G.R. No.

L-6120 June 30, 1953

CIPRIANO P. PRIMICIAS, petitioner, vs.

FELICISIMO OCAMPO, as Judge-at-large presiding over Branch C of the Court of First Instance of Manila and
EUGENIO ANGELES, as City Fiscal of Manila, representing the PEOPLE OF THE PHILIPPINES, respondents.

This is a petition which seeks to prohibit respondent Judge from proceeding with the trial of two criminal cases which
were then pending against petitioner without the assistance of assessors in accordance with the provisions of section 49
of Republic Act No. 409 in relation to section 154 of Act No. 190, and as an auxiliary remedy, to have a writ of
preliminary injunction issued so that the trial may be held pending until further orders of this court.

This petition was originally filed with the Court of Appeals, but was later certified to this court on the ground that the main
basis of the petition is section 49 of Republic Act No. 409, otherwise known as Revised Charter of the City of Manila,
approved on June 18, 1949, and respondents assail the constitutionality of said section in that it contravenes the constitutional
provision that the rules of court "shall be uniform for all courts of the same grade . . . .(Section 13, Article VIII of the Constitution.).

Petitioner was charged before the Court of First Instance of Manila with two statutory offenses, namely, (1) with a
violation of Commonwealth Act No. 606, which was docketed as criminal case No. 18374, in that he knowingly
chartered a vessel of Philippine registry to an alien without the approval of the President of the Philippines and (2) with
a violation of section 129 in relation to section 2713 of the Revised Administrative Code, which was docketed as
Criminal Case No. 18375, in that he failed to submit to the Collector of Customs the manifests and certain
authenticated documents for the vessel "Antarctic" and failed to obtain the necessary clearance from the Bureau of
Customs prior to the departure of said vessel for a foreign port.

On April 23, 1952, before the trial of said criminal cases, petitioner filed a motion praying that assessors be appointed
to assist the court in considering the questions of fact involved in said cases as authorized by section 49 of Republic
Act No. 409, otherwise known as Revised Charter of the City of Manila, which provides that "the aid of assessors in
the trial of any civil or criminal action in the Municipal Court, or the Court of First Instance, within the City, may be
invoked in the manner provided in the Code of Civil Procedure." This motion was opposed by the City Fiscal who
appeared for the People of the Philippines.

On April 28, 1952, the court issued an order denying the motion holding in effect that with the promulgation of the
Rules of Court by the Supreme Court, which became effective on July 1, 1940, all rules concerning pleading, practice
and procedure in all courts of the Philippines previously existing were not only superseded but expressly repealed, that
the Supreme Court, having been vested with the rule-making power, expressly omitted the portions of the Code of
Civil Procedure regarding assessors in said Rules of Court, and that the reference to said statute by section 49 of
Republic Act No. 409 on the provisions regarding assessors should be deemed as a mere surplusage. Believing that this
order is erroneous, petitioner now comes to this court imputing abuse of discretion to the respondent Judge.

The issues now posed by petitioner are:.

I. The right of the petitioner to a trial with the aid of assessors is an absolute substantive right, and the duty of the court
to provide assessors is mandatory.
II. The right to trial with the aid of assessors, being a substantive right, cannot be impaired by this court in the exercise
of its rule-making power.
III. Section 154 of the Code of Civil Procedure and Section 2477 of the Old Charter of Manila, creating the right to
trial with the aid of assessors, are substantive law and were not repealed by Rules of Court.
IV. Granting without admitting that the provisions on assessors of the Code of Civil Procedure and the old Charter of
Manila were impliedly repealed, nevertheless, the same provisions were later reenacted by reference in section 49 of
the Revised Charter of Manila, which is now the source of the right to trial with the aid of assessors and which refers to
the Code of Civil Procedure merely to indicate the procedure for appointing assessors.
V. Section 49 of the Revised Charter of Manila is not invalid class legislation and does not violate the constitutional
provision that the rules of pleading, practice and procedure 'shall be uniform for all the courts of the same grade.
A brief summary of the historical background of the legislation regarding trial with the aid of assessors in the
Philippines may be of help in the determination of the issues posed by petitioner. The first provision which allowed
trial with the aid of assessors in civil cases in inferior courts and Courts of First Instance is contained in Act No. 190 of
the Philippine Commission, otherwise known as the Code of Civil Procedure, which took effect on October 1, 1901
(Sections 58-62; 154-161). Almost simultaneously, or on October 17, 1901, the trial with the aid of assessors both in
civil and criminal cases was allowed in the Manila courts upon the enactment of Act No. 267, amending Act No. 183,
the original Charter of Manila. In 1914, the trial by assessors was allowed in criminal cases in the courts of first instance in
the provinces with the enactment of Act No. 2369. And in 1915, Act No. 2520 was passed extending the same trial by
assessors to the courts of first instance and justice of the peace courts in the Department of Mindanao and Sulu.

In connection with the use of assessors in Manila, section 44 of Act No. 183, the original Charter of Manila, as amended by
section 13 of Act No. 267, was reenacted as section 2449 of the Administrative Code 1916, Act No. 2657. Section 2449 of
the Administrative Code of 1916 became section 2477 of Act No. 2711, otherwise known as the Revised Administrative
Code of 1917. And section 2477 in turn became section 49 of the Republic Act No. 409, which is the present Charter of the
City of Manila. This section 49 is the law now invoked by petitioner in support of his claim to a trial with the aid of assessors
in the two criminal cases now pending against him. Its pertinent provisions are quoted hereunder for ready reference:.
 SEC. 49. Assessors in the courts in the city. The aid of assessors in the trial of any civil or criminal action in the
municipal court, or the Court of First Instance, within the city, may be invoked in the manner provided in the Code
of Civil Procedure. It shall be the duty of the Municipal Board to prepare one list of the names of twenty-five
residents of the City best fitted by education, natural ability and reputation for probity to sit as assessors in the trial
of actions in the municipal court and a like list of persons to sit as assessors in the trial of the action in the Court of
First Instance. The Board may at any time strike any name from the list so prepared, by reason of the death,
permanent disability, or unfitness of the person named; and in case names are so stricken out, other names shall be
added in their place, to be selected as in this section provided. Parties desiring to avail themselves of the use of
assessors in the municipal or Court of First Instance shall proceed as provided for by law or rules of court; and the
method of summoning assessors, enforcing their attendance, excusing them from attendance, their compensation,
oath duties and effect of dissent from the opinion of the judges shall be as provided in those laws or rules.

A careful analysis of the above provisions is interesting. Their most salient features are: The aid of assessors in the trial
of any civil or criminal action in the Municipal Court or the Court of First Instance may be invoked in the manner
provided in the Code of Civil Procedure. The parties desiring to avail themselves of the use of assessors "shall proceed
as provided for by law or rules of court", and "the method of summoning assessors, enforcing their attendance,
excusing them from attendance, their compensation, oath, duties, and effect of the dissent from the opinion of the judge
shall be as provided in those laws or rules." If we are to be guided merely by these provisions, the right to trial with the
aid of assessor would seem to be beyond dispute. These provisions are simple and clear and appear to be mandatory.
But where the difficulty arises is in their relation or bearing on the directive of the Constitution which provides that
"the existing laws on pleading, practice, and procedure are hereby repealed as statutes, and are declared rules of courts
subject to the power of the Supreme Court to alter and modify the same." Pursuant to this rule-making power, the
Supreme Court promulgated the present Rules of Court, which became effective on July 1, 1940, but because it failed
to incorporate therein the provisions of the Code of Civil Procedure on assessors, respondents now contend that the
right to trial with the aid of assessors, with all its concomitant provisions, cannot now be invoked because, being
procedural in nature, the same must be deemed to have been impliedly eliminated.

This claim would be correct if we were to hold that the right to trial with the aid of assessors is not substantive but
procedural or adjective in nature. If it were merely procedural, not having been incorporated in the Rules of Court, the
logical conclusion is that the rule- making power has deemed wise to eliminate it. But no such presumption, nor
conclusion, can be drawn for the reason that the right to a trial by assessors is substantive in the sense that it must
created and defined by express enactment as opposed to a mere remedy devised to enforce such right or obtain redress
therefor. "Rules of procedure should be distinguished from substantive law. A substantive law creates, defines or
regulates rights concerning life, liberty or property, or the powers of agencies or instrumentalities for the administration
of public affairs, whereas rules of procedure are provisions prescribing the method by which substantive rights may be
enforced in courts of justice." (Moran, Comments on the Rules of Court, Vol. I, 1952 ed., p.4.)

In Bustos vs. Lucero,* (46 Off. Gaz., January Supp., pp. 445, 448), this Court cited with approval the following
definitions of substantive law:

Substantive law creates substantive rights and the two terms in this respect may be said to be synonymous.
Substantive rights in a term which includes those rights which one enjoys under the legal system prior to the
disturbance of normal relations. (60 C.J. 980.)

Substantive law is that part of the law which creates, defines and regulates rights, or which regulates the right and
duties which give rise to a cause of action; that part of the law which courts are established to administer; as
opposed to adjective or remedial law, which prescribes the method of enforcing rights or obtain redress for their
invasions (36 C.J. 27; 52 C.J.S. 1026).

The trial with the aid of assessors as granted by section 154 of the Code of Civil Procedure and section 2477 of the old
Charter of Manila are parts of substantive law and as such are not embraced by the rule-making power of the Supreme
Court. This is so because in said section 154 this matter is referred to as a right given by law to a party litigant. Section
2477 of the Administrative Code of 1917 is couched is such a manner that a similar right is implied when invoked by a
party litigant. It says that the aid may be invoked in the manner provided in the Code of Civil Procedure. And this right
has been declared absolute and substantial by this Court in several cases where the aid of assessors had been invoked
(Berbari vs. Concepcion, et al., 40 Phil., 320; Colegio de San Jose vs. Sison, 54 Phil., 344.) Thus, it was there said that these
provisions "necessarily lead to the conclusion that the intervention of the assessors is not an empty formality which may be
disregarded without violating either the letter or the spirit of the law. It is another security given by the law to the litigants,
and as such, it is a substantial right of which they cannot be deprived without vitiating all the proceedings. Were we to agree
that for one reason or another the trial by assessors may be done away with, the same line of reasoning would force us to
admit that the parties litigant may be deprived of their right to be represented by counsel, to appear and be present at the
hearings, and so on, to the extent of omitting the trial in a civil case, and thus set at naught the essential rights granted by the
law to the parties, with consequent nullity of the proceedings." (Colegio de San Jose vs. Sison, 54 Phil., 344, 349.)

Being substantive in nature, it is not difficult to see why the provisions concerning trial by assessors embodied in the
Code of Civil Procedure have not been incorporated by the Supreme Court in the present Rules of Court. To have done
so, it would have been a travesty of its rule-making power which, by direct mandate of the Constitution, is limited to
matters referring to pleading, practice and procedure. The application that the respondents draw from the failure to
incorporate these provisions in the present Rules of Court to the effect that the intention was to eliminate them or repeal them
all together cannot, therefore, stand in the light of the observations and authorities we have above adverted to.
There is a point in the claim that the provisions concerning trial by assessors embodied in the Code of Civil Procedure
are not wholly substantive but portions thereof are remedial such as those which refer to the method of summoning
assessors, enforcing their attendance, excusing them from attendance, their compensation, oath, duties and effect of
dissent from the opinion of the judge, as to which no cogent reason is seen for their non-incorporation if the intent is
not to eliminate them from the Rules of Court. This is true; but it is likewise true that because said remedial provisions
are inextricably interwoven with the substantive part, it must have been deemed wise and proper to leave them as they
were for reasons of coordination and expediency, it being a truism that the one cannot be detached from the other. Ubi
jus ibi remedium. Remedial measures are but implementary in character and they must be appended to the portion of
the law to which they belong. Mention should be made here that not all of the provisions appearing in the Code of Civil
Procedure are remedial in nature, such as those pertaining to prescription, the requisites for making a will, and the
succession of the estate of an adopted child, which are admittedly substantive in character and for that reason were not
incorporated in the Rules of Court. To this group belong the provisions under consideration.

Granting arguendo that the provisions on assessors of the Code of Civil Procedure and even in the old Charter of
Manila are purely remedial in nature and because of the failure to incorporate them in the Rules of Court they are
deemed to have been impliedly repealed as claimed by respondents, we are of the opinion that they can still be invoked
by a litigant upon the theory that they had been reaffirmed and reenacted by Republic Act No. 409, which was
approved in 1949, or nine years after the Rules of Court became effective. As already stated, section 49 of said Act
states that the aid of assessors may be invoked in the manner provided in the Code of Civil Procedure. It likewise states
that the parties desiring to avail themselves for the use of assessors shall proceed as provided for by law. The mention
made of the Code of Civil Procedure in said section indicates in itself a re-enactment or incorporation by reference of
the provisions concerning assessors contained in said law. Congress, whose members were mostly lawyers, must be
presumed to know that at the time said Act was approved the Rules of Court had already been promulgated without
incorporating therein the provisions concerning the aid to assessors, and fully cognizant of this situation, and not desiring to
omit this right granted to a litigant, they must have deemed it wise and proper to re-enact them by reference in said section
49. This Congress can do, for, while our Constitution has given the power to adopt rules of procedure to the Supreme Court,
such grant did not preclude Congress from enacting any procedural law or altering, amending, or supplementing any of the
rules that may be promulgated by the Supreme Court (Section 13, Article VIII, Philippine Constitution).

The practice of making such reference has long been sanctioned. Our Congress did this not only in connection with
courts in the City of Manila. It also did it in connection with courts in Quezon City (Republic Act No. 537). Statutes
which refer to other statutes and make them applicable to the subject for legislation are called "reference statutes".
These statutes are frequently used "to avoid encumbering the statute books by unnecessary repetition, and they have
frequently been recognized as an approval method of legislation, in the absence of constitutional restrictions." [50 Am.
Jur. 57; Gruen vs. Tax Commission, 211 P. (2d) (1949) 651, 666.].

Again, it has been held that "The adoption of an earlier statute by reference makes it as much as a part of the latter act
as though it had been incorporated at full length. This is true of a legislative act which refers to another act for the
procedure to be taken." (50 Am. Jur. 58.) The reference in Republic Act No. 409 to the provisions on assessors must be
deemed, therefore, to have incorporated therein the pertinent provisions on the matter contained in the Code of Civil
Procedure in much the same manner as if the whole provisions had been reproduced. Consistent with this theory, we
cannot but hold that the observations made by respondents to the effect that the reference made to said provisions is
section 49 is a mere surplusage, or was due to a mere oversight, has no legal basis, as such innuendo would be
tantamount to imputing lack of foresight, if not brazen negligence, to our legislative body.

It is finally contended that section 49 of Republic Act No. 409 is unconstitutional because it violates the constitutional
provisions that procedural rules "shall be uniform for all courts of the same grade" and, therefore, it is a class
legislation. This contention cannot be entertained: firstly, because it is raised for the first time in this instance, a
procedural defect which would bar any further discussion on the matter following well-known precedents 1 and,
secondly, because it is not correct that at present only in Manila trial with the aid of assessors may be invoked if we
will sustain the theory that the promulgation of the Rules of Court did not have the effect of repealing the provisions on
assessors embodied in the Code of Civil Procedure.

The contention of respondents we reckon is predicated on the assumption that the provisions on assessors of the
Code of Civil Procedure had been impliedly repealed. Such is not the case. We have already pointed out that the basic
provisions on the matter partake of the nature of substantive law and as such they were left intact by the Supreme
Court. The corollary to this conclusion is that this remedy may be invoked out only in Manila but in all other places
where it existed prior to the promulgation of the Rules of Court. This is true in civil cases. With regard to criminal
cases, we have already said that the same remedy may be invoked in the cities of Cebu, Iloilo and Quezon, with the
particularity that their charters make express reference, either directly or indirectly, to the provisions of the code of
Civil Procedure. With this historical background, the claim that under the theory we have entertained the trial with the
aid of assessors can only be invoked in the City of Manila is certainly without merit.

In view of the foregoing, we hold that the provisions on assessors embodied in the Code of Civil Procedure are still in
force and that the same may still be invoked in the light of the provisions of section 49 of the Republic Act No. 409. It
is therefore our opinion that the respondent Judge acted with abuse of discretion in denying petitioner his right to the
aid of assessors in the trial of the two criminal cases now pending in the Court of First Instance of Manila.

Wherefore, petition is hereby granted, without pronouncement as to costs.

 G.R. No. L-286 March 29, 1946
FREDESVINDO S. ALVERO, petitioner, vs. M.L. DE LA ROSA, Judge of First Instance of Manila, JOSE
R. VICTORIANO, and MARGARITA VILLARICA, respondents.

This is an original petition for certiorari filed in this court.

The record shows that, on June 25, 1945, respondent Jose R. Victoriano had filed a complaint, in the Court of First
Instance of the City of Manila, against petitioner Fredesvindo S. Alvero and one Margarita Villarica, alleging two
causes of action, to wit, (1) to declare in force the contract of sale, made on October 1, 1940, between said Jose R.
Victoriano and Margarita Villarica, of two (2) parcels of land in the Manotoc subdivision, Balintawak, in the barrio of
Calaanan, municipality of Caloocan, Province of Rizal, with a combined area of 480 square meters, which land was
subsequently sold by said Villarica, in favor of petitioner Fredesvindo S. Alvero, on December 31, 1944, for the sum of
P100,000 in Japanese military notes; and (2) to declare said subsequent sale null and void.

On July 7, 1945, Margarita Villarica filed an answer to said complaint, expressly admitting having sold said land to
Fresdesvindo S. Alvero, for P100,000, in December, 1944, due to the imperative necessity of raising funds with which
to provide for herself and family, and that she did not remember the previous sale; at the same time, offering to
repurchase said land from Fredesvindo S. Alvero in the sum of P5,000, but that the latter refused to accept the offer.
On July 13, 1945, Fredesvindo S. Alvero, in answering said complaint, denied the allegations made therein, and
claimed exclusive ownership of the land in question, and at the same time set up a counterclaim and crossclaim in his
answer, demanding from Jose R. Victoriano a P200-monthly rent on said property, beginning from February, 1945, plus
P2,000 as damages.
On July 21, 1945, Jose R. Victoriano filed an answer to said counterclaim, denying Fredesvindo S. Alvero's alleged
ownership over said land, and the other allegations contained in Alvero's answer.
After the trial of the case before the Hon. Mariano L. de la Rosa, Judge of the Court of First Instance of the City of
Manila, one of the respondents in this case, on November 16, 1945, said respondent judge rendered his decision, in
which it was declared that the two (2) parcels of land in question, with a combined area of 480 square meters had been
sold by Margarita Villarica to Jose R. Victoriano, since October 1, 1940, for the sum of P6,000, on the condition that
the purchaser should make a down payment of P1,700, and a monthly payment of P76.86 in 120 equal monthly
installments; that Jose R. Victoriano continued making said monthly payments until December, 1941, but that owing to
the war-time conditions then existing, Margarita Villarica agreed verbally to suspend such payments until the
restoration of peace; that immediately after said sale of said land to him, Jose R. Victoriano took possession thereof and
made improvements thereon to the amount of P800, and continued occupying said property until December, 1944,
when he abandoned the same to go to evacuation places, but returned thereto in February, 1945; that Margarita
Villarica, having forgotten the sale of said land to Jose R. Victoriano, sold the same for P100,000 in Japanese military
notes, on December 31, 1944, to Fredesvindo S. Alvero, but afterwards offered to repurchase said property from him,
for the sum of P8,000 in genuine Philippine currency, after liberation; that Fredesvindo S. Alvero presented the deed of
sale, executed in his favor, to the Register of Deeds of the City of Manila, on January 3, 1945, and took possession of
said property in December, 1944, but afterwards found Jose R. Victoriano in the premises in February, 1945; that in the
contract of sale executed by Margarita Villarica, in favor of Jose R. Victoriano, it was agreed that, upon failure of the
purchaser to make payments of three (3) successive mothly installments, the vendor would be free to sell the property
again, forfeiting the payments made, except in the case of force majeure; that there was really a verbal agreement
between Margarita Villarica and Jose Victoriano, made in February, 1942, for the suspension of the payment of the
monthly installments until the restoration of peace; and that although Jose R. Victoriano had presented the deed of sale,
executed in his favor, to the Register of Deeds, in Pasig, Rizal, like Fredesvindo S. Alvero, he had also failed to secure
the transfer of title to his name. And considering that Jose R. Victoriano's document was older than that of Fredesvindo
S. Alvero, and that he had taken possession of said property, since October 1, 1940, the respondent judge rendered his
decision in favor of Jose R. Victoriano, adjudging to him the title over the property in question, including all the
improvements existing thereon, and dismissed the counterclaim.

On November 28, 1945, Fredesvindo S. Alvero was notified of said decision; and on December 27, 1945, he filed a
petition for reconsideration and new trial, which was denied on January 3, 1946; and of said order he was notified on
January 7, 1946.
On January 8, 1946, Fredesvindo S. Alvero filed his notice of appeal and record on appeal simultaneously in the lower
court, without filing the P60-appeal bond.
On January 14, 1946, Jose R. Victoriano filed a petition to dismiss the appeal, and at the same time, asked for the
execution of the judgment.
On January 15, 1946, Fredesvindo S. Alvero filed an opposition to said motion to dismiss, alleging that on the very
same day, January 15, 1946, said appeal bond for P60 had been actually filed, and allege as an excuse, for not filing the said
appeal bond, in due time, the illness of his lawyer's wife, who died on January 10, 1946, and buried the following day.
On January 17, 1946, the respondent judge, Hon. Mariano L. de la Rosa, ordered the dismissal of the appeal, declaring that,
although the notice of appeal and record on appeal had been filed in due time, the P60-appeal bond was filed too late.
On January 23, 1946, Fredesvindo S. Alvero filed a petition for the reconsideration of the said order dated January 17, 1946,
dismissing his appeal; and said petition for reconsideration was denied on January 29, 1946. Hence, this petition
for certiorari.
On February 11, 1946, the respondents filed their answer to the petition for certiorari, alleging (1) that said petition is
defective in form as well as in substance; (2) that there has been no excusable negligence, on the part of the petitioner,
or grave abuse of discretion on the part of the respondent judge, in the instant case.
As already stated, the decision rendered by the respondent judge, Hon. Mariano L. de la Rosa, was dated November 16,
1945, of which counsel for Fredesvindo S. Alvero was notified on November 28, 1945; that his motion for
reconsideration and new trial was filed on December 27, 1945, and denied on January 3, 1946, and that said counsel for
Alvero was notified of said order on January 7, 1946; and that he filed his notice of appeal and record on appeal the
following day, to wit, January 8, 1946, and that the P60-appeal bond was filed only on January 15, 1946.
According to the computation erroneously made by the court, the last day for filing and perfecting the appeal, in this
case, was January 8, 1946, or which date, Fredesvindo S. Alvero should have filed his (1) notice of appeal, (2) record
on appeal, and (3) appeal bond. But the P60-appeal bond was filed only on January 15, 1946.
Failure to perfect the appeal, within the time prescribed by the rules of court, will cause the judgment to become final,
and the certification of the record on appeal thereafter, cannot restore the jurisdiction which has been lost. (Roman
Catholic Bishop of Tuguegarao vs. Director of Lands, 34 Phil., 623; Estate of Cordoba and Zarate vs. Alabado, 34
Phil., 920; and Bermudez vs. Director of Lands, 36 Phil., 774.)
The period within which the record on appeal and appeal bond should be perfected and filed may, however, be
extended by order of the court, upon application made, prior to the expiration of the original period.
(Layda vs. Legaspi, 39 Phil., 83.)
Rules of courts, promulgated by authority of law, have the force and effect of law; and rules of court prescribing the
time within which certain acts must be done, or certain proceedings taken, are considered absolutely indispensable to the
prevention of needless delays and to the orderly and speedy discharge of judicial business. (Shioji vs. Harvey, 43 Phil., 333.)
Strict compliance with the rules of court has been held mandatory and imperative, so that failure to pay the docket fee
in the Supreme Court, within the period fixed for that purpose, will cause the dismissal of the appeal.
(Salaveria vs. Albindo, 39Phil., 922.) In the same manner, on failure of the appellant in a civil case to serve his brief,
within the time prescribed by said rules, on motion of the appellee and notice to the appellant, or on its own motion, the
court may dismiss the appeal. (Shioji vs. Harvey, 43 Phil., 333.)
Counsel for the petitioner Fredesvindo Alvero alleges as an excuse, for his failure to perfect and file his appeal, in due
time, the illness of his wife, which ended in her death on January 10, 1946, and by which he was greatly affected.
How little, indeed, does one realize that in life he lives in the midst of death; and that every that passes in a step nearer
towards eternity. Yet, notwithstanding the inexorable laws of human destiny, every mortal fears death, and such fear is
worse than death itself. That is perhaps the reason why those feeling its approach, in their last moments, want to be
surrounded by the ones dearest to their heart, to hear from them words of tenderness and eternal truth, and thus receive
as balm their love and the cheering influence of the traditional faith, and the consolation of religious hope.
The virtuous and loving wife is the peculiar gift of heaven, and Mother is the name for God in the innocent lips and
hearts of adoring children. "She looketh well to the ways of her household, and eateth not the bread of idleness." "And
her daughters arise up and call her blessed." And when she dies in the bosom of God, her children find solace in the
contemplation of her eternal bliss, as mirrored in her tranquil beauty.
It is not, therefore, difficult to understand the state of mind of the attorney, and his intense devotion and ardent
affection towards his dying wife.
Unfortunately, counsel for petitioner has created a difficult situation. In his motion for reconsideration and new trial,
dated December 27, 1945, he did not point out specifically the findings or conclusions in the judgment, are not
supported by the evidence or which are contrary to law, making express reference to the pertinent evidence or legal
provisions, as expressly required by Rule 37, section 2, paragraph (c) of the Rules of Court. Motions of that kind have
been considered as motions pro forma intended merely to delay the proceeding, and, as such, they cannot and will not
interrupt or suspend the period of time for the perfection of the appeal. (Valdez vs. Jugo, 74 Phil., 49, and
Reyes vs. Court of Appeals and Bautista, 74 Phil., 235.) Hence, the period for perfecting herein petitioner's appeal
commenced from November 28, 1945, when he was notified of the judgment rendered in the case, and expired on
December 28, 1945; and, therefore, his notice of appeal and record on appeal filed on January 8, 1946, were filed out
of time, and much more so his appeal bond, which was only filed on January 15, 1946.
It is futile to speak of hospitals, doctors and nurses to minister alone to the needs of the sick and the dying, who are
dearest to us, for our reasoning powers are of little avail when sorrow or despair rages within.
But human laws are inflexible and no personal consideration should stand in the way of performing a legal duty.
The attorney for petitioner Fredesvindo S. Alvero could have asked for an extension of time, within which to file and
perfect his appeal, in the court below; but he had failed to do so, and he must bear the consequences of his act. A strict
observance of the rules of court, which have been considered indispensable to the prevention of needless delays and to
the orderly and speedy dispatch of judicial business, is an imperative necessity.
It may not be amiss to state in this connection that no irreparable damage has been caused to the petitioner Fredesvindo S.
Alvero, as Margarita Villarica, the vendor to the two, of the land in question, has shown readiness to repair the damage done.
No showing having been made that there had been merely excusable negligece, on the part of the attorney for petitioner
Fredesvindo S. Alvero, and that there had been gave abuse of sound judicial discretion, on the part of the respondent
judge, the petition for certiorari filed in this case, is, therefore, hereby dismissed, without costs. So ordered.
 G.R. No. L-23614 February 27, 1970
PEDRO M. BERMEJO, petitioner-appellant, vs. ISIDRO BARRIOS, ET AL., respondents-appellees.

G.R. No. L-23615 February 27, 1970

JOVITA CARMORIN, petitioner-appellant, vs.ISIDRO BARRIOS, ET AL., respondents-appellees.
These two cases, being interrelated, are decided together.

These are appeals from the joint decision of the Court of First Instance of Capiz, rendered on June 3, 1964, dismissing
two petitions for certiorari and prohibition with preliminary injunction: one filed by petitioner Pedro M. Bermejo
against City Judge Isidro Barrios and City Fiscal Quirico Abela of Roxas City, docketed as Special Civil Case No. V-2721;
and the other filed by petitioner Jovita Carmorin against the same respondents, docketed as Special Civil Case No. V-2723.

In G.R. No. L-23614, petitioner Pedro M. Bermejo and Julia "Doe" (her identity at the time was unknown) were
charged in the city court of Roxas City, on August 22, 1963, of the crime of falsification of public or official document
in an information filed by the city fiscal. It was alleged in the information that on or about the 25th day of February
1963, in Roxas City, the two accused, being private individuals, conspired and confederated together and mutually
helped each other, and willfully and feloniously prepared and executed a document consisting of an amended petition
for habeas corpus entitled "Pedro M. Bermejo and Jovita Carmorin, petitioners, vs. Jose M. Bernales and Wilfredo
Bernales, respondents", which petition Pedro M. Bermejo signed while Julia "Doe" placed her thumbmark over the
name "Jovita Carmorin", which petition was subscribed and sworn to by the two accused before the Clerk of Court, and
filed in the Court of First Instance of Capiz, docketed as Special Proceeding No. 2669, thus the two accused stated and
made it appear in the amended petition that the same was signed and sworn to by Jovita Carmorin as one of the
petitioners when in truth and in fact the said Jovita Carmorin never signed and swore to it, because it was in fact the
accused Julia "Doe" who signed and swore to that petition as Julia Carmorin.

Relying on the certification of the city fiscal that a preliminary investigation had been conducted by him and that he had
examined the witnesses under oath before filing the information, the City Judge, Hon. Isidro O. Barrios, issued, on August
24, 1963, an order for the arrest of accused Bermejo. To prevent his incarceration, said accused put up the necessary bond.

Upon arraignment, Bermejo filed a motion to quash the information alleging in substance: (1) that the information did
not charge an offense because the amended petition for habeas corpus (in Special Proceeding No. V-2669 of the Court
of First Instance of Capiz), allegedly falsified, is not a document contemplated under the provisions of Article 172 of
the Revised Penal Code, and that in a previous judgment of the Court of First Instance of Capiz in the habeas
corpus proceedings it was declared that the thumbmark in the amended petition was that of Jovita Carmorin; and (2)
that the court did not acquire jurisdiction over his person because the warrant issued for his arrest was illegal, Judge
Barrios having issued the same without first examining the witnesses under oath and in the form of searching questions
and answers as required under Republic Act 3828.

The city fiscal filed his opposition to the motion to quash, contending that the petition for habeas corpus is a public
document; that the provisions of Republic Act 3828 are applicable only to municipal judges and not to city judges; and
that the principle of res judicata, or conclusiveness of judgment, cannot be invoked by the accused. After Bermejo had
filed a supplement to his motion to quash and a reply to the city fiscal's opposition, respondent City Judge, on October
5, 1963, issued an order denying the motion to quash.

On October 14, 1963, Bermejo filed his motion for reconsideration, but the same was denied for lack of merit.
Thereupon he filed a petition for certiorari and prohibition with preliminary injunction before the Court of First
Instance of Capiz, naming as respondents City Judge Isidro Barrios and City Fiscal Quirico Abela, contending that City
Fiscal Abela committed a grave abuse of discretion in filing an information against him without conducting the proper
preliminary investigation, and that the City Judge committed a grave abuse of discretion in denying his motion to
quash, raising practically the same issues that he raised in the motion to quash before the city court, and praying that
respondent City Judge be enjoined from hearing the criminal case against him during the pendency of the special civil
action in the Court of First Instance.

In G.R. No. L-23615, Jovita Carmorin was charged by respondent City Fiscal Quirico Abela with perjury, on August 23,
1963, in the same city court of Roxas City (Criminal Case No. 4452) for allegedly having "subscribed and swore to an
affidavit ... that she was really the one who signed with her thumbmark as Jovita Carmorin ... the amended petition
for habeas corpus ... when in truth and in fact, as she very well knew, she had not done such act of signing with her
thumbmark said petition and it was another person, who signed with a thumbmark said petition as Jovita Carmorin ... ." The city
fiscal also certified that he had conducted the preliminary investigation in accordance with law before filing the information.

On the basis of the certification by the city fiscal that he had conducted the proper preliminary investigation,
respondent City Judge Barrios issued an order for the arrest of accused Carmorin. After posting a bond, said accused,
thru her counsel, Atty. Pedro M. Bermejo (the same person accused in the falsification case), filed a motion to quash
the information, alleging substantially, that the court had not acquired jurisdiction over her person because the warrant
of arrest issued for her arrest was improvidently issued, the respondent City Judge having issued the same without
examining the witnesses personally in the form of searching questions and answers in violation of "Republic Act 3828,
and that no offense was committed by the accused because it had already been declared by the Court of First Instance
of Capiz in the habeas corpus case (Special Proceedings No. V-2669) that the thumbmark appearing in the petition
for habeas corpus was the true thumbmark of accused Carmorin.
After the city fiscal has filed his opposition to the motion to quash, and the accused, her reply, on October 15, 1963,
City Judge Barrios issued an order denying the motion to quash. Carmorin's motion for reconsideration having been
denied, she likewise filed a petition for certiorari and prohibition with preliminary injunction with the Court of First
Instance of Capiz, also naming as respondents City Judge Barrios and City Fiscal Abella, imputing abuse of discretion
on the part of City Fiscal Abella in filing an information against her without conducting the proper preliminary
investigation, and on the part of respondent Judge Barrios in denying her motion to quash, raising the same questions
raised by her in her motion to quash before the city court and also praying that respondent City Judge be enjoined from
hearing the case pending decision of the special civil action.

On November 22, 1963, respondent city fiscal filed answers to the two petitions, admitting some of the allegations in
the petitions, and denying others; and setting up the affirmative defense that the orders of respondent City Judge in the
criminal cases against the two petitioners cannot be the subject of the petitions for certiorari and prohibition before the
Court of First Instance of Capiz because the city court of Roxas City issued said orders in the exercise oaf its
concurrent jurisdiction with the Court of First Instance of Capiz, so that the latter court has no jurisdiction to entertain
the petitions for certiorari and prohibition filed before it, pursuant to Section 87, paragraph (e) of Republic Act 296, as
amended by Section 6 of Republic Act 3828.

Herein petitioners filed their replies to respondents' answers, asserting that the Court of First Instance of Capiz has
jurisdiction to take cognizance of the two cases for certiorari and prohibition with preliminary injunction. After the
parties had filed their memoranda in support of their respective contentions regarding the jurisdiction of the court, the
Court of First Instance of Capiz issued an order, on January 6, 1964, declaring that it had jurisdiction to take
cognizance of the two special civil actions for certiorari and prohibition with preliminary injunction, and the court set
the hearing of the two cases for January 24, 1964.

During the hearing of the two cases, which was held jointly, Atty. Bermejo appeared and testified in his behalf and in
behalf of his co-accused Carmorin, while Fiscal Quirico Abella testified for the prosecution. Thereafter, the parties
filed their memoranda. On June 3, 1964, the Court of First Instance of Capiz rendered a decision dismissing the two
petitions, without pronouncement as to costs. Their joint motion for reconsideration having been denied, herein
petitioners brought the present appeals to this Court.

Before resolving the questions posed in these appeals, We consider it necessary to rule on the matter regarding the
jurisdiction of the Court of First instance of Capiz to take cognizance of the two petitions for certiorari and prohibition
with preliminary injunction a question that was properly raised by the respondents in the court below, although this
question is not now raised in the appeals. We hold that the Court of First Instance of Capiz erred in taking cognizance
of the two petitions. Section 6 of Republic Act 3828, amending Section 87, paragraph (c) of the Judiciary Act. of 1948,
provides in part, as follows:

Justices of the peace in the capitals of provinces and subprovinces and judges of municipal courts shall have like
jurisdiction as the Court of First Instance to try parties charged with an offense committed within their respective
jurisdictions, in which the penalty provided by law does not exceed prision correccional or imprisonment for not
more than six years or fine not exceeding six thousand pesos or both, and in the absence of the district judge, shall
have like jurisdiction within the province as the Court of First Instance to hear applications for bail.

All cases filed under the next preceding paragraph with justices of the peace of capitals and municipal court
judges shall be tried and decided on the merits by the respective justices of the peace or municipal judges.
Proceedings had shall be recorded and decisions therein shall be appealable direct to the Court of Appeals or the
Supreme Court, as the case may be.1

The crime of falsification of a public or official document by a private individual, of which petitioner Bermejo is
charged in the city court of Roxas City in Criminal Case No. 4451, is punishable with prision correccional in its
medium and maximum periods, while the crime of perjury of which petitioner Carmorin is charged in Criminal Case
No. 4452 before the city court of Roxas City is punishable with arresto mayor in its maximum period to prision
correccional in its minimum period.2 Undoubtedly, these two cases fall within the concurrent jurisdiction of the city
court of Roxas City and the Court of First Instance of Capiz. This Court, interpreting the aforequoted provision of
Republic Act 3828, ruled that "[w]here the municipal court (city court of Manila) has taken cognizance of a criminal
case in its concurrent jurisdiction with the Court of First Instance, appeal must be taken direct to the Court of Appeals
or the Supreme Court; and where the Court of First Instance has taken cognizance of such appeal in its appellate
jurisdiction and refused to elevate the case to the Court of Appeals, said Court of First Instance acted without
jurisdiction.3 And this rule applies even if the order is not a judgment on the merits because in cases of this nature the
Court of First Instance exercises no supervisory jurisdiction over the city court, and having concurrent jurisdiction the
city court acts with "like jurisdiction" as the Court of First Instance. 4It is Our view, therefore, that the decision of the
Court of First Instance of Capiz in Special Civil Cases Nos. 2721 and 2723, now appealed to this Court, is null and
void because said court has no jurisdiction to take cognizance of those cases. The two special civil actions against the
City Judge and the City Fiscal of Roxas City should have been filed with the Court of Appeals in aid of the latter's
appellate jurisdiction over direct appeals from the decision or order of the city court. We note, however, that the
decision of the Court of First Instance of Capiz is correct insofar as it had dismissed the two petitions in question.

Be that as it may, however, We believe that the error of the petitioners in filing their petitions for certiorari and prohibition
with preliminary injunction with the Court of First Instance of Capiz and the error of the latter court in taking cognizance of
those petitions should not deter Us from ruling on the questions raised in the present appeals. The record shows that these
proceedings have been pending for more than six years, and were We to remand these cases to the courts below so the
petitions for certiorari should be brought up to the Court of Appeals, our action would only cause further delay.

We shall, therefore, decide whether herein petitioners are right in assailing the correctness or legality of the
proceedings in the city court of Roxas City in connection with the two criminal cases filed against them, as they now
contend in the present appeals.

While petitioners maintain in the court below that the City Fiscal of Roxas City has no power to initiate the
investigation of cases without a previous complaint by an offended party, they now admit in their brief that under the
existing laws he can commence such preliminary inquiry. 5 Nevertheless, petitioner Bermejo contends that before the
city fiscal can conduct such preliminary investigation, there must be a violation of the law, and in the instant case he
avers that there was no violation of law. Basis of his argument is that the petition for habeas corpus not being a
document as contemplated in Article 172 of the Revised Penal Code, the city fiscal is precluded from conducting the
preliminary investigation, much less from filing the information, because Bermejo could not be prosecuted for
falsification of the alleged public or official document.

The contention of Bermejo is untenable. In the case of U.S. v. Orera,6 a "document" is defined as a deed, instrument or
other duly authorized paper by which something is proved, evidenced or set forth. In U.S. v. Asensi,7 this Court held
that any instrument authorized by a notary public or a competent public official, with the solemnities required by law,
is a public document. Section 38, Rule 123 of the old Rules of Court, 8 enumerates the following as public writings:

(a) The written acts or records of the acts of the sovereign authority, of official bodies and tribunals, and of public
officers, legislative, judicial and executive, whether of the Philippines, or of a foreign country;

(b) Public records, kept in the Philippines, of private writings.

The same principle also obtains in the United States, that "defendant's pleadings and papers, which were involved in
civil actions and which were in custody of county clerk as ex-oficio clerk of superior court in which action was
pending, were 'public documents' and were within scope of subject matter of statute making alteration of court records an
offense."9 Considering that the petition for habeas corpus (Special Proceedings No. V-2669) alleged the illegal confinement,
or deprivation of liberty, of one Soterania Carmorin, and that said petition was duly subscribed and sworn to before Clerk of
Court Leopoldo B. Dorado and filed with the Court of First Instance of Capiz, forming, therefore, a part of the court records
in said proceedings, it cannot be disputed that said petition is a public or official document as contemplated in Articles 171
and 172 of the Revised Penal Code. Petitioner Bermejo, therefore, cannot say that he committed no crime if it can be shown
that, as charged in the information, he connived or conspired with a certain Julia "Doe" in falsifying said petition by making
it appear that Jovita Carmorin placed her thumbmark therein when in fact she did not do so.

Petitioner Bermejo likewise complains that notwithstanding his request to be present at the preliminary investigation,
the same was conducted in his absence or behind his back thus denying him his day in court. We find however, in the
record and the court a quo so found too that on March 11, 1963, a subpoena was issued to Atty. Pedro M.
Bermejo requiring him to appear at the office of the city fiscal of Roxas City on March 14, 1963 in an investigation.
This subpoena was received by Bermejo on March 12, 1963, and on the same day he sent a letter to the city fiscal,
which was received by the latter in the afternoon of the same day, requesting that the investigation be postponed to
March 19, 1963 because he Bermejo had to attend to another case which was scheduled to be heard on the same date.
The city fiscal acceded to his request, but because the fiscal's office failed to notify him of the hearing on March 19,
1963, Bermejo was not present when the investigation was conducted on that day. The preliminary investigation was
conducted on the very day requested by Bermejo, and after finding that there was a prima facie case the city fiscal filed
the information against him on August 22, 1963.

It appears, therefore, that while the city fiscal failed to notify petitioner Bermejo that his request for postponement was
granted, which should have been done, it can also be said that Bermejo was not entirely blameless if the preliminary
investigation was conducted in his absence. It was he himself who set the date of the investigation in his request for
postponement, but he did not bother to come on the date he fixed. Neither did he try to find out what action the city
fiscal had taken on his request for postponement, on any day before the date of the hearing set by him, although he is
living in Roxas City where the city fiscal holds his office. Moreover, the information was filed five months later, and
this petitioner never inquired, at least as to the status of his case. This behavior of petitioner cannot merit Our approval.
It is obvious that he failed to employ the standard of care or reasonable diligence that is expected of him. His
unwarranted absence on the day of the hearing which he himself requested, coupled with his seeming indifference or
unconcern about his case, is a clear indication that he was guilty of gross negligence in the protection of his rights. If he
did not have his day in court, it was because of his own negligence. If he was really interested to attend the
investigation, as he now pretends, he should have taken pains to communicate with the city fiscal. This Court had ruled
that in the application of the principle of due process, what is sought to be safeguarded is not lack of previous notice
but the denial of opportunity to be heard. 10 Since petitioner Bermejo was afforded the opportunity to appear at the
preliminary investigation but did not take advantage of it, he has no one to blame but himself. Anyway, said petitioner's
rights can still be amply protected in the regular trial of the case against him in the city court where he can cross
examine the witnesses and present his evidence. 11

Furthermore, even assuming that the city fiscal did not notify petitioners, but had conducted the preliminary
investigations ex parte, their rights to due process could not have been violated for they are not entitled as of right to
preliminary investigation. The numerous authorities 12 supporting this view are not rendered obsolete, as claimed by
petitioners, because Section 14, Rule 112 of the new Rules of Court invoked by them has no application in their cases, it
appearing that the new Rules of Court took effect on January 1, 1964 while the preliminary investigations conducted by the
city fiscal were conducted in 1963. 13 The Rules of Court are not penal statutes, and they cannot be given retroactive effect. 14

Having arrived at the conclusion that respondent city fiscal did not abuse his discretion in conducting the preliminary
investigations and that he filed the informations against herein petitioners in accordance with law, there is, therefore, no
merit in the assertion of petitioners that the warrants of arrest issued for their arrest were illegal. Besides,
granting arguendo that the orders of arrest were tainted with irregularity, still the posting by petitioners of their bail
bonds amounted to a waiver of the effect of said defects.

There is merit in the assertion that the warrant of arrest was irregularly issued. Section 87 of the Judiciary Act as
amended by Republic Act 3828 requires that the Municipal Judge issuing the same, personally, examine under
oath the witnesses, and by searching questions and answers which are to be reduced to writing. Here, instead of
searching questions and answers, we have only the affidavits of respondent and her one witness. Moreover, said
affidavits were sworn to before Judge Cabungcal, not before Judge Juntereal who issued the warrant of arrest.

However, the giving of bail bond by petitioner constitutes a waiver of the irregularity attending her arrest. Besides,
by her other personal appearances before the municipal court and the court a quo, petitioner voluntarily submitted
herself to the court's jurisdiction. Hence, the absence of preliminary examination becomes moot already, the court
having acquired jurisdiction over the person of petitioner and could therefore proceed with the preliminary
investigation proper." (Doce v. Branch II, Court of First Instance of Quezon, et al., supra; Luna v. Plaza, L-27511,
November 29, 1968).

The other point raised by petitioners in their contention that the respondent City Judge abused his discretion in denying
their motion to quash is that there was a judicial declaration in the habeas corpus case (Special Proceedings No. V-
2669) that the thumbmark appearing in the petition was the genuine thumbmark of Jovita Carmorin, and that
pronouncement is now conclusive so that they cannot be prosecuted for falsification or perjury, as the case may be.
This particular question should rather be submitted and threshed out in the city court during the trial. The record of
the habeas corpus proceeding is not before Us, and We have no means of knowing what actually transpired in that
proceeding. The proper determination of this question will involve not only the introduction and consideration of
evidence, but also calls for a detailed inquiry on the principle of estoppel by, or conclusiveness of, judgment.

Also devoid of merit is the other error pointed to by petitioners with respect to the alleged admission by respondents
that they acted illegally, capriciously, or in excess of jurisdiction. A cursory examination of their answers would reveal
that what was admitted by respondent was the fact of the filing by petitioners of their pleadings, but not the allegations
contained therein, for, as shown in the record, respondents have staunchly defended their acts and insisted that their
actuations are legal or in accordance with law.

IN VIEW OF THE FOREGOING, the decision of the Court of First Instance of Capiz in Special Civil Cases Nos. 2721
and 2723 is set aside for having been rendered by the court without jurisdiction, and the instant appeals are dismissed.
We declare that the warrants of arrests issued, and the informations filed, in Criminal Cases Nos. 4451 and 4452 of the
City Court of Roxas City, are in accordance with law, and these cases should be remanded to the City Court of Roxas
City for trial on the merits. No pronouncement as to costs. It is so ordered.
 G.R. No. 18940 April 27, 1922
SHIOJI, petitioner, vs.Honorable GEO R. HARVEY, Judge of First Instance of Manila, PACIFIC MAIL
STEAMSHIP CO. and TOYO KISEN KAISHA, respondents.
Two questions are presented for decisions in this original proceeding by prohibition. The first question, pressed by
petitioner, related to the interference on the part of the lower court with a judgment of the Supreme Court. The second
question, urged by respondents, relates to the validity of Rule 24 (a) of the Supreme Court. While, in our opinion, a
resolution of the first point is decisive of the case, and any discussion of the other point has no more than academic
interest, yet , having in mind the positions of the court; when one of its owner rules is assailed as "unconstitutional, null
and void," we have decided to give serious consideration to both questions.

In logical sequence, there follows a statement of the case and the facts, an opinion on the two points above stated, and
the judgment.

STATEMENT OF THE CASE AND THE FACTS

In cause No. 19471 of the Court of First Instance of Manila, wherein S. Shioji was plaintiff, and the Toyo Kisen Kaisah
and the Pacific Mail Steamship Co., were defendants, judgment was rendered on October 31, 1920, by Judge
Concepcion presiding in the second branch of the court, in favor of the plaintiff and against the defendants jointly and
severally for the sum of P19,533.49, with legal interest and costs. Thereafter, the defendants duly perfected an appeal
by way of bill of exceptions, to the Supreme Court of the Philippine Islands, and the case was docketed as R. G. No.
18592. 1 The date on which the bill of exceptions was filed in the office of the clerk of the Supreme Court was February
16, 1922, while attorneys for the respective parties received copies of the same on February 17, 1922.
In accordance with Rule 21 of the Supreme Court, the appellants had thirty days from the receipt of the printed bill of
exceptions within which to serve and file copies of their brief. This period expired on March 19, 1922, without an
extension of time within which to present it. Accordingly, when on March 22 appellants filed a motion for an additional
period, the court, on March 24, 1922, denied the motion because it was filed out of time, and pursuant to Rule 24 ( a)
dismissed the appeal. Subsequent order of the court on motions for reconsideration have reaffirmed the order of
dismissal, and have noted the exception of counsel.
The regular fifteen-day period fixed by the order of the court, of March 24, 1922, for the issuance of judgment and the
return of the records to the lower court, having expired, on April 12, 1922, the records was transmitted to the Court of
First Instance of Manila. Execution was then issued to enforce the judgment but prior to the levy the defendants in the
case R. G. No. 18592, filed an action in the Court of First Instance of Manila, docket No. 21905, based principally on
the allegation that the "judgment of the Supreme Court is unconscionable and was rendered without due process of law,
and that the rule (Rule 24 [a]) under which the judgment was rendered, is unconstitutional, and being in conflict with
law is null and void," in which they prayed that a preliminary injunction forthwith issue enjoining the respondents from
levying any execution under the aforesaid judgment and that after hearing the injunction be made perpetual. After
judge Concepcion had singed and order for the transference of the case to the judge presiding in Branch III, Judge
Harvey issued the preliminary injunction in accordance with the prayer of the complaint.
The countermove of the respondents in the injunction proceedings pending the Court of First Instance was to file a
complaint in prohibition in the Supreme Court, to compel the respondent Judge of First Instance to desist from
interfering with the execution of the judgment in case No. 19471 of the Court of First Instance of Manila and to issue
an order revoking the previously promulgated by him. The preliminary injunction prayed for as an incident to the
complaint in prohibition was immediately issued by the Supreme Court, and has been complied with by the
respondents herein. Counsel Petitioner herein moves for judgment on the pleadings.
A public hearing has been held and the case has been argued with marked ability by counsel for both parties. The
attorney for respondents was in a particularly delicate position, in that he must attack the action of the court, but it is
only fair to say that he has maintained toward the court the respectful attitude which the ethics of his profession
requires of him. We cannot, however, follow counsel into the supercritical mazes of his argument, and must perforce
our opinion to the big issues.

OPINION
I. As intimated in the beginning of this decision, the primary question raised by petitioner concerns the action of the
Judge of First Instance in assuming the jurisdiction to interpret and review judgment and order of the Supreme Court,
and to obstruct the enforcement of the decisions of the appellate court.
Lengthy elucidation of the proposition that he only function of a lower court, when the judgment of a high court is returned
to its, is the ministerial one of issuing the order of execution, and that lower court is without supervisory jurisdiction to
interpret or to reverse the judgment of the higher court, would seem to be superfluous. A judge of a lower court cannot
enforce different decrees than those rendered by the superior court. If each and every Court of First Instance could enjoy the
privilege of overruling decisions of the Supreme Court, there would be no end to litigation, and judicial chaos would result.
Appellate jurisdiction would be a farce if the Supreme Court did not have the power of preventing inferior courts from
meddling with decisions when sent to them for compliance. Where a cause has been appealed from the Court of First
Instance to the Supreme Court of the Philippine Islands, and a judgment rendered by the latter, no interference therewith by
the lower court can be tolerated through any proceedings other than such as are directed by the appellate court. Until revoked by
the Supreme Court of the United States, the decision of the Supreme Court of the Philippine Islands must stand and be enforced.
The inferior court is bound by the decree as the law of the case, and must carry it into execution according to the
mandate. They cannot vary its, or examine it for any other purpose than execution, or give any other or further relief, or
review it upon any matter decided on appeal for error apparent, or intermeddle with it, further than to settle so much as
has been remanded. These are the words of the Supreme Court of the United States in the early case of
Sibbald vs. United States ([1838], 12 Pet., 488).
When a district court attempted to grant a new trial subsequent to the return of the mandate of the United States
Supreme Court, the trite but emphatic rule of the higher court was that "The district court had no power to set aside the
judgment of the Supreme Court, its authority extending only to executing the mandate." (Ex parte Dubuque & Pacific
Railroad [1864], 1 Wall., 69 See, further, State ex rel. vs. Superior Court [1894] 8 Wash., 591; State ex. rel. Heirs of
Gee vs. Drew and Thompson [1886], 38 La. Ann., 274; In re Alexander [1911], 127 La., 854.)
What has been said is in justification of the preliminary injunction heretofore granted ordering Judge of First Instance
Harvey to desist from interfering with the execution of the judgment in the case of S. Shioji vs. Toyo Kisen Kaisha, et
al., and requiring him to revoke the injunction order previously issued. We ought properly to stop here, because an
attack on the validity of the rules of the Supreme Court should not be initiated by collateral proceedings in a lower
court, but as before explained, we waive this phase of the case so as to do full justice the complainant and so as to
make a definite ruling on the point which he raises.
II. The Supreme Court of the Philippine Island is expressly authorized by statute to make rules for regulation of its
practice and the conduct of its business. Section 28 of the Judiciary Act (No. 136), grants to the members of the
Supreme Court the power to "make all necessary rules for orderly procedure in Supreme Court . . . in accordance with
the provisions of the Code of Civil Procedure, which rules shall be . . . binding upon the several courts." The Code of
Civil Procedure, in turn, provides in its section 6, as follows:
The judges of the Supreme Court shall prepared rules regulating the conduct of business in the Supreme Court and in
the Courts of First Instance. The rules shall be uniform for all Courts of First Instance throughout the Islands. Such
rules, when duly made and promulgated and not in conflict with the laws of the United States or of the Philippine
Islands, shall be binding and must be observed, but no judgement shall be reversed by reason of a failure of the court to
comply with such rules unless the substantial rights of a party have been impaired by such failure.
The rules of the Supreme Court of the Philippines, drafted principally by Mr. Justice Willard, were promulgated soon
after the organization of the court of American occupation of the Philippines. Amendments of the rules were announced
from time to time. In 1981, a special committee of three members of the Supreme Court was appointed by the court, to
compile and revise the rules of court, and the after long study, and after a number of public hearings, a craft was
presented, which was adopted by the court on October 2, 1918. These are rules which, with a few minor amendments,
are now in force.
The rules of the Supreme Court and the rules of the Courts of First Instance alike contain provisions intended to
facilitate the progress of judicial business. Of this nature, and of particular interest here, are rules 21, 22, 23, and 24 of
the Supreme court. The first mentioned rule, 21, provides in mandatory language that "Within thirty days from the
receipt of the printed record on appeal or bill of exception the appellant shall serve upon the appellee errors and file
thirty copies thereof with the clerk." The following rule assign a similar period of time for the serving and filing of the
briefs of the appelle. Rule 23, likewise in mandatory language, provides that "Motions for extension of time for filing
of briefs must be presented before the expiration of the time mentioned in rules 21 and 22, or within a time fixed by
special order of the court. No such extension will be allowed except on notice to the opposite party in accordance with
Rule 13, and for good and sufficient cause shown. Extensions may also be granted upon stipulation of counsel, within
reasonable limits." In reality, this was the rule which appellants failed to observe. Then comes Rule 24 (a) specifically
challenged in these proceedings, reading as follows: "If the appellant, in any civil case, fails to serve his brief within
the time prescribed by these rules the court may, on motion of the appellee and notice to the appellant, or on its own
motion, dismiss the bill of exceptions or the appeal." The later rule, it may be observed, by the use of the word "may",
and in language quite similar to Rule 5, under "Briefs", of the Rules of the Supreme Court of the United States,
confirms the discretionary power of the court to dismiss actions for want of prosecution.
The practice of the court in the enforcement of its rules has been uniform. The court has gone upon the assumption that
although it retains the power of amendment, nevertheless, its is the duty of the court to enforce its rules, to the best if
its judgment, irrespective of the case, the parties or the counsel. Extensions of time for the filing of briefs are daily
granted. The first extension ordinarily is for fifteen days, the second for ten days, and the third for five days; but an
unvarying prerequisite is that motions be presented before the expiration of the period. This means that attorneys can
have a full period of sixty days for the preparation of their briefs, and in extraordinary cases, for good and sufficient
reason, even this period will be enlarged. But if the brief of the appellant is not filed within the thirty-day period, or if a
motion for an extensions of time is not filed before the expiration of this period, then such cases are removed from the
calendar, either on motion of appelle, or on the court's own motion.,
The Supreme Court is, of course, primarily the best judge of its own rules. It is, accordingly, of interest to note what the
court has heretofore said of the rules. In Paterno vs. City of Manila ([1910], 17 Phil., 26), rules 19 and 20 were held
valid and the appeal was dismissed. In the course of the decision, Mr. Justice Trent, speaking for the court, said that
"That rules of this court are few and simple. They are the laws of the court and must be obeyed until repealed, unless it
can be shown that they are in conflict with the laws of the United States or of the Philippine Islands. . . . These rules
mean something, otherwise they would not have been promulgated." Mr. Justice Fisher, who drafted the new rules of
the Supreme Court, in submitting the rules for consideration, gave as principal change, "the discouragement of dilatory
tactics by imposing upon the moving party the duty of proceeding promptly under penalty of dismissal of the appeal."
In Salaveria vs. Albindo ([1919], 30 Phil., 922), it was said:
The Rules of the Supreme Court of the Philippine Islands effective after the first day of January, nineteen hundred and
nineteen, were drafted with the primary object of expediting justice. . . . On the supposition that the Supreme Court
was, as it is a court of appeal, period of time were fixed within which attorneys must act, not to urge on the sluggard
and the dilatory. If certain provisions of the rules were not followed automatically the appeal would disappear.
The interpretation of the Rules of the Supreme Court of the Philippine Islands is in substantial accord with the
interpretation of corresponding rules by the other courts. Rules of court prescribing the time within which certain acts
must be done, or certain held as absolutely indispensable to the prevention of needless delays and to the orderly and
speedy discharge of business. The number of instances in which courts have, by rule, filled out the terms of the statutes
can be realized on turning to the encyclopedias. The reason for rules of this nature is because the dispatch of business
by courts would be impossible, and intolerable delays would results, without rules governing practice, and designed to
expedite the transaction of business. Such rules are necessary incident to the proper, efficient and orderly discharge of
judicial functions. (See 412 A. S. R., 639, notes.)
In other jurisdictions, there has been no doubt of the validity of such rules, and that failure to comply with them may
deprive the appellant of his right to the judgement of the appellate court. For example, where the record was not filed
by the appellant within the time prescribed by the Rules of the United States Supreme Court, and the appellee filed a
copy of it, the appeal was dismissed upon his motion (U. S. vs. Fremont [1855], 18 How., 30.) Again, where a rule of
the Supreme Court of Florida limited the time to ten days after the return day of writs of error, within which a motion
to strike the records or a part thereof, can be made, and when a motion was made after the lapse of such limited time,
the court held that it could not entertain or consider it. (McRae vs. Preston [1907], 54 Fla., 188.
Rules of court, promulgated by authority of law, have the force and effect of law, if not in conflict with positive law.
(Inchausti & Co. vs. De Leon [1913], 24 Phil., 224.) The rule is subordinate to the statute, and, in case of conflict, the
statute will prevail. An instance is where Congress expressly enabled the courts to make establish all necessary rules
for the orderly conduct of business, provided such rules were not repugnant to the laws of the United States, in the
great case of Wayman vs. Southard ([1825], 10 Wheat., 1), made the remark that "these section give the court full
power over all matters of practice. . . ."
Recurring now to section 28 of the Judiciary Law, and section 6 of the Code of Civil Procedure, which constitute the
legislative authority for the promulgation of rules by the Supreme Court of the Philippine Islands, it is to be noted, in
the first place, that the court is given the power to make all necessary rules for orderly procedure in the court, and for
regulating the conduct of business in the court. We apprehend that within this language would be included regulations
having to do with the preparation and filing of briefs. The law also provides that such rules shall be binding and must
be observed. The general limitation is, that the rules must not be in conflict with laws of the United States or of the
Philippine Islands. The specific limitation is that no judgment shall be reversed by reason of the failure of the court to
comply with such rules, unless the substantial rights of the party have been impaired buy such failure.
As the specific limitation in section 6 of the Code of Civil Procedure is not here in question, since the Supreme Court is
affirming and not reversing a judgment, the whole case comes down to a determination of whether or not Rule 24 ( a) is
in conflict with any law of the United States or of the Philippine Islands.
Respondents point out no provision of a federal statute which bears on the issue, and we know of none. In addition to
emphasizing that the rules prepared by the Supreme Court shall be "in accordance with the provision of the Code of
Civil Procedure," counsel specifically relies on sections 2, 500, 502 and 503 of the Code.
A portion of section 2 of the Code of Civil Procedure is quoted by respondents, but we prefer to set forth the entire
section. It reads: "The provisions of this Code, and the proceedings under it, shall be liberally construed, in order to
promote its object and assist the parties in obtaining speedy justice." We can conceive of no direct applicability of this
provision of law, unless it be that rules of court shall be liberally construed, and that the construction shall be such as to
assist the parties in obtaining speedy justice. In reality, it was the latter purpose which the court had in mind when it
laid down definite period for the filing of briefs, and held both the parties and the court to a compliance therewith.
Portions of sections 500,502 and 503 of the Code of Civil Procedure are also quoted by respondents. But it will be
noticed in this connection, that these various sections speak of the dismissal of bills of exceptions. There is no such
question before us. Respondents undoubtedly have a perfectly good bill of exceptions. Where they failed was in taking
the next step seasonably, with the result that the judgment of the trial court stands.
It is our holding that Rule 24 (a) is not in conflict with any law of the United States or of the Philippines, but is a
necessary rule for orderly procedure and for regulating the conduct of business in Supreme Court. It is a rule which
relates to a matter of practice and procedure over which the Legislature has not exercised its power. It is a rule which
does not operate to deprive a party of any statutory right. It is a rule in harmony with judicial practice and procedure
over which the Legislature has not exercised its power. It is a rule which does not operate to deprive a party of any
statutory right. It is a rule in harmony with judicial practice and procedure and essential to the existence of the courts.
And, finally, it is a rule which must be enforced according to the discretion of the court.
Independent of any statutory provision, we assert that every court has inherent power to do all things reasonably
necessary for the administration of justice within the scope of its jurisdiction.
Any misgivings one might entertain with the reference to the justice of this decision must disappear when it brought to
mind that the respondents herein already have had a day in court; that the presumption of the Code on which they place
so much reliance is always in favor of the correctness of the judgment of the lower court, that an appeal is neither an
inherent right nor a necessary element of due process or law; that both bench and bar must be held to strict
accountability for the speedy administration of justice; that the stability of the whole judicial structure would be shaken
by the appellate court complacently permitting an inferior court to reverse the judgment of the former; and that for the
Supreme Court to purge counsel of his negligence and to reinstate his cause would be merely to invite charges of
favoritism and would lead to never-ending confusion.
Counsel for the respondents speaks incidentally of his desire to have the validity of the Rules of the Supreme Court of
the Philippine Islands and by the Supreme Court of the United States. Although we are aware of no constitutional
question involved, in order again to give counsel all the latitude possible, we will say that , on proper motion, and on
presentation of a sufficient supersedeas bond, the instant proceedings will be stayed in order to allow counsel, if he
desire, to take the case to the Supreme Court of the United States.
In corroboration of the foregoing, the writ prayed for is granted, and the preliminary injunction is made permanent.
Without special findings as to costs, it is so ordered.
 G.R. No. 106251 November 19, 1993

CHIAO LIONG TAN, petitioner, vs. THE HONORABLE COURT OF APPEALS, HON MANUEL T.
MURO, Presiding Judge, RTC of Manila, Branch 54 and TAN BAN YONG, respondents.

Petitioner seeks in this petition the reversal of the Court of Appeals' decision dated May 15, 1992 in CA-G.R. CV No.
29982 affirming the unfavorable decision of the trial court 1 in his suit for replevin and damages.

Petitioner Chiao Liong Tan claims to be the owner of a motor vehicle, particularly described as Isuzu Elf van, 1976
Model with Motor No. 44999-2 and Chassis No. 9646780 which he purchased in March, 1987. As owner thereof,
petitioner says he has been in possession, enjoyment and utilization of the said motor vehicle until it was taken from
him by his older brother, Tan Ban Yong, the private respondent herein.

Petitioner relies principally on the fact that the Isuzu Elf van is registered in his name under Certificate of Registration
No. 1501909. He claims in his testimony before the trial court that the said vehicle was purchased from Balintawak
Isuzu Motor Center for a price of over P100,000.00; that he sent his brother to pay for the van and the receipt for
payment was placed in his (petitioner's) name because it was his money that was used to pay for the vehicle; that he
allowed his brother to use the van because the latter was working for his company, the CLT Industries; and that his
brother later refused to return the van to him and appropriated the same for himself.

On the other hand, private respondent testified that CLT Industries is a family business that was placed in petitioner's name
because at that time he was then leaving for the United States and petitioner is the remaining Filipino in the family residing
in the Philippines. When the family business needed a vehicle in 1987 for use in the delivery of machinery to its customers,
he asked petitioner to look for a vehicle and gave him the amount of P5,000.00 to be deposited as down payment for an Isuzu
Elf Van which would be available in about a month. After a month, he himself paid the whole price out of a loan of
P140,000.00 which he obtained from his friend Tan Pit Sin. Inasmuch as the receipt for the downpayment was placed in the
name of petitioner and since he was still on good terms with him, private respondent allowed the registration of the vehicle
in petitioner's name. It was also their understanding that he would keep the van for himself because CLT Industries was not
in a position to pay him. Hence, from the time of the purchase, he had been in possession of the vehicle including the
original registration papers thereof, but allowing petitioner from time to time to use the van for deliveries of machinery.

Tan Pit Sin who had known private respondent since 1968, not only because they were classmates but also because of
their business dealings with each other, confirmed that private respondent borrowed from him P140,000.00 in March,
1987 to buy an Isuzu Elf van. In fact, he had borrowed said vehicle for a few times.

Gina Lu, an employee of the Balintawak Isuzu Motors, testified that private respondent paid the balance of the
purchase price of the Isuzu Elf van in the amount of P133,000.00 but the receipt was issued in the name of Chiao Liong
Tan to make the records consistent because it was the latter who made the deposit of P5,000.00. Thereafter, the Isuzu
Elf van was released to him.

After hearing, the trial court found for private respondent. The dispositive portion of the decision reads as follows:

WHEREFORE, judgment is hereby rendered declaring defendant Tan Ban Yong to be the owner of and entitled to
the possession of the vehicle described in par. 2 of the Complaint, and the plaintiff is hereby ordered to deliver
possession thereof to the said defendant or in the alternative if such delivery cannot be made, to the sum of
P138,000.00 as the value of the vehicle taking into account the depreciation of the vehicle but offset by the
inflation rate; in either alternative, plaintiff is also ordered to pay to said defendant consequential damages of
P20,000.00 for the latter having been deprived of the possession and use of the vehicle and to pay the costs. All
amounts adjudged herein, except costs, shall bear interest at the legal rate from the date of this decision, until
delivery of the vehicle or the alternative payment of the value thereof as well as payment of consequential
damages is paid; the interest applies to the value of the vehicle if return thereof is delayed. No cost. 2

Finding no merit in the appeal, the respondent Court of Appeals affirmed the decision of the trial court. Undaunted by
his successive failures, petitioner comes to us and raised the following error allegedly committed by the respondent
Court of Appeals, to wit:

1. . . . in finding the testimonies of private respondent's witnesses credible;

2. . . . in disregarding the Certificate of Registration of the subject motor vehicle as proof of ownership by the
petitioner-appellant. 3
Since the Court of Appeals merely affirmed the trial court's assessment of the credibility of the witnesses that testified
before it, petitioner is in effect questioning the factual findings of said court and its appraisal of their testimony which
this Court cannot review, its jurisdiction being limited to questions of law. The considerable weight given to the
findings of the trial court is not without any reason. It had the opportunity to observe the demeanor of witnesses which
is usually not reflected in the transcript of records. The profundity of the conclusions thus reached is just the result of
such observance. When the Court of Appeals affirmed said findings, it goes to show that no misapprehension of facts
was committed as said Court has the power to scrutinize said factual findings under existing rules of procedure.

In concluding that the testimonies of Tan Ban Yong, Tan Pit Sin and Gina Lu cast doubt on the petitioner's ownership of the
motor vehicle in question, both the trial court and the Court of Appeals attached significance to their respective interlocking
accounts on how the motor vehicle was acquired, complete with the financing source and mode of repayment. Respondent
Tan Ban Yong's declaration that he borrowed P140,000.00 from Tan Pit Sin and paid the balance of the purchase price of the
motor vehicle himself to Gina Lu of the Balintawak Isuzu Motors, is corroborated by the above-mentioned persons
themselves. Tan Pit Sin not only confirmed the loan but also stated that the same was paid in three (3) months; P50,000.00
on the first payment; another P50,000.00 on the second payment and P40,000.00 on the last payment. 4 Gina Lu, who
testified at the instance of petitioner, declared that the downpayment of P5,000.00 was paid by petitioner and so the receipt
for the same was issued in his name but the balance of P133,000.00 was paid by private respondent and to make the record
consistent, she issued the receipt in the name of petitioner again.

In contrast to the clear and categorical averments of private respondent and the witnesses in this case negating petitioner's
ownership of the motor vehicle in question, petitioner's averments before the trial court and this Court are not only disparate
but conflicting. In his testimony below, petitioner averred that he used his own money to purchase the motor vehicle by
paying the sum of P100,000.00, 5 which testimony is negated by his admission on page 5 of his petition 6 before this Court
that private respondent borrowed money from Tan Pit Sin with which to purchase the subject motor vehicle. Then, in his
pleading before the court below, particularly in his reply to the answer of private respondent, petitioner alleged that the motor
vehicle was intended for his exclusive use and not to service the family business. 7 And yet , in his petition before this Court,
he claimed that the subject motor vehicle was purchased for CLT Industries, which he solely owned and accordingly,
registered in the latter's name. 8 On top of these entangled averments, petitioner did not have in his possession the Certificate
of Registration of the motor vehicle and the official receipt of payment for the same, thereby lending credence to the claim of
private respondent who has possession thereof, that he owns the subject motor vehicle.

A certificate of registration of a motor vehicle in one's name indeed creates a strong presumption of ownership. For all
practical purposes, the person in whose favor it has been issued is virtually the owner thereof unless proved otherwise.
In other words, such presumption is rebuttable by competent proof.

The New Civil Code recognizes cases of implied trust other than those enumerated therein. 9 Thus, although no specific
provision could be cited to apply to the parties herein, it is undeniable that an implied trust was created when the
certificate of registration of the motor vehicle was placed in the name of the petitioner although the price thereof was
not paid by him but by private respondent. The principle that a trustee who puts a certificate of registration in his name
cannot repudiate the trust by relying on the registration is one of the well-known limitations upon a title. A trust, which
derives its strength from the confidence one reposes on another especially between brothers, does not lose that
character simply because of what appears in a legal document.

Even under the Torrens System of land registration, this Court in some instances did away with the irrevocability or
indefeasibility of a certificate of title to prevent injustice against the rightful owner of the property. 10

It is true that the judgment 11 in a replevin suit must only resolve in whom is the right of possession. Primarily, the
action of replevin is possessory in character and determined nothing more than the right of possession. However, when
the title to the property is distinctly put in issue by the defendant's plea and by reason of the policy to settle in one
action all the conflicting claims of the parties to the possession of the property in controversy, the question of
ownership may be resolved in the same proceeding.

Procedure-wise, the Court observes that the action by petitioner as plaintiff in the trial court was only one for Replevin
and Damages. Since replevin is only a provisional remedy where the replevin plaintiff claims immediate delivery of personal
property pending the judgment of the trial court in a principal case, 12 the petitioner should have filed in the trial court as a
main case an action to recover possession of the Isuzu Elf van which was in the possession of the private respondent.
Logically, the basis of petitioner's cause of action should have been his ownership of said van.In the State of California, from
whose Code of Procedure 13 we copied our rule on replevin, their old replevin rule which allowed the immediate delivery of
the chattel at the commencement of the action upon application with bond by the replevin plaintiff had already been struck
down as early as July 1, 1971 in the case of Blair v. Pitchess. 14 As in fact, on June 12, 1972 when the United States Supreme
Court struck down as unconstitutional the Florida and Pennsylvania replevin statutes in Fuentes v. Shevin, 15 most of the
states, on their own, changed their replevin statutes to include a mandatory preliminary hearing before the writ could be
issued, similar to our mandatory preliminary hearing before the writ of preliminary injunction can be issued. 16

If that had been the case in this jurisdiction, then the trial judge would have discovered right away at the preliminary
hearing that private respondent should have immediately staked his claim of ownership and that would have created
serious doubts about petitioner's claim of ownership. Most likely, the writ would not have been issued and the
complaint would have been dismissed motu proprio by the trial court upon the discovery that the petitioner did not
have a principal case therein. As it is, the complaint proceeded its course to the detriment of private respondent.

Finally, although a "replevin" action is primarily one for the possession of personality, yet it is sufficiently flexible to
authorize a settlement of all equities between the parties, arising from or growing out of the main controversy. 17Thus,
in an action for replevin where the defendant is adjudged entitled to possession, he need not go to another forum to
procure relief for the return of the replevied property or secure a judgment for the value of the property in case the
adjudged return thereof could not be had. Appropriately, the trial court rendered an alternative judgment.

WHEREFORE, the questioned decision being in accordance with the law, the instant petition for review is hereby
DENIED for lack of merit.
SO ORDERED.
 IN THE MATTER TO DECLARE CONTEMPT OF COURT HON. SIMEON A. DATUMANONG
in the latters capacity as Secretary of the Department of Public Works and Highways.
G.R. No. 150274

Petitioner Jimmie F. Tel-Equen, District Engineer of Mountain Province, DPWH Cordillera Administrative Region, filed this
present petition to cite the former Secretary Simeon A. Datumanong of the Department of Public Works and Highways
(DPWH) in contempt of court for issuing Memorandum Order dated October 5, 2001 dismissing him from the service.

The facts of the case are as follows:

The Ombudsman Task Force on Public Works and Highways filed with the Office of the Ombudsman an administrative
complaint for dishonesty, falsification of official documents, grave misconduct, gross neglect of duty, violation of
office rules and regulations, and conduct prejudicial to the service against petitioner Tel-Equen and several others,
relative to the anomalous payment of P553,900.00 of the bailey bridge components owned by the government. The
case was docketed as OMB-ADM-0-91-0430.[1]

On March 28, 1994, the Administrative Adjudication Bureau of the Office of the Ombudsman found
respondents guilty of dishonesty, falsification of public documents, misconduct and conduct prejudicial to the best
interest of the service and ordered their dismissal from the service with accessory penalties pursuant to Section 23 of
Rule XIV, Book V of Executive Order No. 292, otherwise known as the Revised Administrative Code of 1987.[2]

After the denial of the motions for reconsideration, three petitions were filed before this Court which were consolidated and
referred to the Court of Appeals in light of the ruling in Fabian v. Desierto[3] where appeals from decisions of the Office of
the Ombudsman in administrative cases should be referred to the appellate court under Rule 43 of the Rules of Court. [4]

On March 2, 2000, the Court of Appeals affirmed with modification the decision of the Administrative Adjudication
Bureau of the Office of the Ombudsman finding petitioner and two co-accused guilty as charged and dismissed them
from the service while the other two respondents were exonerated from administrative liability for lack of evidence. [5]

Petitioner, together with his two co-accused, appealed from the decision of the Court of Appeals which was docketed as
G.R. No. 144694.[6] Meanwhile, while appeal was still pending, Secretary Datumanong issued the assailed
Memorandum Order,[7] which reads:

October 5, 2001
MEMORANDUM TO:
Messrs:
JIMMIE F. TEL-EQUEN
District Engineer
RUDY P. ANTONIO
Chief, Construction Section
All of Mountain Province Engineering District
This Department
This is with reference to the Order of the Ombudsman dated December 11, 1995 in OMB ADM. 0-91-0430 entitled
OMB TASK FORCE ON DPWH versus JIMMIE F. TEL-EQUEN, ET AL. (Annex A), affirming the March 28, 1994
Resolution (Annex B) in the same case finding you guilty of having committed acts of dishonesty, falsification of
public documents, misconduct and conduct prejudicial to the best interest of the service and recommending that you
be DISMISSED from the service together with its accessory penalties pursuant to Sec. 23, Rule XIV, Book V of
Executive Order No. 292.
The Order was affirmed by the Court of Appeals (Eight Division) in its Decision (Annex C) promulgated on March 02,
2000 in CA-G.R. SP No. 50324 entitled ROMULO H. MABUNGA, ET AL. versus THE OMBUDSMAND, ET AL.
Inasmuch as the Order dismissing you from the service is not a subject of any injunction or restraining order from the
Supreme Court, the same is immediately executory. Wherefore, you are hereby ordered DROPPED/DISMISSED
from the service effective upon receipt hereof.
(Sgd.) SIMEON A. DATUMANONG
Secretary

Hence, the instant petition to cite Secretary Datumanong in contempt of court.

Petitioner contends that in issuing the Memorandum Order despite knowledge of the pendency of G.R. No. 144694,
Secretary Datumanong committed a contumacious act, a gross and blatant display of abuse of discretion and an
unlawful interference with the proceedings before the Court, thereby directly or indirectly impeding, obstructing and
degrading the administration of justice, and pre-empting the Courts sole right to make a decision in accord with the
evidence and law.[8]

Petition lacks merit.

The power to declare a person in contempt of court and in dealing with him accordingly is an inherent power lodged in
courts of justice, to be used as a means to protect and preserve the dignity of the court, the solemnity of the proceedings
therein, and the administration of justice from callous misbehavior, offensive personalities, and contumacious refusal to
comply with court orders.[9] This contempt power, however plenary it may seem, must be exercised judiciously and
sparingly with utmost self-restraint with the end in view of utilizing the same for correction and preservation of the
dignity of the court, not for retaliation or vindication. [10] It should not be availed of unless necessary in the interest of
justice.[11]
After careful consideration of the facts and circumstances of the case, we find that the issuance of the Memorandum
Order by Secretary Datumanong was not a contumacious conduct tending, directly or indirectly, to impede, obstruct or
degrade the administration of justice. A conduct, to be contumacious, implies willfulness, bad faith or with deliberate
intent to cause injustice, which is not so in the case at bar. If it were otherwise, petitioner should have been dismissed
immediately after the Administrative Adjudication Bureau of the Office of the Ombudsman rendered its decision
on March 28, 1994. It was only after the Court of Appeals rendered its decision on March 2, 2000affirming the
dismissal that Secretary Datumanong issued the memorandum and after ascertaining that no injunction or restraining
order was issued by the Court.
At most, it may be considered only an error of judgment or a result of confusion considering the different rules
regarding execution of decisions pending appeal.
Decisions of the Civil Service Commission under the Administrative Code of 1987 [12] are immediately executory even
pending appeal because the pertinent laws [13]under which the decisions were rendered mandate them to be so.
[14]
Thus, where the legislature has seen fit to declare that the decision of the quasi-judicial agency is immediately final
and executory pending appeal, the law expressly so provides.[15] Otherwise, execution of decisions takes place only
when they become final and executory, like decisions rendered by the Office of the Ombudsman.

Thus, in Lapid v. Court of Appeals,[16] the Court held:

Petitioner was administratively charged for misconduct under the provisions of R.A. 6770, the
Ombudsman Act of 1989. Section 27 of the said Act provides as follows:
Section 27. Effectivity and Finality of Decisions. All provisionary orders of the Office of the
Ombudsman are immediately effective and executory.
A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman must be
filed within five (5) days after receipt of written notice and shall be entertained only on the following grounds:
xxxxxxxxx
Findings of fact of the Office of the Ombudsman when supported by substantial evidence are
conclusive. Any order, directive or decision imposing the penalty of public censure or reprimand, suspension
of not more than one months salary shall be final and unappealable.
In all administrative disciplinary cases, orders, directives or decisions of the Office of the Ombudsman
may be appealed to the Supreme Court by filing a petition for certiorari within ten (10) days from receipt of
the written notice of the order, directive or decision or denial of the motion for reconsideration in accordance
with Rule 45 of the Rules of Court.
The Rules of Procedure of the Office of the Ombudsman likewise contain a similar provision. Section 7, Rule
III of the said Rules provides as follows:
Sec. 7. Finality of Decision where the respondent is absolved of the charge and in case of conviction
where the penalty imposed is public censure or reprimand, suspension of not more than one month, or a fine
not equivalent to one month salary, the decision shall be final and unappealable. In all other cases, the
decision shall become final after the expiration of ten (10) days from receipt thereof by the respondent,
unless a motion for reconsideration or petition for certiorari, shall have been filed by him as prescribed in
Section 27 of R.A. 6770.
It is clear from the above provisions that the punishment imposed upon petitioner, i.e. suspension without
pay for one year, is not among those listed as final and unappealable, hence, immediately executory. Section 27
states that all provisionary orders of the Office of the Ombudsman are immediately effective and executory; and
that any order, directive or decision of the said Office imposing the penalty of censure or reprimand or
suspension of not more than one months salary is final and unappealable. As such the legal maxim inclusio[n]
unius est exclusio alterius finds application. The express mention of the things included excludes those that are
not included. The clear import of these statements taken together is that all other decisions of the Office of
the Ombudsman which impose penalties that are not enumerated in the said Section 27 are not final,
unappealable and immediately executory. An appeal timely filed, such as the one filed in the instant case,
will stay the immediate implementation of the decision. This finds support in the Rules of Procedure issued
by the Ombudsman itself which states that (I)n all other cases, the decision shall become final after the
expiration of ten (10) days from receipt thereof by the respondent, unless a motion for reconsideration or
petition for certiorari (should now be petition for review under Rule 43) shall have been filed by him as
prescribed in Section 27 of R.A. 6770.
xxxx
 A judgment becomes final and executory by operation of law. Section 27 of the Ombudsman Act provides
that any order, directive or decision of the Office of the Ombudsman imposing a penalty of public censure or
reprimand, or suspension of not more than one months salary shall be final and unappealable. In all other cases,
the respondent therein has the right to appeal to the Court of Appeals within ten (10) days from receipt of the
written notice of the order, directive or decision. In all these other cases therefore, the judgment imposed therein
will become final after the lapse of the reglementary period of appeal if no appeal is perfected or, an appeal
therefrom having been taken, the judgment in the appellate tribunal becomes final. It is this final judgment
which is then correctly categorized as a final and executory judgment in respect to which execution shall issue
as a matter of right. In other words, the fact that the Ombudsman Act gives parties the right to appeal
from its decisions should generally carry with it the stay of these decisions pending appeal. Otherwise, the
essential nature of these judgments as being appealable would be rendered nugatory. (Emphasis supplied)
Petitioner was charged administratively before the Office of the Ombudsman. Accordingly, the provisions of the
Ombudsman Act and its Rules of Procedure should apply in his case. It is a principle in statutory construction that
where there are two statutes that apply to a particular case, that which was specially designed for the said case must
prevail over the other.[17]
In fine, Secretary Datumanong cannot be held in contempt of court for issuing the Memorandum Order in the absence
of malice or wrongful conduct in issuing it. The remedy of the petitioner is not to file a petition to cite him in contempt
of court but to elevate the error to the higher court for review and correction.
However, two events supervened since the filing of this petition that would support its dismissal. First, on March 28,
2005, the Court in G.R. No. 144694 affirmed the decisions of the Court of Appeals and Administrative Adjudication
Bureau of the Office of the Ombudsman ordering petitioner dismissed from the service for dishonesty, falsification of
public documents, misconduct, and conduct prejudicial to the best interest of the service. Second, Section 7, Rule III of
the Rules of Procedure of the Office of the Ombudsman was amended by Administrative Order No. 17 [18] wherein the
pertinent provision on the execution of decisions pending appeal is now essentially similar to Section 47 of
the Uniform Rules on Administrative Cases in the Civil Service and other related laws, thus:
Rule III
PROCEDURE IN ADMINISTRATIVE CASES
Section 7. Finality and execution of decision. - Where the respondent is absolved of the charge, and in case of
conviction where the penalty imposed is public censure or reprimand, suspension of not more than one month, or a
fine equivalent to one month salary, the decision shall be final, executory and unappealable. In all other cases, the
decision may be appealed to the Court of Appeals on a verified petition for review under the requirements and
conditions set forth in Rule 43 of the Rules of Court, within fifteen (15) days from receipt of the written Notice of the
Decision or Order denying the Motion for Reconsideration.
An appeal shall not stop the decision from being executory. In case the penalty is suspension or removal
and the respondent wins such appeal, he shall be considered as having been under preventive suspension and
shall be paid the salary and such other emoluments that he did not receive by reason of the suspension or
removal.
A decision of the Office of the Ombudsman in administrative cases shall be executed as a matter of course. The
Office of the Ombudsman shall ensure that the decision shall be strictly enforced and properly implemented. The refusal or
failure by any officer without just cause to comply with an order of the Office of the Ombudsman to remove, suspend,
demote, fine, or censure shall be a ground for disciplinary action against said officer.
Well-settled is the rule that procedural laws are construed to be applicable to actions pending and undetermined
at the time of their passage, and are deemed retroactive in that sense and to that extent. As a general rule, the
retroactive application of procedural laws cannot be considered violative of any personal rights because no vested right
may attach to nor arise therefrom. [19]

In the case at bar, the Rules of Procedure of the Office of the Ombudsman are clearly procedural and no vested
right of the petitioner is violated as he is considered preventively suspended while his case is on appeal. Moreover, in
the event he wins on appeal, he shall be paid the salary and such other emoluments that he did not receive by reason of
the suspension or removal. Besides, there is no such thing as a vested interest in an office, or even an absolute right to
hold office. Excepting constitutional offices which provide for special immunity as regards salary and tenure, no one
can be said to have any vested right in an office. [20]

WHEREFORE, in view of the foregoing, the petition to cite former Secretary Simeon A. Datumanong of the
Department of Public Works and Highways in contempt of court for issuing Memorandum Order dated October 5,
2001 dismissing petitioner Jimmie F. Tel-Equen from the service is DISMISSED for lack of merit.

SO ORDERED.
 [G.R. No. 153660. June 10, 2003]
PRUDENCIO BANTOLINO, NESTOR ROMERO, NILO ESPINA, EDDIE LADICA, ARMAN QUELING,
ROLANDO NIETO, RICARDO BARTOLOME, ELUVER GARCIA, EDUARDO GARCIA and NELSON
MANALASTAS, petitioners, vs. COCA-COLA BOTTLERS PHILS., INC., respondent.

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision of the Court of
Appeals[1] dated 21 December 2001 which affirmed with modification the decision of the National Labor Relations
Commission promulgated 30 March 2001.[2]
On 15 February 1995 sixty-two (62) employees of respondent Coca-Cola Bottlers, Inc., and its officers, Lipercon
Services, Inc., Peoples Specialist Services, Inc., and Interim Services, Inc., filed a complaint against respondents for
unfair labor practice through illegal dismissal, violation of their security of tenure and the perpetuation of the Cabo System.
They thus prayed for reinstatement with full back wages, and the declaration of their regular employment status.
For failure to prosecute as they failed to either attend the scheduled mandatory conferences or submit their respective
affidavits, the claims of fifty-two (52) complainant-employees were dismissed. Thereafter, Labor Arbiter Jose De Vera
conducted clarificatory hearings to elicit information from the ten (10) remaining complainants (petitioners herein)
relative to their alleged employment with respondent firm.
In substance, the complainants averred that in the performance of their duties as route helpers, bottle segregators, and others,
they were employees of respondent Coca-Cola Bottlers, Inc. They further maintained that when respondent company
replaced them and prevented them from entering the company premises, they were deemed to have been illegally dismissed.
In lieu of a position paper, respondent company filed a motion to dismiss complaint for lack of jurisdiction and cause of
action, there being no employer-employee relationship between complainants and Coca-Cola Bottlers, Inc., and that
respondents Lipercon Services, Peoples Specialist Services and Interim Services being bona fide independent contractors,
were the real employers of the complainants. [3] As regards the corporate officers, respondent insisted that they could not be
faulted and be held liable for damages as they only acted in their official capacities while performing their respective duties.
On 29 May 1998 Labor Arbiter Jose De Vera rendered a decision ordering respondent company to reinstate
complainants to their former positions with all the rights, privileges and benefits due regular employees, and to pay
their full back wages which, with the exception of Prudencio Bantolino whose back wages must be computed upon
proof of his dismissal as of 31 May 1998, already amounted to an aggregate of P1,810,244.00. [4]
In finding for the complainants, the Labor Arbiter ruled that in contrast with the negative declarations of respondent
companys witnesses who, as district sales supervisors of respondent company denied knowing the complainants
personally, the testimonies of the complainants were more credible as they sufficiently supplied every detail of their
employment, specifically identifying who their salesmen/drivers were, their places of assignment, aside from their
dates of engagement and dismissal.
On appeal, the NLRC sustained the finding of the Labor Arbiter that there was indeed an employer-employee
relationship between the complainants and respondent company when it affirmed in toto the latters decision.
In a resolution dated 17 July 2001 the NLRC subsequently denied for lack of merit respondents motion for consideration.
Respondent Coca-Cola Bottlers appealed to the Court of Appeals which, although affirming the finding of the NLRC
that an employer-employee relationship existed between the contending parties, nonetheless agreed with respondent
that the affidavits of some of the complainants, namely, Prudencio Bantolino, Nestor Romero, Nilo Espina, Ricardo
Bartolome, Eluver Garcia, Eduardo Garcia and Nelson Manalastas, should not have been given probative value for
their failure to affirm the contents thereof and to undergo cross-examination. As a consequence, the appellate court
dismissed their complaints for lack of sufficient evidence. In the same Decision however, complainants Eddie Ladica,
Arman Queling and Rolando Nieto were declared regular employees since they were the only ones subjected to cross-
examination.[5] Thus
x x x (T)he labor arbiter conducted clarificatory hearings to ferret out the truth between the opposing claims of the parties
thereto. He did not submit the case based on position papers and their accompanying documentary evidence as a full-blown
trial was imperative to establish the parties claims. As their allegations were poles apart, it was necessary to give them ample
opportunity to rebut each others statements through cross-examination. In fact, private respondents Ladica, Quelling and
Nieto were subjected to rigid cross-examination by petitioners counsel. However, the testimonies of private respondents
Romero, Espina, and Bantolino were not subjected to cross-examination, as should have been the case, and no explanation
was offered by them or by the labor arbiter as to why this was dispensed with. Since they were represented by counsel, the
latter should have taken steps so as not to squander their testimonies. But nothing was done by their counsel to that effect. [6]
Petitioners now pray for relief from the adverse Decision of the Court of Appeals; that, instead, the favorable judgment
of the NLRC be reinstated.
In essence, petitioners argue that the Court of Appeals should not have given weight to respondents claim of failure to
cross-examine them. They insist that, unlike regular courts, labor cases are decided based merely on the parties position
papers and affidavits in support of their allegations and subsequent pleadings that may be filed thereto. As such,
according to petitioners, the Rules of Court should not be strictly applied in this case specifically by putting them on
the witness stand to be cross-examined because the NLRC has its own rules of procedure which were applied by the
Labor Arbiter in coming up with a decision in their favor.

In its disavowal of liability, respondent commented that since the other alleged affiants were not presented in court
to affirm their statements, much less to be cross-examined, their affidavits should, as the Court of Appeals rightly held,
be stricken off the records for being self-serving, hearsay and inadmissible in evidence. With respect to Nestor Romero,
respondent points out that he should not have been impleaded in the instant petition since he already voluntarily executed
a Compromise Agreement, Waiver and Quitclaim in consideration of P450,000.00. Finally, respondent argues that the instant
petition should be dismissed in view of the failure of petitioners [7] to sign the petition as well as the verification and
certification of non-forum shopping, in clear violation of the principle laid down in Loquias v. Office of the Ombudsman.[8]
The crux of the controversy revolves around the propriety of giving evidentiary value to the affidavits despite the
failure of the affiants to affirm their contents and undergo the test of cross-examination.
The petition is impressed with merit. The issue confronting the Court is not without precedent in jurisprudence. The
oft-cited case of Rabago v. NLRC[9] squarely grapples a similar challenge involving the propriety of the use of affidavits
without the presentation of affiants for cross-examination. In that case, we held that the argument that the affidavit is
hearsay because the affiants were not presented for cross-examination is not persuasive because the rules of evidence
are not strictly observed in proceedings before administrative bodies like the NLRC where decisions may be reached
on the basis of position papers only.
In Rase v. NLRC,[10] this Court likewise sidelined a similar challenge when it ruled that it was not necessary for the
affiants to appear and testify and be cross-examined by counsel for the adverse party. To require otherwise would be to
negate the rationale and purpose of the summary nature of the proceedings mandated by the Rules and to make
mandatory the application of the technical rules of evidence.
Southern Cotabato Dev. and Construction Co. v. NLRC [11] succinctly states that under Art. 221 of the Labor Code, the
rules of evidence prevailing in courts of law do not control proceedings before the Labor Arbiter and the NLRC.
Further, it notes that the Labor Arbiter and the NLRC are authorized to adopt reasonable means to ascertain the facts in
each case speedily and objectively and without regard to technicalities of law and procedure, all in the interest of due
process. We find no compelling reason to deviate therefrom.
To reiterate, administrative bodies like the NLRC are not bound by the technical niceties of law and procedure and the
rules obtaining in courts of law. Indeed, the Revised Rules of Court and prevailing jurisprudence may be given only
stringent application, i.e., by analogy or in a suppletory character and effect. The submission by respondent,
citing People v. Sorrel,[12] that an affidavit not testified to in a trial, is mere hearsay evidence and has no real evidentiary
value, cannot find relevance in the present case considering that a criminal prosecution requires a quantum of evidence
different from that of an administrative proceeding. Under the Rules of the Commission, the Labor Arbiter is given the
discretion to determine the necessity of a formal trial or hearing. Hence, trial-type hearings are not even required as the
cases may be decided based on verified position papers, with supporting documents and their affidavits.
As to whether petitioner Nestor Romero should be properly impleaded in the instant case, we only need to follow the
doctrinal guidance set by Periquet v. NLRC[13] which outlines the parameters for valid compromise agreements,
waivers and quitclaims
Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a
change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible
person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable
transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what
he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as
a valid and binding undertaking.
In closely examining the subject agreements, we find that on their face the Compromise Agreement[14] and Release,
Waiver and Quitclaim[15] are devoid of any palpable inequity as the terms of settlement therein are fair and just. Neither
can we glean from the records any attempt by the parties to renege on their contractual agreements, or to disavow or
disown their due execution. Consequently, the same must be recognized as valid and binding transactions and,
accordingly, the instant case should be dismissed and finally terminated insofar as concerns petitioner Nestor Romero.
We cannot likewise accommodate respondents contention that the failure of all the petitioners to sign the petition as
well as the Verification and Certification of Non-Forum Shopping in contravention of Sec. 5, Rule 7, of the Rules of
Court will cause the dismissal of the present appeal. While the Loquias case requires the strict observance of the Rules,
it however provides an escape hatch for the transgressor to avoid the harsh consequences of non-observance. Thus -
x x x x We find that substantial compliance will not suffice in a matter involving strict observance of the rules. The
attestation contained in the certification on non-forum shopping requires personal knowledge by the party who
executed the same. Petitioners must show reasonable cause for failure to personally sign the certification. Utter disregard of
the rules cannot justly be rationalized by harking on the policy of liberal construction (underscoring supplied).
In their Ex Parte Motion to Litigate as Pauper Litigants, petitioners made a request for a fifteen (15)-day extension, i.e.,
from 24 April 2002 to 8 May 2002, within which to file their petition for review in view of the absence of a counsel to
represent them.[16] The records also reveal that it was only on 10 July 2002 that Atty. Arnold Cacho, through the UST Legal
Aid Clinic, made his formal entry of appearance as counsel for herein petitioners. Clearly, at the time the instant petition was
filed on 7 May 2002 petitioners were not yet represented by counsel. Surely, petitioners who are non-lawyers could not be
faulted for the procedural lapse since they could not be expected to be conversant with the nuances of the law, much less
knowledgeable with the esoteric technicalities of procedure. For this reason alone, the procedural infirmity in the filing of the
present petition may be overlooked and should not be taken against petitioners.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals is REVERSED and SET ASIDE and the
decision of the NLRC dated 30 March 2001 which affirmed in toto the decision of the Labor Arbiter dated 29 May 1998
ordering respondent Coca-Cola Bottlers Phils., Inc., to reinstate Prudencio Bantolino, Nilo Espina, Eddie Ladica, Arman
Queling, Rolando Nieto, Ricardo Bartolome, Eluver Garcia, Eduardo Garcia and Nelson Manalastas to their former positions
as regular employees, and to pay them their full back wages, with the exception of Prudencio Bantolino whose back wages
are yet to be computed upon proof of his dismissal, is REINSTATED, with the MODIFICATION that herein petition is
DENIED insofar as it concerns Nestor Romero who entered into a valid and binding Compromise Agreement and Release,
Waiver and Quitclaim with respondent company.
SO ORDERED.
 G.R. No. 190928 January 13, 2014
TEAM ENERGY CORPORATION (formerly MIRANT PAGBILAO CORP.), Petitioner, vs.
COMMISSIONER OF INTERNAL REVENUE, Respondent.

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court which seeks to reverse and set
aside the Decision1 dated August 14, 2009 and Resolution 2 dated January 5 2010 of the Court of Tax Appeals CTA) En
Banc in CTA EB No. 422 which modified the Decision 3 dated May 16 2008 and Resolution 4 dated September 8, 2008
of the CT A First Division insofar as it reduced the amount of refund granted from P69 618 971.19 to P51 134 951.40.

The facts follow.

On the following dates, petitioner filed with the Bureau of Internal Revenue (BIR) its first to fourth quarterly value-
added tax (VAT) returns for the calendar year 2002:

Quarter Date Filed

First April 25, 2002

Second July 23, 2002

Third October 25, 2002

Fourth January 27, 2003

Subsequently, on December 22, 2003, petitioner filed an administrative claim for refund of unutilized input VAT with
Revenue District Office No. 60, Lucena City, in the total amount of P79,918,002.95 for calendar year 2002.

However, due to respondents inaction, petitioner elevated its claim before the CTA First Division on April 22, 2004. In
his Answer, respondent interposed the following special and affirmative defenses:

5. Petitioners alleged claim for refund is subject to administrative investigation/examination by the respondent;

6. To support its claim, it is imperative for petitioner to prove the following, viz.:

a. The registration requirements of a value-added taxpayer in compliance with Section 6 (a) and (b) of Revenue
Regulations No. 6-97 in relation to Section 4.107-1 (a) of Revenue Regulations No. 7-95, and Section 236 of the
Tax Code, as amended;

b. The invoicing and accounting requirements for VAT-registered persons, as well as the filing and payment of
VAT in compliance with the provisions of Sections 113 and 114 of the Tax Code, as amended;

c. Proof of compliance with the prescribed checklist of requirements to be submitted involving claim for VAT
refund in pursuance to Revenue Memorandum Order No. 53-98, otherwise there would be no sufficient
compliance with the filing of administrative claim for refund which is a condition sine qua non prior to the filing
of judicial claim in accordance with the provision of Section 229 of the Tax Code, as amended. It is worthy of
emphasis that Section 112 (D) of the Tax Code, as amended, requires the submission of complete documents in
support of the application filed with the Bureau of Internal Revenue before the 120-day audit period shall apply,
and before the taxpayer could avail of judicial remedies as provided for in the law. Hence, petitioners failure to submit
proof of compliance with the above-stated requirements warrants immediate dismissal of the petition for review.

d. That the input taxes of P79,918,002.95 allegedly paid by the petitioner on its purchases of goods and services
for the four (4) quarters of the year 2002 were attributable to its zero-rated sales and such have not been applied
against any output tax and were not carried over in the succeeding taxable quarter or quarters;

e. That petitioners administrative and judicial claims for tax credit or refund of unutilized input tax (VAT) was
filed within two (2) years after the close of the taxable quarter when the sales were made in accordance with
Sections 112 (A) and (D) and 229 of the TAX Code, as amended;

f. That petitioners domestic purchases of goods and services were made in the course of its trade and business,
properly supported by VAT invoices and/or official receipts and other documents, such as subsidiary purchase
Journal, showing that it actually paid VAT in accordance with Sections 110 (A) (2) and 113 of the Tax Code as
 amended, and in pursuance to Section 4.104-5 (a) & (b) of Revenue Regulations No. 7-95 (Re: Substantiation of
Claims for Input Tax Credit);

g. The requirements as enumerated under Section 4.104-2 of Revenue Regulations 7-95. (Re: Persons who can
avail of the Input Tax Credits);

7. Furthermore, in an action for refund the burden of proof is on the taxpayer to establish its right to refund and
failure to sustain the burden is fatal to the claim for refund/credit. This is so because exemptions from taxation are
highly disfavored in law and he who claims exemption must be able to justify his claim by the clearest grant of
organic or statutory law. An exemption from common burden cannot be permitted to exist upon vague implications;

8. Claims for refund are construed strictly against the claimant for the same partake the nature of exemption from
taxation and, as such, they are looked upon with disfavor.5

After trial on the merits, the CTA First Division rendered judgment as follows:

WHEREFORE, IN VIEW OF ALL THE FOREGOING, the instant Petition for Review is hereby PARTIALLY
GRANTED. Thus, Respondent is hereby ORDERED TO REFUND OR ISSUE A TAX CREDIT CERTIFICATE to
petitioner in the reduced amount of SIXTY NINE MILLION SIX HUNDRED EIGHTEEN THOUSAND NINE
HUNDRED SEVENTY-ONE AND 19/100 PESOS (P69,618,971.19), representing unutilized input value-added taxes
paid by petitioner on its domestic purchases of goods and services and importation of goods attributable to its
effectively zero-rated sales of power generation services to the National Power Corporation for the taxable year 2002.
SO ORDERED.6
Not satisfied, respondent filed his Motion for Partial Reconsideration against said decision, which the CTA First
Division denied in a Resolution dated September 8, 2008.
On October 10, 2007, respondent filed a Petition for Review with the CTA En Banc.
In a Decision dated August 14, 2009, the CTA En Banc affirmed the CTA First Divisions decision with the
modification that the refundable amount be reduced to P51,134,951.40. The fallo reads:

WHEREFORE, premises considered, the petition is hereby PARTLY GRANTED. The assailed Decision dated May 16,
2008 and Resolution dated September 8, 2008 are hereby AFFIRMED, with modification that only P51,134,951.40 is
the refundable amount to respondent for taxable year 2002. Accordingly, the Commissioner of Internal Revenue is
hereby ORDERED to REFUND or ISSUE a TAX CREDIT CERTIFICATE in favor of Team Energy Corporation the
reduced amount of FIFTY-ONE MILLION ONE HUNDRED THIRTY- FOUR THOUSAND NINE HUNDRED
FIFTY-ONE AND 40/100 (P51,134,951.40), representing the latters excess and unutilized input VAT for the period
covering calendar year 2002.

SO ORDERED.7

Unfazed, petitioner filed a motion for reconsideration against said Decision, but the same was denied in a Resolution
dated January 5, 2010.

Hence, the present petition wherein petitioner raises the following issues for our resolution:

THE CTA EN BANC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN IT DISALLOWED PETITIONERS INPUT VAT FOR THE FIRST QUARTER AMOUNTING
TO P18,484,019.79 BASED ON PRESCRIPTION BECAUSE:

A. PETITIONER FILED ITS JUDICIAL CLAIM FOR REFUND WELL WITHIN THE TWO-YEAR PRESCRIPTIVE
PERIOD RECKONED FROM THE DATE OF FILING OF THE QUARTERLY VAT RETURN PURSUANT TO LONG
STANDING JURISPRUDENCE, WHICH THE HONORABLE COURT EXPRESSLY RECOGNIZED IN ATLAS
CONSOLIDATED MINING AND DEVELOPMENT CORPORATION V. COMMISSIONER OF INTERNAL REVENUE,
G.R. NOS. 141104 & [148763], JUNE 8, 2007 ("ATLAS CASE").

B. THE CTA EN BANC SHOULD NOT HAVE HASTILY RELIED ON THE CONTRARY RULING OF THE HONORABLE
COURT IN COMMISSIONER OF INTERNAL REVENUE V. MIRANT PAGBILAO CORPORATION, G.R. NO. 172129,
SEPTEMBER 12, 2008 ("MIRANT PAGBILAO CASE") AS THE HONORABLE COURT COULD NOT HAVE INTENDED
TO REVERSE THE DOCTRINE IN THE ATLAS CASE IN THE LIGHT OF ARTICLE VIII, SECTION 4 (3) OF THE
CONSTITUTION.

C. ASSUMING, BUT WITHOUT CONCEDING, THAT THE MIRANT PAGBILAO CASE REVERSED THE DOCTRINE
IN THE ATLAS CASE, THE SAME SHOULD BE APPLIED PROSPECTIVELY AND NOT RETROACTIVELY TO THE
PREJUDICE OF PETITIONER WHO RELIED IN GOOD FAITH ON PREVAILING JURISPRUDENCE AT THE TIME OF
FILING OF ITS JUDICIAL CLAIM FOR REFUND.8

Simply, the sole issue for our resolution is whether or not petitioner timely filed its judicial claim for refund of input
VAT for the first quarter of 2002.

To appropriately address this issue, it is relevant to quote Sections 112 (A) and (C) of the Tax Code, viz.:
SEC. 112. Refund or Tax Credits of Input Tax.

(A) Zero-rated or Effectively Zero-rated Sales. Any VAT-registered person, whose sales are zero-rated or effectively
zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the
issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except
transitional input tax, to the extent that such input tax has not been applied against output tax; Provided, however, That
in the case of zero-rated sales under Section 106 (A)(2)(a)(1), (2) and (B) and Section 108 (B)(1) and (2), the
acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and
regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-
rated or effectively zero-rated sale and also in taxable or exempt sale of good of properties or services, and the amount
of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be
allocated proportionately on the basis of the volume of sales.

(C) Period within which Refund or Tax Credit of Input Taxes shall be Made. In proper cases, the Commissioner shall
grant a refund or issue a tax credit certificate for creditable input taxes within one hundred twenty (120) days from the
date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to
act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the
receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the
decision or the unacted claim with the Court of Tax Appeals.

In its assailed decision, the CTA En Banc reduced petitioners claim for refund of its excess or unutilized input VAT
to P51,134,951.40 on the ground that petitioners judicial claim for the first quarter of 2002 was filed beyond the two-
year period prescribed under Section 112 (A) of the Tax Code, to wit:

As regards the fifth requisite, Section 112 (A) of the NIRC of 1997, as amended, provides that a VAT-registered
taxpayer whose sale is zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable
quarter when the sales were made, apply for refund or issuance of a TCC of its creditable input tax or paid attributable
to such sales.

In the recent case of Commissioner of Internal Revenue v. Mirant Pagbilao (Formerly Southern Energy Quezon, Inc.),
565 SCRA 154 (hereafter referred to as the "Mirant Case"), the Supreme Court definitely settled the issue on the
reckoning of the prescriptive period on claims for refund of input VAT attributable to zero-rated or effectively zero-
rated sales, as follows:

Pursuant to the above ruling of the Supreme Court, it is clear that the two-year prescriptive period provided in Section
112 (A) of the NIRC of 1997, as amended, should be counted not from the payment of the tax, but from the close of the
taxable quarter when the sales were made. Pursuant to the above ruling of the Supreme Court, the following are the
pertinent dates relevant to petitioners claim for refund:

Period (2002) Close of Taxable Quarter Last Day for Filing of The Claim

1st Quarter March 31, 2002 March 31, 2004

2nd Quarter June 30, 2002 June 30, 2004

3rd Quarter September 30, 2002 September 30, 2004

4th Quarter December 31, 2002 December 31, 2004

Record shows that respondent filed its administrative claim for refund or issuance of a TCC on December 22, 2003,
while the judicial claim for refund was filed on April 22, 2004. Since respondent filed its judicial claim for refund for
the four quarters of 2002, only on April 22, 2004, twenty-two (22) days from March 31, 2004, the last day prescribed
by the Mirant Case, respondent is barred from claiming refund of its unutilized input taxes for the first quarter of 2002.
Therefore, the claim for refund granted by the First Division of this Court in the amount of P69,618,971.19 should be
reduced by deducting the portion of the claim corresponding to the first quarter that had already prescribed, x x x.

In sum, the Court En Banc finds that the total substantiated input tax filed within the two-year prescriptive period of
respondent TeaM Energy amounts to P51,134,951.40 only.9
Recently, however, in the consolidated cases of Commissioner of Internal Revenue v. San Roque Power
Corporation10 (San Roque ponencia), this Court emphasized that Section 112 (A) and (C) of the Tax Code must be
interpreted according to its clear, plain and unequivocal language.

In said case, we held that the taxpayer can file his administrative claim for refund or issuance of tax credit certificate
anytime within the two-year prescriptive period. If he files his claim on the last day of the two-year prescriptive period,
his claim is still filed on time. The Commissioner will then have 120 days from such filing to decide the claim. If the
Commissioner decides the claim on the 120th day or does not decide it on that day, the taxpayer still has 30 days to file
his judicial claim with the CTA. Thus, the Court expounded:

Section 112 (C) also expressly grants the taxpayer a 30-day period to appeal to the CTA the decision or inaction of the
Commissioner, thus:

x x x the taxpayer affected may, within thirty (30) days from receipt of the decision denying the claim or after the
expiration of the one hundred twenty-day period, appeal the decision or the unacted claim with the Court of Tax
Appeals. (Emphasis supplied)

This law is clear, plain and unequivocal. Following the well-settled verba legis doctrine, this law should be applied
exactly as worded since it is clear, plain and unequivocal. As this law states, the taxpayer may, if he wishes, appeal the
decision of the Commissioner to the CTA within 30 days from receipt of the Commissioners decision, or if the
Commissioner does not act on the taxpayers claim within the 120-day period, the taxpayer may appeal to the CTA
within 30 days from the expiration of the 120-day period.

There are three compelling reasons why the 30-day period need not necessarily fall within the two-year prescriptive
period, as long as the administrative claim is filed within the two-year prescriptive period.

First, Section 112 (A) clearly, plainly and unequivocally provides that the taxpayer "may, within two (2) years after the
close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of the
creditable input tax due or paid to such sales." In short, the law states that the taxpayer may apply with the
Commissioner for a refund or credit "within two (2) years," which means at anytime within two years. Thus, the
application for refund or credit may be filed by the taxpayer with the Commissioner on the last day of the two-year
prescriptive period and it will still strictly comply with the law. The two-year prescriptive period is a grace period in favor of
the taxpayer and he can avail of the full period before his right to apply for a tax refund or credit is barred by prescription.

Second, Section 112 (C) provides that the Commissioner shall decide the application for refund or credit "within one
hundred twenty (120) days from the date of submission of complete documents in support of the application filed in
accordance with Subsection (A)." The reference in Section 112 (C) of the submission of documents "in support of the
application filed in accordance with Subsection (A)" means that the application in Section 112 (A) is the administrative claim
that the Commissioner must decide within the 120-day period. In short, the two-year prescriptive period in Section 112 (A)
refers to the period within which the taxpayer can file an administrative claim for tax refund or credit. Stated otherwise, the
two-year prescriptive period does not refer to the filing of the judicial claim with the CTA but to the filing of the
administrative claim with the Commissioner. As held in Aichi, the "phrase within two years x x x apply for the issuance of a
tax credit or refund" refers to applications for refund/credit with the CIR and not to appeals made to the CTA."

Third, if the 30-day period, or any part of it, is required to fall within the two-year prescriptive period (equivalent to
730 days), then the taxpayer must file his administrative claim for refund or credit within the first 610 days of the two-
year prescriptive period. Otherwise, the filing of the administrative claim beyond the first 610 days will result in the
appeal to the CTA being filed beyond the two-year prescriptive period. Thus, if the taxpayer files his administrative
claim on the 611th day, the Commissioner, with his 120-day period, will have until the 731st day to decide the claim. If
the Commissioner decides only on the 731st day, or does not decide at all, the taxpayer can no longer file his judicial
claim with the CTA because the two-year prescriptive period (equivalent to 730 days) has lapsed. The 30-day period
granted by law to the taxpayer to file an appeal before the CTA becomes utterly useless, even if the taxpayer complied
with the law by filing his administrative claim within the two-year prescriptive period.

The theory that the 30-day period must fall within the two-year prescriptive period adds a condition that is not found in
the law. It results in truncating 120 days from the 730 days that the law grants the taxpayer for filing his administrative
claim with the Commissioner. This Court cannot interpret a law to defeat, wholly or even partly, a remedy that the law
expressly grants in clear, plain and unequivocal language.

Section 112 (A) and (C) must be interpreted according to its clear, plain and unequivocal language. 1wphi1 The
taxpayer can file his administrative claim for refund or credit at any time within the two-year prescriptive period. If he
files his claim on the last day of the two-year prescriptive period, his claim is still filed on time. The Commissioner
will have 120 days from such filing to decide the claim. If the Commissioner decides the claim on the 120th day, or
does not decide it on that day, the taxpayer still has 30 days to file his judicial claim with the CTA. This is not only the
plain meaning but also the only logical interpretation of Section 112 (A) and (C). 11 (Emphasis supplied)

Based on the aforequoted discussions, we therefore disagree with the CTA En Bancs finding that petitioners judicial
claim for the first quarter of 2002 was not timely filed.
The San Roque ponencia firmly enunciates that the taxpayer can file his administrative claim for refund or credit at any
time within the two-year prescriptive period. What is only required of him is to file his judicial claim within thirty (30)
days after denial of his claim by respondent or after the expiration of the 120-day period within which respondent can
decide on its claim.

Here, there is no question that petitioner timely filed its administrative claim with the Bureau of Internal Revenue
within the required period. However, since its administrative claim was filed within the two-year prescriptive period
and its judicial claim was filed on the first day after the expiration of the 120-day period granted to respondent, to
decide on its claim, we rule that petitioners claim for refund for the first quarter of 2002 should be granted.

All told, we revert to the CTA First Division s finding that petitioner s total refundable amount should
be P69,618,971.19, representing petitioner s unutilized input VAT paid on its domestic purchases of goods and services
and importation of goods attributable to its effectively zero-rated sales of power generation services to the National
Power Corporation for the taxable year 2002. WHEREFORE, in view of the foregoing, the Decision dated August 14,
2009 and Resolution dated January 5, 2010 of the Court of Tax Appeals En Banc, in CTA EB No. 422 are hereby
AFFIRMED with MODIFICATION that petitioner s total refundable amount shall be P69,618,971.19.

SO ORDERED.
 G.R. No. 141524 September 14, 2005

DOMINGO NEYPES, LUZ FAUSTINO, ROGELIO FAUSTINO, LOLITO VICTORIANO, JACOB OBANIA AND
DOMINGO CABACUNGAN, Petitioners, vs. HON. COURT OF APPEALS, HEIRS OF BERNARDO DEL MUNDO,
namely: FE, CORAZON, JOSEFA, SALVADOR and CARMEN, all surnamed DEL MUNDO, LAND BANK OF THE
PHILIPPINES AND HON. ANTONIO N. ROSALES, Presiding Judge, Branch 43, Regional Trial Court, Roxas, Oriental
Mindoro, Respondent.

Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito Victoriano, Jacob Obania and Domingo
Cabacungan filed an action for annulment of judgment and titles of land and/or reconveyance and/or reversion with
preliminary injunction before the Regional Trial Court, Branch 43, of Roxas, Oriental Mindoro, against the Bureau of
Forest Development, Bureau of Lands, Land Bank of the Philippines and the heirs of Bernardo del Mundo, namely, Fe,
Corazon, Josefa, Salvador and Carmen.
In the course of the proceedings, the parties (both petitioners and respondents) filed various motions with the trial
court. Among these were: (1) the motion filed by petitioners to declare the respondent heirs, the Bureau of Lands and
the Bureau of Forest Development in default and (2) the motions to dismiss filed by the respondent heirs and the Land
Bank of the Philippines, respectively.
In an order dated May 16, 1997, the trial court, presided by public respondent Judge Antonio N. Rosales, resolved the
foregoing motions as follows: (1) the petitioners motion to declare respondents Bureau of Lands and Bureau of Forest
Development in default was granted for their failure to file an answer, but denied as against the respondent heirs of del
Mundo because the substituted service of summons on them was improper; (2) the Land Banks motion to dismiss for
lack of cause of action was denied because there were hypothetical admissions and matters that could be determined
only after trial, and (3) the motion to dismiss filed by respondent heirs of del Mundo, based on prescription, was also
denied because there were factual matters that could be determined only after trial. 1
The respondent heirs filed a motion for reconsideration of the order denying their motion to dismiss on the ground that
the trial court could very well resolve the issue of prescription from the bare allegations of the complaint itself without
waiting for the trial proper.
In an order2 dated February 12, 1998, the trial court dismissed petitioners complaint on the ground that the action had
already prescribed. Petitioners allegedly received a copy of the order of dismissal on March 3, 1998 and, on the 15th
day thereafter or on March 18, 1998, filed a motion for reconsideration. On July 1, 1998, the trial court issued another
order dismissing the motion for reconsideration3 which petitioners received on July 22, 1998. Five days later, on July
27, 1998, petitioners filed a notice of appeal4 and paid the appeal fees on August 3, 1998.
On August 4, 1998, the court a quo denied the notice of appeal, holding that it was filed eight days late. 5 This was
received by petitioners on July 31, 1998. Petitioners filed a motion for reconsideration but this too was denied in an
order dated September 3, 1998.6
Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of Civil Procedure, petitioners assailed the
dismissal of the notice of appeal before the Court of Appeals.
In the appellate court, petitioners claimed that they had seasonably filed their notice of appeal. They argued that the 15-
day reglementary period to appeal started to run only on July 22, 1998 since this was the day they received the final
order of the trial court denying their motion for reconsideration. When they filed their notice of appeal on July 27,
1998, only five days had elapsed and they were well within the reglementary period for appeal. 7
On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It ruled that the 15-day period to appeal
should have been reckoned from March 3, 1998 or the day they received the February 12, 1998 order dismissing their
complaint. According to the appellate court, the order was the "final order" appealable under the Rules. It held further:
Perforce the petitioners tardy appeal was correctly dismissed for the (P)erfection of an appeal within the reglementary
period and in the manner prescribed by law is jurisdictional and non-compliance with such legal requirement is fatal
and effectively renders the judgment final and executory.8
Petitioners filed a motion for reconsideration of the aforementioned decision. This was denied by the Court of Appeals
on January 6, 2000.
In this present petition for review under Rule 45 of the Rules, petitioners ascribe the following errors allegedly
committed by the appellate court:

I THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE PETITIONERS PETITION FOR
CERTIORARI AND MANDAMUS AND IN AFFIRMING THE ORDER OF THE HON. JUDGE ANTONIO N. ROSALES
WHICH DISMISSED THE PETITIONERS APPEAL IN CIVIL CASE NO. C-36 OF THE REGIONAL TRIAL COURT,
BRANCH 43, ROXAS, ORIENTAL MINDORO, EVEN AFTER THE PETITIONERS HAD PAID THE APPEAL DOCKET FEES.

II THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING AND AFFIRMING THE DECISION OR
ORDER OF THE RESPONDENT HON. ANTONIO M. ROSALES THAT PETITIONERS APPEAL WAS FILED OUT OF
TIME WHEN PETITIONERS RECEIVED THE LAST OR FINAL ORDER OF THE COURT ON JULY 22, 1998 AND FILED
THEIR NOTICE OF APPEAL ON JULY 27, 1998 AND PAID THE APPEAL DOCKET FEE ON AUGUST 3, 1998.

III THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING THAT THE WORDS "FINAL ORDER"
IN SECTION 3, RULE 41, OF THE 1997 RULES OF CIVIL PROCEDURE WILL REFER TO THE [FIRST] ORDER OF
RESPONDENT JUDGE HON. ANTONIO M. MORALES DATED FEBRUARY 12, 1998 INSTEAD OF THE LAST AND
FINAL ORDER DATED JULY 1, 1998 COPY OF WHICH WAS RECEIVED BY PETITIONERS THROUGH COUNSEL ON
JULY 22, 1998.
IV. THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING THAT THE DECISION IN THE CASE
OF DENSO, INC. V. IAC, 148 SCRA 280, IS APPLICABLE IN THE INSTANT CASE THEREBY IGNORING THE PECULIAR
FACTS AND CIRCUMSTANCES OF THIS CASE AND THE FACT THAT THE SAID DECISION WAS RENDERED PRIOR
TO THE ENACTMENT OF THE 1997 RULES OF CIVIL PROCEDURE.9

The foregoing issues essentially revolve around the period within which petitioners should have filed their notice of appeal.
First and foremost, the right to appeal is neither a natural right nor a part of due process. It is merely a statutory
privilege and may be exercised only in the manner and in accordance with the provisions of law. Thus, one who seeks
to avail of the right to appeal must comply with the requirements of the Rules. Failure to do so often leads to the loss of the
right to appeal.10 The period to appeal is fixed by both statute and procedural rules. BP 129,11 as amended, provides:
Sec. 39. Appeals. The period for appeal from final orders, resolutions, awards, judgments, or decisions of any court in
all these cases shall be fifteen (15) days counted from the notice of the final order, resolution, award, judgment, or
decision appealed from. Provided, however, that in habeas corpus cases, the period for appeal shall be (48) forty-eight
hours from the notice of judgment appealed from. x x x
Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:
SEC. 3. Period of ordinary appeal. The appeal shall be taken within fifteen (15) days from the notice of the
judgment or final order appealed from. Where a record on appeal is required, the appellant shall file a notice of
appeal and a record on appeal within thirty (30) days from the notice of judgment or final order.
The period to appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion for extension
of time to file a motion for new trial or reconsideration shall be allowed. (emphasis supplied)
Based on the foregoing, an appeal should be taken within 15 days from the notice of judgment or final order appealed
from. A final judgment or order is one that finally disposes of a case, leaving nothing more for the court to do with
respect to it. It is an adjudication on the merits which, considering the evidence presented at the trial, declares categorically
what the rights and obligations of the parties are; or it may be an order or judgment that dismisses an action. 12
As already mentioned, petitioners argue that the order of July 1, 1998 denying their motion for reconsideration should
be construed as the "final order," not the February 12, 1998 order which dismissed their complaint. Since they received
their copy of the denial of their motion for reconsideration only on July 22, 1998, the 15-day reglementary period to
appeal had not yet lapsed when they filed their notice of appeal on July 27, 1998.
What therefore should be deemed as the "final order," receipt of which triggers the start of the 15-day reglementary
period to appeal the February 12, 1998 order dismissing the complaint or the July 1, 1998 order dismissing the MR?
In the recent case of Quelnan v. VHF Philippines, Inc.,13 the trial court declared petitioner Quelnan non-suited and
accordingly dismissed his complaint. Upon receipt of the order of dismissal, he filed an omnibus motion to set it aside.
When the omnibus motion was filed, 12 days of the 15-day period to appeal the order had lapsed. He later on received
another order, this time dismissing his omnibus motion. He then filed his notice of appeal. But this was likewise
dismissed for having been filed out of time.
The court a quo ruled that petitioner should have appealed within 15 days after the dismissal of his complaint since this
was the final order that was appealable under the Rules. We reversed the trial court and declared that it was the denial
of the motion for reconsideration of an order of dismissal of a complaint which constituted the final order as it was
what ended the issues raised there.
This pronouncement was reiterated in the more recent case of Apuyan v. Haldeman et al.14 where we again considered
the order denying petitioner Apuyans motion for reconsideration as the final order which finally disposed of the issues
involved in the case.
Based on the aforementioned cases, we sustain petitioners view that the order dated July 1, 1998 denying their motion
for reconsideration was the final order contemplated in the Rules.
We now come to the next question: if July 1, 1998 was the start of the 15-day reglementary period to appeal, did
petitioners in fact file their notice of appeal on time?
Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or final order to appeal the decision of the
trial court. On the 15th day of the original appeal period (March 18, 1998), petitioners did not file a notice of appeal
but instead opted to file a motion for reconsideration. According to the trial court, the MR only interrupted the running
of the 15-day appeal period.15 It ruled that petitioners, having filed their MR on the last day of the 15-day reglementary
period to appeal, had only one (1) day left to file the notice of appeal upon receipt of the notice of denial of their MR.
Petitioners, however, argue that they were entitled under the Rules to a fresh period of 15 days from receipt of the
"final order" or the order dismissing their motion for reconsideration.
In Quelnan and Apuyan, both petitioners filed a motion for reconsideration of the decision of the trial court. We ruled
there that they only had the remaining time of the 15-day appeal period to file the notice of appeal. We consistently
applied this rule in similar cases,16 premised on the long-settled doctrine that the perfection of an appeal in the manner
and within the period permitted by law is not only mandatory but also jurisdictional. 17 The rule is also founded on
deep-seated considerations of public policy and sound practice that, at risk of occasional error, the judgments and
awards of courts must become final at some definite time fixed by law.18
Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised Rules of Court read:
Sec. 3. How appeal is taken. Appeal maybe taken by serving upon the adverse party and filing with the trial
court within thirty (30) days from notice of order or judgment, a notice of appeal, an appeal bond, and a record
on appeal. The time during which a motion to set aside the judgment or order or for new trial has been pending shall
be deducted, unless such motion fails to satisfy the requirements of Rule 37.
But where such motion has been filed during office hours of the last day of the period herein provided, the appeal must
be perfected within the day following that in which the party appealing received notice of the denial of said
motion.19 (emphasis supplied)
According to the foregoing provision, the appeal period previously consisted of 30 days. BP 129, however, reduced this
appeal period to 15 days. In the deliberations of the Committee on Judicial Reorganization 20 that drafted BP 129,
the raison d etre behind the amendment was to shorten the period of appeal 21 and enhance the efficiency and
dispensation of justice. We have since required strict observance of this reglementary period of appeal. Seldom have
we condoned late filing of notices of appeal,22 and only in very exceptional instances to better serve the ends of justice.
In National Waterworks and Sewerage Authority and Authority v. Municipality of Libmanan,23 however, we declared that appeal is
an essential part of our judicial system and the rules of procedure should not be applied rigidly. This Court has on occasion advised
the lower courts to be cautious about not depriving a party of the right to appeal and that every party litigant should be afforded the
amplest opportunity for the proper and just disposition of his cause, free from the constraint of technicalities.
In de la Rosa v. Court of Appeals,24 we stated that, as a rule, periods which require litigants to do certain acts must be
followed unless, under exceptional circumstances, a delay in the filing of an appeal may be excused on grounds of
substantial justice. There, we condoned the delay incurred by the appealing party due to strong considerations of
fairness and justice.
In setting aside technical infirmities and thereby giving due course to tardy appeals, we have not been oblivious to or
unmindful of the extraordinary situations that merit liberal application of the Rules. In those situations where
technicalities were dispensed with, our decisions were not meant to undermine the force and effectivity of the periods
set by law. But we hasten to add that in those rare cases where procedural rules were not stringently applied, there
always existed a clear need to prevent the commission of a grave injustice. Our judicial system and the courts have
always tried to maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that
every litigant be given the full opportunity for the just and proper disposition of his cause. 25
The Supreme Court may promulgate procedural rules in all courts. 26 It has the sole prerogative to amend, repeal or even
establish new rules for a more simplified and inexpensive process, and the speedy disposition of cases. In the rules governing
appeals to it and to the Court of Appeals, particularly Rules 42, 27 4328 and 45,29 the Court allows extensions of time, based on
justifiable and compelling reasons, for parties to file their appeals. These extensions may consist of 15 days or more.
To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the
Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the Regional
Trial Court, counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration. 30
Henceforth, this "fresh period rule" shall also apply to Rule 40 governing appeals from the Municipal Trial Courts to
the Regional Trial Courts; Rule 42 on petitions for review from the Regional Trial Courts to the Court of Appeals; Rule
43 on appeals from quasi-judicial agencies 31 to the Court of Appeals and Rule 45 governing appeals by certiorari to the
Supreme Court.32 The new rule aims to regiment or make the appeal period uniform, to be counted from receipt of the order
denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution.
We thus hold that petitioners seasonably filed their notice of appeal within the fresh period of 15 days, counted from
July 22, 1998 (the date of receipt of notice denying their motion for reconsideration). This pronouncement is not
inconsistent with Rule 41, Section 3 of the Rules which states that the appeal shall be taken within 15 days from notice
of judgment or final order appealed from. The use of the disjunctive word "or" signifies disassociation and
independence of one thing from another. It should, as a rule, be construed in the sense in which it ordinarily
implies.33 Hence, the use of "or" in the above provision supposes that the notice of appeal may be filed within 15 days
from the notice of judgment or within 15 days from notice of the "final order," which we already determined to refer to
the July 1, 1998 order denying the motion for a new trial or reconsideration.
Neither does this new rule run counter to the spirit of Section 39 of BP 129 which shortened the appeal period from 30
days to 15 days to hasten the disposition of cases. The original period of appeal (in this case March 3-18, 1998)
remains and the requirement for strict compliance still applies. The fresh period of 15 days becomes significant only
when a party opts to file a motion for new trial or motion for reconsideration. In this manner, the trial court which
rendered the assailed decision is given another opportunity to review the case and, in the process, minimize and/or
rectify any error of judgment. While we aim to resolve cases with dispatch and to have judgments of courts become
final at some definite time, we likewise aspire to deliver justice fairly.
In this case, the new period of 15 days eradicates the confusion as to when the 15-day appeal period should be counted
from receipt of notice of judgment (March 3, 1998) or from receipt of notice of "final order" appealed from (July 22, 1998).
To recapitulate, a party litigant may either file his notice of appeal within 15 days from receipt of the Regional Trial
Courts decision or file it within 15 days from receipt of the order (the "final order") denying his motion for new trial or
motion for reconsideration. Obviously, the new 15-day period may be availed of only if either motion is filed; otherwise, the
decision becomes final and executory after the lapse of the original appeal period provided in Rule 41, Section 3.
Petitioners here filed their notice of appeal on July 27, 1998 or five days from receipt of the order denying their motion
for reconsideration on July 22, 1998. Hence, the notice of appeal was well within the fresh appeal period of 15 days, as
already discussed.34
We deem it unnecessary to discuss the applicability of Denso (Philippines), Inc. v. IAC 35 since the Court of Appeals
never even referred to it in its assailed decision.
WHEREFORE, the petition is hereby GRANTED and the assailed decision of the Court of
Appeals REVERSED and SET ASIDE. Accordingly, let the records of this case be remanded to the Court of Appeals
for further proceedings. No costs.
SO ORDERED.
 G.R. No. 146611 February 6, 2007
TANCREDO REDEA, Petitioner, vs.
HON. COURT OF APPEALS and LEOCADIO REDEA, Respondents.

In this special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, petitioner Tancredo
Redea (Tancredo, hereafter) seeks the annulment and setting aside of the Resolution 1 dated April 28, 2000 of the
Court of Appeals in CA-G.R. CV No. 59641, as reiterated in its Resolution 2 of November 16, 2000, denying the
petitioners motion for reconsideration.
The present controversy sprung from an action for partition filed by petitioner Tancredo against his older half-brother,
herein private respondent Leocadio Redea (Leocadio, for brevity) before the then Court of First Instance (now
Regional Trial Court [RTC]) of San Pablo City, Laguna, and thereat docketed as Civil Case No. S-241 which was
subsequently inherited by Branch 33 of the RTC, Siniloan, Laguna.
The basic complaint for partition alleges that plaintiff Tancredo and defendant Leocadio are both sons of one Maximo
Redea: Tancredo, by Maximos marriage to Magdalena Fernandez, and Leocadio, by Maximos previous marriage to
Emerenciana Redea. The complaint further alleged that the parties common father, Maximo, left several pieces of
realty, to wit: a residential lot at M. Calim Street, Famy, Laguna; a riceland at Poroza, Famy, Laguna; and another
parcel of land at Maate, also in Famy, Laguna.
In a decision3 dated August 20, 1997, the trial court, based on the evidence presented, confined the partition to only the
property actually pertaining to the estate of the parties deceased father and co-owned by them, namely, the parcel of
land at Maate, and accordingly rendered judgment as follows:
WHEREFORE, premises considered, judgment is hereby rendered ordering the defendant [now respondent Leocadio]
to partition only the property located at Maate, Famy, Laguna after plaintiffs [Tancredos] reimbursement of the
expenses incurred by the defendant in relation to the said lot. However, partition cannot be effected with regard to
properties located at M. Calim Street, Famy, Laguna and the property located at Poroza, Famy, Laguna, as the same
belong to the defendant. No pronouncement as to costs.
SO ORDERED. (Words in brackets supplied)
On December 11, 1997, petitioner filed with the trial court a Notice of Appeal. 4 The court gave due course to the notice
and directed the elevation of the records of the case to the CA whereat petitioners appeal was docketed as CA-G.R.CV
No. 59641.
On September 28, 1998, the CA issued a resolution directing petitioner, as appellant, to file his appellants brief.
Evidently, the period for filing the brief was even extended by the CA.
On March 9, 1999, there being no appellants brief filed within the extended period, the CA issued a
resolution5considering the appeal abandoned and accordingly dismissing the same. The dismissal resolution reads:
For failure of plaintiff-appellant [now petitioner] to file the required brief within the extended period, the instant appeal
is hereby considered ABANDONED and accordingly DISMISSED, pursuant to Section 1(e), Rule 50, 1997 Rules of
Civil Procedure.
On November 8, 1999 or eight (8) months after the CA issued the above resolution, petitioner filed a motion for
reconsideration6 thereof. In a resolution7 of November 25, 1999, the CA denied the motion.
Then, on December 28, 1999, in the same CA-G.R. CV No. 59641, petitioner filed a Petition for Relief 8 bearing date
December 27, 1999, anchored on Section 2, 9 Rule 38 of the 1997 Rules of Civil Procedure. In that pleading, petitioner
prays the CA to set aside its dismissal resolution of March 9, 1999, supra, reinstate his appeal and grant him a fresh
period of forty-five (45) days from notice within which to file his appellants brief.
In the herein assailed Resolution10 dated April 28, 2000, the CA denied the aforementioned Petition for Relief, thus:
WHEREFORE, the petition for relief dated 27 December 1999 is hereby DENIED.
SO ORDERED.
Explains the CA in said resolution:
Petition for relief is not among the remedies available in the Court of Appeals. In fact, authorities in remedial law
(noted authors Regalado, Herrera, and Feria) are one in their commentaries that these petitions are filed with the trial
courts. Not one of them has advanced an opinion or comment that this equitable relief can be obtained in the Court of
Appeals. Under Rule 47, an annulment of judgment or final orders and resolutions may be filed before this court based
on the ground of extrinsic fraud which seems to be the premise of the petition. Perhaps it is worth looking into by the
petitioner if the factual basis of the present petition for relief may qualify as an extrinsic fraud, under Rule 47.
Petitioners motion for reconsideration of the above-mentioned resolution was likewise denied by the CA in its equally
challenged Resolution11 of November 16, 2000, wherein the appellate court further wrote:
Under the 1964 Rules of Court, there was only one court where a petition for relief may be filed the Court of First
Instance, now the Regional Trial Court. Section 1 thereof governs a petition to Court of First Instance for relief from
judgment of inferior court while Section 2 thereof governs petition to Court of First Instance for relief from judgment
or other proceeding thereof. The 1997 Rules of Civil Procedure has altered the said precept. Now, it must be filed
before the Municipal Trial Courts or Metropolitan Trial Courts for judgments or final orders or other proceedings taken
in said courts, and in the same case. And for judgment, order, or other proceedings in the Regional Trial Court, it must
be filed in the same Regional Trial Court which rendered the judgment or final order, or other proceedings taken and in
the same case. In other words, under the present rule, such a petition may be filed in the same court which rendered the
judgment or final order, or proceedings taken and in the same case. This is in accordance with uniform procedure rule
for Municipal and Regional Trial Courts.
The above construction to limit the term "any court" to Municipal Trial Court and Regional Trial Court and not to
include the Court of Appeals finds support in Section 7 of the Rules which states:
Sec. 7. Procedure where the denial of an appeal is set aside. Where the denial of an appeal is set aside, the lower
court shall be required to give due course to the appeal and to elevate the record of the appealed case as if a timely and
proper appeal had been made.
Significantly, there is no specific provision in both the 1964 and 1997 Rules of Court making the petition under Rule
38, applicable in the Court of Appeals. The procedure in the Court of Appeals from Rule 44 to Rule 55 with the
exception of Rule 45 which pertains to the Supreme Court, identifies the remedies available before said court such as
annulment of judgment or final orders and resolution (Rule 47); motion for reconsideration (Rule 52); and, new trial,
(Rule 53). Nowhere is petition for relief under Rule 38 mentioned.
But even as the CA stood firm on its stand that a petition for relief from denial of appeal is not among the remedies
available before the CA itself, the appellate court, in the same Resolution of November 16, 2000, left the final
determination of the question to this Court, thus:
Parenthetically, the main question presented herein is novel in that there is yet no definite and definitive jurisprudence
from the Supreme Court. Perhaps, the case will clarify this gray area in our adjective law for guidance of the Bench
and Bar. The issue should be elevated to that Tribunal.
Presently, petitioner is now before this Court via the instant recourse on his submission that the CA committed grave
abuse of discretion when it
I XXX RULED THAT A PETITION FOR RELIEF IS NOT AN AVAILABLE REMEDY IN THE COURT OF
APPEALS.
II XXX REFUSED TO GRANT THE PETITION DESPITE A CLEAR SHOWING THAT (A) PETITIONER,
BY REASON OF FRAUD AND MISTAKE, WAS PREVENTED FROM PROSECUTING HIS APPEAL, AND (B)
PETITIONER HAS A GOOD AND SUBSTANTIAL CAUSE OF ACTION AGAINST PRIVATE RESPONDENT.
We DISMISS.

In Hagonoy Market Vendor Association v. Municipality of Hagonoy, Bulacan, G.R. No. 137621, February 6, 2002,
then Associate Justice, now Chief Justice Reynato S. Puno, reminded us that
Laws are of two (2) kinds: substantive and procedural. Substantive laws, insofar as their provisions are unambiguous,
are rigorously applied to resolve legal issues on the merits. In contrast, courts generally frown upon an
uncompromising application of procedural laws so as not to subvert substantial justice. Nonetheless, it is not totally
uncommon for courts to decide cases based on a rigid application of the so-called technical rules of procedure as these
rules exist for the orderly administration of justice.
From the petition, it is clear that this Court is called upon to relax the application of procedural rules, or suspend them
altogether, in favor of petitioners substantial rights. There is no doubt as to the power of this Court to do that. In a
fairly recent case, we reiterated:
The Court has often stressed that rules of procedure are merely tools designed to facilitate the attainment of justice.
They were conceived and promulgated to effectively aid the court in the dispensation of justice. Courts are not slaves
to or robots of technical rules, shorn of judicial discretion. In rendering justice, courts have always been, as they ought
to be, conscientiously guided by the norm that on the balance, technicalities take a backseat against substantive rights,
and not the other way around. Thus, if the application of the Rules would tend to frustrate rather than promote justice,
it is always within our power to suspend the rules or except a particular case from its operation. 12
The Rules itself expressly states in Section 2 of Rule 1 that the rules shall be liberally construed in order to promote
their object and to assist the parties in obtaining just, speedy and inexpensive determination of every action and
proceeding. Courts, therefore, not only have the power but the duty to construe and apply technical rules liberally in
favor of substantive law and substantial justice. Furthermore, this Court, unlike courts below, has the power not only to
liberally construe the rules, but also to suspend them, in favor of substantive law or substantial rights. Such power
inherently belongs to this Court, which is expressly vested with rule-making power by no less than the Constitution.
It is equally settled, however, that this Courts power to liberally construe and even to suspend the rules, presupposes
the existence of substantial rights in favor of which, the strict application of technical rules must concede. The facts are
borne out by the records pertaining to petitioners purported undivided share in the property at M. Calim Street, Famy,
Laguna, and the property in Poroza clearly showed that these two properties had been subject of an agreement (Exh.
"1") whereby petitioner recognized respondents rights to said properties. This fact binds this Court, there being
nothing on record with the trial court as to the herein alleged fraud against the petitioner. Upon thorough deliberation of
the supposed substantial rights claimed by the petitioner with the court below, the Court finds no cogent basis to
favorably rule on the merits of the appeal even if it may be given due course which is indispensable to justify this Court
in considering this case as an exception to the rules.
The present case will have to be decided in accordance with existing rules of procedure. We apply the settled principle
that petition for relief under Rule 38 of the Rules of Court is of equitable character, allowed only in exceptional cases
as when there is no other available or adequate remedy. 14 Hence, a petition for relief may not be availed of where a
party has another adequate remedy available to him, which is either a motion for new trial or appeal from the adverse
decision of the lower court, and he is not prevented from filing such motion or taking the appeal. The rule is that relief
will not be granted to a party who seeks to be relieved from the effect of the judgment when the loss of the remedy at
law is due to his own negligence, or a mistaken mode of procedure; otherwise, the petition for relief will be tantamount
to reviving the right of appeal which has already been lost either because of inexcusable negligence or due to a mistake
in the mode of procedure taken by counsel.15
Under Section 2 of Rule 38, supra, of the Rules of Court, a party prevented from taking an appeal from a judgment or
final order of a court by reason of fraud, accident, mistake or excusable negligence, may file in the same court and in
the same case a petition for relief praying that his appeal be given due course. This presupposes, of course, that no
appeal was taken precisely because of any of the aforestated reasons which prevented him from appealing his case.
Hence, a petition for relief under Rule 38 cannot be availed of in the CA, the latter being a court of appellate
jurisdiction. For sure, under the present Rules, petitions for relief from a judgment, final order or other proceeding
rendered or taken should be filed in and resolved by the court in the same case from which the petition arose. Thus, petition
for relief from a judgment, final order or proceeding involved in a case tried by a municipal trial court shall be filed in and
decided by the same court in the same case, just like the procedure followed in the present Regional Trial Court. 16
Here, the record shows that petitioner in fact filed a Notice of Appeal with the trial court, which the latter granted in its
order of December 11, 1997 and ordered the elevation of the records to the CA. In turn, the CA, in its resolution of
September 28, 1998, required the petitioner, thru his former counsel, Atty. Geminiano Almeda, to file his appellants
brief. But petitioner failed to comply. Consequently, in its resolution of March 9, 1999, the CA considered the
appellants appeal as ABANDONED and DISMISSED the same.
Additionally, after the dismissal of his appeal, petitioner filed with the CA a motion for reconsideration of the dismissal
resolution. Unfortunately, however, the motion was filed very much late on November 8, 1999. Expectedly, in its
resolution17 of November 25, 1999, the CA denied the motion for reconsideration, to wit:
The last day to file a motion for reconsideration was on 06 April 1999 and as of 18 October 1999 no such motion was
ever filed; in fact on 19 October 1999 the court resolved that an entry of judgment may now be issued. The motion for
reconsideration, however, pleas for leniency on account of his former lawyers inefficiency and negligence in that he
failed to appeal the case. This is not well taken.
His former lawyers lack of fidelity and devotion to his client in the discharge of his duty of perfecting the appeal on
time without demonstrating fraud, accident, mistake or excusable negligence cannot be a basis for judicial relief. The
client has to bear the adverse consequences of the inexcusable mistake or negligence of his counsel or of the latters
employee and may not be heard to complain that the result of the litigation might have been different had he proceeded
differently (Inocando v. Inocando, 100 Phil. 266)
WHEREFORE, the motion is hereby DENIED.
Petitioner presents himself as a mere farmer seeking the Courts leniency to the point of disregarding the rules on
reglementary period for filing pleadings. But he fails to point out any circumstance which might lead the Court to
conclude that his station in life had in any way placed his half-brother in a more advantageous position. As we see it,
petitioner failed to show diligence in pursuing his cause. His condition as a farmer, by itself alone, does not excuse or
exempt him from being vigilant on his right. He cannot lay the blame solely on his former lawyer. It is settled that clients are
bound by the mistakes, negligence and omission of their counsel. 18 While, exceptionally, a client may be excused from the
failure of his counsel, the circumstances obtaining in this case do not convince the Court to take exception.
In seeking exemption from the above rule, petitioner claims that he will suffer deprivation of property without due
process of law on account of the gross negligence of his previous counsel. To him, the negligence of his former counsel
was so gross that it practically resulted to fraud because he was allegedly placed under the impression that the counsel
had prepared and filed his appellants brief. He thus prays the Court reverse the CA and remand the main case to the
court of origin for new trial.
Admittedly, this Court has relaxed the rule on the binding effect of counsels negligence and allowed a litigant another
chance to present his case (1) where the reckless or gross negligence of counsel deprives the client of due process of
law; (2) when application of the rule will result in outright deprivation of the clients liberty or property; or (3) where
the interests of justice so require.19 None of these exceptions obtains here.
For a claim of counsels gross negligence to prosper, nothing short of clear abandonment of the clients cause must be
shown. Here, petitioners counsel failed to file the appellants brief. While this omission can plausibly qualify as simple
negligence, it does not amount to gross negligence to justify the annulment of the proceedings below.
In Legarda v. Court of Appeals,20 where the Court initially held that the counsels failure to file pleadings at the trial
court and later on appeal amounted to gross negligence, the Court, on motion of the respondent therein, granted
reconsideration and applied the general rule binding the litigant to her counsels negligence. In said case, the Court
noted that the proceedings which led to the filing of the petition "were not attended by any irregularity." The same
observation squarely applies here.
To recapitulate, petitioner is not entitled to relief under Rule 38, Section 2 of the Rules of Court. He was not prevented
from filing his notice of appeal by fraud, accident, mistake or excusable negligence, as in fact he filed one. The relief
afforded by Rule 38 will not be granted to a party who seeks to be relieved from the effects of the judgment when the
loss of the remedy of law was due to his own negligence, or a mistaken mode of procedure for that matter; otherwise,
the petition for relief will be tantamount to reviving the right of appeal which has already been lost, either because of
inexcusable negligence or due to a mistake of procedure by counsel. 21 The Rules allow a petition for relief only when
there is no other available remedy, and not when litigants, like the petitioner, lose a remedy by negligence.
On a final note, the extraordinary writ of certiorari may be issued only where it is clearly shown that there is patent and
gross abuse of discretion as to amount to an evasion of positive duty or to virtual refusal to perform a duty enjoined by
law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by
reason of passion or personal hostility.22 The Court finds no such abuse of discretion in this case.
WHEREFORE, the instant petition is DISMISSED and the assailed resolutions of the CA are AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
 G.R. No. 164195 April 5, 2011
APO FRUITS CORPORATION and HIJO PLANTATION, INC., Petitioners, vs.
LAND BANK OF THE PHILIPPINES, Respondent.
We resolve Land Bank of the Philippines (LBPs) 2nd Motion for Reconsideration of December 14, 2010 that
addresses our Resolutions of October 12, 2010 and November 23, 2010. This motion prays as well for the holding of
oral arguments. We likewise resolve the Office of the Solicitor Generals (OSG) Motion for Leave to Intervene and to Admit
Motion for Reconsideration-in-Intervention dated February 15, 2011 in behalf of the Republic of the Philippines (Republic).

The Motion for Reconsideration

The LBP submits the following arguments in support of its 2nd motion for reconsideration:
a) the test of "transcendental importance" does not apply to the present case;
b) the standard of "transcendental importance" cannot justify the negation of the doctrine of immutability of a final
judgment and the abrogation of a vested right in favor of the Government that respondent LBP represents;
c) the Honorable Court ignored the deliberations of the 1986 Constitutional Commission showing that just
compensation for expropriated agricultural property must be viewed in the context of social justice; and
d) granting arguendo that the interest payment has factual and legal bases, only six (6%) percent interest per annum
may be validly imposed.
We have more than amply addressed argument (d) above in our October 12, 2010 Resolution, and we see no point in
further discussing it. Without in any way detracting from the overriding effect of our main and primary ruling that the
present 2nd motion for reconsideration is a prohibited motion that the Court can no longer entertain, and if only to
emphatically signal an unequivocal finis to this case, we examine for the last and final time the LBPs other arguments.

In the course of the Courts deliberations, Mr. Justice Roberto A. Abad questioned the application of Section 3, Rule 15
of the Internal Rules of the Supreme Court to the present 2nd motion for reconsideration. He posited that instead of
voting immediately on the present 2nd motion for reconsideration, the Court should instead first consider the validity
of our October 12, 2010 Resolution; he claimed that this Resolution is null and void because the Court violated the
above-cited provision of the Internal Rules when it did not first vote on whether the Resolutions underlying motion
(itself a 3rd motion for reconsideration) should be entertained before voting on the motions merits. We shall lay to rest
Mr. Justice Abads observation before dwelling on the merits of the present 2nd motion for reconsideration.

Our Ruling

We find no merit in the LBPs second motion for reconsideration, and reject as well the Mr. Justice Abads
observation on how to approach the consideration of the present motion.

Mr. Justice Abads Observations/Objections;

The Rules on 2nd Motions for Reconsideration.

Mr. Justice Abads observation apparently stemmed from the peculiar history of the present case.

a. A recap of the history of the case.

This case was originally handled by the Third Division of this Court. In its original Decision of February 6, 2007, the
Division affirmed the RTCs decision setting the just compensation to be paid and fixing the interest due on the balance
of the compensation due at 12% per annum. In its Resolution of December 19, 2007, the Third Division resolved the
parties motions for reconsideration by deleting the 12% interest due on the balance of the awarded just compensation.
The parties subsequent motions to reconsider this Resolution were denied on April 30, 2008; on May 16, 2008, entry
of judgment followed. Despite the entry of judgment, the present petitioners filed a second motion for reconsideration
that prayed as well that the case be referred to the Court en banc. Finding merit in these motions, the Third Division
referred the case to the En Banc for its disposition. On December 4, 2009, the Court en banc denied the petitioners
second motion for reconsideration. Maintaining their belief in their demand to be granted 12% interest, the petitioners
persisted in filing another motion for reconsideration. In the interim, the Court promulgated its Internal Rules that
regulated, among others, 2nd motions for reconsideration. On October 12, 2010, the Court en banc granted by a vote
of 8 for and 4 against the petitioners motion and awarded the 12% interests the petitioners prayed for, thus affirming
the interests the RTC originally awarded. The Court subsequently denied the respondents motion for reconsideration,
giving rise to the present 2nd motion for reconsideration. It was at this point that the OSG moved for leave to
intervene.

b. The governing rules on2nd motions for reconsideration

The basic rule governing 2nd motions for reconsideration is Section 2, Rule 52 (which applies to original actions in the
Supreme Court pursuant to Section 2, Rule 56) of the Rules of Court. This Rule expressly provides:

Sec. 2. Second Motion for Reconsideration. No second motion for reconsideration of a judgment or final resolution by
the same party shall be entertained.

The absolute terms of this Rule is tempered by Section 3, Rule 15 of the Internal Rules of the Supreme Court that
provides:
Sec. 3. Second Motion for Reconsideration. The Court shall not entertain a second motion for reconsideration and
any exception to this rule can only be granted in the higher interest of justice by the Court en banc upon a vote of at
least two-thirds of its actual membership. There is reconsideration "in the higher interest of justice" when the assailed
decision is not only legally erroneous, but is likewise patently unjust and potentially capable of causing unwarranted
and irremediable injury or damage to the parties. A second motion for reconsideration can only be entertained before
the ruling sought to be reconsidered becomes final by operation of law or by the Courts declaration. [Emphases
supplied.]

Separately from these rules is Article VIII, Section 4 (2) of the 1987 Constitution which governs the decision-making
by the Court en banc of any matter before it, including a motion for the reconsideration of a previous decision. This
provision states:

Section 4.

(2) All cases involving the constitutionality of a treaty, international or executive agreement, or law, which shall be
heard by the Supreme Court en banc, and all other cases which under the Rules of Court are required to be heard en
banc, including those involving the constitutionality, application, or operation of presidential decrees, proclamations,
orders, instructions, ordinances, and other regulations, shall be decided with the concurrence of a majority of the
Members who actually took part in the deliberations on the issues in the case and voted thereon.

Thus, while the Constitution grants the Supreme Court the power to promulgate rules concerning the practice and
procedure in all courts1 (and allows the Court to regulate the consideration of 2nd motions for reconsideration,
including the vote that the Court shall require), these procedural rules must be consistent with the standards set by the
Constitution itself. Among these constitutional standards is the above quoted Section 4 which applies to "all other cases
which under the Rules of Court are required to be heard en banc," and does not make any distinction as to the type of
cases or rulings it applies to, i.e, whether these cases are originally filed with the Supreme Court, or cases on appeal, or
rulings on the merits of motions before the Court. Thus, rulings on the merits by the Court en banc on 2nd motions for
reconsideration, if allowed by the Court to be entertained under its Internal Rules, must be decided with the
concurrence of a majority of the Members who actually took part in the deliberations.

When the Court ruled on October 12, 2010 on the petitioners motion for reconsideration by a vote of 12 Members (8
for the grant of the motion and 4 against), the Court ruled on the merits of the petitioners motion. This ruling complied
in all respects with the Constitution requirement for the votes that should support a ruling of the Court.

Admittedly, the Court did not make any express prior ruling accepting or disallowing the petitioners motion as
required by Section 3, Rule 15 of the Internal Rules. The Court, however, did not thereby contravene its own rule on
2nd motions for reconsideration; since 12 Members of the Court opted to entertain the motion by voting for and against
it, the Court simply did not register an express vote, but instead demonstrated its compliance with the rule through the
participation by no less than 12 of its 15 Members.1avvphi1 Viewed in this light, the Court cannot even be claimed to
have suspended the effectiveness of its rule on 2nd motions for reconsideration; it simply complied with this rule in a
form other than by express and separate voting.

Based on these considerations, arrived at after a lengthy deliberation, the Court thus rejected Mr. Justice Abads
observations, and proceeded to vote on the question of whether to entertain the respondents present 2nd motion for
reconsideration. The vote was 9 to 2, with 9 Members voting not to entertain the LBPs 2nd motion for reconsideration.
By this vote, the ruling sought to be reconsidered for the second time was unequivocally upheld; its finality already
declared by the Court in its Resolution of November 23, 2010 was reiterated. To quote the dispositive portion of the
reiterated November 23, 2010 Resolution:

On these considerations, we hereby DENY the Motion for Reconsideration with FINALITY. No further pleadings shall
be entertained. Let entry of judgment be made in due course.

Thus, this Court mandated a clear, unequivocal, final and emphatic finis to the present case.

Landowners right to just compensation: a matter of public interest

In assailing our October 12, 2010 resolution, the LBP emphasizes the need to respect the doctrine of immutability of
final judgments. The LBP maintains that we should not have granted the petitioners motion for reconsideration in our
October 12, 2010 Resolution because the ruling deleting the 12% interest had already attained finality when an Entry
of Judgment was issued. The LBP argues, too, that the present case does not involve a matter of transcendental
importance, as it does not involve life or liberty. The LBP further contends that the Court mistakenly used the concept
of transcendental importance to recall a final ruling; this standard should only apply to questions on the legal standing
of parties.

In his dissenting opinion, Mr. Justice Roberto Abad agrees with the LBPs assertion, positing that this case does not fall
under any of the exceptions to the immutability doctrine since it only involves money and does not involve a matter of
overriding public interest.

We reject the basic premise of the LBP's and Mr. Justice Abads arguments for being flawed. The present case goes
beyond the private interests involved; it involves a matter of public interest the proper application of a basic
constitutionally-guaranteed right, namely, the right of a landowner to receive just compensation when the government
exercises the power of eminent domain in its agrarian reform program.

Section 9, Article III of the 1987 Constitution expresses the constitutional rule on eminent domain "Private property
shall not be taken for public use without just compensation." While confirming the States inherent power and right to
take private property for public use, this provision at the same time lays down the limitation in the exercise of this
power. When it takes property pursuant to its inherent right and power, the State has the corresponding obligation to
pay the owner just compensation for the property taken. For compensation to be considered "just," it must not only be
the full and fair equivalent of the property taken; 2 it must also be paid to the landowner without delay.3

To fully and properly appreciate the significance of this case, we have to consider it in its proper context. Contrary to
the LBPs and Mr. Justice Abads assertions, the outcome of this case is not confined to the fate of the two petitioners
alone. This case involves the governments agrarian reform program whose success largely depends on the willingness
of the participants, both the farmers-beneficiaries and the landowners, to cooperate with the government. Inevitably, if
the government falters or is seen to be faltering through lack of good faith in implementing the needed reforms,
including any hesitation in paying the landowners just compensation, this reform program and its objectives would
suffer major setbacks. That the governments agrarian reform program and its success are matters of public interest, to
our mind, cannot be disputed as the program seeks to remedy long existing and widespread social justice and economic
problems.

In a last ditch attempt to muddle the issues, the LBP focuses on our use of the phrase "transcendental importance," and
asserts that we erred in applying this doctrine, applicable only to legal standing questions, to negate the doctrine of
immutability of judgment. This is a very myopic reading of our ruling as the context clearly shows that the phrase
"transcendental importance" was used only to emphasize the overriding public interest involved in this case. Thus,
we said:

That the issues posed by this case are of transcendental importance is not hard to discern from these discussions. A
constitutional limitation, guaranteed under no less than the all-important Bill of Rights, is at stake in this case: how can
compensation in an eminent domain case be "just" when the payment for the compensation for property already taken
has been unreasonably delayed? To claim, as the assailed Resolution does, that only private interest is involved in this
case is to forget that an expropriation involves the government as a necessary actor. It forgets, too, that under eminent
domain, the constitutional limits or standards apply to government who carries the burden of showing that these
standards have been met. Thus, to simply dismiss the case as a private interest matter is an extremely shortsighted view
that this Court should not leave uncorrected.

xxxx

More than the stability of our jurisprudence, the matter before us is of transcendental importance to the nation because
of the subject matter involved agrarian reform, a societal objective of that the government has unceasingly sought to
achieve in the past half century.4

From this perspective, our Resolution of October 12, 2010 only had to demonstrate, as it did, that the higher interests of
justice are duly served. All these, amply discussed in the Resolution of October 12, 2010, are briefly summarized and
reiterated below.

LBP at fault for twelve-year delay in payment

In his dissenting opinion, Mr. Justice Abad insists that the LBPs initial valuation of the petitioners properties was fully
in accord with Section 17 of the CARL. He posits that when the RTC gave a significantly higher value to these lands,
the LBP acted well within its rights when it appealed the valuation. Thus, to him, it was wrong for this Court to
characterize the LBPs appeal as malicious or in bad faith.

A simple look at the attendant facts disproves the accuracy of this claim.

First, Mr. Justice Abads allegation that the LBP correctly valued the petitioners properties is not at all accurate.
Significantly, Mr. Justice Abad does not cite any evidence on record to support his claim that "the Land Bank valued
the lands using the compensation formula that Section 17 of Republic Act 6657 and the DARs implementing rules
provide."5

More to the point, this Court has already determined, in a final and executed judgment, that the RTCs valuation of the
petitioners properties is the correct one. To recall, the LBP initially fixed the value of Apo Fruits Corporations (AFC)
properties at P165,484.47 per hectare or P16.00 per square meter (sqm), while it valued Hijo Plantation Inc.s (HPI)
properties at P201,929.97 per hectare, or approximately P20.00/sqm. In contrast, the Regional Trial Court fixed the valuation
of the petitioners properties at P103.33/sqm., or more than five times the initial valuation fixed by the LBP.

After reviewing the records, this Court affirmed the RTCs valuation in its February 6, 2007 decision, noting that it was
based on the following evidence: (a) the Commissioners reports, (b) the Cuervo appraisers report, (c) the schedule of
market values of the City of Tagum per its 1993 and 1994 Revision of Assessment and Property Classification, (d) the
value of the permanent improvements found on the expropriated properties, and (e) the comparative sales of adjacent
lands from early 1995 to early 1997. The Court observed that the RTC valuation also took into consideration the lands
nature as irrigated land, its location along the highway, market value, assessors value, and the volume and value of its
produce. This valuation is fully in accordance with Section 17 of RA 6657, which states:

Section 17. Determination of Just Compensation. - In determining just compensation, the cost of acquisition of the
land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner,
the tax declarations, and the assessment made by government assessors, shall be considered. The social and
economic benefits contributed by the farmers and the farm workers and by government to the property as well as the
non-payment of taxes or loans secured from any government financing institution on the said land shall be considered
as additional factors to determine its valuation.

On its face, the staggering difference between the LBPs initial valuation of the petitioners properties
(totaling P251,379,104.02) and the RTCs valuation (totaling P1,383,179,000.00) a difference of P1,131,799,895.98
amounting to 81% of the total price betrays the lack of good faith on the part of the government in dealing with the
landowners. The sheer enormity of the difference between the two amounts cannot but lead us to conclude that the
LBPs error was grievous and amounted to nothing less than gross negligence in the exercise of its duty in this case,
to properly ascertain the just compensation due to the petitioners.

Mr. Justice Abad further argues that interest on just compensation is due only where there is delay in payment. In the
present case, the petitioners allegedly did not suffer any delay in payment since the LBP made partial payments prior to
the taking of their lands.

This argument completely overlooks the definition of just compensation already established in jurisprudence. Apart
from the requirement that compensation for expropriated land must be fair and reasonable, compensation, to be
"just," must also be made without delay.6 In simpler terms, for the governments payment to be considered just
compensation, the landowner must receive it in full without delay.

In the present case, it is undisputed that the government took the petitioners lands on December 9, 1996; the
petitioners only received full payment of the just compensation due on May 9, 2008. This circumstance, by itself,
already confirms the unconscionable delay in the payment of just compensation.

Admittedly, a grain of truth exists in Justice Abads observation that the petitioners received partial payments from the
LBP before the titles to their landholdings were transferred to the government. The full and exact truth, however, is
that the partial payments at the time of the taking only amounted to a trifling five percent (5%) of the actual value of
the expropriated properties, as determined with finality by this Court. Even taking into consideration the subsequent
partial payments made totaling P411,769,168.32 (inclusive of the amounts deposited prior to the taking), these
payments only constituted a mere one-third (1/3) of the actual value of the petitioners properties.

It should be considered as highlighted in our October 12, 2010 Resolution that the properties the government took
were fully operating and earning plantations at the time of the taking. Thus, the landowners lost not only their
properties, but the fruits of these properties. These were all lost in 1996, leaving the landowners without any
replacement income from their properties, except for the possible interest for the trifling payment made at the time of
the taking that, together with the subsequent payment, only amounted to a third of the total amount due. Thus, for
twelve long years, the amount of P971,409,831.68 was withheld from the landowners.

An added dimension to this delayed payment is the impact of the delay. One impact as pointed out above is the loss
of income the landowners suffered. Another impact that the LBP now glosses over is the income that the LBP earned
from the sizeable sum it withheld for twelve long years. From this perspective, the unaccounted-for LBP income
is unjust enrichment in its favor and an inequitable loss to the landowners. This situation was what the Court
essentially addressed when it awarded the petitioners 12% interest.

Mr. Justice Abad goes on to argue that the delay should not be attributed to the LBP as it could not have foreseen that it
would take twelve years for the case to be resolved. Justice Abads stance could have been correct were it not for the
fact that the delay in this case is ultimately attributable to the government. Two significant factors justify the attribution
of the delay to the government.

The first is the DARs gross undervaluation of the petitioners properties the government move that started the cycle
of court actions.

The second factor to consider is government inaction. Records show that after the petitioners received the LBPs initial
valuation of their lands, they filed petitions with the DARAB, the responsible agency of the DAR, for the proper
determination of just compensation. Instead of dismissing these petitions outright for lack of jurisdiction, the DARAB
sat on these cases for three years. It was only after the petitioners resorted to judicial intervention, filing their petitions
for the determination of just compensation with the RTC, that the petitioners case advanced.

The RTC interpreted the DARABs inaction as reluctance of the government to pay the petitioners just compensation, a
view this Court affirmed in its October 12, 2010 Resolution.

Expropriation for agrarian reform requires the payment of just compensation

The LBP claims that the just compensation in this case should be determined within the context of the article on social
justice found in the 1987 Constitution. In the LBPs opinion, when we awarded the petitioners 12% interest by way of
potential income, we removed from the taking of agricultural properties for agrarian reform its main public purpose of
righting the wrong inflicted on landless farmers.

By this argument, the LBP effectively attempts to make a distinction between the just compensation given to
landowners whose properties are taken for the governments agrarian reform program and properties taken for other
public purposes. This perceived distinction, however, is misplaced and is more apparent than real.

The constitutional basis for our agrarian reform program is Section 4, Article XIII of the 1987 Constitution, which
mandates:

Section 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular
farm workers, who are landless, to own directly or collectively the lands they till or, in the case of other farm workers,
to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of
all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking
into account ecological, developmental, or equity considerations, and subject to the payment of just compensation.

This provision expressly provides that the taking of land for use in the governments agrarian reform program
is conditioned on the payment of just compensation. Nothing in the wording of this provision even remotely
suggests that the just compensation required from the taking of land for the agrarian reform program should be treated
any differently from the just compensation required in any other case of expropriation. As explained by Commissioner
Roberto R. Concepcion during the deliberations of the 1986 Constitutional Commission:

[T]he term "just compensation" is used in several parts of the Constitution, and, therefore, it must have a uniform
meaning. It cannot have in one part a meaning different from that which appears in the other portion. If, after all, the
party whose property is taken will receive the real value of the property on just compensation, that is good enough. 7

In fact, while a proposal was made during the deliberations of the 1986 Constitutional Commission to give a lower
market price per square meter for larger tracts of land, the Commission never intended to give agricultural landowners
less than just compensation in the expropriation of property for agrarian reform purposes. 8

To our mind, nothing is inherently contradictory in the public purpose of land reform and the right of landowners to
receive just compensation for the expropriation by the State of their properties. That the petitioners are corporations
that used to own large tracts of land should not be taken against them. As Mr. Justice Isagani Cruz eloquently put it:

[S]ocial justice - or any justice for that matter - is for the deserving, whether he be a millionaire in his mansion or a
pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt the balance in favor of the
poor, to whom the Constitution fittingly extends its sympathy and compassion. But never is it justified to prefer the
poor simply because they are poor, or to reject the rich simply because they are rich, for justice must always be served,
for poor and rich alike, according to the mandate of the law.9

Interest payments borne by government, not by farmers-beneficiaries

Nor do we find any merit in the LBPs assertion that the large amount of just compensation that we awarded the
petitioners, together with the amount of interest due, would necessarily result in making the farmers- beneficiaries
endure another form of bondage the payment of an exorbitant amount for the rest of their lives.

As the petitioners correctly pointed out, the governments liability for the payment of interest to the landowner for any
delay attributable to it in paying just compensation for the expropriated property is entirely separate and distinct from
the farmers-beneficiaries obligations to pay regular amortizations for the properties transferred to them.

Republic Act No. 6657 (The Comprehensive Agrarian Reform Law, or CARL) provides for the specific source of
funding to be used by the government in implementing the agrarian reform program; this funding does not come
directly from the payments made by the farmers-beneficiaries. 101avvphi1

More to the point, under the CARL, the amount the farmers-beneficiaries must pay the LBP for their land is, for the
most part, subsidized by the State and is not equivalent to the actual cost of the land that the Department of Agrarian
Reform paid to the original landowners. Section 26, Chapter VII of the CARL provides:

SEC. 26. Payment by Beneficiaries. - Lands awarded pursuant to this Act shall be paid for by the beneficiaries to the
LBP in thirty (30) annual amortizations at six percent (6%) interest per annum. The payments for the first three (3)
years after the award may be at reduced amounts as established by the PARC: Provided, That the first five (5) annual
payments may not be more than five percent (5%) of the value of the annual gross productions paidas
established by the DAR. Should the scheduled annual payments after the fifth year exceed ten percent (10) of the
annual gross production and the failure to produce accordingly is not due to the beneficiary's fault, the LBP may reduce
the interest rate or reduce the principal obligation to make the payment affordable.

Interpreting this provision of the law, DAR Administrative Order No. 6, Series of 1993 provides:
 A. As a general rule, land awarded pursuant to E.O. 229 and R.A. 6657 shall be repaid by the Agrarian Reform
Beneficiary (ARB) to LANDBANK in thirty (30) annual amortizations at six (6%) percent interest per annum. The
annual amortization shall start one year from date of Certificate of Landownership Award (CLOA) registration.

B. The payments by the ARBs for the first three (3) years shall be two and a half percent (2.5%) of AGP [Annual
Gross Production] and five percent (5.0%) of AGP for the fourth and fifth years. To further make the payments
affordable, the ARBs shall pay ten percent (10%) of AGP or the regular amortization, whichever is lower, from the
sixth (6th) to the thirtieth (30th) year.

Clearly, the payments made by the farmers-beneficiaries to the LBP are primarily based on a fixed percentage of
their annual gross production, or the value of the annual yield/produce of the land awarded to them. 11 The cost of the
land will only be considered as the basis for the payments made by the farmers-beneficiaries when this amount is lower
than the amount based on the annual gross production. Thus, there is no basis for the LBP to claim that our ruling has
violated the letter and spirit of the social justice provision of the 1987 Constitution. On the contrary, our ruling is made
in accordance with the intent of the 1987 Constitution.

Motion for Oral Arguments

We deny as well the LBPs motion to set the case for oral arguments. The submissions of the parties, as well as the
records of the case, have already provided this Court with enough arguments and particulars to rule on the issues
involved. Oral arguments at this point would be superfluous and would serve no useful purpose.

The OSGs Intervention

The interest of the Republic, for whom the OSG speaks, has been amply protected through the direct action of
petitioner LBP the government instrumentality created by law to provide timely and adequate financial support in all
phases involved in the execution of needed agrarian reform. The OSG had every opportunity to intervene through the
long years that this case had been pending but it chose to show its hand only at this very late stage when its presence
can only serve to delay the final disposition of this case. The arguments the OSG presents, furthermore, are issues that
this Court has considered in the course of resolving this case. Thus, every reason exists to deny the intervention prayed
for.

WHEREFORE, premises considered, the respondents second motion for reconsideration and the motion to set the
case for oral arguments are hereby DENIED WITH ABSOLUTE FINALITY. The motion for intervention filed by
the Office of the Solicitor General is, likewise, denied. We reiterate, under pain of contempt if our directive is
disregarded or disobeyed, that no further pleadings shall be entertained. Let judgment be entered in due course.

SO ORDERED.
 G.R. No. 167471 February 5, 2007
GLICERIA SARMIENTO, Petitioner, vs. EMERITA ZARATAN, Respondent.
This petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to nullify the Court of Appeals
Decision1 in CA-G.R. SP No. 79001 entitled, "Emerita Zaratan v. Hon. Ramon A. Cruz, as Presiding Judge of RTC,
Quezon City, Branch 223, and Gliceria Sarmiento," dated 17 August 2004, which reversed and set side the Orders
dated 19 June 2003 and 31 July 2003 of the Regional Trial Court (RTC) of Quezon City in Civil Case No. Q-03-49437,
dismissing respondents appeal for failure to file the memorandum within the period provided for by law.

On 2 September 2002, petitioner Gliceria Sarmiento filed an ejectment case 2 against respondent Emerita Zaratan, in the
Metropolitan Trial Court (MeTC) of Quezon City, Branch 36, docketed as Civil Case No. 29109.

On 31 March 2003, the MeTC rendered a decision in favor of petitioner, the dispositive portion of which reads:

WHEREFORE, the Court finds that plaintiff has sufficiently established her causes against the defendant and hereby
order the defendant and all persons claiming rights under her:

1. to pay plaintiff the monthly rentals of P3,500.00 for the said premises from August 1, 2002 until defendant
vacates the premises;

2. to pay plaintiff the sum of P20,000.00 plus P1,500.00 per appearance of counsel in court, as and for attorneys
fees; and to pay the cost of suit.3

Respondent filed her notice of appeal.4 Thereafter, the case was raffled to the RTC of Quezon City, Branch 223,
docketed as Civil Case No. Q-03-49437.

In the Notice of Appealed Case, 5 the RTC directed respondent to submit her memorandum in accordance with the provisions
of Section 7(b) of Rule 40 of the Rules of Court and petitioner to file a reply memorandum within 15 days from receipt.

Respondents counsel having received the notice on 19 May 2003, he had until 3 June 2003 within which to file the
requisite memorandum. But on 3 June 2003, he filed a Motion for Extension of Time of five days due to his failure to
finish the draft of the said Memorandum. He cited as reasons for the delay of filing his illness for one week, lack of
staff to do the work due to storm and flood compounded by the grounding of the computers because the wirings got
wet.6 But the motion remained unacted.

On 9 June 2003, respondent filed her Memorandum. On 19 June 2003, the RTC dismissed the appeal as follows:

Record shows that defendant-appellant received the Notice of Appealed Case, through counsel, on May 19, 2003
(Registry Return Receipt dated May 12, 2003, Record, back of p. 298). Thus, under Section 7(b), Rule 40 of the 1997
Rules of Civil Procedure, she had fifteen (15) days or until June 3, 2003 within which to submit a memorandum on
appeal. As further appears on record, however, the required Memorandum was filed by defendant-appellant only on
June 9, 2003 (Record, p. 623), or six (6) days beyond the expiration of the aforesaid fifteen day period.

It should be stressed that while the rules should be liberally construed, the provisions on reglemenatry periods are
strictly applied as they are "deemed indispensable to the prevention of needless delays and necessary to the orderly and
speedy discharge of judicial business" (Legaspi-Santos vs. Court of Appeals, G.R. No. 60577, October 11, 1983) and
strict compliance therewith is mandatory and imperative (FJR Garments Industries vs. Court of Appeals, G.R. No. L-
49329, June 29, 1984). The same is true with respect to the rules on the manner and periods for perfecting appeals
(Gutierrez vs. Court of Appeals, L-25972, November 26, 1968).

Premises considered, the instant appeal is hereby DISMISSED. This renders academic defendant-appellants
application for a writ of preliminary injunction. 7 1awphi1.net

On the basis of the above-quoted Order, petitioner filed a Motion for Immediate Execution, 8 while respondent moved
for the Reconsideration.9 Both motions were denied by the RTC on 31 July 2003. The Order in part reads:

In the main, defendant-appellants Motion for Reconsideration is premised on the argument that she filed a timely
"Motion for Extension of Time To File Memorandum," dated and filed on June 3, 2003, but that her motion was not
acted upon by this Court. She adds that her appeal memorandum was filed well within the period sought by her in her
"Motion for Extension of Time to File Memorandum" so that her appeal should not have been dismissed.

The argument is without merit. This Court did not take cognizance of defendant-appellants "Motion for Extension of
Time to File Memorandum," and rightly so, because it did not contain a notice of hearing as required by Sections 4 and
5, Rule 15 of the Rules of Court, an omission for which it could offer no explanation. As declared in the case of Gozon,
et al. v. court of Appeals (G.R. No. 105781, June 17, 1993);

It is well-entrenched in this jurisdiction that a motion does not meet the requirements of Sections 4 and 5 of Rule 15 of
the Rules of Court is considered a worthless piece of paper which the clerk has no right to receive, and the court has no
authority to act upon.
Moreover, parties and counsel should not assume that courts are bound to grant the time they pray for. A motion that is
not acted upon in due time is deemed denied (Orosa vs. Court of Appeals, 261 SCRA 376 [1996]). Thus, defendant-
appellants appeal was properly dismissed on account of her failure to file an appeal memorandum within the fifteen
(15) day period provided under Section 7(b), Rule 40 of the 1997 Rules of Civil Procedure.

With regard to the "Motion for Immediate Execution," dated June 23, 2003, filed by plaintiff-appellee, the rule is
explicit that the execution of a judgment in an ejectment case, must be sought with the inferior court which rendered
the same. The appellate court which affirms a decision brought before it on appeal cannot decree its execution in the guise of
an execution of the affirming decision. The only exception is when said appellate court grants an execution pending appeal,
which is not the case herein (City of Manila vs. Court of Appeals, 204 SCRA 362; Sy vs. Romero, 214 SCRA 187). 10

Petitioner moved for reconsideration of the said Order, while respondent sought clarification on whether the 31 July
2003 Order dismissing the appeal was anchored on Section (b), Rule 40 or Section 7(c) of the same Rule.

On 27 August 2003, the RTC reconsidered its previous Order by granting petitioners motion for Immediate Execution,
but denied respondents Motion for Clarification, in this wise:

Section 21, Rule 70 of the Rules of Court provides that "the judgment of the Regional Trial Court against the defendant
shall be immediately executory, without prejudice to a further appeal that may be taken therefrom. Pursuant to this
Rule and taking into account the arguments of the plaintiff in her "Urgent Motion for Reconsideration," the Court is
inclined to grant the same. As further correctly argued by the plaintiff, through counsel, during the hearing on her
motion on August 15, 2003, the cases of City of Manila v. Court of Appeals (204 SCRA 362) and Sy vs. Romero (214
SCRA 187) cited in the July 31, 2003 Order refer to ejectment cases which has (sic) been decided with finality and
hence, inapplicable to this case where a further appeal is still available to the defendant. It should likewise be noted that
while the Supreme Court ruled in these cases that execution of a judgment in an ejectment case must be sought with the
inferior court which rendered the same, it likewise provided that for an exception to this rule, that is, in cases where the
appellate court grants an execution pending appeal, as the case herein.

With regard to defendants Motion for Clarification, contained in her Opposition, the Court notes that the issues raised
therein have already been squarely dealt with in the July 31, 2003 Order. The same must, therefore, be denied. 11

Aggrieved, respondent filed a Petition for Certiorari in the Court of Appeals, which was granted in a decision dated 17
August 2004. The appellate court nullified and set aside the 19 June 2003 and 31 July 2003 Orders of the RTC and
ordered the reinstatement of respondents appeal. Consequently, respondents appeal memorandum was admitted and
the case remanded to the RTC for further proceedings. 12

Petitioner filed a motion for reconsideration 13 on 13 September 2004, followed by a Motion for Inhibition 14 of the
members of the Eighth Division of the Court of Appeals on 20 September 2004. Both motions were denied for lack of
merit on 10 March 2005.15

Hence, this appeal by petitioner posing the following issues, 16 thus:

1. Whether respondents petition for certiorari should have been dismissed in the first place;
2. Whether the trial court committed grave abuse of discretion in denying respondents motion for extension;
3. Whether it is Section 19 of Rule 7 that applies, and not Section 21; and
4. Whether the Court of Appeals Justices should have inhibited themselves from further proceeding with the subject
case.
Stated otherwise, the main issue for resolution is whether the Court of Appeals committed a reversible error of law in
granting the Writ of Certiorari. In granting the petition, the Court of Appeals ruled that the RTC erred in dismissing
respondents appeal for failure to file the required Memorandum within the period provided by law and in granting
petitioners Motion for Immediate Execution of the MeTC decision.

Before resolving the substantive issues raised by petitioner, the Court will first address the procedural infirmities
ascribed by petitioner. Petitioner assails the correctness and propriety of the remedy resorted to by respondent by filing
a Petition for Certiorari in the Court of Appeals. According to petitioner, certiorari is not appropriate and unavailing as
the proper remedy is an appeal.

It must be noted that respondents appeal in the RTC was dismissed for failure to file the required memorandum within
the period allowed by law, as the Motion for Extension of Time to file Memorandum was not acted upon for failure to
attach a notice of hearing. From the said dismissal, respondent filed a Petition for Certiorari in the Court of Appeals.

Respondent correctly filed said petition pursuant to Section 41 of the Rules of Court, which provides:

Section 1. Subject of appeal. An appeal may be taken from a judgment or final order that completely disposes of the
case, or of a particular matter therein when declared by these Rules to be appealable.

No appeal may be taken:

(d) An order disallowing or dismissing an appeal;

In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an
appropriate civil action under Rule 65. (Underscoring supplied.)

Petitioner also contends that the Petition for Certiorari filed in the Court of Appeals should be dismissed as the
certification of non-forum shopping was defective. The verification in part reads:

I, EMERITA ZARATAN, of legal age, after having been duly sworn to, according to law, depose and say:

That I, Emerita Zaratan is one of the respondent (sic) in the above entitled case, hereby declare, that I have caused the
preparation and filing of the foregoing Comment on the Petition; that I have read all the allegations therein, which are
true and correct to the best of my own knowledge.

That as respondent, I further certify that I have not commenced any other action or proceeding involving the same
issues in the foregoing Petition in the Court of Appeals, the Supreme Court, or different Divisions thereof, respectively,
or any tribunal, or agency; and should it be known that a similar action or proceeding has been filed or is pending in
any of the abovementioned Courts or different Divisions thereof, the petitioner shall notify the Honorable Court to
which this certification is filed, within five (5) days from such notice. (Underscoring ours.)

Petitioner avers that respondent by stating in the above-quoted certification that she was the respondent, while in truth
she was the petitioner and by stating that respondent caused the preparation of the comment on the petition, instead of
the petition itself, indicate that respondent did not understand what she was signing. The defect of the verification all
renders the petition in the Court of Appeals without legal effect and constitutes ground for its dismissal.

The contention is baseless.

The purpose of requiring a verification is to secure an assurance that the allegations of the petition have been made in
good faith, or are true and correct, not merely speculative. This requirement is simply a condition affecting the form of
pleadings and non-compliance therewith does not necessarily render it fatally defective. 17 Perusal of the verification in
question shows there was sufficient compliance with the requirements of the Rules and the alleged defects are not so
material as to justify the dismissal of the petition in the Court of Appeals. The defects are mere typographical errors.
There appears to be no intention to circumvent the need for proper verification and certification, which are intended to
assure the truthfulness and correctness of the allegations in the petition and to discourage forum shopping. 18

Now, the substantial issues.

Corollary to the dismissal of the appeal by the RTC is the question of whether the lack of notice of hearing in the
Motion for Extension of Time to file Memorandum on Appeal is fatal, such that the filing of the motion is a worthless
piece of paper.

Petitioner avers that, because of the failure of respondent to include a Notice of Hearing in her Motion for Extension of
Time to file Memorandum on Appeal in the RTC, the latters motion is a worthless piece of paper with no legal effect.

It is not disputed that respondent perfected her appeal on 4 April 2003 with the filing of her Notice of Appeal and
payment of the required docket fees. However, before the expiration of time to file the Memorandum, she filed a
Motion for Extension of Time seeking an additional period of five days within which to file her Memorandum, which
motion lacked the Notice of Hearing required by Section 4, Rule 15 of the 1997 Rules of Court which provides:

SEC. 4. Hearing of Motion. - Except for motions which the court may act upon without prejudicing the rights of the
adverse party, every written motion shall be set for hearing by the applicant.

Every written motion required to be heard and the notice of the hearing thereof shall be served in such a manner as to
ensure its receipt by the other party at least three (3) days before the date of hearing, unless the court for good cause
sets the hearing on shorter notice.

As may be gleaned above and as held time and again, the notice requirement in a motion is mandatory. As a rule, a
motion without a Notice of Hearing is considered pro forma and does not affect the reglementary period for the appeal
or the filing of the requisite pleading.19

As a general rule, notice of motion is required where a party has a right to resist the relief sought by the motion and
principles of natural justice demand that his right be not affected without an opportunity to be heard. 20 The three-day
notice required by law is intended not for the benefit of the movant but to avoid surprises upon the adverse party and to
give the latter time to study and meet the arguments of the motion. 21 Principles of natural justice demand that the right
of a party should not be affected without giving it an opportunity to be heard. 22

The test is the presence of the opportunity to be heard, as well as to have time to study the motion and meaningfully
oppose or controvert the grounds upon which it is based. 23 Considering the circumstances of the present case, we
believe that procedural due process was substantially complied with.

There are, indeed, reasons which would warrant the suspension of the Rules: (a) the existence of special or compelling
circumstances, b) the merits of the case, (c) a cause not entirely attributable to the fault or negligence of the party
favored by the suspension of rules, (d) a lack of any showing that the review sought is merely frivolous and dilatory,
and (e) the other party will not be unjustly prejudiced thereby. 24 Elements or circumstances (c), (d) and (e) exist in the
present case.

The suspension of the Rules is warranted in this case. The motion in question does not affect the substantive rights of
petitioner as it merely seeks to extend the period to file Memorandum. The required extension was due to respondents
counsels illness, lack of staff to do the work due to storm and flood, compounded by the grounding of the computers.
There is no claim likewise that said motion was interposed to delay the appeal. 25 As it appears, respondent sought
extension prior to the expiration of the time to do so and the memorandum was subsequently filed within the requested
extended period. Under the circumstances, substantial justice requires that we go into the merits of the case to resolve
the issue of who is entitled to the possession of the land in question.

Further, it has been held that a "motion for extension of time x x x is not a litigated motion where notice to the adverse
party is necessary to afford the latter an opportunity to resist the application, but an ex parte motion made to the court
in behalf of one or the other of the parties to the action, in the absence and usually without the knowledge of the other
party or parties." As a general rule, notice of motion is required where a party has a right to resist the relief sought by
the motion and principles of natural justice demand that his rights be not affected without an opportunity to be heard. It
has been said that "ex parte motions are frequently permissible in procedural matters, and also in situations and under
circumstances of emergency; and an exception to a rule requiring notice is sometimes made where notice or the
resulting delay might tend to defeat the objective of the motion." 26

It is well to remember that this Court, in not a few cases, has consistently held that cases shall be determined on the
merits, after full opportunity to all parties for ventilation of their causes and defense, rather than on technicality or
some procedural imperfections. In so doing, the ends of justice would be better served. 27 Furthermore, this Court
emphasized its policy that technical rules should accede to the demands of substantial justice because there is no vested
right in technicalities. Litigations, should, as much as possible, be decided on their merits and not on technicality.
Dismissal of appeals purely on technical grounds is frowned upon, and the rules of procedure ought not to be applied in
a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice, and thereby defeat
their very aims. As has been the constant rulings of this Court, every party-litigant should be afforded the amplest
opportunity for the proper and just disposition of his cause, free from constraints of technicalities. 28 Indeed, rules of
procedure are mere tools designed to expedite the resolution of cases and other matters pending in court. A strict and
rigid application of the rules that would result in technicalities that tend to frustrate rather than promote justice must be
avoided.29

The visible emerging trend is to afford every party-litigant the amplest opportunity for the proper and just
determination of his cause, free from constraints and technicalities.

Parenthetically, it must be noted also that when the appeal was dismissed on 19 June 2003, the memorandum was
already filed in court on 9 June 2003.

On the issue of immediate execution of judgment.

The applicable provision is Section 19, Rule 70 of the Rules of Court, which reads:

SEC. 19. Immediate Execution of judgment; how to stay the same.- If judgment is rendered against the defendant,
execution shall issue immediately upon motion, unless an appeal has been perfected and the defendant to stay
execution files a sufficient supersedeas bond, approved by the Municipal Trial Court and executed in favor of the
plaintiff to pay the rents, damages, and costs accruing down to the time of the judgment appealed from, and unless,
during the pendency of the appeal, he deposits with the appellate court the amount of rent due from time to time under
the contract, if any, as determined by the judgment of the Municipal Trial Court. x x x.

To stay the immediate execution of judgment in ejectment proceedings, Section 19 requires that the defendant-
appellant must (a) perfect his appeal, (b) file a supersedeas bond, and (c) periodically deposit the rentals falling due
during the pendency of the appeal.

As correctly observed by the Court of Appeals, execution pending appeal was premature as respondent had already
filed a supersedeas bond and the monthly rental for the current month of the premises in question. 30

The invocation of petitioner of the provisions of Section 21, Rule 70 of the Rules of Court, which runs:

Sec. 21. Immediate execution on appeal to Court of Appeals or Supreme Court.- The judgment of the Regional Trial
Court against the defendant shall be immediately executory, without prejudice to a further appeal that may be taken
therefrom.

to justify the issuance of the writ of execution pending appeal in this case is misplaced.

A closer examination of the above-quoted provision reveals that said provision applies to decision of the RTC rendered
in its appellate jurisdiction, affirming the decision of the MeTC. In the case at bar, the RTC order was an order
dismissing respondents appeal based on technicality. It did not resolve substantive matters delving on the merits of the
parties claim in the ejectment case. Thus, the case brought to the Court of Appeals was the dismissal of the appeal for
failure to file the required memorandum within the period provided by law, and not on the merits of the ejectment case.

Lastly, petitioner posited the view that the Court of Appeals justices should have inhibited themselves because of bias
and partiality for deciding the case within eight months and for being very selective in discussing the issues.

We reject the proposition.

Inhibition must be for just and valid causes. The mere imputation of bias and partiality is not enough ground for judges
to inhibit, especially when the charge is without basis. This Court has to be shown acts or conduct clearly indicative of
arbitrariness or prejudice before it can brand them with the stigma of bias and partiality. 31 This Court has invariably
held that for bias and prejudice to be considered valid reasons for the voluntary inhibition of judges, mere suspicion is
not enough. Bare allegations of their partiality will not suffice "in the absence of clear and convincing evidence to
overcome the presumption that the judge will undertake his noble role to dispense justice according to law and
evidence and without fear and favor."32

There is no factual support to petitioners charge of bias and partiality. A perusal of the records of the case fails to
reveal that any bias or prejudice motivated the Court of Appeals in granting respondents petition. Neither did this
Court find any questionable or suspicious circumstances leading to the issuance of the questioned decision, as
suggested by petitioner.

The fact alone that the Court of Appeals decided the case within eight months does not in any way indicate bias and
partiality against petitioner. It is within the constitutional mandate to decide the case within 12 months. 33

As to petitioners allegation that the Court of Appeals was selective in choosing what issues to resolve, it bears to stress
again that "a judges appreciation or misappreciation of the sufficiency of evidence x x x adduced by the parties, x x x,
without proof of malice on the part of respondent judge, is not sufficient to show bias and partiality." 34We also
emphasized that "repeated rulings against a litigant, no matter how erroneously, vigorously and consistently expressed,
do not amount to bias and prejudice which can be bases for the disqualification of a judge." 35

IN ALL, petitioner utterly failed to show that the appellate court erred in issuing the assailed decision. On the contrary,
it acted prudently in accordance with law and jurisprudence.

WHEREFORE, the instant petition is hereby DENIED for lack of merit. The Decision dated 17 August 2004 and the
Resolution dated 10 March 2005 of the Court of Appeals in CA-G.R. SP No. 79001 are hereby AFFIRMED. No costs.

SO ORDERED.
 G.R. No. 171238
F.A.T. KEE COMPUTER SYSTEMS, INC., Petitioner vs
ONLINE NETWORKS INTERNATIONAL, INC., Respondent.

For consideration of the Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court, which
seeks to challenge the Decision[2] dated September 26, 2005 of the Court of Appeals in CA-G.R. CV No. 71910. The
appellate court reversed and set aside the Decision [3] dated November 7, 2000 of the Regional Trial Court (RTC) of
Makati City, Branch 148, in Civil Case No. 99-167, which dismissed the complaint filed by herein respondent Online
Networks International, Inc. (ONLINE).

Petitioner F.A.T. Kee Computer Systems, Inc. (FAT KEE) is a domestic corporation engaged in the business of selling
computer equipment and conducting maintenance services for the units it sold.
ONLINE is also a domestic corporation principally engaged in the business of selling computer units, parts and software.

On January 25, 1999, ONLINE filed a Complaint [4] for Sum of Money against FAT KEE docketed as Civil Case No.
99-167. ONLINE alleged that sometime in November 1997, it sold computer printers to FAT KEE for which the latter
agreed to pay the purchase price of US$136,149.43. The agreement was evidenced by Invoice Nos. 4680, 4838, 5090
and 5096[5] issued by ONLINE to FAT KEE. The invoice receipts contained a stipulation that interest at 28% per
annum is to be charged on all accounts overdue and an additional sum equal to 25% of the amount will be charged by
vendor for attorneys fees plus cost of collection in case of suit. [6] It was further asserted in the Complaint that thereafter,
FAT KEE, through its President Frederick Huang, Jr., offered to pay its US dollar obligations in Philippine pesos using
the exchange rate of P40:US$1. ONLINE claimed to have duly accepted the offer. The amount payable was then
computed at P5,445,977.20. FAT KEE then made several payments amounting to P2,502,033.06 between the periods of
March and May 1998.[7] As of May 12, 1998, the balance of FAT KEE purportedly amounted to P2,943,944.14. As the
obligations of FAT KEE matured in December 1997, ONLINE applied the 28% interest on the unpaid
amount. However, in view of the good business relationship of the parties, ONLINE allegedly applied the interest on
the balance for a period of three months only. Thus, the total amount due, plus interest, was P3,012,636.17.[8] FAT KEE
subsequently made additional payments in the amount of P2,256,541.12. A balance of P756,095.05, thus, remained
according to ONLINEs computations. Despite repeated demands, FAT KEE failed to pay its obligations to ONLINE
without any valid reason. ONLINE was allegedly constrained to send a final demand letter for the payment of the
aforementioned balance. As FAT KEE still ignored the demand, ONLINE instituted the instant case, praying that FAT
KEE be ordered to pay the principal amount of P756,095.05, plus 28% interest per annum computed from July 28,
1998 until full payment. ONLINE likewise sought the payment of 25% of the total amount due as attorneys fees, as
well as litigation expenses and costs of suit.

FAT KEE duly answered[9] the complaint alleging, inter alia, that it did not reach an agreement with ONLINE for the
payment of its obligations in US dollars. FAT KEE claimed that the invoice receipts of the computer printers, which
quoted the purchase price in US dollars, were unilaterally prepared by ONLINE. While FAT KEE admitted that it
offered to pay its obligations in Philippine pesos, it averred that the amount owing to ONLINE was
only P5,067,925.34, as reflected in the Statement of Account (SOA) sent by ONLINE dated December 9, 1997. [10] FAT
KEE stated that payments in Philippine pesos were tendered to ONLINE, in accordance with the SOA, and the latter
accepted the same. FAT KEE denied that it agreed to the conversion rate of P40:US$1 and claimed that it had already
fully paid its total obligations to ONLINE. FAT KEE, thus, prayed for the dismissal of the complaint and, by way of
counterclaim, sought the payment of P250,000.00 as attorneys fees.

The trial of the case ensued thereafter.

ONLINE first called Peter Jeoffrey Goco to the witness stand. Goco testified that he was the Legal Officer of ONLINE,
whose duty was to monitor the outstanding or unpaid accounts of ONLINEs clients, as well as to send demand letters
and recommend the filing of cases should the clients fail to pay. [11] FAT KEE was one of the clients of ONLINE, which
had an outstanding balance of a little over P756,000.00.[12] Goco stated that the invoice receipts sent to FAT KEE were
denominated in US dollars as the business of ONLINE was to sell imported computer products, in wholesale and
retail. In view of the currency fluctuations during those times, ONLINE deemed that the better business policy was to
bill their clients in US dollars. [13] FAT KEE allegedly had an outstanding balance of roughly around US$136,000.00.
[14]
When ONLINE demanded payment, FAT KEE negotiated that it be allowed to pay in Philippine pesos. Goco
attested that the parties subsequently agreed to a conversion rate of P40:US$1.FAT KEE was able to remit partial
payments to ONLINE, but as of May 1998, the amount of P756,095.05 remained unpaid.[15] As FAT KEE failed to
settle its obligations, ONLINE included the payment of interests on the latters claim. [16] FAT KEE then sent a letter to
ONLINE, insisting that there was no agreement as to the exchange rate to be used in converting the unpaid obligations
of FAT KEE and that the latter could not pay because of the extraordinary currency fluctuations. [17] The lawyers of
ONLINE eventually sent a demand letter [18] to FAT KEE for the payment of the outstanding balance, but this too went
unheeded. ONLINE, thus, filed the instant case.[19]

The next witness to be presented by ONLINE was James Payoyo, an Account Manager for the said company. Payoyo
testified, among others, that sometime in November 1997, FAT KEE submitted their Purchase Order [20] for Hewlett
Packard computers and printers, which was quoted in US dollars. [21] Prior to this, FAT KEE likewise sent ONLINE a
Purchase Order[22] dated October 23, 1997 and the same was denominated in US dollars. [23] Payoyo related that, on
January 15, 1998, the officials of ONLINE met with Frederick Huang, Jr., the President of FAT KEE, and the latters
lawyer. The parties discussed the payment scheme for the outstanding balance of FAT KEE.ONLINE proposed that the
total unpaid amount of more than US$136,000.00 shall be divided in two, such that 50% of the amount was to be paid
in US dollars and the other half was to be settled in Philippine pesos. The exchange rate to be applied to the Philippine
peso component was P41:US$1.[24] FAT KEE then offered to renegotiate the exchange rate, offering to pay P35:US$1, but

ONLINE rejected the same. According to Payoyo, the parties subsequently agreed to a P40:US$1 conversion rate.[25]

Lastly, ONLINE called on Sonia Magpili to likewise testify to the fact that FAT KEE renegotiated with ONLINE for
the conversion rate of P40:US$1. Magpili stated that she was then the Executive Vice President of ONLINE [26] and was
among the company officials who met with FAT KEE President Huang on January 15, 1998. [27] Discussed in the
meeting was the proposal to split the payment to be made by FAT KEE. [28] Frederick Huang, Jr. subsequently called the
office of ONLINE to request for the lowering of the exchange rate to P40:US$1, to which ONLINE agreed. [29] FAT
KEE made partial payments from March 1998, but later tried to negotiate again for a lower exchange rate. Magpili
testified that ONLINE no longer agreed to this proposal as the account of FAT KEE had already fallen due as of
December 1997.[30] On cross-examination, however, Magpili admitted that FAT KEE did not execute any written

confirmation to signify its agreement to the proposal to split its outstanding balance and the conversion rate of P40:US$1.[31]

FAT KEE, afterwards, presented its testimonial evidence, calling forth Frederick Huang, Jr. to the witness
stand. Pertinently, Huang testified that the exchange rate they used in order to compute their total unpaid obligation to
ONLINE was P34:US$1. Huang explained that this figure was arrived at by taking into account the SOA dated
December 9, 1997. Therein, the unpaid dollar amounts in the assailed Invoice Nos. 4680 and 4838 [32] were
denominated in Philippine pesos as P2,343,414.33 and P1,502,033.06, respectively. A simple computation[33] then
revealed that the rate of exchange rate thereon was P34:US$1.[34] FAT KEE also applied the said rate on Invoice Nos.
5090 and 5096,[35] such that the dollar amounts stated thereon were respectively converted to P384,107.52
and P466,480.00.
 Huang also stated that FAT KEE quoted in US dollars the Purchase Order dated November 26, 1997, since the
same was upon the instructions of Payoyo. During that time, the fluctuations of the Philippine peso were rapid and the
Accounting Department of ONLINE informed Huang that the computer equipment ordered by FAT KEE would not be
delivered unless FAT KEE issued a Purchase Order in US dollars. Huang also said that there was no agreement
between FAT KEE and ONLINE for the payment in US dollars, nor did the parties agree to a specific exchange rate.
[36]
On January 15, 1998, the parties met, but they failed to reach any agreement regarding the exchange rate and the
payment in US dollars. The next day, ONLINE, through Payoyo, wrote a letter to FAT KEE, confirming their supposed
agreement on an exchange rate of P41:US$1.[37] On February 23, 1998, Payoyo again wrote to Huang, informing him
that the new exchange rate to be applied was P40:US$1. On March 2, 1998, Huang communicated to Payoyo, stating
that the Board of Directors of FAT KEE agreed to settle the outstanding balance of the company at the rate
of P37:US$1.[38] Huang then testified that FAT KEE continued to pay its obligation in Philippine pesos until its
obligation was fully paid. [39] Later, FAT KEE received demand letters from ONLINE, directing the former to pay the
amount of P756,095.05.[40]

Mayumi Huang also testified for FAT KEE. Being the Operations Manager[41] of FAT KEE, she admitted that she was
the one who issued the Purchase Order dated November 26, 1997 to ONLINE for $13,720.00. [42]

As rebuttal evidence, ONLINE offered the testimony of Melissa Tan to prove that the SOA dated December 9, 1997
that was purportedly issued by ONLINE was in fact unauthorized and FAT KEE was duly informed of the same. Tan
stated that she was the Credit and Collection Supervisor for ONLINE. [43] Sometime in December 1997, Magpili
showed her a copy of the SOA dated December 9, 1997, asking Tan if she approved the said document. Tan declared
that she did not issue the SOA, nor was she even aware of its issuance. [44] Tan explained that the absence of her
signature on the SOA meant that the same was not authorized by ONLINE. The standard procedure was for Tan to
review and approve such documents first before the same were issued. [45] Tan noted that the SOA was prepared by
Edwin Morales, an Accountant of ONLINE.When confronted about the SOA, Morales reasoned that he merely wanted
to give FAT KEE an initial computation of the latters outstanding balance, but he mistakenly included the billings that
were denominated in US dollars. [46] At the meeting between ONLINE and FAT KEE on January 15, 1998, the latter was
informed that the SOA was not official and the parties negotiated the applicable conversion rate. [47] Upon cross-
examination, Tan revealed that ONLINE did not rectify or correct the entries contained in the SOA. No disciplinary
action was likewise taken against Morales for the unauthorized issuance of the said document. [48]

Finally, FAT KEE presented the testimony of Frederick Huang, Jr. as surrebuttal evidence. Huang again maintained that
the parties failed to reach an agreement as regards the payment of FAT KEEs obligations to ONLINE, as well as the
proposal to apply the exchange rate of P37:US$1.[49]

In a Decision dated November 7, 2000, the RTC dismissed the complaint of ONLINE, ratiocinating thus:
After assessing the evidence presented by both parties, the court is of the belief that [ONLINE] failed to
establish its claim against [FAT KEE]. While indeed [FAT KEE] purchased computer printers from [ONLINE],
[the latter] has not established the fact that at the time when the obligation became due and demandable, there
was an agreement as to the conversion rate between [ONLINE] and [FAT KEE] as to the rate of exchange from
US dollars into Philippine Peso in the payment of purchase price of printers. When there is no agreement
between [ONLINE] and [FAT KEE] as to the rate of exchange from US dollars to Philippine peso, while it is
correct to say that it is the prevailing rate of exchange at the time when the obligation became due and
demandable, the prevailing rate should be used that prevailing rate, is the rate pegged by [ONLINE], which was
contained in the Statement of Account dated 9 December 1997.

x x x Edwin Morales in the Statement of Account he sent to [FAT KEE] dated 9 December 1997
computed the obligation of [FAT KEE] in Philippine currency and after computing the total obligation, by
simple mathematical computation, it appears indeed that the exchange rate used by [ONLINE] is PHP34.00 for
every US$1.00. [ONLINE], therefore, is estopped from claiming that the rate of exchange rate should be at the
rate of either PHP41.50 or PHP40.00 per US$1.00, as the rate which [ONLINE] itself used is PHP34.00 for
every US$1.00 by [ONLINEs] own computation. [FAT KEE] even paid an excess of PHP62,539.24.
 Considering that [FAT KEE] have fully paid the amount and there being really no dispute as to the
exchange rate by [ONLINEs] own admission in its Statement of Account dated 9 December 1997, it is but
proper to consider that [FAT KEE] has fully paid its obligation with [ONLINE] as evidenced by various receipts
presented during the trial.

With all these, considering that [ONLINE] failed to prove through preponderance of evidence its claim
against [FAT KEE] and therefore [ONLINEs] complaint must be dismissed.

However, [FAT KEE] in its counterclaim claimed among others that [FAT KEE] is entitled to attorneys
fees in the amount of P250,000.00. It having been satisfactorily proven by [FAT KEE] that [it] is entitled to
attorneys fees, the court, in its discretion, awards to [FAT KEE] the amount of PHP100,000.00 for and as
attorneys fees, which [ONLINE] must pay to [FAT KEE] considering that the claim of [ONLINE] is incorrect
and its complaint baseless.

WHEREFORE, premises considered, [judgment] is hereby rendered in favor of [FAT KEE] and as
against [ONLINE]. As a consequence, [ONLINEs] Complaint is dismissed, and [ONLINE] is therefore
adjudged to pay [FAT KEE] the amount of P100,000.00 for and as attorneys fees.

Costs against [ONLINE].[50]

On February 20, 2001, ONLINE filed a Motion for Reconsideration [51] of the above decision. ONLINE argued that
estoppel may not be invoked against it as FAT KEE did not act or rely on the representations in the SOA dated
December 9, 1997. ONLINE maintained that FAT KEE was informed that the SOA was erroneous and unauthorized
and the parties subsequently met and negotiated on the exchange rate to be applied. Likewise, ONLINE challenged the
award of attorneys fees in favor of FAT KEE.
In an Order dated July 25, 2001, the RTC denied ONLINEs motion for lack of merit. Said the RTC:
The principle of Estoppel properly applies to [ONLINE] brought about by the Statement of Account dated
December 9, 1997 which was sent to [FAT KEE] through [ONLINEs] own collection clerk employee, Mr.
Edwin Morales. While, indeed, there is no exchange rate agreed upon between [ONLINE] and [FAT KEE], [the
latter] actually made payments using the exchange rate of P34 for every US dollar after the Statement of
Account dated December 9, 1997 was received by [FAT KEE]. Neither was there any formal action to correct
the alleged unauthorized Statement of Account received by [FAT KEE] nor was the employee, Mr. Edwin
Morales meted appropriate disciplinary action for the acts. On the contrary, it was only during the rebuttal stage
of the case when [ONLINE] tried to rectify the alleged mistake committed and not at the time when the same
was discovered. Moreover, [ONLINEs] claim that [FAT KEE] did not reply on the Statement of Account
aforestated is not entirely correct as the payments made by [FAT KEE] which [ONLINE] accepted were actually
based on the Statement of Account using the rate of exchange of P34 for every US Dollar.

In the matter of the award for Attorneys fees, the same is justified and reasonable under the circumstances. The
complaint being unfounded and baseless, [FAT KEE] was forced to litigate and to engage the services of counsel
for the protection of its interest. The Court therefore finds justifiable and equitable reason for attorneys fees to
be awarded.

WHEREFORE, premises considered, for lack of substantial merit and for reasons stated above, the Motion for
Reconsideration is hereby DENIED.[52]

ONLINE thereafter filed a Notice of Appeal, [53] elevating the case to the Court of Appeals.
On September 26, 2005, the Court of Appeals rendered a Decision, reversing the judgment of the RTC in this wise:

We find the appeal meritorious.

In the proceedings below, both parties harped on the propriety of using the exchange rate of P40:$1 as
against the stated rate contained in the December SOA which the court a quo fixed
at P34.00. However, after scrutinizing the pieces of evidence submitted by the contending parties, We
found the pronouncement of the court a quo wanting of bases and support. Thus, in light of this
conclusion, this Court is constrained to take exception from the findings of the trial court considering
that there were pieces [of] evidence which had been misappreciated that will compel a contrary
conclusion if properly taken into account.[54]
On the issue of estoppel on the part of ONLINE, the Court of Appeals adjudged that:

As borne by the records, ONLINE and FAT KEE had previous dealings with each other. Out of all
their transactions in the month of November 1997, six of these were transacted using the US Currency in their
price quotations; two of these were actually paid in said notes. While We agree that Invoice Nos. 4680 and
 4838 were included in the December SOA, it should not however, be assumed that the same was the
applicable conversion rate upon which FAT KEE relied on.

xxxx

Even granting that FAT KEE was of the impression that P34:$1 was the applicable rate for its
obligation, this was however, immediately rectified by ONLINE when the parties met on January 1998,
barely two months from FAT KEEs receipt of the subject statement of account and before any payment
for the same was advanced by FAT KEE, in order to negotiate the conversion rate of its obligation. x x
x The fact that FAT KEE started paying its obligation under the dollar denominated invoices only on
March 1998 fortifies the fact that both parties did not intend to be bound by the December SOA with
respect to the subject invoices.

Clearly, no estoppel as regards the December SOA may be ascribed to ONLINE because FAT KEE was
not misled by ONLINEs actuations, and even assuming arguendo that it was in fact misled, it still cannot
invoke the principle as it was clearly negligent in not fully scrutinizing the receipts issued to it, which on
their face made specific reference as to where payment was to be applied. x x x In pegging the amount
at P34:$1, a peculiar situation will result where FAT KEE will be allowed to gain from defaulting payment
despite absolute knowledge of its transactions with ONLINE. x x x.

x x x Other than its bare assertion, there were no indications to show that [FAT KEE] sought to correct the
alleged irregular transactions. Neither is there any evidence on record demonstrating that sometime after
making the purchase order, it made known its intention to take exception from the currency to be used. By and
large, FAT KEE cannot now be permitted to escape liability by simply alleging that the subject transactions
were made solely upon the insistence of ONLINE.

xxxx

In this present recourse, it is undeniable that FAT KEE had given its assent to the foreign currency-based
transaction with full knowledge of its probable effects and consequences that may spring therefrom. This is
evident from its acquiescence to the varying rates of exchange that ONLINE was charging the dollar
transactions and its willingness to negotiate on the conversion rate. x x x And while this single proof of
payment may not be regarded as a customary business practice, this however, may be taken as an indicium of
FAT KEEs concurrence to enter into a transaction that involves a foreign currency.[55] (Emphases ours.)

As regards the applicable conversion rate, the appellate court held that:

Nevertheless, despite the above findings, this Court does not agree that the rate of conversion has been
pegged by the parties at P40:$1. It is evident that when the parties met on 15 January 1999, ONLINEs
proposal to FAT KEE to use the exchange rate of P41:$1 was declined by the latter and instead, FAT KEE
made a counter offer of P35:$1. Further renegotiations then ensued with ONLINE proposing a rate
of P40:$1. On the other hand, FAT KEE, in a correspondence dated 2 March 1998, offered to use the exchange
rate of P37:$1 for the satisfaction of its remaining obligation. Thereafter, no further negotiations took
place. Significantly, on 17 March 1998, FAT KEE started to make payments for its remaining obligations,
which ONLINE accepted without any protest.

In fine, if ONLINE is to be held in estoppel, it is not from the issuance of the December SOA but rather from
the last offer which pegged the exchange rate at the ratio of 37:1. To Our mind, the silence of ONLINE and its
receipt of the FAT KEEs payment fifteen (15) days after the last correspondence may be taken as an implied
acquiescence to the latters offer to pay in Philippine currency pegging the exchange rate at P37.00 to a US
dollar.

Thereby, from its actions subsequent to FAT KEEs last offer, ONLINE is now barred from adopting an
inconsistent position that would eventually cause loss or injury to another. x x x

On the other hand, ONLINEs bare denial that this last offer was refused by the company simply contradicts
the course of its action and at best, self serving. Accordingly, utilizing the ratio of 37:1, FAT KEEs obligation
under Invoice Nos. 4680, 4838, 5090 and 5096 stands in the total amount of P5,148,528.91. Admittedly, FAT
KEE had already made payments for these invoices in the total amount of P4,758,574.18 from 17 March to 19
May 1998 and thus, only the amount of P389,954.73 remains unpaid.[56]

Thus, the Court of Appeals resolved the case as follows:

The only issue now left for resolution is where ONLINEs claim should be computed at the
fixed rate of exchange or the rate prevailing at the time of payment of the obligation.

Under Republic Act No. 8183, repealing Republic Act No. 529, parties to a contract may now
agree that the obligation or transaction shall be settled in any currency other than the Philippine
Currency at the time of payment. The repeal of R.A. No. 529 by R.A. No. 8183 has the effect of
removing the prohibition on the stipulation of currency other than Philippine currency, such that
obligations or transactions may now be paid in the currency agreed upon by the parties. Just like R.A.
 No. 529, however, the new law does not provide for the applicable rate of exchange for the conversion
of foreign currency-incurred obligations in their peso equivalent. It follows, therefore, that the
jurisprudence established in R.A. No. 529 regarding the rate of conversion remains applicable.

Thus, in Asia World Recruitment, Inc. v. National Labor Relations Commission, the High
Court, applying R.A. No. 8183, sustained the ruling of the NLRC that obligations in foreign currency
may be discharged in Philippine currency based on the prevailing rate at the time of payment. The
wisdom on which the jurisprudence interpreting R.A. No. 529 is based, equally holds true with R.A.
No. 8183. Verily, it is just and fair to preserve the real value of the foreign exchange-incurred
obligation to the date of its payment.

In this present recourse, We observed that ONLINE failed to sufficiently establish that the
obligation was payable in US currency. On the other hand, its actuations of negotiating for the mode of
payment and allowing FAT KEE to settle its obligation in pesos are indicia of the want of any
unequivocal agreement between the parties. With no definite agreement that the transaction shall be
settled in US Currency at the time of payment and considering the agreement of the parties to peg the
rate at P37:$1, it now becomes an ineluctable conclusion that FAT KEEs unpaid obligation shall be
based at the rate of P37:$1 for the reasons discussed above. Further validating this is ONLINEs
insistence that FAT KEE was liable to pay the amount of P756,095.05 and its allegations that the
remaining unsettled controversy was confined to the amount of the applicable exchange rate. Thus, it
now becomes indubitable that the obligation was payable in a fixed rate.

Prescinding from the foregoing, We find that the exchange rate to be applied on FAT KEEs
obligation is the ratio of 37:1, and after deducting the amounts already paid, FAT KEE still owes
ONLINE the amount of P389,954.73 excluding interest at the rate of 28% per annum, as stated on the
face of the pertinent invoices, commencing from July 1998. In the same manner and for having been
compelled to institute this suit to vindicate its rights, attorneys fees are also awarded to the [ONLINE]
but the same is reduced to 10% of the total award.

WHEREFORE, the foregoing considered, the appeal is hereby GRANTED and the decision
of the court a quo REVERSED and SET ASIDE. Accordingly, the [FAT KEE] is ordered to pay the
amount of P389,954.73 to [ONLINE] with interest at the rate [of] 28% per annum from July 1998 until
paid, plus 10% of the total award representing attorneys fees. [57]

FAT KEE filed a Motion for Reconsideration[58] of the above decision, but the Court of Appeals denied the same in a
Resolution dated January 26, 2006.

Hence, this petition.

FAT KEE invokes for resolution the following legal issues, to wit:

I THE PETITION IS COMPLETE IN FORM AND SUBSTANCE

II F.A.T. KEE DID NOT AGREE TO ENTER INTO A FOREIGN CURRENCY TRANSACTION

III THERE WAS NO AGREEMENT TO USE A 1:37 PESO TO DOLLAR EXCHANGE RATE

IV ONLINE WAS ESTOPPED BY THE 9 DECEMBER 1997 STATEMENT OF ACCOUNT.

The Court shall determine the procedural questions first.

FAT KEE contests the argument of ONLINE that the instant petition is fatally defective for the failure of the
former to attach the transcript of stenographic notes (TSN) of the RTC proceedings. FAT KEE counters that there is no
need to annex the said TSN given that ONLINE does not dispute the accuracy of the quoted portions of the transcripts
and the petition does not request for a reevaluation of the evidence of the parties. Assuming arguendo that the TSN
should have been attached to the petition, FAT KEE begs for the relaxation of the rules so as not to frustrate the ends of
substantive justice. FAT KEE also rejects the contention of ONLINE that the petition raises only factual issues, which
are not proper in a petition for review on certiorari. FAT KEE argues that the Court of Appeals likewise erred in re-
evaluating the evidence and substituted its own interpretation of the testimonies of the witnesses.

On this preliminary procedural issue, we rule that the non-attachment of the relevant portions of the TSN does not
render the petition of FAT KEE fatally defective.

Rule 45, Section 4 of the Rules of Court indeed requires the attachment to the petition for review
on certiorari such material portions of the record as would support the petition. [59] However, such a requirement was
not meant to be an ironclad rule such that the failure to follow the same would merit the outright dismissal of the
petition.In accordance with Section 7 of Rule 45, the Supreme Court may require or allow the filing of such pleadings,
briefs, memoranda or documents as it may deem necessary within such periods and under such conditions as it may
consider appropriate.[60] More importantly, Section 8 of Rule 45 declares that [i]f the petition is given due course, the
Supreme Court may require the elevation of the complete record of the case or specified parts thereof within fifteen
(15) days from notice.[61] Given that the TSN of the proceedings before the RTC forms part of the records of the instant
case, the failure of FAT KEE to attach the relevant portions of the TSN was already cured by the subsequent elevation
of the case records to this Court. This pronouncement is likewise in keeping with the doctrine that procedural rules
should be liberally construed in order to promote their objective and assist the parties in obtaining just, speedy and
inexpensive determination of every action or proceeding. [62]

As to the substantive issues raised in the instant petition, the Court finds that, indeed, questions of fact are being
invoked by FAT KEE. A question of law arises when there is doubt as to what the law is on a certain state of facts,
while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be
one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants
or any of them.[63]

Rule 45, Section 1 of the Rules of Court dictates that a petition for review on certiorari shall raise only
questions of law, which must be distinctly set forth. [64] This rule is, however, subject to exceptions, [65] one of which is when
the findings of fact of the Court of Appeals and the RTC are conflicting. Said exception applies to the instant case.

Substantially, FAT KEE primarily argues there was neither any agreement to enter into a foreign currency-
based transaction, nor to use a dollar exchange rate of P37:US$1. The invoice receipts denominated in US dollars were
unilaterally prepared by ONLINE. Similarly, the Accounting Department of ONLINE required that the Purchase Order
to be submitted by FAT KEE be denominated in US dollars and Frederick Huang, Jr. merely complied with the same
upon the instructions of Payoyo.Contrary to ONLINEs claim, it issued the SOA dated December 9, 1997 with the
alleged unpaid obligation of FAT KEE quoted in Philippine pesos. FAT KEE also takes issue with the ruling of the
Court of Appeals that it assented to the payment in US dollars of the transactions covered under Invoice Nos. 4680,
4838, 5090 and 5096. Lastly, FAT KEE reiterates the ruling of the RTC that ONLINE was estopped from seeking
payment in US dollars since the outstanding obligation of FAT KEE was denominated in Philippine pesos in the SOA
dated December 9, 1997. Claiming that the SOA was its only basis for payment, FAT KEE allegedly paid its
obligations in accordance therewith and ONLINE duly accepted the payments.

After a meticulous review of the records, we resolve to deny the petition.

FAT KEE subscribes to the rulings of the RTC in the Decision dated November 7, 2000 and the Order dated
July 25, 2001. The trial court found that there was no agreement as to the exchange rate for the conversion of the
outstanding balance of FAT KEE to Philippine pesos. A reading of the RTC rulings reveals that the trial court
principally relied on the SOA dated December 9, 1997 and the testimony of Frederick Huang, Jr. in setting the
exchange rate at P34:US$1. The RTC ruled that ONLINE was estopped from claiming otherwise since FAT KEE
actually paid its outstanding balance in accordance with the SOA. Furthermore, the RTC determined that ONLINE
failed to undertake any action to correct the SOA, which the latter claimed was unauthorized. No disciplinary action
was likewise taken against Edwin Morales, the employee who allegedly issued the SOA without authority.
In British American Tobacco v. Camacho,[66] the Court emphasized the doctrine of estoppel as follows:

Estoppel, an equitable principle rooted in natural justice, prevents persons from going back on
their own acts and representations, to the prejudice of others who have relied on them. The principle is
codified in Article 1431 of the Civil Code, which provides:

Through estoppel, an admission or representation is rendered conclusive upon the person

making it and cannot be denied or disproved as against the person relying thereon.

Estoppel can also be found in Rule 131, Section 2 (a) of the Rules of Court, viz:

Sec. 2. Conclusive presumptions. The following are instances of conclusive presumptions:

(a) Whenever a party has by his own declaration, act or omission, intentionally and
deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any
litigation arising out of such declaration, act or omission be permitted to falsify it.

The elements of estoppel are: first, the actor who usually must have knowledge, notice or
suspicion of the true facts, communicates something to another in a misleading way, either by words,
conduct or silence; second, the other in fact relies, and relies reasonably or justifiably, upon that
communication; third, the other would be harmed materially if the actor is later permitted to assert any
 claim inconsistent with his earlier conduct; and fourth, the actor knows, expects or foresees that the
other would act upon the information given or that a reasonable person in the actor's position would
expect or foresee such action.[67]

In the instant case, we find that FAT KEE cannot invoke estoppel against ONLINE for the latters issuance of
the SOA on December 9, 1997. The Court agrees with the Court of Appeals ruling that any misconception on the part
of FAT KEE engendered by the issuance of the SOA should have already been rectified when the parties subsequently
met on January 15, 1998. The testimonial evidence of both ONLINE and FAT KEE establish that, during the meeting,
the parties tried but failed to reach an agreement as regards the payment of FAT KEEs outstanding obligation and the
exchange rate to be applied thereto. Whether or not FAT KEE was duly informed of the fact that the SOA was
unauthorized is no longer of much importance. By their act of submitting their respective proposals and counter-
proposals on the mode of payment and the exchange rate, FAT KEE and ONLINE demonstrated that it was not their
intention to be further bound by the SOA, especially with respect to the exchange rate to be used.Moreover, FAT KEE
only started making payments vis--vis the subject invoice receipts on March 17, 1998, or two months after the
aforementioned meeting.

At this point, Mijares v. Court of Appeals[68] is instructive in declaring that:

One who claims the benefit of an estoppel on the ground that he has been misled by the representations
of another must not have been misled through his own want of reasonable care and circumspection. A lack of
diligence by a party claiming an estoppel is generally fatal. If the party conducts himself with careless
indifference to means of information reasonably at hand, or ignores highly suspicious circumstances, he may not
invoke the doctrine of estoppel. Good faith is generally regarded as requiring the exercise of reasonable
diligence to learn the truth, and accordingly estoppel is denied where the party claiming it was put on inquiry as
to the truth and had available means for ascertaining it, at least where actual fraud has not been practised on the
party claiming the estoppel.[69]

Thus, after participating in the meeting on January 15, 1998, submitting its own proposals and further
renegotiating for the lowering of the exchange rate, FAT KEE cannot anymore insist that it was completely under the
impression that the applicable exchange rate was P34:US$1 as purportedly indicated in the December 9, 1997 SOA.

Anent the proper exchange rate to be applied in this case, we likewise uphold the ruling of the Court of
Appeals that estoppel finds application in this case as regards the implied acquiescence of ONLINE to the use of
the P37:US$1 exchange rate. On March 2, 1998, after a series of proposals on the conversion rate to be applied, FAT
KEE finally offered to settle its outstanding balance at the rate of P37:US$1. To this offer, ONLINE did not
respond. Thereafter, on March 17, 1998, FAT KEE began remitting payments continuously, which ONLINE duly
accepted. Following the dictum stated in British American Tobacco, ONLINE communicated, through its silence and
acceptance of payments, that it was agreeable to the P37:US$1 rate. Indeed, ONLINE should not be allowed to adopt a
contrary position to the detriment of FAT KEE.

Premises considered, we find therefore that the applicable exchange rate to determine the outstanding balance
of FAT KEE is P37:US$1. We note, however, that the Court of Appeals inadvertently erred in computing the remaining
balance to be paid by FAT KEE. According to Invoice Nos. 4680, 4838, 5090 and 5096, the total unpaid amount
is US$136,149.43. By applying P37:US$1 rate on the unpaid amount, the resulting balance is P5,037,528.91,
not P5,148,528.91 as determined by the Court of Appeals. As FAT KEE has already paid a total amount
of P4,758,574.18,[70] the total unpaid amount owed to ONLINE is P278,954.73.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The Decision dated September 26, 2005
of the Court of Appeals in CA-G.R. CV No. 71910 is hereby AFFIRMED with MODIFICATION that F.A.T. Kee
Computer Systems, Inc. is ordered to pay the amount of P278,954.73 to Online Networks International, Inc., with
interest at the rate of 28% per annum from July 1998 until fully paid, plus 10% of the total award as attorneys fees. No
costs.

SO ORDERED.
 G.R. No. 168973 August 24, 2011
CITY OF DUMAGUETE, herein Represented by City Mayor, Agustin R. Perdices, Petitioner,
vs. PHILIPPINE PORTS AUTHORITY,Respondent.
Before Us is a Petition for Review under Rule 45 of the Rules of Court assailing the Decision 1 dated March 4, 2005
and Resolution2 dated June 6, 2005 of the Court Appeals in CA-G.R. SP No. 64379, which granted the Petition for
Certiorari and Prohibition of respondent Philippine Ports Authority and set aside the Orders dated December 7, 2000
and February 20, 2001 of the Regional Trial Court (RTC), Branch 44 of the City of Dumaguete in LRC Case No. N-
201.

The antecedent facts are as follows:

On October 14, 1998, petitioner City of Dumaguete, through Mayor Felipe Antonio B. Remollo (Remollo), filed before
the RTC an Application for Original Registration of Title over a parcel of land with improvements, located at Barangay
Looc, City of Dumaguete (subject property), under the Property Registration Decree. The application was docketed as
LRC Case No. N-201.

Petitioner alleged in support of its application:

1. That the applicant, City of Dumaguete through its Honorable Mayor Felipe Antonio B. Remollo, is the
owner of the land subject of this application with all improvements and buildings comprising the Engineers
Compound where it is now situated and has been in continuous occupation and possession of the same for
more than 30 years or from the year 1960 (Affidavit of Ownership executed by Felipe Antonio G. Remollo,
the City Mayor, dated August 21, 1998 herein attached as ANNEX A). The said land consist of 5,410 square
meters and is situated and bounded and described as shown on the plan (true and photostatic copies of the
original plan marked Psu-07-006805 approved by the Regional Technical Director of the [Department of
Environment and Natural Resources] DENR, Regional Office, Cebu City herein attached as ANNEX B) and
technical descriptions attached hereto (technical description attached as ANNEX C) and made a part hereof;
2. That said land at the last assessment for taxation was assessed at P676,250, Philippine currency, with
market value of P1,352,500.00, Philippine currency. (Declaration of Real Property with the assessed and
market values attached as ANNEX D);
3. That to the best of my knowledge and belief, there is no mortgage or encumbrance of any kind whatsoever
affecting said land, nor another person having any estate or interest therein, legal or equitable, in possession,
remainder, reversion or expectancy;
4. That the land was acquired by possessory title in open, continuous, adverse occupation and possession in
the concept of owner for more than thirty years since 1960 (please refer to ANNEX A);
5. That the land is adjoined by the following:
NorthWest
NorthEast
SouthEast
All along line 1-2-3-4-5-6-7-8-9-10 by Flores Avenue, City Road and the Dumaguete Port Road
SouthWest along line 10-1 by Plan Msi-V-20453
8. That the land included is bounded on the West by Flores Avenue and on the North by the City Road, all public
highways and on the East by the Dumaguete Port Road, a private road made part of the Port Zone. 3

In an Order4 dated October 23, 1998, the RTC noted that:

A perusal of the records of the case shows that the annexes lack the following copies:
a) two blue print copies of the approved plan;
b) two copies of the technical description of the lot sought to be registered;
c) two copies of the Surveyors certificate;
d) a certificate in quadruplicate of the City Assessor of the assessed value of the land;
e) all original muniments of title in the possession of the applicant which prove ownership of the land;
f) two copies of the petition/application.
Further, the application did not state the number of the lot sought to be registered, the number of parcels applied for,
the improvements found thereon, and indicate whether it claims a portion of the road which serves as a boundary line.
All these must be alleged in the petition so that the Court will know the nature of the property.
The RTC explained that the extra copies submitted by petitioner shall be forwarded by the RTC Clerk of Court to the Land
Registration Commission (LRC) in Manila for comment. Only thereafter would the RTC set the application for hearing.
Petitioner filed its Compliance5 with the above-mentioned Order, submitting additional copies of the required
documents and clarifying thus:
1. The approved plan does not state the number of lot sought to be registered because it is a public land, thus, only
PSU-07-006805 appears on the plan which is being applied for registration;
2. Only one (1) parcel of land is applied for by petitioners which consist of five thousand four hundred ten (5,410)
square meters, more or less;
3. The City Engineers Building within the City Engineers compound are the only improvement found thereon; and
4. Petitioners do not claim any portion of the road which serves as a boundary line.
The RTC accordingly set the initial hearing of LRC Case No. N-201 on April 12, 1999, and sent notices to the parties.
The Republic of the Philippines, represented by the Director of Lands, and respondent, represented by the Office of the
Government Corporate Counsel, filed separate Oppositions 6 to the application for registration of petitioner. Both the
Republic and respondent averred that petitioner may not register the subject property in its name since petitioner had
never been in open, continuous, exclusive, and notorious possession of the said property for at least 30 years
immediately preceding the filing of the application; and the subject property remains to be a portion of the public
domain which belongs to the Republic.

After several postponements of the scheduled hearings, petitioner presented the testimony of its first witness, Engineer Rilthe
P. Dorado (Engr. Dorado), on January 14, 2000. Engr. Dorados examination on the witness stand was terminated on April 7,
2000. The presentation of the other witnesses of petitioner was then scheduled to continue on June 2, 2000. 7

However, before the next hearing, respondent filed a Motion to Dismiss, 8 seeking the dismissal of LRC Case No. N-
201 on the ground that the RTC lacked jurisdiction to hear and decide the case. Respondent argued that Section 14(1)
of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, refers only to alienable and
disposable lands of the public domain under a bona fide claim of ownership. The subject property in LRC Case No. N-
201 is not alienable and disposable, since it is a foreshore land, as explicitly testified to by petitioners own witness,
Engr. Dorado. A foreshore land is not registerable. This was precisely the reason why, respondent points out, that the subject
property was included in Presidential Proclamation No. 1232 (delineating the territorial boundaries of the Dumaguete Port
Zone), so that the same would be administered and managed by the State, through respondent, for the benefit of the people.

In its Terse Opposition to Oppositors Motion to Dismiss, petitioner claimed that the subject property was a swamp
reclaimed about 40 years ago, which it occupied openly, continuously, exclusively, and notoriously under a bona fide
claim of ownership. The technical description and approved plan of the subject property showed that the said property
was not bounded by any part of the sea. Petitioner invoked Republic Act No. 1899, 9 which authorizes chartered cities
and municipalities to undertake and carry out, at their own expense, the reclamation of foreshore lands bordering them;
and grants said chartered cities and municipalities ownership over the reclaimed lands. Presidential Proclamation No.
1232 is immaterial to the present application for registration because it merely authorizes respondent to administer and
manage the Dumaguete Port Zone and does not confer upon respondent ownership of the subject property. 10

Respondent filed a Reply/Rejoinder (To Applicants Opposition to Oppositors Motion to Dismiss), 11 asserting that
there are no factual or legal basis for the claim of petitioner that the subject property is reclaimed land. Petitioner
sought the original registration of its title over the subject property acquired through alleged continuous possession for
30 years under Section 14(1) of the Property Registration Decree, and not through the reclamation of the said property
at its own expense under Republic Act No. 1899. The present claim of petitioner that the subject property is reclaimed
land should not be allowed for it would improperly change the earlier theory in support of the application for
registration. Respondent reiterated that the subject property is foreshore land which cannot be registered; and that
Presidential Proclamation No. 1232 is very material to LRC Case No. N-201 because it confirms that areas within the
Dumaguete Port Zone, including the subject property, are not alienable and disposable lands of the public domain.

On September 7, 2000, the RTC issued an Order12 granting the Motion to Dismiss of respondent based on the following
ratiocination:

The Court agrees with [herein respondent] Philippine Ports Authority that the basis of the [herein petitioners]
application for original registration of the subject lot is Section 14 of the Presidential Decree No. 1529, otherwise
known as the Property Registration Decree. A circumspect scrutiny of said Section readily shows that it refers to
alienable and disposable lands of the public domain as proper subjects of registration, provided the applicant has met
the other requirements such as open, continuous, exclusive and notorious possession for at least thirty (30) years under
a bona fide claim of ownership.

It having been shown by [petitioners] own evidence that the lot subject of the application for original registration is a
foreshore land, and therefore not registerable (Dizon, et al. vs. Bayona, et al., 98 SCRA 942, 944), the application must be
denied.

Again as correctly argued by [respondent], [petitioners] reliance on Republic Act 1899 which authorizes all
municipalities and chartered cities to undertake and carry out the reclamation by dredging, filling or other means of any
foreshore lands bordering them and which confers ownership on them of the lands so reclaimed, is misplaced, as such
has never been alleged in the application. It is fundamental that a party cannot prove what it has not alleged in his
complaint or application, as in this case.

The admission by Engr. Dorado that there is no formal declaration from the executive branch of government or law
passed by Congress that the land in question is no longer needed for public use or special industries x x x further
militates against the application.

Moreover, the authority granted to municipalities and chartered cities to undertake and carry out at their own expense
the reclamation by dredging, filling, or other means, of any foreshore lands bordering them is for the purpose of
establishing, providing, constructing, maintaining, and repairing proper and adequate docking and harbor facilities as
such municipalities and chartered cities may determine in consultation with the Secretary of Finance and the Secretary
of Public Works and Communications.
By its own evidence, [petitioner] has utilized the subject property allegedly reclaimed by it as Office of the City Engineer
and not as docking and harboring facilities. [Petitioner] has failed to show that such reclamation was undertaken by it in
consultation with the Secretary of Finance and the Secretary of Public Works and Communications. 13

The RTC decreed in the end that "the instant application for original registration is dismissed for lack of merit." 14

In its Motion for Reconsideration15 and Supplemental Motion for Reconsideration, 16 petitioner contended that the
dismissal of its application was premature and tantamount to a denial of its right to due process. It has yet to present
evidence to prove factual matters in support of its application, such as the subject property already being alienable and
disposable at the time it was occupied and possessed by petitioner.

Petitioner also pointed out that its witness, Engr. Dorado, "testified only as to the physical status of the land in question
at the time when the cadastral survey of Dumaguete was made sometime in 1916." 17 In fact, Engr. Dorado expressly
testified that the subject property was "part of the shore or foreshore a long time ago[;]" 18 and he did not testify at all
that the subject property was a foreshore lot at the time petitioner occupied and possessed the same. The physical state
of the subject property had already changed since 1916. It is now within the "alienable and disposable area as per the
Land Classification Map No. 674, Project No. 1-D, BL C-6, certified on July 3, 1927, of the Bureau of Lands, now
Land Management Sector of the Department of Environment and Natural Resources[,]" 19as verified and certified by the
Chief of the Map Projection Section, Land Management Sector, DENR Regional Office in Cebu City, who has yet to
take the witness stand before the RTC.

Petitioner insisted that the RTC should continue with the hearing of LRC Case No. N-201 and allow petitioner to
present evidence that the subject property is reclaimed land. Petitioner sufficiently alleged in its application for
registration that it has been in "open, continuous, exclusive, and notorious possession of the [subject property] for more
than thirty (30) years under a bona fide claim of ownership." 20 In support of such allegation, petitioner must necessarily
prove that the subject property was previously a swampy area, which had to be filled or reclaimed before the
construction of the City Engineers Office building thereon.

Respondent based its Opposition (To Applicants Motion for Reconsideration dated September 28, 2000) 21 and
Opposition (To Applicants Supplemental Motion for Reconsideration) 22 on technical and substantive grounds.

According to respondent, the Motion for Reconsideration of petitioner violated Sections 4 (Hearing of motion), 5
(Notice of hearing), and 6 (Proof of service necessary), Rule 15 of the Rules of Court. Petitioner did not set its Motion
for Reconsideration for hearing even when the said Motion could not be considered as non-litigable. The RTC could
not hear the motion for reconsideration ex parte as they are prejudicial to the rights of respondent. Petitioner also failed
to comply with Section 11, Rule 13 of the Rules of Court when it did not attach to the Motion for Reconsideration a
written explanation why it did not resort to personal service of the said Motion. Thus, respondent averred that the
Motion for Reconsideration of petitioner should be treated as a mere scrap of paper with no legal effect. It did not
interrupt the reglementary period to appeal and the RTC Order dated September 7, 2000, dismissing LRC Case No. N-
201, had already attained finality. Respondent also pointed out that the Supplemental Motion for Reconsideration of
petitioner suffered from the same fatal defects as the original Motion for Reconsideration.

Respondent again posited that the subject property was foreshore land belonging to the State and not subject to private
appropriation, unless the same had already been declared by the executive or legislative department of the national
government as no longer needed for coast guard service, public use, or special industries, and classified as alienable
and disposable. Full- blown trial in LRC Case No. N-201 was no longer necessary as the evidence so far presented by
petitioner had already established that the RTC lacked jurisdiction over the subject matter of the case.

In its Order23 dated November 16, 2000, the RTC initially agreed with respondent that the Motion for Reconsideration
of petitioner violated Sections 4, 5, and 6, Rule 15 and Section 11, Rule 13 of the Rules of Court. Resultantly, the
Motion for Reconsideration of petitioner was considered as not filed and did not toll the running of the period to file an
appeal, rendering final and executory the order of dismissal of LRC Case No. N-201.

However, after taking into consideration the Supplemental Motion for Reconsideration of petitioner, the RTC issued
another Order24 dated December 7, 2000, setting aside its Order dated September 7, 2000 in the interest of justice and
resolving to have a full-blown proceeding to determine factual issues in LRC Case No. N-201.

It was then the turn of respondent to file with the RTC a Motion for Reconsideration 25 of the Order dated December 7,
2000. In an Order26 dated February 20, 2001, the RTC denied the motion of respondent and admitted the following:

A thorough review and perusal of the disputed order dated September 7, 2000 and December 7, 2000, whereby this
Court dismissed [petitioners] petition for registration of Lot No. 1, Dumaguete Cadastre, and later set aside the Order
of September 7, 2000, shows that there was honest mistake in declaring said lot 1, as a shoreline. Indeed, the adjoining
lots are already titled and bounded by a City Road. It is not bounded by a sea. The Court wants to correct this error in
its findings on the September 7, 2000 Order, that Lot No. 1 is situated on the shoreline of Dumaguete City. The Court
simply committed an oversight on the petitioners evidence that the lot in question is a foreshore land x x x when in
fact it is not. And it is for this reason that the court reconsidered and set aside said September 7, 2000 Order, to correct
the same while it is true that said September 7, 2000 Order had attained its finality, yet this Court cannot in conscience
allow injustice to perpetuate in this case and that hearing on the merits must proceed to determine the legality and
truthfulness of its application for registration of title.
Respondent sought recourse from the Court of Appeals by filing a Petition for Certiorari and Prohibition under Rule 65
of the Rules of Court, docketed as CA-G.R. SP No. 64379. Respondent challenged the RTC Orders dated December 7,
2000 and February 20, 2001 for having been issued by the RTC in grave abuse of discretion amounting to lack or
excess of jurisdiction. Respondent reiterated that the RTC Order dated September 7, 2000, dismissing LRC Case No.
N-201 had already attained finality. The defects of the Motion for Reconsideration of petitioner rendered the same as a mere
scrap of paper, which did not toll the running of the prescriptive period to appeal the RTC Order dated September 7, 2000.

The Court of Appeals, in its Decision dated March 4, 2005, found merit in the Petition of respondent and set aside the
RTC Orders dated December 7, 2000 and February 20, 2001. The appellate court, in its Resolution dated June 6, 2005,
denied the Motion for Reconsideration of petitioner.

Hence, petitioner comes before us via the instant Petition for Review with the following assignment of error:

GROUND FOR THE APPEAL

Error of law: The March 4, 2005 decision of the Court of Appeals and its June 6, 2005 Resolution, erred on question of
law in setting aside the Orders of the Regional Trial Court, Branch 44, dated December 7, 2000 and February 20, 2001.
The said Orders of the trial court were made in order to determine factual issues and to correct its error in its findings
on the September 7, 2000 Order. Thus, the Court of Appeals decision is contrary to law, justice, equity and existing
jurisprudence.27

Respondent insists on the strict application of Sections 4, 5, and 6, Rule 15 and Section 11, Rule 13 of the Rules of
Court. Violations of the said rules were fatal to the Motion for Reconsideration and Supplemental Motion for
Reconsideration of the petitioner, and as a result, the RTC Order dated September 7, 2000, dismissing LRC Case No.
N-201, had already become final and executory and, thus, beyond the jurisdiction of the RTC to set aside. Respondent urges
us to reject the plea of petitioner for a liberal application of the rules in the absence of a compelling reason to do so.

We grant the Petition.

The grant of a petition for certiorari under Rule 65 of the Rules of Court requires grave abuse of discretion amounting
to lack or excess of jurisdiction. Grave abuse of discretion exists where an act is performed with a capricious or
whimsical exercise of judgment equivalent to lack of jurisdiction. The abuse of discretion must be patent and gross as
to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or
personal hostility.28

The Court of Appeals erred in granting the writ of certiorari in favor of respondent. The RTC did not commit grave
abuse of discretion when, in its Orders dated December 7, 2000 and February 20, 2001, it set aside the order of dismissal of
LRC Case No. N-201 and resolved to have a full-blown proceeding to determine factual issues in said case.

Procedural rules were conceived to aid the attainment of justice. If a stringent application of the rules would hinder rather
than serve the demands of substantial justice, the former must yield to the latter.29 In Basco v. Court of Appeals,30 we allowed
a liberal application of technical rules of procedure, pertaining to the requisites of a proper notice of hearing, upon
consideration of the importance of the subject matter of the controversy, as illustrated in well-settled cases, to wit:

The liberal construction of the rules on notice of hearing is exemplified in Goldloop Properties, Inc. v. CA:

Admittedly, the filing of respondent-spouses' motion for reconsideration did not stop the running of the period of
appeal because of the absence of a notice of hearing required in Secs. 3, 4 and 5, Rule 15, of the Rules of Court. As we
have repeatedly held, a motion that does not contain a notice of hearing is a mere scrap of paper; it presents no question
which merits the attention of the court. Being a mere scrap of paper, the trial court had no alternative but to disregard it.
Such being the case, it was as if no motion for reconsideration was filed and, therefore, the reglementary period within
which respondent-spouses should have filed an appeal expired on 23 November 1989.

But, where a rigid application of that rule will result in a manifest failure or miscarriage of justice, then the rule may be
relaxed, especially if a party successfully shows that the alleged defect in the questioned final and executory judgment
is not apparent on its face or from the recitals contained therein. Technicalities may thus be disregarded in order to
resolve the case. After all, no party can even claim a vested right in technicalities. Litigations should, as much as
possible, be decided on the merits and not on technicalities.

Hence, this Court should not easily allow a party to lose title and ownership over a party worth P4,000,000.00 for a measly
P650,000.00 without affording him ample opportunity to prove his claim that the transaction entered into was not in fact an
absolute sale but one of mortgage. Such grave injustice must not be permitted to prevail on the anvil of technicalities.

Likewise, in Samoso v. CA, the Court ruled:

But time and again, the Court has stressed that the rules of procedure are not to be applied in a very strict and technical
sense. The rules of procedure are used only to help secure not override substantial justice (National Waterworks &
Sewerage System vs. Municipality of Libmanan, 97 SCRA 138 [1980]; Gregorio v. Court of Appeals, 72 SCRA 120
[1976]). The right to appeal should not be lightly disregarded by a stringent application of rules of procedure especially
where the appeal is on its face meritorious and the interests of substantial justice would be served by permitting the
appeal (Siguenza v. Court of Appeals, 137 SCRA 570 [1985]; Pacific Asia Overseas Shipping Corporation v. National
Labor Relations Commission, et al., G.R. No. 76595, May 6, 1998). . . .

In the instant case, it is petitioner's life and liberty that is at stake. The trial court has sentenced him to suffer the
penalty of reclusion perpetua and his conviction attained finality on the basis of mere technicality. It is but just,
therefore, that petitioner be given the opportunity to defend himself and pursue his appeal. To do otherwise would be
tantamount to grave injustice. A relaxation of the procedural rules, considering the particular circumstances herein, is
justified.31 (Emphasis ours.)

In the case at bar, the Motion for Reconsideration and Supplemental Motion for Reconsideration of petitioner, which
sought the reversal of RTC Order dated September 7, 2000 dismissing LRC Case No. N-201, cite meritorious grounds
that justify a liberal application of procedural rules.

The dismissal by the RTC of LRC Case No. N-201 for lack of jurisdiction is patently erroneous.

Basic as a hornbook principle is that jurisdiction over the subject matter of a case is conferred by law and determined
by the allegations in the complaint which comprise a concise statement of the ultimate facts constituting the plaintiff's
cause of action. The nature of an action, as well as which court or body has jurisdiction over it, is determined based on
the allegations contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to
recover upon all or some of the claims asserted therein. The averments in the complaint and the character of the relief
sought are the ones to be consulted. Once vested by the allegations in the complaint, jurisdiction also remains vested
irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. 32

As a necessary consequence, the jurisdiction of the court cannot be made to depend upon the defenses set up in the
answer or upon the motion to dismiss; for otherwise, the question of jurisdiction would almost entirely depend upon
the defendant. What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the
allegations in the complaint. The averments therein and the character of the relief sought are the ones to be consulted. 33

Under Act No. 496, otherwise known as the Land Registration Act, as amended by Act No. 2347, jurisdiction over all
applications for registration of title to land was conferred upon the Courts of First Instance (CFI) of the respective
provinces in which the land sought to be registered was situated. Jurisdiction over land registration cases, as in ordinary
actions, is acquired upon the filing in court of the application for registration, and is retained up to the end of the litigation. 34

The land registration laws were updated and codified by the Property Registration Decree, and under Section 17
thereof, jurisdiction over an application for land registration was still vested on the CFI of the province or city where
the land was situated, viz:

SEC. 17. What and where to file. The application for land registration shall be filed with the Court of First Instance
of the province or city where the land is situated. The applicant shall file together with the application all original
muniments of titles or copies thereof and a survey plan of the land approved by the Bureau of Lands.

The Clerk of Court shall not accept any application unless it is shown that the applicant has furnished the Director of
Lands with a copy of the application and all annexes.

Batas Pambansa Blg. 129, otherwise known as The Judiciary Reorganization Act of 1980, created the RTC 35 in place of
the CFI. Presently, jurisdiction over an application for land registration remains with the RTC where the land is
situated, except when such jurisdiction is delegated by the Supreme Court to the Metropolitan Trial Court, Municipal
Trial Courts, and Municipal Circuit Trial Courts under certain circumstances. 36

It is not disputed that the Application for Original Registration of Title filed by petitioner before the RTC of the City of
Dumaguete conformed to Section 15 of the Property Registration Decree, which prescribes the form and contents of
such applications. In its Application, petitioner prayed that its title to the subject property, which it repeatedly alleged
to have acquired through continuous and adverse possession and occupation of the said property for more than 30 years
or since 1960, be placed under the land registration laws. The allegations and prayer in the Application of petitioner
were sufficient to vest jurisdiction on the RTC over the said Application upon the filing thereof.

Respondent sought the dismissal of LRC Case No. N-201 on the ground of lack of jurisdiction, not because of the
insufficiency of the allegations and prayer therein, but because the evidence presented by petitioner itself during the
trial supposedly showed that the subject property is a foreshore land, which is not alienable and disposable. The RTC
granted the Motion to Dismiss of respondent in its Order dated September 7, 2000. The RTC went beyond the
allegations and prayer for relief in the Application for Original Registration of petitioner, and already scrutinized and
weighed the testimony of Engr. Dorado, the only witness petitioner was able to present.

As to whether or not the subject property is indeed foreshore land is a factual issue which the RTC should resolve in
the exercise of its jurisdiction, after giving both parties the opportunity to present their respective evidence at a full-
blown trial. As we have explained in the Estate of the Late Jesus S. Yujuico v. Republic 37 :

The plain import of Municipality of Antipolo is that a land registration court, the RTC at present, has no jurisdiction over the
subject matter of the application which respondent Republic claims is public land. This ruling needs elucidation.
Firmly entrenched is the principle that jurisdiction over the subject matter is conferred by law. Consequently, the
proper CFI (now the RTC) under Section 14 of PD 1529 (Property Registration Decree) has jurisdiction over
applications for registration of title to land.

Conformably, the Pasig-Rizal CFI, Branch XXII has jurisdiction over the subject matter of the land registration case
filed by Fermina Castro, petitioners predecessor-in-interest, since jurisdiction over the subject matter is determined by
the allegations of the initiatory pleading the application. Settled is the rule that "the authority to decide a case and not
the decision rendered therein is what makes up jurisdiction. When there is jurisdiction, the decision of all questions
arising in the case is but an exercise of jurisdiction.

In our view, it was imprecise to state in Municipality of Antipolo that the "Land Registration Court [has] no jurisdiction
to entertain the application for registration of public property x x x" for such court precisely has the jurisdiction to
entertain land registration applications since that is conferred by PD 1529. The applicant in a land registration case
usually claims the land subject matter of the application as his/her private property, as in the case of the application of
Castro. Thus, the conclusion of the CA that the Pasig-Rizal CFI has no jurisdiction over the subject matter of the
application of Castro has no mooring. The land registration court initially has jurisdiction over the land applied for at
the time of the filing of the application. After trial, the court, in the exercise of its jurisdiction, can determine whether
the title to the land applied for is registerable and can be confirmed. In the event that the subject matter of the
application turns out to be inalienable public land, then it has no jurisdiction to order the registration of the land and
perforce must dismiss the application. 38 (Emphasis ours.)

It is true that petitioner, as the applicant, has the burden of proving that the subject property is alienable and disposable
and its title to the same is capable of registration. However, we stress that the RTC, when it issued its Order dated
September 7, 2000, had so far heard only the testimony of Engr. Dorado, the first witness for the petitioner. Petitioner
was no longer afforded the opportunity to present other witnesses and pieces of evidence in support of its Application.
The RTC Order dated September 7, 2000 already declaring the subject property as inalienable public land, over
which the RTC has no jurisdiction to order registration was evidently premature.

The RTC Order dated September 7, 2000 has not yet become final and executory as petitioner was able to duly file a
Motion for Reconsideration and Supplemental Motion for Reconsideration of the same, which the RTC eventually
granted in its Order dated December 7, 2000. Admittedly, said motions filed by petitioner did not comply with certain
rules of procedure. Ordinarily, such non-compliance would have rendered said motions as mere scraps of paper,
considered as not having been filed at all, and unable to toll the reglementary period for an appeal. However, we find
that the exceptional circumstances extant in the present case warrant the liberal application of the rules.

Also, the Motion for Reconsideration and Supplemental Motion for Reconsideration of the Order dated September 7,
2000 filed by petitioner did not comply with Section 11, Rule 13 of the Rules of Court, for these did not include a
written explanation why service or filing thereof was not done personally. Nonetheless, in Maceda v. Encarnacion de
Guzman Vda. de Magpantay,39 citing Solar Team Entertainment, Inc. v. Ricafort, 40 and Musa v. Amor,41 we explained
the rationale behind said rule and the mandatory nature of the same, vis--vis the exercise of discretion by the court in
case of non-compliance therewith:

In Solar Team Entertainment, Inc. v. Ricafort, this Court, passing upon Section 11 of Rule 13 of the Rules of Court,
held that a court has the discretion to consider a pleading or paper as not filed if said rule is not complied with.

Personal service and filing are preferred for obvious reasons. Plainly, such should expedite action or resolution on a
pleading, motion or other paper; and conversely, minimize, if not eliminate, delays likely to be incurred if service or
filing is done by mail, considering the inefficiency of the postal service. Likewise, personal service will do away with
the practice of some lawyers who, wanting to appear clever, resort to the following less than ethical practices: (1)
serving or filing pleadings by mail to catch opposing counsel off-guard, thus leaving the latter with little or no time to
prepare, for instance, responsive pleadings or an opposition; or (2) upon receiving notice from the post office that the
registered containing the pleading of or other paper from the adverse party may be claimed, unduly procrastinating
before claiming the parcel, or, worse, not claiming it at all, thereby causing undue delay in the disposition of such
pleading or other papers.

If only to underscore the mandatory nature of this innovation to our set of adjective rules requiring personal service
whenever practicable, Section 11 of Rule 13 then gives the court the discretion to consider a pleading or paper as not
filed if the other modes of service or filing were not resorted to and no written explanation was made as to why
personal service was not done in the first place. The exercise of discretion must, necessarily consider the practicability
of personal service, for Section 11 itself begins with the clause "whenever practicable."

We thus take this opportunity to clarify that under Section 11, Rule 13 of the 1997 Rules of Civil Procedure, personal service
and filing is the general rule, and resort to other modes of service and filing, the exception. Henceforth, whenever personal
service or filing is practicable, in the light of the circumstances of time, place and person, personal service or filing is
mandatory. Only when personal service or filing is not practicable may resort to other modes be had, which must then be
accompanied by a written explanation as to why personal service or filing was not practicable to begin with. In adjudging the
plausibility of an explanation, a court shall likewise consider the importance of the subject matter of the case or the issues
involved therein, and the prima facie merit of the pleading sought to be expunged for violation of Section 11.

In Musa v. Amor, this Court, on noting the impracticality of personal service, exercised its discretion and liberally
applied Section 11 of Rule 13:
As [Section 11, Rule 13 of the Rules of Court] requires, service and filing of pleadings must be done personally
whenever practicable. The court notes that in the present case, personal service would not be practicable. Considering
the distance between the Court of Appeals and Donsol, Sorsogon where the petition was posted, clearly, service by
registered mail [sic] would have entailed considerable time, effort and expense. A written explanation why service was
not done personally might have been superfluous. In any case, as the rule is so worded with the use of "may,"
signifying permissiveness, a violation thereof gives the court discretion whether or not to consider the paper as not
filed. While it is true that procedural rules are necessary to secure an orderly and speedy administration of justice, rigid
application of Section 11, Rule 13 may be relaxed in this case in the interest of substantial justice.

In the case at bar, the address of respondents counsel is Lopez, Quezon, while petitioner Sonias counsels is Lucena
City. Lopez, Quezon is 83 kilometers away from Lucena City. Such distance makes personal service impracticable. As
in Musa v. Amor, a written explanation why service was not done personally "might have been
superfluous."42 (Emphases supplied and citations omitted.)

Our ruling in the above-cited cases is relevant to the instant case. Counsel for petitioner holds office in Dumaguete
City, Negros Oriental, in the Visayas; while counsel for respondent holds office in Quezon City, Metro Manila, in
Luzon. Given the considerable distance between the offices of these two counsels, personal service of pleadings and
motions by one upon the other was clearly not practicable and a written explanation as to why personal service was not
done would only be superfluous.43 In addition, we refer once more to the merits of the Motion for Reconsideration and
Supplemental Motion for Reconsideration of the RTC Order dated September 7, 2000 filed by petitioner, which justify
the liberal interpretation of Section 11, Rule 13 of the Rules of Court in this case.1avvphi1

Jurisprudence confirms that the requirements laid down in Sections 4, 5, and 6, Rule 15 of the Rules of Court that the
notice of hearing shall be directed to the parties concerned, and shall state the time and place for the hearing of the
motion, are mandatory. If not religiously complied with, they render the motion pro forma. As such, the motion is a
useless piece of paper that will not toll the running of the prescriptive period. 44

Yet, again, there were previous cases with peculiar circumstances that had compelled us to liberally apply the rules on
notice of hearing and recognize substantial compliance with the same. Once such case is Philippine National Bank v.
Paneda,45 where we adjudged:

Thus, even if the Motion may be defective for failure to address the notice of hearing of said motion to the parties
concerned, the defect was cured by the court's taking cognizance thereof and the fact that the adverse party was
otherwise notified of the existence of said pleading. There is substantial compliance with the foregoing rules if a copy
of the said motion for reconsideration was furnished to the counsel of herein private respondents.

In the present case, records reveal that the notices in the Motion were addressed to the respective counsels of the private
respondents and they were duly furnished with copies of the same as shown by the receipts signed by their staff or agents.

Consequently, the Court finds that the petitioner substantially complied with the pertinent provisions of the Rules of
Court and existing jurisprudence on the requirements of motions and pleadings. 46 (Emphasis supplied.)

It was not refuted that petitioner furnished respondent and respondent actually received copies of the Motion for
Reconsideration, as well as the Supplemental Motion for Reconsideration of the RTC Order dated September 7, 2000
filed by petitioner. As a result, respondent was able to file its Oppositions to the said Motions. The RTC, in issuing its
Order dated December 7, 2000, was able to consider the arguments presented by both sides. Hence, there was
substantial compliance by petitioner with the rules on notice of hearing for its Motion for Reconsideration and
Supplemental Motion for Reconsideration of the RTC Order dated September 7, 2000. Respondent cannot claim that it
was deprived of the opportunity to be heard on its opposition to said Motions.

In view of the foregoing circumstances, the RTC judiciously, rather than abusively or arbitrarily, exercised its
discretion when it subsequently issued the Order dated December 7, 2000, setting aside its Order dated September 7,
2000 and proceeding with the trial in LRC Case No. N-201.

WHEREFORE, the instant Petition for Review of petitioner City of Dumaguete is hereby GRANTED. The Decision
dated March 4, 2005 and Resolution dated June 6, 2005 of the Court Appeals in CA-G.R. SP No. 64379 are SET
ASIDE, and the Orders dated December 7, 2000 and February 20, 2001 of Branch 44 of the Regional Trial Court of the
City of Dumaguete in LRC Case No. N-201 are REINSTATED. The said trial court is DIRECTED to proceed with the
hearing of LRC Case No. N-201 with dispatch.

SO ORDERED.
 G.R. No. 150175 February 5, 2007
ERLINDA PILAPIL and HEIRS OF DONATA ORTIZ BRIONES, namely: ESTELA, ERIBERTO AND VIRGILIO
SANTOS, ANA SANTOS CULTURA, ELVIRA SANTOS INOCENTES, ERNESTO MENDOZA, RIZALINA SANTOS,
ADOLFO MENDOZA and PACITA MENDOZA, Petitioners, vs.
HEIRS OF MAXIMINO R. BRIONES, namely: SILVERIO S. BRIONES, PETRA BRIONES, BONIFACIO CABAHUG,
JR., ANITA TRASMONTE, CIRILITA FORTUNA, CRESENCIA BRIONES, FUGURACION MEDALLE and
MERCEDES LAGBAS, Respondents.

On 10 March 2006, this Court promulgated its Decision 1 in the above-entitled case, ruling in favor of the petitioners.
The dispositive portion2 reads as follows:

IN VIEW OF THE FOREGOING, the assailed Decision of the Court of Appeals in CA-GR CV No. 55194, dated 31
August 2001, affirming the Decision of the Cebu City RTC in Civil Case No. CEB-5794, dated 28 September 1986, is
hereby REVERSED and SET ASIDE; and the Complaint for partition, annulment, and recovery of possession filed by
the heirs of Maximino in Civil Case No. CEB-5794 is hereby DISMISSED.

On 10 May 2006, a Motion for Reconsideration 3 of the foregoing Decision was filed by Atty. Celso C. Reales of the
Reales Law Office on behalf of the respondents, heirs of Maximino R. Briones. On 19 May 2006, petitioners Erlinda
Pilapil and the other co-heirs of Donata Ortiz Vda. de Briones, through counsel, filed an Opposition to Respondents
Motion for Reconsideration,4 to which the respondents filed a Rejoinder 5 on 23 May 2006. Thereafter, Atty. Amador F.
Brioso, Jr. of the Canto Brioso Arnedo Law Office entered his appearance as collaborating counsel for the
respondents.6 Atty. Brioso then filed on 11 June 2006 and 16 June 2006, respectively, a Reply 7 and Supplemental
Reply8 to the petitioners Opposition to respondents Motion for Reconsideration. Finally, petitioners filed a
Rejoinder9 to the respondents Reply and Supplemental Reply on 5 July 2006.

The facts of the case, as recounted in the Decision, 10 are as follows

Petitioners are the heirs of the late Donata Ortiz-Briones (Donata), consisting of her surviving sister, Rizalina Ortiz-
Aguila (Rizalina); Rizalinas daughter, Erlinda Pilapil (Erlinda); and the other nephews and nieces of Donata, in
representation of her two other sisters who had also passed away. Respondents, on the other hand, are the heirs of the
late Maximino Briones (Maximino), composed of his nephews and nieces, and grandnephews and grandnieces, in
representation of the deceased siblings of Maximino.

Maximino was married to Donata but their union did not produce any children. When Maximino died on 1 May 1952,
Donata instituted intestate proceedings to settle her husbands estate with the Cebu City Court of First Instance (CFI),
14th Judicial District, designated as Special Proceedings No. 928-R. On 8 July 1952, the CFI issued Letters of
Administration appointing Donata as the administratrix of Maximinos estate. She submitted an Inventory of
Maximinos properties, which included, among other things, the following parcels of land x x x.

The CFI would subsequently issue an Order, dated 2 October 1952, awarding ownership of the aforementioned real
properties to Donata. On 27 June 1960, Donata had the said CFI Order recorded in the Primary Entry Book of the
Register of Deeds, and by virtue thereof, received new TCTs, covering the said properties, now in her name.

Donata died on 1 November 1977. Erlinda, one of Donatas nieces, instituted with the RTC a petition for the
administration of the intestate estate of Donata. Erlinda and her husband, Gregorio, were appointed by the RTC as
administrators of Donatas intestate estate. Controversy arose among Donatas heirs when Erlinda claimed exclusive
ownership of three parcels of land, covered by TCTs No. 21542, 21545, and 58684, based on two Deeds of Donation,
both dated 15 September 1977, allegedly executed in her favor by her aunt Donata. The other heirs of Donata opposed
Erlindas claim. This Court, however, was no longer informed of the subsequent development in the intestate
proceedings of the estate of Donata; and as far as this Petition is concerned, all the heirs of Donata, including Erlinda,
appear to be on the same side.

On 21 January 1985, Silverio Briones (Silverio), a nephew of Maximino, filed a Petition with the RTC for Letters of
Administration for the intestate estate of Maximino, which was initially granted by the RTC. The RTC also issued an
Order, dated 5 December 1985, allowing Silverio to collect rentals from Maximinos properties. But then, Gregorio
filed with the RTC a Motion to Set Aside the Order, dated 5 December 1985, claiming that the said properties were
already under his and his wifes administration as part of the intestate estate of Donata. Silverios Letters of
Administration for the intestate estate of Maximino was subsequently set aside by the RTC.

On 3 March 1987, the heirs of Maximino filed a Complaint with the RTC against the heirs of Donata for the partition,
annulment, and recovery of possession of real property, docketed as Civil Case No. CEB-5794. They later filed an
Amended Complaint, on 11 December 1992. They alleged that Donata, as administratrix of the estate of Maximino,
through fraud and misrepresentation, in breach of trust, and without the knowledge of the other heirs, succeeded in
registering in her name the real properties belonging to the intestate estate of Maximino.

After trial in due course, the RTC rendered its Decision, dated 8 April 1986, in favor of the heirs of Maximino x x x.

x x x[T]he RTC declared that the heirs of Maximino were entitled to of the real properties covered by TCTs No.
21542, 21543, 21544, 21545, 21546, and 58684. It also ordered Erlinda to reconvey to the heirs of Maximino the said
properties and to render an accounting of the fruits thereof.
The heirs of Donata appealed the RTC Decision, dated 8 April 1986, to the Court of Appeals. The Court of Appeals, in
its Decision, promulgated on 31 August 2001, affirmed the RTC Decision, x x x.

Unsatisfied with the afore-quoted Decision of the Court of Appeals, the heirs of Donata filed the present Petition, x x x.

In its Decision, dated 10 March 2006, this Court found the Petition meritorious and, reversing the Decisions of the Court of
Appeals and the Regional Trial Court (RTC), dismissed the Complaint for partition, annulment, and recovery of possession
of real property filed by the heirs of Maximino in Civil Case No. CEB-5794. This Court summed up its findings, 11 thus

In summary, the heirs of Maximino failed to prove by clear and convincing evidence that Donata managed, through
fraud, to have the real properties, belonging to the intestate estate of Maximino, registered in her name. In the absence
of fraud, no implied trust was established between Donata and the heirs of Maximino under Article 1456 of the New
Civil Code. Donata was able to register the real properties in her name, not through fraud or mistake, but pursuant to an
Order, dated 2 October 1952, issued by the CFI in Special Proceedings No. 928-R. The CFI Order, presumed to be
fairly and regularly issued, declared Donata as the sole, absolute, and exclusive heir of Maximino; hence, making
Donata the singular owner of the entire estate of Maximino, including the real properties, and not merely a co-owner
with the other heirs of her deceased husband. There being no basis for the Complaint of the heirs of Maximino in Civil
Case No. CEB-5794, the same should have been dismissed.

Respondents move for the reconsideration of the Decision of this Court raising still the arguments that Donata
committed fraud in securing the Court of First Instance Order, dated 2 October 1952, which declared her as the sole
heir of her deceased husband Maximino and authorized her to have Maximinos properties registered exclusively in her
name; that respondents right to succession to the disputed properties was transmitted or vested from the moment of
Maximinos death and which they could no longer be deprived of; that Donata merely possessed and held the
properties in trust for her co-heirs/owners; and that, by virtue of this Courts ruling in Quion v. Claridad 12and Sevilla, et
al. v. De Los Angeles,13 respondents action to recover title to and possession of their shares in Maximinos estate, held
in trust for their benefit by Donata, and eventually, by petitioners as the latters successors-in-interest, is
imprescriptible. Respondents also advance a fresh contention that the CFI Order, dated 2 October 1952, being based on
the fraudulent misrepresentation of Donata that she was Maximinos sole heir, was a void order, which produced no
legal effect. Lastly, respondents asseverate that, by relying on certain procedural presumptions in its Decision, dated 10
March 2006, this Court has sacrificed their substantive right to succession, thus, making justice "subservient to the
dictates of mere procedural fiats."14

While this Court is persuaded to reexamine and clarify some points in its previous Decision in this case, it does not find
any new evidence or argument that would adequately justify a change in its previous position.

On the finding of fraud

As this Court declared in its Decision, the existence of any trust relations between petitioners and respondents shall be
examined in the light of Article 1456 of the New Civil Code, which provides that, "[i]f property is acquired through
mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of
the person from whom the property comes." Hence, the foremost question to be answered is still whether an implied
trust under Article 1456 of the New Civil Code had been sufficiently established in the present case.

In the Decision, this Court ruled in the negative, since there was insufficient evidence to establish that Donata
committed fraud. It should be remembered that Donata was able to secure certificates of title to the disputed properties
by virtue of the CFI Order in Special Proceedings No. 928-R (the proceedings she instituted to settle Maximinos
intestate estate), which declared her as Maximinos sole heir. In the absence of proof to the contrary, the Court
accorded to Special Proceedings No. 928-R the presumptions of regularity and validity. Reproduced below are the
relevant portions15 of the Decision

At the onset, it should be emphasized that Donata was able to secure the TCTs covering the real properties belonging to
the estate of Maximino by virtue of a CFI Order, dated 2 October 1952. It is undisputed that the said CFI Order was
issued by the CFI in Special Proceedings No. 928-R, instituted by Donata herself, to settle the intestate estate of
Maximino. The petitioners, heirs of Donata, were unable to present a copy of the CFI Order, but this is not surprising
considering that it was issued 35 years prior to the filing by the heirs of Maximino of their Complaint in Civil Case No.
CEB-5794 on 3 March 1987. The existence of such CFI Order, nonetheless, cannot be denied. It was recorded in the
Primary Entry Book of the Register of Deeds on 27 June 1960, at 1:10 p.m., as Entry No. 1714. It was annotated on the
TCTs covering the real properties as having declared Donata the sole, absolute, and exclusive heir of Maximino. The
non-presentation of the actual CFI Order was not fatal to the cause of the heirs of Donata considering that its
authenticity and contents were never questioned. The allegation of fraud by the heirs of Maximino did not pertain to
the CFI Order, but to the manner or procedure by which it was issued in favor of Donata. Moreover, the non-
presentation of the CFI Order, contrary to the declaration by the RTC, does not amount to a willful suppression of
evidence that would give rise to the presumption that it would be adverse to the heirs of Donata if produced. x x x.

The CFI Order, dated 2 October 1952, issued in Special Proceedings No. 928-R, effectively settled the intestate estate
of Maximino by declaring Donata as the sole, absolute, and exclusive heir of her deceased husband. The issuance by
the CFI of the said Order, as well as its conduct of the entire Special Proceedings No. 928-R, enjoy the presumption of
validity pursuant to the Section 3(m) and (n) of Rule 131 of the Revised Rules of Court, reproduced below
SEC. 3. Disputable presumptions. The following presumptions are satisfactory if uncontradicted, but may be
contradicted and overcome by other evidence:
(m) That official duty has been regularly performed;
(n) That a court, or judge acting as such, whether in the Philippines or elsewhere, was acting in the lawful exercise of
jurisdiction.
By reason of the foregoing provisions, this Court must presume, in the absence of any clear and convincing proof to the
contrary, that the CFI in Special Proceedings No. 928-R had jurisdiction of the subject matter and the parties, and to
have rendered a judgment valid in every respect; and it could not give credence to the following statements made by
the Court of Appeals in its Decision.

There was totally no evidentiary basis for the foregoing pronouncements. First of all, the Petition filed by Donata for
Letters of Administration in Special Proceedings No. 928-R before the CFI was not even referred to nor presented
during the course of the trial of Civil Case No. CEB-5794 before the RTC. How then could the Court of Appeals make
a finding that Donata willfully excluded from the said Petition the names, ages, and residences of the other heirs of
Maximino? Second, there was also no evidence showing that the CFI actually failed to send notices of Special
Proceedings No. 928-R to the heirs of Maximino or that it did not require presentation of proof of service of such
notices. It should be remembered that there stands a presumption that the CFI Judge had regularly performed his duties
in Special Proceedings No. 928-R, which included sending out of notices and requiring the presentation of proof of
service of such notices; and, the heirs of Maximino did not propound sufficient evidence to debunk such presumption.
They only made a general denial of knowledge of Special Proceedings No. 928-R, at least until 1985. There was no
testimony or document presented in which the heirs of Maximino categorically denied receipt of notice from the CFI of
the pendency of Special Proceedings No. 928-R. The only evidence on record in reference to the absence of notice of
such proceedings was the testimony of Aurelia Briones (Aurelia), one of the heirs of Maximino, x x x.

Aurelias testimony deserves scant credit considering that she was not testifying on matters within her personal
knowledge. The phrase "I dont think" is a clear indication that she is merely voicing out her opinion on how she
believed her uncles and aunts would have acted had they received notice of Special Proceedings No. 928-R.

It is worth noting that, in its foregoing ratiocination, the Court was proceeding from an evaluation of the evidence on
record, which did not include an actual copy of the CFI Order in Special Proceedings No. 928-R. Respondents only
submitted a certified true copy thereof on 15 June 2006, annexed to their Supplemental Reply to petitioners opposition
to their motion for reconsideration of this Courts Decision. Respondents did not offer any explanation as to why they
belatedly produced a copy of the said Order, but merely claimed to have been "fortunate enough to obtain a copy"
thereof from the Register of Deeds of Cebu. 16

Respondents should be taken to task for springing new evidence so late into the proceedings of this case. Parties should
present all their available evidence at the courts below so as to give the opposing party the opportunity to scrutinize and
challenge such evidence during the course of the trial. However, given that the existence of the CFI Order in Special
Proceedings No. 928-R was never in issue and was, in fact, admitted by the petitioners; that the copy submitted is a
certified true copy of the said Order; and that the said Order may provide new information vital to a just resolution of
the present case, this Court is compelled to consider the same as part of the evidence on record.

The CFI Order17 in question reads in full as

ORDER

This is with reference to the Motion of the Administratrix, dated January 5, 1960, that she be declared the sole heir of
her deceased husband, Maximino Suico Briones, the latter having died without any legitimate ascendant nor
descendant, nor any legitimate brother or sister, nephews or nieces.

At the hearing of this incident today, nobody appeared to resist the motion, and based on the uncontradicted testimony
of Donata G. Ortiz that she was the nearest surviving relative of the deceased Maximino Suico Briones at the time of
the latters death, and pursuant to the pertinent provisions of the new Civil Code of the Philippines, the Court hereby
declares the aforesaid Donata G. Ortiz the sole, absolute and exclusive heir of the estate of the deceased Maximino
Suico Briones, and she is hereby entitled to inherit all the residue of this estate after paying all the obligations thereof,
which properties are those contained in the Inventory, dated October 2, 1952.1awphi1.net

Cebu City, January 15, 1960.

From the contents of the afore-quoted Order, this Court is able to deduce that the CFI Order was in fact issued on 15
January 1960 and not 2 October 1952, as earlier stated in the Decision. It was the inventory of properties, submitted by
Donata as administratrix of Maximinos intestate estate, which was dated 2 October 1952. 18 Other than such
observation, this Court finds nothing in the CFI Order which could change its original position in the Decision under
consideration.

While it is true that since the CFI was not informed that Maximino still had surviving siblings and so the court was not
able to order that these siblings be given personal notices of the intestate proceedings, it should be borne in mind that
the settlement of estate, whether testate or intestate, is a proceeding in rem,19 and that the publication in the newspapers
of the filing of the application and of the date set for the hearing of the same, in the manner prescribed by law, is a
notice to the whole world of the existence of the proceedings and of the hearing on the date and time indicated in the
publication. The publication requirement of the notice in newspapers is precisely for the purpose of informing all interested
parties in the estate of the deceased of the existence of the settlement proceedings, most especially those who were not
named as heirs or creditors in the petition, regardless of whether such omission was voluntarily or involuntarily made.

This Court cannot stress enough that the CFI Order was the result of the intestate proceedings instituted by Donata
before the trial court. As this Court pointed out in its earlier Decision, the manner by which the CFI judge conducted
the proceedings enjoys the presumption of regularity, and encompassed in such presumption is the order of publication
of the notice of the intestate proceedings. A review of the records fails to show any allegation or concrete proof that the
CFI also failed to order the publication in newspapers of the notice of the intestate proceedings and to require proof
from Donata of compliance therewith. Neither can this Court find any reason or explanation as to why Maximinos
siblings could have missed the published notice of the intestate proceedings of their brother.

In relying on the presumptions of the regular performance of official duty and lawful exercise of jurisdiction by the
CFI in rendering the questioned Order, dated 15 January 1960, this Court is not, as counsel for respondents allege,
sacrificing the substantive right of respondents to their share in the inheritance in favor of mere procedural fiats. There is a
rationale for the establishment of rules of procedure, as amply explained by this Court in De Dios v. Court of Appeals20

Procedural rules are designed to insure the orderly and expeditious administration of justice by providing for a practical
system by which the parties to a litigation may be accorded a full and fair opportunity to present their respective
positions and refute each other's submissions under the prescribed requirements, conditions and limitations. Adjective
law is not the counterfoil of substantive law. In fact, there is a symbiotic relationship between them. By complying faithfully
with the Rules of Court, the bench and the bar are better able to discuss, analyze and understand substantive rights and duties
and consequently to more effectively protect and enforce them. The other alternative is judicial anarchy.

Thus, compliance with the procedural rules is the general rule, and abandonment thereof should only be done in the
most exceptional circumstances. The presumptions relied upon by this Court in the instant case are disputable
presumptions, which are satisfactory, unless contradicted or overcome by evidence. This Court finds that the evidence
presented by respondents failed to overcome the given presumptions.

Although Donata may have alleged before the CFI that she was her husbands sole heir, it was not established that she
did so knowingly, maliciously and in bad faith, so as for this Court to conclude that she indeed committed fraud. This
Court again brings to the fore the delay by which respondents filed the present case, when the principal actors
involved, particularly, Donata and Maximinos siblings, have already passed away and their lips forever sealed as to
what truly transpired between them. On the other hand, Special Proceedings No. 928-R took place when all these
principal actors were still alive and each would have been capable to act to protect his or her own right to Maximinos
estate. Letters of Administration of Maximinos estate were issued in favor of Donata as early as 8 July 1952, and the
CFI Order in question was issued only on 15 January 1960. The intestate proceedings for the settlement of Maximinos
estate were thus pending for almost eight years, and it is the burden of the respondents to establish that their parents or
grandparents, Maximinos surviving siblings, had absolutely no knowledge of the said proceedings all these years. As
established in Ramos v. Ramos,21 the degree of proof to establish fraud in a case where the principal actors to the
transaction have already passed away is proof beyond reasonable doubt, to wit

"x x x But length of time necessarily obscures all human evidence; and as it thus removes from the parties all the
immediate means to verify the nature of the original transactions, it operates by way of presumption, in favor of
innocence, and against imputation of fraud. It would be unreasonable, after a great length of time, to require exact
proof of all the minute circumstances of any transaction, or to expect a satisfactory explanation of every difficulty, real
or apparent, with which it may be encumbered. The most that can fairly be expected, in such cases, if the parties are
living, from the frailty of memory, and human infirmity, is, that the material facts can be given with certainty to a
common intent; and, if the parties are dead, and the cases rest in confidence, and in parol agreements, the most that we
can hope is to arrive at probable conjectures, and to substitute general presumptions of law, for exact
knowledge. Fraud, or breach of trust, ought not lightly to be imputed to the living; for, the legal presumption is the
other way; as to the dead, who are not here to answer for themselves, it would be the height of injustice and cruelty,
to disturb their ashes, and violate the sanctity of the grave, unless the evidence of fraud be clear, beyond a
reasonable doubt (Prevost vs. Gratz, 6 Wheat. [U.S.], 481, 498).

Moreover, even if Donatas allegation that she was Maximinos sole heir does constitute fraud, it is insufficient to
justify abandonment of the CFI Order, dated 15 January 1960, 22 considering the nature of intestate proceedings as
being in rem and the disputable presumptions of the regular performance of official duty and lawful exercise of
jurisdiction by the CFI in rendering the questioned Order, dated 15 January 1960, in Special Proceedings No. 928-R.

On prescription of the right to recover based on implied trust

Assuming, for the sake of argument, that Donatas misrepresentation constitutes fraud that would impose upon her the
implied trust provided in Article 1456 of the Civil Code, this Court still cannot sustain respondents contention that
their right to recover their shares in Maximinos estate is imprescriptible. It is already settled in jurisprudence that an
implied trust, as opposed to an express trust, is subject to prescription and laches.

The case of Ramos v. Ramos23 already provides an elucidating discourse on the matter, to wit
"Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties. Implied trusts
come into being by operation of law" (Art. 1441, Civil Code). "No express trusts concerning an immovable or any interest
therein may be proven by oral evidence. An implied trust may be proven by oral evidence" (Ibid; Arts. 1443 and 1457).

"No particular words are required for the creation of an express trust, it being sufficient that a trust is clearly intended"
(Ibid; Art. 1444; Tuason de Perez vs. Caluag, 96 Phil. 981; Julio vs. Dalandan, L-19012, October 30, 1967, 21 SCRA
543, 546). "Express trusts are those which are created by the direct and positive acts of the parties, by some writing or
deed, or will, or by words either expressly or impliedly evincing an intention to create a trust" (89 C.J. S. 122).

"Implied trusts are those which, without being expressed, are deducible from the nature of the transaction as matters of
intent, or which are superinduced on the transaction by operation of law as matters of equity, independently of the particular
intention of the parties" (89 C.J.S. 724). They are ordinarily subdivided into resulting and constructive trusts (89 C.J.S. 722).

"A resulting trust is broadly defined as a trust which is raised or created by the act or construction of law, but in its
more restricted sense it is a trust raised by implication of law and presumed always to have been contemplated by the
parties, the intention as to which is to be found in the nature of their transaction, but not expressed in the deed or
instrument of conveyance" (89 C.J.S. 725). Examples of resulting trusts are found in Article 1448 to 1455 of the Civil
Code. See Padilla vs. Court of Appeals, L-31569, September 28, 1973, 53 SCRA 168, 179).

On the other hand, a constructive trust is a trust "raised by construction of law, or arising by operation of law." In a
more restricted sense and as contradistinguished from a resulting trust, a constructive trust is "a trust not created by any
words, either expressly or impliedly evincing a direct intention to create a trust, but by the construction of equity in
order to satisfy the demands of justice. It does not arise by agreement or intention but by operation of law." (89 C.J.S.
726-727). "If a person obtains legal title to property by fraud or concealment, courts of equity will impress upon the
title a so-called constructive trust in favor of the defrauded party." A constructive trust is not a trust in the technical
sense (Gayondato vs. Treasurer of the P.I., 49 Phil. 244; See Art. 1456, Civil Code).

There is a rule that a trustee cannot acquire by prescription the ownership of property entrusted to him (Palma vs.
Cristobal, 77 Phil. 712), or that an action to compel a trustee to convey property registered in his name in trust for the
benefit of the cestui qui trust does not prescribe (Manalang vs. Canlas, 94 Phil. 776; Cristobal vs. Gomez, 50 Phil. 810),
or that the defense of prescription cannot be set up in an action to recover property held by a person in trust for the benefit of
another (Sevilla vs. De los Angeles, 97 Phil. 875), or that property held in trust can be recovered by the beneficiary
regardless of the lapse of time (Marabilles vs. Quito, 100 Phil. 64; Bancairen vs. Diones, 98 Phil. 122, 126; Juan vs. Zuiga,
62 O.G. 1351; 4 SCRA 1221; Jacinto vs. Jacinto, L-17957, May 31, 1962. See Tamayo vs. Callejo, 147 Phil. 31, 37).

That rule applies squarely to express trusts. The basis of the rule is that the possession of a trustee is not adverse. Not
being adverse, he does not acquire by prescription the property held in trust. Thus, Section 38 of Act 190 provides that
the law of prescription does not apply "in the case of a continuing and subsisting trust" (Diaz vs. Gorricho and Aguado,
103 Phil. 261, 266; Laguna vs. Levantino, 71 Phil. 566; Sumira vs. Vistan, 74 Phil. 138; Golfeo vs. Court of Appeals,
63 O.G. 4895, 12 SCRA 199; Caladiao vs. Santos, 63 O.G. 1956, 10 SCRA 691).

The rule of imprescriptibility of the action to recover property held in trust may possibly apply to resulting trusts as
long as the trustee has not repudiated the trust (Heirs of Candelaria vs. Romero, 109 Phil. 500, 502-3; Martinez vs.
Grao, 42 Phil. 35; Buencamino vs. Matias, 63 O. G. 11033, 16 SCRA 849).

The rule of imprescriptibility was misapplied to constructive trusts (Geronimo and Isidoro vs. Nava and Aquino, 105
Phil. 145, 153. Compare with Cuison vs. Fernandez and Bengzon, 105 Phil. 135, 139; De Pasion vs. De Pasion, 112
Phil. 403, 407).

Acquisitive prescription may bar the action of the beneficiary against the trustee in an express trust for the recovery of
the property held in trust where (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of
the cestui qui trust; (b) such positive acts of repudiation have been made known to the cestui qui trust and (c) the
evidence thereon is clear and conclusive (Laguna vs. Levantino, supra; Salinas vs. Tuason, 55 Phil. 729. Compare with
the rule regarding co-owners found in the last paragraph of Article 494, Civil Code; Casaas vs. Rosello, 50 Phil. 97;
Gerona vs. De Guzman, L-19060, May 29, 1964, 11 SCRA 153, 157).

With respect to constructive trusts, the rule is different. The prescriptibility of an action for reconveyance based on
constructive trust is now settled (Alzona vs. Capunitan, L-10228, February 28, 1962, 4 SCRA 450; Gerona vs. De
Guzman, supra; Claridad vs. Henares, 97 Phil. 973; Gonzales vs. Jimenez, L-19073, January 30, 1965, 13 SCRA 80;
Boaga vs. Soler, 112 Phil. 651; J. M. Tuason & Co., vs. Magdangal, L-15539, January 30, 1962, 4 SCRA
84). Prescription may supervene in an implied trust (Bueno vs. Reyes, L-22587, April 28, 1969, 27 SCRA 1179; Fabian
vs. Fabian, L-20449, January 29, 1968; Jacinto vs. Jacinto, L-17957, May 31, 1962, 5 SCRA 371).

And whether the trust is resulting or constructive, its enforcement may be barred by laches (90 C.J.S. 887-889; 54 Am Jur.
449-450; Diaz vs. Gorricho and Aguado, supra; Compare with Mejia vs. Gampona, 100 Phil. 277). [Emphases supplied.]

A present reading of the Quion24 and Sevilla25 cases, invoked by respondents, must be made in conjunction with and
guided accordingly by the principles established in the afore-quoted case. Thus, while respondents right to inheritance
was transferred or vested upon them at the time of Maximinos death, their enforcement of said right by appropriate
legal action may be barred by the prescription of the action.
Prescription of the action for reconveyance of the disputed properties based on implied trust is governed by Article
1144 of the New Civil Code, which reads

ART. 1144. The following actions must be brought within ten years from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
Since an implied trust is an obligation created by law (specifically, in this case, by Article 1456 of the New Civil
Code), then respondents had 10 years within which to bring an action for reconveyance of their shares in Maximinos
properties. The next question now is when should the ten-year prescriptive period be reckoned from. The general rule
is that an action for reconveyance of real property based on implied trust prescribes ten years from registration and/or
issuance of the title to the property,26 not only because registration under the Torrens system is a constructive notice of
title,27 but also because by registering the disputed properties exclusively in her name, Donata had already
unequivocally repudiated any other claim to the same.

By virtue of the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R, Donata was able to register and
secure certificates of title over the disputed properties in her name on 27 June 1960. The respondents filed with the
RTC their Complaint for partition, annulment, and recovery of possession of the disputed real properties, docketed as Civil
Case No. CEB-5794, only on 3 March 1987, almost 27 years after the registration of the said properties in the name of
Donata. Therefore, respondents action for recovery of possession of the disputed properties had clearly prescribed.

Moreover, even though respondents Complaint before the RTC in Civil Case No. CEB-5794 also prays for partition of
the disputed properties, it does not make their action to enforce their right to the said properties imprescriptible. While
as a general rule, the action for partition among co-owners does not prescribe so long as the co-ownership is expressly
or impliedly recognized, as provided for in Article 494, of the New Civil Code, it bears to emphasize that Donata had
never recognized respondents as co-owners or co-heirs, either expressly or impliedly. 28 Her assertion before the CFI in
Special Proceedings No. 928-R that she was Maximinos sole heir necessarily excludes recognition of some other co-
owner or co-heir to the inherited properties; Consequently, the rule on non-prescription of action for partition of
property owned in common does not apply to the case at bar.

On laches as bar to recovery

Other than prescription of action, respondents right to recover possession of the disputed properties, based on implied trust,
is also barred by laches. The defense of laches, which is a question of inequity in permitting a claim to be enforced, applies
independently of prescription, which is a question of time. Prescription is statutory; laches is equitable. 29

Laches is defined as the failure to assert a right for an unreasonable and unexplained length of time, warranting a
presumption that the party entitled to assert it has either abandoned or declined to assert it. This equitable defense is
based upon grounds of public policy, which requires the discouragement of stale claims for the peace of society. 30

This Court has already thoroughly discussed in its Decision the basis for barring respondents action for recovery of the
disputed properties because of laches. This Court pointed out therein 31 that

In further support of their contention of fraud by Donata, the heirs of Maximino even emphasized that Donata lived
along the same street as some of the siblings of Maximino and, yet, she failed to inform them of the CFI Order, dated
[15 January 1960], in Special Proceedings No. 928-R, and the issuance in her name of new TCTs covering the real
properties which belonged to the estate of Maximino. This Court, however, appreciates such information differently. It
actually works against the heirs of Maximino. Since they only lived nearby, Maximinos siblings had ample
opportunity to inquire or discuss with Donata the status of the estate of their deceased brother. Some of the real
properties, which belonged to the estate of Maximino, were also located within the same area as their residences in
Cebu City, and Maximinos siblings could have regularly observed the actions and behavior of Donata with regard to
the said real properties. It is uncontested that from the time of Maximinos death on 1 May 1952, Donata had
possession of the real properties. She managed the real properties and even collected rental fees on some of them until
her own death on 1 November 1977. After Donatas death, Erlinda took possession of the real properties, and continued
to manage the same and collect the rental fees thereon. Donata and, subsequently, Erlinda, were so obviously
exercising rights of ownership over the real properties, in exclusion of all others, which must have already put the heirs
of Maximino on guard if they truly believed that they still had rights thereto.

The heirs of Maximino knew he died on 1 May 1952. They even attended his wake. They did not offer any explanation
as to why they had waited 33 years from Maximinos death before one of them, Silverio, filed a Petition for Letters of
Administration for the intestate estate of Maximino on 21 January 1985. After learning that the intestate estate of
Maximino was already settled in Special Proceedings No. 928-R, they waited another two years, before instituting, on
3 March 1987, Civil Case No. CEB-5794, the Complaint for partition, annulment and recovery of the real property
belonging to the estate of Maximino. x x x

Considering the circumstances in the afore-quoted paragraphs, as well as respondents conduct before this Court,
particularly the belated submission of evidence and argument of new issues, respondents are consistently displaying a
penchant for delayed action, without any proffered reason or justification for such delay.
It is well established that the law serves those who are vigilant and diligent and not those who sleep when the law
requires them to act. The law does not encourage laches, indifference, negligence or ignorance. On the contrary, for a
party to deserve the considerations of the courts, he must show that he is not guilty of any of the aforesaid failings. 32

On void judgment or order

Respondents presented only in their Reply and Supplemental Reply to the petitioners Opposition to their Motion for
Reconsideration the argument that the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R is void
and, thus, it cannot have any legal effect. Consequently, the registration of the disputed properties in the name of
Donata pursuant to such Order was likewise void.

This Court is unconvinced.

In the jurisprudence referred to by the respondents, 33 an order or judgment is considered void when rendered by the
court without or in excess of its jurisdiction or in violation of a mandatory duty, circumstances which are not present in
the case at bar.

Distinction must be made between a void judgment and a voidable one, thus

"* * * A voidable judgment is one which, though not a mere nullity, is liable to be made void when a person who has a
right to proceed in the matter takes the proper steps to have its invalidity declared. It always contains some defect
which may become fatal. It carries within it the means of its own overthrow. But unless and until it is duly annulled, it
is attended with all the ordinary consequences of a legal judgment. The party against whom it is given may escape its
effect as a bar or an obligation, but only by a proper application to have it vacated or reversed. Until that is done, it will
be efficacious as a claim, an estoppel, or a source of title. If no proceedings are ever taken against it, it will continue
throughout its life to all intents a valid sentence. If emanating from a court of general jurisdiction, it will be sustained
by the ordinary presumptions of regularity, and it is not open to impeachment in any collateral action. * * *"

But it is otherwise when the judgment is void. "A void judgment is in legal effect no judgment. By it no rights are
divested. From it no rights can be obtained. Being worthless in itself, all proceedings founded upon it are equally
worthless. It neither binds nor bars any one. All acts performed under it and all claims flowing out of it are void. The
parties attempting to enforce it may be responsible as trespassers. The purchaser at a sale by virtue of its authority finds
himself without title and without redress." (Freeman on Judgments, sec. 117, citing Campbell vs. McCahan, 41 Ill., 45;
Roberts vs. Stowers, 7 Bush, 295, Huls vs. Buntin, 47 Ill., 396; Sherrell vs. Goodrum, 3 Humph., 418; Andrews vs.
State, 2 Sneed, 549; Hollingsworth vs. Bagley, 35 Tex., 345; Morton vs. Root, 2 Dill., 312; Commercial Bank of
Manchester vs. Martin, 9 Smedes & M., 613; Hargis vs. Morse, 7 Kan., 259. See also Cornell vs. Barnes, 7 Hill, 35;
Dawson and Another vs. Wells, 3 Ind., 399; Meyer vs. Mintonye, 106 Ill., 414; Olson vs. Nunnally, 47 Kan., 391;
White vs. Foote L. & M. Co., 29 W. Va., 385.)

It is not always easy to draw the line of demarcation between a void judgment and a voidable one, but all authorities
agree that jurisdiction over the subject-matter is essential to the validity of a judgment and that want of such
jurisdiction renders it void and a mere nullity. In the eye of the law it is non-existent. (Fisher vs. Harnden, 1 Paine, 55;
Towns vs. Springer, 9 Ga., 130; Mobley vs. Mobley, 9 Ga., 247; Beverly and McBride vs. Burke, 9 Ga., 440; Central
Bank of Georgia vs. Gibson, 11 Ga., 453; Johnson vs. Johnson, 30 Ill., 215; St. Louis and Sandoval Coal and Mining
Co. vs. Sandoval Coal and Mining Co., 111 Ill., 32; Swiggart vs. Harber, 4 Scam., 364; Miller vs. Snyder, 6 Ind., 1;
Seely vs. Reid, 3 Greene [Iowa], 374.)34

The fraud and misrepresentation fostered by Donata on the CFI in Special Proceedings No. 928-R did not deprive the
trial court of jurisdiction over the subject-matter of the case, namely, the intestate estate of Maximino. Donatas fraud
and misrepresentation may have rendered the CFI Order, dated 15 January 1960, voidable, but not void on its face.
Hence, the said Order, which already became final and executory, can only be set aside by direct action to annul and
enjoin its enforcement.35 It cannot be the subject of a collateral attack as is being done in this case. Note that
respondents Complaint before the RTC in Civil Case No. CEB-5794 was one for partition, annulment, and recovery of
possession of the disputed properties. The annulment sought in the Complaint was not that of the CFI Order, dated 15
January 1960, but of the certificates of title over the properties issued in Donatas name. So until and unless
respondents bring a direct action to nullify the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R,
and attain a favorable judgment therein, the assailed Order remains valid and binding.

Nonetheless, this Court also points out that an action to annul an order or judgment based on fraud must be brought
within four years from the discovery of the fraud.36 If it is conceded that the respondents came to know of Donatas
fraudulent acts only in 1985, during the course of the RTC proceedings which they instituted for the settlement of
Maximinos estate, then their right to file an action to annul the CFI Order, dated 15 January 1960, in Special Proceedings
No. 928-R (earlier instituted by Donata for the settlement of Maximinos estate), has likewise prescribed by present time.

In view of the foregoing, the Motion for Reconsideration is DENIED.

SO ORDERED.
 G.R. No. 169942 January 24, 2011

BARANGAY DASMARIAS thru BARANGAY CAPTAIN MA. ENCARNACION R. LEGASPI, Petitioner, vs.
CREATIVE PLAY CORNER SCHOOL, DR. AMADO J. PIAMONTE, REGINA PIAMONTE TAMBUNTING,
CELINE CONCEPCION LEBRON and CECILE CUNA COLINA, Respondents.

"Utter disregard of [the rules of procedure] cannot justly be rationalized by harking on the policy of liberal
construction."1

This Petition for Review on Certiorari assails the Resolution2 dated July 21, 2005 of the Court of Appeals (CA) in CA-
G.R. SP No. 89723 denying petitioners Second Motion for Extension of Time to File Petition for Review and
consequently dismissing the Petition for Review for having been filed beyond the period allowed by the Rules of
Court. Likewise assailed is the Resolution3 dated September 29, 2005 denying the Motion for Reconsideration thereto.

Factual Antecedents

On June 28, 2004, petitioner Barangay Dasmarias thru Ma. Encarnacion R. Legaspi (Legaspi) filed a Complaint-
Affidavit4 before the Office of the Prosecutor of Makati docketed as I.S. No. 04-F-10389, charging respondent Creative
Play Corner School (CPC) and its alleged owners, respondents Dr. Amado J. Piamonte (Piamonte), Regina Piamonte
Tambunting (Tambunting), Celine Concepcion Lebron (Lebron) and Cecille Cuna Colina (Colina) with Falsification
and Use of Falsified Documents. Petitioner alleged that respondents falsified and used the Barangay Clearance and
Official Receipt purportedly issued in the name of CPC by the Office of the Barangay Captain of Dasmarias Village,
Makati City of which Lepaspi was Barangay Captain.

In their Counter-Affidavit,5 Lebron and Colina denied having falsified the subject documents. They averred that
petitioner's assertion that they were owners of CPC is a mere allegation without proof. They also pointed out that the
complaint neither shows any operative act committed by any of the respondents in perpetrating the crime charged nor
identified who among them actually committed it. They thus insisted that no probable cause exists to warrant their
indictment for the offense charged. For their part, Tambunting and Piamonte in their respective Counter-
Affidavits6 affirmed the arguments made by Lebron and Colina. In addition, Tambunting alleged that the subject
documents were not received by any relevant office while Piamonte claimed that he had no participation whatsoever in
the operation of CPC. Both of them averred that petitioner was not able to discharge its burden of presenting sufficient
evidence to support the belief that they committed the crime charged.

Ruling of the Prosecutor

In a Resolution7 dated September 29, 2004, Assistant City Prosecutor Carolina Esguerra-Ochoa (Prosecutor Ochoa)
recommended the dismissal of the case because of failure to establish probable cause. Prosecutor Ochoa noted the
absence of any finding from pertinent police laboratory tests and/or law enforcement agency confirming that the
subject documents were indeed falsified, forged or tampered or if so, that respondents were the ones who falsified,
forged or tampered the same. Prosecutor Ochoa concluded that petitioner failed to show any cause which would
engender the belief that respondents are probably guilty of the offense charged.

City Prosecutor Feliciano Aspi approved the Resolution and released the same on November 4, 2004.

Petitioner thus brought the case before the Department of Justice (DOJ) through a Petition for Review.

Ruling of the Department of Justice

Petitioner refuted the prosecutors finding of lack of probable cause. It claimed that since it was Legaspi's signature
which was forged, she was in the best position to attest to the fact of falsification and therefore her affidavit speaks
volumes. Petitioner likewise argued that the documents attached to the complaint, i.e. sample format of Barangay
Clearances legitimately issued by the Office of the Barangay Captain showing Legaspi's signature and Certifications
regarding the allegation of tampered official receipt, were sufficient to support a finding of probable cause. After all, a
finding of probable cause does not mean conviction; it simply manifests that there is sufficient evidence to procure a
conviction. It is enough that it is believed that the act complained of constitutes the offense charged. Thus, petitioner
sought for the reversal and setting aside of the Resolution of the Prosecution Office and prayed for the issuance of an
order directing it to cause the filing of the corresponding criminal information against respondents.

Respondents, on the other hand, basically reiterated the allegations in their respective counter-affidavits and maintained
that Prosecutor Ochoa did not err in holding that no probable cause exists against them.

The DOJ, though, after finding that no error which would justify the reversal of the assailed resolution was committed
by Prosecutor Ochoa and that the petition was filed late, dismissed the Petition for Review through a Resolution 8 dated
February 21, 2005. Petitioner filed a Motion for Reconsideration9 thereto but same was also denied in a
Resolution10 dated April 25, 2005.

Still unsatisfied, petitioner challenged this dismissal through a Petition for Review before the CA.

Ruling of the Court of Appeals

But before petitioner was able to file its petition, it first sought for an extension of time 11 of 15 days from May 13,
200512 or until May 28, 2005 within which to file the same due to counsels heavy workload. The CA granted the
extension in a Resolution13 dated May 23, 2005. Subsequently, petitioner asked for another extension 14 of five days from
May 28, 2005 until June 2, 2005 for the same reason given in its first motion for extension. However, petitioner filed the
petition by mail only on June 7, 2005.15 Because of these, the CA issued the following assailed Resolution of July 21, 2005:

In a Resolution dated May 23, 2005, this Court granted petitioner an additional period of fifteen (15) days from May
13, 2005 or until May 28, 2005 within which to file its petition for review. However, instead of filing its petition on
May 28, 2005, petitioner filed [the] Second Motion for Extension of Time to File Petition for Review requesting for an
additional period of five days from May 28, 2005 or until June 2, 2005 within which to file its petition for review.

Section 4, Rule 43 of the Rules of Court provides that we may grant an additional period of fifteen (15) days only
within which to file the petition for review and no further extension shall be granted except for the most compelling
reason. We do not find petitioners reason to be compelling to grant another extension. In this second motion, petitioner
gave the same reason it gave us in its first motion for extension of time to file petition for review, i.e. pressures of other
equally important pleadings. The original period of fifteen days and the extension of fifteen days granted are not
unreasonable as they add up to thirty days within which petitioner can prepare, perfect and file its petition.

In addition, records of the case show that petitioner filed its petition for review on June 7, 2005 or five days late from
the extension sought from us.

WHEREFORE, premises considered, we hereby DENY the Second Motion for Extension of Time to File Petition for
Review and DISMISS the Petition for Review for having been filed beyond the period allowed by the Revised Rules
of Civil Procedure.

SO ORDERED.16

Petitioner filed a Motion for Reconsideration17 explaining therein that aside from the first and second motions for
extension, it also filed a Final Motion for Additional Time to File Petition for Review 18 asking for another five days
from June 2, 2005 or until June 7, 2005 within which to file the petition. This new request for extension was allegedly
on account of a sudden death in the family of the handling lawyer, Atty. Maria Katrina Bote-Veguillas (Atty. Bote-
Veguillas). Thus, petitioner argued that when the petition was filed on June 7, 2005, it was still within the period of
extension prayed for in said final motion for extension. At any rate, petitioner prayed that the CA set aside rules of
technicalities as it claimed that the slight delay in the filing of the petition did not after all result to the prejudice of
respondents. More importantly, it believed that the merits of the case justify the relaxation of technical rules.

After respondents filed their Comment,19 the CA issued its September 29, 2005 Resolution 20 denying the Motion for
Reconsideration. The CA ratiocinated that while Section 4, Rule 43 of the Rules of Court allows it a great leeway in the
exercise of discretion in granting an additional period of 15 days for filing a petition for review, said Rules, however,
limit such discretion in the grant of a second extension only to the most compelling reasons presented by the movant.
And, considering that the reason given by petitioner for the extension sought in its first and second motions for
extension, i.e. pressure and large volume of work of counsel, is, as held by jurisprudence, not an excuse for filing a
petition out of time, the CA was constrained to deny the second motion for extension and consequently, dismiss the
petition for review.

With respect to the final motion for extension, the CA gave three reasons for it to disregard the same: First, a third
extension is not authorized by the Rules of Court. Second, the reason given for the extension sought was the sudden
death of a relative of the handling lawyer Atty. Bote-Veguillas. However, no details as to the degree of relationship
between Atty. Bote-Veguillas and the deceased was given for the court to determine whether such reason is indeed
compelling. Third, the reason given is not sufficiently persuasive because petitioners counsel of record is Dela Vega
Matta Bote-Veguillas and Associates Law Offices and not Atty. Bote-Veguillas alone. This means that any member of the law
firm could have prepared, perfected and filed the petition for the law firm other than Atty. Bote-Veguillas if the latter has
indeed gone through a personal tragedy. The CA thus saw no reason to grant petitioner's Motion for Reconsideration.

This notwithstanding, petitioner still firmly believes that the case should have been resolved on the merits and hence, it
is now before this Court via this Petition for Review on Certiorari.

Issues

Petitioner advances the following grounds:

The Honorable Court of Appeals gravely erred in dismissing the Petition For Review on a mere technicality, without
considering the substantive grounds on which the Petition For Review was based.

The Honorable Court of Appeals gravely erred in not considering that respondents rights had not been prejudiced in
any way by the short delay of ten days on account of the requests for extension of time to file Petition for Review.

The Honorable Court of Appeals gravely erred when it dismissed the Petition for Review despite the clear and
categorical existence of probable cause that would justify the filing of criminal cases against the respondents. 21
Petitioners Arguments

Petitioner harps on the policy of liberal construction embodied in Section 6, Rule 1 of the Rules of Court which
provides that the rules shall be liberally construed in order to promote their object and to assist the parties in obtaining just,
speedy and inexpensive determination of every action. It cites several jurisprudence 22 where this Court set aside technical
rules to give way to the merits of the case. Petitioner notes that the CA in dismissing the petition merely focused on the
technical infirmity and did not even bother to take a look at its substance. Petitioner believes that if only the CA examined
the records of the case, it would find that the substantial merits of the case are enough to override technical deficiencies.
It likewise argues that Cosmo Entertainment Management, Inc. v. La Ville Commercial Corporation 23 relied upon by
respondents does not apply because although the Court dismissed the appeal in said case for having been filed beyond the
reglementary period and did not find "pressure of work on equally important cases" as compelling reason to grant an
extension of time to file the same, still the merits of the case were nevertheless examined and considered.

Moreover, petitioner avers that even if the petition was filed 10 days beyond the extended period, respondents have not
been prejudiced in any way by such delay as they were free and not detained. Petitioner also posits that since it
received the CAs resolution denying its Second Motion for Extension on July 27, 2005 or after it has filed the Petition
for Review and paid the corresponding docket fees, such belated filing of the petition has already become moot and the
more equitable action of the CA should have been to admit the petition.

Lastly, petitioner believes that there is probable cause for the charge of falsification and use of falsified documents
against respondents and that it was able to discharge its burden of establishing the same.1avvphi1

Respondents Arguments

Respondents find no error on the part of the CA in denying petitioners Second Motion for Extension and in dismissing
the petition. They cited Cosmo Entertainment Management, Inc. v. La Ville Commercial Corporation 24wherein this
Court held that "pressure of work on equally important cases" is not a compelling reason to merit an extension of time.
Besides, even assuming that petitioners Second Motion for Extension was granted, respondents point out that the
petition was nevertheless filed beyond the period requested. With respect to petitioner's Final Motion for Extension, the
CA has already adequately explained the reasons why it cannot consider the same.

Moreover, respondents call this Courts attention to petitioners repeated transgression of technical rules: first, before the
DOJ where it belatedly filed thereat its petition for review and again, before the CA. To respondents, petitioner's utter
disregard of the rules should not be countenanced and hence the Court must not excuse it from complying therewith.

Respondents also put forward the principle that the determination of probable cause is an executive function and that as
a matter of sound judicial policy, courts should refrain from interfering in the conduct of investigation. It is precisely
because of this principle that the DOJ has a wide latitude of discretion in the determination of what constitutes
sufficient evidence to establish probable cause. This means that petitioner can assail the decision of the prosecuting
arm of the government only if the same is tainted with grave abuse of discretion. In this case, however, it is clear that
there is no grave abuse of discretion. As petitioner was not able to point out any operative act committed by any of the
respondents in perpetrating the crime charged or when and who among them perpetrated it, the CA, therefore, was
correct in dismissing the petition. Finally, respondents argue that the issues raised are factual and hence cannot be
passed upon by this Court in this Petition for Review on Certiorari. In sum, respondents pray that the present petition
be dismissed and the assailed CA resolutions affirmed.

Our Ruling

We deny the petition.

Section 4, Rule 43 of the Rules of Court provides:

Section 4. Period of appeal. The appeal shall be taken within fifteen (15) days from notice of the award, judgment,
final order or resolution, or from the date of its last publication, if publication is required by law for its effectivity, or of
the denial of petitioners motion for new trial or reconsideration duly filed in accordance with the governing law of the
court or agency a quo. Only one (1) motion for reconsideration shall be allowed. Upon proper motion and the
payment of the full amount of the docket fee before the expiration of the reglementary period, the Court of Appeals
may grant an additional period of fifteen (15) days only within which to file the petition for review. No further
extension shall be granted except for the most compelling reason and in no case to exceed fifteen (15)
days. (Emphasis supplied.)

From the above, it is clear that the CA, after it has already allowed petitioner an extension of 15 days within which to
file a petition for review, may only grant a further extension when presented with the most compelling reason but same
is limited only to a period of 15 days. Thus, when the CA denied petitioners Second Motion for Extension of five
days, it was merely following the abovementioned provision of the rules after it found the reason for the second
extension as not compelling. And, considering that the CA has already sufficiently explained how it was able to arrive
at the conclusion that there is no compelling reason for such second extension, we deem it unnecessary to repeat the
same especially since we are in total agreement with the ratiocination of the CA.
As to petitioners invocation of liberal application of the rules, we cannot heed the same. "It is true that litigation is not
a game of technicalities and that the rules of procedure should not be strictly followed in the interest of substantial
justice. However, it does not mean that the Rules of Court may be ignored at will. It bears emphasizing that procedural rules
should not be belittled or dismissed simply because their non-observance may have resulted in prejudice to a partys
substantial rights. Like all rules, they are required to be followed except only for the most persuasive of reasons." 25

While petitioner cites several jurisprudence wherein this Court set aside procedural rules, an imperative existed in
those cases that warranted a liberal application of the rules. We have examined the records of this case, however, and
we are convinced that the present case is not attended by such an imperative that justifies relaxation of the rules.
Moreover, as pointed out by respondents, petitioner had not only once transgressed procedural rules. This Court has
previously held that "[t]echnical rules may be relaxed only for the furtherance of justice and to benefit the
deserving."26 Petitioners low regard of procedural rules only shows that it is undeserving of their relaxation.

Also, we cannot subscribe to petitioners argument that considering that no prejudice was caused to respondents by the
belated filing of the petition as the latter were free and not detained hence, the CA should have just disregarded such
belated filing. Likewise, the filing of the petition and payment of the corresponding docket fees prior to petitioners
receipt of the CAs resolution denying its Second Motion for Extension does not, contrary to petitioners position,
render such belated filing moot. If such would be the case, the delay in the delivery of court resolutions caused by the
limitations of postal service would serve as a convenient cover up for a pleading or a motions belated filing. This
would be contrary to the aim of procedural rules which is to secure an effective and expeditious administration of
justice.

Besides, even if the CA ignores the petitions belated filing, the same would have been dismissed for being an improper
remedy. It has been held that "[t]he remedy of a party desiring to elevate to the appellate court an adverse resolution of
the Secretary of Justice is a petition for certiorari under Rule 65. A Rule 43 petition for review is a wrong mode of
appeal."27

With the foregoing, it is clear that the present petition is unworthy of this Courts attention and should be denied.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed Resolutions dated July 21, 2005 and
September 29, 2005 of the Court of Appeals in CA-G.R. SP No. 89723 are AFFIRMED.

SO ORDERED.
 G.R. No. L-33672 September 28, 1973

VICENTE MUOZ, petitioner, vs. PEOPLE OF THE PHILIPPINES and THE COURT OF
APPEALS, respondents, DELIA T. SUTTON, respondent.

We have before us a task far from pleasant. Respondent, Delia T. Sutton, a member of the Philippine Bar, connected
with the law firm of Salonga, Ordoez, Yap, Parlade, and Associates, must be held accountable for failure to live up to
that exacting standard expected of counsel, more specifically with reference to a duty owing this Tribunal. She failed to
meet the test of candor and honesty required of pleaders when, in a petition for certiorari prepared by her to review a
Court of Appeals decision, she attributed to it a finding of facts in reckless disregard, to say the least, of what in truth
was its version as to what transpired. When given an opportunity to make proper amends, both in her appearance
before us and thereafter in her memorandum, there was lacking any showing of regret for a misconduct so obvious and
so inexcusable. Such an attitude of intransigence hardly commends itself. Her liability is clear. Only her relative
inexperience in the ways of the law did save her from a penalty graver than severe censure. So we rule.

The background of the incident before us was set forth in our resolution of July 12, 1971. It reads as follows:
"Acting upon the petition for review in G.R. No. L-33672, Vicente Muoz v. People of the Philippines and the
Court of Appeals, and considering that the main issue therein is whether petitioner Muoz is guilty of homicide
through reckless negligence, as charged in the information; that in the language of the decision of the Court of
Appeals "the prosecution and the defense offered two conflicting versions of the incident that gave rise to the
case"; that, upon examination of the evidence, the Court of Appeals found, as did the trial court, that the version of
the prosecution is the true one and that of the defense is unbelievable; that this finding of the Court of Appeals is
borne out by substantial evidence, whereas the version of the defense is inconsistent with some established facts,
for: (a) petitioner's theory, to the effect that his boat had been rammed by that of the complainant, is refuted by the
fact that after hitting the left frontal outrigger of the latter's boat, the prow and front outrigger of petitioner's
motorboat hit also the left front portion of complainant's boat where the complainant was seated, thereby
hitting him on the back and inflicting the injury that cause his death so that, immediately after the collision -
part of petitioner's boat was on top of that of the complainant; (b) these circumstances, likewise, indicate the
considerable speed at which petitioner's motorboat was cruising, (c) petitioner's motorboat had suffered very little
damage, which would have been considerable had it been rammed by the offended party's boat, the latter being
bigger than, as well as provided with an engine twice as powerful as, that of the petitioner; and (d) although
appellant's boat carried several passengers, including children, and was, in fact, overloaded, appellant acted as
pilot and, at the same time, as its machinist, thereby rendering it difficult for him to manuever it properly; the
Court resolved to [deny] the petition upon the ground that it is mainly factual and for lack of merit. Considering
further, that the petition quotes, on page 5 thereof a portion of the decision appealed from, summing up evidence
for the defense, and makes reference thereto "findings" of the Court of Appeals, which is not true; that, on page 6
of the petition, petitioner states, referring to a portion of the same quotation, that the same "are the established
uncontroverted facts recognized by the Court of Appeals," which is, likewise, untrue; that, on page 8 of the
petition, it is averred "It being conceded that the two versions recounted above are by themselves credible,
although they are conflicting the same cannot be binding on, and is therefore, reviewable by the Honorable
Supreme Court. Where the findings of fact of the Court of Appeals [are conflicting], the same [are not binding] on the
Supreme Court. (Cesica v. Villaseca, G.R. L-9590, April 30, 1957)" although, in fact, no conflicting findings of fact are
made in the decision appealed from; and that, on page 9 of the petition, it is alleged that the Court of Appeals
had"affirmed the minimum penalty of one (1) year and one (1) day imposed by the lower court," although, in fact,
minimum penalty imposed by the trial court was "four(4) months of arresto mayor"; the Court resolved to require
counsel for the petitioner to show cause, within ten (10) days from notice, why they should not be dealt with for
contempt of court [or] otherwise subjected to disciplinary action for making aforementioned misrepresentations." " 1

A pleading entitled "Compliance with Resolution" by the aforesaid law firm was filed on August 14, 1971. There
was no attempt at justification, because in law there is none, but it did offer what was hoped to be a satisfactory
explanation. If so, such optimism was misplaced. It betrayed on its face more than just a hint of lack of candor, of
minimizing the effects of grave inaccuracies in the attribution to the Court of Appeals certain alleged facts not so
considered as such. It was then to say that the least a far from meticulous appraisal of the matter in issue. Much of
what was therein contained did not ring true.

Under the circumstances, we set the matter for hearing on September 14 of the same year, requiring all lawyers-
partners in said firm to be present. At such a hearing, respondent Delia T. Sutton appeared. While her demeanor was
respectful, it was obvious that she was far from contrite. On the contrary, the impression she gave the Court was that
what was done by her was hardly deserving of any reproach. Even when subjected to intensive questioning by several
members of the Court, she was not to be budged from such an untenable position. It was as if she was serenely
unconcerned, oblivious of the unfavorable reaction to, which her evasive answers gave rise. There certainly was lack of
awareness of the serious character of her misdeed. The act of unruffled assurance under the circumstances was hard to
understand. Perhaps realizing that the Court was not disposed to look at the matter as a minor peccadillo, Attorney
Sedfrey A. Ordoez of the law firm expressly acknowledged that what appeared in its petition for certiorari prepared
by respondent Delia T. Sutton insofar as it did misrepresent what is set forth in the Court of Appeals decision sought to
be reviewed was reprehensible, and did make with the proper spirit of humility the necessary expression of regret.

What is more, the law firm in a pleading entitled "Joint Apology to the Supreme Court" filed on December 1, 1971,
signed jointly by Sedfrey A. Ordoez and Delia Sutton, did seek to make amends thus: "1. That undersigned attorney,
Delia T. Sutton, together with Messrs. Sedfrey A. Ordoez, Pedro L. Yap and Custodio O. Parlade, partners in the firm
of Salonga, Ordoez, Yap, Parlade & Associates, appeared before this Honorable Court on November 22, 1971,
pursuant to an order dated October 18, 1971; 2. That with all the sincerity and candor at the command of undersigned
attorney, the circumstances surrounding her preparation of the pleading which gave rise to the instant citation to show
cause why she should not be punished for contempt of court were explained by her, with the assistance of Atty. Sedfrey
A. Ordoez; 3. That the undersigned Delia T. Sutton had no intention to misrepresent any question of fact before this
Honorable Court for her personal gain or benefit, and that it was her lack of adequate extensive experience in preparing
petitions for certiorari which may have caused the inaccurate statements in the said petition which were enumerated in
the order of this Honorable Court; 4. That undersigned Delia T. Sutton contritely realizes the errors which she
committed in the preparation of the said petition for certiorari and that the same will not recur in the future as she will
always abide by the provisions on candor and fairness in the Canons of Professional Ethics, which reads: "22. [Candor
and Fairness]. The conduct of the lawyer before the court and with other lawyers should be characterized by candor
and fairness. It is not candid or fair for the lawyer knowingly to misquote the contents of a paper, the testimony of a
witness, the language or the argument of opposing counsel, or the language of a decision or a textbook or; with
knowledge of its invalidity, to cite as authority a decision that has been overruled, or a statute that has been repealed; or
in argument to assert as fact that which has not been proved, or in those jurisdictions where a side has the opening and
closing arguments to mislead his opponent by concealing or withholding positions in his opening argument upon which
his side then intends to rely. ..." 5. That undersigned Atty. Sedfrey A. Ordoez joins Atty. Delia T. Sutton in expressing
his own apologies to the Honorable Court for not having thoroughly supervised the preparation by Atty. Delia T. Sutton
of a type of pleading with which she was not thoroughly familiar." 2

The "Joint Apology" thus offered did mitigate to some extent the liability of respondent Sutton. Some members of the
Court feel, however, that it does not go far enough. While expressing regret and offering apology, there was lacking
that free admission that what was done by her should not characterized merely as "errors" consisting as they do of
"inaccurate statements." If there were a greater sincerity on her part, the offense should have been acknowledged as the
submission of deliberate misstatements. There ought to be, for the apology to gain significance, no further attempt at
minimizing the enormity of the misdeed. It is then as if there was hardly any retreat from the untenable stand originally
taken. The mood, even at this stage, seems to be that she could brazen it out as long as the words indicative of an
apology were offered. This Court does not view matters thus. To purge herself of the contempt, she ought to have
displayed the proper spirit of contrition and humility. The burden cast on the judiciary would be intolerable if it could
not take at face value what is asserted by counsel. The time that will have to be devoted just to the task of verification
of allegations submitted could easily be imagined. Even with due recognition then that counsel is expected to display
the utmost zeal in defense of a client's cause, it must never be at the expense of deviation from the truth. As set forth in
the applicable Canon of Legal Ethics: "Nothing operates more certainly to create or to foster popular prejudice against
lawyers as a class, and to deprive the profession of that full measure of public esteem and confidence which belongs to
the proper discharge of its duties than does the false claim, often set up by the unscrupulous in defense of questionable
transactions, that it is the duty of the lawyer to do whatever may enable him to succeed in winning his client's
cause." 3 What is more, the obligation to the bench, especially to this Court, for candor and honesty takes precedence. It
is by virtue of such considerations that punishment that must fit the offense has to be meted out to respondent Delia T.
Sutton.

At the same time, the attitude displayed by one of the senior partners, Attorney Sedfrey A. Ordoez, both in the
appearances before the Court and in the pleadings submitted, must be commended. He has made manifest that his
awareness of the role properly incumbent on counsel, especially in his relationship to this Court, is deep-seated. It must
be stated, however, that in the future he, as well as the other senior partners, should exercise greater care in the
supervision of the attorneys connected with their law firm, perhaps inexperienced as yet but nonetheless called upon to
comply with the peremptory tenets of ethical conduct.

WHEREFORE, respondent Delia T. Sutton is severely censured. Let a copy of this resolution be spread on her record.
 G.R. No. 170232 December 5, 2006

VETTE INDUSTRIAL SALES CO., INC., KENNETH TAN, ESTRELLA CHENG, LUISITO RAMOS, YVETTE TAN,
KESSENTH CHENG, VEVETTE CHENG and FELESAVETTE CHENG, petitioners, vs.
SUI SOAN S. CHENG a.k.a. CHENG SUI SOAN, respondent.

G.R. No. 170301 December 5, 2006

SUI SOAN S. CHENG a.k.a. CHENG SUI SOAN, petitioner, vs.

VETTE INDUSTRIAL SALES CO., INC., KENNETH TAN, ESTRELLA CHENG, LUISITO RAMOS, YVETTE TAN,
KESSENTH CHENG, VEVETTE CHENG and FELESAVETTE CHENG, respondents.

These consolidated Petitions for Review on Certiorari 1 assail the Decision2 dated September 22, 2005 of the Court of
Appeals in CA-G.R. SP No. 88863 entitled, "Vette Industrial Sales, Company, Inc., Kenneth Tan, Estrella Cheng,
Luisito Ramos, Yvette Tan, Kessenth Cheng, Vevette Cheng, and Felesavette Cheng, Petitioners versus Hon. Regional
Trial Court of Manila, Branch 173, and Sui Soan S. Cheng a.k.a. Cheng Sui Soan, Respondents." Also assailed is the
Resolution3 dated October 27, 2005 denying petitioners motion for partial reconsideration and respondent Suis motion
for reconsideration.

In his Complaint4 for specific performance and damages filed against Vette Industrial Sales Company, Inc., Kenneth
Tan, Estrella Cheng, Luisito Ramos, Yvette Tan, Kessenth Cheng, Vevette Cheng, and Felesavette Cheng (petitioners)
and docketed as Civil Case No. 03-105691, Sui Soan S. Cheng a.k.a. Cheng Sui Soan (Sui) alleged that on October 24,
2001, he executed a Deed of Assignment,5 where he transferred his 40,000 shares in the company in favor of Kenneth
Tan, Vevette Cheng, Felesavette Cheng, and Yvette Tan (Petitioners-Assignees). To implement the Deed of Assignment,
the company acknowledged in a Memorandum of Agreement (MOA), 6 that it owed him P6.8 million pesos, plus
insurance proceeds amounting to P760,000.00 and a signing bonus of P300,000.00. Thereafter, he was issued 48
postdated checks but after the 11th check, the remaining checks were dishonored by the bank. Sui also claimed that
petitioners did not remit to him the insurance proceeds, thus breaching their obligation under the MOA which entitled
him to moral and exemplary damages, and attorneys fees.

In their Answer With Compulsory Counterclaim, 7 petitioners alleged that Sui sold his shares for only P1.00 per share
which they already paid; that the MOA was unenforceable because it was executed without authorization from the
board of directors; that the MOA was void for want of consideration; and that petitioner Kenneth Tan executed the
MOA after Sui issued threats and refused to sign the waiver and quitclaim.

After the issues were joined, pre-trial was set on July 3, 2003. 8 However, the case was first submitted for mediation but it
was referred back to the court for continuation of the proceedings when no settlement was arrived at during mediation.

Sui thereafter filed a Motion to Set Pre-trial 9 on December 16, 2003. Petitioners received the motion but they did not
attend because there was no notice from the Court setting the pre-trial date. On December 29, 2003, petitioners
received two orders from the trial court. The first Order 10 allowed Sui to present evidence ex-parte, while the second
Order11 revoked the first order after the trial court noted that "what was set for consideration on December 16, 2003
was merely a motion to set pre-trial." Thus, the trial court reset the pre-trial on January 15, 2004 but it was postponed
and moved to May 21, 2004. On said date, Sui and his counsel, Atty. Pedro M. Ferrer (Atty. Ferrer), failed to appear.
Consequently, the trial court ordered the dismissal of the case without prejudice on the part of petitioners to present and
prove their counterclaim and set the hearing for reception of evidence on June 22, 2004. 12

Atty. Ferrer filed a Manifestation and Motion for Reconsideration 13 of the order of dismissal, explaining that he arrived
late for the hearing because he had to drop by his office to get the case folder because he had just arrived from South
Cotabato where he served as Chief Counsel in the Provincial Board of Canvassers for Governor Datu Pax
Mangudadatu and Congressman Suharto Mangudadatu.

The trial court required petitioners to file their Comment on the Manifestation and Motion for Reconsideration. In their
Opposition,14 petitioners asserted that the motion for reconsideration be denied outright because (1) Sui did not comply
with the three-day notice rule which is mandatory under Section 4, Rule 15 of the Rules of Court considering that
petitioners received the manifestation and motion for reconsideration only one day prior to the date of hearing of the
motion for resolution, thus the same must be treated as a mere scrap of paper; (2) the trial court did not comply with
Section 6 of Rule 15 of the Rules 15 when it acted on the manifestation and motion of Sui despite the latters failure to
submit proof of receipt by petitioners of the manifestation and motion; (3) the negligence of counsel binds the client,
thus, when Atty. Ferrer arrived late for the hearing, the trial court correctly dismissed the complaint; and (4) the
explanation of Atty. Ferrer is unacceptable because traffic gridlocks are daily events in the metropolis, thus, Atty. Ferrer
should have left his place early.

In his Reply,16 Sui averred that the motion complied with Section 5 of Rule 15 of the Rules 17 and that the setting of the
hearing of the motion on May 28, 2004 was within the three day period for it was filed on May 25, 2004. He added that
the same was not heard because the trial court allowed petitioners to file a comment on the manifestation and motion
for reconsideration, which was received by the latter prior to the said setting.

In an Order dated December 16, 2004, 18 the trial court granted Suis motion for reconsideration and set aside the
dismissal of the complaint, the dispositive portion of which provides:
WHEREFORE, prescinding with such ruling and in the interest of substantial justice, plaintiffs motion is GRANTED
and the order dated May 21, 2004 is hereby lifted and set aside with the warning that any delay in this proceedings will
not be countenanced by the Court.

Set pre-trial anew on February 15, 2005.

Notify the parties.
SO ORDERED.19
The trial court cited Ace Navigation Co., Inc. v. Court of Appeals,20 which held that 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 the dismissal of an
appeal on purely technical ground is frowned upon especially if it will result to unfairness.

The Motion for Reconsideration21 filed by petitioners was denied by the trial court 22 hence they filed a Petition for
Certiorari23 with the Court of Appeals which granted the petition, thus:

UPON THE VIEW WE TAKE OF THIS CASE, THUS, the writ applied for is partly GRANTED. The assailed
orders must be, as they hereby are, VACATED and SET ASIDE, and another hereby issued dismissing the instant
complaint, but "without prejudice." This means that the complaint can be REINSTATED. On the other hand,
petitioners are hereby given leave to present before the Trial Court evidence of their counterclaim. Without costs in
this instance.

SO ORDERED.24

The Court of Appeals noted that both Atty. Ferrer and Sui were not in attendance at the pre-trial conference; that
Section 5 of Rule 18 mentions only the effect of the failure to appear on the part of "the plaintiff" but is silent on the
effect of failure of the partys counsel to appear at the pre-trial; that the Manifestation and Motion for
Reconsideration25 mentioned only the reasons why Atty. Ferrer was absent without stating that he was fully authorized
in writing to enter into an amicable settlement, or to submit to alternative modes of dispute resolution, or to enter into
stipulations or admissions of facts and of documents; and that there was no explanation for Suis nonappearance. Thus,
based on these circumstances, the Court of Appeals held that dismissal of the case is proper but without prejudice to the
filing of a new action.26

Both parties moved for reconsideration but the same were jointly denied in a Resolution dated October 27, 2005.

Hence, these consolidated Petitions.

In G.R. No. 170232, petitioners raise the following errors:

I. THE COURT OF APPEALS ERRED IN NOT DISMISSING THE COMPLAINT OF RESPONDENT CHENG IN CIVIL
CASE NO. 03-105691 WITH PREJUDICE.

II. THE COURT OF APPEALS ERRED IN CONCLUDING THAT RESPONDENTS COUNSEL FAILED TO
APPRECIATE THE BASIC RULES ON PRE-TRIAL.

III. THE COURT OF APPEALS ERRED IN NOT CONSIDERING THE MISTAKE OR NEGLIGENCE OF
RESPONDENTS COUNSEL AS BINDING ON THE RESPONDENT HIMSELF.

IV. THE COURT OF APPEALS ERRED IN APPLYING THE RULINGS OF THE HONORABLE COURT IN THE DE LOS
REYES VS. CAPULE (102 PHIL. 464) AND SUAREZ VS. COURT OF APPEALS (220 SCRA 274) CASES.

V. THE COURT OF APPEALS ERRED IN NOT CONSIDERING RESPONDENTS MANIFESTATION AND MOTION
FOR RECONSIDERATION DATED MAY 21, 2004 FILED BEFORE THE TRIAL COURT AS A MERE SCRAP, AND A
USELESS PIECE, OF PAPER AND IN NOT CONSIDERING THE ORDER DATED MAY 21, 2004 OF THE TRIAL
COURT AS ALREADY FINAL IN VIEW OF THE PROCEDURAL INVALIDITY/DEFECTIVENESS (I.E. IT FAILED TO
COMPLY WITH SECTIONS 4 AND 6 OF THE RULES) OF RESPONDENTS MANIFESTATION AND MOTION FOR
RECONSIDERATION DATED MAY 21, 2004.

In G.R. No. 170301, Sui raises the following issues, thus:

I. THE COURT OF APPEALS ERRED IN NOT RULING THAT THE NON-APPEARANCE OF

PETITIONER IN THE PRE-TRIAL MAY BE EXCUSED FOR A VALID CAUSE.

II. THE COURT OF APPEALS ERRED IN NOT RULING THAT THE CASE OF ACE NAVIGATION CO.
INC. VS. COURT OF APPEALS IS SQUARELY APPLICABLE TO THE INSTANT CASE.

The core issue for resolution is whether the Court of Appeals erred in dismissing without prejudice Civil Case No. 03-
105691 and in ruling that the trial court committed grave abuse of discretion when it granted Suis motion for
reconsideration to set aside the order of dismissal of the complaint.

The judge has the discretion whether or not to declare a party non-suited. 27 It is, likewise, settled that the determination
of whether or not an order of dismissal issued under such conditions should be maintained or reconsidered rests upon
the sound discretion of the trial judge. 28 The next question to be resolved is whether there was grave abuse of discretion
of the trial judge. We hold that there was none.

The case of Estate of Salud Jimenez v. Philippine Export Processing Zone 29 discussed the propriety of filing a Petition
for Certiorari under Section 1 of Rule 65 of the Rules of Court, thus:

A petition for certiorari is the proper remedy when any tribunal, board, or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction and there is no appeal, nor any plain, speedy, and adequate remedy at law. Grave abuse
of discretion is defined as the capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction.
An error of judgment committed in the exercise of its legitimate jurisdiction is not the same as "grave abuse of
discretion." An abuse of discretion is not sufficient by itself to justify the issuance of a writ of certiorari. The abuse must
be grave and patent, and it must be shown that the discretion was exercised arbitrarily and despotically.

As a general rule, a petition for certiorari will not lie if an appeal is the proper remedy thereto such as when an error
of judgment as well as of procedure are involved. As long as a court acts within its jurisdiction and does not gravely
abuse its discretion in the exercise thereof, any supposed error committed by it will amount to nothing more than an
error of judgment reviewable by a timely appeal and not assailable by a special civil action of certiorari. However,
in certain exceptional cases, where the rigid application of such rule will result in a manifest failure or miscarriage
of justice, the provisions of the Rules of Court which are technical rules may be relaxed. Certiorari has been deemed
to be justified, for instance, in order to prevent irreparable damage and injury to a party where the trial judge has
capriciously and whimsically exercised his judgment, or where there may be danger of clear failure of justice, or
where an ordinary appeal would simply be inadequate to relieve a party from the injurious effects of the judgment
complained of.30 (Emphasis supplied)

Lack of jurisdiction and excess of jurisdiction are distinguished thus: the respondent acts without jurisdiction if he does
not have the legal power to determine the case; where the respondent, being clothed with the power to determine the
case, oversteps his authority as determined by law, he is performing a function in excess of his jurisdiction. 31 Thus, we
now discuss whether the trial court granted the motion for reconsideration of Sui and reinstated the complaint without
basis in law. Citing the case of Ace Navigation Co., Inc. v. Court of Appeals, 32 the trial court held that rules of
procedures are mere tools designed to facilitate the attainment of justice and must be relaxed if its strict and rigid application
would frustrate rather than promote substantial justice. Thus, it lifted and set aside its order of dismissal in the interest of
substantial justice, which is the legal basis for the trial court to grant the motion for reconsideration of Sui.

We have repeatedly warned against the injudicious and often impetuous issuance of default orders. 33 While it is
desirable that the Rules of Court be faithfully observed, courts should not be so strict about procedural lapses that do
not really impair the proper administration of justice. If the rules are intended to ensure the proper and orderly conduct
of litigation, it is because of the higher objective they seek which is the attainment of justice and the protection of
substantive rights of the parties. Thus, the relaxation of procedural rules, or saving a particular case from the operation
of technicalities when substantial justice requires it, as in the instant case, should no longer be subject to cavil. 34

When the Court of Appeals held that the case is dismissible because Sui did not attend the pre-trial conference, it failed
to consider the explanation of Atty. Ferrer that Sui executed a "Special Power of Attorney" in his behalf and that he was
not absent on the scheduled pre-trial but was only late.

Under Section 4 of Rule 18 of the Rules, 35 the non-appearance of a party at the pre-trial may be excused when there is a
valid cause shown or when a representative shall appear in his behalf, and is fully authorized in writing to enter into an
amicable settlement, to submit to alternative modes of dispute resolution, and to enter into stipulations or admissions of
facts and of documents. Although Sui was absent during the pre-trial, Atty. Ferrer alleged that he was fully authorized
to represent Sui. Moreover, it is not entirely accurate to state that Atty. Ferrer was absent during the pre-trial because he
was only late, the reasons for which he explained in his Manifestation and Motion for Reconsideration. The
circumstances attendant in the instant case compel this Court to relax the rules of procedure in the interest of
substantial justice.

Petitioners claim that the motion for reconsideration of Sui was procedurally defective because it was not served three
days before the date of the hearing and no proof of service was given to the court, in violation of Sections 4 and 6 of
Rule 15. Petitioners also aver that they received the Manifestation and Motion for Reconsideration of Sui on May 27,
2004 but the hearing was scheduled on May 28, 2004. Thus, it is nothing but a scrap of paper because it violated the
three-day notice rule.

We are not persuaded.

In the instant case, we find that the purpose of a notice of hearing had been served. In Vlason Enterprises Corporation
v. Court of Appeals,36 we enumerated the exceptions to the rule on notice of hearing, to wit:

The Court has consistently held that a motion which does not meet the requirements of Sections 4 and 5 of Rule 15
of the Rules of Court is considered a worthless piece of paper, which the clerk of court has no right to receive and
the trial court has no authority to act upon. Service of a copy of a motion containing a notice of the time and the
place of hearing of that motion is a mandatory requirement, and the failure of movants to comply with these
 requirements renders their motions fatally defective. However, there are exceptions to the strict application of this
rule. These exceptions are as follows:

"x x x Liberal construction of this rule has been allowed by this Court in cases (1) where a rigid application
will result in a manifest failure or miscarriage of justice; especially if a party successfully shows that the
alleged defect in the questioned final and executory judgment is not apparent on its face or from the recitals
contained therein; (2) where the interest of substantial justice will be served; (3) where the resolution of the motion
is addressed solely to the sound and judicious discretion of the court; and (4) where the injustice to the adverse party
is not commensurate [to] the degree of his thoughtlessness in not complying with the procedure prescribed."

The present case falls under the first exception. Petitioner was not informed of any cause of action or claim against
it. All of a sudden, the vessels which petitioner used in its salvaging business were levied upon and sold in
execution to satisfy a supposed judgment against it. To allow this to happen simply because of a lapse in fulfilling
the notice requirement which, as already said, was satisfactorily explained would be a manifest failure or
miscarriage of justice.

A notice of hearing is conceptualized as an integral component of procedural due process intended to afford the
adverse parties a chance to be heard before a motion is resolved by the court. Through such notice, the adverse
party is permitted time to study and answer the arguments in the motion.

Circumstances in the case at bar show that private respondent was not denied procedural due process, and that the
very purpose of a notice of hearing had been served. On the day of the hearing, Atty. Desierto did not object to the
said Motion for lack of notice to him; in fact, he was furnished in open court with a copy of the motion and was
granted by the trial court thirty days to file his opposition to it. These circumstances clearly justify a departure
from the literal application of the notice of hearing rule. In other cases, after the trial court learns that a motion
lacks such notice, the prompt resetting of the hearing with due notice to all the parties is held to have cured the
defect.

Verily, the notice requirement is not a ritual to be followed blindly. Procedural due process is not based solely on a
mechanistic and literal application that renders any deviation inexorably fatal. Instead, procedural rules are
liberally construed to promote their objective and to assist in obtaining a just, speedy and inexpensive determination of
any action and proceeding. For the foregoing reasons, we believe that Respondent Court committed reversible error in
holding that the Motion for Reconsideration was a mere scrap of paper.37(Emphasis supplied)

When the trial court received Suis Manifestation and Motion for Reconsideration, it did not immediately resolve the
motion. Instead, it allowed petitioners to file their comment and also leave to file a rejoinder if Sui files a reply. 38These
circumstances justify a departure from the literal application of the rule because petitioners were given the opportunity
to study and answer the arguments in the motion.

Petitioners claim that Sui failed to attach proof of service in violation of Section 6, Rule 15 of the Rule, must fail. In
Republic of the Philippines v. Court of Appeals,39 we held, thus:

Nonetheless, considering the question raised in the appeal of the government and the amount involved in this
case, we think the Court of Appeals should have considered the subsequent service of the motion for
reconsideration to be a substantial compliance with the requirement in Rule 15, 6. In De Rapisura v. Nicolas,
the movant also failed to attach to his motion for reconsideration proof of service of a copy thereof to the other
party. Nonetheless, this Court held the failure not fatal as the adverse party had actually received a copy of the
motion and was in fact present in court when the motion was heard. It was held that the demands of substantial
justice were satisfied by the actual receipt of said motion under those conditions. 40

Petitioners admitted that they received a copy of Suis Manifestation and Motion for Reconsideration. In fact, they had
the opportunity to oppose the same. Under these circumstances, we find that the demands of substantial justice and due
process were satisfied.

It is the policy of the Court to afford party-litigants the amplest opportunity to enable them to have their cases justly
determined, free from the constraints of technicalities. 41 It should be remembered that rules of procedure are but tools
designed to facilitate the attainment of justice, such that when rigid application of the rules tend to frustrate rather than
promote substantial justice, this Court is empowered to suspend their operation. 42

WHEREFORE, in view of the foregoing, the Decision dated September 22, 2005 and the Resolution dated October 27,
2005 of the Court of Appeals in CA-G.R. SP No. 88863 is REVERSED and SET ASIDE. The Order of the Regional
Trial Court in Civil Case No. 03-105691, lifting its previous order of dismissal is REINSTATED and AFFIRMED.

SO ORDERED.
 G.R. No. 180572 June 18, 2012

SPOUSES ATTY. ERLANDO A. ABRENICA and JOENA B. ABRENICA Petitioners, vs.

LAW FIRM OF ABRENICA, TUNGOL and TIBAYAN, ATTYS. ABELARDO M. TIBAYAN and DANILO N.
TUNGOL, Respondents.

The present case is a continuation of G.R. No. 169420 1 decided by this Court on 22 September 2006. For brevity, we
quote the relevant facts narrated in that case:
Petitioner Atty. Erlando A. Abrenica was a partner of individual respondents, Attys. Danilo N. Tungol and Abelardo M.
Tibayan, in the Law Firm of Abrenica, Tungol and Tibayan ("the firm").
In 1998, respondents filed with the Securities and Exchange Commission (SEC) two cases against petitioner. The first
was SEC Case No. 05-98-5959, for Accounting and Return and Transfer of Partnership Funds With Damages and
Application for Issuance of Preliminary Attachment, where they alleged that petitioner refused to return partnership
funds representing profits from the sale of a parcel of land in Lemery, Batangas. The second was SEC Case No. 10-98-
6123, also for Accounting and Return and Transfer of Partnership Funds where respondents sought to recover from
petitioner retainer fees that he received from two clients of the firm and the balance of the cash advance that he
obtained in 1997.
The SEC initially heard the cases but they were later transferred to the Regional Trial Court of Quezon City pursuant to
Republic Act No. 8799, which transferred jurisdiction over intra-corporate controversies from the SEC to the courts. In
a Consolidated Decision dated November 23, 2004, the Regional Trial Court of Quezon City, Branch 226, held that:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered as follows:
CIVIL CASE NO. Q01-42948

1. Ordering the respondent Atty. Erlando Abrenica to render full accounting of the amounts he received as profits
from the sale and resale of the Lemery property in the amount of P 4,524,000.00;

2. Ordering the respondent Atty. Erlando Abrenica to remit to the law firm the said amount of P 4,524,000.00 plus
interest of 12% per annum from the time he received the same and converted the same to his own personal use or
from September 1997 until fully paid; and

3. To pay the costs of suit.

CIVIL CASE NO. Q01-42959

1. Ordering Atty. Erlando Abrenica to render a full accounting of the amounts he received under the retainer
agreement between the law firm and Atlanta Industries Inc. and Atlanta Land Corporation in the amount
of P 320,000.00.

2. Ordering Atty. Erlando Abrenica to remit to the law firm the amount received by him under the Retainer
Agreement with Atlanta Industries, Inc. and Atlanta Land Corporation in the amount of P 320,000.00 plus interests
of 12% per annum from June 1998 until fully paid;

3. Ordering Atty. Erlando Abrenica to pay the law firm his balance on his cash advance in the amount
of P 25,000.00 with interest of 12% per annum from the date this decision becomes final; and

4. To pay the costs of suit.

SO ORDERED.
Petitioner received a copy of the decision on December 17, 2004. On December 21, 2004, he filed a notice of appeal
under Rule 41 and paid the required appeal fees.
Two days later, respondents filed a Motion for Issuance of Writ of Execution pursuant to A.M. 01-2-04-SC, which
provides that decisions in intra-corporate disputes are immediately executory and not subject to appeal unless stayed by
an appellate court.
On January 7, 2005, respondents filed an Opposition (To Defendant's Notice of Appeal) on the ground that it violated
A.M. No. 04-9-07-SC2 prescribing appeal by certiorari under Rule 43 as the correct mode of appeal from the trial
courts decisions on intra-corporate disputes.
Petitioner thereafter filed a Reply with Manifestation (To the Opposition to Defendant's Notice of Appeal) and an
Opposition to respondents motion for execution.
On May 11, 2005, the trial court issued an Order requiring petitioner to show cause why it should take cognizance of
the notice of appeal in view of A.M. No. 04-9-07-SC. Petitioner did not comply with the said Order. Instead, on June
10, 2005, he filed with the Court of Appeals a Motion for Leave of Court to Admit Attached Petition for Review under
Rule 43 of the Revised Rules of Court. Respondents opposed the motion.
The Court of Appeals denied petitioner's motion in its assailed Resolution dated June 29, 2005 x x x.
The Court of Appeals also denied petitioner's motion for reconsideration in its August 23, 2005 Resolution.
Given the foregoing facts, we dismissed the Petition in G.R. No. 169420 on the ground that the appeal filed by
petitioner was the wrong remedy. For that reason, we held as follows: 3
Time and again, this Court has upheld dismissals of incorrect appeals, even if these were timely filed. In Lanzaderas v.
Amethyst Security and General Services, Inc., this Court affirmed the dismissal by the Court of Appeals of a petition
for review under Rule 43 to question a decision because the proper mode of appeal should have been a petition for
certiorari under Rule 65. x x x.
Indeed, litigations should, and do, come to an end. "Public interest demands an end to every litigation and a belated
effort to reopen a case that has already attained finality will serve no purpose other than to delay the administration of
justice." In the instant case, the trial court's decision became final and executory on January 3, 2005. Respondents had
already acquired a vested right in the effects of the finality of the decision, which should not be disturbed any longer.
WHEREFORE, the petition is DENIED. The Court of Appeals Resolutions dated June 29, 2005 and August 23, 2005
in CA-G.R. SP No. 90076 denying admission of petitioners Petition for Review are AFFIRMED.
Thus, respondents sought the execution of the judgment. On 11 April 2007, G.R. No. 169420 became final and executory.4
Apparently not wanting to be bound by this Courts Decision in G.R. No. 169420, petitioners Erlando and Joena
subsequently filed with the Court of Appeals (CA) a Petition for Annulment of Judgment with prayer for the issuance
of a writ of preliminary injunction and/or temporary restraining order, docketed as CA-G.R. SP No. 98679. The
Petition for Annulment of Judgment assailed the merits of the RTCs Decision in Civil Case Nos. Q-01-42948 and Q-
01-42959, subject of G.R. No. 169420. In that Petition for Annulment, Petitioners raised the following grounds:
I. The lower court erred in concluding that both petitioners and respondents did not present direct documentary
evidence to substantiate [their] respective claims.

II. The lower court erred in concluding that both petitioners and respondents relied mainly on testimonial evidence
to prove their respective position[s].

III. The lower court erred in not ruling that the real estate transaction entered into by said petitioners and spouses
Roman and Amalia Aguzar was a personal transaction and not a law partnership transaction.

IV. The lower court erred in ruling that the testimonies of the respondents are credible.

V. The lower court erred in ruling that the purchase price for the lot involved was P 3 million and not P 8 million.

VI. The lower court erred in ruling that petitioners retainer agreement with Atlanta Industries, Inc. was a law
partnership transaction.

VII. The lower court erred when it failed to rule on said petitioners permissive counterclaim relative to the various
personal loans secured by respondents.

VIII. The lower court not only erred in the exercise of its jurisdiction but more importantly it acted without
jurisdiction or with lack of jurisdiction. 5

We note that petitioners were married on 28 May 1998. The cases filed with the Securities and Exchange Commission
(SEC) on 6 May 1998 and 15 October 1998 were filed against petitioner Erlando only. It was with the filing of CA-
G.R. SP No. 98679 on 24 April 2007 that Joena joined Erlando as a co-petitioner.

On 26 April 2007, the CA issued a Resolution6 dismissing the Petition. First, it reasoned that the remedy of annulment
of judgment under Rule 47 of the Rules of Court is available only when the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies are no longer available through no fault of petitioners. 7Considering that
the dismissal of the appeal was directly attributable to them, the remedy under Rule 47 was no longer available.

Second, the CA stated that the grounds alleged in the Petition delved on the merits of the case and the appreciation by
the trial court of the evidence presented to the latter. Under Rule 47, the grounds for annulment are limited only to
extrinsic fraud and lack of jurisdiction.

Lastly, the CA held that the fact that the trial court was not designated as a special commercial court did not mean that
the latter had no jurisdiction over the case. The appellate court stated that, in any event, petitioners could have raised
this matter on appeal or through a petition for certiorari under Rule 65, but they did not do so.

Petitioners filed an Amended Petition for Annulment of Judgment dated 2 May 2007, but the CA had by then already
issued the 26 April 2007 Resolution dismissing the Petition.

On 24 May 2007, the 26 April 2007 Resolution in CA-G.R. SP No. 98679 became final and executory.8

Petitioners did not give up. They once again filed a 105-page Petition for Annulment of Judgment with the CA dated 25
May 20079 docketed as CA-G.R. SP No. 99719. This time, they injected the ground of extrinsic fraud into what
appeared to be substantially the same issues raised in CA-G.R. SP No. 98679. The following were the grounds raised in
CA-G.R. SP No. 99719:

A. Extrinsic fraud and/or collusion attended the rendition of the Consolidated Decision x x x based on the following
badges of fraud and/or glaring errors deliberately committed, to wit:
 I. The lower court deliberately erred in concluding that both petitioners and respondents did not present direct
documentary evidence to substantiate their respective claims, as it relied purely on the gist of what its personnel did
as regards the transcript of stenographic notes the latter [sic] in collusion with the respondents.

II. The lower court deliberately erred in concluding that both petitioners and respondents relied mainly on
testimonial evidence to prove their respective positions by relying totally on what was presented to it by its
personnel who drafted the Consolidated Decision in collusion with the respondents.

III. The lower court deliberately erred in not ruling that the real estate transaction entered into by said petitioners
and spouses Roman and Amalia Aguzar was a personal transaction and not a law partnership transaction for the
same reasons as stated in Nos. 1 and II above.

IV. The lower court deliberately erred in ruling that the testimonies of the respondents are credible as against the
petitioner Erlando Abrenica and his witnesses for the same reasons as stated in Nos. I and II above.

V. The lower court deliberately erred in ruling that the purchase price for the lot involved was P 3 million and
not P 8 million for the same reasons as stated in Nos. 1 and II above.

VI. The lower court deliberately erred in ruling that petitioners retainer agreement with Atlanta Industries, Inc. was
a law partnership transaction for the same reasons as stated in Nos. 1 and II above.

VII. The lower court deliberately erred when it failed to rule on said petitioners permissive counterclaim relative to
the various personal loans secured by respondents also for the same reasons as the above.

B. As an incident of the extrinsic fraud[,] the lower court[,] despite full knowledge of its incapacity[,]
rendered/promulgated the assailed Consolidated Decision x x x without jurisdiction or with lack of
jurisdiction.10(Underscoring in the original.)

On 2 August 2007, the CA issued the first assailed Resolution 11 dismissing the Petition in CA-G.R. SP No. 99719,
which held the Petition to be insufficient in form and substance. It noted the following:

x x x. Readily noticeable is that CA-G.R. SP No. 90076 practically contained the prayer for the annulment of the
subject consolidated Decision premised on the very same allegations, grounds or issues as the present annulment of
judgment case.

Annulment of judgment is a recourse equitable in character, allowed only in exceptional cases as where there is no
available or other adequate remedy (Espinosa vs. Court of Appeals, 430 SCRA 96[2004]). Under Section 2 of Rule 47
of the Revised Rules of Court, the only grounds for an annulment of judgment are extrinsic fraud and lack of
jurisdiction (Cerezo vs. Tuazon, 426 SCRA 167 [2004]). Extrinsic fraud shall not be a valid ground if it was availed of,
or could have been availed of, in a motion for new trial or petition for relief.

x x x. In the case at bar, not only has the court a quo jurisdiction over the subject matter and over the persons of the
parties, what petitioner is truly complaining [of] here is only a possible error in the exercise of jurisdiction, not on the
issue of jurisdiction itself. Where there is jurisdiction over the person and the subject matter (as in this case), the
decision on all other questions arising in the case is but an exercise of the jurisdiction. And the errors which the court
may commit in the exercise of jurisdiction are merely errors of judgment which are the proper subject of an appeal
(Republic vs. "G" Holdings, supra, citing Tolentino vs. Leviste, supra). (Emphasis supplied.)

Subsequently, petitioners filed a Humble Motion for Reconsideration 12 on 28 August 2007.

While the 28 August 2007 motion was pending, on 13 September 2007, petitioner Erlando filed an Urgent Omnibus
Motion13 with Branch 226, alleging that the sheriff had levied on properties belonging to his children and petitioner
Joena. In addition, Erlando alleged that the trial court still had to determine the manner of distribution of the firms
assets and the value of the levied properties. Lastly, he insisted that the RTC still had to determine the issue of whether
the Rule 41 appeal was the correct remedy.

On the same day, Joena filed an Affidavit of Third Party Claim 14 also with Branch 226 of the RTC of Quezon City,
alleging that she15 and her stepchildren16 owned a number of the personal properties sought to be levied. She also
insisted that she owned half of the two (2) motor vehicles as well as the house and lot covered by Transfer Certificate
of Title (TCT) No. 216818, which formed part of the absolute community of property. She likewise alleged that the real
property, being a family home, and the furniture and the utensils necessary for housekeeping having a depreciated
combined value of one hundred thousand pesos (P 100,000) were exempt from execution pursuant to Rule 39, Section
13 of the Rules of Court. Thus, she sought their discharge and release and likewise the immediate remittance to her of
half of the proceeds, if any.

Accordingly, the RTC scheduled17 a hearing on the motion. On 17 October 2007, however, petitioner Erlando moved to
withdraw his motion on account of ongoing negotiations with respondents. 18
Thereafter, petitioner Erlando and respondent Abelardo Tibayan, witnessed by Sheriff Nardo de Guzman, Jr. of Branch
226 of the RTC of Quezon City, executed an agreement to postpone the auction sale of the property covered by TCT
No. 216818 in anticipation of an amicable settlement of the money judgment. 19

Finally, on 30 October 2007, the CA in CA-G.R. SP No. 99719 issued the second assailed Resolution 20 denying
petitioners Motion for Reconsideration for having been filed out of time, as the last day for filing was on 27 August
2007. Moreover, the CA found that the grounds stated in the motion were merely recycled and rehashed propositions,
which had already been dispensed with.

Petitioners are now assailing the CA Resolutions dated 2 August 2007 and 30 October 2007, respectively, in CA-G.R.
SP No. 99719. They insist that there is still a pending issue that has not been resolved by the RTC. That issue arose
from the Order21 given by the trial court to petitioner Erlando to explain why it should take cognizance of the Notice of
Appeal when the proper remedy was a petition for review under Rule 43 of the Rules of Court.

Further, petitioners blame the trial and the appellate courts for the dismissal of their appeal despite this Courts
explanation in G.R. No. 169420 that the appeal was the wrong remedy and was thus correctly dismissed by the CA.
Instead of complying with the show-cause Order issued by the RTC, petitioners went directly to the CA and insisted
that the remedy they had undertaken was correct.

Petitioners also contend that there was extrinsic fraud in the appreciation of the merits of the case. They raise in the
present Petition the grounds they cited in the three (3) Petitions for Annulment of Judgment (including the Amended
Petition) quoted above.

Next, they assert that petitioner Joenas right to due process was also violated when she was not made a party-in-
interest to the proceedings in the lower courts, even if her half of the absolute community of property was included in
the execution of the judgment rendered by Branch 226 of the RTC of Quezon City.

Finally, they insist that their Humble Motion for Reconsideration was filed on time, since 27 August 2007 was a
holiday. Therefore, they had until 28 August 2007 to file their motion.

Since then, it appears that a Sheriffs Certificate of Sale was issued on 3 January 2008 in favor of the law firm for the
sum of P 5 million for the property covered by TCT No. 216818.

On 18 March 2009, while the case was pending with this Court, petitioners filed a Complaint 22 with a prayer for the
issuance of a writ of preliminary injunction before the RTC of Marikina City against herein respondents and Sheriff
Nardo I. de Guzman, Jr. of Branch 226 of the RTC of Quezon City. The case was docketed as Civil Case No. 09-1323-
MK and was raffled to Branch 273 of the RTC of Marikina City. 23 Petitioners sought the nullification of the sheriffs
sale on execution of the Decision in the consolidated cases rendered by Branch 226, as well as the payment of
damages. They alleged that the process of the execution sale was conducted irregularly, unlawfully, and in violation of
their right to due process.

On 2 July 2009, Branch 273 of the RTC of Marikina City issued a Writ of Preliminary Injunction enjoining respondents
and/or their agents, and the Register of Deeds of Marikina City from consolidating TCT No. 216818. 24

The filing of the Complaint with the RTC of Marikina City prompted respondents to file a Motion 25 before us to cite for
contempt petitioner spouses and their counsel, Atty. Antonio R. Bautista. This Motion was on the ground that
petitioners committed forum shopping when they filed the Complaint pending with Branch 273 of the RTC of Marikina
City, while the present case was also still pending.

Meanwhile, on 22 September 2009, respondents filed before Branch 226 an Ex Parte Motion for Issuance of Writ of
Possession.26 That Motion was granted by Branch 226 through a Resolution 27 issued on 10 November 2011. This
Resolution then became the subject of a Petition for Certiorari 28 under Rule 65 filed by petitioners before the CA
docketed as CA-G.R. SP No. 123164.

Soon after, on 6 March 2012, petitioners filed with the CA an Urgent Motion for Issuance of Temporary Restraining
Order (T.R.O.)29 after Sheriff De Guzman, Jr. served on them a Notice to Vacate within five days from receipt or until
11 March 2012. As of the writing of this Decision, the CA has not resolved the issue raised in the Petition in CA-G.R.
SP No. 123164.

Our Ruling

Petitioners elevated this case to this Court, because they were allegedly denied due process when the CA rejected their
second attempt at the annulment of the Decision of the RTC and their Humble Motion for Reconsideration.

We DENY petitioners claims.

The rules of procedure were formulated to achieve the ends of justice, not to thwart them. Petitioners may not defy the
pronouncement of this Court in G.R. No. 169420 by pursuing remedies that are no longer available to them. Twice, the
CA correctly ruled that the remedy of annulment of judgment was no longer available to them, because they had
already filed an appeal under Rule 41. Due to their own actions, that appeal was dismissed.
It must be emphasized that the RTC Decision became final and executory through the fault of petitioners themselves
when petitioner Erlando (1) filed an appeal under Rule 41 instead of Rule 43; and (2) filed a Petition for Review
directly with the CA, without waiting for the resolution by the RTC of the issues still pending before the trial court.

In Enriquez v. Court of Appeals,30 we said:

It is true that the Rules should be interpreted so as to give litigants ample opportunity to prove their respective claims
and that a possible denial of substantial justice due to legal technicalities should be avoided. But it is equally true that
an appeal being a purely statutory right, an appealing party must strictly comply with the requisites laid down in the
Rules of Court. In other words, he who seeks to avail of the right to appeal must play by the rules. x x x. (Emphasis
supplied.)

With regard to the allegation of petitioner Joena that her right to due process was violated, it must be recalled that after
she filed her Affidavit of Third Party Claim on 13 September 2007 and petitioner Erlando filed his Urgent Omnibus
Motion raising the same issues contained in that third-party claim, he subsequently filed two Motions withdrawing his
Urgent Omnibus Motion. Petitioner Joena, meanwhile, no longer pursued her third-party claim or any other remedy
available to her. Her failure to act gives this Court the impression that she was no longer interested in her case. Thus, it
was through her own fault that she was not able to ventilate her claim.

Furthermore, it appears from the records that petitioner Erlando was first married to a certain Ma. Aline Lovejoy Padua
on 13 October 1983. They had three children: Patrik Erlando (born on 14 April 1985), Maria Monica Erline (born on 9
September 1986), and Patrik Randel (born on 12 April 1990).

After the dissolution of the first marriage of Erlando, he and Joena got married on 28 May 1998. 31 In her Affidavit,
Joena alleged that she represented her stepchildren; that the levied personal properties in particular, a piano with a
chair, computer equipment and a computer table were owned by the latter. We note that two of these stepchildren
were already of legal age when Joena filed her Affidavit. As to Patrik Randel, parental authority over him belongs to
his parents. Absent any special power of attorney authorizing Joena to represent Erlandos children, her claim cannot
be sustained.

Petitioner Joena also asserted that the two (2) motor vehicles purchased in 1992 and 1997, as well as the house and lot
covered by TCT No. 216818 formed part of the absolute community regime.1wphi1 However, Art. 92, par. (3) of the
Family Code excludes from the community property the property acquired before the marriage of a spouse who has
legitimate descendants by a former marriage; and the fruits and the income, if any, of that property. Neither these two
vehicles nor the house and lot belong to the second marriage.

We now proceed to discuss the Motion for contempt filed by respondents.

Respondents claim that petitioners and their present counsel, Atty. Antonio R. Bautista, were guilty of forum shopping
when the latter filed Civil Case No. 09-1323-MK with the RTC of Marikina City while the case was still pending
before us. In Executive Secretary v. Gordon,32 we explained forum shopping in this wise:

Forum-shopping consists of filing multiple suits involving the same parties for the same cause of action, either
simultaneously or successively, for the purpose of obtaining a favorable judgment. Thus, it has been held that there is
forum-shopping

(1) whenever as a result of an adverse decision in one forum, a party seeks a favorable decision (other than by
appeal or certiorari) in another, or

(2) if, after he has filed a petition before the Supreme Court, a party files another before the Court of Appeals since
in such case he deliberately splits appeals "in the hope that even as one case in which a particular remedy is sought
is dismissed, another case (offering a similar remedy) would still be open," or

(3) where a party attempts to obtain a preliminary injunction in another court after failing to obtain the same from
the original court.

Civil Case No. 09-1323-MK was filed to question the proceedings undertaken by the sheriff in executing the judgment
in Civil Case Nos. Q01-42948 and Q01-42959. On the other hand, the present case questions the merits of the Decision
itself in Civil Case Nos. Q01-42948 and Q01-42959. These cases have different causes of action. Thus, it cannot be
said that petitioners were clearly guilty of forum shopping when they filed the Complaint before the RTC of Marikina
City.

WHEREFORE, in view of the foregoing, the Petition is hereby DENIED. The Resolutions dated 2 August 2007 and 30
October 2007 issued by the Court of Appeals in CA-G.R. SP No. 99719 are AFFIRMED.

SO ORDERED.
 G.R. No. 139884 February 15, 2001

SPOUSES OCTAVIO and EPIFANIA LORBES, petitioners, vs.

COURT OF APPEALS, RICARDO DELOS REYES and JOSEFINA CRUZ, respondents.

This petition for review on certiorari arose from an action for reformation of instrument and damages originally filed
with the Regional Trial Court of Antipolo, Rizal, Branch 74, the decision on which was reviewed and reversed by the
Third Division of the Court of Appeals.

Petitioners were the registered owners of a 225-square meter parcel of land located in Antipolo, Rizal covered by
Transfer Certificate of Title No. 165009. Sometime in August 1991, petitioners mortgaged this property to Florencio
and Nestor Carlos in the amount of P150,000.00.

About a year later, the mortgage obligation had increased to P500,000.00 and fearing foreclosure of the property,
petitioners asked their son-in-law, herein private respondent Ricardo delos Reyes, for help in redeeming their property.
Private respondent delos Reyes agreed to redeem the property but because he allegedly had no money then for the
purpose he solicited the assistance of private respondent Josefina Cruz, a family friend of the delos Reyeses and an
employee of the Land Bank of the Philippines.1wphi1.nt

It was agreed that petitioners will sign a deed of sale conveying the mortgaged property in favor of private respondent
Cruz and thereafter, Cruz will apply for a housing loan with Land Bank, using the subject property as collateral. It was
further agreed that out of the proceeds of the loan, P500,000.00 will be paid to the Carloses as mortgagees, and an such
balance will be applied by petitioners for capital gains tax, expenses for the cancellation of the mortgage to the
Carloses, transfer of title to Josefina Cruz, and registration of a mortgage in favor of Land Bank. 1 Moreover, the
monthly amortization on the housing loan which was supposed to be deducted from the salary of private respondent
Cruz will be reimbursed by private respondent delos Reyes.

On September 29, 1992, the Land Bank issued a letter of guarantee in favor of the Carloses, informing them that Cruzs
loan had been approved. On October 22, 1992, Transfer Certificate of Title No. 165009 was cancelled and Transfer
Certificate of Title No. 229891 in the name of Josefina Cruz was issued in lieu thereof. 2 On November 25, 1992, the
mortgage was discharged.

Sometime in 1993, petitioners notified private respondent delos Reyes that they were ready to redeem the property but
the offer was refused. Aggrieved, petitioners filed on July 22, 1994 a complaint for reformation of instrument and
damages with the RTC of Antipolo, Rizal, docketed as Civil Case No. 94-3296.

In the complaint, petitioners claimed that the deed was merely a formality to meet the requirements of the bank for the
housing loan, and that the real intention of the parties in securing the loan was to apply the proceeds thereof for the
payment of the mortgage obligation.3 They alleged that the deed of sale did not reflect the true intention of the parties,
and that the transaction was not an absolute sale but an equitable mortgage, considering that the price of the sale was
inadequate considering the market value of the subject property and because they continued paying the real estate taxes
thereto even after the execution of the said deed of sale. Petitioners averred that they did not see any reason why
private respondents would retract from their original agreement other than that they (petitioners) and the members of
their family resigned en masse from the Mahal Namin Organization, of which private respondent delos Reyes was the
president and chairman of the board of directors, and private respondent Cruz was the treasurer. In the same complaint,
they demanded moral damages, exemplary damages, and attorneys fees.

On July 29, 1996, the trial court issued a temporary restraining order enjoining private respondents from ejecting
petitioners from the premises of the disputed property; this was soon replaced by a writ of preliminary injunction.

Summons and a copy of the complaint were served upon private respondents on August 1, 1994. Private respondents
filed their answer beyond the reglamentary period, or only on September 1, 1994. Thus, on September 5, 1994,
petitioners filed a motion to declare private respondents in default, which the trial court granted in an order dated
September 16, 1994. On September 30 of the same year, petitioners presented their evidence ex parte before the trial
court. The principal witness presented was petitioner Octavio Lorbes, whose testimony was corroborated by his son,
Atty. Salvador Lorbes.

On October 12, 1994, private respondents filed a motion to lift order of default and to strike out evidence presented ex
parte, which the court denied in an order dated October 26, 1994.

On June 20, 1995, the trial court rendered judgment in favor of petitioners, upon finding that: (1) the Deed of Absolute
Sale dated October 21, 1992 did not reflect the true intention of the parties, and (2) the transaction entered into between
petitioners and Cruz was not an absolute sale but an equitable mortgage, considering that the price stated in the Deed of
Absolute Sale was insufficient compared to the value of the property, petitioners are still in possession of the property,
and petitioners had continued to pay the real estate taxes thereon after the execution of the said deed of sale. As
explained by the trial court in its decision:

The foregoing uncontroverted facts clearly show that the transaction entered into between the plaintiffs and the
defendants is not an absolute sale but merely an equitable mortgage as the sale was executed in order to secure
 a loan from a certain bank to save the property from the danger of foreclosure and to use it as collateral thereof
for bank loan purposes and that the same does not reflect the real intention of the parties in executing the said
Deed of Sale. The court notes that at the time the transaction and the Deed of Absolute Sale was executed by
the plaintiffs sometime in 1992, the prevailing market value of the lot alone was P400,000.00 per square meter
such that the lot alone consisting of 255 square meters, excluding the house and improvements thereon would
already cost more than a million pesos already hence, the consideration of P600,000.00 in the said Deed of
Sale is considerably insufficient compared to the value of the property. Further, the plaintiffs are still in
possession of the subject property and had been paying the realty taxes thereon even after the execution of the
sale and the transfer of the title from the plaintiffs to defendant Josephine Cruz which clearly evinces the true
badge of the transaction which occurred between the plaintiffs and defendants as that of an equitable mortgage
and not an absolute sale and that the plaintiffs were only compelled to enter into the said transaction of sale
with the defendants as the former were in extreme need of money in order to redeem their only conjugal
property and to save it from being foreclosed for non-payment of the mortgage obligation and that it was never
the intention of the plaintiffs to sell the property to the defendants, as it was their agreement that plaintiffs can
redeem the property or any member of the family thereof, when they become financially stable. 4

The dispositive portion of the trial courts decision thus provides:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiffs and against the
defendants, ordering the latter jointly and severally, as follows:

1. To reconvey the subject property to the plaintiffs upon payment of the price stipulated in the contract
of sale;

2. To pay plaintiffs the sum of P50,000.00 as moral damages;

3. To pay plaintiffs the sum of P50,000.00 as and by way of attorneys fees plus P1,000.00 per court
appearance;

4. To pay the costs of suit.

SO ORDERED.5

The Court of Appeals reversed the above decision, finding that private respondents were denied due process by the
refusal of the trial court to lift the order of default against them, and that the transaction between petitioners and Cruz
was one of absolute sale, not of equitable mortgage. It also held the RTC decision to be constitutionally infirm for its
failure to clearly and distinctly state the facts and the law on which it is based.

The Court of Appeals held that the reformation of the Deeds of Absolute Sale in the instant case is improper because
there is no showing that such instrument failed to express the true intention of the parties by reason of mistake, fraud,
inequitable conduct, or accident in the execution thereof. 6 To the Court of Appeals, the transaction was unmistakably a
contract of sale, as evidenced by the numerous supporting documents thereto, such as the Contract to Sell dated June
1992, Affidavit of Waiver/Assignment dated August 14, 1992, Receipt of Partial Advance Payment dated September 9,
1992, and Transfer Certificate of Title No. 229891 issued in the name of private respondent Cruz. Going over the
indicators giving rise to a presumption of equitable mortgage cited in the decision of the RTC, the Court of Appeals
held: (1) inadequacy of price is material only in a sale with right to repurchase, which is not the case with herein
petitioners and Cruz; moreover, the estimate of the market value of the property came only from the bare testimony of
petitioner Octavio Lorbes, (2) petitioners remaining in possession of the property resulted only from their refusal to
vacate the same despite the lawful demands of private respondent Cruz, and (3) there was no documentary evidence
that petitioners continued paying the taxes on the disputed property after the execution of the Deed of Absolute Sale.

In its decision, the Court of Appeals also pointed out that under the usual arrangement of pacto de retro the vendor of
the property is a debtor of the vendee, and the property is used as security for his obligation. In the instant case, the
mortgage creditors (the Carloses) are third persons to the Deed of Absolute Sale.

This petition raises three issues before the Court: (1) whether respondent court erred in ruling that the Deed of Absolute
Sale dated October 21, 1992 was an equitable mortgage, (2) whether respondent court erred in ruling that by declaring
private respondents in default they were denied due process of law, and (3) whether respondent court erred in ruling
that the trial courts decision violates the constitutional requirement that it should clearly and distinctly state the facts
and the law on which it is based.7

We shall first deal with the second and third issues, these being preliminary matters.

Well-settled is the rule that courts should be liberal in setting aside orders of default for judgments of default are
frowned upon, unless in cases where it clearly appears that the reopening of the case is intended for delay. 8 The
issuance of orders of default should be the exception rather than the rule, to be allowed only in clear cases of obstinate
refusal by the defendant to comply with the orders of the trial court. 9

Under the factual milieu of this case, the RTC was indeed remiss in denying private respondents motion to lift the
order of default and to strike out the evidence presented by petitioners ex parte, especially considering that an answer
was filed, though out of time. We thus sustain the holding of the Court of Appeals that the default order of the RTC was
immoderate and in violation of private respondents due process rights. However, we do not think that the violation was
of a degree as to justify a remand of the proceedings to the trial court, first, because such relief was not prayed for by
private respondents, and second, because the affirmative defenses and evidence that private respondents would have
presented before the RTC were capably ventilated before respondent court, and were taken into account by the latter in
reviewing the correctness of the evaluation of petitioners evidence by the RTC and ultimately, in reversing the
decision of the RTC. This is evident from the discussions in the decision of the Court of Appeals, which cited with
approval a number of private respondents arguments and evidence, including the documents annexed to their
opposition to the issuance of a writ of preliminary injunction filed with the RTC. 10 To emphasize, the reversal of
respondent court was not simply on due process grounds but on the merits, going into the issue of whether the
transaction was one of equitable mortgage or of sale, and so we find that we can properly take cognizance of the
substantive issue in this case, while of course bearing in mind the inordinate manner by which the RTC issued its
default order.

As regards the third issue, we reverse for being unfounded the holding of the Court of Appeals since the RTC decision,
some parts of which we even reproduced in our earlier discussions, clearly complied with the constitutional
requirement to state clearly and distinctly the facts and the law on which it was based.

Thus, the one issue essential to the resolution of this case is the nature of the transaction between petitioners and
private respondent Cruz concerning the subject parcel of land. Did the parties intend for the contested Deed of
Absolute Sale to be a bona fide and absolute conveyance of the property, or merely an equitable mortgage?

On the outset, it must be emphasized that there is no conclusive test to determine whether a deed absolute on its face is
really a simple loan accommodation secured by a mortgage. 11 "The decisive factor in evaluating such agreement is the
intention of the parties, as shown not necessarily by the terminology used in the contract but by all the surrounding
circumstances, such as the relative situation of the parties at that time, the attitude, acts, conduct, declarations of the
parties, the negotiations between them leading to the deed, and generally, all pertinent facts having a tendency to fix
and determine the real nature of their design and understanding. As such, documentary and parol evidence may be
submitted and admitted to prove the intention of the parties." 12

The conditions which give way to a presumption of equitable mortgage, as set out in Article 1602 of the Civil Code,
apply with equal force to a contract purporting to be one of absolute sale. 13 Moreover, the presence of even one of the
circumstances laid out in Article 1602, and not a concurrence of the circumstances therein enumerated, suffices to
construe a contract of sale to be one of equitable mortgage. 14 This is simply in consonance with the rule that the law
favors the least transmission of property rights. 15

Thus, under Article 1602 of the Civil Code, a contract shall be presumed to be an equitable mortgage when --- (a) the
price of a sale with right to repurchase is unusually inadequate; (b) the vendor remains in possession as lessee or
otherwise; (c) upon or after the expiration of the right of repurchase another instrument extending the period of
redemption or granting a new period is executed; (d) the purchaser retains for himself a part of the purchase price; (e)
the vendor binds himself to pay the taxes on the thing sold; and, (f) in any other case where it may be fairly inferred
that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any
other obligation.

Applying the foregoing considerations to the instant case, the Court finds that the true intention between the parties for
executing the Deed of Absolute Sale was not to convey ownership of the property in question but merely to secure the
housing loan of Cruz, in which petitioners had a direct interest since the proceeds thereof were to be immediately
applied to their outstanding mortgage obligation to the Carloses.

It is not disputed that before the execution of the Deed of Absolute Sale petitioners mortgage obligation to the Carloses
as nearing maturity and they were in dire need of money to meet the same. Hence, they asked for the help of their son-
in-law delos Reyes who in turn requested Cruz to take out a housing loan with Land Bank. Since collateral is a
standard requirement of banks in giving out loans, it was made to appear that the subject property was sold to Cruz so
she can declare the same as collateral for the housing loan. This was simply in line with the basic requirement in our
laws that the mortgagor be the absolute owner of the property sought to be mortgaged. 16Consistent with their
agreement, as soon as the housing loan was approved, the full amount of the proceeds were immediately turned over to
petitioners, who promptly paid P500,000.00 therefrom to the Carloses in full satisfaction of their mortgage obligation.
The balance was spent by petitioners in transferring title to the property to Cruz and registering the new mortgage with
Land Bank.

Understandably, the Deed of Absolute Sale and its supporting documents do not reflect the true arrangement between
the parties as to how the loan proceeds are to be actually applied because it was not the intention of the parties for these
documents to do so. The sole purpose for preparing these documents was to satisfy Land Bank that the requirement of
collateral relative to Cruzs application for a housing loan was met.

Were we to accept, as respondent court had, that the loan that Cruz took out with Land Bank was indeed a housing
loan, then it is rather curious that Cruz kept none of the loan proceeds but allowed for the bulk thereof to be
immediately applied to the payment of petitioners outstanding mortgage obligation. It also strains credulity that
petitioners, who were exhausting all means to save their sole conjugal real property from being foreclosed by the
Carloses, would concurrently part with the same in favor of Cruz.
Such urgent prospect of foreclosure helps to explain why petitioners would subscribe to an agreement like the Deed of
Absolute Sale in the herein case, which on its face represents their unconditional relinquishment of ownership over
their property. Passing upon previous similar situations the Court has declared that "while it was true that plaintiffs
were aware of the contents of the contracts, the preponderance of the evidence showed however that they signed
knowing that said contracts did not express their real intention, and if they did so notwithstanding this, it was due to
the urgent necessity of obtaining funds. "Necessitous men are not, truly speaking, free men; but to answer a present
emergency, will submit to any terms that the crafty may impose upon them." 17

The facts further bear out that petitioners remained in possession of the disputed property after the execution of the
Deed of Absolute Sale and the transfer of registered title to Cruz in October 1992. Cruz made no demand on petitioners
to vacate the subject premises until March 19, 1994; 18 interestingly, this was two days after petitioners signified their
intention to redeem the property by paying the full amount of P600,000.00. 19 On this basis, the finding of respondent
court that petitioners remained in possession of the property only because they refused to vacate on Cruzs demand is
not accurate because the records reflect that no such demand was made until more than a year since the purported sale
of the property.

Copies of realty tax receipts attached to the record also show that petitioners continued paying for the taxes on the
property for the period 1992 to 1994,20 or after the property was supposed to have been sold to Cruz.

From the above, the Court is satisfied that enough of the circumstances set out in Article 1602 of the Civil Code are
attendant in the instant case, as to show that the true arrangement between petitioners and private respondent Cruz was
an equitable mortgage.

That a transfer certificate of title was issued in favor of private respondent Cruz also does not import conclusive
evidence of ownership or that the agreement between the parties was one of sale. As was stated in Oronce vs. Court of
Appeals,21 citing Macapinlac vs. Gutierrez Repide22:

xxx it must be borne in mind that the equitable doctrine xxx to the effect that any conveyance intended as
security for a debt will be held in effect to be a mortgage, whether so actually expressed in the instrument or
not, operates regardless of the form of the agreement chosen by the contracting parties as the repository of their
will. Equity looks through the form and considers the substance; and no kind of engagement can be adopted
which will enable the parties to escape from the equitable doctrine to which reference is made. In other words,
a conveyance of land, accompanied by registration in the name of the transferee and the issuance of a new
certificate, is no more secured from the operation of the equitable doctrine than the most informal conveyance
that could be devised.

Before we fully set aside this issue, it will be recalled that the instant petition originated as a complaint for reformation
filed before the RTC of Antipolo, Rizal. The Court of Appeals found petitioners action for reformation unmeritorious
because there was no showing that the failure of the deed of sale to express the parties true intention was because of
mistake, fraud, inequitable conduct, or accident. 23 Indeed, under the facts of the present case, reformation may not be
proper for failure to fully meet the requisites in Article 1359 of the Civil Code, and because as the evidence eventually
bore out the contested Deed of Absolute Sale was not intended to reflect the true agreement between the parties but was
merely to comply with the collateral requirements of Land Bank. However, the fact that the complaint filed by
petitioners before the trial court was categorized to be one for reformation of instrument should not preclude the Court
from passing upon the issue of whether the transaction was in fact an equitable mortgage as the same has been squarely
raised in the complaint and had been the subject of arguments and evidence of the parties. Thus we have held that it is
not the caption of the pleading but the allegations therein that determine the nature of the action, and the Court shall
grant relief warranted by the allegations and the proof even if no such relief is prayed for.24

Finally, on the award of damages. Considering the due process flaws that attended the default judgment of the RTC,
and applying the rule adopted by this Court that in instances where no actual damages are adjudicated the awards for
moral and exemplary damages may be reduced, 25 we reduce the award for moral damages in the instant case from
P50,000.00 to P30,000.00. At the same time, we sustain the award of attorneys fees in the amount of P50,000.00, it
being clear that petitioners were compelled to incur expenses and undergo the rigors of litigation to recover their
property.1wphi1.nt

WHEREFORE, the decision of the Court of Appeals is REVERSED and SET ASIDE. The decision of the Regional
Trial Court of Antipolo, Rizal is REINSTATED, with the MODIFICATION that the award of moral damages is
reduced to P30,000.00, and in all other respects AFFIRMED. Costs against private respondents.

SO ORDERED.
 G.R. No. 112024 January 28, 1999

PHILIPPINE BANK OF COMMUNICATIONS, petitioner, vs.

COMMISSIONER OF INTERNAL REVENUE, COURT OF TAX APPEALS and COURT OF
APPEALS, respondent.

This petition for review assails the Resolution 1 of the Court of Appeals dated September 22, 1993 affirming the
Decision2 and a Resolution 3 of the Court Of Tax Appeals which denied the claims of the petitioner for tax refund and
tax credits, and disposing as follows:

IN VIEW OF ALL, THE FOREGOING, the instant petition for review, is DENIED due course. The Decision of the
Court of Tax Appeals dated May 20, 1993 and its resolution dated July 20, 1993, are hereby AFFIRMED in toto.

SO ORDERED. 4

The Court of Tax Appeals earlier ruled as follows:

WHEREFORE, Petitioner's claim for refund/tax credits of overpaid income tax for 1985 in the amount of
P5,299,749.95 is hereby denied for having been filed beyond the reglementary period. The 1986 claim for refund
amounting to P234,077.69 is likewise denied since petitioner has opted and in all likelihood automatically credited
the same to the succeeding year. The petition for review is dismissed for lack of merit.

SO ORDERED. 5

The facts on record show the antecedent circumstances pertinent to this case.

Petitioner, Philippine Bank of Communications (PBCom), a commercial banking corporation duly organized under
Philippine laws, filed its quarterly income tax returns for the first and second quarters of 1985, reported profits, and
paid the total income tax of P5,016,954.00. The taxes due were settled by applying PBCom's tax credit memos and
accordingly, the Bureau of Internal Revenue (BIR) issued Tax Debit Memo Nos. 0746-85 and 0747-85 for
P3,401,701.00 and P1,615,253.00, respectively.
Subsequently, however, PBCom suffered losses so that when it filed its Annual Income Tax Returns for the year-ended
December 31, 1986, the petitioner likewise reported a net loss of P14,129,602.00, and thus declared no tax payable for
the year.
But during these two years, PBCom earned rental income from leased properties. The lessees withheld and remitted to
the BIR withholding creditable taxes of P282,795.50 in 1985 and P234,077.69 in 1986.
On August 7, 1987, petitioner requested the Commissioner of Internal Revenue, among others, for a tax credit of
P5,016,954.00 representing the overpayment of taxes in the first and second quarters of 1985.
Thereafter, on July 25, 1988, petitioner filed a claim for refund of creditable taxes withheld by their lessees from
property rentals in 1985 for P282,795.50 and in 1986 for P234,077.69.
Pending the investigation of the respondent Commissioner of Internal Revenue, petitioner instituted a Petition for
Review on November 18, 1988 before the Court of Tax Appeals (CTA). The petition was docketed as CTA Case No.
4309 entitled: "Philippine Bank of Communications vs. Commissioner of Internal Revenue."
The losses petitioner incurred as per the summary of petitioner's claims for refund and tax credit for 1985 and 1986,
filed before the Court of Tax Appeals, are as follows:

1985 1986

Net Income (Loss) (P25,317,288.00) (P14,129,602.00)
Tax Due NIL NIL
Quarterly tax.
Payments Made 5,016,954.00
Tax Withheld at Source 282,795.50 234,077.69

Excess Tax Payments P5,299,749.50* P234,077.69
=============== =============

* CTA's decision reflects PBCom's 1985 tax claim as P5,299,749.95. A forty five centavo difference was noted.

On May 20, 1993, the CTA rendered a decision which, as stated on the outset, denied the request of petitioner for a tax
refund or credit in the sum amount of P5,299,749.95, on the ground that it was filed beyond the two-year reglementary
period provided for by law. The petitioner's claim for refund in 1986 amounting to P234,077.69 was likewise denied on
the assumption that it was automatically credited by PBCom against its tax payment in the succeeding year.

On June 22, 1993, petitioner filed a Motion for Reconsideration of the CTA's decision but the same was denied due
course for lack of merit. 6
Thereafter, PBCom filed a petition for review of said decision and resolution of the CTA with the Court of Appeals.
However on September 22, 1993, the Court of Appeals affirmed in toto the CTA's resolution dated July 20, 1993.
Hence this petition now before us.

The issues raised by the petitioner are:

I. Whether taxpayer PBCom which relied in good faith on the formal assurances of BIR in RMC No. 7-85 and
did not immediately file with the CTA a petition for review asking for the refund/tax credit of its 1985-86 excess
quarterly income tax payments can be prejudiced by the subsequent BIR rejection, applied retroactivity, of its
assurances in RMC No. 7-85 that the prescriptive period for the refund/tax credit of excess quarterly income tax
payments is not two years but ten (10). 7

II. Whether the Court of Appeals seriously erred in affirming the CTA decision which denied PBCom's claim for
the refund of P234,077.69 income tax overpaid in 1986 on the mere speculation, without proof, that there were
taxes due in 1987 and that PBCom availed of tax-crediting that year. 8

Simply stated, the main question is: Whether or not the Court of Appeals erred in denying the plea for tax refund or tax
credits on the ground of prescription, despite petitioner's reliance on RMC No. 7-85, changing the prescriptive period
of two years to ten years?

Petitioner argues that its claims for refund and tax credits are not yet barred by prescription relying on the applicability
of Revenue Memorandum Circular No. 7-85 issued on April 1, 1985. The circular states that overpaid income taxes are
not covered by the two-year prescriptive period under the tax Code and that taxpayers may claim refund or tax credits
for the excess quarterly income tax with the BIR within ten (10) years under Article 1144 of the Civil Code. The
pertinent portions of the circular reads:

REVENUE MEMORANDUM CIRCULAR NO. 7-85

SUBJECT: PROCESSING OF REFUND OR TAX CREDIT OF EXCESS CORPORATE INCOME TAX

RESULTING FROM THE FILING OF THE FINAL ADJUSTMENT RETURN.

TO: All Internal Revenue Officers and Others Concerned.

Sec. 85 And 86 Of the National Internal Revenue Code provide:

The foregoing provisions are implemented by Section 7 of Revenue Regulations Nos. 10-77 which provide;

It has been observed, however, that because of the excess tax payments, corporations file claims for recovery of
overpaid income tax with the Court of Tax Appeals within the two-year period from the date of payment, in
accordance with sections 292 and 295 of the National Internal Revenue Code. It is obvious that the filing of the
case in court is to preserve the judicial right of the corporation to claim the refund or tax credit.

It should he noted, however, that this is not a case of erroneously or illegally paid tax under the provisions of
Sections 292 and 295 of the Tax Code.

In the above provision of the Regulations the corporation may request for the refund of the overpaid income tax or
claim for automatic tax credit. To insure prompt action on corporate annual income tax returns showing refundable
amounts arising from overpaid quarterly income taxes, this Office has promulgated Revenue Memorandum Order
No. 32-76 dated June 11, 1976, containing the procedure in processing said returns. Under these procedures, the
returns are merely pre-audited which consist mainly of checking mathematical accuracy of the figures of the
return. After which, the refund or tax credit is granted, and, this procedure was adopted to facilitate immediate
action on cases like this.

In this regard, therefore, there is no need to file petitions for review in the Court of Tax Appeals in order to preserve the
right to claim refund or tax credit the two year period. As already stated, actions hereon by the Bureau are immediate
after only a cursory pre-audit of the income tax returns. Moreover, a taxpayer may recover from the Bureau of Internal
Revenue excess income tax paid under the provisions of Section 86 of the Tax Code within 10 years from the date of
payment considering that it is an obligation created by law (Article 1144 of the Civil Code). 9 (Emphasis supplied.)

Petitioner argues that the government is barred from asserting a position contrary to its declared circular if it would
result to injustice to taxpayers. Citing ABS CBN Broadcasting Corporation vs. Court of Tax Appeals 10 petitioner claims
that rulings or circulars promulgated by the Commissioner of Internal Revenue have no retroactive effect if it would be
prejudicial to taxpayers, In ABS-CBN case, the Court held that the government is precluded from adopting a position
inconsistent with one previously taken where injustice would result therefrom or where there has been a
misrepresentation to the taxpayer.

Petitioner contends that Sec. 246 of the National Internal Revenue Code explicitly provides for this rules as follows:
Sec. 246 Non-retroactivity of rulings Any revocation, modification or reversal of any of the rules and
regulations promulgated in accordance with the preceding section or any of the rulings or circulars promulgated
 by the Commissioner shall not be given retroactive application if the revocation, modification or reversal will be
prejudicial to the taxpayers except in the following cases:
a). where the taxpayer deliberately misstates or omits material facts from his return or in any document
required of him by the Bureau of Internal Revenue;
b). where the facts subsequently gathered by the Bureau of Internal Revenue are materially different from the
facts on which the ruling is based;
c). where the taxpayer acted in bad faith.

Respondent Commissioner of Internal Revenue, through Solicitor General, argues that the two-year prescriptive period
for filing tax cases in court concerning income tax payments of Corporations is reckoned from the date of filing the
Final Adjusted Income Tax Return, which is generally done on April 15 following the close of the calendar year. As
precedents, respondent Commissioner cited cases which adhered to this principle, to wit ACCRA Investments Corp. vs.
Court of Appeals, et al., 11 and Commissioner of Internal Revenue vs. TMX Sales, Inc., et al.. 12Respondent
Commissioner also states that since the Final Adjusted Income Tax Return of the petitioner for the taxable year 1985
was supposed to be filed on April 15, 1986, the latter had only until April 15, 1988 to seek relief from the court.
Further, respondent Commissioner stresses that when the petitioner filed the case before the CTA on November 18,
1988, the same was filed beyond the time fixed by law, and such failure is fatal to petitioner's cause of action.
After a careful study of the records and applicable jurisprudence on the matter, we find that, contrary to the petitioner's
contention, the relaxation of revenue regulations by RMC 7-85 is not warranted as it disregards the two-year
prescriptive period set by law.
Basic is the principle that "taxes are the lifeblood of the nation." The primary purpose is to generate funds for the State
to finance the needs of the citizenry and to advance the common weal. 13 Due process of law under the Constitution
does not require judicial proceedings in tax cases. This must necessarily be so because it is upon taxation that the
government chiefly relies to obtain the means to carry on its operations and it is of utmost importance that the modes
adopted to enforce the collection of taxes levied should be summary and interfered with as little as possible. 14
From the same perspective, claims for refund or tax credit should be exercised within the time fixed by law because the
BIR being an administrative body enforced to collect taxes, its functions should not be unduly delayed or hampered by
incidental matters.

Sec. 230 of the National Internal Revenue Code (NIRC) of 1977 (now Sec. 229, NIRC of 1997) provides for the
prescriptive period for filing a court proceeding for the recovery of tax erroneously or illegally collected, viz.:
Sec. 230. Recovery of tax erroneously or illegally collected. No suit or proceeding shall be maintained in any court
for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or
collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been
excessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the
Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid
under protest or duress.
In any case, no such suit or proceedings shall begun after the expiration of two years from the date of payment of the
tax or penalty regardless of any supervening cause that may arise after payment; Provided however, That the
Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return
upon which payment was made, such payment appears clearly to have been erroneously paid. (Emphasis supplied)

The rule states that the taxpayer may file a claim for refund or credit with the Commissioner of Internal Revenue,
within two (2) years after payment of tax, before any suit in CTA is commenced. The two-year prescriptive period
provided, should be computed from the time of filing the Adjustment Return and final payment of the tax for the year.

In Commissioner of Internal Revenue vs. Philippine American Life Insurance Co., 15 this Court explained the
application of Sec. 230 of 1977 NIRC, as follows:

Clearly, the prescriptive period of two years should commence to run only from the time that the refund is
ascertained, which can only be determined after a final adjustment return is accomplished. In the present case, this
date is April 16, 1984, and two years from this date would be April 16, 1986. . . . As we have earlier said in the
TMX Sales case, Sections 68. 16 69, 17 and 70 18 on Quarterly Corporate Income Tax Payment and Section 321
should be considered in conjunction with it 19

When the Acting Commissioner of Internal Revenue issued RMC 7-85, changing the prescriptive period of two years
to ten years on claims of excess quarterly income tax payments, such circular created a clear inconsistency with the
provision of Sec. 230 of 1977 NIRC. In so doing, the BIR did not simply interpret the law; rather it legislated
guidelines contrary to the statute passed by Congress.

It bears repeating that Revenue memorandum-circulars are considered administrative rulings (in the sense of more
specific and less general interpretations of tax laws) which are issued from time to time by the Commissioner of
Internal Revenue. It is widely accepted that the interpretation placed upon a statute by the executive officers, whose
duty is to enforce it, is entitled to great respect by the courts. Nevertheless, such interpretation is not conclusive and
will be ignored if judicially found to be erroneous. 20 Thus, courts will not countenance administrative issuances that
override, instead of remaining consistent and in harmony with the law they seek to apply and implement. 21

In the case of People vs. Lim, 22 it was held that rules and regulations issued by administrative officials to implement a
law cannot go beyond the terms and provisions of the latter.
 Appellant contends that Section 2 of FAO No. 37-1 is void because it is not only inconsistent with but is contrary
to the provisions and spirit of Act. No 4003 as amended, because whereas the prohibition prescribed in said
Fisheries Act was for any single period of time not exceeding five years duration, FAO No 37-1 fixed no period,
that is to say, it establishes an absolute ban for all time. This discrepancy between Act No. 4003 and FAO No.
37-1 was probably due to an oversight on the part of Secretary of Agriculture and Natural Resources. Of course,
in case of discrepancy, the basic Act prevails, for the reason that the regulation or rule issued to implement a law
cannot go beyond the terms and provisions of the latter. . . . In this connection, the attention of the technical men
in the offices of Department Heads who draft rules and regulation is called to the importance and necessity of
closely following the terms and provisions of the law which they intended to implement, t`his to avoid any
possible misunderstanding or confusion as in the present case. 23

Further, fundamental is the rule that the State cannot be put in estoppel by the mistakes or errors of its officials or
agents. 24 As pointed out by the respondent courts, the nullification of RMC No. 7-85 issued by the Acting
Commissioner of Internal Revenue is an administrative interpretation which is not in harmony with Sec. 230 of 1977
NIRC. for being contrary to the express provision of a statute. Hence, his interpretation could not be given weight for
to do so would, in effect, amend the statute.

It is likewise argued that the Commissioner of Internal Revenue, after promulgating RMC No. 7-85, is estopped by the
principle of non-retroactively of BIR rulings. Again We do not agree. The Memorandum Circular, stating that a
taxpayer may recover the excess income tax paid within 10 years from date of payment because this is an obligation
created by law, was issued by the Acting Commissioner of Internal Revenue. On the other hand, the decision, stating
that the taxpayer should still file a claim for a refund or tax credit and corresponding petition fro review within the two-
year prescription period, and that the lengthening of the period of limitation on refund from two to ten years would be
adverse to public policy and run counter to the positive mandate of Sec. 230, NIRC, - was the ruling and judicial
interpretation of the Court of Tax Appeals. Estoppel has no application in the case at bar because it was not the
Commissioner of Internal Revenue who denied petitioner's claim of refund or tax credit. Rather, it was the Court of Tax
Appeals who denied (albeit correctly) the claim and in effect, ruled that the RMC No. 7-85 issued by the Commissioner of
Internal Revenue is an administrative interpretation which is out of harmony with or contrary to the express provision of a
statute (specifically Sec. 230, NIRC), hence, cannot be given weight for to do so would in effect amend the statute. 25
Art. 8 of the Civil Code 26 recognizes judicial decisions, applying or interpreting statutes as part of the legal system of
the country. But administrative decisions do not enjoy that level of recognition. A memorandum-circular of a bureau
head could not operate to vest a taxpayer with shield against judicial action. For there are no vested rights to speak of
respecting a wrong construction of the law by the administrative officials and such wrong interpretation could not place
the Government in estoppel to correct or overrule the same. 27 Moreover, the non-retroactivity of rulings by the
Commissioner of Internal Revenue is not applicable in this case because the nullity of RMC No. 7-85 was declared by
respondent courts and not by the Commissioner of Internal Revenue. Lastly, it must be noted that, as repeatedly held by
this Court, a claim for refund is in the nature of a claim for exemption and should be construed in strictissimi
juris against the taxpayer. 28
On the second issue, the petitioner alleges that the Court of Appeals seriously erred in affirming CTA's decision
denying its claim for refund of P234,077.69 (tax overpaid in 1986), based on mere speculation, without proof, that
PBCom availed of the automatic tax credit in 1987.
Sec. 69 of the 1977 NIRC 29 (now Sec. 76 of the 1997 NIRC) provides that any excess of the total quarterly payments
over the actual income tax computed in the adjustment or final corporate income tax return, shall either (a) be refunded
to the corporation, or (b) may be credited against the estimated quarterly income tax liabilities for the quarters of the
succeeding taxable year.
The corporation must signify in its annual corporate adjustment return (by marking the option box provided in the BIR
form) its intention, whether to request for a refund or claim for an automatic tax credit for the succeeding taxable year. To
ease the administration of tax collection, these remedies are in the alternative, and the choice of one precludes the other.

As stated by respondent Court of Appeals:

Finally, as to the claimed refund of income tax over-paid in 1986 the Court of Tax Appeals, after examining the
adjusted final corporate annual income tax return for taxable year 1986, found out that petitioner opted to apply
for automatic tax credit. This was the basis used (vis-avis the fact that the 1987 annual corporate tax return was not
offered by the petitioner as evidence) by the CTA in concluding that petitioner had indeed availed of and applied
the automatic tax credit to the succeeding year, hence it can no longer ask for refund, as to [ sic] the two remedies
of refund and tax credit are alternative. 30

That the petitioner opted for an automatic tax credit in accordance with Sec. 69 of the 1977 NIRC, as specified in its
1986 Final Adjusted Income Tax Return, is a finding of fact which we must respect. Moreover, the 1987 annual
corporate tax return of the petitioner was not offered as evidence to contovert said fact. Thus, we are bound by the
findings of fact by respondent courts, there being no showing of gross error or abuse on their part to disturb our
reliance thereon. 31

WHEREFORE, the, petition is hereby DENIED, The decision of the Court of Appeals appealed from is AFFIRMED,
with COSTS against the petitioner.1wphi1.nt

SO ORDERED.
 G.R. No. 105294 February 26, 1997

PACITA DAVID-CHAN, petitioner, vs.

COURT OF APPEALS and PHIL. RABBIT BUS LINES, INC., respondents.

In pleading for an easement of right of way, petitioner correctly cites the requirements of law but fails to provide
factual support to show her entitlement thereto. Since findings of facts by the Court of Appeals affirming those of the
trial court are binding on the Supreme Court, the petition must thus fail. Even petitioner's plea for equity becomes
unavailing because resort to equity is possible only in the absence, and never in contravention, of statutory law.

The petition assails the Decision 1 of respondent Court 2 promulgated on April 30, 1992. The Decision of respondent
Court affirmed the decision dated July 26, 1989, of the Regional Trial Court of San Fernando, Pampanga, Branch 44, in
Civil Case No. 8049. The dispositive portion of the affirmed decision of the trial court reads: 3

IN VIEW OF THE FOREGOING CONSIDERATIONS, and finding plaintiff's petition to be without merit, the
same is, as it is hereby ordered dismissed with costs against plaintiff.

On defendant's (Singian) counterclaim, the same is, as it is hereby dismissed for insufficiency of evidence.

The Facts

On September 29, 1987, petitioner filed with the trial court an amended petition with prayer for preliminary prohibitory
injunction, seeking to stop private respondent from fencing its property and depriving her of access to the highway.
Petitioner alleged that her property, consisting of around 635 square meters, situated in Del Pilar, San Fernando,
Pampanga and covered by TCT No. 57596-R, was delineated on its northern and western sides by various business
establishments. Adjoining her property along its southern boundary was the land of the Pineda family, while along the
east-northeastern boundary, and lying between her property and the MacArthur Highway, was another lot with an area
of approximately 161 square meters owned by private respondent. In short, petitioner's lot was almost completely
surrounded by other immovables and cut off from the highway. Her only access to the highway was a very small
opening measuring two feet four inches wide through the aforementioned property of private respondent. Petitioner
believed she was entitled to a wider compulsory easement of right of way through the said property of private
respondent. The prospective subservient estate was a portion of a bigger lot consisting of 7,239 square meters and
covered by TCT No. 163033-R, which was formerly owned by the Singian Brothers Corporation hereinafter referred to
as ("Singian Brothers") and was sold to private respondent without the knowledge and consent of petitioner, who was
thereby allegedly prevented from exercising her right of pre-emption or right of redemption. Petitioner alleged that
private respondent was about to complete the construction of its concrete fence on the said lot which would result in
depriving petitioner of the only available right of way, and that therefore, she was constrained to petition the trial court
to enjoin private respondent from fencing said lot. The petition likewise prayed that judgment be rendered ordering
private respondent to sell to petitioner the subject lot and to pay the damages, attorney's fees and cost of suit.

Private respondent denied the allegations of petitioner. The parents and relatives of petitioner were never tenants or
lessees of the former owner, Singian Brothers; rather, they were found to be illegally occupying the property as ruled
by the MTC-San Fernando, Pampanga, Branch 1, in Civil Case No. 4865. The dispositive portion the judgment of
ejectment reads: 4

WHEREFORE, defendants Eduardo Mangune, Pacita David-Chan and Primo David including their
agents/representatives and, any and all persons given access by them to the disputed premises claiming any right
under them, are hereby ordered to immediately vacate the area in question, remove all the improvements that they
have constructed thereon; to pay the plaintiff corporation jointly and severally the sum of P2,000.00 pesos as
Attorney's fees and the costs of this suit.

The case against defendants Loida Makabali and Helen Hermidia is hereby dismissed as the action has become moot.

The defendants' counterclaim, Pacita David-Chan and Eduardo Mangune is hereby dismissed for lack of merit.

Hence the former owners were not obliged to inform petitioner of the sale. The land sold by the Singian Brothers was
free from all liens and encumbrances as stated in the Deed of Absolute Sale. Private respondent was not selling the 161
square-meter lot because it needed the property. Also, petitioner had another access to the highway without passing
through the lot in question.

The Singian Brothers were impleaded in the trial court. In their answer, they alleged that they did not authorize anyone
to receive rentals for the disputed lot. As their affirmative and special defenses, Defendant Singian Brothers averred
that the complaint of petitioner stated no cause of action because, being apparent and discontinuous, the right of way
cannot be acquired by prescription. Petitioner was not a tenant of the Singian Brothers; therefore she was not entitled to
a right of pre-emption or right of redemption. Finally, petitioner had another access to the National Highway which,
however, she closed during the pendency of the case at the trial court when she extended the construction of her fence. 5

The Issues
Failing to obtain relief at both the trial and respondent courts, petitioner now submits the following issues for
consideration of this Court:

I. In its reaffirmation of the lower court's decision, the Court of Appeals missed to temper with human
compassion of the Art. 649 and 650 of the New Civil Code of the Phil. which requires the presence of four
requisites for a compulsory easement of way. 6

II. (The) Court (of Appeals) had used in its decision all technical and legal niceties to favor respondents,
violating time-honored and deeply-rooted Filipino values. 7

III. With due respect, the Court (of Appeals) erred in deciding this case in favor of the respondent despite the
facts existing at the background. 8

IV. The Court (of Appeals) erred in stating that petitioner had an outlet measuring two (2) feet and four (4)
inches to the national highway without passing through respondent's property as per the commissioner's report. 9

In her Memorandum 10 dated February 26, 1993, petitioner alleges only one issue:

Whether or not petitioner is entitled to a legal easement of right of way over that portion of the
property of respondent Rabbit?

On the other hand, private respondent raises two issues: 11

1. Is the petitioner entitled to an easement of right of way from the private respondents?

2. Should she be granted her desire for a right of way by way of "pakikisama" and "pakikipagkapwa-tao"?

After deliberating on the various submissions of the parties, the Court holds that the issues can be condensed into two,
as follows:

(1) Is petitioner legally entitled to a right of way through private respondent's property?

(2) In any event, is she entitled to such easement through the recognition and application of the Filipino values
of pakikisama and pakikipagkapwa-tao?

The Court's Ruling

The petition is devoid of merit.

First Issue: Requisites of an Easement of Right of Way

Citing Articles 649 and 650 of the Civil Code, 12 petitioner submits that "the owner of an estate may claim a
compulsory right of way only after he (or she) has established the existence of four requisites, namely: (1) the estate is
surrounded by other immovables and is without adequate out-let to a public highway; (2) proper indemnity is paid; (3)
the isolation is not due to the proprietor's own acts; and (4) the right of way claimed is at a point least prejudicial to the
servient estate and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway
may be the shortest. 13

While petitioner may be correct in her theoretical reading of Articles 649 and 650, she nevertheless failed to show
sufficient factual evidence to satisfy their requirements. Evaluating her evidence, respondent Court ruled that petitioner
is not "without adequate outlet to a public highway" as follows: 14

1. Let it be stressed that it was plaintiff who built a concrete fence on the southern boundary of her property
to separate it from the property of the Pineda family. Worse, during the pendency of the case, she closed the
28-inch clearance which she could use as a means to reach the National Highway without passing through the
property of defendant. If plaintiff wants a bigger opening, then she can always destroy a portion of the
concrete fence which she erected and pass through the property of the Pineda family which, as shown on the
attached sketch on the Commissioner's Report, has an open space on the southern boundary of plaintiff's land.

2. Plaintiff maintains that once the Pineda family (fences) off their lot, plaintiff has no more way to the
National Highway.

Plaintiff's apprehensions are without basis. The Pineda family could no longer fence off their property
because plaintiff (had) already constructed a fence to separate the two properties. And even granting that the
Pineda family would eventually fence off their land, then plaintiff could ask for an easement of right of way
from the Pineda family.

The appellate court likewise found that petitioner failed to satisfy the third requirement because she caused her own
isolation by closing her access through the Pineda property, thus: 15
 1. Worthy of note is the fact that it was plaintiff who built a fence to separate her property from that of the
Pineda family on the southern boundary. And she even closed the small opening causing her property to be
isolated and losing one access to the National Highway. Plaintiff thus failed to meet the third requisite for the
grant of an easement of right of way. As held by the Hon. Supreme Court in the case of Francisco
vs. Intermediate Appellate Court, 177 SCRA 52,.534-535:

"The evidence is, therefore, persuasively to the effect that the private respondent had been granted an
adequate access to the public highway (Parada Road) through the adjacent estate of Epifania Dila even as he
was trying to negotiate a satisfactory agreement with petitioner Francisco for another passageway through
the latters' property. If at the time he filed suit against the petitioner, such access (through the property of
Epifania Dila) could no longer be used, it was because he himself had closed it off by erecting a stone wall
on his lot at the point where the passageway began for no reason to which the record can attest except to
demonstrate the isolation of his property alleged in his complaint. But the law makes it amply clear that an
owner cannot. as respondent has done. by his own act isolate his property from a public highway and then
claim an easement of way through an adjacent estate. The third of the cited requisites; that the claimant of
a right of way has not himself procured the isolation of his property had not been met-indeed the
respondent had actually brought about the contrary condition and thereby vitiated his claim to such an
easement. It will not do to assert that use of the passageway through Lot 860-B was difficult or
inconvenient, the evidence being to the contrary and that it was wide enough to be traversable by even a
truck, and also because it has been held that mere inconvenience attending the use of an existing right of
way does not justify a claim for a similar easement in an alternative location." (Emphasis ours)

The Court of Appeals also ruled that petitioner failed to prove she made a valid tender of the proper indemnity, to
wit: 16

2. The second requisite that there was payment of the proper indemnity was likewise not met by the
plaintiff. Plaintiffs complaint contained no averment that demand for the easement of right of way had been
made after payment of the proper indemnity. There was no showing that plaintiff ever made a tender of
payment of the proper indemnity for the right of way. As the lower court said, "The fact that plaintiff prays
that defendant Rabbit be ordered to sell to her the disputed premises hardly satisfies the requisite regarding
the payment of the proper indemnity."

The questions of whether (1) petitioner has another adequate outlet to the public highway, or (2) she caused her own
isolation, or (3) she made, in fact, a tender of the proper indemnity are all issues of facts which this Court has no
authority to rule upon. 17 The Supreme Court is not a trier of facts. 18

It is doctrinal that findings of facts of the Court of Appeals upholding those of the trial court are binding upon this
Court. 19 While there are exceptions to this rule, 20 petitioner has not convinced us that this case falls under one of them.

Second Issue: Application of Traditional Filipino Values

Perhaps sensing the inadequacy of her legal arguments, petitioner who claims to be an "ordinary housewife (with) . . .
meager resources" pleads that "those who have less in life should have more in law" and that the Court should apply
the Filipino values of pakikisama and pakikipag-kapwa-tao in resolving the case.

Such appeal of petitioner is based on equity which has been aptly described as "justice outside legality." However,
equity is applied only in the absence of, and never against, statutory law or judicial rules of procedure. 21 As found by
respondent Court, petitioner is not legally entitled to a right of way on the property of private respondent. Thus, such
equitable arguments cannot prevail over the legal findings.

There are rigorous standards to be complied with by owners of the dominant estate before they may be granted with
easement of right of way. These standards must be strictly complied with because easement is a burden on the property
of another. Before such inconvenience may be imposed by the Court, applicants must prove that they deserve judicial
intervention on the basis of law, and certainly not when their isolation is caused by their own acts. In the latter case,
they decide their detachment and must bear the consequences of such choice.

WHEREFORE, in view of the foregoing, the Petition is DENIED and the Decision dated April 30, 1992, of the
respondent Court is AFFIRMED. Costs against petitioner.

SO ORDERED.
 [G.R. No. 128628. August 23, 2001]
ILDEFONSO SAMALA AND BENJAMIN BABISTA, petitioners, vs. THE HON. COURT OF APPEALS, THE
HON. REGIONAL TRIAL COURT, Branch 15, Naic, Cavite, and ROMULO OCAMPO, respondents.
What is before the Court is an appeal via certiorari from the decision of the Court of Appeals [1] that denied the
petition for relief from the order granting a writ of execution.
On October 19, 1990, at about 8:00 p.m., Super Saint Bus with plate number NKJ 468 and body number 975
sideswiped a Yamaha motorcycle with plate number MCGB 5256, along Panamitan Highway, Kawit, Cavite. Romulo
Ocampo was riding at the back of the motorcycle driver.
As a result of the impact, Ocampo was thrown several meters away and landed on a concrete highway causing
serious physical injuries on his neck and left leg. He was confined at the Perpetual Help Hospital for three days and had
several months of treatment.
After hitting the motorcycle, the bus sped away. The driver, Benjamin Babista, did not even lend assistance to the
victim and left the victim on the highway.
On December 20, 1990, Romulo Ocampo filed with the Regional Trial Court, Cavite, Branch 15, Naic, a
complaint[2] for damages against driver Benjamin Babista and the owner of the Super Saint Bus, Ildefonso Samala.
After due trial, on May 15, 1995, the trial court rendered a decision in favor of respondent Ocampo, the decretal
portion of which reads:

Wherefore, the Court finds judgment in favor of plaintiff as against defendants jointly and solidarily and Orders the
defendants to pay plaintiff as follows:

1. To pay jointly and severally plaintiff:

a. P11,000.00 as actual damages e. P40,000.00 as exemplary damages
b. P30,000.00 as consequential damages f. P15,000.00 for attorneys fees
c. P78,192.00 as loss of earning g. P3,000.00 for litigation expenses
d. P50,000.00 as moral damages

2. To pay the costs of suit.

SO ORDERED.

Naic, Cavite, May 15, 1995.

ENRIQUE M. ALMARIO

Judge[3]

On October 16, 1995, petitioners filed with the trial court a notice of appeal.
On October 17, 1995, the trial court denied the appeal. We quote:

This refers to the Notice of Appeal received and filed on 16 October 1995. The decision sought to be appealed was
received on 29 September 1995. It is clear that more than 15 days had elapsed; hence, the decision is now final.

WHEREFORE, the Notice of Appeal cannot be given due course.

SO ORDERED.

Naic, Cavite, 17 October 1995.

EMERITO M. AGCAOILI

Assisting Judge[4]

On November 24, 1995, petitioners filed with the trial court a petition for relief from order denying their
appeal. Petitioners argued that the reason for the failure to file the notice of appeal within fifteen (15) days was the fact
that the notice was entrusted to Jose Samala, Jr. but he suffered from diarrhea on October 11 to 12, 1995. He could not
leave the house and nobody could attend to the filing of the notice. Thus, he filed it only on Monday, October 16, 1995,
thinking that the period had not lapsed.
On February 21, 1996, the trial court denied the petition for relief for not having adduced any reason compelling
enough to warrant reconsideration of the order.[5]
On March 7, 1996 petitioners filed with the trial court their notice of appeal. [6] Petitioners appealed the orders of
October 17, 1995 and February 21, 1996, denying the petition for relief to the Court of Appeals.
Meanwhile, on March 20, 1996, the trial court granted respondent Ocampos motion for writ of execution. [7]
 On April 8, 1996, petitioners filed with the trial court a motion for reconsideration [8] of the order dated March 20,
1996. In their motion, petitioners prayed for denial of the writ of execution and for the records of the case to be
elevated to the Court of Appeals for review.
On July 1, 1996, the trial court denied the motion for reconsideration. [9]
On July 17, 1996, petitioners filed with the Court of Appeals [10] a petition for certiorari and prohibition assailing
the trial courts denial of the petition for relief from order.
On September 17, 1996 the Court of Appeals promulgated its decision denying the petition. [11]
On October 2, 1996, petitioners filed a motion for reconsideration of the denial. [12]
On March 7, 1997, the Court of Appeals denied the motion. [13]
Hence, this petition.[14]
The issue presented is whether the Court of Appeals erred in refusing to grant petitioners relief from order that
denied their appeal from the judgment of the trial court.
Samoso vs. CA[15] elucidates that relief from judgment under Rule 38 of the Revised Rules of Court (1964
Revision) is a remedy provided to any person against whom a decision or order is entered into through fraud, accident,
mistake or excusable negligence. A petition for relief from judgment is an equitable remedy that is allowed in
exceptional cases when there is no other available or adequate remedy. [16]
Thus, the question now before us is whether the failure of petitioners to file the notice of appeal on time (one day
late) would fall under excusable negligence.
We said that the general aim of procedural law is to facilitate the application of justice to the rival claims of
contending parties, bearing in mind that procedural rules are created not to hinder or delay but to facilitate and promote
the administration of justice.[17] In rendering decisions, courts must not be too dogmatic. A complete view must be
taken in order to render a just and equitable judgment. [18] It is far better to dispose of a case on the merits,
which is a primordial end, than on technicality that may result in injustice. [19]
The rules of procedure are mere tools designed to facilitate the attainment of justice. Their strict and rigid
application especially on technical matters, which tends to frustrate rather than promote substantial justice, must be
avoided. Even the Revised Rules of Court envision this liberality.[20] Technicality, when it deserts its proper office as an
aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from the courts. [21]
In this case, the last day for filing the notice of appeal fell on a Friday, October 13, 1995. Petitioners entrusted the
filing of the notice of appeal to Jose Samala on October 11, 1995. However, he suffered from stomach pains which
lasted until the following days. Jose Samala filed the notice immediately on the next business day, Monday, October
16, 1995. He believed in good faith that he could still file it on Monday. Delay in filing the notice of appeal was
actually for one (1) day. Saturday and Sunday are excluded. Considering the facts of the case, this was excusable
negligence.
In United Airlines v. Uy,[22] where the respondent filed his notice of appeal two (2) days later than the prescribed
period, although his counsel failed to give the reason for the delay, we gave due course to the appeal due to the unique
and peculiar facts of the case and the serious question of law it poses.
The real purpose behind the limitation of the period of appeal is to forestall or avoid an unreasonable delay in the
administration of justice and to put an end to controversies. [23] Where no element of intent to delay the administration
of justice could be attributed to petitioners, a one-day delay does not justify their appeals denial.
We are inclined to give the same consideration in this case in light of the rules on justice, equity and fair
play. After all, the petition embodied circumstances that warrant heeding the petitioners' plea for justice. The law
abhors technicalities that impede the cause of justice. [24]
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G. R. SP No. 41281 is
hereby REVERSED. The trial court is ordered to elevate the records of Civil Case No. NC-346 to the Court of Appeals
for review in due course of appeal.
No costs.
SO ORDERED.
 G.R. No. 159208 August 18, 2006

RENNIE DECLARADOR, Petitioner, vs.

HON. SALVADOR S. GUBATON, Presiding Judge, Branch 14, Roxas City, and FRANK
BANSALES, Respondents.

This is a Petition for Certiorari seeking to nullify the portion of the Decision 1 of the Regional Trial Court (RTC),
Roxas City, Branch 14, in Criminal Case No. C-1419-10-2002, suspending the sentence of respondent Frank Bansales
and ordering his commitment to the Regional Rehabilitation Center for Youth at Concordia, Nueva Valencia, Guimaras.

Frank Bansales was born on June 3, 1985. He was a student at the Cabug-Cabug National High School in President
Roxas, Capiz. At around 9:45 a.m. on July 25, 2002, Yvonne Declarador was stabbed to death. After conducting the
autopsy on the cadaver, Rural Health Physician Pilar Posadas prepared a Post-Mortem Certificate indicating that the
victim sustained 15 stab wounds on different parts of the body. 2

On October 10, 2002, an Information charging Frank Bansales with murder was filed by the Assistant Provincial
Prosecutor with the Family Court. The accusatory portion reads:

That on or about 9:45 oclock in the morning of July 25, 2002, inside a classroom in Cabug-Cabug National High
School in President Roxas, Capiz, Philippines, and within the jurisdiction of this Honorable Court, the accused armed
with a knife and with intent to kill, did then and there, willfully, unlawfully and feloniously attack, assault and stab
with the said knife [his] teacher, one YVONNE DECLARADOR, thereby hitting and inflicting upon the latter multiple
fatal stab wounds in the different parts of the body which caused the immediate death of the said Yvonne Declarador.

The crime was committed with the attendance of the qualifying aggravating circumstances of evident premeditation
and abuse of superior strength considering that the attack was made by the accused using a long knife which the latter
carried along with him from his house to the school against his lady teacher who was unarmed and defenseless at that
time and by inflicting upon the latter about fifteen (15) fatal knife wounds resulting to her death. 3

In view of the plea of the accused and the evidence presented, the RTC rendered judgment on May 20, 2003 finding
Bansales guilty of murder. However, the court suspended the sentence of the accused and ordered his commitment to
the Regional Rehabilitation for Youth at Concordia, Nueva Valencia, Guimaras. The dispositive portion of the decision
reads:

In view of the Plea of Guilty by the accused and the evidence presented by the prosecution, the court finds CICL Frank
Bansales GUILTY beyond reasonable doubt of the crime of Murder being charged. Being a minor, 17 years of age at
the time of the commission of the offense charged, he is entitled to a special mitigating circumstance of minority, and is
sentenced to suffer an indeterminate imprisonment of twelve (12) years and one (1) day to seventeen (17) years and
four (4) month of reclusion temporal and to pay the heirs of Yvonne Declarador, a civil indemnity of Seventy-Five
Thousand Pesos (P75,000.00), Fifty Thousand Pesos (P50,000.00) for moral damages, Forty-Three Thousand Pesos
(P43,000.00) for funeral expenses, attorneys fee of One Hundred Thousand Pesos (P100,000.00) and unearned income
of One Million Three Hundred Seventy Thousand Pesos and Seventy Centavos (P1,370,000.70).

The parents (father and mother of juvenile Frank Bansales) and his teacher-in-charge at the Cabug-Cabug National
High School of President Roxas, Capiz, are jointly subsidiarily liable in case of insolvency, as the crime was
established to have been committed inside the classroom of Cabug-Cabug National High School and during school
hours.

Pursuant to the provision of P.D. 603, as amended, the sentence is suspended and the Child in conflict with the law
(CICL), Frank Bansales is ordered committed to the Regional Rehabilitation Center for Youth at Concordia, Nueva
Valencia, Guimaras.

Furnish copies of this decision the Office of the Provincial Prosecutor, the Private Prosecutors, the DSWD Capiz
Provincial Office, Roxas City, the Regional Rehabilitation for Youth, Concordia, Guimaras, the accused and his
counsel, Atty. Ramcez John Honrado.

SO ORDERED. 4

On June 2, 2003, the RTC set a preliminary conference for 10:00 a.m. of June 10, 2003 with the Public Prosecutor, the
Social Welfare Officer of the court, and the Officer-in-Charge of the Regional Rehabilitation Center for Youth,
considering that the accused would turn 18 on June 3, 2003. 5

Rennie Declarador, the surviving spouse of the deceased, filed a petition for certiorari under Rule 65 of the Rules of
Court assailing that portion of the decision of the trial courts decision suspending the sentence of the accused and
committing him to the rehabilitation center.

Petitioner claimed that under Article 192 of Presidential Decree (P.D.) No. 603, as well as A.M. No. 02-1-18-SC
(otherwise known as the Rule on Juveniles in Conflict with the Law), the benefit of a suspended sentence does not
apply to a juvenile who is convicted of an offense punishable by death, 6 reclusion perpetua or life imprisonment.
Citing the ruling of this Court in People v. Ondo, 7 petitioner avers that since Bansales was charged with murder
punishable by reclusion perpetua to death, he is disqualified from availing the benefits of a suspended sentence.

In his Comment, Bansales avers that petitioner has no standing to file the petition, considering that the offense charged
is a public crime brought in the name of the People of the Philippines; only the Office of the Solicitor General (OSG) is
authorized to file a petition in court assailing the order of the RTC which suspended the service of his sentence. He
further avers that Section 32 of A.M. No. 02-1-18-SC entitles the accused to an automatic suspension of sentence and
allows the court to commit the juvenile to the youth center; hence, the court did not abuse its discretion in suspending
the sentence of the accused.

In reply, petitioner maintains that he has sufficient personality to file the petition.

The OSG, for its part, posits that respondents sentence cannot be suspended since he was charged with a capital
offense punishable by reclusion perpetua to death. It insists that the entitlement of a juvenile to a suspended sentence
does not depend upon the sentence actually imposed by the trial court but upon the imposable penalty for the crime
charged as provided for by law.

The issues for resolution are the following: (1) whether petitioner has standing to file the petition; (2) whether
petitioner violated the doctrine of hierarchy of courts in filing his petition with this Court; and (3) whether respondent
court committed grave abuse of discretion amounting to excess or lack of jurisdiction in ordering the suspension of the
sentence of respondent Bansales and his commitment to the Regional Rehabilitation Center for the Youth.

The petition is granted.

On the first issue, we rule for the petitioner. Being the surviving spouse of the deceased and the offended party, he has
sufficient personality to file the instant special civil action for certiorari. 8 This is in line with the underlying spirit of
the liberal construction of the Rules of Court in order to promote their object. 9 Moreover, the OSG has filed its
comment on the petition and has joined the petitioner in his plea for the nullification of the assailed portion of the RTC
decision.

On the second issue, the rule is that a petition for review on certiorari which seeks to nullify an order of the RTC
should be filed in the Court of Appeals in aid of its appellate jurisdiction. 10 A direct invocation of the original
jurisdiction of the Court to issue writs of certiorari may be allowed only when there are special and important reasons
therefor clearly and specifically set out in the petition. 11 This is an established policy necessary to prevent inordinate
demands upon this Courts time and attention which are better devoted to those matters within its exclusive
jurisdiction, and to prevent further overcrowding of the Courts docket. 12

However, in Fortich v. Corona, 13 the Court held that considering the nature and importance of the issues raised and in
the interest of speedy justice, and to avoid future litigations, the Court may take cognizance of a petition for certiorari
directly filed before it. 14 Moreover, this Court has suspended its own rules and excepted a particular case from their
operation whenever the interests of justice so require.

In this case, we resolve to take cognizance of the case, involving as it does a juvenile and the application of the Rule on
Juveniles in Conflict with the Law.

The charge against respondent Bansales was murder with the qualifying circumstance of either evident premeditation
or abuse of superior strength. Under Article 248 of the Revised Penal Code, as amended by Republic Act (Rep. Act)
No. 7659, the imposable penalty for the crime is reclusion perpetua to death. The trial court found him guilty of
murder.

Article 192 of P.D. No. 603, as amended, provides:

Art. 192. Suspension of Sentence and Commitment of Youthful Offender. If after hearing the evidence in the proper
proceedings, the court should find that the youthful offender has committed the acts charged against him, the court,
shall determine the imposable penalty, including any civil liability chargeable against him. However, instead of
pronouncing judgment of conviction, the court, upon application of the youthful offender and if it finds that the best
interest of the public, as well as that of the offender will be served thereby, may suspend all further proceedings and
commit such minor to the custody or care of the Department of Social Welfare and Development or to any training
institution operated by the government or any other responsible person until he shall have reached twenty-one years of
age, or for a shorter period as the court may deem proper, after considering the reports and recommendations of the
Department of Social Welfare and Development or the government training institution or responsible person under
whose care he has been committed.

Upon receipt of the application of the youthful offender for suspension of his sentence, the court may require the
Department of Social Welfare and Development to prepare and submit to the court a social case study report over the
offender and his family.

The youthful offender shall be subject to visitation and supervision by the representative of the Department of Social
Welfare and Development or government training institution as the court may designate subject to such conditions as it
may prescribe.
The benefits of this article shall not apply to a youthful offender who has once enjoyed suspension of sentence under its
provisions or to one who is convicted for an offense punishable by death or life imprisonment or to one who is
convicted for an offense by the Military Tribunals.

The law was reproduced in A.M. No. 02-1-18-SC where, except for those under paragraph 3, Section 32 of the law, the
sentence of the accused is automatically suspended:

Sec. 32. Automatic Suspension of Sentence and Disposition Orders. The sentence shall be suspended without need of
application by the juvenile in conflict with the law. The court shall set the case for disposition conference within fifteen
(15) days from the promulgation of sentence which shall be attended by the social worker of the Family Court, the
juvenile, and his parents or guardian ad litem. It shall proceed to issue any or a combination of the following
disposition measures best suited to the rehabilitation and welfare of the juvenile: care, guidance, and supervision
orders; Drug and alcohol treatment; Participation in group counseling and similar activities; Commitment to the Youth
Rehabilitation Center of the DSWD or other centers for juvenile in conflict with the law authorized by the Secretary of
DSWD.

The Social Services and Counseling Division (SSCD) of the DSWD shall monitor the compliance by the juvenile in
conflict with the law with the disposition measure and shall submit regularly to the Family Court a status and progress
report on the matter. The Family Court may set a conference for the evaluation of such report in the presence, if
practicable, of the juvenile, his parents or guardian, and other persons whose presence may be deemed necessary.

The benefits of suspended sentence shall not apply to a juvenile in conflict with the law who has once enjoyed
suspension of sentence, or to one who is convicted of an offense punishable by death, reclusion perpetua or life
imprisonment, or when at the time of promulgation of judgment the juvenile is already eighteen (18) years of age or
over.

Thus, it is clear that a person who is convicted of an offense punishable by death, life imprisonment, or reclusion
perpetua is disqualified from availing the benefits of a suspended sentence. "Punishable" is defined as "deserving of, or
capable, or liable to punishment; liable to be punished; may be punished; liable to punishment." 15 The word
"punishable" does not mean "must be punished," but "liable to be punished" as specified. 16 In U.S. v. Villalon, 17the
Court defined punishable as "deserving of, or liable for, punishment." Thus, the term refers to the possible, not to the
actual sentence. It is concerned with the penalty which may be, and not which is imposed.

The disqualification is based on the nature of the crime charged and the imposable penalty therefor, and not on the
penalty imposed by the court after trial. It is not the actual penalty imposed but the possible one which determines the
disqualification of a juvenile. 18 Despite the disqualification of Bansales, respondent Judge, nevertheless, ordered the
suspension of the sentence meted against him. By this act, respondent Judge committed grave abuse of discretion
amounting to excess of jurisdiction.

We note that, in the meantime, Rep. Act No. 9344 took effect on May 20, 2006. Section 38 of the law reads:

SEC. 38. Automatic Suspension of Sentence. Once the child who is under eighteen (18) years of age at the time of
the commission of the offense is found guilty of the offense charged, the court shall determine and ascertain any civil
liability which may have resulted from the offense committed. However, instead of pronouncing the judgment of
conviction, the court shall place the child in conflict with the law under suspended sentence, without need of
application: Provided, however, That suspension of sentence shall still be applied even if the juvenile is already
eighteen (18) years of age or more at the time of the pronouncement of his/her guilt.

Upon suspension of sentence and after considering the various circumstances of the child, the court shall impose the
appropriate disposition measures as provided in the Supreme Court on Juveniles in Conflict with the Law.

The law merely amended Article 192 of P.D. No. 603, as amended by A.M. No. 02-1-18-SC, in that the suspension of
sentence shall be enjoyed by the juvenile even if he is already 18 years of age or more at the time of the
pronouncement of his/her guilt. The other disqualifications in Article 192 of P.D. No. 603, as amended, and Section 32
of A.M. No. 02-1-18-SC have not been deleted from Section 38 of Rep. Act No. 9344. Evidently, the intention of
Congress was to maintain the other disqualifications as provided in Article 192 of P.D. No. 603, as amended, and
Section 32 of A.M. No. 02-1-18-SC. Hence, juveniles who have been convicted of a crime the imposable penalty for
which is reclusion perpetua, life imprisonment or reclusion perpetua to death or death, are disqualified from having
their sentences suspended.

Case law has it that statutes in pari materia should be read and construed together because enactments of the same
legislature on the same subject are supposed to form part of one uniform system; later statutes are supplementary or
complimentary to the earlier enactments and in the passage of its acts the legislature is supposed to have in mind the
existing legislations on the subject and to have enacted the new act with reference thereto. 19Statutes in pari materia
should be construed together to attain the purpose of an expressed national policy. 20

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Order of the respondent Judge suspending the
sentence of respondent Frank Bansales is NULLIFIED.

SO ORDERED.
 G.R. No. 170404
FERDINAND A. CRUZ, Petitioner, VS
JUDGE HENRICK F. GINGOYON, [Deceased], JUDGE JESUS B. MUPAS, Acting Presiding Judge, Regional Trial
Court Branch 117, Pasay City, Respondent.

While there are remedies available to a party adjudged in contempt of court, same may only be availed of when the
procedures laid down for its availment are satisfied.
By this Petition for Certiorari,[1] petitioner Ferdinand A. Cruz (petitioner) assails the Order [2] dated November 25, 2005
issued by the now deceased Judge Henrick F. Gingoyon (Judge Gingoyon) of Branch 117, Regional Trial Court (RTC) of Pasay
City (respondent court) citing him in direct contempt of court, the dispositive portion of which states:

WHEREFORE, Ferdinand Cruz is hereby found GUILTY beyond reasonable doubt of DIRECT CONTEMPT
OF COURT.
Accordingly, he is hereby sentenced to suffer TWO (2) DAYS of imprisonment and to pay a fine of P2,000.00.

SO ORDERED.[3]

Essentially, petitioner prays for this Court to declare the assailed Order void and that Judge Gingoyon abused his
discretion in citing him in contempt, as well as in denying his motion to fix the amount of bond.

Antecedent Facts
This case stemmed from a Civil Complaint [4] filed by petitioner against his neighbor, Benjamin Mina, Jr. (Mina),
docketed as Civil Case No. 01-0401 in the RTC of Pasay City for abatement of nuisance. In the said case, petitioner sought redress
from the court to declare as a nuisance the basketball goal which was permanently attached to the second floor of Minas residence
but protrudes to the alley which serves as the publics only right of way.

Mina was declared in default[5] hence petitioner presented his evidence ex-parte.

After trial, Judge Gingoyon, in his Decision[6] dated October 21, 2005, declared the basketball goal as a public nuisance
but dismissed the case on the ground that petitioner lacked locus standi. Citing Article 701 of the Civil Code, Judge Gingoyon
ruled that the action for abatement of nuisance should be commenced by the city or municipal mayor and not by a private
individual like the petitioner.

In the same Decision, Judge Gingoyon also opined that:

Plaintiffs must learn to accept the sad reality of the kind of place they live in. x x x Their place is bursting with
people most of whom live in cramped tenements with no place to spare for recreation, to laze around or doing their
daily household chores.

Thus, residents are forced by circumstance to invade the alleys. The alleys become the grounds where children run
around and play, the venue where adults do all sorts of things to entertain them or pass the time, their wash area or
even a place to cook food in. Take in a few ambulant vendors who display their wares in their choice spots in the
alley and their customers that mill around them, and one can only behold chaos if not madness in these alleys. But
for the residents of the places of this kind, they still find order in this madness and get out of this kind of life
unscathed. Its because they all simply live and let live. Walking through the alleys daily, the residents of the area
have become adept at [weaving] away from the playthings that children at play throw every which way, sidestepping
from the path of children chasing each other, dodging and [ducking]from awnings or canopies or clotheslines full of
dripping clothes that encroach [on] the alleys. Plaintiffs appear to be fastidious and delicate and they cannot be
faulted for such a desirable trait. But they can only do so within their own abode. Once they step outside the doors of
their home, as it were, they cannot foist their delicacy and fastidiousness upon their neighbors. They must accept
their alleys as the jungle of people and the site of myriad of activities that it is. They must also learn to accept the
people in their place as they are; they must live and let live. Unless they choose to live in a less blighted human
settlement or better still move to an upscale residential area, their only remaining choice is for them to live in
perpetual conflict with their neighbors all the days of their lives.[7]

Petitioner sought reconsideration of the Decision. In his Motion for Reconsideration,[8] he took exception to the advice
given by Judge Gingoyon thus:

The 12th and 13th paragraphs of the assailed decision, though only an advice of the court, are off-tangent and
even spouses illegality;
 Since when is living in cramped tenements become a license for people to invade the alleys and use the said
alley for doing all sorts of things, i.e., as wash area or cooking food? In effect, this court is making his own legislations
and providing for exceptions in law when there are none, as far as nuisance is concerned;

The court might not be aware that in so doing, he is giving a wrong signal to the defendants and to the public
at large that land grabbing, squatting, illegal occupation of property is all right and justified when violators are those
people who live in cramped tenements or the underprivileged poor, as the court in a sweeping statement proclaimed
that residents are forced by circumstance to invade the alleys;

For the enlightenment of the court, and as was proven during the ex-parte presentation of evidence by the
plaintiff, Edang estate comprises properties which are subdivided and titled (plaintiffs and defendants have their own
titled properties and even the right of way or alley has a separate title) and not the kind the court wrongfully perceives
the place to be;

Moreover, the court has no right to impose upon the herein plaintiffs to accept their alleys as a jungle of
people and the site of myriad of activities that it is. For the information of the court, plaintiffs have holdings in upscale
residential areas and it is a misconception for the court to consider the Pasay City residence of the plaintiffs as a
blighted human settlement. Apparently the court is very much misinformed and has no basis in his litany of eye sore
descriptions;

Undersigned is at quandary what will this court do should he be similarly situated with the plaintiffs? Will the
court abandon his residence, giving way to illegality in the name of live and let live principle?

Nonetheless, what remains bugling [sic] is the fact that the court in his unsolicited advice knows exactly the
description of the alley where the complained nuisance is located and the specific activities that the defendants do in
relation to the alley. The court should be reminded that the undersigned plaintiff presented his evidence ex-parte
and where else can the court gather these information about the alleys aside from the logical conclusion that the court
has been communicating with the defendant, off the record, given that the latter has already been in default.
[9]
(Emphasis supplied.)

Petitioner requested the respondent court to hear his motion for reconsideration on November 18, 2005.[10]
In an Order[11] dated November 11, 2005, Judge Gingoyon set the motion for hearing on November 18, 2005, a date
chosen by petitioner,[12] and directed him to substantiate his serious charge or show cause on even date why he should not be
punished for contempt.[13] Judge Gingoyon also opined that:

This court, more specifically this Presiding Judge, has not seen the faintest of shadow of the defendant or heard
even an echo of his voice up to the present. Plaintiff Ferdinand Cruz is therefore directed to substantiate his
serious charge that he has been communicating with the defendant off the record, given that the latter has
already been declared in default. He is therefore ordered to show cause on November 18, 2005, why he should
not be punished for contempt of court for committing improper conduct tending directly or indirectly to degrade
the administration of justice.[14]

On November 18, 2005, petitioner, however, did not appear. Judge Gingoyon then motu proprio issued an Order[15] in
open court to give petitioner another 10 days to show cause. The Order reads:

In his Motion for Reconsideration, plaintiff Ferdinand Cruz specifically prayed that he is submitting his
Motion for Resolution and Approval of this court today, Friday, November 18, 2005, at 8:30 A.M. Fridays have
always been earmarked for criminal cases only. Moreover, long before plaintiff filed his motion for
reconsideration, this court no longer scheduled hearings for November 18, 2005 because there will be no
Prosecutors on this date as they will be holding their National Convention. Nevertheless, since it is the specific
prayer of the plaintiff that he will be submitting his motion for resolution and approval by the court on said date,
the court yielded to his wish and set his motion for hearing on his preferred date.

When this case was called for hearing today, plaintiff did not appear. The court waited until 9:45 A.M.
but still no appearance was entered by the plaintiff or any person who might represent himself as an authorized
representative of the plaintiff. Instead it was the defendant and his counsel who appealed and who earlier filed an
Opposition to Motion for Reconsideration.

In view of the failure of the plaintiff to appear in todays hearing, the court considers the motion for
reconsideration submitted for resolution. As for the Order of this court for the plaintiff to show cause why he
should not be punished for contempt of court, the court [motu proprio] grants plaintiff last ten (10) days to show
cause why he should not be punished for contempt of court. After the lapse of the said period, the court will
resolve the issue of whether or not he should be cited for contempt. x x x[16]

In his Compliance[17] to the Show Cause Order, petitioner maintained that the alleged contumacious remarks he made
have a leg to stand on for the same were based on the circumstances of the instant case. He even reiterated his insinuation that
Judge Gingoyon communicated with Mina by posing the query: where then did this court gather an exact description of the alley
and the myriad of [sic] activities that the inhabitants of interior Edang do in relation to the alley, when the defendant was held in
default and absent plaintiffs evidence so exacting as the description made by this court in paragraphs 12 and 13 of his Decision
dated October 21, 2005.[18]

On November 25, 2005, Judge Gingoyon issued an Order[19] finding petitioner guilty of direct contempt of court. The
Order reads:
Ferdinand Cruz was ordered to substantiate with facts his serious charge that the Judge has been
communicating with the defendant off the record. But instead of presenting proof of facts or stating facts, Cruz
simply shot back with a query: Where then did this court gather an exact description of the alley and the myriad
activities that the inhabitants of interior Edang do in relation to the alley, when the defendant was held in default
and absent plaintiffs evidence so exacting as the description made by this court By this token, Cruz adamantly
stood pat on his accusation, which now appears to be wholly based on suspicion, that the Judge has been
communicating with the defendant off the record.

The suspicion of Ferdinand Cruz may be paraphrased thus: The only way for the Judge [to] know the blight in
his place in Pasay City is for the Judge to communicate with the defendant. It is only by communicating with the
defendant and by no other means may the Judge know such blight.

Blinded by his suspicion, Cruz did not consider that as State Prosecutor, the Judge was detailed
in Pasay City in 1991 and that he has been a judge in Pasay City since 1997. The nuisance that Cruz
complained of, or the blight of his place, is not a unique feature of that particular place. It is replicated in many
other places of the city. Indeed, it is but a microcosm of what is prevalent not only within the urban areas within
Metro Manila but also in many other highly urbanized areas in the country. Judges are no hermits that they
would fail to witness this blight. Cruz did not care to make this allowance for the benefit of preserving the dignity
of the court.

Cruzs open accusation without factual basis that the judge is communicating with the defendant is an act that
brings the court into disrepute or disrespect; or offends its dignity, affront its majesty, or challenge its authority. It
constitutes contempt of court. (People vs. De Leon, L-10236, January 31, 1958). x x x By alleging that the judge
communicated with the defendant, Cruz is in effect charging the judge of partiality. Since there is not an iota of
proof that the judge did the act complained of, the charge of partiality is uncalled for and constitutes direct
contempt (Salcedo vs. Hernandez, 61 Phil. 724; Lualhati vs. Albert, 57 Phil.86; Malolos vs. Reyes, 111 Phil.
1113).

WHEREFORE, Ferdinand Cruz is hereby found GUILTY beyond reasonable doubt of DIRECT CONTEMPT
OF COURT.
Accordingly, he is hereby sentenced to suffer TWO (2) DAYS of imprisonment and to pay a fine of P2,000.00.

SO ORDERED.[20]

An Order of Arrest[21] was issued against the petitioner on even date.

On December 1, 2005, at 10:00 A.M., petitioner filed an Urgent Ex-Parte Motion to Post Bond and Quash Warrant of
Arrest (Ex-Parte Motion)[22] with the respondent court. In said Ex-Parte Motion, petitioner averred that:
xxxx

2. To date, undersigned has already filed a Petition for Certiorari before the Supreme Court;

xxxx

The respondent court denied the Ex-Parte Motion in its Order[23] dated December 1, 2005 based on petitioners failure to
attach the alleged duly filed Petition for Certiorari with the Supreme Court. The respondent court held that unless petitioner has
shown proof of filing said petition for certiorari, he cannot avail of the remedy provided in Section 2, Rule 71 of the Rules of
Court.
Meanwhile, Judge Gingoyon was slain on December 31, 2005. In a Resolution[24] dated February 1, 2006, this Court
directed the incumbent Judge of Branch 117, RTC of Pasay City, Judge Jesus B. Mupas, to submit a comment on the petition
inasmuch as direct or indirect contempt pertains to the misbehavior or disrespect committed towards the court and not to judges in
their personal capacities.[25]

Issues
Petitioner raises the following issues:
 A. WHETHER X X X PETITIONER [IS] GUILTY OF CONTEMPT OF COURT.

B. WHETHER RESPONDENT COURT HAS ENOUGH FACTUAL BASIS FOR CITING

PETITIONER IN CONTEMPT.

C. WHETHER THE RESPONDENT COURT ABUSED ITS DISCRETION IN DENYING

PETITIONERS MOTION TO FIX BOND.[26]

The issues may be summed up as follows: whether the respondent court properly adjudged petitioner in direct contempt
of court and whether abuse of discretion was committed by respondent court in denying the Ex-Parte Motion.

Petitioner contends that the alleged contumacious remark is merely a fair observation or comment and a logical conclusion made
based on the detailed description given by the respondent court of what has been happening in the alley subject of the civil
case. Petitioner avers that no other conclusion can be had except that Judge Gingoyon was communicating with the defendant off
the record, since the exact description of what was happening in the alley was not adduced in evidence during trial. Further,
petitioner contends that fair and logical conclusion founded on circumstances of the case cannot be considered contemptuous.

Petitioner likewise insists that the respondent court abused its discretion when it denied his motion to fix bond, therefore violating
due process.

Our Ruling

We find the petition unmeritorious.

A pleading containing derogatory, offensive or malicious statements
submitted to the court or judge wherein proceedings are pending is
considered direct contempt.
 [C]ontemptuous statements made in pleadings filed with the court constitute direct contempt. [27] [A] pleading x x x
containing derogatory, offensive or malicious statements submitted to the court or judge in which the proceedings are pending x x
x has been held to be equivalent to misbehavior committed in the presence of or so near a court or judge as to interrupt the
proceedings before the same within the meaning of Rule 71, 1 of the Rules of Court and, therefore, constitutes direct contempt.[28]

Based on the abovementioned facts and consistent with the foregoing principles set forth, we agree with the finding of
respondent court that petitioner is guilty of direct contempt of court.

The Motion for Reconsideration filed by petitioner with the respondent court contained a serious allegation that Judge
Gingoyon has been communicating with the defendant off the record, which is considered as a grave offense. This allegation is
unsubstantiated and totally bereft of factual basis. In fact, when asked to adduce proof of the allegation, petitioner was not able to
give any, but repeatedly argued that it is his fair observation or conclusion.[29]

Petitioner vehemently stood by his suspicion and repeated the allegation in the Compliance to the show-cause Order
dated November 11, 2005 which he filed with the respondent court. The allegation was repeated despite Judge Gingoyons outright
denial of communicating with the defendant and explanation in the Order[30] dated November 25, 2005 that Judge Gingoyon was
familiar with the area as he was detailed in Pasay City since 1991 as State Prosecutor, and thereafter, as judge since 1997.

Instead of showing proof of the alleged communication between Judge Gingoyon and the defendant off the record,
petitioner stubbornly insisted that there is nothing contumacious about his allegation against the Judge as he was just giving
his fair and logical observation. Clearly, petitioner openly accused Judge Gingoyon of wrongdoing without factual basis.Suffice it
to say that this accusation is a dangerous one as it exposes Judge Gingoyon to severe reprimand and even removal from office.

On the other hand, a careful perusal of the description as provided by Judge Gingoyon in the Decision shows but a
general description of what is normally seen and what normally happens in places such as Edang Street, to wit: x x x place is
bursting with people most of whom live in cramped tenements with no place to spare for recreation, to laze around or [do] their
daily household chores x x x. The alleys become the grounds where children run around and play, the venue where adults do all
sorts of things to entertain [themselves] or pass the time, their wash area or even a place to cook food in x x x. Ambulant vendors
who display their wares in the alley and their customers that mill around them; x x x children
chasing eachother, dodging and [ducking] from awnings or canopies; x x x clotheslines full of dripping clothes that encroach
[on] the alleys x x x.[31]

The act of petitioner in openly accusing Judge Gingoyon of communicating with the defendant off the record, without
factual basis, brings the court into disrepute. The accusation in the Motion for Reconsideration and the Compliance submitted by
the petitioner to the respondent court is derogatory, offensive and malicious. The accusation taints the credibility and the dignity of
the court and questions its impartiality. It is a direct affront to the integrity and authority of the court, subjecting it to loss of public
respect and confidence, which ultimately affects the administration of justice.

Furthermore, assuming that the conclusion of petitioner is justified by the facts, it is still not a valid defense in cases of
contempt. Where the matter is abusive or insulting, evidence that the language used was justified by the facts is not admissible as a
defense. Respect for the judicial office should always be observed and enforced.[32]

Moreover, the charge of partiality is uncalled for, and there being no scintilla of proof that Judge Gingoyon did the act
complained of, petitioners act amounts to direct contempt of court.[33]

Denial of the Ex-Parte Motion to Post Bond and Quash Warrant of Arrest is
proper; there is no abuse of discretion on the part of respondent court.
 Petitioner avers that the respondent court abused its discretion in denying his Ex-Parte Motion. Petitioner insists that the
respondent court should have granted his Ex-Parte Motion since he already filed a Petition for Certiorari before this Court
pursuant to Rule 71 of the Rules of Court. He further avers that respondent court violated his right to due process by fixing the
bond only on December 5, 2005 or 10 days after the Orders of contempt and arrest were issued.

Petitioners contention lacks merit.

The respondent court was well within the bounds of its authority when it
denied petitioners Ex-Parte Motion.

A person may be adjudged in direct contempt of court pursuant to Section 1, Rule 71 of the Rules of Court [34] without
need of a hearing but may thereafter avail of the remedies of certiorari or prohibition.[35]

Section 2, Rule 71 of the Rules of Court provides:

Section 2. Remedy therefrom. The person adjudged in direct contempt by any court may not appeal
therefrom, but may avail himself of the remedies of certiorari or prohibition. The execution of the judgment
shall be suspended pending resolution of such petition, provided such person files a bond fixed by the court
which rendered the judgment and conditioned that he will abide by and perform the judgment should the petition
be decided against him. (Emphasis supplied.)

In this case, we find that the respondent court properly denied petitioners Ex-Parte Motion there being no proof that he
already filed a petition for certiorari. Notably, the Ex-ParteMotion was filed with the respondent court on December 1, 2005 at
10:00 A.M.[36] and therein petitioner stated that he already filed a Petition for Certiorari with this Court. However, perusal of the
records would show that the Petition for Certiorari was filed with the Supreme Court on the same day but at 1:06 P.M. [37] Clearly,
when the motion was filed with the respondent court, it cannot be accurately said that a petition for certiorari was already duly
filed with this Court. Significantly, the records show that respondent court was furnished a copy of the Petition for Certiorari by
registered mail and which was received only on December 5, 2005. [38] It is therefore clear that at the time that petitioner filed
the Ex-Parte Motion with the respondent court, he has not yet availed of the remedy of certiorari. In fact, it was only after filing
the Ex- Parte Motion with respondent court that petitioner filed the Petition for Certiorari with the Supreme Court. This
explained why no proof of such filing was presented by petitioner to the respondent court thus prompting it to declare that unless
petitioner has shown proof of filing said petition for certiorari, he cannot avail of the remedy provided in Section 2, Rule 71 of the
Rules of Court.[39] Petitioner thus cannot attribute abuse of discretion on the part of respondent court in denying the Ex-
Parte Motion. To reiterate, at the time the said Ex-Parte Motion was filed and acted upon by the respondent court, petitioner was
not yet entitled to the remedy prayed for. Clearly, the respondent court did not commit error, nor did it overstep its authority in
denying petitioners Ex-Parte Motion.

All told, we take a similar stand as Judge Gingoyon and affirm the Order adjudging petitioner guilty of direct
contempt. However, as to the penalty imposed upon petitioner, we find the fine of P2,000.00 commensurate with the acts
committed.

We also find the necessity to emphasize strict observance of the hierarchy of courts. A becoming regard for that judicial
hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level (inferior) courts should be
filed with the [RTC], and those against the latter, with the Court of Appeals (CA). A direct invocation of the Supreme Courts
original jurisdiction to issue extraordinary writs should be allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. [40] For the guidance of the petitioner, [t]his Courts original jurisdiction to issue writs
of certiorari (as well as prohibition, mandamus, quo warranto, habeas corpus and injunction) is not exclusive.[41] Its jurisdiction is
concurrent with the CA, and with the RTC in proper cases. [42] However, this concurrence of jurisdiction does not grant upon a party
seeking any of the extraordinary writs the absolute freedom to file his petition with the court of his choice. This Court is a court of
last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by the Constitution and immemorial
tradition.[43] Unwarranted demands upon this Courts attention must be prevented to allow time and devotion for pressing matters
within its exclusive jurisdiction.

Adhering to the policy on judicial hierarchy of courts, [w]here the issuance of an extraordinary writ is also within the
competence of the [CA] or a [RTC], it is in either of these courts that the specific action for the writs procurement must be
presented.[44] In consequence, the instant petition should have been filed with the CA as there is no allegation of any special or
compelling reason to warrant direct recourse to this Court. However, to avoid further delay, we deem it practical to resolve the
controversy.

Finally, it must be pointed out that on April 28, 2010, we directed petitioner to cause the entry of appearance of his
[45]
counsel within 15 days from notice. Petitioner failed to comply hence we directed him to show cause why he should not be
disciplinarily dealt with in our Resolution dated September 6, 2010. [46] Still, petitioner failed to comply hence he was
fined P1,000.00 in our Resolution dated January 17, 2011[47] which was increased to P3,000.00 in our Resolution of June 29,
2011. Consequently, petitioner is hereby directed to pay said fine of P3,000.00 otherwise he would be dealt with more severely.

WHEREFORE, the Petition for Certiorari is DISMISSED. The Order dated November 25, 2005 of Branch 117 of
the Regional Trial Court of Pasay City finding petitioner Ferdinand A. Cruz guilty of direct contempt is AFFIRMED with
MODIFICATION. Petitioner is hereby sentenced to pay a fine of P2,000.00. In addition, petitioner is ordered to PAY a fine
of P3,000.00 for his repeated failure to heed the directives of this Court. Petitioner is STERNLY WARNED that a repetition of
the same or similar act shall be dealt with more severely.

SO ORDERED.
 G.R. No. L-2068 October 20, 1948

DOMINADOR B. BUSTOS, petitioner, vs.

ANTONIO G. LUCERO, Judge of First Instance of Pampanga, respondent.

The petitioner herein, an accused in a criminal case, filed a motion with the Court of First Instance of Pampanga after
he had been bound over to that court for trial, praying that the record of the case be remanded to the justice of the peace
court of Masantol, the court of origin, in order that the petitioner might cross-examine the complainant and her
witnesses in connection with their testimony, on the strength of which warrant was issued for the arrest of the accused.
The motion was denied and that denial is the subject matter of this proceeding.

According to the memorandum submitted by the petitioner's attorney to the Court of First Instance in support of his
motion, the accused, assisted by counsel, appeared at the preliminary investigation. In that investigation, the justice of
the peace informed him of the charges and asked him if he pleaded guilty or not guilty, upon which he entered the plea
of not guilty. "Then his counsel moved that the complainant present her evidence so that she and her witnesses could be
examined and cross-examined in the manner and form provided by law." The fiscal and the private prosecutor objected,
invoking section 11 of rule 108, and the objection was sustained. "In view thereof, the accused's counsel announced his
intention to renounce his right to present evidence," and the justice of the peace forwarded the case to the court of first
instance.

Leaving aside the question whether the accused, after renouncing his right to present evidence, and by reason of that
waiver he was committed to the corresponding court for trial, is estopped, we are of the opinion that the respondent
judge did not act in excess of his jurisdiction or in abuse of discretion in refusing to grant the accused's motion to
return the record for the purpose set out therein. In Dequito and Saling Buhay vs. Arellano, G.R. No. L-1336, recently
promulgated, in which case the respondent justice of the peace had allowed the accused, over the complaint's objection,
to recall the complainant and her witnesses at the preliminary investigation so that they might be cross-examined, we
sustained the justice of the peace's order. We said that section 11 of Rule 108 does not curtail the sound discretion of
the justice of the peace on the matter. We said that "while section 11 of Rule 108 defines the bounds of the defendant's
right in the preliminary investigation, there is nothing in it or any other law restricting the authority, inherent in a court
of justice, to pursue a course of action reasonably calculated to bring out the truth."

But we made it clear that the "defendant can not, as a matter of right, compel the complaint and his witnesses to repeat
in his presence what they had said at the preliminary examination before the issuance of the order of arrest." We called
attention to the fact that "the constitutional right of an accused to be confronted by the witnesses against him does not
apply to preliminary hearings' nor will the absence of a preliminary examination be an infringement of his right to
confront witnesses." As a matter of fact, preliminary investigation may be done away with entirely without infringing
the constitutional right of an accused under the due process clause to a fair trial.

The foregoing decision was rendered by a divided court. The minority went farther than the majority and denied even
any discretion on the part of the justice of the peace or judge holding the preliminary investigation to compel the
complainant and his witnesses to testify anew.

Upon the foregoing considerations, the present petition is dismissed with costs against the petitioner.