I.

WHEN ACT IS DONE WITHOUT JURISDICTION

PEOPLE V SANDIGANBAYAN (FOURTH DIVISION)
665 SCRA 89 (2012) ---- DI KO SURE KUNG TAMA.

Republic of the Philippines

Supreme Court
Manila

EN BANC
PEOPLE OF THE PHILIPPINES,
Petitioner,

G.R. Nos. 153304-05

Present:

- versus -

HON. SANDIGANBAYAN (FOURTH

DIVISION), IMELDA R. MARCOS,
JOSE
CONRADO
BENITEZ
and
GILBERT C. DULAY,*
Respondents.

CORONA, C.J.,
CARPIO,
VELASCO, JR.,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA,
SERENO,
REYES, and
PERLAS-BERNABE, JJ.
Promulgated:
February 7, 2012

x-----------------------------------------------------------------------------------------x
DECISION
BRION, J.:

Before us is a petition for certiorari filed by the People of the Philippines

(petitioner) assailing the decision dated March 22, 2002 of the Sandiganbayan [1]in
Criminal

Case

Nos.

20345

and

20346

which

granted

the

demurrers

to

evidence filed by Imelda R. Marcos, Jose Conrado Benitez (respondents) and Rafael
Zagala.
The Facts
The petition stemmed from two criminal informations filed before the
Sandiganbayan, charging the respondents with the crime of malversation of public
funds, defined and penalized under Article 217, paragraph 4 of the Revised Penal
Code, as amended.The charges arose from the transactions that the respondents
participated in, in their official capacities as Minister and Deputy Minister of the
Ministry of Human Settlements (MHS) under the MHS Kabisig Program.
In Criminal Case No. 20345, respondents, together with Gilbert C. Dulay,
were charged with malversation of public funds, committed as follows:
That on or about April 6, 1984 or sometime and/or
[subsequent] thereto, in Pasig, Metro Manila, Philippines, and within
the jurisdiction of this Honorable Court, the above-named accused, all
public officers charged with the administration of public funds and as
such, accountable officers, Imelda R. Marcos being then the Minister
of Human Settlements, Jose Conrado Benitez being then the Deputy
Minister of Human Settlements and Gilbert C. Dulay being then [the]
Assistant Manager for Finance, Ministry of Human Settlements, while
in the performance of their official functions, taking advantage of
their positions, acting in concert and mutually helping one another
thru manifest partiality and evident bad faith did then and there,
willfully, unlawfully and criminally, in a series of anomalous
transactions, abstract the total amount of P57.954 Million Pesos (sic),
Philippine Currency from the funds of the Ministry of Human
Settlements in the following manner:accused Conrado Benitez
approved the series of cash advances made and received by
Gilbert C. Dulay, and made it appear that the funds were
transferred to the University of Life, a private foundation
represented likewise by Gilbert C. Dulay when in truth and in
fact no such funds were transferred while Imelda R. Marcos
concurred in the series of such cash advances approved by Jose
Conrado Benitez and received by Gilbert C. Dulay and in
furtherance of the conspiracy, in order to camouflage the
aforesaid anomalous and irregular cash advances and
withdrawals, Imelda R. Marcos requested that the funds of the

KSS Program be treated as Confidential Funds; and as such

be considered as Classified Information; and that the abovenamed accused, once in possession of the said aggregate
amount of P57.954 Million Pesos (sic), misappropriated and
converted the same to their own use and benefit to the damage
and prejudice of the government in the said amount.
CONTRARY TO LAW. [Emphasis ours][2]

In Criminal Case No. 20346, respondents together with Zagala were

charged with malversation of public funds under these allegations:
That on or about April 6 to April 16, 1984 [3] and/or sometime or
subsequent thereto, in Pasig, Metro Manila, Philippines, and within
the jurisdiction of this Honorable Court, the above-named accused, all
public officers charged with the administration of public funds and as
such, accountable officers, Imelda R. Marcos being then the Minister
of Human Settlements, Jose Conrado Benitez being then the Deputy
Minister of Human Settlements[,] and Rafael Zagala being then [the]
Assistant Manager for Regional Operations and at the same time
Presidential Action Officer, while in the performance of their official
functions, taking advantage of their positions, acting in concert and
mutually helping one another thru manifest partiality and evident bad
faith[,] did then and there, willfully, unlawfully and criminally, in a
series of anomalous transactions, abstract from the funds of the
Ministry of Human Settlements the total amount of P40 Million Pesos
(sic), Philippine Currency, in the following manner: Jose Conrado
Benitez approved the cash advances made by Rafael Zagala and
Imelda R. Marcos concurred in the series of cash advances
approved by Jose Conrado Benitez in favor of Rafael G. Zagala;
and in furtherance of the conspiracy, Imelda R. Marcos in order
to camouflage the aforesaid anomalous and irregular cash
advances, requested that funds of the KSS Program be treated
as Confidential Funds; and as such be considered as
Classified Information; and the above-named accused, once
in possession of the total amount of P40 Million Pesos (sic),
misappropriated and converted the same to their own use and
benefit to the damage and prejudice of the government in the
said amount.
CONTRARY TO LAW. [Emphasis ours][4]

Only the respondents and Zagala were arraigned for the above charges to
which they pleaded not guilty; Dulay was not arraigned and remains at large. On
March 15, 2000, Zagala died, leaving the respondents to answer the charges in the
criminal cases.

After the pre-trial conference, a joint trial of the criminal cases ensued. The
prosecutions chief evidence was based on the lone testimony of Commission of
Audit (COA) Auditor Iluminada Cortez and the documentary evidence used in the
audit examination of the subject funds.[5]
The gist of COA Auditor Cortez direct testimony was summarized by the
Sandiganbaya, as follows:
In Criminal Case No. 20345
[s]he was appointed on March 31, 1986 by then COA Chairman
Teofisto Guingona, Jr. to head a team of COA auditors. Upon
examination of the documents, she declared that an amount of P100
Million Pesos (sic) from the Office of Budget and Management was
released for the KSS Project of the Ministry of Human Settlements
(MHS) by virtue of an Advice of Allotment for Calendar Year 1984.
Also, an amount of P42.4 Million Pesos (sic) was separately disbursed
for the Kabisig Program of the Ministry of Human Settlements. With
regard to the amount of P100 Million Pesos (sic) received by the
MHS, P60 Million Pesos (sic) [was] disbursed through cash advances.
Of the P60 Million Pesos (sic) in cash advances, accused Zagala
received P40 Million Pesos (sic) in four (4) disbursements while
accused Dulay received the remaining P20 Million Pesos (sic) in two
disbursements.
With respect to accused Rafael Zagala, the cash advances
consist of four (4) disbursement vouchers in the amount of P5 Million
Pesos (sic),P10 Million Pesos (sic), P10 Million Pesos (sic) and P15
Million Pesos (sic). All of these vouchers are in the name of accused
Zagala as claimant and accused Benitez as approving officer and are
accompanied by their corresponding Treasury Warrants that were
countersigned by accused Benitez and approved by accused Dulay.
In contrast, x x x a disbursement voucher in the amount
of P10 Million Pesos (sic) was drawn in favor of accused Gilbert Dulay
and approved by accused Benitez. Pursuant to this, a Treasury
Warrant was issued to the order of accused Dulay, countersigned by
accused Benitez and approved by accused Zagala. Another voucher
was drawn in favor of accused Dulay in the amount of P10 Million
Pesos (sic) and approved by accused Benitez. Again, a Treasury
Warrant was issued to the order of accused Dulay in the amount
of P10 Million Pesos (sic), which was countersigned by accused
Benitez and approved by accused Zagala.

x x x [A]ccused Marcos sent a letter to then President

Ferdinand E. Marcos requesting that the fund intended for the KSS
Project in the amount of P100 Million Pesos (sic) be deemed as
Confidential Fund.
x x x [T]he liquidation of accused Zagalas account, which was
contained in a Journal Voucher dated November 27, 1984, was
without any supporting documents. Upon this discovery, witness
requested and secured a certification from the Manager of the
National Government Audit Office to the effect that the COA did not
receive any document coming from the MHS. However, this
liquidation voucher which contained figures in the total amount ofP50
Million Pesos (sic), comprised the entire cash advances of accused
Zagala in the amount of P40 Million Pesos (sic) and the P10 Million
Pesos (sic) cash advance made by accused Dulay. Since the amount
of P10 Million Pesos (sic) was already contained in Zagalas Journal
Voucher, the witness and her team of auditors tried to locate the
remaining P10 Million Pesos (sic) and found out that accused Dulay
had liquidated the same amount.[6] (footnotes omitted)

According to COA Auditor Cortez, Zagalas cash advances were supported by

a liquidation report and supporting documents submitted to the resident
auditoreven before the P100 Million Kilusang Sariling Sikap (KSS) fund was made
confidential.[7] The witness also testified that the COA resident auditor found no
irregularity in this liquidation report.[8]
COA Auditor Cortez stated that since the P100 Million KSS fund was
classified as confidential, the liquidation report should have been submitted to the
COA Chairman who should have then issued a credit memo. No credit memo was
ever found during the audit examination of the MHS accounts. [9] COA Auditor
Cortez admitted that she did not verify whether the supporting documents of
Zagalas cash advances were sent to the COA Chairman.[10]
Respondent Marcos was prosecuted because of her participation as Minister
of the MHS, in requesting that the P100 Million KSS fund be declared confidential.
Respondent Benitez was prosecuted because he was the approving officer in these
disputed transactions.
In Criminal Case No. 20346

Regarding the Kabisig Program of the MHS, the COA team of

auditors examined the vouchers of the MHS, which upon inspection
revealed that there were at least three (3) memoranda of agreements
entered into between the MHS and University of Life (UL). With
reference to the first Memorandum of Agreement dated July 2, 1985,
an amount of P21.6 Million Pesos (sic) was transferred by the MHS to
the UL to pay for the operations of the Community Mobilization
Program and the Kabisig Program of the MHS. Accused Benitez as the
Deputy Minister of the MHS and accused Dulay as Vice President of
the UL were the signatories of this agreement. Although there is no
disbursement voucher in the records, it is admitted that a Treasury
Warrant was drawn in the sum of P21.6 Million Pesos (sic). The
second Memorandum of Agreement dated July 10, 1985 provided for a
fund transfer in the amount of P3.8 Million Pesos (sic) for the Human
Resources Development Plan of the MHS. Accordingly, a
Disbursement Voucher certified by accused Dulay and approved by
accused Benitez was drawn in the sum of P3.8 Million Pesos (sic). The
third Memorandum of Agreement in the sum of P17 Million Pesos (sic)
was granted for the acquisition of motor vehicles and other equipment
to support the Kabisig Program of the MHS. For that reason, a
Disbursement Voucher pertaining thereto accompanied by a Treasury
Warrant was drafted.
Similarly, the witness declared that although they did not
examine any of the records of the UL, the abovementioned sums were
not received by the UL based on the affidavit of the UL Comptroller
named Pablo Cueto. In the same way, an affidavit was executed by the
UL Chief Accountant named Ernesto Jiao attesting that there is no
financial transaction on record covering the purchase of motor
vehicles. Again, witness Cortez admitted that they did not examine the
books of the UL on this matter but only inquired about it from Mr.
Jiao. The affidavit of Mr. Jiao with respect to the nonexistence of the
purchases of motor vehicles was further corroborated by the affidavit
of one Romeo Sison, who was the Administrative Assistant of the
Property Section of the UL.
The respective treasury warrants representing the various
sums of P21.6 Million Pesos (sic), P17 Million Pesos (sic) and P3.8
Million Pesos (sic) were subsequently deposited with the United
Coconut Planters Bank (UCPB), Shaw Blvd. Branch, Mandaluyong,
under various accounts. Soon after, several checks were drawn out of
these funds as evidenced by the Photostat copies recovered by the
COA auditors. In the course of the testimony of the witness, she
revealed that her team of auditors classified said several checks into
different groups in accordance with the account numbers of the said
deposits.
x x x [T]he amount of P3.8 Million Pesos (sic), the same was
intended for the Human Resource Development Plan of the UL. x x x
[T]he aforesaid amount is not a cash advance but rather paid as an

expense account, which is charged directly as if services have already

been rendered. Hence, UL is not mandated to render liquidation for
the disbursement of P3.8 Million Pesos (sic).
The sums of P21.6 Million Pesos (sic) andP17 Million Pesos (sic)
were deposited under x x x the name of the UL Special Account. Out
of these deposits, the following first sequence of withdrawals of
checks[11] payable either to its order or to cash x x x reached a total
sum ofP5,690,750.93 Million Pesos (sic).
The second list of checks[12] [which] consists of numerous
[Managers] Checks x x x reached the amount of P18,416,062.15.
A third set of checks allegedly consists of nine (9) ordinary
checks and two (2) managers checks in the sum of P1,971,568.00
andP4,566,712.18[,] respectively. x x x
Moreover, [a] witness confirmed that as regards the amount
of P17 Million Pesos (sic) intended for the acquisition of motor
vehicles,P10.4 Million Pesos (sic) was spent for the purchase of some
five hundred (500) units of motorcycles while P2.1 Million Pesos (sic)
was used to procure eight (8) brand new cars. The balance of P4.5
Million Pesos (sic) was later refunded to the MHS. As regards the five
hundred (500) units of motorcycle, the Presidential Task Force
furnished the witness documents attesting to the transfers of some
two hundred seventy-one (271) units of motorcycles from the UL to
the MHS by virtue of Deed of Assignments allegedly executed on
February 17, 1986. However, of the two hundred seventy-one (271)
units of motorcycle, only one hundred ninety (190) units were covered
with complete documents. With respect to the eight (8) brand new
cars, the team of auditors did not see any registration papers.
(footnotes omitted; underscorings ours)[13]

COA Auditor Cortez admitted that the audit team did not conduct a physical
inventory of these motor vehicles; it based its report on the information given by
the Presidential Task Force.[14] She emphasized that the audit team found it highly
irregular that the motor vehicles were registered in the name of University of Life
(UL) and not in the name of MHS; and for this reason, she believed that no proper
liquidation was made of these vehicles by MHS.[15]
After COA Auditor Cortez testimony, the prosecution submitted its formal
offer of evidence and rested its case.
Subsequently, separate motions to dismiss the criminal cases, by way
of demurrers to evidence, were filed by Zagala and the respondents on

November 15, 1997, January 5, 1998 and January 28, 1998; on January 27,
1998, the prosecution filed a Manifestation stating that it was not opposing
the demurrers to evidence.[16]
The Sandiganbayans Ruling
The Sandiganbayan granted the demurrers to evidence and acquitted the
respondents in its assailed decision dated March 22, 2002. The dispositive portion
of this decision reads:
Wherefore, the Demurrers to Evidence are hereby granted.
Accused Imelda R. Marcos, Jose Conrado Benitez and Gilbert C. Dulay
are hereby acquitted of the crime of Malversation in Criminal Case
No. 20435 for insufficiency of evidence to prove their guilt beyond
reasonable doubt. Accused Imelda R. Marcos, Jose Conrado Benitez
and Rafael G. Zagala are likewise acquitted of the offense of
Malversation in Criminal Case No. 20346 for insufficiency of evidence
in proving their guilt beyond reasonable doubt.[17]

In dismissing these criminal cases, the Sandiganbayan found no evidence of

misappropriation of the subject funds in the two criminal cases considering the
unreliability and incompleteness of the audit report. [18]

The Issues
The issues for our consideration are:
1.

Whether the prosecutors actions and/or omissions in these cases

effectively deprived the State of its right to due process; and

2.

Whether the Sandiganbayan gravely abused its discretion in granting

the demurrers to evidence of the respondents.

The petitioner claims that the State was denied due process because of the
nonfeasance committed by the special prosecutor in failing to present sufficient
evidence to prove its case. It claims that the prosecutor failed to protect the
States interest in the proceedings before the Sandiganbayan. To support its
position, petitioner cites the case of Merciales v. Court of Appeals [19] where the
Court nullified the dismissal of the criminal cases due to the serious nonfeasance
committed by the public prosecutor.
The petitioner argues that the Sandiganbayan committed grave abuse of
discretion amounting to lack or excess of jurisdiction that resulted in a miscarriage
of justice prejudicial to the States interest when it took the demurrers to
evidence at face value instead of requiring the presentation of additional evidence,
taking into consideration the huge amounts of public funds involved and the
special prosecutors failure to oppose the demurrers to evidence.
The Courts Ruling
We do not find the petition meritorious.

We are called to overturn a judgment of acquittal in favor of the respondents

brought about by the dismissal, for insufficiency of evidence, of the malversation
charged in the two criminal cases. As a rule, once the court grants the demurrer,
the grant amounts to an acquittal; any further prosecution of the accused would
violate

the

constitutional

proscription

ondouble

jeopardy. [20] Notably,

the

proscription against double jeopardy only envisages appeals based on errors of

judgment, but not errors of jurisdiction. Jurisprudence recognizes two grounds

where double jeopardy will not attach, these are: (i) on the ground of grave abuse
of discretion amounting to lack or excess of jurisdiction;[21] and/or (ii) where there
is a denial of a partys due process rights.[22]
A judgment of acquittal sought to be reviewed on the basis of grave abuse of
discretion amounting to lack or excess of jurisdiction or on the ground of denial of
due process implies an invalid or otherwise void judgment. If either or both
grounds are established, the judgment of acquittal is considered void; as a void
judgment, it is legally inexistent and does not have the effect of an acquittal.
[23]

Thus, the defense of double jeopardy will not lie in such a case. [24]
Accordingly, a review of a dismissal order of the Sandiganbayan granting an

accuseds

demurrer

to

evidence may

be

done via the

special

civil

action

ofcertiorari under Rule 65, based on the narrow ground of grave abuse of
discretion amounting to lack or excess of jurisdiction. [25] Mere allegations of grave
abuse of discretion, however, are not enough to establish this ground; so also,
mere abuse of discretion is not sufficient. [26] On the petitioner lies the burden
ofdemonstrating, plainly and distinctly, all facts essential to establish its right to
a writ of certiorari.[27]
In the present case, the petitioner particularly imputes grave abuse of
discretion on the Sandiganbayan for its grant of the demurrer to evidence, without
requiring the presentation of additional evidence and despite the lack of basis for
the grant traceable to the special prosecutors conduct. The special prosecutors
conduct allegedly also violated the States due process rights.
There is grave abuse of discretion when the public respondent acts in a
capricious, whimsical, arbitrary or despotic manner, amounting to lack of
jurisdiction, in the exercise of its judgment. [28] An act is done without jurisdiction if
the public respondent does not have the legal power to act or where the
respondent, being clothed with the power to act, oversteps its authority as
determined by law,[29] or acts outside the contemplation of law. For the grant of the
present petition, the petitioner must prove, based on the existing records, action in
the above manner by the Sandiganbayan.
I.

States right to due process

In People v. Leviste,[30] we stressed that the State, like any other litigant, is
entitled to its day in court; in criminal proceedings, the public prosecutor acts for
and represents the State, and carries the burden of diligently pursuing the
criminal prosecution in a manner consistent with public interest. [31] The States
right to be heard in court rests to a large extent on whether the public prosecutor
properly undertook his duties in pursuing the criminal action for the punishment
of the guilty.[32]
The prosecutors role in the administration of justice is to lay before the
court, fairly and fully, every fact and circumstance known to him or her to exist,
without regard to whether such fact tends to establish the guilt or innocence of the
accused and without regard to any personal conviction or presumption on what the
judge may or is disposed to do. [33] The prosecutor owes the State, the court and
the accused the duty to lay before the court the pertinent facts at his disposal with
methodical and meticulous attention, clarifying contradictions and filling up gaps
and loopholes in his evidence to the end that the courts mind may not be tortured
by doubts; that the innocent may not suffer; and that the guilty may not escape
unpunished.[34] In the conduct of the criminal proceedings, the prosecutor has
ample discretionary power to control the conduct of the presentation of the
prosecution evidence, part of which is the option to choose what evidence to
present or who to call as witness.[35]
The petitioner claims that the special prosecutor failed in her duty to give
effective legal representation to enable the State to fully present its case against
the respondents, citing Merciales v. Court of Appeals [36]where we considered the
following

factual

circumstances

(1)

the

public

prosecutor

rested

the

case knowing fully well that the evidence adduced was insufficient; (2) the refusal
of the public prosecutor to present other witnesses available to take the stand; (3)
the knowledge of the trial court of the insufficiency of the prosecutions evidence
when the demurrer to evidence was filed before it; and (4) the trial courts failure
to require the presentation of additional evidence before it acted on the demurrer
to evidence. All these circumstances effectively resulted in the denial of the
States right to due process, attributable to the inaction of the public prosecutor
and/or the trial court.

Merciales was

followed

by Valencia

v.

Sandiganbayan,[37] where we

recognized the violation of the States right to due process in criminal

proceedings

because

of

sufficient

showing

that

the

special

prosecutor haphazardly handled the prosecution. In upholding the prosecutions

right to present additional evidence under the circumstances,Valencia took into
account the fact that the former special prosecutor rested his case solely on the
basis of a Joint Stipulation of Facts that was not even signed by the accused.
These two cases, to our mind, not only show the existing factual
considerations[38] that led to the conclusion that the public prosecutor willfully and
deliberately failed to perform his mandated duty to represent the States interest,
but stress as well that there must be sufficient facts on record supporting this
conclusion. In the absence of these supporting facts, no conclusion similar to
the Merciales and Valenciaoutcomes can be reached.
The requirement for supporting factual premises finds complement in the
general rule founded on public policy [39] that the negligence or mistake of a
counsel binds the client. While this rule admits of exceptions [40] (as when the gross
negligence of a counsel resulted in depriving the client of due process), the
application of the exception likewise depends on a showing of facts on record
demonstrating a clear violation of the clients due process rights.
II.

The factual premises cited in the

petition and the issue of due process

In the present case, we find that the State was not denied due process in
the proceedings before the Sandiganbayan. There was no indication that the
special prosecutor deliberately and willfully failed to present available evidence
or that other evidence could be secured. For purposes of clarity, we shall address
the instances cited in the petition as alleged proof of the denial of the States due
process rights, and our reasons in finding them inadequate.
First. The petitioner bewails the alleged lack of efforts by the special
prosecutor to ascertain the last known addresses and whereabouts, and to compel
the attendance of Pablo C. Cueto, Ernesto M. Jiao and Romeo F. Sison, UL officers

who executed affidavits in connection with the alleged anomalous fund transfers
from MHS to UL.
The special prosecutor likewise allegedly did not present the records of the
UL to show that the sums under the Memoranda of Agreement were not received
by UL (based on the affidavit of UL Comptroller Cueto) and that no financial
transactions really took place for the purchase of the motor vehicles (based on the
affidavit of UL Chief Accountant Jiao, as corroborated by the affidavit of UL
Administrative Assistant Sison).
We note that, other than making a claim that these instances demonstrate
the serious nonfeasance by the special prosecutor, the petitioner failed to offer
any explanation showing how these instances deprived the State of due process.
An examination of the records shows that the affidavits of Cueto, [41] Jiao and Sison
surfaced early on to prove the alleged anomalous fund transfers from MHS to UL.
The records further show that during the hearing of December 5, 1995 - when the
special prosecutor was asked by the presiding judge what she intended to do with
these affidavits the special prosecutor replied that she planned to present Jiao
and Cueto who were the chief accountant and the designated comptroller,
respectively, of UL.[42] The same records, however, show that, indeed, an attempt
had been made to bring these prospective witnesses to court; as early as April 20,
1994, subpoenas had been issued to these three individuals and these were all
returned unserved because the subjects had RESIGNED from the service
sometime in 1992, and their present whereabouts were unknown. [43]
We consider at this point that these individuals executed their respective
affidavits on the alleged anomalous transactions between MHS and UL sometime
in 1986; from that period on, and until the actual criminal prosecution started in
1994, a considerable time had elapsed bringing undesirable changes one of
which was the disappearance of these prospective witnesses.
Significantly, no evidence exists or has been submitted showing that the
special prosecutor willfully and deliberately opted not to present these
individuals. The petitioner also failed to show that the whereabouts of these
individuals could have been located by the exercise of reasonable diligence in
order to prove that the special prosecutor had been remiss in performing her

duties. We can in fact deduce from the allegations in the petition that even at
present, the petitioner has not and cannot ascertain the whereabouts of these
prospective witnesses.
Further, the records show that the affidavits of these individuals (who
denied the transfer of the funds in the amounts of P21.6 Million, P3.8 Million
and P17 Million from MHS to UL) were refuted by contrary evidence of the
prosecution itself. The records indicate that the special prosecutor presented
treasury warrants and disbursement vouchers issued in the name of UL, bearing
the respective amounts for transactions between MHS and UL. [44]
The special prosecutor admitted that the audit team failed to examine the
records of UL to support the prosecutions allegation of an anomalous fund
transfer. COA Auditor Cortez admitted, too, that the amounts (P21.6 Million
and P3.8 Million) were transferred[45] to UL[46] and that a portion of the amount
of P17 Million, i.e., P12.5 Million, was used to purchase 500 motorcycles and
eight cars, while the remaining amount of P4.5 Million was refunded by UL to
MHS.[47]
Under these facts, and in the absence of indicators too that other persons
could have testified, we cannot give weight to the petitioners allegation that no
efforts were exerted by the special prosecutor. On the contrary, we find under the
circumstances that the special prosecutor exerted reasonable efforts to present
these individuals in court, but failed to do so for reasons beyond her control. One
of these reasons appears to be the simple lack of concrete evidence of
irregularities in the respondents handling of the MHS funds.
Second. The petitioner alleged that the special prosecutor failed to present
the resident auditor to testify on the physical inventory of the vehicles, or to
produce documents showing that an inspection was conducted on the vehicles.
The prosecutions theory, as the records would show, was to prove that there
had been misappropriation of funds since the motor vehicles were registered in
ULs name instead of the MHS.[48]In this regard, the special prosecutor presented
COA Auditor Cortez who testified that the audit team did not assail the existence of
the motor vehicles and she also did not dispute that the amount of P12.5 Million

(out ofP17 Million) was used to purchase 500 motorcycles and eight cars. The
witness stated that the audit team was more concerned with the documentation of
the disbursements made rather than the physical liquidation (inventory) of the
funds.[49] The witness further explained that it was the Presidential Task Force
which had the duty to keep track of the existence of the motor vehicles. [50] She
reiterated that the audit team was only questioning the registration of the vehicles;
it never doubted that the vehicles were purchased.[51]
More importantly, COA Auditor Cortez stated that at the time the team made
the audit examination in April 1986, 500 registration papers supported the
purchase of these motorcycles;[52] none of the audit team at that time found this
documentation inadequate or anomalous.[53] The witness also stated that the
Presidential Task Force gave the audit team a folder showing that P10.4 Million
was used to purchase the motorcycles and P2.1 Million was used to purchase the
cars.[54] Checks were presented indicating the dates when the purchase of some of
the motor vehicles was made.[55] COA Auditor Cortez also testified that 270 of
these motorcycles had already been transferred by UL in the name of MHS. [56] She
stated that all the documents are in order except for the registration of the motor
vehicles in the name of UL.[57]
Given these admissions regarding the existence of the motor vehicles, the
presentation of the resident auditor who would simply testify on the physical
inventory of the motor vehicles, or that an inspection had been conducted
thereon, was unnecessary. Her presentation in court would not materially
reinforce the prosecutions case; thus, the omission to present her did not deprive
the State of due process. To repeat, the prosecutions theory of misappropriation
was not based on the fact that the funds were not used to purchase motor
vehicles, in which case, the testimony of the resident auditor would have had
material implications. Rather, the prosecutions theory, as established by the
records, shows that the imputed misappropriation stemmed from the registration
of the motor vehicles in ULs name an administrative lapse in light of the
relationship of UL to MHS simply as an implementing agency. [58]
Third. Despite the Sandiganbayans warning on June 7, 1996 that the
various checks covering the cash advances for P40 Million were photostatic

copies, the special prosecutor still failed to present the certified copies from the
legal custodian of these commercial documents.
The petitioner faults the special prosecutor for failing to present the original
copies of the checks drawn out of the P21.6 Million and P17 Million combination
account from the United Coconut Planters Bank (UCPB), as well as the P3.8 Million
expense account with the same bank. The presentation would have allegedly
proven the misappropriation of these amounts.[59]
Records show that instead of presenting the original copies of these checks,
the special prosecutor tried to establish, through the testimony of COA Auditor
Cortez, that these checks were photocopied from the original checks in the
possession of UCPB, which were obtained through the assistance of the UL
management.[60] Thus, while the originals of these checks were not presented,
COA Auditor Cortez testified that the photostatic copies were furnished by the
UCPB which had custody of the original checks. [61] Further, the witness also
testified that at the time she made the examination of these documents, the entries
thereon were legible.[62] She also presented a summary schedule of the various
micro film prints of the UCPB checks that she examined.[63]
At any rate, we observe that the defense never objected[64] to the submission
of the photostatic copies of the UCPB checks as evidence, thus making the
production of the originals dispensable. This was our view in Estrada v. Hon.
Desierto[65] where we ruled that the production of the original may be dispensed
with if the opponent does not dispute the contents of the document and no other
useful purpose would be served by requiring its production. In such case, we ruled
that secondary evidence of the content of the writing would be received in
evidence if no objection was made to its reception. [66] We note, too, that in addition
to the defenses failure to object to the presentation of photostatic copies of the
checks, the petitioner failed to show that the presentation of the originals would
serve a useful purpose, pursuant to our ruling in Estrada.
We reiterate in this regard our earlier observation that other than
enumerating instances in the petition where the State was allegedly deprived of
due process in the principal case, no explanation was ever offered by the petitioner

on how each instance resulted in the deprivation of the States right to due process
warranting the annulment of the presently assailed Sandiganbayan ruling.
Fourth. The petitioner faults the special prosecutor for making no effort to
produce the final audit report dated June 6, 1986, referred to in the last
paragraph of the Affidavit[67] dated June 10, 1987 of COA Auditor Cortez.
The records show that although this final audit report dated June 6, 1986
was not presented in court, the prosecution questioned her on the contents of this
audit report since she had a hand in its preparation. COA Auditor Cortez directly
testified on the audit teams findings and examination, which took three hearings
to complete; the cross-examination of COA Auditor Cortez took two hearings to
complete; and subsequently, the Sandiganbayan ordered that a clarificatory
hearing be held with respect to COA Auditor Cortez testimony. In addition to her
testimony, the special prosecutor did present, too, other pieces of documentary
evidence (from which the final audit report was based) before the Sandiganbayan.
Under these circumstances, we are reluctant to consider the special
prosecutors omission as significant in the petitioners allegation of serious
nonfeasance or misfeasance.
Fifth. The petitioner presents the special prosecutors failure to oppose the
demurrer to evidence as its last point and as basis for the applicability of
theMerciales ruling.
The failure to oppose per se cannot be a ground for grave abuse of
discretion. The real issue, to our mind, is whether the special prosecutor had basis
to act as she did. As the point-by-point presentation above shows, the dismissal of
the criminal cases cannot be attributed to any grossly negligent handling by the
special prosecutor. To begin with, the prosecutions case suffered from lack of
witnesses because, among others, of the time that elapsed between the act
charged and the start of the actual prosecution in 1994; and from lack of sufficient
preparatory investigation conducted, resulting in insufficiency of its evidence as a
whole. In sum, in the absence of circumstances approximating the facts
of Merciales and Valencia, which circumstances the petitioner failed to show, no

basis exists to conclude that the special prosecutor grossly erred in failing to
oppose the demurrer to evidence.
Neither are we persuaded by the petitioners position that the special
prosecutors Manifestation of non-opposition to the demurrer needed to be
submitted to, and approved by, her superiors.[68] The petitioners argument
assumes that the special prosecutor lacked the necessary authority from her
superiors when she filed her non-opposition to the demurrers to evidence. This
starting

assumption,

in

our

view,

is

incorrect. The

correct

premise

and

presumption, since the special prosecutor is a State delegate, is that she had all
incidental and necessary powers to prosecute the case in the States behalf so that
her actions as a State delegate bound the State. We do not believe that the State
can have an unbridled discretion to disown the acts of its delegates at will unless it
can clearly establish that its agent had been grossly negligent [69]or was guilty of
collusion with the accused or other interested party, [70] resulting in the States
deprivation of its due process rights as client-principal.
Gross negligence exists where there is want, or absence of or failure to
exercise slight care or diligence, or the entire absence of care.

It involves a

thoughtless disregard of consequences without exerting any effort to avoid them.

[71]

As the above discussions show, the State failed to clearly establish the gross

negligence on the part of the special prosecutor (or to show or even allege that
there was collusion in the principal case between the special prosecutor and the
respondents) that resulted in depriving the petitioner of its due process rights;
and, consequently prevent the application of the rule on double jeopardy. If at all,
what the records emphasized, as previously discussed, is the weakness of
the prosecutions evidence as a whole rather than the gross negligence of
the special prosecutor. In these lights, we must reject the petitioners position.
III.

Grave abuse of discretion

Under the Rules on Criminal Procedure, the Sandiganbayan is under no

obligation to require the parties to present additional evidence when a demurrer to

evidence is filed. In a criminal proceeding, the burden lies with the prosecution to
prove that the accused committed the crime charged beyond reasonable doubt, as
the constitutional presumption of innocence ordinarily stands in favor of the

accused. Whether the Sandiganbayan will intervene in the course of the

prosecution of the case is within its exclusive jurisdiction, competence and
discretion, provided that its actions do not result in the impairment of the
substantial rights of the accused, or of the right of the State and of the offended
party to due process of law.[72]
A discussion of the violation of the States right to due process in the present
case, however, is intimately linked with the gross negligence or the fraudulent
action of the States agent. The absence of this circumstance in the present case
cannot but have a negative impact on how the petitioner would want the Court to
view the Sandiganbayans actuation and exercise of discretion.
The court, in the exercise of its sound discretion,may require or allow the
prosecution to present additional evidence (at its own initiative or upon a motion)
after a demurrer to evidence is filed. This exercise, however, must be for good
reasons and in the paramount interest of justice. [73] As mentioned, the court may
require the presentation of further evidence if its action on the demurrer to
evidence would patently result in the denial of due process; it may also allow the
presentation of additional evidence if it is newly discovered, if it was omitted
through inadvertence or mistake, or if it is intended to correct the evidence
previously offered.[74]
In this case, we cannot attribute grave abuse of discretion to the
Sandiganbayan when it exercised restraint and did not require the presentation of
additional evidence, given the clear weakness of the case at that point. We note
that under the obtaining circumstances, the petitioner failed to show what and
how additional available evidence could have helped and the paramount interest of
justice sought to be achieved. It does not appear that pieces of evidence had been
omitted through inadvertence or mistake, or that these pieces of evidence are
intended to correctevidence previously offered. More importantly, it does not
appear that these contemplated additional pieces of evidence (which the special
prosecutor allegedly should have presented) were ever present and available. For
instance, at no point in the records did the petitioner unequivocally state that it
could present the three UL officers, Cueto, Jiao and Sison. The petitioner also
failed to demonstrate its possession of or access to these documents (such as
the final audit report) to support the prosecutions charges the proof that the

State had been deprived of due process due to the special prosecutors alleged
inaction.

IIIa. Grave abuse of discretion and the demurrers to evidence

In Criminal Case No. 20345 that charged conspiracy for abstracting P57.59
Million out of theP100 Million KSS fund, the prosecutions evidence showed
that P60 Million of this fund was disbursed by respondent Benitez, as approving
officer, in the nature of cash advances to Zagala (who received a total amount
of P40 Million) and Dulay (who received P20 Million).
To prove the misappropriation, the prosecution tried to establish that there
was an irregularity in the procedure of liquidating these amounts on the basis of
COA Auditor Cortez testimony that the liquidation should have been made before
the COA Chairman (not to the resident auditor of the MHS) because these funds
were confidential.[75]
Quite evident from the prosecutions position is that it did not dispute
whether a liquidation had been made of the whole amount of P60 Million; rather,
what it disputed was the identity of the person before whom the liquidation should
have been made. Before the directive of former President Marcos was made which
declared the KSS funds (of which the P60 Million formed part) to be confidential,
the liquidation of this amount must be made before the resident auditor of the
MHS. With the issuance of the directive, liquidation should have been made to the
COA Chairman who should have then issued a credit memo to prove proper
liquidation.[76]
To justify conviction for malversation of public funds, the prosecution has to
prove that the accused received public funds or property that they could not
account for, or was not in their possession and which they could not give a
reasonable excuse for the disappearance of such public funds or property. [77]The
prosecution failed in this task as the subject funds were liquidated and were not
shown to have been converted for personal use by the respondents.

The records reveal that the amounts of P50 Million and P10 Million were
liquidated by Zagala and Dulay, respectively.[78] On Zagalas part, the liquidation
of P50 Million (P10 Million of which was the cash advance given to Dulay) was
made to resident auditor Flerida V. Creencia on September 25, 1984 or before the
directive of former President Marcos (declaring the said funds confidential) was
issued on November 7, 1984.[79] Hence, at the time the liquidation of the amount
was made, the liquidation report submitted to the resident auditor was the proper
procedure of liquidation. Respondent Benitez, for his part, submitted Journal
Voucher No. 4350208 dated November 27, 1984 stating, among others, that as
early as June 22, 1984, the supporting papers for the liquidation of the P50 Million
had already been submitted to the COA.[80]
Moreover, even if the liquidation should have been made in compliance with
the former Presidents directive, the prosecutions evidence did not sufficiently
establish the non-existence of a credit memo. As admitted by COA Auditor Cortez,
certain documents they were looking for during the audit examination (including
the credit memo) could no longer be located after the (EDSA) revolution. [81] She
further declared that she did not know if COA Chairman Alfredo Tantingco
complied with the required audit examination of the liquidated P60 Million.[82]
In Criminal Case No. 20346, respondents are sought to be held liable under
the

criminal

information

for

converting P40

Million

(subdivided

to P21.6

Million, P3.8 Million and P17 Million or a total ofP42.4 Million) to their own use
given that these funds were never allegedly transferred to UL, the intended
beneficiary.
Records

show

that

the

disputed

amount

allegedly

malversed

was

actually P37,757,364.57 Million because of evidence that an amount of P4.5

Million was returned by respondent Benitez. [83] As previously mentioned, the
documentary evidence adduced reveals the existence of treasury warrants and
disbursement vouchers issued in the name of UL bearing the amounts of P21.6
Million, P3.8 Million and P17 Million.[84] Documentary evidence also exists
showing that these amounts were deposited in the UCPB and drawn afterwards
by means of checks issued for purchases intended for the Kabisig Program of the
MHS.

Except for the appropriated P17 Million, the petitioners evidence does not
sufficiently show how the amounts of P21.6 Million and P3.8 Million were
converted to the personal use by the respondents. The testimony of COA Auditor
Cortez revealed that documents showing the disbursements of the subject funds
were in possession of one Flordeliz Gomez as the Records Custodian and
Secretary of UL. For undisclosed reasons, however, COA Auditor Cortez failed to
communicate with Gomez but merely relied on the documents and checks, which
the audit team already had in its possession.[85]
This omission, in our view, raises doubts on the completeness and accuracy
of the audit examination pertaining to the P21.6 Million and P3.8 Million funds.
Such doubt was further strengthened by COA Auditor Cortez testimony showing
that P3.8 Million was listed in the books of the MHS as a direct expense account
to which UL is not required to render an accounting or liquidation. [86] Also, she
admitted that the amount of P21.6 Million was contained in a liquidation voucher
submitted by Dulay, which was included in the transmittal letter signed by the
respondents to the COA and accompanied by a performance report on
the Kabisig Program. This performance report showed that the total amount
ofP21.6 Million was exhausted in the Kabisig Program.[87]
With respect to the P17 Million, evidence adduced showed that 270 units of
the motorcycles have already been transferred in the name of MHS by UL. [88] There
is also evidence that the audit team initially found nothing irregular in the
documentation of the 500 motorcycles during the audit examination conducted in
April 1986; the same goes for the eight cars purchased.
Under

the

circumstances,

we

agree

with

the

Sandiganbayan

that

registration of these vehicles in ULs name alone did not constitute malversation in
the absence of proof, based on the available evidence, to establish that the
respondents benefited from the registration of these motor vehicles in ULs name,
or that these motor vehicles were converted by the respondents to their own
personal use.[89] In the end, the prosecutions evidence tended to prove that the
subject funds were actually used for their intended purpose.
IV.

Conclusion

In dismissing this petition, we observe that the criminal cases might have
been prompted by reasons other than injury to government interest as
the primaryconcern.[90] These other reasons might have triggered the hastiness
that attended the conduct of audit examinations which resulted in evidentiary gaps
in the prosecutions case to hold the respondents liable for the crime of
malversation.[91] As matters now stand, no sufficient evidence exists to support the
charges of malversation against the respondents. Hence, the Sandiganbayan did
not commit any grave abuse of discretion amounting to lack or excess of
jurisdiction when it granted the demurrers to evidence and, consequently,
dismissed the criminal cases against the respondents.
We take this opportunity to remind the prosecution that this Court is as
much a judge in behalf of an accused-defendant whose liberty is in jeopardy, as it is
the judge in behalf of the State, for the purpose of safeguarding the interests of
society.[92] Therefore, unless the petitioner demonstrates, through evidence and
records, that its case falls within the narrow exceptions from the criminal
protection of double jeopardy, the Court has no recourse but to apply the finalityof-acquittal rule.
WHEREFORE, premises considered, we hereby DENY the petition.
SO ORDERED.

TAGLAY V DARAY
678 SCRA 640 (2013)
ISA PATO WALA AKO MAKUHA FULL CASE

C. JURISDICTIONAS DETERMINED BY THE PRESENCE OF ESSENTIAL

ELEMENTS
I. JURISDICTION OVER THE PERSON OR JURISDICTION IN PERSONAM
1. COVIL ACTIONS
I. JURISDICTION OVER THE PLAINTIFF/PETITIONER

Republic
SUPREME
Manila

of

the

Philippines
COURT

FIRST DIVISION
G.R. No. 156759

June 5, 2013

ALLEN A. MACASAET, NICOLAS V. QUIJANO, JR., ISAIAS ALBANO, LILY

REYES, JANET BAY, JESUS R. GALANG, AND RANDY HAGOS, Petitioners,
vs.
FRANCISCO R. CO, JR., Respondent.
DECISION
BERSAMIN, J.:
To warrant the substituted service of the summons and copy of the complaint, the
serving officer must first attempt to effect the same upon the defendant in person.
Only after the attempt at personal service has become futile or impossible within a
reasonable time may the officer resort to substituted service.
The Case
Petitioners defendants in a suit for libel brought by respondent appeal the
decision promulgated on March 8, 2002 1 and the resolution promulgated on
January 13, 2003,2 whereby the Court of Appeals (CA) respectively dismissed their
petition for certiorari, prohibition and mandamus and denied their motion for
reconsideration. Thereby, the CA upheld the order the Regional Trial Court (RTC),
Branch 51, in Manila had issued on March 12, 2001 denying their motion to
dismiss because the substituted service of the summons and copies of the
complaint on each of them had been valid and effective. 3
Antecedents
On July 3, 2000, respondent, a retired police officer assigned at the Western Police
District in Manila, sued Abante Tonite, a daily tabloid of general circulation; its
Publisher Allen A. Macasaet; its Managing Director Nicolas V. Quijano; its
Circulation Manager Isaias Albano; its Editors Janet Bay, Jesus R. Galang and
Randy Hagos; and its Columnist/Reporter Lily Reyes (petitioners), claiming
damages because of an allegedly libelous article petitioners published in the June
6, 2000 issue of Abante Tonite. The suit, docketed as Civil Case No. 00-97907, was
raffled to Branch 51 of the RTC, which in due course issued summons to be served
on each defendant, including Abante Tonite, at their business address at Monica
Publishing Corporation, 301-305 3rd Floor, BF Condominium Building, Solana
Street corner A. Soriano Street, Intramuros, Manila.4
In the morning of September 18, 2000, RTC Sheriff Raul Medina proceeded to the
stated address to effect the personal service of the summons on the defendants.

But his efforts to personally serve each defendant in the address were futile
because the defendants were then out of the office and unavailable. He returned in
the afternoon of that day to make a second attempt at serving the summons, but he
was informed that petitioners were still out of the office. He decided to resort to
substituted service of the summons, and explained why in his sheriffs return dated
September 22, 2005,5 to wit:
SHERIFFS RETURN
This is to certify that on September 18, 2000, I caused the service of summons
together with copies of complaint and its annexes attached thereto, upon the
following:
1. Defendant Allen A. Macasaet, President/Publisher of defendant
AbanteTonite, at Monica Publishing Corporation, Rooms 301-305 3rd Floor,
BF Condominium Building, Solana corner A. Soriano Streets, Intramuros,
Manila, thru his secretary Lu-Ann Quijano, a person of sufficient age and
discretion working therein, who signed to acknowledge receipt thereof. That
effort (sic) to serve the said summons personally upon said defendant were
made, but the same were ineffectual and unavailing on the ground that per
information of Ms. Quijano said defendant is always out and not available,
thus, substituted service was applied;
2. Defendant Nicolas V. Quijano, at the same address, thru his wife Lu-Ann
Quijano, who signed to acknowledge receipt thereof. That effort (sic) to
serve the said summons personally upon said defendant were made, but the
same were ineffectual and unavailing on the ground that per information of
(sic) his wife said defendant is always out and not available, thus,
substituted service was applied;
3. Defendants Isaias Albano, Janet Bay, Jesus R. Galang, Randy Hagos and
Lily Reyes, at the same address, thru Rene Esleta, Editorial Assistant of
defendant AbanteTonite, a person of sufficient age and discretion working
therein who signed to acknowledge receipt thereof. That effort (sic) to serve
the said summons personally upon said defendants were made, but the same
were ineffectual and unavailing on the ground that per information of (sic)
Mr. Esleta said defendants is (sic) always roving outside and gathering news,
thus, substituted service was applied.
Original copy of summons is therefore, respectfully returned duly served.
Manila, September 22, 2000.
On October 3, 2000, petitioners moved for the dismissal of the complaint through
counsels special appearance in their behalf, alleging lack of jurisdiction over their
persons because of the invalid and ineffectual substituted service of summons.
They contended that the sheriff had made no prior attempt to serve the summons
personally on each of them in accordance with Section 6 and Section 7, Rule 14 of
the Rules of Court. They further moved to drop Abante Tonite as a defendant by

virtue of its being neither a natural nor a juridical person that could be impleaded
as a party in a civil action.
At the hearing of petitioners motion to dismiss, Medina testified that he had gone
to the office address of petitioners in the morning of September 18, 2000 to
personally serve the summons on each defendant; that petitioners were out of the
office at the time; that he had returned in the afternoon of the same day to again
attempt to serve on each defendant personally but his attempt had still proved
futile because all of petitioners were still out of the office; that some competent
persons working in petitioners office had informed him that Macasaet and Quijano
were always out and unavailable, and that Albano, Bay, Galang, Hagos and Reyes
were always out roving to gather news; and that he had then resorted to
substituted service upon realizing the impossibility of his finding petitioners in
person within a reasonable time.
On March 12, 2001, the RTC denied the motion to dismiss, and directed petitioners
to file their answers to the complaint within the remaining period allowed by the
Rules of Court,6 relevantly stating:
Records show that the summonses were served upon Allen A. Macasaet,
President/Publisher of defendant AbanteTonite, through LuAnn Quijano; upon
defendants Isaias Albano, Janet Bay, Jesus R. Galang, Randy Hagos and Lily Reyes,
through Rene Esleta, Editorial Assistant of defendant Abante Tonite (p. 12,
records). It is apparent in the Sheriffs Return that on several occasions, efforts to
served (sic) the summons personally upon all the defendants were ineffectual as
they were always out and unavailable, so the Sheriff served the summons by
substituted service.
Considering that summonses cannot be served within a reasonable time to the
persons of all the defendants, hence substituted service of summonses was validly
applied. Secretary of the President who is duly authorized to receive such
document, the wife of the defendant and the Editorial Assistant of the defendant,
were considered competent persons with sufficient discretion to realize the
importance of the legal papers served upon them and to relay the same to the
defendants named therein (Sec. 7, Rule 14, 1997 Rules of Civil Procedure).
WHEREFORE, in view of the foregoing, the Motion to Dismiss is hereby DENIED
for lack of merit..
Accordingly, defendants are directed to file their Answers to the complaint within
the period still open to them, pursuant to the rules.
SO ORDERED.
Petitioners filed a motion for reconsideration, asserting that the sheriff had
immediately resorted to substituted service of the summons upon being informed
that they were not around to personally receive the summons, and that Abante
Tonite, being neither a natural nor a juridical person, could not be made a party in
the action.

On June 29, 2001, the RTC denied petitioners motion for reconsideration. 7 It
stated in respect of the service of summons, as follows:
The allegations of the defendants that the Sheriff immediately resorted to
substituted service of summons upon them when he was informed that they were
not around to personally receive the same is untenable. During the hearing of the
herein motion, Sheriff Raul Medina of this Branch of the Court testified that on
September 18, 2000 in the morning, he went to the office address of the
defendants to personally serve summons upon them but they were out. So he went
back to serve said summons upon the defendants in the afternoon of the same day,
but then again he was informed that the defendants were out and unavailable, and
that they were always out because they were roving around to gather news.
Because of that information and because of the nature of the work of the
defendants that they are always on field, so the sheriff resorted to substituted
service of summons. There was substantial compliance with the rules, considering
the difficulty to serve the summons personally to them because of the nature of
their job which compels them to be always out and unavailable. Additional matters
regarding the service of summons upon defendants were sufficiently discussed in
the Order of this Court dated March 12, 2001.
Regarding the impleading of Abante Tonite as defendant, the RTC held, viz:
"Abante Tonite" is a daily tabloid of general circulation. People all over the country
could buy a copy of "Abante Tonite" and read it, hence, it is for public consumption.
The persons who organized said publication obviously derived profit from it. The
information written on the said newspaper will affect the person, natural as well as
juridical, who was stated or implicated in the news. All of these facts imply that
"Abante Tonite" falls within the provision of Art. 44 (2 or 3), New Civil Code.
Assuming arguendo that "Abante Tonite" is not registered with the Securities and
Exchange Commission, it is deemed a corporation by estoppels considering that it
possesses attributes of a juridical person, otherwise it cannot be held liable for
damages and injuries it may inflict to other persons.
Undaunted, petitioners brought a petition for certiorari, prohibition, mandamusin
the CA to nullify the orders of the RTC dated March 12, 2001 and June 29, 2001.
Ruling of the CA
On March 8, 2002, the CA promulgated its questioned decision, 8 dismissing the
petition for certiorari, prohibition, mandamus, to wit:
We find petitioners argument without merit. The rule is that certiorari will prosper
only if there is a showing of grave abuse of discretion or an act without or in
excess of jurisdiction committed by the respondent Judge. A judicious reading of
the questioned orders of respondent Judge would show that the same were not
issued in a capricious or whimsical exercise of judgment. There are factual bases
and legal justification for the assailed orders. From the Return, the sheriff certified
that "effort to serve the summons personally xxx were made, but the same were
ineffectual and unavailing xxx.

and upholding the trial courts finding that there was a substantial compliance with
the rules that allowed the substituted service.
Furthermore, the CA ruled:
Anent the issue raised by petitioners that "Abante Tonite is neither a natural or
juridical person who may be a party in a civil case," and therefore the case against
it must be dismissed and/or dropped, is untenable.
The respondent Judge, in denying petitioners motion for reconsideration, held
that:
xxxx
Abante Tonites newspapers are circulated nationwide, showing ostensibly its
being a corporate entity, thus the doctrine of corporation by estoppel may
appropriately apply.
An unincorporated association, which represents itself to be a corporation, will be
estopped from denying its corporate capacity in a suit against it by a third person
who relies in good faith on such representation.
There being no grave abuse of discretion committed by the respondent Judge in
the exercise of his jurisdiction, the relief of prohibition is also unavailable.
WHEREFORE, the instant petition is DENIED. The assailed Orders of respondent
Judge are AFFIRMED.
SO ORDERED.9
On January 13, 2003, the CA denied petitioners motion for reconsideration. 10
Issues
Petitioners hereby submit that:
1. THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN
HOLDING THAT THE TRIAL COURT ACQUIRED JURISDICTION OVER
HEREIN PETITIONERS.
2. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR BY
SUSTAINING THE INCLUSION OF ABANTE TONITE AS PARTY IN THE
INSTANT CASE.11
Ruling
The petition for review lacks merit.

Jurisdiction over the person, or jurisdiction in personam the power of the court to
render a personal judgment or to subject the parties in a particular action to the
judgment and other rulings rendered in the action is an element of due process
that is essential in all actions, civil as well as criminal, except in actions in rem or
quasi in rem. Jurisdiction over the defendantin an action in rem or quasi in rem is
not required, and the court acquires jurisdiction over an actionas long as it
acquires jurisdiction over the resthat is thesubject matter of the action. The
purpose of summons in such action is not the acquisition of jurisdiction over the
defendant but mainly to satisfy the constitutional requirement of due process. 12
The distinctions that need to be perceived between an action in personam, on the
one hand, and an action inrem or quasi in rem, on the other hand, are aptly
delineated in Domagas v. Jensen,13 thusly:
The settled rule is that the aim and object of an action determine its character.
Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is
determined by its nature and purpose, and by these only. A proceeding in
personam is a proceeding to enforce personal rights and obligations brought
against the person and is based on the jurisdiction of the person, although it may
involve his right to, or the exercise of ownership of, specific property, or seek to
compel him to control or dispose of it in accordance with the mandate of the court.
The purpose of a proceeding in personam is to impose, through the judgment of a
court, some responsibility or liability directly upon the person of the defendant. Of
this character are suits to compel a defendant to specifically perform some act or
actions to fasten a pecuniary liability on him. An action in personam is said to be
one which has for its object a judgment against the person, as distinguished from a
judgment against the property to determine its state. It has been held that an
action in personam is a proceeding to enforce personal rights or obligations; such
action is brought against the person. As far as suits for injunctive relief are
concerned, it is well-settled that it is an injunctive act in personam. In Combs v.
Combs, the appellate court held that proceedings to enforce personal rights and
obligations and in which personal judgments are rendered adjusting the rights and
obligations between the affected parties is in personam. Actions for recovery of
real property are in personam.
On the other hand, a proceeding quasi in rem is one brought against persons
seeking to subject the property of such persons to the discharge of the claims
assailed. In an action quasi in rem, an individual is named as defendant and the
purpose of the proceeding is to subject his interests therein to the obligation or
loan burdening the property. Actions quasi in rem deal with the status, ownership
or liability of a particular property but which are intended to operate on these
questions only as between the particular parties to the proceedings and not to
ascertain or cut off the rights or interests of all possible claimants. The judgments
therein are binding only upon the parties who joined in the action.
As a rule, Philippine courts cannot try any case against a defendant who does not
reside and is not found in the Philippines because of the impossibility of acquiring
jurisdiction over his person unless he voluntarily appears in court; but when the
case is an action in rem or quasi in rem enumerated in Section 15, Rule 14 of the
Rules of Court, Philippine courts have jurisdiction to hear and decide the case

because they have jurisdiction over the res, and jurisdiction over the person of the
non-resident defendant is not essential. In the latter instance, extraterritorial
service of summons can be made upon the defendant, and such extraterritorial
service of summons is not for the purpose of vesting the court with jurisdiction, but
for the purpose of complying with the requirements of fair play or due process, so
that the defendant will be informed of the pendency of the action against him and
the possibility that property in the Philippines belonging to him or in which he has
an interest may be subjected to a judgment in favor of the plaintiff, and he can
thereby take steps to protect his interest if he is so minded. On the other hand,
when the defendant in an action in personam does not reside and is not found in
the Philippines, our courts cannot try the case against him because of the
impossibility of acquiring jurisdiction over his person unless he voluntarily appears
in court.14
As the initiating party, the plaintiff in a civil action voluntarily submits himself to
the jurisdiction of the court by the act of filing the initiatory pleading. As to the
defendant, the court acquires jurisdiction over his person either by the proper
service of the summons, or by a voluntary appearance in the action. 15
Upon the filing of the complaint and the payment of the requisite legal fees, the
clerk of court forthwith issues the corresponding summons to the defendant. 16 The
summons is directed to the defendant and signed by the clerk of court under seal.
It contains the name of the court and the names of the parties to the action; a
direction that the defendant answers within the time fixed by the Rules of Court;
and a notice that unless the defendant so answers, the plaintiff will take judgment
by default and may be granted the relief applied for. 17 To be attached to the
original copy of the summons and all copies thereof is a copy of the complaint (and
its attachments, if any) and the order, if any, for the appointment of a guardian ad
litem.18
The significance of the proper service of the summons on the defendant in an
action in personam cannot be overemphasized. The service of the summons fulfills
two fundamental objectives, namely: (a) to vest in the court jurisdiction over the
person of the defendant; and (b) to afford to the defendant the opportunity to be
heard on the claim brought against him. 19 As to the former, when jurisdiction in
personam is not acquired in a civil action through the proper service of the
summons or upon a valid waiver of such proper service, the ensuing trial and
judgment are void.20 If the defendant knowingly does an act inconsistent with the
right to object to the lack of personal jurisdiction as to him, like voluntarily
appearing in the action, he is deemed to have submitted himself to the jurisdiction
of the court.21 As to the latter, the essence of due process lies in the reasonable
opportunity to be heard and to submit any evidence the defendant may have in
support of his defense. With the proper service of the summons being intended to
afford to him the opportunity to be heard on the claim against him, he may also
waive the process.21 In other words, compliance with the rules regarding the
service of the summons is as much an issue of due process as it is of jurisdiction. 23
Under the Rules of Court, the service of the summons should firstly be effected on
the defendant himself whenever practicable. Such personal service consists either
in handing a copy of the summons to the defendant in person, or, if the defendant

refuses to receive and sign for it, in tendering it to him. 24 The rule on personal
service is to be rigidly enforced in order to ensure the realization of the two
fundamental objectives earlier mentioned. If, for justifiable reasons, the defendant
cannot be served in person within a reasonable time, the service of the summons
may then be effected either (a) by leaving a copy of the summons at his residence
with some person of suitable age and discretion then residing therein, or (b) by
leaving the copy at his office or regular place of business with some competent
person in charge thereof.25 The latter mode of service is known as substituted
service because the service of the summons on the defendant is made through his
substitute.
It is no longer debatable that the statutory requirements of substituted service
must be followed strictly, faithfully and fully, and any substituted service other than
that authorized by statute is considered ineffective. 26 This is because substituted
service, being in derogation of the usual method of service, is extraordinary in
character and may be used only as prescribed and in the circumstances authorized
by statute.27 Only when the defendant cannot be served personally within a
reasonable time may substituted service be resorted to. Hence, the impossibility of
prompt personal service should be shown by stating the efforts made to find the
defendant himself and the fact that such efforts failed, which statement should be
found in the proof of service or sheriffs return. 28 Nonetheless, the requisite
showing of the impossibility of prompt personal service as basis for resorting to
substituted service may be waived by the defendant either expressly or impliedly. 29
There is no question that Sheriff Medina twice attempted to serve the summons
upon each of petitioners in person at their office address, the first in the morning
of September 18, 2000 and the second in the afternoon of the same date. Each
attempt failed because Macasaet and Quijano were "always out and not available"
and the other petitioners were "always roving outside and gathering news." After
Medina learned from those present in the office address on his second attempt that
there was no likelihood of any of petitioners going to the office during the business
hours of that or any other day, he concluded that further attempts to serve them in
person within a reasonable time would be futile. The circumstances fully
warranted his conclusion. He was not expected or required as the serving officer to
effect personal service by all means and at all times, considering that he was
expressly authorized to resort to substituted service should he be unable to effect
the personal service within a reasonable time. In that regard, what was a
reasonable time was dependent on the circumstances obtaining. While we are
strict in insisting on personal service on the defendant, we do not cling to such
strictness should the circumstances already justify substituted service instead. It is
the spirit of the procedural rules, not their letter, that governs. 30
In reality, petitioners insistence on personal service by the serving officer was
demonstrably superfluous. They had actually received the summonses served
through their substitutes, as borne out by their filing of several pleadings in the
RTC, including an answer with compulsory counterclaim ad cautelam and a pretrial brief ad cautelam. They had also availed themselves of the modes of discovery
available under the Rules of Court. Such acts evinced their voluntary appearance
in the action.

Nor can we sustain petitioners contention that Abante Tonite could not be sued as
a defendant due to its not being either a natural or a juridical person. In rejecting
their contention, the CA categorized Abante Tonite as a corporation by estoppel as
the result of its having represented itself to the reading public as a corporation
despite its not being incorporated. Thereby, the CA concluded that the RTC did not
gravely abuse its discretion in holding that the non-incorporation of Abante Tonite
with the Securities and Exchange Commission was of no consequence, for,
otherwise, whoever of the public who would suffer any damage from the
publication of articles in the pages of its tabloids would be left without recourse.
We cannot disagree with the CA, considering that the editorial box of the daily
tabloid disclosed that basis, nothing in the box indicated that Monica Publishing
Corporation had owned Abante Tonite.
WHEREFORE, the Court AFFIRMS the decision promulgated on March 8, 2002;
and ORDERS petitioners to pay the costs of suit.
SO ORDERED.

A. COMPLAINT/PETITION NOT FILED BY PLAINTIFF/PETITIONER

PERSONALLY OR WITHOUT AUTHORITY DEEMED AS IF NOT FILED

Republic
SUPREME
Manila

of

the

Philippines
COURT

THIRD DIVISION
G.R. No. 171219

September 3, 2012

ATTY.
FE
Q.
PALMIANO-SALVADOR, Petitioner,
vs.
CONSTANTINO ANGELES, substituted by LUZ G. ANGELES*, Respondent.
DECISION
PERALTA, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of
Court, praying that the Decision 1 of the Court of Appeals (CA) promulgated on
September 16, 2005 dismissing the petition before it, and its Resolution 2dated
January 13, 2006, denying petitioner's Motion for Reconsideration, be reversed
and set aside.
The records reveal the CA's narration of facts to be accurate, to wit:

xxxx
Respondent-appellee ANGELES is one of the registered owners of a parcel of land
located at 1287 Castanos Street, Sampaloc, Manila, evidenced by Transfer
Certificate of Title No. 150872. The subject parcel of land was occupied by one
Jelly Galiga (GALIGA) from 1979 up to 1993, as a lessee with a lease contract.
Subsequently, Fe Salvador (SALVADOR) alleged that she bought on September 7,
1993 the subject parcel of land from GALIGA who represented that he was the
owner, being one in possession. Petitioner-appellant SALVADOR remained in
possession of said subject property from November 1993 up to the present.
On November 18, 1993, the registered owner, the respondentappellee ANGELES,
sent a letter to petitioner-appellant SALVADOR demanding that the latter vacate
the subject property, which was not heeded by petitioner-appellant SALVADOR.
Respondent-appellee ANGELES, thru one Rosauro Diaz, Jr. (DIAZ), filed a
complaint for ejectment on October 12, 1994 with the Metropolitan Trial Court
[MeTC] of Manila, Branch 16, docketed as Civil Case No. 146190-CV.
The Assailed Decision of the Trial Courts
The [MeTC] rendered its decision on November 29, 1999 in favor of herein
respondent-appellee ANGELES, the dispositive portion of which reads, to wit:
WHEREFORE, judgment is hereby rendered for the plaintiff and against the
defendant ordering the latter and all persons claiming under her to:
1) vacate the parcel of land located at 1287 Castanos Street, Sampaloc,
Manila, and surrender the same to the plaintiff;
2) pay the plaintiff the sum of Php1,000.00 monthly as reasonable
compensation for her use and occupancy of the above parcel of land
beginning November 1993 up to the time she has actually vacated the
premises;
3) pay the plaintiff the sum of Php5,000.00 as attorney's fees and the cost of
suit.
SO ORDERED.
In the appeal filed by petitioner-appellant SALVADOR, she alleged, among others,
that DIAZ, who filed the complaint for ejectment, had no authority whatsoever
from respondent-appellee ANGELES at the time of filing of the suit. Petitionerappellant SALVADOR's appeal was denied by the [Regional Trial Court] RTC in a
Decision dated March 12, 2003. The Motion for Reconsideration filed by
SALVADOR was denied in an Order dated March 16, 2004. 3
Petitioner elevated the case to the CA via a petition for review, but in a Decision
dated September 16, 2005, said petition was dismissed for lack of merit. The CA
affirmed the factual findings of the lower courts that Galiga, the person who

supposedly sold the subject premises to petitioner, was a mere lessee of

respondent, the registered owner of the land in question. Such being the case, the
lower court ruled that Galiga could not have validly transferred ownership of
subject property to herein petitioner. It was ruled by the CA that there were no
significant facts or circumstances that the trial court overlooked or misinterpreted,
thus, it found no reason to overturn the factual findings of the MeTC and the RTC.
A motion for reconsideration of said Decision was denied in a Resolution dated
January 13, 2006.
Hence, the present petition, where one of the important issues for resolution is the
effect of Rosauro Diaz's (respondent's representative) failure to present proof of
his authority to represent respondent (plaintiff before the MeTC) in filing the
complaint. This basic issue has been ignored by the MeTC and the RTC, while the
CA absolutely failed to address it, despite petitioner's insistence on it from the very
beginning, i.e., in her Answer filed with the MeTC. This is quite unfortunate,
because this threshold issue should have been resolved at the outset as it is
determinative of the court's jurisdiction over the complaint and the plaintiff.
Note that the complaint before the MeTC was filed in the name of respondent, but
it was one Rosauro Diaz who executed the verification and certification dated
October 12, 1994, alleging therein that he was respondent's attorney-in-fact. There
was, however, no copy of any document attached to the complaint to prove Diaz's
allegation regarding the authority supposedly granted to him. This prompted
petitioner to raise in her Answer and in her Position Paper, the issue of Diaz's
authority to file the case. On December 11, 1995, more than a year after the
complaint was filed, respondent attached to his Reply and/or Comment to
Respondent's (herein petitioner) Position Paper,4 a document entitled Special
Power of Attorney (SPA)5 supposedly executed by respondent in favor of Rosauro
Diaz. However, said SPA was executed only on November 16, 1994, or more
than a month after the complaint was filed, appearing to have been notarized
by one Robert F. McGuire of Santa Clara County. Observe, further, that there was
no certification from the Philippine Consulate General in San Francisco, California,
U.S.A, that said person is indeed a notary public in Santa Clara County, California.
Verily, the court cannot give full faith and credit to the official acts of said Robert
McGuire, and hence, no evidentiary weight or value can be attached to the
document designated as an SPA dated November 16, 1994. Thus, there is nothing
on record to show that Diaz had been authorized by respondent to initiate the
action against petitioner.1wphi1
What then, is the effect of a complaint filed by one who has not proven his
authority to represent a plaintiff in filing an action? In Tamondong v. Court of
Appeals,6 the Court categorically stated that "[i]f a complaint is filed for and in
behalf of the plaintiff [by one] who is not authorized to do so, the complaint is not
deemed filed. An unauthorized complaint does not produce any legal effect. Hence,
the court should dismiss the complaint on the ground that it has no jurisdiction
over the complaint and the plaintiff." 7 This ruling was reiterated in Cosco
Philippines Shipping, Inc. v. Kemper Insurance Company,8 where the Court went
on to say that "[i]n order for the court to have authority to dispose of the case on
the merits, it must acquire jurisdiction over the subject matter and the parties.
Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint, and

to be bound by a decision, a party should first be subjected to the court's

jurisdiction. Clearly, since no valid complaint was ever filed with the [MeTC], the
same did not acquire jurisdiction over the person of respondent [plaintiff before
the lower court]."9
Pursuant to the foregoing rulings, therefore, the MeTC never acquired jurisdiction
over this case and all proceedings before it were null and void. The courts could
not have delved into the very merits of the case, because legally, there was no
complaint to speak of. The court's jurisdiction cannot be deemed to have been
invoked at all.
IN VIEW OF THE FOREGOING, the Petition is GRANTED. The Decision of the
Metropolitan Trial Court in Civil Case No. 146190, dated November 29, 1999; the
Decision of the Regional Trial Court in Civil Case No. 00-96344, dated March 12,
2003; and the Decision of the Court of Appeals in CA-G.R. SP No. 83467, are SET
ASIDE AND NULLIFIED. The complaint filed by respondent before the
Metropolitan Trial Court is hereby DISMISSED.
SO ORDERED.

II. JURISDICTION OVER THE DEFENDANT/RESPONDENT

Republic
SUPREME
Manila

of

the

Philippines
COURT

FIRST DIVISION
G.R. No. 183035

January 9, 2013

OPTIMA
REALTY
CORPORATION, Petitioner,
vs.
HERTZ PHIL. EXCLUSIVE CARS, INC., Respondent.
DECISION
SERENO, CJ.:
Before us is a Rule 45 Petition assailing the Decision 1 and Resolution2 of the Court
of Appeals (CA) in CA-GR SP No. 99890, which reversed the Decision 3 and
Resolution4 of the Regional Trial Court (RTC), Branch 13 7, Makati City in Civil
Case No. 06-672. The RTC had affirmed in toto the 22 May 2006 Decision 5 of the
Metropolitan Trial Court (MeTC), Branch 64, Makati City in Civil Case No. 90842
evicting respondent Hertz Phil.
Exclusive Cars, Inc. (Hertz) and ordering it to pay back rentals and other
arrearages to petitioner Optima Realty Corporation (Optima).

Optima is engaged in the business of leasing and renting out commercial spaces
and buildings to its tenants. On 12 December 2002, it entered into a Contract of
Lease with respondent over a 131-square-meter office unit and a parking slot in
the Optima Building for a period of three years commencing on 1 March 2003 and
ending on 28 February 2006.6 On 9 March 2004, the parties amended their lease
agreement by shortening the lease period to two years and five months,
commencing on 1 October 2003 and ending on 28 February 2006. 7
Renovations in the Optima Building commenced in January and ended in November
2005.8 As a result, Hertz alleged that it experienced a 50% drop in monthly sales
and a significant decrease in its personnels productivity. It then requested a 50%
discount on its rent for the months of May, June, July and August 2005. 9
On 8 December 2005, Optima granted the request of Hertz. 10 However, the latter
still failed to pay its rentals for the months of August to December of 2005 and
January to February 2006,11 or a total of seven months. In addition, Hertz likewise
failed to pay its utility bills for the months of November and December of 2005 and
January and February of 2006,12 or a total of four months.
On 8 December 2005, Optima wrote another letter to Hertz, 13 reminding the latter
that the Contract of Lease could be renewed only by a new negotiation between
the parties and upon written notice by the lessee to the lessor at least 90 days
prior to the termination of the lease period. 14 As no letter was received from Hertz
regarding its intention to seek negotiation and extension of the lease contract
within the 90-day period, Optima informed it that the lease would expire on 28
February 2006 and would not be renewed.15
On 21 December 2005, Hertz wrote a letter belatedly advising Optima of the
formers desire to negotiate and extend the lease. 16 However, as the Contract of
Lease provided that the notice to negotiate its renewal must be given by the lessee
at least 90 days prior to the expiration of the contract, petitioner no longer
entertained respondents notice.
On 30 January 2006, Hertz filed a Complaint for Specific Performance, Injunction
and Damages and/or Sum of Money with prayer for the issuance of a Temporary
Restraining Order (TRO) and Writ of Preliminary Injunction (Complaint for Specific
Performance) against Optima. In that Complaint, Hertz prayed for the issuance of a
TRO to enjoin petitioner from committing acts that would tend to disrupt
respondents peaceful use and possession of the leased premises; for a Writ of
Preliminary Injunction ordering petitioner to reconnect its utilities; for petitioner
to be ordered to renegotiate a renewal of the Contract of Lease; and for actual,
moral and exemplary damages, as well as attorneys fees and costs.
On 1 March 2006, Optima, through counsel, wrote Hertz a letter requiring the
latter to surrender and vacate the leased premises in view of the expiration of the
Contract of Lease on 28 February 2006.17 It likewise demanded payment of the
sum of 420,967.28 in rental arrearages, unpaid utility bills and other
charges.18 Hertz, however, refused to vacate the leased premises. 19 As a result,
Optima was constrained to file before the MeTC a Complaint for Unlawful Detainer

and Damages with Prayer for the Issuance of a TRO and/or Preliminary Mandatory
Injunction (Unlawful Detainer Complaint) against Hertz. 20
On 14 March 2006, Summons for the Unlawful Detainer Complaint was served on
Henry Bobiles, quality control supervisor of Hertz, who complied with the
telephone instruction of manager Rudy Tirador to receive the Summons. 21
On 28 March 2006, or 14 days after service of the Summons, Hertz filed a Motion
for Leave of Court to file Answer with Counterclaim and to Admit Answer with
Counterclaim (Motion for Leave to File Answer).22 In that Motion, Hertz stated
that, "in spite of the defective service of summons, it opted to file the instant
Answer with Counterclaim with Leave of Court."23 In the same Motion, it likewise
prayed that, in the interest of substantial justice, the Answer with Counterclaim
attached to the Motion for Leave to File Answer should be admitted regardless of
its belated filing, since the service of summons was defective. 24
On 22 May 2006, the MeTC rendered a Decision, 25 ruling that petitioner Optima
had established its right to evict Hertz from the subject premises due to
nonpayment of rentals and the expiration of the period of lease. 26 The dispositive
portion of the Decision reads:
WHEREFORE, premises considered, the Court hereby renders judgment for the
plaintiff and against the defendant, ordering:
1. the defendant corporation and all persons claiming rights from it to
immediately vacate the leased premises and to surrender possession thereof
to the plaintiff;
2. the defendant corporation to pay the plaintiff the amount of Four Hundred
Twenty Thousand Nine Hundred Sixty Seven Pesos and 28/100
(P420,967.28) representing its rentals arrearages and utility charges for the
period of August 2005 to February 2006, deducting therefrom defendants
security deposit;
3. the defendant corporation to pay the amount of Fifty Four Thousand Two
Hundred Pesos (P54,200.00) as a reasonable monthly compensation for the
use and occupancy of the premises starting from March 2006 until
possession thereof is restored to the plaintiff; and
4. the defendant corporation to pay the amount of Thirty Thousand Pesos
(P30,000.00) as and for attorneys fees; and
5. the cost of suit.
SO ORDERED.27
Hertz appealed the MeTCs Decision to the RTC.28

Finding no compelling reason to warrant the reversal of the MeTCs Decision, the
RTC affirmed it by dismissing the appeal in a Decision 29 dated 16 March 2007.
On 18 June 2007, the RTC denied respondents Motion for Reconsideration of its
assailed Decision.30
Hertz thereafter filed a verified Rule 42 Petition for Review on Certiorari with the
CA.31
On appeal, the CA ruled that, due to the improper service of summons, the MeTC
failed to acquire jurisdiction over the person of respondent Hertz. The appellate
court thereafter reversed the RTC and remanded the case to the MeTC to ensure
the proper service of summons. Accordingly, the CA issued its 17 March 2008
Decision, the fallo of which reads:
WHEREFORE, premises considered, the May 22, 2006 Decision of the
Metropolitan Trial Court of Makati City, Branch 64, in Civil Case No. 90842, and
both the March 16, 2007 Decision, as well as the June 18, 2007 Resolution, of the
Regional Trial Court of Makati City, Branch 137, in Civil Case No. 06-672, are
hereby REVERSED, ANNULLED and SET ASIDE due to lack of jurisdiction over
the person of the defendant corporation HERTZ. This case is hereby REMANDED
to the Metropolitan Trial Court of Makati City, Branch 64, in Civil Case No. 90842,
which is DIRECTED to ensure that its Sheriff properly serve summons to only
those persons listed in Sec. 11, Rule 14 of the Rules of Civil Procedure in order
that the MTC could acquire jurisdiction over the person of the defendant
corporation HERTZ.
SO ORDERED.32
Petitioners Motion for Reconsideration of the CAs Decision was denied in a
Resolution dated 20 May 2008.33
Aggrieved by the ruling of the appellate court, petitioner then filed the instant Rule
45 Petition for Review on Certiorari with this Court.34
THE ISSUES
As culled from the records, the following issues are submitted for resolution by this
Court:
1. Whether the MeTC properly acquired jurisdiction over the person of
respondent Hertz;
2. Whether the unlawful detainer case is barred by litis pendentia; and
3. Whether the ejectment of Hertz and the award of damages, attorneys fees
and costs are proper.
THE COURTS RULING

We grant the Petition and reverse the assailed Decision and Resolution of the
appellate court.
I
The MeTC acquired jurisdiction over the person of respondent Hertz.
In civil cases, jurisdiction over the person of the defendant may be acquired either
by service of summons or by the defendants voluntary appearance in court and
submission to its authority.35
In this case, the MeTC acquired jurisdiction over the person of respondent Hertz
by reason of the latters voluntary appearance in court.
In Philippine Commercial International Bank v. Spouses Dy, 36 we had occasion to
state:
Preliminarily, jurisdiction over the defendant in a civil case is acquired either by
the coercive power of legal processes exerted over his person, or his voluntary
appearance in court. As a general proposition, one who seeks an affirmative relief
is deemed to have submitted to the jurisdiction of the court. It is by reason of this
rule that we have had occasion to declare that the filing of motions to admit
answer, for additional time to file answer, for reconsideration of a default
judgment, and to lift order of default with motion for reconsideration, is considered
voluntary submission to the court's jurisdiction. This, however, is tempered by the
concept of conditional appearance, such that a party who makes a special
appearance to challenge, among others, the court's jurisdiction over his person
cannot be considered to have submitted to its authority.
Prescinding from the foregoing, it is thus clear that:
(1) Special appearance operates as an exception to the general rule on
voluntary appearance;
(2) Accordingly, objections to the jurisdiction of the court over the person of
the defendant must be explicitly made, i.e., set forth in an unequivocal
manner; and
(3) Failure to do so constitutes voluntary submission to the jurisdiction of the
court, especially in instances where a pleading or motion seeking affirmative
relief is filed and submitted to the court for resolution. (Emphases supplied)
In this case, the records show that the following statement appeared in
respondents Motion for Leave to File Answer:
In spite of the defective service of summons, the defendant opted to file the instant
Answer with Counterclaim with Leave of Court, upon inquiring from the office of
the clerk of court of this Honorable Court and due to its notice of hearing on

March 29, 2005 application for TRO/Preliminary Mandatory Injunction was

received on March 26, 2006. (Emphasis supplied)37
Furthermore, the Answer with Counterclaim filed by Hertz never raised the
defense of improper service of summons. The defenses that it pleaded were limited
to litis pendentia, pari delicto, performance of its obligations and lack of cause of
action.38 Finally, it even asserted its own counterclaim against Optima. 39
Measured against the standards in Philippine Commercial International Bank,
these actions lead to no other conclusion than that Hertz voluntarily appeared
before the court a quo. We therefore rule that, by virtue of the voluntary
appearance of respondent Hertz before the MeTC, the trial court acquired
jurisdiction over respondents.
II
The instant ejectment case is not barred by litis pendentia. Hertz contends that the
instant case is barred by litis pendentia because of the pendency of its Complaint
for Specific Performance against Optima before the RTC.
We disagree.
Litis pendentia requires the concurrence of the following elements:
(1) Identity of parties, or at least their representation of the same interests
in both actions;
(2) Identity of rights asserted and reliefs prayed for, the relief being founded
on the same facts; and
(3) Identity with respect to the two preceding particulars in the two cases,
such that any judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata in the
other case.40
Here, while there is identity of parties in both cases, we find that the rights
asserted and the reliefs prayed for under the Complaint for Specific Performance
and those under the present Unlawful Detainer Complaint are different. As aptly
found by the trial court:
The Complaint for Specific Performance] seeks to compel plaintiff-appellee Optima
to: (1) renegotiate the contract of lease; (2) reconnect the utilities at the leased
premises; and (3) pay damages. On the other hand, the unlawful detainer case
sought the ejectment of defendant-appellant Hertz from the leased premises and to
collect arrears in rentals and utility bills.41
As the rights asserted and the reliefs sought in the two cases are different, we find
that the pendency of the Complaint for Specific Performance is not a bar to the
institution of the present case for ejectment.

III
The eviction of respondent and the award of damages,
attorneys fees and costs were proper.
We find that the RTCs ruling upholding the ejectment of Hertz from the building
premises was proper. First, respondent failed to pay rental arrearages and utility
bills to Optima; and, second, the Contract of Lease expired without any request
from Hertz for a renegotiation thereof at least 90 days prior to its expiration.
On the first ground, the records show that Hertz failed to pay rental arrearages
and utility bills to Optima. Failure to pay timely rentals and utility charges is an
event of default under the Contract of Lease, 42 entitling the lessor to terminate the
lease.
Moreover, the failure of Hertz to pay timely rentals and utility charges entitles the
lessor to judicially eject it under the provisions of the Civil Code. 43
On the second ground, the records likewise show that the lease had already
expired on 28 February 2006 because of Hertzs failure to request a renegotiation
at least 90 days prior to the termination of the lease period.
The pertinent provision of the Contract of Lease reads:
x x x. The lease can be renewed only by a new negotiation between the parties
upon written notice by the LESSEE to be given to the LESSOR at least 90 days
prior to termination of the above lease period.44
As the lease was set to expire on 28 February 2006, Hertz had until 30 November
2005 within which to express its interest in negotiating an extension of the lease
with Optima. However, Hertz failed to communicate its intention to negotiate for
an extension of the lease within the time agreed upon by the parties. Thus, by its
own provisions, the Contract of Lease expired on 28 February 2006.1wphi1
Under the Civil Code, the expiry of the period agreed upon by the parties is
likewise a ground for judicial ejectment.45
As to the award of monthly compensation, we find that Hertz should pay adequate
compensation to Optima, since the former continued to occupy the leased premises
even after the expiration of the lease contract. As the lease price during the
effectivity of the lease contract was P54,200 per month, we find it to be a
reasonable award.
Finally, we uphold the award of attorney's fees in the amount of P30,000 and
judicial costs in the light of Hertz's unjustifiable and unlawful retention of the
leased premises, thus forcing Optima to file the instant case in order to protect its
rights and interest.

From the foregoing, we find that the MeTC committed no reversible error in its 22
May 2006 Decision, and that the RTC committed no reversible error either in
affirming the MeTC's Decision.
WHEREFORE, in view of the foregoing, the instant Rule 45 Petition for Review is
GRANTED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R.
SP No. 99890 are hereby REVERSED and SET ASIDE. The Decision of the Regional
Trial Court, Branch 13 7, Makati City in Civil Case No. 06-672 affirming in toto the
Decision of the Metropolitan Trial Court, Branch 64, Makati City in Civil Case No.
90842 is hereby REINSTATED and AFFIRMED.
SO ORDERED.

Republic
SUPREME
Manila

of

the

Philippines
COURT

THIRD DIVISION
G.R. No. 174077

November 21, 2012

ELLICE AGRO-INDUSTRIAL CORPORATION, represented by its Chairman

of the Board of Directors and President, RAUL E. GALA, Petitioner,
vs.
RODEL
T.
YOUNG,
DELFIN
CHAN,
JIM
WEE,
and
GUIA
G.
DOMINGO, *** Respondents.
DECISION
MENDOZA, J.:
Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of
Court are the July 1, 2003 Decision 1and the August 8, 2006 Resolution 2 of the
Court of Appeals (CA), in CA-G.R. SP No. 64421, dismissing the petition and
upholding the November 11, 1999 Decision of the Regional Trial Court of Lucena
City, Branch 60 (RTC), in Civil Case No. 96-177, entitled "Rodel T. Young, Delfin
Chan and Jim Wee v. Ellice Agro Industrial Corporation, represented by Guia G.
Domingo."
The Facts
On July 24, 1995, Rodel T. Young, Delfin Chan and Jim Wee (respondents) and
Ellice Agro-Industrial Corporation (EAIC), represented by its alleged corporate
secretary and attorney-in-fact, Guia G. Domingo (Domingo), entered into a
Contract to Sell, under certain terms and conditions, wherein EAIC agreed to sell
to the respondents a 30,000 square-meter portion of a parcel of land located in
Lutucan, Sariaya, Quezon and registered under EAICs name and covered by

Transfer Certificate of Title (TCT) No. T-157038 in consideration of One Million and
Fifty Thousand (P1,050,000.00) Pesos.
Pursuant to the Contract to Sell, 3 respondents paid EAIC, through Domingo, the
aggregate amount of Five Hundred Forty Five Thousand (P545,000.00) Pesos as
partial payment for the acquisition of the subject property. Despite such payment,
EAIC failed to deliver to respondents the owners duplicate certificate of title of the
subject property and the corresponding deed of sale as required under the
Contract to Sell.
On November 8, 1996, prompted by the failure of EAIC to comply with its
obligation, respondents had their Affidavit of Adverse Claim annotated in TCT No.
T-157038.4
On November 14, 1996, respondents filed a Complaint5 for specific performance,
docketed as Civil Case No. 96-177, against EAIC and Domingo before the RTC.
Consequently, on November 18, 1996, respondents caused the annotation of a
Notice of Lis Pendens involving Civil Case No. 96-177 in TCT No. T-157038.6
The initial attempt to serve the summons and a copy of the complaint and its
annexes on EAIC, through Domingo, on Rizal Street, Sariaya, Quezon, was
unsuccessful as EAIC could not be located in the said address.
Another attempt was made to serve the alias summons on EAIC at 996 Maligaya
Street, Singalong, Manila, the residence of Domingo. The second attempt to serve
the alias summons to Domingo was, this time, successful.
On March 21, 1997, EAIC, represented by Domingo, filed its Answer with
Counterclaim.7
Meanwhile, respondent Jim Wee (Wee) sent Raul E. Gala (Gala), EAICs Chairman
and President, a letter, 8 dated July 9, 1997, seeking a conference with the latter
relating to the execution of an absolute deed of sale pursuant to the Contract to
Sell entered into between EAIC and respondents.
In response, the Robles Ricafrente Aguirre Sanvicente & Cacho Law Firm,
introducing itself to be the counsel of EAIC, sent Wee a letter, 9 dated July 18, 1997,
informing him of Domingos lack of authority to represent EAIC.
On the scheduled pre-trial conference on January 27, 1998, neither Domingo nor
her counsel appeared. As a result of EAICs failure to appear in the pre-trial
conference, respondents were allowed to present their evidence ex parte, pursuant
to Section 5, Rule 1810 of the Rules of Court.
Following the presentation of evidence ex parte, the RTC rendered its November
11, 1999 Decision ordering EAIC to deliver the owners duplicate copy of TCT No.
T-157038 and to execute a final deed of sale in favor of respondents.

No motion for reconsideration or notice of appeal was filed by EAIC, hence, the
said RTC decision became final and executory on December 8, 1999.11
On July 10, 2000 (roughly seven months after the finality of the RTC Decision),
EAIC, represented by Gala, filed its Petition for Relief from Judgment 12 under Rule
38 of the Rules of Court of the November 11, 1999 RTC Decision before the same
court. The petition for relief from judgment was premised on the alleged fraud
committed by Domingo in concealing the existence of both the Contract to Sell and
Civil Case No. 96-177 from EAIC.
In its July 12, 2000 Order,13 the RTC denied the petition for relief from judgment
for being clearly filed out of time under Section 3, Rule 38 of the Rules of Court. 14
On April 24, 2001, EAIC, represented by Gala, initiated the Petition for Annulment
of Judgment15 under Rule 47 of the Rules of Court of the November 11, 1999 RTC
Decision before the CA. The petition was grounded on the RTCs lack of
jurisdiction over EAIC and the extrinsic fraud committed by Domingo. EAIC
discarded any knowledge of the said sale and the suit filed by respondents against
it. According to EAIC, it could not be bound by the assailed RTC Decision pursuant
to Section 13, Rule 1416 of the 1964 Rules of Court which was, the applicable rule
then. Domingo was not its President, Manager, Secretary, Cashier, Agent or
Director, as evidenced by the General Information Sheets17 (GIS) it filed with the
Securities and Exchange Commission (SEC), at the time the summons was served
upon her and she did not possess the requisite authorization to represent EAIC in
the subject transaction. Furthermore, her misrepresentation that she was EAICs
corporate secretary who was properly authorized to sell and receive payment for
the subject property, defrauded EAIC of the potential gains it should have realized
from the proceeds of the sale.
In their Answer with Counterclaim18 filed before the CA, respondents countered
that considering EAICs petition for relief from judgment under Rule 38 grounded
on extrinsic fraud, had already been rejected with finality, EAIC could not be
permitted to invoke the same ground in a petition for annulment of judgment
under Rule 47. Further, EAIC could not feign ignorance of Civil Case No. 96-177
because of the November 8, 1996 Adverse Claim and the November 18, 1996
Notice of Lis Pendens annotated at the back of TCT No. T-157038. Respondents
insisted that the mentioned annotations in TCT No. T-157038 should be deemed
constructive notices to the world of the pending litigation referred to therein and,
therefore, bound EAIC to Civil Case No. 96-177. Moreover, with the exchange of
letters, dated July 9, 199719 and July 18, 1997,20 between Wee and EAIC, through
Gala, EAIC was informed of the pending civil case against it.
In its Reply21 filed before the CA, EAIC explained that the RTC did not touch upon
the issue of fraud in the petition for relief from judgment as it was dismissed for
being filed out of time. In addition, EAIC claimed that the exchange of letters
between Wee and EAIC never stated anything whatsoever of any pending suit
between them.
In its July 1, 2003 Decision, the CA dismissed the petition for annulment of
judgment. In its decision, the CA ratiocinated:

x x x x.
The corporation, at the inception of Civil Case No. 96-177 on November 14, 1996,
already had constructive notice of the three (3) businessmens herein respondents
adverse claim to a 30,000
square-meter portion of the land covered by TCT No. T-157038 because this claim
was duly registered and annotated on the said title even before this date.
Moreover, four (4) days after the inception of the civil case, room was provided for
on the same title for the annotation of a notice of lis pendens.
These constructive notices ought to have spurred the corporation into action by
filing an answer in Civil Case No. 96-177 through proper or legitimate
representations, for instance. But the corporation chose to keep quiet, thus,
making the trial court and everyone else concerned with said civil case believe that
Guia G. Domingo is its proper or legitimate representative. It even appears that
she was, after all, a proper or legitimate representative of the corporation because
in the decision, dated November 3, 1998, rendered in SEC Cases Nos. 3747 and
4027, the corporations board headed by Raul E. Gala since August 24, 1990 was
held to be illegitimate.
Even without the constructive notices, the businessmen herein respondents,
through a letter signed by one of them, apprised the corporation, through Raul E.
Gala, of their contract to sell. This was in July, 1997. The letter was duly
acknowledged and the parties thereafter even tried to settle among themselves the
consideration and conveyance of the 30,000 square-meter portion.
When this failed, there was no reason why the corporation could not have
proceeded with the pre-trial in Civil Case No. 96-177. It did not.
The corporations reticence in view of the constructive notices and its then
incumbent boards personal knowledge of the case had, in effect, amounted to a
waiver of its right to actively participate in the proper disposition of Civil Case No.
96-177, to move for a new trial therein and to appeal from the decision rendered
therein. Certainly, these remedies no longer are available, but only the corporation
should be faulted for this.
Be that as it may, the corporation had availed of the remedy of relief from the
judgment in Civil Case No. 96-177. The fact that it was not able to prove that it was
entitled thereto does not mean that it can now avail of the instant remedy.
It would serve no useful purpose then to delve into the issues of jurisdiction and
fraud raised in the petition as the petition itself is unavailing under the
circumstances.
x x x x.
EAICs motion for reconsideration was denied by the CA in its Resolution, dated
August 8, 2006.

Hence, this petition for review.

The Issues
Not in conformity with the ruling of the CA, EAIC seeks relief from this Court
raising the following errors:
THE COURT OF APPEALS ERRED IN RULING THAT THERE WAS VALID
SERVICE OF SUMMONS UPON PETITIONER CORPORATION.
THE COURT OF APPEALS ERRED IN RULING THAT GUIA G. DOMINGO
WAS A DIRECTOR OF PETITIONER CORPORATION AT THE TIME
SUMMONS WAS SERVED UPON HER AND IN DENYING PETITIONERS
MOTION FOR RECONSIDERATION.
THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER CAN NO
LONGER AVAIL OF THE PRESENT PETITION HAVING EARLIER FILED A
PETITION FOR RELIEF FROM JUDGMENT.22
The main issue for the Courts consideration is whether the RTC validly acquired
jurisdiction over the person of EAIC, defendant in Civil Case No. 96-177.
In their Memorandum,23 respondents argue that at the time the summons was
served upon Domingo, she was acting for and in behalf of EAIC. They further point
out that, at any rate, EAICs filing of its Answer with Counterclaim and the petition
for relief from judgment before the trial court constitutes voluntary appearance
thereby submitting itself to the jurisdiction of the RTC. Respondents stress that the
extrinsic fraud claimed by EAIC is not a valid ground for a petition for annulment
of judgment because the latter had already availed of the said ground in a petition
from relief from judgment in contravention to Section 2, Rule 47.24
In her Memorandum,25 Domingo argues that EAIC, in filing its Answer with
Counterclaim and Petition for Relief from Judgment, had invoked the jurisdiction of
the same trial court that it now denies. Further, she claims that she acted in utmost
good faith in receiving the summons and filing the Answer in Civil Case No. 96-177
for EAIC since she truly believed that she was authorized to do so.
On the other hand, EAIC, in its Memorandum, 26 contends that there was no valid
service of summons because Domingo, at the time summons was served, was not
its president, manager, secretary, cashier, agent, or director. The GIS filed with the
SEC consistently showed that she never held any position with EAIC which could
have authorized her to receive summons in behalf of EAIC. The CA erred in
considering the Adverse Claim and Notice of Lis Pendens annotated in TCT No. T157038 as constructive notice to EAIC of the pendency of Civil Case No. 96-177
and, therefore, clothed the RTC with jurisdiction over the person of EAIC. Those
annotations in the TCT merely serve to apprise third persons of the controversy or
pending litigation relating to the subject property but do not place a party under
the jurisdiction of the court. Moreover, respondents duty to prosecute their case
diligently includes ensuring that the proper parties are impleaded and properly
served with summonses.

The Courts Ruling

The Court finds merit in the petition.
It is a settled rule that jurisdiction over the defendant is acquired either upon a
valid service of summons or the defendants voluntary appearance in court. When
the defendant does not voluntarily submit to the courts jurisdiction or when there
is no valid service of summons, any judgment of the court which has no jurisdiction
over the person of the defendant is null and void. 27 The purpose of summons is not
only to acquire jurisdiction over the person of the defendant, but also to give notice
to the defendant that an action has been commenced against it and to afford it an
opportunity to be heard on the claim made against it. The requirements of the rule
on summons must be strictly followed, otherwise, the trial court will not acquire
jurisdiction over the defendant.28
Section 13, Rule 14 of the 1964 Rules of Civil Procedure, the applicable rule on
service of summons upon a private domestic corporation then, provides:
Sec. 13. Service upon private domestic corporation or partnership. If the
defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors. [Underscoring supplied]
Based on the above-quoted provision, for service of summons upon a private
domestic corporation, to be effective and valid, should be made on the persons
enumerated in the rule. Conversely, service of summons on anyone other than the
president, manager, secretary, cashier, agent, or director, is not valid. The purpose
is to render it reasonably certain that the corporation will receive prompt and
proper notice in an action against it or to insure that the summons be served on a
representative so integrated with the corporation that such person will know what
to do with the legal papers served on him.29
In the present case, the 1996 GIS30 of EAIC, the pertinent document showing
EAICs composition at the time the summons was served upon it, through
Domingo, will readily reveal that she was not its president, manager, secretary,
cashier, agent or director. Due to this fact, the Court is of the view that her honest
belief that she was the authorized corporate secretary was clearly mistaken
because she was evidently not the corporate secretary she claimed to be. In view
of Domingos lack of authority to properly represent EAIC, the Court is constrained
to rule that there was no valid service of summons binding on it.
Granting arguendo that EAIC had actual knowledge of the existence of Civil Case
No. 96-177 lodged against it, the RTC still failed to validly acquire jurisdiction over
EAIC. In Cesar v. Ricafort-Bautista, 31 it was held that "x x x jurisdiction of the court
over the person of the defendant or respondent cannot be acquired
notwithstanding his knowledge of the pendency of a case against him unless he
was validly served with summons. Such is the important role a valid service of
summons plays in court actions."

The Court cannot likewise subscribe to respondents argument that by filing its
answer with counterclaim, through Domingo, with the RTC, EAIC is deemed to
have voluntarily submitted itself to the jurisdiction of the RTC. In Salenga v. Court
of Appeals,32 the Court stated:
A corporation can only exercise its powers and transact its business through its
board of directors and through its officers and agents when authorized by a board
resolution or its bylaws. The power of a corporation to sue and be sued is exercised
by the board of directors. The physical acts of the corporation, like the signing of
documents, can be performed only by natural persons duly authorized for the
purpose by corporate bylaws or by a specific act of the board.
In this case, at the time she filed the Answer with Counterclaim, Domingo was
clearly not an officer of EAIC, much less duly authorized by any board resolution or
secretarys certificate from EAIC to file the said Answer with Counterclaim in
behalf of EAIC. Undoubtedly, Domingo lacked the necessary authority to bind EAIC
to Civil Case No. 96-177 before the RTC despite the filing of an Answer with
Counterclaim. EAIC cannot be bound or deemed to have voluntarily appeared
before the RTC by the act of an unauthorized stranger.
Incidentally, Domingo alleged in her Answer with Counterclaim that "Alicia E. Gala
is the real owner and possessor of all the real properties registered in the business
name and style Ellice-Agro Industrial Corporation x x x." 33 In the same pleading,
Domingo claimed that she was authorized by Alicia E. Gala, the purported
beneficial owner of the subject property, to represent her in Civil Case No. 96-177
by virtue of a General Power of Attorney. In advancing the said allegations, among
others, Domingo evidently acted in representation of Alicia E. Gala, not EAIC.
Hence, her conduct in the filing of the Answer with Counterclaim cannot and
should not be binding to EAIC.
In view of the fact that EAIC was not validly served with summons and did not
voluntarily appear in Civil Case No. 96-177, the RTC did not validly acquire
jurisdiction over the person of EAIC. Consequently, the proceedings had before the
RTC and ultimately its November 11, 1999 Decision were null and void.1wphi1
Pursuant to Section 7, Rule 4734 of the Rules of Court, a judgment of annulment
shall set aside the questioned judgment or final order or resolution and render the
same null and void.
WHEREFORE, the petition is GRANTED. The July 1, 2003 Decision and August 8,
2006 Resolution of the Court of Appeals, in CA-G.R. SP No. 64421, are hereby
REVERSED. The November 11, 1999 Decision of the Regional Trial Court of
Lucena City, Branch 60, in Civil Case No. 96-177, is hereby declared VACATED and
SET ASIDE.
The records of the case is hereby ordered remanded to the Regional Trial Court of
Lucena City, Branch 60, for the proper service of summons to the petitioner and
other parties, if any, and for other appropriate proceedings.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 173379

December 1, 2010

ABUBAKAR A. AFDAL and FATIMA A. AFDAL, Petitioners,

vs.
ROMEO CARLOS, Respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the 3 January 20052 and 16 June 20063 Orders of
the Regional Trial Court, Branch 25, Bian, Laguna (RTC) in Civil Case No. B-6721.
In its 3 January 2005 Order, the RTC ordered the dismissal of petitioners Abubakar
A. Afdal and Fatima A. Afdals (petitioners) petition for relief from judgment. In its
16 June 2006 Order, the RTC denied petitioners motion for reconsideration.
The Facts
On 18 December 2003, respondent Romeo Carlos (respondent) filed a complaint
for unlawful detainer and damages against petitioners, Zenaida Guijabar
(Guijabar), John Doe, Peter Doe, Juana Doe, and all persons claiming rights under
them docketed as Civil Case No. 3719 before the Municipal Trial Court, Bian,
Laguna (MTC). Respondent alleged that petitioners, Guijabar, and all other persons
claiming rights under them were occupying, by mere tolerance, a parcel of land in
respondents name covered by Transfer Certificate of Title No. T-530139 4 in the
Registry of Deeds Calamba, Laguna. Respondent claimed that petitioner Abubakar
Afdal (petitioner Abubakar) sold the property to him but that he allowed
petitioners to stay in the property. On 25 August 2003, respondent demanded that
petitioners, Guijabar, and all persons claiming rights under them turn over the
property to him because he needed the property for his personal use. 5 Respondent
further alleged that petitioners refused to heed his demand and he was
constrained to file a complaint before the Lupon ng Tagapamayapa (Lupon).
According to respondent, petitioners ignored the notices and the Lupon issued a
"certificate to file action."6 Then, respondent filed the complaint before the MTC.
According to the records, there were three attempts to serve the summons and
complaint on petitioners 14 January, 3 and 18 February 2004. 7 However,
petitioners failed to file an answer.

On 2 June 2004, respondent filed an ex-parte motion and compliance with position
paper submitting the case for decision based on the pleadings on record. 8
In its 23 August 2004 Decision,9 the MTC ruled in favor of respondent. The
dispositive portion of the 23 August 2004 Decision reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
defendants as follows:
1. Ordering defendants Abubakar Afdal, Zenaida Guijabar and all persons
claiming rights under them to vacate the subject property and peacefully
turn-over possession of the same to plaintiff;
2. Ordering defendants to pay plaintiff the amount of TEN THOUSAND
PESOS (P10,000.00) as rental arrears from August 25, 2003 up to the date
of decision;
3. Ordering defendants to pay plaintiff the amount of TEN THOUSAND
PESOS (P10,000.00) a month thereafter, as reasonable compensation for the
use of the subject premises until they finally vacate the same;
4. Ordering defendants to pay plaintiff the amount of FIFTY THOUSAND
PESOS (P50,000.00) as and for attorneys fees plus ONE THOUSAND FIVE
HUNDRED PESOS (P1,500.00) appearance fee;
5. Ordering defendants to pay the costs of suit.
SO ORDERED.10
On 1 October 2004, the MTC issued a writ of execution. 11
On 30 October 2004, petitioners filed a petition for relief from judgment with the
MTC.12 Respondent filed a motion to dismiss or strike out the petition for
relief.13 Subsequently, petitioners manifested their intention to withdraw the
petition for relief after realizing that it was a prohibited pleading under the
Revised Rule on Summary Procedure. On 10 November 2004, the MTC granted
petitioners request to withdraw the petition for relief.14
On 6 December 2004, petitioners filed the petition for relief before the
RTC.15 Petitioners alleged that they are the lawful owners of the property which
they purchased from spouses Martha D.G. Ubaldo and Francisco D. Ubaldo.
Petitioners denied that they sold the property to respondent. Petitioners added that
on 15 December 2003, petitioner Abubakar filed with the Commission on Elections
his certificate of candidacy as mayor in the municipality of Labangan, Zamboanga
del Sur, for the 10 May 2004 elections. Petitioners said they only learned of the
MTCs 23 August 2004 Decision on 27 October 2004. Petitioners also pointed out
that they never received respondents demand letter nor were they informed of,
much less participated in, the proceedings before the Lupon. Moreover, petitioners
said they were not served a copy of the summons and the complaint.

On 3 January 2005, the RTC issued the assailed Order dismissing the petition for
relief. The RTC said it had no jurisdiction over the petition because the petition
should have been filed before the MTC in accordance with Section 1 of Rule 38 of
the Rules of Court which provides that a petition for relief should be filed "in such
court and in the same case praying that the judgment, order or proceeding be set
aside."
Petitioners filed a motion for reconsideration. In its 16 June 2006 Order, the RTC
denied petitioners motion.
Hence, this petition.
The Issue
Petitioners raise the sole issue of whether the RTC erred in dismissing their
petition for relief from judgment.
The Ruling of the Court
Petitioners maintain that the RTC erred in dismissing their petition for relief.
Petitioners argue that they have no other recourse but to file the petition for relief
with the RTC. Petitioners allege the need to reconcile the apparent inconsistencies
with respect to the filing of a petition for relief from judgment under Rule 38 of the
Rules of Court and the prohibition under the Revised Rule on Summary Procedure.
Petitioners suggest that petitions for relief from judgment in forcible entry and
unlawful detainer cases can be filed with the RTC provided that petitioners have
complied with all the legal requirements to entitle him to avail of such legal
remedy.
Section 13(4) of Rule 70 of the Rules of Court provides:
SEC. 13. Prohibited pleadings and motions. - The following petitions, motions, or
pleadings shall not be allowed: x x x
4. Petition for relief from judgment; x x x
Section 19(d) of the Revised Rule on Summary Procedure also provides:
SEC. 19. Prohibited pleadings and motions. - The following pleadings, motions, or
petitions shall not be allowed in the cases covered by this Rule: x x x
(d) Petition for relief from judgment; x x x
Clearly, a petition for relief from judgment in forcible entry and unlawful detainer
cases, as in the present case, is a prohibited pleading. The reason for this is to
achieve an expeditious and inexpensive determination of the cases subject of
summary procedure.16
Moreover, Section 1, Rule 38 of the Rules of Court provides:

SEC. 1. Petition for relief from judgment, order or other proceedings. - When a
judgment or final order is entered, or any other proceeding is thereafter taken
against a party in any court through fraud, accident, mistake or excusable
negligence, he may file a petition in such court and in the same case praying
that the judgment, order or proceeding be set aside. (Emphasis supplied)
A petition for relief from judgment, if allowed by the Rules and not a prohibited
pleading, should be filed with and resolved by the court in the same case from
which the petition arose.171avvphi1
In the present case, petitioners cannot file the petition for relief with the MTC
because it is a prohibited pleading in an unlawful detainer case. Petitioners cannot
also file the petition for relief with the RTC because the RTC has no jurisdiction to
entertain petitions for relief from judgments of the MTC. Therefore, the RTC did
not err in dismissing the petition for relief from judgment of the MTC.
The remedy of petitioners in such a situation is to file a petition for certiorari with
the RTC under Rule 6518 of the Rules of Court on the ground of lack of jurisdiction
of the MTC over the person of petitioners in view of the absence of summons to
petitioners. Here, we shall treat petitioners petition for relief from judgment as a
petition for certiorari before the RTC.
An action for unlawful detainer or forcible entry is a real action and in
personam because the plaintiff seeks to enforce a personal obligation on the
defendant for the latter to vacate the property subject of the action, restore
physical possession thereof to the plaintiff, and pay actual damages by way of
reasonable compensation for his use or occupation of the property. 19 In an action in
personam, jurisdiction over the person of the defendant is necessary for the court
to validly try and decide the case.20 Jurisdiction over the defendant is acquired
either upon a valid service of summons or the defendants voluntary appearance in
court.21 If the defendant does not voluntarily appear in court, jurisdiction can be
acquired by personal or substituted service of summons as laid out under Sections
6 and 7 of Rule 14 of the Rules of Court, which state:
Sec. 6. Service in person on defendant. - Whenever practicable, the summons shall
be served by handing a copy thereof to the defendant in person, or, if he refuses to
receive and sign for it, by tendering it to him.
Sec. 7. Substituted Service. - If, for justifiable causes, the defendant cannot be
served within a reasonable time as provided in the preceding section, service may
be effected (a) by leaving copies of the summons at the defendants residence with
some person of suitable age and discretion then residing therein, or (b) by leaving
the copies at defendants office or regular place of business with some competent
person in charge thereof.
Any judgment of the court which has no jurisdiction over the person of the
defendant is null and void.22
The 23 August 2004 Decision of the MTC states:

Record shows that there were three attempts to serve the summons to the
defendants. The first was on January 14, 2004 where the same was unserved. The
second was on February 3, 2004 where the same was served to one Gary Akob and
the last was on February 18, 2004 where the return was duly served but refused to
sign.23
A closer look at the records of the case also reveals that the first indorsement
dated 14 January 2004 carried the annotation that it was "unsatisfied/given
address cannot be located."24 The second indorsement dated 3 February 2004
stated that the summons was "duly served as evidenced by his signature of one
Gary Acob25 (relative)."26While the last indorsement dated 18 February 2004
carried the annotation that it was "duly served but refused to sign" without
specifying to whom it was served.27
Service of summons upon the defendant shall be by personal service first and only
when the defendant cannot be promptly served in person will substituted service
be availed of.28 In Samartino v. Raon,29 we said:
We have long held that the impossibility of personal service justifying availment of
substituted service should be explained in the proof of service; why efforts exerted
towards personal service failed. The pertinent facts and circumstances attendant
to the service of summons must be stated in the proof of service or Officers
Return; otherwise, the substituted service cannot be upheld. 30
In this case, the indorsements failed to state that prompt and personal service on
petitioners was rendered impossible. It failed to show the reason why personal
service could not be made. It was also not shown that efforts were made to find
petitioners personally and that said efforts failed. These requirements are
indispensable because substituted service is in derogation of the usual method of
service. It is an extraordinary method since it seeks to bind the defendant to the
consequences of a suit even though notice of such action is served not upon him
but upon another whom the law could only presume would notify him of the
pending proceedings. Failure to faithfully, strictly, and fully comply with the
statutory requirements of substituted service renders such service ineffective. 31
Likewise, nowhere in the return of summons or in the records of the case was it
shown that Gary Acob, the person on whom substituted service of summons was
effected, was a person of suitable age and discretion residing in petitioners
residence. In Manotoc v. Court of Appeals,32 we said:
If the substituted service will be effected at defendants house or residence, it
should be left with a person of "suitable age and discretion then residing therein."
A person of suitable age and discretion is one who has attained the age of full legal
capacity (18 years old) and is considered to have enough discernment to
understand the importance of a summons. "Discretion" is defined as "the ability to
make decisions which represent a responsible choice and for which an
understanding of what is lawful, right or wise may be presupposed." Thus, to be of
sufficient discretion, such person must know how to read and understand English
to comprehend the import of the summons, and fully realize the need to deliver the
summons and complaint to the defendant at the earliest possible time for the

person to take appropriate action. Thus, the person must have the "relation of
confidence" to the defendant, ensuring that the latter would receive or at least be
notified of the receipt of the summons. The sheriff must therefore determine if
the person found in the alleged dwelling or residence of defendant is of
legal age, what the recipients relationship with the defendant is, and
whether said person comprehends the significance of the receipt of the
summons and his duty to immediately deliver it to the defendant or at least
notify the defendant of said receipt of summons. These matters must be
clearly and specifically described in the Return of Summons.33 (Emphasis
supplied)
In this case, the process server failed to specify Gary Acobs age, his relationship
to petitioners and to ascertain whether he comprehends the significance of the
receipt of the summons and his duty to deliver it to petitioners or at least notify
them of said receipt of summons.
In sum, petitioners were not validly served with summons and the complaint in
Civil Case No. 3719 by substituted service. Hence, the MTC failed to acquire
jurisdiction over the person of the petitioners and, thus, the MTCs 23 August 2004
Decision is void.34 Since the MTCs 23 August 2004 Decision is void, it also never
became final.35
WHEREFORE, we GRANT the petition. We SET ASIDE the 3 January 2005 and
16 June 2006 Orders of the Regional Trial Court, Branch 25, Bian, Laguna. The 23
August 2004 Decision and the 1 October 2004 Writ of Execution, as well as all acts
and deeds incidental to the judgment in Civil Case No. 3719, are declared VOID.
WeREMAND the case to the Municipal Trial Court, Bian, Laguna, for
consolidation with the unlawful detainer case in Civil Case No. 3719 and for the
said Municipal Trial Court to continue proceedings thereon by affording petitioners
Abubakar A. Afdal and Fatima A. Afdal a chance to file their answer and present
evidence in their defense, and thereafter to hear and decide the case.
SO ORDERED.

RAPID
CITY
REALTY
AND
DEVELOPMENT CORPORATION,
Petitioner,

Present:
PUNO, C.J., Chairperson,
CARPIO MORALES,
NACHURA,*
CASTRO,
BERSAMIN, and
VILLARAMA, JR., JJ.

- versus -

ORLANDO VILLA
PAEZ-VILLA,[1]

G.R. No. 184197

and

LOURDES
Respondents.

Promulgated:
February 11, 2010

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO MORALES, J.:

Sometime in 2004, Rapid City Realty and Development Corporation

(petitioner) filed a

complaint

for

declaration

of

nullity

of

subdivision

plans . . . mandamus and damages against several defendants including Spouses

Orlando and Lourdes Villa (respondents). The complaint, which was docketed at
the Regional Trial Court of Antipolo City as Civil Case No. 04-7350, was lodged at
Branch 71 thereof.
After one failed attempt at personal service of summons, Gregorio Zapanta
(Zapanta), court process server, resorted to substituted service by serving
summons upon respondents househelp who did not acknowledge receipt thereof
and refused to divulge their names. Thus Zapanta stated in the Return of
Summons:
THIS IS TO CERTIFY that on September 24, 2004, the
undersigned caused the service of summons together with a copy of
the complaint with its annexes to defendant Spouses Lourdes
Estudillo Paez-Cline and Orlando Villa at their given address at 905
Padre Faura Street, Ermita Manila, as per information given by two
lady househelps who are also residing at the said address, the
defendant spouses are not around at that time. On the 27 th of
September, 2004, I returned to the same place to serve the summons.I
served the summons and the copy of the complaint with its annexes to
the two ladies (The same lady househelp I met on Sept. 24, 2004)
but they refused to sign to acknowledge receipt and they
refused to tell their name as per instruction of the defendants.
With me who can attest to the said incident is Mr. Jun Llanes, who was
with me at that time.[2] x x x (emphasis and underscoring supplied)

Despite substituted service, respondents failed to file their Answer,

prompting petitioner to file a Motion to Declare Defendants[-herein respondents]
in Default which the trial court granted by Order of May 3, 2005.
More than eight months thereafter or on January 30, 2006, respondents filed
a Motion to Lift Order of Default, [3] claiming that on January 27, 2006 they

officially received all pertinent papers such as Complaint and Annexes. Motion
to Dismiss of the Solicitor General and the ORDER dated May 3, 2005 granting the
Motion to Declare [them] in Default.

And they denied the existence of two

women helpers who allegedly refused to sign and acknowledge receipt of the
summons. In any event, they contended that assuming that the allegation were
true, the helpers had no authority to receive the documents. [4]
By Order of July 17, 2006, the trial court set aside the Order of Default and
gave herein respondents five days to file their Answer. Respondents just the same
did not file an Answer, drawing petitioner toagain file a Motion to declare them in
default, which the trial court again granted by Order of February 21, 2007.
On April 18, 2007, respondents filed an Omnibus Motion for reconsideration
of the second order declaring them in default and to vacate proceedings, this time
claiming that the trial court did not acquire jurisdiction over their persons due to
invalid service of summons.
The trial court denied respondents Omnibus Motion by Order of May 22,
2007 and proceeded to receive ex-parte evidence for petitioner.
Respondents, via certiorari, challenged the trial courts February 21, 2007
and April 18, 2007 Orders before the Court of Appeals.
In the meantime, the trial court, by Decision of September 4, 2007,
rendered judgment in favor of petitioner.
By Decision of April 29, 2008, [5] the appellate court annulled the trial courts
Orders declaring respondents in default for the second time in this wise:
In assailing the orders of the trial court through their Motion to Lift
and later their OmnibusMotion the petitioners [herein-respondents]
never raised any other defense in avoidance of the respondents
[herein petitioners] claim, and instead focused all their energies on
questioning the said courts jurisdiction. The latter motionclearly
stated prefatorily their counsels reservation or special appearance
to question jurisdiction over the persons of the petitioners. A party
who makes a special appearance in court challenging the jurisdiction
of said court based on the ground of invalid service of summons is not
deemed to have submitted himself to the jurisdiction of the

court.[6] (citation
supplied)

omitted; italics,

emphasis

and

underscoring

Petitioners motion for reconsideration having been denied by the appellate

court by Resolution of August 12, 2008, it comes to the Court via petition for
review on certiorari, arguing in the main that respondents, in filing the first Motion
to Lift the Order of Default, voluntarily submitted themselves to the jurisdiction of
the court.
The petition is impressed with merit.
It is settled that if there is no valid service of summons, the court can still
acquire jurisdiction over the person of the defendant by virtue of the latters
voluntary appearance. Thus Section 20 of Rule 14 of the Rules of Court provides:
Sec. 20. Voluntary appearance. The defendants voluntary
appearance in the action shall be equivalent to service of summons.
The inclusion in a motion to dismiss of other grounds aside from lack
of jurisdiction over the person shall not be deemed a voluntary
appearance.

And Philippine Commercial International Bank v. Spouses Wilson Dy Hong Pi and

Lolita Dy, et al.enlightens:
Preliminarily, jurisdiction over the defendant in a civil case is acquired
either by the coercive power of legal processes exerted over his
person, or his voluntary appearance in court. As a general
proposition, one who seeks an affirmative relief is deemed to have
submitted to the jurisdiction of the court. It is by reason of this rule
that we have had occasion to declare that the filing of motions to
admit answer, for additional time to file answer, for reconsideration of
a default judgment, and to lift order of default with motion for
reconsideration, is considered voluntary submission to the
courts jurisdiction. This, however, is tempered by the concept of
conditional appearance, such that a party who makes a special
appearance to challenge, among others, the courts jurisdiction over
his person cannot be considered to have submitted to its authority.
Prescinding from the foregoing, it is thus clear that:
(1) Special appearance operates as an exception to the general rule
on voluntary appearance;

(2) Accordingly, objections to the jurisdiction of the court over the

person of the defendant must be explicitly made, i.e., set forth in
an unequivocal manner; and
(3) Failure to do so constitutes voluntary submission to the
jurisdiction of the court, especially in instances where a pleading or
motion seeking affirmative relief is filed and submitted to the court for
resolution.[7] (italics and underscoring supplied)

In their first Motion to Lift the Order of Default [8] dated January 30, 2006,
respondents alleged:

4.

xxxx
In the case of respondents, there is no reason why they should
not receive the Orders of this Honorable Court since the subject
of the case is their multi-million real estate property and
naturally they would not want to be declared in default or lose
the same outright without the benefit of a trial on the merits;

5.

It would be the height of injustice if the respondents is [sic]

denied the equal protection of the laws[;]

6.

Respondents must be afforded Due process of Law as

enshrined in the New Constitution, which is a basic right of every
Filipino, since they were not furnished copies of pleadings by the
plaintiff and the Order dated May 3, 2005;
x x x x[9]

and accordingly prayed as follows:

WHEREFORE, . . . it is most respectfully prayed . . . that the
Order dated May 5, 2005 declaring [them] in default be LIFTED. [10]

Respondents did not, in said motion, allege that their filing thereof was a special
appearance for the purpose only to question the jurisdiction over their
persons. Clearly, they had acquiesced to the jurisdiction of the court.
WHEREFORE, the petition is GRANTED. The assailed Court of Appeals
Decision of April 29, 2008 isREVERSED and SET ASIDE.

Let the original records of Civil Case No. 04-7350 be remanded to the court
of origin, Regional Trial Court of Antipolo City, Branch 71.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
G.R. No. 82971 September 15, 1989
PHILIPPINE NATIONAL BANK, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, THE REGIONAL TRIAL COURT,
JUDICIAL REGION V, BRANCH 43, EPIFANIO MATIENZO, AND FLORENCIA
MATIENZO, respondents.
The Chief Legal Counsel for petitioner.
Delfin G. Posada for private respondents.

GRIO-AQUINO, J.:
In this petition for certiorari and prohibition with prayer for preliminary injunction,
herein petitioner, Philippine National Bank (or PNB for brevity), seeks the reversal
of the decision of the Court of Appeals in AC-G.R. No. CV-02959-R, entitled
"Epifanio Matienzo and Florencia Matienzo, Plaintiffs-Appellants vs. Domingo
Molina, Orlando Molina and Ireneo Molina, Defendants-Appellees," reversing the
judgment appealed from and ordering petitioner to reconvey one-half of the
mortgaged land in favor of herein private respondents, the Matienzo spouses.
Epifanio Matienzo and Florencia Matienzo were the original owners of a 4,161 sq.
meter-lot registered under OCT No. 5253, Free Patent No. 27945 (pp. 3-4, Rollo)
situated at Cabinitan, Virac, Catanduanes.
In May, 1977, the business partners, Domingo, Orlando and Ireneo, all surnamed
Molina, were looking for a lot in Virac where they could put up a furniture shop
and a 'chicharon' factory. Respondents Matienzos offered to sell their lot in
Cabinitan, Virac, for the price of Pl0 per square meter.

The Molinas wanted to buy only one-half of the property. An affidavit (Exh. C) was
executed by the parties containing the following memorandum of their agreement:
That the true intention of the parties in the Deed of Sale (Exh. A) to be executed by
them was for the transfer of ownership over one-half only (2,080 sq. meters) of
Matienzo's property, but the other half (2,081 sq. meters) would be included in the
sale for the purpose of facilitating the defendant-partners' loan and to use it as
additional collateral to enable them to secure a bigger loan from PNB. Likewise,
they agreed that after five (5) or ten (10) years, Orlando Molina would, at his own
expense, cause the other half portion of the land to be surveyed and titled in the
name of Epifanio Matienzo.
Orlando Molina issued a promissory note (Exh. B) for P20,800, payable in
installments as the price of the 2,080-sq.-meter portion of Matienzo's land. Both
the affidavit (Exh. C) and the promissory note (Exh. B) were signed by Orlando
Molina.
However, when the Deed of Absolute Sale (Exh. A) was presented to Matienzo for
signing on November 9, 1977, Domingo Molina appeared as vendee, instead of
Orlando. The spouses wondered why that was so, but they were assured that there
would be no problem because Domingo Molina was one of the partners to the
proposed business venture. Convinced of the group's sincerity, the respondent
spouses signed the Deed of Absolute Sale.
On March 14, 1978, Domingo Molina sold the whole parcel of land to Orlando
Molina for the same price of P20,800. Whereupon, Transfer Certificate of Title
1332 was issued in the name of Orlando Molina (p. 3, Rollo).
On October 8, 1979, Orlando Molina mortgaged the entire lot to the PNB branch in
Virac for P l5, 000.
The defendants were able to pay Matienzo only P3,350 out of the P20,000 price of
the sale of one-half of their property. Despite repeated demands for payment, the
Molinas defaulted.
They also defaulted in paying the PNB loan. PNB foreclosed the real estate
mortgage and purchased the mortgaged property as the highest bidder at the
public auction sale which was conducted on March 10, 1981.
On March 31, 1981, the Matienzos filed an action for Reconveyance of Title,
Recovery of Ownership and Possession, Annulment of the Document and Damages
(Civil Case No. 1105), against defendants Domingo Molina, Orlando Molina and
the Manager of PNB Virac Branch. Later, the complaint was amended to include
another defendant, Ireneo Molina.
On June 15, 1983, the Regional Trial Court, Fifth Judicial Region, Branch
43, dismissed the case insofar as the defendant Manager of PNB Virac Branch was
concerned (p. 14, Rollo). The order reads as follows:

A perusal of the complaint will readily show that even if all the
allegations in the complaint are admitted, there is no liability on the
part of defendant PNB Manager. This case therefore as against the
defendant PNB Manager is hereby dismissed.
The counterclaim contained in the answer of defendant PNB Manager
is also hereby dismissed as he could have prayed for the dismissal of
the complaint as against him right after receipt of the copy
thereof. . . .
Meanwhile, PNB consolidated its ownership over the mortgaged land.
In August 1983, Orlando Molina deposited with PNB Virac Branch the amount of
P15,000 as earnest money for the redemption of the foreclosed property.
After the trial, the lower court on February 9, 1984, dismissed Civil Case No. 1105.
It found "that no actionable wrong amounting to fraud were (sic) committed by
defendants to entitle plaintiffs to the relief prayed for" (p. 26, Rollo).
Upon appeal by the Matienzos to the Court of Appeals (AC G.R. No. CV-02959-R),
the appellate court reversed the appealed judgment. The dispositive part of its
decision promulgated on October 31, 1985 (Annex C, pp. 27-41, Rollo) reads thus:
WHEREFORE, PREMISES CONSIDERED, the decision appealed from
is hereby REVERSED and another one is hereby entered:
1. Ordering the defendants-appellees Domingo Molina and Orlando
Molina to pay jointly and severally the plaintiffs-appellants the
remaining balance of the consideration of the Deed of Sale, Exh. A, in
the amount of Pl7,450, with 12 % interest from the time of the filing of
the complaint until the amount is fully paid;
2. Ordering the court of origin to cause the partition of the property
into two equal parts, for the PNB Virac Branch, which is hereby
ordered and declared a party in this appeal, to recovery (sic) the
ownership and peaceful possession over 1/2 portion thereof to the
plaintiffs-appellants; and ordering the Register of Deeds of Virac,
Catanduanes to issue the corresponding title over said half portion in
the names of plaintiffs-appellants; and
3. Ordering the defendants-appellees Domingo Molina and Orlando
Molina to pay jointly and severally the plaintiffs-appellants the amount
of P10,000 as attorney's fees and litigation expenses, plus costs.
Upon remand of the case to the trial court for execution, the court issued, on
motion of the plaintiffs, an order placing in custodia legis the P15,000 earnest
money deposited by Orlando Molina in the PNB (p. 5, Rollo).

On January 12, 1987, the court issued an alias writ of execution ordering the PNB
Virac Branch to turn over to the sheriff the amount of P15,000 as partial execution
of the appellate court's judgment. An urgent motion for reconsideration of the
order was filed by PNB on January 26, 1987.
On February 12, 1988, the trial court issued an order of execution against Domingo
and Orlando Molina to pay the unpaid balance of P7,450 of the price of the 2,080
square meters sold to them by Matienzo, and
Furthermore, to completely enforce the judgment of the Intermediate
Appellate Court, the parties concerned, under paragraph 2 of the
dispositive portion of the decision, are hereby directed to submit their
proposed project of partition of the property involved, within a period
of fifteen (15) days from receipt of this order, in order that separate
titles may be issued to PNB, Virac Branch, and the plaintiffsappellants. (Annex D, P. 42, Rollo.)
On May 3,1988, PNB filed a petition for certiorari under Rule 65 of the Rules of
Court, alleging mainly:
1. That the Court of Appeals had no jurisdiction to render
the judgment against it; and
2. That the decision of the Court of Appeals deprives it of
its property without due process.
Upon receipt of the petition for certiorari, we issued a temporary restraining order
to stop the implementation of the writ of execution issued pursuant to the order of
February 12, 1988 and the decision dated October 31, 1985 of the Court of Appeals
in case AC-G.R. CV No. 02959-R (p. 44, Rollo).
During the pendency of the case, Florencia Matienzo died and she was substituted
by her heirs (p. 79, Rollo).
The petition is meritorious.
The Court of Appeals was aware of the dismissal of the complaint against the PNB
manager for that fact was mentioned in the appealed decision of the trial court
(Annex B, p. 15, Rollo) and in its own decision as follows:
On June 18,1983, the then Acting Presiding Judge in this Court, Hon.
Silvestre S. Felix, dismissed the case insofar as defendant Manager
PNB Virac Agency is concerned. To which dismissal no opposition nor
appeal was interposed by the plaintiffs. (p. 28, Rollo.)
Since the PNB was not a party in the suit (only its manager was sued and then
dropped from the complaint) both the trial court and the Court of Appeals did not
acquire jurisdiction over said Bank. The Court of Appeals' decision ordering the
Bank to reconvey to Matienzo one-half of the land which it had purchased at the

foreclosure sale, was therefore null and void for lack of jurisdiction (Paramount
Insurance Corporation vs. Luna, 148 SCRA 564; Hyopsung Maritime Co., Ltd. vs.
Court of Appeals, G.R. No. 77369, August 31, 1988).
. . . For the respondent court, in the instant case, to have rendered a
decision against petitioners who were neither appellants nor
appellees in the appeal brought before said court, is to act entirely
without jurisdiction. As a corollary, petitioners would also be denied
due process, never having been put on notice that they were involved
in the appeal so that they would have tried to prevent the appellate
court from rendering an adverse decision against them in the ordinary
course of law. (Fernando Go, et al. vs. Court of Appeals, et al., G.R.
No. L-25393, October 30, 1980, p. 74, Rollo.)
The decision of the Court of Appeals ordering the PNB to reconvey one-half of the
lot in question to Matienzo without giving PNB a chance to defend its own title to
the property, furthermore constitutes a deprivation of property without due
process, hence, null and void for that cause.
Mere service of the appellants' brief on PNB did not operate to bring the Bank into
the case. Jurisdiction over a person is acquired by service of summons and copy of
the complaint on him (Rule 14, Rules of Court). PNB could not be expected to
answer the appellants' brief not only because it was not a party in the appeal (nor
in the trial court) but also because the dismissal of the complaint against the PNB
manager in Virac was not one of the errors argued in the appellants' brief.
The trial court and the Court of Appeals found as a fact that, as stated in the
affidavit of Orlando Molina (Exh. C) Epifanio Matienzo allowed Orlando Molina to use the other half of the
property as additional collateral of a loan to be made with the DBP
(sic).
The trial court found that when plaintiffs entered into the contract of sale of the lot
in question, they knew the purpose for which the property was being purchased by
the defendants Domingo Molina and Orlando Molina. As stated by Pio Tiu, the
reduction of the consideration in the Deed of Sale was explained to the plaintiffs,
without them interposing any objection. The plan of the defendants Orlando Molina
and Ireneo Molina to mortgage the property in question to the PNB or other
banking institution to obtain capital for the business they intended to put up, was
likewise explained to plaintiff spouses, as borne out by the testimony of plaintiff
Florencia Matienzo (pp. 31-32, Rollo). For that reason, Matienzo signed the Deed
of Sale for the whole of his land, although the true agreement with Molina was to
sell to him only one-half of it.
Under the circumstances, the trial court correctly found no fraud or deceit both in
the execution of the deed of sale by Matienzo and in the mortgage of the whole lot
to the PNB by Molina.

PNB was an innocent mortgagee (and purchaser) of the property for value. It had
no notice of the adverse claim of Matienzo to one-half of the mortgaged property.
The title in the name of Orlando Molina was clean. The filing of Civil Case No.
1105, after the property had been sold to the Bank at the foreclosure sale, did not
invalidate the sale nor the title of the Bank.
The Court of Appeals' finding that the order dismissing the complaint against the
Bank's manager in Virac "has never become final" (p. 40, Rollo) has no basis. While
it is true, as observed by the Court, that the PNB was an indispensable party in
Civil Case No. 1105 without whom no complete relief could be accorded to the
plaintiffs (p. 40, Rollo), the fact is it was never actually joined as a defendant in the
case. The Bank manager in Virac (who was sued but later dropped from the
complaint) is not the PNB. He is only an employee of the bank. Upon noticing that
an indispensable party had not been impleaded, the Court of Appeals should have
sent back the case to the trial court for it to order the plaintiffs to amend their
complaint, bring in the PNB as an additional defendant, and for the Bank to answer
the amended complaint and present its evidence in the case (Banco EspaolFilipino vs. Palanca, 37 Phil. 921; Infante vs. Toledo, 44 Phil. 834; Nilo vs. Romero,
L-15195, March 29,1961).
Sending a copy of the appellants' brief to a lawyer of the Bank in the Virac agency
was not the proper way to implead the bank. Neither could it be done by a
peremptory declaration in the dispositive portion of the Court's decision that the
PNB "is hereby ordered and declared a party in this appeal" even if it never was (p.
41, Rollo).
WHEREFORE, the petition for certiorari is granted. Paragraph 2 of the dispositive
portion of the decision of the Court of Appeals:
2. Ordering the court of origin to cause the partition of the property
into two equal parts, for the PNB Virac Branch, which is hereby
ordered and declared a party in this appeal, to recover the ownership
and peaceful possession over 1/2 portion thereof to the plaintiffsappellants; and ordering the Register of Deeds of Virac, Catanduanes
to issue the corresponding title over said half portion in the names of
plaintiffs-appellants. (p. 41, Rollo.)
is annulled and set aside. The temporary restraining order which we issued is
hereby made permanent with regard to said paragraph 2, but it is lifted with
regard to paragraphs 1 and 3 of the dispositive portion of the same decision which
are affirmed. Costs against the private respondents.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION
G.R. No. 72827 July 18, 1989
LUCIA EUROPA (Mother of Deceased Lucrecia Europa), petitioner,
vs.
HUNTER GARMENTS MFG. (PHIL.) INC. and INTERMEDIATE APPELLATE
COURT, respondents.

PARAS, J.:
This is a petition for certiorari to annul the Court of Appeals decision which set
aside the order of default and judgment by default rendered by the Court of First
Instance of Rizal Branch XIII in Civil Case No. 37848 for Damages.
The facts of the case are briefly as follows:
In 1973, the petitioner's daughter, Lucrecia Europa, was employed as sample
maker by the private respondent Hunter Garments Manufacturing (Philippines)
Incorporated. Sometime during the course of her employment, or on March 9,
1978, Lucrecia got electrocuted by the high speed sewing machine which had been
assigned to her by the private respondent.
Thus, on July 18, 1980, the petitioner filed an action for damages against private
respondent based on quasi-delict.
Summons, together with a copy of the complaint, was served on its production
manager, Mr. Simplicio A. Garcia.
No answer to the complaint was ever filed. Thus, private respondent was declared
in default and the petitioner was allowed to present evidence ex parte.
On April 8, 1981, the trial court rendered judgment, the dispositive portion of
which reads;
WHEREFORE, the plaintiff having established her cause of action,
judgment is rendered against the defendant corporation ordering the
latter to pay the plaintiff the following:
a) for the death of Lucrecia, the sum of P12,000.00;
b) for actual expenses for the wake, the funeral and burial expenses
and other miscellaneous expenses, the sum of P5,580.00;
c) for loss of income, the sum of P30,000.00;
d) for moral damages, the sum of P10,000.00;

e) for attorney's fees, the sum of P5,000.00; and pay the costs. (p. 39,
Rollo)
Private respondent filed a motion for reconsideration of the aforesaid decision and
a motion to admit answer, alleging its failure to seasonably file an answer was due
to the excusable negligence of Ms. Lilia Jimenez, the production manager's
secretary, who failed to forward the summons and the copy of the complaint to the
company president, despite instructions to do so by her superior. The trial court
denied both motions.
Thus, private respondent appealed to the Court of Appeals, assigning the following
errors:
The Honorable Court, a quo, erred in not ruling that defendantappellant's failure to seasonably file its Answer was due to excusable
negligence;
The Honorable Court, a quo, erred in declaring defendant-appellant in
default and in allowing plaintiff-appellee to present her evidence ex
parte despite the fact that summons had not been properly served;
and
Assuming, arguendo, that the Honorable Court, a quo, had validly
acquired jurisdiction over the person of defendant-appellant, it erred
in rendering a decision which is not supported by law and the facts of
the case. (p. 42, Rollo)
Finding that the trial court never acquired jurisdiction over the person of private
respondent as summons was improperly served (the production manager not being
the same "manager" referred to in Section 13 Rule 14 of the Revised Rules of
Court for purposes of service of summons upon a domestic private corporation),
the Court of Appeals set aside the default order and judgment by default and
directed the trial court to conduct further proceedings for the adjudication of the
case. (p. 22, Rollo)
The petitioner filed a motion for reconsideration of the aforesaid decision but the
same was denied.
Hence, the instant petition for certiorari.
There is merit in this petition. Assuming arguendo that the court below originally
did not acquire jurisdiction over the private respondent, the latter certainly
submitted to it when private respondent filed a motion for reconsideration of the
judgment by default and a motion to admit answer on the ground of excusable
negligence. Therefore, the lower court's denial of both motions is binding on
private respondent. (Soriano vs. Palacio, 12 SCRA 449).
Private respondent likewise appealed from the judgment by default, thus, We shall
proceed to review the evidence presented and the propriety of damages awarded
by the lower court.

The evidence on record discloses that on March 9, 1978, Lucrecia Europa was
electrocuted by the sewing machine owned by private respondent. The autopsy
conducted by Dr. Nieto M. Salvador confirmed that Lucrecia died from "shock
probably secondary to electrocution" (Annex "A" of the complaint).
The facts and circumstances of the case point to the reasonableness of the
damages awarded. There is an express finding of gross negligence on the part of
private respondent in the judgment of the lower court, thus:
... There are at least two incidents, according to De la Cruz, where
high speed sewing machines of the defendant corporation were
grounded. These incidents were brought to the attention of the
management of the defendant corporation. Apparently, nothing was
done by way of checking these grounded machines.
At one time, Fornoza claimed that when her machine was grounded
and she complained about it, she was told by the management to get
out of there.' The defendant corporation does not employ a dulylicensed electrical engineer but only has three (3) electricians whose
services clearly proved inadequate for maintaining the safety of the
machines in the factory.
There is no indication that the management had ever shown any
serious concern for the safety of those operating said machines. As it
was, the defendant corporation even tended to be apathetic to the
plight of its employees manning the factory sewing machines....
If the machines were frequently and regularly checked or properly
maintained, the death of Lucrecia by electrocution would surely not
have come to pass, ... (p. 2, Decision).
In actions based on quasi-delict as in this case, all damages for the natural and
probable consequences of the act or omission complained of are recoverable.
(Article 2202 of the New Civil Code).
WHEREFORE, the decision of the Court of Appeals is hereby set aside and the
decision of the lower court is hereby reinstated except that the indemnity for the
death itself is increased to Thirty Thousand (P30,000.00) Pesos.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-17029

September 30, 1964

SAMUEL S. SHARRUF, petitioner,

vs.
FRANK BUBLA, ARSENIO SOLIDUM, Presiding Judge, Court of First
Instance of Manila, Branch XVII,respondents.
Ernesto T. Zshornack for petitioner.
William H. Quasha & Associates for respondents.
DIZON, J.:
This is a verified petition for certiorari, with a prayer for a preliminary injunction
filed by Samuel S. Sharruf against Frank Bubla and the Hon. Arsenio Solidum,
Judge of the Court of First Instance of Manila, Branch XVII, to set aside the latter's
orders of March 14 and April 11, 1960 in Civil Case No. 33461 denying petitioner's
motion for new trial, for lack of merit, and his motion for reconsideration thereof,
respectively, and his order of June 3, 1960 disallowing petitioner's appeal from the
order of denial of March 14, 1960 on the ground that the order aforesaid was
already final and executory, and ordering its execution.
On August 15, 1957 respondent Bubla, a non-resident alien, through his counsel
and legal representative, William Quasha & Associates, filed a complaint with the
respondent court to compel petitioner to render an accounting in connection with a
written contract entered into between them (Civil Case No. 33461). Petitioner filed
an answer denying the material allegations of the complaint and setting forth
therein a counterclaim for damages, but on September 17, 1958 his counsel filed a
motion to withdraw his appearance for the reason that he had been unable to get
in touch with him. The court granted the motion.
When the case called for pre-trial on September 27, 1958, petitioner failed to
appear, and the court set the case for trial on the judgments an December 1, 1958.
Notice thereof was sent to petitioner at his address of record. After several
postponements, the hearing of the case was reset for March 6, 1959, but petitioner
again failed to appear either personally or thru counsel, despite notice sent to him
at his address of record. Instead of proceeding with the trial of the case as His
Honor could have done he directed respondent Bubla's counsel to exert efforts
to notify petitioner of the trial of the case on April 23, 1959. Upon petitioner's
failure to appear when the case was finally called for trial on that date, the court
received Bubla's evidence which consisted of Bubla's deposition taken before the
Philippine Consul, Philippine Embassy at Sydney, Australia, and documentary
evidence relative to their contract, management and operation of the theatrical
venture and stipulation as to accounting. On the basis thereof, the respondent
court found that the following facts had been established:
From the evidence in the record, it appears that the plaintiff, Frank Bubla, is
a resident of 11 Shipley Street, South Yarra Melbourne, State of Victoria,
Commonwealth of Australia, and was an entrepreneur managing a theatrical
troupe under the name of "Bubla Continental Revue" in 1954, while the
defendant, Samuel S. Sharruf was then the operator and manager of the
"Riviera Night Club" at Dewey Boulevard, Manila. Exhibits "A" to "K" of
plaintiff's deposition show that plaintiff and defendant entered into a series

of agreement by correspondence whereby the former undertook to provide

the latter with the so-called "Bubla Continental Revue" for the purpose of
presenting two nightly floor shows in said night club for a consideration of
P2,500.00 monthly, "net and free income tax", as well as three daily stage
shows at the Manila Grand Opera House (Exhibits "E", "A-3", and "A-46"),
for another P2,500.00 a month. Subsequently, plaintiff and defendant
reduced the terms of their agreement to a formal contract (Exhibit "P").
The "Bubla Continental Revue", comprising of six members excluding the
plaintiff, who was unable to enter this country because his visa was not
approved, arrived in Manila sometime in September, 1954, and from
September 29, 1954 to January 15, 1955, it performed floor shows at the
"Riviera Night Club" twice nightly, and three or four stage shows daily at the
Manila Grand Opera House under the management and sponsorship of
herein defendant (Exhibits "A-28", "A-36", "A-42", "A-43" and "A-46"). In the
meantime plaintiff authorized defendant to pay the salaries of the members
of said theatrical troupe and requested an accounting of the expenditures
incurred as well as payment of whatever amount was due plaintiff by virtue
of their contract (Exhibit "P"). However, despite such demands (Annex "A",
Exhibits "II", "III", "IV" and "V"), defendant failed to render any accounting
and to pay to plaintiff such amount as was due him, thereby compelling the
latter to engage the services of his lawyers for P5,000.00 for the purpose of
instituting this action.
and on June 9, 1959, it rendered judgment as follows:
WHEREFORE, judgment is hereby rendered ordering the defendant, Samuel
S. Sharuff as follows:
a) To render to the plaintiff, Frank Bubla, an accounting of the gross receipts
from the Theatrical performances of the "Bubla Continental Revue" at the
"Riviera Night Club", Manila Grand Opera House and in other places in the
Philippines covering the period of four (4) months under defendant's
management, less authorized expenditures and advances;
b) To pay such sum as may be due the plaintiff as a result of such
accounting, with interest thereon at the legal rate from January 31, 1955,
until fully paid;
c) To pay to plaintiff the amount of P2,000.00 by way of attorney's fees; and
d) The costs of suit.
On February 5, 1960, copy of the above-quoted decision was served upon
petitioner. On March 7, 1960, he filed a motion for new trial on the ground of
mistake and/or excusable negligence which motion was denied by the court in its
order of March 14, 1960, as follows:
Inasmuch as the Motion for New Trial and to set aside the decision in this
case is not supported by affidavits of merit, as required by the Rules, the

same is hereby DENIED. Moreover, it appears from the record that the
decision was rendered on June 9, 1959, whereas the Motion for New Trial
was filed on March 7, 1960, more than six months after the condition of such
judgment, as provided in Section 3, Rule 38 of the Rules of Court ... .
On March 18, 1960, petitioner filed an urgent motion for reconsideration which
was denied by the court on March 19, 1960. Four days later, petitioner filed
another motion for reconsideration raising as additional grounds therefor that the
decision rendered in said case was null and void for want of notice to him of the
hearing thereof and that respondent Bubla had no legal capacity to sue before our
courts. Said motion was denied on April 11, 1960. In another order of June 3, 1960,
the respondent court disallowed petitioner's appeal from its order of March 14th,
on the ground that it was not filed within the reglementary period for appeal, and
ordered the issuance of a writ of execution.
Upon the facts before Us, we find no sufficient reason to grant the writ prayed
for.1awphl.nt
The granting or denial of a motion for new trial is a matter addressed to the sound
discretion of the trial court. In this case where petitioner's motion was based on
mistake and/or excusable negligence, the lower court found that the same was not
supported by any affidavit of merit. Even if we were to agree with petitioner that,
in this connection, his answer to the complaint may be taken into account, the
allegations made therein do not appear to satisfy the rule as to proof of mistake or
excusable negligence. Consequently, the respondent court committed no error in
denying said motion.
Petitioner insists that the respondent court acquired no jurisdiction over the
person of respondent Bubla. We find this to be without merit. It is settled law in
this jurisdiction that a court may acquire jurisdiction over the person of a party
either by his voluntary appearance in court demanding affirmative relief or by
having him served. With summons within the territorial jurisdiction of the
Philippines. Bubla was the plaintiff in Civil Case No. 33461 filed against the herein
petitioner. By filing his complaint, therefore, Bubla submitted voluntarily to the
jurisdiction of the respondent court and the latter acquired such jurisdiction even
if, as a matter of fact, Bubla had never been able to enter the Philippines.
Petitioner's claim that the decision of the respondent court in Civil Case No. 33461
is void because of lack of notice of trial served on him is likewise untenable. The
record shows that petitioner had a registered address in the record of said case at
which repeated notices of trial were addressed to him. Aside from this, it also
appears that the respondent court, instead of proceeding to receive the evidence of
the plaintiff on March 6, went out of its way and deemed it wise to reset the trial
for April 23 of the same year, directing Bubla's counsel to exert efforts to notify
petitioner. But this notwithstanding, the latter failed to appear on the aforesaid
date, for which reason the respondent court received Bubla's evidence and
subsequently rendered judgment in his favor.
WHEREFORE, the petition for certiorari under consideration is dismissed, with
costs.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-30666 September 28, 1984
ANDRES ABAN and DOLORES GALOPE, petitioners,
vs.
HONORABLE MANUEL L. ENAGE, as District Judge of the Court of First
Instance of Agusan, Branch II, Heirs of ELEUTERIO CUENCA, and ATTY.
TIMOTEO D. NALDOZA, Attorney-in-Fact and Counsel,respondents.
Noe Cangco Zarate for petitioners.
Francisco T. Concon for respondents Heirs of Eleuterio Cuenca.
RESOLUTION

MAKASIAR, J., Chairman:

On February 25, 1983, We rendered a decision in this case dismissing the petition
filed therein and affirming the order of the Court of First Instance, Branch II, dated
July 29, 1968 in Civil Case No. 1005 which cancelled TCT No. RT-1693 in the
names of herein petitioners covering Lot No. 427C-1 and lifting the temporary
restraining order issued by this Court on July 9, 1969.
Petitioners, in their motion for reconsideration filed on April 8, 1983, now seek to
have the aforesaid decision reconsidered on the basis of these grounds:
1. This Court erred in upholding the challenged order despite the fact
that the proceedings conducted before the lower court partake of the
nature of a hearing under Sec. 112 of Act 496, instead of an ordinary
civil action; and
2. The cancellation of the Transfer Certificate of Title No. RT-1693 in
the name of herein petitioners deprived them, in the ultimate analysis,
of their property rights without due process of law (p. 631, Vol. II,
rec.).
Petitioners thus pray for reconsideration of the aforesaid decision and the
rendition of another one which would declare the proceedings in the lower court
void (p. 648, Vol. II, rec.).

On May 30, 1983, private respondents, thru Senecio Cuenca as heir and
representative of the heirs of Eleuterio Cuenca, filed their comments on the motion
for reconsideration. In opposition to the said motion, private respondents allege
that:
1. The motion failed to show when the petitioners received notice of
the decision sought to be reconsidered to enable the Supreme Court
to determine whether or not it was filed on nine;
2. The grounds or assignment of errors raised by petitioners in their
motion were already fully and intelligently discussed, with all
supporting authorities, unanimously concurred in by all the members
of the Second Division; and
3. Anent the second assignment of error, it can be fairly and justly
stated that petitioners were not deprived of their property rights
without due process of law, for they were given by the lower court an
opportunity to be heard and submit evidence and were represented by
counsel. They should be bound by the failure of their counsel to
protect their interests and claim (pp. 657, 659, Vol II, rec.).
On June 6, 1983, petitioners filed their manifestation or motion to allow them to
submit transcripts of records of proceedings in the lower court two weeks from
date of filing of their manifestation (p. 662, Vol. II, rec.).
In its resolution of June 20, 1983, this Court granted the aforecited manifestation
to allow petitioners to submit the transcripts of records (p. 666, Vol. II rec.).
Respondents heirs of Eleuterio Cuenca filed. a motion to dismiss on February 1,
1984 praying for the denial of aforesaid manifestation/motion and the termination
of herein case for petitioners' failure to submit the transcript of records within the
time requested for and their lack of interest to prosecute their cause after a lapse
of over six months from June 20, 1983 (p. 667, Vol. II, rec.).
WE do not find merit in petitioners' motion for reconsideration. WE have
thoroughly considered petitioners' assigned errors and have resolved the same
with finality, thus:
For even assuming that the motion to cancel filed by private
respondents in the court below is a separate, distinct, and
independent action by itself, as argued by the petitioners,
nevertheless, by the service of summons upon herein petitioners, and
by their act of filing an opposition to the motion as well as their
voluntary appearance in court when the motion was get for hearing,
together with the submission of their memorandum (pp. 168-177,
rec.), the petitioners are deemed to have submitted themselves to the
jurisdiction of the court, and, consequently, they are bound by the
legal implications of the order of the court a quo.

Moreover, the filing of petitioners' three motions for reconsideration is

a further submission on their part to the jurisdiction Of the court, and
the denial of such motions was binding on petitioner herein (Soriano
vs. Palacio, et al., 12 SCRA 447, 449).
It cannot be said that 'the petitioners-were denied their day in court.
Neither can it be said that the petitioners' substantial rights were
prejudiced thereby. The petitioners have had the fullest opportunity to
lay before the court the merits of their claim when they; as stated
heretofore, voluntarily submitted themselves to the jurisdiction of the
court a quo.
To assert that the court had no jurisdiction because petitioner Andres
Aban was not a party in Civil Case No. 1005 would appear therefore
to be a mere technicality that would not serve the interest of the
administration of justice (Torres vs. Caluag, et al., 17 SCRA 808, 811).
Besides, petitioner Andres Aban's not being a party in Civil Case No.
1005 was of his own making. By not joining as party plaintiff in Civil
Case No. 1005, and, at the same time, asking that court to drop him
as party-defendant (he was sued as one of the parties-defendants
when his consent to have him joined as one of the parties-plaintiffs
could not be secured) in the same case, which the court a quo granted
in an order dated September 17, 1964, petitioner Andres Aban
virtually toyed with his right to enforce and protect his claim over a
portion of Lot No. 427 of Butuan Cadastre. There is no plausible
reason for petitioner Andres Aban to assume that the lot he claims
(Lot No. 427-C-1) is not involved in Civil Case No. 1005 because what
is precisely under litigation in said case is Lot No. 427 as a whole, of
which Lot No. 427-C-1 is part and parcel (120 SCRA 769, 797).
Again, petitioners defaulted in their bid to be heard by this Court which, in two
instances, were afforded them. It must be noted that their motion for
reconsideration was taken note of and thereafter, their manifestation/motion to
allow them two weeks to submit transcripts of proceedings in the lower court was
granted in the Court resolution dated June 20, 1983. It has been more than one
year now since June 20, 1983 when petitioners were allowed time (which they
themselves requested for to submit transcripts of the lower court proceedings and
yet, they have not produced said transcripts nor have they submitted any
explanation. This Court has waited for more than a year and it cannot waste its
time waiting for parties like petitioners herein whose irresponsibility and apathy
caused undue delay in the dispensation of justice and grave prejudice to the herein
respondents.
WHEREFORE, PETITIONERS' MOTION FOR RECONSIDERATION DATED MARCH
29, 1983 IS HEREBY DENIED FOR LACK OF MERIT AND THE DECISION OF
THIS COURT DATED FEBRUARY 25, 1983 IS HEREBY DECLARED FINAL AND
EXECUTORY.
SO ORDERED.