Вы находитесь на странице: 1из 38

Gomez-Castillo vs.

Commission on Elections

investigation; and require Commission on Human Rights to submit to Supreme Court its report with
recommendations.

Notes.While constitutional rights can be protected under the Grave Abuse Clause through remedies
of injunction or prohibition under Rule 65 of the Rules of Court and a petition for habeas corpus under
Rule 102, these remedies may not be adequate to address the pestering problem of extralegal killings and
enforced disappearancesthe swiftness required to resolve a petition for a writ of Amparo through
summary proceedings and the availability of appropriate interim and permanent reliefs under the Amparo
Rule offers a better remedy to extralegal killings and enforced disappearances and threats thereof.
(Secretary of National Defense vs. Manalo, 568 SCRA 1 [2008])
Where there is a criminal case pending against the accused, he should file his application for reliefs
under the writ of Amparo by motion in the criminal case. (Reyes vs. Court of Appeals, 606 SCRA 580
[2009])
o0o

G.R. No. 187231. June 22, 2010.*


MINERVA GOMEZ-CASTILLO, petitioner, vs. COMMISSION ON ELECTIONS and STRIKE B.
REVILLA, respondents.
Courts; Jurisdiction; Separation of Powers; The allocation of jurisdiction is vested in Congress, and cannot be
delegated to another office or agency of the Government; The Rules of Court can only determine the means, ways or
manner in which said jurisdiction, as fixed by the Constitution and acts of Congress, shall be exercised.It is well-settled
that jurisdiction is conferred by law. As such, jurisdic-
_______________
* EN BANC.
500
500 SUPREME COURT REPORTS ANNOTATED
Gomez-Castillo vs. Commission on Elections
tion cannot be fixed by the will of the parties; nor be acquired through waiver nor enlarged by the omission of the parties;
nor conferred by any acquiescence of the court. The allocation of jurisdiction is vested in Congress, and cannot be
delegated to another office or agency of the Government. The Rules of Court does not define jurisdictional boundaries of
the courts. In promulgating the Rules of Court, the Supreme Court is circumscribed by the zone properly denominated as
the promulgation of rules concerning pleading, practice, and procedure in all courts; consequently, the Rules of Court can
only determine the means, ways or manner in which said jurisdiction, as fixed by the Constitution and acts of Congress,
shall be exercised. The Rules of Court yields to the substantive law in determining jurisdiction.

Same; Same; Election Law; Election Contests; The jurisdiction over election contests involving elective municipal
officials has been vested in the Regional Trial Court (RTC) by Section 251, Batas Pambansa Blg. 881 (Omnibus
Election Code), while A.M. No. 07-4-15-SC, by specifying the proper venue where such cases may be filed and heard,
only spelled out the manner by which an RTC with jurisdiction exercises such jurisdiction; Where an election protest
was filed in a court other than the one designated in A.M. No. 07-4-15-SC, considering that the protestants wrong
choice did not affect the jurisdiction of the Regional Trial Court (RTC), what the court where the protest was filed
should do is to transfer the protest to the proper branch of the RTC.The jurisdiction over election contests involving
elective municipal officials has been vested in the RTC by Section 251, Batas Pambansa Blg. 881 (Omnibus Election
Code). On the other hand, A.M. No. 07-4-15-SC, by specifying the proper venue where such cases may be filed and heard,
only spelled out the manner by which an RTC with jurisdiction exercises such jurisdiction. Like other rules on venue,
A.M. No. 07-4-15-SC was designed to ensure a just and orderly administration of justice, and is permissive, because it was
enacted to ensure the exclusive and speedy disposition of election protests and petitions for quo warranto involving
elective municipal officials. Castillos filing her protest in the RTC in Bacoor, Cavite amounted only to a wrong choice of
venue. Hence, the dismissal of the protest by Branch 19 constituted plain error, considering that her wrong choice did not
affect the jurisdiction of the RTC. What Branch 19 should have done under the circumstances was to transfer the protest to
Branch 22 of the RTC in Imus, Cavite, which was the
501
VOL. 621, JUNE 22, 2010 501
Gomez-Castillo vs. Commission on Elections
proper venue. Such transfer was proper, whether she as the protestant sought it or not, given that the determination of the
will of the electorate of Bacoor, Cavite according to the process set forth by law was of the highest concern of our
institutions, particularly of the courts.
Same; Same; Same; Same; Appeals; The period of appeal and the perfection of appeal are not mere technicalities to
be so lightly regarded, for they are essential to the finality of judgments, a notion underlying the stability of our judicial
system; The short period of five days as the period to appeal recognizes the essentiality of time in election protests, in
order that the will of the electorate is ascertained as soon as possible so that the winning candidate is not deprived of the
right to assume office, and so that any doubt that can cloud the incumbency of the truly deserving winning candidate is
quickly removed.Castillo now insists that her appeal should not be dismissed, because she claims that the five-day
reglementary period was a mere technicality, implying that such period was but a trivial guideline to be ignored or brushed
aside at will. Castillos insistence is unacceptable. The period of appeal and the perfection of appeal are not mere
technicalities to be so lightly regarded, for they are essential to the finality of judgments, a notion underlying the stability
of our judicial system. A greater reason to adhere to this notion exists herein, for the short period of five days as the period
to appeal recognizes the essentiality of time in election protests, in order that the will of the electorate is ascertained as
soon as possible so that the winning candidate is not deprived of the right to assume office, and so that any doubt that can
cloud the incumbency of the truly deserving winning candidate is quickly removed.

Appeals; The presumption of timeliness would not arise if her appeal was actually tardy.Contrary to Castillos
posture, we cannot also presume the timeliness of her appeal from the fact that the RTC gave due course to her appeal by
its elevating the protest to the COMELEC. The presumption of timeliness would not arise if her appeal was actually tardy.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Sayuno, Mendoza & San Jose Law Offices for petitioner.
502
502 SUPREME COURT REPORTS ANNOTATED
Gomez-Castillo vs. Commission on Elections

George Erwin M. Garcia for private respondent.


BERSAMIN, J.:
Petitioner Minerva Gomez-Castillo (Castillo) hereby seeks to nullify the orders dated January 30, 2009
and March 11, 20091 issued in EAC No. A-01-2009 by the Commission on Elections (COMELEC).
Antecedents
Castillo and respondent Strike P. Revilla ran for Municipal Mayor of Bacoor, Cavite during the May 14,
2007 local elections. After the Municipal Board of Canvassers proclaimed Revilla as the elected
Municipal Mayor of Bacoor, Cavite, Castillo filed an Election Protest Ad Cautelam2 in the Regional Trial
Court (RTC) in Bacoor, Cavite, which was eventually raffled to Branch 19.

Through his Answer, Revilla sought the dismissal of the election protest, alleging that it was filed in the
wrong Branch of the RTC. He pointed out that Supreme Court Administrative Order (SCAO) No. 54-
2007 designated Branch 22 of the RTC in Imus, Cavite and Branch 88 of the RTC in Cavite City to hear,
try and decide election contests involving municipal officials in Cavite; and that contrary to SCAO No.
54-2007, Castillo filed his protest in the RTC in Bacoor, Cavite, which was not the proper court.
_______________
1 Both issued by then Presiding Commissioner Rene V. Sarmiento; Commissioner Leonardo L. Leonida; and Commissioner Armando
C. Velasco; record, pp. 23 and 37.
2 The protest was designated ad cautelam because it was filed during the pendency of Castillos Petition to Declare Failure of Elections
before the COMELEC, which was dismissed by the Commission shortly after the filing of the election protest. All these can clearly be
gleaned from the third paragraph of the RTC Bacoors Order dated November 21, 2008, Record, p. 16.
503
VOL. 621, JUNE 22, 2010 503
Gomez-Castillo vs. Commission on Elections
On November 21, 2008, Branch 19 dismissed Castillos election protest for being violative of SCAO No.
54-2007.
On December 23, 2008, Castillo presented a notice of appeal.3 Thereupon, the RTC ordered that the
complete records of the protest be forwarded to the Election Contests Adjudication Department (ECAD)
of the COMELEC.4
The First Division of the COMELEC dismissed the appeal for being brought beyond the five-day
reglementary period, noting that although Castillo had received the November 21, 2008 order of the RTC
on December 15, 2008, she filed her notice of appeal on December 23, 2008, a day too late to appeal, to
wit:
Pursuant to Section 3, Rule 22 of the COMELEC Rules of Procedure which requires the appellant to file her notice of
appeal within five (5) days after promulgation of the decision of the court xxx and considering further that jurisprudence
holds that perfection of an appeal in the manner and within the period laid down by law is not only mandatory but
JURISDICTIONAL, this Commission, First Division, RESOLVES to DISMISS the instant appeal for appellants failure
to file her Notice of Appeal within the five (5) day reglementary period.
SO ORDERED.5
Castillo moved for the reconsideration of the dismissal of her appeal, but the COMELEC denied the
motion because she did not pay the motion fees required under Sec. 7(f), Rule 40 of the COMELEC
Rules of Procedure, as amended by COMELEC Resolution No. 02-0130, viz.:
The Motion for Reconsideration filed by protestant-appellant Minerva G. Castillo, thru registered mail on 13 February
2009 and received by this Commission on 4 March 2009, seeking reconsideration of the Commissions (First Division)
Order dated 30 January
_______________
3 Record, p. 1.
4 Id., p. 12
5 Id., p. 28.
504
504 SUPREME COURT REPORTS ANNOTATED
Gomez-Castillo vs. Commission on Elections
2009, is hereby DENIED for failure of the movant to pay the necessary motion fees under Sec. 7(f), Rule 40 of the
Comelec Rules of Procedure6 as amended by Comelec Resolution no. 02-0130.7
Castillo has brought the present recourse, contending that the COMELECs orders dismissing her appeal
and denying her motion for reconsideration were issued with grave abuse of discretion amounting to lack
or excess of jurisdiction.
Parties Arguments
Castillo insists that her notice of appeal was seasonably filed; otherwise, the RTC would not have given
due course to his appeal; that Section 3, Rule 22 of the COMELEC Rules of Procedure, cited in the
assailed order dated January 30, 2009, did not apply to her case, because Section 2 of Rule I of the
COMELEC Rules of Procedure provides that:
Sec. 2. Applicability.These rules, except Part VI, shall apply to all actions and proceedings brought before the
Commission. Part VI shall apply to election contests and Quo Warranto cases cognizable by courts of general
jurisdiction.

that the COMELEC Rules of Procedure applied only to actions and proceedings brought before the
COMELEC, not to actions or proceedings originating in courts of general jurisdiction; that even assuming
that the appeal was belatedly filed, the rules on election contests should be liberally construed to the end
that mere technical objections would not defeat the will of the people in the choice of public officers; that
the Court relaxed on numerous occasions the application
_______________
6 x x x Legal fees.The following legal fees shall be charged and collected:
xxx xxx xxx
(1) For filing of a motion for reconsideration on a decision, order or resolution . . . . . P[500.00]
xxx xxx xxx
7 Record, p. 37.
505
VOL. 621, JUNE 22, 2010 505
Gomez-Castillo vs. Commission on Elections
of the rules in order to give due course to belated appeals upon strong and compelling reasons; that an
electoral contest like hers was imbued with public interest, because it involved the paramount need to
clarify the real choice of the electorate; that Section 4 of Rule I of the COMELEC Rules of Procedure
even allows the COMELEC to suspend its own rules of procedure in order to obtain a speedy disposition
of all matters pending before the COMELEC; and that the COMELEC should not have dismissed her
motion for reconsideration for her mere failure to pay the corresponding filing fee, but should have
considered the soundness of her argument to the effect that SCAO No. 54-2007 continued to vest
jurisdiction to try and decide election contest involving elective municipal officials in the RTC as a
whole, rendering the designation of the RTC branches to handle election protests akin to a designation of
venue.
Castillo further insists that Section 12 of Rule 2 of the COMELEC Rules of Procedure provides that
assignment of cases to the specially designated courts should be done exclusively by raffle conducted by
the executive judge or by the judges designated by the Supreme Court; and that her protest was thus duly
raffled to the RTC in Bacoor, Cavite, considering that SCAO 54-2007 should be construed as a
permissive rule that cannot supersede the general rule that jurisdiction over election contests is vested in
the RTC.
In his comment,8 Revilla submits that the COMELEC correctly dismissed Castillos appeal for being filed
beyond the five-day reglementary period prescribed in Section 3 of Rule 22 of the COMELEC Rules of
Procedure, thus:
Section 3. Notice of Appeal.Within five (5) days after promulgation of the decision of the court, the aggrieved party
may filed with said court a notice of appeal, and serve a copy thereof upon the attorney of record of the adverse party.
_______________
8 Rollo, pp. 41-49.
506
506 SUPREME COURT REPORTS ANNOTATED
Gomez-Castillo vs. Commission on Elections
that A.M. No. 07-4-15-SC, otherwise known as The Rules of Procedure in Election Contests Involving
Elective Municipal and Barangay Officials, clearly and categorically directed:
Section 8. Appeal.An aggrieved party may appeal the decision to the commission on Elections, within five days after
promulgation, by filing a notice of appeal with the court that rendered the decision, with copy served on the adverse
counsel or party if not represented by counsel.

that the period for filing an appeal is not a mere technicality of law or procedure and the right to appeal is
merely a statutory privilege that may be exercised only in the manner prescribed by the law; that the
notice of appeal, even on the assumption that it was filed on time, still remained futile due to the
petitioners failure to pay the corresponding fee for the motion for reconsideration; that the failure to pay
the filing fee rendered the motion for reconsideration a mere scrap of paper, because it prevented the
COMELEC from acquiring jurisdiction over the protest; and that the COMELEC could not be faulted for
applying its procedural rules to achieve a just and expeditious determination of every proceeding brought
before it.

Issues

Does Section 13 of Rule 2 of A.M. No. 07-4-15-SC designate the RTC Branch that has jurisdiction over
an election contest, or does it merely designate the proper venue for filing?
In case the RTC was incorrect, is the error enough to warrant the reversal of its order of dismissal despite
its having attained finality?

Ruling
The petition has no merit.
507
VOL. 621, JUNE 22, 2010 507
Gomez-Castillo vs. Commission on Elections

AError of Petitioner in filing the protest inRTC in Bacoor, not jurisdictional It is well-settled that
jurisdiction is conferred by law. As such, jurisdiction cannot be fixed by the will of the parties; nor be
acquired through waiver nor enlarged by the omission of the parties; nor conferred by any acquiescence
of the court. The allocation of jurisdiction is vested in Congress, and cannot be delegated to another office
or agency of the Government.

The Rules of Court does not define jurisdictional boundaries of the courts. In promulgating the Rules of
Court, the Supreme Court is circumscribed by the zone properly denominated as the promulgation of
rules concerning pleading, practice, and procedure in all courts;9 consequently, the Rules of Court can
only determine the means, ways or manner in which said jurisdiction, as fixed by the Constitution and
acts of Congress, shall be exercised. The Rules of Court yields to the substantive law in determining
jurisdiction.10

The jurisdiction over election contests involving elective municipal officials has been vested in the RTC
by Section 251, Batas Pambansa Blg. 881 (Omnibus Election Code).11 On the other hand, A.M. No. 07-4-
15-SC, by specifying the proper venue where such cases may be filed and heard, only spelled out the
manner by which an RTC with jurisdiction exercises such jurisdiction. Like other rules on venue, A.M.
No. 07-4-15-SC was designed to ensure a just and orderly administration
_______________
9 Section 5 (5), Article VIII, 1987 Constitution.
10 De Jesus. v. Garcia, G.R. No. L-26816, February 28, 1967, 19 SCRA 554, 558.
11 Sec. 251. Election contests for municipal offices.A sworn petition contesting the election of a municipal officer shall be filed with
the proper regional trial court by any candidate who has duly filed a certificate of candidacy and has been voted for the same office,
within ten days after proclamation of the results of the election.
508
508 SUPREME COURT REPORTS ANNOTATED
Gomez-Castillo vs. Commission on Elections
of justice,12 and is permissive, because it was enacted to ensure the exclusive and speedy disposition of
election protests and petitions for quo warranto involving elective municipal officials.13
Castillos filing her protest in the RTC in Bacoor, Cavite amounted only to a wrong choice of venue.
Hence, the dismissal of the protest by Branch 19 constituted plain error, considering that her wrong
choice did not affect the jurisdiction of the RTC. What Branch 19 should have done under the
circumstances was to transfer the protest to Branch 22 of the RTC in Imus, Cavite, which was the proper
venue. Such transfer was proper, whether she as the protestant sought it or not, given that the
determination of the will of the electorate of Bacoor, Cavite according to the process set forth by law was
of the highest concern of our institutions, particularly of the courts.
BCastillos tardy appeal should be dismissed
Section 8 of A.M. No. 07-4-15-SC provides that:
Section 8. AppealAn aggrieved party may appeal the decision to the Commission on Elections within five days after
promulgation by filing a notice of appeal with the court that rendered the decision with copy served on the adverse counsel
or party if not represented by counsel.
Although Castillo had received the November 21, 2008 order of the RTC on December 15, 2008, she filed
her notice of appeal only on December 23, 2008, or eight days after her receipt of the decision. Her
appeal was properly dismissed for being too late under the aforequoted rule of the COMELEC.
_______________
12 Esuerte v. Court of Appeals, G.R. No. 53485, February 6, 1991, 193 SCRA 541, 544.
13 A.M. No. 07-4-15-SC, paragraph 6, Whereas clauses.
509
VOL. 621, JUNE 22, 2010 509
Gomez-Castillo vs. Commission on Elections

Castillo now insists that her appeal should not be dismissed, because she claims that the five-day
reglementary period was a mere technicality, implying that such period was but a trivial guideline to be
ignored or brushed aside at will.

Castillos insistence is unacceptable. The period of appeal and the perfection of appeal are not mere
technicalities to be so lightly regarded, for they are essential to the finality of judgments, a notion
underlying the stability of our judicial system.14 A greater reason to adhere to this notion exists herein, for
the short period of five days as the period to appeal recognizes the essentiality of time in election protests,
in order that the will of the electorate is ascertained as soon as possible so that the winning candidate is
not deprived of the right to assume office, and so that any doubt that can cloud the incumbency of the
truly deserving winning candidate is quickly removed.
Contrary to Castillos posture, we cannot also presume the timeliness of her appeal from the fact that the
RTC gave due course to her appeal by its elevating the protest to the COMELEC. The presumption of
timeliness would not arise if her appeal was actually tardy.
It is not trite to observe, finally, that Castillos tardy appeal resulted in the finality of the RTCs dismissal
even before January 30, 2002. This result provides an additional reason to warrant the assailed actions of
the COMELEC in dismissing
_______________
14 E.g., National Power Corporation v. Spouses Laohoo, G.R. No. 151973, July 23, 2009, 593 SCRA 564, where the Court states:
[T]he non-perfection of [an] appeal on time is not a mere technicality. Besides, to grant the petitioners plea for the relaxation of the rule
on technicality would disturb a well-entrenched ruling that could make uncertain when a judgment attains finality, leaving the same to
depend upon the resourcefulness of a party in concocting implausible excuses to justify an unwarranted departure from the time-honored
policy of the law that the period for the perfection of an appeal is mandatory and jurisdictional.
510
510 SUPREME COURT REPORTS ANNOTATED
Gomez-Castillo vs. Commission on Elections
her appeal. Accordingly, the Court finds that the COMELECs assailed actions were appropriate and
lawful, not tainted by either arbitrariness or whimsicality,
WHEREFORE, the petition is dismissed for lack of merit.
SO ORDERED.
Corona (C.J.), Carpio, Carpio-Morales, Velasco, Jr., Nachura, Leonardo-De Castro, Brion,
Peralta, Del Castillo, Abad, Villarama, Jr. and Perez, JJ., concur.
Mendoza, J., On Leave.

Petition dismissed.

Note.Judicial review is indeed an integral component of the delicate system of checks and balances
which, together with the corollary principle of separation of powers, forms the bedrock of our republican
form of government and insures that its vast powers are utilized only for the benefit of the people for
which it serves. (Francisco, Jr. vs. Nagmamalasakit na mga Manananggol ng mga Manggagawang
Pilipino, Inc., 415 SCRA 44 [2003])
o0o
VOL. 524, JUNE 8, 2007 591
Department of Budget and Management Procurement Service vs. Kolonwel Trading
G.R. No. 175608. June 8, 2007.*
DEPARTMENT of BUDGET and MANAGEMENT PROCUREMENT SERVICE (DBM-PS) and the
Inter-Agency Bids and Awards Committee (IABAC), petitioners, vs. KOLONWEL TRADING,
respondent.
G.R. No. 175616. June 8, 2007.*
VIBAL PUBLISHING HOUSE, INC., LG & M CORPORATION and SD PUBLICATIONS, INC.,
petitioners, vs. KOLONWEL TRADING, respondent.
G.R. No. 175659. June 8, 2007.*
DEPARTMENT OF EDUCATION, petitioner, vs. KOLONWEL TRADING, respondent.
Bids and Bidding; Government Procurement Reform Act (R.A. No. 9184); Jurisdictions; Section 55 of R.A. No. 9184 sets
three (3) requirements that must be met by the party desiring to protest the decision of the Bids and Awards Committee
(BAC), namely: 1) the protest must be in writing, in the form of a verified position paper; 2) the protest must be submitted
to the head of the procuring entity; and 3) the payment of a non-refundable protest fee.The Court is unable to lend
concurrence to the trial courts and respondents positions on the interplay of the protest and jurisdictional issues. As may
be noted, the aforequoted Section 55 of R.A. No. 9184 sets three (3) requirements that must be met by the party desiring to
protest the decision of the Bids and Awards Committee (BAC). These are: 1) the protest must be in writing, in the form of
a verified position paper; 2)
_______________
* EN BANC.

592

592 SUPREME COURT REPORTS ANNOTATED


Department of Budget and Management Procurement Service vs. Kolonwel Trading
the protest must be submitted to the head of the procuring entity; and 3) the payment of a non-refundable protest fee. The
jurisdictional caveat that authorizes courts to assume or, inversely, precludes courts from assuming, jurisdiction over suits
assailing the BACs decisions is in turn found in the succeeding Section 58 which provides that the courts would have
jurisdiction over such suits only if the protest procedure has already been completed. Respondents letters of May 18, 2006
and June 28, 2006 in which it requested reconsideration of its disqualification cannot plausibly be given the status of a
protest in the context of the aforequoted provisions of R.A. No. 9184. For one, neither of the letter-request was addressed
to the head of the procuring entity, in this case the DepEd Secretary or the head of the DBM Procurement Service, as
required by law. For another, the same letters were unverified. And not to be overlooked of course is the fact that the third
protest-completing requirement, i.e., payment of protest fee, was not complied with.

Same; Same; Same; Where a disqualified bidders petition in the Regional Trial Court is filed in violation of the protest
process set forth in Section 55 of R.A. No. 9184, said court could not lawfully acquire jurisdiction over the subject matter
of this case.Given the above perspective, it cannot really be said that the respondent availed itself of the protest
procedure prescribed under Section 55 of R.A. No. 9184 before going to the RTC of Manila via a petition for certiorari.
Stated a bit differently, respondent sought judicial intervention even before duly completing the protest process. Hence, its
filing of SP Civil Case No. 06-116010 was precipitate. Or, as the law itself would put it, cases that are filed in violation of
the protest process shall be dismissed for lack of jurisdiction. Considering that the respondents petition in RTC Manila
was actually filed in violation of the protest process set forth in Section 55 of R.A. No. 9184, that court could not have
lawfully acquired jurisdiction over the subject matter of this case. In fact, Section 58, supra, of R.A. No. 9184
emphatically states that cases filed in violation of the protest process therein provided shall be dismissed for lack of
jurisdiction. It is to be stressed that the protest mechanism adverted to is a builtin administrative remedy embodied in the
law itself. It was not prescribed by an administrative agency tasked with implementing a statute through the medium of
interpretative circulars or bulletins. Ignoring thus this administrative remedy would be to defy the law itself.
593
VOL. 524, JUNE 8, 2007 593
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Same; Same; Same; Implementing Rules and Regulations; As the last sentence of Section 55 of R.A. No. 9184 is couched,
the specific office of an Implementing Rules and Regulations (IRR) for foreign-funded project, vis--vis the matter of
protest, is limited to fixing the amount of the protest fee and the periods during which the protest may be filed and
resolvedhence, the absence of an IRR does not excuse compliance with the protest procedure.It will not avail the
respondent any to argue that the absence of an IRR to make the protest mechanism under R.A. No. 9184 become operative
for foreign-funded projects was what prevented it from complying with the protest procedure. As the last sentence of the
afore-quoted Section 55 of R.A. No. 9184 is couched, the specific office of an IRR for foreignfunded project, vis--vis the
matter of protest, is limited to fixing the amount of the protest fee and the periods during which the protest may be filed
and resolved. Surely, the absence of provisions on protest fee and reglementary period does not signify the deferment of
the implementation of the protest mechanism as a condition sine qua non to resort to judicial relief. As applied to the
present case, the respondent had to file a protest and pursue it until its completion before going to court. There was hardly
any need to wait for the specific filing period to be prescribed by the IRR because the protest, as a matter of necessity, has
to be lodged before court action. Neither is it necessary that the amount of protest fee be prescribed first. Respondent could
very well have proceeded with its protest without paying the required protest fee, remitting the proper amount once the
appropriate IRR fixed the protest fee.
Same; Same; Same; Same; Foreign-Funded Projects; There is no discernable justification why a different procedure
should obtain with respect to foreign-funded procurement undertakings as opposed to a locally funded project, and
certainly there is no concrete foundation in R.A. 9184 to indicate that Congress intended such a variance in the protest
procedure.As in Abaya, there really should be no reason why the policy behind Section 55.l of IRR-A on the procedure
for protest cannot be applied, even analogously, to foreign-funded procurement projects, such as those in this case. Indeed,
there is no discernable justification why a different procedure should obtain with respect to foreign-funded procurement
undertakings as opposed to a locally funded project, and certainly there is no concrete foundation in R.A. 9184 to indicate
that Congress intended such a variance in the protest procedure.
594
594 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Jurisdictions; It is Congress by law, not the courts by discretion, which defines the courts jurisdiction not otherwise
conferred by the Constitution, and it is through the same medium, Congress also draws the parameters in the exercise of
the functions of administrative agencies.It is Congress by law, not the courts by discretion, which defines the courts
jurisdiction not otherwise conferred by the Constitution. Through the same medium, Congress also draws the parameters
in the exercise of the functions of administrative agencies. Section 55 of R.A. No. 9184 could not be any clearer when it
mandates the manner of protesting the decision of bids and awards committees. Similarly, there can be no quibbling that,
under Section 58 of the same law, courts do not have jurisdiction over decisions of the BACs unless the appropriate protest
has been made and completed. The absence of the IRR does not detract from the reality that R.A. No. 9184 requires a
protest to be filed under the form therein prescribed. Given the above perspective, the Manila RTC had no jurisdiction
over respondent Kolonwels petition for certiorari and prohibition. Accordingly, it ought to have granted herein
petitioners motion to dismiss, but it did not. Worse, the court even added another layer to its grievous error when it
granted the respondents basic petition for certiorari and prohibition itself.
Parties; Words and Phrases; Indispensable parties are those with such interest in the controversy that a final decree
would necessarily affect their rights so that courts cannot proceed without their presenceall of them must be included in
a suit for an action to prosper or for a final determination to be had.There can be no dispute that Watana is an
indispensable party to the respondents petition in SP Civil Case No. 06-116010, Kolonwel having therein assailed and
sought to nullify the contract-award made in its and Vibals favor. Indispensable parties are those with such interest in the
controversy that a final decree would necessarily affect their rights so that courts cannot proceed without their presence.
All of them must be included in a suit for an action to prosper or for a final determination to be had. Watana, to repeat, was
never served with summons; neither did it participate in the proceedings below. Plainly, then, the Manila RTC did not
acquire jurisdiction over one of the indispensable parties, the joinder of whom is compulsory.
International Law; Pacta Sunt Servanda; Foreign-Funded Projects; Under the fundamental international law principle of
pacta sunt servanda, which is in fact embodied in Section 4 of R.A. No.
595

VOL. 524, JUNE 8, 2007 595


Department of Budget and Management Procurement Service vs. Kolonwel Trading
9184, the RP, as borrower, bound itself to perform in good faith its duties and obligation under Loan No. 7118 -PHthe
Inter-Agency Bids and Awards Committee (IABAC) was legally obliged to comply with, or accord primacy to, the World
Bank Guidelines on the conduct and implementation of the bidding/procurement process in question.The question as to
whether or not foreign loan agreements with international financial institutions, such as Loan No. 7118-PH, partake of an
executive or international agreement within the purview of the Section 4 of R.A. No. 9184, has been answered by the
Court in the affirmative in Abaya, supra. Significantly, Abaya declared that the RP-JBIC loan agreement was to be of
governing application over the CP I project and that the JBIC Procurement Guidelines, as stipulated in the loan agreement,
shall primarily govern the procurement of goods necessary to implement the main project. Under the fundamental
international law principle of pacta sunt servanda, which is in fact embodied in the afore-quoted Section 4 of R.A. No.
9184, the RP, as borrower, bound itself to perform in good faith its duties and obligation under Loan No. 7118-PH.
Applying this postulate in the concrete to this case, the IABAC was legally obliged to comply with, or accord primacy to,
the WB Guidelines on the conduct and implementation of the bidding/procurement process in question.
PETITIONS for review on certiorari of an order of the Manila Regional Trial Court, Br. 18.
The facts are stated in the opinion of the Court.
Policarpio, Pangulayan and Azura Law Office for petitioners Vibal Publishing House, Inc., LG & M
Corp. and SD Publications, Inc.
Roque and Butuyan Law Offices for respondent Kolonwel Trading.
GARCIA, J.:
Before the Court are these consolidated three (3) petitions for review under Rule 45 of the Rules of Court,
with a prayer for a temporary restraining order, to nullify and set aside the
596
596 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Order1 dated December 4, 2006 of the Manila Regional Trial Court (RTC), Branch 18, in SP Civil Case
No. 06-116010, a special civil action for certiorari and prohibition thereat commenced by herein
respondent Kolonwel Trading (Kolonwel for short) against the Department of Budget and Management
Procurement Service (DBM-PS), et al.
At the core of the controversy are the bidding and the eventual contract awards for the supply and
delivery of some 17.5 million copies of Makabayan (social studies) textbooks and teachers manuals, a
project of the Department of Education (DepEd).
The factual antecedents:
In the middle of 2005, the DepEd requested the services of the DBM-PS to undertake the aforementioned
procurement project which is to be jointly funded by the World Bank (WB), through the Second Social
Expenditure Management Program (SEMP2) of the Philippines (RP)International Bank for
Reconstruction and Development (IBRD) Loan Agreement No. 7118-PH2 (Loan No. 7118-PH,
hereinafter) dated September 12, 2002; and the Asian Development Bank (ADB), through SEDIP Loan
No. 1654-PHI. Earlier, the Executive Director of the Government Procurement Policy Board (GPPB), in
reply to a DepEd query, stated that procurement[s] for MAKABAYAN . . . textbooks where funds
therefore (sic) are sourced from World Bank Loan shall be governed by the applicable procurement
guidelines of the foreign lending institution. The 2005 Call for Submission of Textbooks and Teachers
Manuals shall be viewed vis--vis re levant World Bank guidelines.3

On October 27, 2005, the DBM-PS Inter-Agency Bids and Awards Committee (IABAC) called for a
bidding for the supply of the Makabayan textbooks and manuals, divided into
_______________
1 Rollo (G.R. No. 175659), pp. 44-103.
2 Annex D of Petition (G.R. No. 175608); id. (G.R. No. 175608), at pp. 122 et seq.
3 Id. (G.R. No. 175659), at pp. 108 et seq.
597
VOL. 524, JUNE 8, 2007 597
Department of Budget and Management Procurement Service vs. Kolonwel Trading
three (3) lots, to wit: Lot 1 for Sibika Grades 1-3; Lot 2 for HeKaSi Grades 4-6 and Lot 3 for Araling
Panlipunan Years IIV. Of the entities, foreign and local, which responded and procured the Bidding
Documents,4 only eleven (11) bidders submitted, either as principal or in joint venture arrangement,
proposals for the different lots. Among them were Watana Phanit Printing & Publishing Co., Ltd., of
Thailand (Watana, for short), petitioner Vibal Publishing House, Inc., (Vibal, hereinafter), Daewoo
International Corporation of South Korea (Daewoo, for brevity) and respondent Kolonwel. Kolonwels
tender appeared to cover all three (3) lots.5
Following the bid and the book content/body evaluation process, the IABAC, via Resolution (Res.) No.
001-20066 dated March 9, 2006, resolved to recommend to the [WB] and the [ADB] failure of bids for
all lots in view of the abovementioned disqualifications, non-compliance and reservations of [DepEd] .
Issues of Conflict of interest with respect to Watana and Vibal, failure in cover stock testing for
Kolonwel and DepEds reservation were among the disqualifying reasons stated in the resolution.
On March 15, 2006, the IABAC submitted to WB for its review and information Res. No. 001-2006.
Appended to the covering letter was a document entitled Bid Evaluation Report and Recommendation
for Award of Contract.7
The following events, as recited in the assailed Manila RTC order and as borne out by the records, then
transpired:
1 1.In a letter8 dated April 24, 2006 to the DepEd and the DBM-PS IABAC Chairman, the WB,
through its Regional Senior Economist, Ms. Rekha Menon, disagreed, for stated reasons, with
_______________
4 Annex G of Petition (G.R. No. 175608); id. (G.R. No. 175608), at pp. 187-348.
5 Id. (G.R. No. 175659), at pp. 143 et seq.
6 Id., at pp. 135, et seq.
7 Id., at pp. 143, et seq.
8 Id., at pp. 195, et seq.
598
598 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
1 the IABACs finding of conflict of interest on the part of Vibal and Watana and the rejection of their
bids. Ms. Menon, however, upheld the disqualification of all the other bidders. She thus asked the
IABAC to review its evaluation and to provide the WB with the revised Bid Evaluation Report
(BER), taking into account the December 31, 2006 RP-IBRD Loan closing date.
2 2. On May 11, 2006, the IABAC informed Kolonwel of its or its bids failure to post qualify and of the
grounds for the failure.9 In its reply-letter of May 18, 2006,10 Kolonwel raised several issues and
requested that its disqualification be reconsidered and set aside. In reaction, IABAC apprised WB
of Kolonwels concerns stated in its letter-reply.
3 3.Subsequently, the IABAC, agreeing with WBs position articulated in Ms. Menon, issued Res. No.
001-2006-A effectively recommending to WB the contract award to Vibal of Sibika 1 & 3 and
HekaSi 5; to Watana of Sibika 2 and HeKaSi 4 & 5 and to Daewoo of Sibika 3. Upon review, WB
offered no objection to the recommended award.11
4 4.The issuance of notices of award and the execution on September 12, 2006 of the corresponding
Purchaser-Supplier contracts followed.12
5 5.On June 23, 2006, the DBM-PS IABAC chairman informed Kolonwel of the denial of its request for
reconsideration and of the WBs concurrence with the denial.13 The IABAC denied, on September
8, 2006, a second request for reconsideration of Kolonwel 14 after WB found the reasons therefor,
as detailed in PS IABAC Res. No. 001-2006-B15 dated July 18, 2006, unmeritorious, particularly
on the aspect of cover stock testing.
_______________
9 Id., at pp. 198, et seq.
10 Id., at pp. 200, et seq.
11 Id., at pp. 214, et seq.
12 Id., at pp. 245-250, [WatanaDBM-PS]; pp. 262-266 [VibalDBM-PS]; at pp. 272-275 [Daewoo-DBM-PS].
13 Id., at pp. 223 et seq.
14 Embodied in a letter of June 28, 2006; Id., at pp. 244 et seq.
15 Id., at pp. 234 et seq.
599
VOL. 524, JUNE 8, 2007 599
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Such was the state of things when on, October 12, 2006, Kolonwel filed with the RTC of Manila a special
civil action for certiorari and prohibition with a prayer for a temporary restraining order (TRO) and/or
writ of preliminary injunction. Docketed as SP Civil Case No. 06-116010, and raffled to Branch 18 of the
court,16 the petition sought to nullify IABAC Res. Nos. 001-2006 and 001-2006-A and to set aside the
contract awards in favor of Vibal and Watana. In support of its TRO application, Kolonwel alleged,
among other things, that the supply-awardees were rushing with the implementation of the void supply
contracts to beat the loan closing-date deadline.

A week after, the Manila RTC scheduledand eventually conducteda summary hearing on the TRO
application. In an order17 of October 31, 2006, as amended in another order18 dated November 20, 2006,
the court granted a 20-day TRO enjoining the IABAC, et al, starting November 6, 2006, from proceeding
with the subject September 12, 2006 purchasesupply contracts. In the original order, the court set the
preliminary conference and hearing for the applied preliminary injunction on November 7, and 8, 2006,
respectively.
In the meantime, Vibal filed an urgent motion to dismiss19 Kolonwels petition on several grounds, among
them want of jurisdiction and lack of cause of action, inter alia alleging that the latter had pursued
judicial relief without first complying with the protest procedure prescribed by Republic Act (R.A.) No.
9184, otherwise known as the Government Procurement Reform Act. The DepEd later followed with its
own motion to dismiss, partly based on the same protest provision. As records show, the trial court did
not conduct a hearing on either dismissal motions, albeit it heard the parties on their oppos-
_______________
16 Presided by RTC Judge Myra V. Garcia Hernandez.
17 Rollo, (G. R. No. 175659), pp. 318 et seq.
18 Id., at pp. 340.
19 Id., (G.R. No. 175608), at pp. 576 et seq.
600
600 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
ing claims respecting the propriety of issuing a writ of preliminary injunction.
On December 4, 2006, the Manila RTC issued its assailed Order 20 finding for Kolonwel, as petitioner a
quo, disposing as follows:
WHEREFORE, the court grants the petition for certiorari and prohibition. The IABAC Resolution No. 001-2006-A dated
May 30, 2006 is annulled and set aside. IABAC Resolution No. 001-2006 is declared validly and regularly issued in the
absence of a showing of grave abuse of discretion or excess of jurisdiction. All subsequent actions of the respondents
resulting from the issuance of IABAC Resolution No. 001-2006-A are consequently nullified and set aside. This court
grants a final injunction pursuant to Sec. 9 of Rule 58 of the Rules of Court as amended, restraining respondents
Department of Education and Culture (sic), [DBM-PS], [IABAC], Vibal Publishing House, Inc., LG & M Corporation and
SD Publications from the commission or continuance of acts, contracts or transactions proceeding from the issuance of
IABAC Resolution No. 001-2006-A.
SO ORDERED. (Emphasis and words in brackets supplied)
Hence, these three (3) petitions which the Court, per its Resolution21 of January 16, 2007, ordered
consolidated. Earlier, the Court issued, in G.R. No. 175616, a TRO22 enjoining the presiding judge23 of the
RTC of Manila, Branch 18, from proceeding with SP Civil Case No. 06-116010 or implementing its
assailed order.
Petitioners urge the annulment of the assailed RTC Order dated December 4, 2006, on jurisdictional
ground, among others. It is their parallel posture that the Manila RTC erred in assuming jurisdiction over
the case despite respondent Kolonwels failure to observe the protest mechanism provided
_______________
20 Supra note 1.
21 Id., (G.R. No. 175659), at p. 360.
22 Id., (G.R. No. 175616), at pp. 470-71.
23 Supra note 16.
601
VOL. 524, JUNE 8, 2007 601
Department of Budget and Management Procurement Service vs. Kolonwel Trading
under Sec. 55 in relation to Secs. 57 and 58 of R.A. No. 9184, respectively reading as follows:
Sec. 55. Protest on Decision of the BAC.Decisions of the BAC [Bids and Awards Committee] in all stages of
procurement may be protested to the head of the procuring entity. . . . Decisions of the BAC may be protested by filing a
verified position paper and paying a non-refundable protest fee. The amount of the protest fee and the periods during
which the protest may be filed and resolved shall be specific in the IRR.
Sec. 57. Non-interruption of the Bidding Process.In no case shall any process taken from any decision treated in this
Article stay or delay the bidding process. Protests must first be resolved before any award is made.
Sec. 58. Report to Regular Courts; Certiorari.Court action may be resorted to only after the protests contemplated in
this Article shall have been completed. Cases that are filed in violation of the process specified in this article shall be
dismissed for lack of jurisdiction. The [RTC] shall have jurisdiction over final decisions of the head of the procuring
entity. (Emphasis and words in bracket added.)
As a counterpoint, the respondent draws attention to its having twice asked, and having been twice
spurned by, the IABAC to reconsider its disqualification, obviously agreeing with the Manila RTC that
the judicial window was already opened under the exhaustion of available administrative remedies
principle. In the same breath, however, the respondent would argue, again following the RTCs line, that
it was prevented from filing a protest inasmuch as the government had not issued the Implementing Rules
and Regulations (IRR) of R.A. No. 9184 to render the protest mechanism of the law operative for foreign-
funded projects.
You
The Court is unable to lend concurrence to the trial courts and respondents positions on the interplay of
the protest and jurisdictional issues. As may be noted, the aforequoted Section 55 of R.A. No. 9184 sets
three (3) requirements that must be met by the party desiring to protest the decision of the Bids
602
602 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
and Awards Committee (BAC). These are: 1) the protest must be in writing, in the form of a verified
position paper; 2) the protest must be submitted to the head of the procuring entity; and 3) the payment of
a non-refundable protest fee. The jurisdictional caveat that authorizes courts to assume or, inversely,
precludes courts from assuming, jurisdiction over suits assailing the BACs decisions is in turn found in
the succeeding Section 58 which provides that the courts would have jurisdiction over such suits only if
the protest procedure has already been completed.
Respondents letters of May 18, 200624 and June 28, 200625 in which it requested reconsideration of its
disqualification cannot plausibly be given the status of a protest in the context of the aforequoted
provisions of R.A. No. 9184. For one, neither of the letter-request was addressed to the head of the
procuring entity, in this case the DepEd Secretary or the head of the DBM Procurement Service, as
required by law. For another, the same letters were unverified. And not to be overlooked of course is the
fact that the third protest-completing requirement, i.e., payment of protest fee, was not complied with.
Given the above perspective, it cannot really be said that the respondent availed itself of the protest
procedure prescribed under Section 55 of R.A. No. 9184 before going to the RTC of Manila via a petition
for certiorari. Stated a bit differently, respondent sought judicial intervention even before duly
completing the protest process. Hence, its filing of SP Civil Case No. 06-116010 was precipitate. Or, as
the law itself would put it, cases that are filed in violation of the protest process shall be dismissed for
lack of jurisdiction.
Considering that the respondents petition in RTC Manila was actually filed in violation of the protest
process set forth in Section 55 of R.A. No. 9184, that court could not have law-
_______________
24 Supra note 10.
25 Supra note 14.
603
VOL. 524, JUNE 8, 2007 603
Department of Budget and Management Procurement Service vs. Kolonwel Trading
fully acquired jurisdiction over the subject matter of this case. In fact, Section 58, supra, of R.A. No.
9184 emphatically states that cases filed in violation of the protest process therein provided shall be
dismissed for lack of jurisdiction. It is to be stressed that the protest mechanism adverted to is a built-in
administrative remedy embodied in the law itself.
It was not prescribed by an administrative agency tasked with implementing a statute through the medium
of interpretative circulars or bulletins. Ignoring thus this administrative remedy would be to defy the law
itself.
It will not avail the respondent any to argue that the absence of an IRR to make the protest mechanism
under R.A. No. 9184 become operative for foreign-funded projects was what prevented it from complying
with the protest procedure. As the last sentence of the afore-quoted Section 55 of R.A. No. 9184 is
couched, the specific office of an IRR for foreignfunded project, vis--vis the matter of protest, is limited
to fixing the amount of the protest fee and the periods during which the protest may be filed and
resolved. Surely, the absence of provisions on protest fee and reglementary period does not signify the
deferment of the implementation of the protest mechanism as a condition sine qua non to resort to judicial
relief. As applied to the present case, the respondent had to file a protest and pursue it until its completion
before going to court. There was hardly any need to wait for the specific filing period to be prescribed by
the IRR because the protest, as a matter of necessity, has to be lodged before court action.
Neither is it necessary that the amount of protest fee be prescribed first. Respondent could very well have
proceeded with its protest without paying the required protest fee, remitting the proper amount once the
appropriate IRR fixed the protest fee.
There may perhaps be room for relaxing the prescription on protest if a bona fide attempt to comply with
legal requirements had been made. But the fact alone that the respondent
604
604 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
did not even submit a verified position paper by way of protest argues against such plausibility.
Significantly, none of the reconsideration-seeking letters of the respondent advert to the protest procedure
under Section 55 of R.A. No. 9184, even by way of noting that it was at a loss as to the inoperativeness of
such provision in the light of the absence of an IRR.
In its petition before the Manila RTC, the respondent veritably admitted to not complying with the protest
requirement, albeit with the lame excuse that it was effectively barred from complying with the required
administrative remedies of protest. Neither did the respondent then argue that it was not able to comply
due to the absence of an IRR for foreignfunded projects.
At any rate, there is, in fact a set of implementing rules and regulations, denominated as IRR-A, issued
on July 11, 2003 by the GPPB and the Joint Congressional Oversight Committee, Section 55.1 26 of which
provides that prior to a resort to protest, the aggrieved party must first file a motion for reconsideration of
the decision of the BAC. It is only after the BAC itself denies reconsideration that the protest,
accompanied by a fixed protest fee, shall be filed within the period defined in the IRR.
It may be that IRR-A specifically defines its coverage to all fully domestically-funded procurement
activities, it being also
_______________
26 Sec. 55.1. Decisions of the BAC with respect to the conduct of bidding may be protested in writing to the head of the procuring entity:
Provided, however, That a prior motion for reconsideration should have been filed by the party concerned within the reglementary
periods specified in this IRR-A, and the same has been resolved. The protest must be filed within seven (7) days from receipt . . . of the
resolution of the BAC denying its motion for reconsideration. A protest may be made by filing a verified position paper . . . accompanied
by the payment of a non-refundable protest fee. The nonrefundable protest fee shall be in an amount equivalent to no less than one (1%)
of the ABC.
605
VOL. 524, JUNE 8, 2007 605
Department of Budget and Management Procurement Service vs. Kolonwel Trading
provided that foreign-funded procurement activities shall be the subject of a subsequent issuance.27
However, a similarly drawn argument involving IRR-A was set aside in Abaya v. Ebdane,28 a case
involving Loan Agreement No. PH-P204 entered into by and between the RP and the Japan Bank for
International Cooperation (JBIC) for the implementation DPWH Contract Package No. I (CP I). Wrote
the Court in Abaya:
Admittedly, IRR-A covers only fully domestically-funded procurement activities from procurement planning up to
contract implementation and that it is expressly stated that IRR-B for foreignfunded procurement activities shall be subject
of a subsequent issuance. Nonetheless, there is no reason why the policy behind Section 77 of IRR-A cannot be applied to
foreign-funded procurement projects like the CP I project. Stated differently, the policy on the prospective or non-
retroactive application of RA 9184 with respect to domestically-funded procurement projects cannot be any different with
respect to foreign-funded procurement projects . It would be incongruous, even absurd, to provide for the prospective
application of RA 9184 with respect to domestically-funded procurement projects and, on the other hand, as urged by the
petitioners, apply RA 9184 retroactively with respect to foreign-funded procurement projects. To be sure, the lawmakers
could not have intended such an absurdity.
As in Abaya, there really should be no reason why the policy behind Section 55.1 of IRR-A on the
procedure for protest cannot be applied, even analogously, to foreign-funded procurement projects, such
as those in this case. Indeed, there is no discernable justification why a different procedure should obtain
with respect to foreign-funded procurement undertakings as opposed to a locally funded project, and
certainly there is no concrete foundation in R.A. 9184 to indicate that Congress intended such a variance
in the protest procedure.
The Manila RTC, in granting the petition for certiorari and prohibition, stated the observation that there
was substan-
_______________
27 Section, Rule 1.
28 G.R. No. 167919, February 14, 2007, 515 SCRA 720.
606
606 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
tial compliance of the requirement of protest.29 Yet, it is not even clear that respondent Kolonwel, in its
dealings with the IABAC, particularly in seeking reconsideration of its decision, was even aware of the
protest requirements. What is beyond dispute, however, is that courts are precluded by express legislative
command from entertaining protests from decisions of the BAC. What Congress contextually intended
under the premises was that not only would there be a distinct administrative grievance mechanism to be
observed in assailing decisions of the BAC, but that courts would be without jurisdiction over actions
impugning decisions of the BACs, unless, in the meantime, the protest procedure mandated under Section
55 of R.A. No. 9184 is brought to its logical completion.
It is Congress by law, not the courts by discretion, which defines the courts jurisdiction not otherwise
conferred by the Constitution. Through the same medium, Congress also draws the parameters in the
exercise of the functions of administrative agencies. Section 55 of R.A. No. 9184 could not be any clearer
when it mandates the manner of protesting the decision of bids and awards committees. Similarly, there
can be no quibbling that, under Section 58 of the same law, courts do not have jurisdiction over decisions
of the BACs unless the appropriate protest has been made and completed. The absence of the IRR does
not detract from the reality that R.A. No. 9184 requires a protest to be filed under the form therein
prescribed.
Given the above perspective, the Manila RTC had no jurisdiction over respondent Kolonwels petition for
certiorari and prohibition. Accordingly, it ought to have granted herein petitioners motion to dismiss, but
it did not. Worse, the court even added another layer to its grievous error when it granted the respondents
basic petition for certiorari and prohibition itself.
_______________
29 Page 15 of the RTC Order.
607
VOL. 524, JUNE 8, 2007 607
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Compounding the Manila RTCs error is its having proceeded with SP Civil Case No. 06-116010 even
without acquiring jurisdiction over Watana. As may be recalled, the respondent, in its petition before the
RTC, impleaded Watana as one of the defendants, the latter having been awarded by the IABAC Sibika 2
and HeKaSi 4 & 5 . The records, however, show that Watana was not served with summons. The Sheriffs
Return dated October 18, 2006, noted that summons was not served on Watana and another defendant at
No. 1281 G. Araneta Avenue cor. Ma. Clara Street, Quezon City, on the ground that said companies
were not holding office thereat according to Mr. Marvin V. Catacutan.
There can be no dispute that Watana is an indispensable party to the respondents petition in SP Civil
Case No. 06-116010, Kolonwel having therein assailed and sought to nullify the contract-award made in
its and Vibals favor. Indispensable parties are those with such interest in the controversy that a final
decree would necessarily affect their rights so that courts cannot proceed without their presence.30 All of
them must be included in a suit for an action to prosper or for a final determination to be had. 31 Watana, to
repeat, was never served with summons; neither did it participate in the proceedings below. Plainly, then,
the Manila RTC did not acquire jurisdiction over one of the indispensable parties, the joinder of whom is
compulsory.32
With the foregoing disquisitions, the Court finds it unnecessary to even dwell on the other points raised in
this consolidated cases. In the light, however, of the Manila RTCs holding that the WB Guidelines on
Procurement under IBRD Loans do not in any way provided superiority over local laws
_______________
30 Seno v. Mangubat, G.R. No. L-44339, December 2, 1987, 156 SCRA 113.
31 Rule 3, Sec. 7 of the Rules of Court.
32 Ibid.; Nery v. Leyson, G.R. No. 139306, August 29, 2000, 339 SCRA 232.
608
608 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
on the matter,33 the Court wishes to state the following observation:
As may be recalled, all interested bidders were put on notice that the DepEds procurement project was to
be funded from the proceeds of the RP-IBRD Loan No. 7118-PH,34 Section 1, Schedule 4 of which
stipulates that Goods . . . shall be procured in accordance with the provisions of Section 1 35 of the
Guidelines for Procurement under IBRD Loans. Accordingly, the IABAC conducted the bidding for
the supply of textbooks and manuals based on the WB Guidelines, particularly the provisions on
International Competitive Bidding (ICB). Section 4 of R.A. No. 9184 expressly recognized this particular
process, thus:
Sec. 4. Scope and application.This Act shall apply to the Procurement of . . . Goods and Consulting Services,
regardless of source of funds, whether local or foreign by all branches and instrumentalities of government . . . . Any treaty
or international or executive agreement affecting the subject matter of this Act to which the Philippine government is a
signatory shall be observed. (Emphasis added.)
The question as to whether or not foreign loan agreements with international financial institutions, such as
Loan No. 7118-PH, partake of an executive or international agreement within the purview of the Section
4 of R.A. No. 9184, has been answered by the Court in the affirmative in Abaya, supra. Significantly,
Abaya declared that the RP-JBIC loan agreement was to be of governing application over the CP I project
and that the JBIC Procurement Guidelines, as stipulated in the loan agreement, shall primarily govern the
procurement of goods necessary to implement the main project.
_______________
33 Page 59 of the RTC Order.
34 Supra note 2.
35 Sec. 1 of the Guidelines provides that the procedures outlined [herein] apply to all contracts for goods . . . financed in whole or in part
from Bank loans.
609
VOL. 524, JUNE 8, 2007 609
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Under the fundamental international law principle of pacta sunt servanda,36 which is in fact embodied in
the afore-quoted Section 4 of R.A. No. 9184, the RP, as borrower, bound itself to perform in good faith its
duties and obligation under Loan No. 7118-PH. Applying this postulate in the concrete to this case, the
IABAC was legally obliged to comply with, or accord primacy to, the WB Guidelines on the conduct and
implementation of the bidding/procurement process in question.
WHEREFORE, the instant consolidated petitions are GRANTED and the assailed Order dated
December 4, 2006 of the Regional Trial Court of Manila in its SP Case No. 06-116010 is NULLIFIED
and SET ASIDE.
No cost.
SO ORDERED.
Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Azcuna, Chico-Nazario and Velasco, Jr.,
JJ., concur.
Puno (C.J.), On Official Leave.
Quisumbing and Ynares-Santiago, JJ., In the result.
Carpio-Morales, J., On Leave.
Tinga, J., Please see concurring opinion.
Nachura, J., No part. Filed pleading as Solicitor General.
CONCURRING OPINION
TINGA, J.:
I concur in the thoughtful ponencia of Justice Garcia on the jurisdictional aspects of the case. However, as
regards the concluding discussion prefaced by reference to the Manila RTCs holding that the WB
Guidelines on Procurement under IBRD Loans do not provide in any way superiority over local
_______________
36 An agreement must be kept; a treaty must be kept in good faith.
610
610 SUPREME COURT REPORTS ANNOTATED
Sangca vs. City Prosecutor of Cebu City
laws on the matter,1 I withhold comment until the point is raised as a determinative issue in an
appropriate case. Said closing discussion is rightly intended by the ponencia as dictum, and indeed any
conclusion on that point will not affect the jurisdictional flaws that attended the petition filed before the
RTC.
Petitions granted, assailed order dated December 4, 2006 nullified and set aside.
Note.By its nature and characteristic, a competitive public bidding aims to protect the public interest
by giving the public the best possible advantages thru competitionin a public bidding there must be
competition that is legitimate, fair and honest. (Oani vs. People, 454 SCRA 416 [2005])
o0o
VOL. 524, JUNE 8, 2007 591
Department of Budget and Management Procurement Service vs. Kolonwel Trading
G.R. No. 175608. June 8, 2007.*
DEPARTMENT of BUDGET and MANAGEMENT PROCUREMENT SERVICE (DBM-PS) and the
Inter-Agency Bids and Awards Committee (IABAC), petitioners, vs. KOLONWEL TRADING,
respondent.
G.R. No. 175616. June 8, 2007.*
VIBAL PUBLISHING HOUSE, INC., LG & M CORPORATION and SD PUBLICATIONS, INC.,
petitioners, vs. KOLONWEL TRADING, respondent.
G.R. No. 175659. June 8, 2007.*
DEPARTMENT OF EDUCATION, petitioner, vs. KOLONWEL TRADING, respondent.
Bids and Bidding; Government Procurement Reform Act (R.A. No. 9184); Jurisdictions; Section 55 of R.A. No. 9184 sets
three (3) requirements that must be met by the party desiring to protest the decision of the Bids and Awards Committee
(BAC), namely: 1) the protest must be in writing, in the form of a verified position paper; 2) the protest must be submitted
to the head of the procuring entity; and 3) the payment of a non-refundable protest fee.The Court is unable to lend
concurrence to the trial courts and respondents positions on the interplay of the protest and jurisdictional issues. As may
be noted, the aforequoted Section 55 of R.A. No. 9184 sets three (3) requirements that must be met by the party desiring to
protest the decision of the Bids and Awards Committee (BAC). These are: 1) the protest must be in writing, in the form of
a verified position paper; 2)
_______________
* EN BANC.

592

592 SUPREME COURT REPORTS ANNOTATED


Department of Budget and Management Procurement Service vs. Kolonwel Trading
the protest must be submitted to the head of the procuring entity; and 3) the payment of a non-refundable protest fee. The
jurisdictional caveat that authorizes courts to assume or, inversely, precludes courts from assuming, jurisdiction over suits
assailing the BACs decisions is in turn found in the succeeding Section 58 which provides that the courts would have
jurisdiction over such suits only if the protest procedure has already been completed. Respondents letters of May 18, 2006
and June 28, 2006 in which it requested reconsideration of its disqualification cannot plausibly be given the status of a
protest in the context of the aforequoted provisions of R.A. No. 9184. For one, neither of the letter-request was addressed
to the head of the procuring entity, in this case the DepEd Secretary or the head of the DBM Procurement Service, as
required by law. For another, the same letters were unverified. And not to be overlooked of course is the fact that the third
protest-completing requirement, i.e., payment of protest fee, was not complied with.
Same; Same; Same; Where a disqualified bidders petition in the Regional Trial Court is filed in violation of the protest
process set forth in Section 55 of R.A. No. 9184, said court could not lawfully acquire jurisdiction over the subject matter
of this case.Given the above perspective, it cannot really be said that the respondent availed itself of the protest
procedure prescribed under Section 55 of R.A. No. 9184 before going to the RTC of Manila via a petition for certiorari.
Stated a bit differently, respondent sought judicial intervention even before duly completing the protest process. Hence, its
filing of SP Civil Case No. 06-116010 was precipitate. Or, as the law itself would put it, cases that are filed in violation of
the protest process shall be dismissed for lack of jurisdiction. Considering that the respondents petition in RTC Manila
was actually filed in violation of the protest process set forth in Section 55 of R.A. No. 9184, that court could not have
lawfully acquired jurisdiction over the subject matter of this case. In fact, Section 58, supra, of R.A. No. 9184
emphatically states that cases filed in violation of the protest process therein provided shall be dismissed for lack of
jurisdiction. It is to be stressed that the protest mechanism adverted to is a builtin administrative remedy embodied in the
law itself. It was not prescribed by an administrative agency tasked with implementing a statute through the medium of
interpretative circulars or bulletins. Ignoring thus this administrative remedy would be to defy the law itself.
593
VOL. 524, JUNE 8, 2007 593
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Same; Same; Same; Implementing Rules and Regulations; As the last sentence of Section 55 of R.A. No. 9184 is couched,
the specific office of an Implementing Rules and Regulations (IRR) for foreign-funded project, vis--vis the matter of
protest, is limited to fixing the amount of the protest fee and the periods during which the protest may be filed and
resolvedhence, the absence of an IRR does not excuse compliance with the protest procedure.It will not avail the
respondent any to argue that the absence of an IRR to make the protest mechanism under R.A. No. 9184 become operative
for foreign-funded projects was what prevented it from complying with the protest procedure. As the last sentence of the
afore-quoted Section 55 of R.A. No. 9184 is couched, the specific office of an IRR for foreignfunded project, vis--vis the
matter of protest, is limited to fixing the amount of the protest fee and the periods during which the protest may be filed
and resolved. Surely, the absence of provisions on protest fee and reglementary period does not signify the deferment of
the implementation of the protest mechanism as a condition sine qua non to resort to judicial relief. As applied to the
present case, the respondent had to file a protest and pursue it until its completion before going to court. There was hardly
any need to wait for the specific filing period to be prescribed by the IRR because the protest, as a matter of necessity, has
to be lodged before court action. Neither is it necessary that the amount of protest fee be prescribed first. Respondent could
very well have proceeded with its protest without paying the required protest fee, remitting the proper amount once the
appropriate IRR fixed the protest fee.
Same; Same; Same; Same; Foreign-Funded Projects; There is no discernable justification why a different procedure
should obtain with respect to foreign-funded procurement undertakings as opposed to a locally funded project, and
certainly there is no concrete foundation in R.A. 9184 to indicate that Congress intended such a variance in the protest
procedure.As in Abaya, there really should be no reason why the policy behind Section 55.l of IRR-A on the procedure
for protest cannot be applied, even analogously, to foreign-funded procurement projects, such as those in this case. Indeed,
there is no discernable justification why a different procedure should obtain with respect to foreign-funded procurement
undertakings as opposed to a locally funded project, and certainly there is no concrete foundation in R.A. 9184 to indicate
that Congress intended such a variance in the protest procedure.
594
594 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Jurisdictions; It is Congress by law, not the courts by discretion, which defines the courts jurisdiction not otherwise
conferred by the Constitution, and it is through the same medium, Congress also draws the parameters in the exercise of
the functions of administrative agencies.It is Congress by law, not the courts by discretion, which defines the courts
jurisdiction not otherwise conferred by the Constitution. Through the same medium, Congress also draws the parameters
in the exercise of the functions of administrative agencies. Section 55 of R.A. No. 9184 could not be any clearer when it
mandates the manner of protesting the decision of bids and awards committees. Similarly, there can be no quibbling that,
under Section 58 of the same law, courts do not have jurisdiction over decisions of the BACs unless the appropriate protest
has been made and completed. The absence of the IRR does not detract from the reality that R.A. No. 9184 requires a
protest to be filed under the form therein prescribed. Given the above perspective, the Manila RTC had no jurisdiction
over respondent Kolonwels petition for certiorari and prohibition. Accordingly, it ought to have granted herein
petitioners motion to dismiss, but it did not. Worse, the court even added another layer to its grievous error when it
granted the respondents basic petition for certiorari and prohibition itself.
Parties; Words and Phrases; Indispensable parties are those with such interest in the controversy that a final decree
would necessarily affect their rights so that courts cannot proceed without their presenceall of them must be included in
a suit for an action to prosper or for a final determination to be had.There can be no dispute that Watana is an
indispensable party to the respondents petition in SP Civil Case No. 06-116010, Kolonwel having therein assailed and
sought to nullify the contract-award made in its and Vibals favor. Indispensable parties are those with such interest in the
controversy that a final decree would necessarily affect their rights so that courts cannot proceed without their presence.
All of them must be included in a suit for an action to prosper or for a final determination to be had. Watana, to repeat, was
never served with summons; neither did it participate in the proceedings below. Plainly, then, the Manila RTC did not
acquire jurisdiction over one of the indispensable parties, the joinder of whom is compulsory.
International Law; Pacta Sunt Servanda; Foreign-Funded Projects; Under the fundamental international law principle of
pacta sunt servanda, which is in fact embodied in Section 4 of R.A. No.
595

VOL. 524, JUNE 8, 2007 595


Department of Budget and Management Procurement Service vs. Kolonwel Trading
9184, the RP, as borrower, bound itself to perform in good faith its duties and obligation under Loan No. 7118-PHthe
Inter-Agency Bids and Awards Committee (IABAC) was legally obliged to comply with, or accord primacy to, the World
Bank Guidelines on the conduct and implementation of the bidding/procurement process in question.The question as to
whether or not foreign loan agreements with international financial institutions, such as Loan No. 7118-PH, partake of an
executive or international agreement within the purview of the Section 4 of R.A. No. 9184, has been answered by the
Court in the affirmative in Abaya, supra. Significantly, Abaya declared that the RP-JBIC loan agreement was to be of
governing application over the CP I project and that the JBIC Procurement Guidelines, as stipulated in the loan agreement,
shall primarily govern the procurement of goods necessary to implement the main project. Under the fundamental
international law principle of pacta sunt servanda, which is in fact embodied in the afore-quoted Section 4 of R.A. No.
9184, the RP, as borrower, bound itself to perform in good faith its duties and obligation under Loan No. 7118-PH.
Applying this postulate in the concrete to this case, the IABAC was legally obliged to comply with, or accord primacy to,
the WB Guidelines on the conduct and implementation of the bidding/procurement process in question.
PETITIONS for review on certiorari of an order of the Manila Regional Trial Court, Br. 18.
The facts are stated in the opinion of the Court.
Policarpio, Pangulayan and Azura Law Office for petitioners Vibal Publishing House, Inc., LG & M
Corp. and SD Publications, Inc.
Roque and Butuyan Law Offices for respondent Kolonwel Trading.
GARCIA, J.:
Before the Court are these consolidated three (3) petitions for review under Rule 45 of the Rules of Court,
with a prayer for a temporary restraining order, to nullify and set aside the
596
596 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Order1 dated December 4, 2006 of the Manila Regional Trial Court (RTC), Branch 18, in SP Civil Case
No. 06-116010, a special civil action for certiorari and prohibition thereat commenced by herein
respondent Kolonwel Trading (Kolonwel for short) against the Department of Budget and Management
Procurement Service (DBM-PS), et al.
At the core of the controversy are the bidding and the eventual contract awards for the supply and
delivery of some 17.5 million copies of Makabayan (social studies) textbooks and teachers manuals, a
project of the Department of Education (DepEd).
The factual antecedents:
In the middle of 2005, the DepEd requested the services of the DBM-PS to undertake the aforementioned
procurement project which is to be jointly funded by the World Bank (WB), through the Second Social
Expenditure Management Program (SEMP2) of the Philippines (RP)International Bank for
Reconstruction and Development (IBRD) Loan Agreement No. 7118-PH2 (Loan No. 7118-PH,
hereinafter) dated September 12, 2002; and the Asian Development Bank (ADB), through SEDIP Loan
No. 1654-PHI. Earlier, the Executive Director of the Government Procurement Policy Board (GPPB), in
reply to a DepEd query, stated that procurement[s] for MAKABAYAN . . . textbooks where funds
therefore (sic) are sourced from World Bank Loan shall be governed by the applicable procurement
guidelines of the foreign lending institution. The 2005 Call for Submission of Textbooks and Teachers
Manuals shall be viewed vis--vis re levant World Bank guidelines.3
On October 27, 2005, the DBM-PS Inter-Agency Bids and Awards Committee (IABAC) called for a
bidding for the supply of the Makabayan textbooks and manuals, divided into
_______________
1 Rollo (G.R. No. 175659), pp. 44-103.
2 Annex D of Petition (G.R. No. 175608); id. (G.R. No. 175608), at pp. 122 et seq.
3 Id. (G.R. No. 175659), at pp. 108 et seq.
597
VOL. 524, JUNE 8, 2007 597
Department of Budget and Management Procurement Service vs. Kolonwel Trading
three (3) lots, to wit: Lot 1 for Sibika Grades 1-3; Lot 2 for HeKaSi Grades 4-6 and Lot 3 for Araling
Panlipunan Years IIV. Of the entities, foreign and local, which responded and procured the Bidding
Documents,4 only eleven (11) bidders submitted, either as principal or in joint venture arrangement,
proposals for the different lots. Among them were Watana Phanit Printing & Publishing Co., Ltd., of
Thailand (Watana, for short), petitioner Vibal Publishing House, Inc., (Vibal, hereinafter), Daewoo
International Corporation of South Korea (Daewoo, for brevity) and respondent Kolonwel. Kolonwels
tender appeared to cover all three (3) lots.5
Following the bid and the book content/body evaluation process, the IABAC, via Resolution (Res.) No.
001-20066 dated March 9, 2006, resolved to recommend to the [WB] and the [ADB] failure of bids for
all lots in view of the abovementioned disqualifications, non-compliance and reservations of [DepEd] .
Issues of Conflict of interest with respect to Watana and Vibal, failure in cover stock testing for
Kolonwel and DepEds reservation were among the disqualifying reasons stated in the resolution.
On March 15, 2006, the IABAC submitted to WB for its review and information Res. No. 001-2006.
Appended to the covering letter was a document entitled Bid Evaluation Report and Recommendation
for Award of Contract.7
The following events, as recited in the assailed Manila RTC order and as borne out by the records, then
transpired:
1 1.In a letter8 dated April 24, 2006 to the DepEd and the DBM-PS IABAC Chairman, the WB,
through its Regional Senior Economist, Ms. Rekha Menon, disagreed, for stated reasons, with
_______________
4 Annex G of Petition (G.R. No. 175608); id. (G.R. No. 175608), at pp. 187-348.
5 Id. (G.R. No. 175659), at pp. 143 et seq.
6 Id., at pp. 135, et seq.
7 Id., at pp. 143, et seq.
8 Id., at pp. 195, et seq.
598
598 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
1 the IABACs finding of conflict of interest on the part of Vibal and Watana and the rejection of their
bids. Ms. Menon, however, upheld the disqualification of all the other bidders. She thus asked the
IABAC to review its evaluation and to provide the WB with the revised Bid Evaluation Report
(BER), taking into account the December 31, 2006 RP-IBRD Loan closing date.
2 2. On May 11, 2006, the IABAC informed Kolonwel of its or its bids failure to post qualify and of the
grounds for the failure.9 In its reply-letter of May 18, 2006,10 Kolonwel raised several issues and
requested that its disqualification be reconsidered and set aside. In reaction, IABAC apprised WB
of Kolonwels concerns stated in its letter-reply.
3 3.Subsequently, the IABAC, agreeing with WBs position articulated in Ms. Menon, issued Res. No.
001-2006-A effectively recommending to WB the contract award to Vibal of Sibika 1 & 3 and
HekaSi 5; to Watana of Sibika 2 and HeKaSi 4 & 5 and to Daewoo of Sibika 3. Upon review, WB
offered no objection to the recommended award.11
4 4.The issuance of notices of award and the execution on September 12, 2006 of the corresponding
Purchaser-Supplier contracts followed.12
5 5.On June 23, 2006, the DBM-PS IABAC chairman informed Kolonwel of the denial of its request for
reconsideration and of the WBs concurrence with the denial.13 The IABAC denied, on September
8, 2006, a second request for reconsideration of Kolonwel 14 after WB found the reasons therefor,
as detailed in PS IABAC Res. No. 001-2006-B15 dated July 18, 2006, unmeritorious, particularly
on the aspect of cover stock testing.
_______________
9 Id., at pp. 198, et seq.
10 Id., at pp. 200, et seq.
11 Id., at pp. 214, et seq.
12 Id., at pp. 245-250, [WatanaDBM-PS]; pp. 262-266 [VibalDBM-PS]; at pp. 272-275 [Daewoo-DBM-PS].
13 Id., at pp. 223 et seq.
14 Embodied in a letter of June 28, 2006; Id., at pp. 244 et seq.
15 Id., at pp. 234 et seq.
599
VOL. 524, JUNE 8, 2007 599
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Such was the state of things when on, October 12, 2006, Kolonwel filed with the RTC of Manila a special
civil action for certiorari and prohibition with a prayer for a temporary restraining order (TRO) and/or
writ of preliminary injunction. Docketed as SP Civil Case No. 06-116010, and raffled to Branch 18 of the
court,16 the petition sought to nullify IABAC Res. Nos. 001-2006 and 001-2006-A and to set aside the
contract awards in favor of Vibal and Watana. In support of its TRO application, Kolonwel alleged,
among other things, that the supply-awardees were rushing with the implementation of the void supply
contracts to beat the loan closing-date deadline.
A week after, the Manila RTC scheduledand eventually conducteda summary hearing on the TRO
application. In an order17 of October 31, 2006, as amended in another order18 dated November 20, 2006,
the court granted a 20-day TRO enjoining the IABAC, et al, starting November 6, 2006, from proceeding
with the subject September 12, 2006 purchasesupply contracts. In the original order, the court set the
preliminary conference and hearing for the applied preliminary injunction on November 7, and 8, 2006,
respectively.
In the meantime, Vibal filed an urgent motion to dismiss19 Kolonwels petition on several grounds, among
them want of jurisdiction and lack of cause of action, inter alia alleging that the latter had pursued
judicial relief without first complying with the protest procedure prescribed by Republic Act (R.A.) No.
9184, otherwise known as the Government Procurement Reform Act. The DepEd later followed with its
own motion to dismiss, partly based on the same protest provision. As records show, the trial court did
not conduct a hearing on either dismissal motions, albeit it heard the parties on their oppos-
_______________
16 Presided by RTC Judge Myra V. Garcia Hernandez.
17 Rollo, (G. R. No. 175659), pp. 318 et seq.
18 Id., at pp. 340.
19 Id., (G.R. No. 175608), at pp. 576 et seq.
600
600 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
ing claims respecting the propriety of issuing a writ of preliminary injunction.
On December 4, 2006, the Manila RTC issued its assailed Order 20 finding for Kolonwel, as petitioner a
quo, disposing as follows:
WHEREFORE, the court grants the petition for certiorari and prohibition. The IABAC Resolution No. 001-2006-A dated
May 30, 2006 is annulled and set aside. IABAC Resolution No. 001-2006 is declared validly and regularly issued in the
absence of a showing of grave abuse of discretion or excess of jurisdiction. All subsequent actions of the respondents
resulting from the issuance of IABAC Resolution No. 001-2006-A are consequently nullified and set aside. This court
grants a final injunction pursuant to Sec. 9 of Rule 58 of the Rules of Court as amended, restraining respondents
Department of Education and Culture (sic), [DBM-PS], [IABAC], Vibal Publishing House, Inc., LG & M Corporation and
SD Publications from the commission or continuance of acts, contracts or transactions proceeding from the issuance of
IABAC Resolution No. 001-2006-A.
SO ORDERED. (Emphasis and words in brackets supplied)
Hence, these three (3) petitions which the Court, per its Resolution21 of January 16, 2007, ordered
consolidated. Earlier, the Court issued, in G.R. No. 175616, a TRO22 enjoining the presiding judge23 of the
RTC of Manila, Branch 18, from proceeding with SP Civil Case No. 06-116010 or implementing its
assailed order.
Petitioners urge the annulment of the assailed RTC Order dated December 4, 2006, on jurisdictional
ground, among others. It is their parallel posture that the Manila RTC erred in assuming jurisdiction over
the case despite respondent Kolonwels failure to observe the protest mechanism provided
_______________
20 Supra note 1.
21 Id., (G.R. No. 175659), at p. 360.
22 Id., (G.R. No. 175616), at pp. 470-71.
23 Supra note 16.
601
VOL. 524, JUNE 8, 2007 601
Department of Budget and Management Procurement Service vs. Kolonwel Trading
under Sec. 55 in relation to Secs. 57 and 58 of R.A. No. 9184, respectively reading as follows:
Sec. 55. Protest on Decision of the BAC.Decisions of the BAC [Bids and Awards Committee] in all stages of
procurement may be protested to the head of the procuring entity. . . . Decisions of the BAC may be protested by filing a
verified position paper and paying a non-refundable protest fee. The amount of the protest fee and the periods during
which the protest may be filed and resolved shall be specific in the IRR.
Sec. 57. Non-interruption of the Bidding Process.In no case shall any process taken from any decision treated in this
Article stay or delay the bidding process. Protests must first be resolved before any award is made.
Sec. 58. Report to Regular Courts; Certiorari.Court action may be resorted to only after the protests contemplated in
this Article shall have been completed. Cases that are filed in violation of the process specified in this article shall be
dismissed for lack of jurisdiction. The [RTC] shall have jurisdiction over final decisions of the head of the procuring
entity. (Emphasis and words in bracket added.)
As a counterpoint, the respondent draws attention to its having twice asked, and having been twice
spurned by, the IABAC to reconsider its disqualification, obviously agreeing with the Manila RTC that
the judicial window was already opened under the exhaustion of available administrative remedies
principle. In the same breath, however, the respondent would argue, again following the RTCs line, that
it was prevented from filing a protest inasmuch as the government had not issued the Implementing Rules
and Regulations (IRR) of R.A. No. 9184 to render the protest mechanism of the law operative for foreign-
funded projects.
The Court is unable to lend concurrence to the trial courts and respondents positions on the interplay of
the protest and jurisdictional issues. As may be noted, the aforequoted Section 55 of R.A. No. 9184 sets
three (3) requirements that must be met by the party desiring to protest the decision of the Bids
602
602 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
and Awards Committee (BAC). These are: 1) the protest must be in writing, in the form of a verified
position paper; 2) the protest must be submitted to the head of the procuring entity; and 3) the payment of
a non-refundable protest fee. The jurisdictional caveat that authorizes courts to assume or, inversely,
precludes courts from assuming, jurisdiction over suits assailing the BACs decisions is in turn found in
the succeeding Section 58 which provides that the courts would have jurisdiction over such suits only if
the protest procedure has already been completed.
Respondents letters of May 18, 200624 and June 28, 200625 in which it requested reconsideration of its
disqualification cannot plausibly be given the status of a protest in the context of the aforequoted
provisions of R.A. No. 9184. For one, neither of the letter-request was addressed to the head of the
procuring entity, in this case the DepEd Secretary or the head of the DBM Procurement Service, as
required by law. For another, the same letters were unverified. And not to be overlooked of course is the
fact that the third protest-completing requirement, i.e., payment of protest fee, was not complied with.
Given the above perspective, it cannot really be said that the respondent availed itself of the protest
procedure prescribed under Section 55 of R.A. No. 9184 before going to the RTC of Manila via a petition
for certiorari. Stated a bit differently, respondent sought judicial intervention even before duly
completing the protest process. Hence, its filing of SP Civil Case No. 06-116010 was precipitate. Or, as
the law itself would put it, cases that are filed in violation of the protest process shall be dismissed for
lack of jurisdiction.
Considering that the respondents petition in RTC Manila was actually filed in violation of the protest
process set forth in Section 55 of R.A. No. 9184, that court could not have law-
_______________
24 Supra note 10.
25 Supra note 14.
603
VOL. 524, JUNE 8, 2007 603
Department of Budget and Management Procurement Service vs. Kolonwel Trading
fully acquired jurisdiction over the subject matter of this case. In fact, Section 58, supra, of R.A. No.
9184 emphatically states that cases filed in violation of the protest process therein provided shall be
dismissed for lack of jurisdiction. It is to be stressed that the protest mechanism adverted to is a built-in
administrative remedy embodied in the law itself.
It was not prescribed by an administrative agency tasked with implementing a statute through the medium
of interpretative circulars or bulletins. Ignoring thus this administrative remedy would be to defy the law
itself.
It will not avail the respondent any to argue that the absence of an IRR to make the protest mechanism
under R.A. No. 9184 become operative for foreign-funded projects was what prevented it from complying
with the protest procedure. As the last sentence of the afore-quoted Section 55 of R.A. No. 9184 is
couched, the specific office of an IRR for foreignfunded project, vis--vis the matter of protest, is limited
to fixing the amount of the protest fee and the periods during which the protest may be filed and
resolved. Surely, the absence of provisions on protest fee and reglementary period does not signify the
deferment of the implementation of the protest mechanism as a condition sine qua non to resort to judicial
relief. As applied to the present case, the respondent had to file a protest and pursue it until its completion
before going to court. There was hardly any need to wait for the specific filing period to be prescribed by
the IRR because the protest, as a matter of necessity, has to be lodged before court action.
Neither is it necessary that the amount of protest fee be prescribed first. Respondent could very well have
proceeded with its protest without paying the required protest fee, remitting the proper amount once the
appropriate IRR fixed the protest fee.
There may perhaps be room for relaxing the prescription on protest if a bona fide attempt to comply with
legal requirements had been made. But the fact alone that the respondent
604
604 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
did not even submit a verified position paper by way of protest argues against such plausibility.
Significantly, none of the reconsideration-seeking letters of the respondent advert to the protest procedure
under Section 55 of R.A. No. 9184, even by way of noting that it was at a loss as to the inoperativeness of
such provision in the light of the absence of an IRR.
In its petition before the Manila RTC, the respondent veritably admitted to not complying with the protest
requirement, albeit with the lame excuse that it was effectively barred from complying with the required
administrative remedies of protest. Neither did the respondent then argue that it was not able to comply
due to the absence of an IRR for foreignfunded projects.
At any rate, there is, in fact a set of implementing rules and regulations, denominated as IRR-A, issued
on July 11, 2003 by the GPPB and the Joint Congressional Oversight Committee, Section 55.1 26 of which
provides that prior to a resort to protest, the aggrieved party must first file a motion for reconsideration of
the decision of the BAC. It is only after the BAC itself denies reconsideration that the protest,
accompanied by a fixed protest fee, shall be filed within the period defined in the IRR.
It may be that IRR-A specifically defines its coverage to all fully domestically-funded procurement
activities, it being also
_______________
26 Sec. 55.1. Decisions of the BAC with respect to the conduct of bidding may be protested in writing to the head of the procuring entity:
Provided, however, That a prior motion for reconsideration should have been filed by the party concerned within the reglementary
periods specified in this IRR-A, and the same has been resolved. The protest must be filed within seven (7) days from receipt . . . of the
resolution of the BAC denying its motion for reconsideration. A protest may be made by filing a verified position paper . . . accompanied
by the payment of a non-refundable protest fee. The nonrefundable protest fee shall be in an amount equivalent to no less than one (1%)
of the ABC.
605
VOL. 524, JUNE 8, 2007 605
Department of Budget and Management Procurement Service vs. Kolonwel Trading
provided that foreign-funded procurement activities shall be the subject of a subsequent issuance.27
However, a similarly drawn argument involving IRR-A was set aside in Abaya v. Ebdane,28 a case
involving Loan Agreement No. PH-P204 entered into by and between the RP and the Japan Bank for
International Cooperation (JBIC) for the implementation DPWH Contract Package No. I (CP I). Wrote
the Court in Abaya:
Admittedly, IRR-A covers only fully domestically-funded procurement activities from procurement planning up to
contract implementation and that it is expressly stated that IRR-B for foreignfunded procurement activities shall be subject
of a subsequent issuance. Nonetheless, there is no reason why the policy behind Section 77 of IRR-A cannot be applied to
foreign-funded procurement projects like the CP I project. Stated differently, the policy on the prospective or non-
retroactive application of RA 9184 with respect to domestically-funded procurement projects cannot be any different with
respect to foreign-funded procurement projects . It would be incongruous, even absurd, to provide for the prospective
application of RA 9184 with respect to domestically-funded procurement projects and, on the other hand, as urged by the
petitioners, apply RA 9184 retroactively with respect to foreign-funded procurement projects. To be sure, the lawmakers
could not have intended such an absurdity.
As in Abaya, there really should be no reason why the policy behind Section 55.1 of IRR-A on the
procedure for protest cannot be applied, even analogously, to foreign-funded procurement projects, such
as those in this case. Indeed, there is no discernable justification why a different procedure should obtain
with respect to foreign-funded procurement undertakings as opposed to a locally funded project, and
certainly there is no concrete foundation in R.A. 9184 to indicate that Congress intended such a variance
in the protest procedure.
The Manila RTC, in granting the petition for certiorari and prohibition, stated the observation that there
was substan-
_______________
27 Section, Rule 1.
28 G.R. No. 167919, February 14, 2007, 515 SCRA 720.
606
606 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
tial compliance of the requirement of protest.29 Yet, it is not even clear that respondent Kolonwel, in its
dealings with the IABAC, particularly in seeking reconsideration of its decision, was even aware of the
protest requirements. What is beyond dispute, however, is that courts are precluded by express legislative
command from entertaining protests from decisions of the BAC. What Congress contextually intended
under the premises was that not only would there be a distinct administrative grievance mechanism to be
observed in assailing decisions of the BAC, but that courts would be without jurisdiction over actions
impugning decisions of the BACs, unless, in the meantime, the protest procedure mandated under Section
55 of R.A. No. 9184 is brought to its logical completion.
It is Congress by law, not the courts by discretion, which defines the courts jurisdiction not otherwise
conferred by the Constitution. Through the same medium, Congress also draws the parameters in the
exercise of the functions of administrative agencies. Section 55 of R.A. No. 9184 could not be any clearer
when it mandates the manner of protesting the decision of bids and awards committees. Similarly, there
can be no quibbling that, under Section 58 of the same law, courts do not have jurisdiction over decisions
of the BACs unless the appropriate protest has been made and completed. The absence of the IRR does
not detract from the reality that R.A. No. 9184 requires a protest to be filed under the form therein
prescribed.
Given the above perspective, the Manila RTC had no jurisdiction over respondent Kolonwels petition for
certiorari and prohibition. Accordingly, it ought to have granted herein petitioners motion to dismiss, but
it did not. Worse, the court even added another layer to its grievous error when it granted the respondents
basic petition for certiorari and prohibition itself.
_______________
29 Page 15 of the RTC Order.
607
VOL. 524, JUNE 8, 2007 607
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Compounding the Manila RTCs error is its having proceeded with SP Civil Case No. 06-116010 even
without acquiring jurisdiction over Watana. As may be recalled, the respondent, in its petition before the
RTC, impleaded Watana as one of the defendants, the latter having been awarded by the IABAC Sibika 2
and HeKaSi 4 & 5 . The records, however, show that Watana was not served with summons. The Sheriffs
Return dated October 18, 2006, noted that summons was not served on Watana and another defendant at
No. 1281 G. Araneta Avenue cor. Ma. Clara Street, Quezon City, on the ground that said companies
were not holding office thereat according to Mr. Marvin V. Catacutan.
There can be no dispute that Watana is an indispensable party to the respondents petition in SP Civil
Case No. 06-116010, Kolonwel having therein assailed and sought to nullify the contract-award made in
its and Vibals favor. Indispensable parties are those with such interest in the controversy that a final
decree would necessarily affect their rights so that courts cannot proceed without their presence. 30 All of
them must be included in a suit for an action to prosper or for a final determination to be had.31 Watana, to
repeat, was never served with summons; neither did it participate in the proceedings below. Plainly, then,
the Manila RTC did not acquire jurisdiction over one of the indispensable parties, the joinder of whom is
compulsory.32
With the foregoing disquisitions, the Court finds it unnecessary to even dwell on the other points raised in
this consolidated cases. In the light, however, of the Manila RTCs holding that the WB Guidelines on
Procurement under IBRD Loans do not in any way provided superiority over local laws
_______________
30 Seno v. Mangubat, G.R. No. L-44339, December 2, 1987, 156 SCRA 113.
31 Rule 3, Sec. 7 of the Rules of Court.
32 Ibid.; Nery v. Leyson, G.R. No. 139306, August 29, 2000, 339 SCRA 232.
608
608 SUPREME COURT REPORTS ANNOTATED
Department of Budget and Management Procurement Service vs. Kolonwel Trading
on the matter,33 the Court wishes to state the following observation:
As may be recalled, all interested bidders were put on notice that the DepEds procurement project was to
be funded from the proceeds of the RP-IBRD Loan No. 7118-PH,34 Section 1, Schedule 4 of which
stipulates that Goods . . . shall be procured in accordance with the provisions of Section 135 of the
Guidelines for Procurement under IBRD Loans. Accordingly, the IABAC conducted the bidding for
the supply of textbooks and manuals based on the WB Guidelines, particularly the provisions on
International Competitive Bidding (ICB). Section 4 of R.A. No. 9184 expressly recognized this particular
process, thus:
Sec. 4. Scope and application.This Act shall apply to the Procurement of . . . Goods and Consulting Services,
regardless of source of funds, whether local or foreign by all branches and instrumentalities of government . . . . Any treaty
or international or executive agreement affecting the subject matter of this Act to which the Philippine government is a
signatory shall be observed. (Emphasis added.)
The question as to whether or not foreign loan agreements with international financial institutions, such as
Loan No. 7118-PH, partake of an executive or international agreement within the purview of the Section
4 of R.A. No. 9184, has been answered by the Court in the affirmative in Abaya, supra. Significantly,
Abaya declared that the RP-JBIC loan agreement was to be of governing application over the CP I project
and that the JBIC Procurement Guidelines, as stipulated in the loan agreement, shall primarily govern the
procurement of goods necessary to implement the main project.
_______________
33 Page 59 of the RTC Order.
34 Supra note 2.
35 Sec. 1 of the Guidelines provides that the procedures outlined [herein] apply to all contracts for goods . . . financed in whole or in part
from Bank loans.
609
VOL. 524, JUNE 8, 2007 609
Department of Budget and Management Procurement Service vs. Kolonwel Trading
Under the fundamental international law principle of pacta sunt servanda,36 which is in fact embodied in
the afore-quoted Section 4 of R.A. No. 9184, the RP, as borrower, bound itself to perform in good faith its
duties and obligation under Loan No. 7118-PH. Applying this postulate in the concrete to this case, the
IABAC was legally obliged to comply with, or accord primacy to, the WB Guidelines on the conduct and
implementation of the bidding/procurement process in question.

WHEREFORE, the instant consolidated petitions are GRANTED and the assailed Order dated
December 4, 2006 of the Regional Trial Court of Manila in its SP Case No. 06-116010 is NULLIFIED
and SET ASIDE.
No cost.
SO ORDERED.
Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Azcuna, Chico-Nazario and Velasco, Jr.,
JJ., concur.
Puno (C.J.), On Official Leave.
Quisumbing and Ynares-Santiago, JJ., In the result.
Carpio-Morales, J., On Leave.
Tinga, J., Please see concurring opinion.
Nachura, J., No part. Filed pleading as Solicitor General.
CONCURRING OPINION
TINGA, J.:
I concur in the thoughtful ponencia of Justice Garcia on the jurisdictional aspects of the case. However, as
regards the concluding discussion prefaced by reference to the Manila RTCs holding that the WB
Guidelines on Procurement under IBRD Loans do not provide in any way superiority over local
_______________
36 An agreement must be kept; a treaty must be kept in good faith.
610
610 SUPREME COURT REPORTS ANNOTATED
Sangca vs. City Prosecutor of Cebu City
laws on the matter,1 I withhold comment until the point is raised as a determinative issue in an
appropriate case. Said closing discussion is rightly intended by the ponencia as dictum, and indeed any
conclusion on that point will not affect the jurisdictional flaws that attended the petition filed before the
RTC.

Petitions granted, assailed order dated December 4, 2006 nullified and set aside.
Note.By its nature and characteristic, a competitive public bidding aims to protect the public interest
by giving the public the best possible advantages thru competitionin a public bidding there must be
competition that is legitimate, fair and honest. (Oani vs. People, 454 SCRA 416 [2005])
o0o
VOL. 533, SEPTEMBER 14, 2007 385
Sevilleno vs. Carilo
G.R. No. 146454. September 14, 2007.*
PAMELA S. SEVILLENO and PURITA S. SEVILLENO, petitioners, vs. PACITA CARILO and
CAMELO CARILO, respondents.
Remedial Law; Civil Procedure; Appeals; Rule on appeal summarized in Macawiwili Gold Mining and Development Co.,
Inc. vs. Court of Appeals, 297 SCRA 602 (1998).In Macawiwili Gold Mining and Development Co., Inc. v. Court of
Appeals, 297 SCRA 602 (1998), we summarized the rule on appeals as follows:
(1) In all cases decided by the RTC in the exercise of its original jurisdiction, appeal may be made to the Court of
Appeals by mere notice of appeal where the appellant raises questions of fact or mixed questions of fact and law;

(2) In all cases decided by the RTC in the exercise of its original jurisdiction where the appellant raises only
questions of law, the appeal must be taken to the Supreme Court on a petition for review on certiorari under Rule
45.

(3) All appeals from judgments rendered by the RTC in the exercise of its appellate jurisdiction, regardless of
whether the appellant raises questions of fact, questions of law, or mixed questions of fact and law, shall be brought
to the Court of Appeals by filing a petition for review under Rule 42.

Same; Same; Same; Actions; Jurisdictions; A courts jurisdiction over the subject matter of an action is conferred only by
the Constitution or by statute.It is not disputed that the issue brought by petitioners to the Court of Appeals involves the
jurisdiction of the RTC over the subject matter of the case. We have a long standing rule that a courts jurisdiction over the
subject matter of an action is conferred only by the Constitution or by statute. Otherwise put, jurisdiction of a court over
the subject matter of the action is a matter of law. Consequently, issues which deal with the jurisdiction of a court over the
subject matter of a case are pure questions of law. As petitioners appeal solely involves a question of law, they should
have directly taken their appeal to this Court by filing a petition for review on certiorari under Rule 45, not an ordinary
appeal with the Court of Appeals under Rule 41. Clearly, the appellate court did not err in holding that petitioners pursued
the wrong mode of appeal.
_______________
* FIRST DIVISION.
386
386 SUPREME COURT REPORTS ANNOTATED
Sevilleno vs. Carilo
Same; Same; Same; An appeal from the RTC to the Court of Appeals raising only questions of law shall be dismissed; An
appeal erroneously taken to the Court of Appeals shall be dismissed outright.The Court of Appeals did not err in
dismissing petitioners appeal. Section 2, Rule 50 of the same Rules provides that an appeal from the RTC to the Court of
Appeals raising only questions of law shall be dismissed; and that an appeal erroneously taken to the Court of Appeals
shall be dismissed outright.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Domingo Lucenario for petitioners.
Acosta, Rueda-Acosta Law Office & Associates for respondents.
SANDOVAL-GUTIERREZ, J.:
For our resolution is a petition for review on certiorari assailing the Resolution1 of the Court of Appeals
(Third Division) dated December 20, 2000 in CA-G.R. CV No. 63608.

On October 28, 1998, Pamela and Purita, both surnamed Sevilleno, petitioners, filed with the Regional
Trial Court (RTC), Branch 82, Quezon City, a complaint for damages against spouses Camelo and Pacita
Carilo, respondents, docketed as Civil Case No. Q-35895. Petitioners prayed for an award of P5,000.00 as
actual damages, P400,000.00 as moral damages, P10,000.00 as exemplary damages, and P50,000.00 for
attorneys fees.
_______________
1Rollo, pp. 13-14. Penned by Associate Justice Remedios A. Salazar-Fernando and concurred in by Associate Justice Quirino D. Abad
Santos, Jr. (retired) and Associate Justice Salvador J. Valdez, Jr. (deceased).
387
VOL. 533, SEPTEMBER 14, 2007 387
Sevilleno vs. Carilo

Respondents seasonably filed their answer with compulsory counterclaim. They prayed that the
trial court dismiss the complaint for lack of cause of action.

On March 23, 1999, the RTC motu proprio issued an Order dismissing the case for lack of
jurisdiction over the subject matter of the case.

Petitioners filed a motion for reconsideration but it was denied by the RTC in an Order dated May
18, 1999.

Petitioners interposed an appeal to the Court of Appeals but it was dismissed for being the wrong
mode of appeal. The appellate court held that since the issue being raised is whether the RTC has
jurisdiction over the subject matter of the case, which is a question of law, the appeal should have been
elevated to the Supreme Court under Rule 45 of the 1997 Rules of Civil Procedure, as amended.
Section 2, Rule 41 of the same Rules which governs appeals from judgments and final orders of the RTC
to the Court of Appeals, provides:

SEC. 2. Modes of appeal.


1 (a)Ordinary appeal.The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise
of its original jurisdiction shall be taken by filing a notice of appeal with the court which rendered the judgment
or final order appealed from and serving a copy thereof upon the adverse party. No record on appeal shall be
required except in special proceedings and other cases of multiple or separate appeals where the law or these
Rules so require. In such cases, the record on appeal shall be filed and served in like manner.

2 (b)Petition for review.The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the
exercise of its appellate jurisdiction shall be by petition for review in accordance with Rule 42.

3 (c)Appeal by certiorari.In all cases where only questions of law are raised or involved, the appeal shall be to the
Supreme Court by petition for review on certiorari in accordance with Rule 45.
388
388 SUPREME COURT REPORTS ANNOTATED
Sevilleno vs. Carilo
In Macawiwili Gold Mining and Development Co., Inc. v. Court of Appeals,2 we summarized the rule on
appeals as follows:

1 (1)In all cases decided by the RTC in the exercise of its original jurisdiction, appeal may be made to
the Court of Appeals by mere notice of appeal where the appellant raises questions of fact or
mixed questions of fact and law;
2
3 (2) In all cases decided by the RTC in the exercise of its original jurisdiction where the appellant
raises only questions of law, the appeal must be taken to the Supreme Court on a petition for
review on certiorari under Rule 45.
4
5 (3)All appeals from judgments rendered by the RTC in the exercise of its appellate jurisdiction,
regardless of whether the appellant raises questions of fact, questions of law, or mixed questions
of fact and law, shall be brought to the Court of Appeals by filing a petition for review under Rule
42.
It is not disputed that the issue brought by petitioners to the Court of Appeals involves the jurisdiction of
the RTC over the subject matter of the case. We have a long standing rule that a courts jurisdiction over
the subject matter of an action is conferred only by the Constitution or by statute. 3 Otherwise put,
jurisdiction of a court over the subject matter of the action is a matter of law.4 Consequently, issues which
deal with the jurisdiction of a court over the subject matter of a case are pure questions of law. As
petitioners appeal solely involves a question of law, they should have directly taken their appeal to this
Court by filing a petition for review on certiorari under
_______________
2 G.R. No. 115104, October 12, 1998, 297 SCRA 602.
3 De Jesus v. Garcia, G.R. No. 26816, February 28, 1967, 19 SCRA 554.
4 Calimlim, et al. v. Ramirez, et al., G.R. No. 34362, November 12, 1982, 118 SCRA 399.
389
VOL. 533, SEPTEMBER 14, 2007 389
Sevilleno vs. Carilo
Rule 45, not an ordinary appeal with the Court of Appeals under Rule 41. Clearly, the appellate court did
not err in holding that petitioners pursued the wrong mode of appeal.
Indeed, the Court of Appeals did not err in dismissing petitioners appeal. Section 2, Rule 50 of the same
Rules provides that an appeal from the RTC to the Court of Appeals raising only questions of law shall be
dismissed; and that an appeal erroneously taken to the Court of Appeals shall be dismissed outright, thus:

Sec. 2. Dismissal of improper appeal to the Court of Appeals.An appeal under Rule 41 taken from the Regional Trial
Court to the Court of Appeals raising only questions of law shall be dismissed, issues of pure law not being reviewable by
said court. Similarly, an appeal by notice of appeal instead of by petition for review from the appellate judgment of a
Regional Trial Court shall be dismissed.
An appeal erroneously taken to the Court of Appeals shall not be transferred to the appropriate court but
shall be dismissed outright.

WHEREFORE, we DENY the petition. The questioned Resolution of the Court of Appeals (Third
Division) in CAG.R. CV No. 63608 is AFFIRMED. Costs against petitioners.
SO ORDERED.
Puno (C.J., Chairperson), Corona, Azcuna and Garcia, JJ., concur.
Petition denied, resolution affirmed.
Note.Under Rule 45 which governs appeal by certiorari only questions of law may be raised as the
Supreme Court is not a trier of facts. (Naguiat vs. Court of Appeals, 412 SCRA 591 [2003])
o0o
390
Copyright 2010 CentralBooks Inc. All rights reserved.

G.R. No. 179488. April 23, 2012.*


COSCO PHILIPPINES SHIPPING, INC., petitioner, vs. KEMPER INSURANCE COMPANY,
respondent.
Remedial Law; Civil Procedure; Certification Against Forum Shopping; The certification against forum shopping
must be signed by the principal parties. If, for any reason, the principal party cannot sign the petition, the one signing on
his behalf must have been duly authorized.We have consistently held that the certification against forum shopping must
be signed by the principal parties. If, for any reason, the principal party cannot sign the petition, the one signing on his
behalf must have been duly authorized. With respect to a corporation, the certification against forum shopping may be
signed for and on its behalf, by a specifically authorized lawyer who has personal knowledge of the facts required to be
disclosed in such document.
Corporation Law; Actions; Board of Directors; The power of a corporation to sue and be sued in any court is lodged
with the board of directors that exercises its corporate powers. In turn, physical acts of the corporation, like the signing of
documents, can be performed only by natural persons duly authorized for the purpose by corporate by-laws or by a
specific act of the board of directors.A corporation has no power, except those expressly conferred on it by the
Corporation Code and those that are implied or incidental to its existence. In turn, a corporation exercises said powers
through its board of directors and/or its duly authorized officers and agents. Thus, it has been observed that the power of a
corporation to sue and be sued in any court is lodged with the board of directors that exercises its corporate powers. In
turn, physical acts of the corporation, like the signing of documents, can be performed only by natural persons duly
authorized for the purpose by corporate by-laws or by a specific act of the board of directors.

Remedial Law; Civil Procedure; Certification Against Forum Shopping; Only individuals vested with authority by a
valid board resolution may sign the certificate of non-forum shopping on behalf of
_______________
* THIRD DIVISION.
344
344 SUPREME COURT REPORTS ANNOTATED
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company
a corporation.In Philippine Airlines, Inc. v. Flight Attendants and Stewards Association of the Philippines (FASAP),
479 SCRA 605 (2006), we ruled that only individuals vested with authority by a valid board resolution may sign the
certificate of non-forum shopping on behalf of a corporation. We also required proof of such authority to be presented.
The petition is subject to dismissal if a certification was submitted unaccompanied by proof of the signatorys authority.

Same; Same; Same; The lack of certification against forum shopping is generally not curable by mere amendment of
the complaint, but shall be a cause for the dismissal of the case without prejudice.In the present case, since respondent is
a corporation, the certification must be executed by an officer or member of the board of directors or by one who is duly
authorized by a resolution of the board of directors; otherwise, the complaint will have to be dismissed. The lack of
certification against forum shopping is generally not curable by mere amendment of the complaint, but shall be a cause for
the dismissal of the case without prejudice. The same rule applies to certifications against forum shopping signed by a
person on behalf of a corporation which are unaccompanied by proof that said signatory is authorized to file the complaint
on behalf of the corporation.
Same; Same; Same; If a complaint is filed for and in behalf of the plaintiff who is not authorized to do so, the
complaint is not deemed filed. An unauthorized complaint does not produce any legal effect.In Tamondong v. Court of
Appeals, 444 SCRA 509 (2004), we held that if a complaint is filed for and in behalf of the plaintiff who is not authorized
to do so, the complaint is not deemed filed. An unauthorized complaint does not produce any legal effect. Hence, the court
should dismiss the complaint on the ground that it has no jurisdiction over the complaint and the plaintiff. Accordingly,
since Atty. Lat was not duly authorized by respondent to file the complaint and sign the verification and certification
against forum shopping, the complaint is considered not filed and ineffectual, and, as a necessary consequence, is
dismissable due to lack of jurisdiction.

Same; Same; Courts; Jurisdiction; Jurisdiction is the power with which courts are invested for administering justice;
that is, for hearing and deciding cases. In order for the court to have authority to dispose of the case on the merits, it must
acquire jurisdiction over the subject matter and the parties.Jurisdiction is the power with which
345
VOL. 670, APRIL 23, 2012 345
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company
courts are invested for administering justice; that is, for hearing and deciding cases. In order for the court to have authority
to dispose of the case on the merits, it must acquire jurisdiction over the subject matter and the parties. Courts acquire
jurisdiction over the plaintiffs upon the filing of the complaint, and to be bound by a decision, a party should first be
subjected to the courts jurisdiction. Clearly, since no valid complaint was ever filed with the RTC, Branch 8, Manila, the
same did not acquire jurisdiction over the person of respondent.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Ortega, Del Castillo, Bacorro, Odulio, Calma & Carbonell for petitioner.
Rodolfo A. Lat Law Office for respondent.
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and
set aside the Decision1 and Resolution2 of the Court of Appeals (CA), in CA-G.R. CV No. 75895, entitled
Kemper Insurance Company v. Cosco Philippines Shipping, Inc. The CA Decision reversed and set aside
the Order dated March 22, 2002 of the Regional Trial Court (RTC), Branch 8, Manila, which granted the
Motion to Dismiss filed by petitioner Cosco Philippines Shipping, Inc., and ordered that the case be
remanded to the trial court for further proceedings.
The antecedents are as follows:
_______________
1 Penned by Associate Justice Japar B. Dimaampao, with Associate Justices Conrado M. Vasquez, Jr. and Mario L. Guaria III,
concurring; Rollo, pp. 31-38.
2 Id., at pp. 40-41.
346
346 SUPREME COURT REPORTS ANNOTATED
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company

Respondent Kemper Insurance Company is a foreign insurance company based in Illinois, United States
of America (USA) with no license to engage in business in the Philippines, as it is not doing business in
the Philippines, except in isolated transactions; while petitioner is a domestic shipping company
organized in accordance with Philippine laws.

In 1998, respondent insured the shipment of imported frozen boneless beef (owned by Genosi, Inc.),
which was loaded at a port in Brisbane, Australia, for shipment to Genosi, Inc. (the importer-consignee)
in the Philippines. However, upon arrival at the Manila port, a portion of the shipment was rejected by
Genosi, Inc. by reason of spoilage arising from the alleged temperature fluctuations of petitioners reefer
containers.

Thus1, Genosi, Inc. filed a claim against both petitioner shipping company and respondent Kemper
Insurance Company. The claim was referred to McLarens Chartered for investigation, evaluation, and
adjustment of the claim. After processing the claim documents, McLarens Chartered recommended a
settlement of the claim in the amount of $64,492.58, which Genosi, Inc. (the consignee-insured) accepted.

Thereafter, respondent paid the claim of Genosi, Inc. (the insured) in the amount of $64,492.58.
Consequently, Genosi, Inc., through its General Manager, Avelino S. Mangahas, Jr., executed a Loss and
Subrogation Receipt3 dated September 22, 1999, stating that Genosi, Inc. received from respondent the
amount of $64,492.58 as the full and final satisfaction compromise, and discharges respondent of all
claims for losses and expenses sustained by the property insured, under various policy numbers, due to
spoilage brought about by machinery breakdown which occurred on October 25, November 7 and 10, and
December 5, 14, and 18, 1998; and, in consideration thereof, subrogates respondent to the claims of
_______________
3 Records, p. 10.
347
VOL. 670, APRIL 23, 2012 347
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company

Genosi, Inc. to the extent of the said amount. Respondent then made demands upon petitioner, but the
latter failed and refused to pay the said amount.

Hence, on October 28, 1999, respondent filed a Complaint for Insurance Loss and Damages4 against
petitioner before the trial court, docketed as Civil Case No. 99-95561, entitled Kemper Insurance
Company v. Cosco Philippines Shipping, Inc. Respondent alleged that despite repeated demands to pay
and settle the total amount of US$64,492.58, representing the value of the loss, petitioner failed and
refused to pay the same, thereby causing damage and prejudice to respondent in the amount of
US$64,492.58; that the loss and damage it sustained was due to the fault and negligence of petitioner,
specifically, the fluctuations in the temperature of the reefer container beyond the required setting which
was caused by the breakdown in the electronics controller assembly; that due to the unjustified failure and
refusal to pay its just and valid claims, petitioner should be held liable to pay interest thereon at the legal
rate from the date of demand; and that due to the unjustified refusal of the petitioner to pay the said
amount, it was compelled to engage the services of a counsel whom it agreed to pay 25% of the whole
amount due as attorneys fees. Respondent prayed that after due hearing, judgment be rendered in its
favor and that petitioner be ordered to pay the amount of US$64,492.58, or its equivalent in Philippine
currency at the prevailing foreign exchange rate, or a total of P2,594,513.00, with interest thereon at the
legal rate from date of demand, 25% of the whole amount due as attorneys fees, and costs.

In its Answer5 dated November 29, 1999, petitioner insisted, among others, that respondent had no
capacity to sue since it was doing business in the Philippines without the required license; that the
complaint has prescribed and/or is
_______________
4 Id., at pp. 1-4.
5 Id., at pp. 13-19.
348
348 SUPREME COURT REPORTS ANNOTATED
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company
barred by laches; that no timely claim was filed; that the loss or damage sustained by the shipments, if
any, was due to causes beyond the carriers control and was due to the inherent nature or
insufficient packing of the shipments and/or fault of the consignee or the hired stevedores or arrastre
operator or the fault of persons whose acts or omissions cannot be the basis of liability of the carrier; and
that the subject shipment was discharged under required temperature and was complete, sealed, and in
good order condition.

During the pre-trial proceedings, respondents counsel proffered and marked its exhibits, while
petitioners counsel manifested that he would mark his clients exhibits on the next scheduled pre-trial.
However, on November 8, 2001, petitioner filed a Motion to Dismiss,6 contending that the same was filed
by one Atty. Rodolfo A. Lat, who failed to show his authority to sue and sign the corresponding
certification against forum shopping. It argued that Atty. Lats act of signing the certification against
forum shopping was a clear violation of Section 5, Rule 7 of the 1997 Rules of Court.

In its Order7 dated March 22, 2002, the trial court granted petitioners Motion to Dismiss and dismissed
the case without prejudice, ruling that it is mandatory that the certification must be executed by the
petitioner himself, and not by counsel. Since respondents counsel did not have a Special Power of
Attorney (SPA) to act on its behalf, hence, the certification against forum shopping executed by said
counsel was fatally defective and constituted a valid cause for dismissal of the complaint.

Respondents Motion for Reconsideration8 was denied by the trial court in an Order9 dated July 9, 2002.
_______________
6 Id., at pp. 119-122.
7 Id., at pp. 141-142.
8 Id., at pp. 145-147.
9 Id., at pp. 171-172.
349
VOL. 670, APRIL 23, 2012 349
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company
On appeal by respondent, the CA, in its Decision10 dated March 23, 2007, reversed and set aside the trial
courts order. The CA ruled that the required certificate of non-forum shopping is mandatory and that the
same must be signed by the plaintiff or principal party concerned and not by counsel; and in case of
corporations, the physical act of signing may be performed in behalf of the corporate entity by
specifically authorized individuals. However, the CA pointed out that the factual circumstances of the
case warranted the liberal application of the rules and, as such, ordered the remand of the case to the trial
court for further proceedings.
Petitioners Motion for Reconsideration11 was later denied by the CA in the Resolution12 dated September
3, 2007.
Hence, petitioner elevated the case to this Court via Petition for Review on Certiorari under Rule 45 of
the Rules of Court, with the following issues:
THE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT ATTY. RODOLFO LAT WAS PROPERLY
AUTHORIZED BY THE RESPONDENT TO SIGN THE CERTIFICATE AGAINST FORUM SHOPPING DESPITE
THE UNDISPUTED FACTS THAT:
A) THE PERSON WHO EXECUTED THE SPECIAL POWER OF ATTORNEY (SPA) APPOINTING ATTY. LAT
AS RESPONDENTS ATTORNEY-IN-FACT WAS MERELY AN UNDERWRITER OF THE RESPONDENT WHO
HAS NOT SHOWN PROOF THAT HE WAS AUTHORIZED BY THE BOARD OF DIRECTORS OF RESPONDENT
TO DO SO.
B) THE POWERS GRANTED TO ATTY. LAT REFER TO [THE AUTHORITY TO REPRESENT DURING THE]
PRE-TRIAL [STAGE] AND DO NOT COVER THE SPECIFIC POWER TO SIGN THE CERTIFICATE. 13

_______________
10 CA Rollo, pp. 74-81.
11 Id., at pp. 86-95.
12 Id., at pp. 105-106.
13 Rollo, p. 15.
350
350 SUPREME COURT REPORTS ANNOTATED
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company
Petitioner alleged that respondent failed to submit any board resolution or secretarys certificate
authorizing Atty. Lat to institute the complaint and sign the certificate of non-forum shopping on its
behalf. Petitioner submits that since respondent is a juridical entity, the signatory in the complaint must
show proof of his or her authority to sign on behalf of the corporation. Further, the SPA 14 dated May 11,
2000, submitted by Atty. Lat, which was notarized before the Consulate General of Chicago, Illinois,
USA, allegedly authorizing him to represent respondent in the pre-trial and other stages of the
proceedings was signed by one Brent Healy (respondents underwriter), who lacks authorization from its
board of directors.
In its Comment, respondent admitted that it failed to attach in the complaint a concrete proof of Atty.
Lats authority to execute the certificate of non-forum shopping on its behalf. However, there was
subsequent compliance as respondent submitted an authenticated SPA empowering Atty. Lat to represent
it in the pre-trial and all stages of the proceedings. Further, it averred that petitioner is barred by laches
from questioning the purported defect in respondents certificate of non-forum shopping.
The main issue in this case is whether Atty. Lat was properly authorized by respondent to sign the
certification against forum shopping on its behalf.
The petition is meritorious.
We have consistently held that the certification against forum shopping must be signed by the principal
parties.15 If, for any reason, the principal party cannot sign the petition, the
_______________
14 Records, pp. 148-149.
15 Athena Computers, Inc. v. Reyes, G.R. No. 156905, September 5, 2007, 532 SCRA 343, 351; Development Bank of the Philippines v.
Court of Appeals, G.R. No. 147217, October 7, 2004, 440 SCRA 200, 205.
351
VOL. 670, APRIL 23, 2012 351
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company
one signing on his behalf must have been duly authorized.16 With respect to a corporation, the
certification against forum shopping may be signed for and on its behalf, by a specifically authorized
lawyer who has personal knowledge of the facts required to be disclosed in such document. 17 A
corporation has no power, except those expressly conferred on it by the Corporation Code and those that
are implied or incidental to its existence. In turn, a corporation exercises said powers through its board of
directors and/or its duly authorized officers and agents. Thus, it has been observed that the power of a
corporation to sue and be sued in any court is lodged with the board of directors that exercises its
corporate powers. In turn, physical acts of the corporation, like the signing of documents, can be
performed only by natural persons duly authorized for the purpose by corporate by-laws or by a specific
act of the board of directors.18
In Philippine Airlines, Inc. v. Flight Attendants and Stewards Association of the Philippines (FASAP),19
we ruled that only individuals vested with authority by a valid board resolution may sign the certificate of
non-forum shopping on behalf of a corporation. We also required proof of such authority to be presented.
The petition is subject to dismissal if a certification was submitted unaccompanied by proof of the
signatorys authority.
In the present case, since respondent is a corporation, the certification must be executed by an officer or
member of the board of directors or by one who is duly authorized by a resolution of the board of
directors; otherwise, the complaint will
_______________
16 Eagle Ridge Golf & Country Club v. Court of Appeals, G.R. No. 178989, March 18, 2010, 616 SCRA 116, 132.
17 Athena Computers, Inc. v. Reyes, G.R. No. 156905, September 5, 2007, 532 SCRA 343, 351.
18 Republic v. Coalbrine International Philippines, Inc., G.R. No. 161838, April 7, 2010, 617 SCRA 491, 498.
19 G.R. No. 143088, January 24, 2006, 479 SCRA 605, 608.
352
352 SUPREME COURT REPORTS ANNOTATED
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company
have to be dismissed.20 The lack of certification against forum shopping is generally not curable by mere
amendment of the complaint, but shall be a cause for the dismissal of the case without prejudice.21 The
same rule applies to certifications against forum shopping signed by a person on behalf of a corporation
which are unaccompanied by proof that said signatory is authorized to file the complaint on behalf of the
corporation.22
_______________
20 Tamondong v. Court of Appeals, G.R. No. 158397, November 26, 2004, 444 SCRA 509, 520-521.
21 Section 5 of Rule 7 of the 1997 Rules of Civil Procedure provides:
SEC. 5. Certification against forum shopping.The plaintiff or principal party shall certify under oath in the complaint or other
initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he
has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency
and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a
complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been
filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory
pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The
submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect contempt of court,
without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful
and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as
well as a cause for administrative sanctions. (Emphasis supplied.)
22 Republic v. Coalbrine International Philippines, Inc., supra note 18, at p. 499.
353
VOL. 670, APRIL 23, 2012 353
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company
There is no proof that respondent, a private corporation, authorized Atty. Lat, through a board resolution,
to sign the verification and certification against forum shopping on its behalf. Accordingly, the
certification against forum shopping appended to the complaint is fatally defective, and warrants the
dismissal of respondents complaint for Insurance Loss and Damages (Civil Case No. 99-95561) against
petitioner.
In Republic v. Coalbrine International Philippines, Inc.,23 the Court cited instances wherein the lack of
authority of the person making the certification of non-forum shopping was remedied through subsequent
compliance by the parties therein. Thus,
[w]hile there were instances where we have allowed the filing of a certification against non-forum shopping by someone
on behalf of a corporation without the accompanying proof of authority at the time of its filing, we did so on the basis of a
special circumstance or compelling reason. Moreover, there was a subsequent compliance by the submission of the proof
of authority attesting to the fact that the person who signed the certification was duly authorized.
In China Banking Corporation v. Mondragon International Philippines, Inc., the CA dismissed the petition filed by China
Bank, since the latter failed to show that its bank manager who signed the certification against non-forum shopping was
authorized to do so. We reversed the CA and said that the case be decided on the merits despite the failure to attach the
required proof of authority, since the board resolution which was subsequently attached recognized the pre-existing status
of the bank manager as an authorized signatory.
In Abaya Investments Corporation v. Merit Philippines, where the complaint before the Metropolitan Trial Court of
Manila was instituted by petitioners Chairman and President, Ofelia Abaya, who signed the verification and certification
against non-forum shopping without proof of authority to sign for the corporation, we also relaxed the rule. We did so
taking into consideration the merits of the case and to avoid a re-litigation of the issues and further delay the
administration of justice, since the case had already been de-
_______________
23 Supra note 18.
354
354 SUPREME COURT REPORTS ANNOTATED
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company
cided by the lower courts on the merits. Moreover, Abayas authority to sign the certification was ratified by the Board.24
Contrary to the CAs finding, the Court finds that the circumstances of this case do not necessitate the
relaxation of the rules. There was no proof of authority submitted, even belatedly, to show subsequent
compliance with the requirement of the law. Neither was there a copy of the board resolution or
secretarys certificate subsequently submitted to the trial court that would attest to the fact that Atty. Lat
was indeed authorized to file said complaint and sign the verification and certification against forum
shopping, nor did respondent satisfactorily explain why it failed to comply with the rules. Thus, there
exists no cogent reason for the relaxation of the rule on this matter. Obedience to the requirements of
procedural rules is needed if we are to expect fair results therefrom, and utter disregard of the rules cannot
justly be rationalized by harking on the policy of liberal construction.25
Moreover, the SPA dated May 11, 2000, submitted by respondent allegedly authorizing Atty. Lat to
appear on behalf of the corporation, in the pre-trial and all stages of the proceedings, signed by Brent
Healy, was fatally defective and had no evidentiary value. It failed to establish Healys authority to act in
behalf of respondent, in view of the absence of a resolution from respondents board of directors or
secretarys certificate proving the same. Like any other corporate act, the power of Healy to name,
constitute, and appoint Atty. Lat as respondents attorney-in-fact, with full powers to represent respondent
in the proceedings, should have been evidenced by a board resolution or secretarys certificate.
Respondents allegation that petitioner is estopped by
laches from raising the defect in respondents certificate of non-forum shopping does not hold water.
_______________
24 Id., at pp. 500-501. (Citations omitted.)
25 Clavecilla v. Quitain, G.R. No. 147989, February 20, 2006, 482 SCRA 623, 631.
355
VOL. 670, APRIL 23, 2012 355
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company

In Tamondong v. Court of Appeals,26 we held that if a complaint is filed for and in behalf of the plaintiff
who is not authorized to do so, the complaint is not deemed filed. An unauthorized complaint does not
produce any legal effect. Hence, the court should dismiss the complaint on the ground that it has no
jurisdiction over the complaint and the plaintiff.27 Accordingly, since Atty. Lat was not duly authorized
by respondent to file the complaint and sign the verification and certification against forum shopping, the
complaint is considered not filed and ineffectual, and, as a necessary consequence, is dismissable due to
lack of jurisdiction.
Jurisdiction is the power with which courts are invested for administering justice; that is, for hearing and
deciding cases. In order for the court to have authority to dispose of the case on the merits, it must acquire
jurisdiction over the subject matter and the parties. Courts acquire jurisdiction over the plaintiffs upon the
filing of the complaint, and to be bound by a decision, a party should first be subjected to the courts
jurisdiction.28 Clearly, since no valid complaint was ever filed with the RTC, Branch 8, Manila, the same
did not acquire jurisdiction over the person of respondent.
Since the court has no jurisdiction over the complaint and respondent, petitioner is not estopped from
challenging the trial courts jurisdiction, even at the pre-trial stage of the proceedings. This is so because
the issue of jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost by
waiver or by estoppel.29
_______________
26 Supra note 20, cited in Negros Merchant's Enterprises, Inc. v. China Banking Corporation, G.R. No. 150918, August 17, 2007, 530
SCRA 478, 487.
27 Id., at p. 519.
28 Perkin Elmer Singapore Pte. Ltd. v. Dakila Trading Corporation, G.R. No. 172242, August 14, 2007, 530 SCRA 170, 186.
29 Figueroa v. People, G.R. No. 147406, July 14, 2008, 558 SCRA 63, 81.
356
356 SUPREME COURT REPORTS ANNOTATED
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company
In Regalado v. Go,30 the Court held that laches should be clearly present for the Sibonghanoy31 doctrine
to apply, thus:
Laches is defined as the failure or neglect for an unreasonable and unexplained length of time, to do that which, by
exercising due diligence, could or should have been done earlier, it is negligence or omission to assert a right within a
reasonable length of time, warranting a presumption that the party entitled to assert it either has abandoned it or declined
to assert it.
The ruling in People v. Regalario that was based on the landmark doctrine enunciated in Tijam v. Sibonghanoy on the
matter of jurisdiction by estoppel is the exception rather than the rule. Estoppel by laches may be invoked to bar the issue
of lack of jurisdiction only in cases in which the factual milieu is analogous to that in the cited case. In such controversies,
laches should have been clearly present; that is, lack of jurisdiction must have been raised so belatedly as to warrant the
presumption that the party entitled to assert it had abandoned or declined to assert it.
In Sibonghanoy, the defense of lack of jurisdiction was raised for the first time in a motion to dismiss filed by the Surety
almost 15 years after the questioned ruling had been rendered. At several stages of the proceedings, in the court a quo as
well as in the Court of Appeals, the Surety invoked the jurisdiction of the said courts to obtain affirmative relief and
submitted its case for final adjudication on the merits. It was only when the adverse decision was rendered by the Court of
Appeals that it finally woke up to raise the question of jurisdiction.32
The factual setting attendant in Sibonghanoy is not similar to that of the present case so as to make it fall
under the doctrine of estoppel by laches. Here, the trial courts jurisdiction
_______________
30 G.R. No. 167988, February 6, 2007, 514 SCRA 616.
31 In Tijam v. Sibonghanoy, 131 Phil. 556; 23 SCRA 29 (1968), the Court held that a party may be barred by laches from invoking lack
of jurisdiction at a late hour for the purpose of annulling everything done in the case with the active participation of said party invoking
the plea of lack of jurisdiction.
32 Id., at pp. 635-636.
357
VOL. 670, APRIL 23, 2012 357
Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company
was questioned by the petitioner during the pre-trial stage of the proceedings, and it cannot be said that
considerable length of time had elapsed for laches to attach.
WHEREFORE, the petition is GRANTED. The Decision and the Resolution of the Court of Appeals,
dated March 23, 2007 and September 3, 2007, respectively, in CA-G.R. CV No. 75895 are REVERSED
and SET ASIDE. The Orders of the Regional Trial Court, dated March 22, 2002 and July 9, 2002,
respectively, in Civil Case No. 99-95561, are REINSTATED.
SO ORDERED.
Velasco, Jr. (Chairperson), Abad, Mendoza and Perlas-Bernabe, JJ., concur.
Petition granted, judgment and resolution reversed and set aside.
Notes.The power to institute actions necessarily includes the power to execute the verification and
certification against forum shopping required in initiatory pleadings. (Cunanan vs. Jumping Jap Trading
Corporation, 586 SCRA 620 [2009])
As to the certification against forum shopping, non-compliance therewith or a defect therein, unlike in
verification, is generally not curable by its subsequent submission or correction thereof. (Mactan-Cebu
International Airport Authority vs. Heirs of Estanislao Mioza, 641 SCRA 520 [2011])
o0o
Copyright 2010 CentralBooks Inc. All rights reserved.