1. ALIBSAR ADOMA, complainant, vs.

ROMEO GATCHECO, Sheriff III, and EUGENIO TAGUBA,

Process Server, of Branches 1 and 2, respectively, of the Municipal Trial Court in Cities of Santiago
City,respondents.
FACTS: Complainant Alibsar Adoma claimed that on August 16, 2003 a writ of replevin for the recovery
of an L-300 van was issued in his favor. On the same day, respondent sheriff Romeo Gatcheco
implemented the writ. He was accompanied by respondent Eugenio Taguba, a process server of
Branch 2 of MTCC, Santiago City, who volunteered to assist respondent sheriff. After the two
respondents seized the vehicle, they demanded payment of P8,000.00, allegedly promised by
complainant but the latter was able to give only P1,000.00 and another P1,000.00 the following day.
The writ of replevin stated that the vehicle will be delivered to complainant after 5 days from the
implementation thereof. With the vehicle still undelivered on the 7th day, complainant threatened to file
an administrative case against respondent sheriff. Finally, on August 29, 2003, the latter was forced to
release the vehicle to complainant. Respondents, however, continued to demand P6,000.00, hence
complainant filed the instant administrative case.
Respondents, on the other hand, denied soliciting and receiving any amount from the complainant.
Respondent sheriff admitted, however, that complainant promised to give him P10,000.00 if the vehicle
will be sold.
On September 10, 2003, the Court referred the instant administrative complaint to Judge Fe Albano
Madrid, Executive Judge, Regional Trial Court, Santiago City, Isabela, for investigation, report and
recommendation.
In her investigation report, Judge Madrid found the testimony of complainant which was corroborated
by two witnesses, to be more credible. She refused to believe the claim of respondent sheriff that he did
not release the vehicle to complainant after 5 days from the implementation of the writ on August 16,
2003, because he was awaiting instructions from Judge Plata. However, she found that respondent
sheriff did not actually demand money for the implementation of the writ because it was complainant
who promised to give money in exchange for the implementation of the writ of replevin. Nevertheless,
she concluded that respondent sheriff is guilty of misconduct considering that he accepted partial
payment and insisted on its full payment.
As to respondent Taguba, Judge Madrid recommended that he be reprimanded for trying to abet the
misconduct of respondent sheriff.
ISSUE: WON the procedure for execution of writ of replevin has been properly followed by the
respondents? (NO)
HELD: Under Section 9, Rule 141 of the Rules of Court, the procedure for the execution of writs and
other processes are: first, the sheriff must make an estimate of the expenses to be incurred by him;
second, he must obtain court approval for such estimated expenses;third, the approved estimated
expenses shall be deposited by the interested party with the Clerk of Court and ex-oficio sheriff; fourth,
the Clerk of Court shall disburse the amount to the executing sheriff; and fifth, the executing sheriff shall
liquidate his expenses within the same period for rendering a return on the writ. Any amount received
by the sheriff in excess of the lawful fees allowed by the Rules of Court is an unlawful exaction which
renders him liable for grave misconduct and gross dishonesty.
In the instant case, respondent sheriff totally disregarded the aforecited procedure. He failed to make
and submit estimate of the sheriffs expenses. The amounts received and demanded by him are
therefore unauthorized fees. His acts of accepting and soliciting said monetary considerations make
him liable not only for conduct unbecoming a court employee but also for grave misconduct and
dishonesty.
Respondent sheriff deliberately failed to place complainant in possession of the vehicle after five days
from the implementation of the writ because the latter failed to give the whole amount he promised.
Since the adverse party did not object to the complainants bond nor posted a redelivery bond to
recover possession of the vehicle taken under the writ of replevin, respondent sheriff is under obligation
to deliver the van to complainant. However, it took respondent sheriff 13 days before he released the
vehicle to complainant, a clear violation of Section 6, Rule 60 of the 1997 Revised Rules of Civil
Procedure which provides
SEC. 6. Disposition of property by sheriff.If within five (5) days after the taking of the property by the
sheriff, the adverse party does not object to the sufficiency of the bond, or of the surety or sureties
thereon; or if the adverse party so objects and the court affirms its approval of the applicants bond or
approves a new bond, or if the adverse party requires the return of the property but his bond is objected
to and found insufficient and he does not forthwith file an approved bond, the property shall be
delivered to the applicant. If for any reason the property is not delivered to the applicant, the sheriff
must return it to the adverse party. (6a)


2. G.R. No. 73317 August 31, 1989
THOMAS YANG, petitioner, vs. THE HONORABLE MARCELINO R. VALDEZ, Presiding Judge,
Regional Trial Court, 11th Judicial Region, Branch XXII, General Santos City, SPS. RICARDO
MORANTE and MILAGROS MORANTE, respondents.
FACTS: On 4 January 1985, respondent spouses Ricardo and Milagros Morante brought an action in
the Regional Trial Court of General Santos City against petitioner Thomas Yang and Manuel
Yaphockun, to recover possession of two (2) Isuzu-cargo trucks. In their complaint, the Morante
spouses alleged that they had actual use and possession of the two (2) cargo trucks, having acquired
them during the period from 1982 to 1984. The trucks were, however, registered in the name of
petitioner Thomas Yang who was the Treasurer in the Morante spouses' business of buying and selling
corn. The Morante spouses further alleged that they were deprived of possession of the vehicles in the
morning of 3 January 1985, when petitioner Yang had the vehicles taken from where they were parked
in front of the Coca-Cola Plant in General Santos City, to the warehouse of Manuel Yaphockun and
there they were thereafter held. Despite repeated demands, the complaint alleged, petitioner Yang
refused to release the trucks to respondent spouses.
To obtain immediate possession of the Isuzu trucks, respondent spouses applied for a writ of replevin
and put up a replevin bond of P560,000.00 executed by respondent Milagros Morante and Atty. Bayani
Calonzo (counsel for respondent spouses). The respondent judge issued an order of seizure directing
the Provincial Sheriff of South Cotabato to take immediate possession and custody of the vehicles
involved. The Sheriff carried out the order.
Manuel Yaphockun filed a motion seeking repossession of the cargo trucks, and posted a replevin
counter-bond of P560,000.00 executed by himself and one Narciso Mirabueno. The respondent judge
promptly required the respondent spouses to comment on the counter-bond proffered.
The respondent spouses reacted by amending their complaint by excluding Manuel Yaphockun as
party-defendant and submitted an opposition to Yaphockun's counter-bond, contending that since
Manuel Yaphockun was merely a nominal defendant, he had no standing to demand the return of the
cargo trucks. The respondent judge disapproved the counter-bond filed by Manuel Yaphockun, since
the latter had been dropped as party-defendant and accordingly no longer had any personality to
litigate in the replevin suit. The trial court also ordered the immediate release and delivery of the cargo
trucks to respondent spouses.

Petitioner Yang moved for an extension of fifteen (15) days within which to file an answer to the
complaint for replevin. Four days later, petitioner put up a counter-bond in the amount of P560,000.00
which counter-bond was, however, rejected by the respondent judge for having been filed out of time.
ISSUE: WON respondent judge had committed a grave abuse of discretion amounting to lack or excess
of jurisdiction in approving the replevin bond of respondent spouses and rejecting petitioner's counter-
bond? (NO)
HELD: A bond that is required to be given by law is commonly understood to refer to an obligation or
undertaking in writing that is sufficiently secured. It is not indispensably necessary, however, that the
obligation of the bond be secured or supported by cash or personal property or real property or the
obligation of a surety other than the person giving the bond. Most generally understood, a "bond" is an
obligation reduced to writing binding the obligor to pay a sum of money to the obligee under specified
conditions. At common law, a bond was merely a written obligation under seal. A bond is often, as a
commercial matter, secured by a mortgage on real property; the mortgagee may be the obligee,
although the mortgagee may also be a third party surety whose personal credit is added to that of the
principal obligor under the bond.
The sufficiency of a bond is a matter that is addressed to the sound discretion of the court which must
approve the bond. In the case at bar, the replevin bond given by the respondent Morante spouses was
properly secured by the sureties themselves who declared their solvency and capacity to answer for the
undertaking assumed, through an Affidavit of Justification. This sworn declaration of solvency which
was submitted to the judge together with the bond, in effect secured the replevin bond. We note also
that the sureties or bondsmen under the bond included not only Milagros Morante who was party-
plaintiff below, but also a third person, Atty. Bayani L. Calonzo who was not a party-litigant. Petitioner
Yang never put in issue the financial capability of these two (2) sureties. It follows that the approval of
the replevin bond by respondent judge, before whom it was presented and who was in a better position
than this Court to appreciate the financial standing of the sureties, is not a grave abuse of discretion.
Petitioner also contends that since the respondent spouses are not the registered owners of the cargo
trucks involved, the writ of replevin should not have been issued. This is wrong. The provisional remedy
of replevin is in the nature of a possessory action and the applicant who seeks immediate possession
of the property involved need not be holder of the legal title to the property. It suffices, if at the time he
applies for a writ of replevin, he is, in the words of Section 2, Rule 60, "entitled to the possession
thereof."

A defendant in a replevin suit may demand return of possession of the property replevied by filing a
redelivery bond within the periods specified in Sections 5 and 6 of Rule 60.
Under Section 5, petitioner may "at any time before the delivery of the property to the plaintiff" require
the return of the property; in Section 6, he may do so, "within five (5) days after the taking of the
property by the officer." Both these periods are mandatory in character. 9 Thus, a lower court which
approves a counter-bond filed beyond the statutory periods, acts in excess of its jurisdiction. In the
instant case, the cargo trucks were taken into custody by the Sheriff on 7 January 1985. Petitioner
Yang's counter-replevin bond was filed on 25 January 1985. The matter was treated at length in the
trial court's order of 28 February 1985:
It is also borne by the record that defendant, thru counsel, was served with copy 6f the amended
complaint dropping defendant Manuel Yap from the complaint on January 14, 1985 and hence, said
receipt of the amended complaint was tantamount to a summons issued to the defendant Thomas
Yang. It is a truism that the primary purpose of summons is to acquire jurisdiction over the person of the
parties, and jurisdiction can be acquired by the voluntary submission of the defendant to the jurisdiction
of the Court. Hence, after defendant had been duly represented by counsel even at the inception of the
service of summons and a copy of the order of replevin on January 7, 1985, defendant Thomas Yang
had already been duly served, especially so, when counsel manifested in their comment to the
opposition filed by plaintiffs that Manuel Yap has been duly authorized to represent Thomas Yang.
From then on defendant should have been on guard as to the provision of Section 6, Rule 60 of the
Rules of Court re the five (5) days period within which to file the counter-replevin for the approval
of the court, counted from the actual taking of the property by the officer or the sheriff on January 7,
1985. It is honestly believed that the five-day period spoken of by the Rule begins from the taking of the
property by the sheriff and not from the service of summons to the defendant, for even if summons was
already duly served to the defendant but the property has not yet been taken by the sheriff, the
provision above cited does not apply. Hence, it is clear that the prescriptive period for filing a counter-
replevin bond must be counted from the actual taking of the property by the sheriff, subject of the
replevin bond and in this particular case on January 7, 1985. True indeed, that defendant Manuel Yap
filed the counter-replevin bond on January 10, 1985, which was denied by this court, that was three (3)
days after the property was taken on January 7, 1985 but when the said defendant was dropped from
the complaint on January 14, 1985, defendant Thomas Yang should have immediately filed the proper
counter-replevin bond after Manuel Yap has been dropped from the complaint on January 14, 1985
considering that the counter-replevin bond filed on January 10, 1985 by Manuel Yap has become
obsolete on this date, January 14, 1985. The service of summons to Thomas Yang on January 25,
1985, has become an academic formality because on January 21, 1985, counsel has already filed a
motion for extension of time of fifteen (15) days within which to file their responsive pleading counted
from January 31, 1985, for the original period of fifteen (15) days for filing the corresponding answer
lapsed on January 31, 1985, which this court readily granted. Hence, irrespective of the order of this
court dated January 18,1985, denying the counter-replevin bond filed,defendant Thomas Yang should
and must have filed his counter replevin bond within two (2) days from service of the amended
complaint, the same must have been)'filed on January 18, 1985, to conform with liberal interpretation of
the rules and not on January 25, 1985, for then the counter replevin bond had been filed beyond the
period provided by the Rules. The decisional principle on the filing of counter replevin bond to entitle
the defendant to the redelivery or retaining possession of the property, is compliance with all the
conditions precedent pursuant to the rules, and failure to comply therewith entitles plaintiff to
possession, and the initial steps in obtaining redelivery must be taken within the time limit provided
thereto.



3. SERGS PRODUCTS, INC., and SERGIO T. GOQUIOLAY, petitioners, vs. PCI LEASING AND
FINANCE, INC., respondent.
FACTS: On February 13, 1998, respondent PCI Leasing and Finance, Inc. filed with the RTC-QC a
complaint for sum of mone, with an application for a writ of replevin. On March 6, 1998, upon an ex-
parte application of PCI Leasing, respondent judge issued a writ of replevin directing its sheriff to seize
and deliver the machineries and equipment to PCI Leasing after 5 days and upon the payment of the
necessary expenses. On March 24, 1998, in implementation of said writ, the sheriff proceeded to
petitioners factory, seized one machinery with [the] word that he [would] return for the other
machineries. On March 25, 1998, petitioners filed a motion for special protective order (Annex C),
invoking the power of the court to control the conduct of its officers and amend and control its
processes, praying for a directive for the sheriff to defer enforcement of the writ of replevin. This motion
was opposed by PCI Leasing (Annex F), on the ground that the properties [were] still personal and
therefore still subject to seizure and a writ of replevin.
In their Reply, petitioners asserted that the properties sought to be seized [were] immovable as defined
in Article 415 of the Civil Code, the parties agreement to the contrary notwithstanding. They argued
that to give effect to the agreement would be prejudicial to innocent third parties. They further stated
that PCI Leasing [was] estopped from treating these machineries as personal because the contracts in
which the alleged agreement [were] embodied [were] totally sham and farcical. On April 6, 1998, the
sheriff again sought to enforce the writ of seizure and take possession of the remaining properties. He
was able to take two more, but was prevented by the workers from taking the rest. On April 7, 1998,
they went to [the CA] via an original action for certiorari.
The CA held that the subject machines were personal property, and that they had only been leased, not
owned, by petitioners. It also ruled that the words of the contract are clear and leave no doubt upon
the true intention of the contracting parties. Observing that Petitioner Goquiolay was an experienced
businessman who was not unfamiliar with the ways of the trade, it ruled that he should have realized
the import of the document he signed.
ISSUE: WON the machines are personal, not immovable, property which may be a proper subject of a
writ of replevin? (YES)
HELD: Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of
personal property only. Section 3 thereof reads:
SEC. 3. Order. -- Upon the filing of such affidavit and approval of the bond, the court shall issue an
order and the corresponding writ of replevin describing the personal property alleged to be wrongfully
detained and requiring the sheriff forthwith to take such property into his custody.
On the other hand, Article 415 of the Civil Code enumerates immovable or real property and among
those enumerations is: Machinery, receptacles, instruments or implements intended by the owner of the
tenement for an industry or works which may be carried on in a building or on a piece of land, and
which tend directly to meet the needs of the said industry or works.
Here, the machines that were the subjects of the Writ of Seizure were placed by petitioners in the
factory built on their own land. Indisputably, they were essential and principal elements of their
chocolate-making industry. Hence, although each of them was movable or personal property on its
own, all of them have become immobilized by destination because they are essential and principal
elements in the industry.[16] In that sense, petitioners are correct in arguing that the said machines are
real, not personal, property pursuant to Article 415 (5) of the Civil Code.
Be that as it may, we disagree with the submission of the petitioners that the said machines are not
proper subjects of the Writ of Seizure.
The Court has held that contracting parties may validly stipulate that a real property be considered as
personal. After agreeing to such stipulation, they are consequently estopped from claiming otherwise.
Under the principle of estoppel, a party to a contract is ordinarily precluded from denying the truth of
any material fact found therein.
Here, the Lease Agreement clearly provides that the machines in question are to be considered as
personal property. Specifically, Section 12.1 of the Agreement reads as follows:
12.1 The PROPERTY is, and shall at all times be and remain, personal property notwithstanding that
the PROPERTY or any part thereof may now be, or hereafter become, in any manner affixed or
attached to or embedded in, or permanently resting upon, real property or any building thereon, or
attached in any manner to what is permanent.
Clearly then, petitioners are estopped from denying the characterization of the subject machines as
personal property. Under the circumstances, they are proper subjects of the Writ of Seizure.
It should be stressed, however, that our holding -- that the machines should be deemed personal
property pursuant to the Lease Agreement is good only insofar as the contracting parties are
concerned. Hence, while the parties are bound by the Agreement, third persons acting in good faith are
not affected by its stipulation characterizing the subject machinery as personal. In any event, there is no
showing that any specific third party would be adversely affected.


4. G.R. No. L-59906 October 23, 1982
BUENAVENTURA SAN JUAN, petitioner, vs. HON. MANUEL E. VALENZUELA, Judge of the Court of
First Instance of Rizal and DOROTEA MEJIA,respondents.
FACTS: This is a petition for certiorari to annul and set aside the order of respondent Judge Manuel E.
Valenzuela, ordering petitioner Buenaventura San Juan to give support pendente lite to respondent
Dorotea Mejia and her minor children.
It appears that on September 16, 1981, the marriage between respondent Mejia and petitioner San
Juan, solemnized on October 2, 1973, was declared null and void by the Court of First Instance of Rizal
on the ground of a prior and subsisting marriage between petitioner and one Isabel Bandin. On
February 25, 1981, respondent Mejia instituted the instance action against petitioner, docketed as Civil
Case No. 8874- P, seeking support for herself and her two minor children.
After issues were joined, the respondent judge, on motion of Mejia, entered the challenged order
granting support pendente lite as follows:
IN VIEW OF THE FOREGOING, pursuant to Section 5, Rule 61 of the New Rules of Court and after
giving due regard to the necessities of the plaintiff Dorotea Mejia and her children, Rachel San Juan
and Jeffrey San Juan, the application for support pendente lite is hereby granted, and the same is fixed
at P2,500.00 a month commencing from January 1, 1982 to be paid to the plaintiff on or the 5th day of
each month until this case is finally adjudicated. This is without prejudice to any judgment for support in
arrears due the plaintiff if the evidence will so warrant after trial. SO ORDERED.
Petitioner's motion for reconsideration of the above order on the grounds that (1) the amount is grossly
disproportionate to petitioner's means; (2) petitioner is not obliged to support respondent Mejia as their
marriage is null and void; and (3) no evidence was presented as to petitioner's present resources, was
denied. Hence, on March 16, 1982, petitioner instituted this petition.
ISSUE: WON petitioner is obliged to give support pendente lite to respondents? (YES)
HELD: It appears that pending resolution of this petition, petitioner filed with the trial court a
manifestation, dated June 17, 1982, proposing to settle his obligation of P15,000.00, representing the
amount of support which accrued from January to June, 1982, and to pay the same in three equal
installments, the first to be paid upon approval by the court of his scheme of payment, and the balance
within a period of two (2) months thereafter. This proposal was approved by the court. In the same
manifestation, petitioner sought the reduction of the amount of support pendente lite to P1,000.00 a
month on the ground that the sum of P2,500.00 previously fixed by respondent judge is now beyond his
means to pay. According to private respondent, the court had not yet acted on petitioner's request for
reduction of the monthly support because the respondent judge left for abroad. 1
Unquestionably, the petitioner's willingness to pay the amount of support pendente lite in the mariner
indicated in his manifestation, and the approval thereof by the respondent Judge have rendered this
petition moot and academic.
As to the factual issue of whether the amount of P2,500.00 previously fixed by respondent judge is now
beyond the means of petitioner, the same should be resolved by the lower court on the basis of the
evidence to be presented at the proper hearing. The order of December 24 fixing the amount of support
pendente lite is not final in character in the sense that it can be the subject of modification, depending
on the changing conditions affecting the ability of the obligor to pay the amount fixed for support.



5. SPS. RAFAEL P. ESTANISLAO AND ZENAIDA ESTANISLAO vs. EAST WEST BANKING
CORPORATION G.R. No. 178537; February 11, 2008
FACTS: Petitioners obtained a loan from the respondent in the amount of P3,925,000.00 evidenced by
a promissory note and secured by two deeds of chattel mortgage: one covering two dump trucks and a
bulldozer to secure the loan amount of P2,375,000.00, and another covering bulldozer and a wheel
loader to secure the loan amount of P1,550,000.00. Petitioners defaulted in the amortizations and the
entire obligation became due and demandable.
Respondent bank filed a suit for replevin with damages, praying that the equipment covered by the first
deed of chattel mortgage be seized and delivered to it. In the alternative, respondent prayed that
petitioners be ordered to pay the outstanding principal amount of P3,846,127.73 with 19.5% interest per
annum reckoned from judicial demand until fully paid, exemplary damages of P50,000.00, attorneys
fees equivalent to 20% of the total amount due, other expenses and costs of suit.
Subsequently, respondent moved for suspension of the proceedings on account of an earnest attempt
to arrive at an amicable settlement of the case. The trial court suspended the proceedings, and during
the course of negotiations, a deed of assignment was drafted by the respondent. Petitioners affixed
their signatures on the deed of assignment. However, for some unknown reason, respondent banks
duly authorized representative failed to sign the deed.
Petitioners completed the delivery of the heavy equipment mentioned in the deed of assignment two
dump trucks and a bulldozer to respondent, which accepted the same without protest or objection.
However, on June 20, 2001, respondent filed a manifestation and motion to admit an amended
complaint for the seizure and delivery of two more heavy equipment the bulldozer and wheel loader
which are covered under the second deed of chattel mortgage. Respondent claimed that its
representative inadvertently failed to include the second deed of chattel mortgage among the
documents forwarded to its counsel when the original complaint was being drafted.
The trial court held that the deed of assignment and the petitioners delivery of the heavy equipment
effectively extinguished petitioners total loan obligation. It also held that respondent was estopped from
further collecting from the petitioners when it accepted, without any protest, delivery of the three units of
heavy equipment as full and complete satisfaction of the petitioners total loan obligation. Respondent
likewise failed to timely rectify its alleged mistake in the original complaint and deed of assignment,
taking almost a year to act.

Respondent bank appealed to the Court of Appeals, which reversed the trial courts decision. The
reversal of the lower courts decision hinges on: (1) the appellate courts finding that the deed of
assignment cannot bind the respondent because it did not sign the same. The appellate court ruled
that the assignment contract was never perfected although it was prepared and drafted by the
respondent; (2) respondent was not estopped by its own declarations in the deed of assignment,
because such declarations were the result of ignorance founded upon an innocent mistake and plain
oversight on the part of respondents staff in the banks loan operations department, who failed to
forward the complete documents pertaining to petitioners account to the banks legal department, such
that when the original complaint for replevin was prepared, the second deed of chattel mortgage
covering two other pieces of heavy equipment was inadvertently excluded; (3) petitioners are aware
that there were five pieces of heavy equipment under chattel mortgage for an outstanding balance of
over P7 million; and (4) the appellate court held that even after the delivery of the heavy equipment
covered by the deed of assignment, the petitioners continued to negotiate with the respondent on a
possible refinancing scheme that will enable them to retain the two other units of heavy equipment still
in their possession and which are the subject of the second deed of chattel mortgage.
ISSUE: WON the deed of assignment which expressly provides that the transfer and conveyance to
respondent of the three units of heavy equipment, and its acceptance thereof, shall be in full payment
of the petitioners total outstanding obligation to the latter operate to extinguish petitioners debt to
respondent, such that the replevin suit could no longer prosper? (YES)
HELD: The appellate court erroneously denominated the replevin suit as a collection case. A reading
of the original and amended complaints show that what the respondent initiated was a pure replevin
suit, and not a collection case. Recovery of the heavy equipment was the principal aim of the suit;
payment of the total obligation was merely an alternative prayer which respondent sought in the event
manual delivery of the heavy equipment could no longer be made.
Replevin, broadly understood, is both a form of principal remedy and a provisional relief. It may refer
either to the action itself, i.e., to regain the possession of personal chattels being wrongfully detained
from the plaintiff by another, or to the provisional remedy that would allow the plaintiff to retain the thing
during the pendency of the action and hold it pendente lite.
The deed of assignment was a perfected agreement which extinguished petitioners total outstanding
obligation to the respondent. The deed explicitly provides that the assignor (petitioners), in full
payment of its obligation in the amount ofP7,305,459.52, shall deliver the three units of heavy
equipment to the assignee (respondent), which accepts the assignmentin full payment of the above-
mentioned debt. This could only mean that should petitioners complete the delivery of the three units
of heavy equipment covered by the deed, respondents credit would have been satisfied in full, and
petitioners aggregate indebtedness of P7,305,459.52 would then be considered to have been paid in
full as well.
The nature of the assignment was a dation in payment, whereby property is alienated to the creditor in
satisfaction of a debt in money. Such transaction is governed by the law on sales.[6] Even if we were
to consider the agreement as a compromise agreement, there was no need for respondents signature
on the same, because with the delivery of the heavy equipment which the latter accepted, the
agreement was consummated. Respondents approval may be inferred from its unqualified acceptance
of the heavy equipment.
Consent to contracts is manifested by the meeting of the offer and the acceptance of the thing and the
cause which are to constitute the contract; the offer must be certain and the acceptance absolute.[7]
The acceptance of an offer must be made known to the offeror, and unless the offeror knows of the
acceptance, there is no meeting of the minds of the parties, no real concurrence of offer and
acceptance.[8] Upon due acceptance, the contract is perfected, and from that moment the parties are
bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences
which, according to their nature, may be in keeping with good faith, usage and law.
With its years of banking experience, resources and manpower, respondent bank is presumed to be
familiar with the implications of entering into the deed of assignment, whose terms are categorical and
left nothing for interpretation. The alleged non-inclusion in the deed of certain units of heavy equipment
due to inadvertence, plain oversight or mistake, is tantamount to inexcusable manifest negligence,
which should not invalidate the juridical tie that was created.[10] Respondent is presumed to have
maintained a high level of meticulousness in its dealings with petitioners. The business of a bank is
affected with public interest; thus, it makes a sworn profession of diligence and meticulousness in
giving irreproachable service.
The legal presumption is always on the validity of contracts. In order to judge the intention of the
contracting parties, their contemporaneous and subsequent acts shall be principally considered.[13]
When respondent accepted delivery of all three units of heavy equipment under the deed of
assignment, there could be no doubt that it intended to be bound under the agreement.
Since the agreement was consummated by the delivery on March 8, 2001 of the last unit of heavy
equipment under the deed, petitioners are deemed to have been released from all their obligations to
respondent.

Since there is no more credit to collect, no principal obligation to speak of, then there is no more
second deed of chattel mortgage that may subsist. A chattel mortgage cannot exist as an independent
contract since its consideration is the same as that of the principal contract. Being a mere accessory
contract, its validity would depend on the validity of the loan secured by it.[14] This being so, the
amended complaint for replevin should be dismissed, because the chattel mortgage agreement upon
which it is based had been rendered ineffectual.

6. DAVID v. CA & VILLAR
Facts: Petitioner Daisie T. David worked as secretary of private respondent Ramon R. Villar, a
businessman in Angeles City. After a while, the relationship between petitioner and private respondent
developed into an intimate one, and resulted to the birth of a son, Christopher J., was and was followed
by two more children, both girls.
Villar asked Daisie to allow Christopher J., then six years of age, to go with his family to Boracay.
Daisie agreed, but after the trip, Villar refused to give back the child. Villar said he had enrolled
Christopher J. at the Holy Family Academy for the next school year. Thus, Daisie filed a petition for
habeas corpus on behalf of Christopher J. The RTC rendered its judgment in favor of David and
ordered Villar among others, to to give a temporary support of P3,000.00 a month to the subject minor
Christopher J. T. David, Christine David and Cathy Mae David to take effect upon the finality of this
decision. However, the CA set aside the prior decision and ruled that habeas corpus is not applicable in
this case since the parents are not married, and the child is an illegitimate child. Moreover, it ruled that
the custody should remain with Villar since he is well of and rich, expressing his willingness to support
the child with his needs. While the mother, herein petitioner only depends from her sisters and relatives
for help to support her children.
ISSUE: WON the support of the child could be conditioned upon the grant of the custody. (NO)
HELD: Although the question of support is proper in a proceeding for that purpose, the grant of support
in this case is justified by the fact that private respondent has expressed willingness to support the
minor child. The order for payment of allowance need not be conditioned on the grant to him of custody
of the child. Under Art. 204 of the Family Code, a person obliged to give support can fulfill his obligation
either by paying the allowance fixed by the court or by receiving and maintaining in the family dwelling
the person who is entitled to support unless, in the latter case, there is "a moral or legal obstacle
thereto."
In the case at bar, as has already been pointed out, Christopher J., being less than seven years of age
at least at the time the case was decided by the RTC, cannot be taken from the mother's custody. Even
now that the child is over seven years of age, the mother's custody over him will have to be upheld
because the child categorically expressed preference to live with his mother. Under Art. 213 of the
Family Code, courts must respect the "choice of the child over seven years of age, unless the parent
chosen is unfit" and here it has not been shown that the mother is in any way unfit to have custody of
her child. Indeed, if private respondent loves his child, he should not condition the grant of support for
him on the award of his custody to him (private respondent).
The decision of the Court of Appeals is reversed and private respondent is ordered to deliver the minor
Christopher J. T. David to the custody of his mother, the herein petitioner, and to give him temporary
support in the amount of P3,000.00, pending the fixing of the amount of support in an appropriate
action.


7. TEODORO LERMA v. CA & CONCEPCION DIAZ
Facts: Petitioner Lerma and respondent Diaz are husband and wife. The petitioner filed a complaint for
adultery against the respondent and a certain Teodoro Ramirez. On November 18, 1969 the
respondent filed with the lower court, presided by Judge Leonor Ines Luciano, a complaint against the
petitioner for legal separation and/or separation of properties, custody of their children and support, with
an urgent petition for support pendente lite for her and their youngest son, Gregory, who was then and
until now is in her custody. The petitioner filed his opposition to the respondent's application for support
pendente lite, setting up as defense the adultery charge he had filed against the respondent. Judge
Luciano granted the respondent's application for support pendente lite. The respondent was declared
entitled to support pendente lite from the date of the filing of the complaint and the amount of such
monthly support was reduced from P2,250.00 to P1,820.00.
The respondent court (CA) granted the petition for preliminary injunction filed by the petitioner and set
aside the assailed orders and granted the petitioner an opportunity to present evidence before the
lower court in support of his defense against the application for supportpendente lite. The respondent
moved to reconsider the decision on the ground that the petitioner had not asked that he be allowed to
present evidence in the lower court. The respondent court, in its resolution of January 20, 1971, set
aside the decision of October 8 and rendered another, dismissing the petition. Hence, this petition for
review.
The petitioner maintains that Sec. 5 Rule 61 was disregarded by the lower court when it issued the
disputed orders without provisionally determining the pertinent facts of the case, particularly insofar as
they might have a bearing on its probable outcome, merely relying on the bare allegations of the
complaint. The petitioner also claims he was deprived of the opportunity to present evidence in support
of his defense of adultery against the respondent's application for support pendente lite
ISSUE: WON the CA erred in holding that the lower court did not commit any grave abuse of discretion
when it granted the support pedente lite in favor of respondent Diaz.
HELD: The procedural law on support pendente lite is Rule 61 of the Revised Rules of Court,
specifically Section 5 thereof, which partly provides:
The court shall determine provisionally the pertinent facts, and shall render such order as equity and
justice may require, having due regard to the necessities of the applicant, the means of the adverse
party, the probable outcome of the case, and such other circumstances as may aid in the proper
elucidation of the questions involved. ...
In a provisional sense at least, within the meaning of Rule 61 (Section 5), the probable failure of the
respondent's suit for legal separation can be foreseen since she is not an innocent spouse, having
been convicted of adultery by the Court of First Instance. It is true that the judgment of conviction is on
appeal in the Court of Appeals, but the same undoubtedly satisfies the standard of provisional showing
set by the aforesaid Rule. If legal separation cannot be claimed by the guilty spouse in the first place,
the fact that an action for that purpose is filed anyway should not be permitted to be used as a means
to obtain support pendente lite, which, without such action, would be denied on the strength of the
decisions of this Court recognizing adultery as a good defense. Otherwise, as pointed out by the
petitioner, all that an erring spouse has to do to circumvent such defense would be to file a suit for legal
separation no matter how groundless.
The right to separate support or maintenance, even from the conjugal partnership property,
presupposes the existence of a justifiable cause for the spouse claiming such right to live separately.
This is implicit in Article 104 of the Civil Code, which states that after the filing of the petition for legal
separation the spouses shall be entitled to live separately from each other. A petition in bad faith, such
as that filed by one who is himself or herself guilty of an act which constitutes a ground for legal
separation at the instance of the other spouse, cannot be considered as within the intendment of the
law granting separate support. In fact under Article 303 of the same Code the obligation to give support
shall cease "when the recipient, be he a forced heir or not, has committed some act which gives rise to
disinheritance;" and under Article 921 one of the causes for disinheriting a spouse is "when the spouse
has given cause for legal separation." The loss of the substantive right to support in such a situation is
incompatible with any claim for support pendente lite.
What has been said above, of course, is not meant to be a prejudgment of either the legal separation
proceeding pending in the lower court or the criminal case for adultery pending in the Court of Appeals.
It is to be understood only in the light of Rule 61, Section 5, of the Rules of Court, which specifically
governs the subject of supportpendente lite.
The resolution of respondent Court of Appeals of January 20, 1971 and the orders of respondent
Juvenile and Domestic Relations Court herein complained of, dated December 24, 1969 and February
15, 1970, all are set aside and their enforcement enjoined, without prejudice to such judgment as may
be rendered in the pending action for legal separation between the parties. No pronouncement as to
costs.


8. ROSITA VELOSO DE OLAYVAR v. ARISTOTELES OLAYVAR
Facts: Plaintiff instituted this action in the Court of First Instance of Leyte praying that support be given
her and her four children coupled with a petition for support pendente lite. Defendant in his answer set
up as special defense that in the Court of First Instance of Cebu there is a case for legal separation
pending between the same parties on the ground of adultery wherein the right of plaintiff to demand
support is incidentally involved.
In view of the pending separation case, the Court deemed it proper to hold in abeyance further
action on the case for support for the reason that the case in Cebu "should have priority in order to
ascertain the rights of the parties with particular reference to support in favor of the plaintiff." The court
however modified later this ruling on the premise that, as the legal separation case might take a long
time before it is finally disposed of, it is imperative that the matter of support be given preferential
consideration.
Defendant moved to have this ruling reconsidered, and having failed in this attempt, he filed a
motion to dismiss and invoking in his favor the rule that a complaint may be dismissed where "there is
another action pending between the same parties for the same cause." [Rule 8, section 1(d)] And on
March 24, 1954, the court entered an order dismissing the case in line with the plea of the defendant.
This is the order subject of the present appeal.
Issue: Whether or not the proceedings for support pendente lite should be dismissed in view of the
pending legal separation case?
Held: Yes. The foregoing shows that the two cases involved, the legal separation and support, raise
practically the same issues. There is therefore no need of prosecuting them separately and
independently for that would amount to duplicity of action. And as it appears that the case of legal
separation was instituted earlier than the one for support, it is fair that the latter be dismissed as was
correctly done by the lower court.
The order appealed from is affirmed, without pronouncement as to costs.


9. IDONAH SLADE PERKINS v. EUGENE ARTHUR PERKINS
Facts: The parties to this action are husband and wife, married in Manila in 1914. The wife has entered
suit for separate maintenance. This is an appeal from the order of the Court of First Instance of Manila,
granting certain amounts for maintenance and P1,000 for expenses for litigation.
The order here complained of is for certain items of debts, advances, and living expenses existing at
the time of the order fixing the monthly allowance. Appellee, in her brief, has moved to dismiss the
appeal contending that the order is interlocutory, relying upon the language of this court in the case of
Mendoza vs. Parungao (49 Phil., 271).
In the case now before us, the order of the Court of First Instance of Nueva Ecija of November 27,
1925, may be considered as an order for the payment of P50 monthly as an advance payment on
account of such share of the conjugal property as may be found from the liquidation to belong to
Gorgonio Parungao. This order, however, being of an interlocutory character and not final (sec. 123,
Act No. 190) no writ of execution can be issued thereon (sec. 443, Act No. 190; 23 C. J., 314); but its
unjustified disobedience may constitute contempt of court and, after the proper proceedings prescribed
by law in such cases, may be punished as such.
Appellant relies on 3 Corpus Juris p. 689, where it is said:
Waiver of Objections to Right of Appeal. The right to object to the taking of an appeal or the
issuance of a writ of error may be waived by appellee or defendant in error whenever the objection is
founded upon some act or omission on the part of appellant or plaintiff in error, which may be pleaded
by his opponent as an estoppel to the right of review. This waiver may arise from express stipulation, or
it may be implied from some act on the part of appellee or defendant in error, such as joining issue on
the appeal or writ of error, or from some other act showing acquiescence or evincing an intention to
treat the appeal or writ of error as valid. (Citing numerous decisions.) Thus, in Luengo and Martinez vs.
Herrero (17 Phil., 29), wherein the appellees made a motion in their brief, to dismiss the appeal, this
court ruled that the motion came too late, saying:
These questions were presented to this court for the first time on the hearing of the case upon its
merits. They should have been raised and determined by motion before the case was called for
hearing. Before the hearing of the case upon its merits all preliminary questions should be disposed of,
and when such questions as these are raised for the first time upon the hearing of the case on its
merits they come too late.
Issue: WON the appellant is estopped from any right from the motion to dismiss (YES)
Held: Article 148 of the Civil Code reads in part:
The obligation to give support may be enforced whenever the person having a right to claim it requires
such assistance for his or her maintenance; such allowance, however, shall only be paid from the date
of the filing of the complaint, and the character and the nature of the support is defined in Article 142.
The pertinent portion thereof reads:
By support is understood all that is necessary for food, shelter, clothing and medical attendance,
according to the social standing of the family.
In the opinion of the court, some of the items are clearly without the rules laid down in the Code, while
others may be partly within the rules. Some, in their entirety, long precede the date of the filing of this
suit. While the item known as the Manila Hotel is evidently allowable in part, being for ordinary
necessities of life, it covers a period both before and after the filing of the suit. Others, such as the claim
for money loaned to the wife, are not within the rule (13 R. C. L., 1209; Ramirez and De Marcaida vs.
Redfern, 49 Phil., 849). It is impossible, from the evidence of record, for this court to state how much
should be allowed. It is also noted that no allowance has as yet been made for the period from the filing
of suit to the date of allowance of temporary maintenance two months thereafter.
It being impossible for this court to state the amount that should be allowed, the case must be
remanded for further proceedings in accord with the views herein expressed, and it is so ordered. No
pronouncement is made regarding costs.


10. LORENZO MENDOZA v. PARUNGAO
Facts: The CFI of Nueva Ecija declared the marriage between plaintiff Parungao, herein respondent,
and petitioner Mendoza null on account of the return of the first husband of the petitioner, who had
been though dead after an absence of more than seven years.
Said judgment annulling the marriage being on appeal, on September 14, 1925, the said respondent
Gorgonia Parugao brought an action, numbered 3962 in the Court of First Instance of Nueva Ecija,
against the petitioner Lorenzo Mendoza in which she alleged the existence of certain conjugal property
acquired during her marriage with the said petitioner, and asked for a settlement of the same and the
sum of P300 as alimony during the pendency of the suit.
Upon petition of a party the court issued an order directing the defendant Lorenzo Mendoza, during the
pendency of the case and from the filing of the complaint, to pay the plaintiff the sum of P50 monthly
and in advance by way of support. On January 20, 1926, upon petition of the plaintiff, the court issued
an order directing the execution of the order of November 27, 1925, granting the said plaintiff support.
On February 8, 1926, the defendant Lorenzo Mendoza filed a motion praying for the reconsideration of
said order of November 27, 1925. A writ of execution was issued against the property of the defendant
in order to collect the sum of P325 the total amount of the monthly payments due from September 14,
1925
On July 10, 1926, the Court of First Instance of Nueva Ecija issued an order denying the motion of the
defendant praying that the writs of attachment of the dates of January 20th and March 23rd of 1926,
respectively, be cancelled.
ISSUE: WON the respondent Gorgonia Parugao, on September 14, 1925, when she filed her
complaint for the liquidation of the conjugal property and alimony, was entitled to support during the
pendency of the action
HELD: After the complaint for annulment of marriage has been filed by the wife and admitted she is
entitled to support during the pendency of the suit (arts. 67 and 68, par. 4, Civil Code), but once the
nullity is decreed, the right ceases, because the mutual obligation created by the marriage is
extinguished. The marriage of the respondent with the petitioner having been annulled on August 7,
1925, by virtue of the rule enunciated, she was no longer entitled to support on September 14, 1925,
when she filed her complaint for support. This does not mean, however, that she is not entitled to
payment in advance of a part of her undetermined share of the conjugal property if, after the liquidation
sought by her, there exists such conjugal property.
In the case now before us, the order of the Court of First Instance of Nueva Ecija of November 27,
1925, may be considered as an order for the payment of P50 monthly as an advance payment on
account of such share of the conjugal property as may be found from the liquidation to belong to
Gorgonia Parugao. This order, however, being of an interlocutory character and not final (sec. 123,
Act No. 190) no writ of execution can be issued thereon (sec. 443, Act No. 190; 23 C. J., 314); but its
unjustified disobedience may constitute contempt of court and, after the proper proceedings prescribed
by law in such cases, may be punished as such.

11. and 14. TERLYN GRACE RIVERA VS. FLORENCIO VARGAS, G.R. No. 113475, February 15,
1994
FACTS: Respondent Vargas filed a complaint against petitioner and several John Does before the RTC
in Tuguegarao City, Cagayan, for the recovery of a 150 T/H rock crushing plant located in Sariaya,
Quezon. In his complaint and affidavit, Vargas claims ownership of the said equipment, having
purchased and imported the same directly from Hyun Dae Trading Co., in Seoul, South Korea. The
equipment was allegedly entrusted to petitioners husband, Jan T. Rivera, who died sometime in late
2002, as caretaker of respondents construction aggregates business in Batangas. According to
Vargas, petitioner failed to return the said equipment after her husbands death despite his repeated
demands, thus forcing him to resort to court action. The complaint was accompanied by a prayer for the
issuance of a writ of replevin and the necessary bond amounting to P2,400,000.00.
Summons dated February 24, 2003 was served upon petitioner through her personal secretary on April
28, 2003 at her residence in Paraaque City. Interestingly, however, the writ of replevin was served
upon and signed by a certain Joseph Rejumo, the security guard on duty in petitioners crushing plant
in Sariaya, Quezon on April 29, 2003, contrary to the sheriffs return stating that the writ was served
upon Rivera.
Rivera filed her answer, manifestation, and motion for the acceptance of petitioners redelivery bond.
She further averred that from the time that the partnership was dissolved sometime in 2000 until Jan
Riveras death in late 2002, it was petitioners husband who exercised ownership over the said
equipment without any disturbance from respondent.
On May 12, 2003, the RTC issued an Order disapproving petitioners redelivery bond application for
failure to comply with the requirements under Sections 5 and 6 of Rule 60 of the Rules of Court.
Without directly saying so, the RTC faulted petitioner for her failure to file the application for redelivery
bond within five (5) days from the date of seizure as provided in the Rules of Court. Petitioner moved
for reconsideration, but the same was also denied.
Petitioner argues that the RTC committed grave abuse of discretion in denying her counterbond on the
ground that it was filed out of time. She contends that the mandatory five-day period did not even begin
to run in this case due to the improper service of the writ of replevin, contrary to Section 4 of Rule 60.
ISSUE: WON mandatory 5 day period will not begin to run in case of improper service of the writ of
replevin? (YES)

HELD: Service of the writ upon the adverse party is mandatory in line with the constitutional guaranty
on procedural due process and as safeguard against unreasonable searches and seizures. If the writ
was not served upon the adverse party but was instead merely handed to a person who is neither an
agent of the adverse party nor a person authorized to receive court processes on his behalf, the service
thereof is erroneous and is, therefore, invalid, running afoul of the statutory and constitutional
requirements. The service is likewise invalid if the writ of replevin was served without the required
documents. Under these circumstances, no right to seize and to detain the property shall pass, the act
of the sheriff being both unlawful and unconstitutional.
But since the writ was invalidly served, petitioner is correct in contending that there is no reckoning
point from which the mandatory five-day period shall commence to run.
The trial court is reminded that not only should the writ or order of replevin comply with all the
requirements as to matters of form or contents prescribed by the Rules of Court.[43] The writ must also
satisfy proper service in order to be valid and effective:i.e. it should be directed to the officer who is
authorized to serve it; and it should be served upon the person who not only has the possession or
custody of the property involved but who is also a party or agent of a party to the action. Consequently,
a trial court is deemed to have acted without or in excess of its jurisdiction with respect to the ancillary
action of replevin if it seizes and detains a personalty on the basis of a writ that was improperly served,
such as what happened in this case.



12. BA FINANCE CORPORATION vs. COURT OF APPEALS, G.R. No. 102998. July 5, 1996
FACTS: The spouses Reynaldo and Florencia Manahan executed, a promissory note[4] binding
themselves to pay Carmasters, Inc., the amount of P83,080.00 in 36 monthly installments. To secure
payment, the Manahan spouses executed a deed of chattel mortgage over a motor vehicle, a Ford
Cortina 1.6 GL, with. Carmasters later assigned[ the promissory note and the chattel mortgage to
petitioner BA Finance Corporation with the conformity of the Manahans. When the latter failed to pay
the due installments, petitioner sent demand letters. The demands not having been heeded, petitioner,
filed a complaint for replevin with damages against the spouses, as well as against a John Doe, praying
for the recovery of the vehicle with an alternative prayer for the payment of a sum of money should the
vehicle not be returned. Upon petitioner's motion and the filing of a bond, the lower court issued a writ
of replevin. The court, however, cautioned petitioner that should summons be not served on the
defendants within thirty (30) days from the writ's issuance, the case would be dismissed for failure to
prosecute. The warning was based on what the court perceived to be the deplorable practice of some
mortgagees of "freezing (the) foreclosure or replevin cases" which they would so "conveniently utilize
as a leverage for the collection of unpaid installments on mortgaged chattels."
The original of the summons had the name and the signature of private respondent Roberto M. Reyes
indicating that he received, a copy of the summons and the complaint. Forthwith, petitioner, through its
Legal Assistantissued a certification to the effect that it had received from Orson R. Santiago, the
deputy sheriff of the Regional Trial Court of Manila, , the Ford Cortina seized from private respondent
Roberto M. Reyes, the John Doe referred to in the complaint in Sorsogon, Sorsogon. Alleging
possession in good faith, private respondent filed, on 26 October 1987, a motion for an extension of
time within which to file his answer and/or a motion for intervention. The court granted the motion.
On 20 April 1988, the court granted petitioner's motion for reconsideration and accordingly recalled the
order directing the return of the vehicle to private respondent, set aside the order dismissing the case,
directed petitioner "to cause the service of summons together with a copy of the complaint on the
principal defendants within five (5) days from receipt"thereof at petitioner's expense, and ordered
private respondent to answer the complaint.
A few months later, or on 02 August 1988, petitioner filed a motion to declare private respondent in
default. The court granted the motion on that same day and declared private respondent "in default for
his failure to file the x x x answer within the reglementary period."[17] The court likewise granted
petitioner's motion to set the case for the presentation, ex parte, of evidence. Petitioner, thereupon,
submitted the promissory note, the deed of chattel mortgage, the deed of assignment, a statement of
account in the name of Florencia Manahan and two demand letters.
On 27 February 1989, the trial court rendered a decision dismissing the complaint against the
Manahans for failure of petitioner to prosecute the case against them. It also dismissed the case
against private respondent for failure of petitioner to show any legal basis for said respondent's liability.
"It is an undisputed fact that the subject motor vehicle was taken from the possession of said Roberto
M. Reyes, a third person with respect to the contract of chattel mortgage between the appellant and the
defendants spouses Manahan.
ISSUE: WON a mortgagee can maintain an action for replevin against any possessor of the object of a
chattel mortgage even if the latter were not a party to the mortgage. (YES)
HELD: In Northern Motors, Inc. vs. Herrera the Court has said:
"There can be no question that persons having a special right of property in the goods the recovery of
which is sought, such as a chattel mortgagee, may maintain an action for replevin therefor. Where the
mortgage authorizes the mortgagee to take possession of the property on default, he may maintain an
action to recover possession of the mortgaged chattels from the mortgagor or from any person in
whose hands he may find them."
In effect then, the mortgagee, upon the mortgagor's default, is constituted an attorney-in-fact of the
mortgagor enabling such mortgagee to act for and in behalf of the owner. Accordingly, that the
defendant is not privy to the chattel mortgage should be inconsequential. By the fact that the object of
replevin is traced to his possession, one properly can be a defendant in an action for replevin. It is here
assumed that the plaintiff's right to possess the thing is not or cannot be disputed.
"Rule 60 of the Rules of Court allows a plaintiff, in an action for the recovery of possession of personal
property, to apply for a writ of replevin if it can be shown that he is `the owner of the property claimedor
is entitled to the possession thereof. The plaintiff need not be the owner so long as he is able to specify
his right to the possession of the property and his legal basis therefore


13. SMART COMMUNICATIONS INC. vs. REGINA ASTORGA,
FACTS: Astorga was employed by respondent SMART as District Sales Manager of the Corporate
Sales Marketing Group/ Fixed Services Division (CSMG/FSD). As District Sales Manager, Astorga
enjoyed additional benefits, namely, annual performance incentive equivalent to 30% of her annual
gross salary, a group life and hospitalization insurance coverage, and a car plan in the amount
ofP455,000.00.
SMART launched an organizational realignment to achieve more efficient operations. This was made
known to the employees.Part of the reorganization was the outsourcing of the marketing and sales
force. Thus, SMART entered into a joint venture agreement with NTT of Japan, and formed SMART-
NTT Multimedia, Incorporated (SNMI). Since SNMI was formed to do the sales and marketing work,
SMART abolished the CSMG/FSD, Astorgas division.
To soften the blow of the realignment, SNMI agreed to absorb the CSMG personnel who would be
recommended by SMART. Astorga landed last in the performance evaluation, thus, she was not
recommended by SMART. SMART, nonetheless, offered her a supervisory position in the Customer
Care Department, but she refused the offer because the position carried lower salary rank and rate.
Astorga continued reporting for work. But on March 3, 1998, SMART issued a memorandum advising
Astorga of the termination of her employment on ground of redundancy.
SMART sent a letter to Astorga demanding that she pay the current market value of the Honda Civic
Sedan which was given to her under the companys car plan program, or to surrender the same to the
company for proper disposition. Astorga, however, failed and refused to do either, thus prompting
SMART to file a suit for replevin with the Regional Trial Court of Makati (RTC) .
Astorga posited that the regular courts have no jurisdiction over the complaint because the subject
thereof pertains to a benefit arising from an employment contract; hence, jurisdiction over the same is
vested in the labor tribunal and not in regular courts.
ISSUE: WON the RTC has jurisdiction to issue writ of replevin? (YES)
HELD: Replevin is an action whereby the owner or person entitled to repossession of goods or chattels
may recover those goods or chattels from one who has wrongfully distrained or taken, or who
wrongfully detains such goods or chattels. It is designed to permit one having right to possession to
recover property in specie from one who has wrongfully taken or detained the property. The term may
refer either to the action itself, for the recovery of personalty, or to the provisional remedy traditionally
associated with it, by which possession of the property may be obtained by the plaintiff and retained
during the pendency of the action.
the RTC rightfully assumed jurisdiction over the suit and acted well within its discretion in denying
Astorgas motion to dismiss. SMARTs demand for payment of the market value of the car or, in the
alternative, the surrender of the car, is not a labor, but a civil, dispute. It involves the relationship of
debtor and creditor rather than employee-employer relations.[33] As such, the dispute falls within the
jurisdiction of the regular courts.
In Basaya, Jr. v. Militante, this Court, in upholding the jurisdiction of the RTC over the replevin suit,
explained:
Replevin is a possessory action, the gist of which is the right of possession in the plaintiff. The primary
relief sought therein is the return of the property in specie wrongfully detained by another person. It is
an ordinary statutory proceeding to adjudicate rights to the title or possession of personal property. The
question of whether or not a party has the right of possession over the property involved and if so,
whether or not the adverse party has wrongfully taken and detained said property as to require its
return to plaintiff, is outside the pale of competence of a labor tribunal and beyond the field of
specialization of Labor Arbiters.
The labor dispute involved is not intertwined with the issue in the Replevin Case. The respective issues
raised in each forum can be resolved independently on the other. In fact in 18 November 1986, the
NLRC in the case before it had issued an Injunctive Writ enjoining the petitioners from blocking the free
ingress and egress to the Vessel and ordering the petitioners to disembark and vacate. That aspect of
the controversy is properly settled under the Labor Code. So also with petitioners right to picket. But
the determination of the question of who has the better right to take possession of the Vessel and
whether petitioners can deprive the Charterer, as the legal possessor of the Vessel, of that right to
possess in addressed to the competence of Civil Courts.
In thus ruling, this Court is not sanctioning split jurisdiction but defining avenues of jurisdiction as laid
down by pertinent laws.




15. ROGER NAVARRO vs. HON. JOSE ESCOBIDO, G.R. No. 153788, November 27, 2009
FACTS: Respondent Karen T. Go filed two complaints, before the RTC for replevin and/or sum of
money with damages against Navarro. In these complaints, Karen Go prayed that the RTC issue writs
of replevin for the seizure of two (2) motor vehicles in Navarros possession.
NAVARRO delivered unto plaintiff 6 post-dated checks each in the amount ofP66,333.33 which were
supposedly in payment of the agreed rentals; that when the fifth and sixth checks, respectively dated
January 8, 1998 and February 8, 1998, were presented for payment and/or credit, the same were
dishonored and/or returned by the drawee bank for the common reason that the current deposit
account against which the said checks were issued did not have sufficient funds to cover the amounts
thereof;
The second complaint also alleged that Navarro delivered three post-dated checks, each for the
amount of P100,000.00, to Karen Go in payment of the agreed rentals; however, the third check was
dishonored when presented for payment.[8]
The RTC issued writs of replevin for both cases; as a result, the Sheriff seized the two vehicles and
delivered them to the possession of Karen Go.
Navarro maintains that the complaints were premature because no prior demand was made on him to
comply with the provisions of the lease agreements before the complaints for replevin were filed.
Lastly, Navarro posits that since the two writs of replevin were issued based on flawed complaints, the
vehicles were illegally seized from his possession and should be returned to him immediately.
ISSUE: WON demand is required prior to filing of replevin? (NO)
HELD: For a writ of replevin to issue, all that the applicant must do is to file an affidavit and bond,
pursuant to Section 2, Rule 60 of the Rules, which states:
Sec. 2. Affidavit and bond.
The applicant must show by his own affidavit or that of some other person who personally knows the
facts:
(a) That the applicant is the owner of the property claimed, particularly describing it, or is entitled to
the possession thereof;
(b) That the property is wrongfully detained by the adverse party, alleging the cause of detention
thereof according to the best of his knowledge, information, and belief;
(c) That the property has not been distrained or taken for a tax assessment or a fine pursuant to law,
or seized under a writ of execution or preliminary attachment, or otherwise placed under custodia legis,
or if so seized, that it is exempt from such seizure or custody; and
(d) The actual market value of the property.
The applicant must also give a bond, executed to the adverse party in double the value of the property
as stated in the affidavit aforementioned, for the return of the property to the adverse party if such
return be adjudged, and for the payment to the adverse party of such sum as he may recover from the
applicant in the action.
Nothing in these provisions which requires the applicant to make a prior demand on the possessor of
the property before he can file an action for a writ of replevin. Thus, prior demand is not a condition
precedent to an action for a writ of replevin.

16. Advent Capital and Finance Corporation vs Roland Young
Facts: This case stemmed from a replevin suit instituted by petitioner Advent Capital and Finance
Corporation against Roland Young to recover the possession of a 1996 Mercedes Benz.
Prior to the replevin case, or on 16 July 2001, Advent filed for corporate rehabilitation with the Regional
Trial Court of Makati City (rehabilitation court).
On 6 November 2002, the rehabilitation court approved the rehabilitation plan submitted by Advent.
Included in the inventory of Advents assets was the subject car which remained in Youngs possession
at the time.
Roland Young did not want to return the Mercedes and Advent filed a Replevin Case on July 8 2003.
After Advents posting of P3,000,000 replevin bond, then upon receipt of the Writ of Seizure, Young
turned over the car to Advent which delivered the same to the rehabilitation receiver.
Young filed an Answer alleging that as a former employee of Advent, he had the option to purchase the
subject car at book value pursuant to the company car plan and to offset the value of the car with the
proceeds of his retirement pay and stock option plan. Young sought the (1) execution of a deed of sale
over the subject car; and (2) determination and payment of the net amount due him as retirement
benefits under the stock option plan.
Advent filed a Reply with a motion to dismiss Youngs counterclaim, alleging that the counterclaim did
not arise from or has no logical relationship with the issue of ownership of the subject car.
On 28 April 2005, the trial court issued an Order dismissing the replevin case without prejudice for
Advents failure to prosecute. In the same order, the trial court dismissed Youngs counterclaim against
Advent for lack of jurisdiction.
On 24 March 2006, the trial court issued an Order denying Youngs motion for partial reconsideration
The Court of Appeals ruled in favor of Young and annulled the assailed rulings of the trial court.
ISSUES: WON Court of Appeals committed reversible error in
(1) directing the return of the seized car to Young (NO)
(2) ordering the trial court to set a hearing for the determination of damages against the replevin bond
(YES)
HELD:
1. Upon the dismissal of the replevin case for failure to prosecute, the writ of seizure, which is merely
ancillary in nature, became functus officio and should have been lifted. There was no adjudication on
the merits, which means that there was no determination of the issue who has the better right to
possess the subject car. Advent cannot therefore retain possession of the subject car considering that it
was not adjudged as the prevailing party entitled to the remedy of replevin.
2. While Young filed a motion for partial reconsideration on 10 June 2005, it was only concerned with
the dismissal of his counterclaim, without any claim for damages against the replevin bond. It was only
on 8 July 2005 that Young filed an omnibus motion seeking damages against the replevin bond, after
the dismissal order had already become final for Advents non-appeal of such order. Thus, Young is
barred from claiming damages against the replevin bond.

17. EUFEMIA ALMEDA and ROMEL ALMEDA vs. BATHALA MARKETING INDUSTRIES, INC.
Facts: Sometime in May 1997, respondent Bathala Marketing Industries, Inc. renewed its Contract of
Lease with Ponciano L. Almeda (Ponciano), as lessor, husband of petitioner Eufemia and father of
petitioner Romel Almeda. Under the said contract, Ponciano agreed to lease a portion of the Almeda
Compound, located at 2208 Pasong Tamo Street, Makati City, consisting of 7,348.25 square meters,
for a monthly rental of P1,107,348.69, for a term of four (4) years from May 1, 1997 unless sooner
terminated as provided in the contract.
During the effectivity of the contract, Ponciano died. Thereafter, respondent dealt with petitioners.
December 29, 1997, petitioners advised respondent that the former shall assess and collect Value
Added Tax (VAT) on its monthly rentals.
On January 26, 1998, respondent received another letter from petitioners informing the former that its
monthly rental should be increased by 73% pursuant to condition No. 7 of the contract and Article 1250
of the Civil Code. Respondent opposed petitioners demand and insisted that there was no
extraordinary inflation to warrant the application of Article 1250 in light of the pronouncement of this
Court in various cases.
Respondent refused to pay the VAT and adjusted rentals as demanded by petitioners but continued to
pay the stipulated amount set forth in their contract.
On February 18, 1998, respondent instituted an action for declaratory relief for purposes of determining
the correct interpretation of condition Nos. 6 and 7 of the lease contract to prevent damage and
prejudice.
On March 10, 1998, petitioners in turn filed an action for ejectment, rescission and damages against
respondent for failure of the latter to vacate the premises after the demand made by the formerBefore
respondent could file an answer, petitioners filed a Notice of Dismissal.They subsequently refiled the
complaint before the Metropolitan Trial Court of Makati;
Petitioners later moved for the dismissal of the declaratory relief case for being an improper remedy
considering that respondent was already in breach of the obligation.
Petitioners claim that the instant petition is not proper because a separate action for rescission,
ejectment and damages had been commenced before another court; thus, the construction of the
subject contractual provisions should be ventilated in the same forum. RTC ruled in favor of respondent
and against petitioners
CA Agreed with RTC but said RTC exceeded its jurisdiction in granting affirmative relief to the
respondent, particularly the restitution of its excess payment.
ISSUES: 1) WON for declaratory relief is proper (NO)
2) WON respondent is liable to pay 10% VAT (NO)
3) WON the amount of rentals due the petitioners should be adjusted by reason of extraordinary
inflation or devaluation. (NO)
HELD:
1. After petitioners demanded payment of adjusted rentals and in the months that followed, respondent
complied with the terms and conditions set forth in their contract of lease by paying the rentals
stipulated therein. Respondent religiously fulfilled its obligations to petitioners even during the
pendency of the present suit. There is no showing that respondent committed an act constituting a
breach of the subject contract of lease. Thus, respondent is not barred from instituting before the trial
court the petition for declaratory relief. (See requisites of declaratory relief). In in Panganiban v.
Pilipinas Shell Petroleum Corporation SC held that the petition for declaratory relief should be
dismissed in view of the pendency of a separate action for unlawful detainer, however In Panganiban,
the unlawful detainer case had already been resolved by the trial court before the dismissal of the
declaratory relief case. In the case at bench, the trial court had not yet resolved the
rescission/ejectment case during the pendency of the declaratory relief petition
2 and 3: Substantive issues.

18. CARMEN DANAO MALANA, MARIA DANAO ACORDA, EVELYN DANAO, FERMINA DANAO,
LETICIA DANAO and LEONORA DANAO, the last two are represented herein by their Attorney-in-
Fact, MARIA DANAO ACORDA,
VS.
BENIGNO TAPPA, JERRY REYNA, SATURNINO CAMBRI and SPOUSES FRANCISCO AND MARIA
LIGUTAN
Facts: Petitioners filed before the RTC their Complaint for Reivindicacion, Quieting of Title, and
Damages against respondents on 27 March 2007. Petitioners alleged in their Complaint that they are
the owners of a parcel of land in Tuguegarao City, Cagayan. Petitioners inherited the subject property
from Anastacio Danao (Anastacio), who died intestate. During the lifetime of Anastacio, he had allowed
Consuelo Pauig (Consuelo), who was married to Joaquin Boncad, to build on and occupy the southern
portion of the subject property. Anastacio and Consuelo agreed that the latter would vacate the said
land at any time that Anastacio and his heirs might need it.
Petitioners demanded that respondents vacate the same. Respondents, however, refused to heed
petitioners demand.
During the conciliation proceedings, respondents asserted that they owned the subject property and
presented documents ostensibly supporting their claim According to petitioners, respondents
documents were highly dubious, falsified, and incapable of proving the latters claim of ownership over
the subject property; nevertheless, they created a cloud upon petitioners title to the property. Thus,
petitioners were compelled to file before the RTC a Complaint to remove such cloud from their title.
RTC issued an Order dated 4 May 2007 dismissing petitioners Complaint on the ground of lack of
jurisdiction. It found that the subject property had a value of less than P20,000.00; hence, petitioners
action to recover the same was outside the jurisdiction of the RTC. MR denied.
Petitioners filed a pleading to set aside rtc decision. Petitioners reiterated their earlier argument that
Section 1, Rule 63 of the Rules of Court states that an action to quiet title falls under the exclusive
jurisdiction of the RTC. They also contended that there was no obstacle to their joining the two causes
of action, i.e., quieting of title and reivindicacion And even if the two causes of action could not be
joined, petitioners maintained that the misjoinder of said causes of action was not a ground for the
dismissal of their Complaint. MR denied
ISSUE: WON RTC committed grave abuse of discretion in dismissing petitioners Complaint for lack of
jurisdiction. (NO)
HELD: Petitioners Complaint contained sufficient allegations for an accion reivindicatoria. Jurisdiction
over such an action would depend on the value of the property involved. Given that the subject
property herein is valued only at P410.00, then the MTC, not the RTC, has jurisdiction over an action to
recover the same. The RTC, therefore, did not commit grave abuse of discretion in dismissing, without
prejudice.
To determine which court has jurisdiction over the actions identified in the second paragraph (one of
which is an action for quieting title) of Section 1, Rule 63 of the Rules of Court, said provision must be
read together with those of the Judiciary Reorganization Act of 1980, as amended.
Section 1, Rule 63 of the Rules of Court does not categorically require that an action to quiet title be
filed before the RTC. It repeatedly uses the word may that an action for quieting of title may be
brought under [the] Rule on petitions for declaratory relief, and a person desiring to file a petition for
declaratory relief maybring an action in the appropriate Regional Trial Court. The use of the word
may in a statute denotes that the provision is merely permissive and indicates a mere possibility, an
opportunity or an option.

19. COMMISSIONER OF CUSTOMS and the DISTRICT COLLECTOR OF THE PORT OF SUBIC,
VS.
HYPERMIX FEEDS CORPORATION
Facts: On 7 November 2003, petitioner Commissioner of Customs issued a Memorandum: for tariff
purposes, wheat was classified according to the following: (1) importer or consignee; (2) country of
origin; and (3) port of discharge. The regulation provided an exclusive list of corporations, ports of
discharge, commodity descriptions and countries of origin. Depending on these factors, wheat would be
classified either as food grade or feed grade. The corresponding tariff for food grade wheat was 3%, for
feed grade, 7%.
The Memorandum further provided for the proper procedure for protest or Valuation and Classification
Review Committee (VCRC) cases. Under this procedure, the release of the articles that were the
subject of protest required the importer to post a cash bond to cover the tariff differential.
A month after the issuance of the Memorandum, on 19 December 2003, respondent filed a Petition for
Declaratory Relief with the RTC. Respondent contended that the MEMO was issued without following
the mandate of the Revised Administrative Code on public participation, prior notice, and publication or
registration with the University of the Philippines Law Center among other issues such as violation of
due process etc.
Petitioners thereafter filed a Motion to Dismiss saying among others is that an action for declaratory
relief was improper. RTC favored Respondent. Declared the MEMO invalid and stated that the
Declaratory relief is valid. CA dismissed the appeal.
ISSUE: WON declaratory relief was valid (YES)
HELD: Who may file petition for declaratory relief: Any person interested under a deed, will, contract or
other written instrument, or whose rights are affected by a statute, executive order or regulation,
ordinance, or any other governmental regulation may, before breach or violation thereof, bring an action
in the appropriate Regional Trial Court to determine any question of construction or validity arising, and
for a declaration of his rights or duties, thereunder.
Petitioner filed the petition correctly and the requirements had been met (see requirements on ROC)
The controversy is between two parties that have adverse interests. Petitioners are summarily imposing
a tariff rate that respondent is refusing to pay. The issue raised by respondent is ripe for judicial
determination, because litigation is inevitable. There was a Justiciable controversy, respondent has
legal interest in the controversy.
Substantive issue: Petitioners violated respondents right to due process in the issuance of CMO 27-
2003 when they failed to observe the requirements under the Revised Administrative Code.

20. RENATO V. DIAZ and AURORA MA. F. TIMBOL,
vs.
THE SECRETARY OF FINANCE and THE COMMISSIONER OF INTERNAL REVENUE
Facts: Petitioners Renato V. Diaz and Aurora Ma. F. Timbol (petitioners) filed this petition for
declaratory reliefassailing the validity of the impending imposition of value-added tax (VAT) by the
Bureau of Internal Revenue (BIR) on the collections of tollway operators.
Petitioners claim that, since the VAT would result in increased toll fees, they have an interest as
regular users of tollways in stopping the BIR action.
On August 13, 2010 the Court issued a temporary restraining order (TRO), enjoining the
implementation of the VAT. Later, the Court issued another resolution treating the petition as one for
prohibition.
On August 23, 2010 the Office of the Solicitor General filed the governments comment. The
government avers that the NIRC imposes VAT on all kinds of services of franchise grantees, including
tollway operations, except where the law provides otherwise; that the Court should seek the meaning
and intent of the law from the words used in the statute; and that the imposition of VAT on tollway
operations has been the subject as early as 2003 of several BIR rulings and circulars.
The government also argues that petitioners allegations clearly made out a case for declaratory relief,
an action over which the Court has no original jurisdiction.
ISSUE: WON Declaratory Relief turning into prohibition (rule 65) is valid. (YES)
HELD: Although the petition does not strictly comply with the requirements of Rule 65, the Court has
ample power to waive such technical requirements when the legal questions to be resolved are of great
importance to the public.
The imposition of VAT on toll fees has far-reaching implications. Its imposition would impact, not only
on the more than half a million motorists who use the tollways everyday, but more so on the
governments effort to raise revenue for funding various projects and for reducing budgetary deficits.
Substantial issue: Vat on collection of tollways operators was declared constitutional. Tollway operators
are not among the franchise grantees that are exempted as provided for in sec 119 of the NIRC.

21. GAMBOA vs. FINANCE SECRETARY TEVES
FACTS: In 1969, General Telephone and Electronics Corporation (GTE), an American company and a
major PLDT stockholder, sold 26 percent of the outstanding common shares of PLDT to PTIC. In 1977,
PTIC stockholders Ramon Cojuangco and Luis Tirso Rivilla executed a Deed of Assignment of
111,415 shares of stock of PTIC to Prime Holdings, Inc. (PHI). In 1986, the 111,415 shares of stock
held by PHI, which represent about 46.125 percent of the outstanding capital stock of PTIC were
sequestered by the Presidential Commission on Good Government (PCGG) and were later declared by
this Court to be owned by the Republic of the Philippines.
In 1999, First Pacific, a Bermuda-registered, Hong Kong-based investment firm, acquired the remaining
54 percent of the outstanding capital stock of PTIC. On 20 November 2006, the Inter-Agency
Privatization Council (IPC) of the Philippine Government announced that it would sell the 111,415 PTIC
shares, or 46.125 percent of the outstanding capital stock of PTIC, through a public bidding. Only two
bidders, Parallax Venture Fund XXVII (Parallax) and Pan-Asia Presidio Capital, submitted their bids.
Parallax won with a bid of P25.6 billion or US$510 million.
Thereafter, First Pacific announced that it would exercise its right of first refusal as a PTIC stockholder
and buy the 111,415 PTIC shares by matching the bid price of Parallax. However, First Pacific failed to
do so by the 1 February 2007 deadline set by IPC and instead, yielded its right to PTIC itself which was
then given by IPC until 2 March 2007 to buy the PTIC shares. On 14 February 2007, First Pacific,
through its subsidiary, MPAH, entered into a Conditional Sale and Purchase Agreement of the 111,415
PTIC shares, or 46.125 percent of the outstanding capital stock of PTIC, with the Philippine
Government for the price of P25,217,556,000 or US$510,580,189. The sale was completed on 28
February 2007.
On 28 February 2007, petitioner filed the instant petition for prohibition, injunction, declaratory relief,
and declaration of nullity of sale of the 111,415 PTIC shares to the Supreme Court.
On 13 August 2007, Pablito V. Sanidad and Arno V. Sanidad filed a Motion for Leave to Intervene and
Admit Attached Petition-in-Intervention which the court granted on 28 August 2007. Petitioners-in-
intervention join petitioner Wilson Gamboa in seeking, among others, to enjoin and/or nullify the sale
by respondents of the 111,415 PTIC shares to First Pacific or assignee claiming that With the sale, First
Pacifics common shareholdings in PLDT increased from 30.7 percent to 37 percent, thereby increasing
the common shareholdings of foreigners in PLDT to about 81.47 percent. This violates Section 11,
Article XII of the 1987 Philippine Constitution which limits foreign ownership of the capital of a public
utility to not more than 40 percent.
ISSUE: WON the Supreme Court has jurisdiction to grant petition for prohibition, injunction, declaratory
relief, and declaration of nullity of sale. PARTLY
HELD: Among the remedies petitioner seeks, only the petition for prohibition is within the original
jurisdiction of this court, which however is not exclusive but is concurrent with the Regional Trial Court
and the Court of Appeals. The actions for declaratory relief,10 injunction, and annulment of sale are not
embraced within the original jurisdiction of the Supreme Court. On this ground alone, the petition could
have been dismissed outright. However, exceptions to this rule have been recognized. Thus, where the
petition has far-reaching implications and raises questions that should be resolved, it may be treated as
one for mandamus.
While direct resort to this Court may be justified in a petition for prohibition,1 the Court shall
nevertheless refrain from discussing the grounds in support of the petition for prohibition since on 28
February 2007, the questioned sale was consummated when MPAH paid IPC P25,217,556,000 and the
government delivered the certificates for the 111,415 PTIC shares. However, since the threshold and
purely legal issue on the definition of the term capital in Section 11, Article XII of the Constitution has
far-reaching implications to the national economy, the Court treats the petition for declaratory relief as
one for mandamus.
In the present case, petitioner seeks primarily the interpretation of the term capital in Section 11,
Article XII of the Constitution. He prays that this Court declare that the term capital refers to common
shares only, and that such shares constitute the sole basis in determining foreign equity in a public
utility. Petitioner further asks this Court to declare any ruling inconsistent with such interpretation
unconstitutional.
The interpretation of the term capital in Section 11, Article XII of the Constitution has far-reaching
implications to the national economy. In fact, a resolution of this issue will determine whether Filipinos
are masters, or second class citizens, in their own country. What is at stake here is whether Filipinos or
foreigners will have effective control of the national economy. Indeed, if ever there is a legal issue that
has far-reaching implications to the entire nation, and to future generations of Filipinos, it is the
threshold legal issue presented in this case.
The instant petition therefore presents the Court with another opportunity to finally settle this purely
legal issue which is of transcendental importance to the national economy and a fundamental
requirement to a faithful adherence to our Constitution. The Court must forthwith seize such
opportunity, not only for the benefit of the litigants, but more significantly for the benefit of the entire
Filipino people, to ensure, in the words of the Constitution, a self-reliant and independent national
economy effectively controlled by Filipinos.18 Besides, in the light of vague and confusing positions
taken by government agencies on this purely legal issue, present and future foreign investors in this
country deserve, as a matter of basic fairness, a categorical ruling from this Court on the extent of their
participation in the capital of public utilities and other nationalized businesses.














22. CANDELARIO L. VERZOSA, JR. vs. GUILLERMO N. CARAGUE
FACTS: On two separate occasions in December 1992, the Cooperative Development Authority (CDA)
purchased from Tetra Corporation (Tetra) a total of forty-six (46) units of computer equipment and
peripherals in the total amount of P2,285,279.00. Tetra was chosen from among three qualified bidders
(Tetra, Microcircuits and Columbia). In the technical evaluation of the units to be supplied by the
qualified bidders, CDA engaged the services of the Development Academy of the Philippines-Technical
Evaluation Committee (DAP-TEC).
On May 18, 1993, the Resident Auditor sought the assistance of the Technical Services Office (TSO),
COA in the determination of the reasonableness of the prices of the purchased computers. TSO found
that the purchased computers were overpriced/excessive by a total of P881,819.00.The Resident
Auditor issued Notice of Disallowance No. 93-0016-101 for the amount of P881,819.00.
In a letter dated May 13, 1994, CDA Chairman Edna E. Aberilla appealed for reconsideration of the
disallowance to COA Chairman Celso D. Gangan. TSO submitted its comments on the justifications
submitted by the CDA. On the other hand, the Resident Auditor maintained her stand on the
disallowance. The National Government Audit Office I concurred with the opinion of the Resident
Auditor that CDAs request may not be given due course. On October 21, 1998, respondent COA
issued the assailed decision affirming the disallowance. Petitioners motion for reconsideration having
been denied, he now comes to this Court for relief present petition for review on certiorari.
ISSUES: 1.WON the jurisdiction was correctly invoked by petitioners when it filed petition for review
under Rule 45 in assailing the COAs decision. (NO)
2. WON the computer units bought by CDA from Tetra were overpriced. (YES)
3. WON petitioner is personally liable for the disallowance. (YES)
HELD: 1. Petitioner availed of the wrong remedy in filing a petition for review under Rule 45. Article IX-
A, Section 7 of the Constitution provides that decisions, orders or rulings of the Commission on Audit
may be brought to the Supreme Court on certiorari by the aggrieved party.24 Moreover, under Section
2, Rule 64, of the Revised Rules of Civil Procedure, a judgment or final order or resolution of the
Commission on Audit may be brought by the aggrieved party to the Supreme Court on certiorari under
Rule 65.

2. The petition lacks merit. Records showed that while the respondents found nothing wrong per se with
the criteria adopted by the CDA in the overall evaluation of the bids, the technical aspect was seriously
questioned. The final technical evaluation report was apparently manipulated to favor Tetra, which
offered a Korean-made brand as against Microcircuits which offered a US-made brand said to be more
durable, at a lower price. Upon investigation, respondents discovered that there was an earlier report
(1st report) which actually stated a contrary finding (Tetra units emerged as the most inferior in quality)
but the representative from CDA (Rey Evangelista) came to the DAP-CITD and gave further
instructions on "penalty points" for deviation in hardware specifications, resulting in a modified 2nd
report.
Findings of quasi-judicial agencies, such as the COA, which have acquired expertise because their
jurisdiction is confined to specific matters are generally accorded not only respect but at times even
finality if such findings are supported by substantial evidence.34 It is only upon a clear showing that the
COA acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or
excess of jurisdiction that this Court will set aside its decisions or final orders.35 We find no such
arbitrariness or grave abuse on the part of the COA when it disallowed in audit the amount representing
the overprice in the payment by CDA for the purchased computer units and peripherals, its findings are
well-supported by the evidence on record.
3. The doctrine of separate personality of a corporation finds no application because CDA is not a
private entity but a government agency created by virtue of Republic Act No. 6939 in compliance with
the provisions of Section 15, Article XII of the 1987 Constitution. Moreover, respondents acted in bad
faith when he prevailed upon the DAP-TEC to modify the initial result of the technical evaluation of the
computers by imposing an irrelevant grading system that was intended to favor one of the bidders, after
the bids had been opened.
Section 103 of Presidential Decree No. 1445 (Government Auditing Code of the Philippines) provides:
SECTION 103. General liability for unlawful expenditures. -- Expenditures of government funds or uses
of government property in violation of law or regulations shall be a personal liability of the official or
employee found to be directly responsible therefor.




23. VELOSO vs. COA
FACTS: On December 7, 2000, the City Council of Manila enacted Ordinance No. 8040 entitled An
Ordinance Authorizing the Conferment of Exemplary Public Service Award to Elective Local Officials of
Manila Who Have Been Elected for Three (3) Consecutive Terms in the Same Position. Section 2
thereof provides:
SEC. 2. The EPSA shall consist of a Plaque of Appreciation, retirement and gratuity pay remuneration
equivalent to the actual time served in the position for three (3) consecutive terms, subject to the
availability of funds as certified by the City Treasurer. PROVIDED, That [it] shall be accorded to
qualified elected City Officials on or before the first day of service in an appropriated public ceremony to
be conducted for the purpose. PROVIDED FURTHER, That this Ordinance shall only cover the Position
of Mayor, Vice-Mayor and Councilor: PROVIDED FURTHERMORE, That those who were elected for
this term and run for higher elective position thereafter, after being elected shall still be eligible for this
award for the actual time served: PROVIDED FINALLY That the necessary and incidental expenses
needed to implement the provisions of this Ordinance shall be appropriated and be included in the
executive budget for the year when any city official will qualify for the Award.
The ordinance was deemed approved on August 23, 2002. Pursuant to the ordinance, the City made
partial payments in favor of seven councilors in the total amount of P9,923,257.00.
On August 8, 2005, Atty. Gabriel J. Espina (Atty. Espina), Supervising Auditor of the City of Manila,
issued Audit Observation Memorandum (AOM) No. 2005-100(05)07(05)[6] with the following
observations: 1) The initial payment of monetary reward as part of EPSA amounting to P9,923,257.00
to former councilors of the City Government of Manila as authorized by City Ordinance No. 8040 is
without legal basis; 2) the monetary reward is excessive and tantamount to double compensation in
contravention to Article 170 (c) of the IRR of RA 7160; and 3) The appropriations for retirement gratuity
to implement EPSA ordinance was classified as Maintenance and Other Operating Expenses instead of
Personal Services contrary to Section 7, Volume III of the Manual on the New Government Accounting
System (NGAS) for local government units and COA Circular No. 2004-008 dated September 20, 2004
which provide the updated description of accounts under the NGAS.
After evaluation of the AOM, the Director, Legal and Adjudication Office (LAO)-Local of the COA
issued Notice of Disallowance dated May 24, 2006.
On November 9, 2006, former councilors filed a Motion to Lift the Notice of Disallowance. In its
Decision dated November 29, 2007, the LAO-Local decided in favor of the movants as the reasons for
the disallowance have been sufficiently explained. Upon review, the COA rendered the assailed
Decision No. 2008-088 sustaining ND No. 06-010-100-05.[13] The motion for reconsideration was
likewise denied in Decision No. 2010-077.[14] Aggrieved, petitioners Veloso, Cabochan, Dawis-
Asuncion and Lacson come before the Court in this special civil action forcertiorari alleging grave abuse
of discretion on the part of the COA. On November 30, 2010, the Court issued a Status Quo Ante
Order[18] requiring the parties to maintain the status quoprevailing before the implementation of the
assailed COA decisions.

ISSUES: 1. Whether or not COA has the authority to disallow the disbursement of local government
funds. (YES)
2. Whether the COA committed grave abuse of discretion in affirming the disallowance of
P9,923,257.00 covering the EPSA of former three-term councilors of the City of Manila authorized by
Ordinance No. 8040. (NO)
HELD: 1. Section 2, Article IX-D of the Constitution gives a broad outline of the powers and functions
of the COA, to wit:
Section 2. (1) The Commission on Audit shall have the power, authority, and duty to examine, audit,
and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and
property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions,
agencies, or instrumentalities, including government-owned or controlled corporations with original
charters, and on a post-audit basis: (a) constitutional bodies, commissions and offices that have been
granted fiscal autonomy under this Constitution; (b) autonomous state colleges and universities; (c)
other government-owned or controlled corporations and their subsidiaries; and (d) such non-
governmental entities receiving subsidy or equity, directly or indirectly, from or through the Government,
which are required by law or the granting institution to submit to such audit as a condition of subsidy or
equity. However, where the internal control system of the audited agencies is inadequate, the
Commission may adopt such measures, including temporary or special pre-audit, as are necessary and
appropriate to correct the deficiencies. It shall keep the general accounts of the Government and, for
such period as may be provided by law, preserve the vouchers and other supporting papers pertaining
thereto.
(2)The Commission shall have exclusive authority, subject to the limitations in this Article, to define the
scope of its audit and examination, establish the techniques and methods required therefor, and
promulgate accounting and auditing rules and regulations, including those forthe prevention and
disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or
uses of government funds and properties.
Section 11, Chapter 4, Subtitle B, Title I, Book V of the Administrative Code of 1987 echoes this
constitutional mandate to COA.
The Court had therefore previously upheld the authority of the COA to disapprove payments which it
finds excessive and disadvantageous to the Government; to determine the meaning of public bidding
and when there is failure in the bidding; to disallow expenditures which it finds unnecessary according
to its rules even if disallowance will mean discontinuance of foreign aid; to disallow a contract even
after it has been executed and goods have been delivered.[32]
Thus, LGUs, though granted local fiscal autonomy, are still within the audit jurisdiction of the COA.
2. It is the general policy of the Court to sustain the decisions of administrative authorities, especially
one which is constitutionally-created not only on the basis of the doctrine of separation of powers but
also for their presumed expertise in the laws they are entrusted to enforce. Findings of administrative
agencies are accorded not only respect but also finality when the decision and order are not tainted
with unfairness or arbitrariness that would amount to grave abuse of discretion.[33] It is only when the
COA has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction, that this Court entertains a petition questioning its rulings.[34] There is grave
abuse of discretion when there is an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law or to act in contemplation of law as when the judgment rendered is not based on law
and evidence but on caprice, whim and despotism.[35]
In this case, we find no grave abuse of discretion on the part of the COA in issuing the assailed
decisions. Indeed, Section 458 of RA 7160 defines the power, duties, functions and compensation of
the Sangguniang Panlungsod one of which is to determine the positions and salaries, wages,
allowances and other emoluments and benefits of officials and employees paid wholly or mainly from
city funds and provide for expenditures necessary for the proper conduct of programs, projects,
services, and activities of the city government, however, as correctly held by the COA, the above power
is not without limitations. These limitations are embodied in Section 81 of RA 7160, to wit:
SEC. 81. Compensation of Local Officials and Employees. The compensation of local officials and
personnel shall be determined by the sanggunian concerned: Provided, That the increase in
compensation of elective local officials shall take effect only after the terms of office of those approving
such increase shall have expired: Provided, further, That the increase in compensation of the
appointive officials and employees shall take effect as provided in the ordinance authorizing such
increase; Provided however, That said increases shall not exceed the limitations on budgetary
allocations for personal services provided under Title Five, Book II of this Code: Provided finally, That
such compensation may be based upon the pertinent provisions of Republic Act Numbered Sixty-seven
fifty-eight (R.A. No. 6758), otherwise known as the Compensation and Position Classification Act of
1989.
However, in line with existing jurisprudence, we need not require the refund of the disallowed amount
because all the parties acted in good faith. In this case, the questioned disbursement was made
pursuant to an ordinance enacted as early as December 7, 2000 although deemed approved only on
August 22, 2002. The city officials disbursed the retirement and gratuity pay remuneration in the honest
belief that the amounts given were due to the recipients and the latter accepted the same with
gratitude, confident that they richly deserve such reward.















24. BRENDA L. NAZARETH vs. THE HON. REYNALDO A. VILLAR
FACTS: On December 22, 1997, Congress enacted R.A. No. 8439 otherwise known as the Magna
Carta for Scientists, Engineers, Researchers, and other Science and Technology Personnel in the
Government (Magna Carta, for short). Section 7 of R.A. No. 8439 grants the following additional
allowances and benefits (Magna Carta benefits) to the covered officials and employees of the DOST, to
wit: a) Honorarium; b) share in royalties; c) hazard allowance; d) subsistence allowance; e) laundry
allowance ; f) housing and quarter allowance; g) longevity pay; and h) medical examination.
Under R.A. No. 8439, the funds for the payment of the Magna Carta benefits are to be appropriated by
the General Appropriations Act (GAA) of the year following the enactment of R.A. No. 8439. However,
the DOST Regional Office No. IX in Zamboanga City released the Magna Carta benefits to the covered
officials and employees commencing in CY 1998 despite the absence of specific appropriation for the
purpose in the GAA which caused several Notice of Disallowance (ND) to be issued from COA State
Auditor Ramon Vargas disapproving such payments.
The NDs prompted then DOST Secretary Dr. Filemon Uriarte, Jr. to request the Office of the President
(OP) through his Memorandum dated April 3, 2000 (Request for Authority to Use Savings for the
Payment of Magna Carta Benefits as provided for in R.A. 8439) for the authority to utilize the DOSTs
savings to pay the Magna Carta benefits. On April 12, 2000, then Executive Secretary Ronaldo
Zamora, acting by authority of the President, approved the request of Secretary Uriarte, Jr.
On July 28, 2003, the petitioner, in her capacity as the DOST Regional Director in Region IX, lodged an
appeal with COA Regional Cluster Director Ellen Sescon, urging the lifting of the disallowance of the
Magna Carta benefits for the period covering CY 1998 to CY 2001 amounting to P4,363,997.47. COA
Regional Office IX in Zamboanga City denied the appeal and affirmed the grounds stated in the NDs.
On September 15, 2005, respondent Director Khem N. Inok of the COA Legal and Adjudication Office
rendered a decision in LAO-N-2005- 308, denying the petitioners appeal with the modification that only
the NDs covering the Magna Carta benefits for CY 2000 were to be set aside in view of the
authorization under the Memorandum of April 12, 2000 issued by Executive Secretary Zamora as the
alter ego of the President.
On December 1, 2005, the petitioner filed her motion for reconsideration in the COA Legal and
Adjudication Office-National in Quezon City. By resolution dated May 12, 2006,12 the COA Legal and
Adjudication Office-National denied the motion for reconsideration. Thence, the petitioner filed a petition
for review in the COA Head Office.

On June 4, 2009, the COA rendered the assailed decision, further modifying the decision of respondent
Director Inok by also lifting and setting aside the NDs covering the Magna Carta benefits for CY 1998
and CY 1999 for the same reason applicable to the lifting of the NDs for CY 2000, but maintaining the
disallowance of the benefits for CY 2001 on the ground that they were not covered by the authorization
granted by the Memorandum of April 12, 2000 of Executive Secretary Zamora.
Hence, this special civil action for certiorari.
ISSUE: 1. WON COA commit grave abuse of discretion in issuing ND Nos. 2001-014-101(01) to ND
No. 2001-032-101(01)? (NO)
2.If not, are the benefits disallowed be reimbursed or refunded to the government? (NO)

HELD:
1. The petitioner dismally failed to discharge her burden. We conclude and declare, therefore, that the
COAs assailed decision was issued in steadfast compliance of its duty under the Constitution and in
the judicious exercise of its general audit power conferred to it by the Constitution. Thus, the COA is
generally accorded complete discretion in the exercise of its constitutional duty and responsibility to
examine and audit expenditures of public funds, particularly those which are perceptibly beyond what is
sanctioned by law. Verily, the Court has sustained the decisions of administrative authorities like the
COA as a matter of general policy, not only on the basis of the doctrine of separation of powers but also
upon the recognition that such administrative authorities held the expertise as to the laws they are
entrusted to enforce.
In the funding of current activities, projects, and programs, the general rule should still be that the
budgetary amount contained in the appropriations bill is the extent Congress will determine as sufficient
for the budgetary allocation for the proponent agency. The only exception is found in Section 25 (5),
Article VI of the Constitution, by which the President, the President of the Senate, the Speaker of the
House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional
Commissions are authorized to transfer appropriations to augment any item in the GAA for their
respective offices from the savings in other items of their respective appropriations. The plain language
of the constitutional restriction leaves no room for the petitioners posture, which we should now
dispose of as untenable. It bears emphasizing that the exception in favor of the high officials named in
Section 25(5), Article VI of the Constitution limiting the authority to transfer savings only to augment
another item in the GAA is strictly but reasonably construed as exclusive. Clearly and indubitably, the
prohibition against the transfer of appropriations is the general rule. Consequently, the payment of the
Magna Carta benefits for CY 2001 without a specific item or provision in the GAA and without due
authority from the President to utilize the DOSTs savings in other items for the purpose was repugnant
to R.A. No. 8439, the Constitution, and the re-enacted GAA for 2001. The COA is endowed with
sufficient latitude.
2. Since the DOST officials who caused the payment of the Magna Carta benefits to the covered
officials and employees acted in good faith in the honest belief that there was a firm legal basis for the
payment of the benefits. Evincing their good faith even after receiving the NDs from the COA was their
taking the initiative of earnestly requesting the OP for the authorization to use the DOSTs savings to
pay the Magna Carta benefits. On their part, the DOST covered officials and employees received the
benefits because they considered themselves rightfully deserving of the benefits under the long-
awaited law. The Court declares and holds that the disallowed benefits received in good faith need not
be reimbursed to the Government.