FIRST DIVISION
We affirmed said decision of the appellate court
[G.R. No. 161028. January 31, 2005]
TERESITA V. IDOLOR, petitioner, vs. HON. COURT OF APPEALS,
SPOUSES GUMERSINDO DE GUZMAN and ILUMINADA DE GUZMAN
and HON. JOSE G. PINEDA, Presiding Judge of Regional Trial Court,
National Capital Judicial Region, Branch 220, Quezon City,
respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the September 1, 2003
decision[1] of the Court of Appeals in CA-G.R. SP No. 72494 which
reversed the May 27, 2002 order of the Regional Trial Court of
Quezon City, Branch 220, in Civil Case No. Q-98-34728, denying
respondent-spouses Motion for Immediate Issuance of Writ of
Possession.
Petitioner Teresita V. Idolor obtained a loan from respondent-
spouses Gumersindo and Iluminada De Guzman secured by a real
estate mortgage over a property covered by Transfer Certificate of
Title No. 25659.[2]
Upon default by petitioner in the payment of her obligation,
respondent-spouses instituted extra-judicial foreclosure
proceedings against the real estate mortgage. During the auction
sale, respondent-spouses emerged as the highest bidder and were
issued a Certificate of Sale.[3]
On June 25, 1998, petitioner filed with the Regional Trial Court of
Quezon City, Branch 220, a complaint for annulment of the
Certificate of Sale with prayer for the issuance of a temporary
restraining order and a writ of preliminary injunction. The case was
docketed as Civil Case No. Q-98-34728.
The trial court issued a writ of preliminary injunction, however, the
Court of Appeals in a petition for certiorari filed by respondent-
spouses, annulled the same for having been issued with grave
1
abuse of discretion.
in Idolor v. Court of Appeals.[4]
The ownership over the subject property having been consolidated
in their name, respondent-spouses De Guzman moved for the
issuance of a writ of possession with the Regional Trial Court where
the case for the annulment of the Certificate of Sale was pending.
[5] On May 27, 2002, the trial court denied the motion, ruling that
the the lifting of the writ of preliminary injunction does not ipso
facto entitle defendant De Guzman to the issuance of a writ of
possession over the property in question. It only allows the
defendant Sheriff to issue a final deed of sale and confirmation sale
and the defendant De Guzman to consolidate the ownership/title
over the subject property in his name.[6]
In a petition for certiorari before the Court of Appeals, the appellate
court found that the trial court gravely abused its discretion in
denying the motion for the issuance of the writ of possession to the
mortgagee or the winning bidder is a ministerial function of the
court and that the pendency of an action questioning the validity of
a mortgage cannot bar the issuance of the writ of possession after
title to the property has been consolidated in the mortgagee.[7]
Hence, it reversed and set aside the May 27, 2002 order of the trial
court.
The following issues are raised for our consideration:
A. WHETHER OR NOT THE COURT A QUO HAS JURISDICTION ON THE
MOTION OF THE MORTGAGEE TO APPLY FOR A WRIT OF
POSSESSION NOTWITHSTANDING NON-PAYMENT OF DOCKET FEES;
B. WHETHER OR NOT THE MORTGAGEE, BY MERE MOTION, NOT BY
A PETITION, MAY APPLY FOR A WRIT OF POSSESSION IN THE SAME
CASE FOR ANNULMENT OF THE SHERIFFS CERTIFICATE OF SALE OF
WHICH HE IS A DEFENDANT.[8]
A writ of possession is an order whereby the sheriff is commanded
to place a person in possession of a real or personal property.[9] It
may be issued under the following instances: (1) land registration
proceedings under Sec. 17 of Act 496; (2) judicial foreclosure,
provided the debtor is in possession of the mortgaged realty and no
third person, not a party to the foreclosure suit, had intervened;
and (3) extrajudicial foreclosure of a real estate mortgage under
Sec. 7 of Act 3135 as amended by Act 4118,[10] to which the
present case falls.
Section 7, Act 3135, as amended by Act 4118, provides:
SECTION 7. In any sale made under the provisions of this Act, the
purchaser may petition the Court of First Instance of the province or
place where the property or any part thereof is situated, to give
him possession thereof during the redemption period, furnishing
bond in an amount equivalent to the use of the property for a
period of twelve months, to indemnify the debtor in case it be
shown that the sale was made without violating the mortgage or
without complying with the requirements of this Act. Such petition
shall be made under oath and filed in form of an ex parte motion in
the registration or cadastral proceedings if the property is
registered, or in special proceedings in the case of property
registered under the Mortgage Law or under section one hundred
and ninety-four of the Administrative Code, or of any other real
property encumbered with a mortgage duly registered in the office
of any register of deeds in accordance with any existing law, and in
each case the clerk of the court shall, upon the filing of such
petition, collect the fees specified in paragraph eleven of section
one hundred and fourteen of Act Numbered Four hundred and
ninety-six, as amended by Act Numbered Twenty-eight hundred and
sixty-six, and the court shall, upon approval of the bond, order that
a writ of possession issue, addressed to the sheriff of the province
in which the property is situated, who shall execute said order
immediately.
Under the provision cited above, the purchaser in a foreclosure sale
may apply for a writ of possession during the redemption period by
filing for that purpose an ex parte motion under oath, in the
corresponding registration or cadastral proceeding in the case of a
property with torrens title. Upon the filing of such motion and the
approval of the corresponding bond, the court is expressly directed
to issue the writ.[11]
Upon the expiration of the redemption period, the right of the
purchaser to the possession of the foreclosed property becomes
absolute. The basis of this right to possession is the purchasers
ownership of the property. Mere filing of an ex parte motion for the
2
issuance of the writ of possession would suffice, and the bond
required is no longer necessary, since possession becomes an
absolute right of the purchaser as the confirmed owner.[12]
In this case, respondent-spouses acquired an absolute right over
the property upon the failure of petitioner to exercise her right of
redemption and upon the consolidation of the title in their name.
The pendency of the case for the annulment of the Certificate of
Sale is not a bar to the issuance of the writ of possession. Upon the
filing of the motion, the trial court has no discretion to deny the
same, thus:
This Court has consistently held that the duty of the trial court to
grant a writ of possession is ministerial. Such writ issues as a
matter of course upon the filing of the proper motion and the
approval of the corresponding bond. No discretion is left to the trial
court. Any question regarding the regularity and validity of the sale,
as well as the consequent cancellation of the writ, is to be
determined in a subsequent proceeding as outlined in Section 8 of
Act 3135. Such question cannot be raised to oppose the issuance of
the writ, since the proceeding is ex parte. The recourse is available
even before the expiration of the redemption period provided by
law and the Rules of Court.[13]
The judge to whom an application for writ of possession is filed
need not look into the validity of the mortgage or the manner of its
foreclosure. As a rule, after the consolidation of title in the buyers
name, for failure of the mortgagor to redeem, the writ of
possession becomes a matter of right. Its issuance to a purchaser
in an extrajudicial foreclosure is merely a ministerial function. As
such, the court neither exercises its official discretion nor judgment.
[14] Any question regarding the validity of the mortgage or its
foreclosure cannot be a legal ground for refusing the issuance of a
writ of possession. Regardless of whether or not there is a pending
suit for annulment of the mortgage or the foreclosure itself, the
purchaser is entitled to a writ of possession, without prejudice of
course to the eventual outcome of said case.[15]
Contrary to petitioners assertion, the Regional Trial Court of Quezon
City has jurisdiction to act on respondents motion for writ of
possession. Section 7, Act 3135, as amended, is clear that in any
sale made under its provisions, the purchaser may petition the
Court of the province or place where the property or any part
thereof is situated Since the property subject of this controversy is
in Quezon City, then the citys Regional Trial Court should rightly
take cognizance of the case.
The Court of Appeals correctly observed:
Thus, it is clear under the aforesaid law that the RTC of the place
where the property is situated has the appropriate authority to
issue the writ of possession and, specifically in the instant case, it is
the RTC of Quezon City. And when jurisdiction pertains to the RTC of
Quezon City, it includes all branches thereof including the court a
quo where a related proceeding is being conducted.[16]
Further, in Bacalso, et al. v. Ramolete, et al.,[17] we held:
The various branches of the Court of First Instance of Cebu under
the Fourteenth Judicial District, are a coordinate and co-equal
courts, and the totality of which is only one Court of First Instance.
The jurisdiction is vested in the court, not in the judges. And when
a case is filed in one branch, jurisdiction over the case does not
attach to the branch or judge alone, to the exclusion of the other
branches. Trial may be held or proceedings continue by and before
another branch or judge. It is for this reason that Section 57 of the
Judiciary Act expressly grants to the Secretary of Justice, the
administrative right or power to apportion the cases among the
different branches, both for the convenience of the parties and for
the coordination of the work by the different branches of the same
court. The apportionment and distribution of cases does not involve
a grant or limitation of jurisdiction; the jurisdiction attaches and
continues to be vested in the Court of First Instance of the province,
and the trials may be held by any branch or judge of the court.
Necessarily, therefore, Branch 220 of the Regional Trial Court of
Quezon City has jurisdiction over respondent-spouses application
for writ of possession over a property in Quezon City.
The Court of Appeals properly debunked petitioners claim that the
Regional Trial Court acquired no jurisdiction over the case due to
alleged non-payment of docket fees by the respondent. This
allegation, having been raised for the first time on appeal, should
be disallowed. Besides, the fees mentioned in Section 7, Act 3135
3
in relation to Section 114, Act 496, pertain to fees payable upon
registration of land titles, and not to court or docket fees, as
erroneously claimed by petitioner.
An ex-parte petition for issuance of possessory writ under Section 7
of Act No. 3135 is not, strictly speaking, a judicial process. Even if
the same may be considered a judicial proceeding for the
enforcement of ones right of possession as purchaser in a
foreclosure sale, it is not an ordinary suit filed in court, by which
one party sues another for the enforcement or protection of a right,
or the prevention or redress of a wrong.[18] It is a non-litigious
proceeding and summary in nature as well. As such, the rigid and
technical application of the rules on legal fees may be relaxed in
order to avoid manifest injustice to the respondent. After all, rules
of procedure are used to help secure and not override substantial
justice. Even the Rules of Court mandates a liberal construction in
order to promote their objective of securing a just, speedy and
inexpensive disposition of every action and proceeding. Since rules
of procedure are mere tools designed to facilitate the attainment of
justice, their strict and rigid application which would result in
technicalities that tend to frustrate rather than promote substantial
justice must always be avoided.[19]
This rule is applicable in the present case. Although respondent-
spouses have been declared as the highest bidder and despite
having consolidated the title in their name, they still failed to take
possession of the property through numerous legal maneuverings
of the petitioner. A simple ex parte application for the issuance of a
writ of possession has become a litigious and protracted
proceeding.
Thus, if we strictly apply the Rules, justice long been denied to
respondent would be effectively defeated. At any rate, should there
be fees and costs relative to the issuance and implementation of
the writ of possession, the same may be assessed and collected
from the respondent-spouses De Guzman.
WHEREFORE, in view of the foregoing, the petition for review on
certiorari is DENIED and the decision of the Court of Appeals in CA-
G.R. SP No. 72494 is AFFIRMED. The Regional Trial Court of Quezon
City, Branch 220 is ordered to issue a writ of possession in favor of
respondent-spouses Gumersindo and Iluminada De Guzman.
SO ORDERED.
SECOND DIVISION
[A.M. No. MTJ-00-1250. February 28, 2001]
RIMEO S. GUSTILO, complainant, vs. HON. RICARDO S. REAL, SR.,
Presiding Judge, 2nd Municipal Circuit Trial Court of Victorias-
Manapla, Negros Occidental, respondent.
RESOLUTION
QUISUMBING, J.:
In a verified complainti[1] dated June 15, 1997, Rimeo S. Gustilo
charged respondent Judge Ricardo S. Real, Sr., of the Municipal
Circuit Trial Court of Victorias-Manapla, Negros Occidental with
gross misconduct, gross incompetence, gross ignorance of the law,
and violation of the Anti-Graft and Corrupt Practices Act relative to
Civil Case No. 703-M entitled Weddy C. Libo-on v. Rimeo S. Gustilo,
et al. for recounting of ballots of Precinct Nos. 27 and 27-A,
Barangay Punta Mesa, Manapla, Negros Occidental.
Complainant avers that he was a candidate for punong barangay of
Barangay Punta Mesa, Manapla, Negros Occidental in the May 12,
1997 elections. His lone opponent was Weddy C. Libo-on, then the
incumbent punong barangay and the representative of the
Association of Barangay Captains (ABC) to the Sangguniang Bayan
of Manapla and the Sangguniang Panlalawigan of Negros
Occidental. Both complainant and Libo-on garnered eight hundred
nineteen (819) votes during the elections, resulting in a tie. The
breaking of the tie by the Board of Canvassers was in complainants
favor and he was proclaimed duly elected punong barangay of
Punta Mesa, Manapla.ii[2]
On May 20, 1997, his opponent filed an election protest case,
docketed as Civil Case No. 703-M, before the MCTC of Victorias-
Manapla, Negros Occidental. Libo-on sought the recounting of
ballots in two precincts, preliminary prohibitory injunction, and
damages.
4
On May 21, 1997, respondent ordered the issuance of summons to
the parties and set the hearing on June 6, 1997.iii[3]
On May 27, 1997, however, Libo-on filed a motion to advance the
hearing to May 29 and 30, 1997.
The next day, respondent granted Libo-ons motion. The hearing
was advanced to May 29 and 30, 1997 cancelling the hearing for
June 6, 1997.iv[4] Complainant avers that he was not furnished a
copy of this Order dated May 28, 1997.
On May 29, 1997, respondent judge issued a temporary restraining
order (TRO) and annulled the proclamation of complainant as the
duly elected punong barangay of Punta Mesa, Manapla.v[5]
Complainant declares that no copy of this Order dated May 29,
1997 was served on him. That same day, however, he was able to
secure copies of the orders of respondent dated May 28 and May
29, 1997 from the COMELEC Registrar of Manapla, Negros
Occidental and the Department of Interior and Local Government
(DILG). Moreover, it was only in the afternoon of May 29, 1997 that
complainant received a copy of Libo-ons petition in Civil Case No.
703-M and respondents Order dated May 21, 1997.
On May 30, 1997, complainant took his oath of office as punong
barangay.vi[6] That same day, he also filed a petition for certiorari
before the Regional Trial Court of Silay City, Negros Occidental,
Branch 69 docketed as Special Civil Action No. 1936-69.
On June 5, 1997, the RTC lifted the TRO issued by respondent and
declared as null and void the order nullifying complainants
proclamation as duly elected punong barangay.vii[7]
Believing that respondent could not decide Civil Case No. 703-M
impartially, complainant moved for his inhibition.
On June 11, 1997, respondent denied complainants motion for
inhibition and after hearing Libo-ons motion for permanent
injunction, issued a second TRO to maintain the status quo
between the contending parties.viii[8]
Complainant argues that by issuing the second TRO, respondent
reversed the order of the RTC of Silay City dated June 5, 1997. He
also claims that by preventing him from assuming office, he was
excluded by the DILG from participating in the election of the Liga
ng Mga Barangay on June 14, 1997.
In his Comment, respondent denied the allegations. He claimed
that when Libo-on filed his motion to advance the hearing of the
prayer for injunction on May 27, 1997 in Civil Case No. 703-M,
complainant was served a copy by registered mail as shown by the
registry receipts attached to said motion. Considering the urgency
of the matter and since there was substantial compliance with due
process, he issued the Order of May 28, 1997 which cancelled the
hearing set for June 6, 1997 and advanced it to May 29 and 30,
1997.
Respondent claims that on May 29, 1997, Libo-on and his counsel
appeared but complainant did not, despite due notice. The hearing
then proceeded, with Libo-on presenting his evidence. As a result,
he issued the TRO prayed for and annulled complainants
proclamation. Respondent admits that the Order of May 29, 1997,
particularly the annulment of complainants proclamation, was
outside the jurisdiction of his court. But since the COMELEC ignored
Libo-ons petition for correction of erroneous tabulation and Libo-on
had no other remedy under the law, he was constrained to annul
complainants proclamation, which from the very beginning was
illegal. He justified his action by our rulings in Bince, Jr. v.
COMELEC, 312 Phil. 316 (1995) and Tatlonghari v. COMELEC, 199
SCRA 849 (1991), which held that a faulty tabulation cannot be the
basis of a valid proclamation.
Respondent also faults the RTC of Silay City for issuing the Order
dated June 5, 1997, which lifted the TRO he issued and declared
void his nullification of complainants proclamation. Respondent
contends that complainant should first have exhausted all remedies
in his court before resorting to the special civil action for certiorari
with the RTC. The latter court, in turn, should have dismissed the
action for certiorari for failure to exhaust judicial remedies.
With respect to his Order of June 11, 1997, respondent explains
that it was never meant to reverse the Order of the RTC of Silay
City dated June 5, 1997. He points out that both parties in Civil
Case No. 703-M were present during the hearing after due notice.
After receiving their evidence, he found that unless a TRO was
issued, Libo-on would suffer a grave injustice and irreparable injury.
5
He submits that absent fraud, dishonesty, or corruption, his acts,
even if erroneous, are not the subject of disciplinary action.
In its evaluation and recommendation report dated November 29,
1999, the Office of the Court Administrator (OCA) found that
respondents errors were not honest mistakes in the performance of
his duties. Rather, his actions showed a bias in favor of Libo-on and
evinced a pattern to prevent the complainant from assuming office
as the duly elected punong barangay despite his having been
proclaimed as such by the Board of Canvassers. The OCA
recommends that respondent be fined P20,000.00 and warned that
a repetition of similar acts in the future will be dealt with more
severely.
Supreme Court Administrative Circular No. 20-95 provides:
2. The application for a TRO shall be acted upon only after all
parties are heard in a summary hearing conducted within
twenty-four (24) hours after the records are transmitted to the
branch selected by raffle. The records shall be transmitted
immediately after raffle (Emphasis supplied).
xxx
4. With the exception of the provisions which necessarily
involve multiple-sala stations, these rules shall apply to single-
sala stations especially with regard to immediate notice to all
parties of all applications for TRO.
The foregoing clearly show that whenever an application for a TRO
is filed, the court may act on the application only after all parties
have been notified and heard in a summary hearing. In other
words, a summary hearing may not be dispensed with.ix[9] In the
instant case, respondent admits that he issued the injunctive writ
sought on May 29, 1997 after receiving the applicants evidence ex
parte. His failure to abide by Administrative Circular No. 20-95 in
issuing the first TRO is grave abuse of authority, misconduct, and
conduct prejudicial to the proper administration of justice.
Worse, he compounded the infraction by annulling complainants
proclamation as the duly elected punong barangay of Punta Mesa,
Manapla and prohibiting him from assuming office. Respondent
admits that his court was not vested with the power or jurisdiction
to annul the proclamation, but seeks to justify his action on the
ground that the proclamation was void ab initio. In so doing,
respondent wantonly usurped a power exclusively vested by law in
the COMELEC.x[10] A judge is expected to know the jurisdictional
boundaries of courts and quasi-judicial bodies like the COMELEC as
mapped out by the Constitution and statutes and to act only within
said limits. A judge who wantonly arrogates unto himself the
authority and power vested in other agencies not only acts in
oppressive disregard of the basic requirements of due process, but
also creates chaos and contributes to confusion in the
administration of justice. Respondent, in transgressing the
jurisdictional demarcation lines between his court and the
COMELEC, clearly failed to realize the position that his court
occupies in the interrelation and operation of the countrys justice
system. He displayed a marked ignorance of basic laws and
principles. Rule 3.01 of the Code of Judicial Conduct provides that a
judge shall be faithful to the law and maintain professional
competence. By annulling complainants proclamation as the duly
elected punong barangay, despite being aware of the fact that his
court had no power to do so, not only is respondent guilty of grave
abuse of authority, he also manifests unfaithfulness to a basic legal
rule as well as injudicious conduct.
Moreover, in willfully nullifying complainants proclamation despite
his courts want of authority, respondent knowingly issued an unjust
order.
Note that the RTC of Silay City corrected respondents errors by
declaring null and void his Order dated May 29, 1997. Nonetheless,
he compounded his previous errors of judgment by proceeding to
hear Libo-ons motion for permanent injunction and issuing a
second TRO on June 11, 1997 on the ground that extreme urgency
and grave injustice and irreparable injury will arise if no injunctive
remedy were granted. Respondent insists that his act did not
reverse the Order of the RTC in Special Civil Action No. 1936-69,
since the second TRO he issued satisfied the notice and hearing
requirements of Circular No. 20-95.
Before an injunctive writ can be issued, it is essential that the
following requisites be present: (1) there must be a right in esse or
the existence of a right to be protected; and (2) the act against
which injunction to be directed is a violation of such right. xi[11] The
6
onus probandi is on movant to show that there exists a right to be
protected, which is directly threatened by the act sought to be
enjoined. Further, there must be a showing that the invasion of the
right is material and substantial and that there is an urgent and
paramount necessity for the writ to prevent a serious damage.xii
[12] In this case, complainant had been duly proclaimed as the
winning candidate for punong barangay. He had taken his oath of
office. Unless his election was annulled, he was entitled to all the
rights of said office. We do not see how the complainants exercise
of such rights would cause an irreparable injury or violate the right
of the losing candidate so as to justify the issuance of a temporary
restraining order to maintain the status quo. We see no reason to
disagree with the finding of the OCA that the evident purpose of the
second TRO was to prevent complainant from participating in the
election of the Liga ng mga Barangay. Respondent must be held
liable for violating Rule 3.02 of the Code of Judicial Conduct which
provides that, In every case, a judge shall endeavor diligently to
ascertain the facts and the applicable law unswayed by partisan
interests, public opinion, or fear of criticism.
In a similar case, a judge was fined P5,000.00 for failure to observe
the requirements of Administrative Circular No. 20-95 when he
issued a TRO enjoining a duly proclaimed barangay captain from
participating in the elections of officers of the ABC of Taft, Eastern
Samar.xiii[13] Note, however, that in the instant case, the
respondents infractions are not limited to the mere issuance of a
restraining order without conducting the summary conference
required by Administrative Circular No. 20-95. He also annulled the
proclamation of the complainant knowing very well that he had no
such authority. When his first restraining order was set aside and
nullification of complainants proclamation was declared null and
void by the RTC of Silay City, a superior court, he again issued a
TRO, which showed his partiality to complainants political rival.
Respondent is thus guilty of violating Rules 3.01 and 3.02 of the
Code of Judicial Conduct; knowingly rendering an unjust order;
gross ignorance of the law or procedure; as well as bias and
partiality. All of the foregoing are serious charges under Rule 140,
Section 3 of the Rules of Court. We agree with the sanction
recommended by the OCA, finding it to be in accord with Rule 140,
Section 10 (A) of the Rules of Court.
WHEREFORE, this COURT finds respondent judge GUILTY of
violating Rules 3.01 and 3.02 of the Code of Judicial Conduct,
knowingly rendering an unjust order, gross ignorance of the law BRISTOL-MYERS SQUIBB (PHIL.), G.R. No. 170684
and procedure, and bias and partiality. Accordingly, a fine of Twenty INC./MEAD JOHNSON PHIL.,
Thousand Pesos (P20,000.00) is hereby imposed upon respondent Petitioner,
with a STERN WARNING that a repetition of the same or similar acts
will be dealt with more severely.
- versus -
SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur. COURT OF APPEALS and MICHAEL J. Promulgated:
LAGROSAS,
Respondents. September 12, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - -x
DECISION
QUISUMBING, J.:
SECOND DIVISION

Before this Court are two consolidated petitions. The first

MICHAEL J. LAGROSAS, G.R. No. 168637 petition, docketed as G.R. No. 168637, filed by Michael J.
Petitioner, Lagrosas, assails the Decision1[1] dated January 28, 2005 and the
Resolution2[2] dated June 23, 2005 of the Court of Appeals in CA-
G.R. SP No. 83885. The second petition, docketed as G.R. No.
- versus - Present: 170684, filed by Bristol-Myers Squibb (Phil.), Inc./Mead Johnson
Phil., assails the Resolutions3[3] dated August 12, 2005 and
October 28, 2005 of the Court of Appeals in CA-G.R. SP No. 83885.
QUISUMBING, J., Chairperson,
BRISTOL-MYERS SQUIBB (PHIL.), CARPIO MORALES,
INC./MEAD JOHNSON PHIL., RICHARD TINGA, The facts are undisputed.
SMYTH as General Manager and FERDIE VELASCO, JR., and
SARFATI, as Medical Sales Director, BRION, JJ.
Respondents. Michael J. Lagrosas was employed by Bristol-Myers Squibb
x- - - - - - - - - - - - - - - - - - - - - - - - - -x (Phil.), Inc./Mead Johnson Phil. from January 6, 1997 until March 23,
2000 as Territory Manager in its Medical Sales Force Division. 4[4]

1[1] Rollo (G.R. No. 168637), pp. 35-46. Penned by Associate Justice
Hakim S. Abdulwahid, with Associate Justices Remedios A. Salazar-
Fernando and Juan Q. Enriquez, Jr. concurring.

2[2] Id. at 32-33.

3[3] Rollo (G.R. No. 170684), pp. 24-25 and 27-29.

7
 On February 4, 2000, Ma. Dulcinea S. Lim, also a Territory
Manager and Lagrosas former girlfriend, attended a district
meeting of territory managers at McDonalds Alabang Town Center.
After the meeting, she dined out with her friends. She left her car at
McDonalds and rode with Cesar R. Menquito, Jr. When they returned
to McDonalds, Lim saw Lagrosas car parked beside her car. Lim told
Menquito not to stop his car but Lagrosas followed them and
slammed Menquitos car thrice. Menquito and Lim alighted from the
car. Lagrosas approached them and hit Menquito with a metal
steering wheel lock. When Lim tried to intervene, Lagrosas
accidentally hit her head.
Upon learning of the incident, Bristol-Myers required
Lagrosas to explain in writing why he should not be dismissed for
assaulting a co-employee outside of business hours. While the
offense is not covered by the Code of Discipline for Territory
Managers, the Code states that other infractions not provided for
herein shall be penalized in the most appropriate manner at the
discretion of management.5[5] In his memo, Lagrosas admitted
that he accidentally hit Lim when she tried to intervene. He
explained that he did not intend to hit her as shown by the fact that
he never left the hospital until he was assured that she was all
right.6[6]
In the disciplinary hearing that followed, it was established
that Lagrosas and Lim had physical confrontations prior to the
incident. But Lagrosas denied saying that he might not be able to
control himself and hurt Lim and her boyfriend if he sees them
together.
4[4] Records, Vol. I, p. 53.
5[5] Id. at 79.
6[6] Id. at 82.
8
On March 23, 2000, Bristol-Myers dismissed Lagrosas
effective immediately.7[7] Lagrosas then filed a complaint8[8] for
illegal dismissal, non-payment of vacation and sick leave benefits,
13th month pay, attorneys fees, damages and fair market value of
his Team Share Stock Option Grant.
On February 28, 2002, Labor Arbiter Renaldo O. Hernandez
rendered a Decision9[9] in NLRC NCR Case No. 00-03-02821-99,
declaring the dismissal illegal. He noted that while Lagrosas
committed a misconduct, it was not connected with his work. The
incident occurred outside of company premises and office hours. He
also observed that the misconduct was not directed against a co-
employee who just happened to be accidentally hit in the process.
Nevertheless, Labor Arbiter Hernandez imposed a penalty of three
months suspension or forfeiture of pay to remind Lagrosas not to be
carried away by the mindless dictates of his passion. Thus, the
Arbiter ruled:
WHEREFORE, premises considered,
judgment is hereby [rendered] finding that
respondent company illegally dismissed complainant
thus, ORDERING it:
1) [t]o reinstate him to his former position
without loss of seniority rights, privileges and
benefits and to pay him full backwages reckoned
from [the] date of his illegal dismissal on 23 March
2000 including the monetary value of his
vacation/sick leave of 16 days per year reckoned
from July 1, 2000 until actually reinstated, less three
(3) months salary as penalty for his infraction;
2) to pay him the monetary equivalent of his
accrued and unused combined sick/vacation leaves
as of June 30, 2000 of 16 days x 3 years and 4
7[7] Id. at 18-21.
8[8] Id. at 1.
9[9] Id. at 146-155.
 months 10 days x P545.45 = P23,636.16 and the
present fair market value of his Team Share stock
option grant for eight hundred (800) BMS common
shares of stock listed in the New York Stock Exchange
which vested in complainant as of 01 July 1997,
provisionally computed as 90% (800 shares x
US$40.00 per share x P43.20/US$ = P1,244,160.00).
3) to pay him Attorneys fee of 10% on the
entire computable amount.
All other claims of complainant are dismissed
for lack of merit.
SO ORDERED.10[10]
On appeal, the National Labor Relations Commission (NLRC)
set aside the Decision of Labor Arbiter Hernandez in its
Decision11[11] dated September 24, 2002. It held that Lagrosas
was validly dismissed for serious misconduct in hitting his co-
employee and another person with a metal steering wheel lock. The
gravity and seriousness of his misconduct is clear from the fact that
he deliberately waited for Lim and Menquito to return to
McDonalds. The NLRC also ruled that the misconduct was
committed in connection with his duty as Territory Manager since it
occurred immediately after the district meeting of territory
managers.
Lagrosas moved for reconsideration. On May 7, 2003, the
NLRC issued a Resolution 12[12] reversing its earlier ruling. It
ratiocinated that the incident was not work-related since it occurred
only after the district meeting of territory managers. It emphasized
that for a serious misconduct to merit dismissal, it must be
connected with the employees work. The dispositive portion of the
Resolution states:
10[10] Id. at 155.
11[11] Id. at 534-543.
12[12] Id. at 616-619.
9
WHEREFORE, premises considered, We find
this time no reason to alter the Labor Arbiters
Decision of February 28, 2002 and hereby affirm the
same in toto. We vacate our previous Decision of
September 24, 2002.
SO ORDERED.13[13]
Bristol-Myers filed a motion for reconsideration which the
NLRC denied in an Order dated February 4, 2004 in NLRC NCR Case
No. 00-03-02821-99 (NLRC NCR CA No. 031646-02).14[14] Later,
Labor Arbiter Hernandez issued a writ of execution.15[15] Notices of
garnishment were then served upon the Philippine British
Assurance Co., Inc. for the supersedeas bond posted by Bristol-
Myers and the Bank of the Philippine Islands for the balance of the
judgment award.16[16]
Bristol-Myers moved to quash the writ of execution
contending that it timely filed a petition for certiorari with the Court
of Appeals. The appellate court gave due course to Bristol-Myers
petition and issued a temporary restraining order (TRO) 17[17]
enjoining the enforcement of the writ of execution and notices of
garnishment. Upon the expiration of the TRO, the appellate court
issued a writ of preliminary injunction dated September 17, 2004. 18
[18]
13[13] Id. at 618-619.
14[14] Id. at 723-724.
15[15] Id. at 806-808.
16[16] Records, Vol. II, p. 31.
17[17] CA rollo, p. 188.
18[18] Id. at 406.
 Bristol-Myers then moved to discharge and release the TRO
cash bond. It argued that since it has posted an injunction cash
bond, the TRO cash bond should be legally discharged and
released.
On January 28, 2005, the appellate court rendered the
following Decision:
WHEREFORE, the petition is GRANTED. The
Resolution of May 7, 2003 and the Order of February
4, 2004 in NLRC NCR Case No. [00-03-02821-99]
(NLRC NCR CA No. [031646-02]), are REVERSED and
SET ASIDE. The public respondent NLRCs Decision
dated September 24, 2002 which reversed the Labor
Arbiters decision and in effect sustained the legality
of the private respondents termination and the
dismissal of his claim for the fair market value of the
[Team Share] stock option grant is REINSTATED and
AFFIRMED, with MODIFICATION that the petitioner
shall pay the private respondent the monetary
equivalent of his accrued and unused combined
sick/vacation leave plus ten (10%) percent thereof,
as attorneys fees. The injunction bond and the TRO
bond previously posted by the petitioner are
DISCHARGED.
SO ORDERED.19[19]
The appellate court considered the misconduct as having
been committed in connection with Lagrosas duty as Territory
Manager since it occurred immediately after the district meeting of
territory managers. It also held that the gravity and seriousness of
the misconduct cannot be denied. Lagrosas employed such a
degree of violence that caused damage not only to Menquitos car
but also physical injuries to Lim and Menquito.
Lagrosas filed a motion for reconsideration which the
appellate court denied.
19[19] Rollo (G.R. No. 168637), pp. 45-46.
10
In the meantime, Bristol-Myers moved to release the TRO
cash bond and injunction cash bond in view of the Decision dated
January 28, 2005. On August 12, 2005, the appellate court denied
the motion as premature since the decision is not yet final and
executory due to Lagrosas appeal to this Court.20[20]
Bristol-Myers filed a motion for reconsideration. On October
28, 2005, the appellate court resolved:
WHEREFORE, the petitioners Motion [f]or
Reconsideration dated September 6, 2005 is
PARTIALLY GRANTED and the Resolution of August
12, 2005 is RECONSIDERED and SET ASIDE. The
temporary restraining order cash bond in the amount
of SIX HUNDRED THOUSAND PESOS (P600,000.00)
which was posted by the petitioners on July 19, 2004
is ordered DISCHARGED and RELEASED to the
petitioners.
SO ORDERED.21[21]
The appellate court held that upon the expiration of the
TRO, the cash bond intended for it also expired. Thus, the discharge
and release of the cash bond for the expired TRO is proper. But the
appellate court disallowed the discharge of the injunction cash
bond since the writ of preliminary injunction was issued pendente
lite. Since there is a pending appeal with the Supreme Court, the
Decision dated January 28, 2005 is not yet final and executory.
Hence, the instant petitions.
In G.R. No. 168637, Lagrosas assigns the following errors:
I.
20[20] Rollo (G.R. No. 170684), pp. 24-25.
21[21] Id. at 29.
 THE HONORABLE COURT OF APPEALS IN DECLARING
THAT THE TERMINATION OF EMPLOYMENT OF THE
PETITIONER-APPELLANT WAS LEGAL HAD DECIDED A
QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD
WITH THE LABOR LAWS AND JURISPRUDENCE AND
DEPARTED FROM THE ACCEPTED AND USUAL
COURSE OF JUDICIAL PROCEEDINGS, AS TO CALL FOR
THE EXERCISE OF THIS HONORABLE COURTS POWER
OF REVIEW AND/OR SUPERVISION.
II.
THE HONORABLE COURT OF APPEALS IN IMPOSING
THE PENALTY OF DISMISSAL, BEING A PENALTY TOO
HARSH IN THIS CASE, DECIDED A QUESTION OF
SUBSTANCE IN A WAY NOT IN ACCORD WITH THE
LABOR LAWS AND JURISPRUDENCE AND DEPARTED
FROM THE ACCEPTED AND USUAL COURSE OF
JUDICIAL PROCEEDINGS, AS TO CALL FOR THE
EXERCISE OF THIS HONORABLE COURTS POWER OF
REVIEW AND/OR SUPERVISION.22[22]
In G.R. No. 170684, Bristol-Myers raises the following
issue:
[WHETHER OR NOT THE HONORABLE] COURT OF
APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION
IN DISALLOWING THE RELEASE AND DISCHARGE OF
PETITIONERS INJUNCTION BOND.23[23]
Simply put, the basic issues in the instant petitions are: (1)
Did the Court of Appeals err in finding the dismissal of Lagrosas
legal? and (2) Did the Court of Appeals err in disallowing the
discharge and release of the injunction cash bond?
22[22] Rollo (G.R. No. 168637), p. 6.
23[23] Rollo (G.R. No. 170684), p. 12.
11
On the first issue, serious misconduct as a valid cause for
the dismissal of an employee is defined simply as improper or
wrong conduct. It is a transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, willful
in character, and implies wrongful intent and not mere error of
judgment. To be serious within the meaning and intendment of the
law, the misconduct must be of such grave and aggravated
character and not merely trivial or unimportant. However serious
such misconduct, it must, nevertheless, be in connection with the
employees work to constitute just cause for his separation. The act
complained of must be related to the performance of the
employees duties such as would show him to be unfit to continue
working for the employer.24[24]
Thus, for misconduct or improper behavior to be a just
cause for dismissal, it (a) must be serious; (b) must relate to the
performance of the employees duties; and (c) must show that the
employee has become unfit to continue working for the employer. 25
[25]
Tested against the foregoing standards, it is clear that
Lagrosas was not guilty of serious misconduct. It may be that the
injury sustained by Lim was serious since it rendered her
unconscious and caused her to suffer cerebral contusion that
necessitated hospitalization for several days. But we fail to see how
such misconduct could be characterized as work-related and
reflective of Lagrosas unfitness to continue working for Bristol-
Myers.
24[24] Villamor Golf Club v. Pehid, G.R. No. 166152, October 4, 2005, 472 SCRA 36, 48; Samson
v. National Labor Relations Commission, G.R. No. 121035, April 12, 2000, 330 SCRA 460, 471.
25[25] Lopez v. National Labor Relations Commission, G.R. No. 167385, December 13, 2005, 477
SCRA 596, 601; Fujitsu Computer Products Corporation of the Philippines v. Court of Appeals,
G.R. No. 158232, March 31, 2005, 454 SCRA 737, 768.
 Although we have recognized that fighting within company
premises may constitute serious misconduct, we have also held
that not every fight within company premises in which an employee
is involved would automatically warrant dismissal from service. 26
[26] More so, in this case where the incident occurred outside of
company premises and office hours and not intentionally directed
against a co-employee, as hereafter explained.
First, the incident occurred outside of company premises
and after office hours since the district meeting of territory
managers which Lim attended at McDonalds had long been
finished. McDonalds may be considered an extension of Bristol-
Myers office and any business conducted therein as within office
hours, but the moment the district meeting was concluded, that
ceased too. When Lim dined with her friends, it was no longer part
of the district meeting and considered official time. Thus, when
Lagrosas assaulted Lim and Menquito upon their return, it was no
longer within company premises and during office hours. Second,
Bristol-Myers itself admitted that Lagrosas intended to hit Menquito
only. In the Memorandum27[27] dated March 23, 2000, it was
stated that You got out from your car holding an umbrella steering
wheel lock and proceeded to hit Mr. Menquito. Dulce tried to
intervene, but you accidentally hit her on the head, knocking her
unconscious.28[28] Indeed, the misconduct was not directed
against a co-employee who unfortunately got hit in the process.
Third, Lagrosas was not performing official work at the time of the
incident. He was not even a participant in the district meeting.
Hence, we fail to see how his action could have reflected his
unfitness to continue working for Bristol-Myers.
In light of Bristol-Myers failure to adduce substantial
evidence to prove that Lagrosas was guilty of serious misconduct, it
cannot use this ground to justify his dismissal. Thus, the dismissal
of Lagrosas employment was without factual and legal basis.
26[26] Supreme Steel Pipe Corporation v. Bardaje, G.R. No. 170811, April 24, 2007, 522 SCRA
155, 167.
27[27] Records, Vol. I, pp. 18-21.
28[28] Id. at 18.
12
On the second issue, it is settled that the purpose of a
preliminary injunction is to prevent threatened or continuous
irremediable injury to some of the parties before their claims can
be thoroughly studied and adjudicated. Its sole aim is to preserve
the status quo until the merits of the case can be heard fully. 29[29]
A preliminary injunction may be granted only when, among
other things, the applicant, not explicitly exempted, files with the
court where the action or proceeding is pending, a bond executed
to the party or person enjoined, in an amount to be fixed by the
court, to the effect that the applicant will pay such party or person
all damages which he may sustain by reason of the injunction or
temporary restraining order if the court should finally decide that
the applicant was not entitled thereto. Upon approval of the
requisite bond, a writ of preliminary injunction shall be issued. 30
[30]
The injunction bond is intended as a security for damages in
case it is finally decided that the injunction ought not to have been
granted. Its principal purpose is to protect the enjoined party
against loss or damage by reason of the injunction, and the bond is
usually conditioned accordingly.31[31]
In this case, the Court of Appeals issued the writ of
preliminary injunction to enjoin the implementation of the writ of
execution and notices of garnishment pending final resolution of
this case or unless the [w]rit is sooner lifted by the Court. 32[32]
By its Decision dated January 28, 2005, the appellate court
disposed of the case by granting Bristol-Myers petition and
29[29] Medina v. Greenfield Development Corporation, G.R. No. 140228, November
19, 2004, 443 SCRA 150, 159.
30[30] Limitless Potentials, Inc. v. Court of Appeals, G.R. No. 164459, April 24, 2007,
522 SCRA 70, 83-84.
31[31] Id. at 84.
32[32] CA rollo, p. 406.
reinstating the Decision dated September 24, 2002 of the NLRC SO ORDERED.
which dismissed the complaint for dismissal. It also ordered the
discharge of the TRO cash bond and injunction cash bond. Thus,
both conditions of the writ of preliminary injunction were satisfied.

Notably, the appellate court ruled that Lagrosas had no right

to the monetary awards granted by the labor arbiter and the NLRC, SECOND DIVISION
and that the implementation of the writ of execution and notices of
garnishment was properly enjoined. This in effect amounted to a
NELSON JENOSA and his son NIO G.R. No. 172138
finding that Lagrosas did not sustain any damage by reason of the
CARLO JENOSA, SOCORRO CANTO and
injunction. To reiterate, the injunction bond is intended to protect
her son PATRICK CANTO, CYNTHIA Present:
Lagrosas against loss or damage by reason of the injunction only.
APALISOK and her daughter CYNDY
Contrary to Lagrosas claim, it is not a security for the judgment
APALISOK, EDUARDO VARGAS and his CARPIO, J., Chairperson,
award by the labor arbiter.33[33]
son CLINT EDUARD VARGAS, and NACHURA,
NELIA DURO and her son NONELL PERALTA,
Considering the foregoing, we hold that the appellate court GREGORY DURO, ABAD, and
erred in disallowing the discharge and release of the injunction cash Petitioners, MENDOZA, JJ.
bond.
- versus -
WHEREFORE, the two consolidated petitions are REV. FR. JOSE RENE C. DELARIARTE,
GRANTED. In G.R. No. 168637, filed by Michael J. Lagrosas, the O.S.A., in his capacity as the incumbent
Decision dated January 28, 2005, and the Resolution dated June 23, Principal of the High School Department
2005 of the Court of Appeals in CA-G.R. SP No. 83885 are of the University of San Agustin, and the
REVERSED. The Resolution dated May 7, 2003, and the Order UNIVERSITY OF SAN AGUSTIN, herein
dated February 4, 2004 of the NLRC in NLRC NCR Case No. 00-03- represented by its incumbent President
02821-99 (NLRC NCR CA No. 031646-02) are REINSTATED and REV. FR. MANUEL G. VERGARA,
hereby AFFIRMED. O.S.A., Promulgated:
Respondents.
In G.R. No. 170684, filed by Bristol-Myers Squibb (Phil.), September 8, 2010
Inc./Mead Johnson Phil., the Resolutions dated August 12, 2005 and x-------------------------------------------------
October 28, 2005 of the Court of Appeals in CA-G.R. SP No. 83885 -x
are REVERSED. The injunction cash bond in the amount of SIX
HUNDRED THOUSAND PESOS (P600,000) which was posted by DECISION
Bristol-Myers Squibb (Phil.), Inc./Mead Johnson Phil. on September
17, 2004 is hereby ordered DISCHARGED and RELEASED to it.
CARPIO, J.:
No pronouncement as to costs.
The Case

33[33] Rollo (G.R. No. 170684), p. 318.

13
 This is a petition for review34[1] of the 16 June 2005
Decision35[2] and 22 March 200636[3] Resolution of the Court of
Appeals in CA-G.R. SP No. 78894. In its 16 June 2005 Decision, the
Court of Appeals granted the petition of respondents University of
San Augustin (University), represented by its incumbent President
Rev. Fr. Manuel G. Vergara, O.S.A. (University President), and Rev.
Fr. Jose Rene C. Delariarte, O.S.A. (Principal), in his capacity as the
incumbent Principal of the High School Department of the
University (respondents) and ordered the dismissal of Civil Case
Nos. 03-27460 and 03-27646 for lack of jurisdiction over the
subject matter. In its 22 March 2006 Resolution, the Court of
Appeals denied the motion for reconsideration of petitioners Nelson
Jenosa and his son Nio Carlo Jenosa, Socorro Canto and her son
Patrick Canto, Cynthia Apalisok and her daughter Cyndy Apalisok,
Eduardo Vargas and his son Clint Eduard Vargas, and Nelia Duro
and her son Nonell Gregory Duro (petitioners).
The Facts
On 22 November 2002, some students of the University,
among them petitioners Nio Carlo Jenosa, Patrick Canto, Cyndy
Apalisok, Clint Eduard Vargas, and Nonell Gregory Duro (petitioner
students), were caught engaging in hazing outside the school
premises. The hazing incident was entered into the blotter of the
Iloilo City Police.37[4]
Thereafter, dialogues and consultations were conducted
among the school authorities, the apprehended students and their
parents. During the 28 November 2002 meeting, the parties agreed
34[1]Under Rule 45 of the Rules of Civil Procedure.
35[2]Rollo, pp. 24-34. Penned by Associate Justice Arsenio J. Magpale, with
Associate Justices Sesinando E. Villon and Enrico A. Lanzanas, concurring.
36[3]Id. at 36-37. Penned by Associate Justice Arsenio J. Magpale, with Associate
Justices Vicente L. Yap and Enrico A. Lanzanas, concurring.
37[4]Id. at 62.
14
that, instead of the possibility of being charged and found guilty of
hazing, the students who participated in the hazing incident as
initiators, including petitioner students, would just transfer to
another school, while those who participated as neophytes would
be suspended for one month. The parents of the apprehended
students, including petitioners, affixed their signatures to the
minutes of the meeting to signify their conformity. 38[5] In view of
the agreement, the University did not anymore convene the
Committee on Student Discipline (COSD) to investigate the hazing
incident.
On 5 December 2002, the parents of petitioner students
(petitioner parents) sent a letter to the University President urging
him not to implement the 28 November 2002 agreement. 39[6]
According to petitioner parents, the Principal, without convening
the COSD, decided to order the immediate transfer of petitioner
students.
On 10 December 2002, petitioner parents also wrote a letter
to Mrs. Ida B. Endonila, School Division Superintendent,
Department of Education (DepEd), Iloilo City, seeking her
intervention and prayed that petitioner students be allowed to take
the home study program instead of transferring to another school. 40
[7] The DepEd asked the University to comment on the letter. 41[8]
The University replied and attached the minutes of the 28
November 2002 meeting.42[9]
38[5]Id. at 93-94.
39[6]Id. at 63-64.
40[7]Id. at 65-68.
41[8]Id. at 69.
42 [9]Id. at 92-94.

On 3 January 2003, petitioners filed a complaint for
injunction and damages with the Regional Trial Court, Branch 29,
Iloilo City (trial court) docketed as Civil Case No. 03-27460. 43[10]
Petitioners assailed the Principals decision to order the immediate
transfer of petitioner students as a violation of their right to due
process because the COSD was not convened.
On 5 February 2003, the trial court issued a writ of
preliminary injunction and directed respondents to admit petitioner
students during the pendency of the case. 44[11] The 5 February
2003 Order reads:
WHEREFORE, let [a] Writ of Preliminary
Mandatory Injunction issue. The defendants are
hereby directed to allow the plaintiffs minor children
to attend their classes during the pendency of this
case, without prejudice to any disciplinary
proceeding to which any or all of them may be liable.
SO ORDERED.45[12]
Respondents filed a motion for reconsideration and asked
for the dissolution of the writ. The trial court denied respondents
motion. Respondents complied but with reservations.
43 [10]Id. at 55-61.
44 [11]Id. at 95-96.
45 [12]Id. at 96.
15
On 25 March 2003, respondents filed a motion to dismiss.
Respondents alleged that the trial court had no jurisdiction over the
subject matter of the case and that petitioners were guilty of forum
shopping. On 19 May 2003, the trial court denied respondents
motion. Respondents filed a motion for reconsideration.
On 21 April 2003, petitioners wrote the DepEd and asked
that it direct the University to release the report cards and other
credentials of petitioner students.46[13] On 8 May 2003, the DepEd
sent a letter to the University advising it to release petitioner
students report cards and other credentials if there was no valid
reason to withhold the same. 47[14] On 14 May 2003, the DepEd
sent another letter to the University to follow-up petitioners
request.48[15] On 20 May 2003, the University replied that it could
not release petitioner students report cards due to their pending
disciplinary case with the COSD.49[16]
On 28 May 2003, petitioners filed another complaint for
mandatory injunction praying for the release of petitioner students
report cards and other credentials docketed as Civil Case No. 03-
27646.50[17]
The trial court consolidated the two cases.51[18]
46 [13]Id. at 76.
47 [14]Id. at 75.
48 [15]Id. at 77.
49[16]Id. at 78-79.
50[17]Id. at 98-105.
51[18]Id. at 388-389.
 On 17 June 2003, the trial court issued a writ of preliminary
injunction and directed the University to release petitioner students
report cards and other credentials.52[19] Respondents filed a
motion for reconsideration. Respondents alleged that they could
not comply with the writ because of the on-going disciplinary case
against petitioner students.
On 26 June 2003, the COSD met with petitioners for a
preliminary conference on the hazing incident. On 7 July 2003, the
University, through the COSD, issued its report finding petitioner
students guilty of hazing. The COSD also recommended the
exclusion of petitioner students from its rolls effective 28 November
2002.
On 14 July 2003, the trial court issued an Order denying
both motions for reconsideration.53[20]
On 1 September 2003, respondents filed a special civil
action for certiorari with the Court of Appeals. Respondents insisted
that the trial court had no jurisdiction over the subject matter of
Civil Case Nos. 03-27460 and 03-27646. Respondents also alleged
that petitioners were guilty of forum shopping.
The Ruling of the Court of Appeals
In its 16 June 2005 Decision, the Court of Appeals granted
respondents petition and ordered the trial court to dismiss Civil
Case Nos. 03-27460 and 03-27646 for lack of jurisdiction over the
subject matter because of petitioners failure to exhaust
administrative remedies or for being premature. According to the
Court of Appeals, petitioners should have waited for the action of
52[19]Id. at 141-142.
53[20]Id. at 151-152.
16
the DepEd or of the University President before resorting to judicial
action. The Court of Appeals held:
From the foregoing, it is clear that the court a quo
committed grave [abuse] of discretion amounting to
LACK OF JURISDICTION in INTERFERING, pre-maturely,
with the exclusive and inherent authority of educational
institutions to discipline.
In directing herein petitioners [respondents in this
case] to re-admit herein private respondents
[petitioners in this case] and eventually, to release the
report cards and other school credentials, prior to the
action of the President of USA and of the
recommendation of the COSD, the court a quo is guilty
of improper judicial intrusion by encroaching into the
exclusive prerogative of educational institutions. 54[21]
Petitioners filed a motion for reconsideration. 55[22] In its 22
March 2006 Resolution, the Court of Appeals denied petitioners
motion for lack of merit.
The Issues
Petitioners raise the following issues:
1. Was the Court of Appeals correct in holding that
Branch 29 of the Regional Trial Court of Iloilo City in
Civil Case Nos. 03-27460 and 03-27646 did not
acquire jurisdiction over the subject matter of this
case for failure of petitioners to exhaust
administrative remedies?
54[21]Id. at 32-33.
55[22]Id. at 39-46.
 2. Was the recommendation/report/order of the
Committee on Student Discipline dated 7 July 2003
valid, and did it justify the order of exclusion of
petitioner students retroactive to 28 November
2002?56[23]
The Ruling of the Court
The petition has no merit.
Discipline in education is specifically mandated by the 1987
Constitution which provides that all educational institutions shall
teach the rights and duties of citizenship, strengthen ethical and
spiritual values, develop moral character and personal discipline. 57
[24] Schools and school administrators have the authority to
maintain school discipline58[25] and the right to impose appropriate
and reasonable disciplinary measures.59[26] On the other hand,
students have the duty and the responsibility to promote and
maintain the peace and tranquility of the school by observing the
rules of discipline.60[27]
56[23]Id. at 852.
57[24]CONSTITUTION, Art. XIV, Sec. 3(2).
58[25]Manual of Regulations for Private Schools (1992),
Section 74.
59[26]Manual of Regulations for Private Schools (1992),
Section 75.
60[27]Batas Pambansa Blg. 232 (1982), Section 15.3.
17
In this case, we rule that the Principal had the authority to
order the immediate transfer of petitioner students because of the
28 November 2002 agreement. 61[28] Petitioner parents affixed their
signatures to the minutes of the 28 November 2002 meeting and
signified their conformity to transfer their children to another
school. Petitioners Socorro Canto and Nelia Duro even wrote a letter
to inform the University that they would transfer their children to
another school and requested for the pertinent papers needed for
the transfer.62[29] In turn, the University did not anymore convene
the COSD. The University agreed that it would no longer conduct
disciplinary proceedings and instead issue the transfer credentials
of petitioner students. Then petitioners reneged on their agreement
without any justifiable reason. Since petitioners present complaint
is one for injunction, and injunction is the strong arm of equity,
petitioners must come to court with clean hands. In University of
the Philippines v. Hon. Catungal, Jr.,63[30] a case involving student
misconduct, this Court ruled:
Since injunction is the strong arm of equity, he
who must apply for it must come with equity or with
clean hands. This is so because among the maxims
of equity are (1) he who seeks equity must do equity,
and (2) he who comes into equity must come with
clean hands. The latter is a frequently stated maxim
which is also expressed in the principle that he who
has done inequity shall not have equity. It signifies
that a litigant may be denied relief by a court of
equity on the ground that his conduct has been
inequitable, unfair and dishonest, or fraudulent, or
deceitful as to the controversy in issue.64[31]
61[28]Rollo, pp. 92-94.
62[29]Id. at 246 and 248.
63[30]338 Phil. 728 (1997).
 This petition for review on certiorari1 assails the
Here, petitioners, having reneged on their agreement
Decision2 dated April 16, 2007 and the Resolution3 dated
without any justifiable reason, come to court with unclean hands.
September 18, 2007 of the Court of Appeals in CA-G.R. SP
This Court may deny a litigant relief if his conduct has been
No. 81968.
inequitable, unfair and dishonest as to the controversy in issue.

During the period from September 4, 1992 to March 27,

Since petitioners have come to court with inequitable and
unfair conduct, we deny them relief. We uphold the validity of the
28 November 2002 agreement and rule that the Principal had the
authority to order the immediate transfer of petitioner students
based on the 28 November 2002 agreement.
WHEREFORE, we DENY the petition. We AFFIRM the 16
June 2005 Decision and the 22 March 2006 Resolution of the Court
of Appeals.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
1996, China Banking Corporation (CBC) granted several
loans to Solid Builders, Inc. (SBI), which amounted to
P139,999,234.34, exclusive of interests and other charges.
To secure the loans, Medina Foods Industries, Inc. (MFII)
executed in CBCs favor several surety agreements and
contracts of real estate mortgage over parcels of land in
the Loyola Grand Villas in Quezon City and New Cubao
Central in Cainta, Rizal.4
Subsequently, SBI proposed to CBC a scheme through
which SBI would sell the mortgaged properties and share
the proceeds with CBC on a 50-50 basis until such time that
the whole obligation would be fully paid. SBI also proposed
that there be partial releases of the certificates of title of
the mortgaged properties without the burden of updating
interests on all loans.5

G.R. No. 179665 April 3, 2013

In a letter dated March 20, 2000 addressed to CBC, SBI
SOLID BUILDERS, INC. and MEDINA FOODS INDUSTRIES, requested the restructuring of its loans, a reduction of
INC., Petitioners, interests and penalties and the implementation of a dacion
vs. en pago of the New Cubao Central property.6
CHINA BANKING CORPORATION, Respondent.

The letter reads:

DECISION

March 20, 2000

LEONARDO-DE CASTRO, J.:

CHINA BANKING CORPORATION

64[31]Id. at 743-744.
18
 Dasmarinas cor. Juan Luna Sts.
Binondo, Manila
Attn: Mr. George Yap
Account Officer
Dear Mr. Yap,
This is to refer to our meeting held at your office last
March 10, 2000.
In this regard, please allow us to call your attention on
the following important matters we have discussed:
1. With respect to the penalties, we are requesting for
a reduction in the rates as we find it onerous considering
the big amount of our loan (P218,540,648.00). The interest
together with the penalties that you are imposing is similar
to the ones being charged by private lending institutions,
i.e., 4.5%/month total.
2. As I had discussed with you regarding Dacion en
Pago, which you categorically stated that it could be a
possibility, we are considering putting our New Cubao
Central (NCC) on Dacion and restructuring our loan with
regards to our Loyola Grand Villas.
Considering that you had stated that our restructuring
had not been finalized, we find it timely to raise these
urgent matters and possibly agree on a realistic and
workable scheme that we can incorporate on our final
agreement.
19
Thank you and we strongly hope for your prompt
consideration on our request.
Very truly yours,
V. BENITO R. SOLIVEN (Sgd.)
President7
In response, CBC sent SBI a letter dated April 17, 2000
stating that the loans had been completely restructured
effective March 1, 1999 in the amount of P218,540,646.00.
On the aspect of interests and charges, CBC suggested the
updating of the obligation to avoid paying interests and
charges.8 The relevant portion of the letter dated April 17,
2000 reads:
First of all, to clarify, the loans restructuring has been
finalized and completed on 3/01/99 with the booking of the
Restructured loan of P218,540,646. Only two Amendments
of Real Estate Mortgages remain to be registered to date.
Certain documents that we requested from your company
since last year, that could facilitate this amendment have
not yet been forwarded to us until now. Nevertheless, this
does not change the fact that the restructuring of the loan
has been done with and finalized.
This in turn is with regards to statement[s] no. 1 & 2 of
your letter, referring to the interest rates and penalties. As
per our records, the rates are actually the prevailing bank
interest rates. In addition, penalty charges are imposed in
the event of non-payment. To avoid experiencing having to
pay more due to the penalty charges, updating of
obligations is necessary. Thus, we advise updating of your
obligations to avoid penalty charges. However, should you
be able to update both interest and penalty through a "one-
time" payment, we shall present your request to Senior
Management for possible reduction in penalty charges.
Concerning statement no. 3 containing your request for
the possible Dacion en Pago of your NCC properties, as was
discussed already in the meeting, it is a concern that has to
be discussed with Senior Management and approved by the
Executive Committee before we can commit to you on the
matter. We suggest that your company, Solid Builders,
exhaust all possibilities to sell the NCC properties
yourselves because, being a real estate company, Solid has
better ways and means of selling the properties.9
concern that has to be discussed with Senior Management
and approved by the Executive Committee before we can
commit to you on the matter. We suggest that your
company, Solid Builders, exhaust all possibilities to sell the
NCC properties yourselves because, being a real estate
company, Solid has better ways and means of selling the
properties.10
Subsequently, in a letter dated September 18, 2000, CBC
demanded SBI to settle its outstanding account within ten
days from receipt thereof. The letter dated September 18,
2000 reads:

September 18, 2000

This was followed by another communication from CBC to
SBI reiterating, among others, that the loan has been
restructured effective March 1, 1999 upon issuance by SBI SOLID BUILDERS, INC.
of promissory notes in favor of CBC. The relevant portion of
that letter dated May 19, 2000 reads: V.V. Soliven Bldg., I
EDSA, San Juan, Metro Manila
Again, in response to your query with regards the issue 1wphi1
of the loans restructuring, to reiterate, the loan
restructuring has been finalized and completed on 3/01/99 PN NUMBER O/S BALANCE DUE DATE
with the booking of the Restructured loan of P231,716,646. INTEREST
The Restructured Loan was effective ever since the new
PN-MK-TS-342924 PHP 89,700,000.00
Promissory Note was signed on the said date. 03/01/2004 04/13/1999
PN-MK-TS-342931 19,350,000.00 03/01/2004
The interest rates for the loans are actually rates booked 08/05/1999
since the new Promissory Notes were effective.1wphi1 Any
PN-MK-TS-342948 35,888,000.00 03/01/2004
move of changing it or "re-pricing" the interest is only ---------------
possible every 90 days from the booking date, which
represents the interest amortization payment dates. No PN-MK-TS-342955 6,870,000.00 03/01/2004
change or "re-pricing" in interest rates is possible since ---------------
interest payment/obligations have not yet been paid.
PN-MK-TS-342962 5,533,646.00 03/01/2004
07/26/1999
With regards to the possible Dacion en Pago of your NCC PN-MK-TS-342979 21,950,000.00 03/01/2004
properties, as was discussed already in the meeting, it is a ---------------
20
 PN-MK-TS-342986 3,505,000.00 03/01/2004 MERCEDES E. GERMAN (Sgd.)
08/09/1999
Manager
PN-MK-TS-342993 19,455,000.00 03/01/2004
---------------
PN-MK-TS-343002 4,168,000.00 03/01/2004 Loans & Discounts Department H.O.11
---------------
PN-MK-TS-343026 12,121,000.00 03/01/2004 On October 5, 2000, claiming that the interests, penalties
--------------- and charges imposed by CBC were iniquitous and
PHP218,540,646.00 unconscionable and to enjoin CBC from initiating
foreclosure proceedings, SBI and MFII filed a Complaint "To
================ Compel Execution of Contract and for Performance and
Damages, With Prayer for Writ of Preliminary Injunction and
Ex-Parte Temporary Restraining Order" in the Regional Trial
Greetings! Court (RTC) of Pasig City. The case was docketed as Civil
Case No. 68105 and assigned to Branch 264.12

We refer again to the balances of the abovementioned

Promissory Notes amounting to PHP218,540,646.00
excluding interest, penalties and other charges signed by
you jointly and severally in our favor, which remains unpaid
up to this date despite repeated demands for payment.
In view of the strict regulations of Bangko Sentral ng
Pilipinas on past due accounts, we regret that we cannot
hold these accounts further in abeyance. Accordingly, we
are reiterating our request that arrangements to have
these accounts settled within ten (10) days from receipt
hereof, otherwise, we shall be constrained to refer the
matter to our lawyers for collection.
We enclose a Statement of Account as of September
30, 2000 for your reference and guidance.
In support of their application for the issuance of writ of
preliminary injunction, SBI and MFII alleged:
IV. APPLICATION FOR PRELIMINARY INJUNCTION WITH EX-
PARTE TEMPORARY RESTRAINING ORDER
A. GROUNDS FOR PRELIMINARY INJUNCTION
1. That SBI and MFII are entitled to the reliefs demanded,
among which is enjoining/restraining the commission of the
acts complained of, the continuance of which will work
injustice to the plaintiffs; that such acts are in violation of
the rights of plaintiffs and, if not enjoined/restrained, will
render the judgment sought herein ineffectual.

Very truly yours, 2. That under the circumstances, it is necessary to

require, through preliminary injunction, CBC to refrain from
immediately enforcing its letters dated April 17, 2000 and

21
May 19, 2000 and September 18, 2000 during the pendency
of this complaint, and
3. That SBI and MFII submit that they are exempt from
filing of a bond considering that the letters dated April 17,
2000, May 19, 2000 and September 18, 2000 are a patent
nullity, and in the event they are not, they are willing to
post such bond this Honorable Court may determine and
under the conditions required by Section 4, Rule 58.13
In its Answer and Opposition to the issuance of the writ
of preliminary injunction, CBC alleged that to implement the
agreed restructuring of the loan, SBI executed ten
promissory notes stipulating that the interest rate shall be
at 18.5% per annum. For its part, MFII executed third party
real estate mortgage over its properties in favor of CBC to
secure the payment of SBIs restructured loan. As SBI was
delinquent in the payment of the principal as well as the
interest thereon, CBC demanded settlement of SBIs
account.14
After hearing the parties, the trial court issued an Order
dated December 14, 2000 granting the application of SBI
and MFII for the issuance of a writ of preliminary injunction.
The trial court held that SBI and MFII were able to
sufficiently comply with the requisites for the issuance of
an injunctive writ:
It is well-settled that to be entitled to an injunctive writ,
a party must show that: (1) the invasion of right sought to
be protected is material and substantial; (2) the right of
complainant is clear and unmistakable; and, (3) there is an
urgent and paramount necessity for the writ to prevent
serious damage.
22
The Court opines that the above-mentioned requisites
have been sufficiently shown by plaintiffs in this case,
accordingly, a writ of preliminary injunction is in order.
The three subject letters, particularly the letter dated
September 18, 2000, indicate that the promissory notes
executed by Benito Soliven as President of plaintiff SBI
amounted to P218,540,646.00, excluding interest, penalties
and other charges remained unpaid, and demand that the
account be settled within ten days, else defendant bank
shall refer the latter to its lawyers for collection.
The message in the letter is clear: If the account is not
settled within the grace period, defendant bank will resort
to foreclosure of mortgage on the subject properties.
The actual or imminent damage to plaintiffs is likewise
clear. Considering the number of parcels of land and area
involved, if these are foreclosed by defendant bank,
plaintiffs properties and source of income will be
effectively diminished, possibly to the point of closure.
The only issue remaining is whether or not plaintiffs have
the right to ask for an injunctive writ in order to prevent
defendant bank from taking over their properties.
Plaintiffs argued that the interest and penalties charged
them in the subject letters and attached statements of
account increased during a seven-month period to an
amount they described as "onerous", "usurious" ad
"greedy".
They likewise asserted that there were on-going talks
between officers of the corporations involved to treat or
restructure the contracts to a dacion en pago, as there was
a proposed plan of action by representatives of plaintiffs
during the meetings.
Defendant, on the other hand, sought to explain the
increase in the interest as contained in the promissory
notes which were voluntarily and willingly signed by
Soliven, therefore, binding on plaintiffs and that the
proposed plan of action is merely an oral contract still in
the negotiation stage and not binding.
The condition on the interest payments as contained in
the promissory notes are as follows:
"Interest for the first quarter shall be @ 18.5% P.A.
Thereafter, it shall be payable quarterly in arrears based on
three months average rate."
In its Memorandum, defendant bank tried to show that
the questioned increase in the interests was merely in
compliance with the above condition. To this Court, the
explanation is insufficient. A more detailed rationalization is
required to convince the court of the fairness of the
increase in interests and penalties.
However, the coming explanation may probably be heard
only during trial on the merits, and by then this pending
incident or the entire case, may already be moot and
academic if the injunctive writ is not issued.15
The dispositive portion of the trial courts Order dated
December 14, 2000 reads:
WHEREFORE, premises considered, the application for
issuance of writ of preliminary injunction is GRANTED.
23
Defendant CHINA BANKING CORPORATION, its
representatives, agents and all persons working in its
behalf are hereby enjoined from enforcing the contents of
its letters to plaintiffs dated April 17, 2000, May 19, 2000
and September 18, 2000, particularly the banks legal
department or other counsel commencing collection
proceedings against plaintiffs in the amount stated in the
letters and statements of account.
The Writ of Preliminary Injunction shall be issued upon
plaintiffs posting of a bond executed to defendant in the
amount of Two Million Pesos (P2,000,000.00) to the effect
[that] the plaintiffs will pay defendant all damages which
the latter may sustain by reason of the injunction if it be
ultimately decided that the injunction is unwarranted.16
CBC sought reconsideration but the trial court denied it
in an Order17 dated December 10, 2001.
Subsequently, CBC filed a "Motion to Dissolve Injunction
Order" but this was denied in an Order18 dated November
10, 2003. The trial court ruled that the motion was in the
nature of a mere belated second motion for reconsideration
of the Order dated December 14, 2000. It also declared that
CBC failed to substantiate its prayer for the dissolution of
the injunctive writ.
Aggrieved, CBC filed a Petition for Certiorari docketed as
CA-G.R. SP No. 81968 in the Court of Appeals where it
claimed that the Orders dated December 14, 2000 (granting
the application of petitioners SBI and MFII for the issuance
of writ of preliminary injunction), December 10, 2001
(denying reconsideration of the order dated December 14,
2000), and November 10, 2003 (denying the CBCs motion
to dissolve injunction order) were all issued with grave
abuse of discretion amounting to lack of jurisdiction.19

In a Decision dated April 16, 2007, the Court of Appeals
found that, on its face, the trial courts Order dated
December 14, 2000 granting the application of SBI and MFII
for the issuance of a writ of preliminary injunction had no
basis as there were no findings of fact or law which would
indicate the existence of any of the requisites for the grant
of an injunctive writ. It appeared to the Court of Appeals
that, in ordering the issuance of a writ of injunction, the
trial court simply relied on the imposition by CBC of the
interest rates to the loans obtained by SBI and MFII.
According to the Court of Appeals, however, the records do
not reveal a clear and unmistakable right on the part of SBI
and MFII that would entitle them to the protection of a writ
of preliminary injunction. Thus, the Court of Appeals
granted the petition of CBC, set aside the Orders dated
December 14, 2000, December 10, 2001, and November 10,
2003 and dissolved the injunctive writ issued by the RTC of
Pasig City.20
SBI and MFII filed a motion for reconsideration but it was
denied by the Court of Appeals in a Resolution dated
September 18, 2007.
Hence, this petition.
SBI and MFII assert that the Decision dated April 16,
2007 of the Court of Appeals is legally infirm as its
conclusions are contrary to the judicial admissions of CBC.
They allege that, in its Answer, CBC admitted paragraphs 25
and 26 of the Complaint regarding the interests and
charges amounting to P35,093,980.14 and P80,614,525.15,
respectively, which constituted more than 50% of the total
obligation of P334,249,151.29 as of February 15, 2000. For
SBI and MFII, CBCs admission of paragraphs 25 and 26 of
the Complaint is an admission that the interest rate
imposed by CBC is usurious, exorbitant and confiscatory.
Thus, when the Court of Appeals granted the petition of
CBC and ordered the lifting of the writ of preliminary
24
injunction it effectively disposed of the main case, Civil
Case No. 68105, without trial on the merits and rendered
moot and academic as it enabled CBC to foreclose on the
mortgages despite the usurious, exorbitant and
confiscatory interest rates.21
SBI and MFII also claim that the Court of Appeals either
overlooked or disregarded undisputed and admitted facts
which, if properly considered, would have called for the
maintenance and preservation of the preliminary injunction
issued by the trial court. They argue that the Court of
Appeals did not even consider Article 1229 of the Civil Code
which provides:
Art. 1229. The judge shall equitably reduce the penalty
when the principal obligation has been partly or irregularly
complied with by the debtor. Even if there has been no
performance, the penalty may also be reduced by the
courts if it is iniquitous or unconscionable.
For SBI and MFII, the failure of the Court of Appeals to
take into account Article 1229 of the Civil Code and its act
of lifting the preliminary injunction "would definitely pave
the way for CBCs unbridled imposition of illegal rates of
interest and immediate foreclosure" of the properties of SBI
and MFII "without the benefit of a full blown trial."22
For its part, CBC assails the petition contending that it is
not allowed under Rule 45 of the Rules of Court because it
simply raises issues of fact and not issues of law. CBC
further asserts that the Decision of the Court of Appeals is
an exercise of sound judicial discretion as it is in accord
with the law and the applicable provisions of this Court.23
The petition fails.
 This Court has recently reiterated the general principles
in issuing a writ of preliminary injunction in Palm Tree
Estates, Inc. v. Philippine National Bank24:
A preliminary injunction is an order granted at any stage
of an action prior to judgment of final order, requiring a
party, court, agency, or person to refrain from a particular
act or acts. It is a preservative remedy to ensure the
protection of a partys substantive rights or interests
pending the final judgment in the principal action. A plea
for an injunctive writ lies upon the existence of a claimed
emergency or extraordinary situation which should be
avoided for otherwise, the outcome of a litigation would be
useless as far as the party applying for the writ is
concerned.
At times referred to as the "Strong Arm of Equity," we
have consistently ruled that there is no power the exercise
of which is more delicate and which calls for greater
circumspection than the issuance of an injunction. It should
only be extended in cases of great injury where courts of
law cannot afford an adequate or commensurate remedy in
damages; "in cases of extreme urgency; where the right is
very clear; where considerations of relative inconvenience
bear strongly in complainants favor; where there is a
willful and unlawful invasion of plaintiffs right against his
protest and remonstrance, the injury being a continuing
one, and where the effect of the mandatory injunction is
rather to reestablish and maintain a preexisting continuing
relation between the parties, recently and arbitrarily
interrupted by the defendant, than to establish a new
relation."
A writ of preliminary injunction is an extraordinary event
which must be granted only in the face of actual and
existing substantial rights. The duty of the court taking
cognizance of a prayer for a writ of preliminary injunction is
to determine whether the requisites necessary for the grant
of an injunction are present in the case before it.25 In this
connection, a writ of preliminary injunction is issued to
25
preserve the status quo ante, upon the applicants showing
of two important requisite conditions, namely: (1) the right
to be protected exists prima facie, and (2) the acts sought
to be enjoined are violative of that right. It must be proven
that the violation sought to be prevented would cause an
irreparable injury.26
Here, SBI and MFII basically claim a right to have their
mortgaged properties shielded from foreclosure by CBC on
the ground that the interest rate and penalty charges
imposed by CBC on the loans availed of by SBI are
iniquitous and unconscionable. In particular, SBI and MFII
assert:
There is therefore an urgent necessity for the issuance of
a writ of preliminary injunction or at least a status quo
[order], otherwise, respondent bank will definitely foreclose
petitioners properties without awaiting the trial of the
main case on the merits, with said usurious and
confiscatory rates of interest as basis.27
and
There is therefore no legal justification for the Honorable
Court of Appeals to lift/dissolve the injunction issued by the
trial court, otherwise, respondent bank on the basis of
this illegal imposition of interest can already foreclose the
properties of petitioners and render the whole case (sans
trial on the merits) moot and academic.28
On this matter, the Order dated December 14, 2000 of
the trial court enumerates as the first argument raised by
SBI and MFII in support of their application for the issuance
of a writ of preliminary injunction:
 1. Their rights basically are for the protection of their
properties put up as collateral for the loans extended by
defendant bank to them.29
As debtor-mortgagors, however, SBI and MFII do not have
a right to prevent the creditor-mortgagee CBC from
foreclosing on the mortgaged properties simply on the
basis of alleged "usurious, exorbitant and confiscatory rate
of interest."30 First, assuming that the interest rate agreed
upon by the parties is usurious, the nullity of the
stipulation of usurious interest does not affect the lenders
right to recover the principal loan, nor affect the other
terms thereof.31 Thus, in a usurious loan with mortgage,
the right to foreclose the mortgage subsists, and this right
can be exercised by the creditor upon failure by the debtor
to pay the debt due.32
Second, even the Order dated December 14, 2000 of the
trial court, which granted the application for the issuance
of a writ of preliminary injunction, recognizes that the
parties still have to be heard on the alleged lack of
"fairness of the increase in interests and penalties" during
the trial on the merits.33 Thus, the basis of the right
claimed by SBI and MFII remains to be controversial or
disputable as there is still a need to determine whether or
not, upon consideration of the various circumstances
surrounding the agreement of the parties, the interest
rates and penalty charges are unconscionable. Therefore,
such claimed right cannot be considered clear, actual and
subsisting. In the absence of a clear legal right, the
issuance of the injunctive writ constitutes grave abuse of
discretion.34
The Order dated December 10, 2001 also shows the
reasoning of the trial court which betrays that its grant of
the application of SBI and MFII for the issuance of a writ of
preliminary injunction was not based on a clear legal right.
Said the trial court:
26
It was likewise shown that plaintiffs SBI and MFII had the
clear right and urgency to ask for injunction because of the
issue of validity of the increase in the amount of the loan
obligation.35 (Emphasis supplied.)
At most, the above finding of the trial court that the
validity of the increase in the amount of the loan obligation
is in issue simply amounted to a finding that the rights of
SBI and MFII vis--vis that of CBC are disputed and
debatable. In such a case where the complainant-movants
right is doubtful or disputed, the issuance of an injunctive
writ is not proper.36
Even assuming that SBI and MFII are correct in claiming
their supposed right, it nonetheless disintegrates in the
face of the ten promissory notes in the total amount of
P218,540,648.00, exclusive of interest and penalties, issued
by SBI in favor of CBC on March 1, 1999 which until now
remain unpaid despite the maturity of the said notes on
March 1, 2004 and CBCs repeated demands for payment.37
Foreclosure is but a necessary consequence of nonpayment
of mortgage indebtedness.38 As this Court held in
Equitable PCI Bank, Inc. v. OJ-Mark Trading, Inc.39:
Where the parties stipulated in their credit agreements,
mortgage contracts and promissory notes that the
mortgagee is authorized to foreclose the mortgaged
properties in case of default by the mortgagors, the
mortgagee has a clear right to foreclosure in case of
default, making the issuance of a Writ of Preliminary
Injunction improper. x x x. (Citation omitted.)
In addition, the default of SBI and MFII to pay the
mortgage indebtedness disqualifies them from availing of
the equitable relief that is the injunctive writ. In particular,
SBI and MFII have stated in their Complaint that they have
made various requests to CBC for restructuring of the
loan.40 The trial courts Order dated December 14, 2000
also found that SBI wrote several letters to CBC
"requesting, among others, for a reduction of interests and
penalties and restructuring of the loan."41 A debtors
various and constant requests for deferment of payment
and restructuring of loan, without actually paying the
amount due, are clear indications that said debtor was
unable to settle his obligation.42 SBIs default or failure to
settle its obligation is a breach of contractual obligation
which tainted its hands and disqualified it from availing of
the equitable remedy of preliminary injunction.
As SBI is not entitled to the issuance of a writ of
preliminary injunction, so is MFII. The accessory follows the
principal. The accessory obligation of MFII as
accommodation mortgagor and surety is tied to SBIs
principal obligation to CBC and arises only in the event of
SBIs default.
Thus, MFIIs interest in the issuance of the writ of
preliminary injunction is necessarily prejudiced by SBIs
wrongful conduct and breach of contract.
Even Article 1229 of the Civil Code, which SBI and MFII
invoke, works against them. Under that provision, the
equitable reduction of the penalty stipulated by the parties
in their contract will be based on a finding by the court that
such penalty is iniquitous or unconscionable. Here, the trial
court has not yet made a ruling as to whether the penalty
agreed upon by CBC with SBI and MFII is unconscionable.
Such finding will be made by the trial court only after it has
heard both parties and weighed their respective evidence
in light of all relevant circumstances. Hence, for SBI and
MFII to claim any right or benefit under that provision at
this point is premature.
As no clear right that warrants the extraordinary
protection of an injunctive writ has been shown by SBI and
MFII to exist in their favor, the first requirement for the
27
grant of a preliminary injunction has not been satisfied. In
the absence of any requisite, and where facts are shown to
be wanting in bringing the matter within the conditions for
its issuance, the ancillary writ of injunction must be struck
down for having been rendered in grave abuse of
discretion.43 Thus, the Court of Appeals did not err when it
granted the petition for certiorari of CBC and ordered the
dissolution of the writ of preliminary injunction issued by
the trial court.
Neither has there been a showing of irreparable injury.
An injury is considered irreparable if it is of such constant
and frequent recurrence that no fair or reasonable redress
can be had therefor in a court of law, or where there is no
standard by which their amount can be measured with
reasonable accuracy, that is, it is not susceptible of
mathematical computation. The provisional remedy of
preliminary injunction may only be resorted to when there
is a pressing necessity to avoid injurious consequences
which cannot be remedied under any standard of
compensation.44
In the first place, any injury that SBI and MFII may suffer
in case of foreclosure of the mortgaged properties will be
purely monetary and compensable by an appropriate
judgment in a proper case against CBC. Moreover, where
there is a valid cause to foreclose on the mortgages, it
cannot be correctly claimed that the irreparable damage
sought to be prevented by the application for preliminary
injunction is the loss of the mortgaged properties to
auction sale.45 The alleged entitlement of SBI and MFII to
the "protection of their properties put up as collateral for
the loans" they procured from CBC is not the kind of
irreparable injury contemplated by law. Foreclosure of
mortgaged property is not an irreparable damage that will
merit for the debtor-mortgagor the extraordinary
provisional remedy of preliminary injunction. As this Court
stated in Philippine National Bank v. Castalloy Technology
Corporation46:
 All is not lost for defaulting mortgagors whose properties
were foreclosed by creditors-mortgagees. The respondents
will not be deprived outrightly of their property, given the
right of redemption granted to them under the law.
Moreover, in extrajudicial foreclosures, mortgagors have
the right to receive any surplus in the selling price. Thus, if
the mortgagee is retaining more of the proceeds of the sale
than he is entitled to, this fact alone will not affect the
validity of the sale but will give the mortgagor a cause of
action to recover such surplus. (Citation omitted.)
The En Banc Resolution in A.M. No. 99-10-05-0, Re:
Procedure in Extrajudicial or Judicial Foreclosure of Real
Estate Mortgages, further stacks the odds against SBI and
MFII. Issued on February 20, 2007, or some two months
before the Court of Appeals promulgated its decision in this
case, the resolution embodies the additional guidelines
intended to aid courts in foreclosure proceedings,
specifically limiting the instances, and citing the conditions,
when a writ against foreclosure of a mortgage may be
issued, to wit:
(1) No temporary restraining order or writ of preliminary
injunction against the extrajudicial foreclosure of real
estate mortgage shall be issued on the allegation that the
loan secured by the mortgage has been paid or is not
delinquent unless the application is verified and supported
by evidence of payment.
(2) No temporary restraining order or writ of preliminary
injunction against the extrajudicial foreclosure of real
estate mortgage shall be issued on the allegation that the
interest on the loan is unconscionable, unless the debtor
pays the mortgagee at least twelve percent per annum
interest on the principal obligation as stated in the
application for foreclosure sale, which shall be updated
monthly while the case is pending.
28
(3) Where a writ of preliminary injunction has been
issued against a foreclosure of mortgage, the disposition of
the case shall be speedily resolved. To this end, the court
concerned shall submit to the Supreme Court, through the
Office of the Court Administrator, quarterly reports on the
progress of the cases involving ten million pesos and
above.
(4) All requirements and restrictions prescribed for the
issuance of a temporary restraining order/writ of
preliminary injunction, such as the posting of a bond, which
shall be equal to the amount of the outstanding debt, and
the time limitation for its effectivity, shall apply as well to a
status quo order.47
The guidelines speak of strict exceptions and
conditions.48 To reverse the decision of the Court of
Appeals and reinstate the writ of preliminary injunction
issued by the trial court will be to allow SBI and MFII to
circumvent the guidelines and conditions provided by the
En Banc Resolution in A.M. No. 99-10-05-0 dated February
20, 2007 and prevent CBC from foreclosing on the
mortgaged properties based simply on the allegation that
the interest on the loan is unconscionable. This Court will
not permit such a situation. What cannot be done directly
cannot be done indirectly.49
All told, the relevant circumstances in this case show
that there was failure to satisfy the requisites for the
issuance of a writ of preliminary injunction. The injunctive
writ issued by the trial court should therefore be lifted and
dissolved. That was how the Court of Appeals decided. That
is how it should be.
WHEREFORE, the petition is hereby DENIED.
SO ORDERED.
 DECISION

BRION, J.:

Today is Thursday, February 04, 2016 Through a petition for review on certiorari,1 filed under Rule 45
of the Rules of Court, the petitioners, spouses Silvestre O. Plaza and
Elena Y. Plaza, seek the reversal of the decision2 dated October 24,
2005 and the Resolution3 dated April 6, 2006 of the Court of
Appeals (CA) in CA-G.R. SP No. 59859.

Republic of the Philippines THE FACTS

SUPREME COURT

Manila On August 28, 1997, the CA4 ruled that among the Plaza
siblings, namely: Aureliano, Emiliana, Vidal, Marciano, and Barbara,
Barbara was the owner of the subject agricultural land. The
decision became final and executory and Barbara's successors,
respondents Guillermo Lustiva, Eleodora Vda. de Martinez and
SECOND DIVISION Vicky Sayson Goloseno, have continued occupying the property.

G.R. No. 172909 March 5, 2014 On September 14, 1999, Vidals son and daughter-in-law, the
petitioners, filed a Complaint for Injunction, Damages, Attorneys
Fees with Prayer for the Issuance of the Writ of Preliminary
Injunction and/or Temporary Restraining Order against the
SPOUSES SILVESTRE O. PLAZA AND ELENA Y. PLAZA, Petitioners, respondents and the City Government of Butuan. They prayed that
the respondents be enjoined from unlawfully and illegally
vs. threatening to take possession of the subject property. According to
the petitioners, they acquired the land from Virginia Tuazon in
GUILLERMO LUSTIVA, ELEODORA VDA. DE MARTINEZ AND VICKY 1997; Tuazon was the sole bidder and winner in a tax delinquency
SAYSON GOLOSENO, Respondents. sale conducted by the City of Butuan on December 27, 1996.

29
 In their answer, the respondents pointed out that they were
never delinquent in paying the land taxes and were in fact not
aware that their property had been offered for public auction.
Moreover, Tuazon, being a government employee, was disqualified
to bid in the public auction, as stated in Section 89 of the Local
Government Code of 1991.5 As Tuazons participation in the sale
was void, she could have not transferred ownership to the
petitioners. Equally important, the petitioners merely falsified the
property tax declaration by inserting the name of the petitioners
father, making him appear as a co-owner of the auctioned land.
Armed with the falsified tax declaration, the petitioners, as heirs of
their father, fraudulently redeemed the land from Tuazon.
Nonetheless, there was nothing to redeem as the land was not sold.
For these irregularities, the petitioners had no right to the Writ of
Preliminary Injunction and/or Temporary Restraining Order prayed
for against them.
THE RTCS RULING
In its December 14, 1999 order,6 the Regional Trial Court (RTC) of
Butuan City, Branch 5, reconsidered its earlier order,7 denied the
prayer for a Writ of Preliminary Injunction, and ordered that the
possession and occupation of the land be returned to the
respondents. The RTC found that the auction sale was tainted with
irregularity as the bidder was a government employee disqualified
in accordance with Section 89 of the Local Government Code of
1991. The petitioners are not buyers in good faith either. On the
contrary, they were in bad faith for having falsified the tax
declaration they redeemed the property with.
THE CAS RULING
Through a petition for review on certiorari under Rule 65, the
petitioners challenged the RTCs order before the CA.
While the petition for review on certiorari was pending before the
CA, the petitioners filed an action for specific performance8 against
the City Government of Butuan. According to the petitioners, they
acquired possession and ownership over the auctioned property
30
when they redeemed it from Tuazon. The City Government of
Butuan must therefore issue them a certificate of sale.9
In its October 24, 2005 decision,10 the CA affirmed the RTCs
ruling, found the petitioners guilty of forum shopping, dismissed
the case, and referred the case to the Court and to the Integrated
Bar of the Philippines for investigation and institution of the
appropriate administrative action.11 The CA, after legal analysis,
similarly concluded that for being disqualified to bid under Section
89 of the Local Government Code of 1991, Tuazon never obtained
ownership over the property; much less transmit any proprietary
rights to the petitioners. Clearly, the petitioners failed to establish
any clear and unmistakable right enforceable by the injunctive
relief.
On April 6, 2006, the CA rejected the petitioners motion for
reconsideration.
THE PARTIES ARGUMENTS
The petitioners filed the present petition for review on certiorari
with this Court to challenge the CA rulings. The petitioners maintain
that they did not falsify the tax declaration in acquiring the
auctioned property. Moreover, assuming that Tuazon, the sole
bidder, was indeed disqualified from participating in the public
auction, Section 18112 of the Local Government Code of 1991 finds
application. Applying the law, it is as if there was no bidder, for
which the City Government of Butuan was to be considered the
purchaser of the land in auction. Therefore, when the petitioners
bought the land, they bought it directly from the purchaser - City
Government of Butuan - and not from Tuazon, as redeemers.
Also, the respondents may not question the validity of the public
auction for failing to deposit with the court the amount required by
Section 26713 of the Local Government Code of 1991.
Finally, the petitioners argue that they did not commit forum
shopping, as the reliefs prayed for in the present case and in the
specific performance case are not the same. In the present case,
they merely impleaded the City Government of Butuan as a
nominal party to pay for the value of the land only if possession of
the land was awarded to the respondents. On the other hand, the
complaint for specific performance prayed that the City
Government of Butuan execute the necessary certificate of sale
and other relevant documents pertaining to the auction.
The respondents, for their part, reiterate the lower courts
findings that there could have been no legal redemption in favor of
the petitioners as the highest bidder was disqualified from bidding.
Moreover, the CA correctly applied the law in finding the petitioners
guilty of forum shopping. Most importantly, the grant of preliminary
injunction lies in the sound discretion of the court and the
petitioners failed to show proof that they are entitled to it.
Meanwhile, on August 8, 2013, the RTC dismissed the main
action and ordered the petitioners to pay the respondents
attorneys fees and litigation expenses.14
THE COURTS RULING
We resolve to deny the petition for lack of merit.
The petitioners may not
raise factual issues
The petitioners maintain that they did not falsify the tax
declaration they reimbursed the property with. According to them,
the document already existed in 1987, way before they acquired
the land in 1997. Contrary likewise to the lower courts finding, they
did not purchase the land from Tuazon as redemptioners; they
directly bought the property from the City Government of Butuan.
These factual contests are not appropriate for a petition for
review on certiorari under Rule 45. The Court is not a trier of
facts.15 The Court will not revisit, re-examine, and re-evaluate the
evidence and the factual conclusions arrived at by the lower
courts.16 In the absence of compelling reasons, the Court will not
disturb the rule that factual findings of the lower tribunals are final
and binding on this Court.17
31
Sections 181 and 267 of the Local Government Code of 1991 are
inapplicable; these provisions do not apply to the present case
The petitioners may not invoke Section 18118 of the Local
Government Code of 1991 to validate their alleged title. The law
authorizes the local government unit to purchase the auctioned
property only in instances where "there is no bidder" or "the
highest bid is xxx insufficient." A disqualified bidder is not among
the authorized grounds. The local government also never
undertook steps to purchase the property under Section 181 of the
Local Government Code of 1991, presumably because it knew the
invoked provision does not apply.
Neither can the Court agree with the petitioners stance that the
respondents defense the petitioners defective title must fail
for want of deposit to the court the amount required by Section 267
of the Local Government Code. The provision states:
Section 267. Action Assailing Validity of Tax Sale. - No court shall
entertain any action assailing the validity or any sale at public
auction of real property or rights therein under this Title until the
taxpayer shall have deposited with the court the amount for which
the real property was sold, together with interest of two percent
(2%) per month from the date of sale to the time of the institution
of the action. The amount so deposited shall be paid to the
purchaser at the auction sale if the deed is declared invalid but it
shall be returned to the depositor if the action fails.
Neither shall any court declare a sale at public auction invalid by
reason or irregularities or informalities in the proceedings unless
the substantive rights of the delinquent owner of the real property
or the person having legal interest therein have been impaired.
[underscores ours; italics supplied]
A simple reading of the title readily reveals that the provision
relates to actions for annulment of tax sales. The section likewise
makes use of terms "entertain" and "institution" to mean that the
deposit requirement applies only to initiatory actions assailing the
validity of tax sales. The intent of the provision to limit the deposit
requirement to actions for annulment of tax sales led to the Courts
ruling in National Housing Authority v. Iloilo City, et al.19 that the
deposit requirement is jurisdictional a condition necessary for
the court to entertain the action:
As is apparent from a reading of the foregoing provision, a
deposit equivalent to the amount of the sale at public auction plus
two percent (2%) interest per month from the date of the sale to
the time the court action is instituted is a condition a
"prerequisite," to borrow the term used by the acknowledged father
of the Local Government Code which must be satisfied before
the court can entertain any action assailing the validity of the
public auction sale. The law, in plain and unequivocal language,
prevents the court from entertaining a suit unless a deposit is
made. xxx. Otherwise stated, the deposit is a jurisdictional
requirement the nonpayment of which warrants the failure of the
action.
xxxx
Clearly, the deposit precondition is an ingenious legal device to
guarantee the satisfaction of the tax delinquency, with the local
government unit keeping the payment on the bid price no matter
the final outcome of the suit to nullify the tax sale.20
The Court would later reiterate the jurisdictional nature of the
deposit in Wong v. City of Iloilo,21 and pronounce:
In this regard, National Housing Authority v. Iloilo City holds that
the deposit required under Section 267 of the Local Government
32
Code is a jurisdictional requirement, the nonpayment of which
warrants the dismissal of the action. Because petitioners in this
case did not make such deposit, the RTC never acquired jurisdiction
over the complaints.22
These rulings clearly render inapplicable the petitioners
insistence that the respondents should have made a deposit to the
court. The suit filed by the petitioners was an action for injunction
and damages; the issue of nullity of the auction was raised by the
respondents themselves merely as a defense and in no way
converted the action to an action for annulment of a tax sale.
The petitioners failed to show clear
and unmistakable rights to be protected
by the writ; the present action has been
rendered moot and academic by the
dismissal of the main action
As the lower courts correctly found, Tuazon had no ownership to
confer to the petitioners despite the latters reimbursement of
Tuazons purchase expenses. Because they were never owners of
the property, the petitioners failed to establish entitlement to the
writ of preliminary injunction. "[T]o be entitled to an injunctive writ,
the right to be protected and the violation against that right must
be shown. A writ of preliminary injunction may be issued only upon
clear showing of an actual existing right to be protected during the
pendency of the principal action. When the complainants right or
title is doubtful or disputed, he does not have a clear legal right
and, therefore, the issuance of injunctive relief is not proper."23
Likewise, upon the dismissal of the main case by the RTC on
August 8, 2013, the question of issuance of the writ of preliminary
injunction has become moot and academic. In Arevalo v. Planters
Development Bank,24 the Court ruled that a case becomes moot
and academic when there is no more issue between the parties or
object that can be served in deciding the merits of the case. Upon
the dismissal of the main action, the question of the non-issuance
of a writ of preliminary injunction automatically died with it. A writ
of preliminary injunction is a provisional remedy; it is auxiliary, an
adjunct of, and subject to the determination of the main action. It is
deemed lifted upon the dismissal of the main case, any appeal
therefrom notwithstanding.25
The petitioners are guilty
of forum shopping
We agree with the CA that the petitioners committed forum
shopping when they filed the specific performance case despite the
pendency of the present case before the CA. In the recent case of
Heirs of Marcelo Sotto, etc., et al. v. Matilde S. Palicte,26 the Court
laid down the three ways forum shopping may be committed: 1)
through litis pendentia filing multiple cases based on the same
cause of action and with the same prayer, the previous case not
having been resolved yet; 2) through res judicata filing multiple
cases based on the same cause of action and the same prayer, the
previous case having been finally resolved; and 3) splitting of
causes of action filing multiple cases based on the same cause of
action but with different prayers the ground to dismiss being
either litis pendentia or res judicata. "The requisites of litis
pendentia are: (a) the identity of parties, or at least such as
representing the same interests in both actions; (b) the identity of
rights asserted and relief prayed for, the relief being founded on
the same facts; and (c) the identity of the two cases such that
judgment in one, regardless of which party is successful, would
amount to res judicata in the other."27
Noticeable among these three types of forum shopping is the
identity of the cause of action in the different cases filed. Cause of
action is "the act or omission by which a party violates the right of
another."28
33
The cause of action in the present case (and the main case) is
the petitioners claim of ownership of the land when they bought it,
either from the City Government of Butuan or from Tuazon. This
ownership is the petitioners basis in enjoining the respondents
from dispossessing them of the property. On the other hand, the
specific performance case prayed that the City Government of
Butuan be ordered to issue the petitioners the certificate of sale
grounded on the petitioners ownership of the land when they had
bought it, either from the City Government of Butuan or from
Tuazon. While it may appear that the main relief prayed for in the
present injunction case is different from what was prayed for in the
specific performance case, the cause of action which serves as the
basis for the reliefs remains the same the petitioners alleged
ownership of the property after its purchase in a public auction.
Thus, the petitioners' subsequent filing of the specific
performance action is forum shopping of the third kind-splitting
causes of action or filing multiple cases based on the same cause
of action, but with different prayers. As the Court has held in the
past, "there is still forum shopping even if the reliefs prayed for in
the two cases are different, so long as both cases raise
substantially the same issues."29
Similarly, the CA correctly found that the petitioners and their
counsel were guilty of forum shopping based on litis pendentia. Not
only were the parties in both cases the same insofar as the City
Government of Butuan is concerned, there was also identity of
rights asserted and identity of facts alleged. The cause of action in
the specific performance case had already been ruled upon in the
present case, although it was still pending appeal before the CA.
Likewise, the prayer sought in the specific performance case-for the
City Government ofButuan to execute a deed of sale in favor of the
petitioners - had been indirectly ruled upon in the present case
when the R TC declared that no certificate of sale could be issued
because there had been no valid sale.
 WHEREFORE, premises considered, the Court DENIES the petition
for review on certiorari.1wphi1 The decision dated October 24,
2005 and the resolution dated April 6, 2006 of the Court of Appeals
in CA-G.R. SP No. 59859 are hereby AFFIRMED.
The attendant facts are not complicated and, in fact, involve the
oft-repeated scenario in the public service workplace -a complaint
by subordinate employees against their superior officer for
misconduct in office. In a twist of fortune (or misfortune), an
accident triggered the whole train of events that led to the present
case.

Republic of the Philippines

SUPREME COURT
Manila Dechavez was the president of the Negros State College of
Agriculture (NSCA) from 2001 until his retirement on April 9, 2006.
SECOND DIVISION On May 5, 2002, a Sunday, Dechavez and his wife, Amelia M.
Dechavez (Mrs. Dechavez), used the college service Suzuki Vitara
G.R. No. 176702 November 13, 2013 to go to Pontevedra, Negros Occidental. Dechavez drove the
vehicle himself. On their way back to the NSCA, they figured in a
OFFICE OF THE OMBUDSMAN, Petitioner, vehicular accident in Himamaylan City, resulting in minor injuries to
vs. the occupants and damage to the vehicle.
MARCELINO A. DECHAVEZ, Respondent.

To support his claim for insurance, Dechavez executed an

DECISION affidavit5 before the Government Service Insurance System (GSIS).
The GSIS subsequently granted Dechavez's claims amounting to
P308,000.00, while the NSCA shouldered P71,000.00 as its share in
the vehicle's depreciation expense. The GSIS released P6,000.00
BRION, J.: for Mrs. Dechavez's third-party liability claim for bodily injuries.

The petitioner, Office of the Ombudsman (Ombudsman), seeks in
this Rule 45 petition for review on certiorari1 the reversal of the
Court of Appeals (CA s) decision2 and resolution3 reversing the
Ombudsmans rulings4 that dismissed respondent Marcelino A.
Dechavez (Dechavez) from the service for dishonesty.
On November 11 2002, twenty (20) faculty and staff members of
the NSCA (complainants) asked the Commission on Audit (COA) to
conduct an audit investigation of NSCAs expenditures in the May 5,
2002 vehicular accident. The COA dismissed the complaint for lack
of merit.

The complainants then sought recourse with the Ombudsman,

Visayas, through a verified complaint7 charging Dechavez with
Dishonesty under Section 46(b)(l), Chapter 6, Tile I of the
THE FACTS Administrative Code of 1987.8

34
 THE OMBUDSMAN S RULING
The Ombudsman dismissed Dechavez from the service with all
accessory penalties after finding him guilty.9 The Ombudsman
ruled that the complainants sufficiently established their
allegations, while Dechavez's defenses had been successfully
rebutted. The motion for reconsideration that Dechavez filed was
subsequently denied.10
THE CAS RULING
The CA examined the same pieces of evidence that the
Ombudsman considered and reversed the Ombudsman s
findings.11
In complete contrast with the Ombudsman's rulings, the CA
found that the complainants failed to sufficiently show that
Dechavez had deliberately lied in his May 10, 2002 affidavit.
Dechavez sufficiently proved that he went on an official trip, based
on the reasons outlined below and its reading of the evidence:
First, there was nothing wrong if Dechavez worked on a Sunday;
he must, in fact, be commended for his dedication.
Second, the Ombudsman should have accorded greater belief on
the NSCA drivers positive assertion that they were not available to
drive for Mr. and Mrs. Dechavez (as they had serviced other faculty
members at that time), as against the NSCA security guards
allegation that these drivers were available then (because they
allegedly saw the drivers within the college premises on that
Sunday); speculations on the nature of the trip should not arise
simply because Dechavez personally drove the vehicle.
35
Third, the certifications of Mr. Larry Parroco (Pontevedra
Sanggunian Bayan Member) and Mr. Cornelio Geanga (Chair of the
Education Committee and Head Teacher of the M.H. Del Pilar
Elementary School) should have persuaded the Ombudsman that
the affiants are public officials who would not lightly issue a
certification or falsely execute affidavits as they know the
implications and consequences of any falsity.
Fourth, and lastly the two lists of teaching instructors had been
prepared by the same person, and if the second list had indeed
been questionable, Mr. Pablito Cuizon (NSCA s Chairman for
Instructions) would have not attached the second list to his
affidavit.
On February 7, 2007, the CA denied12 the motion for
reconsideration filed by the Ombudsman.
THE PARTIES ARGUMENTS
The Ombudsman argues that the guilt of Dechavez has been
proven by substantial evidence -the quantum of evidence required
in administrative proceedings. It likewise invokes its findings and
posits that because they are supported by substantial evidence,
they deserve great weight and must be accorded full respect and
credit.
Dechavez counters that the present petition raises factual issues
that are improper for a petition for review on certiorari under Rule
45. He adds that the present case has been mooted by his
retirement from the service on April 9, 2006, and should properly
be dismissed.
THE COURTS RULING
 The Court finds the petition meritorious.
The CAs factual findings are conclusive exceptions
The rule that the Court will not disturb the CA' s findings of fact is
not an absolute rule that admits of no exceptions. 13 A notable
exception is the presence of conflict of findings of fact between or
among the tribunals' rulings on questions of fact. The case before
us squarely falls under this exception as the tribunals below made
two critical conflicting factual findings. We are thus compelled to
undertake our own factual examination of the evidence presented.
This Court cannot be any clearer in laying down the rule on the
quaritum of evidence to support an administrative ruling: In
administrative cases, substantial evidence is required to support
any findings. Substantial evidence is such relevant evidence as a
reasonable mind may accept as adequate to support a conclusion.
The requirement is satisfied where there is reasonable ground to
believe that the petitioner is guilty of the act or omission
complained of, even if the evidence might not be overwhelming."14
Our own examination of the records tells us that the
Ombudsman's findings and appreciation of the presented evidence
are more in accord with reason and common experience so that it
successfully proved, by the required quantum of evidence,
Dechavez's dishonesty, at the same time that we find the
respondent's reading of the evidence to be stretched to the point of
breaking, as our analysis below shows.
We start with our agreement with the CA's view that the
Ombudsman's finding that Dechavez was not on official business
on May 5, 2002 because it was a Sunday (a non-working day) -by
36
itself, is not sufficient basis for the conclusion that Dechavez's
business on that day was not official. We, nevertheless, examined
the other surrounding facts and are convinced that the spouses
Dechavez's trip was a personal one; thus, Dechavez had been
dishonest when he made the claim that he went on official
business. The dishonesty, of course, did not arise simply from the
nature of the trip, but from the claim for insurance that brought the
spouses a substantial sum. First, Dechavez alleged that the trip was
urgent, and there were no drivers available; hence, he drove the
vehicle himself. He added that the fact that the trip ticket was
accomplished on May 5, 2002, a Sunday, and that it was
typewritten, are not material as he was not prohibited from driving
the car himself.
We do not agree with Dechavez's claim about the immateriality
of the trip ticket; it was presented as evidence and, as such, carries
implications far beyond what Dechavez claims. The fact alone that
the ticket, for a trip that was allegedly urgent, was typewritten
already speaks volumes about the integrity of this piece of
evidence. We agree with the Ombudsman, based on common
experience and probability, that had the trip really been urgent and
had the trip ticket been accomplished on the date of the trip, May
5, 2002, it would have been handwritten. The trip ticket, however,
was typewritten, indicating that it had been prepared ahead of
time, or thereafter, not on that Sunday immediately before leaving
on an urgent trip. In fact, if it had been prepared ahead of time,
then the trip could not have been urgent as there was advance
planning involved.
In other words, if the trip ticket had been prepared ahead of
time, the trip should have been scheduled ahead of time, and
necessary arrangements should have been made for the
availability of a driver. Therefore, it was unlikely that Dechavez
would have known that no driver would be available for him on the
date of the trip.
 On another note, if the trip ticket had been prepared after the
trip, the Ombudsman was correct in observing that Dechavez had
no authority to drive the vehicle in the absence of the requisite trip
ticket.15 Worse, if it had been prepared after the trip after an
accident had intervened, then there had been a. conscious attempt
to sanitize the incidents of the trip. It is at this point where the
claim for insurance becomes material; the trip ticket removed all
questions about the regularity and official character of the trip.
After examining the testimonies, too, we lean in favor of the view
that there were available drivers on May 5, 2002, contrary to what
Dechavez claimed. As between the assertion of the security guards
that they had seen available drivers on the day of the trip, and the
drivers' denial (and assertion that they had serviced other faculty
members at that time), the settled evidentiary rule is that as
between a positive and categorical testimony which has a ring of
truth, on one hand, and a bare denial, on the other, the former is
generally held to prevail.16 Furthermore, while Dechavez insists
that the allegations of the drivers were corroborated by the
teachers they had driven for, the attestations of these teachers
remained to be hearsay: Dechavez failed to present their
attestations in evidence.
Dechavez additionally argues that the way the trip ticket was
accomplished bears no significance in these circumstances,
insisting further that it is of no moment that he drove the vehicle
himself, as he was not prohibited from doing so. Read in isolation,
the Court might just have found these positions convincing. Read
with the other attendant circumstances, however, the argument
becomes shaky.
37
If Dechavez thought that there was nothing wrong in driving the
vehicle himself, why would he indicate that the reason he drove the
vehicle himself was that there were no available drivers, and that it
was urgent? Finally, if indeed it was true that Dechavez used to
perform his extension service or confer with the NSCA's linkages
during weekends, how come the trip became urgent and the driver
had not been assigned beforehand?
Second. We cannot give weight to the certification of Mr. Parroco
that Dechavez used to visit the Pontevedra District to coordinate
with his office, and that Dechavez also visited his office on May 5,
2002. We likewise disregard the statement of Mr. Geanga that
Dechavez appeared before his office on May 5, 2002. The
certifications of these two witnesses were submitted only in
October 2004 or two (2) years after the case was filed with the
Ombudsman. The time lag alone already renders the certifications
suspect and this inconsistency has not been satisfactorily
explained. The late use of the certifications also deprived the
complainants of the opportunity to refute them and the
Ombudsman the chance to examine the affiants. As the
Ombudsman observed, too, it is hard to believe that all four (4) of
them -Mr. and Mrs. Dechavez, Mr. Parroco, and Mr. Geanga
-happened to agree to work on a Sunday, a non-working day; this
story simply stretches matters beyond the point of believability in
the absence of supporting proof that this kind of arrangement has
been usual among them.
Finally we find that Mrs. Dechavez was not on official business on
May 5, 2002; in fact, she was not teaching at that time. We note in
this regard that the parties presented two (2) conflicting
instructor's summer teaching loads for 2002: the first one, dated
April 1, 2002, which did not include Mrs. Dechavez, while the other,
an undated one, included Mrs. Dechavez's name. Curiously, the
same person who prepared both documents, Mr. Cuizon, failed to
explain why there were two (2) versions of the same document.
Considering the highly irregular and undated nature of the list that
contained the name of Mrs. Dechavez, we again concur with the
Ombudsman's reading that while we can presume that the undated
list had been prepared before the start of the summer classes, we
can also presume that the other list had been prepared
subsequently to conveniently suit the defense of the respondent.17
Likewise, Ms. Fe Ulpiana, a teacher at the NSCA, whose name
appears in the second document, attested that she had never been
assigned to register and assess the students' school fees, contrary
to what appeared thereon. We find it worth mentioning that
Dechavez's witness, Mr. Cuizon, despite being subpoenaed by the
Ombudsman, failed to furnish the Schedule of Classes for Summer
2002 and the Actual Teaching Load for Summer 2002.18 Dechavez
also failed to provide the Ombudsman with the subpoenaed daily
time record (DTR) of Mrs. Dechavez for summer 2002 as the DTR
supposedly could not be located.
All told, too many gaps simply existed in Dechavez's tale and
supporting evidence for his case to be convincing.
Retirement from the service
during the pendency of an
administrative case does not
render the case moot and academic
As early as 1975, we have upheld the rule that the jurisdiction
that was Ours at the time of the filing of the administrative
complaint was not lost by the mere fact that the respondent public
official had ceased to be in office during the pendency of his case.
The Court retains its jurisdiction either to pronounce the respondent
official innocent of the charges or declare him guilty thereof. A
contrary rule would be fraught with injustices and pregnant with
dreadful and dangerous implications."19
38
Arguably, the cited case above is not applicable as it involved a
judge who retired four (4) days after a charge of grave misconduct,
gross dishonesty and serious inefficiency was filed against
him.1wphi1 The wisdom of citing this authority in the present case
can be found, however, in its ruling that: "If innocent, respondent
official merits vindication of his name and integrity as he leaves the
government which he served well and faithfully; if guilty, he
deserves to receive the corresponding censure and a penalty
proper and imposable under the situation."20
Recently, we emphasized that in a case that a public official's
cessation from service does not render moot an administrative case
that was filed prior to the official's resignation. In the 2011 case of
Office of the Ombudsman v. Andutan Jr.21 we reiterated the
doctrine and laid down the line of cases supporting this principle
when we ruled:
To recall, we have held in the past that a public official's
resignation does not render moot an administrative case that was
filed prior to the official's resignation. In Pagano v. Nazarro, Jr., we
held that:
In Office of the Court Administrator v. Juan [A.M. No. P-03-1726,
22 July 2004, 434 SCRA 654, 658], this Court categorically ruled
that the precipitate resignation of a government employee charged
with an offense punishable by dismissal from the service does not
render moot the administrative case against him. Resignation is not
a way out to evade administrative liability when facing
administrative sanction. The resignation of a public servant does
not preclude the finding of any administrative liability to which he
or she shall still be answerable-[Baquerfo v. Sanchez A.M. No. P-05-
1974, 6 April 2005, 455 SCRA 13, 19-20]. [Italics supplied, citation
omitted]
 Likewise, in Baquerfo v. Sanchez22 we held:
Cessation from office of respondent by resignation or retirement
neither warrants the dismissal of the administrative complaint filed
against him while he was still in the service nor does it render said
administrative case moot and academic. The jurisdiction that was
this Court's at the time of the filing of the administrative complaint
was not lost by the mere fact that the respondent public official had
ceased in office during the pendency of his case. Respondent's
resignation does not preclude the finding of any administrative
liability to which he shall still be answerable. [Emphases ours;
citations omitted]
39
Thus, from the strictly legal point of view and as we have held in
a long line of cases, jurisdiction, once it attaches, cannot be
defeated by the acts of the respondent save only where death
intervenes and the action does not survive.
WHEREFORE, under these premises we hereby GRANT the
petition for review on certiorari Accordingly we REVERSE AND SET
ASIDE the decision dated March 31, 2006 and the resolution dated
February 7, 2007 of the Court of Appeals in CA-G.R. SP. No. 00673
and REINSTATE the decision dated October 29 2004 and the order
dated April 6 2005 of the Office of the Ombudsman.
Costs against respondent Marcelino A. Dechavez.
SO ORDERED.
i[1] Rollo, pp. 1-12.

ii[2] Id. at 14.

iii[3] Id. at 38.

iv[4] Id. at 39.

v[5] Id. at 40.

vi[6] Id. at 15.

vii[7] Id. at 41-44.

viii[8] Id. at 61.

ix[9] Abundo v. Judge Manio, Jr., 312 SCRA 1, 19 (1999).

x[10] Elect. Code, Art. 242. Commissions exclusive jurisdiction of all pre-proclamation controversies. The Commission shall
have exclusive jurisdiction of all pre-proclamation controversies. It may motu proprio or upon written petition, and after due
notice and hearing, order the partial or total suspension of the proclamation of any candidate-elect or annul partially or
totally any proclamation, if one has been made, as the evidence shall warrant in accordance with the succeeding sections.

xi[11] Ortaez-Enderes, et al. v. Court of Appeals, 321 SCRA 178, 186 (1999).

xii[12] Medina, et al. v. City Sheriff of Manila, 276 SCRA 133, 139 (1997).

xiii[13] Adao v. Judge Lorenzo, 316 SCRA 570, 580 (1999).