FILM DEVELOPMENT COUNCIL OF THE PHILIPPINES vs SM PRIME HOLDINGS, INC.

FACTS:

SM Prime Holdings, Inc. is the owner and operator of cinema houses at SM Cebu in Cebu City. Under the
Local Government Code of 1991, owners, proprietors and lessees of theaters and cinema houses are
subject to amusement tax. Section 140 of which states that: “The province may levy an amusement tax
to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses,
boxing stadia, and other places of amusement at a rate of not more than thirty percent (30%) of the
gross receipts from admission fees.”

On 1993, the Sangguniang Panglungsod of Cebu City approved City Tax Ordinance No. LXIX pursuant to
the amusement tax found in the LGC. Said ordinance provides the manner of payment being that “tax
shall first be deducted and withheld by their proprietors, lessee, or operators and paid to the city
treasurer before the gross receipts are divided between said proprietors, lessee, operators and the
distributors of the cinematographic films”

On 2002, Congress approved RA No. 9167 which created the Film Development Council (FDC) of the
Philippines, herein petitioner. FDC’s mandate includes the development and implementation of “an
incentive and reward system for the producers based on merit to encourage the production of quality of
films.” For the purpose of implementing the incentive system, RA 9167 mandates the remittance of the
proceeds of the amusement tax collected by the LGUs to FDC. To ensure enforcement of the above
provision, the law empowered FDC not only to impose administrative fines and penalties but also to
cause or initiate criminal or administrative prosecution to the violators.

On 2009, FDC through the Office of the Solicitor General (OSG) sent a demand letter to SM Prime for the
payment of the sum of P76,836,807.08 representing the amusement tax rewards due to producers of 89
films graded A and B which were shown at SM cinemas from September 11, 2003 to November 4, 2008.

The City of Cebu filed in the Cebu City RTC a petition for declaratory relief with application for a writ of
preliminary injunction against FDC, docketed as Civil Case No. CEB-35529. The City of Cebu sought to
declare Section 14 of R.A. No. 9167 as invalid and unconstitutional on grounds that: (1) it violates the
basic policy on local autonomy; (2) it constitutes an undue limitation of the taxing power of LGUs; (3) it
unduly deprives LGUs of the revenue from the amusement tax imposed on theatre owners and
operators; and (4) it amounts to technical malversation since revenue from the collection of amusement
taxes that would otherwise accrue to and form part of the general fund of the LGU concerned would
now be directly awarded to a private entity — the producers of graded films — bypassing the budget
process of the LGU and without the proper appropriation ordinance from the sanggunian.

A temporary restraining order (TRO) was issued by the Cebu City RTC enjoining FDC and its duly
constituted agents from collecting the amusement tax incentive award from the owners, proprietors or
lessees of theaters and cinema houses within the City of Cebu; imposing surcharge on the unpaid
amount; filing any case or suit of whatever kind or nature due to or arising from the failure to deduct,
withhold and remit the amusement tax incentives award on the graded films of FDC; and initiating
administrative or criminal prosecution against the said owners, proprietors or lessees.

Later in 2009, FDC sued SM Prime for the payment of P76,836,807.08 representing the unpaid
amusement tax incentive reward docketed as Civil Case No. 72238 of the RTC of Pasig City.
Meanwhile, SM Prime led a Motion to Dismiss in Civil Case No. 72238 arguing that:

FDC's complaint merits dismissal considering that its claim had already been extinguished by SM
Prime's prior payment or remittance of the subject amusement taxes to the City of Cebu. SM Prime
called attention to IRR of RA No. 9167 which directed FDC to execute a Memorandum of Agreement
(MOA) with proprietors, operators and lessees of theaters and cinemas as well as movie producers, on
the systems and procedures to be followed for the collection, remittance and monitoring of the
amusement taxes withheld on graded films. In the apparent absence of such MOA and the "general
procedure/process", SM Prime has been withholding such taxes and remitting the same to the City of
Cebu pursuant to Cebu City Tax Ordinance, as shown by a Certification issued by the Office of the
Treasurer of Cebu City stating that SM Prime "had religiously remitted their monthly amusement taxes
due to the Cebu City Government."

In its Comment on the motion to dismiss, FDC argued that:

Section 14 of R.A. No. 9167 is valid and constitutional. FDC asserted that the execution of a MOA is
not a condition sine qua non for a valid enforcement of the provisions of R.A. No. 9167. The IRR cited
by SM Prime cannot prevail over the clear import of the law on which it is based, and hence SM Prime
cannot invoke it to excuse nonpayment of the amusement tax incentive rewards due to the producers of
graded films which should have been remitted to FDC in accordance with R.A. No. 9167.

On 2010, SM Prime led in Civil Case No. CEB-35529 a Motion for Leave to File and Admit Attached
Comment-in-Intervention. In its Comment-in Intervention With Interpleader, SM Prime prayed that the
judgment on the validity and constitutionality of Sections 13 and 14 of R.A. No. 9167 include a
pronouncement on its rights and duties as a consequence of such judgment, as it clearly has a legal
interest in the success of either party in the case.

Cebu City RTC granted SM Prime's motion for intervention. Pasig City RTC issued the assailed order
granting the motion to dismiss, holding that the action before the Cebu City RTC (Civil Case No. CEB-
35529) is the appropriate vehicle for litigating the issues between the parties in Civil Case No. 72238.
Moreover, said court found all the elements of litis pendentia present and accordingly dismissed the
complaint. FDC's motion for reconsideration was denied.

ISSUES:

1. WON the Pasig City RTC ignored the well-settled rule that unless and until a specific provision of law is
declared invalid and unconstitutional, the same is entitled to obedience and respect 2. WON the Pasig
City RTC erred in dismissing the complaint in Civil Case No. 72238 on the ground of litis pendentia

RULING:

1. NO, the dismissal of the complaint in Civil Case No. 72238 does not amount to abdication of Pasig City
RTC's concurrent jurisdiction to settle constitutional questions involving a statute or its implementing
rules. The 1997 Rules of Civil Procedure, as amended, provides for specific grounds for the dismissal of
any complaint in civil cases including those where the trial court has competence and authority to hear
and decide the issues raised and relief sought. One of these grounds is litis pendentia.

Litis pendentia, as a ground for the dismissal of a civil action, refers to a situation where two actions are
pending between the same parties for the same cause of action, so that one of them becomes
unnecessary and vexatious. It is based on the policy against multiplicity of suits and authorizes a court to
dismiss a case motu proprio. The requisites in order that an action may be dismissed on the ground of
litis pendentia are: (a) the identity of parties, or at least such as representing the same interest in both
actions; (b) the identity of rights asserted and relief prayed for, the relief being founded on the same
facts, and (c) the identity of the two cases such that judgment in one, regardless of which party is
successful, would amount to res judicata in the other.

Among the several tests resorted to in ascertaining whether two suits relate to a single or common
cause of action are: (1) whether the same evidence would support and sustain both the first and second
causes of action; and (2) whether the defenses in one case may be used to substantiate the complaint in
the other. The determination of whether there is an identity of causes of action for purposes of litis
pendentia is inextricably linked with that of res judicata, each constituting an element of the other. In
either case, both relate to the sound practice of including, in a single litigation, the disposition of all
issues relating to a cause of action that is before a court.

In this case, what FDC failed to take into account is that the Cebu City RTC allowed SM Prime to
intervene in Civil Case No. CEB-35529 by way of an interpleader action as to which government entity —
whether FDC or the Cebu City Government — should have remitted the amusement taxes it collected
from the admission fees of graded films shown in SM Prime's cinemas in Cebu City. It must be noted that
since 1993 when City Tax Ordinance was enforced, SM Prime had been faithfully remitting amusement
taxes to the City of Cebu and because of the collection suit led by FDC, such defense of prior payment
and evidence to prove it which SM Prime could have presented at the trial in Civil Case No. 72238 would
be the same defense and evidence necessary to sustain SM Prime's interpleader action in Civil Case No.
CEB35529 before the Cebu City RTC. Also, in both cases, SM Prime had raised the matter of conflicting
provisions of R.A. No. 9167 and Local Government Code of 1991, while FDC pleaded and argued the
constitutionality and validity of Sections 13 and 14 of R.A. No. 9167. The interpleader action of SM
Prime/intervenor, anchored on its defense of prior payment, would be considered by the Cebu City RTC
in its final determination of the parties' rights and interests as it resolves the legal questions. The Pasig
City RTC is likewise confronted with the legal and constitutional issues in

the collection suit, alongside with SM Prime's defense of prior payment. It is evident that FDC's claim
against SM Prime hinges on the correct interpretation of the conflicting provisions of the Local
Government Code of 1991 and R.A. No. 9167. There could be no doubt that a judgment in either case
would constitute res judicata to the other. Sound practice thus dictates that the common factual and
legal issues be resolved in a single proceeding.

2. NO, Pasig City RTC did not commit any error in ruling that Civil Case No. CEB35529 is the appropriate
vehicle for litigating the issues raised by FDC and SM Prime in Civil Case No. 72238.

Under the established jurisprudence on litis pendentia, the following considerations predominate in the
ascending order of importance in determining which action should prevail: (1) the date of filing, with
preference generally given to the first action led to be retained; (2) whether the action sought to be
dismissed was led merely to preempt the later action or to anticipate its filing and lay the basis for its
dismissal; and (3) whether the action is the appropriate vehicle for litigating the issues between the
parties. Moreover, considering the predicament of SM Prime, we also find relevant the criterion of the
consideration of the interest of justice we enunciated in Roa v. Magsaysay. In applying this standard,
what was asked was which court would be "in a better position to serve the interests of justice," taking
into account (a) the nature of the controversy, (b) the comparative accessibility of the court to the
parties and (c) other similar factors.

In this case, all things considered, there can be no doubt Civil Case No. CEB 35529 is the appropriate
vehicle to determine the rights of FDC and SM Prime. In that declaratory relief case instituted by the City
of Cebu, to which SM Prime had been remitting the subject amusement taxes being claimed by FDC in
Civil Case No. 72238, the issue of validity or constitutionality of Sections 13 and 14 of R.A. No. 9167 was
directly pleaded and argued between FDC and the City of Cebu, with subsequent inclusion of SM Prime
as intervenor. Moreover, the presence of City of Cebu as party plaintiff would afford proper relief to SM
Prime in the event the Cebu City RTC renders judgment sustaining the validity of the said provisions. SM
Prime had vigorously asserted in both courts that it had remitted the amusement taxes in good faith to
the City of Cebu which had threatened sanctions for non-compliance with City Tax Ordinance No. LXIX,
and that it should not be made to pay once again the same taxes to FDC. As equally dire consequences
for non-compliance with the demand for payment having been made by FDC, such defense of good faith
is best ventilated in Civil Case No. CEB-35529 where the City of Cebu is a party. FDC's insistence that the
Pasig City RTC proceed with trial notwithstanding the pendency of Civil Case No. CEB-35529 before the
Cebu City RTC is thus untenable.

FRANK UY and UNIFISH PACKING CORPORATION vs BUREAU OF INTERNAL REVENUE and HON.
MERCEDES GOZO-DADOLE

FACTS:

Rodrigo Abos, a former employee of UNIFISH, reported to the BIR that petitioners Unifish Packing
Corporation and Uy Chin Ho alias Frank Uy were engaged in activities constituting violations of the NIRC.
Abos, executed an Affidavit stating:

1. He has personal knowledge that UNIFISH PACKING CORPORATION is selling cartons of canned
sardines without issuing receipt, which is in violation of Sections 253 and 263 of the NIRC.

XXXXX

3. Another fraudulent practice is the sale of imported oil locally to different customers, which is a case
smuggling. UNIFISH is exempted in the importation of oil as long it is used only for processing of canned
tuna.

4. Another fraudulent practice involves the sales of unused cans; UNIFISH also enjoys tax exemptions in
its purchases of tin cans subject to the condition that these are to be used as containers for its
processed tuna for export.

XXXXX

Nestor N. Labaria, Assistant Chief of the Special Investigation Branch of the BIR, applied for search
warrants before the RTC of Cebu. After hearing the depositions of Labaria and Abos, Judge Mercedes
Gozo-Dadole issued the disputed search warrants.

The first Seach Warrant, FOR: VIOLATION OF SECTION 253 ("Search Warrant A-1"), and consists of two
pages.
The second Search Warrant, FOR: VIOLATION OF SEC. 253 ("Search Warrant A2"). Search Warrant A-2, is
almost identical in content to Search Warrant A-1.

Judge Gozo-Dadole issued a third Search Warrant, FOR: VIOLATION OF SEC. 238 in relation to SEC. 263
(hereinafter, "Search Warrant B"). Except for the docket number and the designation of the crime in the
body of the warrant, Search Warrant B is a verbatim reproduction of Search Warrant A-2.

As such, agents of the BIR, accompanied by members of the PNP, searched the premises of UNIFISH.
They seized, among other things, the records and documents

of petitioner corporation. A return of said search was duly made by Labaria. Then, the BIR filed against a
case against UY and UNIFISH before the DOJ.

UY and UNIFISH filed motions to quash the subject search warrants with the RTC that issued said
warrants. However, the RTC denied petitioners' motions to quash as well as their subsequent motion for
reconsideration, prompting petitioners to file a petition for certiorari with the CA.

The CA dismissed their petition, holding that petitioners failed to comply with Section 2(a), Rule 6 of the
Revised Internal Rules of the Court of Appeals (RIRCA). The CA found that petitioners did not submit
certified true copies of (1) the Motions to Quash, (2) the Motion for Reconsideration, and (3) the
Affidavit of Rodrigo Abos. It also held that certiorari was not the proper remedy to question the
resolution denying the motion to quash.

ISSUES:

1. Whether or not the CA erred in dismissing the petition of UY and UNIFISH. 2. Whether or not the
subject warrants are defective.

HELD:

1. YES. CA should not have dismissed the petition on the ground of failure to submit certified true copies
of (1) the Motions to Quash, (2) the Motion for Reconsideration, and (3) the Affidavit of Rodrigo Abos.
First, it appears that the case could have been decided without these pleadings and documents. Second,
even if the CA deemed them essential to the resolution of the case, it could have asked for the records
from the RTC. Third, in a similar case, we held that the submission of a document together with the
motion for reconsideration constitutes substantial compliance with Section 3, Rule 46 of the Rules of
Court, requiring the submission of a certified true copy of material portions of the record as are referred
to [in the petition], and other documents relevant or pertinent thereto along with the petition. So
should it be in this case, especially considering that it involves an alleged violation of a constitutionally
guaranteed right. The rules of procedure are not to be applied in a very rigid, technical sense; rules of
procedure are used only to help secure substantial justice. If a technical and rigid enforcement of the
rules is made, their aim could be defeated.

The CA likewise erred in holding that petitioners cannot avail of certiorari to question the resolution
denying their motions to quash the subject search warrants.The applicable jurisprudence is Marcelo vs.
De Guzman, where we held that the issuing judges disregard of the requirements for the issuance of a
search warrant constitutes grave abuse of discretion, which may be remedied by certiorari. In this case,
petitioners alleged in their petition before the CA that the issuing judge violated the pertinent provisions
of the Constitution and the Rules of Court in issuing the disputed search warrants, which, if true, would
have constituted grave abuse of discretion. Petitioners also alleged that the enforcers of the warrants
seized almost all the records and documents of the corporation thus resulting in the paralysis of its
business. Appeal, therefore, would not be an adequate remedy that would afford petitioners
expeditious relief.

2. YES, but only as regards the failure to indicate with particularity, the things to be seized.

A search warrant must conform strictly to the requirements of the foregoing constitutional and
statutory provisions. These requirements, in outline form, are:

(1) the warrant must be issued upon probable cause;

(2) the probable cause must be determined by the judge himself and not by the applicant or any other
person;

(3) in the determination of probable cause, the judge must examine, under oath or affirmation, the
complainant and such witnesses as the latter may produce; and

(4) the warrant issued must particularly describe the place to be searched and persons or things to be
seized.

The absence of any of these requisites will cause the downright nullification of the search warrants.

Inconsistencies in the description of the place to be searched Petitioners observe that the caption of
Search Warrant A-1 indicates the address of Uy Chin Ho alias Frank Uy as Hernan Cortes St., Cebu City
while the body of the same warrant states the address as Hernan Cortes St., Mandaue City.
Parenthetically, Search Warrants A-2 and B consistently state the address of petitioner as Hernan Cortes
St., Mandaue City.

The Constitution requires, for the validity of a search warrant, that there be a particular description of
the place to be searched and the persons of things to be seized. The rule is that a description of a place
to be searched is sufficient if the officer with the warrant can, with reasonable effort, ascertain and
identify the place intended and distinguish it from other places in the community. Any designation or
description known to the locality that points out the place to the exclusion of all others, and on inquiry
leads the officers unerringly to it, satisfies the constitutional requirement.

In this case, it was not shown that a street similarly named Hernan Cortes could be found in Cebu City.
Nor was it established that the enforcing officers had any difficulty in locating the premises of petitioner
corporation. That Search Warrant A-1, therefore, inconsistently identified the city where the premises to
be searched is not a defect that would spell the warrants invalidation in this case.

Inconsistencies in the description of the persons named in the two warrants Petitioners also find fault in
the description of the names of the persons in Search Warrants A-1 and A-2. Search Warrant A-1 was
issued solely against Uy Chin Ho alias Frank Uy. Search Warrant A-2, on the other hand, was directed
against UY CHIN HO alias FRANK UY, and Unifish Packing Corporation.

However, these discrepancies are hardly relevant. Since, in the case at bar, the warrant was issued not
for search of the persons owning or occupying the premises, but only a search of the premises occupied
by them, the search could not be declared unlawful or in violation of the constitutional rights of the
owner or occupants of the premises, because of inconsistencies in stating their names.

Two warrants issued at one time for one crime and one place In any event, Search Warrant A-1 should
be deemed superseded by Search Warrant A-2.

Two warrants, Search Warrants A-1 and A-2, were actually issued by the trial court for the same crime
(violation of SEC. 253 of the National Internal Revenue Code). It appears, however, that Search Warrant
A-2 was issued merely to correct the inconsistencies in the address in Search Warrant A-1, as well as to
include Unifish Packing Corporation as a party against whom the warrant was issued. Search Warrant A-
2 was evidently an attempt by the issuing judge to be more precise in the names of the persons against
whom the warrant was issued and in the description of the place to be searched. Indeed, it would be
absurd for the judge to issue on a single occasion two warrants authorizing the search of a single place
for a single offense. Inasmuch as the apparent intent in issuing Search Warrant A-2 was to supersede
Search Warrant A-1, the latter should be deemed revoked by the former.

The alleged absence of probable cause Petitioners claim there was no probable cause for Judge Gozo-
Dadole to issue the subject search warrants.

It may be recalled that before issuing the warrants, the judge deposed two witnesses, namely, Nestor
Labaria of the BIR, and Rodrigo Abos, who claimed to be an old employee of Unifish. Petitioners claim
that the testimonies of Labaria and Abos are hearsay. We agree with this contention, but only as to the
testimony of Labaria. His testimony shows that his knowledge of the alleged illegal activities of
petitioners was acquired not through his own perception but was merely supplied by Abos. Therefore,
the deposition of Labaria, which is based on hearsay.
The application for the warrants, however, is not based solely on Labarias deposition but is supported by
that of Abos, whose knowledge of petitioner’s alleged illegal practices was apparently obtained during
his employment with Unifish. In his deposition, Abos detailed the schemes employed by Frank Uy and
Unifish to evade the payment of taxes, and described the place where the documents supposedly
evidencing these schemes were located:

Abos stated that, as former Operating Chief of Unifish, he had access to the company records, and even
showed the issuing judge photocopies thereof. Thus, we reject the contention that this witness did not
have personal knowledge of the facts to which he testified. The contents of the deposition clearly
demonstrate otherwise. The deposition also shows that, contrary to petitioner’s submission, the
inquiries made by the judge were far from leading or being a rehash of the witness affidavit. We find
such inquiries to be sufficiently probing.

Alleged lack of particularity in the description of the things seized In the case at bar, the things to be
seized were described in the following manner:

1. Multiple sets of Books of Accounts; Ledgers, Journals, Columnar Books, Cash Register Books, Sales
Books or Records; Provisional & Official Receipts;

2. Production Record Books/Inventory Lists [,] Stock Cards;

3. Unregistered Delivery Receipts;

4. Unregistered Purchase & Sales Invoices;

5. Sales Records, Job Order;

6. Corporate Financial Records; and

7. Bank Statements/Cancelled Checks

We agree that most of the items listed in the warrants fail to meet the test of particularity, especially
since witness Abos had furnished the judge photocopies of the documents sought to be seized. The
issuing judge could have formed a more specific description of these documents from said photocopies
instead of merely employing a generic description thereof. The use of a generic term or a general
description in a warrant is acceptable only when a more specific description of the things to be seized is
unavailable. The failure to employ the specificity available will invalidate a general description in a
warrant. The use by the issuing judge of the terms multiple sets of books of accounts, ledgers, journals,
columnar books, cash register books, sales books or records, provisional & official receipts, production
record books/inventory lists, stock cards, sales records, job order, corporate financial records, and bank
statements/cancelled checks is therefore unacceptable considering the circumstances of this case.
As regards the terms unregistered delivery receipts and unregistered purchase & sales invoices,
however, we hold otherwise. The Solicitor General correctly argues that the serial markings of these
documents need not be specified as it is not possible to do so precisely because they are unregistered.
Where, by the nature of the goods to be seized, their description must be rather general, it is not
required that a technical description be given, as this would mean that no warrant could issue. Taking
into consideration the nature of the articles so described, it is clear that no other more adequate and
detailed description could have been given, particularly because it is difficult to give a particular
description of the contents thereof. Although it appears that photocopies of these unregistered
documents were among those handed by Abos to the issuing judge, it would be impractical to require
the latter to specify each and every receipt and invoice, and the contents thereof, to the minutest detail.

The general description of most of the documents listed in the warrants does not render the entire
warrant void. Insofar as the warrants authorize the search and seizure of unregistered delivery receipts
and unregistered purchase and sales invoices, the warrants remain valid. The search warrant is
severable, and those items not particularly described may be cut off without destroying the whole
warrant.

Accordingly, things belonging to petitioner not specifically mentioned in the warrants, like those not
particularly described, must be ordered returned to petitioners. The money which was not indicated in
the search warrant, had been illegally seized from petitioner. The fact that the members of the police
team were doing their task of pursuing subversives is not a valid excuse for the illegal seizure. The
presumption juris tantum of regularity in the performance of official duty cannot by itself prevail against
the constitutionally protected right of an individual.

However, as regards the articles supposedly belonging to PIDC, we cannot order their return in the
present proceedings. The legality of a seizure can be contested only by the party whose rights have been
impaired thereby, and the objection to an unlawful search and seizure is purely personal and cannot be
availed of by third parties.

ENGR. RANULFO C. FELICIANO vs NESTOR P. VILLASIN

DIGEST

FACTS:

Petitioner Feliciano was appointed General Manager (GM) of Leyte Metropolitan Water District (LMWD)
on 11 June 1975 by the LMWD Board of Directors. On 6 March 1990, the Local Water Utilities
Administration (LWUA) took over the management and policy-making functions of LMWD owing to
LMWDs default on the payment of its obligations to LWUA, pursuant to P.D. No. 198, otherwise known
as THE PROVINCIAL WATER UTILITIES ACT OF 1973. LWUA appointed Engr. Cayo U. Emnas take-over
General Manager and the latter filed administrative charges against Feliciano for Grave Misconduct,
Dishonesty and Conduct Unbecoming an LMWD Official.
The Office of the Government Corporate Counsel (OGCC) handled the investigation of the charges
against Feliciano. In a Resolution dated 16 September 1991, the OGCC found Feliciano guilty as charged
and recommended the penalty of dismissal. The Interim LMWD Board of Directors approved in toto the
findings of the OGCC including its recommendation to dismiss Feliciano.

The CSC issued Memorandum Circular No. 41, Series of 1993, directing Board Chairpersons and GMs of
water districts to submit personnel appointments for approval by the CSC.

By virtue of the issuance of Resolution No. 138, Series of 1998 issued by the LWUA Board of Trustees,
the take-over of the management and operations of the LMWD by the LWUA was lifted. Also, Feliciano
re-assumed the post as GM when the new regular LMWD Board of Directors unanimously approved
Resolution No. 98002 ordering his re-assumption.

As GM, Feliciano appointed Edgar R. Nedruda, Milagros A. Majadillas and Edgar B. Ortega to various
positions at the LMWD. However, the CSCRO disapproved Felicianos LMWD personnel appointments
since GM Feliciano did not possess the required CSC-approved appointment pursuant to CSC
Memorandum Circular No. 41, S. 1993. The CSC likewise denied Feliciano’s appeal through CSC
Resolution No. 002107, on the ground that he was only a de facto officer. Feliciano had no authority to
make appointments since he himself lacked the required CSC-approved appointment

In his motion for reconsideration, Feliciano argued that LMWD is not covered by the CSC rules as it is not
a GOCC, but a special type of non-stock, non-profit private corporation imbued with public interest. The
CSC denied Feliciano’s Motion for Reconsideration in its Resolution No. 010218,

Feliciano filed a certiorari with the CA. However, the CA denied the petition. His motion for
reconsideration was likewise denied. Feliciano thereafter filed a petition for review on certiorari. In an
en banc Decision, the SC denied the petition for its failure to sufficiently show that the CSC committed
any reversible error in issuing the challenged decision and resolution. His motion for reconsideration
was likewise denied.

Now due to the failure of the LMWD Board of Directors to submit the required appointment of Feliciano
as GM of LMWD for attestation, the CSC CSC Resolution No. 050307, declaring Feliciano to be a mere de
facto officer of LMWD and ordering him to vacate the position of GM.

From this, Feliciano filed with the CA a Petition for Certiorari and Prohibition with application for TRO
and Writ of Injunction, seeking to enjoin the implementation of CSC Resolution No. 050307.

While the case was pending with the CA, Villasin was appointed as the new GM of LMWD. Thereafter,
the CA dismissed the appeal of Feliciano. Moreover, the SC also denied the appeal by Feliciano.

Feliciano thus filed with the RTC a Petition for Quo Warranto against Villasin. He asked the RTC to
restore him to his position as GM of LMWD, and to remove Villasin therefrom. After hearing, the RTC
dismissed the petition for quo warranto. Feliciano’s motion for reconsideration was likewise denied by
the RTC. Aggrieved, Feliciano went directly to this Court via the instant Petition for Certiorari under Rule
65 of the Revised Rules of Court.
ISSUE: Whether or not Feliciano has a right to file a petition for Quo Warranto under the circumstances
surrounding the case.

HELD: NO. Due to the recent turn of events, Feliciano lost any legal standing to pursue via Quo Warranto
proceedings his claim to the position of GM of LMWD considering the SC’s En Banc Resolutions dated 6
June 2006 and 22 August 2006 in G.R. No. 172141. To recall, CSC Resolution No. 050307 treated
Feliciano as a de facto officer with regard to his acts as GM of LMWD; and declared him to be a usurper
of or an intruder to the said position beginning 6 February 2001, and thus ordered him to vacate the
same.

Considering that entry of judgment was already made in G.R. No. 172141 as of 14 November 2006, there
is therefore no more obstacle to the appointment by the LMWD Board of Directors of Villasin as the new
GM of LMWD.

Feliciano imputes grave abuse of discretion on the part of the RTC for allegedly failing to afford him due
process, since his Petition for Quo Warranto was dismissed based on its face and without having been
heard.

The Court emphasizes that an action for Quo Warranto may be dismissed at any stage when it becomes
apparent that the plaintiff is not entitled to the disputed pubic office, position or franchise. Hence, the
RTC is not compelled to still proceed with the trial when it is already apparent on the face of the Petition
for Quo Warranto that it is insufficient. The RTC may already dismiss said petition at this point.

Feliciano presents as an alternative argument the fact that as GM of LMWD, he is not part of the
personnel of the water district, arguing that his appointment does not need CSC attestation.

The SC finds this claim untenable.

To determine whether personnel of the LMWD, particularly the GM, are subject to CSC Rules and
Regulations, we must delve into the pertinent laws affecting the management and policy-making
functions of the LMWD.

The provisions of Presidential Decree No. 198 read:

Chapter VI Officers and Employees

Section 23. Additional Officers. - At the first meeting of the board, or as soon thereafter as practicable,
the board shall appoint, by a majority vote, a general manager, an auditor, and an attorney, and shall
define their duties and fix their compensation. Said officers shall service at the pleasure of the board.

xxxx
Section 25. Exemption from Civil Service. - The district and its employees, being engaged in a proprietary
function, are hereby exempt from the provisions of the Civil Service Law. x x x.

On 15 August 1975, Presidential Decree No. 768 amended Section 23 of Presidential Decree No. 198 to
read:

SEC. 23. The General Manager. - At the first meeting of the board, or as soon thereafter as practicable,
the board shall appoint, by a majority vote, a general manager and shall define his duties and fix his
compensation. Said officer shall serve at the pleasure of the board.

On 11 June 1978, Presidential Decree No. 1479[40] amended Presidential Decree No. 198, as amended
by Presidential Decree No. 768, removing Section 25 of the latter, which had exempted the district and
its employees from the coverage of the Civil Service. Thus, with such amendment, officers and
employees of water districts were put under the mantle of Civil Service Rules and Regulations.

On 2 April 2004, Republic Act No. 9286 further amended Section 23 of Presidential Decree No. 198, to
read:

Sec. 23. The General Manager. At the first meeting of the Board, or as soon thereafter as practicable,
the Board shall appoint, by a majority vote, a general manager and shall define his duties and fix his
compensation. Said officer shall not be removed from office, except for cause and after due process.

From the foregoing, as early as the issuance of Presidential Decree No. 1479 on 11 June 1978, it is clear
that the LMWD GM is covered by Civil Service Rules and Regulations. More so, water districts are
government instrumentalities whose officers and employees belong to the civil service.

The position of General Manager being unequivocally part of the personnel of the water district whose
officers and employees are covered under the civil service, an appointment thereto requires the
attestation of the CSC for it to be valid.

AUTOCORP GROUP and AUTOGRAPHICS, INC. vs Hon. COURT OF APPEALS and KEPPEL MONTE
BANK (formerly Promulgated: Monte de Piedad and Savings Bank)

DIGEST

FACTS:

Keppel Monte Bank extended a loan of (P85,000,000.00) in favor of petitioner Autocorp Group
(Autocorp). The loan was secured by pledge and real estate mortgage on several properties, among
which, were 4 lots in Cebu City and 2 other lots in Lapu-lapu City. The lots in Cebu is co-owned by
petitioner Autographics, Inc, while the lots in Lapu-lapu City registered under the name of Eurasia Heavy
Industries, Inc. The Agreement provided an acceleration clause.

Autocorp failed to pay the loan. Despite its failure, it asked for an additional loan of P48,800,000.00
payable in 1 year at 20% interest per annum. Of this additional loan, P17,000,000.00 was applied
partially against the original loan. However, Autocorp was again unable to pay both accounts totaling
P116,800,000.00, despite repeated demands and various requests for extension.
As such, Keppel resorted to an extrajudicial foreclosure of the 6 lots mortgaged. It filed a notarized letter
with the Office of the Clerk of Court Ex Oficio Provincial Sheriff of Cebu City and the same was raffled to
Deputy Sheriff Jessie Belarmino for implementation.

However, Autocorp filed a complaint to annul the loan agreement and real estate mortgage, with ex
parte Restraining Order, Preliminary injunction and Damages. The trial court issued a writ of preliminary
injunction, conditioned on petitioners filing of a bond of two million pesos (P2,000,000.00).

Keppel filed a certiorari with the CA, to annul the order and resolution of the trial court. It contended
that the preliminary injunction was issued without the requisite prior notice and hearing, provided
under Section 5, Rule 58 of the 1997 Rules of Court. The Court of Appeals granted the petition after
finding that the summary hearing conducted by the trial court was insufficient.

Thereafter, Deputy Sheriff Belarmino prepared and served the Notice of Extrajudicial Sale. However,
before the notice could be published, Autocorp filed an Urgent Motion to Hold in Abeyance the
Extrajudicial Sale with the RTC of Cebu. In addition, it filed a Very Urgent Motion for Issuance of an
Order of Status Quo with the CA.

The CA denied the motion of Autocorp. The RTC of Cebualso denied petitioners motion to hold the
extrajudicial sale in abeyance on the ground that petitioners violated the rule against forum-shopping.
Petitioners filed a motion for the reconsideration of the trial courts decision but without any success.

After the extrajudicial sale, The 6 properties were awarded to Keppel as the lone bidder. A Certificate of
Sale with the approval of Executive Judge Priscila Agana, was issued.

Autocorp filed a motion to admit their Amended/Supplemental Complaint with a prayer for the issuance
of an ex parte TRO and an Order for Preliminary Injunction to stop the Register of Deeds of Cebu from
registering the Certificate of Sale in the name of respondent bank and the latter from taking possession
of the properties subject of the foreclosure.

Keppel presented the Certificate of Sale to the Register of Deeds of Cebu and LapuLapu on separate
occasions. However, in the Register of Deeds of Cebu, the entry fee and the registration were belatedly
paid, that is, paid only the next day as the cashier in charge had already left. Nevertheless, the certificate
of sale was entered in the primary entry book. Also, the certificate of sale was duly annotated at the
back of the TCTs.

But then, the RTC admitted the amended/supplemental complaint of Autocorp and granted their prayer
for the issuance of a TRO, directing the Office of the Register of Deeds to refrain from registering the
assailed sheriffs certificate of sale and also respondent bank from taking possession of the properties
subject of the certificate of sale. Eventually, it granted a preliminary injunction.

Keppel filed a petition for certiorari with the CA. As such, the CA reversed the orders of the RTC.
Autocorps motion for reconsideration was likewise denied by the CA.

ISSUES:

1. Whether or not the payment of the registration fees is a condition precedent before any valid entry
can be made in the primary book. 2. Whether the case of DBP vs Acting Register of Deeds of Nueva
Ecija is applicable in this case. 3. Whether the injunction to prevent Keppel Monte Bank from taking
possession of the properties was proper.

RULING:

1. NO. The objection as to the payment of the requisite fees is unavailing. There is no question that the
fees were paid, albeit belatedly. Respondent bank presented the certificate of sale to the Office of the
Register of Deeds of Cebu City for registration on January 21, 1999 at 4:30 p.m. As the cashier had
already left, the Office could not receive the payment for entry and registration fees, but still, the
certificate of sale was entered in the primary entry book. The following day, respondent bank paid the
requisite entry and registration fees. Given the peculiar facts of the case, we agree with the Court of
Appeals that the payment of respondent bank must be deemed to be substantial compliance with the
law; and, the entry of the instrument the day before, should not be invalidated. In any case, even if we
consider the entry to have been made on January 22, the important fact is that the entry in the primary
entry book was done prior to the issuance of the writ of injunction by the trial court.

Section 56 of P.D. No. 1529 provides: SEC. 56. Primary Entry Book; fees; certified copies. Each Register of
Deeds shall keep a primary entry book in which, upon payment of the entry fee, he shall enter, in the
order of their reception, all instruments including copies of writs and processes filed with him relating to
registered land. He shall, as a preliminary process in registration, note in such book the date, hour and
minute of reception of all instruments, in the order in which they were received. They shall be regarded
as registered from the time so noted, and the memorandum of each instrument, when made on the
certificate of title to which it refers, shall bear the same date: Provided, that the national

government as well as the provincial and city governments shall be exempt from the payment of such
fees in advance in order to be entitled to entry and registration. (emphasis ours)

2. YES. Like in DBP vs. Acting Register of Deeds of Nueva Ecija, the instrument involved in the case at bar,
is a sheriffs certificate of sale. We hold now, as we held therein, that the registrant is under no necessity
to present the owners duplicates of the certificates of title affected, for purposes of primary entry, as
the transaction sought to be recorded is an involuntary transaction.

Registration is merely a specie of notice. It is a ministerial act by which an instrument is sought to be

inscribed in the records of the Office of the Register of Deeds and annotated at the back of the
certificate of title covering the land subject of the instrument. It is not a declaration by the State that
such an instrument is a valid and subsisting interest in the land. The law on registration does not require
that only valid instruments shall be registered. The purpose of registration is merely to give notice.

It is a ministerial duty on the part of the Register of Deeds to annotate the instrument on the certificate
of sale after a valid entry in the primary entry book. P.D. No. 1524 provides:
SEC. 63. Foreclosure of Mortgage. x x x

(b) If the mortgage was foreclosed extrajudicially, a certificate of sale executed by the officer who
conducted the sale shall be filed with the Register of Deeds who shall make a brief memorandum
thereof on the certificate of title. (emphases ours)

In fine, petitioners prayer for the issuance of a writ of injunction, to prevent the register of deeds from
registering the subject certificate of sale, had been rendered moot and academic by the valid entry of
the instrument in the primary entry book. Such entry is equivalent to registration. Injunction would not
lie anymore, as the act sought to be enjoined had already become a fait accompli or an accomplished
act.

3. NO.

A writ of possession is generally understood to be an order whereby a sheriff is commanded to place a

person in possession of a real or personal property, such

as, when a property is extrajudicially foreclosed. It has been consistently held that during the period of
redemption after the registration of the sale, a writ of possession issues as a matter of course upon the
filing of the proper motion and the approval of a bond. A writ of possession may also be issued after
consolidation of ownership of the property in the name of the purchaser. It is settled that the buyer in a
foreclosure sale, who becomes the absolute owner of the property if the same is not redeemed during
the one-year redemption period after the registration of the sale, is entitled to the possession of the
property and can demand it at any time, following the consolidation of ownership in his name and the
issuance to him of a new transfer certificate of title. To underscore the writs ministerial character, we
have disallowed injunction to prohibit its issuance, just as we have held that issuance of the same may
not be stayed by a pending action for annulment of the mortgage or the foreclosure itself.

As such, the preliminary injunction issued by the trial court to prevent respondent bank from taking
possession of the subject lots, was properly set aside by the Court of Appeals, as the trial court judge
acted with grave abuse of discretion when it issued the same. It was not alleged that respondent bank
committed acts of possession over the properties before it could file a petition for a writ of possession
during the redemption period. If the trial court cannot refuse to issue a writ of possession in the event
that respondent bank complies with the requisites for its issuance, with more reason that the trial court
cannot issue an injunction, preempting respondent bank from filing a petition or application for a writ of
possession, over the properties subject of the certificate of sale.

VALENTIN CABRERA, MANUEL CABRERA, and REBECCA LESLIE CABRAS vs ELIZABETH GETARUELA,
EULOGIO ABABON, LEONIDA LIGAN, MARIETTO ABABON, GLORIA PANAL, LEONORA OCARIZA,
SOTERO ABABON, JR., and JOSEPH ABABON
DIGEST

FACTS:

Atty. Ceniza and his client Daniel Wistehuff, Sr. organized and established Inmark Marketing Philippines,
Inc. (IMPI). Petitioner owns 5% of the shares of stocks of the IMPI, and the other stockholders are
respondents Daniel Wistehuff III, Marites Gonzales-Wistehuff, and Bryan K. Wistehuff.

Atty. Ceniza filed a Complaint for an accounting of income and expenses of the IMPI, declaration of
dividends, enforcement of his right to financial statements, attorneys fees, and damages. The RTC
denied his plea for the appointment of a receiver or management committee pendente lite.
Nevertheless, the RTC ruled in favor of Atty. Ceniza and thus order the respondents to make a true and
correct accounting of the earnings of IMPI, which will be the basis of the declaration of dividents.

When petitioner moved for the execution, the RTC issued an Omnibus Order. Consequently, a Writ of
Execution was issued. Then, the IMPI submitted the following documents to the sheriff in compliance
with the writ issued by the court: (a) Report of Sta. Ana Rivera & Co.; (b) Balance Sheet; (3) Statements
of Operation; (4) Statements of Changes in Equity; (5) Statements of Cash Flows; and (6) Notes to
Financial Statements pertaining to the corporation.

However, Atty. Ceniza filed for indirect contempt on the belief that defendantsstockholders and their
counsel acted in conspiracy with each other and willfully and deliberately refused to comply with the
writ of execution issued by the court to render a true and correct accounting of the earning of IMPI.
Petitioner prayed that judgment be rendered against respondents.

In their answer to the petition, respondents averred they complied with the writ issued by the court and
submitted a true and correct accounting of the earnings of the IMPI which will be the basis of the
computation of dividends.

The RTC dismissed the petition for indirect contempt. The court ruled that the petition for indirect
contempt was criminal in nature; hence, Ceniza, as petitioner, had to prove the guilt of the respondents
beyond reasonable doubt.

Atty. Ceniza filed a Motion for Reconsideration on the ground that his petition for indirect contempt was
civil in nature; he adduced the requisite quantum of evidence to prove respondents guilt for indirect
contempt; and that they failed to present the auditor who prepared the 1992 Financial Statement of
IMPI. Then, Atty. Ceniza also filed a Motion for the appointment of a commissioner.

However, the RTC denied his motion for reconsideration on the ground that respondents acquittal is not
appealable, or cannot be the subject of a motion for reconsideration as such a motion amounted to an
appeal. The court ruled that, as in criminal proceedings, an appeal would not lie from the order of
dismissal of, or exoneration from, a charge of contempt of court.

However, the RTC granted Motion for the Appointment of Atty. Bayani Atup as Commissioner to receive
and report evidence to the court on the following issue of fact the true and correct accounting of the
earnings of IMPI since the start of its operations in 1996 up to the present.
Atty. Ceniza filed a Notice of Appeal with Alternative Motion. But the RTC denied the Alternative Motion
and declined to give due course to his Notice of Appeal. It ruled that, as gleaned from the relief prayed
for in the Petition for Indirect Contempt, petitioners purpose was primarily punishment and, only
incidentally, compensatory or remedial. The acquittal of the respondents was not subject to a motion
for reconsideration or appeal.

The IMPI on the other hand, filed a petition for certiorari, prohibition and mandamus with the Court of
Appeals for the nullification of the Appointment of a Commissioner to receive evidence of the parties,
and report on the true and correct accounting of the earnings of IMPI from 1996 up to the present.

Now Atty. Ceniza eventually filed a petition for review on certiorari under Rule 45 of the Rules of Court
with the SC.

Allegations of Atty. Ceniza:

Contempt proceedings may actually be either civil or criminal. He asserts that his petition for
indirect contempt below is civil in nature for the reason that the accounting ordered by the trial court
was for the benefit of one party and the purpose of the contempt proceeding below was not to
vindicate the authority of the court and to protect its outraged dignity. An appeal from the decision
dismissing the same is not barred by double jeopardy. Respondents should be found guilty of indirect
contempt for willfully and deliberately refusing to submit a full and correct accounting of the earnings of
the corporation. He posits that the 2001 Financial Statements submitted by the corporation do not
constitute compliance with the Order to render a true and correct accounting as they do not merit faith
and credence but show documented fraud, wrongdoing and deception.

Defense of Respondents:

The RTC correctly denied the Notice of Appeal of petitioner since the Petition for Indirect Contempt
filed by him below was criminal in nature;

hence, the decision of the trial court dismissing the charge was not appealable. The RTC correctly
dismissed Atty. Ceniza’s contempt charge because they submitted the report of the independent auditor
together with the other documents, which, according to them, serve as a true and correct accounting of
the earnings of the corporation.

ISSUE:

Whether the petition for indirect contempt filed by the Atty. Ceniza is criminal in nature

HELD:

NO. The petition for indirect contempt filed by Atty. Ceniza is actually civil in nature, not criminal.

The SC agree with the contention of petitioner that, as gleaned from the averments of his petition and
the relief prayed for, the indirect contempt charge filed by him below was civil in nature. He submits
that respondents willfully and deliberately refused to comply with the decision of the court requiring
them to submit a true and correct accounting of the earnings of IMPI which could be the basis of the
declaration of dividends and that the 2002 Financial Statement submitted by them did not comply with
such decision. Petitioner maintains that said financial statement is fraudulent, and the purpose of the
petition was to have the respondents punished for their alleged recalcitrance and to compel them to
comply with the courts decision. Indeed, the petitioners prayer, that respondents be incarcerated and
remain in detention until they comply with the decision of the court conformably with Rule 71, Section 8
of the Rules of Court, is in the nature of an execution to enforce the judgment. Thus, the punishment
sought by petitioner for the respondents is not punitive in nature, but designed for his own benefit and
advantage, and not for the purpose of vindicating the dignity of the court and preserving its power.

Since the proceedings below is civil in nature, petitioner had the right to file a motion for
reconsideration of the RTCs April 15, 2004 Order and to appeal therefrom within the period therefor
after its denial. However, the RTC disallowed the appeal on its perception that the petition for indirect
contempt was criminal in nature and that, therefore, no motion for reconsideration or appeal could be
filed, since respondents would thereby be placed in double jeopardy. Such disallowance by the trial
court of petitioners appeal cannot be the subject of an appeal as provided for in Section 1(d) of Rule 41
of the Rules of Court. Under Section 3, Rule 65, the remedy from an Order disallowing an appeal is to file
a petition for mandamus with the CA. However, petitioner filed with this Court a petition for review on
certiorari under Rule 45; patently then, the remedy resorted to by petitioner is inappropriate.