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COMMISSIONER OF G.R. No. 124557 On June 20, 1990, Lucas Adamson and AMC sold 131,897 common shares
INTERNAL REVENUE, of stock in Adamson and Adamson, Inc. (AAI) to APAC Holding Limited (APAC). The
Petitioner, shares were valued at P7,789,995.00.[1] On June 22, 1990, P159,363.21 was paid as
Present: capital gains tax for the transaction.
-versus- PUNO, C.J., Chairperson, On October 12, 1990, AMC sold to APAC Philippines, Inc. another 229,870
CARPIO, common shares of stock in AAIfor P17,718,360.00. AMC paid the capital gains tax
CORONA, of P352,242.96.
COURT OF APPEALS, COURT LEONARDO-DE CASTRO, and
OF TAX APPEALS, ADAMSON BERSAMIN, JJ. On October 15, 1993, the Commissioner issued a Notice of Taxpayer to AMC,
MANAGEMENT CORPORATION, Lucas G. Adamson, Therese June D. Adamson and Sara S. de los Reyes, informing
LUCAS G. ADAMSON, THERESE them of deficiencies on their payment of capital gains tax and Value Added Tax
JUNE D. ADAMSON, and SARA Promulgated: (VAT). The notice contained a schedule for preliminary conference.
S. DE LOS REYES, The events preceding G.R. No. 120935 are the following:
Respondents. May 21, 2009
On October 22, 1993, the Commissioner filed with the Department of Justice
x--------------------------------------------------x (DOJ) her Affidavit of Complaint[2] against AMC, Lucas G. Adamson, Therese June D.
Adamson and Sara S. de los Reyes for violation of Sections 45 (a) and (d)[3], and 110[4],
in relation to Section 100[5], as penalized under Section 255,[6] and for violation of
DECISION Section 253[7], in relation to Section 252 (b) and (d) of the National Internal Revenue
Code (NIRC).[8]
PUNO, C.J.: AMC, Lucas G. Adamson, Therese June D. Adamson and Sara S. de los
Reyes filed with the DOJ a motion to suspend proceedings on the ground of prejudicial
Before the Court are the consolidated cases of G.R. No. 120935 and G.R. No. 124557. question, pendency of a civil case with the Supreme Court, and pendency of their letter-
request for re-investigation with the Commissioner. After the preliminary investigation, 41919-24, May 30, 1980, 97 SCRA 877) TO THE CASE AT
State Prosecutor Alfredo P. Agcaoili found probable cause. The Motion for BAR.
Reconsideration against the findings of probable cause was denied by the prosecutor.
2. WHETHER OR NOT AN ASSESSMENT IS
On April 29, 1994, Lucas G. Adamson, Therese June D. Adamson and Sara REQUIRED UNDER THE SECOND CATEGORY OF THE
S. de los Reyes were charged before the Regional Trial Court (RTC) of Makati, Branch OFFENSE IN SECTION 253 OF THE NIRC.
150 in Criminal Case Nos. 94-1842 to 94-1846. They filed a Motion to Dismiss or
Suspend the Proceedings. They invoked the grounds that there was yet no final 3. WHETHER OR NOT THERE WAS A VALID
assessment of their tax liability, and there were still pending relevant Supreme Court ASSESSMENT MADE BY THE COMMISSIONER IN THE
and CTA cases. Initially, the trial court denied the motion. A Motion for Reconsideration CASE AT BAR.
was however filed, this time assailing the trial courts lack of jurisdiction over the nature
of the subject cases. On August 8, 1994, the trial court granted the Motion. It ruled that 4. WHETHER OR NOT THE FILING OF A CRIMINAL
the complaints for tax evasion filed by the Commissioner should be regarded as a COMPLAINT SERVES AS AN IMPLIED ASSESSMENT
decision of the Commissioner regarding the tax liabilities of Lucas G. Adamson, ON THE TAX LIABILITY OF THE TAXPAYER.
Therese June D. Adamson and Sara S. de los Reyes, and appealable to the CTA. It
further held that the said cases cannot proceed independently of the assessment case 5. WHETHER OR NOT THE FILING OF THE CRIMINAL
pending before the CTA, which has jurisdiction to determine the civil and criminal tax INFORMATION FOR TAX EVASION IN THE TRIAL
liability of the respondents therein. COURT IS PREMATURE BECAUSE THERE IS YET NO
BASIS FOR THE CRIMINAL CHARGE OF WILLFULL
On October 10, 1994, the Commissioner filed a Petition for Review with the INTENT TO EVADE THE PAYMENT OF A TAX.
Court of Appeals assailing the trial courts dismissal of the criminal cases. She averred
that it was not a condition prerequisite that a formal assessment should first be given 6. WHETHER OR NOT THE DOCTRINES LAID DOWN
to the private respondents before she may file the aforesaid criminal complaints against IN THE CASES OF YABES V. FLOJO (No. L-46954, July
them. She argued that the criminal complaints for tax evasion may proceed 20, 1982, 115 SCRA 286) AND CIR V. UNION SHIPPING
independently from the assessment cases pending before the CTA. CORP. (G.R. No. 66160, May 21, 1990, 185 SCRA
547) ARE APPLICABLE TO THE CASE AT BAR.
On March 21, 1995, the Court of Appeals reversed the trial courts decision
and reinstated the criminal complaints. The appellate court held that, in a criminal 7. WHETHER OR NOT THE COURT OF TAX
prosecution for tax evasion, assessment of tax deficiency is not required APPEALS HAS JURISDICTION OVER THE DISPUTE ON
because the offense of tax evasion is complete or consummated when the WHAT CONSTITUTES THE PROPER TAXES DUE FROM
offender has knowingly and willfully filed a fraudulent return with intent to evade THE TAXPAYER.
the tax.[9] It ruled that private respondents filed false and fraudulent returns with
intent to evade taxes, and acting thereupon, petitioner filed an Affidavit of
Complaint with the Department of Justice, without an accompanying assessment In parallel circumstances, the following events preceded G.R. No. 124557:
of the tax deficiency of private respondents, in order to commence criminal
action against the latter for tax evasion.[10] On December 1, 1993, AMC, Lucas G. Adamson, Therese June D. Adamson
and Sara S. de los Reyes filed a letter request for re-investigation with the
Private respondents filed a Motion for Reconsideration, but the trial court Commissioner of the Examiners Findings earlier issued by the Bureau of Internal
denied the motion on July 6, 1995.Thus, they filed the petition in G.R. No. 120935, Revenue (BIR), which pointed out the tax deficiencies.
raising the following issues:
On March 15, 1994 before the Commissioner could act on their letter-request,
1. WHETHER OR NOT THE RESPONDENT AMC, Lucas G. Adamson, Therese June D. Adamson and Sara S. de los Reyes filed a
HONORABLE COURT OF APPEALS ERRED IN Petition for Review with the CTA. They assailed the Commissioners finding of tax
APPLYING THE DOCTRINE IN UNGAB V. CUSI (Nos. L- evasion against them. The Commissioner moved to dismiss the petition, on the ground
that it was premature, as she had not yet issued a formal assessment of the tax liability
of therein petitioners.On September 19, 1994, the CTA denied the Motion to Dismiss. It
considered the criminal complaint filed by the Commissioner with the DOJ as an implied 2. WHETHER THERE IS BASIS FOR THE CRIMINAL
formal assessment, and the filing of the criminal informations with the RTC as a denial CASES FOR TAX EVASION TO PROCEED AGAINST
of petitioners protest regarding the tax deficiency. AMC, LUCAS G. ADAMSON, THERESE JUNE D.
ADAMSON AND SARA S. DE LOS REYES; and
The Commissioner repaired to the Court of Appeals on the ground that
the CTA acted with grave abuse of discretion. She contended that, with regard to the 3. WHETHER THE COURT OF TAX
protest provided under Section 229 of the NIRC, there must first be a formal APPEALS HAS JURISDICTION TO TAKE COGNIZANCE
assessment issued by the Commissioner, and it must be in accord with Section 6 of OF BOTH THE CIVIL AND THE CRIMINAL ASPECTS OF
Revenue Regulation No. 12-85. She maintained that she had not yet issued a formal THE TAX LIABILITY OF AMC, LUCAS G. ADAMSON,
assessment of tax liability, and the tax deficiency amounts mentioned in her criminal THERESE JUNE D. ADAMSON AND SARA S. DE LOS
complaint with the DOJ were given only to show the difference between the tax returns REYES.
filed and the audit findings of the revenue examiner.
The Court of Appeals sustained the CTAs denial of the Commissioners Motion The case of CIR v. Pascor Realty, et al.[11] is relevant. In this case, then
to Dismiss. Thus, the Commissioner filed the petition for review under G.R. No. BIR Commissioner Jose U. Ong authorized revenue officers to examine the books of
124557, raising the following issues: accounts and other accounting records of Pascor Realty and Development
Corporation (PRDC) for 1986, 1987 and 1988. This resulted in a recommendation for
1. WHETHER OR NOT THE INSTANT PETITION the issuance of an assessment in the amounts of P7,498,434.65 and P3,015,236.35
SHOULD BE DISMISSED FOR FAILURE TO COMPLY for the years 1986 and 1987, respectively.
WITH THE MANDATORY REQUIREMENT OF A
CERTIFICATION UNDER OATH AGAINST FORUM On March 1, 1995, the Commissioner filed a criminal complaint before the
SHOPPING; DOJ against PRDC, its President Rogelio A. Dio, and its Treasurer Virginia S. Dio,
alleging evasion of taxes in the total amount of P10,513,671.00.Private respondents
2. WHETHER OR NOT THE CRIMINAL CASE FOR TAX filed an Urgent Request for Reconsideration/Reinvestigation disputing the tax
EVASION IN THE CASE AT BAR CAN PROCEED assessment and tax liability.
WITHOUT AN ASSESSMENT;
The Commissioner denied the urgent request for
3. WHETHER OR NOT THE COMPLAINT FILED WITH reconsideration/reinvestigation because she had not yet issued a formal assessment.
THE DEPARTMENT OF JUSTICE CAN BE CONSTRUED
AS AN IMPLIED ASSESSMENT; and Private respondents then elevated the Decision of the Commissioner to the
CTA on a petition for review. The Commissioner filed a Motion to Dismiss the petition
4. WHETHER OR NOT THE COURT OF TAX on the ground that the CTA has no jurisdiction over the subject matter of the petition,
APPEALS HAS JURISDICTION TO ACT ON PRIVATE as there was yet no formal assessment issued against the petitioners. The CTA
RESPONDENTS PETITION FOR REVIEW FILED WITH denied the said motion to dismiss and ordered the Commissioner to file an answer
THE SAID COURT. within thirty (30) days. The Commissioner did not file an answer nor did she move to
reconsider the resolution. Instead, the Commissioner filed a petition for review of the
The issues in G.R. No. 124557 and G.R. No. 120935 can be compressed into CTA decision with the Court of Appeals. The Court of Appeals upheld the CTA order.
three: However, this Court reversed the Court of Appeals decision and the CTA order, and
ordered the dismissal of the petition. We held:
1. WHETHER THE COMMISSIONER HAS ALREADY
RENDERED AN ASSESSMENT (FORMAL OR An assessment contains not only a computation of tax liabilities,
OTHERWISE) OF THE TAX LIABILITY OF AMC, LUCAS but also a demand for payment within a prescribed period. It also
G. ADAMSON, THERESE JUNE D. ADAMSON AND signals the time when penalties and interests begin to accrue against
SARA S. DE LOS REYES; the taxpayer. To enable the taxpayer to determine his remedies
thereon, due process requires that it must be served on and received only when the collector of internal revenue releases, mails or sends
by the taxpayer.Accordingly, an affidavit, which was executed by such notice to the taxpayer.[17]
revenue officers stating the tax liabilities of a taxpayer and attached
to a criminal complaint for tax evasion, cannot be deemed an In the present case, the revenue officers Affidavit merely
assessment that can be questioned before the Court of Tax Appeals. contained a computation of respondents tax liability. It did not state
a demand or a period for payment. Worse, it was addressed to the
Neither the NIRC nor the revenue regulations governing the justice secretary, not to the taxpayers.
protest of assessments[12] provide a specific definition or form of an
assessment. However, the NIRC defines the specific functions and Respondents maintain that an assessment, in relation to
effects of an assessment. To consider the affidavit attached to the taxation, is simply understood to mean:
Complaint as a proper assessment is to subvert the nature of an
assessment and to set a bad precedent that will prejudice innocent A notice to the effect that the amount
taxpayers. therein stated is due as tax and a demand for
payment thereof.[18]
True, as pointed out by the private respondents, an assessment
Fixes the liability of the taxpayer and
informs the taxpayer that he or she has tax liabilities.But not all
ascertains the facts and furnishes the data for the
documents coming from the BIR containing a computation of the tax
proper presentation of tax rolls.[19]
liability can be deemed assessments.
No costs.
SO ORDERED.
(A)(1), (3) and (20) of the Civil Service Law. Based on this complaint, a case for
Violations of R.A. No. 1379,[4] Art. 183 of the Revised Penal Code, and Sec. 8 in relation
EN BANC to Sec. 11 of R.A. No. 6713, docketed as Case
Acting on the Republics prayer for issuance of a writ of preliminary attachment, the
Promulgated: Sandiganbayan issued the questioned Resolution granting the relief prayed for. The
June 22, 2005 corresponding writ of preliminary attachment was subsequently issued on 2 November
x ------------------------------------------------------------------ x 2004 upon the filing of a bond by the Republic. On 17 November 2004, petitioner (as
respondent a quo) filed a Motion to Dismiss[8] in Civil Case No. 0193 on the ground of
DECISION lack of jurisdiction of the Sandiganbayan over forfeiture proceedings under R.A. No.
TINGA, J.: 1379. On even date, petitioner filed the present Petition, raising the same issue of lack
jurisdiction on the part of the Sandiganbayan.
Petitioner Major General Carlos F. Garcia was the Deputy Chief of Staff for
Comptrollership, J6, of the Armed Forces of the Philippines. Petitioner filed
this Petition for certiorari and prohibition under Rule 65 to annul and set aside public
respondent Sandiganbayans Resolution[1] dated 29 October 2004 and Writ of
Preliminary Attachment[2] dated 2 November 2004, and to enjoin public respondents
Sandiganbayan and Office of the Ombudsman from further proceeding with any action Petitioner argues in this Petition that the Sandiganbayan is without jurisdiction over the
relating to the enforcement of the assailed issuances. civil action for forfeiture of unlawfully acquired properties under R.A. No. 1379,
maintaining that such jurisdiction actually resides in the Regional Trial Courts as
On 27 September 2004, Atty. Maria Olivia Elena A. Roxas, Graft Investigation and provided under Sec. 2[9] of the law, and that the jurisdiction of the Sandiganbayan in
Prosecution Officer II of the Field Investigation Office of the Office of the Ombudsman, civil actions pertains only to separate actions for recovery of unlawfully acquired
after due investigation, filed a complaint against petitioner with public respondent Office property against President Marcos, his family, and cronies as can be gleaned from Sec.
of the Ombudsman, for violation of Sec. 8, in relation to Sec. 11 of Republic Act (R.A.) 4 of Presidential Decree (P.D.) No. 1606,[10] as amended, and Executive Orders (E.O.)
No. 6713,[3] violation of Art. 183 of the Revised Penal Code, and violation of Section 52 Nos. 14[11] and 14-A.[12]
In their Comment,[16] respondents submit the contrary, noting that the issues raised by
Theorizing that the Sandiganbayan, under P.D. No. 1606 or the law creating it, was petitioner are not novel as these have been settled in Republic vs.
intended principally as a criminal court, with no jurisdiction over separate civil actions, Sandiganbayan[17] which categorically ruled that there is no issue that jurisdiction over
petitioner points to President Corazon C. Aquinos issuances after the EDSA violations of [R.A.] Nos. 3019 and 1379 now rests with the
Revolution, namely: (1) E.O. No. 1 creating the Presidential Commission on Good Sandiganbayan.[18] Respondents argue that under the Constitution[19] and prevailing
Government (PCGG) for the recovery of ill-gotten wealth amassed by President statutes, the Sandiganbayan is vested with authority and jurisdiction over the petition
Ferdinand E. Marcos, his family and cronies, (2) E.O. No. 14 which amended P.D. No. for forfeiture under R.A. No. 1379 filed against petitioner. Respondents point to Sec.
1606 and R.A. No. 1379 by transferring to the Sandiganbayan jurisdiction over civil 4.a (1) (d) of P.D. 1606, as amended, as the prevailing law on the jurisdiction of
actions filed against President Marcos, his family and cronies based on R.A. No. 1379, the Sandiganbayan, thus:
the Civil Code and other existing laws, and (3) E.O. No. 14-A whch further amended
E.O. No. 14, P.D. No. 1606 and R.A. No. 1379 by providing that the civil action under Sec. 4. Jurisdiction.The Sandiganbayan shall exercise exclusive
R.A. No. 1379 which may be filed against President Marcos, his family and cronies, original jurisdiction in all cases involving:
may proceed independently of the criminal action.
a. Violations of Republic Act No. 3019, as
Petitioner gathers from the presidential issuances that the Sandiganbayan has amended, otherwise known as the Anti-Graft and Corrupt Practices
been granted jurisdiction only over the separate civil actions filed against President Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII, Book
Marcos, his family and cronies, regardless of whether these civil actions were for II of the Revised Penal Code, where one or more of the accused are
recovery of unlawfully acquired property under R.A. No. 1379 or for restitution, officials occupying the following positions in the government, whether
reparation of damages or indemnification for consequential damages or other civil in a permanent, acting or interim capacity, at the time of the
actions under the Civil Code or other existing laws. According to petitioner, nowhere in commission of the offense:
the amendments to P.D. No. 1606 and R.A. No. 1379 does it provide that the
Sandiganbayan has been vested jurisdiction over separate civil actions other than (1) Officials of the executive branch occupying the
those filed against President Marcos, his family and cronies. [13] Hence, the positions of regional director and higher, otherwise classified
Sandiganbayan has no jurisdiction over any separate civil action against him, even if as Grade 27 and higher of the Compensation and Position
such separate civil action is for recovery of unlawfully acquired property under R.A. No. Classification Act of 1989 (Republic Act No. 6758), specifically
1379. including:
Petitioner further contends that in any event, the petition for forfeiture filed against him .
is fatally defective for failing to comply with the jurisdictional requirements under Sec.
2, R.A. No. 1379, [14] namely: (a) an inquiry similar to a preliminary investigation (d) Philippine army and air force colonels, naval
conducted by the prosecution arm of the government; (b) a certification to the Solicitor captains, and all officers of higher ranks;
General that there is reasonable ground to believe that there has been violation of the
said law and that respondent is guilty thereof; and (c) an action filed by the Solicitor .
General on behalf of the Republic of the Philippines.[15] He argues that only informations As petitioner falls squarely under the category of public positions covered by the
for perjury were filed and there has been no information filed against him for violation aforestated law, the petition for forfeiture should be within the jurisdiction of the
of R.A. No. 1379. Consequently, he maintains, it is impossible for the Office of the Sandiganbayan.
Ombudsman to certify that there is reasonable ground to believe that a violation of the
said law had been committed and that he is guilty thereof. The petition is also Respondents also brush off as inconsequential petitioners argument that the petition
supposedly bereft of the required certification which should be made by the for forfeiture is civil in nature and the Sandiganbayan, having allegedly no jurisdiction
investigating City or Provincial Fiscal (now Prosecutor) to the Solicitor General. over civil actions, therefore has no jurisdiction over the petition, since the same P.D.
Furthermore, he opines that it should have been the Office of the Solicitor General No. 1606 encompasses all cases involving violations of R.A. No. 3019, irrespective of
which filed the petition and not the Office of the Ombudsman as in this case. The whether these cases are civil or criminal in nature. The petition for forfeiture should not
petition being fatally defective, the same should have been dismissed, petitioner be confused with the cases initiated and prosecuted by the PCGG pursuant to E.O.
concludes. Nos. 14 and 14-A, as these are dealt with under a separate subparagraph of P.D. No.
1606, as amended, in particular Sec. 4.c thereof. [20] Further, respondents stress that
E.O. Nos. 14 and 14-A exclusively apply to actions for recovery of unlawfully acquired Petitioner refutes these arguments in his Reply[31] and enunciates that the
property against President Marcos, his family, and cronies. It would also not be Sandiganbayans criminal jurisdiction is separate and distinct from its civil jurisdiction,
accurate to refer to a petition for forfeiture as a civil case, since it has been held that and that the Sandiganbayans jurisdiction over forfeiture cases had been removed
petitions for forfeiture are deemed criminal or penal and that it is only the proceeding without subsequent amendments expressly restoring such civil jurisdiction. His thesis
for its prosecution which is civil in nature.[21] is that R.A. No. 1379 is a special law which is primarily civil and remedial in nature, the
clear intent of which is to separate the prima facie determination in forfeiture
The Office of the Ombudsman filed a separate Comment,[22] likewise relying proceedings from the litigation of the civil action. This intent is further demonstrated by
on Republic v. Sandiganbayan to argue that the Sandiganbayan has jurisdiction over Sec. 2 of R.A. No. 1379 which grants the authority to make an inquiry similar to a
the petition for forfeiture filed against petitioner. The Ombudsman explains that the preliminary investigation being done by the City or Provincial Fiscal, and the authority
grant to the Sandiganbayan of jurisdiction over violations of R.A. No. 1379 did not to file a petition for forfeiture to the Solicitor General.
change even under the amendments of
Petitioner also points out in his Reply[32] to the Comment of the Office of the
Ombudsman, that the use of the phrase violations of [R.A.] Nos. 3019 and 1379 in P.D.
No. 1606, as amended, implies jurisdiction over cases which are principally criminal or
R.A. No. 7975[23] and R.A. No. 8294[24], although it came to be limited to cases involving penal in nature because the concept of violation of certain laws necessarily carries with
high-ranking public officials as enumerated therein, including Philippine army and air it the concept of imposition of penalties for such violation. Hence, when reference was
force colonels, naval captains, and all other officers of higher rank, to which petitioner made to violations of [R.A.] Nos. 3019 and 1379, the only jurisdiction that can
belongs.[25] supposedly be implied is criminal jurisdiction, not civil jurisdiction, thereby highlighting
respondent Sandiganbayans lack of jurisdiction over the civil case for forfeiture of ill-
In arguing that it has authority to investigate and initiate forfeiture proceedings gotten wealth. Of course, petitioner does not rule out cases where the crime carries
against petitioner, the Office of the Ombudsman refers to both the Constitution [26] and with it the corresponding civil liability such that when the criminal action is instituted,
R.A. No. 6770.[27] The constitutional power of investigation of the Office of the the civil action for enforcement of the civil liability is impliedly instituted with it, and the
Ombudsman is plenary and unqualified; its power to investigate any act of a public court having jurisdiction over the criminal action also acquires jurisdiction over the
official or employee which appears to be illegal, unjust, improper or inefficient covers ancillary civil action. However, petitioner argues that the action for forfeiture subject of
the unlawful acquisition of wealth by public officials as defined under R.A. No. 1379. this case is not the ancillary civil action impliedly instituted with the criminal action.
Furthermore, Sec. 15 (11)[28] of R.A. No. 6770 expressly empowers the Ombudsman Rather, the petition for forfeiture is an independent civil action over which the
to investigate and prosecute such cases of unlawful acquisition of wealth. This authority Sandiganbayan has no jurisdiction. Petitioner points to P.D. No. 1606, as amended,
of the Ombudsman has been affirmed also in Republic vs. Sandiganbayan.[29] which treats of independent civil actions only in the last paragraph of Sec. 4 thereof:
The Office of the Ombudsman then refutes petitioners allegation that the petition for
forfeiture filed against him failed to comply with the procedural and formal requirements Any provisions of law or Rules of Court to the contrary
under the law. It asserts that all the requirements of R.A. No. 1379 have been strictly notwithstanding, the criminal action and the corresponding civil
complied with. An inquiry similar to a preliminary investigation was conducted by a action for the recovery of civil liability shall at all times be
Prosecution Officer of the Office of the Ombudsman. The participation of the Office of simultaneously instituted with, and jointly determined in, the same
the Solicitor General, claimed by petitioner to be necessary, is actually no longer proceeding by the Sandiganbayan or the appropriate courts, the filing
required since the Office of the Ombudsman is endowed with the authority to of the criminal action being deemed to necessarily carry with it the
investigate and prosecute the case as discussed above.[30] filing of the civil action, and no right to reserve the filing of such civil
action separately from the criminal action shall be
In addition, the Office of the Ombudsman alleges that the present Petition should be recognized: Provided, however, That where the civil action had
dismissed for blatant forum-shopping. Even as petitioner had filed a Motion to heretofore been filed separately but judgment therein has not yet
Dismiss as regards the petition for forfeiture (docketed as Civil Case No. 0193) before been rendered, and the criminal case is hereafter filed with the
the Sandiganbayan on the ground of the Sandiganbayans alleged lack of jurisdiction, Sandiganbayan or the appropriate court, said civil action shall be
he filed the instant Petition raising exactly the same issue, even though the Motion to transferred to the Sandiganbayan or the appropriate court, as the
Dismiss in Civil Case No. 0193 is still pending resolution. Worse, it appears that case may be, for consolidation and joint determination with the
the Motion to Dismiss and the instant Petition were filed on the same day, 17 criminal action, otherwise the separate civil action shall be deemed
November 2004. abandoned.
Under R.A. No. 8249, the Sandiganbayan is vested with exclusive original
Petitioner however did not raise any argument to refute the charge of forum-shopping. jurisdiction in all cases involving violations of R.A. No. 3019, R.A. No. 1379, and
Chapter II, Sec. 2, Title VII, Book II of the Revised Penal Code, where one or more of
The issues for resolution are: (a) whether the Sandiganbayan has jurisdiction over the accused are officials occupying the following positions whether in a permanent,
petitions for forfeiture under R.A. No. 1379; (b) whether the Office of the Ombudsman acting or interim capacity, at the time of the commission of the offense: (1) Officials of
has the authority to investigate, initiate and prosecute such petitions for forfeiture; and the executive branch occupying the positions of regional director and higher, otherwise
(c) whether petitioner is guilty of forum-shopping. classified as Grade '27' and higher, of the Compensation and Position Classification
Act of 989 (R.A. No. 6758), specifically including: (a) Provincial governors, vice-
The petition is patently without merit. It should be dismissed. governors, members of the sangguniang panlalawigan, and provincial treasurers,
assessors, engineers, and other city department heads; (b) City mayor, vice-mayors,
The seminal decision of Republic v. Sandiganbayan[33] squarely rules on the issues members of the sangguniang panlungsod, city treasurers, assessors, engineers, and
raised by petitioner concerning the jurisdiction of the Sandiganbayan and the authority other city department heads; (c) Officials of the diplomatic service occupying the
of the Office of the Ombudsman. After reviewing the legislative history of the position of consul and higher; (d) Philippine army and air force colonels, naval captains,
Sandiganbayan and the Office of the Ombudsman, the Court therein resolved the and all officers of higher rank; (e) Officers of the Philippine National Police while
question of jurisdiction by the Sandiganbayan over violations of R.A. No. 3019 and R.A. occupying the position of provincial director and those holding the rank of senior
No. 1379. Originally, it was the Solicitor General who was authorized to initiate forfeiture superintended or higher; (f) City and provincial prosecutors and their assistants, and
proceedings before the then Court of First Instance of the city or province where the officials and prosecutors in the Office of the Ombudsman and special prosecutor; (g)
public officer or employee resides or holds office, pursuant to Sec. 2 of R.A. No. Presidents, directors or trustees, or managers of government-owned or controlled
1379.Upon the creation of the Sandiganbayan pursuant to P.D. No. 1486, [34] original corporations, state universities or educational institutions or foundations; (2) Members
and exclusive jurisdiction over such violations was vested in the said court. [35] P.D. No. of Congress and officials thereof classified as Grade '27' and up under the
1606[36] was later issued expressly repealing P.D. No. 1486, as well as modifying the Compensation and Position Classification Act of 1989; (3) Members of the judiciary
jurisdiction of the Sandiganbayan by removing its jurisdiction over civil actions brought without prejudice to the provisions of the Constitution; (4) Chairmen and members of
in connection with crimes within the exclusive jurisdiction of said court. [37] Such civil Constitutional Commission, without prejudice to the provisions of the Constitution; and
actions removed from the jurisdiction of the Sandigabayan include those for restitution (5) All other national and local officials classified as Grade '27' and higher under the
or reparation of damages, recovery of instruments and effects of the crime, civil actions Compensation and Position Classification Act of 1989.[45]
under Articles 32 and 34 of the Civil Code, and forfeiture proceedings provided for
under R.A. No. 1379.[38] In the face of the prevailing jurisprudence and the present state of statutory law on the
jurisdiction of the Sandiganbayan, petitioners argumentthat the Sandiganbayan has no
Subsequently, Batas Pambansa Blg. 129[39] abolished the concurrent jurisdiction over the petition for forfeiture it being civil in nature and the Sandiganbayan
jurisdiction of the Sandiganbayan and the regular courts and expanded the exclusive allegedly having no jurisdiction over civil actionscollapses completely.
original jurisdiction of the Sandiganbayan over the offenses enumerated in Sec. 4 of
P.D. No. 1606 to embrace all such offenses irrespective of the imposable penalty. Since The civil nature of an action for forfeiture was first recognized in Republic v.
this change resulted in the proliferation of the filing of cases before the Sandiganbayan Sandiganbayan, thus: [T]he rule is settled that forfeiture proceedings are actions in
where the offense charged is punishable by a penalty not higher than prision rem and, therefore, civil in nature.[46] Then, Almeda, Sr.
correccional or its equivalent, and such cases not being of a serious nature, P.D. No. v. Perez,[47] followed, holding that the proceedings under R.A. No. 1379 do not
1606 was again amended by P.D. No. 1860[40] and eventually by P.D. No. 1861.[41] terminate in the imposition of a penalty but merely in the forfeiture of the properties
illegally acquired in favor of the State. It noted that the
On the foregoing premises alone, the Court in Republic v. Sandiganbayan, deduced procedure outlined in the law leading to forfeiture is that provided for in a civil action.[48]
that jurisdiction over violations of R.A. No. 3019 and 1379 is lodged with the
Sandiganbayan.[42] It could not have taken into consideration R.A. No. 7975 [43] and R.A. However, the Court has had occasion to rule that forfeiture of illegally acquired
No. 8249[44] since both statutes which also amended the jurisdiction of the property partakes the nature of a penalty. In Cabal v. Kapunan, Jr.,[49] the Court cited
Sandiganbayan were not yet enacted at the time. The subsequent enactments only voluminous authorities in support of its declaration of the criminal or penal nature of
serve to buttress the conclusion that the Sandiganbayan indeed has jurisdiction over forfeiture proceedings, viz:
violations of R.A. No. 1379.
In a strict signification, a forfeiture is a divestiture of property against the owner, as well as against the goods; for it is his breach
without compensation, in consequence of a default or an offense, of the laws which has to be proved to establish the forfeiture and his
and the term is used in such a sense in this article. A forfeiture, as property is sought to be forfeited." (15 Am. Jur., Sec. 104, p. 368) [50]
thus defined, is imposed by way of punishment not by the mere
convention of the parties, but by the lawmaking power, to insure a
prescribed course of conduct. It is a method deemed necessary by Cabal v. Kapunan modified the earlier ruling in Almeda, Sr. v. Perez.[51] The Court
the legislature to restrain the commission of an offense and to aid in in Cabal held that the doctrine laid down in Almeda refers to the purely procedural
the prevention of such an offense. The effect of such a forfeiture is aspect of the forfeiture proceedings and has no bearing on the substantial rights of
to transfer the title to the specific thing from the owner to the respondents, particularly their constitutional right against self-incrimination.[52] This was
sovereign power. (23 Am. Jur. 599) reaffirmed and reiterated in
On 10 December 1978, P.D. No. 1606 was enacted expressly repealing P.D. No. 1486.
prosecute petitions for forfeiture under R.A. No. 1379. This was the main issue resolved Issued on the same date was P.D. No. 1607 [66] which amended the powers of the
in Republic v. Sandiganbayan.[59] Tanodbayan to investigate administrative complaints [67] and created the Office of the
Chief Special Prosecutor.[68] P.D. No. 1607 provided said Office of the Chief Special
Under Sec. 2 of R.A. No. 1379, it was the Solicitor General who was Prosecutor with exclusive authority to conduct preliminary investigation of all cases
authorized to initiate forfeiture proceedings before the then Courts of First Instance. cognizable by the Sandiganbayan, file informations therefor, and direct and control the
P.D. No. Decree No. 1486 was later issued on 11 June 1978 vesting the prosecution of said cases.[69] P.D. No. 1607 also removed from the Chief Special
Sandiganbayan with jurisdiction over R.A. No. 1379 forfeiture proceedings. Sec. 12 of Prosecutor the authority to file actions for forfeiture under R.A. No. 1379.[70]
P.D. No. 1486 gave the Chief Special Prosecutor the authority to file and prosecute The rule is that when a law which expressly repeals a prior law is itself
forfeiture cases. This may be taken as an implied repeal by P.D. No. 1486 of the repealed, the law first repealed shall not be thereby revived unless expressly so
jurisdiction of the former Courts of First Instance and the authority of the Solicitor provided. From this it may fairly be inferred that the old rule continues in force where a
General to file a petition for forfeiture under Sec. 2 of R.A. No. 1379 by transferring said law which repeals a prior law, not expressly but by implication, is itself repealed; and
jurisdiction and authority to the Sandiganbayan and the Chief Special Prosecutor, that in such cases the repeal of the repealing law revives the prior law, unless the
respectively.[60] An implied repeal is one which takes place when a new law contains language of the repealing statute provides otherwise. [71] Hence, the repeal of P.D. No.
some provisions which are contrary to, but do not expressly repeal those of a former 1486 by P.D. No. 1606 necessarily revived the authority of the Solicitor General to file
law.[61] As a rule, repeals by implication are not favored and will not be so declared a petition for forfeiture under R.A. No. 1379, but not the jurisdiction of the Courts of First
unless it be manifest that the legislature so intended. Before such repeal is deemed to Instance over the case nor the authority of the Provincial or City Fiscals (now
exist, it must be shown that the statutes or statutory provisions deal with the same Prosecutors) to conduct the preliminary investigation therefore, since said powers at
subject matter and that the latter be inconsistent with the former. The language used in that time remained in the Sandiganbayan and the Chief Special Prosecutor. [72]
the latter statute must be such as to render it irreconcilable with what had been formerly
enacted. An inconsistency that falls short of that standard does not suffice. What is The Tanodbayans authority was further expanded by P.D. No. 1630 [73] issued on 18
needed is a manifest indication of the legislative purpose to repeal. [62] July 1990. Among other things, the Tanodbayan was given the exclusive authority to
conduct preliminary investigation of all cases cognizable by the Sandiganbayan, to file
P.D. No. 1486 contains a repealing clause which provides that [A]ny provision informations therefore and to direct and control the prosecution of said cases. [74] The
of law, order, rule or regulation inconsistent with the provisions of this Decree is hereby power to conduct the necessary investigation and to file and prosecute the
repealed or modified accordingly.[63] This is not an express repealing clause because it corresponding criminal and administrative cases before the Sandiganbayan or the
fails to identify or designate the statutes that are intended to be repealed. Rather, it is proper court or administrative agency against any public personnel who has acted in a
a clause which predicates the intended repeal upon the condition that a substantial manner warranting criminal and disciplinary action or proceedings was also transferred
conflict must be found in existing and prior laws.[64] from the Chief Special Prosecutor to the Tanodbayan.[75]
The conflict between P.D. No. 1486 and R.A. No. 1379 refers to the jurisdiction Thereafter, P.D. No. 1606 was amended by P.D. Nos. 1860 and 1861[76] which granted
over the forfeiture proceeding and the authority to file the petition for forfeiture. As P.D. the Tanodbayan the same authority. The present Constitution was subsequently ratified
No. 1486 grants exclusive jurisdiction and authority to the Sandiganbayan and the Chief and then the Tanodbayan became known as the Office of the Special Prosecutor which
Special Prosecutor, the then Courts of First Instance and Solicitor General cannot continued to exercise its powers except those conferred on the Office of the
exercise concurrent jurisdiction or authority over such cases. Hence, P.D. No. 1486 Ombudsman created under the Constitution.[77] The Office of the Ombudsman was
and Sec. 2, R.A. No. 1379 are inconsistent with each other and the former should be officially created under R.A. No. 6770.[78]
deemed to have repealed the latter.
At present, the powers of the Ombudsman, as defined by R.A. No. 6770, corollary to
On 11 June 1978, the same day that P.D. No. 1486 was enacted, P.D. No. Sec. 13, Art. XI of the Constitution, include the authority, among others, to:
1487[65] creating the Office of the Ombudsman (then known as the Tanodbayan) was
passed. The Tanodbayan initially had no authority to prosecute cases falling within the (1) Investigate and prosecute on its own or on complaint by
any person, any act or omission of any public officer or employee,
office or agency, when such act or omission appears to be illegal, There is ample reason to hold that petitioner is guilty of forum-shopping. The present
unjust, improper or inefficient. It has primary jurisdiction over cases petition was filed accompanied by the requisite Verification and Certification Against
cognizable by the Sandiganbayan and, in the exercise of this primary Forum Shopping[87] in which petitioner made the following representation:
jurisdiction, may take over, at any stage, from any investigatory
agency of Government, the investigation of such cases; [79] .
(11) Investigate and initiate the proper action for the
recovery of ill-gotten and/or unexplained wealth amassed after 25 3.] As Petitioner, I have not heretofore commenced any other action
February 1986 and the prosecution of the parties involved therein. [80] or proceeding in the Supreme Court, the Court of Appeals, or
any other tribunal or agency, involving the same issues as that
Ostensibly, it is the Ombudsman who should file the petition for forfeiture in the above-captioned case.
under R.A. No. 1379. However, the Ombudsmans exercise of the correlative powers to
investigate and initiate the proper action for recovery of ill-gotten and/or unexplained 4.] To the best of my knowledge, no such action or proceeding is
wealth is restricted only to cases for the recovery of ill-gotten and/or unexplained wealth pending in the Supreme Court, the Court of Appeals, or any
amassed after 25 February 1986.[81] As regards such wealth accumulated on or before other tribunal or agency.
said date, the Ombudsman is without authority to commence before the
Sandiganbayan such forfeiture actionsince the authority to file forfeiture proceedings 5.] If I should hereafter learn that such proceeding has been
on or before 25 February 1986 belongs to the Solicitor Generalalthough he has the commenced or is pending before the Supreme Court, the Court
authority to investigate such cases for forfeiture even before 25 February 1986, of Appeals, or any other tribunal or agency, I undertake to report
pursuant to the Ombudsmans general investigatory power under Sec. 15 (1) of R.A. that fact to this Honorable Court within five (5) days from
No. 6770.[82] knowledge thereof.
It is obvious then that respondent Office of the Ombudsman acted well within
its authority in conducting the investigation of petitioners illegally acquired assets and However, petitioner failed to inform the Court that he had filed a Motion to
in filing the petition for forfeiture against him. The contention that the procedural Dismiss[88] in relation to the petition for forfeiture before the Sandiganbayan. The
requirements under Sec. 2 of R.A. No. 1379 were not complied with no longer deserve existence of this motion was only brought to the attention of this Court by respondent
consideration in view of the foregoing discussion. Office of the Ombudsman in its Comment. A scrutiny of the Motion to Dismiss reveals
that petitioner raised substantially the same issues and prayed for the same reliefs
Now to the charge that petitioner is guilty of forum-shopping. Forum-shopping therein as it has in the instant petition. In fact, the Arguments and Discussion [89] in
is manifest whenever a party repetitively avail[s] of several judicial remedies in different the Petition of petitioners thesis that the Sandiganbayan has no jurisdiction over
courts, simultaneously or successively, all substantially founded on the same separate civil actions for forfeiture of unlawfully acquired properties appears to be
transactions and the same essential facts and circumstances, and all raising wholly lifted from the Motion to Dismiss. The only difference between the two is that in
substantially the same issues either pending in, or already resolved adversely by, some the Petition, petitioner raises the ground of failure of the petition for forfeiture to comply
other court.[83] It has also been defined as an act of a party against whom an adverse with the procedural requirements of R.A. No. 1379, and petitioner prays for the
judgment has been rendered in one forum of seeking and possibly getting a favorable annulment of the Sandiganbayans Resolution dated 29 October 2004 and Writ of
opinion in another forum, other than by appeal or the special civil action of certiorari, or Preliminary Attachment dated 2 November 2004. Nevertheless, these differences are
the institution of two or more actions or proceedings grounded on the same cause on only superficial. Both Petition and Motion to Dismiss have the same intent of dismissing
the supposition that one or the other court would make a favorable the case for forfeiture filed against petitioner, his wife and their sons. It is undeniable
disposition.[84] Considered a pernicious evil, it adversely affects the efficient that petitioner had failed to fulfill his undertaking. This is incontestably forum-shopping
administration of justice since it clogs the court dockets, unduly burdens the financial which is reason enough to dismiss the petition outright, without prejudice to the taking
and human resources of the judiciary, and trifles with and mocks judicial of appropriate action against the counsel and party concerned. [90] The brazenness of
processes.[85] Willful and deliberate forum-shopping is a ground for summary dismissal this attempt at forum-shopping is even demonstrated by the fact that both
of the complaint or initiatory pleading with prejudice and constitutes direct contempt of the Petition and Motion to Dismiss were filed on the same day, 17 November 2004.
court, as well as a cause for administrative sanctions, which may both be resolved and Petitioner should have waited for the resolution of his Motion to Dismiss before
imposed in the same case where the forum-shopping is found.[86] resorting to the petition at hand.
Petitioners counsel of record, Atty. Constantino B. De Jesus, needs to be
reminded that his primary duty is to assist the courts in the administration of justice. As
an officer of the court, his duties to the court are more significant and important than
his obligations to his clients. Any conduct which tends to delay, impede or obstruct the
administration thereof contravenes his oath of office.[91] Atty. De Jesus failed to accord
due regard, as he must, the tenets of the legal profession and the mission of our courts
of justice. For this, he should be penalized. Penalties imposed upon lawyers who
engaged in forum-shopping range from severe censure to suspension from the practice
of law.[92] In the instant case, we deem the imposition of a fine in the amount
of P20,000.00 to be sufficient to make Atty. De Jesus realize the seriousness of his
naked abuse of the judicial process.
WHEREFORE, in view of the foregoing, the Petition is DISMISSED. Atty. Constantino
B. De Jesus is DECLARED in CONTEMPT of this Court and meted a fine of Twenty
Thousand Pesos (P20,000.00) to be paid within ten (10) days from the finality of
this Decision. Costs against petitioner.
SO ORDERED.
FIRST DIVISION conjugal dwelling and going to Albay and then to Laguna disrupted the education of
their children and deprived them of their mothers care. She prayed that petitioner be
FELIPE N. MADRIAN, G.R. No. 159374 ordered to appear and produce their sons before the court and to explain why they
Petitioner, should not be returned to her custody.
Present:
Petitioner and respondent appeared at the hearing on September 17, 2002. They
PUNO, C.J., Chairperson, initially agreed that petitioner would return the custody of their three sons to respondent.
SANDOVAL-GUTIERREZ,* Petitioner, however, had a change of heart[1] and decided to file a memorandum.
- v e r s u s - CORONA,
AZCUNA and On September 3, 2002, petitioner filed his memorandum[2] alleging that respondent was
GARCIA,** JJ. unfit to take custody of their three sons because she was habitually drunk, frequently
went home late at night or in the wee hours of the morning, spent much of her time at
a beer house and neglected her duties as a mother. He claimed that, after their
FRANCISCA R. MADRIAN, squabble on May 18, 2002, it was respondent who left, taking their daughter with her.
Respondent. Promulgated: It was only then that he went to Sta. Rosa, Laguna where he worked as a tricycle driver.
July 12, 2007 He submitted a certification from the principal of the Dila Elementary School in Sta.
Rosa, Laguna that Ronnick and Phillip were enrolled there. He also questioned the
x------------------------------------------x jurisdiction of the Court of Appeals claiming that under Section 5(b) of RA 8369
(otherwise known as the Family Courts Act of 1997) family courts have exclusive
original jurisdiction to hear and decide the petition for habeas corpus filed by
DECISION respondent.[3]
CORONA, J.: For her part, respondent averred that she did not leave their home on May 18,
2002 but was driven out by petitioner. She alleged that it was petitioner who was an
When a family breaks up, the children are always the victims. The ensuing alcoholic, gambler and drug addict. Petitioners alcoholism and drug addiction impaired
battle for custody of the minor children is not only a thorny issue but also a highly his mental faculties, causing him to commit acts of violence against her and their
sensitive and heart-rending affair. Such is the case here. Even the usually technical children. The situation was aggravated by the fact that their home was adjacent to that
subject of jurisdiction became emotionally charged. of her in-laws who frequently meddled in their personal problems.[4]
Petitioner Felipe N. Madrian and respondent Francisca R. Madrian were married on On October 21, 2002, the Court of Appeals [5] rendered a decision[6] asserting
July 7, 1993 in Paraaque City. They resided in San Agustin Village, Brgy. Moonwalk, its authority to take cognizance of the petition and ruling that, under Article 213 of the
Paraaque City. Family Code, respondent was entitled to the custody of Phillip and Francis Angelo who
were at that time aged six and four, respectively, subject to the visitation rights of
Their union was blessed with three sons and a daughter: Ronnick, born on petitioner. With respect to Ronnick who was then eight years old, the court ruled that
January 30, 1994; Phillip, born on November 19, 1996; Francis Angelo, born on May his custody should be determined by the proper family court in a special proceeding on
12, 1998 and Krizia Ann, born on December 12, 2000. custody of minors under Rule 99 of the Rules of Court.
After a bitter quarrel on May 18, 2002, petitioner allegedly left their conjugal abode and Petitioner moved for reconsideration of the Court of Appeals decision but it
took their three sons with him to Ligao City, Albay and subsequently to Sta. Rosa, was denied. Hence, this recourse.
Laguna. Respondent sought the help of her parents and parents-in-law to patch things
up between her and petitioner to no avail. She then brought the matter to the Lupong Petitioner challenges the jurisdiction of the Court of Appeals over the petition
Tagapamayapa in their barangay but this too proved futile. for habeas corpus and insists that jurisdiction over the case is lodged in the family
courts under RA 8369. He invokes Section 5(b) of RA 8369:
Thus respondent filed a petition for habeas corpus of Ronnick, Phillip and
Francis Angelo in the Court of Appeals, alleging that petitioners act of leaving the
Section 5. Jurisdiction of Family Courts. The Family corpus where the custody of minors is at issue.[8] (emphases
Courts shall have exclusive original jurisdiction to hear and decide supplied)
the following cases:
xxxxxxxxx The jurisdiction of the Court of Appeals over petitions for habeas corpus was further
affirmed by A.M. No. 03-03-04-SC (April 22, 2004) in Re: Rule on Custody of Minors
b) Petitions for guardianship, custody of children, habeas and Writ of Habeas Corpus in Relation to Custody of Minors:
corpus in relation to the latter; In any case, whatever uncertainty there was has been
settled with the adoption of A.M. No. 03-03-04-SC Re: Rule on
xxxxxxxxx Custody of Minors and Writ of Habeas Corpus in Relation to
Custody of Minors. Section 20 of the rule provides that:
Petitioner is wrong.
Section 20. Petition for writ of habeas
In Thornton v. Thornton,[7] this Court resolved the issue of the Court of Appeals corpus. A verified petition for a writ of habeas
jurisdiction to issue writs of habeas corpus in cases involving custody of minors in the corpus involving custody of minors shall be filed
light of the provision in RA 8369 giving family courts exclusive original jurisdiction over with the Family Court. The writ shall be
such petitions: enforceable within its judicial region to which the
Family Court belongs.
xxxxxxxxx
The Court of Appeals should take cognizance of the
case since there is nothing in RA 8369 that revoked its The petition may likewise be filed
jurisdiction to issue writs of habeas corpus involving the with the Supreme Court, Court of Appeals, or
custody of minors. with any of its members and, if so granted, the
writ shall be enforceable anywhere in the
xxxxxxxxx Philippines. The writ may be made returnable
to a Family Court or to any regular court within
We rule therefore that RA 8369 did not divest the Court of the region where the petitioner resides or where
Appeals and the Supreme Court of their jurisdiction the minor may be found for hearing and decision
over habeas corpus cases involving the custody of minors. on the merits.
The rule therefore is: when by law jurisdiction is conferred on a court or judicial
officer, all auxiliary writs, processes and other means necessary to carry it into effect
may be employed by such court or officer.[11] Once a court acquires jurisdiction over
the subject matter of a case, it does so to the exclusion of all other courts, including
related incidents and ancillary matters.
Accordingly, the petition is hereby DENIED.
SO ORDERED.
x---------------------------------------------------------------------------------x
SECOND DIVISION
DECISION
GOVERNMENT SERVICE, G.R. No. 183905
INSURANCE SYSTEM, TINGA, J.:
Petitioner,
Present:
QUISUMBING, These are the undisputed facts.
- versus - Chairperson,
CARPIO MORALES, The annual stockholders meeting (annual meeting) of the Manila Electric
TINGA, Company (Meralco) was scheduled on 27 May 2008. [1] In connection with the annual
VELASCO, JR., and meeting, proxies[2] were required to be submitted on or before 17 May 2008, and the
THE HON. COURT OF APPEALS, BRION, JJ. proxy validation was slated for five days later, or 22 May. [3]
(8TH DIVISION), ANTHONY V.
ROSETE, MANUEL M. LOPEZ,
FELIPE B. ALFONSO, JESUS F. Promulgated:
FRANCISCO, CHRISTIAN S.
MONSOD, ELPIDIO L. IBAEZ,
and FRANCIS GILES PUNO, April 16, 2009
Respondents.
In view of the resignation of Camilo Quiason, [4] the position of corporate secretary of
x----------------------------------------------------------------------------------------------- x Meralco became vacant.[5]On 15 May 2008, the board of directors of Meralco
designated Jose Vitug[6] to act as corporate secretary for the annual
SECURITIES AND EXCHANGE G.R. No. 184275 meeting.[7] However, when the proxy validation began on 22 May, the proceedings were
COMMISSION, COMMISSIONER presided over by respondent Anthony Rosete (Rosete), assistant corporate secretary
JESUS ENRIQUE G. MARTINEZ and in-house chief legal counsel of Meralco.[8]Private respondents nonetheless argue
IN HIS CAPACITY AS OFFICER- that Rosete was the acting corporate secretary of Meralco. [9] Petitioner Government
IN-CHARGE OF THE SECURITIES Service Insurance System (GSIS), a major shareholder in Meralco, was distressed over
AND EXCHANGE COMMISSION the proxy validation proceedings, and the resulting certification of proxies in favor of the
and HUBERT G. GUEVARA IN HIS Meralco management.[10]
CAPACITY AS DIRECTOR OF THE
COMPLIANCE AND ENFORCEMENT On 23 May 2008, GSIS filed a complaint with the Regional Trial Court (RTC)
DEPT. OF SECURITIES of Pasay City, docketed as R-PSY-08-05777-C4
Petitioners, seeking the declaration of certain proxies as invalid.[11] Three days
- versus -
And the answer must be in the negative, Section 1 of Rule At this point, only one petition remainsthe petition for certiorari filed by GSIS in G.R.
45 allows a party to appeal by certiorari from a judgment of the No. 183905. Casting off the uncritical and unimportant aspects, the two main issues for
Court of Appeals by filing with this Court a petition for review adjudication are as follows: (1) whether the SEC has jurisdiction over the petition filed
on certiorari. But petitioner judge was not a party either in the by GSIS against private respondents; and (2) whether the CDO and SCO issued by the
expropriation proceeding or in the certiorari proceeding in the SEC are valid.
Court of Appeals. His being named as respondent in the Court of
Appeals was merely to comply with the rule that in original II.
petitions for certiorari, the court or the judge, in his capacity as
such, should be named as party respondent because the question
It is our resolute inclination that this case, which raises interesting questions of law, be
in such a proceeding is the jurisdiction of the court
decided solely on the merits, without regard to the personalities involved or the well-
itself (See Mayol v. Blanco, 61 Phil. 547 [19351, cited in Comments on
reported drama preceding the petition. To that end, the Court has taken note of reports
the Rules of Court, Moran, Vol. II, 1979 ed., p. 471). "In special
in the media that GSIS and the Lopez group have taken positive steps to divest or
proceedings, the judge whose order is under attack is merely a
significantly reduce their respective interests in Meralco. [40] These are developments
nominal party; wherefore, a judge in his official capacity, should
that certainly ease the tension surrounding this case, not to mention reason enough for
not be made to appear as a party seeking reversal of a decision
the two groups to make an internal reassessment of their respective positions and
that is unfavorable to the action taken by him. A decent regard for
interests in relation to this case. Still, the key legal questions raised in the petition do
the judicial hierarchy bars a judge from suing against the adverse
not depend at all on the identity of any of the parties, and would obtain the same
opinion of a higher court,. . . ." (Alcasid v. Samson, 102 Phil. 785, 740
denouement even if this case was lodged by unknowns as petitioners against similarly
[1957])
obscure respondents.
ACCORDINGLY, this petition is DENIED for lack of legal
capacity to sue by the petitioner.[37] With the objective to resolve the key questions of law raised in the petition,
some of the issues raised diminish as peripheral. For example, petitioners raise
arguments tied to the behavior of individual justices of the Court of Appeals, particularly
former Justice Vicente Roxas, in relation to this case as it was pending before the
appellate court. The Court takes cognizance of our Resolution in A.M. No. 08-8-11-CA
dated 9 September 2008, which duly recited the various anomalous or unbecoming fact, condition, practice or matter which it may deem necessary or
acts in relation to this case performed by two of the justices who decided the case in proper to aid in the enforcement of the provisions of this Code, in
behalf of the Court of Appealsformer Justice Roxas (the ponente) and Justice the prescribing of rules and regulations thereunder, or in securing
Bienvenido L. Reyes (the Chairman of the 8th Division) as well as three other members information to serve as a basis for recommending further
of the Court of Appeals. At the same time, the consensus of the Court as it deliberated legislation concerning the matters to which this Code relates: xxx
on A.M. No. 08-8-11-CA was to reserve comment or conclusion on the assailed (emphasis supplied)
decision of the Court of Appeals, in recognition of the reality that however stigmatized
SEC. 20. Proxy Solicitations. 20.1. Proxies must be issued
the actions and motivations of Justice Roxas are, the decision is still the product of the
and proxy solicitation must be made in accordance with rules and
Court of Appeals as a collegial judicial body, and not of one or some rogue justices.
regulations to be issued by the Commission;
The penalties levied by the Court on these appellate court justices, in our estimation,
redress the unwholesome acts which they had committed. At the same time, given the
jurisprudential importance of the questions of law raised in the petition, any result
reached without squarely addressing such questions would be unsatisfactory, perhaps
derelict even.
III. The argument, stripped of extravagance, is that since proxy solicitations following
Section 20.1 have to be made in accordance with rules and regulations issued by the
SEC, it is the SEC under Section 53.1 that has the jurisdiction to investigate alleged
We now examine whether the SEC has jurisdiction over the petition filed by GSIS. To
violations of the rules on proxy solicitations. The GSIS petition invoked AIRR-AIRR-
recall, SEC has sought to enjoin the use and annul the validation, of the proxies issued
SRC Rule 20, otherwise known as The Proxy Rule, which enumerates the requirements
in favor of several of the private respondents, particularly in connection with the annual
as to form of proxy and delivery of information to security holders. According to GSIS,
meeting.
the information statement Meralco had filed with the SEC in connection with the annual
meeting did not contain any proxy form as required under AIRR-SRC Rule 20.
A.
On the other hand, private respondents argue before us that under Section
Jurisdiction is conferred by no other source but law. Both sides have relied upon
5.2 of the SRC, the SECs jurisdiction over all cases enumerated in Section 5 of
provisions of Rep. Act No. 8799, otherwise known as the Securities Regulation Code
Presidential Decree No. 902-A was transferred to the courts of general jurisdiction or
(SRC), its implementing rules (Amended Implementing Rules or AIRR-SRC), and other
the appropriate regional trial court. The two particular classes of cases in the
related rules to support their competing contentions that either the SEC or the trial
enumeration under Section 5 of Presidential Decree No. 902-A which private
courts has exclusive original jurisdiction over the dispute.
respondents especially refer to are as follows:
GSIS primarily anchors its argument on two correlated provisions of the SRC. These
xxx
are Section 53.1 and Section 20.1, which we cite:
(2) Controversies arising out of intra-corporate, partnership, or
SEC. 53. Investigations, Injunctions and Prosecution of association relations, between and among stockholders, members,
Offenses . - 53.1. The Commission may, in its discretion, make such or associates; or association of which they are stockholders,
investigations as it deems necessary to determine whether any members, or associates, respectively;
person has violated or is about to violate any provision of
this Code, any rule, regulation or order thereunder, or any rule of 3) Controversies in the election or appointment of directors, trustees,
an Exchange, registered securities association, clearing agency, officers or managers of corporations, partnerships, or associations;
other self-regulatory organization, and may require or permit any
person to file with it a statement in writing, under oath or otherwise, as
xxx
the Commission shall determine, as to all facts and circumstances
concerning the matter to be investigated. The Commission may publish
information concerning any such violations, and to investigate any
In addition, private respondents cite the Interim Rules on Intra-Corporate C. the furnishing of a form of proxy or other communication to
Controversies (Interim Rules) promulgated by this Court in 2001, most pertinently, security holders under circumstance reasonably calculated to
Section 2 of Rule 6 (on Election Contests), which defines election contests as follows: result in the procurement, withholding or revocation of a proxy.
At the same time, Meralco raises the substantial point that nothing in the SRC
empowers the SEC to annul or invalidate improper proxies issued in contravention of
Section 20. It cites that the penalties defined by the SEC itself for violation of Section
Corporation Code,[41] but it is the SRC which specifically regulates the form and use of 20 or AIRR-SRC Rule 20 are limited to a reprimand/warning for the first offense, and
proxies, more particularly the procedure of proxy solicitation, primarily through Section pecuniary fines for succeeding offenses.[43] Indeed, if the SEC does not have the power
20.[42] AIRR-SRC Rule 20 defines the terms solicit and solicitation: to invalidate proxies solicited in violation of its promulgated rules, serious questions
may be raised whether it has the power to adjudicate claims of violation in the first
The terms solicit and solicitation include: place, since the relief it may extend does not directly redress the cause of action of the
complainant seeking the exclusion of the proxies.
A. any request for a proxy whether or not accompanied by or
included in a form of proxy There is an interesting point, which neither party raises, and it concerns
Section 6(g) of Presidential Decree No. 902-A, which states:
B. any request to execute or not to execute, or to revoke, a proxy;
or
SEC. 6. In order to effectively exercise such jurisdiction, the Under Section 5(c) of Presidential Decree No. 902-A, in relation to the SRC, the
Commission shall possess the following powers: jurisdiction of the regular trial courts with respect to election-related controversies is
specifically confined to controversies in the election or appointment of directors,
xxx
trustees, officers or managers of corporations, partnerships, or
(g) To pass upon the validity of the issuance and use of proxies associations. Evidently, the jurisdiction of the regular courts over so-called
and voting trust agreements for absent stockholders or members; election contests or controversies under Section 5(c) does not extend to every
xxx potential subject that may be voted on by shareholders, but only to the election
of directors or trustees, in which stockholders are authorized to participate
under Section 24 of the Corporation Code.[49]
As promulgated then, the provision would confer on the SEC the power to adjudicate
controversies relating not only to proxy solicitation, but also to proxy validation. Should
the proposition hold true up to the present, the position of GSIS would have merit, This qualification allows for a useful distinction that gives due effect to the
especially since Section 6 of Presidential Decree No. 902-A was not expressly repealed statutory right of the SEC to regulate proxy solicitation, and the statutory jurisdiction of
or abrogated by the SRC.[44] regular courts over election contests or controversies. The power of the SEC to
investigate violations of its rules on proxy solicitation is unquestioned when proxies are
obtained to vote on matters unrelated to the cases enumerated under Section 5 of
Yet a closer reading of the provision indicates that such power of the SEC
Presidential Decree No. 902-A. However, when proxies are solicited in relation to
then was incidental or ancillary to the exercise of such jurisdiction. Note that Section 6
the election of corporate directors, the resulting controversy, even if it ostensibly
is immediately preceded by Section 5, which originally conferred on the SEC original
raised the violation of the SEC rules on proxy solicitation, should be properly
and exclusive jurisdiction to hear and decide cases involving controversies in the
seen as an election controversy within the original and exclusive jurisdiction of
election or appointments of directors, trustees, officers or managers of such
the trial courts by virtue of Section 5.2 of the SRC in relation to Section 5(c) of
corporations, partnerships or associations. The cases referred to in Section 5 were
Presidential Decree No. 902-A.
transferred from the jurisdiction of the SEC to the regular courts with the passage of
the SRC, specifically Section 5.2. Thus, the SECs power to pass upon the validity of
proxies in relation to election controversies has effectively been withdrawn, tied as it is The conferment of original and exclusive jurisdiction on the regular courts over such
to its abrogated jurisdictional powers. controversies in the election of corporate directors must be seen as intended to confine
to one body the adjudication of all related claims and controversy arising from the
election of such directors. For that reason, the aforequoted Section 2, Rule 6 of the
Based on the foregoing, it is evident that the linchpin in deciding the question
Interim Rules broadly defines the term election contest as encompassing all plausible
is whether or not the cause of action of GSIS before the SEC is intimately tied to an
incidents arising from the election of corporate directors, including: (1) any controversy
election controversy, as defined under Section 5(c) of Presidential Decree No. 902-A.
or dispute involving title or claim to any elective office in a stock or nonstock corporation,
To answer that, we need to properly ascertain the scope of the power of trial courts to
(2) the validation of proxies, (3) the manner and validity of elections and (4) the
resolve controversies in corporate elections.
qualifications of candidates, including the proclamation of winners. If all matters
anteceding the holding of such election which affect its manner and conduct, such as
B.
the proxy solicitation process, are deemed within the original and exclusive jurisdiction
of the SEC, then the prospect of overlapping and competing jurisdictions between that
Shares of stock in corporations may be divided into voting shares and non-voting body and the regular courts becomes frighteningly real. From the language of Section
shares, which are generally issued as preferred or redeemable shares. [45] Voting rights 5(c) of Presidential Decree No. 902-A, it is indubitable that controversies as to the
are exercised during regular or special meetings of stockholders; regular meetings to qualification of voting shares, or the validity of votes cast in favor of a candidate for
be held annually on a fixed date, while special meetings may be held at any time election to the board of directors are properly cognizable and adjudicable by the regular
necessary or as provided in the by-laws, upon due notice.[46] The Corporation Code courts exercising original and exclusive jurisdiction over election cases. Questions
provides for a whole range of matters which can be voted upon by stockholders, relating to the proper solicitation of proxies used in such election are indisputably
including a limited set on which even non-voting stockholders are entitled to vote related to such issues, yet if the position of GSIS were to be upheld, they would be
on.[47] On any of these matters which may be voted upon by stockholders, the proxy resolved by the SEC and not the regular courts, even if they fall within controversies in
device is generally available.[48] the election of directors.
The Court recognizes that GSISs position flirts with the abhorrent evil of split of the Company. All of the nominees are current directors of the
jurisdiction,[50] allowing as it does both the SEC and the regular courts to assert Company.[52]
jurisdiction over the same controversies surrounding an election contest. Should the
argument of GSIS be sustained, we would be perpetually confronted with the spectacle
of election controversies being heard and adjudicated by both the SEC and the regular
Under the circumstances, we do not see it feasible for GSIS to posit that its challenge
courts, made possible through a mere allegation that the anteceding proxy solicitation
to the solicitation or validation of proxies bore no relation at all to the scheduled election
process was errant, but the competing cases filed with one objective in mind to affect
of the board of directors of Meralco during the annual meeting. GSIS very well knew
the outcome of the election of the board of directors. There is no definitive statutory
that the controversy falls within the contemplation of an election controversy properly
provision that expressly mandates so untidy a framework, and we are disinclined to
within the jurisdiction of the regular courts. Otherwise, it would have never filed its
construe the SRC in such a manner as to pave the way for the splitting of jurisdiction.
original petition with the RTC of Pasay. GSIS may have withdrawn its petition with the
RTC on a new assessment made in good faith that the controversy falls within the
Unlike either Section 20.1 or Section 53.1, which merely alludes to the rule-making or
jurisdiction of the SEC, yet the reality is that the reassessment is precisely wrong as a
investigatory power of the SEC, Section 5 of Pres. Decree No. 902-A sets forth a
matter of law.
definitive rule on jurisdiction, expressly granting as it does original and exclusive
jurisdiction first to the SEC, and now to the regular courts. The fact that the jurisdiction
IV.
of the regular courts under Section 5(c) is confined to the voting on election of officers,
and not on all matters which may be voted upon by stockholders, elucidates that the
power of the SEC to regulate proxies remains extant and could very well be exercised The lack of jurisdiction of the SEC over the subject matter of GSISs petition
when stockholders vote on matters other than the election of directors. necessarily invalidates the CDOand SDO issued by that body. However, especially
with respect to the CDO, there is need for this Court to squarely rule on the question
pertaining to its validity, if only for jurisprudential value and for the guidance of the SEC.
To recount the facts surrounding the issuance of the CDO, GSIS filed its
That the proxy challenge raised by GSIS relates to the election of the directors of
petition with the SEC on 26 May 2008. The CDO, six (6) pages in all with three (3)
Meralco is undisputed. The controversy was engendered by the looming annual
pages devoted to the tenability of granting the injunctive relief, was issued on the very
meeting, during which the stockholders of Meralco were to elect the directors of the
same day, 26 May 2008, without notice or hearing. The CDO bore the signature of
corporation. GSIS very well knew of that fact. On 17 March 2008, the Meralco board of
Commissioner Jesus Martinez, identified therein as Officer-in-Charge, and nobody
directors adopted a board resolution stating:
elses.
64.2. Until the Commission issues a cease and desist order, It appears that the CDO under Section 5(i) is similar to the CDO under Section 64.1.
the fact that an investigation has been initiated or that a complaint has Both require a common finding of a need to prevent fraud or injury to the investing
been filed, including the contents of the complaint, shall be confidential. public. At the same time, no mention is made whether the CDO defined under Section
Upon issuance of a cease and desist order, the Commission shall make 5(i) may be issued ex-parte, while the CDO under Section 64.1 requires grave and
public such order and a copy thereof shall be immediately furnished to irreparable injury, language absent in Section 5(i). Notwithstanding the similarities
each person subject to the order.
between Section 5(i) and Section 64.1, it remains clear that the CDO issued under praying for the provisional remedy of a cease and desist order.[55] The CDO then
Section 53.3 is a distinct creation from that under Section 64. discusses the nature of the right of GSIS to obtain the CDO, as well as the urgent and
paramount necessity to prevent serious damage because the stockholders meeting is
The Court of Appeals cited the CDO as having been issued in violation of the scheduled on May 28, 2008 x x x Had the CDO stopped there, the unequivocal
constitutional provision on due process, which requires both prior notice and prior impression would have been that the order is based on Section 64.
hearing.[53] Yet interestingly, the CDO as contemplated in Section 53.3 or in Section 64,
may be issued ex-parte (under Section 53.3) or without necessity of hearing (under But the CDO goes on to cite Section 5.1, quoting paragraphs (i) and (n) in full,
Section 64.1). Nothing in these provisions impose a requisite hearing before ratiocinating that under these provisions, the SEC had the power to issue cease and
the CDO may be issued thereunder. Nonetheless, there are identifiable requisite desist orders to prevent fraud or injury to the public and such other measures necessary
actions on the part of the SEC that must be undertaken before the CDOmay be issued to carry out the Commissions role as regulator.[56] Immediately thence, the CDO cites
either under Section 53.3 or Section 64. In the case of Section 53.3, the SEC must Section 53.3 as providing that whenever it shall appear to the Commission that nay
make two findings: (1) that such person has engaged in any such act or practice, and person has engaged or is about to engage in any act or practice constituting a violation
(2) that there is a reasonable likelihood of continuing, (or engaging in) further or future of any provision, any rule, regulation or order thereunder, the Commission may issue
violations by such person. In the case of Section 64, the SEC must adjudge that the ex-parte a cease and desist order for a maximum period of ten (10) days, enjoining the
act, unless restrained, will operate as a fraud on investors or is otherwise likely to cause violation and compelling compliance therewith.[57]
grave or irreparable injury or prejudice to the investing public.
The citation in the CDO of Section 5.1, Section 53.3 and Section 64 together
Noticeably, the CDO is not precisely clear whether it was issued on the basis may leave the impression that it is grounded on all three provisions, and that may very
of Section 5.1, Section 53.3 or Section 64 of the SRC. The CDO actually refers and well have been the intention of the SEC. Assuming that is so, it is legally impermissible
cites all three provisions, yet it is apparent that a singular CDOcould not be founded on for the SEC to have utilized both Section 53.3 and Section 64 as basis for the CDO at
Section 5.1, Section 53.3 and Section 64 collectively. At the very least, the CDO under the same time. The CDO under Section 53.3 is premised on distinctly different
Section 53.3 and under Section 64 have their respective requisites and terms. requisites than the CDO under Section 64. Even more crucially, the lifetime of
the CDO under Section 53.3 is confined to a definite span of ten (10) days, which is not
GSIS was similarly cagey in its petition before the SEC, it demurring to state the case with the CDO under Section 64. This CDO under Section 64 may be the object
whether it was seeking the CDO under Section 5.1, Section 53.3, or Section 64. of a formal request for lifting within five (5) days from its issuance, a remedy not
Considering that injunctive relief generally avails upon the showing of a clear legal right expressly afforded to the CDO under Section 53.3.
to such relief, the inability or unwillingness to lay bare the precise statutory basis for
the prayer for injunction is an obvious impediment to a successful Any respondent to a CDO which cites both Section 53.3 and Section 64 would
not have an intelligent or adequate basis to respond to the same. Such respondent
would not know whether the CDO would have a determinate lifespan of ten (10) days,
application. Nonetheless, the error of the SEC in granting the CDO without stating as in Section 53.3, or would necessitate a formal request for lifting within five (5) days,
which kind of CDO it was issuing is more unpardonable, as it is an act that contravenes as required under Section 64.1. This lack of clarity is to the obvious prejudice of the
due process of law. respondent, and is in clear defiance of the constitutional right to due process of law.
Indeed, the veritable mlange that the assailed CDO is, with its jumbled mixture of
We have particularly required, in administrative proceedings, that the body or premises and conclusions, the antithesis of due process.
tribunal in all controversial questions, render its decision in such a manner that the
parties to the proceeding can know the various issues involved, and the reason for the Had the CDO issued by the SEC expressed the length of its term, perhaps
decision rendered.[54] This requirement is vital, as its fulfillment would afford the adverse greater clarity would have been offered on what Section of the SRC it is based.
party the opportunity to interpose a reasoned and intelligent appeal that is responsive However, the CDO is precisely silent as to its lifetime, thereby precluding much needed
to the grounds cited against it. The CDO extended by the SEC fails to provide the clarification. In view of the statutory differences among the three CDOs under the SRC,
needed reasonable clarity of the rationale behind its issuance. it is essential that the SEC, in issuing such injunctive relief, identify the exact provision
of the SRC on which the CDO is founded. Only by doing so could the adversely affected
The subject CDO first refers to Section 64, citing its provisions, then stating: party be able to properly evaluate whatever his responses under the law.
[p]rescinding from the aforequoted, there can be no doubt whatsoever that the
Commission is in fact mandated to take up, if expeditiously, any verified complaint
To make matters worse for the SEC, the fact that the CDO was signed, much in every deliberation concerning a case or any incident therein that is subject to the
less apparently deliberated upon, by only by one commissioner likewise renders the jurisdiction of the SEC.
order fatally infirm.
GSIS attempts to defend former Commissioner Martinezs action, but its argument is
without merit. It cites SEC Order No. 169, Series of 2008, whereby Martinez was
designated as Officer-in-Charge of the Commission for the duration of the official travel
of the Chairperson to Paris, France, to attend the 33rd Annual Conference of the
[IOSCO] from May 26-30, 2008.[62] As officer-in-charge (OIC), Martinez was authorized
The SEC is a collegial body composed of a Chairperson and four (4) to sign all documents and papers and perform all other acts and deeds as may be
Commissioners.[58] In order to constitute a quorum to conduct business, the presence necessary in the day-to-day operation of the Commission.
of at least three (3) Commissioners is required.[59] In the leading case of GMCR v.
Bell,[60] we definitively explained the nature of a collegial body, and how the act of one It is clear that Martinez was designated as OIC because of the official travel
member of such body, even if the head, could not be considered as that of the entire of only one member, Chairperson Fe Barin. Martinez was not commissioned to act as
body itself. Thus: the SEC itself. At most, he was to act in place of Chairperson Barin in the exercise of
her duties as Chairperson of the SEC. Under Section 4.3 of the SRC, the Chairperson
We hereby declare that the NTC is a collegial body requiring a is the chief executive officer of the SEC, and thus empowered to execute and
majority vote out of the three members of the commission in order to administer the policies, decisions, orders and resolutions approved by the Commission,
validly decide a case or any incident therein. Corollarily, the vote alone as well as to have the
of the chairman of the commission, as in this case, the vote of
Commissioner Kintanar, absent the required concurring vote coming
from the rest of the membership of the commission to at least arrive at
a majority decision, is not sufficient to legally render an NTC order, general executive direction and supervision of the work and operation of the
resolution or decision. Commission.[63] It is in relation to the exercise of these duties of the Chairperson, and
not to the functions of the Commission, that Martinez was authorized to sign all
Simply put, Commissioner Kintanar is not the National documents and papers and perform all other acts and deeds as may be necessary in
Telecommunications Commission. He alone does not speak for and in the day-to-day operation of the Commission.
behalf of the NTC. The NTC acts through a three-man body, and the
three members of the commission each has one vote to cast in every
deliberation concerning a case or any incident therein that is subject to GSIS likewise cites, as authority for Martinezs unilateral issuance of the CDO,
the jurisdiction of the NTC. When we consider the historical milieu in Section 4.6 of the SRC, which states that the SEC may, for purposes of efficiency,
which the NTC evolved into the quasi-judicial agency it is now under delegate any of its functions to any department or office of the Commission, an
Executive Order No. 146 which organized the NTC as a three-man individual Commissioner or staff member of the Commission except its review or
commission and expose the illegality of all memorandum circulars appellate authority and its power to adopt, alter and supplement any rule or regulation.
negating the collegial nature of the NTC under Executive Order No. 146, Reliance on this provision is inappropriate. First, there is no convincing demonstration
we are left with only one logical conclusion: the NTC is a collegial body that the SEC had delegated to Martinez the authority to issue the CDO. The SEC Order
and was a collegial body even during the time when it was acting as a designating Martinez as OIC only authorized him to exercise the functions of the absent
one-man regime.[61] Chairperson, and not of the Commission. If the Order is read as enabling Martinez to
issue the CDO in behalf of the Commission, it would be akin to conceding that the SEC
Chairperson, acting alone, can issue the CDO in behalf of the SEC itself. That again
We can adopt a virtually word-for-word observation with respect to former contravenes our holding in GMCR v. Bell.
Commissioner Martinez and the SEC. Simply put, Commissioner Martinez is not the
SEC. He alone does not speak for and in behalf of the SEC. The SEC acts through a
five-person body, and the five members of the commission each has one vote to cast
In addition, it is clear under Section 4.6 that the ability to delegate functions to SEC. 47. Legal Counsel.The Government Corporate Counsel shall be
a single commissioner does not extend to the exercise of the review or appellate the legal adviser and consultant of GSIS, but GSIS may assign to the
authority of the SEC. The issuance of the CDO is an act of the SEC itself done in the Office of the Government Corporate Counsel (OGCC) cases for legal
exercise of its original jurisdiction to review actual cases or controversies. If it has not action or trial, issues for legal opinions, preparation and review of
been clear to the SEC before, it should be clear now that its power to issue a CDO can contracts/agreements and others, as GSIS may decide or determine
not, under the SRC, be delegated to an individual commissioner. from time to time: Provided, however, That the present legal services
group in GSIS shall serve as its in-house legal counsel.
V.
The GSIS may, subject to approval by the proper court,
In the end, even assuming that the events narrated in our Resolution in A.M. No. 08-8- deputize any personnel of the legal service group to act as special
11-CA constitute sufficient basis to nullify the assailed decision of the Court of Appeals, sheriff in the enforcement of writs and processes issued by the court,
still it remains clear that the reliefs GSIS seeks of this Court have no basis in law. quasi-judicial agencies or administrative bodies in cases involving
Notwithstanding the black mark that stains the appellate courts decision, the first GSIS.[67]
paragraph of its fallo, to the extent that it dismissed the complaint of GSIS with the SEC
for lack of jurisdiction and consequently nullified the CDO and SDO, defies unbiased The designation of the OGCC as the legal counsel for GOCCs is set forth by statute,
scrutiny and deserves affirmation. initially by Rep. Act No. 3838, then reiterated by the Administrative Code of
1987.[68] Given that the designation is statutory in nature, there is no impediment for
A. Congress to impose a different role for the OGCC with respect to particular GOCCs it
may charter. Congress appears to have done so with respect to GSIS, designating the
In its dispositive portion, the Court of Appeals likewise pronounced that the complaint OGCC as a legal adviser and consultant, rather than as counsel to GSIS. Further, the
filed by GSIS with the SEC should be barred from being considered as an election law clearly vests unto GSIS the discretion, rather than the duty, to assign cases to the
contest in the RTC, given that the fifteen (15) day prescriptive period to file an election OGCC for legal action, while designating the present legal services group of GSIS as
contest with the RTC, under Section 3, Rule 6 of the Interim Rules, had already run its in-house legal counsel. This situates GSIS differently from the Land Bank of
course.[64] Yet no such relief was requested by private respondents in their petition for the Philippines, whose own in-house lawyers have persistently argued before this
certiorari filed with the Court of Appeals[65]. Without disputing the legal predicates Court to no avail on their alleged right
surrounding this pronouncement, we note that its tenor, if not the text, unduly suggests
an unwholesome pre-emptive strike. Given our observations in A.M. No. 08-8-11-CA of
the undue interest exhibited by the author of the appellate court decision, such
declaration is best deleted. Nonetheless, we do trust that any court or tribunal that may to file petitions before us instead of the OGCC.[69] Nothing in the Land
be confronted with that premise adverted to by the Court of Appeals would know how Bank charter[70] vested it with the discretion to choose when to assign
to properly treat the same. cases to the OGCC, notwithstanding the establishment of its own Legal Department. [71]
B. Congress is not bound to retain the OGCC as the primary or exclusive legal
counsel of GSIS even if it performs such a role for other GOCCs. To bind Congress to
Finally, we turn to the sanction on the lawyers of GSIS imposed by the Court perform in that manner would be akin to elevating the OGCCs statutory role to
of Appeals. irrepealable status, and it is basic that Congress is barred from passing irrepealable
laws.[72]
Nonetheless, we find that as a matter of law the sanctions are unwarranted. The charter
of GSIS[66] is unique among government owned or controlled corporations with original C.
charter in that it allocates a role for its internal legal counsel that is in conjunction with
or complementary to the Office of the Government Corporate Counsel (OGCC), which We close by acknowledging that the surrounding circumstances behind these
is the statutory legal counsel for GOCCs. Section 47 of GSIS charter reads: petitions are unfortunate, given the events as narrated in A.M. No. 08-8-11-CA. While
due punishment has been meted on the errant magistrates, the corporate world may
very well be reminded that the members of the judiciary are not to be viewed or treated
as
mere pawns or puppets in the internecine fights businessmen and their associates
wage against other businessmen in the quest for corporate dominance. In the end, the
petitions did afford this Court to clarify consequential points of law, points rooted in
principles which will endure long after the names of the participants in these cases have
been forgotten.
WHEREFORE, the petition in G.R. No. 184275 is EXPUNGED for lack of capacity of
the petitioner to bring forth the suit.
The petition in G.R. No. 183905 is DISMISSED for lack of merit except that the second
and third paragraphs of the fallo of the assailed decision dated 23 July 2008 of the
Court of Appeals, including subparagraphs (1), (2), 2(a), 2(b), 2(c) and 2(d) under the
second paragraph, are hereby DELETED.
No pronouncements as to costs.
SO ORDERED.
failed or refused to pay the corresponding increase on rent when his rental obligation
THIRD DIVISION for the month of 1 October 2001 became due. The rental dispute was brought to
the Lupon Tagapagpamayapa of Poblacion, Alaminos, Pangasinan, in an attempt to
[G.R. NO. 176405 : August 20, 2008] amicably settle the matter but the parties failed to reach an agreement, resulting in
the issuance by the BarangayLupon of a Certification to file action in court on 18
January 2002. On 10 June 2002, respondent George de Castro sent a letter to
LEO WEE, Petitioner, v. GEORGE DE CASTRO (on his behalf and as attorney-in-
petitioner terminating their lease agreement and demanding that the latter vacate and
fact of ANNIE DE CASTRO and FELOMINA UBAN) and MARTINIANA DE
turn over the subject property to respondents. Since petitioner stubbornly refused to
CASTRO, Respondents.
comply with said demand letter, respondent George de Castro, together with his
siblings and co-respondents, Annie de Castro, Felomina de Castro Uban and Jesus
DECISION de Castro, filed the Complaint for ejectment before the MTC.
CHICO-NAZARIO, J.: It must be noted, at this point, that although the Complaint stated that it was being
filed by all of the respondents, the Verification and the Certificate of Non-Forum
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Revised Shopping were signed by respondent George de Castro alone. He would
Rules of Court filed by petitioner Leo Wee, seeking the reversal and setting aside of subsequently attach to his position paper filed before the MTC on 28 October 2002
the Decision2 dated 19 September 2006 and the Resolution3 dated 25 January 2007 the Special Powers of Attorney (SPAs) executed by his sisters Annie de Castro and
of the Court of Appeals in CA-G.R. SP No. 90906. The appellate court, in its assailed Felomina de Castro Uban dated 7 February 2002 and 14 March 2002 respectively,
Decision, reversed the dismissal of Civil Case. No. 1990, an action for ejectment authorizing him to institute the ejectment case against petitioner.
instituted by respondent George de Castro, on his own behalf and on behalf of Annie
de Castro, Felomina de Castro Uban and Jesus de Castro 4 against petitioner, by the Petitioner, on the other hand, countered that there was no agreement between the
Municipal Trial Court (MTC) of Alaminos City, which was affirmed by the Regional parties to increase the monthly rentals and respondents' demand for an increase was
Trial Court (RTC), Branch 54, Alaminos City, Pangasinan; and, ruling in favor of the exorbitant. The agreed monthly rental was only for the amount of P9,000.00 and he
respondents, ordered the petitioner to vacate the subject property. In its assailed was religiously paying the same every month. Petitioner then argued that respondents
Resolution dated 25 January 2007, the Court of Appeals refused to reconsider its failed to comply with the jurisdictional requirement of conciliation before
earlier Decision of 19 September 2006. the Barangay Lupon prior to the filing of Civil Case. No. 1990, meriting the dismissal
of their Complaint therein. The Certification to file action issued by
In their Complaint5 filed on 1 July 2002 with the MTC of Alaminos City, docketed as the Barangay Lupon appended to the respondents' Complaint merely referred to the
Civil Case No. 1990, respondentsalleged that they are the registered owners of the issue of rental increase and not the matter of ejectment. Petitioner asserted further
subject property, a two-storey building erected on a parcel of land registered under that the MTC lacked jurisdiction over the ejectment suit, since respondents' Complaint
Transfer Certificate of Title (TCT) No. 16193 in the Registry of Deeds of Pangasinan, was devoid of any allegation that there was an "unlawful withholding" of the subject
described and bounded as follows: property by the petitioner.8
A parcel of land (Lot 13033-D-2, Psd-01550-022319, being a portion of Lot 13033-D, During the Pre-Trial Conference9 held before the MTC, the parties stipulated that in
Psd-018529, LRC Rec. No. ____) situated in Pob., Alaminos City; bounded on the May 2002, petitioner tendered to respondents the sum of P9,000.00 as rental
NW. along line 1-2 by Lot 13035-D-1 of the subdivision plan; on the NE. along line 2-3 payment for the month of January 2002; petitioner paid rentals for the months of
by Vericiano St.; on the SE. along line 3-4 by Lot 13033-D-2 of the subdivision plan; October 2001 to January 2002 but only in the amount of P9,000.00 per month;
on the SW. along line 4-1 by Lot 575, Numeriano Rabago. It is coverd by TCT No. respondents, thru counsel, sent a letter to petitioner on 10 June 2002 terminating their
16193 of the Register of Deeds of Pangasinan (Alaminos City) and declared for lease agreement which petitioner ignored; and the Barangay Lupon did issue a
taxation purposes per T.D. No. 2075, and assessed in the sum of P93,400.00.6 Certification to file action after the parties failed to reach an agreement before it.
Respondents rented out the subject property to petitioner on a month to month basis After the submission of the parties of their respective Position Papers, the MTC, on 21
for P9,000.00 per month.7 Both parties agreed that effective 1 October 2001, the November 2002, rendered a Decision10 dismissing respondents' Complaint in Civil
rental payment shall be increased from P9,000.00 to P15,000.00. Petitioner, however,
Case No. 1990 for failure to comply with the prior conciliation requirement before act as their attorney-in-fact in the institution of the ejectment suit against the
the Barangay Lupon. The decretal portion of the MTC Decision reads: petitioner.
WHEREFORE, premised considered, judgment is hereby rendered ordering the On 19 September 2006, the Court of Appeals rendered a Decision granting the
dismissal of this case. Costs against the [herein respondents]. respondents' Petition and ordering petitioner to vacate the subject property and turn
over the same to respondents. The Court of Appeals decreed:
On appeal, docketed as Civil Case No. A-2835, the RTC of Alaminos, Pangasinan,
Branch 54, promulgated its Decision11 dated 27 June 2005 affirming the dismissal of WHEREFORE, premises considered, the instant petition is GRANTED. The assailed
respondents' Complaint for ejectment after finding that the appealed MTC Decision Decision dated June 27, 2005 issued by the RTC of Alaminos City, Pangasinan,
was based on facts and law on the matter. The RTC declared that since the original Branch 54, is REVERSED and SET ASIDE. A new one is hereby rendered ordering
agreement entered into by the parties was for petitioner to pay only the sum [herein petitioner] Leo Wee to SURRENDER and VACATE the leased premises in
of P9.000.00 per month for the rent of the subject property, and no concession was question as well as to pay the sum of P15,000.00 per month reckoned from March,
reached by the parties to increase such amount to P15.000.00, petitioner cannot be 2002 until he shall have actually turned over the possession thereof to petitioners plus
faulted for paying only the originally agreed upon monthly rentals. Adopting the rental arrearages of P30,000.00 representing unpaid increase in rent for the
petitioner's position, the RTC declared that respondents' failure to refer the matter to period from October, 2001 to February, 2002, with legal interest at 6% per annum to
the Barangay court for conciliation process barred the ejectment case, conciliation be computed from June 7, 2002 until finality of this decision and 12% thereafter until
before the Lupon being a condition sine qua non in the filing of ejectment suits. The full payment thereof. Respondent is likewise hereby ordered to pay petitioners the
RTC likewise agreed with petitioner in ruling that the allegation in the Complaint was amount of P20,000.00 as and for attorney's fees and the costs of suit. 14
flawed, since respondents failed to allege that there was an "unlawful withholding" of
possession of the subject property, taking out Civil Case No. 1990 from the purview of In a Resolution dated 25 January 2007, the appellate court denied the Motion for
an action for unlawful detainer. Finally, the RTC decreed that respondents' Complaint Reconsideration interposed by petitioner for lack of merit.
failed to comply with the rule that a co-owner could not maintain an action without
joining all the other co-owners. Thus, according to the dispositive portion of the RTC Petitioner is now before this Court via the Petition at bar, making the following
Decision: assignment of errors:
WHEREFORE the appellate Court finds no cogent reason to disturb the findings of I.
the court a quo. The Decision dated November 21, 2002 appealed from is hereby
AFFIRMED IN TOTO.12
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT
CONCILIATION PROCESS IS NOT A JURISDICTIONAL REQUIREMENT THAT
Undaunted, respondents filed a Petition for Review on Certiorari13 with the Court of NON-COMPLIANCE THEREWITH DOES NOT AFFECT THE JURISDICTION IN
Appeals where it was docketed as CA-G.R. SP No. 90906. Respondents argued in EJECTMENT CASE;
their Petition that the RTC gravely erred in ruling that their failure to comply with the
conciliation process was fatal to their Complaint, since it is only respondent George
II.
de Castro who resides in Alaminos City, Pangasinan, while respondent Annie de
Castro resides in Pennsylvania, United States of America (USA); respondent
Felomina de Castro Uban, in California, USA; and respondent Jesus de Castro, now THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN UPHOLDING THE
substituted by his wife, Martiniana, resides in Manila. Respondents further claimed SUFFICIENCY OF THE ALLEGATIONS IN THE COMPLAINT FOR EJECTMENT
that the MTC was not divested of jurisdiction over their Complaint for ejectment DESPITE THE WANT OF ALLEGATION OF "UNLAWFUL WITHOLDING
because of the mere absence therein of the term "unlawful withholding" of their PREMISES" (sic) QUESTIONED BY PETITIONER;
subject property, considering that they had sufficiently alleged the same in their
Complaint, albeit worded differently. Finally, respondents posited that the fact that III.
only respondent George de Castro signed the Verification and the Certificate of Non-
Forum Shopping attached to the Complaint was irrelevant since the other THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT
respondents already executed Special Powers of Attorney (SPAs) authorizing him to THE FILING OF THE COMPLAINT OF RESPONDENT GEORGE DE CASTRO
WITHOUT JOINING ALL HIS OTHER CO-OWNERS OVER THE SUBJECT adjudication, unless there has been a confrontation between the parties before the
PROPERTY IS PROPER; lupon chairman or the pangkat, and that no conciliation or settlement has been
reached as certified by the lupon secretary or pangkat secretary as attested to by the
IV. lupon or pangkat chairman or unless the settlement has been repudiated by the
parties thereto.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING
SUPREME COURT CIRCULAR NO. 10 WHICH DIRECTS A PLEADER TO (b) Where parties may go directly to court. - The parties may go directly to court in the
INDICATE IN HIS PLEADINGS HIS OFFICIAL RECEIPT OF HIS PAYMENT OF HIS following instances:
IBP DUES.15
(1) Where the accused is under detention;
Petitioner avers that respondents failed to go through the conciliation process before
the Barangay Lupon, a jurisdictional defect that bars the legal action for ejectment. (2) Where a person has otherwise been deprived of personal liberty calling for habeas
The Certification to file action dated 18 January 2002 issued by the Barangay Lupon, corpus proceedings;
appended by the respondents to their Complaint in Civil Case No. 1990, is of no
moment, for it attested only that there was confrontation between the parties on the (3) Where actions are coupled with provisional remedies such as preliminary
matter of rental increase but not on unlawful detainer of the subject property by the injunction, attachment, delivery of personal property, and support pendente lite;
petitioner. If it was the intention of the respondents from the very beginning to eject andcralawlibrary
petitioner from the subject property, they should have brought up the alleged unlawful
stay of the petitioner on the subject property for conciliation before the Barangay (4) Where the action may otherwise be barred by the statute of limitations.
Lupon.
A co-owner may bring such an action, without the necessity of joining all the Failure by respondent George de Castro to attach the said SPAs to the Complaint is
other co-owners as co-plaintiffs, because the suit is deemed to be instituted for innocuous, since it is undisputed that he was granted by his sisters the authority to file
the benefit of all. If the action is for the benefit of the plaintiff alone, such that he the action for ejectment against petitioner prior to the institution of Civil Case No.
claims possession for himself and not for the co-ownership, the action will not 1990. The SPAs in his favor were respectively executed by respondents Annie de
prosper. (Emphasis added.) Castro and Felomina de Castro Uban on 7 February 2002 and 14 March 2002; while
Civil Case No. 1990 was filed by respondent George de Castro on his own behalf and
on behalf of his siblings only on 1 July 2002, or way after he was given by his siblings
In the more recent case of Carandang v. Heirs of De Guzman,21 this Court declared
the authority to file said action. The Court quotes with approval the following
that a co-owner is not even a necessary party to an action for ejectment, for complete
disquisition of the Court of Appeals:
relief can be afforded even in his absence, thus:
Moreover, records show that [herein respondent] George de Castro was indeed
In sum, in suits to recover properties, all co-owners are real parties in interest.
authorized by his sisters Annie de Castro and Felomina de Castro Uban, to prosecute
However, pursuant to Article 487 of the Civil Code and the relevant jurisprudence, any
the case in their behalf as shown by the Special Power of Attorney dated February 7,
one of them may bring an action, any kind of action for the recovery of co-owned
2002 and March 14, 2002. That these documents were appended only to [respondent
properties. Therefore, only one of the co-owners, namely the co-owner who filed the
George de Castro's] position paper is of no moment considering that the authority
suit for the recovery of the co-owned property, is an indispensable party thereto. The
conferred therein was given prior to the institution of the complaint in July, 2002. x x
other co-owners are not indispensable parties. They are not even necessary parties,
x.24
for a complete relief can be afforded in the suit even without their participation, since
the suit is presumed to have been filed for the benefit of all co-owners.
Respondent deceased Jesus de Castro's failure to sign the Verification and
Certificate of Non-Forum Shopping may be excused since he already executed an
Moreover, respondents Annie de Castro and Felomina de Castro Uban each
Affidavit25 with respondent George de Castro that he had personal knowledge of the
executed a Special Power of Attorney, giving respondent George de Castro the
filing of Civil Case No. 1990. In Torres v. Specialized Packaging Development
authority to initiate Civil Case No. 1990.
Corporation,26 the Court ruled that the personal signing of the verification requirement
was deemed substantially complied with when, as in the instant case, two out of 25
A power of attorney is an instrument in writing by which one person, as principal, real parties-in-interest, who undoubtedly have sufficient knowledge and belief to
appoints another as his agent and confers upon him the authority to perform certain swear to the truth of the allegations in the petition, signed the verification attached to
specified acts or kinds of acts on behalf of the principal. The written authorization it.
itself is the power of attorney, and this is clearly indicated by the fact that it has also
been called a "letter of attorney."22
In the same vein, this Court is not persuaded by petitioner's assertion that
respondents' failure to allege the jurisdictional fact that there was "unlawful
Even then, the Court views the SPAs as mere surplusage, such that the lack thereof withholding" of the subject property was fatal to their cause of action.
does not in any way affect the validity of the action for ejectment instituted by
respondent George de Castro. This also disposes of petitioner's contention that
It is apodictic that what determines the nature of an action as well as which court has
respondent George de Castro lacked the authority to sign the Verification and the
jurisdiction over it are the allegations in the complaint and the character of the relief
Certificate of Non-Forum Shopping. As the Court ruled in Mendoza v. Coronel23 :
sought. In an unlawful detainer case, the defendant's possession was originally lawful
but ceased to be so upon the expiration of his right to possess. Hence, the phrase
"unlawful withholding" has been held to imply possession on the part of defendant,
which was legal in the beginning, having no other source than a contract, express or
implied, and which later expired as a right and is being withheld by defendant. 27
In Barba v. Court of Appeals,28 the Court held that although the phrase "unlawfully
withholding" was not actually used by therein petitioner in her complaint, the Court
held that her allegations, nonetheless, amounted to an unlawful withholding of the
subject property by therein private respondents, because they continuously refused to
vacate the premises even after notice and demand.
In the Petition at bar, respondents alleged in their Complaint that they are the
registered owners of the subject property; the subject property was being occupied by
the petitioner pursuant to a monthly lease contract; petitioner refused to accede to
respondents' demand for rental increase; the respondents sent petitioner a letter
terminating the lease agreement and demanding that petitioner vacate and turn over
the possession of the subject property to respondents; and despite such demand,
petitioner failed to surrender the subject property to respondents. 29 The Complaint
sufficiently alleges the unlawful withholding of the subject property by petitioner,
constitutive of unlawful detainer, although the exact words "unlawful withholding" were
not used. In an action for unlawful detainer, an allegation that the defendant is
unlawfully withholding possession from the plaintiff is deemed sufficient, without
necessarily employing the terminology of the law.30
Petitioner's averment that the Court of Appeals should have dismissed respondents'
Petition in light of the failure of their counsel to attach the Official Receipt of his
updated payment of Integrated Bar of the Philippines (IBP) dues is now moot and
academic, since respondents' counsel has already duly complied therewith. It must be
stressed that judicial cases do not come and go through the portals of a court of law
by the mere mandate of technicalities.31 Where a rigid application of the rules will
result in a manifest failure or miscarriage of justice, technicalities should be
disregarded in order to resolve the case.32
Finally, we agree in the ruling of the Court of Appeals that petitioner is liable for the
payment of back rentals, attorney's fees and cost of the suit. Respondents must be
duly indemnified for the loss of income from the subject property on account of
petitioner's refusal to vacate the leased premises.
SO ORDERED.
THIRD DIVISION Complaint, Aure and Aure Lending alleged that they acquired the subject property from
Aquino and her husband Manuel (spouses Aquino) by virtue of a Deed of
Sale[8]executed on 4 June 1996. Aure claimed that after the spouses Aquino received
LIBRADA M. AQUINO, G.R. No. 153567 substantial consideration for the sale of the subject property, they refused to vacate the
Petitioner, Present: same.[9]
YNARES-SANTIAGO, J., In her Answer,[10] Aquino countered that the Complaint in Civil Case No. 17450
Chairperson, lacks cause of action for Aure and Aure Lending do not have any legal right over the
AUSTRIA-MARTINEZ, subject property. Aquino admitted that there was a sale but such was governed by the
CHICO-NAZARIO, Memorandum of Agreement[11] (MOA) signed by Aure. As stated in the MOA, Aure shall
- versus - NACHURA, and secure a loan from a bank or financial institution in his own name using the subject
REYES, JJ. property as collateral and turn over the proceeds thereof to the spouses
Aquino. However, even after Aure successfully secured a loan, the spouses Aquino did
not receive the proceeds thereon or benefited therefrom.
Promulgated:
On 20 April 1999, the MeTC rendered a Decision in Civil Case No. 17450 in
ERNEST S. AURE[1], February 18, 2008 favor of Aquino and dismissed the Complaint for ejectment of Aure and Aure Lending
Respondent. for non-compliance with the barangay conciliation process, among other grounds. The
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x MeTC observed that Aure and Aquino are residents of the same barangay but there is
no showing that any attempt has been made to settle the case amicably at
the barangay level. The MeTC further observed that Aure Lending was improperly
included as plaintiff in Civil Case No. 17450 for it did not stand to be injured or benefited
DECISION by the suit. Finally, the MeTC ruled that since the question of ownership was put in
issue, the action was converted from a mere detainer suit to one incapable of pecuniary
estimation which properly rests within the original exclusive jurisdiction of the RTC. The
CHICO-NAZARIO, J.: dispositive portion of the MeTC Decision reads:
(2) Where a person has otherwise been deprived of There is no dispute herein that the present case was never referred to the
personal liberty calling for habeas corpus proceedings; Barangay Lupon for conciliation before Aure and Aure Lending instituted Civil Case No.
17450. In fact, no allegation of such barangay conciliation proceedings was made in
(3) Where actions are coupled with provisional remedies Aure and Aure Lendings Complaint before the MeTC. The only issue to be resolved is
such as preliminary injunction, attachment, delivery of personal whether non-recourse to the barangay conciliation process is a jurisdictional flaw that
property, and support pendente lite; and warrants the dismissal of the ejectment suit filed with the MeTC.
(4) Where the action may otherwise be barred by the statute Aquino posits that failure to resort to barangay conciliation makes the action
of limitations. for ejectment premature and, hence, dismissible. She likewise avers that this objection
(c) Conciliation among members of indigenous cultural communities. was timely raised during the pre-trial and even subsequently in her Position Paper
The customs and traditions of indigenous cultural communities shall submitted to the MeTC.
be applied in settling disputes between members of the cultural We do not agree.
communities.
SEC. 408. Subject Matter for Amicable Settlement; It is true that the precise technical effect of failure to comply with the
Exception Therein. The lupon of each barangay shall have authority requirement of Section 412 of the Local Government Code on barangay conciliation
to bring together the parties actually residing in the same city or (previously contained in Section 5 of Presidential Decree No. 1508) is much the same
municipality for amicable settlement of all disputes except: effect produced by non-exhaustion of administrative remedies -- the complaint
becomes afflicted with the vice of pre-maturity; and the controversy there alleged is not
(a) Where one party is the government or any subdivision ripe for judicial determination. The complaint becomes vulnerable to a motion to
or instrumentality thereof; dismiss.[22] Nevertheless, the conciliation process is not a jurisdictional
requirement, so that non-compliance therewith cannot affect the jurisdiction
(b) Where one party is a public officer or employee, and the which the court has otherwise acquired over the subject matter or over the
dispute relates to the performance of his official functions; person of the defendant.[23]
(c) Offenses punishable by imprisonment exceeding one As enunciated in the landmark case of Royales v. Intermediate Appellate
(1) year or a fine exceeding Five thousand pesos (P5,000.00); Court[24]:
In other words, inferior courts are now conditionally vested with adjudicatory power over The Case
the issue of title or ownership raised by the parties in an ejectment suit. These courts
shall resolve the question of ownership raised as an incident in an ejectment case Before the Court is a petition for review assailing the 26 July 2002 Decision [1] and the
where a determination thereof is necessary for a proper and complete adjudication of 10 December 2002 Resolution[2] of the Court of Appeals in CA-G.R. SP No. 62002.
the issue of possession.[33]
WHEREFORE, premises considered, the instant Petition is DENIED. The The Antecedent Facts
Court of Appeals Decision dated 17 October 2001 and its Resolution dated 8 May 2002
in CA-G.R. SP No. 63733 are hereby AFFIRMED. Costs against the petitioner. On 18 January 2000, Atty. Oswaldo Macadangdang (Atty. Macadangdang), acting as
administrator of the Estate of Felomina G. Macadangdang (petitioner), filed an action
SO ORDERED. for Unlawful Detainer with Damages against Lucia Gaviola, Agapito Romero, Cristina
Quiones, Boy Laurente, Agustina Tuna, Sotero Tapon, Buenaventura Muring, Sr.,
FIRST DIVISION Rogelio Pasaje, Fe Tuboro, Estanislao Pen, Pablo Navales, and Jose Dagatan
(respondents). Respondents were occupying, by mere tolerance, portions of four
ESTATE OF FELOMINA G.R. No. 156809 parcels of land in the name of the late Felomina G. Macadangdang, covered by
G. MACADANGDANG, Transfer Certificate of Title Nos. T-6084, T-6085, T-6086, and T-6087, all in the Registry
represented by Court Appointed Present: of Deeds of Davao City.
Administrator ATTY. OSWALDO
MACADANGDANG, PUNO, C.J., Chairperson, In a Decision[3] dated 27 June 2000, the Municipal Trial Court in Cities (MTCC), Branch
Petitioner, CARPIO, 4, Davao City, ruled in favor of petitioner, as follows:
CORONA,
LEONARDO-DE CASTRO, and WHEREFORE, judgment is hereby rendered ordering the
- versus - BRION,* JJ. defendants and all the persons claiming rights under them to:
On petitioners motion, the RTC remanded the case to the MTCC for execution of Petitioner moved for the reconsideration of the Decision of the Court of Appeals.
judgment in its Order[6] dated 22 September 2000.
In its 10 December 2002 Resolution, the Court of Appeals denied the motion for lack of
On 3 October 2000, respondents filed a Motion for Reconsideration/New Trial. merit.
In an Order[7] dated 16 October 2000, the MTCC ordered the issuance of a writ of Hence, the petition before this Court.
execution after payment of the execution fee.
The Issue
In an Order[8] dated 30 October 2000, the RTC denied respondents motion for
reconsideration. The RTC ruled that it no longer had jurisdiction over the motion after The sole issue in this case is whether the Court of Appeals erred in reversing the RTCs
the dismissal of respondents appeal. dismissal of respondents appeal for failure to file an appeal memorandum.
Respondents filed a petition for review before the Court of Appeals assailing the RTCs
14 September 2000 Order. The Ruling of this Court
In its Decision promulgated on 26 July 2002, the Court of Appeals set aside the 14 Petitioners allege that the Court of Appeals erred when it allowed the filing of a motion
September 2000 Order and remanded the case to the RTC. for reconsideration before the RTC. Petitioners allege that the case stemmed from an
unlawful detainer case where the Rules on Summary Procedure apply. Petitioners
The Court of Appeals ruled that as a matter of policy, the dismissal of an appeal on allege that under the Rules on Summary Procedure, a motion for reconsideration is a
purely technical grounds is frowned upon. The Court of Appeals ruled that rules of prohibited pleading. Petitioners also allege that due to the mandatory character of
procedure are intended to promote and not defeat substantial justice and should not be Section 7(b), Rule 40 of the 1997 Rules of Civil Procedure, the RTC correctly dismissed
applied in a very rigid and technical sense. The Court of Appeals further ruled that the appeal. Petitioners also pointed out that respondents Motion for
litigants should be afforded every opportunity to establish the merits of their cases Reconsideration/New Trial was neither verified nor accompanied by affidavits of merit
without the constraints of technicalities. as required under Section 2, Rule 37 of the 1997 Rules of Civil Procedure.
Applicability of the Rules on Summary Procedure
The Court of Appeals ruled that a distinction should be made between failure to file a
notice of appeal within the reglementary period and failure to file the appeal Jurisdiction over forcible entry and unlawful detainer cases falls on the Metropolitan
memorandum within the period granted by the appellate court.The Court of Appeals Trial Courts, the Municipal Trial Courts in Cities, the Municipal Trial Courts, and the
ruled that failure to file a notice of appeal within the reglementary period would result to Municipal Circuit Trial Courts.[9] Since the case before the the MTCC was an unlawful
failure of the appellate court to obtain jurisdiction over the appealed decision. Thus, the detainer case, it was governed by the Rules on Summary Procedure. The purpose of
assailed decision would become final and executory upon failure to move for the Rules on Summary Procedure is to prevent undue delays in the disposition of cases
reconsideration. On the other hand, failure to file the appeal memorandum within the and to achieve this, the filing of certain pleadings is prohibited, [10] including the filing of
period granted by the appellate court would only result to abandonment of appeal, a motion for reconsideration.[11]
which could lead to its dismissal upon failure to move for its reconsideration. Thus, the
RTC erred in denying respondents motion for reconsideration on the ground of lack of However, the motion for reconsideration that petitioners allege to be a prohibited
jurisdiction. pleading was filed before the RTC acting as an appellate court. The appeal before the
RTC is no longer covered by the Rules on Summary Procedure.The Rules on Summary
Finally, the Court of Appeals ruled that while the negligence of counsel binds the client, Procedure apply before the appeal to the RTC. Hence, respondents motion for
the rule is not without exceptions such as when its application would result to outright reconsideration filed with the RTC is not a prohibited pleading.
In this case, respondents counsel advanced this reason for his failure to submit the
Procedure on Appeal appeal memorandum:
c. That there was a delay in the filing of defendants-appellants[]
Section 7, Rule 40 of the 1997 Rules of Civil Procedure provides: appeal memorandum due to the heavy backlog of legal paperwork
piled on the table of the undersigned counsel, and he realized his
Sec. 7. Procedure in the Regional Trial Court. - failure to submit defendants[] appeal memorandum when he
received a copy of the dismissal of the case. This is to consider that
(a) Upon receipt of the complete records or the record on appeal, the he is the only lawyer in his law office doing a herculean task.[14]
clerk of court of the Regional Trial Court shall notify the parties of
such fact.
We find no reason to exempt respondents from the general rule. The cause of the delay
(b) Within fifteen (15) days from such notice, it shall be the duty of the in the filing of the appeal memorandum, as explained by respondents counsel, was not
appellant to submit a memorandum which shall briefly discuss the due to gross negligence. It could have been prevented by respondents counsel if he
errors imputed to the lower court, a copy of which shall be furnished only acted with ordinary diligence and prudence in handling the case. For a claim of
by him to the adverse party.Within fifteen (15) days from receipt of gross negligence of counsel to prosper, nothing short of clear abandonment of the
the appellants memorandum, the appellee may file his clients cause must be shown.[15]In one case, the Court ruled that failure to file appellants
memorandum. Failure of the appellant to file a memorandum brief can qualify as simple negligence but it does not amount to gross neglience to
shall be a ground for dismissal of the appeal. justify the annulment of the proceedings below.[16]
(c) Upon the filing of the memorandum of the appellee, or the Finally, respondents were not deprived of due process of law. The right to appeal is not
expiration of the period to do so, the case shall be considered a natural right or a part of due process.[17] It is merely a statutory privilege and may be
submitted for decision. The Regional Trial Court shall decide the case exercised only in the manner and in accordance with the provisions of the law. [18] The
on the basis of the entire record of the proceedings had in the court Court notes that in their memoranda,[19] respondents admitted that they signed an
of origin and such memoranda as are filed. (Emphasis supplied) agreement that they would vacate the land they occupy not later than 28 February
1998. They refused to vacate the land only because they were not relocated as
promised by the owner. Respondents claimed that the land was later declared alienable
In this case, the RTC dismissed respondents appeal for their failure to file an appeal and disposable, and the decision was affirmed by this Court. Hence, respondents
memorandum in accordance with Section 7(b), Rule 40 of the 1997 Rules of Civil alleged that petitioner no longer had the right to drive them out of the land. However,
Procedure. The Court of Appeals reversed the RTCs dismissal of the appeal. respondents did not even indicate the case number and title, as well as the date of
promulgation of the alleged Supreme Court decision, in their memoranda.
The Court of Appeals ruled that while the negligence of counsel binds the client, the
circumstances in this case warrant a departure from this general rule. The Court of WHEREFORE, we GRANT the petition. We SET ASIDE the 26 July 2002 Decision
Appeals ruled that respondents counsel only realized his failure to submit the appeal and the 10 December 2002 Resolution of the Court of Appeals in CA-G.R. SP No.
memorandum when he received a copy of the dismissal of the appeal. The Court of 62002.
Appeals ruled that exceptions to the general rule are recognized to accord relief to a
client who suffered by reason of the counsels gross or palpable mistake or negligence. SO ORDERED.
The general rule is that a client is bound by the acts, even mistakes, of his counsel in
the realm of procedural technique.[12] There are exceptions to this rule, such as when
the reckless or gross negligence of counsel deprives the client of due process of law,
or when the application of the general rule results in the outright deprivation of ones
property through a technicality. [13]
3. That the lessee obligated herself with the Lessor
by virtue of this Lease, to do the following, to wit:
SECOND DIVISION
a) xxx
G.R. No. 152131
FLORAIDA TERAA, b) To keep the leased property in such
Petitioner, Present: repair and condition as it was in the
commencement of the Lease with the
*QUISUMBING, J. Chairperson, exception of portions or parts which may
*CARPIO MORALES, be impaired due to reasonable wear and
**TINGA, tear;
- versus - VELASCO, JR., and
BRION, JJ. c) xxx
BRION, J.: The respondent thus filed a complaint for unlawful detainer[12] against the petitioner
on April 16, 1997 on the ground of the petitioners violation of the terms of the Contract
of Lease.[13] The respondent prayed for the petitioners ejectment of the leased property,
The petitioner Floraida Terana (petitioner) asks us to reverse and set aside, and for the award of P70,000.00, representing the cost of the materials from the
through this Petition for Review on Certiorari,[1] the September 7, 2001 Decision[2] of demolished house, attorneys fees, and costs.[14]
the Court of Appeals (CA), and its subsequent Resolution[3] denying the petitioners
motion for reconsideration. The presiding judge of the Municipal Trial Court (MTC) of Nasugbu,
Batangas, Hon. Herminia Lucas, inhibited from the case on the ground that she is
THE FACTS related to the respondent.[15]
The respondent Antonio Simuangco (respondent) owned a house and lot The petitioner denied allegations of the complaint in her Sagot.[16] She claimed that she
at 138 J.P. Laurel St., Nasugbu, Batangas, which he leased to the demolished the old building and built a new one with the knowledge and consent of the
petitioner.[4] Sometime in 1996, the petitioner demolished the leased house and erected respondent; that the original house was old and was on the verge of collapsing;[17] that
a new one in its place.[5] The respondent alleged that this was done without his without the timely repairs made by the petitioner, the houses collapse would have
consent.[6] The Contract of Lease[7] defining the respective rights and obligations of the caused the death of the petitioner and her family. The petitioner prayed for the court
parties contained the following provisions, which the petitioner allegedly violated: to: 1) dismiss the ejectment case against her; and 2) award in her favor: a) P100,000.00
as moral damages, b) P200,000.00 as reimbursement for the expenses incurred in
building the new house, c) P50,000.00 as attorneys fees, and d) P10,000.00 as costs 2. Ordering the said defendant to pay the amount of
incurred in relation to the suit.[18] Five Thousand Pesos (P5,000.00) as Attorneys fees;
The trial court called for a preliminary conference under Section 7 of the Revised Rules and
of Summary Procedure (RSP) and Section 8 of Rule 70 of the Rules of Court, and
required the parties to file their position papers and affidavits of their witnesses after 3. To pay the costs of suit.
they failed to reach an amicable settlement. [19] Instead of filing their position papers,
both parties moved for an extension of time to file the necessary pleadings. The trial SO ORDERED.[25]
court denied both motions on the ground that the RSP and the Rules of Court,
particularly Rule 70, Section 13(5), prohibit the filing of a motion for extension of time. [20]
The MTC framed the issues in the case as follows: Unaware that a decision had already been rendered, the petitioner filed a
letter entitled Kahilingan,[26] to which she attached her position paper and the affidavits
1. Whether or not there was a violation of the contract of lease of her witnesses.[27] The submission was essentially a motion for reconsideration of the
when the old house was demolished and a new house was denial of motion for extension of time. On November 6, 1977, the MTC denied the
constructed by the defendant; and petitioners Kahilingan as follows:
The MTC rendered its decision on November 5, 1997[23] despite the parties failure to SO ORDERED.[28]
timely file their respective position papers.[24] The decision stated that: according to the
parties Contract of Lease, the consent of the respondent must be obtained before any
alteration or repair could be done on the leased property; that the petitioner failed to Petitioner then filed a Notice of Appeal on November 12, 1997. [29] The
produce any evidence that the respondent had given her prior permission to demolish records of the case were ordered elevated to the Regional Trial Court (RTC) where the
the leased house and construct a new one; that even in her answer, she failed to give case was docketed as Civil Case No. 439.
specific details about the consent given to her; that in demolishing the old structure and
constructing the new one, the petitioner violated the Contract of Lease; that this
violation of the terms of the lease was a ground for judicial ejectment under Article
1673(3) of the Civil Code; and that since the demolition and construction of the new
house was without the consent of the respondent, there was no basis to order the
respondent to reimburse the petitioner. THE RTCS DECISION[30]
SO ORDERED. Third, Section 6 of Rule 37 contemplates a motion for new trial and for reconsideration
filed before a trial court a quo. The RTC in this case was acting as an appellate court;
the petitioners motion for new trial and reconsideration was directed against
the appellate judgment of the RTC, not the original judgment of the trial court.
ISSUES
Fourth, after Republic Act No. 6031 mandated municipal trial courts to record their
proceedings, a trial de novo at the appellate level may no longer be conducted. The
appellate courts may instead review the evidence and records transmitted to it by the
trial court. Since the petitioner is asking the court to review the records of the MTC, The petitioner submits the following as the issue to be decided:
inclusive of her position paper and the affidavits of her witnesses, it is also important to [W]hether under the Rules of Summary Procedure, the Regional
give the respondent an opportunity to file his position paper and the affidavits of his Trial Court, as well as the Court of Appeals, may order the case
witnesses before the MTC renders a judgment. It is the MTC or the trial court that has remanded to the MTC after the plaintiff, herein respondent, failed to
the jurisdiction to do that. submit evidence in support of his complaint because his Position
Paper, affidavit of witnesses and evidence, were not submitted on
THE CAS DECISION time and the extension of time to file the same was denied because
it is prohibited under the Rules on Summary Procedure.[39]
The CA affirmed the RTC in a decision promulgated on September 7, which we break down into the following sub-issues: 1) whether a remand is proper; 2)
2001.[35] The CA noted that the RTCs order of remand was not just based on equity whether the Court should appreciate the petitioners position paper and the affidavits of
and substantial justice, but was also based on law, specifically Section 6 of Rule 135. her witnesses; and 3) whether the complaint for unlawful detainer should be dismissed.
Thus, the CA ruled that the RTC did not err in remanding the case to the MTC and
ordering the conduct of further proceedings after giving the respondent an opportunity
to present his position paper and the affidavits of his witnesses. This ruling did not THE COURTS RULING
satisfy petitioner, giving way to the present petition.
The petition is partly meritorious.
THE PETITION We find that a remand of the case to the lower courts is no longer necessary,
given the pleadings and submissions filed, and the records of the proceedings below.
A remand would delay the overdue resolution of this case (originally filed with the MTC
Before this Court, the petitioner alleges: 1) that the respondent made a on April 16, 1997), and would run counter to the spirit and intent of the RSP. [40]
request for the petitioner to vacate the subject property because his nearest of kin
needed it; 2) that she was only going to vacate the premises if she were reimbursed Petitioners Position Paper
the actual cost incurred in building the said house; [36] 3) that the case be decided on and the Affidavits of Her
the basis of the entire record of the proceedings in the court of origin, including Witnesses Cannot Be
memoranda and briefs submitted by the parties, instead of being remanded to the Admitted
MTC.
In his Comment[37] and Memorandum,[38] the respondent joins the Should the Court admit the petitioners position paper and the affidavits of
petitioners prayer for a ruling based on the records instead of remanding the case to her witnesses attached to her Kahilingan?
the MTC. He prays that, as the MTC ruled, the petitioner be ordered to vacate the
leased property, and that the petitioners claim for reimbursement be denied. The The intent and terms of the RSP both speak against the liberality that the
respondent argues that the MTC correctly ruled on the basis of the parties pleadings, petitioner sees. By its express terms, the purpose of the RSP is to achieve an
the stipulation of facts during the preliminary conference, and the records of the expeditious and inexpensive determination of the cases they cover, among them,
proceedings. forcible entry and unlawful detainer cases.[41] To achieve this objective, the RSP
expressly prohibit certain motions and pleadings that could cause delay, among them, which event the judgment shall be rendered within 30 days from the issuance of the
a motion for extension of time to file pleadings, affidavits or any other paper. If the order.[44] Thus, the proceedings may stop at that point, without need for the submission
extension for the filing of these submissions cannot be allowed, we believe it illogical of position papers. In such a case, what would be extant in the record and the bases
and incongruous to admit a pleading that is already filed late. Effectively, we would for the judgment would be the complaint, answer, and the record of the preliminary
then allow indirectly what we prohibit to be done directly. It is for this reason that in Don conference.
Tino Realty Development Corporation v. Florentino,[42] albeit on the issue of late filing
of an answer in a summary proceeding, we stated that [t]o admit a late answer is to put
a premium on dilatory measures, the very mischief that the rules seek to redress. Unlawful detainer
That a position paper is not indispensable to the courts authority to render The petitioner contends that the Court should not give credence to the respondents
judgment is further evident from what the RSP provides regarding a preliminary claim that he neither had knowledge of nor gave his consent to her acts. She argued
conference: on the basis of the pleadings and the stipulations and admissions made that the respondent had the burden of proving this allegation with positive evidence
by the parties, judgment may be rendered without the need for further proceedings, in after she frontally denied it in her answer. Since the respondent failed to discharge this
burden, she argues that she no longer needed to prove her defense that the demolition verbally or in writing. She could have stated when the consent was solicited and
and construction were done with the respondents knowledge and consent.[48] procured. These, she failed to do. Ergo, the petitioner is deemed to have admitted the
material allegations in the complaint.
The petitioners contention is misplaced.
Second, both parties failed to present evidence other than the allegations in their
First, the material allegations in a complaint must be specifically denied by the pleadings. Thus, the court may weigh the parties allegations against each other. The
defendant in his answer. Section 10, Rule 8 of the 1997 Rules of Court, provides: petitioner presented a general denial, while the respondent set forth an affirmative
assertion. This Court has time and again said that a general denial cannot be given
more weight than an affirmative assertion.[51]
A defendant must specify each material allegation of fact
the truth of which he does not admit and, whenever practicable,
Damages recoverable in an
shall set forth the substance of the matters upon which he relies
unlawful detainer action are
to support his denial. Where a defendant desires to deny only a
limited to rentals or
part of an averment, he shall specify so much of it as is true
reasonable compensation for
and material and shall deny the remainder. Where a defendant
the use of the property
is without knowledge or information sufficient to form a belief as
to the truth of a material averment made in the complaint, he
shall so state, and this shall have the effect of a denial.
This Court has no jurisdiction to award the reimbursement prayed for by both
Section 11, Rule 8 of the Rules of Court likewise provides that material parties. Both parties seek damages other than rentals or reasonable compensation for
allegations in the complaint which are not specifically denied, other than the amount of the use of the property, which are the only forms of damages that may be recovered in
unliquidated damages, are deemed admitted. A denial made without setting forth the an unlawful detainer case.[52] Rule 70, Section 17 of the Rules of Court authorizes the
substance of the matters relied upon in support of the denial, even when to do so is trial court to order the award of an amount representing arrears of rent or reasonable
practicable, does not amount to a specific denial.[49] compensation for the use and occupation of the premises if it finds that the allegations
of the complaint are true.[53]
The petitioners denial in her answer consists of the following:
The rationale for limiting the kind of damages recoverable in an unlawful
1. Maliban sa personal na katangian at tirahan ng detainer case was explained in Araos v. Court of Appeals,[54] wherein the Court held
nasasakdal, ay walang katotuhanan ang mga that:
isinasakdal ng nagsasakdal;
The rule is settled that in forcible entry or unlawful
2. Na hindi lumabag sa kasunduan ng upahan ang detainer cases, the only damage that can be recovered is the fair
nasasakdal; rental value or the reasonable compensation for the use and
occupation of the leased property. The reason for this is that in
3. Na, ang pagpapagawa ng bahay na inuupahan ng such cases, the only issue raised in ejectment cases is that of
nasasakdal ay sa kaalaman at kapahintulutan ng rightful possession; hence, the damages which could be
nagsasakdal at higit na gumanda at tumibay ang recovered are those which the plaintiff could have sustained as a
bahay ng nagsasakdal sa pamamagitan ng mere possessor, or those caused by the loss of the use and
pagpapagawa ng nasasakdal; xxx[50] occupation of the property, and not the damages which he may
have suffered but which have no direct relation to his loss of
We do not find this denial to be specific as the petitioner failed to set forth the substance material possession.
of the matters in which she relied upon to support her denial. The petitioner merely
alleged that consent was given; how and why, she did not say. If indeed consent were
given, it would have been easy to fill in the details. She could have stated in her An action for reimbursement or for recovery of damages may not be properly
pleadings that she verbally informed the respondent of the need for the repairs, or wrote joined with the action for ejectment. The former is an ordinary civil action requiring a
him a letter. She could have stated his response, and how it was conveyed, whether full-blown trial, while an action for unlawful detainer is a special civil action which
requires a summary procedure. The joinder of the two actions is specifically enjoined
by Section 5 of Rule 2 of the Rules of Court, which provides:
SO ORDERED.
4.0 On or about August 11, 1996, the [private respondents] Rubills and Tong Woon
THIRD DIVISION vessel M/V "CHERRY" arrived in Manila and docked at Pier 15 South Harbor, Manila,
and therein completely unloaded on September 9, 1996 a shipment of 120MT Red
[G.R. NO. 167403 : August 6, 2008] Beans and 153.00MT Cattle Meat Colloid covered by Bill of Lading dated August 01,
1996, a photocopy of which is herewith attached as Annex "A" and made an integral
part hereof;
MAKATI INSURANCE CO., INC., Petitioner, v. HON. WILFREDO D. REYES, as
Presiding Judge of the Regional Trial Court of Manila, Branch 36, RUBILLS
INTERNATIONAL, INC., TONG WOON SHIPPING PTE LTD, and ASIAN 5.0 It was found out after the inspection of the subject shipment that eighty four (84)
TERMINALS, INC., Respondents. ton bags of the shipment were in apparent damaged condition, partly to badly wet and
loose/torn on sides and/or ends with spillages/wettages to contents apparent. x x x.
DECISION
xxx
CHICO-NAZARIO, J.:
6.0 The aforesaid losses and damages sustained by the subject shipment were
directly caused and brought about by the wanton fault, gross negligence, malevolent
Assailed in this Petition for Review under Rule 451 of the Revised Rules of Court are
mishandling and culpable disregard, recreance and/or breach of contractual
(1) the Decision2dated 12 August 2004 of the Court of Appeals dismissing the petition
obligations of all or either of the [private respondents] as common carrier and arrastre
filed in CA-G.R. SP No. 74220 by herein petitioner Makati Insurance Co., Inc., and
operator respectively, and as a result of which the owner/assured/consignee Silver
affirming the Order3 dated 2 October 2002 of the Regional Trial Court (RTC) of
Allies Trading International sustained damages and losses in the total sum of Four
Manila, Branch 36, in Civil Case No. 97-84952, which dismissed petitioner's Notice of
Hundred Twelve Thousand Two Hundred Fifty Three & 91/100 Pesos (P412,253.91)
Appeal for having been filed three days beyond the reglementary period; and (2) the
for which [herein petitioner]-insurer paid the consignee-assured. Thus, [petitioner] was
Resolution4 dated 17 February 2005 of the Court of Appeals in the same case
subrogated into the rights and interests of the consignee-assured relative to the said
denying petitioner's Motion for Reconsideration of its earlier Decision.
losses and damages sustained by the subject shipment;
3.2 [Herein private respondent] Asian Terminals, Inc. [ATI] was and is the arrastre
operator at the port of Manila and as such was charged and obligated with the duty of A. Actual damages in the amount of P412,253.91 with legal interest from the date of
receiving cargoes discharged from the vessels docking at the port of Manila, of the filing of the complaint until fully paid;
safekeeping and taking good care of the same while in its protective custody, and
thereafter delivering the same to the respective consignees and/or consignee's b. Exemplary damages in the sum of at least P20,000.00 or as may be found proper
representatives. by this Honorable Court;
c. Attorney's fees in the sum equivalent to twenty five percent (25%) of the principal According to the 17 June 2002 RTC Order:
claim of P103,063.47; andcralawlibrary
After a careful review of the grounds relied upon by [herein petitioner]'s counsel in his
d. Litigation expenses in the sum of at least P10,000.00 or as may be proven, plus verified motion for reconsideration dated December 1, 2001, the Court has no other
costs of suit.7 recourse but to deny the same as the grounds of said motion for reconsideration are
not impressive so as to convince the Court to reverse its Order of November 19,
After the issues were joined, the case was set for pre-trial conference. For the failure 2001,
of petitioner's counsel to appear at the scheduled pre-trial conference on 19
November 2001, RTC Presiding Judge Wilfredo D. Reyes (Judge Reyes) dismissed WHEREFORE, [petitioner]'s motion for reconsideration is DENIED.11
the case without prejudice. His Order of even date reads:
Petitioner received notice of the afore-mentioned Order on 3 July 2002.
On third call of this case at 10:40 o'clock this morning, only counsels for [herein
private respondents] Rubills International, Inc. and Asian Terminals, Inc. appeared. On 17 July 2002, petitioner filed a Notice of Appeal,12 which was promptly opposed by
There was no appearance for [herein petitioner] despite due notice. private respondents for having been filed out of time.13 Petitioner countered that its
failure to file the Notice of Appeal on time was due to its counsel's inadvertence in
Respective counsels of [private respondents] moved for the dismissal of the case on computing the appeal period. The inadvertence was allegedly due to the fact that its
the following grounds: Verified Motion for Reconsideration was filed by registered mail, and the messenger
who mailed it failed to attach to the records of the case the postal receipt showing the
1. For failure of [petitioner] to properly appear for pre-trial conference on September date the said motion was mailed.14 Petitioner's counsel, therefore, was unable to
5, 2001 considering that its counsel and/or representative did not have the requisite determine correctly when petitioner's period to appeal was interrupted by the filing of
authority. its Verified Motion for Reconsideration and how many more days were left in said
period when its Motion was denied.
2. For failure of [petitioner] to appear at the pre-trial conference at the proper time set
on October 16, 2001 although [petitioner]'s counsel came in after [private On 23 September 2002, petitioner filed a Motion to Admit Notice of Appeal,15 alleging
respondents]' counsel had left the court room and the case re-set for continuation of it had no intention to delay the resolution of the case; it had a meritorious case; and
pre-trial on November 19, 2001, and its Notice of Appeal should be granted pursuant to the dictum that "courts should not
place undue importance on technicalities, when by so doing, substantial justice is
3. For failure of [petitioner]'s counsel to appear at today's pre-trial. sacrificed."
It appearing that [petitioner]'s counsel has been given ample opportunity to appear in On 2 October 2002, Judge Reyes issued his Order16 dismissing petitioner's Notice of
the pre-trial conference of this case with the requisite authority for its counsel and/or Appeal for being filed three days beyond the 15-day reglementary period. In so ruling,
representative and that [petitioner]'s counsel has failed to so appear for pre-trial Judge Reyes held that pursuant to Section 3, Rule 41 vis - à-vis Section 2, Rule 22 of
conference, and upon motion of [private respondents]' counsel, this case is dismissed the Revised Rules of Court, the period to appeal is interrupted by a timely motion for
without prejudice. reconsideration. Petitioner filed its Verified Motion for Reconsideration five days after
receiving the Order dismissing the case without prejudice. Excluding the day the said
motion was filed, petitioner had only 11 days left to file a notice of appeal. Petitioner
WHEREFORE, the case at bar is dismissed without prejudice. No costs. 8
received the Order of 17 June 2002 denying its Verified Motion for Reconsideration
on 3 July 2002. Accordingly, it had only until 14 July 2002 to file a Notice of Appeal.
On 29 November 2001, petitioner received the Order dated 19 November 2001 Petitioner, however, filed its Notice of Appeal on 17 July 2002. 17 Judge Reyes,
dismissing its case. On 4 December 2001, petitioner filed its Verified Motion for therefore, held:
Reconsideration9 alleging that sickness prevented its counsel from attending the pre-
trial conference. On 3 July 2002, petitioner received Judge Reyes's Order dated 17
WHEREFORE, plaintiff's notice of appeal is ordered dismissed as it was filed three
June 2002 denying its Verified Motion for Reconsideration. 10
(3) days beyond the reglementary period.18
Petitioner then filed with the Court of Appeals a Petition for Certiorari under Rule 65 of declares categorically what the rights and obligations of the parties are; or it may be
the Revised Rules of Court questioning the 2 October 2002 RTC Order dismissing its an order or judgment that dismisses an action.23
Notice of Appeal. The Petition, however, was denied by the Court of Appeals based
on the following reasons: Propitious to petitioner is Neypes v. Court of Appeals,24 promulgated on 14
September 2005 while the present Petition was already pending before us. In
F]rom an order dismissing an action without prejudice, the remedy of the aggrieved party is to file a petition for certiorari under Neypes, we pronounced that:
Rule 65, or to re-file the case. On this score, therefore, petitioner's Notice of Appeal is clearly dismissible.
To standardize the appeal periods provided in the Rules and to afford litigants fair
Even assuming arguendo that appeal is petitioner's proper remedy, it should still be opportunity to appeal their cases, the Court deems it practical to allow a fresh period
denied for having been filed out of time. x x x.19 of 15 days within which to file the notice of appeal in the Regional Trial Court,
counted from receipt of the order dismissing a motion for a new trial or motion for
The Court of Appeals held: reconsideration.
WHEREFORE, the instant petition is hereby DISMISSED, and the assailed Order Henceforth, this "fresh period rule" shall also apply to Rule 40 governing appeals
dated October 2, 2002 AFFIRMED.20 from the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for
review from the Regional Trial Courts to the Court of Appeals; Rule 43 on
The Motion for Reconsideration filed by the petitioner was denied by the Court of appeals from quasi-judicial agencies to the Court of Appeals and Rule 45 governing
Appeals in a Resolution dated 17 February 2005. appeals by certiorarito the Supreme Court. The new rule aims to regiment or make
the appeal period uniform, to be counted from receipt of the order denying the motion
for new trial, motion for reconsideration (whether full or partial) or any final order or
In the Petition at bar, petitioner insists that:
resolution. (Emphasis ours.)
Based on the foregoing, an appeal should be taken within 15 days from the notice of The Supreme Court may promulgate procedural rules in all courts. It has the sole
judgment or final order appealed from.22 A final judgment or order is one that finally prerogative to amend, repeal or even establish new rules for a more simplified and
disposes of a case, leaving nothing more for the court to do with respect to it. It is an inexpensive process, and the speedy disposition of cases. In the rules governing
adjudication on the merits which, considering the evidence presented at the trial, appeals to it and to the Court of Appeals, particularly Rules 42, 43 and 45, the Court
allows extensions of time, based on justifiable and compelling reasons, for parties to Thereafter, in First Aqua Sugar Traders, Inc. v. Bank of the Philippine Islands,34 we
file their appeals. These extensions may consist of 15 days or more.26 held that a party litigant may now file his notice of appeal either within fifteen days
from receipt of the original decision or within fifteen days from the receipt of the order
Hence, in the interest of substantial justice, procedural rules of the most mandatory denying the motion for reconsideration.
character in terms of compliance may be relaxed.27
In De los Santos v. Vda de Mangubat,35 we applied the same principle of "fresh
With the advent of the "fresh period rule," parties who availed themselves of the period rule," expostulating that procedural law refers to the adjective law which
remedy of motion for reconsideration are now allowed to file a notice of appeal within prescribes rules and forms of procedure in order that courts may be able to administer
fifteen days from the denial of that motion.28 justice. Procedural laws do not come within the legal conception of a retroactive law,
or the general rule against the retroactive operation of statutes. The "fresh period
The "fresh period rule" is not inconsistent with Rule 41, Section 3 of the Revised rule" is irrefragably procedural, prescribing the manner in which the appropriate
Rules of Court which states that the appeal shall be taken "within fifteen (15) days period for appeal is to be computed or determined and, therefore, can be made
from notice of judgment or final order appealed from." The use of the disjunctive word applicable to actions pending upon its effectivity, such as the present case, without
"or" signifies disassociation and independence of one thing from another. It should, as danger of violating anyone else's rights.
a rule, be construed in the sense which it ordinarily implies. 29 Hence, the use of "or" in
the above provision supposes that the notice of appeal may be filed within 15 days We thus hold that when herein petitioner filed its notice of appeal on 17 July 2002, the
from the notice of judgment or within 15 days from notice of the "final order," which, in same was seasonably filed within the fresh period of 15 days, counted from 3 July
this case is the 17 July 2002 RTC Order denying petitioner's Verified Motion for 2002, the date it received the denial of its Verified Motion for Reconsideration.
Reconsideration, received by petitioner on 3 July 2002.
This fresh 15-day period within which to file notice of appeal counted from notice of
Neither does the new rule run counter to the spirit of Section 39 of Batas Pambansa the denial of the motion for reconsideration may be applied to petitioner's case
Blg. 129 which shortened the appeal period from 30 days to 15 days to hasten the inasmuch as rules of procedure may be given retroactive effect on actions pending
disposition of cases. The original period of appeal remains and the requirement for and undetermined at the time of their passage. In Republic v. Court of
strict compliance still applies. The fresh period of 15 days becomes significant only Appeals,36 involving A.M. No. 00-2-03-SC, which provided for the rule that the 60-day
when a party opts to file a motion for new trial or motion for reconsideration. In this period within which to file a Petition for Certiorari shall be reckoned from receipt of the
manner, the trial court which rendered the assailed decision is given another order denying the motion for reconsideration, we stated that rules of procedure "may
opportunity to review the case and, in the process, minimize and/or rectify any error of be given retroactive effect to actions pending and undetermined at the time of their
judgment. While we aim to resolve cases with dispatch and to have judgments of passage and this will not violate any right of a person who may feel that he is
courts become final at some definite time, we likewise aspire to deliver justice fairly. 30 adversely affected, inasmuch as there is no vested rights in rules of procedure."
The "fresh period rule" finally eradicates the confusion as to when the 15-day appeal We also take note of an important declaration made by the Court of Appeals in its
period should be counted - from receipt of notice of judgment or from receipt of notice assailed Decision that even if petitioner's Notice of Appeal was considered filed on
of "final order" appealed from.31 time, it was dismissible for being the wrong remedy.
Taking our bearings from Neypes, in Sumaway v. Urban Bank, Inc.,32 we set aside It bears repeating that the RTC dismissed Civil Case No. 97-84952 without prejudice.
the denial of a notice of appeal which was purportedly filed five days late. With the The rules37provide:
fresh period rule, the 15-day period within which to file the notice of appeal was
counted from notice of the denial of the therein petitioner's motion for reconsideration. Rule 41
APPEAL FROM THE REGIONAL
We followed suit in Elbiña v. Ceniza,33 wherein we applied the principle granting a TRIAL COURTS
fresh period of 15 days within which to file the notice of appeal, counted from receipt
of the order dismissing a motion for new trial or motion for reconsideration or any final Section 1. x x x
order or resolution.
No appeal may be taken from:
xxx All these postponements truly manifest a lack of interest to prosecute on the part of
the petitioner as found by the RTC. Section 3, Rule 17 of the Rules of Court states:
(h) An order dismissing an action without prejudice.
SEC. 3. Dismissal due to fault of plaintiff. - If, for no justifiable cause, the plaintiff fails
Indeed, under the 1997 Rules of Civil Procedure, Rule 41, Section 1(h), thereof to appear on the date of the presentation of his evidence in chief on the complaint, or
expressly provides that no appeal may be taken from an order dismissing an action to prosecute his action for an unreasonable length of time, or to comply with these
without prejudice. It may be subject of a special civil action for certiorari under Rule 65 Rules or any order of the court, the complaint may be dismissed upon motion of the
of the Rules of Court, as amended by the said 1997 Rules of Civil Procedure. The defendant or upon the court's own motion, without prejudice to the right of the
Court of Appeals, therefore, acted correctly in stating that the Notice of Appeal filed by defendant to prosecute his counterclaim in the same or in a separate action. This
the petitioner was dismissible. dismissal shall have the effect of an adjudication upon the merits, unless otherwise
declared by the court.
Even if in the interest of substantial justice, we consider the Notice of Appeal as a
Petition for Certiorariunder Rule 65 of the Rules of Court, still no grave abuse of We have always been steadfast in ruling that in every action, the plaintiff is duty-
discretion may be attributed to the RTC in dismissing Civil Case No. 97-84952. bound to prosecute the same with utmost diligence and with reasonable dispatch to
enable him to obtain the relief prayed for and, at the same time, minimize the clogging
The Writ of Certiorari is an extraordinary remedy to correct errors of jurisdiction. An of the court dockets. The expeditious disposition of cases is as much the duty of the
act of a court or tribunal may only be considered as committed in grave abuse of plaintiff as the court. It must be remembered that a defendant in a case likewise has
discretion when the same was performed in a capricious or whimsical exercise of the right to the speedy disposition of the action filed against him, considering that any
judgment which is equivalent to lack of jurisdiction. The abuse of discretion must be delay in the proceedings entails prolonged anxiety and valuable time wasted. 54
so patent and gross as to amount to an evasion of positive duty or to a virtual refusal
to perform a duty enjoined by law or to act at all in contemplation of law, as where the In all, we find that while it is true that the petitioner's Notice of Appeal was timely filed
power is exercised in an arbitrary and despotic manner by reason of passion or based on our ruling in Neypes, said Notice of Appeal was the wrong remedy. Even if
personal hostility. Be that as it may, it must be emphasized that this practice is considered as a Petition for Certiorari under Rule 65 of the Rules of Court, the same
applied only under certain exceptional circumstances to prevent unnecessary delay in has no merit as discussed above.
the administration of justice and so as not to unduly burden the courts. 38
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals
In the present case, Civil Case No. 97-84952 was initially scheduled for pre-trial dated 12 August 2004 and Resolution dated 17 February 2005 are AFFIRMED. Costs
conference on 17 April 2000.39 By agreement of the parties, the pre-trial conference against petitioner.
was re-set to 8 June 2000.40 Again, by agreement of the parties, the pre-trial
conference was re-set to 6 July 2000,41 only to be re-set once more to 3 August SO ORDERED.
2000.42 On 3 August 2000, petitioner filed a motion to re-set pre-trial conference to 11
September 2000.43 On 11 September 2000, petitioner's counsel was not present;
thus, the pre-trial conference was cancelled and re-set to 17 October 2000.44 On 17
October 2000, the parties manifested that they might settle the case amicably so the
pre-trial conference on said date was cancelled.45 The pre-trial conference was re-set
to 28 November 200046 and again to 17 January 2001 upon motion of private
respondent Asian Terminals, Inc.47 Cancellation and re-setting of the pre-trial
conference also occurred to 28 March 2001,48 19 April 2001,49 20 June 2001,50 31
July 2001.51 Then again on 5 September 2001,52 on the ground that petitioner's
counsel/representative did not have the requisite authority, and on 15 October 2001
because petitioner's counsel failed to arrive at the proper time. 53When petitioner's
counsel again failed to attend the pre-trial conference on 19 November 2001, the RTC
finally ordered the dismissal of the case without prejudice.
Sometime in 1998, RBSL discovered that Dan committed unsound banking
THIRD DIVISION practices, which included the granting of loans to herself, her relatives, and close
friends. Accordingly, Dan was charged with the following offenses: (a) violation of
Section 5 of Republic Act No. 7353;[5] (b) loss of confidence; (c) serious misconduct;
RURAL BANK OF THE SEVENLAKES (S.P.C.), Inc., G.R. No. 174109 (d) willful disobedience to the lawful order of the employer; (e) willful breach of trust;
Petitioner, Present: and (f) incompetence. On 30 September 1998, Dan was preventively suspended from
employment by the RBSL pending the investigation of the charges against her. After
YNARES-SANTIAGO, J., the hearing held before the RBSL, Dan was determined to have committed the offenses
Chairperson, charged. Consequently, Dans appointment as bank manager was revoked by the
AUSTRIA-MARTINEZ, RBSL Board of Directors through Board Resolution No. 1998-127 dated 10 November
- versus - CHICO-NAZARIO, 1998.[6]
NACHURA, and
REYES, JJ. On 4 March 1999, Dan filed a Petition[7] before the SEC, docketed as SEC
Case No. 03-99-6229, praying, inter alia, for the nullification of (a) her preventive
Promulgated: suspension and (b) the revocation of her appointment as bank manager; as well as the
BELEN A. DAN, payment of her backwages and moral and exemplary damages.
Respondent. December 24, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x During the pendency of SEC Case No. 03-99-6229, Dan instituted an action
for damages against RBSL before the Regional Trial Court (RTC) of San Pablo City,
Branch 32, docketed as Civil Case SP No. 5734-2000. In her Complaint in said civil
DECISION case, Dan alleged that she suffered serious anxiety as a result of her wrongful
separation from employment by RBSL. RBSL filed a motion to dismiss Civil Case SP
No. 5734-2000 on the ground of forum shopping, averring that the said case was based
CHICO-NAZARIO, J.: exactly on the same cause of action as that in SEC Case No. 03-99-6229 pending
before the SEC, namely, the wrongful termination of Dans employment. The RTC, in
its Order dated 4 September 2000, granted the motion of RBSL and dismissed Civil
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Revised Case SP No. 5734-2000. The RTC denied Dans Motion for Reconsideration in an Order
Rules of Court, filed by petitioner Rural Bank of the Seven Lakes (RBSL), seeking to dated 3 December 2000. Dan challenged the RTC Orders dated 4 September
reverse and set aside the Decision[1] dated 21 October 2002 and its 2000 and 3 December 2000, dismissing Civil Case SP No. 5734-2000, in her appeal
Resolution[2] dated 7 August 2006 of the Court of Appeals in CA-G.R. SP No. 59193. In before the Court of Appeals.[8]
[3]
its assailed Decision, the appellate court reversed the Decision dated 9 May 2000 of
the Securities and Exchange Commission (SEC) en banc, which upheld the dismissal In the meantime, the SEC Hearing Officer called SEC Case No. 03-99-
by the SEC Hearing Officer of SEC Case No. 03-99-6229, instituted by respondent 6229 for hearing on 3 November 1999, but Dan failed to appear on the said
Belen A. Dan (Dan), for failure to prosecute. date.[9] Thus, the SEC Hearing Officer was prompted to reset the hearing to 29
November 1999, with a warning that should Dan again fail to appear on the date set,
The factual and procedural antecedents of this instant Petition are as follows: the SEC Hearing Officer would already be constrained to dismiss the case. [10] On 24
November 1999, Dans counsel filed an Urgent Motion for Cancellation of the 29
RBSL is a domestic corporation duly authorized by the Central Bank of November 1999 hearing, since he had another hearing scheduled on the same date. In
the Philippines to engage in the banking business. an Order[11] dated 24 November 1999, the SEC Hearing Officer granted the motion and
reset the hearing to 6 December 1999, with a stern warning that he would no longer
In 1975, Dan was employed by RBSL as an assistant bookkeeper. She rose entertain further postponement. Notwithstanding the explicit warning of the SEC
from the ranks and, in 1982, she was appointed bank manager by the RBSL Board of Hearing Officer, Dans counsel still failed to attend the hearing set on 6 December 1999,
Directors.[4] finally causing the Hearing Officer to dismiss SEC Case No. 03-99-6229 for failure to
prosecute.[12]
On appeal, the SEC en banc rendered its Decision[13] dated 9 May THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
2000, affirming the Order dated 6 December 1999 of the SEC Hearing Officer, which RULING THAT [DAN] HAD NOT VIOLATED THE RULE AGAINST
dismissed SEC Case No. 03-99-6229 for non-suit. FORUM-SHOPPING.
Unyielding, Dan filed before the Court of Appeals a Petition for II.
Review[14] under Rule 43 of the Revised Rules of Court assailing the Decision dated 9 THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
May 2000 of the SEC en banc. Dan invoked in her Petition equitable justice to justify HOLDING THAT THE REQUIREMENT OF A VERIFICATION IN
her counsels several postponements of the hearing before the SEC Hearing APPEALS BEFORE THE SEC CAN BE RELAXED.
Officer. Dan urged the appellate court to afford her ample opportunity to fully ventilate
her side of the controversy, in consonance with the Constitutional dicta on due process; III.
and not dispose of her case on technicality. Dan also argued that the issue involving
the postponements of the hearing was rendered moot and academic, considering the THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
issuance by the SEC Hearing Officer, with the conformity of RBSL, of the orders DISREGARDING [DANS] FAILURE TO PROSECUTE HER CASE.
granting her counsels motions for postponement.Lastly, Dan asserted that the failure
of her counsel to appear on the hearing scheduled on 6 December 1999constituted
gross and inexcusable neglect which should not bind her. [15] RBSL accuses Dan of forum shopping in instituting SEC Case No. 03-99-6229
before the SEC and Civil Case SP No. 5734-2000 before the RTC. RBSL alleged that
In response, the RBSL underscored the procedural lapses flagrantly Dan had trifled with the courts and abused their processes by improperly instituting
committed by Dan. RBSL alleged that Dan violated the rule against forum shopping by several cases from the same cause of action.
stating in her Complaint in Civil Case SP No. 5734-2000 before the RTC, that she had
no knowledge of the pendency of any action involving the same party and the same Forum shopping is a deplorable practice of litigants of resorting to two
subject matter, despite her prior institution of SEC Case No. 03-99-6229 before the different fora for the purpose of obtaining the same relief, to increase his or her chances
SEC. RBSL also pointed out that Dans appeal before the SEC En Banc lacked of obtaining a favorable judgment. What is pivotal to consider in determining whether
verification as required by Section 2, Rule II of the 1999 SEC Rules of Procedure. Aside forum shopping exists or not is the vexation caused to the courts and the parties-
from these procedural flaws, RBSL further contended that, in repeatedly disregarding litigants by a person who asks appellate courts and/or administrative entities to rule on
the hearings set in SEC Case No. 03-99-6229, Dan only showed that she was not the same related causes and/or to grant the same or substantially the same relief, in
interested in prosecuting the case.[16] the process creating the possibility of conflicting decisions by the different courts
On 21 October 2002, the Court of Appeals promulgated its Decision[17] in favor or fora upon the same issues.[20]
of Dan, thus, reversing the Decision dated 9 May 2000 of the SEC en banc. According
to the appellate court, the rules of procedure should be viewed as mere tools designed The grave evil sought to be avoided by the rule against forum shopping is the
to facilitate the attainment of justice. Their strict and rigid application, which would result rendition by two competent tribunals of two separate, and contradictory
in technicalities that tend to frustrate rather than promote substantial justice, must decisions. Unscrupulous party litigants, taking advantage of a variety of competent
always be avoided. In the highest interest of justice and equity, the Court of Appeals tribunals, may repeatedly try their luck in several different fora until a favorable result is
directed the SEC Hearing Officer to allow Dan to complete the presentation of her reached. To avoid the resultant confusion, this Court adheres strictly to the rules against
evidence. forum shopping, and any violation of these rules results in the dismissal of a case.[21]
The Motion for Reconsideration of RBSL was denied by the Court of Appeals To stamp out this abominable practice which seriously impairs the efficient
in its Resolution[18] dated 7 August 2006. administration of justice, this Court promulgated Administrative Circulars No. 28-91 and
No. 04-94, which are now embodied as Section 5, Rule 7 of the Rules of Court, which
Hence, this instant Petition for Review on Certiorari[19] filed by RBSL assigning reads:
the following errors:
SEC. 5. Certification against forum shopping. The plaintiff
I. or principal party shall certify under oath in the complaint or other
initiatory pleading asserting a claim for relief, or in a sworn
certification annexed thereto and simultaneously filed therewith: (a)
that he has not theretofore commenced any action or filed any claim and a singular cause of action: the purportedly unjust revocation of her appointment as
involving the same issues in any court, tribunal or quasi-judicial bank manager of RBSL. And thirdly, a judgment rendered in either SEC Case No. 03-
agency and, to the best of his knowledge, no such other action or 99-6229 and Civil Case No. SP No. 5734-2000 shall constitute res judicata on the
claim is pending therein; (b) if there is such other pending action or other. Before they could award the moral damages Dan prayed for, both the SEC and
claim, a complete statement of the present status thereof; and (c) if the RTC must first resolve the issue of whether the revocation of Dans appointment
he should thereafter learn that the same or similar action or claim has was valid.Should the SEC determine that the revocation of Dans appointment was
been filed or is pending, he shall report that fact within five (5) days proper and, consequently, refuse to award moral damages, then the RTC would be
therefrom to the court wherein his aforesaid complaint or initiatory bound thereby and could not render a contrary ruling on the very same issue.
pleading has been filed.
Dismissal of the case and contempt is the inevitable consequence of Dans
Failure to comply with the foregoing requirements shall not violation of the prohibition against forum shopping. As discussed in Sps. Ong v. Court
be curable by mere amendment of the complaint or other initiatory of Appeals[23]:
pleading but shall be cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion and after The distinction between the prohibition against forum shopping and
hearing. The submission of a false certification or non-compliance the certification requirement should by now be too elementary to be
with any of the undertakings therein shall constitute indirect contempt misunderstood. To reiterate, compliance with the certification against
of court, without prejudice to the corresponding administrative and forum shopping is separate from and independent of the avoidance
criminal actions. If the acts of the party or his counsel clearly of the act of forum shopping itself. There is a difference in the
constitute willful and deliberate forum shopping, the same shall be treatment between failure to comply with the certification requirement
ground for summary dismissal with prejudice and shall constitute and violation of the prohibition against forum shopping not only in
direct contempt, as well as a cause for administrative sanctions. terms of imposable sanctions but also in the manner of enforcing
them. The former constitutes sufficient cause for the dismissal
without prejudice of the complaint or initiatory pleading upon
The test for determining the existence of forum shopping is whether the motion and after hearing, while the latter is a ground for
elements of litis pendentia are present, or whether a final judgment in one case summary dismissal thereof and for direct contempt. x x
amounts to res judicata in another. Thus, there is forum shopping when the following x. (Emphasis supplied.)
elements are present: (a) identity of parties, or at least such parties as represent the
same interests in both actions; (b) identity of rights asserted and relief prayed for, the
relief being founded on the same facts; and (c) the identity of the two preceding Dan committed another procedural faux pas in filing an appeal before the
particulars, such that any judgment rendered in the other action will, regardless of which SEC en banc without the required verification.
party is successful, amount to res judicata in the action under consideration; said
requisites are also constitutive of the requisites for auter action pendant or lis The SEC Rules of Procedure on verification under Section 2, Rule III thereof
pendens.[22] states:
The Court holds that the afore-mentioned requisites are all present in the SECTION 2. Verification. All pleadings filed with the
instant case. First, the parties in SEC Case No. 03-99-6229 and Civil Case No. SP No. Commission shall be verified by an affidavit that the affiant has read
5734-2000 are the same, no other than Dan and RBSL. Second, there is also the the pleading and the allegations therein are true and correct of his
identity of rights asserted and reliefs prayed for in these two cases. Dans Complaint own knowledge and belief. A pleading which contains a verification
in Civil Case No. SP No. 5734-2000 before the RTC was for the payment of moral based on information and belief, or upon "knowledges, information
damages and litigation expenses premised on the alleged wrongful revocation of her and belief," or which lacks a proper verification, shall be treated as
appointment as bank manager of RBSL. While the primary relief sought by Dan in an unsigned pleading and shall not be considered as filed.
filing SEC Case No. 03-99-6229 was for the nullification of the revocation of her
appointment as bank manage of RBSL, she also prayed in the same Petition for the
payment of the moral damages she suffered by reason thereof. Undeniably, the It is not controverted that Dans appeal was not verified at all. The Court of
damages Dan seeks to recover in these two cases arose from the same set of facts Appeals, however, held that the absence of verification in Dans appeal before the
SEC en banc is excusable and does not warrant the dismissal of the same. Echoing To the contrary, this Court sees no fault on the part of the SEC Hearing Officer
the ruling of the appellate court, Dan pleads for the liberal interpretation of the when it finally decided to dismiss SEC Case No. 03-99-6229 after the repeated non-
procedural rules in the interest of substantial justice. appearance of Dan and/or her counsel on the scheduled dates for the hearing of her
case.
The Court is not persuaded.
The true test for the exercise of the power to dismiss a case on the ground of failure to
The Court cannot sanction Dans utter disregard of procedural rules. It must prosecute is whether, under the prevailing circumstances, the plaintiff is culpable for
be emphasized that procedural rules are designed to facilitate the adjudication of want of due diligence in failing to proceed with reasonable promptitude. [28]
cases. Courts and litigants alike are enjoined to abide strictly by the rules. While in
certain instances, the Court allows a relaxation in the application of the rules, it never It must be recalled that the hearing of SEC Case No. 03-99-6229 was
intends to forge a weapon for erring litigants to violate the rules with impunity. The originally set on 3 November 1999. It was reset to 24 November 1999 for non-
liberal interpretation and application of rules apply only in proper cases of appearance of Dans counsel. However, the hearing was postponed again upon motion
demonstrable merit and under justifiable causes and circumstances.While it is of Dans counsel, who already had another hearing scheduled on the same date; hence,
true that litigation is not a game of technicalities, it is equally true that every case must the hearing was moved to 6 December 1999. Despite the fact that the hearing was
be prosecuted in accordance with the prescribed procedure to ensure an orderly and reset on her account, Dans counsel still failed to appear before the Hearing Officer on 6
speedy administration of justice. Party litigants and their counsel are well advised to December 1999. Neither Dan nor her counsel provided an explanation for their latest
abide by, rather than flaunt, procedural rules, for these rules illumine the path of the law absence. These events demonstrate a total lack of regard and respect for the
and rationalize the pursuit of justice.[24] It is this symbiosis between form and substance proceedings taking place before the SEC on the part of Dan and her counsel.
that guarantees that discernible result.[25]
Dan blames her counsel for being negligent in handling her case before SEC
The use of the words substantial justice is not a magic wand that will Case No. 03-99-6229. However, other than her counsels failure to attend the scheduled
automatically compel this Court to suspend procedural rules. Procedural rules are not hearings, Dan did not allege or present evidence demonstrative of her counsels gross
to be belittled or dismissed, simply because their non-observance may have resulted or inexcusable negligence, sufficient to release her from the binding effects of her
in prejudice to a partys substantive rights. Like all rules, they are required to be followed counsels acts.
except only for the most persuasive of reasons, when they may be relaxed to relieve a
litigant of an injustice not commensurate with the degree of his thoughtlessness in not It is a well-settled rule that a client is bound by his counsels conduct,
complying with the procedure prescribed.[26] Thus, as called upon by the respondents, negligence, and mistakes in handling the case; the client cannot be heard to complain
the Court yields to the time-honored principle Justice is for all. Litigants must have that the result might have been different had his lawyer proceeded differently. [29]
equal footing in a court of law; the rules are laid down for the benefit of all and should
not be made dependent upon a suitors sweet time and own bidding. [27] The only exception to the general rule -- that a client is bound by the mistakes
of his counsel -- which this Court finds acceptable is when the reckless or gross
Considering the circumstances in the instant case, the Court finds no negligence of counsel deprives the client of due process of law, or when the application
justification for the relaxation of the procedural rules. Other than invoking the Courts of the rule results in the outright deprivation of ones property through a
liberality, Dan miserably failed to give any reason for her failure to comply with the technicality.[30]None of the exceptions exist in the instant case.
procedural requirement of submitting a verification with her appeal to the SEC en
banc. Without a valid explanation, the Court cannot be expected to be liberal or Moreover, Dan herself is guilty of some measure of negligence. If only she
indulgent. kept herself updated as to the developments in SEC Case No. 03-99-6229, she would
have come to know that there had already been several postponements of the hearings
Finally, the Court finds that the Court of Appeals erred in pronouncing that the therein. She could have reminded and/or demanded of her counsel to give due
dismissal of SEC Case No. 03-99-6229 for failure to prosecute by the SEC Hearing attention to her case and to attend the next hearing set. It must be stressed that a
Officer, as affirmed by the SEC en banc, was unjustified. It cannot sustain the plaintiff is bound to prosecute his complaint with assiduousness. Plaintiff is obliged to
reasoning of the appellate court that the postponements of the hearing were not give the necessary assistance to his counsel, as his interest in the outcome of the case
intended to delay the proceedings before the SEC and caused no substantial prejudice is at stake.[31] Failure to do so would justify the dismissal of the case. [32] It is wrong for
to RBSL. plaintiff to expect that all he needs to do is sit back, relax and await a favorable
outcome.[33]
The actuations of Dan and her counsel concerning SEC Case No. 02-99-6229 are
replete with negligence, laxity, and truancy, which justify the dismissal of the said
case. The evident complacency, if not delinquency, of Dan and her counsel in SEC
Case No. 02-99-6229 does not merit the Courts sympathy and consideration. For
failure to diligently pursue her Petition in SEC Case No. 02-99-6229, Dan violated the
right of RBSL to speedy trial. She also sorely tried the patience of the administrative
agency and wasted its precious time and attention. And given the foregoing finding of
this Court of negligence and fault on the part of Dan herself, Dan cannot seek protection
behind the protective veil of equity in consonance with the basic principle in law that he
who comes to court must come with clean hands.[34]
A final word. Equitable relief is not the supremacy but the entitlement of due process
previously denied the litigant.[35] There was no denial of due process in the instant case
that would warrant us to restore a right that was already lost upon the initiative and fault
of Dan.
SO ORDERED.
THIRD DIVISION The dispute arose when Landex started the construction of a concrete wall on one of
its lots. To restrain construction of the wall, Aneco filed a complaint for injunction[5] with
the RTC in Quezon City. Aneco later filed two (2) supplemental complaints seeking to
ANECO REALTY AND G.R. No. 165952 demolish the newly-built wall and to hold Landex liable for two million pesos in
DEVELOPMENT damages.[6]
CORPORATION, Present:
Petitioner, Landex filed its Answer[7] alleging, among others, that Aneco was not deprived access
YNARES-SANTIAGO, J., to its lots due to the construction of the concrete wall. Landex claimed that Aneco has
Cha its own entrance to its property along Miller Street, Resthaven Street, and San
irperson, Francisco del Monte Street. The Resthaven access, however, was rendered
AUSTRIA-MARTINEZ, inaccessible when Aneco constructed a building on said street. Landex also claimed
- versus - CHICO-NAZARIO, that FHDI sold ordinary lots, not subdivision lots, to Aneco based on the express
NACHURA, and stipulation in the deed of sale that FHDI was not interested in pursuing its own
REYES, JJ. subdivision project.
THIS is a simple case of a neighbor seeking to restrain the landowner from fencing his 1. To stop the completion of the concrete wall and
own property. The right to fence flows from the right of ownership. Absent a clear legal excavation of the road lot in question and if
and enforceable right, We will not unduly restrain the landowner from exercising an the same is already completed, to remove
inherent proprietary right. the same and to return the lot to its original
situation;
Before Us is a petition for review on certiorari of the Decision[1] of the Court of
Appeals (CA) affirming the Order[2] of the Regional Trial Court (RTC) dismissing the 2. To pay actual and compensatory damage to the
complaint for injunction filed by petitioner AnecoRealty and Development Corporation plaintiff in the total amount of P50,000.00;
(Aneco) against respondent Landex Development Corporation (Landex).
3. To pay attorneys fees in the amount
Facts of P20,000.00;
Fernandez Hermanos Development, Inc. (FHDI) is the original owner of a tract 4. To pay the cost.
of land in San Francisco Del Monte, Quezon City. FHDI subdivided the land into thirty-
nine (39) lots.[3] It later sold twenty-two (22) lots to petitioner Aneco and the remaining SO ORDERED.[9]
seventeen (17) lots to respondent Landex.[4]
Landex moved for reconsideration.[10] Records reveal that Landex failed to include a
notice of hearing in its motion for reconsideration as required under Section 5, Rule 15
of the 1997 Rules of Civil Procedure. Realizing the defect, Landex later filed a WHEREFORE, in consideration of the foregoing, the instant
motion[11] setting a hearing for its motion for reconsideration. Aneco countered with a appeal is perforce dismissed. Accordingly, the order dated 31 March
motion for execution[12] claiming that the RTC decision is already final and executory. 1996 is hereby affirmed.
Acting on the motion of Landex, the RTC set a hearing on the motion for SO ORDERED.[18]
reconsideration on August 28, 1996. Aneco failed to attend the slated
hearing. The RTC gave Aneco additional time to file a comment on the motion for
reconsideration.[13] In affirming the RTC dismissal of the complaint for injunction, the CA held
that Aneco knew at the time of the sale that the lots sold by FHDI were not subdivision
On March 13, 1997, the RTC issued an order[14] denying the motion for units based on the express stipulation in the deed of sale that FHDI, the seller, was no
execution of Aneco. longer interested in pursuing its subdivision project, thus:
On March 31, 1997, the RTC issued an order granting the motion for The subject property ceased to be a road lot when its former
reconsideration of Landex and dismissing the complaint of Aneco. In granting owner (Fernandez Hermanos, Inc.) sold it to appellant Aneco not as
reconsideration, the RTC stated: subdivision lots and without the intention of pursuing the subdivision
project. The law in point is Article 624 of the New Civil Code, which
In previously ruling for the plaintiff, this Court anchored its provides:
decision on the ruling of the Supreme Court in the case of White
Plains Association vs. Legaspi, 193 SCRA 765, wherein the issue Art. 624. The existence of an apparent
involved was the ownership of a road lot, in an existing, fully sign of easement between two estates,
developed and authorized subdivision, which after a second look, is established or maintained by the owner of both,
apparently inapplicable to the instant case at bar, simply because the shall be considered, should either of them be
property in question never did exist as a subdivision. Since, the alienated, as a title in order that the easement may
property in question never did exist as a subdivision, the limitations continue actively and passively, unless, at the time
imposed by Section 1 of Republic Act No. 440, that no portion of a the ownership of the two estates is divided, the
subdivision road lot shall be closed without the approval of the Court contrary should be provided in the title of
is clearly in appropriate to the case at bar. conveyance of either of them, or the sign aforesaid
should be removed before the execution of the
The records show that the plaintiffs property has access to deed. This provision shall also apply in case of the
a public road as it has its own ingress and egress along Miller St.; division of a thing owned in common by two or
That plaintiffs property is not isolated as it is bounded by Miller St. more persons.
and Resthaven St. in San Francisco del Monte, Quezon City; that
plaintiff could easily make an access to a public road within the Viewed from the aforesaid law, there is no question that the
bounds and limits of its own property; and that the defendant has not law allows the continued use of an apparent easement should the
yet been indemnified whatsoever for the use of his property, as owner alienate the property to different persons. It is noteworthy to
mandated by the Bill of rights. The foregoing circumstances, negates emphasize that the lot in question was provided by the previous
the alleged plaintiffs right of way.[15] owner (Fernandez Hermanos, Inc.) as a road lot because of its
intention to convert it into a subdivision project. The previous owner
Aneco appealed to the CA.[16] even applied for a development permit over the subject
property. However, when the twenty-two (22) lots were sold to
CA Disposition appellant Aneco, it was very clear from the sellers deed of sale that
the lots sold ceased to be subdivision lots. The seller even warranted
On March 31, 2003, the CA rendered a Decision[17] affirming the RTC order, disposing that it shall undertake to extend all the necessary assistance for
as follows: the consolidation of the subdivided lots, including the execution of
the requisite manifestation before the appropriate government
agencies that the seller is no longer interested in pursuing the Issues
subdivision project. In fine, appellant Aneco knew from the very start
that at the time of the sale, the 22 lots sold to it were not intended as Petitioner Aneco assigns quadruple errors to the CA in the following tenor:
subdivision units, although the titles to the different lots have yet to
be consolidated. Consequently, the easement that used to exist on A.
the subject lot ceased when appellant Aneco and the former owner THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING
agreed that the lots would be consolidated and would no longer be PETITIONERS APPEAL AND SUSTAINING THE TRIAL
intended as a subdivision project. COURTS ORDER DATED 31 MARCH 1997 GRANTING
RESPONDENTS MOTION FOR RECONSIDERATION WHICH IS
Appellant Aneco insists that it has the intention of FATALLY DEFECTIVE FOR LACK OF NOTICE OF HEARING.
continuing the subdivision project earlier commenced by the former
owner. It also holds on to the previous development permit granted B.
to Fernandez Hermanos, Inc. The insistence is THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE
futile. Appellant Aneco did not acquire any right from the said TRIAL COURTS ORDER WHICH
previous owner since the latter itself expressly stated in their GAVE FULL WEIGHT AND CREDIT TO THE
agreement that it has no more intention of continuing the subdivision MISLEADING AND ERRONEOUS CERTIFICATION ISSUED BY
project. If appellant desires to convert its property into a subdivision GILDA E. ESTILO WHICH SHE LATER
project, it has to apply in its own name, and must have its own EXPRESSLY AND CATEGORICALLY RECANTED BY WAY OF
provisions for a road lot.[19] HER AFFIDAVIT.
Section 5, Rule 15 of the 1997 Rules of Civil Procedure[23] requires a notice of The emerging trend in the rulings of this Court is to afford
hearing for a contested motion filed in court. Records disclose that the motion for every party litigant the amplest opportunity for the proper and just
reconsideration filed by Landex of the RTC decision did not contain a notice of determination of his cause, free from the constraints of
hearing. There is no dispute that the motion for reconsideration is technicalities. Time and again, this Court has consistently held that
defective. The RTC and the CA ignored the procedural defect and ruled on the rules must not be applied rigidly so as not to override substantial
substantive issues raised by Landex in its motion for reconsideration. The issue justice.[27]
before Us is whether or not the RTC and the CA correctly exercised its discretion in
ignoring the procedural defect. Simply put, the issue is whether or not the requirement Here, We find that the RTC and the CA soundly exercised their discretion in opting for
of notice of hearing should be strictly or liberally applied under the circumstances. a liberal rather than a strict application of the rules on notice of hearing. It must be
stressed that there are no vested right to technicalities. It is within the courts sound
Aneco bats for strict construction. It cites a litany of cases which held that discretion to relax procedural rules in order to fully adjudicate the merits of a case. This
notice of hearing is mandatory. A motion without the required notice of hearing is a Court will not interfere with the exercise of that discretion absent grave abuse or
mere scrap of paper. It does not toll the running of the period to file an appeal or a palpable error. Section 6, Rule 1 of the 1997 Rules of Civil Procedure even mandates
motion for reconsideration. It is argued that the original RTC decision is already final a liberal construction of the rules to promote their objectives of securing a just, speedy,
and executory because of the defective motion.[24] and inexpensive disposition of every action and proceeding.
Landex counters for liberal construction. It similarly cites a catena of cases To be sure, the requirement of a notice of hearing in every contested motion is part of
which held that procedural rules may be relaxed in the interest of substantial due process of law. The notice alerts the opposing party of a pending motion in court
justice. Landex asserts that the procedural defect was cured when it filed a motion and gives him an opportunity to oppose it. What the rule forbids is not the mere absence
setting a hearing for its motion for reconsideration. It is claimed that Aneco was properly of a notice of hearing in a contested motion but the unfair surprise caused by the lack
informed of the pending motion for reconsideration and it was not deprived of an of notice. It is the dire consequences which flow from the procedural error which is
opportunity to be heard.[25] proscribed. If the opposing party is given a sufficient opportunity to oppose a defective
motion, the procedural lapse is deemed cured and the intent of the rule is substantially
It is true that appeals are mere statutory privileges which should be exercised complied. In E & L Mercantile, Inc. v. Intermediate Appellate Court,[28]this Court held:
only in the manner required by law. Procedural rules serve a vital function in our judicial
system. They promote the orderly resolution of cases.Without procedure, there will be Procedural due process is not based solely on a
chaos. It thus behooves upon a litigant to follow basic procedural rules. Dire mechanistic and literal application of a rule such that any deviation is
consequences may flow from procedural lapses. inexorably fatal. Rules of procedure, and this includes the three (3)
days notice requirement, are liberally construed in order to promote
Nonetheless, it is also true that procedural rules are mere tools designed to their object and to assist the parties in obtaining just, speedy, and
facilitate the attainment of justice. Their strict and rigid application should be relaxed inexpensive determination of every action and proceeding (Section
when they hinder rather than promote substantial justice. Public policy dictates that 2, Rule 1, Rules of Court). In Case and Nantz v. Jugo (77 Phil. 517),
court cases should, as much as possible, be resolved on the merits not on mere this Court made it clear that lapses in the literal observance of a rule
technicalities.Substantive justice trumps procedural rules. In Barnes v. Padilla,[26] this of procedure may be overlooked when they have not prejudiced the
Court held: adverse party and have not deprived the court of its authority.
Let it be emphasized that the rules of procedure should be A party cannot ignore a more than sufficient opportunity to
viewed as mere tools designed to facilitate the attainment of exercise its right to be heard and once the court performs its duty
justice. Their strict and rigid application, which would result in and the outcome happens to be against that negligent party,
suddenly interpose a procedural violation already cured, insisting Well-settled is the rule that factual findings and conclusions of law of the trial court when
that everybody should again go back to square one. Dilatory tactics affirmed by the CA are accorded great weight and respect. Here, We find no cogent
cannot be the guiding principle. reason to deviate from the factual findings and conclusion of law of the trial court and
the appellate court. We have meticulously reviewed the records and agree
The rule in De Borja v. Tan (93 Phil. 167), that what the law that Aneco failed to prove any clear legal right to prevent, much less
prohibits is not the absence of previous notice, but the absolute restrain, Landex from fencing its own property.
absence thereof and lack of opportunity to be heard, is the applicable
doctrine. (See also Aguilar v. Tan, 31 SCRA 205; Omico v. Vallejos,
63 SCRA 285; Sumadchat v. Court of Appeals, 111 SCRA Aneco cannot rely on the road lot under the old subdivision project of FHDI because it
488.) x x x[29] knew at the time of the sale that it was buying ordinary lots, not subdivision lots, from
FHDI. This is clear from the deed of sale between FHDI and Aneco where FHDI
We also find that the procedural lapse committed by Landex was manifested that it was no longer interested in pursuing its own subdivision
sufficiently cured when it filed another motion setting a hearing for its defective motion project. If Aneco wants to transform its own lots into a subdivision project, it must make
for reconsideration. Records reveal that the RTC set a hearing for the motion for its own provision for road lots. It certainly cannot piggy back on the road lot of the
reconsideration but Anecos counsel failed to appear. The RTC then defunct subdivision project of FHDI to the detriment of the new
gave Aneco additional time to file comment on the motion for reconsideration.[30] owner Landex. The RTC and the CA correctly dismissed the complaint for injunction
of Aneco for lack of merit.
Aneco was afforded procedural due process when it was given an opportunity to
oppose the motion for reconsideration. It cannot argue unfair surprise because it was WHEREFORE, the petition is DENIED and the appealed Decision AFFIRMED.
afforded ample time to file a comment, as it did comment, on the motion for
reconsideration. There being no substantial injury or unfair prejudice, the RTC and the SO ORDERED.
CA correctly ignored the procedural defect.
Anent the substantive issue, We agree with the RTC and the CA that the complaint for
injunction against Landexshould be dismissed for lack of merit. What is involved here
is an undue interference on the property rights of a landowner to build a concrete wall
on his own property. It is a simple case of a neighbor, petitioner Aneco, seeking to
restrain a landowner, respondent Landex, from fencing his own land.
Article 430 of the Civil Code gives every owner the right to enclose or fence
his land or tenement by means of walls, ditches, hedges or any other means. The right
to fence flows from the right of ownership. As owner of the land, Landex may fence his
property subject only to the limitations and restrictions provided by law. Absent a clear
legal and enforceable right, as here, We will not interfere with the exercise of an
essential attribute of ownership.