G.R. No. 174975 January 20, 2009 On December 12, 2005, private respondents filed a Motion for Reconsideration.
On December 12, 2005, private respondents filed a Motion for Reconsideration.12 On December 28,
LUISA KHO MONTAÑER, ALEJANDRO MONTAÑER, JR., LILLIBETH MONTAÑER-BARRIOS, AND
RHODORA ELEANOR MONTAÑER-DALUPAN, Petitioners,
vs.
SHARI'A DISTRICT COURT, FOURTH SHARI'A JUDICIAL DISTRICT, MARAWI CITY, LILING DISANGCOPAN,
AND ALMAHLEEN LILING S. MONTAÑER, Respondents.
DECISION
PUNO, C.J.:
This Petition for Certiorari and Prohibition seeks to set aside the Orders of the Shari’a District Court,
Fourth Shari’a Judicial District, Marawi City, dated August 22, 20061 and September 21, 2006.2
On August 17, 1956, petitioner Luisa Kho Montañer, a Roman Catholic, married Alejandro Montañer, Sr.
at the Immaculate Conception Parish in Cubao, Quezon City.3 Petitioners Alejandro Montañer, Jr.,
Lillibeth Montañer-Barrios, and Rhodora Eleanor Montañer-Dalupan are their children.4 On May 26,
1995, Alejandro Montañer, Sr. died.5
On August 19, 2005, private respondents Liling Disangcopan and her daughter, Almahleen Liling S.
Montañer, both Muslims, filed a "Complaint" for the judicial partition of properties before the Shari’a
District Court.6 The said complaint was entitled "Almahleen Liling S. Montañer and Liling M.
Disangcopan v. the Estates and Properties of Late Alejandro Montañer, Sr., Luisa Kho Montañer,
Lillibeth K. Montañer, Alejandro Kho Montañer, Jr., and Rhodora Eleanor K. Montañer," and docketed
as "Special Civil Action No. 7-05."7 In the said complaint, private respondents made the following
allegations: (1) in May 1995, Alejandro Montañer, Sr. died; (2) the late Alejandro Montañer, Sr. is a
Muslim; (3) petitioners are the first family of the decedent; (4) Liling Disangcopan is the widow of the
decedent; (5) Almahleen Liling S. Montañer is the daughter of the decedent; and (6) the estimated
value of and a list of the properties comprising the estate of the decedent.8 Private respondents prayed
for the Shari’a District Court to order, among others, the following: (1) the partition of the estate of the
decedent; and (2) the appointment of an administrator for the estate of the decedent.9
Petitioners filed an Answer with a Motion to Dismiss mainly on the following grounds: (1) the Shari’a
District Court has no jurisdiction over the estate of the late Alejandro Montañer, Sr., because he was a
Roman Catholic; (2) private respondents failed to pay the correct amount of docket fees; and (3) private
respondents’ complaint is barred by prescription, as it seeks to establish filiation between Almahleen
Liling S. Montañer and the decedent, pursuant to Article 175 of the Family Code.10
On November 22, 2005, the Shari’a District Court dismissed the private respondents’ complaint. The
district court held that Alejandro Montañer, Sr. was not a Muslim, and its jurisdiction extends only to
the settlement and distribution of the estate of deceased Muslims.11
2005, petitioners filed an Opposition to the Motion for Reconsideration, alleging that the motion for
reconsideration lacked a notice of hearing.13 On January 17, 2006, the Shari’a District Court denied
petitioners’ opposition.14 Despite finding that the said motion for reconsideration "lacked notice of
hearing," the district court held that such defect was cured as petitioners "were notified of the
existence of the pleading," and it took cognizance of the said motion.15 The Shari’a District Court also
reset the hearing for the motion for reconsideration.16
In its first assailed order dated August 22, 2006, the Shari’a District Court reconsidered its order of
dismissal dated November 22, 2005.17 The district court allowed private respondents to adduce further
evidence.18 In its second assailed order dated September 21, 2006, the Shari’a District Court ordered
the continuation of trial, trial on the merits, adducement of further evidence, and pre-trial
conference.19
Seeking recourse before this Court, petitioners raise the following issues:
I.
RESPONDENT SHARI’A DISTRICT COURT – MARAWI CITY LACKS JURISDICTION OVER PETITIONERS WHO
ARE ROMAN CATHOLICS AND NON-MUSLIMS.
II.
RESPONDENT SHARI’A DISTRICT COURT – MARAWI CITY DID NOT ACQUIRE JURISDICTION OVER "THE
ESTATES AND PROPERTIES OF THE LATE ALEJANDRO MONTAÑER, SR." WHICH IS NOT A NATURAL OR
JURIDICAL PERSON WITH CAPACITY TO BE SUED.
III.
RESPONDENT SHARI’A DISTRICT COURT DID NOT ACQUIRE JURISDICTION OVER THE COMPLAINT OF
PRIVATE RESPONDENTS AGAINST PETITIONERS DUE TO NON-PAYMENT OF THE FILING AND DOCKETING
FEES.
IV.
RESPONDENT SHARI’A DISTRICT COURT—MARAWI CITY COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION WHEN IT DENIED THE OPPOSITION OF PETITIONERS AND THEN
GRANTED THE MOTION FOR RECONSIDERATION OF RESPONDENTS LILING DISANGCOPAN, ET AL.
WHICH WAS FATALLY DEFECTIVE FOR LACK OF A "NOTICE OF HEARING."
V.
RESPONDENT SHARI’A DISTRICT COURT—MARAWI CITY COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION WHEN IT SET SPL. CIVIL ACTION 7-05 FOR TRIAL EVEN IF THE
COMPLAINT PLAINLY REVEALS THAT RESPONDENT ALMAHLEEN LILING S. MONTAÑER SEEKS
RECOGNITION FROM ALEJANDRO MONTAÑER, SR. WHICH CAUSE OF ACTION PRESCRIBED UPON THE
DEATH OF ALEJANDRO MONTAÑER, SR. ON MAY 26, 1995.
In their Comment to the Petition for Certiorari, private respondents stress that the Shari’a District Court
must be given the opportunity to hear and decide the question of whether the decedent is a Muslim in
order to determine whether it has jurisdiction.20
Jurisdiction: Settlement of the Estate of Deceased Muslims
Petitioners’ first argument, regarding the Shari’a District Court’s jurisdiction, is dependent on a question
of fact, whether the late Alejandro Montañer, Sr. is a Muslim. Inherent in this argument is the premise
that there has already been a determination resolving such a question of fact. It bears emphasis,
however, that the assailed orders did not determine whether the decedent is a Muslim. The assailed
orders did, however, set a hearing for the purpose of resolving this issue.
Article 143(b) of Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws
of the Philippines, provides that the Shari’a District Courts have exclusive original jurisdiction over the
settlement of the estate of deceased Muslims:
ARTICLE 143. Original jurisdiction. — (1) The Shari'a District Court shall have exclusive original
jurisdiction over:
xxxx
(b) All cases involving disposition, distribution and settlement of the estate of deceased Muslims,
probate of wills, issuance of letters of administration or appointment of administrators or executors
regardless of the nature or the aggregate value of the property.
The determination of the nature of an action or proceeding is controlled by the averments and
character of the relief sought in the complaint or petition.21 The designation given by parties to their
own pleadings does not necessarily bind the courts to treat it according to the said designation. Rather
than rely on "a falsa descriptio or defective caption," courts are "guided by the substantive averments
of the pleadings."22
Although private respondents designated the pleading filed before the Shari’a District Court as a
"Complaint" for judicial partition of properties, it is a petition for the issuance of letters of
administration, settlement, and distribution of the estate of the decedent. It contains sufficient
jurisdictional facts required for the settlement of the estate of a deceased Muslim,23 such as the fact of
Alejandro Montañer, Sr.’s death as well as the allegation that he is a Muslim. The said petition also
contains an enumeration of the names of his legal heirs, so far as known to the private respondents,
and a probable list of the properties left by the decedent, which are the very properties sought to be
settled before a probate court. Furthermore, the reliefs prayed for reveal that it is the intention of the
private respondents to seek judicial settlement of the estate of the decedent.24 These include the
following: (1) the prayer for the partition of the estate of the decedent; and (2) the prayer for the
appointment of an administrator of the said estate.
We cannot agree with the contention of the petitioners that the district court does not have jurisdiction
over the case because of an allegation in their answer with a motion to dismiss that Montañer, Sr. is not
a Muslim. Jurisdiction of a court over the nature of the action and its subject matter does not depend
upon the defenses set forth in an answer25 or a motion to dismiss.26 Otherwise, jurisdiction would
depend almost entirely on the defendant27 or result in having "a case either thrown out of court or its
proceedings unduly delayed by simple stratagem.28 Indeed, the "defense of lack of jurisdiction which is
dependent on a question of fact does not render the court to lose or be deprived of its jurisdiction."29
The same rationale applies to an answer with a motion to dismiss.30 In the case at bar, the Shari’a
District Court is not deprived of jurisdiction simply because petitioners raised as a defense the
allegation that the deceased is not a Muslim. The Shari’a District Court has the authority to hear and
receive evidence to determine whether it has jurisdiction, which requires an a priori determination that
the deceased is a Muslim. If after hearing, the Shari’a District Court determines that the deceased was
not in fact a Muslim, the district court should dismiss the case for lack of jurisdiction.
Special Proceedings
The underlying assumption in petitioners’ second argument, that the proceeding before the Shari’a
District Court is an ordinary civil action against a deceased person, rests on an erroneous understanding
of the proceeding before the court a quo. Part of the confusion may be attributed to the proceeding
before the Shari’a District Court, where the parties were designated either as plaintiffs or defendants
and the case was denominated as a special civil action. We reiterate that the proceedings before the
court a quo are for the issuance of letters of administration, settlement, and distribution of the estate
of the deceased, which is a special proceeding. Section 3(c) of the Rules of Court (Rules) defines a
special proceeding as "a remedy by which a party seeks to establish a status, a right, or a particular
fact." This Court has applied the Rules, particularly the rules on special proceedings, for the settlement
of the estate of a deceased Muslim.31 In a petition for the issuance of letters of administration,
settlement, and distribution of estate, the applicants seek to establish the fact of death of the decedent
and later to be duly recognized as among the decedent’s heirs, which would allow them to exercise
their right to participate in the settlement and liquidation of the estate of the decedent.32 Here, the
respondents seek to establish the fact of Alejandro Montañer, Sr.’s death and, subsequently, for private
respondent Almahleen Liling S. Montañer to be recognized as among his heirs, if such is the case in fact.
Petitioners’ argument, that the prohibition against a decedent or his estate from being a party
defendant in a civil action33 applies to a special proceeding such as the settlement of the estate of the
deceased, is misplaced. Unlike a civil action which has definite adverse parties, a special proceeding has
no definite adverse party. The definitions of a civil action and a special proceeding, respectively, in the
Rules illustrate this difference. A civil action, in which "a party sues another for the enforcement or
protection of a right, or the prevention or redress of a wrong"34 necessarily has definite adverse
parties, who are either the plaintiff or defendant.35 On the other hand, a special proceeding, "by which
a party seeks to establish a status, right, or a particular fact,"36 has one definite party, who petitions or
applies for a declaration of a status, right, or particular fact, but no definite adverse party. In the case at
bar, it bears emphasis that the estate of the decedent is not being sued for any cause of action. As a
special proceeding, the purpose of the settlement of the estate of the decedent is to determine all the
assets of the estate,37 pay its liabilities,38 and to distribute the residual to those entitled to the
same.39
Docket Fees
Petitioners’ third argument, that jurisdiction was not validly acquired for non-payment of docket fees, is
untenable. Petitioners point to private respondents’ petition in the proceeding before the court a quo,
which contains an allegation estimating the decedent’s estate as the basis for the conclusion that what
private respondents paid as docket fees was insufficient. Petitioners’ argument essentially involves two
aspects: (1) whether the clerk of court correctly assessed the docket fees; and (2) whether private
respondents paid the correct assessment of the docket fees.
Filing the appropriate initiatory pleading and the payment of the prescribed docket fees vest a trial
court with jurisdiction over the subject matter.40 If the party filing the case paid less than the correct
amount for the docket fees because that was the amount assessed by the clerk of court, the
responsibility of making a deficiency assessment lies with the same clerk of court.41 In such a case, the
lower court concerned will not automatically lose jurisdiction, because of a party’s reliance on the clerk
of court’s insufficient assessment of the docket fees.42 As "every citizen has the right to assume and
trust that a public officer charged by law with certain duties knows his duties and performs them in
accordance with law," the party filing the case cannot be penalized with the clerk of court’s insufficient
assessment.43 However, the party concerned will be required to pay the deficiency.44
In the case at bar, petitioners did not present the clerk of court’s assessment of the docket fees.
Moreover, the records do not include this assessment. There can be no determination of whether
private respondents correctly paid the docket fees without the clerk of court’s assessment.
Exception to Notice of Hearing
Petitioners’ fourth argument, that private respondents’ motion for reconsideration before the Shari’a
District Court is defective for lack of a notice of hearing, must fail as the unique circumstances in the
present case constitute an exception to this requirement. The Rules require every written motion to be
set for hearing by the applicant and to address the notice of hearing to all parties concerned.45 The
Rules also provide that "no written motion set for hearing shall be acted upon by the court without
proof of service thereof."46 However, the Rules allow a liberal construction of its provisions "in order to
promote [the] objective of securing a just, speedy, and inexpensive disposition of every action and
proceeding."47 Moreover, this Court has upheld a liberal construction specifically of the rules of notice
of hearing in cases where "a rigid application will result in a manifest failure or miscarriage of justice
especially if a party successfully shows that the alleged defect in the questioned final and executory
judgment is not apparent on its face or from the recitals contained therein."48 In these exceptional
cases, the Court considers that "no party can even claim a vested right in technicalities," and for this
reason, cases should, as much as possible, be decided on the merits rather than on technicalities.49
The case at bar falls under this exception. To deny the Shari’a District Court of an opportunity to
determine whether it has jurisdiction over a petition for the settlement of the estate of a decedent
alleged to be a Muslim would also deny its inherent power as a court to control its process to ensure
conformity with the law and justice. To sanction such a situation simply because of a lapse in fulfilling
the notice requirement will result in a miscarriage of justice.
In addition, the present case calls for a liberal construction of the rules on notice of hearing, because
the rights of the petitioners were not affected. This Court has held that an exception to the rules on
notice of hearing is where it appears that the rights of the adverse party were not affected.50 The
purpose for the notice of hearing coincides with procedural due process,51 for the court to determine
whether the adverse party agrees or objects to the motion, as the Rules do not fix any period within
which to file a reply or opposition.52 In probate proceedings, "what the law prohibits is not the absence
of previous notice, but the absolute absence thereof and lack of opportunity to be heard."53 In the case
at bar, as evident from the Shari’a District Court’s order dated January 17, 2006, petitioners’ counsel
received a copy of the motion for reconsideration in question. Petitioners were certainly not denied an
opportunity to study the arguments in the said motion as they filed an opposition to the same. Since
the Shari’a District Court reset the hearing for the motion for reconsideration in the same order,
petitioners were not denied the opportunity to object to the said motion in a hearing. Taken together,
these circumstances show that the purpose for the rules of notice of hearing, procedural process, was
duly observed.
Prescription and Filiation
Petitioners’ fifth argument is premature. Again, the Shari’a District Court has not yet determined
whether it has jurisdiction to settle the estate of the decedent. In the event that a special proceeding
for the settlement of the estate of a decedent is pending, questions regarding heirship, including
prescription in relation to recognition and filiation, should be raised and settled in the said
proceeding.54 The court, in its capacity as a probate court, has jurisdiction to declare who are the heirs
of the decedent.55 In the case at bar, the determination of the heirs of the decedent depends on an
affirmative answer to the question of whether the Shari’a District Court has jurisdiction over the estate
of the decedent.
IN VIEW WHEREOF, the petition is DENIED. The Orders of the Shari’a District Court, dated August 22,
2006 and September 21, 2006 respectively, are AFFIRMED. Cost against petitioners.
SO ORDERED.
G.R. No. 150206 March 13, 2009
Heirs of TEOFILO GABATAN, namely: LOLITA GABATAN, POMPEYO GABATAN, PEREGRINO GABATAN,
REYNALDO GABATAN, NILA GABATAN AND JESUS JABINIS, RIORITA GABATAN TUMALA and FREIRA
GABATAN, Petitioners,
vs.
Hon. COURT OF APPEALS and LOURDES EVERO PACANA, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
Assailed and sought to be set aside in the instant petition for review on certiorari are the Decision1
dated April 28, 2000, and Resolution2 dated September 12, 2001 of the Court of Appeals (CA), in CA
G.R. CV No. 52273. The challenged Decision affirmed the decision3 of the Regional Trial Court (RTC) of
Cagayan de Oro City, Branch 19, dated October 20, 1995 in Civil Case No. 89-092, an action for Recovery
of Property and Ownership and Possession, thereat commenced by respondent Lourdes Evero Pacana
against petitioners, heirs of Teofilo Gabatan, Jesus Jabinis and Catalino Acantilado.
Subject of the present controversy is a 1.1062 hectare parcel of land, identified as Lot 3095 C-5 and
situated at Calinugan, Balulang, Cagayan de Oro City. This lot was declared for taxation in the name of
Juan Gabatan. In the complaint before the RTC, respondent alleged that she is the sole owner of Lot
3095 C-5, having inherited the same from her deceased mother, Hermogena Gabatan Evero
(Hermogena). Respondent further claimed that her mother, Hermogena, is the only child of Juan
Gabatan and his wife, Laureana Clarito. Respondent alleged that upon the death of Juan Gabatan, Lot
3095 C-5 was entrusted to his brother, Teofilo Gabatan (Teofilo), and Teofilo’s wife, Rita Gabatan, for
administration. It was also claimed that prior to her death Hermogena demanded for the return of the
land but to no avail. After Hermogena’s death, respondent also did the same but petitioners refused to
heed the numerous demands to surrender the subject property. According to respondent, when Teofilo
and his wife died, petitioners Jesus Jabinis and Catalino Acantilado took possession of the disputed land
despite respondent’s demands for them to vacate the same.
In their answer, petitioners denied that respondent’s mother Hermogena was the daughter of Juan
Gabatan with Laureana Clarito and that Hermogena or respondent is the rightful heir of Juan Gabatan.
Petitioners maintained that Juan Gabatan died single in 1934 and without any issue and that Juan was
survived by one brother and two sisters, namely: Teofilo (petitioners’ predecessor-in-interest), Macaria
and Justa. These siblings and/or their heirs, inherited the subject land from Juan Gabatan and have
been in actual, physical, open, public, adverse, continuous and uninterrupted possession thereof in the
concept of owners for more than fifty (50) years and enjoyed the fruits of the improvements thereon,
to the exclusion of the whole world including respondent. Petitioners clarified that Jesus Jabinis and
Catalino Acantilado have no interest in the subject land; the former is merely the husband of Teofilo’s
daughter while the latter is just a caretaker. Petitioners added that a similar case was previously filed by
respondent against Teofilo’s wife, Rita Vda. de Gabatan, on February 21, 1978, docketed as Civil Case
No. 5840 but the case was dismissed on May 3, 1983 for lack of interest. Finally, petitioners contended
that the complaint lacks or states no cause of action or, if there was any, the same has long prescribed
and/or has been barred by laches.
On June 20, 1989, the complaint was amended wherein the heirs of Teofilo were individually named, to
wit: Lolita Gabatan, Pompeyo Gabatan, Peregrino Gabatan, Reynaldo Gabatan, Nila Gabatan and Jesus
Jabinis, Riorita Gabatan Tumal and Freira Gabatan.
On July 30, 1990, petitioners filed an amended answer, additionally alleging that the disputed land was
already covered by OCT No. P-3316 in the name of the heirs of Juan Gabatan represented by petitioner
Riorita Gabatan (Teofilo’s daughter).
On October 20, 1995, the RTC rendered a decision in favor of respondent, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants,
declaring the plaintiff the owner of Lot No. 3095 C-5 situated at Calinugan, Balulang, Cagayan de Oro
City; and ordering the defendants represented by Riorita Gabatan Tumala to RECONVEY Original
Certificate of Title No. P-3316 in favor of plaintiff Lourdes Evero Pacana, free of any encumbrance;
ordering the defendants to pay ₱10,000.00 by way of moral damages; ₱10,000.00 as Attorney’s fees;
and ₱2,000.00 for litigation expenses.
SO ORDERED.4
Aggrieved, petitioners appealed to the CA whereat their recourse was docketed as CA-G.R. CV No.
52273.
On April 28, 2000, the CA rendered the herein challenged Decision affirming that of the RTC.
Dispositively, the Decision reads:
WHEREFORE, premises considered, the questioned decision of the lower court dated October 20, 1995
is hereby AFFIRMED. With costs against appellants.
SO ORDERED.
Discounting petitioners’ argument that respondent is not related to Juan Gabatan, the CA declared that
respondent’s claim of filiation with Juan Gabatan was sufficiently established during trial. Thus, the CA
echoed a long line of jurisprudence that findings of fact of the trial court are entitled to great weight
and are not disturbed except for cogent reasons, such as when the findings of fact are not supported by
evidence.
The CA likewise gave weight to the Deed of Absolute Sale5 executed by Macaria Gabatan de Abrogar,
Teofilo, Hermogena and heirs of Justa Gabatan, wherein Hermogena was identified as an heir of Juan
Gabatan:
x x x HERMOGENA GABATAN, of legal age, married, Filipino citizen and presently residing at
Kolambugan, Lanao del Norte, Philippines, as Heir of the deceased, JUAN GABATAN; x x x.
To the CA, the Deed of Absolute Sale on July 30, 1966 containing such declaration which was signed by
Teofilo and the latter’s nearest relatives by consanguinity, is a tangible proof that they acknowledged
Hermogena’s status as the daughter of Juan Gabatan. Applying Section 38, Rule 1306 of the Rules of
Court on the declaration against interest, the CA ruled that petitioners could not deny that even their
very own father, Teofilo formally recognized Hermogena’s right to heirship from Juan Gabatan which
ultimately passed on to respondent.
As to the issue of prescription, the CA ruled that petitioners’ possession of the disputed property could
not ripen into acquisitive prescription because their predecessor-in-interest, Teofilo, never held the
property in the concept of an owner.lawphil.net
Aggrieved, petitioners are now with this Court via the present recourse principally contending that the
CA committed the following reversible errors:
FIRST ERROR: The lower court erred in not declaring that Juan Gabatan died single and without issue;
SECOND ERROR: The lower court erred in declaring the plaintiff-appellee (respondent) as the sole and
surviving heir of Juan Gabatan, the only child of a certain Hermogena Clareto "GABATAN";
THIRD ERROR: The lower court erred in declaring that a certain Hermogena Clareto "GABATAN" is the
child and sole heir of Juan Gabatan;
FOURTH ERROR: The lower court erred in failing to appreciate by preponderance of evidence in favor of
the defendants-appellants (petitioners) claim that they and the heirs of Justa and Macaria both
surnamed Gabatan are the sole and surviving heirs of Juan Gabatan and, therefore, entitled to inherit
the land subject matter hereof;
FIFTH ERROR: The lower court erred in not declaring that the cause of action of plaintiff-appellee
(respondent) if any, has been barred by laches and/or prescription.7
Before proceeding to the merits of the case, we must pass upon certain preliminary matters.
In general, only questions of law may be raised in a petition for review on certiorari under Rule 45 of
the Rules of Court. Questions of fact cannot be the subject of this particular mode of appeal, for this
Court is not a trier of facts.8 It is not our function to examine and evaluate the probative value of the
evidence presented before the concerned tribunal upon which its impugned decision or resolution is
based.91avvphi1
However, there are established exceptions to the rule on conclusiveness of the findings of fact by the
lower courts, such as (1) when the findings are grounded entirely on speculation, surmises or
conjectures; (2) when the inference made is manifestly mistaken; (3) when there is grave abuse of
discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts
are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case,
or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the
findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific
evidence on which they are based; (9) when the facts set forth in the petition as well as in the
petitioner’s main and reply briefs are not disputed by the respondent; (10) when the findings of fact are
premised on the supposed absence of evidence and contradicted by the evidence on record; and (11)
when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties,
which, if properly considered, would justify a different conclusion.10
Moreover, our rules recognize the broad discretionary power of an appellate court to waive the lack of
proper assignment of errors and to consider errors not assigned. Thus, the Court is clothed with ample
authority to review rulings even if they are not assigned as errors in the appeal in these instances: (a)
grounds not assigned as errors but affecting jurisdiction over the subject matter; (b) matters not
assigned as errors on appeal but are evidently plain or clerical errors within contemplation of law; (c)
matters not assigned as errors on appeal but consideration of which is necessary in arriving at a just
decision and complete resolution of the case or to serve the interests of justice or to avoid dispensing
piecemeal justice; (d) matters not specifically assigned as errors on appeal but raised in the trial court
and are matters of record having some bearing on the issue submitted which the parties failed to raise
or which the lower court ignored; (e) matters not assigned as errors on appeal but closely related to an
error assigned; and (f) matters not assigned as errors on appeal but upon which the determination of a
question properly assigned, is dependent. 11
In the light of the foregoing established doctrines, we now proceed to resolve the merits of the case.
The respondent’s main cause of action in the court a quo is the recovery of ownership and possession
of property. It is undisputed that the subject property, Lot 3095 C-5, was owned by the deceased Juan
Gabatan, during his lifetime.12 Before us are two contending parties, both insisting to be the legal
heir(s) of the decedent.
Jurisprudence dictates that the determination of who are the legal heirs of the deceased must be made
in the proper special proceedings in court, and not in an ordinary suit for recovery of ownership and
possession of property. This must take precedence over the action for recovery of possession and
ownership. The Court has consistently ruled that the trial court cannot make a declaration of heirship in
the civil action for the reason that such a declaration can only be made in a special proceeding. Under
Section 3, Rule 1 of the 1997 Revised Rules of Court, a civil action is defined as one by which a party
sues another for the enforcement or protection of a right, or the prevention or redress of a wrong while
a special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact.
It is then decisively clear that the declaration of heirship can be made only in a special proceeding
inasmuch as the petitioners here are seeking the establishment of a status or right.
In the early case of Litam, et al. v. Rivera,14 this Court ruled that the declaration of heirship must be
made in a special proceeding, and not in an independent civil action. This doctrine was reiterated in
Solivio v. Court of Appeals where the Court held:

xxx where despite the pendency of the special proceedings for the settlement of the intestate estate of
the deceased Rafael Litam, the plaintiffs-appellants filed a civil action in which they claimed that they
were the children by a previous marriage of the deceased to a Chinese woman, hence, entitled to
inherit his one-half share of the conjugal properties acquired during his marriage to Marcosa Rivera, the
trial court in the civil case declared that the plaintiffs-appellants were not children of the deceased, that
the properties in question were paraphernal properties of his wife, Marcosa Rivera, and that the latter
was his only heir. On appeal to this Court, we ruled that ‘such declarations (that Marcosa Rivera was the
only heir of the decedent) is improper, in Civil Case No. 2071, it being within the exclusive competence
of the court in Special Proceedings No. 1537, in which it is not as yet, in issue, and, will not be,
ordinarily, in issue until the presentation of the project of partition.
In the more recent case of Milagros Joaquino v. Lourdes Reyes, the Court reiterated its ruling that
matters relating to the rights of filiation and heirship must be ventilated in the proper probate court in
a special proceeding instituted precisely for the purpose of determining such rights. Citing the case of
Agapay v. Palang, this Court held that the status of an illegitimate child who claimed to be an heir to a
decedent’s estate could not be adjudicated in an ordinary civil action which, as in this case, was for the
recovery of property.
However, we are not unmindful of our decision in Portugal v. Portugal-Beltran,18 where the Court
relaxed its rule and allowed the trial court in a proceeding for annulment of title to determine the
status of the party therein as heirs, to wit:
It appearing, however, that in the present case the only property of the intestate estate of Portugal is
the Caloocan parcel of land, to still subject it, under the circumstances of the case, to a special
proceeding which could be long, hence, not expeditious, just to establish the status of petitioners as
heirs is not only impractical; it is burdensome to the estate with the costs and expenses of an
administration proceeding. And it is superfluous in light of the fact that the parties to the civil case –
subject of the present case, could and had already in fact presented evidence before the trial court
which assumed jurisdiction over the case upon the issues it defined during pre-trial.
In fine, under the circumstances of the present case, there being no compelling reason to still subject
Portugal’s estate to administration proceedings since a determination of petitioners’ status as heirs
could be achieved in the civil case filed by petitioners (Vide Pereira v. Court of Appeals, 174 SCRA 154
[1989]; Intestate Estate of Mercado v. Magtibay, 96 Phil. 383 [1955]), the trial court should proceed to
evaluate the evidence presented by the parties during the trial and render a decision thereon upon the
issues it defined during pre-trial, x x x. (emphasis supplied)
Similarly, in the present case, there appears to be only one parcel of land being claimed by the
contending parties as their inheritance from Juan Gabatan. It would be more practical to dispense with
a separate special proceeding for the determination of the status of respondent as the sole heir of Juan
Gabatan, specially in light of the fact that the parties to Civil Case No. 89-092, had voluntarily submitted
the issue to the RTC and already presented their evidence regarding the issue of heirship in these
proceeding. Also the RTC assumed jurisdiction over the same and consequently rendered judgment
thereon.
We GRANT the petition.
After a meticulous review of the records of this case, we find insufficient and questionable the basis of
the RTC in conferring upon respondent the status of sole heir of Juan Gabatan.
Respondent, in asserting to be entitled to possession and ownership of the property, pinned her claim
entirely on her alleged status as sole heir of Juan Gabatan. It was incumbent upon her to present
preponderant evidence in support of her complaint.
Under the Civil Code, the filiation of legitimate children is established by any of the following:
ART. 265. The filiation of legitimate children is proved by the record of birth appearing in the Civil
Register, or by an authentic document or a final judgment.
ART. 266. In the absence of the titles indicated in the preceding article, the filiation shall be proved by
the continuous possession of status of a legitimate child.
ART. 267. In the absence of a record of birth, authentic document, final judgment or possession of
status, legitimate filiation may be proved by any other means allowed by the Rules of Court and special
laws.
Here, two conflicting birth certificates19 of respondent were presented at the RTC. Respondent, during
her direct testimony, presented and identified a purported certified true copy of her typewritten birth
certificate which indicated that her mother’s maiden name was "Hermogena Clarito Gabatan."
Petitioners, on the other hand, presented a certified true copy of respondent’s handwritten birth
certificate which differed from the copy presented by respondent. Among the differences was
respondent’s mother’s full maiden name which was indicated as "Hermogena Calarito" in the
handwritten birth certificate.
In resolving this particular issue, the trial court ruled in this wise:
The parties are trying to outdo with (sic) each other by presenting two conflicting Certificate (sic) of Live
Birth of plaintiff herein, Lourdes Evero Pacana, which are Exhibit "A" for the plaintiff and Exhibit "1" for
the defendants. Which of this (sic) is genuine, and which is falsified. These (sic) issue is crucial and
requires serious scrutiny. The Court is of the observation that Exhibit "A" for the plaintiff which is a
certified true copy is in due form and bears the "as is and where is" rule. It has the impression of the
original certificate. The forms (sic) is an old one used in the 1950’s. Her mother’s maiden name
appearing thereof is Hermogina (sic) Clarito Gabatan. While Exhibit "1", the entries found thereof (sic) is
handwritten which is very unusual and of dubious source. The form used is of latest vintage. The entry
on the space for mother’s maiden name is Hermogena Calarito. There seems to be an apparent attempt
to thwart plaintiff’s mother filiation with the omission of the surname Gabatan. Considering these
circumstances alone the Court is inclined to believe that Exhibit "A" for the plaintiff is far more genuine
and authentic certificate of live birth.20
Having carefully examined the questioned birth certificates, we simply cannot agree with the above-
quoted findings of the trial court. To begin with, Exhibit A, as the trial court noted, was an original
typewritten document, not a mere photocopy or facsimile. It uses a form of 1950’s vintage21 but this
Court is unable to concur in the trial court’s finding that Exhibit 122 was of a later vintage than Exhibit A
which was one of the trial court’s bases for doubting the authenticity of Exhibit 1. On the contrary, the
printed notation on the upper left hand corner of Exhibit 1 states "Municipal Form No. 102 – (Revised,
January 1945)" which makes it an older form than Exhibit A. Thus, the trial court’s finding regarding
which form was of more recent vintage was manifestly contradicted by the evidence on record. No
actual signature appears on Exhibit A except that of a certain Maximo P. Noriga, Deputy Local Civil
Registrar of the Office of the Local Civil Registrar, Cagayan de Oro City, who purportedly certified on July
6, 1977 that Exhibit A was a true copy of respondent’s birth certificate. The names of the attendant at
birth (Petra Sambaan) and the local civil registrar (J.L. Rivera) in 1950 were typewritten with the
notation "(Sgd.)" also merely typewritten beside their names. The words "A certified true copy: July 6,
1977" above the signature of Maximo P. Noriga on Exhibit A appear to be inscribed by the same
typewriter as the very entries in Exhibit A. It would seem that Exhibit A and the information stated
therein were prepared and entered only in 1977. Significantly, Maximo P. Noriga was never presented
as a witness to identify Exhibit A. Said document and the signature of Maximo P. Noriga therein were
identified by respondent herself whose self-serving testimony cannot be deemed sufficient
authentication of her birth certificate.
We cannot subscribe to the trial court’s view that since the entries in Exhibit 1 were handwritten,
Exhibit 1 was the one of dubious credibility. Verily, the certified true copies of the handwritten birth
certificate of respondent (petitioners’ Exhibits 1 and 8) were duly authenticated by two competent
witnesses; namely, Rosita Vidal (Ms. Vidal), Assistant Registration Officer of the Office of the City Civil
Registrar, Cagayan de Oro City and Maribeth E. Cacho (Ms. Cacho), Archivist of the National Statistics
Office (NSO), Sta. Mesa, Manila. Both witnesses testified that: (a) as part of their official duties they
have custody of birth records in their respective offices,23 and (b) the certified true copy of
respondent’s handwritten birth certificate is a faithful reproduction of the original birth certificate
registered in their respective offices.24 Ms. Vidal, during her testimony, even brought the original of
the handwritten birth certificate before the trial court and respondent’s counsel confirmed that the
certified true copy (which was eventually marked as Exhibit 1) was a faithful reproduction of the
original.25 Ms. Vidal likewise categorically testified that no other copy of respondent’s birth certificate
exists in their records except the handwritten birth certificate.26 Ms. Cacho, in turn, testified that the
original of respondent’s handwritten birth certificate found in the records of the NSO Manila (from
which Exhibit 8 was photocopied) was the one officially transmitted to their office by the Local Civil
Registry Office of Cagayan de Oro.27 Both Ms. Vidal and Ms. Cacho testified and brought their
respective offices’ copies of respondent’s birth certificate in compliance with subpoenas issued by the
trial court and there is no showing that they were motivated by ill will or bias in giving their testimonies.
Thus, between respondent’s Exhibit A and petitioners’ Exhibits 1 and 8, the latter documents deserve to
be given greater probative weight.
Even assuming purely for the sake of argument that the birth certificate presented by respondent
(Exhibit A) is a reliable document, the same on its face is insufficient to prove respondent’s filiation to
her alleged grandfather, Juan Gabatan. All that Exhibit A, if it had been credible and authentic, would
have proven was that respondent’s mother was a certain "Hermogena Clarito Gabatan." It does not
prove that same "Hermogena Clarito Gabatan" is the daughter of Juan Gabatan. Even the CA held that
the conflicting certificates of live birth of respondent submitted by the parties only proved the filiation
of respondent to Hermogena.28
It was absolutely crucial to respondent’s cause of action that she convincingly proves the filiation of her
mother to Juan Gabatan. To reiterate, to prove the relationship of respondent’s mother to Juan
Gabatan, our laws dictate that the best evidence of such familial tie was the record of birth appearing in
the Civil Register, or an authentic document or a final judgment. In the absence of these, respondent
should have presented proof that her mother enjoyed the continuous possession of the status of a
legitimate child. Only in the absence of these two classes of evidence is the respondent allowed to
present other proof admissible under the Rules of Court of her mother’s relationship to Juan Gabatan.
However, respondent’s mother’s (Hermogena’s) birth certificate, which would have been the best
evidence of Hermogena’s relationship to Juan Gabatan, was never offered as evidence at the RTC.
Neither did respondent present any authentic document or final judgment categorically evidencing
Hermogena’s relationship to Juan Gabatan.
Respondent relied on the testimony of her witnesses, Frisco Lawan, Felicisima Nagac Pacana and Cecilia
Nagac Villareal who testified that they personally knew Hermogena (respondent’s mother) and/or Juan
Gabatan, that they knew Juan Gabatan was married to Laureana Clarito and that Hermogena was the
child of Juan and Laureana. However, none of these witnesses had personal knowledge of the fact of
marriage of Juan to Laureana or the fact of birth of Hermogena to Juan and Laureana. They were not
yet born or were very young when Juan supposedly married Laureana or when Hermogena was born
and they all admitted that none of them were present at Juan and Laureana’s wedding or Hermogena’s
birth. These witnesses based their testimony on what they had been told by, or heard from, others as
young children. Their testimonies were, in a word, hearsay.
Other circumstances prevent us from giving full faith to respondent’s witnesses’ testimonies. The
records would show that they cannot be said to be credible and impartial witnesses. Frisco Lawan
testified that he was the son of Laureana by a man other than Juan Gabatan and was admittedly not at
all related to Juan Gabatan.29 His testimony regarding the relationships within the Gabatan family is
hardly reliable. As for Felicisima Nagac Pacana and Cecilia Nagac Villareal who are children of Justa
Gabatan Nagac,30 this Court is wary of according probative weight to their testimonies since
respondent admitted during her cross-examination that her (respondent’s) husband is the son of
Felicisima Nagac Pacana.31 In other words, although these witnesses are indeed blood relatives of
petitioners, they are also the mother and the aunt of respondent’s husband. They cannot be said to be
entirely disinterested in the outcome of the case.
Aside from the testimonies of respondent’s witnesses, both the RTC and the CA relied heavily on a
photocopy of a Deed of Absolute Sale32 (Exhibit H) presented by respondent and which appeared to be
signed by the siblings and the heirs of the siblings of Juan Gabatan. In this document involving the sale
of a lot different from Lot 3095 C-5, "Hermogena Gabatan as heir of the deceased Juan Gabatan" was
indicated as one of the vendors. The RTC deemed the statement therein as an affirmation or
recognition by Teofilo Gabatan, petitioners’ predecessor in interest, that Hermogena Gabatan was the
heir of Juan Gabatan.33 The CA considered the same statement as a declaration against interest on the
part of Teofilo Gabatan.34
However, the admission of this Deed of Absolute Sale, including its contents and the signatures therein,
as competent evidence was vigorously and repeatedly objected to by petitioners’ counsel for being a
mere photocopy and not being properly authenticated.35 After a close scrutiny of the said photocopy
of the Deed of Absolute Sale, this Court cannot uphold the admissibility of the same.
Under the best evidence rule, when the subject of inquiry is the contents of a document, no
evidence shall be admissible other than the original document itself.36 Although the best evidence rule
admits of exceptions and there are instances where the presentation of secondary evidence would be
allowed, such as when the original is lost or the original is a public record, the basis for the presentation
of secondary evidence must still be established. Thus, in Department of Education Culture and Sports v.
Del Rosario,37 we held that a party must first satisfactorily explain the loss of the best or primary
evidence before he can resort to secondary evidence. A party must first present to the court proof of
loss or other satisfactory explanation for non-production of the original instrument.
In the case at bar, a perusal of the transcript of the testimony of Felicisima Nagac Pacana (who
identified the photocopy of the Deed of Absolute Sale) plainly shows that she gave no testimony
regarding the whereabouts of the original, whether it was lost or whether it was recorded in any public
office.
There is an ostensible attempt to pass off Exhibit H as an admissible public document. For this,
respondent relied on the stamped notation on the photocopy of the deed that it is a certified true xerox
copy and said notation was signed by a certain Honesto P. Velez, Sr., Assessment Officer, who seems to
be an officer in the local assessor’s office. Regarding the authentication of public documents, the Rules
of Court38 provide that the record of public documents, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested by the officer having legal custody of
the record, or by his deputy.39 The attestation of the certifying officer must state, in substance, that
the copy is a correct copy of the original, or a specific part thereof, as the case may be.40
To begin with, no proof whatsoever was presented by respondent that an original of Exhibit H
was registered or exists in the records of the local assessor’s office. Furthermore, the stamped
certification of Honesto P. Velez is insufficient authentication of Exhibit H since Velez’s certification did
not state that Exhibit H was a true copy from the original. Even worse, Velez was not presented as a
witness to attest that Exhibit H was a true copy from the original. Indeed, it is highly doubtful that Velez
could have made such an attestation since the assessor’s office is not the official repository of original
notarized deeds of sale and could not have been the legal custodian contemplated in the rules.
It is the notary public who is mandated by law to keep an original of the Deed of Absolute Sale in his
notarial register and to forward the same to the proper court. It is the notary public or the proper court
that has custody of his notarial register that could have produced the original or a certified true copy
thereof. Instead, the Deed of Absolute Sale was identified by Felicisima Nagac Pacana who, despite
appearing to be a signatory thereto, is not a disinterested witness and as can be gleaned from her
testimony, she had no personal knowledge of the preparation of the alleged certified true copy of the
Deed of Absolute Sale. She did not even know who secured a copy of Exhibit H from the assessor’s
office.41 To be sure, the roundabout and defective manner of authentication of Exhibit H renders it
inadmissible for the purpose it was offered, i.e. as proof that Teofilo Gabatan acknowledged or
admitted the status of Hermogena Gabatan as heir of Juan Gabatan.
Even if we are to overlook the lack of proper authentication of Exhibit H and consider the same
admissible, it still nonetheless would have only provided proof that a certain Hermogena Gabatan was
the heir of Juan Gabatan. Exhibit H does not show the filiation of respondent to either Hermogena
Gabatan or Juan Gabatan. As discussed above, the only document that respondent produced to
demonstrate her filiation to "Hermogena Gabatan" (respondent’s Exhibit A) was successfully put in
doubt by contrary evidence presented by petitioners.
As for the issue of laches, we are inclined to likewise rule against respondent. According to
respondent’s own testimony,42 Juan Gabatan died sometime in 1933 and thus, the cause of action of
the heirs of Juan Gabatan to recover the decedent’s property from third parties or to quiet title to their
inheritance accrued in 1933. Yet, respondent and/or her mother Hermogena, if they were truly the
legal heirs of Juan Gabatan, did not assert their rights as such. It is only in 1978 that respondent filed
her first complaint to recover the subject property, docketed as Civil Case No. 5840, against Rita
Gabatan, the widow of Teofilo Gabatan.43 However, that case was dismissed without prejudice for
failure to prosecute.44 Again, respondent waited until 1989 to refile her cause of action, i.e. the present
case.45 She claimed that she waited until the death of Rita Gabatan to refile her case out of respect
because Rita was then already old.46
We cannot accept respondent’s flimsy reason. It is precisely because Rita Gabatan and her
contemporaries (who might have personal knowledge of the matters litigated in this case) were
advancing in age and might soon expire that respondent should have exerted every effort to preserve
valuable evidence and speedily litigate her claim. As we held in Republic of the Philippines v. Agunoy:
"Vigilantibus, sed non dormientibus, jura subveniunt, the law aids the vigilant, not those who sleep on
their rights…[O]ne may not sleep on a right while expecting to preserve it in its pristine purity."47
All in all, this Court finds that respondent dismally failed to substantiate, with convincing,
credible and independently verifiable proof, her assertion that she is the sole heir of Juan Gabatan and
thus, entitled to the property under litigation. Aggravating the weakness of her evidence were the
circumstances that (a) she did not come to court with clean hands for she presented a
tampered/altered, if not outright spurious, copy of her certificate of live birth and (b) she unreasonably
delayed the prosecution of her own cause of action. If the Court cannot now affirm her claim,
respondent has her own self to blame.
WHEREFORE, the petition is GRANTED. The Court of Appeals’ Decision in CA-G.R. CV No.
52273, affirming the decision of the Regional Trial Court in Civil Case No. 89-092, is hereby REVERSED
and SET ASIDE. The complaint and amended complaint in Civil Case No. 89-092 are DISMISSED for lack
of merit.
SO ORDERED.
G.R. No. 109373 March 20, 1995
PACIFIC BANKING CORPORATION EMPLOYEES ORGANIZATION, PAULA S. PAUG, and its officers and
members, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and VITALIANO N. NAÑAGAS II, as Liquidator of Pacific Banking
Corporation, respondents.
G.R. No. 112991 March 20, 1995
THE PRESIDENT OF THE PHILIPPINE DEPOSIT INSURANCE CORPORATION, as Liquidator of the Pacific
Banking Corporation , petitioner,
vs.
COURT OF APPEALS, HON. JUDGE REGINO T. VERIDIANO II, DEPUTY SHERIFF RAMON ENRIQUEZ and
ANG ENG JOO, ANG KEONG LAN and E.J ANG INT'L. LTD., represented by their Attorney-in-fact,
GONZALO C. SY, respondents.
MENDOZA, J.:
These cases have been consolidated because the principal question involved is the same: whether a
petition for liquidation under §29 of Rep. Act No. 265, otherwise known as the Central Bank Act, is a
special proceeding or an ordinary civil action. The Fifth and the Fourteenth Divisions of the Court of
Appeals reached opposite results on this question and consequently applied different periods for
appealing.
The facts are as follows:
I.
Proceedings in the CB and the RTC
On July 5, 1985, the Pacific Banking Corporation (PaBC) was placed under receivership by the Central
Bank of the Philippines pursuant to Resolution No. 699 of its Monetary Board. A few months later, it
was placed under liquidation1 and a Liquidator was appointed.2
On April 7, 1986, the Central Bank filed with the Regional Trial Court of Manila Branch 31, a petition
entitled "Petition for Assistance in the Liquidation of Pacific Banking Corporation." 3 The petition was
approved, after which creditors filed their claims with the court.
On May 17, 1991, a new Liquidator, Vitaliano N. Nañagas,4 President of the Philippine Deposit
Insurance Corporation (PDIC), was appointed by the Central Bank.
On March 13, 1989 the Pacific Banking Corporation Employees Organization (Union for short),
petitioner in G.R. No. 109373, filed a complaint-in-intervention seeking payment of holiday pay, 13th
month pay differential, salary increase differential, Christmas bonus, and cash equivalent of Sick Leave
Benefit due its members as employees of PaBC. In its order dated September 13, 1991, the trial court
ordered payment of the principal claims of the Union.5
The Liquidator received a copy of the order on September 16, 1991. On October 16, 1991, he filed a
Motion for Reconsideration and Clarification of the order. In his order of December 6, 1991, the judge
modified his September 13, 19916 but in effect denied the Liquidator's motion for reconsideration. This
order was received by the Liquidator on December 9, 1991. The following day, December 10, 1991, he
filed a Notice of Appeal and a Motion for Additional Time to Submit Record on Appeal. On December
23, 1991, another Notice of Appeal was filed by the Office of the Solicitor General in behalf of Nañagas.
In his order of February 10, 1992, respondent judge disallowed the Liquidator's Notice of Appeal on the
ground that it was late, i.e., more than 15 days after receipt of the decision. The judge declared his
September 13, 1991 order and subsequent orders to be final and executory and denied
reconsideration. On March 27, 1992, he granted the Union's Motion for issuance of a writ of Execution.
Ang Keong Lan and E.J. Ang Int'l., private respondents in G.R. No. 112991, likewise filed claims for the
payment of investment in the PaBC allegedly in the form of shares of stocks amounting to
US$2,531,632.18. The shares of stocks, consisting of 154,462 common shares, constituted 11% of the
total subscribed capital stock of the PaBC. They alleged that their claim constituted foreign exchange
capital investment entitled to preference in payment under the Foreign Investments Law.
In his order dated September 11, 1992, respondent judge of the RTC directed the Liquidator to pay
private respondents the total amount of their claim as preferred creditors.7
The Liquidator received the order on September 16, 1992. On September 30, 1992 he moved for
reconsideration, but his motion was denied by the court on October 2, 1992. He received the order
denying his Motion for Reconsideration on October 5, 1992. On October 14, 1992 he filed a Notice of
Appeal from the orders of September 16, 1992 and October 2, 1992. As in the case of the Union,
however, the judge ordered the Notice of Appeal stricken off the record on the ground that it had been
filed without authority of the Central Bank and beyond 15 days. In his order of October 28, 1992, the
judge directed the execution of his September 11, 1992 order granting the Stockholders/ Investors'
claim.
II.
Proceedings in the Court of Appeals
The Liquidator filed separate Petitions for Certiorari, Prohibition and Mandamus in the Court of Appeals
to set aside the orders of the trial court denying his appeal from the orders granting the claims of Union
and of the Stockholders/Investors. The two Divisions of the Court of Appeals, to which the cases were
separately raffled, rendered conflicting rulings.
In its decision of November 17, 1992 in CA-G.R. SP No. 27751 (now G.R. No. 09373) the Fifth Division8
held in the case of the Union that the proceeding before the trial court was a special proceeding and,
therefore, the period for appealing from any decision or final order rendered therein is 30 days. Since
the notice of appeal of the Liquidator was filed on the 30th day of his receipt of the decision granting
the Union's claims, the appeal was brought on time. The Fifth Division, therefore, set aside the orders of
the lower court and directed the latter to give due course to the appeal of the Liquidator and set the
Record on Appeal he had filed for hearing.
On the other hand, on December 16, 1993, the Fourteenth Division9 ruled in CA-G.R. SP No. 29351
(now G.R. No. 112991) in the case of the Stockholders/Investors that a liquidation proceeding is an
ordinary action. Therefore, the period for appealing from any decision or final order rendered therein is
15 days and that since the Liquidator's appeal notice was filed on the 23rd day of his receipt of the
order appealed from, deducting the period during which his motion for reconsideration was pending,
the notice of appeal was filed late. Accordingly, the Fourteenth Division dismissed the Liquidator's
petition.
III.
Present Proceedings
The Union and the Liquidator then separately filed petitions before this Court.
In G.R. No. 109373 the Union contends that:
1. The Court of Appeals acted without jurisdiction over the subject matter or nature of the suit.
2. The Court of Appeals gravely erred in taking cognizance of the petition for certiorari filed by
Nañagas who was without any legal authority to file it.
3. The Court of Appeals erred in concluding that the case is a special proceeding governed by
Rules 72 to 109 of the Revised Rules of Court.
4. The Court of Appeals erred seriously in concluding that the notice of appeal filed by Nañagas
was filed on time.
5. The Court of Appeals erred seriously in declaring that the second notice of appeal filed on
December 23, 1991 by the Solicitor General is a superfluity.
On the other hand, in G.R. No. 112991 the Liquidator contends that:
1. The Petition for Assistance in the Liquidation of the Pacific Banking Corporation s a Special
Proceeding case and/or one which allows multiple appeals, in which case the period of appeal is 30 days
and not 15 days from receipt of the order/judgment appealed from.
2. Private respondents are not creditors of PaBC but are plain stockholders whose right to receive
payment as such would accrue only after all the creditors of the insolvent bank have been paid.
3. The claim of private respondents in the amount of US$22,531,632.18 is not in the nature of
foreign investment as it is understood in law.
4. The claim of private respondents has not been clearly established and proved.
5. The issuance of a writ of execution against the assets of PaBC was made with grave abuse of
discretion.
The petitions in these cases must be dismissed.
First. As stated in the beginning, the principal question in these cases is whether a petition for
liquidation under §29 of Rep. Act No. 265 is in the nature of a special proceeding. If it is, then the period
of appeal is 30 days and the party appealing must, in addition to a notice of appeal, file with the trial
court a record on appeal in order to perfect his appeal. Otherwise, if a liquidation proceeding is an
ordinary action, the period of appeal is 15 days from notice of the decision or final order appealed from.
BP Blg. 129 provides:
§39. Appeals. — The period for appeal from final orders, resolutions, awards, judgments, or
decisions of any court in all cases shall be fifteen (15) days counted from the notice of the final order,
resolution, award, judgment or decision appealed from: Provided, however, that in habeas corpus cases
the period for appeal shall be forty-eight (48) hours from the notice of the judgment appealed from.
No record on appeal shall be required to take an appeal. In lieu thereof, the entire record shall be
transmitted with all the pages prominently numbered consecutively, together with an index of the
contents thereof.
This section shall not apply in appeals in special proceedings and in other cases wherein multiple
appeals are allowed under applicable provisions of the Rules of Court.
The Interim Rules and Guidelines to implement BP Blg. 129 provides:
19. Period of Appeals. —
(a) All appeals, except in habeas corpus cases and in the cases referred to in paragraph (b) hereof,
must be taken within fifteen (15) days from notice of the judgment, order, resolution or award
appealed from.
(b) In appeals in special proceedings in accordance with Rule 109 of the Rules of Court and other
cases wherein multiple appeals are allowed, the period of appeals shall be thirty (30) days, a record on
appeal being required.
The Fourteenth Division of the Court of Appeals held that the proceeding is an ordinary action similar to
an action for interpleader under Rule 63. 10 The Fourteenth Division stated:
The petition filed is akin to an interpleader under Rule 63 of the Rules of Court where there are
conflicting claimants or several claims upon the same subject matter, a person who claims no interest
thereon may file an action for interpleader to compel the claimants to "interplead" and litigate their
several claims among themselves. (Section I Rule 63).
An interpleader is in the category of a special civil action under Rule 62 which, like an ordinary action,
may be appealed only within fifteen (15) days from notice of the judgment or order appealed from.
Under Rule 62, the preceding rules covering ordinary civil actions which are not inconsistent with or
may serve to supplement the provisions of the rule relating to such civil actions are applicable to special
civil actions. This embraces Rule 41 covering appeals from the regional trial court to the Court of
Appeals.
xxx xxx xxx
Thus, under Section 1 Rule 2 of the Rules of Court, an action is defined as "an ordinary suit in a court of
justice by which one party prosecutes another for the enforcement or protection of a right or the
prevention or redress of a wrong." On the other hand, Section 2 of the same Rule states that "every
other remedy including one to establish the status or right of a party or a particular fact shall be by
special proceeding."
To our mind, from the aforequoted definitions of an action and a special proceeding, the petition for
assistance of the court in the liquidation of an asset of a bank is not "one to establish the status or right
of a party or a particular fact." Contrary to the submission of the petitioner, the petition is not intended
to establish the fact of insolvency of the bank. The insolvency of the bank had already been previously
determined by the Central Bank in accordance with Section 9 of the CB Act before the petition was
filed. All that needs to be done is to liquidate the assets of the bank and thus the assistance of the
respondent court is sought for that purpose.
It should be pointed out that this petition filed is not among the cases categorized as a special
proceeding under Section 1, Rule 72 of the Rules of Court, nor among the special proceedings that may
be appealed under Section 1, Rule 109 of the Rules.
We disagree with the foregoing view of the Fourteenth Division. Rule 2 of the Rules of Court provide:
§1. Action defined. — Action means an ordinary suit in a court of justice, by which the party
prosecutes another for the enforcement or protection of a right, or the prevention or redress of a
wrong.
§2. Special Proceeding Distinguished. — Every other remedy, including one to establish the status
or right of a party or a particular fact, shall be by special proceeding.
Elucidating the crucial distinction between an ordinary action and a special proceeding, Chief Justice
Moran states:" 11
Action is the act by which one sues another in a court of justice for the enforcement or protection of a
right, or the prevention or redress of a wrong while special proceeding is the act by which one seeks to
establish the status or right of a party, or a particular fact. Hence, action is distinguished from special
proceeding in that the former is a formal demand of a right by one against another, while the latter is
but a petition for a declaration of a status, right or fact. Where a party litigant seeks to recover property
from another, his remedy is to file an action. Where his purpose is to seek the appointment of a
guardian for an insane, his remedy is a special proceeding to establish the fact or status of insanity
calling for an appointment of guardianship.
Considering this distinction, a petition for liquidation of an insolvent corporation should be classified a
special proceeding and not an ordinary action. Such petition does not seek the enforcement or
protection of a right nor the prevention or redress of a wrong against a party. It does not pray for
affirmative relief for injury arising from a party's wrongful act or omission nor state a cause of action
that can be enforced against any person.
What it seeks is merely a declaration by the trial court of the corporation's insolvency so that its
creditors may be able to file their claims in the settlement of the corporation's debts and obligations.
Put in another way, the petition only seeks a declaration of the corporation's debts and obligations. Put
in another way, the petition only seeks a declaration of the corporation's state of insolvency and the
concomitant right of creditors and the order of payment of their claims in the disposition of the
corporation's assets.
Contrary to the rulings of the Fourteenth Division, liquidation proceedings do not resemble petitions for
interpleader. For one, an action for interpleader involves claims on a subject matter against a person
who has no interest therein. 12 This is not the case in a liquidation proceeding where the Liquidator, as
representative of the corporation, takes charge of its assets and liabilities for the benefit of the
creditors.13 He is thus charged with insuring that the assets of the corporation are paid only to rightful
claimants and in the order of payment provided by law.
Rather, a liquidation proceeding resembles the proceeding for the settlement of state of deceased
persons under Rules 73 to 91 of the Rules of Court. The two have a common purpose: the
determination of all the assets and the payment of all the debts and liabilities of the insolvent
corporation or the estate. The Liquidator and the administrator or executor are both charged with the
assets for the benefit of the claimants. In both instances, the liability of the corporation and the estate
is not disputed. The court's concern is with the declaration of creditors and their rights and the
determination of their order of payment.
Furthermore, as in the settlement of estates, multiple appeals are allowed in proceedings for
liquidation of an insolvent corporation. As the Fifth Division of the Court of Appeals, quoting the
Liquidator, correctly noted:
A liquidation proceeding is a single proceeding which consists of a number of cases properly classified
as "claims." It is basically a two-phased proceeding. The first phase is concerned with the approval and
disapproval of claims. Upon the approval of the petition seeking the assistance of the proper court in
the liquidation of a close entity, all money claims against the bank are required to be filed with the
liquidation court. This phase may end with the declaration by the liquidation court that the claim is not
proper or without basis. On the other hand, it may also end with the liquidation court allowing the
claim. In the latter case, the claim shall be classified whether it is ordinary or preferred, and thereafter
included Liquidator. In either case, the order allowing or disallowing a particular claim is final order, and
may be appealed by the party aggrieved thereby.
The second phase involves the approval by the Court of the distribution plan prepared by the duly
appointed liquidator. The distribution plan specifies in detail the total amount available for distribution
to creditors whose claim were earlier allowed. The Order finally disposes of the issue of how much
property is available for disposal. Moreover, it ushers in the final phase of the liquidation proceeding —
payment of all allowed claims in accordance with the order of legal priority and the approved
distribution plan.
Verily, the import of the final character of an Order of allowance or disallowance of a particular claim
cannot be overemphasized. It is the operative fact that constitutes a liquidation proceeding a "case
where multiple appeals are allowed by law." The issuance of an Order which, by its nature, affects only
the particular claims involved, and which may assume finality if no appeal is made therefrom, ipso facto
creates a situation where multiple appeals are allowed.
A liquidation proceeding is commenced by the filing of a single petition by the Solicitor General with a
court of competent jurisdiction entitled, "Petition for Assistance in the Liquidation of e.g., Pacific
Banking Corporation. All claims against the insolvent are required to be filed with the liquidation court.
Although the claims are litigated in the same proceeding, the treatment is individual. Each claim is
heard separately. And the Order issued relative to a particular claim applies only to said claim, leaving
the other claims unaffected, as each claim is considered separate and distinct from the others.
Obviously, in the event that an appeal from an Order allowing or disallowing a particular claim is made,
only said claim is affected, leaving the others to proceed with their ordinary course. In such case, the
original records of the proceeding are not elevated to the appellate court. They remain with the
liquidation court. In lieu of the original record, a record of appeal is instead required to be prepared and
transmitted to the appellate court.
Inevitably, multiple appeals are allowed in liquidation proceedings. Consequently, a record on appeal is
necessary in each and every appeal made. Hence, the period to appeal therefrom should be thirty (30)
days, a record on appeal being required. (Record pp. 162-164).
In G.R. No. 112991 (the case of the Stockholders/Investors), the Liquidator's notice of appeal was filed
on time, having been filed on the 23rd day of receipt of the order granting the claims of the
Stockholders/Investors. However, the Liquidator did not file a record on appeal with the result that he
failed to perfect his appeal. As already stated a record on appeal is required under the Interim Rules
and Guidelines in special proceedings and for cases where multiple appeals are allowed. The reason for
this is that the several claims are actually separate ones and a decision or final order with respect to any
claim can be appealed. Necessarily the original record on appeal must remain in the trial court where
other claims may still be pending.
Because of the Liquidator's failure to perfect his appeal, the order granting the claims of the
Stockholders/Investors became final. Consequently. the Fourteenth Division's decision dismissing the
Liquidator's Petition for Certiorari, Prohibition and Mandamus must be affirmed albeit for a different
reason.
On the other hand, in G.R. No. 109373 (case of the Labor Union), we find that the Fifth Division
correctly granted the Liquidator's Petition for Certiorari. Prohibition and Mandamus. As already noted,
the Liquidator filed a notice of appeal and a motion for extension to file a record on appeal on
December 10, 1991, i.e., within 30 days of his receipt of the order granting the Union's claim. Without
waiting for the resolution of his motion for extension, he filed on December 20, 1991 within the
extension sought a record on appeal. Respondent judge thus erred in disallowing the notice on appeal
and denying the Liquidator's motion for extension to file a record on appeal.
The Fifth Division of the Court of Appeals correctly granted the Liquidator's Petition for Certiorari,
Prohibition and Mandamus and its decision should, therefore, be affirmed.
Second. In G.R. No. 109373, The Union claims that under §29 of Rep. Act No. 265, the court merely
assists in adjudicating the claims of creditors, preserves the assets of the institution, and implements
the liquidation plan approved by the Monetary Board and that, therefore, as representative of the
Monetary Board, the Liquidator cannot question the order of the court or appeal from it. It contends
that since the Monetary Board had previously admitted PaBC's liability to the laborers by in fact setting
aside the amount of P112,234,292.44 for the payment of their claims, there was nothing else for the
Liquidator to do except to comply with the order of the court.
The Union's contention is untenable. In liquidation proceedings, the function of the trial court is not
limited to assisting in the implementation of the orders of the Monetary Board. Under the same section
(§29) of the law invoked by the Union, the court has authority to set aside the decision of the Monetary
Board "if there is a convincing proof that the action is plainly arbitrary and made in bad faith." 14 As this
Court held in Rural Bank of Buhi, Inc. v. Court of Appeals: 15
There is no question, that the action of the monetary Board in this regard may be subject to judicial
review. Thus, it has been held that the Court's may interfere with the Central Bank's exercise of
discretion in determining whether or not a distressed bank shall be supported or liquidated. Discretion
has its limits and has never been held to include arbitrariness, discrimination or bad faith (Ramos v.
Central Bank of the Philippines, 41 SCRA 567 [1971]).
In truth, the Liquidator is the representative not only of the Central Bank but also of the insolvent bank.
Under §§28A-29 of Rep. Act No. 265 he acts in behalf of the bank "personally or through counsel as he
may retain, in all actions or proceedings or against the corporation" and he has authority "to do
whatever may be necessary for these purposes." This authority includes the power to appeal from the
decisions or final orders of the court which he believes to be contrary to the interest of the bank.

Finally the Union contends that the notice of appeal and motion for extension of time to file the record
on appeal filed in behalf of the Central Bank was not filed by the office of the Solicitor General as
counsel for the Central Bank. This contention has no merit. On October 22, 1992, as Assistant Solicitor
General Cecilio O. Estoesta informed the trial court in March 27, 1992, the OSG had previously
authorized lawyers of the PDIC to prepare and sign pleadings in the case. 16 Conformably thereto the
Notice of Appeal and the Motion for Additional Time to submit Record on Appeal filed were jointly
signed by Solicitor Reynaldo I. Saludares in behalf of the OSG and by lawyers of the PDIC. 17

WHEREFORE, in G.R. No. 109373 and G.R. No 112991, the decisions appealed from are AFFIRMED.

SO ORDERED.