alienation. The Secretary is required to approve the
alienation unless there are constitutional and legal grounds
to deny the approval. In this case, there are no apparent
constitutional or legal grounds for the Secretary to
disapprove the sale of the Subject Land.
The failure to secure the approval of the Secretary does
not ipso facto make a sale void.[32] The absence of approval
by the Secretary does not nullify a sale made after the
expiration of the 5-year period, for in such event the
requirement of Section 118 of the Public Land Act becomes
merely directory[33] or a formality.[34] The approval may be
secured later, producing the effect of ratifying and adopting
the transaction as if the sale had been previously
authorized.[35] As held in Evangelista v. Montano:[36]
Section 118 of Commonwealth Act No. 141, as amended,
specifically enjoins that the approval by the Department
Secretary "shall not be denied except on constitutional and
legal grounds." There being no allegation that there were
constitutional or legal impediments to the sales, and no
pretense that if the sales had been submitted to the
Secretary concerned they would have been disapproved,
approval was a ministerial duty, to be had as a matter of
course and demandable if refused. For this reason, and if
necessary, approval may now be applied for and its effect
will be to ratify and adopt the transactions as if they had
been previously authorized. (Emphasis supplied)
Action Not Barred by Prescription and Laches
Petitioners insist that prescription and laches have set
in. We disagree.
The Amended Complaint filed by Armando and Adelia
with the trial court is captioned as one for Specific
Performance. In reality, the ultimate relief sought by
Armando and Adelia is the reconveyance to them of the
Subject Land. An action for reconveyance is one that seeks
to transfer property, wrongfully registered by another, to its
rightful and legal owner.[37] The body of the pleading or
complaint determines the nature of an action, not its title or
heading.[38] Thus, the present action should be treated as
one for reconveyance.[39]
Article 1456 of the Civil Code provides that a person
acquiring property through fraud becomes by operation of
law a trustee of an implied trust for the benefit of the real
owner of the property. The presence of fraud in this case
created an implied trust in favor of Armando and Adelia. This
gives Armando and Adelia the right to seek reconveyance of
the property from the Subsequent Buyers.[40]
To determine when the prescriptive period commenced
in an action for reconveyance, plaintiffs possession of the
disputed property is material. An action for reconveyance
based on an implied trust prescribes in ten years. [41] The ten-
year prescriptive period applies only if there is an actual
need to reconvey the property as when the plaintiff is not in
possession of the property.[42] However, if the plaintiff, as the
real owner of the property also remains in possession of the
property, the prescriptive period to recover title and
possession of the property does not run against him.[43] In
such a case, an action for reconveyance, if nonetheless
filed, would be in the nature of a suit for quieting of title, an
action that is imprescriptible.[44]
In this case, the appellate court resolved the issue of
prescription by ruling that the action should prescribe four
years from discovery of the fraud. We must correct this
erroneous application of the four-year prescriptive
period. In Caro v. Court of Appeals,[45] we explained why
an action for reconveyance based on an implied trust should
prescribe in ten years. In that case, the appellate court also
erroneously applied the four-year prescriptive period. We
declared in Caro:
We disagree. The case of Liwalug Amerol, et al. v. Molok
Bagumbaran, G.R. No. L-33261, September 30, 1987,154
SCRA 396 illuminated what used to be a gray area on the
prescriptive period for an action to reconvey the title to real
property and, corollarily, its point of reference:
xxx It must be remembered that before August 30, 1950,
the date of the effectivity of the new Civil Code, the old
Code of Civil Procedure (Act No. 190) governed prescription.
It provided:
SEC. 43. Other civil actions; how limited.- Civil actions other
than for the recovery of real property can only be brought
within the following periods after the right of action accrues:
3. Within four years: xxx An action for relief on the ground
of fraud, but the right of action in such case shall not be
deemed to have accrued until the discovery of the fraud;
In contrast, under the present Civil Code, we find that just
as an implied or constructive trust is an offspring of the law
(Art. 1456, Civil Code), so is the corresponding obligation to
reconvey the property and the title thereto in favor of the
true owner. In this context, and vis-a-vis prescription, Article
1144 of the Civil Code is applicable.
Article 1144. The following actions must be brought within
ten years from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
An action for reconveyance based on an implied or
constructive trust must perforce prescribe in ten
years and not otherwise. A long line of decisions of this
Court, and of very recent vintage at that, illustrates this
rule. Undoubtedly, it is now well-settled that an action
for reconveyance based on an implied or constructive
trust prescribes in ten years from the issuance of the
Torrens title over the property. The only discordant
note, it seems, is Balbin vs. Medalla which states that the
prescriptive period for a reconveyance action is four years.
However, this variance can be explained by the erroneous
reliance on Gerona vs. de Guzman. But in Gerona, the fraud
was discovered on June 25,1948, hence Section 43(3) of Act
No. 190, was applied, the new Civil Code not coming into
effect until August 30, 1950 as mentioned earlier. It must be
stressed, at this juncture, that article 1144 and article 1456,
are new provisions. They have no counterparts in the old
Civil Code or in the old Code of Civil Procedure, the latter
being then resorted to as legal basis of the four-year
prescriptive period for an action for reconveyance of title of
real property acquired under false pretenses.
An action for reconveyance has its basis in Section 53,
paragraph 3 of Presidential Decree No. 1529, which
provides:
In all cases of registration procured by fraud, the owner may
pursue all his legal and equitable remedies against the
parties to such fraud without prejudice, however, to the
rights of any innocent holder of the decree of registration on
the original petition or application, xxx
This provision should be read in conjunction with Article
1456 of the Civil Code, which provides:
Article 1456. If property is acquired through mistake or
fraud, the person obtaining it is, by force of law, considered
a trustee of an implied trust for the benefit of the person
from whom the property comes.
The law thereby creates the obligation of the trustee to
reconvey the property and the title thereto in favor of the
true owner. Correlating Section 53, paragraph 3 of
Presidential Decree No. 1529 and Article 1456 of the Civil
Code with Article 1144(2) of the Civil Code, supra, the
prescriptive period for the reconveyance of fraudulently
registered real property is ten (10) years reckoned from the
date of the issuance of the certificate of title xxx (Emphasis
supplied)[46]
 Following Caro, we have consistently held that an
action for reconveyance based on an implied trust
prescribes in ten years.[47] We went further by specifying the
reference point of the ten-year prescriptive period as the
date of the registration of the deed or the issuance of the
title.[48]
Had Armando and Adelia remained in possession of the
Subject Land, their action for reconveyance, in effect an
action to quiet title to property, would not be subject to
prescription. Prescription does not run against the plaintiff in
actual possession of the disputed land because such plaintiff
has a right to wait until his possession is disturbed or his
title is questioned before initiating an action to vindicate his
right.[49] His undisturbed possession gives him the continuing
right to seek the aid of a court of equity to determine the
nature of the adverse claim of a third party and its effect on
his title.[50]
Armando and Adelia lost possession of the Subject Land
when the Subsequent Buyers forcibly drove away from the
Subject Land the Natanawans, the tenants of Armando and
Adelia.[51] This created an actual need for Armando and
Adelia to seek reconveyance of the Subject Land. The
statute of limitation becomes relevant in this case. The ten-
year prescriptive period started to run from the date the
Subsequent Buyers registered their deeds of sale with the
Register of Deeds.
The Subsequent Buyers bought the subdivided portions
of the Subject Land on 22 February 1994, the date of
execution of their deeds of sale. The Register of Deeds
issued the transfer certificates of title to the Subsequent
Buyers on 24 February 1994. Armando and Adelia filed the
Complaint on 7 March 1994. Clearly, prescription could not
have set in since the case was filed at the early stage of the
ten-year prescriptive period.
Neither is the action barred by laches. We have defined
laches as the failure or neglect, for an unreasonable time, to
do that which, by the exercise of due diligence, could or
should have been done earlier.[52] It is negligence or
omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it
either has abandoned it or declined to assert it. [53] Armando
and Adelia discovered in January 1994 the subsequent sale
of the Subject Land and they filed this case on 7 March
1994. Plainly, Armando and Adelia did not sleep on their
rights.
Validity of Subsequent Sale of Portions of the
Subject Land
Petitioners maintain that the subsequent sale must be
upheld because the Subsequent Buyers, the co-petitioners
of Godofredo and Carmen, purchased and registered the
Subject Land in good faith. Petitioners argue that the
testimony of Calonso, the person who brokered the second
sale, should not prejudice the Subsequent Buyers. There is
no evidence that Calonso was the agent of the Subsequent
Buyers and that she communicated to them what she knew
about the adverse claim and the prior sale. Petitioners
assert that the adverse claim registered by Armando and
Adelia has no legal basis to render defective the transfer of
title to the Subsequent Buyers.
We are not persuaded. Godofredo and Carmen had
already sold the Subject Land to Armando and Adelia. The
settled rule is when ownership or title passes to the buyer,
the seller ceases to have any title to transfer to any third
person.[54] If the seller sells the same land to another, the
second buyer who has actual or constructive knowledge of
the prior sale cannot be a registrant in good faith. [55] Such
second buyer cannot defeat the first buyers title. [56] In case a
title is issued to the second buyer, the first buyer may seek
reconveyance of the property subject of the sale.[57]
Thus, to merit protection under the second paragraph of
Article 1544[58] of the Civil Code, the second buyer must act
in good faith in registering the deed. [59] In this case, the
Subsequent Buyers good faith hinges on whether they had
knowledge of the previous sale. Petitioners do not dispute
that Armando and Adelia registered their adverse claim with
the Registry of Deeds of Bataan on 8 February 1994. The
Subsequent Buyers purchased their respective lots only on
22 February 1994 as shown by the date of their deeds of
sale.Consequently, the adverse claim registered prior to the
second sale charged the Subsequent Buyers with
constructive notice of the defect in the title of the sellers,
[60]
Godofredo and Carmen.
It is immaterial whether Calonso, the broker of the
second sale, communicated to the Subsequent Buyers the
existence of the adverse claim. The registration of the
adverse claim on 8 February 1994 constituted, by operation
of law, notice to the whole world.[61] From that date onwards,
the Subsequent Buyers were deemed to have constructive
notice of the adverse claim of Armando and Adelia. When
the Subsequent Buyers purchased portions of the Subject
Land on 22 February 1994, they already had constructive
notice of the adverse claim registered earlier.[62] Thus, the
Subsequent Buyers were not buyers in good faith when they
purchased their lots on 22 February 1994. They were also
not registrants in good faith when they registered their
deeds of sale with the Registry of Deeds on 24 February
1994.
The Subsequent Buyers individual titles to their
respective lots are not absolutely indefeasible. The defense
of indefeasibility of the Torrens Title does not extend to a
transferee who takes the certificate of title with notice of a
flaw in his title.[63] The principle of indefeasibility of title does
not apply where fraud attended the issuance of the titles as
in this case.[64]
Attorneys Fees and Costs
We sustain the award of attorneys fees. The decision of
the court must state the grounds for the award of attorneys
fees. The trial court complied with this requirement. [65] We
agree with the trial court that if it were not for petitioners
unjustified refusal to heed the just and valid demands of
Armando and Adelia, the latter would not have been
compelled to file this action.
The Court of Appeals echoed the trial courts
condemnation of petitioners fraudulent maneuverings in
securing the second sale of the Subject Land to the
Subsequent Buyers. We will also not turn a blind eye on
petitioners brazen tactics. Thus, we uphold the treble costs
imposed by the Court of Appeals on petitioners.
WHEREFORE, the petition is DENIED and the appealed
decision is AFFIRMED. Treble costs against petitioners.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, Ynares-
Santiago, and Azcuna, JJ., concur.
EN BANC
[G.R. NO. 168101 : February 13, 2006]
PEOPLE OF THE PHILIPPINES, Appellee, v. GREGORIO
CORPUZ Y ESPIRITU,Appellant.
DECISION
PER CURIAM:
We have before Us yet one more account of how a young
girl, deprived of the attentions of a mother gone to work in
foreign shores, is attacked and betrayed by the one other
person she should have been able to depend on for solace,
protection and love.
This is an appeal from the decision of the Regional Trial
Court (RTC) dated 19 July 1999, Branch 08, Aparri, Cagayan,
in Criminal Case No. 08-974 finding the herein appellant,
Gregorio Corpuz y Espiritu, guilty beyond reasonable doubt
of raping his 13-year-old daughter, Juvilie Corpuz y Antonio,
sentencing him to die by lethal injection, and ordering him
to pay the victim P100,000.00 in moral damages
and P100,000.00 in exemplary damages.
The records of this case were originally transmitted to us on
automatic review. However, conformably with our Decision
in People of the Philippines v. Efren Mateo y
Garcia1modifying Sections 3 and 10 of Rule 122, Section 13
of Rule 124, Section 3 of Rule 125 of the Revised Rules on
Criminal Procedure and any other rule insofar as they
provide for direct appeals from the RTC to the Supreme
Court in cases where the penalty imposed is
death, reclusion perpetua or life imprisonment, we referred
the case and its records to the Court of Appeals2 for
appropriate action and disposition.
On 08 April 2005, the Court of Appeals rendered a
Decision,3 the dispositive portion of which reads:
WHEREFORE, the Judgment dated 19 July 1999 of the
Regional Trial Court, Second Judicial Region, Branch 08,
Aparri, Cagayan, in Criminal Case No. 08-974, finding
accused-appellant Gregorio Corpuz guilty beyond
reasonable doubt of qualified rape and sentencing him to
suffer the DEATH penalty is hereby AFFIRMED with
MODIFICATION in the sense that he is ordered to pay the
victim, Juvilie Corpuz, P75,000.00 as civil
indemnity, P75,000.00 as moral damages, and P25,000.00
as exemplary damages.
The antecedent facts are as follows:
At the time of the incident, Juvilie, then 13, and her two
sisters, Grace, aged 12, and Cheryl, aged 9, were living with
their father, herein appellant Gregorio Corpuz y Espiritu, in a
two-bedroom bungalow in Palagao, Gattaran, Cagayan. The
girls' mother had been working as a domestic helper in
Hongkong since May 1995.
Juvilie and her sister Grace used to sleep in one room, while
the youngest sister Cheryl slept with their father Gregorio in
the other room. For two successive nights sometime prior to
the night in question, Juvilie felt somebody fondling her
breast and caressing her private parts, even inserting a
forefinger inside her. On the second night, she caught her
father doing it. She confronted him, but he denied it,
explaining that his presence in the room was allegedly to
put arsenic rat poison.
On the night of 16 November 1996, Juvilie was awakened by
a fist blow to her stomach. When she reported the matter to
her father, he claimed he had also been hit in his stomach,
and advised her and Grace to sleep in the other room with
him and Cheryl, which they did the following night. Juvilie
laid down on one side of the mat while Gregorio laid on the
other. Her sisters laid between them, with Grace beside
Juvilie and Cheryl beside Gregorio.
At around 11:00 in the evening of 17 November 1996, Juvilie
was awakened by pain she felt in her private parts. She felt
and saw the shape of a man on top of her with his penis
inside her. Her panties had been removed, and her skirt
raised. She pushed and hit the man, and shouted "Okinnam
bastos a laklakayan uleg, baboy" (Vulva of your mother,
dirty old man, snake, pig)! The man moved hurriedly to the
other side of the mat and said "Pakawanennac anakko, tag-
taginep ko lang daydiay" (Forgive me my daughter, I was
only dreaming).
Her two sisters, awakened by the shout, ran out of the room
in fear. Juvilie was left inside the room crying. Her father
prevented her from leaving the room, saying "padasen iti
rumuar ta adda mapasama kenca" (try to go outside and
something will happen to you). He also threatened her with
harm if she told anyone what had happened.
Juvilie's shout had also been heard by her uncles, Rogelio
and Walter Antonio, brothers of her mother, whose houses
were only about ten meters away from Juvilie's. They
immediately went to Juvilie's house, but hearing nothing
further to arouse their suspicions, they went back to their
own homes.
In the afternoon of the following day, Juvilie slipped out of
her house while Gregorio was cooking and told Rogelio what
her father had done to her. Rogelio reported the matter to
their barangay captain, who advised him to inform the
police. Since Gregorio was almost constantly with Juvilie, it
was only on 27 November 1996 that she was able to report
the rape to the police, where she executed a sworn
statement.
Juvilie was examined by Dr. Nida Rosales, the Municipal
Health Officer of Gattaran, Cagayan. Dr. Rosales observed
one completely healed and two incompletely healed
lacerations in Juvilie's hymen. The doctor also noted that
Juvilie's vagina admitted one finger with ease. When asked
for the possible cause of the lacerations, she replied that a
hard object, such as an erect penis, could have caused the
said lacerations.4
On 20 March 1997, on the basis of a complaint filed by
Juvilie Corpuz y Antonio, an Information5 was filed before the
RTC, Branch 08, Aparri, Cagayan, docketed as Criminal Case
No. 08-974, charging the herein appellant with the crime of
qualified rape, thus:
That on or about November 17, 1996, in the municipality of
Gattaran, province of Cagayan, and within the jurisdiction of
this Honorable Court, the above-named accused, being then
the father (parent) of the offended party, with lewd design,
and by the use of force and intimidation, did then and there
willfully, unlawfully and feloniously have carnal knowledge
of said Juvilie Corpuz y Antonio, a woman under eighteen
(18) years of age, all against her will and consent.
On 21 May 1997, the accused-appellant, with the assistance
of counsel de oficio, pleaded "Not Guilty" to the crime
charged.6 Trial thereafter proceeded.
The prosecution presented four witnesses: Rogelio and
Walter Antonio, Dr. Rosales, and the private complainant
herself.
The defense presented the lone testimony of Gregorio. On
the stand, he claimed that he loved his children very much.
He alleged that on the night of 17 November 1996, he
pushed Juvilie's leg hard against the wall, which was why
she woke up and shouted. Thereafter, the case was
submitted for decision.
On 25 June 1999, the trial court issued an order7 stating:
The Presiding Judge was in the process of preparing a
decision when he noticed that there is variance between the
offense charged and that proved.
In order to avoid the miscarriage of justice, the Trial
Prosecutor is hereby directed to amend the Information to
conform with the evidence, specifically, that the rape was
committed while the woman is unconscious instead of by
the use of force and intimidation. He is directed to do so
within ten (10) days.
Thus, on 13 July 1999, the prosecutor filed the following
Amended Information:8
That on or about November 17, 1996, in the municipality of
Gattaran, province of Cagayan, and within the jurisdiction of
this Honorable Court, the above-named accused, being then
the father (parent) of the offended party, with lewd design,
and while the offended party was asleep and unconscious,
did then and there willfully, unlawfully and feloniously have
carnal knowledge of said Juvilie Corpuz y Antonio, a woman
under eighteen (18) years of age, all against her will and
consent.
On 05 August 1999, the trial court promulgated the decision
finding the accused-appellant guilty beyond reasonable
doubt of the crime of rape.9 In giving credence to the
evidence adduced by the prosecution, it explained thus:
It has been truly said that rape is so easy to charge and so
difficult to defend. The logic is not quite difficult to
apprehend. It is usually committed when nobody is present
to witness the same. However, Filipino culture attaches an
indelible stigma to the reputation of one who has been
raped. An accusation for rape is thus not made with
indifference, but with much deliberation, usually only after
consultation with relatives and the family council.
"Art. 335. When and how rape is committed. - Rape is
committed by having carnal knowledge of a woman under
any of the following circumstances.
"1. By using force or intimidation;
"2. When the woman is deprived of reason or otherwise
unconscious; andcralawlibrary
"3. When the woman is under twelve years of age or is
demented.
"The death penalty shall be imposed if the crime of rape is
committed with any of the following attendant
circumstances:
"1. When the victim is under eighteen (18) years of age and
the offender is a parent, ascendant, step-parent, sanguinity
or affinity within the third civil degree, or the common-law
spouse of the parent of the victim x x x.
The elements are carnal knowledge thru force or
intimidation, when the woman is deprived of reason or
unconscious, or when the woman is under 12 or demented.
We are satisfied that there was carnal knowledge by
accused of private complainant while the latter was asleep
on 17 November 1996. This is corroborated by finding of
prosecution witness Dr. Nida Nolasco-Rosales, Municipal
Health Officer of Gattaran Town, Gattaran, Cagayan who
conducted a physical examination of the complainant Juvilie
Corpuz on 28 November 1996. Her findings viz:
"Incomplete healed laceration at 2:00 [o'clock] position
"Complete healed laceration at 6:00 [o'clock] position
"Incomplete healed laceration at 9:00 [o'clock] position
"Genitalia admits one finger with ease"
On the witness box, on questioning by the Court, she
testified that on 17 November 1996 witness-complainant did
not yet have a boyfriend. The testimony of her maternal
uncles Rogelio and Walter Antonio partly corroborates
complainant's testimony. Both uncles testified hearing
complainant cry on the evening of 17 November 1996 when
the rape happened.
Accused himself when testifying admitted that on that
evening, complainant cried when he pushed her legs hard,
which hit the wall. His reason for pushing - that
complainant's legs touched his in their sleep is incredible
considering that the former and the latter were at extreme
ends of the mat with Cheryl and Grace between them. While
accused testified that complainant moves in her sleep, that
is not a sufficient explanation why he had to push her legs
hard causing her to cry. Further, accused did not deny that
complainant uttered the words "ukinam, bastos a
laklakayan, uleg, baboy" during the incident when she
discovered it was her father who was on top of her. On that
occasion he said "Pakawanennac anakko, tag-taginep ko
lang daydiay" (meaning "forgive me my daughter, I was only
dreaming". Accused did not explain this.
Sleep is akin to "unconscious (ness)". It falls within its ambit.
Complainant is accused's daughter. She was barely 13 years
old on 17 November 1996. Accused did not deny that
complainant (his daughter) was aged 13.10
In his brief, the appellant assigns the following errors:
I.
THE COURT A QUO GRAVELY ERRED IN FINDING THAT THE
GUILT OF THE ACCUSED-APPELLANT FOR THE CRIME
CHARGED HAS BEEN PROVEN BEYOND REASONABLE DOUBT
DESPITE THE PRIVATE COMPLAINANT'S HIGHLY DOUBTFUL
POSITIVE IDENTIFICATION OF HER ALLEGED ABUSER.
II.
THE COURT A QUO ERRED IN ORDERING THE AMENDMENT
OF THE INFORMATION TO CONFORM TO THE EVIDENCE
ADDUCED BY THE PROSECUTION
In assailing Juvilie's credibility, the appellant claims that
since the rape of Juvilie took place inside the bedroom with
the lights switched off, and Juvilie was initially asleep when
she was violated, it was extremely unlikely that she was
able to identify her assailant.
The Court of Appeals correctly disposed of the appellant's
arguments.
The pernicious consequences to both accused and offended
party require that utmost care be taken in the review of a
decision involving conviction of rape.11 In such cases, we are
guided by three principles: (1) an accusation for rape can be
made with facility; it is difficult to prove but more difficult for
the accused, though innocent, to disprove; (2) in view of the
intrinsic nature of the crime of rape where only two persons
are usually involved, the testimony of the complainant must
be scrutinized with extreme caution; and (3) the evidence
for the prosecution must stand or fall on its own merits, and
cannot be allowed to draw strength from the weakness of
the evidence for the defense.12
In rape cases, the accused may be convicted solely on the
basis of the testimony of the victim, provided that such
testimony is credible, natural, convincing and consistent
with human nature and the normal course of things.13
Q - Now, while you were there inside the room of your father
on November 17, 1996, at around 11:00 o'clock was there
anything unusual that took place?cralawlibrary
A - There was, Your Honor.
Q - What was the incident?cralawlibrary
A - My father raised my dress and removed my panty, and
went on top of me.
Q - What kind of dress [were] you wearing?cralawlibrary
A - Skirt, Your Honor.

If her testimony meets the test of credibility, such is Q - What about the other?cralawlibrary
sufficient to convict the accused. The credibility of the victim
is almost always the single most important issue to hurdle. A - T-shirt, Your Honor.
In this regard, the trial judge is in the best position to assess
the credibility of the complainant, having personally heard Q - And you said your father removed your panty?
her and observed her deportment and manner of testifying cralawlibrary
during the trial. Absent any showing that the trial judge
overlooked, misunderstood, or misapplied some facts or A - Yes, Your Honor.
circumstances of weight which would affect the result of the
case, or that the judge acted arbitrarily, the trial judge's
Q - Did you already know that your panty was remove[d]
assessment of credibility deserves the appellate court's
and your shirt was raised, do you know who removed them?
highest respect.14
cralawlibrary

Here, the Court of Appeals agreed in the trial judge's

A - Not yet, Your Honor.
assessment of Juvilie's credibility, and observed that she
was direct, unequivocal, convincing and consistent in
Q - And after that, what did you do when your t-shirt was
answering the questions propounded to her. We concur.
raised and your panty was removed?cralawlibrary

Juvilie testified as follows:

A - I pushed him, and boxed him for several times and
grabbed him, Your Honor.
Q - Did you already know that was your father?cralawlibrary
A - Not yet, Your Honor.
Q - Was the light close[d]?cralawlibrary
A - Yes, Your Honor.
Q - What about your two sisters, what were they doing?
cralawlibrary
A - Yes, Your Honor.
Q - And then what did you do after that?cralawlibrary
A - I felt pain and I pushed him sir, for several times and I
even shouted the words "Ukinam bastos a laklakayan uleg,
baboy."
Q - When you felt pain, you pushed the one on top of you,
you boxed him, you grabbed him, why do you know already
who it was?cralawlibrary
A - Yes, Your Honor.

A - They were still sleeping, Your Honor. Q - That was when you shouted?cralawlibrary

xxxx A - Yes, Your Honor.

Fiscal Cortes: Q - Were you already awake when somebody raised your
skirt?cralawlibrary
Q - Aside from removing panty, what else did your fater do?
cralawlibrary A - Not yet, Your Honor.

A - I felt his penish (sic) penetrated, sir. Q - When somebody removed your panty you [were] awake?
cralawlibrary
Court:
A - Not yet, Your Honor.
Q - Were you asleep when your t-shirt was raised and your
panty was removed?cralawlibrary Fiscal Cortes:

A - Yes, Your Honor. Q - When your father inserted his penish (sic) to your vagina
were you already awake?cralawlibrary
Q - And were you still asleep when you felt something inside
your genital?cralawlibrary A - Yes, sir.
Court: A - No more, Your Honor.

Q - Can you recall what particular sensation awake you? Court: Continue.
cralawlibrary
Fiscal Cortes:
A - Yes, sir.
Q - Where was your father then when he uttered those
Q - Why?cralawlibrary words?cralawlibrary

A - When I felt pain that awakened me. A - He was beside of (sic) Cheryl, sir.

xxxx
Fiscal Cortes:
xxx
Q - How did you know that it was your father when
according to you the light was off?cralawlibrary
A - Because my father uttered the word[s] "pakawanen nak
anakko tagtaglinep ko lang daydiay" which means forgive
me my daughter I was only dreaming.
Q - When you woke up because of the pain, [were] your two
sisters also awoke or were they still sleeping?cralawlibrary
A - Yes, sir.
Q - After your father went to the side of your sister Cheryl,
what happened next?cralawlibrary
A - My two sisters went outside the room because they were
frightened, sir.
Court:

Court: Q - How about you?cralawlibrary

Q - When your father asked you for forgiveness was his
pants on?cralawlibrary
A - I do not know, Your Honor, because it was still dark at
that time.
A - I stayed in the bedroom, Your Honor.
Q - With your father?cralawlibrary
A - Yes, Your Honor.

Q - But he was no longer on top of you?cralawlibrary Q - And what happened after that?cralawlibrary
A - When my two sisters were already outside the room and
I was also inside the room and my father threatened me if I
will report I will also die.15
The testimony of child-victims are normally given full weight
and credit, since when a woman, more so if she is a minor,
says that she has been raped, she says in effect all that is
necessary to show that rape was committed. Youth and
immaturity are generally badges of truth and sincerity. No
woman, least of all a child, would concoct a story of
defloration, allow an examination of her private parts and
subject herself to public trial or ridicule if she has not, in
truth, been a victim of rape and impelled to seek justice for
the wrong done to her.16
Moreover, Juvilie's testimony is corroborated by the medical
findings of the examining physician. Where a victim's
testimony is corroborated by the physical findings of
penetration, there is sufficient basis for concluding that
sexual intercourse did take place. A rape victim's account is
sufficient to support a conviction for rape if it is
straightforward, candid and corroborated by the medical
findings of the examining physician,17 as in the present case.
We come now to the accused-appellant's claim that the
prosecution failed to establish the identity of the perpetrator
with certitude since the room was dark and it was not shown
to have been properly illuminated.
It is highly inconceivable that complainant would not
recognize her own father, with whom she had been living for
a long time. We have held that it is the most natural
reaction for victims of criminal violence to strive to see the
appearance of their assailant and observe the manner in
which the crime was committed. Most often, the face and
body movements of the assailants create a lasting
impression which cannot be easily erased from their
memory.18 The impression becomes more profound where
the malefactor is the victim's own father.19 Also, Juvilie
categorically testified that it was her father who raped her. It
is unthinkable, if not completely preposterous, that a
daughter would concoct a story of rape against her father,
taking to mind the reverence and respect for elders that is
too deeply ingrained in Filipino children.20 It is well-settled
that a categorical and positive identification of an accused,
without any showing of ill-motive on the part of the
eyewitness testifying on the matter, prevails over alibi and
denial, which are negative and self-serving evidence
undeserving of real weight in law unless substantiated by
clear and convincing evidence.21
Juvilie was also able to identify her abuser through his voice.
As efficiently summed up by the Court of Appeals:
On the night of 17 November 1996, Juvilie was awakened by
the pain she felt when her abuser inserted his penis inside
her vagina. Upon waking and finding a man on top of her,
she repeatedly pushed and hit her assailant. She shouted at
him, "ukinam bastos a laklakayan uleg, baboy."
The man laying on top of her hastily moved to the other side
of the mat from where Juvilie slept. He then uttered,
"pakawanen nak anako tagtaginep ko lang daydiay." She
recognized his voice as that of her father.
Identification of an accused by his voice has been accepted
particularly in cases where, such as in this case, the witness
has known the malefactor personally for so long and so
intimately. In People v. Calixto, the Supreme Court has given
credence to the blindfolded rape victim's identification of
the accused, a barriomate, by his voice. Also, in an earlier
case, the Supreme Court has said:
"x x x [C]omplainant's identification of the appellant was not
based solely on the latter's physical defect, but by his voice
as well, when he warned complainant, 'Flor, keep quiet.'
Although complainant did not see appellant's face during
the sexual act because the house was dark, nevertheless,
no error could have been committed by the complainant in
identifying the voice of the accused, inasmuch as
complainant were neighbors."
Pitted against the positive, straightforward and unequivocal
testimony of the victim - Juvilie - the mere denial by the
accused-appellant that he raped his daughter cannot
prevail.
Denial is inherently a weak defense. It cannot prevail over
positive identifications, unless buttressed by strong
evidence of non-culpability. Denials are self-serving negative
by strong evidence which cannot prevail over the positive,
straightforward and unequivocal testimony of the victim.
When the offended parties are young and immature girls
from the ages of twelve to sixteen, courts are inclined to
lend credence to their version of what transpired,
considering not only their relative vulnerability but also the
shame and embarrassment to which they would be exposed
by court trial if the matter about which they testified is not
true.
The accused-appellant next contends that the trial court's
order to amend the information as to the mode of
commission of the rape - from "by force and intimidation" to
"while the offended party was asleep or unconscious" - is
not sanctioned by the Rules on Criminal Procedure.
However, this issue has already been directly addressed
in People v. Abiera,22 and later in People v. Atienza,23 where
we upheld the conviction for rape committed under one
mode when the information alleged another.
In Atienza, therein accused-appellant contended that the
trial court erred in finding him guilty of rape under par. (2),
Art, 335, i.e., rape of a woman who was deprived of reason,
including those with the mental capacity of a child below
twelve (12) years old, when the Information charged him
with rape committed through force and intimidation as
defined in par. (1), Art. 335. Atienza cited the earlier case of
Abiera, wherein we held thus:
The appellant maintains that he cannot be convicted of rape
committed under one mode when the information alleged
another mode. He cites the case of People v. Pailano, where
this Court held that to convict the appellant on the finding
that he had committed rape while the victim was
unconscious or otherwise deprived of reason - and not
through force and intimidation, which was the method
alleged - would violate his constitutional right to be informed
of the nature and cause of the accusation against him.
That case works against the appellant. In Pailano, this Court
impliedly recognized that an accused charged with rape
through one mode of commission may still be convicted of
the crime if the evidence shows another mode of
commission provided that the accused did not object to
such evidence. The Court said:
It may be argued that although initially deficient, the
criminal complaint was deemed corrected when the
prosecution introduced evidence on the complainant's
mental condition and the defense did not object, thereby
waiving the procedural defect. Even so, the charge has not
been adequately established.
The prosecution presented evidence to show that Abiera had
carnal knowledge of the complainant when by means of
force, violence and intimidation, he boxed her in the
stomach, causing her to lose consciousness, after which he
violated her. When Alma regained consciousness, the
outrage had already been committed. Her deshabille, her
bleeding vagina, the near-naked man beside her - all these
reasonably indicated that Abiera had deflowered Alma while
she was unconscious. The defense did not object to the
presentation of evidence to establish all these
circumstances.
The Pailano case is different from the case at bar because it
has been proven that Abiera had carnal knowledge of Alma
after rendering her unconscious. Pailano was acquitted
because it was not established that he used force and
intimidation upon the complainant or that the girl was
mentally deficient.24
In the case at bar, the appellant never raised any objection
when the prosecution showed another mode of commission
of the crime charged as alleged in the original information.
Nor did he interpose any objections after the judge issued
his order of 25 June 1999 directing the trial prosecutor to
amend the information to conform with the evidence and
before he rendered judgment.
Be that as it may, the amendment of the information did not
affect the crime committed by the appellant, that is,
qualified rape. In cases of incestuous rape, force or
intimidation need not even be proven. The overpowering
moral influence of the father over the daughter takes the
place of violence and offer of resistance required in rape
cases committed by an accused unrelated to the
victim.25 Consequently, his conviction is in order.
Having determined that rape was indeed committed by
Gregorio against Juvilie, we come now to the question of the
appropriate imposable penalty under the circumstances.
The death penalty is imposed if the crime of rape is
committed with the attendance of certain circumstances,
one of these being when the victim is under eighteen years
of age and the offender is a parent, ascendant, stepparent,
guardian, relative by consanguinity and affinity within the
third civil degree, or the common-law spouse of the parent
of the victim.
Gregorio's paternity was alleged in the information and duly
proven in the course of the trial. He was duly identified as
such by Rogelio Antonio,26 Juvilie's maternal uncle and close
neighbor, by Juvilie herself,27 and admitted by the appellant
during direct examination.28
Juvelie's minority was also alleged in the information and
duly proven during trial, in the course of which her birth
certificate was offered in evidence.29 Appellant himself also
expressly and clearly testified as to her age under direct
examination.30
We have consistently held that the concurrence of the
minority of the victim and her relationship to the offender is
a special qualifying circumstance which increases the
penalty, and must be properly alleged in the information
because of the accused's right to be informed of the nature
and cause of the accusation against him.31 Juvilie's minority
and her relationship with Gregorio having been duly
established by evidence, the death penalty was correctly
imposed upon the appellant.
WHEREFORE, the Decision of the Court of Appeals of 08 April
2005 affirming the Decision dated 19 July 1999 of the
Regional Trial Court, Branch 08, Aparri, Cagayan in Criminal
Case No. 08-974, finding accused-appellant Gregorio Corpuz
guilty beyond reasonable doubt of qualified rape and
sentencing him to suffer the DEATH penalty with the
MODIFICATION that he is ordered to pay the victim, Juvilie
Corpuz, P75,000.00 as civil indemnity, P75,000.00 as moral
damages, and P25,000.00 as exemplary damages, is hereby
AFFIRMED.32
In accordance with Article 83 of the Revised Penal Code, as
amended by Section 25 of Republic Act 7659, upon finality
of this Decision, let the records of this case be forwarded
forthwith to the Office of the President for possible exercise
of executive clemency.
SO ORDERED.
SECOND DIVISION
[G.R. No. 131794. December 10, 2003]
RUBEN AUGUSTO and ATTY. NOEL D.
ARCHIVAL, petitioners, vs. HON. JUDGE
TEODORO K. RISOS, Presiding Judge, Regional
Trial Court, Branch 27, Lapu-Lapu City, CLEOFE
OMOLON, respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for certiorari under Rule 65 of the 1997
Rules of Court, as amended, filed by Ruben Augusto and
Atty. Noel D. Archival, for the nullification of the December
5, 1997 Order[1] of the Regional Trial Court Branch 7, Lapu-
Lapu City.
THE ANTECEDENTS
Felisa Augusto and her siblings, Jose Augusto,
Magdalena Augusto and Alfonso Augusto, all married, were
the co-owners of a parcel of land, identified as Cadastral Lot
No. 4429, with an area of 1,857 square meters. The lot is
located in Barrio Mactan, Opon, Cebu.
On April 20, 1961, the then Justice of the Peace and Ex-
Officio Notary Public notarized a Deed of Absolute Sale
where Felisa, Jose, Magdalena and Alfonso, all surnamed
Augusto, sold the property to Guillermo Omolon for P200.00.
Guillermo Omolon and his wife, Cleofe Omolon, caused the
aforesaid document to be registered in the Office of the City
Assessor of Lapu-Lapu City. Tax Declaration No. 02729 was
issued thereafter, and the vendors took possession of the
property.
In the meantime, the property was registered in the
names of Monico, Felisa, Jose, Filomeno, Teofilo and Sinfroso,
all surnamed Augusto, under Original Certificate of Title
(OCT) No. RO-3560.
Guillermo Omolon died intestate and was survived by
Cleofe Omolon.
Sometime in July 1995, Cleofe Omolon filed a petition
for the reconstitution of the OCT covering Lot No. 4429,
before the RTC of Lapu-Lapu City, Branch 54, docketed as
LRC Case No. 21. On January 10, 1997, the RTC rendered a
decision, the dispositive portion of which reads:
WHEREFORE, all premises considered, the Court grants the
petition and thus directs the Register of Deeds of Lapu-Lapu
City to reconstitute the Original Certificate of Title for Lot No.
4429 of the Cadastral Survey of Opon strictly in accordance
with the technical description of said lot.[2]
However, upon presentation of the aforesaid order to
the Office of the Register of Deeds of Lapu-Lapu City, Cleofe
was informed that the owners copy had already been issued
to Ruben Augusto, pursuant to an Order issued by the court
dated August 23, 1996, and that based on the record, the
same was in the possession of Atty. Noel Archival.
Hence, on May 14, 1997, Cleofe filed a petition before
the RTC of Lapu-Lapu City, docketed as Cad. Case No. 21,
alleging that as lawful co-owner and possessor of Lot No.
4429, she had every right to have and hold the owners
duplicate of the said OCT. She prayed that after due
proceedings, the respondents Ruben Augusto and Atty. Noel
Archival be ordered to surrender the owners copy of the said
title:
WHEREFORE, it is most respectfully prayed of this Honorable
Court that after due consideration, respondents be ordered
to surrender the owners copy of Original Certificate of Title
No. 3560 of the Register of Deeds of Lapu-Lapu City to the
petitioner herein.[3]
In their Comment on the petition, therein respondents
Ruben Augusto and Atty. Noel Archival alleged, inter
alia, that the Deed of Absolute Sale executed by Felisa,
Magdalena, Alfonso and Jose, all surnamed Augusto, was
falsified and fictitious, and, thus, null and void. In
the interim, Cleofe had her adverse claim annotated at the
dorsal portion of the title in the Office of the Register of
Deeds of Lapu-Lapu City.
On October 22, 1997, the RTC issued an order directing
Atty. Noel Archival to produce the owners copy of OCT No.
3560 to allow the annotation of Cleofes interest, upon which
the owners duplicate copy of the title may thereafter be
returned:
WHEREFORE, respondent Atty. Noel Archival is hereby
directed to produce the owners copy of OCT No. 3560,
before the Office of the Clerk of Court within ten (10) days
from receipt of this order to allow the annotation of
petitioners interest, after which title may be returned to the
respondent.
Furnish copies of this order to petitioner and respondents as
well as their respective counsels.[4]
The trial court declared that, based on the pleadings of
the parties, the issue of ownership over the property had
been raised, a matter which the court, sitting as a cadastral
court, could not pass upon. The trial court further ruled that
pending resolution of the issue of ownership over the
property in an appropriate proceedings therefor, there was a
need for the annotation of the petitioners interest over the
property. The respondents therein filed a Motion for a Partial
Reconsideration of the Order alleging that Cleofes interest
over the property had been sufficiently protected by the
annotation of her adverse claim. The respondents suggested
that:
WHEREFORE, it is respectfully prayed of this Honorable
Court to partially reconsider its Order dated 22 October
1997 and issue a new order enjoin (sic) the respondent to
produce the owners copy of OCT No. 3560 before the Office
of the Register of Deeds, Lapu-Lapu City on 25 November
1997 at 2:30 p.m. Other reliefs just and equitable are
likewise prayed for under the premises.
Cebu City, 06 November 1997, Philippines.[5]
 However, on November 14, 1997, the court issued an
Order denying the motion of the respondents therein.
On November 26, 1997, the respondents filed a notice
of appeal from the said order to the Court of
Appeals. On December 5, 1997, the RTC issued an order
denying due course therefor, on its perception that the
orders subject thereof were interlocutory; hence, not
appealable.
The respondents, now the petitioners, filed the instant
petition alleging that the public respondent committed a
grave abuse of discretion amounting to excess or lack of
jurisdiction when it issued the assailed orders, and that
there is no appeal nor any plain, speedy and adequate
remedy in the ordinary course of law available to them. The
petitioners argue that contrary to the ruling of the public
respondent, its October 22, 1997 Order was final and
appealable, as the same disposed of the case.
In her comment on the petition, the private respondent
averred that the October 22, 1997 Order of the public
respondent was merely interlocutory as it did not fully
dispose of the case and had reserved the further
determination of other questions. By its order, the RTC
merely required the petitioners to present the owners copy
of OCT No. 3560 in the Office of the Register of Deeds for
the annotation of her proprietary interest over the property
and ordered the return of the said owners duplicate to the
respondents after such annotation.
THE RULING OF THE COURT
Section 1, Rule 41 of the Rules of Court provides that an
appeal may be taken only from a final order, and not from
an interlocutory one.[6] A final order is one which disposes of
the whole subject matter or terminates a particular
proceeding or action, leaving nothing to be done but to
enforce by execution what has been determined.[7] An order
or judgment is deemed final if it finally disposes of,
adjudicates, or determines the rights, or some right or rights
of the parties, either on the entire controversy or on some
definite and separate branch thereof, and concludes them
until it is reversed or set aside. Where no issue is left for
future consideration, except the fact of compliance with the
terms of the order, such order is final and appealable. [8]In
contrast, an order is interlocutory if it does not finally
dispose of the case.
In this case, the order of the public respondent directing
the petitioners to produce the owners copy of OCT No. 3560
in the Office of the Register of Deeds for the annotation of
the private respondents interest over the property is merely
interlocutory and not final; hence, not appealable by means
of a writ of error. The public respondent had not fully
disposed of the case as it had not yet ruled on whether to
grant the private respondents prayer for the surrender of
the owners copy of OCT No. 3560. As gleaned from the order
of the respondent judge, he believed that he had no
jurisdiction to delve into and resolve the issue of ownership
over the property and was disposed to dismiss the petition.
Before so doing, he believed it was necessary that the
petitioners claim over the property be annotated at the
dorsal portion of the title before the institution of an
ordinary motion for the resolution of the conflicting claims of
ownership over the property:
Going over the pleadings of the parties, the court gathers
that ownership over the land in question is disputed by the
parties, which this court, sitting as a cadastral court, cannot
pass upon. However, since the petitioner has also shown
enough basis for claiming possession of the owners copy of
OCT No. 3560, by virtue of the Deed of Absolute Sale
(Annex A), and in view of the willingness of Atty. Archival to
have petitioners interest annotated at the back of the title,
the court feels that for the protection of both parties, the
owners copy of OCT No. 3560 in the possession of Atty. Noel
Archival must be produced, in order that petitioners interest
may be annotated therein pending resolution of the issue on
ownership in the proper proceedings.
WHEREFORE, respondent Atty. Noel Archival is hereby
directed to produce the owners copy of OCT No. 3560,
before the Office of the Clerk of Court within ten (10) days
from receipt of this order to allow the annotation of
petitioners interest, after which the title may be returned to
the respondent.[9]
In fine, the assailed order of the respondent judge
partook of the nature of an ad cautelam order. This is not to
say that the respondent court sitting as a cadastral court
had no jurisdiction to delve into and resolve the issue of
ownership over the property. Apropos is our ruling in Vda.
de Arceo v. Court of Appeals, et al.,[10] viz:
The first question must, however, be resolved against the
petitioners. We have held that under Section 2 of the
Property Registration Decree, the jurisdiction of the Regional
Trial Court, sitting as a land registration court, is no longer
as circumscribed as it was under Act No. 496, the former
land registration law. We said that the Decree has
eliminated the distinction between the general jurisdiction
vested in the regional trial court and the limited jurisdiction
conferred upon it by the former law when acting merely as a
cadastral court. The amendment was [a]imed at avoiding
multiplicity of suits, the change has simplified registration
proceedings by conferring upon the required trial courts the
authority to act not only on applications for original
registration but also over all petitions filed after original
registration of title, with power to hear and determine all
questions arising from such applications or petitions. At any
rate, we have also stated that the limited jurisdiction-rule
governing land registration courts is subject to recognized
exceptions, to wit, (1) where the parties mutually agreed or
have acquiesced in submitting controversial issues for
determination; (2) where they have been given full
opportunity to present their evidence; and (3) where the
court has considered the evidence already of record and is
convinced that the same is sufficient for rendering a
decision upon such controversial issues. By the same token,
it has been held that the rule is not, in reality, one of
jurisdiction, but rather, of mere procedure, which may be
waived. It is not amiss to state likewise that where the issue,
say, of ownership, is ineluctably tied up with the question of
right of registration, the cadastral court commits no error in
assuming jurisdiction over it, as, for instance, in this case,
where both parties rely on their respective exhibits to defeat
one anothers claims over the parcels sought to be
registered, in which case, registration would not be possible
or would be unduly prolonged unless the court first decided
it.[11]
Earlier, we ruled in Averia, Jr. v. Caguioa,[12] thus:
The above provision has eliminated the distinction between
the general jurisdiction vested in the regional trial court and
the limited jurisdiction conferred upon it by the former law
when acting merely as a cadastral court. Aimed at avoiding
multiplicity of suits, the change has simplified registration
proceedings by conferring upon the regional trial courts the
authority to act not only on applications for original
registration but also over all petitions filed after original
registration of title, with power to hear and determine all
questions arising upon such applications or petitions.
Consequently, and specifically with reference to Section 112
of the Land Registration Act (now Section 108 of P.D. No.
1529), the court is no longer fettered by its former limited
jurisdiction which enabled it to grant relief only in cases
where there was unanimity among the parties or none of
them raised any adverse claim o serious objection. Under
the amended law, the court is now authorized to hear and
decide not only such non-controversial cases but even the
contentious and substantial issues, such as the question at
bar, which were beyond its competence before.[13]
IN LIGHT OF ALL THE FOREGOING, the petition is
DISMISSED. The December 5, 1997 Order of the Regional
Trial Court, Branch 7, Lapu-Lapu City, is AFFIRMED. Costs and issuance of [a hold-departure order] from the
against the petitioners. Philippines against Ignacio E. Rubio. Respondent amended
SO ORDERED. her complaint to include specific performance and damages.

Puno, (Chairman), Quisumbing, Austria- In her amended complaint, respondent averred inter alia
Martinez, and Tinga, JJ., concur.
that she bought the hereditary shares (consisting of 10 lots)
Republic of the Philippines
of Ignacio Rubio [and] the heirs of Luz Baloloy, namely:
SUPREME COURT
Alejandrino, Bayani, and other co-heirs; that said vendors
Manila
executed a contract of sale dated April 10, 1990 in her
favor; that Ignacio Rubio and the heirs of Luz Baloloy
FIRST DIVISION
received [a down payment] or earnest money in the amount
of P102,169.86 and P450,000, respectively; that it was
G.R. No. 137162 January 24, 2007
agreed in the contract of sale that the vendors would secure
certificates of title covering their respective hereditary
CORAZON L. ESCUETA, assisted by her husband
shares; that the balance of the purchase price would be paid
EDGAR ESCUETA, IGNACIO E. RUBIO, THE HEIRS OF
to each heir upon presentation of their individual
LUZ R. BALOLOY, namely, ALEJANDRINO R. BALOLOY
certificate[s] of [title]; that Ignacio Rubio refused to receive
and BAYANI R. BALOLOY, Petitioners,
the other half of the down payment which is P[100,000];
vs.
that Ignacio Rubio refused and still refuses to deliver to
RUFINA LIM, Respondent.
[respondent] the certificates of title covering his share on
the two lots; that with respect to the heirs of Luz Baloloy,
DECISION
they also refused and still refuse to perform the delivery of
the two certificates of title covering their share in the
AZCUNA, J.: disputed lots; that respondent was and is ready and willing
to pay Ignacio Rubio and the heirs of Luz Baloloy upon
This is an appeal by certiorari1 to annul and set aside the presentation of their individual certificates of title, free from
Decision and Resolution of the Court of Appeals (CA) dated whatever lien and encumbrance;
October 26, 1998 and January 11, 1999, respectively, in CA-
G.R. CV No. 48282, entitled "Rufina Lim v. Corazon L. As to petitioner Corazon Escueta, in spite of her knowledge
Escueta, etc., et. al." that the disputed lots have already been sold by Ignacio
Rubio to respondent, it is alleged that a simulated deed of
The facts2 appear as follows: sale involving said lots was effected by Ignacio Rubio in her
favor; and that the simulated deed of sale by Rubio to
Respondent Rufina Lim filed an action to remove cloud on, Escueta has raised doubts and clouds over respondents
or quiet title to, real property, with preliminary injunction title.
In their separate amended answers, petitioners denied the
material allegations of the complaint and alleged inter alia
the following:
For the heirs of Luz Baloloy (Baloloys for brevity):
Respondent has no cause of action, because the subject
contract of sale has no more force and effect as far as the
Baloloys are concerned, since they have withdrawn their
offer to sell for the reason that respondent failed to pay the
balance of the purchase price as orally promised on or
before May 1, 1990.
For petitioners Ignacio Rubio (Rubio for brevity) and Corazon
Escueta (Escueta for brevity):
Respondent has no cause of action, because Rubio has not
entered into a contract of sale with her; that he has
appointed his daughter Patricia Llamas to be his attorney-in-
fact and not in favor of Virginia Rubio Laygo Lim (Lim for
brevity) who was the one who represented him in the sale of
the disputed lots in favor of respondent; that the P100,000
respondent claimed he received as down payment for the
lots is a simple transaction by way of a loan with Lim.
The Baloloys failed to appear at the pre-trial. Upon motion of
respondent, the trial court declared the Baloloys in default.
They then filed a motion to lift the order declaring them in
default, which was denied by the trial court in an order
dated November 27, 1991. Consequently, respondent was
allowed to adduce evidence ex parte. Thereafter, the trial
court rendered a partial decision dated July 23, 1993 against
the Baloloys, the dispositive portion of which reads as
follows:
IN VIEW OF THE FOREGOING, judgment is hereby rendered
in favor of [respondent] and against [petitioners, heirs] of
Luz R. Balolo[y], namely: Alejandrino Baloloy and Bayani
Baloloy. The [petitioners] Alejandrino Baloloy and Bayani
Baloloy are ordered to immediately execute an [Absolute]
Deed of Sale over their hereditary share in the properties
covered by TCT No. 74392 and TCT No. 74394, after
payment to them by [respondent] the amount
of P[1,050,000] or consignation of said amount in Court.
[For] failure of [petitioners] Alejandrino Baloloy and Bayani
Baloloy to execute the Absolute Deed of Sale over their
hereditary share in the property covered by TCT No. T-74392
and TCT No. T-74394 in favor of [respondent], the Clerk of
Court is ordered to execute the necessary Absolute Deed of
Sale in behalf of the Baloloys in favor of [respondent,] with a
consideration of P[1,500,000]. Further[,] [petitioners]
Alejandrino Baloloy and Bayani Baloloy are ordered to jointly
and severally pay [respondent] moral damages in the
amount of P[50,000] and P[20,000] for attorneys fees. The
adverse claim annotated at the back of TCT No. T-74392 and
TCT No. T-74394[,] insofar as the shares of Alejandrino
Baloloy and Bayani Baloloy are concerned[,] [is] ordered
cancelled.
With costs against [petitioners] Alejandrino Baloloy and
Bayani Baloloy.
SO ORDERED.3
The Baloloys filed a petition for relief from judgment and
order dated July 4, 1994 and supplemental petition dated
July 7, 1994. This was denied by the trial court in an order
dated September 16, 1994. Hence, appeal to the Court of
Appeals was taken challenging the order denying the
petition for relief.
Trial on the merits ensued between respondent and Rubio
and Escueta. After trial, the trial court rendered its assailed
Decision, as follows:
IN VIEW OF THE FOREGOING, the complaint [and] amended
complaint are dismissed against [petitioners] Corazon L.
Escueta, Ignacio E. Rubio[,] and the Register of Deeds. The
counterclaim of [petitioners] [is] also dismissed. However,
[petitioner] Ignacio E. Rubio is ordered to return to the
[respondent], Rufina Lim[,] the amount of P102,169.80[,]
with interest at the rate of six percent (6%) per annum from
April 10, [1990] until the same is fully paid. Without
pronouncement as to costs.
SO ORDERED.4
On appeal, the CA affirmed the trial courts order and partial
decision, but reversed the later decision. The dispositive
portion of its assailed Decision reads:
WHEREFORE, upon all the foregoing premises considered,
this Court rules:
1. the appeal of the Baloloys from the Order denying the
Petition for Relief from Judgment and Orders dated July 4,
1994 and Supplemental Petition dated July 7, 1994 is
DISMISSED. The Order appealed from is AFFIRMED.
2. the Decision dismissing [respondents] complaint is
REVERSED and SET ASIDE and a new one is entered.
Accordingly,
a. the validity of the subject contract of sale in favor of
[respondent] is upheld.
b. Rubio is directed to execute a Deed of Absolute Sale
conditioned upon the payment of the balance of the
purchase price by [respondent] within 30 days from the
receipt of the entry of judgment of this Decision.
c. the contracts of sale between Rubio and Escueta involving
Rubios share in the disputed properties is declared NULL
and VOID.
d. Rubio and Escueta are ordered to pay jointly and severally
the [respondent] the amount of P[20,000] as moral
damages and P[20,000] as attorneys fees.
3. the appeal of Rubio and Escueta on the denial of their
counterclaim is DISMISSED.
SO ORDERED.5
Petitioners Motion for Reconsideration of the CA Decision
was denied. Hence, this petition.
The issues are:
I
THE HONORABLE COURT OF APPEALS ERRED IN DENYING
THE PETITION FOR RELIEF FROM JUDGMENT FILED BY THE
BALOLOYS.
II
THE HONORABLE COURT OF APPEALS ERRED IN
REINSTATING THE COMPLAINT AND IN AWARDING MORAL
DAMAGES AND ATTORNEYS FEES IN FAVOR OF
RESPONDENT RUFINA L. LIM CONSIDERING THAT:
A. IGNACIO E. RUBIO IS NOT BOUND BY THE CONTRACT OF
SALE BETWEEN VIRGINIA LAYGO-LIM AND RUFINA LIM.
B. THE CONTRACT ENTERED INTO BETWEEN RUFINA LIM
AND VIRGINIA LAYGO-LIM IS A CONTRACT TO SELL AND NOT
A CONTRACT OF SALE.
C. RUFINA LIM FAILED TO FAITHFULLY COMPLY WITH HER
OBLIGATIONS UNDER THE CONTRACT TO SELL THEREBY
WARRANTING THE CANCELLATION THEREOF.
D. CORAZON L. ESCUETA ACTED IN UTMOST GOOD FAITH IN
ENTERING INTO THE CONTRACT OF SALE WITH IGNACIO E.
RUBIO.
III
THE CONTRACT OF SALE EXECUTED BETWEEN IGNACIO E.
RUBIO AND CORAZON L. ESCUETA IS VALID.
IV
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING
PETITIONERS COUNTERCLAIMS.
Briefly, the issue is whether the contract of sale between
petitioners and respondent is valid.
Petitioners argue, as follows:
First, the CA did not consider the circumstances surrounding
petitioners failure to appear at the pre-trial and to file the
petition for relief on time.
As to the failure to appear at the pre-trial, there was fraud,
accident and/or excusable neglect, because petitioner
Bayani was in the United States. There was no service of the
notice of pre-trial or order. Neither did the former counsel of
record inform him. Consequently, the order declaring him in
default is void, and all subsequent proceedings, orders, or
decision are void.
Furthermore, petitioner Alejandrino was not clothed with a
power of attorney to appear on behalf of Bayani at the pre-
trial conference.
Second, the sale by Virginia to respondent is not binding.
Petitioner Rubio did not authorize Virginia to transact
business in his behalf pertaining to the property. The Special
Power of Attorney was constituted in favor of Llamas, and
the latter was not empowered to designate a substitute
attorney-in-fact. Llamas even disowned her signature
appearing on the "Joint Special Power of Attorney," which
constituted Virginia as her true and lawful attorney-in-fact in
selling Rubios properties.
Dealing with an assumed agent, respondent should
ascertain not only the fact of agency, but also the nature
and extent of the formers authority. Besides, Virginia
exceeded the authority for failing to comply with her
obligations under the "Joint Special Power of Attorney."
The amount encashed by Rubio represented not the down
payment, but the payment of respondents debt. His
acceptance and encashment of the check was not a
ratification of the contract of sale.
Third, the contract between respondent and Virginia is a
contract to sell, not a contract of sale. The real character of
the contract is not the title given, but the intention of the
parties. They intended to reserve ownership of the property
to petitioners pending full payment of the purchase price.
Together with taxes and other fees due on the properties,
these are conditions precedent for the perfection of the sale.
Even assuming that the contract is ambiguous, the same
must be resolved against respondent, the party who caused
the same.
Fourth, Respondent failed to faithfully fulfill her part of the
obligation. Thus, Rubio had the right to sell his properties to
Escueta who exercised due diligence in ascertaining
ownership of the properties sold to her. Besides, a purchaser
need not inquire beyond what appears in a Torrens title.
The petition lacks merit. The contract of sale between
petitioners and respondent is valid.lawphil.net
Bayani Baloloy was represented by his attorney-in-fact,
Alejandrino Baloloy. In the Baloloys answer to the original
complaint and amended complaint, the allegations relating
to the personal circumstances of the Baloloys are clearly
admitted.
"An admission, verbal or written, made by a party in the
course of the proceedings in the same case, does not
require proof."6 The "factual admission in the pleadings on
record [dispenses] with the need x x x to present evidence
to prove the admitted fact."7 It cannot, therefore, "be
controverted by the party making such admission, and [is]
conclusive"8 as to them. All proofs submitted by them
"contrary thereto or inconsistent therewith should be
ignored whether objection is interposed by a party or
not."9 Besides, there is no showing that a palpable mistake
has been committed in their admission or that no admission
has been made by them.
Pre-trial is mandatory.10 The notices of pre-trial had been
sent to both the Baloloys and their former counsel of record.
Being served with notice, he is "charged with the duty of
notifying the party represented by him." 11 He must "see to it
that his client receives such notice and attends the pre-
trial."12 What the Baloloys and their former counsel have
alleged instead in their Motion to Lift Order of As In Default
dated December 11, 1991 is the belated receipt of Bayani
Baloloys special power of attorney in favor of their former
counsel, not that they have not received the notice or been
informed of the scheduled pre-trial. Not having raised the
ground of lack of a special power of attorney in their motion,
they are now deemed to have waived it. Certainly, they
cannot raise it at this late stage of the proceedings. For lack
of representation, Bayani Baloloy was properly declared in
default.
Section 3 of Rule 38 of the Rules of Court states:
SEC. 3. Time for filing petition; contents and verification. A
petition provided for in either of the 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
petitioners good and substantial cause of action or defense,
as the case may be.
There is no reason for the Baloloys to ignore the effects of
the above-cited rule. "The 60-day period is reckoned from
the time the party acquired knowledge of the order,
judgment or proceedings and not from the date he actually
read the same."13 As aptly put by the appellate court:
The evidence on record as far as this issue is concerned
shows that Atty. Arsenio Villalon, Jr., the former counsel of
record of the Baloloys received a copy of the partial decision
dated June 23, 1993 on April 5, 1994. At that time, said
former counsel is still their counsel of record. The reckoning
of the 60 day period therefore is the date when the said
counsel of record received a copy of the partial decision
which was on April 5, 1994. The petition for relief was filed
by the new counsel on July 4, 1994 which means that 90
days have already lapsed or 30 days beyond the 60 day
period. Moreover, the records further show that the Baloloys
received the partial decision on September 13, 1993 as
evidenced by Registry return cards which bear the numbers
02597 and 02598 signed by Mr. Alejandrino Baloloy.
The Baloloys[,] apparently in an attempt to cure the lapse of
the aforesaid reglementary period to file a petition for relief
from judgment[,] included in its petition the two Orders
dated May 6, 1994 and June 29, 1994. The first Order denied
Baloloys motion to fix the period within which plaintiffs-
appellants pay the balance of the purchase price. The
second Order refers to the grant of partial execution, i.e. on
the aspect of damages. These Orders are only
consequences of the partial decision subject of the petition
for relief, and thus, cannot be considered in the
determination of the reglementary period within which to
file the said petition for relief.
Furthermore, no fraud, accident, mistake, or excusable
negligence exists in order that the petition for relief may be
granted.14 There is no proof of extrinsic fraud that "prevents
a party from having a trial x x x or from presenting all of his
case to the court"15 or an "accident x x x which ordinary
prudence could not have guarded against, and by reason of
which the party applying has probably been impaired in his
rights."16 There is also no proof of either a "mistake x x x of
law"17 or an excusable negligence "caused by failure to
receive notice of x x x the trial x x x that it would not be
necessary for him to take an active part in the case x x x by
relying on another person to attend to the case for him,
when such other person x x x was chargeable with that duty
x x x, or by other circumstances not involving fault of the
moving party."18
Article 1892 of the Civil Code provides:
Art. 1892. The agent may appoint a substitute if the
principal has not prohibited him from doing so; but he shall
be responsible for the acts of the substitute:
(1) When he was not given the power to appoint one x x x.
Applying the above-quoted provision to the special power of
attorney executed by Ignacio Rubio in favor of his daughter
Patricia Llamas, it is clear that she is not prohibited from
appointing a substitute. By authorizing Virginia Lim to sell
the subject properties, Patricia merely acted within the limits
of the authority given by her father, but she will have to be
"responsible for the acts of the sub-agent,"19 among which is
precisely the sale of the subject properties in favor of
respondent.
Even assuming that Virginia Lim has no authority to sell the
subject properties, the contract she executed in favor of
respondent is not void, but simply unenforceable, under the
second paragraph of Article 1317 of the Civil Code which
reads:
Art. 1317. A contract entered into in the name of another
by one who has no authority or legal representation, or who
has acted beyond his powers, shall be unenforceable, unless
it is ratified, expressly or impliedly, by the person on whose
behalf it has been executed, before it is revoked by the
other contracting party.
Ignacio Rubio merely denies the contract of sale. He claims,
without substantiation, that what he received was a loan,
not the down payment for the sale of the subject properties.
His acceptance and encashment of the check, however,
constitute ratification of the contract of sale and "produce
the effects of an express power of agency."20"[H]is action
necessarily implies that he waived his right of action to
avoid the contract, and, consequently, it also implies the
tacit, if not express, confirmation of the said sale effected"
by Virginia Lim in favor of respondent.
Similarly, the Baloloys have ratified the contract of sale
when they accepted and enjoyed its benefits. "The doctrine
of estoppel applicable to petitioners here is not only that
which prohibits a party from assuming inconsistent
positions, based on the principle of election, but that which
precludes him from repudiating an obligation voluntarily
assumed after having accepted benefits therefrom. To
countenance such repudiation would be contrary to equity,
and would put a premium on fraud or misrepresentation."21
Indeed, Virginia Lim and respondent have entered into a
contract of sale. Not only has the title to the subject
properties passed to the latter upon delivery of the thing
sold, but there is also no stipulation in the contract that
states the ownership is to be reserved in or "retained by the
vendor until full payment of the price."22
Applying Article 1544 of the Civil Code, a second buyer of
the property who may have had actual or constructive
knowledge of such defect in the sellers title, or at least was
charged with the obligation to discover such defect, cannot
be a registrant in good faith. Such second buyer cannot
defeat the first buyers title. In case a title is issued to the
second buyer, the first buyer may seek reconveyance of the
property subject of the sale.23 Even the argument that a
purchaser need not inquire beyond what appears in a
Torrens title does not hold water. A perusal of the certificates
of title alone will reveal that the subject properties are
registered in common, not in the individual names of the
heirs.
Nothing in the contract "prevents the obligation of the
vendor to convey title from becoming effective"24 or gives
"the vendor the right to unilaterally resolve the contract the
moment the buyer fails to pay within a fixed
period."25Petitioners themselves have failed to deliver their
individual certificates of title, for which reason it is obvious
that respondent cannot be expected to pay the stipulated
taxes, fees, and expenses.
"[A]ll the elements of a valid contract of sale under Article
1458 of the Civil Code are present, such as: (1) consent or
meeting of the minds; (2) determinate subject matter; and
(3) price certain in money or its equivalent." 26Ignacio Rubio,
the Baloloys, and their co-heirs sold their hereditary shares
for a price certain to which respondent agreed to buy and
pay for the subject properties. "The offer and the
acceptance are concurrent, since the minds of the
contracting parties meet in the terms of the agreement." 27
In fact, earnest money has been given by respondent. "[I]t
shall be considered as part of the price and as proof of the
perfection of the contract.28 It constitutes an advance
payment to "be deducted from the total price."29
Article 1477 of the same Code also states that "[t]he
ownership of the thing sold shall be transferred to the
vendee upon actual or constructive delivery thereof."30 In
the present case, there is actual delivery as manifested by
acts simultaneous with and subsequent to the contract of
sale when respondent not only took possession of the
subject properties but also allowed their use as parking
terminal for jeepneys and buses. Moreover, the execution
itself of the contract of sale is constructive delivery.
Consequently, Ignacio Rubio could no longer sell the subject
properties to Corazon Escueta, after having sold them to
respondent. "[I]n a contract of sale, the vendor loses
ownership over the property and cannot recover it until and
unless the contract is resolved or rescinded x x x."31 The
records do not show that Ignacio Rubio asked for a
rescission of the contract. What he adduced was a belated
revocation of the special power of attorney he executed in
favor of Patricia Llamas. "In the sale of immovable property,
even though it may have been stipulated that upon failure
to pay the price at the time agreed upon the rescission of
the contract shall of right take place, the vendee may pay,
even after the expiration of the period, as long as no
demand for rescission of the contract has been made upon
him either judicially or by a notarial act."32
WHEREFORE, the petition is DENIED. The Decision and
Resolution of the Court of Appeals in CA-G.R. CV No. 48282,
dated
October 26, 1998 and January 11, 1999, respectively, are
hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila THIRD DIVISION G.R. NO. 142628,February 6,
2007
SPRINGFIELD DEVELOPMENT CORPORATION, INC. and
HEIRS OF PETRA CAPISTRANO PIIT, Petitioners,
vs.
HONORABLE PRESIDING JUDGE OF REGIONAL TRIAL
COURT OF MISAMIS ORIENTAL, BRANCH 40, CAGAYAN
DE ORO CITY, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a petition for review on certiorari under
Rule 45 of the Rules of Court. The principal issue presented
for resolution is whether the Regional Trial Court (RTC) has
jurisdiction to annul final judgment of the Department of
Agrarian Reform Adjudication Board (DARAB).
The antecedent facts:
Petra Capistrano Piit previously owned Lot No. 2291 located
in Cagayan de Oro City which measured 123,408 square
meters under Transfer Certificate of Title No. T-62623.
Springfield Development Corporation, Inc. (Springfield)
bought Lot No. 2291-C with an area of 68,732 square
meters, and Lot No. 2291-D with an area of 49,778 square
meters.1 Springfield developed these properties into a
subdivision project called Mega Heights Subdivision.2
On May 4, 1990, the Department of Agrarian Reform (DAR),
through its Municipal Agrarian Reform Officer, issued a
Notice of Coverage,3 placing the property under the
coverage of Republic Act (R.A.) No. 6657 or the
Comprehensive Agrarian Reform Law of 1988. There being
an opposition from the heirs of Petra Piit, the case was
docketed as DARAB Case No. X-305. On August 27, 1991,
DARAB Provincial Adjudicator Abeto A. Salcedo, Jr. rendered
a decision declaring the nature of the property as residential
and not suitable for agriculture.4 The Regional Director filed
a notice of appeal, which the Provincial Adjudicator
disallowed for being pro forma and frivolous.5 The decision
became final and executory6 and Springfield proceeded to
develop the property.7
The DAR Regional Director then filed a petition for relief
from judgment of the DARAB Decision, docketed as DARAB
Case No. 0555. In its Decision dated October 5, 1995, the
DARAB granted the petition and gave due course to the
Notice of Coverage. It also directed the Municipal Agrarian
Reform Office to proceed with the documentation,
acquisition, and distribution of the property to the true and
lawful beneficiaries.8
The DARAB also issued an Order dated May 22, 1997,
ordering the heirs of Piit and Springfield to pay the farmer-
beneficiaries the amount of Twelve Million, Three Hundred
Forty Thousand, Eight Hundred Pesos (P12,340,800.00),
corresponding to the value of the property since the
property has already been developed into a subdivision.
On June 13, 1997, Springfield and the heirs of Piit
(petitioners) filed with the RTC of Cagayan de Oro City,
Branch 40, a petition for annulment of the DARAB Decision
dated October 5, 1995 and all its subsequent proceedings.
Petitioners contend that the DARAB decision was rendered
without affording petitioners any notice and hearing.9
On motion filed by the farmer-beneficiaries, the RTC issued
an Order dated June 25, 1997, dismissing the case for lack
of jurisdiction.10
On July 2, 1997, petitioners filed with the Court of Appeals
(CA) a special civil action for certiorari, mandamus, and
prohibition with prayer for the issuance of writ of preliminary
injunction and/or temporary restraining order, docketed as
CA-G.R. SP No. 44563.11 Petitioners alleged that the RTC
committed grave abuse of discretion when it ruled that the
annulment of judgment filed before it is actually an action
for certiorari in a different color. According to petitioners,
what it sought before the RTC is an annulment of the DARAB
Decision and not certiorari, as the DARAB Decision is void ab
initio for having been rendered without due process of law. 12
13
In the assailed Decision dated July 16, 1998, the CA
dismissed the petition for lack of merit, ruling that the RTC
does not have jurisdiction to annul the DARAB Decision
because it is a co-equal body.14
However, on January 12, 1999, the CA ordered the elevation
of the DARAB records before it, declaring that it "overlooked
the fact that petitioners likewise applied for a writ of
prohibition against the enforcement of the DARAB decision
which they claim to be patently void."15 Forwarded to the CA
were the records of the original case filed with the DARAB-
Region X, and it appearing that the petition for relief from
judgment and its pertinent records were forwarded to the
DARAB Central Office, the CA issued another Resolution on
December 20, 1999,16 requiring the DARAB Central Office to
forward the records of the case. But after receipt of the
records, the CA simply denied petitioners' motion for
reconsideration per Resolution17 dated February 23, 2000
without specifically resolving the issues raised concerning
the prayer for a writ of prohibition.
Hence, the present petition on the following grounds:
I RTC with general jurisdiction and an action for annulment is
THE COURT OF APPEALS COMMITTED A CLEAR ERROR OF
LAW IN APPLYING THE PRINCIPLE OF JUDICIAL STABILITY TO
JUSTIFY ITS CONCLUSION DIVESTING THE REGIONAL TRIAL
COURT OF ITS JURISDICTION VESTED BY LAW OVER CASES
WHERE THE EXCLUSIVE JURISDICTION WAS NOT EXPRESSLY
GRANTED TO ANY OTHER COURTS [SIC] OR TRIBUNAL, IN
EFFECT, MODIFYING THE APPLICABLE LAW ON THE MATTER.
II
THE COURT OF APPEALS IRREGULARLY DISMISSED
PETITIONERS' MOTION FOR RECONSIDERATION AFTER IT
HAD RESOLVED TO ENTERTAIN PETITIONERS' PETITION FOR
PROHIBITION AND TO REVIEW THE DARAB PROCEEDINGS,
THEREBY DEPARTING FROM THE USUAL COURSE OF JUDICIAL
PROCEEDINGS.
III
THE HONORABLE SUPREME COURT, BEING THE HIGHEST
TEMPLE OF RIGHTS, AND TO AVOID SERIOUS MISCARRIAGE
OF JUSTICE AND NEEDLESS DELAYS, IS MOST RESPECTFULLY
URGED TO TAKE COGNIZANCE OF THE PETITION FILED IN
CA-G.R. SP No. 44563 IN THE EXERCISE OF ITS CONCURRENT
JURISDICTION, AS IF THE PETITION WAS ORIGINALLY LODGED
BEFORE IT.18
Petitioners argue that under Batas Pambansa (B.P.) Blg. 129,
there is no provision that vests with the CA jurisdiction over
actions for annulment of DARAB judgments. Petitioners,
however, contend that the RTC may take cognizance of the
annulment case since Section 19 of B.P. Blg. 129 vests the
covered under such general jurisdiction. According to
petitioners, "this is but a logical consequence of the fact
that no other courts were expressly given the jurisdiction
over such actions."19Petitioners further argue that the CA
was in error when it summarily ignored their application for
a writ of prohibition, as it was necessary to restrain the
DARAB from enforcing its void decision; and even if the
DARAB decision was valid, the writ of prohibition could have
enjoined the execution of the DARAB decision since there
have been changes which will make the execution unjust
and inequitable.
In their Joint-Comments, the farmer-beneficiaries and the
DARAB (respondents) refute petitioners' allegation that they
were not afforded due process in the DARAB proceedings,
stating that petitioners were impleaded as a party thereto,
and in fact, they attended some of the hearings although
their counsel was absent. Respondents also adopt the CA's
ruling that the RTC is not vested with any jurisdiction to
annul the DARAB decision.
As stated at the outset, the main issue in this case is
whether the RTC has jurisdiction to annul a final judgment of
the DARAB.
Note must be made that the petition for annulment of the
DARAB decision was filed with the RTC on June 13, 1997,
before the advent of the 1997 Rules of Civil Procedure,
which took effect on July 1, 1997. Thus, the applicable law is
B.P. Blg. 129 or the Judiciary Reorganization Act of 1980,
enacted on August 10, 1981.
It is also worthy of note that before the effectivity of B.P. Blg.
129, a court of first instance has the authority to annul a
final and executory judgment rendered by another court of
first instance or by another branch of the same court. This
was the Court's ruling in Dulap v. Court of Appeals.20 Yet, in
subsequent cases,21 the Court held that the better policy, as
a matter of comity or courteous interaction between courts
of first instance and the branches thereof, is for the
annulment cases to be tried by the same court or branch
which heard the main action.
The foregoing doctrines were modified in Ngo Bun Tiong v.
Sayo,22 where the Court expressed that pursuant to the
policy of judicial stability, the doctrine of non-interference
between concurrent and coordinate courts should be
regarded as highly important in the administration of justice
whereby the judgment of a court of competent jurisdiction
may not be opened, modified or vacated by any court of
concurrent jurisdiction.
With the introduction of B.P. Blg. 129,23 the rule on
annulment of judgments was specifically provided in Section
9(2), which vested in the then Intermediate Appellate Court
(now the CA) the exclusive original jurisdiction over actions
for annulment of judgments of RTCs. Sec. 9(3) of B.P. Blg.
129 also vested the CA with "exclusive appellate jurisdiction
over all final judgments, decisions, resolutions, orders, or
awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, except those
falling within the appellate jurisdiction of the Supreme Court
in accordance with the Constitution, the provisions of this
Act, and of sub-paragraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of
the Judiciary Act of 1948." As provided in paragraph 16 of
the Interim Rules and Guidelines implementing B.P. Blg. 129,
the quasi-judicial bodies whose decisions are exclusively
appealable to the CA are those, which under the law, R.A.
No. 5434,24 or its enabling acts, are specifically appealable
to the CA.
Significantly, B.P. Blg. 129 does not specifically provide for
any power of the RTC to annul judgments of quasi-judicial
bodies. However, in BF Northwest Homeowners Association,
Inc. v. Intermediate Appellate Court,25 the Court ruled that
the RTCs have jurisdiction over actions for annulment of the
decisions of the National Water Resources Council, which is
a quasi-judicial body ranked with inferior courts, pursuant to
its original jurisdiction to issue writs of certiorari, prohibition,
and mandamus, under Sec. 21(1) of B.P. Blg. 129, in relation
to acts or omissions of an inferior court. This led to the
conclusion that despite the absence of any provision in B.P.
Blg. 129, the RTC had the power to entertain petitions for
annulment of judgments of inferior courts and
administrative or quasi-judicial bodies of equal ranking.
This is also in harmony with the "pre-B.P. Blg. 129" rulings of
the Court recognizing the power of a trial court (court of first
instance) to annul final judgments.26 Hence, while it is true,
as petitioners contend, that the RTC had the authority to
annul final judgments, such authority pertained only to final
judgments rendered by inferior courts and quasi-judicial
bodies of equal ranking with such inferior courts.
The foregoing statements beg the next question, i.e.,
whether the DARAB is a quasi-judicial body with the rank
of an inferior court such that the RTC may take
cognizance of an action for the annulments of its judgments.
The answer is no.
The DARAB is a quasi-judicial body created by Executive
Order Nos. 229 and 129-A. R.A. No. 6657 delineated its
adjudicatory powers and functions. The DARAB Revised
Rules of Procedure adopted on December 26,
198827specifically provides for the manner of judicial review
of its decisions, orders, rulings, or awards. Rule XIV, Section
1 states:
SECTION 1. Certiorari to the Court of Appeals. Any decision,
order, award or ruling by the Board or its Adjudicators on
any agrarian dispute or on any matter pertaining to the
application, implementation, enforcement or interpretation
of agrarian reform laws or rules and regulations
promulgated thereunder, may be brought within fifteen (15)
days from receipt of a copy thereof, to the Court of Appeals
by certiorari, except as provided in the next succeeding
section. Notwithstanding an appeal to the Court of Appeals
the decision of the Board or Adjudicator appealed from, shall
be immediately executory.
Further, the prevailing 1997 Rules of Civil Procedure, as
amended, expressly provides for an appeal from the DARAB
decisions to the CA.28
The rule is that where legislation provides for an appeal
from decisions of certain administrative bodies to the CA, it
means that such bodies are co-equal with the RTC, in terms
of rank and stature, and logically, beyond the control of the
latter.29
Given that DARAB decisions are appealable to the CA, the
inevitable conclusion is that the DARAB is a co-equal
body with the RTC and its decisions are beyond the
RTC's control. The CA was therefore correct in sustaining
the RTC's dismissal of the petition for annulment of the
DARAB Decision dated October 5, 1995, as the RTC does not
have any jurisdiction to entertain the same.
This brings to fore the issue of whether the petition for
annulment of the DARAB judgment could be brought to the
CA. As previously noted, Section 9(2) of B.P. Blg. 129 vested
in the CA the exclusive original jurisdiction over actions for
annulment of judgments, but only those rendered by the
RTCs. It does not expressly give the CA the power to annul
judgments of quasi-judicial bodies. Thus, in Elcee Farms, Inc.
v. Semillano,30 the Court affirmed the ruling of the CA that it
has no jurisdiction to entertain a petition for annulment of a
final and executory judgment of the NLRC, citing Section 9
of B.P. Blg. 129, as amended, which only vests in the CA
"exclusive jurisdiction over actions for annulment of
judgments of Regional Trial Courts." This was reiterated in
Galang v. Court of Appeals,31 where the Court ruled that that
the CA is without jurisdiction to entertain a petition for
annulment of judgment of a final decision of the Securities
and Exchange Commission.
Recent rulings on similar cases involving annulments of
judgments of quasi-judicial bodies are also quite instructive
on this matter.
In Cole v. Court of Appeals,32 involving an annulment of the
judgment of the HLURB Arbiter and the Office of the
President (OP), filed with the CA, the Court stated that,
"(U)nder Rule 47 of the Rules of Court, the remedy of
annulment of judgment is confined to decisions of the
Regional Trial Court on the ground of extrinsic fraud and lack
of jurisdiction x x x." The Court further ruled, viz.:
Although the grounds set forth in the petition for annulment
of judgment are fraud and lack of jurisdiction, said petition
cannot prosper for the simple reason that the decision
sought to be annulled was not rendered by the
Regional Trial Court but by an administrative agency
(HLU Arbiter and Office of the President), hence, not
within the jurisdiction of the Court of Appeals. There
is no such remedy as annulment of judgment of the
HLURB or the Office of the President. Assuming
arguendo that the annulment petition can be treated as a
petition for review under Rule 43 of the 1997 Rules of Civil
Procedure, the same should have been dismissed by the
Court of Appeals, because no error of judgment was imputed
to the HLURB and the Office of the President. Fraud and lack
of jurisdiction are beyond the province of petitions under
Rule 43 of the Rules of Court, as it covers only errors of
judgment. A petition for annulment of judgment is an
initiatory remedy, hence no error of judgment can be the
subject thereof. Besides, the Arbiter and the Office of the
President indisputably have jurisdiction over the cases
brought before them in line with our ruling in Francisco
Sycip, Jr. vs. Court of Appeals, promulgated on March 17,
2000, where the aggrieved townhouse buyers may seek
protection from the HLURB under Presidential Decree No.
957, otherwise known as "Subdivision and Condominium
Buyers' Protective Decree."33 (Emphasis supplied)
In Macalalag v. Ombudsman,34 the Court ruled that Rule 47
of the 1997 Rules of Civil Procedure on annulment of
judgments or final orders and resolutions covers "annulment
by the Court of Appeals of judgments or final orders and
resolutions in civil actions of Regional Trial Courts for which
the ordinary remedies of new trial, appeal, petition for relief
or other appropriate remedies could no longer be availed of
through no fault of the petitioner." Thus, the Court
concluded that judgments or final orders and resolutions of
the Ombudsman in administrative cases cannot be annulled
by the CA, more so, since The Ombudsman Act specifically
deals with the remedy of an aggrieved party from orders,
directives and decisions of the Ombudsman in
administrative disciplinary cases only, and the right to
appeal is not to be considered granted to parties aggrieved
by orders and decisions of the Ombudsman in criminal or
non-administrative cases.
While these cases involve annulments of judgments under
the 1997 Rules of Civil Procedure, as amended, still, they
still find application in the present case, as the provisions of
B.P. Blg. 129 and the 1997 Rules of Civil Procedure, as
amended, on annulment of judgments are identical.
Consequently, the silence of B.P. Blg. 129 on the jurisdiction
of the CA to annul judgments or final orders and resolutions
of quasi-judicial bodies like the DARAB indicates its lack of
such authority.
Further, petitioners are also asking the Court to take
cognizance of their prayer for the issuance of a writ of
prohibition, which they claim was not acted upon by the CA,
citing the Court's action in Fortich v. Corona35 where the
Court took cognizance of the petition previously filed with
the CA due to compelling reasons. The Court is not
persuaded to do so.
Fortich involved a 144-hectare land located at San Vicente,
Sumilao, Bukidnon, owned by the Norberto Quisumbing, Sr.
Management and Development Corporation (NQSRMDC),
which was leased as a pineapple plantation to Del Monte
Philippines, Inc. for a period of 10 years. During the
existence of the lease, the DAR placed the entire 144-
hectare property under compulsory acquisition and
assessed the land value at P2.38 million. When the
NQSRMDC/BAIDA (Bukidnon Agro-Industrial Development
Association) filed an application for conversion due to the
passage of Resolution No. 6 by the Provincial Development
Council of Bukidnon and Ordinance No. 24 by the
Sangguniang Bayan of Sumilao, Bukidnon, reclassifying the
area from agricultural to industrial/institutional, the same
was disapproved by the DAR Secretary and instead, the
property was placed under the compulsory coverage of
Comprehensive Agrarian Reform Program for distribution to
all qualified beneficiaries. This prompted Governor Carlos O.
Fortich of Bukidnon to file an appeal with the OP, while
NQSRMDC filed with the CA a petition for certiorari, and
prohibition with preliminary injunction.
The OP then issued a Decision dated March 29, 1996
reversing the DAR Secretary's decision and approving the
application for conversion. Executive Secretary Ruben D.
Torres denied the DAR's motion for reconsideration for
having been filed beyond the reglementary period of 15
days, and it was also declared that the OP Decision dated
March 29, 1996 had already become final and executory.
Because of this, the farmer-beneficiaries staged a hunger
strike on October 9, 1997, protesting the OP's decision. In
order to resolve the strike, the OP issued a so-called
"Win/Win" resolution on November 7, 1997, modifying the
decision in that NQSRMDC's application for conversion is
approved only with respect to the approximately 44-hectare
portion of the land adjacent to the highway, as
recommended by the Department of Agriculture, while the
remaining approximately 100 hectares traversed by an
irrigation canal and found to be suitable for agriculture shall
be distributed to qualified farmer-beneficiaries.1awphi1.net
A petition for certiorari and prohibition under Rule 65 of the
Revised Rules of Court36 was then filed with the Court, which
was contested by the Office of the Solicitor General on the
ground that the proper remedy should have been to file a
petition for review directly with the CA in accordance with
Rule 43 of the Revised Rules of Court.
In resolving the issue, the Court recognized the rule that the
Supreme Court, CA and RTC have original concurrent
jurisdiction to issue a writ of certiorari, prohibition, and
mandamus. However, due to compelling reasons and in the
interest of speedy justice, the Court resolved to take primary
jurisdiction over the petition in the interest of speedy
justice, after which the Court nullified the act of the OP in re-
opening the case and substantially modifying its March 29,
1996 Decision which had already become final and
executory, as it was in gross disregard of the rules and basic
legal precept that accord finality to administrative
determinations.
It must be stressed at this point that the Court, as a rule, will
not entertain direct resort to it unless the redress desired
cannot be obtained in the appropriate courts, and
exceptional and compelling circumstances, such as cases of
national interest and of serious implications, justify the
availment of the extraordinary remedy of writ of certiorari,
prohibition, or mandamus calling for the exercise of its
primary jurisdiction.37 The Court finds no compelling
circumstances in this case to warrant a relaxation of the
foregoing rule. The Fortich case is not analogous with the
present case such that the Court is not bound to abandon all
rules, take primary jurisdiction, and resolve the merits of
petitioners' application for a writ of prohibition.
In the present case, the assailed DARAB Decision dated
October 5, 1995 granting the petition for relief from
judgment and giving due course to the Notice of Coverage
was made pursuant to a petition for relief from judgment
filed by the DAR, albeit petitioners are contesting the
validity of the proceedings held thereon. On the other hand,
in Fortich, the OP's "Win/Win" resolution dated November 7,
1997 was made motu proprio, as a result of the hunger
strike staged by the farmer-beneficiaries.
Further, the OP's "Win/Win" Resolution dated November 7,
1997 in the Fortich case is a patently void judgment since it
was evident that there was already an existing final and
executory OP Decision dated March 29, 1996. In this case,
the assailed DARAB Decision dated October 5, 1995 appears
to be regular on its face, and for its alleged nullity to be
resolved, the Court must delve into the records of the case
in order to determine the validity of petitioners' argument of
lack of due process, absent notice and hearing.
Moreover, the principle of hierarchy of courts applies
generally to cases involving factual questions. As it is not a
trier of facts, the Court cannot entertain cases involving
factual issues.38 The question of whether the DARAB
Decision dated October 5, 1995 is null and void and
enforceable against petitioners for having been rendered
without affording petitioners due process is a factual
question which requires a review of the records of this case
for it to be judiciously resolved.
The Court notes that the CA, indeed, failed to resolve
petitioners' prayer for the issuance of the writ of prohibition,
which, significantly, focuses on the alleged nullity of the
DARAB Decision dated October 5, 1995. On this score, the
CA found that the application for the issuance of the writ of
prohibition was actually a collateral attack on the validity of
the DARAB decision. But, a final and executory judgment
may be set aside in three ways;39 and a collateral attack,
whereby in an action to obtain a different relief, an attack on
the judgment is nevertheless made as an incident
thereof,40 is one of these. This tenet is based upon a court's
inherent authority to expunge void acts from its
records.41 Despite recognizing the need to resolve
petitioners' application for the writ of prohibition in its
Resolution dated January 12, 1999, the CA nonetheless
summarily denied petitioners' motion for reconsideration in
its Resolution dated February 23, 2000,42 leaving the matter
hanging and unresolved.
At first, the Court considered resolving the merits of
petitioners' motion for reconsideration concerning their
application for a writ of prohibition against enforcing the
DARAB Decision dated October 5, 1995. Thus, in a
Resolution dated June 5, 2006, the Court directed the CA to
transmit the records of DARAB Case No. 0555, which was
previously required by the CA to be forwarded to it per
Resolution dated December 20, 1999.43 However, as of even
date, the CA has not complied with the Court's Resolution.
Withal, upon re-examination of the issues involved in this
case, the Court deems it more judicious to remand this case
to the CA for immediate resolution of petitioners' motion for
reconsideration, re: their application for the writ of
prohibition.
Moreover, the radical conflict in the findings of the Provincial
Adjudicator and the DARAB as regards the nature of the
subject property necessitates a review of the present case.
In this regard, the CA is in a better position to fully
adjudicate the case for it can delve into the records to
determine the probative value of the evidence supporting
the findings of the Provincial Adjudicator and of the DARAB.
In addition, the CA is empowered by its internal rules to
require parties to submit additional documents, as it may
find necessary to promote the ends of substantial justice,
and further order the transmittal of the proper records for it
to fully adjudicate the case. After all, it is an avowed policy
of the courts that cases should be determined on the merits,
after full opportunity to all parties for ventilation of their
causes and defenses, rather than on technicality or some
procedural imperfections. In that way, the ends of justice
would be served better.44
WHEREFORE, the petition is PARTLY GRANTED. This case
is REMANDED to the Court of Appeals which
is DIRECTED to resolve petitioners' prayer for the issuance
of the writ of prohibition in their Motion for Reconsideration.
Upon finality of this Decision, let the records be remanded
forthwith to the Court of Appeals.
No pronouncement as to costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 173559 January 7, 2013
LETICIA DIONA, represented by her Attorney-in-Fact,
MARCELINA DIONA, Petitioner,
vs.
ROMEO A. BALANGUE, SONNY A. BALANGUE,
REYNALDO A. BALANGUE, and ESTEBAN A.
BALANGUE, JR., Respondents.
DECISION
DEL CASTILLO, J.:
The great of a relief neither sought by the party in whose
favor it was given not supported by the evidence presented
violates the opposing partys right to due process and may
be declared void ab initio in a proper proceeding.
This Petition for Review on Certiorari1 assails the November
24, 2005 Resolution2 of the Court of Appeals (CA) issued in
G.R. SP No. 85541 which granted the Petition for Annulment
of Judgment3 filed by the respondents seeking to nullify that
portion of the October 17, 2000 Decision4 of the Regional
Trial Court (RTC), Branch 75, Valenzuela City awarding
petitioner 5% monthly interest rate for the principal amount
of the loan respondent obtained from her.
This Petition likewise assails the CAs June 26, 2006
Resolution5 denying petitioners Motion for Reconsideration.
Factual Antecedents
The facts of this case are simple and undisputed.
On March 2, 1991, respondents obtained a loan
of P45,000.00 from petitioner payable in six months and
secured by a Real Estate Mortgage6 over their 202-square
meter property located in Marulas, Valenzuela and covered
by Transfer Certificate of Title (TCT) No. V-12296.7 When the
debt became due, respondents failed to pay
notwithstanding demand. Thus, on September 17, 1999,
petitioner filed with the RTC a Complaint8 praying that
respondents be ordered:
(a) To pay petitioner the principal obligation of P45,000.00,
with interest thereon at the rate of 12% per annum, from 02
March 1991 until the full obligation is paid.
(b) To pay petitioner actual damages as may be proven
during the trial but shall in no case be less
than P10,000.00; P25,000.00 by way of attorneys fee,
plus P2,000.00 per hearing as appearance fee.
(c) To issue a decree of foreclosure for the sale at public
auction of the aforementioned parcel of land, and for the
disposition of the proceeds thereof in accordance with law,
upon failure of the respondents to fully pay petitioner within
the period set by law the sums set forth in this complaint.
(d) Costs of this suit.
Other reliefs and remedies just and equitable under the
premises are likewise prayed for. 9 (Emphasis supplied)
Respondents were served with summons thru respondent
Sonny A. Balangue (Sonny). On October 15, 1999, with the
assistance of Atty. Arthur C. Coroza (Atty. Coroza) of the
Public Attorneys Office, they filed a Motion to Extend Period
to Answer. Despite the requested extension, however,
respondents failed to file any responsive pleadings. Thus,
upon motion of the petitioner, the RTC declared them in
default and allowed petitioner to present her evidence ex
parte.10
Ruling of the RTC sought to be annulled.
In a Decision11 dated October 17, 2000, the RTC granted
petitioners Complaint. The dispositive portion of said
Decision reads:
WHEREFORE, judgment is hereby rendered in favor of the
petitioner, ordering the respondents to pay the petitioner as
follows:
a) the sum of FORTY FIVE THOUSAND (P45,000.00) PESOS,
representing the unpaid principal loan obligation plus
interest at 5% per month [sic] reckoned from March 2, 1991,
until the same is fully paid;
b) P20,000.00 as attorneys fees plus cost of suit;
c) in the event the [respondents] fail to satisfy the aforesaid
obligation, an order of foreclosure shall be issued
accordingly for the sale at public auction of the subject
property covered by Transfer Certificate of Title No. V-12296
and the improvements thereon for the satisfaction of the
petitioners claim.
SO ORDERED.12 (Emphasis supplied)
Subsequently, petitioner filed a Motion for
Execution,13 alleging that respondents did not interpose a
timely appeal despite receipt by their former counsel of the
RTCs Decision on November 13, 2000. Before it could be
resolved, however, respondents filed a Motion to Set Aside
Judgment14 dated January 26, 2001, claiming that not all of
them were duly served with summons. According to the
other respondents, they had no knowledge of the case
because their co-respondent Sonny did not inform them
about it. They prayed that the RTCs October 17, 2000
Decision be set aside and a new trial be conducted.
But on March 16, 2001, the RTC ordered15 the issuance of a
Writ of Execution to implement its October 17, 2000
Decision. However, since the writ could not be satisfied,
petitioner moved for the public auction of the mortgaged
property,16 which the RTC granted.17 In an auction sale
conducted on November 7, 2001, petitioner was the only
bidder in the amount of P420,000.00. Thus, a Certificate of
Sale18 was issued in her favor and accordingly annotated at
the back of TCT No. V-12296.
Respondents then filed a Motion to Correct/Amend Judgment
and To Set Aside Execution Sale19 dated December 17, 2001,
claiming that the parties did not agree in writing on any rate
of interest and that petitioner merely sought for a 12% per
annum interest in her Complaint. Surprisingly, the RTC
awarded 5% monthly interest (or 60% per annum) from
March 2, 1991 until full payment. Resultantly, their
indebtedness inclusive of the exorbitant interest from March
2, 1991 to May 22, 2001 ballooned from P124,400.00
to P652,000.00.
In an Order20 dated May 7, 2002, the RTC granted
respondents motion and accordingly modified the interest
rate awarded from 5% monthly to 12% per annum. Then on
August 2, 2002, respondents filed a Motion for Leave To
Deposit/Consign Judgment Obligation21 in the total amount
of P126,650.00.22
Displeased with the RTCs May 7, 2002 Order, petitioner
elevated the matter to the CA via a Petition for
Certiorari23 under Rule 65 of the Rules of Court. On August 5,
2003, the CA rendered a Decision24 declaring that the RTC
exceeded its jurisdiction in awarding the 5% monthly
interest but at the same time pronouncing that the RTC
gravely abused its discretion in subsequently reducing the
rate of interest to 12% per annum. In so ruling, the CA
ratiocinated:
Indeed, We are convinced that the Trial Court exceeded its
jurisdiction when it granted 5% monthly interest instead of
the 12% per annum prayed for in the complaint. However,
the proper remedy is not to amend the judgment but to
declare that portion as a nullity. Void judgment for want of
jurisdiction is no judgment at all. It cannot be the source of
any right nor the creator of any obligation (Leonor vs. CA,
256 SCRA 69). No legal rights can emanate from a resolution
that is null and void (Fortich vs. Corona, 312 SCRA 751).
From the foregoing, the remedy of the respondents is to
have the Court declare the portion of the judgment
providing for a higher interest than that prayed for as null
and void for want of or in excess of jurisdiction. A void
judgment never acquire[s] finality and any action to declare
its nullity does not prescribe (Heirs of Mayor Nemencio
Galvez vs. CA, 255 SCRA 672).
WHEREFORE, foregoing premises considered, the Petition
having merit, is hereby GIVEN DUE COURSE. Resultantly, the
challenged May 7, 2002 and September 5, 2000 orders of
Public Respondent Court are hereby ANNULLED and SET
ASIDE for having been issued with grave abuse of discretion
amounting to lack or in excess of jurisdiction. No costs.
SO ORDERED.25 (Emphases in the original; italics supplied.)
Proceedings before the Court of Appeals
Taking their cue from the Decision of the CA in the special
civil action for certiorari, respondents filed with the same
court a Petition for Annulment of Judgment and Execution
Sale with Damages.26 They contended that the portion of the
RTC Decision granting petitioner 5% monthly interest rate is
in gross violation of Section 3(d) of Rule 9 of the Rules of
Court and of their right to due process. According to
respondents, the loan did not carry any interest as it was
the verbal agreement of the parties that in lieu thereof
petitioners family can continue occupying respondents
residential building located in Marulas, Valenzuela for free
until said loan is fully paid.
Ruling of the Court of Appeals
Initially, the CA denied due course to the Petition.27 Upon
respondents motion, however, it reinstated and granted the
Petition. In setting aside portions of the RTCs October 17,
2000 Decision, the CA ruled that aside from being
unconscionably excessive, the monthly interest rate of 5%
was not agreed upon by the parties and that petitioners
Complaint clearly sought only the legal rate of 12% per
annum. Following the mandate of Section 3(d) of Rule 9 of
the Rules of Court, the CA concluded that the awarded rate
of interest is void for being in excess of the relief sought in
the Complaint. It ruled thus:
WHEREFORE, respondents motion for reconsideration is
GRANTED and our resolution dated October 13, 2004 is,
accordingly, REVERSED and SET ASIDE. In lieu thereof,
another is entered ordering the ANNULMENT OF:
(a) public respondents impugned October 17, 2000
judgment, insofar as it awarded 5% monthly interest in favor
of petitioner; and
(b) all proceedings relative to the sale at public auction of
the property titled in respondents names under Transfer
Certificate of Title No. V-12296 of the Valenzuela registry.
The judgment debt adjudicated in public respondents
impugned October 17, 2000 judgment is, likewise, ordered
RECOMPUTED at the rate of 12% per annum from March 2,
1991. No costs.
SO ORDERED.28 (Emphases in the original.)
Petitioner sought reconsideration, which was denied by the
CA in its June 26, 2006 Resolution. 29
Issues
Hence, this Petition anchored on the following grounds:
I. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
AND SERIOUS ERROR OF LAW WHEN IT GRANTED
RESPONDENTS PETITION FOR ANNULMENT OF JUDGMENT
AS A SUBSTITUTE OR ALTERNATIVE REMEDY OF A LOST
APPEAL.
II. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
AND SERIOUS ERROR AND MISAPPREHENSION OF LAW AND
THE FACTS WHEN IT GRANTED RESPONDENTS PETITION
FOR ANNULMENT OF JUDGMENT OF THE DECISION OF THE
REGIONAL TRIAL COURT OF VALENZUELA, BRANCH 75
DATED OCTOBER 17, 2000 IN CIVIL CASE NO. 241-V-99,
DESPITE THE FACT THAT SAID DECISION HAS BECOME FINAL
AND ALREADY EXECUTED CONTRARY TO THE DOCTRINE OF
IMMUTABILITY OF JUDGMENT.30
Petitioners Arguments
Petitioner claims that the CA erred in partially annulling the
RTCs October 17, 2000 Decision. She contends that a
Petition for Annulment of Judgment may be availed of only
when the ordinary remedies of new trial, appeal, petition for
relief or other appropriate remedies are no longer available
through no fault of the claimant. In the present case,
however, respondents had all the opportunity to question
the October 17, 2000 Decision of the RTC, but because of
their own inaction or negligence they failed to avail of the
remedies sanctioned by the rules. Instead, they contented
themselves with the filing of a Motion to Set Aside Judgment
and then a Motion to Correct/Amend Judgment and to Set
Aside Execution Sale.
Petitioner likewise argues that for a Rule 47 petition to
prosper, the same must either be based on extrinsic fraud or
lack of jurisdiction. However, the allegations in respondents
Rule 47 petition do not constitute extrinsic fraud because
they simply pass the blame to the negligence of their former
counsel. In addition, it is too late for respondents to pass the
buck to their erstwhile counsel considering that when they
filed their Motion to Correct/Amend Judgment and To Set
Aside Execution Sale they were already assisted by their
new lawyer, Atty. Reynaldo A. Ruiz, who did not also avail of
the remedies of new trial, appeal, etc. As to the ground of
lack of jurisdiction, petitioner posits that there is no reason
to doubt that the RTC had jurisdiction over the subject
matter of the case and over the persons of the respondents.
While conceding that the RTC patently made a mistake in
awarding 5% monthly interest, petitioner nonetheless
invokes the doctrine of immutability of final judgment and
contends that the RTC Decision can no longer be corrected
or modified since it had long become final and executory.
She likewise points out that respondents received a copy of
said Decision on November 13, 2000 but did nothing to
correct the same. They did not even question the award of
5% monthly interest when they filed their Motion to Set
Aside Judgment which they anchored on the sole ground of
the RTCs lack of jurisdiction over the persons of some of the
respondents.
Respondents Arguments
Respondents do not contest the existence of their obligation
and the principal amount thereof. They only seek quittance
from the 5% monthly interest or 60% per annum imposed by
the RTC. Respondents contend that Section (3)d of Rule 9 of
the Rules of Court is clear that when the defendant is
declared in default, the court cannot grant a relief more
than what is being prayed for in the Complaint. A judgment
which transgresses said rule, according to the respondents,
is void for having been issued without jurisdiction and for
being violative of due process of law.
Respondents maintain that it was through no fault of their
own, but through the gross negligence of their former
counsel, Atty. Coroza, that the remedies of new trial, appeal
or petition for relief from judgment were lost. They allege
that after filing a Motion to Extend Period to Answer, Atty.
Coroza did not file any pleading resulting to their being
declared in default. While the said lawyer filed on their
behalf a Motion to Set Aside Judgment dated January 26,
2001, he however took no steps to appeal from the Decision
of the RTC, thereby allowing said judgment to lapse into
finality. Citing Legarda v. Court of Appeals,31 respondents
aver that clients are not always bound by the actions of
their counsel, as in the present case where the clients are to
lose their property due to the gross negligence of their
counsel.
With regard to petitioners invocation of immutability of
judgment, respondents argue that said doctrine applies only
to valid and not to void judgments.
Our Ruling
The petition must fail.
We agree with respondents that the award of 5% monthly
interest violated their right to due process and, hence, the
same may be set aside in a Petition for Annulment of
Judgment filed under Rule 47 of the Rules of Court.
Annulment of judgment under Rule 47; an exception to the
final judgment rule; grounds therefor.
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. Said rule
explicitly provides that it is not available as a substitute for
a remedy which was lost due to the partys own neglect in
promptly availing of the same. "The underlying reason is
traceable to the notion that annulling final judgments goes
against the grain of finality of judgment. Litigation must end
and terminate sometime and somewhere, and it is essential
to an effective administration of justice that once a
judgment has become final, the issue or cause involved
therein should be laid to rest."32
While under Section 2, Rule 4733 of the Rules of Court a
Petition for Annulment of Judgment may be based only on
the grounds of extrinsic fraud and lack of jurisdiction,
jurisprudence recognizes lack of due process as additional
ground to annul a judgment.34 In Arcelona v. Court of
Appeals,35 this Court declared that a final and executory
judgment may still be set aside if, upon mere inspection
thereof, its patent nullity can be shown for having been
issued without jurisdiction or for lack of due process of law.
Grant of 5% monthly interest is way beyond the 12% per
annum interest sought in the Complaint and smacks of
violation of due process.
It is settled that courts cannot grant a relief not prayed for in
the pleadings or in excess of what is being sought by the
party. They cannot also grant a relief without first
ascertaining the evidence presented in support thereof. Due
process considerations require that judgments must
conform to and be supported by the pleadings and evidence
presented in court. In Development Bank of the Philippines
v. Teston,36 this Court expounded that:
Due process considerations justify this requirement. It is
improper to enter an order which exceeds the scope of relief
sought by the pleadings, absent notice which affords the
opposing party an opportunity to be heard with respect to
the proposed relief. The fundamental purpose of the
requirement that allegations of a complaint must provide
the measure of recovery is to prevent surprise to the
defendant.
Notably, the Rules is even more strict in safeguarding the
right to due process of a defendant who was declared in
default than of a defendant who participated in trial. For
instance, amendment to conform to the evidence presented
during trial is allowed the parties under the Rules.37 But the
same is not feasible when the defendant is declared in
default because Section 3(d), Rule 9 of the Rules of Court
comes into play and limits the relief that may be granted by
the courts to what has been prayed for in the Complaint. It
provides:
(d) Extent of relief to be awarded. A judgment rendered
against a party in default shall not exceed the amount or be
different in kind from that prayed for nor award unliquidated
damages.
The raison dtre in limiting the extent of relief that may be
granted is that it cannot be presumed that the defendant
would not file an Answer and allow himself to be declared in
default had he known that the plaintiff will be accorded a
relief greater than or different in kind from that sought in
the Complaint.38 No doubt, the reason behind Section 3(d),
Rule 9 of the Rules of Court is to safeguard defendants right
to due process against unforeseen and arbitrarily issued
judgment. This, to the mind of this Court, is akin to the very
essence of due process. It embodies "the sporting idea of
fair play"39 and forbids the grant of relief on matters where
the defendant was not given the opportunity to be heard
thereon.
In the case at bench, the award of 5% monthly interest rate
is not supported both by the allegations in the pleadings and
the evidence on record. The Real Estate
Mortgage40 executed by the parties does not include any
provision on interest. When petitioner filed her Complaint
before the RTC, she alleged that respondents borrowed from
her "the sum of FORTY-FIVE THOUSAND PESOS (P45,000.00),
with interest thereon at the rate of 12% per annum"41 and
sought payment thereof. She did not allege or pray for the
disputed 5% monthly interest. Neither did she present
evidence nor testified thereon. Clearly, the RTCs award of
5% monthly interest or 60% per annum lacks basis and
disregards due process. It violated the due process
requirement because respondents were not informed of the
possibility that the RTC may award 5% monthly interest.
They were deprived of reasonable opportunity to refute and
present controverting evidence as they were made to
believe that the complainant petitioner was seeking for what
she merely stated in her Complaint.
Neither can the grant of the 5% monthly interest be
considered subsumed by petitioners general prayer for
"other reliefs and remedies just and equitable under the
premises x x x."42 To repeat, the courts grant of relief is
limited only to what has been prayed for in the Complaint or
related thereto, supported by evidence, and covered by the
partys cause of action.43 Besides, even assuming that the
awarded 5% monthly or 60% per annum interest was
properly alleged and proven during trial, the same remains
unconscionably excessive and ought to be equitably
reduced in accordance with applicable jurisprudence. In
Bulos, Jr. v. Yasuma,44 this Court held:
In the case of Ruiz v. Court of Appeals, citing the cases of
Medel v. Court of Appeals, Garcia v. Court of Appeals,
Spouses Bautista v. Pilar Development Corporation and the
recent case of Spouses Solangon v. Salazar, this Court
considered the 3% interest per month or 36% interest per
annum as excessive and unconscionable. Thereby, the
Court, in the said case, equitably reduced the rate of
interest to 1% interest per month or 12% interest per
annum. (Citations omitted)
It is understandable for the respondents not to contest the
default order for, as alleged in their Comment, "it is not their
intention to impugn or run away from their just and valid
obligation."45 Nonetheless, their waiver to present evidence
should never be construed as waiver to contest patently
erroneous award which already transgresses their right to
due process, as well as applicable jurisprudence.
Respondents former counsel was grossly negligent in
handling the case of his clients; respondents did not lose
ordinary remedies of new trial, petition for relief, etc.
through their own fault.
Ordinarily, the mistake, negligence or lack of competence of
counsel binds the client.1wphi1 This is based on the rule
that any act performed by a counsel within the scope of his
general or implied authority is regarded as an act of his
client. A recognized exception to the rule is when the
lawyers were grossly negligent in their duty to maintain
their clients cause and such amounted to a deprivation of
their clients property without due process of law.46 In which
case, the courts must step in and accord relief to a client
who suffered thereby.47
The manifest indifference of respondents former counsel in
handling the cause of his client was already present even
from the beginning. It should be recalled that after filing in
behalf of his clients a Motion to Extend Period to Answer,
said counsel allowed the requested extension to pass
without filing an Answer, which resulted to respondents
being declared in default. His negligence was aggravated by
the fact that he did not question the awarded 5% monthly
interest despite receipt of the RTC Decision on November
13, 2000.48 A simple reading of the dispositive portion of the
RTC Decision readily reveals that it awarded exorbitant and
unconscionable rate of interest. Its difference from what is
being prayed for by the petitioner in her Complaint is so
blatant and very patent. It also defies elementary
jurisprudence on legal rate of interests. Had the counsel
carefully read the judgment it would have caught his
attention and compelled him to take the necessary steps to
protect the interest of his client. But he did not. Instead, he
filed in behalf of his clients a Motion to Set Aside
Judgment49 dated January 26, 2001 based on the sole
ground of lack of jurisdiction, oblivious to the fact that the
erroneous award of 5% monthly interest would result to his
clients deprivation of property without due process of law.
Worse, he even allowed the RTC Decision to become final by
not perfecting an appeal. Neither did he file a petition for
relief therefrom. It was only a year later that the patently
erroneous award of 5% monthly interest was brought to the
attention of the RTC when respondents, thru their new
counsel, filed a Motion to Correct/Amend Judgment and To
Set Aside Execution Sale. Even the RTC candidly admitted
that it "made a glaring mistake in directing the defendants
to pay interest on the principal loan at 5% per month which
is very different from what was prayed for by the plaintiff."50
"A lawyer owes entire devotion to the interest of his client,
warmth and zeal in the maintenance and defense of his
rights and the exertion of his utmost learning and ability, to
the end that nothing can be taken or withheld from his client
except in accordance with the law."51 Judging from how
respondents former counsel handled the cause of his
clients, there is no doubt that he was grossly negligent in
protecting their rights, to the extent that they were deprived
of their property without due process of law.
In fine, respondents did not lose the remedies of new trial,
appeal, petition for relief and other remedies through their
own fault. It can only be attributed to the gross negligence
of their erstwhile counsel which prevented them from
pursuing such remedies. We cannot also blame respondents
for relying too much on their former counsel. Clients have
reasonable expectations that their lawyer would amply
protect their interest during the trial of the case.52 Here,
"respondents are plain and ordinary people x x x who are
totally ignorant of the intricacies and technicalities of law
and legal procedures. Being so, they completely relied upon
and trusted their former counsel to appropriately act as their
interest may lawfully warrant and require."53
As a final word, it is worth noting that respondents principal
obligation was only P45,000.00. Due to their former
counsels gross negligence in handling their cause, coupled
with the RTCs erroneous, baseless, and illegal award of 5%
monthly interest, they now stand to lose their property and
still owe petitioner a large amount of money. As aptly
observed by the CA:
x x x If the impugned judgment is not, therefore, rightfully
nullified, petitioners will not only end up losing their
property but will additionally owe private respondent the
sum of P232,000.00 plus the legal interest said balance had,
in the meantime, earned. As a court of justice and equity,
we cannot, in good conscience, allow this unconscionable
situation to prevail.54
Indeed, this Court is appalled by petitioners invocation of
the doctrine of immutability of judgment. Petitioner does not
contest as she even admits that the RTC made a glaring
mistake in awarding 5% monthly interest.55Amazingly, she
wants to benefit from such erroneous award. This Court
cannot allow this injustice to happen.
WHEREFORE, the instant Petition is hereby DENIED and the
assailed November 24, 2005 and June 26, 2006 Resolution
of the Court of Appeals in CA-G.R. SP No. 85541 are
AFFIRMED.
SO ORDERED.
SECOND DIVISION
[G.R. No. 140945. May 16, 2005]NATIONAL HOUSING
AUTHORITY, petitioner, vs. JOSE
EVANGELISTA, respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
A person who was not impleaded in the complaint
cannot be bound by the decision rendered therein, for no
man shall be affected by a proceeding in which he is a
stranger.[1]
This refers to the petition for review on certiorari filed
by the National Housing Authority assailing the decision [2] of
the Court of Appeals (CA) in CA-G.R. SP No. 51646, granting
respondents petition for annulment of judgment. The
dispositive portion of the decision reads:
WHEREFORE, the petition is granted. The assailed part of
paragraph No. 3 of the dispositive portion of the decision
dated November 29, 1995 of the Regional Trial Court, Br.
CIII, Quezon City in Civil Case No. Q-91-10071 is hereby
declared void, non-binding and inapplicable in so far as
petitioners TCT No. 122944 is concerned.
Let a copy hereof be furnished the Register of Deeds of
Quezon City for the proper annotation. No pronouncement
as to costs.
SO ORDERED.[3]
Petitioner now comes before the Court with the
following assignment of errors allegedly committed by the
CA:
I
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING
THAT THE DECISION OF THE LOWER COURT IS NOT BINDING
ON HEREIN RESPONDENT JOSE EVANGELISTA BECAUSE THE
LOWER COURT DID NOT ACQUIRE JURISDICTION OVER HIS
PERSON.
II
THE HONORABLE COURT LIKEWISE ERRED IN ANNULLING
THE DECISION OF THE LOWER COURT ON THE GROUND OF
LACK OF DUE PROCESS OF LAW BECAUSE RESPONDENT
JOSE EVANGELISTA WAS NOT IMPLEADED AS A PARTY
DEFENDANT IN PETITIONERS ACTION FOR RECOVERY OF
TITLE.[4]
The assailed decision of the CA originated from a civil
case filed by petitioner before the Regional Trial Court of
Quezon City (Branch CIII) for recovery of real property,
docketed as Civil Case No. Q-91-10071.[5] Said case involves
a real property measuring 915.50 square meters and
located in V. Luna Road, Quezon City, originally awarded in
1968 by the Peoples Homesite and Housing Corporation
(petitioners predecessor) to a certain Adela Salindon. After
the death of Salindon, her heirs executed an extra-judicial
settlement where the property was transferred to Arsenio
Florendo, Jr., Milagros Florendo, Beatriz Florendo and Eloisa
Florendo-Kulphongpatana. However, in a decision in G.R. No.
L-60544, entitled Arsenio Florendo, Jr., et al. vs. Hon.
Perpetuo D. Coloma, Presiding Judge of Branch VII, City
Court of Quezon City, et al., rendered by the Court on May
19, 1984, the award in favor of Salindon was nullified and
set aside for having been issued in excess of jurisdiction and
with grave abuse of discretion, and petitioner was declared
the owner of the property.
Despite said decision, the property was auctioned off by
the Quezon City Treasurers Office on April 23, 1986, for
unpaid real property taxes by the Florendos. The highest
bidder was Luisito Sarte. Because the Register of Deeds
refused to register the final deed of sale issued by the City
Treasurer, Sarte filed a petition for issuance of title and
confirmation of sale, which was granted by the Regional Trial
Court of Quezon City (Branch 84). Consequently, the
Register of Deeds issued Transfer Certificate of Title (TCT)
No. 28182 in the name of Sarte, who divided the property
into Lot 1-A, measuring 570.50 square meters and covered
by TCT No. 108070, and Lot 1-B, measuring 345 square
meters and covered by TCT No. 108071.[6]
It was in 1991 that petitioner filed Civil Case No. Q-91-
10071 with Sarte, the City Treasurer of Quezon City and the
Quezon City Register of Deeds, as defendants. While the
case was pending, Sarte executed in favor of respondent
Jose Evangelista, a Deed of Assignment dated December 2,
1994, covering Lot 1-A.[7] TCT No. 108070 was cancelled and
TCT No. 122944 was issued in the name of respondent on
December 21, 1994. Subsequently, the Register of Deeds
annotated on TCT No. 122944 an Affidavit of Adverse Claim
of petitioner, to wit:
Entry No. 7159/T-No. 122944: AFFIDAVIT OF ADVERSE CLAIM
Executed under oath by Manuel V. Fernandez (in behalf of
NHA), adverse claimant, claiming among others that NHA
has the right of the ownership of the property being the
subject of controversy in Civil Case No. Q-91-10071, entitled
National Housing Authority vs. Luisito Sarte, et al., now
pending before RTC, Br. 103, Q.C., Doc. No. 76, page 16, Bk.
I, s. of 1995 of Not. Pub. of Q.C. Belsie Cailipan Sy.
Date of the instrument May 4, 1995
Date of the inscription May 4, 1995.[8]
and Notice of Lis Pendens, to wit:
Entry No. 1367/T-No. 122944: NOTICE OF LIS PENDENS
By virtue of a notice of lis pendens presented and filed by
Oscar I. Garcia & Virgilio C. Abejo, notice is hereby given
that a case has been pending RTC, Q.C. in Civil Case No. Q-
95-23940 entitled National Housing Authority, plaintiff, -vs.-
Luistio Sarte, Jose Evangelista, Northern Star Agri-Business
Corporation, BPI Agricultural Development Bank & the
Register of Deeds of Quezon City, defendants, plaintiff
praying for Annulment of the Deed of Assignment, Deed of
Absolute Sale, Real Estate Mortgage, Cancellation of TCT
Nos. 122944 and 126639 & damages.
Date of the Instrument May 24, 1995
Date of the Inscription - May 31, 1995 [9]
On May 1, 1995, petitioner filed a motion for leave to
file supplemental complaint in Civil Case No. Q-91-10071,
seeking to include respondent Evangelista, Northern Star
Agri-Business Corporation and BPI Agricultural Development
Bank as defendants. The proposed additional defendants
were the subsequent purchasers of Lots 1-A and 1-B.[10] The
trial court, however, denied the motion in its Order dated
May 17, 1995.[11]
Thus, petitioner, on May 31, 1995, filed before the
Regional Trial Court of Quezon City (Branch 82) a complaint
for Annulment of Deed of Assignment, Deed of Absolute
Sale, Real Estate Mortgage, Cancellation of TCT Nos. 122944
and 126639, and Damages, against Sarte, respondent
Evangelista, Northern Star Agri-Business Corporation, BPI
Agricultural Development Bank and the Register of Deeds of
Quezon City, docketed as Civil Case No. Q-95-23940. [12] But
the trial court dismissed without prejudice said case on
October 23, 1995, on the ground of the pendency of Civil
Case No. Q-91-10071.[13]
In a decision dated November 29, 1995, the trial court,
in Civil Case No. Q-91-10071, rendered its decision in favor
of petitioner, with the following dispositive portion:
ACCORDINGLY, judgment is hereby rendered in favor of the
plaintiff National Housing Authority as follows:
1. The auction sale conducted by the Quezon City Treasurer
in 1986 of the parcel of land consisting of 915.50 sq. m.
subject of this case previously covered by TCT No. 138007 of
the Register of Deeds of Quezon City issued in the name of
Adela Salindon and wherein defendant Luisito Sarte was the
auction buyer and TCT No. 239729 in the name of Arsenio
Florendo, Milagros Florendo, Beatriz Florendo and Eloisa F.
Kulphongpatana is hereby declared null and void ab initio;
2. TCT No. 28182 subsequently issued in the name of
defendant Luisito Sarte by the Quezon City Registry of
Deeds is hereby declared null and void ab initio and the
herein defendant Quezon City Register of Deeds is hereby
ordered to cancel said TCT 28182 in the name of Luisito
Sarte;
3. Any transfers, assignment, sale or mortgage of
whatever nature of the parcel of land subject of this
case made by defendant Luisito Sarte or his/her
agents or assigns before or during the pendency of
the instant case are hereby declared null and void,
together with any transfer certificates of title issued
in connection with the aforesaid transactions by the
Register of Deeds of Quezon City who is likewise
ordered to cancel or cause the cancellation of such
TCTs;
4. The defendant Register of Deeds of Quezon City is hereby
ordered to issue a new transfer certificate of title over the
entire parcel of land (915.50 sq. m.) subject of this case in
favor of the National Housing Authority by way of satisfying
the Supreme Court in G.R. No. 50544 promulgated on May
1984;
5. The NHA is hereby required and authorized to put in place
on the property at bar a notice, readable, bold, and stable,
sufficiently signifying the essence of this courts decision so
that no person may err as to the real ownership of the
instant parcel of land and to fence the same to prevent
entry of squatters or other illegal intruders.
The court further renders judgment as follows:
1. No pronouncement as to attorneys fees, costs and other
damages as fundamentally the main responsible character
here are the public officers sued in their official capacity.
2. The complaint-in-intervention by Teresita Vasquez is held
premature in view of the disposition herein made in favor of
NHA which can only fully act with regard to the claim of said
intervenor after this decision becomes final. Moreover,
insofar as and to the extent in which intervenor Vasquez has
joined the NHA in the case at bench, her assertions and
prayers have already been adjudged in this decision in favor
of the plaintiff National Housing Authority.
SO ORDERED.[14] (Emphasis supplied)
Respondent then filed with the CA a petition for
annulment of the trial courts judgment, particularly
paragraph 3 of the dispositive portion, referring to the nullity
of any transfer, assignment, sale or mortgage made by
Sarte. In his petition, respondent alleged extrinsic fraud as
ground. According to respondent, since he was not a party
to Civil Case No. Q-91-10071, he was prevented from
ventilating his cause, right or interest over the property, and
the judgment was not binding on him, as the trial court did
not acquire jurisdiction over his person. [15]
The CA granted the petition and declared null and void
paragraph 3 of the dispositive portion of the trial courts
decision insofar as petitioners title to the property is
concerned.[16] The CA found that respondent was not a party
to Civil Case No. Q-91-10071 and the trial court did not
acquire any jurisdiction over his person. The CA also ruled
that the judgment violated respondents right against
deprivation of the property without due process of law.[17]
Its motion for reconsideration having been denied by
the CA, petitioner took the present recourse.
Petitioner insists that it should not be faulted for the
trial courts denial of its motion to include respondent as
defendant in Civil Case No. Q-91-10071. Petitioner also
claims that the auction sale of the property by the City
Treasurer of Quezon City is void ab initio because it was
never supposed to be included in the auction sale as
petitioner, which has been declared by the Court in G.R. No.
L-60544 as the owner of the property, is exempt from
payment of taxes. Hence, Sarte cannot claim any right over
the same and respondent, having bought it from Sarte, does
not acquire any better right thereto. Petitioner also alleges
that respondent is not a buyer in good faith because the
latter was aware of the pending litigation involving the
property.[18]
The sole issue in this case is whether or not the CA
erred in annulling paragraph 3 of the trial courts decision on
grounds of lack of jurisdiction and lack of due process of law.
Annulment of judgment is a recourse equitable in
character, allowed only in exceptional cases as where there
is no available or other adequate remedy. [19] Jurisprudence
and Section 2, Rule 47 of the Rules of Court lay down the
grounds upon which an action for annulment of judgment
may be brought, i.e., (1) extrinsic fraud, and (2) lack of
jurisdiction or denial of due process.[20]
Lack of jurisdiction refers to either lack of jurisdiction
over the person of the defending party or over the subject
matter of the claim, and in either case, the judgment or final
order and resolution are void.[21] A trial court acquires
jurisdiction over the person of the defendant either by his
voluntary appearance in court and his submission to its
authority or by service of summons.[22]
In this case, it is undisputed that respondent was never
made a party to Civil Case No. Q-91-10071. It is basic that
no man shall be affected by any proceeding to which he is a
stranger, and strangers to a case are not bound by
judgment rendered by the court.[23] Yet, the assailed
paragraph 3 of the trial courts decision decreed that (A)ny
transfers, assignment, sale or mortgage of whatever nature
of the parcel of land subject of this case made by defendant
Luisito Sarte or his/her agents or assigns before or during
the pendency of the instant case are hereby declared null
and void, together with any transfer certificates of title
issued in connection with the aforesaid transactions by the
Register of Deeds of Quezon City who is likewise ordered to
cancel or cause the cancellation of such TCTs. Respondent is
adversely affected by such judgment, as he was the
subsequent purchaser of the subject property from Sarte,
and title was already transferred to him. It will be the height
of inequity to allow respondents title to be nullified without
being given the opportunity to present any evidence in
support of his ostensible ownership of the property. Much
more, it is tantamount to a violation of the constitutional
guarantee that no person shall be deprived of property
without due process of law.[24]Clearly, the trial courts
judgment is void insofar as paragraph 3 of its dispositive
portion is concerned.
Petitioner argues that it should not bear the
consequence of the trial courts denial of its motion to
include respondent as defendant in Civil Case No. Q-91-
10071. True, it was not petitioners fault that respondent was
not made a party to the case. But likewise, it was not
respondents fault that he was not given the opportunity to
present his side of the story. Whatever prompted the trial
court to deny petitioners motion to include respondent as
defendant is not for the Court to reason why. Petitioner
could have brought the trial courts denial to the CA
on certiorari but it did not. Instead, it filed Civil Case No. Q-
95-23940 for Annulment of Deed of Assignment, Deed of
Absolute Sale, Real Estate Mortgage, Cancellation of TCT
Nos. 122944 and 126639, and Damages, against herein
respondent Sarte and others. Unfortunately for petitioner,
this was dismissed by the Regional Trial Court of Quezon
City (Branch 82) on the ground of litis pendentia. Be that as
it may, the undeniable fact remains -- respondent is not a
party to Civil Case No. Q-91-10071, and paragraph 3, or any
portion of the trial courts judgment for that matter, cannot
be binding on him.
Petitioner also claims that respondent is not a buyer in
good faith, citing as badge of knowledge, respondents
alleged awareness of the pending lawsuit over the property.
Petitioner claims that respondent had admitted that before
TCT No. 122944 was issued to the latter, the notice of lis
pendens was already annotated at the back of the title.
Respondent, however, denied having made such admission.
[25]
There is merit to respondents denial.
Based on petitioners claim, one would assume that the
notice of lis pendens was annotated on the title preceding
TCT No. 122944, which is TCT No. 108070 in the name of
Sarte. However, there is nothing in TCT No. 108070 which
shows any annotation of a notice of lis pendens or adverse
claim. The last entries on TCT No. 108070 were Entry No.
4172 made on May 24, 1994, canceling Entry No. 674, which
is an annotation of a mortgage,[26] and a registration of the
Deed of Assignment between Sarte and respondent, which
was made on December 21, 1994. [27] It was already after
respondent acquired the property and after TCT No. 122944
was issued in his name that petitioners adverse claim (Entry
No. 7159) and a notice of lis pendens (Entry No. 1367) were
annotated.[28] It should also be pointed out that the notice
of lis pendens annotated on the back of respondents title
refers to Civil Case No. Q-95-23940, and not Civil Case No.
Q-91-10071. It was in petitioners Affidavit of Adverse Claim
that Civil Case No. Q-91-10071 was indicated.
To repeat, as records show, at the time the notice of lis
pendens and adverse claim was annotated, the Deed of
Assignment has already been entered into by respondent
and Sarte, and TCT No. 122944 was already issued in
respondents name on December 21, 1994.
Petitioner filed Civil Case No. Q-91-10071 way back in
1991. TCT Nos. 108070 and 108071 were issued in Sartes
name on May 13, 1994;[29] TCT No. 122944 was issued in
respondents name on December 21, 1994. [30] Petitioner had
enough opportunity to have its adverse claim and a notice
of lis pendens annotated on Sartes title before the latter
assigned the property to Evangelista, but it did not do so.
The adverse claim was annotated only on May 4, 1995 and
the notice of lis pendens, on May 31, 1995.[31] While a notice
of lis pendens serves as a warning to a prospective
purchaser or incumbrancer that the particular property is in
litigation; and that he should keep his hands off the same,
unless he intends to gamble on the results of the litigation,
such constructive notice operates as such from the date of
the registration of the notice of lis pendens,[32] which in this
case, was, at the earliest, on May 4, 1995. This was long
after title to the property was transferred to respondent.
Note also must be made that respondent was not
furnished by petitioner of a copy of its motion for leave to
file supplemental complaint.[33] Thus, it cannot be said that
respondent knew of the existence of Civil Case No. Q-91-
10071. Moreover, the filing of Civil Case No. Q-95-23940
against respondent and other defendants was made only on
May 31, 1995, and at that point, TCT No. 122944 was
already issued in respondents name.
Lest it be misunderstood, the Court is not declaring that
respondent is a purchaser of the property in good faith. This
is an issue that cannot be dealt with by the Court in this
forum, as the only issue in this case is whether or not the CA
erred in annulling paragraph 3 of the trial courts decision on
grounds of lack of jurisdiction and lack of due process of law.
Whether or not respondent is a purchaser in good faith is an
issue which is a different matter altogether that must be
threshed out in a full-blown trial for that purpose in an
appropriate case and in the proper forum. Also, CA-G.R. CV
No. 52466, which is the appeal from the trial courts decision
in Civil Case No. Q-91-10071, is pending before the CA, and
it would be premature and unwarranted for the Court to
render any resolution that would unnecessarily interfere
with the appellate proceedings.
Insofar as this petition is concerned, what the Court
declares is that the notice of lis pendens cannot serve as
constructive notice to respondent for having been annotated
after the transfer of the property to him and that he is
entitled to have paragraph 3 of the trial courts decision
annulled.
WHEREFORE, the petition for review on certiorari is
DENIED for lack of merit and the assailed Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 51646
are hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.
Puno, (Chairman), Callejo, Sr., Tinga, and Chico-Nazario,
JJ., concur.
SECOND DIVISION
G.R. No. 187061, October 08, 2014
CELERINA J. SANTOS, Petitioner, v. RICARDO T.
SANTOS, Respondent.
DECISION
LEONEN, J.:
The proper remedy for a judicial declaration of presumptive
death obtained by extrinsic fraud is an action to annul the
judgment. An affidavit of reappearance is not the proper
remedy when the person declared presumptively dead has
never been absent.
This is a petition for review on certiorari filed by Celerina J.
Santos, assailing the Court of Appeals' resolutions dated
November 28, 2008 and March 5, 2009. The Court of
Appeals dismissed the petition for the annulment of the trial
court's judgment declaring her presumptively dead.
On July 27, 2007, the Regional Trial Court of Tarlac City
declared petitioner Celerina J. Santos (Celerina)
presumptively dead after her husband, respondent Ricardo
T. Santos (Ricardo), had filed a petition for declaration of
absence or presumptive death for the purpose of remarriage
on June 15, 2007.1 Ricardo remarried on September 17,
2008.2chanrobleslaw
In his petition for declaration of absence or presumptive
death, Ricardo alleged that he and Celerina rented an
apartment somewhere in San Juan, Metro Manila; after they
had gotten married on June 18, 1980.3 After a year, they
moved to Tarlac City. They were engaged in the buy and sell
business.4chanrobleslaw
Ricardo claimed that their business did not prosper.5 As a
result, Celerina convinced him to allow her to work as a
domestic helper in Hong Kong.6 Ricardo initially refused but
because of Celerina's insistence, he allowed her to work
abroad.7 She allegedly applied in an employment agency in
Ermita, Manila, in February 1995. She left Tarlac two months
after and was never heard from again.8chanrobleslaw
Ricardo further alleged that he exerted efforts to locate
Celerina.9 He went to Celerina's parents in Cubao, Quezon
City, but they, too, did not know their daughter's
whereabouts.10 He also inquired about her from other
relatives and friends, but no one gave him any
information.11chanrobleslaw
Ricardo claimed that it was almost 12 years from the date of
his Regional Trial Court petition since Celerina left. He
believed that she had passed away.12chanrobleslaw
Celerina claimed that she learned about Ricardo's petition
only sometime in October 2008 when she could no longer
avail the remedies of new trial, appeal, petition for relief, or
other appropriate remedies.13chanrobleslaw
On November 17, 2008, Celerina filed a petition for
annulment of judgment14 before the Court of Appeals on the
grounds of extrinsic fraud and lack of jurisdiction. She
argued that she was deprived her day in court when
Ricardo, despite his knowledge of her true residence,
misrepresented to the court that she was a resident of Tarlac
City.15 According to Celerina, her true residence was in
Neptune Extension, Congressional Avenue, Quezon
City.16 This residence had been her and Ricardo's conjugal
dwelling since 1989 until Ricardo left in May 2008.17 As a
result of Ricardo's misrepresentation, she was deprived of
any notice of and opportunity to oppose the petition
declaring her presumptively dead.18chanrobleslaw
Celerina claimed that she never resided in Tarlac. She also
never left and worked as a domestic helper
abroad.20 Neither did she go to an employment agency in
February 1995.21 She also claimed that it was not true that
she had been absent for 12 years. Ricardo was aware that
she never left their conjugal dwelling in Quezon City. 22 It was
he who left the conjugal dwelling in May 2008 to cohabit
with another woman.23 Celerina referred to a joint affidavit
executed by their children to support her contention that
Ricardo made false allegations in his
petition.24chanrobleslaw
Celerina also argued that the court did not acquire
jurisdiction over Ricardo's petition because it had never
been published in a newspaper.25 She added that the Office
of the Solicitor General and the Provincial Prosecutor's Office
were not furnished copies of Ricardo's
petition.26chanrobleslaw
The Court of Appeals issued the resolution dated November
28, 2008, dismissing Celerina's petition for annulment of
judgment for being a wrong mode of remedy. 27 According to
the Court of Appeals, the proper remedy was to file a sworn
statement before the civil registry, declaring her
reappearance in accordance with Article 42 of the Family
Code.28chanrobleslaw
Celerina filed a motion for reconsideration of the Court of
Appeals' resolution dated November 28, 2008.29 The Court
of Appeals denied the motion for reconsideration in the
resolution dated March 5, 2009.30chanrobleslaw
Hence, this petition was filed.
The issue for resolution is whether the Court of Appeals
erred in dismissing Celerina's petition for annulment of
judgment for being a wrong remedy for a fraudulently
obtained judgment declaring presumptive death.
Celerina argued that filing an affidavit of reappearance
under Article 42 of the Family Code is appropriate only when
the spouse is actually absent and the spouse seeking the
declaration of presumptive death actually has a well-
founded belief of the spouse's death.31 She added that it
would be inappropriate to file an affidavit of reappearance if
she did not disappear in the first place.32 She insisted that
an action for annulment of judgment is proper when the
declaration of presumptive death is obtained
fraudulently.33chanrobleslaw
Celerina further argued that filing an affidavit of
reappearance under Article 42 of the Family Code would not
be a sufficient remedy because it would not nullify the legal
effects of the judgment declaring her presumptive
death.34chanrobleslaw
In Ricardo's comment,35 he argued that a petition for
annulment of judgment is not the proper remedy because it
cannot be availed when there are other remedies available.
Celerina could always file an affidavit of reappearance to
terminate the subsequent marriage. Ricardo iterated the
Court of Appeals' ruling that the remedy afforded to Celerina
under Article 42 of the Family Code is the appropriate
remedy.
The petition is meritorious.
Annulment of judgment is the remedy when the Regional
Trial Court's judgment, order, or resolution has become final,
and the "remedies of new trial, appeal, petition for relief (or
other appropriate remedies) are no longer available through
no fault of the petitioner."36chanrobleslaw
The grounds for annulment of judgment are extrinsic fraud
and lack of jurisdiction.37 This court defined extrinsic fraud
in Stilianopulos v. City of Legaspi:38chanrobleslaw
For fraud to become a basis for annulment of judgment, it
has to be extrinsic or actual. It is intrinsic when the
fraudulent acts pertain to an issue involved in the original
action or where the acts constituting the fraud were or could
have been litigated, It is extrinsic or collateral when a
litigant commits acts outside of the trial which prevents a
parly from having a real contest, or from presenting all of
his case, such that there is no fair submission of the
controversy.39 (Emphasis supplied)
Celerina alleged in her petition for annulment of judgment
that there was fraud when Ricardo deliberately made false
allegations in the court with respect to her
residence.40 Ricardo also falsely claimed that she was absent
for 12 years. There was also no publication of the notice of
hearing of Ricardo's petition in a newspaper of general
circulation.41 Celerina claimed that because of these, she
was deprived of notice and opportunity to oppose Ricardo's
petition to declare her presumptively dead. 42chanrobleslaw
Celerina alleged that all the facts supporting Ricardo's
petition for declaration of presumptive death were
false.43 Celerina further claimed that the court did not
acquire jurisdiction because the Office of the Solicitor
General and the Provincial Prosecutor's Office were not
given copies of Ricardo's petition.44chanrobleslaw
These are allegations of extrinsic fraud and lack of
jurisdiction. Celerina alleged in her petition with the Court of
Appeals sufficient ground/s for annulment of judgment.
Celerina filed her petition for annulment of judgment45 on
November 17, 2008. This was less than two years from the
July 27, 2007 decision declaring her presumptively dead and
about a month from her discovery of the decision in October
2008. The petition was, therefore, filed within the four-year
period allowed by law in case of extrinsic fraud, and before
the action is barred by laches, which is the period allowed in
case of lack of jurisdiction.46chanrobleslaw
There was also no other sufficient remedy available to
Celerina at the time of her discovery of the fraud
perpetrated on her.
The choice of remedy is important because remedies carry
with them certain admissions, presumptions, and conditions.
The Family Code provides that it is the proof of absence of a
spouse for four consecutive years, coupled with a well-
founded belief by the present spouse that the absent spouse
is already dead, that constitutes a justification for a second
marriage during the subsistence of another
marriage.47chanrobleslaw
The Family Code also provides that the second marriage is in
danger of being terminated by the presumptively dead
spouse when he or she reappears.
Thus:chanRoblesvirtualLawlibrary
Article 42. The subsequent marriage referred to in the
preceding Article shall be automatically terminated by the
recording of the affidavit of reappearance of the absent
spouse, unless there is a judgment annulling the previous
marriage or declaring it void ab initio.
A sworn statement of the fact and circumstances of
reappearance shall be recorded in the civil registry of the
residence of the parties to the subsequent marriage at the
instance of any interested person, with due notice to the
spouses of the subsequent marriage and without prejudice
to the fact of reappearance being judicially determined in
case such fact is disputed. (Emphasis supplied)
In other words, the Family Code provides the presumptively
dead spouse with the remedy of terminating the subsequent
marriage by mere reappearance.
The filing of an affidavit of reappearance is an admission on
the part of the first spouse that his or her marriage to the
present spouse was terminated when he or she was
declared absent or presumptively dead.
Moreover, a close reading of the entire Article 42 reveals
that the termination of the subsequent marriage by
reappearance is subject to several conditions: (1) the non-
existence of a judgment annulling the previous marriage or
declaring it void ab initio; (2) recording in the civil registry of
the residence of the parties to the subsequent marriage of
the sworn statement of fact and circumstances of
reappearance; (3) due notice to the spouses of the
subsequent marriage of the fact of reappearance; and (4)
the fact of reappearance must either be undisputed or
judicially determined.
The existence of these conditions means that reappearance
does not always immediately cause the subsequent
marriage's termination. Reappearance of the absent or
presumptively dead spouse will cause the termination of the
subsequent marriage only when all the conditions
enumerated in the Family Code are present.
Hence, the subsequent marriage may still subsist despite
the absent or presumptively dead spouse's reappearance
(1) if the first marriage has already been annulled or has
been declared a nullity; (2) if the sworn statement of the
reappearance is not recorded in the civil registry of the
subsequent spouses' residence; (3) if there is no notice to
the subsequent spouses; or (4) if the fact of reappearance is
disputed in the proper courts of law, and no judgment is yet
rendered confirming, such fact of reappearance.
When subsequent marriages are contracted after a judicial
declaration of presumptive death, a presumption arises that
the first spouse is already dead and that the second
marriage is legal. This presumption should prevail over the
continuance of the marital relations with the first
spouse.48 The second marriage, as with all marriages, is
presumed valid.49 The burden of proof to show that the first
marriage was not properly dissolved rests on the person
assailing the validity of the second marriage.50chanrobleslaw
This court recognized the conditional nature of
reappearance as a cause for terminating the subsequent
marriage in Social Security System v. Vda. de Bailon.51 This
court noted52 that mere reappearance will not terminate the
subsequent marriage even if the parties to the subsequent
marriage were notified if there was "no step . . . taken to
terminate the subsequent marriage, either by [filing an]
affidavit [of reappearance] or by court action[.]"53 "Since the
second marriage has been contracted because of a
presumption that the former spouse is dead, such
presumption continues inspite of the spouse's physical
reappearance, and by fiction of law, he or she must still be
regarded as legally an absentee until the subsequent
marriage is terminated as provided by law."54chanrobleslaw
The choice of the proper remedy is also important for
purposes of determining the status of the second marriage
and the liabilities of the spouse who, in bad faith, claimed
that the other spouse was absent.
A second marriage is bigamous while the first subsists.
However, a bigamous subsequent marriage may be
considered valid when the following are
present:chanRoblesvirtualLawlibrary
1) The prior spouse had been absent for four consecutive
years;
2) The spouse present has a well-founded belief that the
absent spouse was already dead;
3) There must be a summary proceeding for the declaration
of presumptive death of the absent spouse; and
4) There is a court declaration of presumptive death of the
absent spouse.55
A subsequent marriage contracted in bad faith, even if it
was contracted after a court declaration of presumptive
death, lacks the requirement of a well-founded belief 56 that
the spouse is already dead. The first marriage will not be
considered as. validly terminated. Marriages contracted
prior to the valid termination of a subsisting marriage are
generally considered bigamous and void.57 Only a
subsequent marriage contracted in good faith is protected
by law.
Therefore, the party who contracted the subsequent
marriage in bad faith is also not immune from an action to
declare his subsequent marriage void for being bigamous.
The prohibition against marriage during the subsistence of
another marriage still applies.58chanrobleslaw
If, as Celerina contends, Ricardo was in bad faith when he
filed his petition to declare her presumptively dead and
when he contracted the subsequent marriage, such
marriage would be considered void for being bigamous
under Article 35(4) of the Family Code. This is because the
circumstances lack the element of "well-founded belief
under Article 41 of the Family Code, which is essential for
the exception to the rule against bigamous marriages to
apply.59chanrobleslaw
The provision on reappearance in the Family Code as a
remedy to effect the termination of the subsequent
marriage does not preclude the spouse who was declared
presumptively dead from availing other remedies existing in
law. This court had, in fact, recognized that a subsequent
marriage may also be terminated by filing "an action in
court to prove the reappearance of the absentee and obtain
a declaration of dissolution or termination of the subsequent
marriage."60chanrobleslaw
Celerina does not admit to have been absent. She also
seeks not merely the termination of the subsequent
marriage but also the nullification of its effects. She
contends that reappearance is not a sufficient remedy
because it will only terminate the subsequent marriage but
not nullify the effects of the declaration of her presumptive
death and the subsequent marriage.
Celerina is correct. Since an undisturbed subsequent
marriage under Article 42 of the Family Code is valid until
terminated, the "children of such marriage shall be
considered legitimate, and the property relations of the
spouse[s] in such marriage will be the same as in valid
marriages."61 If it is terminated by mere reappearance, the
children of the subsequent marriage conceived before the
termination shall still be considered legitimate.62 Moreover,
a judgment declaring presumptive death is a defense
against prosecution for bigamy.63chanrobleslaw
It is true that in most cases, an action to declare the nullity
of the subsequent marriage may nullify the effects of the
subsequent marriage, specifically, in relation to the status of
children and the prospect of prosecuting a respondent for
bigamy.
However, "a Petition for Declaration of Absolute Nullity of
Void Marriages may be filed solely by the husband or
wife."64 This means that even if Celerina is a real party in
interest who stands to be benefited or injured by the
outcome of an action to nullify the second marriage,65 this
remedy is not available to her.
Therefore, for the purpose of not only terminating the
subsequent marriage but also of nullifying the effects of the
declaration of presumptive death and the subsequent
marriage, mere filing of an affidavit of reappearance would
not suffice. Celerina's choice to file an action for annulment
of judgment will, therefore, lie.
WHEREFORE, the case is REMANDED to the Court of
Appeals for determination of the existence of extrinsic fraud,
grounds for nullity/annulment of the first marriage, and the
merits of the petition.
SO ORDERED.cralawlawlibrary
Carpio, (Chairperson), Del Castillo, Mendoza, and Perlas-
Bernabe,* JJ., concur.