WEEK 1 (Civil Procedure)

I. Neypes vs. Court of Appeals 469 SCRA 633 , September 14, 2005
II. Makati Insurance Co., Inc. vs. Reyes 561 SCRA 234 , August 06, 2008
III. Pinga vs. Heirs of German Santiago 494 SCRA 393 , June 30, 2006 Commissioner of Internal Revenue vs. Mirant Pagbilao Corporation
(formerly Southern Energy Quezon, Inc.) 504 SCRA 484 , October 16, 2006
IV. Commissioner of Internal Revenue vs. Mirant Pagbilao Corporation (formerly Southern Energy Quezon, Inc.) 504 SCRA 484 , October 16,
2006
V. Dela Cruz vs. Court of Appeals 510 SCRA 103 , December 06, 2006
VI. Apo Fruits Corporation vs. Land Bank of the Philippines 632 SCRA 727 , October 12, 2010
VII. Herce, Jr. vs. Municipality of Cabuyao, Laguna 512 SCRA 332 , January 23, 2007
VIII. Lorbes vs. Court of Appeals 351 SCRA 716 , February 15, 2001
IX. Dayrit vs. Philippine Bank of Communications 386 SCRA 117 , August 01, 2002
X. Videogram Regulatory Board vs. Court of Appeals 265 SCRA 50 , November 28, 1996
XI. Aguam vs. Court of Appeals 332 SCRA 784 , May 31, 2000
XII. Siguenza vs. Court of Appeals 137 SCRA 570 , July 16, 1985
XIII. Malayang Kapisanan ng mga Manggagawa sa Associated Anglo American Tobacco Corp. vs. Associated Anglo American Tobacco Corp. 546
SCRA 124 , February 18, 2008
XIV. Heirs of the Late Ruben Reinoso, Sr. vs. Court of Appeals 654 SCRA 1 , July 18, 2011
XV. GOVERNMENT SERVICE INSURANCE SYSTEM vs NATIONAL LABOR RELATIONS COMMISSION (NLRC), G.R. No. 180045, November 17, 2010
XVI. Barangay Dasmariñas vs. Creative Play Corner School 640 SCRA 294, January 24, 2011
XVII. Purok Bagong Silang Association, Inc. vs. Yuipco 489 SCRA 382 , May 04, 2006
XVIII. Lim vs. Vianzon 497 SCRA 482 , August 03, 2006
XIX. Springfield Development Corporation, Inc. vs. Presiding Judge, RTC, Misamis Oriental, Br. 40, Cagayan de Oro City 514 SCRA 326 ,
February 06, 2007
XX. Lapulapu Development and Housing Corp. vs. Group Management Corporation 388 SCRA 493 , September 09, 2002
XXI. Suico Industrial Corporation vs. Court of Appeals 301 SCRA 212 , January 20, 1999
XXII. People vs. Romualdez 587 SCRA 123 , April 29, 2009
XXIII. Astorga vs. People 437 SCRA 152, August 20, 2004
XXIV. Manotok IV vs. Heirs of Homer L. Barque 574 SCRA 468 , December 18, 2008

1. Neypes vs. Court of Appeals 469 SCRA 633 , September 14, 2005

EN BANC

DOMINGO NEYPES, LUZ G.R. No. 141524

FAUSTINO, ROGELIO FAUSTINO,
LOLITO VICTORIANO, JACOB
OBANIA AND DOMINGO Present :
CABACUNGAN,
Petitioners, DAVIDE, JR., C.J.
PUNO,
PANGANIBAN,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
CARPIO,
- v e r s u s - AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
CALLEJO, SR.,
AZCUNA,
TINGA,
CHICO-NAZARIO and
GARCIA, JJ.
HON. COURT OF APPEALS, HEIRS
1
OF BERNARDO DEL MUNDO,
namely: FE, CORAZON, JOSEFA,
SALVADOR and CARMEN, all
surnamed DEL MUNDO, LAND BANK
OF THE PHILIPPINES AND HON.
ANTONIO N. ROSALES, Presiding
Judge, Branch 43, Regional Trial
Court, Roxas, Oriental Mindoro,
Respondents. Promulgated :
September 14, 2005
x-----------------------------------------x

DECISION

CORONA, J.:

Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito Victoriano, Jacob Obania and Domingo Cabacungan filed an
action for annulment of judgment and titles of land and/or reconveyance and/or reversion with preliminary injunction before the Regional
Trial Court, Branch 43, of Roxas, Oriental Mindoro, against the Bureau of Forest Development, Bureau of Lands, Land Bank of the Philippines
and the heirs of Bernardo del Mundo, namely, Fe, Corazon, Josefa, Salvador and Carmen.

In the course of the proceedings, the parties (both petitioners and respondents) filed various motions with the trial court. Among
these were: (1) the motion filed by petitioners to declare the respondent heirs, the Bureau of Lands and the Bureau of Forest Development
in default and (2) the motions to dismiss filed by the respondent heirs and the Land Bank of the Philippines, respectively.

In an order dated May 16, 1997, the trial court, presided by public respondent Judge Antonio N. Rosales, resolved the foregoing
motions as follows: (1) the petitioners motion to declare respondents Bureau of Lands and Bureau of Forest Development in default was
granted for their failure to file an answer, but denied as against the respondent heirs of del Mundo because the substituted service of
summons on them was improper; (2) the Land Banks motion to dismiss for lack of cause of action was denied because there were hypothetical
admissions and matters that could be determined only after trial, and (3) the motion to dismiss filed by respondent heirs of del Mundo, based
on prescription, was also denied because there were factual matters that could be determined only after trial.[1]

The respondent heirs filed a motion for reconsideration of the order denying their motion to dismiss on the ground that the trial
court could very well resolve the issue of prescription from the bare allegations of the complaint itself without waiting for the trial proper.

In an order[2] dated February 12, 1998, the trial court dismissed petitioners complaint on the ground that the action had already
prescribed. Petitioners allegedly received a copy of the order of dismissal on March 3, 1998 and, on the 15 th day thereafter or on March 18,
1998, filed a motion for reconsideration. On July 1, 1998, the trial court issued another order dismissing the motion for
reconsideration[3] which petitioners received on July 22, 1998. Five days later, on July 27, 1998, petitioners filed a notice of appeal[4] and paid
the appeal fees on August 3, 1998.

On August 4, 1998, the court a quo denied the notice of appeal, holding that it was filed eight days late. [5] This was received by
petitioners on July 31, 1998. Petitioners filed a motion for reconsideration but this too was denied in an order dated September 3, 1998. [6]

Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of Civil Procedure, petitioners assailed the dismissal of
the notice of appeal before the Court of Appeals.

In the appellate court, petitioners claimed that they had seasonably filed their notice of appeal. They argued that the 15-day
reglementary period to appeal started to run only on July 22, 1998 since this was the day they received the final order of the trial court
denying their motion for reconsideration. When they filed their notice of appeal on July 27, 1998, only five days had elapsed and they were
well within the reglementary period for appeal.[7]

On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It ruled that the 15-day period to appeal should have
been reckoned from March 3, 1998 or the day they received the February 12, 1998 order dismissing their complaint. According to the
appellate court, the order was the final order appealable under the Rules. It held further:

Perforce the petitioners tardy appeal was correctly dismissed for the (P)erfection of an appeal within the
reglementary period and in the manner prescribed by law is jurisdictional and non-compliance with such legal requirement
is fatal and effectively renders the judgment final and executory.[8]

2
Petitioners filed a motion for reconsideration of the aforementioned decision. This was denied by the Court of Appeals on January 6, 2000.

In this present petition for review under Rule 45 of the Rules, petitioners ascribe the following errors allegedly committed by the appellate
court:

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

II

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

III

THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING THAT THE WORDS FINAL ORDER IN SECTION 3, RULE 41,
OF THE 1997 RULES OF CIVIL PROCEDURE WILL REFER TO THE [FIRST] ORDER OF RESPONDENT JUDGE HON. ANTONIO M.
MORALES DATED FEBRUARY 12, 1998 INSTEAD OF THE LAST AND FINAL ORDER DATED JULY 1, 1998 COPY OF WHICH WAS
RECEIVED BY PETITIONERS THROUGH COUNSEL ON JULY 22, 1998.

IV.

THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING THAT THE DECISION IN THE CASE OF DENSO, INC. V. IAC,
148 SCRA 280, IS APPLICABLE IN THE INSTANT CASE THEREBY IGNORING THE PECULIAR FACTS AND CIRCUMSTANCES OF
THIS CASE AND THE FACT THAT THE SAID DECISION WAS RENDERED PRIOR TO THE ENACTMENT OF THE 1997 RULES OF
CIVIL PROCEDURE.[9]

The foregoing issues essentially revolve around the period within which petitioners should have filed their notice of appeal.
First and foremost, the right to appeal is neither a natural right nor a part of due process. It is merely a statutory privilege and may be
exercised only in the manner and in accordance with the provisions of law. Thus, one who seeks to avail of the right to appeal must comply
with the requirements of the Rules. Failure to do so often leads to the loss of the right to appeal. [10] The period to appeal is fixed by both
statute and procedural rules. BP 129,[11] as amended, provides:

Sec. 39. Appeals. The period for appeal from final orders, resolutions, awards, judgments, or decisions of any court in all these cases
shall be fifteen (15) days counted from the notice of the final order, resolution, award, judgment, or decision appealed
from. Provided, however, that in habeas corpus cases, the period for appeal shall be (48) forty-eight hours from the notice
of judgment appealed from. x x x

Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:

SEC. 3. Period of ordinary appeal. ― The appeal shall be taken within fifteen (15) days from the notice of the judgment
or final order appealed from. Where a record on appeal is required, the appellant shall file a notice of appeal and a record
on appeal within thirty (30) days from the notice of judgment or final order.

The period to appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion for extension of
time to file a motion for new trial or reconsideration shall be allowed. (emphasis supplied)

3
Based on the foregoing, an appeal should be taken within 15 days from the notice of judgment or final order appealed from. A final judgment
or order is one that finally disposes of a case, leaving nothing more for the court to do with respect to it. It is an adjudication on the merits
which, considering the evidence presented at the trial, declares categorically what the rights and obligations of the parties are; or it may be
an order or judgment that dismisses an action.[12]

As already mentioned, petitioners argue that the order of July 1, 1998 denying their motion for reconsideration should be construed as the
final order, not the February 12, 1998 order which dismissed their complaint. Since they received their copy of the denial of their motion for
reconsideration only on July 22, 1998, the 15-day reglementary period to appeal had not yet lapsed when they filed their notice of appeal on
July 27, 1998.

What therefore should be deemed as the final order, receipt of which triggers the start of the 15-day reglementary period to
appeal the February 12, 1998 order dismissing the complaint or the July 1, 1998 order dismissing the MR?
In the recent case of Quelnan v. VHF Philippines, Inc.,[13] the trial court declared petitioner Quelnan non-suited and accordingly
dismissed his complaint. Upon receipt of the order of dismissal, he filed an omnibus motion to set it aside. When the omnibus motion was
filed, 12 days of the 15-day period to appeal the order had lapsed. He later on received another order, this time dismissing his omnibus
motion. He then filed his notice of appeal. But this was likewise dismissed ― for having been filed out of time.
The court a quo ruled that petitioner should have appealed within 15 days after the dismissal of his complaint since this was the
final order that was appealable under the Rules. We reversed the trial court and declared that it was the denial of the motion for
reconsideration of an order of dismissal of a complaint which constituted the final order as it was what ended the issues raised there.

This pronouncement was reiterated in the more recent case of Apuyan v. Haldeman et al.[14] where we again considered the order denying
petitioner Apuyans motion for reconsideration as the final order which finally disposed of the issues involved in the case.

Based on the aforementioned cases, we sustain petitioners view that the order dated July 1, 1998 denying their motion for
reconsideration was the final order contemplated in the Rules.
We now come to the next question: if July 1, 1998 was the start of the 15-day reglementary period to appeal, did petitioners in fact
file their notice of appeal on time?

Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or final order to appeal the decision of the trial court. On
the 15thday of the original appeal period (March 18, 1998), petitioners did not file a notice of appeal but instead opted to file a motion for
reconsideration. According to the trial court, the MR only interrupted the running of the 15-day appeal period.[15] It ruled that petitioners,
having filed their MR on the last day of the 15-day reglementary period to appeal, had only one (1) day left to file the notice of appeal upon
receipt of the notice of denial of their MR. Petitioners, however, argue that they were entitled under the Rules to a fresh period of 15 days
from receipt of the final order or the order dismissing their motion for reconsideration.
In Quelnan and Apuyan, both petitioners filed a motion for reconsideration of the decision of the trial court. We ruled there that
they only had the remaining time of the 15-day appeal period to file the notice of appeal. We consistently applied this rule in similar
cases,[16] premised on the long-settled doctrine that the perfection of an appeal in the manner and within the period permitted by law is not
only mandatory but also jurisdictional.[17] The rule is also founded on deep-seated considerations of public policy and sound practice that, at
risk of occasional error, the judgments and awards of courts must become final at some definite time fixed by law. [18]

Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised Rules of Court read:

Sec. 3. How appeal is taken. Appeal maybe taken by serving upon the adverse party and filing with the trial
court within thirty (30) days from notice of order or judgment, a notice of appeal, an appeal bond, and a record on
appeal. The time during which a motion to set aside the judgment or order or for new trial has been pending shall be
deducted, unless such motion fails to satisfy the requirements of Rule 37.

But where such motion has been filed during office hours of the last day of the period herein provided, the appeal
must be perfected within the day following that in which the party appealing received notice of the denial of said
motion.[19] (emphasis supplied)

According to the foregoing provision, the appeal period previously consisted of 30 days. BP 129, however, reduced this appeal period to 15
days. In the deliberations of the Committee on Judicial Reorganization [20] that drafted BP 129, the raison d etre behind the amendment was
to shorten the period of appeal[21] and enhance the efficiency and dispensation of justice. We have since required strict observance of this
reglementary period of appeal. Seldom have we condoned late filing of notices of appeal, [22] and only in very exceptional instances to better
serve the ends of justice.

4
 In National Waterworks and Sewerage Authority and Authority v. Municipality of Libmanan,[23] however, we declared that appeal is
an essential part of our judicial system and the rules of procedure should not be applied rigidly. This Court has on occasion advised the lower
courts to be cautious about not depriving a party of the right to appeal and that every party litigant should be afforded the amplest
opportunity for the proper and just disposition of his cause, free from the constraint of technicalities.

In de la Rosa v. Court of Appeals,[24] we stated that, as a rule, periods which require litigants to do certain acts must be followed
unless, under exceptional circumstances, a delay in the filing of an appeal may be excused on grounds of substantial justice. There, we
condoned the delay incurred by the appealing party due to strong considerations of fairness and justice.
In setting aside technical infirmities and thereby giving due course to tardy appeals, we have not been oblivious to or unmindful of
the extraordinary situations that merit liberal application of the Rules. In those situations where technicalities were dispensed with, our
decisions were not meant to undermine the force and effectivity of the periods set by law. But we hasten to add that in those rare cases
where procedural rules were not stringently applied, there always existed a clear need to prevent the commission of a grave injustice. Our
judicial system and the courts have always tried to maintain a healthy balance between the strict enforcement of procedural laws and the
guarantee that every litigant be given the full opportunity for the just and proper disposition of his cause.[25]
The Supreme Court may promulgate procedural rules in all courts. [26] It has the sole prerogative to amend, repeal or even establish
new rules for a more simplified and inexpensive process, and the speedy disposition of cases. In the rules governing appeals to it and to the
Court of Appeals, particularly Rules 42,[27] 43[28] and 45,[29] the Court allows extensions of time, based on justifiable and compelling reasons,
for parties to file their appeals. These extensions may consist of 15 days or more.

To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court
deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the Regional Trial Court, counted from receipt
of the order dismissing a motion for a new trial or motion for reconsideration. [30]

Henceforth, this fresh period rule shall also apply to Rule 40 governing appeals from the Municipal Trial Courts to the Regional Trial
Courts; Rule 42 on petitions for review from the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial
agencies[31] to the Court of Appeals and Rule 45 governing appeals by certiorari to the Supreme Court.[32] The new rule aims to regiment or
make the appeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion for reconsideration
(whether full or partial) or any final order or resolution.
We thus hold that petitioners seasonably filed their notice of appeal within the fresh period of 15 days, counted from July 22, 1998
(the date of receipt of notice denying their motion for reconsideration). This pronouncement is not inconsistent with Rule 41, Section 3 of
the Rules which states that the appeal shall be taken within 15 days from notice of judgment or final order appealed from. The use of the
disjunctive word or signifies disassociation and independence of one thing from another. It should, as a rule, be construed in the sense in
which it ordinarily implies.[33] Hence, the use of or in the above provision supposes that the notice of appeal may be filed within 15 days from
the notice of judgment or within 15 days from notice of the final order, which we already determined to refer to the July 1, 1998 order
denying the motion for a new trial or reconsideration.

Neither does this new rule run counter to the spirit of Section 39 of BP 129 which shortened the appeal period from 30 days to 15
days to hasten the disposition of cases. The original period of appeal (in this case March 3-18, 1998) remains and the requirement for strict
compliance still applies. The fresh period of 15 days becomes significant only when a party opts to file a motion for new trial or motion for
reconsideration. In this manner, the trial court which rendered the assailed decision is given another opportunity to review the case and, in
the process, minimize and/or rectify any error of judgment. While we aim to resolve cases with dispatch and to have judgments of courts
become final at some definite time, we likewise aspire to deliver justice fairly.

In this case, the new period of 15 days eradicates the confusion as to when the 15-day appeal period should be counted from receipt
of notice of judgment (March 3, 1998) or from receipt of notice of final order appealed from (July 22, 1998).

To recapitulate, a party litigant may either file his notice of appeal within 15 days from receipt of the Regional Trial Courts decision
or file it within 15 days from receipt of the order (the final order) denying his motion for new trial or motion for reconsideration. Obviously,
the new 15-day period may be availed of only if either motion is filed; otherwise, the decision becomes final and executory after the lapse of
the original appeal period provided in Rule 41, Section 3.
Petitioners here filed their notice of appeal on July 27, 1998 or five days from receipt of the order denying their motion for
reconsideration on July 22, 1998. Hence, the notice of appeal was well within the fresh appeal period of 15 days, as already discussed.[34]

We deem it unnecessary to discuss the applicability of Denso (Philippines), Inc. v. IAC[35] since the Court of Appeals never even referred to it
in its assailed decision.

WHEREFORE, the petition is hereby GRANTED and the assailed decision of the Court of Appeals REVERSED and SET ASIDE.
Accordingly, let the records of this case be remanded to the Court of Appeals for further proceedings.

5
No costs.

SO ORDERED.

2. Makati Insurance Co., Inc. vs. Reyes 561 SCRA 234 , August 06, 2008

THIRD DIVISION

MAKATI INSURANCE CO., INC., G.R. No. 167403

Petitioner, Present:

- versus - YNARES-SANTIAGO, J.,

Chairperson,
AUSTRIA-MARTINEZ,

HON. WILFREDO D. REYES, as Presiding CHICO-NAZARIO,

Judge of the Regional Trial Court of
Manila, Branch 36, RUBILLS NACHURA, and
INTERNATIONAL, INC., TONG WOON REYES, JJ.
SHIPPING PTE LTD, and ASIAN
TERMINALS, INC.,

Respondents.

Promulgated:

August 6, 2008

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Assailed in this Petition for Review under Rule 45[1] of the Revised Rules of Court are (1) the Decision[2] dated 12 August 2004 of the Court of
Appeals dismissing the petition filed in CA-G.R. SP No. 74220 by herein petitioner Makati Insurance Co., Inc., and affirming the Order[3] dated
2 October 2002 of the Regional Trial Court (RTC) of Manila, Branch 36, in Civil Case No. 97-84952, which dismissed petitioners Notice of
Appeal for having been filed three days beyond the reglementary period; and (2) the Resolution [4]dated 17 February 2005 of the Court of
Appeals in the same case denying petitioners Motion for Reconsideration of its earlier Decision.

The generative facts of the present Petition are as follows.

6
Petitioner filed before the RTC a Complaint[5] against private respondents Rubills International, Inc., Tong Woon Shipping PTE., LTD., and Asian
Terminals, Inc. for damages arising from breach of contract of carriage. In its Complaint, petitioner alleged that:

3.1 [Herein private respondents] Rubills International, Inc. and Tong Woon Shipping Pte. Ltd.
[Rubills for brevity], were and are the owners, operators, charterers, bailees, representatives, or agents
of several ocean going vessels, engaged in ocean carriage to and from Philippine ports in foreign trade,
one of which is the vessel M/V Cherry a common carrier, bound to observe extraordinary diligence in
the care and custody of goods while in its protective custody.

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 receiving cargoes discharged from
the vessels docking at the port of Manila, of safekeeping and taking good care of the same while in its
protective custody, and thereafter delivering the same to the respective consignees and/or consignees
representatives.

4.0 On or about August 11, 1996, the [private respondents] Rubills and Tong Woon 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 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;

5.0 It was found out after the inspection of the subject shipment that eighty four (84) 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.

xxxx

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 mishandling and culpable disregard, recreance and/or breach of contractual
obligations of all or either of the [private respondents] as common carrier and arrastre operator respectively, and as a
result of which the owner/assured/consignee Silver Allies Trading International sustained damages and losses in the total
sum of Four Hundred Twelve Thousand Two Hundred Fifty Three & 91/100 Pesos (P412,253.91) for which [herein
petitioner]-insurer paid the consignee-assured. Thus, [petitioner] was subrogated into the rights and interests of the
consignee-assured relative to the said losses and damages sustained by the subject shipment;

7.0 Demands were lodged against the [private respondents] for compensation of the amount paid by the [petitioner] to
the consignee-assured, but the [private respondents] failed, ignored and refused to heed the same to the damage and
prejudice of the [petitioner];

8.0 [Private respondents] are guilty of wanton fault, gross negligence, malevolent mishandling and culpable disregard of
their contractual obligations in bringing about and contumaciously causing the losses and damages to the said shipment
x x x.[6]

Petitioner prayed in its Complaint that:

7
 [J]udgment be rendered ordering the [herein private respondents], jointly and severally or whichever may be found liable,
to pay [herein petitioner]:

a. Actual damages in the amount of P412,253.91 with legal interest from the date of the filing of the complaint until fully
paid;

b. Exemplary damages in the sum of at least P20,000.00 or as may be found proper by this Honorable Court;

c. Attorneys fees in the sum equivalent to twenty five percent (25%) of the principal claim of P103,063.47; and

d. Litigation expenses in the sum of at least P10,000.00 or as may be proven, plus costs of suit.[7]

After the issues were joined, the case was set for pre-trial conference. For the failure of petitioners counsel to appear at the scheduled pre-
trial conference on 19 November 2001, RTC Presiding Judge Wilfredo D. Reyes (Judge Reyes) dismissed the case without prejudice. His Order
of even date reads:

On third call of this case at 10:40 oclock this morning, only counsels for [herein private respondents] Rubills International,
Inc. and Asian Terminals, Inc. appeared. There was no appearance for [herein petitioner] despite due notice.

Respective counsels of [private respondents] moved for the dismissal of the case on the following grounds:

1. For failure of [petitioner] to properly appear for pre-trial conference on September 5, 2001 considering that its counsel
and/or representative did not have the requisite authority.

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 respondents] counsel had left the court room and the case re-set for
continuation of pre-trial on November 19, 2001, and

3. For failure of [petitioner]s counsel to appear at todays pre-trial.

It appearing that [petitioner]s counsel has been given ample opportunity to appear in the pre-trial conference of this case
with the requisite authority for its counsel and/or representative and that [petitioner]s counsel has failed to so appear for
pre-trial conference, and upon motion of [private respondents] counsel, this case is dismissed without prejudice.

WHEREFORE, the case at bar is dismissed without prejudice. No costs.[8]

8
On 29 November 2001, petitioner received the Order dated 19 November 2001 dismissing its case. On 4 December 2001, petitioner filed its
Verified Motion for Reconsideration[9] alleging that sickness prevented its counsel from attending the pre-trial conference. On 3 July 2002,
petitioner received Judge Reyess Order dated 17 June 2002 denying its Verified Motion for Reconsideration.[10]

According to the 17 June 2002 RTC Order:

After a careful review of the grounds relied upon by [herein petitioner]s counsel in his verified motion for reconsideration
dated December 1, 2001, the Court has no other 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, 2001,

WHEREFORE, [petitioner]s motion for reconsideration is DENIED.[11]

Petitioner received notice of the afore-mentioned Order on 3 July 2002.

On 17 July 2002, petitioner filed a Notice of Appeal,[12] which was promptly opposed by 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 counsels inadvertence in computing the appeal
period. The inadvertence was allegedly due to the fact that its 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 date the said motion was
mailed.[14] Petitioners counsel, therefore, was unable to determine correctly when petitioners period to appeal was interrupted by the filing
of its Verified Motion for Reconsideration and how many more days were left in said period when its Motion was denied.

On 23 September 2002, petitioner filed a Motion to Admit Notice of Appeal,[15] alleging it had no intention to delay the resolution of the case;
it had a meritorious case; 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 sacrificed.

On 2 October 2002, Judge Reyes issued his Order[16] dismissing petitioners Notice of Appeal for being filed three days beyond the 15-day
reglementary period. In so ruling, Judge Reyes held that pursuant to Section 3, Rule 41 vis--vis Section 2, Rule 22 of the Revised Rules of Court,
the period to appeal is interrupted by a timely motion for 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 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. Petitioner, however, filed its Notice of Appeal on 17 July
2002.[17] Judge Reyes, therefore, held:

WHEREFORE, plaintiffs notice of appeal is ordered dismissed as it was filed three (3) days beyond the reglementary
period.[18]

Petitioner then filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the Revised Rules of Court questioning the
2 October 2002 RTC Order dismissing its Notice of Appeal. The Petition, however, was denied by the Court of Appeals based on the following
reasons:

[F]rom an order dismissing an action without prejudice, the remedy of the aggrieved party is to file a petition for certiorari
under Rule 65, or to re-file the case. On this score, therefore, petitioners Notice of Appeal is clearly dismissible.

9
 Even assuming arguendo that appeal is petitioners proper remedy, it should still be denied for having been filed out of
time. x x x.[19]

The Court of Appeals held:

WHEREFORE, the instant petition is hereby DISMISSED, and the assailed Order dated October 2, 2002 AFFIRMED.[20]

The Motion for Reconsideration filed by the petitioner was denied by the Court of Appeals in a Resolution dated 17 February 2005.

In the Petition at bar, petitioner insists that:

EXTRAORDINARY CIRCUMSTANCES ATTENDANT TO THE CASE AT BAR WARRANT THE LIBERAL APPLICATION OF THE
RULES.[21]

We first hew our attention to the main issue for our resolution: whether the Notice of Appeal filed by petitioner was filed out of
time.

Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:

SEC. 3. Period of ordinary appeal. The appeal shall be taken within fifteen (15) days from notice of the judgment
or final order appealed from. Where a record on appeal is required, the appellant shall file a notice of appeal and a record
on appeal within thirty (30) days from notice of the judgment or final order.

The period of appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion for
extension of time to file a motion for new trial or reconsideration shall be allowed.

Based on the foregoing, an appeal should be taken within 15 days from the notice of judgment or final order appealed from.[22] A
final judgment or order is one that finally disposes of a case, leaving nothing more for the court to do with respect to it. It is an adjudication
on the merits which, considering the evidence presented at the trial, declares categorically what the rights and obligations of the parties are;
or it may be an order or judgment that dismisses an action.[23]

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 Neypes, we pronounced that:

To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their
cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the
Regional Trial Court, counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration.

10
 Henceforth, this fresh period rule shall also apply to Rule 40 governing appeals from the Municipal Trial Courts
to the Regional Trial Courts; Rule 42 on petitions for review from the Regional Trial Courts to the Court of Appeals; Rule
43 on appeals from quasi-judicial agencies to the Court of Appeals and Rule 45 governing appeals by certiorari to 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 resolution.
(Emphasis ours.)

Rules of Procedure are mere tools designed to facilitate the attainment of justice; their strict and rigid application which would
result in technicalities that tend to frustrate rather than promote substantial justice must always be eschewed.[25]

We justified in Neypes that:

In setting aside technical infirmities and thereby giving due course to tardy appeals, we have not been oblivious
to or unmindful of the extraordinary situations that merit liberal application of the Rules. In those situations where
technicalities were dispensed with, our decisions were not meant to undermine the force and effectivity of the periods set
by law. But we hasten to add that in those rare cases where procedural rules were not stringently applied, there always
existed a clear need to prevent the commission of a grave injustice. Our judicial system and the courts have always tried
to maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that every litigant be
given the full opportunity for the just and proper disposition of his cause.

The Supreme Court may promulgate procedural rules in all courts. It has the sole prerogative to amend, repeal
or even establish new rules for a more simplified and inexpensive process, and the speedy disposition of cases. In the rules
governing appeals to it and to the Court of Appeals, particularly Rules 42, 43 and 45, the Court allows extensions of time,
based on justifiable and compelling reasons, for parties to file their appeals. These extensions may consist of 15 days or
more.[26]

Hence, in the interest of substantial justice, procedural rules of the most mandatory character in terms of compliance may be
relaxed.[27]

With the advent of the "fresh period rule," parties who availed themselves of the remedy of motion for reconsideration are now
allowed to file a notice of appeal within fifteen days from the denial of that motion. [28]

The fresh period rule is not inconsistent with Rule 41, Section 3 of the Revised Rules of Court which states that the appeal shall be
taken within fifteen (15) days from notice of judgment or final order appealed from. The use of the disjunctive word or signifies disassociation
and independence of one thing from another. It should, as a rule, be construed in the sense 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 from the notice of judgment or within 15 days from
notice of the final order, which, in this case is the 17 July 2002 RTC Order denying petitioners Verified Motion for Reconsideration, received
by petitioner on 3 July 2002.

Neither does the new rule run counter to the spirit of Section 39 of Batas Pambansa Blg. 129 which shortened the appeal period
from 30 days to 15 days to hasten the disposition of cases. The original period of appeal remains and the requirement for strict compliance
still applies. The fresh period of 15 days becomes significant only when a party opts to file a motion for new trial or motion for
reconsideration. In this manner, the trial court which rendered the assailed decision is given another opportunity to review the case and, in
the process, minimize and/or rectify any error of judgment. While we aim to resolve cases with dispatch and to have judgments of courts
become final at some definite time, we likewise aspire to deliver justice fairly. [30]

11
 The fresh period rule finally eradicates the confusion as to when the 15-day appeal period should be counted from receipt of notice
of judgment or from receipt of notice of final order appealed from.[31]

Taking our bearings from Neypes, in Sumaway v. Urban Bank, Inc.,[32] we set aside the denial of a notice of appeal which was
purportedly filed five days late. With the 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 petitioners motion for reconsideration.

We followed suit in Elbia v. Ceniza,[33] wherein we applied the principle granting a 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 order or
resolution.

Thereafter, in First Aqua Sugar Traders, Inc. v. Bank of the Philippine Islands, [34] we 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 denying the
motion for reconsideration.

In De los Santos v. Vda de Mangubat,[35] we applied the same principle of fresh period rule, expostulating that procedural law refers
to the adjective law which prescribes rules and forms of procedure in order that courts may be able to administer 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
rule" is irrefragably procedural, prescribing the manner in which the appropriate period for appeal is to be computed or determined and,
therefore, can be made applicable to actions pending upon its effectivity, such as the present case, without danger of violating anyone elses
rights.

We thus hold that when herein petitioner filed its notice of appeal on 17 July 2002, the same was seasonably filed within the fresh
period of 15 days, counted from 3 July 2002, the date it received the denial of its Verified Motion for Reconsideration.

This fresh 15-day period within which to file notice of appeal counted from notice of the denial of the motion for reconsideration
may be applied to petitioners case inasmuch as rules of procedure may be given retroactive effect on actions pending and undetermined at
the time of their passage. In Republic v. Court of Appeals,[36] involving A.M. No. 00-2-03-SC, which provided for the rule that the 60-day period
within which to file a petition for certiorari shall be reckoned from receipt of the order denying the motion for reconsideration, we stated
that rules of procedure may be given retroactive effect to actions pending and undetermined at the time of their passage and this will not
violate any right of a person who may feel that he is adversely affected, inasmuch as there is no vested rights in rules of procedure.

We also take note of an important declaration made by the Court of Appeals in its assailed Decision that even if petitioners Notice
of Appeal was considered filed on time, it was dismissible for being the wrong remedy.

It bears repeating that the RTC dismissed Civil Case No. 97-84952 without prejudice. The rules[37] provide:

Rule 41

APPEAL FROM THE REGIONAL

TRIAL COURTS

Section 1. x x x

12
 No appeal may be taken from:

xxxx

(h) An order dismissing an action without prejudice.

Indeed, under the 1997 Rules of Civil Procedure, Rule 41, Section 1(h), thereof expressly provides that no appeal may be taken from
an order dismissing an action without prejudice. It may be subject of a special civil action for certiorari under Rule 65 of the Rules of Court,
as amended by the said 1997 Rules of Civil Procedure. The Court of Appeals, therefore, acted correctly in stating that the Notice of Appeal
filed by the petitioner was dismissible.

Even if in the interest of substantial justice, we consider the Notice of Appeal as a Petition for Certiorari under Rule 65 of the Rules
of Court, still no grave abuse of discretion may be attributed to the RTC in dismissing Civil Case No. 97-84952.

The Writ of Certiorari is an extraordinary remedy to correct errors of jurisdiction. An act of a court or tribunal may only be considered as
committed in grave abuse of discretion when the same was performed in a capricious or whimsical exercise of judgment which is equivalent
to lack of jurisdiction. The abuse of discretion must be 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 power is exercised in an arbitrary and despotic manner
by reason of passion or personal hostility. Be that as it may, it must be emphasized that this practice is applied only under certain exceptional
circumstances to prevent unnecessary delay in the administration of justice and so as not to unduly burden the courts. [38]

In the present case, Civil Case No. 97-84952 was initially scheduled for pre-trial conference on 17 April 2000.[39] By agreement of the
parties, the pre-trial conference 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 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, petitioners 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 2000[46] 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 petitioners counsel/representative did not
have the requisite authority, and on 15 October 2001 because petitioners counsel failed to arrive at the proper time.[53] When petitioners
counsel again failed to attend the pre-trial conference on 19 November 2001, the RTC finally ordered the dismissal of the case without
prejudice.

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:

SEC. 3. Dismissal due to fault of plaintiff. If, for no justifiable cause, the plaintiff fails to appear on the date of the
presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to
comply with these Rules or any order of the court, the complaint may be dismissed upon motion of the defendant or upon
the courts own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a
separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the
court.

13
 We have always been steadfast in ruling that in every action, the plaintiff is duty-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 of the court
dockets. The expeditious disposition of cases is as much the duty of the plaintiff as the court. It must be remembered that a defendant in a
case likewise has the right to the speedy disposition of the action filed against him, considering that any delay in the proceedings entails
prolonged anxiety and valuable time wasted.[54]

IN ALL, we find that while it is true that the petitioners Notice of Appeal was timely filed based on our ruling in Neypes, said Notice
of Appeal was the wrong remedy.Even if considered as a Petition for Certiorari under Rule 65 of the Rules of Court, the same has no merit as
discussed above.

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated 12 August 2004 and Resolution dated 17
February 2005 are AFFIRMED.Costs against petitioner.

SO ORDERED.

3. Pinga vs. Heirs of German Santiago 494 SCRA 393 , June 30, 2006

THIRD DIVISION

EDGARDO PINGA, G.R. No. 170354

Petitioner,

Present:

QUISUMBING, J.,

- versus - Chairperson,

CARPIO,

CARPIO MORALES,

THE HEIRS OF GERMAN TINGA, and

SANTIAGO represented by VELASCO, JR. JJ.,

FERNANDO SANTIAGO,

Respondents.

Promulgated:

June 30, 2006

x--------------------------------------------------------------------------------x

DECISION

TINGA, J.:
14
The constitutional faculty of the Court to promulgate rules of practice and procedure [1] necessarily carries the power to overturn judicial
precedents on points of remedial law through the amendment of the Rules of Court. One of the notable changes introduced in the 1997 Rules
of Civil Procedure is the explicit proviso that if a complaint is dismissed due to fault of the plaintiff, such dismissal is without prejudice to the
right of the defendant to prosecute his counterclaim in the same or in a separate action.[2] The innovation was instituted in spite of previous
jurisprudence holding that the fact of the dismissal of the complaint was sufficient to justify the dismissal as well of the compulsory
counterclaim.[3]

In granting this petition, the Court recognizes that the former jurisprudential rule can no longer stand in light of Section 3, Rule 17
of the 1997 Rules of Civil Procedure.

The relevant facts are simple enough. Petitioner Eduardo Pinga was named as one of two defendants in a complaint for injunction[4] filed with
Branch 29 of the Regional Trial Court (RTC)[5] of San Miguel, Zamboanga del Sur, by respondent Heirs of German Santiago, represented by
Fernando Santiago. The Complaint[6] dated 28 May 1998 alleged in essence that petitioner and co-defendant Vicente Saavedra had been
unlawfully entering the coco lands of the respondent, cutting wood and bamboos and harvesting the fruits of the coconut trees therein.
Respondents prayed that petitioner and Saavedra be enjoined from committing acts of depredation on their properties, and ordered to pay
damages.

In their Amended Answer with Counterclaim,[7] petitioner and his co-defendant disputed respondents ownership of the properties in
question, asserting that petitioners father, Edmundo Pinga, from whom defendants derived their interest in the properties, had been in
possession thereof since the 1930s.[8] They alleged that as far back as 1968, respondents had already been ordered ejected from the
properties after a complaint for forcible entry was filed by the heirs of Edmundo Pinga. It was further claimed that respondents application
for free patent over the properties was rejected by the Office of the President in 1971. Defendants in turn prayed that owing to respondents
forcible re-entry in the properties and the irresponsible and reckless filing of the case, they be awarded various types of damages instead in
amounts totaling P2,100,000 plus costs of suit.[9]

By July of 2005, the trial of the case had not yet been completed. Moreover, respondents, as plaintiffs, had failed to present their evidence.
It appears that on 25 October 2004, the RTC already ordered the dismissal of the complaint after respondents counsel had sought the
postponement of the hearing scheduled then.[10] However, the order of dismissal was subsequently reconsidered by the RTC in an Order
dated 9 June 2005, which took into account the assurance of respondents counsel that he would give priority to that case. [11]

At the hearing of 27 July 2005, plaintiffs counsel on record failed to appear, sending in his stead a representative who sought the
postponement of the hearing. Counsel for defendants (who include herein petitioner) opposed the move for postponement and moved
instead for the dismissal of the case. The RTC noted that it was obvious that respondents had failed to prosecute the case for an unreasonable
length of time, in fact not having presented their evidence yet. On that ground, the complaint was dismissed. At the same time, the RTC
allowed defendants to present their evidence ex-parte.[12]

Respondents filed a Motion for Reconsideration[13] of the order issued in open court on 27 July 2005, opting however not to seek
that their complaint be reinstated, but praying instead that the entire action be dismissed and petitioner be disallowed from presenting
evidence ex-parte. Respondents claimed that the order of the RTC allowing petitioner to present evidence ex-parte was not in accord with
established jurisprudence. They cited cases, particularly City of Manila v. Ruymann[14] and Domingo v. Santos,[15]which noted those instances
in which a counterclaim could not remain pending for independent adjudication.

On 9 August 2005, the RTC promulgated an order granting respondents Motion for Reconsideration and dismissing the
counterclaim, citing as the only ground therefor that there is no opposition to the Motion for Reconsideration of the
[respondents].[16] Petitioner filed a Motion for Reconsideration, but the same was denied by the RTC in an Order dated 10 October
2005.[17] Notably, respondents filed an Opposition to Defendants Urgent Motion for Reconsideration, wherein they argued that the prevailing
jurisprudential rule[18] is that compulsory counterclaims cannot be adjudicated independently of plaintiffs cause of action, and a conversu,
the dismissal of the complaint carries with it the dismissal of the compulsory counterclaims. [19]

15
 The matter was elevated to this Court directly by way of a Petition for Review under Rule 45 on a pure question of law, the most
relevant being whether the dismissal of the complaint necessarily carries the dismissal of the compulsory counterclaim.

We hold that under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, the dismissal of the complaint due to the fault of plaintiff
does not necessarily carry with it the dismissal of the counterclaim, compulsory or otherwise. In fact, the dismissal of the complaint is without
prejudice to the right of defendants to prosecute the counterclaim.

On a prefatory note, the RTC, in dismissing the counterclaim, did not expressly adopt respondents argument that the dismissal of
their complaint extended as well to the counterclaim. Instead, the RTC justified the dismissal of the counterclaim on the ground that there is
no opposition to [plaintiffs] Motion for Reconsideration [seeking the dismissal of the counterclaim].[20] This explanation is hollow, considering
that there is no mandatory rule requiring that an opposition be filed to a motion for reconsideration without need for a court order to that
effect; and, as posited by petitioner, the failure to file an opposition to the Plaintiffs Motion for Reconsideration is definitely not one among
the established grounds for dismissal [of the counterclaim]. [21] Still, the dismissal of the counterclaim by the RTC betrays at very least a tacit
recognition of respondents argument that the counterclaim did not survive the dismissal of the complaint. At most, the dismissal of the
counterclaim over the objection of the defendant (herein petitioner) on grounds other than the merits of the counterclaim, despite the
provisions under Rule 17 of the 1997 Rules of Civil Procedure, constitutes a debatable question of law, presently meriting justiciability through
the instant action. Indeed, in reviewing the assailed orders of the RTC, it is inevitable that the Court consider whether the dismissal of the
complaint, upon motion of the defendant, on the ground of the failure to prosecute on plaintiffs part precipitates or carries with it the
dismissal of the pending counterclaims.

Our core discussion begins with Section 3, Rule 17 of the 1997 Rules of Civil Procedure, which states:

SEC. 3. Dismissal due to fault of plaintiff.If, for no justifiable cause, the plaintiff fails to appear on the date of the
presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to
comply with these Rules or any order of the court, the complaint may be dismissed upon motion of defendant or upon the
court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a
separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the
court.

The express qualification in the provision that the dismissal of the complaint due to the plaintiffs fault, as in the case for failure to prosecute,
is without prejudice to the right of the defendant to prosecute his counterclaim in the same or separate action. This stands in marked contrast
to the provisions under Rule 17 of the 1964 Rules of Court which were superseded by the 1997 amendments. In the 1964 Rules, dismissals
due to failure to prosecute were governed by Section 3, Rule 17, to wit:

SEC. 3. Failure to prosecute. If plaintiff fails to appear at the time of the trial, or to prosecute his action for an unreasonable
length of time, or to comply with these rules or any order of the court, the action may be dismissed upon motion of the
defendant or upon the courts own motion. This dismissal shall have the effect of an adjudication upon the merits, unless
otherwise provided by court.

Evidently, the old rule was silent on the effect of such dismissal due to failure to prosecute on the pending counterclaims. As a result, there
arose what one authority on remedial law characterized as the nagging question of whether or not the dismissal of the complaint carries with
it the dismissal of the counterclaim.[22] Jurisprudence construing the previous Rules was hardly silent on the matter.

In their arguments before the RTC on the dismissal of the counterclaim, respondents cited in support City of Manila v.

16
Ruymann,[23] Domingo v. Santos,[24] Belleza v. Huntington,[25] and Froilan v. Pan Oriental Shipping Co.,[26] all of which were decided more than
five decades ago. Notably though, none of the complaints in these four cases were dismissed either due to the fault of the plaintiff or upon
the instance of the defendant.[27]

The distinction is relevant, for under the previous and current incarnations of the Rules of Civil Procedure, it is Section 3, Rule 17
that governs the dismissals due to the failure of the plaintiff to prosecute the complaint, as had happened in the case at bar. Otherwise, it is
Section 2, Rule 17, which then, and still is now, covered dismissals ordered by the trial court upon the instance of the plaintiff. [28] Yet, as will
be seen in the foregoing discussion, a discussion of Section 2 cannot be avoided as the postulate behind that provision was eventually
extended as well in cases that should have properly been governed by Section 3.

Even though the cases cited by respondents involved different factual antecedents, there exists more appropriate precedents which they
could have cited in support of their claim that the counterclaim should have been dismissed even if the dismissal of the complaint was upon
the defendants motion and was predicated on the plaintiffs fault. BA Finance Corp. v. Co[29] particularly stands out in that regard, although
that ruling is itself grounded on other precedents as well. Elucidation of these cases is in order.

On the general effect of the dismissal of a complaint, regardless of cause, on the pending counterclaims, previous jurisprudence laid emphasis
on whether the counterclaim was compulsory or permissive in character. The necessity of such distinction was provided in the 1964 Rules
itself, particularly Section 2, Rule 17, which stated that in instances wherein the plaintiff seeks the dismissal of the complaint, if a counterclaim
has been pleaded by a defendant prior to the service upon him of the plaintiffs motion to dismiss, the action shall not be dismissed against
the defendants objection unless the counterclaim can remain pending for independent adjudication by the court.[30] The
vaunted commentaries of Chief Justice Moran, remarking on Section 2, Rule 17, noted that [t]here are instances in which a counterclaim
cannot remain pending for independent adjudication, as, where it arises out of, or is necessarily connected with, the transaction or occurrence
which is the subject matter of the opposing partys claim.[31]

This view expressed in Morans Commentaries was adopted by the Court in cases where the application of Section 2, Rule 17 of the 1964
Rules of Court was called for, such as in Lim Tanhu v. Ramolete,[32] and Dalman v. City Court of Dipolog City.[33] The latter case warrants brief
elaboration. Therein, the plaintiff in a civil case for damages moved for the withdrawal of her own case on the ground that the dispute had
not been referred to the barangay council as required by law. Over the objection of the defendant, who feared that her own counterclaim
would be prejudiced by the dismissal, plaintiffs motion was granted, the complaint and the counterclaim accordingly dismissed by the trial
court. The Court refused to reinstate the counterclaim, opining without elaboration, [i]f the civil case is dismissed, so also is the counterclaim
filed therein.[34] The broad nature of that statement gave rise to the notion that the mandatory dismissal of the counterclaim upon dismissal
of the complaint applied regardless of the cause of the complaints dismissal.[35]

Notably, the qualification concerning compulsory counterclaims was provided in Section 2, Rule 17 of the 1964 Rules, the provision governing
dismissals by order of the court, and not Section 3, Rule 17. As stated earlier, Section 3, which covered dismissals for failure to prosecute
upon motion of the defendant or upon motu proprio action of the trial court, was silent on the effect on the counterclaim of dismissals of
such nature.

Spouses Sta. Maria, Jr. v. Court of Appeals,[36] decided in 1972, ostensibly supplied the gap on the effect on the counterclaim of complaints
dismissed under Section 3. The defendants therein successfully moved before the trial court for the dismissal of the complaint without
prejudice and their declaration in default on the counterclaim after plaintiffs therein failed to attend the pre-trial. After favorable judgment
was rendered on the counterclaim, plaintiffs interposed an appeal, citing among other grounds, that the counterclaim could no longer have
been heard after the dismissal of the complaint. While the Court noted that the adjudication of the counterclaim in question does not depend
upon the adjudication of the claims made in the complaint since they were virtually abandoned by the non-appearance of the plaintiffs
themselves, it was also added that [t]he doctrine invoked is not available to plaintiffs like the petitioners, who prevent or delay the hearing
of their own claims and allegations.[37] The Court, through Justice JBL Reyes, noted:

The doctrine that the complaint may not be dismissed if the counterclaim cannot be independently adjudicated
is not available to, and was not intended for the benefit of, a plaintiff who prevents or delays the prosecution of his
own complaint. Otherwise, the trial of counterclaims would be made to depend upon the maneuvers of the plaintiff, and
the rule would offer a premium to vexing or delaying tactics to the prejudice of the counterclaimants. It is in the same
spirit that we have ruled that a complaint may not be withdrawn over the opposition of the defendant where the
counterclaim is one that arises from, or is necessarily connected with, the plaintiffs action and cannot remain pending for
independent adjudication.[38]

There is no doubt that under the 1964 Rules, the dismissal of a complaint due to the failure of the plaintiff to appear during pre-trial, as what
had happened in Sta. Maria, fell within the coverage of Section 3, Rule 17. On the other hand, Section 2 was clearly limited in scope to those
dismissals sustained at the instance of the plaintiff.[39]Nonetheless, by the early 1990s, jurisprudence was settling on a rule that compulsory
counterclaims were necessarily terminated upon the dismissal of the complaint not only if such dismissal was upon motion of the plaintiff,
but at the instance of the defendant as well. Two decisions from that period stand out in this regard, Metals Engineering Resources Corp. v.
Court of Appeals[40] and International Container Terminal Services v. Court of Appeals.[41]

17
 In Metals, the complaint was expunged from the record after the defendant had filed a motion for reconsideration of a trial court
order allowing the filing of an amended complaint that corrected a jurisdictional error in the original complaint pertaining to the specification
of the amount of damages sought. When the defendant was nonetheless allowed to present evidence on the counterclaim, the plaintiff
assailed such allowance on the ground that the counterclaim was compulsory and could no longer remain pending for independent
adjudication. The Court, in finding for the plaintiff, noted that the counterclaim was indeed compulsory in nature, and as such, was auxiliary
to the proceeding in the original suit and derived its jurisdictional support therefrom. [42] It was further explained that the doctrine was in
consonance with the primary objective of a counterclaim, which was to avoid and prevent circuitry of action by allowing the entire controversy
between the parties to be litigated and finally determined in one action, and to discourage multiplicity of suits.[43] Also, the Court noted that
since the complaint was dismissed for lack of jurisdiction, it was as if no claim was filed against the defendant, and there was thus no more
leg for the complaint to stand on.[44]

In International Container, the defendant filed a motion to dismiss which was granted by the trial court. The defendants
counterclaim was dismissed as well. The Court summarized the key question as what is the effect of the dismissal of a complaint ordered at
the instance of the defendant upon a compulsory counterclaim duly raised in its answer.[45] Then it ruled that the counterclaim did not survive
such dismissal. After classifying the counterclaim therein as compulsory, the Court noted that [i]t is obvious from the very nature of the
counterclaim that it could not remain pending for independent adjudication, that is, without adjudication by the court of the complaint itself
on which the counterclaim was based.[46]

Then in 1993, a divided Court ruled in BA Finance that the dismissal of the complaint for nonappearance of plaintiff at the pre-trial,
upon motion of the defendants, carried with it the dismissal of their compulsory counterclaim.[47] The Court reiterated the rule that a
compulsory counterclaim cannot remain pending for independent adjudication by the court as it is auxiliary to the proceeding in the original
suit and merely derives its jurisdictional support therefrom.[48] Express reliance was made on Metals, International Container, and
even Dalman in support of the majoritys thesis. BA Finance likewise advised that the proper remedy for defendants desirous that their
counterclaims not be dismissed along with the main complaint was for them to move to declare the plaintiffs to be non-suited on their
complaint and as in default on their compulsory counterclaim, instead of moving for the dismissal of the complaint. [49]

Justice Regalado, joined by Chief Justice Narvasa, registered a strong objection to the theory of the majority. They agreed that the
trial court could no longer hear the counterclaim, but only on the ground that defendants motion to be allowed to present evidence on the
counterclaim was filed after the order dismissing the complaint had already become final. They disagreed however that the compulsory
counterclaim was necessarily dismissed along with the main complaint, pointing out that a situation wherein the dismissal of the complaint
was occasioned by plaintiffs failure to appear during pre-trial was governed under Section 3, Rule 17, and not Section 2 of the same rule.
Justice Regalado, who ironically penned the decision in Metals cited by the majority, explained:

Turning back to Rule 17, it is readily apparent that Sections 2 and 3 thereof envisage different factual and
adjective situations. The dismissal of the complaint under Section 2 is at the instance of plaintiff, for whatever reason
he is minded to move for such dismissal, and, as a matter of procedure, is without prejudice unless otherwise stated in
the order of the court or, for that matter, in plaintiff's motion to dismiss his own complaint. By reason thereof, to curb
any dubious or frivolous strategy of plaintiff for his benefit or to obviate possible prejudice to defendant, the former may
not dismiss his complaint over the defendant's objection if the latter has a compulsory counterclaim since said
counterclaim would necessarily be divested of juridical basis and defendant would be deprived of possible recovery
thereon in that same judicial proceeding.

Section 3, on the other hand, contemplates a dismissal not procured by plaintiff, albeit justified by causes
imputable to him and which, in the present case, was petitioner's failure to appear at the pre-trial. This situation is also
covered by Section 3, as extended by judicial interpretation, and is ordered upon motion of defendant or motu
proprio by the court. Here, the issue of whether defendant has a pending counterclaim, permissive or compulsory, is
not of determinative significance. The dismissal of plaintiff's complaint is evidently a confirmation of the failure of
evidence to prove his cause of action outlined therein, hence the dismissal is considered, as a matter of evidence, an
adjudication on the merits. This does not, however, mean that there is likewise such absence of evidence to prove
defendant's counterclaim although the same arises out of the subject matter of the complaint which was merely
terminated for lack of proof. To hold otherwise would not only work injustice to defendant but would be reading a
further provision into Section 3 and wresting a meaning therefrom although neither exists even by mere
implication. Thus understood, the complaint can accordingly be dismissed, but relief can nevertheless be granted as a
matter of course to defendant on his counterclaim as alleged and proved, with or without any reservation therefor on his
part, unless from his conduct, express or implied, he has virtually consented to the concomitant dismissal of his
counterclaim.[50]
18
Justice Regalado also adverted to Sta. Maria and noted that the objections raised and rejected by the Court therein were the same as those
now relied upon by the plaintiff. He pointed out that Dalman and International Container, both relied upon by the majority, involved the
application of Section 2, Rule 17 and not Section 3, which he insisted as the applicable provision in the case at bar. [51]

The partial dissent of Justice Regalado in BA Finance proved opportune, as he happened then to be a member of the Rules of Court Revision
Committee tasked with the revision of the 1964 Rules of Court. Just a few months after BA Finance was decided, Justice Regalado proposed
before the Committee an amendment to Section 3, Rule 17 that would explicitly provide that the dismissal of the complaint due to the fault
of the plaintiff shall be without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. The
amendment, which was approved by the Committee, is reflected in the minutes of the meeting of the Committee held on 12 October 1993:

[Justice Regalado] then proposed that after the words upon the courts own motion in the 6th line of the draft in
Sec. 3 of Rule 17, the following provision be inserted: without prejudice to the right of the defendant to prosecute his
counterclaim in the same or in a separate action. The Committee agreed with the proposed amendment of Justice
Regalado.

Justice Herrera observed that under Secs. 1 to 3 of Rule 17, it is not the action that is dismissed but the complaint. He
asked whether there is any distinction between complaint and action.Justice Regalado opined that the action of the
plaintiff is initiated by his complaint.

Justice Feria then suggested that the dismissal be limited to the complaint[.] Thus, in the 1 st line of Sec. 1, the words An
action will be changed to a complaint; in the 2nd line of Sec. 2, the words an action will be changed to a complaint and
in Sec. 3, the word action on the 5th line of the draft will be changed to complaint. The Committee agreed with Justice
Ferias suggested amendments.

CA Pao believed that there is a need to clarify the counterclaim that the defendant will prosecute, whether it is
permissive or compulsory or all kinds of counterclaims.

Justice Regalado opined that there is no need of making a clarification because it is already understood that it covers
both counterclaims.[52]

It is apparent from these minutes that the survival of the counterclaim despite the dismissal of the complaint under Section 3 stood
irrespective of whether the counterclaim was permissive or compulsory. Moreover, when the Court itself approved the revisions now
contained in the 1997 Rules of Civil Procedure, not only did Justice Regalados amendment to Section 3, Rule 17 remain intact, but the final
version likewise eliminated the qualification formerly offered under Section 2 on counterclaims that can remain pending for independent
adjudication by the court.[53] At present, even Section 2, concerning dismissals on motion of the plaintiff, now recognizes the right of the
defendant to prosecute the counterclaim either in the same or separate action notwithstanding the dismissal of the complaint, and without
regard as to the permissive or compulsory nature of the counterclaim.

In his commentaries on the 1997 Rules of Civil Procedure, Justice Regalado expounds on the effects of the amendments to Section 2 and 3 of
Rule 17:

19
 2. Under this revised section [2], where the plaintiff moves for the dismissal of his complaint to which a counterclaim has
been interposed, the dismissal shall be limited to the complaint. Such dismissal shall be without prejudice to the right of
the defendant to either prosecute his counterclaim in a separate action or to have the same resolved in the same
action. Should he opt for the first alternative, the court should render the corresponding order granting and reserving his
right to prosecute his claim in a separate complaint. Should he choose to have his counterclaim disposed of in the same
action wherein the complaint had been dismissed, he must manifest such preference to the trial court within 15 days from
notice to him of plaintiffs motion to dismiss.These alternative remedies of the defendant are available to him regardless
of whether his counterclaim is compulsory or permissive. A similar alternative procedure, with the same underlying
reason therefor, is adopted in Sec. 6, Rule 16 and Sec. 3 of this Rule, wherein the complaint is dismissed on the motion of
the defendant or, in the latter instance, also by the court motu proprio.

xxxx

2. The second substantial amendment to [Section 3] is with respect to the disposition of the defendants counterclaim in
the event the plaintiffs complaint is dismissed. As already observed, he is here granted the choice to prosecute that
counterclaim in either the same or a separate action. x x x x

3. With the aforestated amendments in Secs. 2 and 3 laying down specific rules on the disposition of counterclaims
involved in the dismissal actions, the controversial doctrine in BA Finance Corporation vs. Co, et al., (G.R. No. 105751,
June 30, 1993) has been abandoned, together with the apparent confusion on the proper application of said Secs. 2 and
3. Said sections were distinguished and discussed in the authors separate opinion in that case, even before they were
clarified by the present amendments x x x.[54]

Similarly, Justice Feria notes that the present rule reaffirms the right of the defendant to move for the dismissal of the complaint and to
prosecute his counterclaim, as stated in the separate opinion [of Justice Regalado in BA Finance.][55] Retired Court of Appeals Justice Herrera
pronounces that the amendment to Section 3, Rule 17 settles that nagging question whether the dismissal of the complaint carries with it
the dismissal of the counterclaim, and opines that by reason of the amendments, the rulings in Metals Engineering, International Container,
and BA Finance may be deemed abandoned.[56] On the effect of amendment to Section 3, Rule 17, the commentators are in general
agreement,[57]although there is less unanimity of views insofar as Section 2, Rule 17 is concerned. [58]

To be certain, when the Court promulgated the 1997 Rules of Civil Procedure, including the amended Rule 17, those previous jural doctrines
that were inconsistent with the new rules incorporated in the 1997 Rules of Civil Procedure were implicitly abandoned insofar as incidents
arising after the effectivity of the new procedural rules on 1 July 1997. BA Finance, or even the doctrine that a counterclaim may be necessarily
dismissed along with the complaint, clearly conflicts with the 1997 Rules of Civil Procedure. The abandonment of BA Finance as doctrine
extends as far back as 1997, when the Court adopted the new Rules of Civil Procedure. If, since then, such abandonment has not been
affirmed in jurisprudence, it is only because no proper case has arisen that would warrant express confirmation of the new rule. That
opportunity is here and now, and we thus rule that the dismissal of a complaint due to fault of the plaintiff is without prejudice to the right
of the defendant to prosecute any pending counterclaims of whatever nature in the same or separate action. We confirm that BA Finance and
all previous rulings of the Court that are inconsistent with this present holding are now abandoned.

Accordingly, the RTC clearly erred when it ordered the dismissal of the counterclaim, since Section 3, Rule 17 mandates that the dismissal of
the complaint is without prejudice to the right of the defendant to prosecute the counterclaim in the same or separate action. If the RTC
were to dismiss the counterclaim, it should be on the merits of such counterclaim. Reversal of the RTC is in order, and a remand is necessary
for trial on the merits of the counterclaim.

It would be perfectly satisfactory for the Court to leave this matter at that. Still, an explanation of the reason behind the new rule is called
for, considering that the rationale behind the previous rule was frequently elaborated upon.

20
 Under Act No. 190, or the Code of Procedure in Civil Actions promulgated in 1901, it was recognized in Section 127(1) that the
plaintiff had the right to seek the dismissal of the complaint at any time before trial, provided a counterclaim has not been made, or
affirmative relief sought by the cross-complaint or answer of the defendant.[59] Note that no qualification was made then as to the nature of
the counterclaim, whether it be compulsory or permissive. The protection of the defendants right to prosecute the counterclaim was indeed
unqualified. In City of Manila, decided in 1918, the Court explained:

By paragraph 1 [of Section 127], it will be seen that, where the defendant has interposed a counterclaim, or is
seeking affirmative relief by a cross-complaint, that then, and in that case, the plaintiff cannot dismiss the action so as to
affect the right of the defendant in his counterclaim or prayer for affirmative relief. The reason for that exception is
clear. When the answer sets up an independent action against the plaintiff, it then becomes an action by the defendant
against the plaintiff, and, of course, the plaintiff has no right to ask for a dismissal of the defendants action.[60]

Nonetheless, a new rule was introduced when Act No. 190 was replaced by the 1940 Rules of Court. Section 2, Rule 30 of the 1940 Rules
specified that if a counterclaim is pleaded by a defendant prior to the service of the plaintiffs motion to dismiss, the action shall not be
dismissed against the defendants objection unless the counterclaim can remain pending for independent adjudication by the court. This
qualification remained intact when the 1964 Rules of Court was introduced. [61] The rule referred only to compulsory counterclaims, or
counterclaims which arise out of or are necessarily connected with the transaction or occurrence that is the subject matter of the plaintiffs
claim, since the rights of the parties arising out of the same transaction should be settled at the same time.[62] As was evident
in Metals, International Container and BA Finance, the rule was eventually extended to instances wherein it was the defendant with the
pending counterclaim, and not the plaintiff, that moved for the dismissal of the complaint.

We should not ignore the theoretical bases of the rule distinguishing compulsory counterclaims from permissive counterclaims insofar as the
dismissal of the action is concerned. There is a particular school of thought that informs the broad proposition in Dalman that if the civil case
is dismissed, so also is the counterclaim filed therein,[63] or the more nuanced discussions offered in Metals, International Container, and BA
Finance. The most potent statement of the theory may be found in Metals,[64] which proceeds from the following fundamental premisesa
compulsory counterclaim must be set up in the same proceeding or would otherwise be abated or barred in a separate or subsequent litigation
on the ground of auter action pendant, litis pendentia or res judicata; a compulsory counterclaim is auxiliary to the main suit and derives its
jurisdictional support therefrom as it arises out of or is necessarily connected with the transaction or occurrence that is the subject matter of
the complaint;[65] and that if the court dismisses the complaint on the ground of lack of jurisdiction, the compulsory counterclaim must also
be dismissed as it is merely ancilliary to the main action and no jurisdiction remained for any grant of relief under the counterclaim.

The first point is derived from Section 4, Rule 9, of the 1964 Rules of Court, while the two latter points are sourced from American
jurisprudence. There is no disputing the theoretical viability of these three points. In fact, the requirement that the compulsory counterclaim
must be set up in the same proceeding remains extant under the 1997 Rules of Civil Procedure.[66] At the same time, other considerations
rooted in actual practice provide a counterbalance to the above-cited rationales.

Whatever the nature of the counterclaim, it bears the same integral characteristics as a complaint; namely a cause (or causes) of action
constituting an act or omission by which a party violates the right of another. The main difference lies in that the cause of action in the
counterclaim is maintained by the defendant against the plaintiff, while the converse holds true with the complaint. Yet, as with a complaint,
a counterclaim without a cause of action cannot survive.

It would then seemingly follow that if the dismissal of the complaint somehow eliminates the cause(s) of the counterclaim, then the
counterclaim cannot survive. Yet that hardly is the case, especially as a general rule. More often than not, the allegations that form the
counterclaim are rooted in an act or omission of the plaintiff other than the plaintiffs very act of filing the complaint. Moreover, such acts
or omissions imputed to the plaintiff are often claimed to have occurred prior to the filing of the complaint itself. The only apparent
exception to this circumstance is if it is alleged in the counterclaim that the very act of the plaintiff in filing the complaint precisely causes
the violation of the defendants rights. Yet even in such an instance, it remains debatable whether the dismissal or withdrawal of the
complaint is sufficient to obviate the pending cause of action maintained by the defendant against the plaintiff. [67]

These considerations persist whether the counterclaim in question is permissive or compulsory. A compulsory counterclaim arises out of or
is connected with the transaction or occurrence constituting the subject matter of the opposing partys claim, does not require for its
adjudication the presence of third parties, and stands within the jurisdiction of the court both as to the amount involved and the nature of
the claim.[68] The fact that the culpable acts on which the counterclaim is based are founded within the same transaction or occurrence as the
21
complaint, is insufficient causation to negate the counterclaim together with the complaint. The dismissal or withdrawal of the complaint
does not traverse the boundaries of time to undo the act or omission of the plaintiff against the defendant, or vice versa. While such dismissal
or withdrawal precludes the pursuit of litigation by the plaintiff, either through his/her own initiative or fault, it would be iniquitous to similarly
encumber the defendant who maintained no such initiative or fault. If the defendant similarly moves for the dismissal of the counterclaim or
neglects to timely pursue such action, let the dismissal of the counterclaim be premised on those grounds imputable to the defendant, and
not on the actuations of the plaintiff.

The other considerations supplied in Metals are anchored on the premise that the jurisdictional foundation of the counterclaim is the
complaint itself. The theory is correct, but there are other facets to this subject that should be taken into account as well. On the established
premise that a counterclaim involves separate causes of action than the complaint even if derived from the same transaction or series of
transactions, the counterclaim could have very well been lodged as a complaint had the defendant filed the action ahead of the
complainant.[69] The terms ancillary or auxiliary may mislead in signifying that a complaint innately possesses more credence than a
counterclaim, yet there are many instances wherein the complaint is trivial but the counterclaim is meritorious. In truth, the notion that a
counterclaim is, or better still, appears to be merely ancillary or auxiliary is chiefly the offshoot of an accident of chronology, more than
anything else.

The formalistic distinction between a complaint and a counterclaim does not detract from the fact that both of them embody causes of action
that have in their end the vindication of rights. While the distinction is necessary as a means to facilitate order and clarity in the rules of
procedure, it should be remembered that the primordial purpose of procedural rules is to provide the means for the vindication of rights. A
party with a valid cause of action against another party cannot be denied the right to relief simply because the opposing side had the good
fortune of filing the case first. Yet this in effect was what had happened under the previous procedural rule and correspondent doctrine,
which under their final permutation, prescribed the automatic dismissal of the compulsory counterclaim upon the dismissal of the complaint,
whether upon the initiative of the plaintiff or of the defendant.

Thus, the present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable disposition of the counterclaims by ensuring that
any judgment thereon is based on the merit of the counterclaim itself and not on the survival of the main complaint. Certainly, if the
counterclaim is palpably without merit or suffers jurisdictional flaws which stand independent of the complaint, the trial court is not precluded
from dismissing it under the amended rules, provided that the judgment or order dismissing the counterclaim is premised on those defects.
At the same time, if the counterclaim is justified, the amended rules now unequivocally protect such counterclaim from peremptory dismissal
by reason of the dismissal of the complaint.

WHEREFORE, the petition is GRANTED. The Orders dated 9 August 2005 and 10 October 2005 of Branch 29, Regional Trial Court of San Miguel,
Zamboanga del Sur in Civil Case No. 98-012 are SET ASIDE. Petitioners counterclaim as defendant in Civil Case. No. 98-012 is REINSTATED. The
Regional Trial Court is ORDERED to hear and decide the counterclaim with deliberate dispatch.

SO ORDERED.

4. Commissioner of Internal Revenue vs. Mirant Pagbilao Corporation (formerly Southern Energy Quezon, Inc.) 504 SCRA 484 ,
October 16, 2006

FIRST DIVISION

COMMISSIONER OF INTERNAL G.R. No. 159593

REVENUE,
Petitioner,
Present:

22
 PANGANIBAN, C.J.
Chairperson,
YNARES-SANTIAGO,

- versus- AUSTRIA-MARTINEZ,

CALLEJO, SR., and

CHICO-NAZARIO, JJ.

MIRANT[1] PAGBILAO CORPORATION

(formerly SOUTHERN ENERGY QUEZON, Promulgated:
INC.),

Respondent.
October 12, 2006

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review[2] under Rule 45 of the 1997 Rules of Civil Procedure assailing the Decision, [3] dated 30 July 2003, of
the Court of Appeals in CA-G.R. SP No. 60783, which affirmed in toto the Decision,[4] dated 11 July 2000, of the Court of Tax Appeals (CTA) in
CTA Case No. 5658. The CTA partially granted the claim of herein respondent Mirant Pagbilao Corporation (MPC) for the refund of the input
Value Added Tax (VAT) on its purchase of capital goods and services for the period 1 April 1996 to 31 December 1996, and ordered herein
petitioner Commissioner of the Bureau of Internal Revenue (BIR) to issue a tax credit certificate in the amount of P28,744,626.95.

There is no dispute as to the following facts that gave rise to the claim for refund of MPC, as found by the CTA [5]

[MPC] is a domestic corporation duly organized and existing under and by virtue of the laws of the Philippines
with principal office address in Pagbilao Grande Island, Pagbilao, Quezon. It is licensed by the Securities and Exchange
Commission to principally engage in the business of power generation and subsequent sale thereof (Exh. A). It is registered
with the Bureau of Internal Revenue as a VAT registered entity with Certificate of Registration bearing RDO Control No.
96-600-002498, dated January 26, 1996.

For the period April 1, 1996 to December 31, 1996, [MPC] seasonably filed its Quarterly VAT Returns reflecting
an (sic) accumulated input taxes in the amount of P39,330,500.85 (Exhs. B, C, and D). These input taxes were allegedly paid
by [MPC] to the suppliers of capital goods and services for the construction and development of the power generating
plant and other related facilities in Pagbilao, Quezon (TSN, November 16, 1998, p. 11).

Pursuant to the procedures prescribed under Revenue Regulations No. 7-95, as amended, [MPC] filed on June
30, 1998, an application for tax credit or refund of the aforementioned unutilized VAT paid on capital goods (Exhibit E).

Without waiting for an answer from the [BIR Commissioner], [MPC] filed the instant petition for review on July
10, 1998, in order to toll the running of the two-year prescriptive period for claiming a refund under the law.

23
 In answer to the Petition, [the BIR Commissioner] advanced as special and affirmative defenses that [MPC]s claim
for refund is still pending investigation and consideration before the office of [the BIR Commissioner] accordingly, the filing
of the present petition is premature; well-settled is the doctrine that provisions in tax refund and credit are construed
strictly against the taxpayer as they are in the nature of a tax exemption; in an action for refund or tax credit, the taxpayer
has the burden to show that the taxes paid were erroneously or illegally paid and failure to sustain the said burden is fatal
to the action for refund; it is incumbent upon [MPC] to show that the claim for tax credit has been filed within the
prescriptive period under the Tax Code; and the taxes allegedly paid by [MPC] are presumed to have been collected and
received in accordance with law and revenue regulations.[]

On July 14, 1998, while the case was pending trial, Revenue Officer, Rosemarie M. Vitto, was assigned by Revenue
District Officer, Ma. Nimfa Penalosa-Asensi, of Revenue District No. 60 to investigate [MPC]s application for tax credit or
refund of input taxes (Exhs. 1 and 1-a). As a result, a memorandum report, dated August 27, 1998, was submitted
recommending a favorable action but in a reduced amount of P49,616.40 representing unapplied input taxes on capital
goods. (Exhs. 2, 2-a, 3, and 3-a).

[MPC], due to the voluminous nature of evidence to be presented, availed of the services of an independent
Certified Public Accountant pursuant to CTA Circular No. 1-95, as amended.As a consequence, Mr. Ruben R. Rubio, Partner
of SGV & Company, was commissioned to verify the accuracy of [MPC]s summary of input taxes (TSN, October 15, 1998,
pp. 3-5). A report, dated March 8, 1999, was presented stating the audit procedures performed and the finding that out
of the total claimed input taxes of P39,330,500.85, only the sum of P28,745,502.40 was properly supported by valid
invoices and/or official receipts (Exh. G; see also TSN, March 3, 1999, p. 12).

The CTA ruled in favor of MPC, and declared that MPC had overwhelmingly proved, through the VAT invoices and official receipts it had
presented, that its purchases of goods and services were necessary in the construction of power plant facilities which it used in its business
of power generation and sale. The tax court, however, reduced the amount of refund to which MPC was entitled, in accordance with the
following computation

Total amount of the claim for P39,330,500.85

refund

Less: Disallowances

a. Per independent auditor P10,584,998.45

b. Per CTAs examination 875.45 10,585,873.90

P28,744,626.95[6]

Thus, the dispositive portion of the CTA Decision,[7] dated 11 July 2000, reads -

WHEREFORE, in view of the foregoing, [MPC]s claim for refund is hereby partially GRANTED. [The BIR
Commissioner] is ORDERED to ISSUE A TAX CREDIT CERTIFICATE in the amount of P28,744,626.95 representing input taxes
paid on capital goods for the period April 1, 1996 to December 31, 1996.

24
The CTA subsequently denied the BIR Commissioners Motion for Reconsideration in a Resolution,[8] dated 31 August 2001.

Aggrieved, the BIR Commissioner filed with the Court of Appeals a Petition for Review[9] of the foregoing Decision, dated 11 July 2000, and
Resolution, dated 31 August 2001, of the CTA. Notably, the BIR Commissioner identified and discussed as grounds[10] for its Petition arguments
that were totally new and were never raised before the CTA, to wit

1. RESPONDENT BEING AN ELECTRIC UTILITY, IT IS SUBJECT TO FRANCHISE TAX UNDER THEN SECTION 117 (NOW
SECTION 119) OF THE TAX CODE AND NOT TO VALUE ADDED TAX (VAT).

2. SINCE RESPONDENT IS EXEMPT FROM VAT, IT IS NOT ENTITLED TO THE REFUND OF INPUT VAT PURSUANT TO
SECTION 4.103-1 OF REVENUE REGULATIONS NO. 7-95.

The Court of Appeals found no merit in the BIR Commissioners Petition, and in its Decision, dated 30 July 2003, it pronounced that: (1) The
BIR Commissioner cannot validly change his theory of the case on appeal; (2) The MPC is not a public utility within the contemplation of law;
(3) The sale by MPC of its generated power to the National Power Corporation (NAPOCOR) is subject to VAT at zero percent rate; and (4) The
MPC, as a VAT-registered taxpayer, may apply for tax credit. Accordingly, the decretal portion of the said Decision[11] reads as follows

WHEREFORE, premises considered, the Petition is DISMISSED for lack of merit and the assailed 11 July
2000 Decision of respondent Court in CTA Case No. 5658 is hereby AFFIRMED in toto. No costs.

Refusing to give up his cause, the BIR Commissioner filed the present Petition before this Court on the ground that the Court of Appeals
committed reversible error in affirming the Decision of the CTA holding respondent entitled to the refund of the amount of P28,744,626.95,
allegedly representing input VAT on capital goods and services for the period 1 April 1996 to 31 December 1996. He argues that (1) The
observance of procedural rules may be relaxed considering that technicalities are not ends in themselves but exist to protect and promote
the substantive rights of the parties; and (2) A tax refund is in the nature of a tax exemption which must be construed strictly against the
taxpayer. He reiterates his position before the Court of Appeals that MPC, as a public utility, is exempt from VAT, subject instead to franchise
tax and, thus, not entitled to a refund of input VAT on its purchase of capital goods and services.

This Court finds no merit in the Petition at bar.

The general rule is that a party cannot change his theory of the case on
appeal.

To recall, the BIR Commissioner raised in its Answer[12] before the CTA the following special and affirmative defenses

3. [MPC]s claim for refund is still pending investigation and consideration before the office of [the BIR
Commissioner]. Accordingly, the present petition is premature;

25
 4. Well-settled is the doctrine that provisions in tax refund and credit are construed strictly against the taxpayer as they
are in the nature of a tax exemption;

5. In an action for refund or tax credit, the taxpayer has the burden to show that the taxes paid were erroneously or illegally
paid and failure to sustain the said burden is fatal to the action for refund;

6. It is incumbent upon [MPC] to show that the claim for tax credit has been filed within the prescriptive period under the
tax code;

7. The taxes allegedly paid by [MPC] are presumed to have been collected and received in accordance with law and revenue
regulations.

These appear to be general and standard arguments used by the BIR to oppose any claim by a taxpayer for refund. The Answer did not posit
any allegation or contention that would defeat the particular claim for refund of MPC. Trial proper ensued before the CTA, during which the
MPC presented evidence of its entitlement to the refund and in negation of the afore-cited defenses of the BIR Commissioner. It was only
after the CTA promulgated its Decision on 11 July 2000, which was favorable to MPC and adverse to the BIR Commissioner, that the latter
filed his Petition for Review before the Court of Appeals on 4 October 2000, averring, for the very first time, that MPC was a public utility,
subject to franchise tax and not VAT; and since it was not paying VAT, it could not claim the refund of input VAT on its purchase of capital
goods and services.

There is a palpable shift in the BIR Commissioners defense against the claim for refund of MPC and an evident change of
theory. Before the CTA, the BIR Commissioner admitted that the MPC is a VAT-registered taxpayer, but charged it with the burden of proving
its entitlement to refund. However, before the Court of Appeals, the BIR Commissioner, in effect denied that the MPC is subject to VAT,
making an affirmative allegation that it is a public utility liable, instead, for franchise tax. Irrefragably, the BIR Commissioner raised for the
first time on appeal questions of both fact and law not taken up before the tax court, an actuality which the BIR Commissioner himself does
not deny, but he argues that he should be allowed to do so as an exception to the technical rules of procedure and in the interest of substantial
justice.

It is already well-settled in this jurisdiction that a party may not change his theory of the case on appeal. [13] Such a rule has been expressly
adopted in Rule 44, Section 15 of the 1997 Rules of Civil Procedure, which provides

SEC. 15. Questions that may be raised on appeal. Whether or not the appellant has filed a motion for new trial in
the court below, he may include in his assignment of errors any question of law or fact that has been raised in the court
below and which is within the issues framed by the parties.

Thus, in Carantes v. Court of Appeals,[14] this Court emphasized that

The settled rule is that defenses not pleaded in the answer may not be raised for the first time on appeal. A party
cannot, on appeal, change fundamentally the nature of the issue in the case. When a party deliberately adopts a certain
theory and the case is decided upon that theory in the court below, he will not be permitted to change the same on appeal,
because to permit him to do so would be unfair to the adverse party.

In the more recent case of Mon v. Court of Appeals,[15] this Court again pronounced that, in this jurisdiction, the settled rule is that
a party cannot change his theory of the case or his cause of action on appeal. It affirms that courts of justice have no jurisdiction or power to
decide a question not in issue. Thus, a judgment that goes beyond the issues and purports to adjudicate something on which the court did
not hear the parties, is not only irregular but also extrajudicial and invalid. The rule rests on the fundamental tenets of fair play.

26
The BIR Commissioner pleads with this Court not to apply the foregoing rule to the instant case, for a rule on technicality should not defeat
substantive justice. The BIR Commissioner apparently forgets that there are specific reasons why technical or procedural rules are imposed
upon the courts, and that compliance with these rules, should still be the general course of action. Hence, this Court has expounded that

Procedural rules, we must stress, should be treated with utmost respect and due regard since they are designed
to facilitate the adjudication of cases to remedy the worsening problem of delay in the resolution of rival claims and in the
administration of justice. The requirement is in pursuance to the bill of rights inscribed in the Constitution which
guarantees that all persons shall have a right to the speedy disposition of their cases before all judicial, quasi-judicial
and administrative bodies.

The adjudicatory bodies and the parties to a case are thus enjoined to abide strictly by the rules. While it is true
that a litigation is not a game of technicalities, it is equally true that every case must be prosecuted in accordance with
the prescribed procedure to ensure an orderly and speedy administration of justice. There have been some instances
wherein this Court allowed a relaxation in the application of the rules, but this flexibility was never intended to forge a
bastion for erring litigants to violate the rules with impunity. A liberal interpretation and application of the rules of
procedure can be resorted to only in proper cases and under justifiable causes and circumstances.[16]

The courts have the power to relax or suspend technical or procedural rules or to except a case from their operation when compelling reasons
so warrant or when the purpose of justice requires it. What constitutes good and sufficient cause that would merit suspension of the rules is
discretionary upon the courts.[17]

In his Petition and Memorandum before this Court, the BIR Commissioner made no attempt to provide reasonable explanation for his failure
to raise before the CTA the issue of MPC being a public utility subject to franchise tax rather than VAT. The BIR Commissioner argues, in a
singular paragraph in his Petition,[18] subsequently reproduced in his Memorandum,[19] that the Court of Appeals should have taken
cognizance of the said issue, although it was raised for the first time on appeal, entirely on the basis of this Courts ruling in Sy v. Court of
Appeals.[20] He contends that

The submission fails to take into account that although this Honorable Court has repeatedly ruled that litigants cannot
raise an issue for the first time on appeal, as this would contravene the basic rules of justice and fair play, the observance
of procedural rules may be relaxed, noting that technicalities are not ends in themselves but exist to protect and promote
the substantive rights of the litigants (Sy v. Court of Appeals, 330 SCRA 570 [2000]).

This Court is unconvinced. There is no sufficient cause to warrant the relaxation of technical or procedural rules in the instant
case. The general rules of procedure still apply and the BIR Commissioner cannot be allowed to raise an issue for the first time on appeal.

It should be emphasized that the BIR Commissioner is invoking a suspension of the general rules of procedure or an exception
thereto, thus, it is incumbent upon him to present sufficient cause or justifiable circumstance that would qualify his case for such a suspension
or exception. That this Court had previously allowed in another case such suspension of or exception to technical or procedural rules does
not necessarily mean that the same shall also be allowed in the present case. The BIR Commissioner has the burden of persuading this Court
that the same causes or circumstances that justified the suspension of or exception to the technical or procedural rules in the other case are
also present in the case at bar.

The Sy case, on which the BIR Commissioner fully anchored his claim for suspension of or exception to the technical or procedural
rules, is not even on all fours with his case. It involves a petition for declaration of nullity of marriage instituted by the therein petitioner
Filipina Sy before the Regional Trial Court (RTC) on the basis of the alleged psychological incapacity of her husband, Fernando Sy. Her petition
was denied by the RTC because it found that Fernandos acts did not constitute psychological incapacity, a finding later affirmed by the Court
of Appeals. In an appeal by certiorari before this Court, Filipina raised the issue that her marriage to Fernando was void from the very
beginning for lack of a marriage license at the time of the ceremony. This Court took cognizance of the said issue, reversed the RTC and the
Court of Appeals, and ruled in favor of Filipina. Its ratiocination on the matter is reproduced in full below

27
 Petitioner, for the first time, raises the issue of the marriage being void for lack of a valid marriage license at the
time of its celebration. It appears that, according to her, the date of the actual celebration of their marriage and the date
of issuance of their marriage certificate and marriage license are different and incongruous.

Although we have repeatedly ruled that litigants cannot raise an issue for the first time on appeal, as this would
contravene the basic rules of fair play and justice, in a number of instances, we have relaxed observance of procedural
rules, noting that technicalities are not ends in themselves but exist to protect and promote substantive rights of
litigants. We said that certain rules ought not to be applied with severity and rigidity if by so doing, the very reason for
their existence would be defeated. Hence, when substantial justice plainly requires, exempting a particular case from the
operation of technicalities should not be subject to cavil. In our view, the case at bar requires that we address the issue of
the validity of the marriage between Filipina and Fernando which petitioner claims is void from the beginning for lack of a
marriage license, in order to arrive at a just resolution of a deeply seated and violent conflict between the parties. Note,
however, that here the pertinent facts are not disputed; and what is required now is a declaration of their effects
according to existing law.[21] [Emphasis supplied.]

In the instant case, the conflict between the MPC and the BIR Commissioner could be hardly described as deeply seated and violent,
it remaining on a professional level.

Moreover, this Court pointed out in the Sy case that the pertinent facts, i.e., the dates of actual celebration of the marriage, issuance
of the marriage certificate, and issuance of the marriage license, were undisputed. The same cannot be said in the case at bar. That MPC is a
public utility is not an undisputed fact; on the contrary, the determination thereof gives rise to a multitude of other questions of fact and
law. It is a mere deduction on the part of the BIR Commissioner that since the MPC is engaged in the generation of power, it is a public
utility. The MPC contests this arguing that it is not a public utility because it sells its generated power to NAPOCOR exclusively, and not to the
general public. It asserts that it is subject to VAT and that its sale of generated electricity to NAPOCOR is subject to zero-rated VAT.

Substantial justice, in such a case, requires not the allowance of issues raised for the first time on appeal, but that the issue of
whether MPC is a public utility, and the correlated issue of whether MPC is subject to VAT or franchise tax, be raised and threshed out in the
first opportunity before the CTA so that either party would have fully presented its evidence and legal arguments in support of its position
and to contravene or rebut those of the opposing party.

In Atlas Consolidated Mining & Development Corp. v. Commissioner of Internal Revenue, [22] this Court held that it was too late for
the BIR Commissioner to raise an issue of fact of payment for the first time in his memorandum in the CTA and in his appeal to this Court. If
raised earlier, the matter ought to have been seriously delved into by the CTA. On this ground, this Court was of the opinion that under all
the attendant circumstances of the case, substantial justice would be served if the BIR Commissioner be held as precluded from attempting
to raise the issue at this stage. Failure to assert a question within a reasonable time warrants a presumption that the party entitled to assert
it either has abandoned or declined to assert it.

Therefore, the Court of Appeals correctly refused to consider the issues raised by the BIR Commissioner for the first time on
appeal. Its discussion on whether the MPC is a public utility and whether it is subject to VAT or franchise tax is nothing more than obiter
dictum. It is best not at all to discuss these issues for they do not simply involve questions of law, but also closely-related questions of
fact[23] which neither the Court of Appeals nor this Court could presume or garner from the evidence on record.

II

Input VAT on capital goods and services may be the subject of a claim for
refund.

The MPC bases its claim for refund of its input VAT on Section 106(b) of the Tax Code of 1986, as amended by Republic Act No. 7716,[24] which
provides
28
 Sec. 106. Refunds or tax credits of creditable input tax.

xxxx

(b) Capital goods. - A VAT-registered person may apply for the issuance of a tax credit certificate or refund of
input taxes paid on capital goods imported or locally purchased, to the extent that such input taxes have not been applied
against output taxes. The application may be made only within two (2) years, after the close of the taxable quarter when
the importation or purchase was made.

Capital goods or properties, as defined in Revenue Regulations No. 7-95, the implementing rules on VAT, are goods and properties with
estimated useful life greater than one year and which are treated as depreciable assets under Section 29(f), used directly or indirectly in the
production or sale of taxable goods or services.[25]

Contrary to the argument of the BIR Commissioner, input VAT on capital goods is among those expressly recognized as creditable
input tax by Section 104(a) of the Tax Code of 1986, as amended by Rep. Act No. 7716, [26] to wit

Sec. 104. Tax Credits. - (a) Creditable input tax. - Any input tax evidenced by a VAT invoice or official receipt issued
in accordance with Section 108 hereof on the following transactions shall be creditable against the output tax:

(1) Purchase or importation of goods:

(A) For sale; or

(B) For conversion into or intended to form part of a finished product for sale including packing materials; or

(C) For use as supplies in the course of business; or

(D) For use as materials supplied in the sale of service; or

(E) For use in trade or business for which deduction for depreciation or amortization is allowed under this Code,
except automobiles, aircraft and yachts. [Emphasis supplied.]

Thus, goods and properties used by the taxpayer in its VAT-taxable business, subject to depreciation or amortization in accordance
with the Tax Code, are considered capital goods. Input VAT on the purchase of such capital goods is creditable against the taxpayers output
VAT. The taxpayer is further given the option, under Section 106(b) of the Tax Code of 1986, as amended by Republic Act No. 7716, to claim
refund of the input VAT on its capital goods, but only to the extent that the said input VAT has not been applied to its output VAT.

This Court, likewise, will not give credence to the BIR Commissioners contention that the claim for refund of input VAT on capital goods by
the MPC should be denied for the latters failure to comply with the requirements for the refund of input VAT credits on zero-rated sales
provided in Section 16 of Revenue Regulations No. 5-87, as amended by Revenue Regulations No. 3-88. The BIR Commissioner is apparently
confused.

MPC is claiming refund of the input VAT it has paid on the purchase of capital goods, it is not claiming refund of its input VAT credits
attributable to its zero-rated sales. These are two different input VAT credits, arising from distinct transactions, although both may be the
subject of claims for refund by the taxpayer.[27] Indeed, the very same regulation invoked by the BIR Commissioner, Revenue Regulations No.
5-87, as amended, distinguishes between these two refundable input VAT credits and discusses them in two separate paragraphs: Section
16(a) on zero-rated sales of goods and services, and Section 16(b) on capital goods. It is also worth noting that Revenue Regulations No. 7-
95, issued on 9 December 1995, which consolidated all VAT regulations, already superseded Revenue Regulations No. 5-87. Still, Revenue
Regulations No. 7-95 maintains the distinction between these two input VAT credits, discussing the zero-rated sales of goods or properties
or services in Section 4.106-1(a), and capital goods in Section 4.106-1(b).

Hence, the present claim for refund of input VAT on capital goods filed by MPC need not comply with the requirements for refund
of input VAT attributable to zero-rated sales.
III

29
There is no reason for this Court to disturb the findings of fact of the CTA,
as affirmed by the Court of Appeals.

While it is true, as the BIR Commissioner alleges, that the MPC has the burden of proving that it is entitled to the refund it is claiming
for, both the CTA and Court of Appeals had ruled that the MPC presented substantial evidence to support its claim for refund of its input VAT
on capital goods and services in the amount of P28,744,626.95.

The CTA found that MPC is registered as a VAT-taxpayer, as evidenced by its Certificate of Registration, issued by the BIR Revenue
District Office (RDO) No. 60, on 26 January 1996. The BIR Commissioner does not contest this fact, and does not offer any explanation as to
why the BIR RDO had approved the registration of MPC as a VAT-taxpayer when, as the BIR Commissioner is now asserting, the MPC is not
subject to VAT but to franchise tax. The MPC had been filing its VAT Quarterly Returns, including those for the period covered by its claim for
refund, 1 April 1996 to 31 December 1996, reporting and reflecting therein the input VAT it had paid on its purchase of capital goods and
services. These capital goods and services were necessary in the construction of the power plant facilities used by MPC in electric power
generation.

The VAT invoices and receipts submitted by MPC, in support of its claim for refund, had been examined and evaluated by an
independent auditor, as well as by the CTA itself. Thus, from the original amount of P39,330,500.85 claimed by MPC for refund, the
independent auditor, SGV & Co., found only the sum of P28,745,502.40 sufficiently supported by valid invoices and/or official
receipts. Following its own examination and evaluation of the evidence submitted, the CTA further reduced the amount refundable
to P28,744,626.95 after disallowing the input VAT on the purchase of xerox and office supplies which cannot be capitalized and not necessary
in the construction of power plant facilities.[28]
It is worth noting that the foregoing findings by the CTA were affirmed in totality by the Court of Appeals. Likewise, this Court finds no reason
to disturb the foregoing findings of the tax court.

Another well-settled principle in this jurisdiction is that this Court is bound by the findings of fact of the CTA. Only errors of law, and not
rulings on the weight of evidence, are reviewable by this Court. Findings of fact of the CTA are not to be disturbed unless clearly shown to be
unsupported by substantial evidence.[29] Quite the reverse, the claim of MPC for refund of input VAT on its purchase of capital goods and
services in the present case is found to be supported by substantial evidence, not just by the CTA, but also by the Court of Appeals. The BIR
Commissioner failed to convince this Court otherwise.

IV

The BIR should seriously study and consider each and every application for
claim for refund pending before it.

As a final point, this Court would like to call the attention of the BIR Commissioner, as well as the responsible BIR officers, to seriously study
and consider each and every application for claim for refund filed before their office. It is very obvious to this Court that the Answer filed by
the BIR Commissioner before the Court of Appeals, which it essentially reproduced as its Memorandum before the same court, presented
general and pro forma arguments. The BIR Commissioner only raised belatedly before the Court of Appeals the issues of whether MPC is a
public utility and whether it is subject to franchise tax and not VAT. Even then, his Petition for Review before the appellate court, numbering
only six pages, with only one page devoted to a discussion of the merits of his Petition, left much to be desired and would hardly persuade
any court. Since he represents the interest of the government in tax cases, the BIR Commissioner should exert more effort and exercise more
diligence in preparing his pleadings before any court; he should not wait to do so only upon appeal of his case to the higher court. This Court
may not always be inclined to allow him to remedy his past laxity.

IN VIEW OF THE FOREGOING, the instant Petition is hereby DENIED. The Decision, dated 30 July 2003, of the Court of Appeals in CA-G.R. SP
No. 60783, which affirmed in toto the Decision, dated 11 July 2000, of the CTA in CTA Case No. 5658, is hereby AFFIRMED. The BIR
Commissioner is hereby ORDERED to issue in favor of MPC a tax credit certificate in the amount of P28,744,626.95 representing input VAT
paid on

30
capital goods and services for the period of 1 April 1996 to 31 December 1996. No pronouncement as to costs.

SO ORDERED.

5. Dela Cruz vs. Court of Appeals 510 SCRA 103 , December 06, 2006

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

LOURDES DELA CRUZ, G.R. No. 139442

Petitioner,
Present:

QUISUMBING, J., Chairperson,

- versus - CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.

HON. COURT OF APPEALS Promulgated:

and MELBA TAN TE,
Respondents. December 6, 2006
x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken
away even that which he hath.

Holy Bible, Matthew 25:29

The Case

This petition for review seeks to nullify the April 30, 1999 Decision and the July 16, 1999 Resolution of the Court of Appeals in CA-G.R. SP No.
49097, which reversed the Decision of the Manila Regional Trial Court (RTC), Branch 35, in Civil Case No. 98-89174, and reinstated the Decision
of the Manila Metropolitan Trial Court (MeTC), Branch 20, which ordered petitioner Dela Cruz to vacate the subject lot in favor of respondent
Tan Te.[1]
The Facts

The Reyes family, represented by Mr. Lino Reyes, owned the lot located at No. 1332 Lacson Street (formerly Gov. Forbes Street),
Sampaloc, Manila. Petitioner Lourdes Dela Cruz was one of their lessees, and she religiously paid rent over a portion of the lot for well over
40 years. Sometime in 1989, a fire struck the premises and destroyed, among others, petitioners dwelling. After the fire, petitioner and some
tenants returned to the said lot and rebuilt their respective houses; simultaneously, the Reyes family made several verbal demands on the
remaining lessees, including petitioner, to vacate the lot but the latter did not comply. On February 21, 1994, petitioner was served a written

31
demand to vacate said lot but refused to leave. Despite the setback, the Reyes family did not initiate court proceedings against any of the
lessees.

On November 26, 1996, the disputed lot was sold by the Reyeses to respondent Melba Tan Te by virtue of the November 26, 1996 Deed of
Absolute Sale. Respondent bought the lot in question for residential purposes. Despite the sale, petitioner Dela Cruz did not give up the lot.

On January 14, 1997, petitioner was sent a written demand to relinquish the premises which she ignored, prompting respondent Tan Te to
initiate conciliation proceedings at the barangay level. While respondent attempted to settle the dispute by offering financial assistance,
petitioner countered by asking PhP 500,000.00 for her house. Respondent rejected the counter offer which she considered
unconscionable. As a result, a certificate to file action was issued to Tan Te.

On September 8, 1997, respondent Tan Te filed an ejectment complaint with damages before the Manila MeTC, entitled Melba Tan Te v.
Lourdes Dela Cruz and docketed as Civil Case No. 156730-CV. The complaint averred that: (1) the previous owners, the Reyeses were in
possession and control of the contested lot; (2) on November 26, 1996, the lot was sold to Tan Te; (3) prior to the sale, Dela Cruz forcibly
entered the property with strategy and/or stealth; (4) the petitioner unlawfully deprived the respondent of physical possession of the
property and continues to do so; and, (5) the respondent sent several written demands to petitioner to vacate the premises but refused to
do so.

On October 24, 1997, petitioner filed her answer and alleged that: (1) the MeTC had no jurisdiction over the case because it falls within the
jurisdiction of the RTC as more than one year had elapsed from petitioners forcible entry; (2) she was a rent-paying tenant protected by PD
20;[2] (3) her lease constituted a legal encumbrance upon the property; and (4) the lot was subject of expropriation.

The Ruling of the Manila MeTC

On April 3, 1998, the MeTC decided as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff as follows:

1. Ordering the defendant and all persons claiming right under her to vacate the premises situated at 1332 Lacson
Street (formerly Gov. Forbes Street), Sampaloc, Manila and peacefully return possession thereof to plaintiff;

2. Ordering the defendant to pay the plaintiff the amount of P360.00 a month from December 1996 to November
1997; P432.00 a month from December 1997 to November 1998, plus 20% for each subsequent year until the
premises shall have been vacated and turned over to the plaintiff;

3. Ordering the defendant to pay the plaintiff the amount of P10,000.00 as attorneys fees; and, the costs of the
suit.

SO ORDERED.[3]

The Ruling of the Regional Trial Court

Unconvinced, petitioner Dela Cruz appealed the Decision of the MeTC in the Manila RTC and the appeal was docketed as Civil Case
No. 98-89174. On September 1, 1998, the RTC rendered its judgment setting aside the April 3, 1998 Decision of the Manila MeTC and dismissed
respondent Tan Tes Complaint on the ground that it was the RTC and not the MeTC which had jurisdiction over the subject matter of the
case. The RTC believed that since Tan Tes predecessor-in-interest learned of petitioners intrusion into the lot as early as February 21, 1994,
the ejectment suit should have been filed within the one-year prescriptive period which expired on February 21, 1995. Since the Reyes
did not file the ejectment suit and respondent Tan Te filed the action only on September 8, 1997, then the suit had become an accion
publiciana cognizable by the RTC.

The Ruling of the Court of Appeals

Disappointed at the turn of events, respondent Tan Te appealed the adverse Decision to the Court of Appeals (CA) which was
docketed as CA-G.R. SP No. 49097. This time, the CA rendered a Decision in favor of respondent Tan Te reversing the Manila RTC September
1, 1998 Decision and reinstated the Manila MeTC April 3, 1998 Decision.

Petitioner tried to have the CA reconsider its Decision but was rebutted in its July 16, 1999 Resolution.

32
Unyielding to the CA Decision and the denial of her request for reconsideration, petitioner Dela Cruz now seeks legal remedy through the
instant Petition for Review on Certiorari before the Court.

The Issues

Petitioner Dela Cruz claims two (2) reversible errors on the part of the appellate court, to wit:

THE HON. COURT OF APPEALS, WITH DUE RESPECT, WENT BEYOND THE ISSUES OF THE CASE AND CONTRARY TO
THOSE OF THE TRIAL COURT.

THE HON. COURT OF APPEALS, WITH DUE RESPECT, ERRED IN REVERSING THE DECISION OF THE RTC AND IN
EFFECT, REINSTATING THE DECISION OF THE [MeTC] WHICH IS CONTRADICTED BY THE EVIDENCE ON RECORD. [4]

The Courts Ruling

Discussion on Rule 45

Before we dwell on the principal issues, a few procedural matters must first be resolved.

Petitioner Dela Cruz asks the Court to review the findings of facts of the CA, a course of action proscribed by Section 1, Rule 45. Firm is the
rule that findings of fact of the CA are final and conclusive and cannot be reviewed on appeal to this Court provided they are supported by
evidence on record or substantial evidence. Fortunately for petitioner, we will be liberal with her petition considering that the CAs factual
findings contradict those of the RTC, and there was an asseveration that the court a quo went beyond the issues of the case. Indeed, these
grounds were considered exceptions to the factual issue bar rule.

Secondly, the petition unnecessarily impleaded the CA in violation of Section 4, Rule 45. We will let this breach pass only because there is a
need to entertain the petition due to the conflicting rulings between the lower courts; however, a repetition may result to sanctions.

The actual threshold issue is which court, the Manila RTC or the Manila MeTC, has jurisdiction over the Tan Te ejectment suit. Once the
jurisdictional issue is settled, the heart of the dispute is whether or not respondent is entitled to the ejectment of petitioner Dela Cruz from
the premises.

However, the petition is bereft of merit.

On the Issue of Jurisdiction

Jurisdiction is the power or capacity given by the law to a court or tribunal to entertain, hear and determine certain
controversies.[5] Jurisdiction over the subject matter is conferred by law.

Section 33 of Chapter III -- on Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts of B. P. No.
129[6] provides:

Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in civil
cases.Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:
xxxx

(2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided, That when, in such
cases, the defendant raises the question of ownership in his pleadings and the question of possession cannot be
resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the
issue of possession.

Thus exclusive, original jurisdiction over ejectment proceedings (accion interdictal) is lodged with the first level courts. This is
clarified in Section 1, Rule 70 of the 1997 Rules of Civil Procedure that embraces an action for forcible entry (detentacion), where one is

33
deprived of physical possession of any land or building by means of force, intimidation, threat, strategy, or stealth. In actions for forcible
entry, three (3) requisites have to be met for the municipal trial court to acquire jurisdiction. First, the plaintiffs must allege their prior physical
possession of the property. Second, they must also assert that they were deprived of possession either by force, intimidation, threat, strategy,
or stealth.Third, the action must be filed within one (1) year from the time the owners or legal possessors learned of their deprivation of
physical possession of the land or building.

The other kind of ejectment proceeding is unlawful detainer (desahucio), where one unlawfully withholds possession of the subject
property after the expiration or termination of the right to possess. Here, the issue of rightful possession is the one decisive; for in such
action, the defendant is the party in actual possession and the plaintiffs cause of action is the termination of the defendants right to continue
in possession.[7] The essential requisites of unlawful detainer are: (1) the fact of lease by virtue of a contract express or implied; (2) the
expiration or termination of the possessors right to hold possession; (3) withholding by the lessee of the possession of the land or building
after expiration or termination of the right to possession; (4) letter of demand upon lessee to pay the rental or comply with the terms of the
lease and vacate the premises; and (5) the action must be filed within one (1) year from date of last demand received by the defendant.

A person who wants to recover physical possession of his real property will prefer an ejectment suit because it is governed by the
Rule on Summary Procedure which allows immediate execution of the judgment under Section 19, Rule 70 unless the defendant perfects an
appeal in the RTC and complies with the requirements to stay execution; all of which are nevertheless beneficial to the interests of the lot
owner or the holder of the right of possession.

On the other hand, Section 19, of Chapter II of B.P. No. 129 on Regional Trial Courts provides:

Section 19. Jurisdiction in civil cases.Regional Trial Courts shall exercise exclusive original jurisdiction:

xxxx

(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, except actions
for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon
Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts.

Two (2) kinds of action to recover possession of real property which fall under the jurisdiction of the RTC are: (1) the plenary action
for the recovery of the real right of possession (accion publiciana) when the dispossession has lasted for more than one year or when the
action was filed more than one (1) year from date of the last demand received by the lessee or defendant; and (2) an action for the recovery
of ownership (accion reivindicatoria) which includes the recovery of possession.

These actions are governed by the regular rules of procedure and adjudication takes a longer period than the summary ejectment
suit.

To determine whether a complaint for recovery of possession falls under the jurisdiction of the MeTC (first level court) or the RTC
(second level court), we are compelled to go over the allegations of the complaint. The general rule is that what determines the nature of
the action and the court that has jurisdiction over the case are the allegations in the complaint. These cannot be made to depend upon
the defenses set up in the answer or pleadings filed by the defendant.[8]

This general rule however admits exceptions. In Ignacio v. CFI of Bulacan, it was held that while the allegations in the complaint
make out a case for forcible entry, where tenancy is averred by way of defense and is proved to be the real issue, the case should be
dismissed for lack of jurisdiction as the case should properly be filed with the then Court of Agrarian Relations. [9]

The cause of action in a complaint is not what the designation of the complaint states, but what the allegations in the body of
the complaint define and describe. The designation or caption is not controlling, more than the allegations in the complaint themselves
are, for it is not even an indispensable part of the complaint.[10]

Let us refer to the allegations of the complaint filed in the Manila MeTC in Civil Case No. 98-89174, which we quote verbatim:

3. That plaintiff is the absolute and registered owner of a parcel of land located at No. 1332, Lacson Street,
Sampaloc, Manila now being occupied by defendant;

4. That plaintiff purchased the above-said parcel of land together with its improvements from the legal heirs of the
late EMERLINDA DIMAYUGA REYES on November 26, 1996, under and by virtue of a Deed of Absolute Sale x x x;

34
 5. That pursuant to the said deed of sale, the title to the land and all its improvements was transferred in plaintiffs
name as evidenced by Transfer Certificate of Title No. 233273 issued by the Register of Deeds of Manila on April
22, 1997 x x x;

6. That prior to said sale, the previous owners, represented by Mr. Lino Reyes, husband of the said deceased
Emerlinda D. Reyes and the administrator of her estate, was in possession and control of the property subject of
this complaint;
7. That also prior to said sale, defendant, without the knowledge and consent of Mr. Lino Reyes, surreptitiously
and by means of stealth and strategy entered, used and occupied the said premises thus depriving the former of
rightful possession thereof;
8. That on February 21, 1994, Mr. Lino Reyes, through Atty. Alejo Sedico, his lawyer, furnished the defendants a
letter formally demanding that defendant vacate the premises x x x;

9. That, however, defendant failed and refused to vacate despite just and legal demand by Mr. Lino Reyes;

10. That after the sale to plaintiff of said premises, plaintiff has several times demanded of defendants to vacate
the premises, the last demand having been made on them personally and in writing on January 14, 1997 x x x;

11. That defendant failed and refused and still fails and refuses to vacate the premises without legal cause or
justifiable reason whatsoever;[11]

The answer of petitioner averred:

4. The Court has no jurisdiction over the case, having been filed by plaintiff more than the reglementary one year
period to commence forcible entry case, which is reckoned from the date of the alleged unlawful entry of defendant
by the use of stealth and strategy into the premises;

5. For more than four decades now, defendant has been and still is a rent-paying tenant of the subject land
occupied by their residential house, dating back to the original owner-lessor, the Dimayuga family. Her lease with
no definite duration, commenced with a rent at P60.00 per month until it was gradually increased in the ensuing
years. As of November 1996, it stood at P300.00 a month;

6. In this circumstances [sic], defendant enjoys the protective mantle of P.D. 20 and the subsequent rental control
status against dispossession. She cannot be ejected other than for causes prescribed under B.P. Blg. 25. Further, in
case of sale of the land, she has the right of first refusal under the express provision of P.D. 1571;

7. Throughout the years of her tenancy, defendant has been updated in her rental payment until the collector of
the original owner-lessor no longer came around as she has done theretofore;

7.1. As a result, she was compelled to file a petition for consignation of rent before the Metropolitan
Trial Court of Manila;

8. A bona fide tenant within the ambit if [sic] P.D. 20 and the subsequent rental control status, including B.P. Blg.
25, under its terms, cannot be ousted on a plea of expiration of her monthly lease;

9. Her lease constitutes a legal encumbrance upon the property of the lessor/owner and binds the latters
successor-in-interest who is under obligation to respect it;

10. The land at bench is the subject of a pending expropriation proceedings;

11. Plaintiff being a married woman cannot sue or be sued without being joined by her husband; [12]

Undeniably, the aforequoted allegations of the complaint are vague and iffy in revealing the nature of the action for ejectment.

The allegations in the complaint show that prior to the sale by Lino Reyes, representing the estate of his wife Emerlinda Reyes, he
was in possession and control of the subject lot but were deprived of said possession when petitioner, by means of stealth and strategy,
entered and occupied the same lot. These circumstances imply that he had prior physical possession of the subject lot and can make up a
forcible entry complaint.

35
 On the other hand, the allegation that petitioner Dela Cruz was served several demands to leave the premises but refused to do so
would seem to indicate an action for unlawful detainer since a written demand is not necessary in an action for forcible entry. It is a fact that
the MeTC complaint was filed on September 8, 1997 within one (1) year from the date of the last written demand upon petitioner Dela Cruz
on January 14, 1997.

As previously discussed, the settled rule is jurisdiction is based on the allegations in the initiatory pleading and the defenses in the
answer are deemed irrelevant and immaterial in its determination. However, we relax the rule and consider the complaint at bar as an
exception in view of the special and unique circumstances present. First, as in Ignacio v. CFI of Bulacan,[13] the defense of lack of jurisdiction
was raised in the answer wherein there was an admission that petitioner Dela Cruz was a lessee of the former owners of the lot, the Reyeses,
prior to the sale to respondent Tan Te. The fact that petitioner was a tenant of the predecessors-in-interest of respondent Tan Te is material
to the determination of jurisdiction. Since this is a judicial admission against the interest of petitioner, such admission can be considered in
determining jurisdiction. Second, the ejectment suit was filed with the Manila MeTC on September 8, 1997 or more than nine (9) years ago. To
dismiss the complaint would be a serious blow to the effective dispensation of justice as the parties will start anew and incur additional legal
expenses after having litigated for a long time. Equitable justice dictates that allegations in the answer should be considered to aid in arriving
at the real nature of the action. Lastly, Section 6, Rule 1 of the Rules of Court clearly empowers the Court to construe Rule 70 and other
pertinent procedural issuances in a liberal manner to promote just, speedy, and inexpensive disposition of every action and proceeding.

Based on the complaint and the answer, it is apparent that the Tan Te ejectment complaint is after all a complaint for unlawful
detainer. It was admitted that petitioner Dela Cruz was a lessee of the Reyeses for around four (4) decades. Thus, initially petitioner as lessee
is the legal possessor of the subject lot by virtue of a contract of lease. When fire destroyed her house, the Reyeses considered the lease
terminated; but petitioner Dela Cruz persisted in returning to the lot and occupied it by strategy and stealth without the consent of the
owners. The Reyeses however tolerated the continued occupancy of the lot by petitioner. Thus, when the lot was sold to respondent Tan Te,
the rights of the Reyeses, with respect to the lot, were transferred to their subrogee, respondent Tan Te, who for a time also tolerated the
stay of petitioner until she decided to eject the latter by sending several demands, the last being the January 14, 1997 letter of demand. Since
the action was filed with the MeTC on September 8, 1997, the action was instituted well within the one (1) year period reckoned from January
14, 1997. Hence, the nature of the complaint is one of unlawful detainer and the Manila MeTC had jurisdiction over the complaint.

Thus, an ejectment complaint based on possession by tolerance of the owner, like the Tan Te complaint, is a specie of unlawful
detainer cases.

As early as 1913, case law introduced the concept of possession by tolerance in ejectment cases as follows:
It is true that the landlord might, upon the failure of the tenant to pay the stipulated rents, consider the contract
broken and demand immediate possession of the rented property, thus converting a legal possession into illegal
possession. Upon the other hand, however, the landlord might conclude to give the tenant credit for the payment
of the rents and allow him to continue indefinitely in the possession of the property. In other words, the landlord
might choose to give the tenant credit from month to month or from year to year for the payment of their rent,
relying upon his honesty of his financial ability to pay the same. During such period the tenant would not be in
illegal possession of the property and the landlord could not maintain an action of desahucio until after he had
taken steps to convert the legal possession into illegal possession. A mere failure to pay the rent in accordance with
the contract would justify the landlord, after the legal notice, in bringing an action of desahucio. The landlord might,
however, elect to recognize the contract as still in force and sue for the sums due under it. It would seem to be
clear that the landlord might sue for the rents due and [unpaid, without electing to terminate the contract of
tenancy;] [w]hether he can declare the contract of tenancy broken and sue in an action desahucio for the
possession of the property and in a separate actions for the rents due and damages, etc. [14]
The concept of possession by tolerance in unlawful detainer cases was further refined and applied in pertinent cases submitted for
decision by 1966. The rule was articulated as follows:

Where despite the lessees failure to pay rent after the first demand, the lessor did not choose to bring an action in
court but suffered the lessee to continue occupying the land for nearly two years, after which the lessor made a
second demand, the one-year period for bringing the detainer case in the justice of the peace court should be
counted not from the day the lessee refused the first demand for payment of rent but from the time the second
demand for rents and surrender of possession was not complied with.[15]
In Calubayan v. Pascual, a case usually cited in subsequent decisions on ejectment, the concept of possession by tolerance was
further elucidated as follows:

In allowing several years to pass without requiring the occupant to vacate the premises nor filing an action to eject
him, plaintiffs have acquiesced to defendants possession and use of the premises. It has been held that a person
who occupies the land of another at the latters tolerance or permission, without any contract between them, is
necessarily bound by an implied promise that he will vacate upon demand, failing which a summary action for

36
 ejectment is the proper remedy against them. The status of the defendant is analogous to that of a lessee or tenant
whose term of lease has expired but whose occupancy continued by tolerance of the owner. In such a case, the
unlawful deprivation or withholding of possession is to be counted from the date of the demand to
vacate.[16] (Emphasis supplied.)

From the foregoing jurisprudence, it is unequivocal that petitioners possession after she intruded into the lot after the firewas by
tolerance or leniency of the Reyeses and hence, the action is properly an unlawful detainer case falling under the jurisdiction of the Manila
MeTC.

Even if we concede that it is the RTC and not the MeTC that has jurisdiction over the Tan Te complaint, following the reasoning that
neither respondent nor her predecessor-in-interest filed an ejectment suit within one (1) year from February 21, 1994 when the Reyeses
knew of the unlawful entry of petitioner, and hence, the complaint is transformed into an accion publiciana, the Court deems it fair and just
to suspend its rules in order to render efficient, effective, and expeditious justice considering the nine (9) year pendency of the ejectment
suit. More importantly, if there was uncertainty on the issue of jurisdiction that arose from the averments of the complaint, the same cannot
be attributed to respondent Tan Te but to her counsel who could have been confused as to the actual nature of the ejectment suit. The
lawyers apparent imprecise language used in the preparation of the complaint without any participation on the part of Tan Te is sufficient
special or compelling reason for the grant of relief.

The case of Barnes v. Padilla[17] elucidates the rationale behind the exercise by this Court of the power to relax, or even suspend,
the application of the rules of procedure:

Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate the
attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate
rather than promote substantial justice, must always be eschewed. Even the Rules of Court reflect this
principle. The power to suspend or even disregard rules can be so pervasive and compelling as to alter even that
which this Court itself has already declared to be final x x x.

The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the
proper and just determination of his cause, free from the constraints of technicalities. Time and again, this Court
has consistently held that rules must not be applied rigidly so as not to override substantial justice. [18]

Moreover, Section 8, Rule 40 authorizes the RTCin case of affirmance of an order of the municipal trial court dismissing a case
without trial on the merits and the ground of dismissal is lack of jurisdiction over the subject matterto try the case on the merits as if the case
was originally filed with it if the RTC has jurisdiction over the case. In the same vein, this Court, in the exercise of its rule-making power, can
suspend its rules with respect to this particular case (pro hac vice), even if initially, the MeTC did not have jurisdiction over the ejectment suit,
and decide to assume jurisdiction over it in order to promptly resolve the dispute.

The issue of jurisdiction settled, we now scrutinize the main issue.

At the heart of every ejectment suit is the issue of who is entitled to physical possession of the lot or possession de facto.

We rule in favor of respondent Tan Te for the following reasons:

1. Petitioner admitted in her Answer that she was a rent-paying tenant of the Reyeses, predecessors-in-interest of respondent Tan
Te. As such, she recognized the ownership of the lot by respondent, which includes the right of possession.

2. After the fire raged over the structures on the subject lot in late 1989 the contracts of lease expired, as a result of which Lino
Reyes demanded that all occupants, including petitioner, vacate the lot but the latter refused to abandon the premises. During the duration
of the lease, petitioners possession was legal but it became unlawful after the fire when the lease contracts were deemed terminated and
demands were made for the tenants to return possession of the lot.

3. Petitioners possession is one by the Reyeses tolerance and generosity and later by respondent Tan Tes.

Petitioner fully knows that her stay in the subject lot is at the leniency and magnanimity of Mr. Lino Reyes and later of respondent
Tan Te; and her acquiescence to such use of the lot carries with it an implicit and assumed commitment that she would leave the premises
the moment it is needed by the owner. When respondent Tan Te made a last, written demand on January 14, 1997 and petitioner breached
her promise to leave upon demand, she lost her right to the physical possession of the lot. Thus, respondent Tan Te should now be allowed
to occupy her lot for residential purposes, a dream that will finally be realized after nine (9) years of litigation.

37
 Petitioner raises the ancillary issue that on March 15, 1998, the Manila City Council passed and approved Ordinance No. 7951:
[a]uthorizing the Manila City Mayor to acquire either by negotiation or expropriation certain parcels of land
covered by Transfer Certificates of Title Nos. 233273, 175106 and 140471, containing an area of One Thousand
Four Hundred Twenty Five (1,425) square meters, located at Maria Clara and Governor Forbes Streets, Sta. Cruz,
Manila, for low cost housing and award to actual bonafide residents thereat and further authorizing the City Mayor
to avail for that purpose any available funds of the city and other existing funding facilities from other government
agencies x x x.[19]

It readily appears that this issue was not presented before the Court of Appeals in CA-G.R. SP No. 49097 despite the fact that the
respondents petition was filed on September 25, 1998, six months after the ordinance was passed. Thus, this issue is proscribed as are all
issues raised for the first time before the Court are proscribed.

Even granting for the sake of argument that we entertain the issue, we rule that the intended expropriation of respondents lot (TCT
No. 233273) by the city government of Manila will not affect the resolution of this petition. For one thing, the issue can be raised by petitioner
in the appropriate legal proceeding. Secondly, the intended expropriation might not even be implemented since it is clear from the ordinance
that the City Mayor will still locate available funds for project, meaning the said expense is not a regular item in the budget.

WHEREFORE, this petition is DENIED for lack of merit. The April 30, 1999 Decision of the Court of Appeals reinstating the April 3,
1998 MeTC Decision in Civil Case No. 156730-CV and the July 16, 1999 Resolution in CA-G.R. SP No. 49097 are hereby AFFIRMED IN TOTO.

No costs.

SO ORDERED.

6. Apo Fruits Corporation vs. Land Bank of the Philippines 632 SCRA 727 , October 12, 2010

Republic of the Philippines

Supreme Court

Manila

EN BANC

38
 APO FRUITS CORPORATION and HIJO G.R. No. 164195
PLANTATION, INC.,
Petitioners,
Present:

CORONA, C.J.,
*CARPIO,

CARPIO MORALES,

VELASCO, JR.,

NACHURA,
- versus -
LEONARDO-DE CASTRO,

BRION,
* PERALTA,

BERSAMIN,

DEL CASTILLO,
* ABAD,

VILLARAMA, JR.,

PEREZ,
LAND BANK OF THE PHILIPPINES,
MENDOZA, and
Respondent.
SERENO, JJ.

Promulgated:

October 12, 2010

x----------------------------------------------------------------------------------------x

RESOLUTION

BRION, J.:

We resolve the petitioners motion for reconsideration addressing our Resolution of December 4, 2009 whose dispositive portion directs:

WHEREFORE, the Court denies the petitioners second motion for reconsideration (with respect to the denial of the award
of legal interest and attorneys fees), and reiterates the decision dated February 6, 2007 and the resolution dated December
19, 2007 of the Third Division.

For a fuller and clearer presentation and appreciation of this Resolution, we hark back to the roots of this case.

39
 Factual Antecedents

Apo Fruits Corporation (AFC) and Hijo Plantation, Inc. (HPI), together also referred to as petitioners, were registered owners of vast
tracks of land; AFC owned 640.3483 hectares, while HPI owned 805.5308 hectares. On October 12, 1995, they voluntarily offered to sell these
landholdings to the government via Voluntary Offer to Sell applications filed with the Department of Agrarian Reform (DAR).

On October 16, 1996, AFC and HPI received separate notices of land acquisition and valuation of their properties from the DARs
Provincial Agrarian Reform Officer (PARO). At the assessed valuation of P165,484.47 per hectare, AFCs land was valued at P86,900,925.88,
while HPIs property was valued at P164,478,178.14. HPI and AFC rejected these valuations for being very low.

In its follow through action, the DAR requested the Land Bank of the Philippines (LBP) to deposit P26,409,549.86 in AFCs bank
account and P45,481,706.76 in HPIs bank account, which amounts the petitioners then withdrew. The titles over AFC and HPIs properties
were thereafter cancelled, and new ones were issued on December 9, 1996 in the name of the Republic of the Philippines.

On February 14, 1997, AFC and HPI filed separate petitions for determination of just compensation with the DAR Adjudication Board (DARAB).
When the DARAB failed to act on these petitions for more than three years, AFC and HPI filed separate complaints for determination and
payment of just compensation with the Regional Trial Court (RTC) of Tagum City, acting as a Special Agrarian Court. These complaints were
subsequently consolidated.

On September 25, 2001, the RTC resolved the consolidated cases, fixing the just compensation for the petitioners 1,338.6027 hectares of
land[1] at P1,383,179,000.00, with interest on this amount at the prevailing market interest rates, computed from the taking of the properties
on December 9, 1996 until fully paid, minus the amounts the petitioners already received under the initial valuation. The RTC also awarded
attorneys fees.

LBP moved for the reconsideration of the decision. The RTC, in its order of December 5, 2001, modified its ruling and fixed the interest at the
rate of 12% per annum from the time the complaint was filed until finality of the decision. The Third Division of this Court, in its Decision
of February 6, 2007, affirmed this RTC decision.

On motion for reconsideration, the Third Division issued its Resolution of December 19, 2007, modifying its February 6, 2007 Decision
by deleting the 12% interest due on the balance of the awarded just compensation. The Third Division justified the deletion by the finding
that the LBP did not delay the payment of just compensation as it had deposited the pertinent amounts due to AFC and HPI within fourteen
months after they filed their complaints for just compensation with the RTC. The Court also considered that AFC had already collected
approximately P149.6 million, while HPI had already collected approximately P262 million from the LBP. The Third Division also deleted the
award of attorneys fees.

All parties moved for the reconsideration of the modified ruling. The Court uniformly denied all the motions in its April 30, 2008
Resolution. Entry of Judgment followed on May 16, 2008.

Notwithstanding the Entry of Judgment, AFC and HPI filed the following motions on May 28, 2008: (1) Motion for Leave to File and Admit
Second Motion for Reconsideration; (2) Second Motion for Reconsideration, with respect to the denial of the award of legal interest and
attorneys fees; and (3) Motion to Refer the Second Motion for Reconsideration to the Honorable Court En Banc.

The Third Division found the motion to admit the Second Motion for Reconsideration and the motion to refer this second motion
to the Court En Banc meritorious, and accordingly referred the case to the Court En Banc. On September 8, 2009, the Court En Banc accepted
the referral.

40
 The Court En Banc Resolution

On December 4, 2009, the Court En Banc, by a majority vote, denied the petitioners second motion for reconsideration based on two
considerations.

First, the grant of the second motion for reconsideration runs counter to the immutability of final decisions. Moreover, the Court saw no
reason to recognize the case as an exception to the immutability principle as the petitioners private claim for the payment of interest does
not qualify as either a substantial or transcendental matter or an issue of paramount public interest.

Second, on the merits, the petitioners are not entitled to recover interest on the just compensation and attorneys fees because they
caused the delay in the payment of the just compensation due them; they erroneously filed their complaints with the DARAB when they
should have directly filed these with the RTC acting as an agrarian court. Furthermore, the Court found it significant that the LBP deposited
the pertinent amounts in the petitioners favor within fourteen months after the petitions were filed with the RTC. Under these circumstances,
the Court found no unreasonable delay on the part of LBP to warrant the award of 12% interest.

The Chico-Nazario Dissent

Justice Minita V. Chico-Nazario,[2] the ponente of the original December 19, 2007 Resolution (deleting the 12% interest), dissented from the
Court En Bancs December 4, 2009 Resolution.

On the issue of immutability of judgment, Justice Chico-Nazario pointed out that under extraordinary circumstances, this Court has
recalled entries of judgment on the ground of substantial justice. Given the special circumstances involved in the present case, the Court En
Banc should have taken a second hard look at the petitioners positions in their second motion for reconsideration, and acted to correct the
clearly erroneous December 19, 2007 Resolution.

Specifically, Justice Chico-Nazario emphasized the obligation of the State, in the exercise of its inherent power of eminent domain,
to pay just compensation to the owner of the expropriated property. To be just, the compensation must not only be the correct amount to
be paid; it must also be paid within a reasonable time from the time the land is taken from the owner. If not, the State must pay the landowner
interest, by way of damages, from the time the property was taken until just compensation is fully paid. This interest, deemed a part of just
compensation due, has been established by prevailing jurisprudence to be 12% per annum.

On these premises, Justice Nazario pointed out that the government deprived the petitioners of their property on December 9,
1996, and paid the balance of the just compensation due them only on May 9, 2008. The delay of almost twelve years earned the petitioners
interest in the total amount of P1,331,124,223.05.

Despite this finding, Justice Chico-Nazario did not see it fit to declare the computed interest to be totally due; she found it
unconscionable to apply the full force of the law on the LBP because of the magnitude of the amount due. She thus reduced the awarded
interest to P400,000,000.00, or approximately 30% of the computed interest.

The Present Motion for Reconsideration

In their motion to reconsider the Court En Bancs December 4, 2009 Resolution (the present Motion for Reconsideration), the petitioners
principally argue that: (a) the principle of immutability of judgment does not apply since the Entry of Judgment was issued even before the
lapse of fifteen days from the parties receipt of the April 30, 2008 Resolution and the petitioners timely filed their second motion for
reconsideration within fifteen days from their receipt of this resolution; (b) the April 30, 2008 Resolution cannot be considered immutable
considering the special and compelling circumstances attendant to the present case which fall within the exceptions to the principle of
41
immutability of judgments; (c) the legal interest due is at 12% per annum, reckoned from the time of the taking of the subject properties and
this rate is not subject to reduction. The power of the courts to equitably reduce interest rates applies solely to liquidated damages under a
contract and not to interest set by the Honorable Court itself as due and owing in just compensation cases; and (d) the Honorable Courts
fears that the interest payments due to the petitioners will produce more harm than good to the system of agrarian reform are misplaced
and are based merely on conjectures.

The Comment of the Land Bank of the Philippines

The LBP commented on the petitioners motion for reconsideration on April 28, 2010. It maintained that: (a) the doctrine of immutability of
the decisions of the Supreme Court clearly applies to the present case; (b) the LBP is not guilty of undue delay in the payment of just
compensation as the petitioners were promptly paid once the Court had determined the final value of the properties expropriated; (c) the
Supreme Court rulings invoked by the petitioners are inapplicable to the present case; (d) since the obligation to pay just compensation is
not a forbearance of money, interest should commence only after the amount due becomes ascertainable or liquidated, and the 12% interest
per annum applies only to the liquidated amount, from the date of finality of judgment; (e) the imposition of 12% interest on the balance of
P971,409,831.68 is unwarranted because there was no unjustified refusal by LBP to pay just compensation, and no contractual breach is
involved; (f) the deletion of the attorneys fees equivalent to 10% of the amount finally awarded as just compensation is proper; (g) this case
does not involve a violation of substantial justice to justify the alteration of the immutable resolution dated December 19, 2007 that deleted
the award of interest and attorneys fees.

The Courts Ruling

We find the petitioners arguments meritorious and accordingly GRANT the present motion for reconsideration.

Just compensation a Basic Limitation on the States

Power of Eminent Domain

At the heart of the present controversy is the Third Divisions December 19, 2007 Resolution which held that the petitioners are not
entitled to 12% interest on the balance of the just compensation belatedly paid by the LBP. In the presently assailed December 4, 2009
Resolution, we affirmed the December 19, 2007 Resolutions findings that: (a) the LBP deposited pertinent amounts in favor of the petitioners
within fourteen months after they filed their complaint for determination of just compensation; and (b) the LBP had already paid the
petitioners P411,769,168.32. We concluded then that these circumstances refuted the petitioners assertion of unreasonable delay on the
part of the LBP.

A re-evaluation of the circumstances of this case and the parties arguments, viewed in light of the just compensation requirement
in the exercise of the States inherent power of eminent domain, compels us to re-examine our findings and conclusions.

Eminent domain is the power of the State to take private property for public use.[3] It is an inherent power of State as it is a power
necessary for the States existence; it is a power the State cannot do without. [4] As an inherent power, it does not need at all to be embodied
in the Constitution; if it is mentioned at all, it is solely for purposes of limiting what is otherwise an unlimited power. The limitation is found
in the Bill of Rights[5] that part of the Constitution whose provisions all aim at the protection of individuals against the excessive exercise of
governmental powers.

42
 Section 9, Article III of the 1987 Constitution (which reads No private property shall be taken for public use without just
compensation.) provides two essential limitations to the power of eminent domain, namely, that (1) the purpose of taking must be for public
use and (2) just compensation must be given to the owner of the private property.

It is not accidental that Section 9 specifies that compensation should be just as the safeguard is there to ensure a balance property
is not to be taken for public use at the expense of private interests; the public, through the State, must balance the injury that the taking of
property causes through compensation for what is taken, value for value.

Nor is it accidental that the Bill of Rights is interpreted liberally in favor of the individual and strictly against the government. The
protection of the individual is the reason for the Bill of Rights being; to keep the exercise of the powers of government within reasonable
bounds is what it seeks.[6]

The concept of just compensation is not new to Philippine constitutional law,[7] but is not original to the Philippines; it is a transplant
from the American Constitution.[8] It found fertile application in this country particularly in the area of agrarian reform where the taking of
private property for distribution to landless farmers has been equated to the public use that the Constitution requires. In Land Bank of the
Philippines v. Orilla,[9] a valuation case under our agrarian reform law, this Court had occasion to state:

Constitutionally, "just compensation" is the sum equivalent to the market value of the property, broadly described
as the price fixed by the seller in open market in the usual and ordinary course of legal action and competition, or the fair
value of the property as between the one who receives and the one who desires to sell, it being fixed at the time of the
actual taking by the government. Just compensation is defined as the full and fair equivalent of the property taken from
its owner by the expropriator. It has been repeatedly stressed by this Court that the true measure is not the taker's gain
but the owner's loss. The word "just" is used to modify the meaning of the word "compensation" to convey the idea
that the equivalent to be given for the property to be taken shall be real, substantial, full and ample.[10] [Emphasis
supplied.]

In the present case, while the DAR initially valued the petitioners landholdings at a total of P251,379,104.02,[11] the RTC, acting as a
special agrarian court, determined the actual value of the petitioners landholdings to be P1,383,179,000.00. This valuation, a finding of fact,
has subsequently been affirmed by this Court, and is now beyond question. In eminent domain terms, this amount is the real, substantial, full
and ample compensation the government must pay to be just to the landowners.

Significantly, this final judicial valuation is far removed from the initial valuation made by the DAR; their values differ
by P1,131,799,897.00 in itself a very substantial sum that is roughly four times the original DAR valuation. We mention these valuations as
they indicate to us how undervalued the petitioners lands had been at the start, particularly at the time the petitioners landholdings were
taken. This reason apparently compelled the petitioners to relentlessly pursue their valuation claims all they way up to the level of this Court.

While the LBP deposited the total amount of P71,891,256.62 into the petitioners accounts (P26,409,549.86 for AFC
and P45,481,706.76 for HPI) at the time the landholdings were taken, these amounts were mere partial payments that only amounted to 5%
of the P1,383,179,000.00 actual value of the expropriated properties. We point this aspect out to show that the initial payments made by the
LBP when the petitioners landholdings were taken, although promptly withdrawn by the petitioners, could not by any means be considered
a fair exchange of values at the time of taking; in fact, the LBPs actual deposit could not be said to be substantial even from the original LBP
valuation of P251,379,103.90.

Thus, the deposits might have been sufficient for purposes of the immediate taking of the landholdings but cannot be claimed as
amounts that would excuse the LBP from the payment of interest on the unpaid balance of the compensation due. As discussed at length
below, they were not enough to compensate the petitioners for the potential income the landholdings could have earned for them if no
immediate taking had taken place. Under the circumstances, the State acted oppressively and was far from just in their position to deny the
petitioners of the potential income that the immediate taking of their properties entailed.

43
Just Compensation from the

Prism of the Element of Taking.

Apart from the requirement that compensation for expropriated land must be fair and reasonable, compensation, to be just, must
also be made without delay.[12]Without prompt payment, compensation cannot be considered "just" if the property is immediately taken as
the property owner suffers the immediate deprivation of both his land and its fruits or income.

This is the principle at the core of the present case where the petitioners were made to wait for more than a decade after the taking
of their property before they actually received the full amount of the principal of the just compensation due them.[13] What they have not
received to date is the income of their landholdings corresponding to what they would have received had no uncompensated taking of
these lands been immediately made. This income, in terms of the interest on the unpaid principal, is the subject of the current litigation.

We recognized in Republic v. Court of Appeals[14] the need for prompt payment and the necessity of the payment of interest to
compensate for any delay in the payment of compensation for property already taken. We ruled in this case that:

The constitutional limitation of just compensation is considered to be the sum equivalent to the market value of
the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal
action and competition or the fair value of the property as between one who receives, and one who desires to sell, i[f]
fixed at the time of the actual taking by the government. Thus, if property is taken for public use before compensation is
deposited with the court having jurisdiction over the case, the final compensation must include interest[s] on its just
value to be computed from the time the property is taken to the time when compensation is actually paid or deposited
with the court. In fine, between the taking of the property and the actual payment, legal interest[s] accrue in order to
place the owner in a position as good as (but not better than) the position he was in before the taking
occurred.[15] [Emphasis supplied.]

Aside from this ruling, Republic notably overturned the Courts previous ruling in National Power Corporation v. Angas[16] which held that just
compensation due for expropriated properties is not a loan or forbearance of money but indemnity for damages for the delay in payment;
since the interest involved is in the nature of damages rather than earnings from loans, then Art. 2209 of the Civil Code, which fixes legal
interest at 6%, shall apply.

In Republic, the Court recognized that the just compensation due to the landowners for their expropriated property amounted to an
effective forbearance on the part of the State. Applying the Eastern Shipping Lines ruling,[17] the Court fixed the applicable interest rate at
12% per annum, computed from the time the property was taken until the full amount of just compensation was paid, in order to eliminate
the issue of the constant fluctuation and inflation of the value of the currency over time. In the Courts own words:

The Bulacan trial court, in its 1979 decision, was correct in imposing interest[s] on the zonal value of the property to be
computed from the time petitioner instituted condemnation proceedings and took the property in September 1969. This
allowance of interest on the amount found to be the value of the property as of the time of the taking computed, being
an effective forbearance, at 12% per annum should help eliminate the issue of the constant fluctuation and inflation of
the value of the currency over time.[18] [Emphasis supplied.]

We subsequently upheld Republics 12% per annum interest rate on the unpaid expropriation compensation in the following
cases: Reyes v. National Housing Authority,[19]Land Bank of the Philippines v. Wycoco,[20] Republic v. Court of Appeals,[21] Land Bank of
the Philippines v. Imperial,[22] Philippine Ports Authority v. Rosales-Bondoc,[23]and Curata v. Philippine Ports Authority.[24]

These were the established rulings that stood before this Court issued the currently assailed Resolution of December 4, 2009. These
would be the rulings this Court shall reverse and de-establish if we maintain and affirm our ruling deleting the 12% interest on the unpaid
balance of compensation due for properties already taken.

44
 Under the circumstances of the present case, we see no compelling reason to depart from the rule that Republic firmly
established. Let it be remembered that shorn of its eminent domain and social justice aspects, what the agrarian land reform program
involves is the purchase by the government, through the LBP, of agricultural lands for sale and distribution to farmers. As a purchase, it
involves an exchange of values the landholdings in exchange for the LBPs payment. In determining the just compensation for this exchange,
however, the measure to be borne in mind is not the taker's gain but the owner's loss [25] since what is involved is the takeover of private
property under the States coercive power. As mentioned above, in the value-for-value exchange in an eminent domain situation, the State
must ensure that the individual whose property is taken is not shortchanged and must hence carry the burden of showing that the just
compensation requirement of the Bill of Rights is satisfied.

The owners loss, of course, is not only his property but also its income-generating potential. Thus, when property is taken, full
compensation of its value must immediately be paid to achieve a fair exchange for the property and the potential income lost. The just
compensation is made available to the property owner so that he may derive income from this compensation, in the same manner that he
would have derived income from his expropriated property. If full compensation is not paid for property taken, then the State must make up
for the shortfall in the earning potential immediately lost due to the taking, and the absence of replacement property from which income
can be derived; interest on the unpaid compensation becomes due as compliance with the constitutional mandate on eminent domain and
as a basic measure of fairness.

In the context of this case, when the LBP took the petitioners landholdings without the corresponding full payment, it became liable
to the petitioners for the income the landholdings would have earned had they not immediately been taken from the petitioners. What is
interesting in this interplay, under the developments of this case, is that the LBP, by taking landholdings without full payment while holding
on at the same time to the interest that it should have paid, effectively used or retained funds that should go to the landowners and
thereby took advantage of these funds for its own account.

From this point of view, the December 19, 2007 Resolution deleting the award of 12% interest is not only patently and legally wrong,
but is also morally unconscionable for being grossly unfair and unjust. If the interest on the just compensation due in reality the equivalent
of the fruits or income of the landholdings would have yielded had these lands not been taken would be denied, the result is effectively a
confiscatory action by this Court in favor of the LBP. We would be allowing the LBP, for twelve long years, to have free use of the interest
that should have gone to the landowners. Otherwise stated, if we continue to deny the petitioners present motion for reconsideration, we
would illogically and without much thought to the fairness that the situation demands uphold the interests of the LBP, not only at the
expense of the landowners but also that of substantial justice as well.

Lest this Court be a party to this monumental unfairness in a social program aimed at fostering balance in our society, we now have
to ring the bell that we have muted in the past, and formally declare that the LBPs position is legally and morally wrong. To do less than this
is to leave the demands of the constitutional just compensation standard (in terms of law) and of our own conscience (in terms of morality)
wanting and unsatisfied.

The Delay in Payment Issue

Separately from the demandability of interest because of the failure to fully pay for property already taken, a recurring issue in the
case is the attribution of the delay.

That delay in payment occurred is not and cannot at all be disputed. While the LBP claimed that it made initial payments
of P411,769,168.32 (out of the principal sum due of P1,383,179,000.00), the undisputed fact is that the petitioners were deprived of their
lands on December 9, 1996 (when titles to their landholdings were cancelled and transferred to the Republic of the Philippines),
and received full payment of the principal amount due them only on May 9, 2008.

In the interim, they received no income from their landholdings because these landholdings had been taken. Nor did they receive
adequate income from what should replace the income potential of their landholdings because the LBP refused to pay interest while
withholding the full amount of the principal of the just compensation due by claiming a grossly low valuation. This sad state continued for
more than a decade. In any language and by any measure, a lengthy delay in payment occurred.
45
 An important starting point in considering attribution for the delay is that the petitioners voluntarily offered to sell their
landholdings to the governments land reform program; they themselves submitted their Voluntary Offer to Sell applications to the DAR, and
they fully cooperated with the governments program. The present case therefore is not one where substantial conflict arose on the issue of
whether expropriation is proper; the petitioners voluntarily submitted to expropriation and surrendered their landholdings, although they
contested the valuation that the government made.

Presumably, had the landholdings been properly valued, the petitioners would have accepted the payment of just compensation
and there would have been no need for them to go to the extent of filing a valuation case. But, as borne by the records, the petitioners lands
were grossly undervalued by the DAR, leaving the petitioners with no choice but to file actions to secure what is justly due them.

The DARs initial gross undervaluation started the cycle of court actions that followed, where the LBP eventually claimed that it could
not be faulted for seeking judicial recourse to defend the governments and its own interests in light of the petitioners valuation claims. This
LBP claim, of course, conveniently forgets that at the root of all these valuation claims and counterclaims was the initial gross undervaluation
by DAR that the LBP stoutly defended. At the end, this undervaluation was proven incorrect by no less than this Court; the petitioners were
proven correct in their claim, and the correct valuation more than five-fold the initial DAR valuation was decreed and became final.

All these developments cannot now be disregarded and reduced to insignificance. In blunter terms, the government and the LBP
cannot now be heard to claim that they were simply protecting their interests when they stubbornly defended their undervalued positions
before the courts. The more apt and accurate statement is that they adopted a grossly unreasonable position and the adverse developments
that followed, particularly the concomitant delay, should be directly chargeable to them.

To be sure, the petitioners were not completely correct in the legal steps they took in their valuation claims. They initially filed their
valuation claim before the DARAB instead of immediately seeking judicial intervention. The DARAB, however, contributed its share to the
petitioners error when it failed or refused to act on the valuation petitions for more than three (3) years. Thus, on top of the DAR
undervaluation was the DARAB inaction after the petitioners landholdings had been taken. This Courts Decision of February 6, 2007 duly
noted this and observed:

It is not controverted that this case started way back on 12 October 1995, when AFC and HPI voluntarily offered
to sell the properties to the DAR. In view of the failure of the parties to agree on the valuation of the properties, the
Complaint for Determination of Just Compensation was filed before the DARAB on 14 February 1997. Despite the lapse of
more than three years from the filing of the complaint, the DARAB failed to render a decision on the valuation of the
land. Meantime, the titles over the properties of AFC and HPI had already been cancelled and in their place a new
certificate of title was issued in the name of the Republic of the Philippines, even as far back as 9 December 1996. A period
of almost 10 years has lapsed. For this reason, there is no dispute that this case has truly languished for a long period of
time, the delay being mainly attributable to both official inaction and indecision, particularly on the determination of the
amount of just compensation, to the detriment of AFC and HPI, which to date, have yet to be fully compensated for the
properties which are already in the hands of farmer-beneficiaries, who, due to the lapse of time, may have already
converted or sold the land awarded to them.

Verily, these two cases could have been disposed with dispatch were it not for LBPs counsel causing unnecessary
delay. At the inception of this case, DARAB, an agency of the DAR which was commissioned by law to determine just
compensation, sat on the cases for three years, which was the reason that AFC and HPI filed the cases before the RTC. We
underscore the pronouncement of the RTC that the delay by DARAB in the determination of just compensation could
only mean the reluctance of the Department of Agrarian Reform and the Land Bank of the Philippines to pay the claim
of just compensation by corporate landowners.

To allow the taking of landowners properties, and to leave them empty-handed while government withholds
compensation is undoubtedly oppressive. [Emphasis supplied.]
46
 These statements cannot but be true today as they were when we originally decided the case and awarded 12% interest on the
balance of the just compensation due. While the petitioners were undisputedly mistaken in initially seeking recourse through the DAR, this
agency itself hence, the government committed a graver transgression when it failed to act at all on the petitioners complaints for
determination of just compensation.

In sum, in a balancing of the attendant delay-related circumstances of this case, delay should be laid at the doorsteps of the
government, not at the petitioners. We conclude, too, that the government should not be allowed to exculpate itself from this delay and
should suffer all the consequences the delay caused.

The LBPs arguments on the applicability of cases imposing

12% interest

The LBP claims in its Comment that our rulings in Republic v. Court of Appeals,[26] Reyes v. National Housing Authority,[27] and Land
Bank of the Philippines v. Imperial,[28] cannot be applied to the present case.

According to the LBP, Republic is inapplicable because, first, the landowners in Republic remained unpaid, notwithstanding the fact
that the award for just compensation had already been fixed by final judgment; in the present case, the Court already acknowledged that
pertinent amounts were deposited in favor of the landowners within 14 months from the filing of their complaint. Second,
while Republic involved an ordinary expropriation case, the present case involves expropriation for agrarian reform. Finally, the just
compensation in Republic remained unpaid notwithstanding the finality of judgment, while the just compensation in the present case was
immediately paid in full after LBP received a copy of the Courts resolution

We find no merit in these assertions.

As we discussed above, the pertinent amounts allegedly deposited by LBP were mere partial payments that amounted to a measly
5% of the actual value of the properties expropriated. They could be the basis for the immediate taking of the expropriated property but by
no stretch of the imagination can these nominal amounts be considered pertinent enough to satisfy the full requirement of just
compensation i.e., the full and fair equivalent of the expropriated property, taking into account its income potential and the foregone income
lost because of the immediate taking.

We likewise find no basis to support the LBPs theory that Republic and the present case have to be treated differently because the
first involves a regular expropriation case, while the present case involves expropriation pursuant to the countrys agrarian reform program.
In both cases, the power of eminent domain was used and private property was taken for public use. Why one should be different from the
other, so that the just compensation ruling in one should not apply to the other, truly escapes us. If there is to be a difference, the treatment
of agrarian reform expropriations should be stricter and on a higher plane because of the governments societal concerns and objectives. To
be sure, the government cannot attempt to remedy the ills of one sector of society by sacrificing the interests of others within the same
society.

Finally, we note that the finality of the decision (that fixed the value of just compensation) in Republic was not a material
consideration for the Court in awarding the landowners 12% interest. The Court, in Republic, simply affirmed the RTC ruling imposing legal
interest on the amount of just compensation due. In the process, the Court determined that the legal interest should be 12% after recognizing
that the just compensation due was effectively a forbearance on the part of the government. Had the finality of the judgment been the critical
factor, then the 12% interest should have been imposed from the time the RTC decision fixing just compensation became final. Instead, the
12% interest was imposed from the time that the Republic commenced condemnation proceedings and took the property.

47
 The LBP additionally asserts that the petitioners erroneously relied on the ruling in Reyes v. National Housing Authority. The LBP
claims that we cannot apply Reyesbecause it involved just compensation that remained unpaid despite the finality of the expropriation
decision. LBPs point of distinction is that just compensation was immediately paid in the present case upon the Courts determination of the
actual value of the expropriated properties. LBP claims, too, that in Reyes, the Court established that the refusal of the NHA to pay just
compensation was unfounded and unjustified, whereas the LBP in the present case clearly demonstrated its willingness to pay just
compensation. Lastly, in Reyes, the records showed that there was an outstanding balance that ought to be paid, while the element of an
outstanding balance is absent in the present case.

Contrary to the LBPs opinion, the imposition of the 12% interest in Reyes did not depend on either the finality of the decision of the
expropriation court, or on the finding that the NHAs refusal to pay just compensation was unfounded and unjustified. Quite clearly, the Court
imposed 12% interest based on the ruling in Republic v. Court of Appeals that x xx if property is taken for public use before compensation is
deposited with the court having jurisdiction over the case, the final compensation must include interest[s] on its just value to be computed
from the time the property is taken to the time when compensation is actually paid or deposited with the court. In fine, between the taking
of the property and the actual payment, legal interest[s] accrue in order to place the owner in a position as good as (but not better than) the
position he was in before the taking occurred.[29]This is the same legal principle applicable to the present case, as discussed above.

While the LBP immediately paid the remaining balance on the just compensation due to the petitioners after this Court had fixed the value
of the expropriated properties, it overlooks one essential fact from the time that the State took the petitioners properties until the time that
the petitioners were fully paid, almost 12 long years passed. This is the rationale for imposing the 12% interest in order to compensate the
petitioners for the income they would have made had they been properly compensated for their properties at the time of the taking.

Finally, the LBP insists that the petitioners quoted our ruling in Land Bank of the Philippines v. Imperial out of context. According to the LBP,
the Court imposed legal interest of 12% per annum only after December 31, 2006, the date when the decision on just compensation became
final.

The LBP is again mistaken. The Imperial case involved land that was expropriated pursuant to Presidential Decree No. 27, [30] and fell under
the coverage of DAR Administrative Order (AO) No. 13.[31] This AO provided for the payment of a 6% annual interest if there is any delay in
payment of just compensation. However, Imperial was decided in 2007 and AO No. 13 was only effective up to December 2006. Thus, the
Court, relying on our ruling in the Republic case, applied the prevailing 12% interest ruling to the period when the just compensation remained
unpaid after December 2006. It is for this reason that December 31, 2006 was important, not because it was the date of finality of the decision
on just compensation.

The 12% Interest Rate and

the Chico-Nazario Dissent

To fully reflect the concerns raised in this Courts deliberations on the present case, we feel it appropriate to discuss the Justice
Minita Chico-Nazarios dissent from the Courts December 4, 2009 Resolution.

While Justice Chico-Nazario admitted that the petitioners were entitled to the 12% interest, she saw it appropriate to equitably
reduce the interest charges from P1,331,124,223.05 to P400,000,000.00. In support of this proposal, she enumerated various cases where
the Court, pursuant to Article 1229 of the Civil Code,[32] equitably reduced interest charges.

We differ with our esteemed colleagues views on the application of equity.

While we have equitably reduced the amount of interest awarded in numerous cases in the past, those cases involved interest that
was essentially consensual in nature, i.e., interest stipulated in signed agreements between the contracting parties. In contrast, the interest

48
involved in the present case runs as a matter of law and follows as a matter of course from the right of the landowner to be placed in as good
a position as money can accomplish, as of the date of taking.[33]

Furthermore, the allegedly considerable payments made by the LBP to the petitioners cannot be a proper premise in denying the
landowners the interest due them under the law and established jurisprudence. If the just compensation for the landholdings is
considerable, this compensation is not undue because the landholdings the owners gave up in exchange are also similarly considerable
AFC gave up an aggregate landholding of 640.3483 hectares, while HPIs gave up 805.5308 hectares. When the petitioners surrendered
these sizeable landholdings to the government, the incomes they gave up were likewise sizeable and cannot in any way be considered
miniscule. The incomes due from these properties, expressed as interest, are what the government should return to the petitioners after the
government took over their lands without full payment of just compensation. In other words, the value of the landholdings themselves
should be equivalent to the principal sum of the just compensation due; interest is due and should be paid to compensate for the unpaid
balance of this principal sum after taking has been completed. This is the compensation arrangement that should prevail if such
compensation is to satisfy the constitutional standard of being just.

Neither can LBPs payment of the full compensation due before the finality of the judgment of this Court justify the reduction of the
interest due them. To rule otherwise would be to forget that the petitioners had to wait twelve years from the time they gave up their lands
before the government fully paid the principal of the just compensation due them. These were twelve years when they had no income from
their landholdings because these landholdings have immediately been taken; no income, or inadequate income, accrued to them from the
proceeds of compensation payment due them because full payment has been withheld by government.

If the full payment of the principal sum of the just compensation is legally significant at all under the circumstances of this case, the
significance is only in putting a stop to the running of the interest due because the principal of the just compensation due has been paid. To
close our eyes to these realities is to condone what is effectively a confiscatory action in favor of the LBP.

That the legal interest due is now almost equivalent to the principal to be paid is not per se an inequitable or unconscionable
situation, considering the length of time the interest has remained unpaid almost twelve long years. From the perspective of interest income,
twelve years would have been sufficient for the petitioners to double the principal, even if invested conservatively, had they been promptly
paid the principal of the just compensation due them. Moreover, the interest, however enormous it may be, cannot be inequitable and
unconscionable because it resulted directly from the application of law and jurisprudence standards that have taken into account fairness
and equity in setting the interest rates due for the use or forebearance of money.

If the LBP sees the total interest due to be immense, it only has itself to blame, as this interest piled up because it unreasonably
acted in its valuation of the landholdings and consequently failed to promptly pay the petitioners. To be sure, the consequences of this
failure i.e., the enormity of the total interest due and the alleged financial hemorrhage the LBP may suffer should not be the very reason that
would excuse it from full compliance. To so rule is to use extremely flawed logic. To so rule is to disregard the question of how the LBP, a
government financial institution that now professes difficulty in paying interest at 12% per annum, managed the funds that it failed to pay
the petitioners for twelve long years.

It would be utterly fallacious, too, to argue that this Court should tread lightly in imposing liabilities on the LBP because this bank
represents the government and, ultimately, the public interest. Suffice it to say that public interest refers to what will benefit the public, not
necessarily the government and its agencies whose task is to contribute to the benefit of the public. Greater public benefit will result if
government agencies like the LBP are conscientious in undertaking its tasks in order to avoid the situation facing it in this case. Greater public
interest would be served if it can contribute to the credibility of the governments land reform program through the conscientious handling
of its part of this program.

As our last point, equity and equitable principles only come into full play when a gap exists in the law and jurisprudence.[34] As we
have shown above, established rulings of this Court are in place for full application to the present case. There is thus no occasion for the
equitable consideration that Justice Chico-Nazario suggested.

49
The Amount Due the Petitioners as Just Compensation

As borne by the records, the 12% interest claimed is only on the difference between the price of the expropriated lands (determined
with finality to be P1,383,179,000.00) and the amount of P411,769,168.32 already paid to the petitioners. The difference between these
figures amounts to the remaining balance of P971,409,831.68 that was only paid on May 9, 2008.

As above discussed, this amount should bear interest at the rate of 12% per annum from the time the petitioners properties were
taken on December 9, 1996 up to the time of payment. At this rate, the LBP now owes the petitioners the total amount of One Billion Three
Hundred Thirty-One Million One Hundred Twenty-Four Thousand Two Hundred Twenty-Three and 05/100 Pesos (P1,331,124,223.05),
computed as follows:

Just Compensation P971,409,831.68

Legal Interest from 12/09/1996

To 05/09/2008 @ 12%/annum

12/09/1996 to 12/31/1996 23 days 7,345,455.17

01/01/1997 to 12/31/2007 11 years 1,282,260,977.82

01/01/2008 to 05/09/2008 130 days 41,517,790.07

P1,331,124,223.05[35]

The Immutability of Judgment Issue

As a rule, a final judgment may no longer be altered, amended or modified, even if the alteration, amendment or modification is
meant to correct what is perceived to be an erroneous conclusion of fact or law and regardless of what court, be it the highest Court of the
land, rendered it.[36] In the past, however, we have recognized exceptions to this rule by reversing judgments and recalling their entries in the
interest of substantial justice and where special and compelling reasons called for such actions.

Notably, in San Miguel Corporation v. National Labor Relations Commission,[37] Galman v. Sandiganbayan,[38] Philippine Consumers
Foundation v. National Telecommunications Commission,[39] and Republic v. de los Angeles,[40] we reversed our judgment on
the second motion for reconsideration, while in Vir-Jen Shipping and Marine Services v. National Labor Relations Commission,[41] we did so on
a third motion for reconsideration. In Cathay Pacific v. Romillo[42] and Cosio v. de Rama,[43] we modified or amended our ruling on the second
motion for reconsideration. More recently, in the cases of Munoz v. Court of Appeals,[44] Tan Tiac Chiong v. Hon. Cosico,[45]Manotok IV v.
Barque,[46] and Barnes v. Padilla,[47] we recalled entries of judgment after finding that doing so was in the interest of substantial
justice. In Barnes, we said:

x x x Phrased elsewise, a final and executory judgment can no longer be attacked by any of the parties or be modified,
directly or indirectly, even by the highest court of the land.

50
 However, this Court has relaxed this rule in order to serve substantial justice considering (a) matters of life,
liberty, honor or property, (b) the existence of special or compelling circumstances, (c) the merits of the case, (d) a cause
not entirely attributable to the fault or negligence of the party favored by the suspension of the rules, (e) a lack of any
showing that the review sought is merely frivolous and dilatory, and (f) the other party will not be unjustly prejudiced
thereby.

Invariably, rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice.
Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial
justice, must always be eschewed. Even the Rules of Court reflects this principle. The power to suspend or even disregard
rules can be so pervasive and compelling as to alter even that which this Court itself had already declared to be
final.[48] [Emphasis supplied.]

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

As duly noted in the above discussions, this issue is not one of first impression in our jurisdiction; the consequences of delay in the
payment of just compensation have been settled by this Court in past rulings. Our settled jurisprudence on the issue alone accords this case
primary importance as a contrary ruling would unsettle, on the flimsiest of grounds, all the rulings we have established in the past.

More than the stability of our jurisprudence, the matter before us is of transcendental importance to the nation because of the
subject matter involved agrarian reform, a societal objective that the government has unceasingly sought to achieve in the past half
century. This reform program and its objectives would suffer a major setback if the government falters or is seen to be faltering, wittingly or
unwittingly, through lack of good faith in implementing the needed reforms. Truly, agrarian reform is so important to the national agenda
that the Solicitor General, no less, pointedly linked agricultural lands, its ownership and abuse, to the idea of revolution. [49] This linkage, to
our mind, remains valid even if the landowner, not the landless farmer, is at the receiving end of the distortion of the agrarian reform program.

As we have ruled often enough, rules of procedure should not be applied in a very rigid, technical sense; rules of procedure are used
only to help secure, not override, substantial justice.[50] As we explained in Ginete v. Court of Appeals:[51]

Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate the
attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather
than promote substantial justice, must always be eschewed. Even the Rules of Court reflect this principle. The power to
suspend or even disregard rules can be so pervasive and compelling as to alter even that which this Court itself has already
declared to be final, as we are now constrained to do in the instant case.
xxxx
The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the
proper and just determination of his cause, free from the constraints of technicalities. Time and again, this Court has
consistently held that rules must not be applied rigidly so as not to override substantial justice. [52] [Emphasis supplied.]

Similarly, in de Guzman v. Sandiganbayan,[53] we had occasion to state:

51
 The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation of justice but not
to bind and chain the hand that dispenses it, for otherwise, courts will be mere slaves to or robots of technical rules, shorn
of judicial discretion. That is precisely why courts in rendering justice have always been, as they ought to be,
conscientiously guided by the norm that when on the balance, technicalities take a backseat against substantive rights,
and not the other way around. Truly then, technicalities, in the appropriate language of Justice Makalintal, "should give
way to the realities of the situation.[54] [Emphasis supplied.]

We made the same recognition in Barnes,[55] on the underlying premise that a courts primordial and most important duty is to
render justice; in discharging the duty to render substantial justice, it is permitted to re-examine even a final and executory judgment.

Based on all these considerations, particularly the patently illegal and erroneous conclusion that the petitioners are not entitled to
12% interest, we find that we are duty-bound to re-examine and overturn the assailed Resolution. We shall completely and inexcusably be
remiss in our duty as defenders of justice if, given the chance to make the rectification, we shall let the opportunity pass.

Attorneys Fees

We are fully aware that the RTC has awarded the petitioners attorneys fees when it fixed the just compensation due and decreed
that interest of 12% should be paid on the balance outstanding after the taking of the petitioners landholdings took place. The petitioners,
however, have not raised the award of attorneys fees as an issue in the present motion for reconsideration. For this reason, we shall not
touch on this issue at all in this Resolution.
WHEREFORE, premises considered, we GRANT the petitioners motion for reconsideration. The Court En Bancs Resolution dated
December 4, 2009, as well as the Third Divisions Resolutions dated April 30, 2008 and December 19, 2007, are hereby REVERSED and SET
ASIDE.

The respondent Land Bank of the Philippines is hereby ORDERED to pay petitioners Apo Fruits Corporation and Hijo Plantation, Inc.
interest at the rate of 12% per annum on the unpaid balance of the just compensation, computed from the date the Government took the
properties on December 9, 1996, until the respondent Land Bank of the Philippines paid on May 9, 2008 the balance on the principal amount.

Unless the parties agree to a shorter payment period, payment shall be in monthly installments at the rate of P60,000,000.00 per
month until the whole amount owing, including interest on the outstanding balance, is fully paid.

Costs against the respondent Land Bank of the Philippines.

7. Herce, Jr. vs. Municipality of Cabuyao, Laguna 512 SCRA 332 , January 23, 2007

FIRST DIVISION

VICENTE D. HERCE, JR., G.R. No. 166645

Petitioner,
Present:
Davide, Jr., C.J. (Chairman),*
- versus - Quisumbing,**

Ynares-Santiago,

Carpio, and

Azcuna, JJ.

52
MUNICIPALITY OF CABUYAO,

LAGUNA and JOSE B. CARPENA, Promulgated:

Respondents.

November 11, 2005

x ---------------------------------------------------------------------------------------- x

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court assails the August 16, 2004 Decision [1] of the Court of
Appeals in CA-G.R. SP No. 79559 which affirmed the August 21, 1998 Order[2] of the Regional Trial Court of Bian, Laguna, Branch 24, to reopen
the decree of registration issued by the Land Registration Authority (LRA) in favor of petitioner; and its January 13, 2005 Resolution[3] denying
the motion for reconsideration.

The facts as found by the Court of Appeals are as follows:

Sometime in the years 1956 and 1957, Juanita Carpena and company applied for the judicial registration of forty-
four (44) parcels of land all situated in Cabuyao, Laguna, docketed as LRC Case No. N-438, LRC Record No. N-10514 with
the then Court of First Instance of Laguna.

After trial on the merits, the trial court granted the application and directed the issuance of a decree of
registration for the aforesaid forty-four parcels.

However, out of these forty-four parcels, only forty-two were issued decrees of registration. One of these two
parcels for which no decree of registration was issued was made the subject of cadastral proceedings instituted by the
Republic of the Philippines in 1976 docketed as Cadastral Case No. N-B-1-LRC, Cadastral No. N-651 with the Court of First
Instance of Laguna, Branch 1.

The property is designated as Lot 3484 in Cadastral Case No. N-B-1 but previously, in the 1957 case filed by Juanita
Carpena, the property was identified as Lot 1, Plan II-2719-A.

Petitioner Vicente D. Herce filed an opposition to the proceedings, informing the court that he had acquired
ownership over the subject property, having purchased the same from a certain Jose Carpena in August of 1975. He alleged
that Jose Carpena is one of the heirs of Juanita Carpena who filed LRC Case No. N-438 in 1956-57.

After trial, the court rendered decision on May 30, 1980 awarding the subject property in favor of petitioner
Vicente Herce. However, in spite of the favorable decision, a decree of registration could not be immediately issued
considering that the subject property was included in the 1956-57 case filed by Juanita Carpena.

53
 Thus in June 1995, petitioner filed a Motion to Modify Decision explaining that since no decree was issued yet in
LRC Case No. N-438, the decision therein could still be modified by excluding the subject property in order to facilitate the
issuance of the decree to him.

After hearing, the trial court issued an order dated May 3, 1996 granting the motion and directing the Land
Registration Authority (hereinafter LRA) to finally issue a decree of registration in the name of petitioner Vicente Herce.
The respondent Municipality of Cabuyao filed a motion for reconsideration of the trial courts order but this was denied by
the court on December 27, 1996.

Aggrieved by the above-described orders of the trial court, the Municipality of Cabuyao filed, on May 15, 1996,
a petition for the reconstitution of its alleged title over the disputed property docketed as LRC Case No. B-2118 before the
RTC of Laguna, Branch 25, arguing among others that it was issued a decree of registration over the said property as early
as 1911.

The petition was dismissed in an order dated February 5, 1996. In the meantime, the LRA issued a decree of
registration in favor of petitioner on January 28, 1997 followed by the issuance of Original Certificate of Title No. 0-2099
in his name.

On January 27, 1998, the Municipality of Cabuyao filed a petition for the reopening of the decree of registration
issued in favor of petitioner. This led to the issuance of the questioned August 21, 1998 Order directing the reopening and
review of the decree of registration. The said order likewise set aside the order dated May 29, 1957 in LRC Case No. N-438
as well as the order dated May 3, 1996. The dispositive portion of the assailed August 21, 1998 Order reads:

In view of the foregoing rule, and considering the Report dated December 2, 1980, of the
Acting Commissioner of Land Registration (Annex B of Claimants Motion to Modify Decision in LRC
Record No. N-10514) that Decree No. 4244 was issued on March 3, 1911 in LRC (GLRO), Record No.
6763, in favor of the Municipality of Cabuyao for apparently the same parcel of land applied for herein,
this Court resolves to open the decree of registration issued herein. The Decision of this Court dated
May 29, 1957, in Land Registration Case No. N-438, LRC Record No. 10514, insofar as Lot 1, Plan II-2719
only is concerned, and the Order of this Court dated May 3, 1996 are both set aside.

Set this case for presentation of evidence for claimant Vicente Herce, Jr. on September 28,
1998 at 8:30 a.m.

SO ORDERED.

Petitioner sought reconsideration of the above-quoted Order but this was similarly denied by the respondent
court in an Order dated August 15, 2003.[4]

Herce filed a petition for certiorari with the Court of Appeals which rendered a decision on August 16, 2004, the decretal portion of
which reads:

WHEREFORE, the foregoing premises considered, the petition is DENIED DUE COURSE, and hereby ordered
DISMISSED, and the challenged orders of the Regional Trial Court (RTC) of Laguna, Branch 24, AFFIRMED.
54
 SO ORDERED.[5]

The appellate court found that the lower court did not abuse its discretion in ordering the reopening of the decree of registration.
It held that the trial court properly granted the reopening of the decree of title considering the existence of two conflicting titles one in favor
of petitioner and the other in the name of the Municipality of Cabuyao.

On January 13, 2005, the Court of Appeals denied for lack of merit petitioners motion for reconsideration. Hence, the present
appeal.

The crux of the controversy is whether or not the Court of Appeals erred in affirming the trial courts order to reopen the decree of
registration.

Petitioner alleges that respondent municipality is guilty of laches because it asserted its ownership over the subject property only
after the lapse of 84 years. Petitioner states that it was only in June 1995 that the municipality first claimed that it applied as early as 1911
for the registration of the subject property.

Petitioner asserts that there is no record of Decree No. 4244 that was purportedly issued in favor of the municipality on March 3,
1911 other than the entry in the Ordinary Registration Book of the LRA. He argues that since there is no record of the alleged Decree No.
4244, there is no way of determining which of the six lots applied for registration is/are covered by the decree. Petitioner insists that the lack
of documentary proof and the fact that respondent municipality never had possession of the subject property prove that it never owned the
disputed property.

Petitioner contends that the petition to open a decree of registration will not prosper if the alleged fraudulent deprivation of
ownership had been controverted, litigated, and resolved. Since the manner by which he acquired the subject property was squarely litigated
and resolved in the cadastral case, petitioner argues that respondent municipality could no longer question the factual findings of the
cadastral court, as this would violate the principle of res judicata.

Moreover, petitioner insists that respondent municipality is barred from filing a petition to review the decree of registration since,
despite actual notice of the cadastral case in 1976 and the 1957 Carpena case, it failed to participate therein and prove its alleged ownership
of the subject property.

He asserts that the belated claim of Jose B. Carpena that he withdrew the money he paid for the subject property and applied the
same as payment for another lot, cannot be given credence. Petitioner clarifies that the September 1978 agreement to purchase another
property was never implemented as he eventually decided to purchase the subject property. He points out that if the September 1978
agreement actually existed, Carpena would have entered his opposition in the 1980 cadastral case and claimed rescission of the sale.

Petitioner doubts the veracity of Carpenas assertion that he (Carpena) was waiving his legal rights and interests over the subject
property in favor of the respondent. He avers that considering the long period of time that has elapsed before Carpena made such claim, it
becomes obvious that the affidavit was executed upon the instigation of the respondent municipality to give semblance of merit to its claim
of ownership over the disputed property.

In its Comment,[6] respondent municipality avers that the instant petition for review raises factual issues which are beyond the scope
of the appellate jurisdiction of the Supreme Court. As such, petitioner cannot invoke the jurisdiction of the Supreme Court to examine, weigh
the probative value of the parties evidence and re-examine the factual findings of the Court of Appeals, particularly on its findings that
respondent municipality satisfied the requirements of Act No. 496 for the reopening of the decree of registration of the subject land.

55
 Respondent municipality argues that petitioner cannot rely on the principle of laches considering that he failed to show that the
reopening of the decree of registration would be manifestly unjust and inequitable. It maintains that it possesses an existing right over the
disputed property and that its petition to reopen the decree of registration will not transgress upon other existing right or would result in
inequity.

It contends that the surrounding circumstances of the present case show that the essential elements of laches are lacking. It is not
in delay in asserting its claim of ownership since it was not properly notified of the previous land registration proceedings involving the
disputed lot. It clarifies that the notice that was published referred to Lot No. 3484, whereas the lot decreed for respondent municipality
under Decree No. 4244 was Lot 1 Plan II-2719-A, and it was only subsequently found that said lots are one and the same. The document
executed by petitioner on August 26, 1975 shows that the latter had knowledge of a possible claim for recovery of ownership that may be
brought by a third party against him over the said property. And, it is the respondents interest over the property that would be prejudiced in
case the issue of ownership will be settled in favor of petitioner.

Respondent claims that Decree No. 4244 was issued in its favor although pertinent records evidencing said decree of registration
were lost or destroyed during the war. It points out that the entries in the approved survey plan for the Municipality of Cabuyao show that
Decree No. 4244 was issued on March 3, 1911 under Cadastral Case No. 6763, as confirmed by the report submitted by the LRA to then CFI,
Branch 1, Bian, Laguna in LRA Cadastral Case No. N-B-1, LRA Rec. No. N-651 dated December 2, 1980, where it was stated that Lot 1 Plan II-
2719-A was one of the six parcels of land previously applied by respondent municipality for registration in LRC (GLRO) Rec. No. 6763, and that
according to their Ordinary Decree Book, LRC (CLR) Rec. No. 6763, Decree No. 4244 was issued on March 3, 1911 over Lot 1 Plan II-2719-A.

We explained in the case of City of Manila v. Lack,[7] that the purpose of the legislature in creating the Court of Land Registration
was to bring the land titles of the Philippine under one comprehensive and harmonious system, the cardinal features of which are
indefeasibility of title and the intervention of the State as a prerequisite to the creation and transfer of titles and interest, with the resultant
increase in the use of land as a business asset by reason of the greater certainty and security of title. The Court of Land Registration does
not create or vest a title. It simply confirms a title already created and already vested, rendering it forever indefeasible.

The Land Registration Act (Act No. 496, now P.D. No. 1529) as well as the Cadastral Act protects only the holders of a title in good
faith and cannot be used as a shield for frauds[8] or that one should enrich himself at the expense of another. One cannot conceal under the
cloak of its provisions to perpetrate fraud and obtain a better title than what he really and lawfully owns. Thus, if he secures a certificate of
title by mistake or obtain more land than what he really owns, the certificate of title should be cancelled or corrected.

In other words, indefeasibility and imprescriptibility are the cornerstones of land registration proceedings. Barring any mistake or use of fraud
in the procurement of the title, owners may rest secure on their ownership and possession once their title is registered under the protective
mantle of the Torrens system. Thus, once a decree of registration is made under the Torrens system, and the reglementary period has passed
within which the decree may be questioned, the title is perfected and cannot be collaterally questioned later on. [9]

Applying these legal precepts to the case at bar, it is clear that Decree No. 4244 issued in favor of the respondent municipality in
1911 has become indefeasible; as such, petitioner is now barred from claiming the subject land. Although the municipalitys claim of ownership
is based on the entry in the Ordinary Decree Book, LRC (CLR) Rec. No. 6763, showing that Decree No. 4244 was issued on March 3, 1911 and
that Lot 1 Plan II-2719 was one of the six parcels of land previously applied for registration by the Municipality of Cabuyao in LRC (GLRO)
Record No. 6763, being a public document, the Ordinary Decree Book is prima facie proof of the entries appearing therein. Section 44, Rule
130, of the Rules of Court provides:

Sec. 44. Entries in official records. Entries in official records made in the performance of his duty by a public officer
of the Philippines, or by a person in the performance of a duty specially enjoined by law, are prima facie evidence of the
facts therein stated.

The trustworthiness of public documents and the value given to the entries made therein could be grounded on (1) the sense
of official duty in the preparation of the statement made, (2) the penalty which is usually affixed to a breach of that duty, (3) the routine and
disinterested origin of most such statements, and (4) the publicity of record which makes more likely the prior exposure of such errors as

56
might have occurred.[10] Besides, these incidents were attested to by Acting Chief, Division of Ordinary Registration, Silverio G. Perez, in the
report dated December 2, 1980.[11]

In the absence of evidence to the contrary, the Ordinary Decree Book, LRC (CLR) Rec. No. 6763, showing that Decree No. 4244 was
issued on March 3, 1911, is presumed to have been regularly issued by the accountable public officers who enjoy the legal presumption of
regularity in the performance of their functions. Thus, the proceedings that led to the issuance of Decree No. 4244 in favor of
the Municipality of Cabuyao cannot be overturned without any countervailing proof to the contrary. In the words of Tichangco v. Enriquez:[12]

To overturn this legal presumption carelessly more than 90 years since the termination of the case will not only endanger
judicial stability, but also violate the underlying principle of the Torrens system. Indeed, to do so would reduce the vaunted
legal indefeasibility of Torrens titles to meaningless verbiage.

Under the Land Registration Act, specifically Section 38 thereof, the adjudication of land in a registration (or cadastral) case becomes
final and incontrovertible after the expiration of one year after the entry of the final decree. Before such time, the decision remains under
the control and sound discretion of the court rendering the decree, which court after hearing, may set aside the decision or decree and
adjudicate the land to another party. As such, Decree No. 4244, which was issued in 1911, has long become final and incontrovertible.

Accordingly, the decree of registration issued by the LRA on January 28, 1997 in favor of petitioner, followed by the issuance of OCT
No. O-2099, pertaining to the same parcel of land covered by Decree No. 4244, has no legal basis and should be nullified.

Contrary to petitioners submission, he and his predecessors-in-interest cannot, by their continuous and uninterrupted occupancy
of the subject land, acquire the same by acquisitive prescription. Section 46 of Act No. 496, now section 47 of P.D. No. 1529, expressly provides
that no title to registered land in derogation of the title of the registered owner shall be acquired by prescription or by adverse possession.

Petitioners contention that respondent municipality is estopped from questioning the decree of registration issued in his favor in
view of the inordinate delay by the respondent municipality in asserting its claim of ownership is likewise erroneous. The fundamental
principle is that prescription does not run against the government. We held in Republic v. Court of Appeals[13] that:

And in so far as the timeliness of the action of the Government is concerned, it is basic that prescription does not
run against the State.... The case law has also been:

When the government is the real party in interest, and is proceeding mainly to assert its own rights
and recover its own property, there can be no defense on the ground of laches or limitation.

Under the Regalian Doctrine, which is enshrined in the 1935, 1973, and 1987 Constitution, all lands of the public domain belong to
the State. Petitioner, as a private claimant, bears the burden of overcoming the presumption that the land sought to be registered forms part
of the public domain. He failed to discharge this burden. There is paucity of proof that the subject property was segregated from the bulk of
the public domain and declared by competent authority to be alienable and disposable. The necessity of such proof becomes more significant
in the light of clear indications that the property under litigation was intended for public use. The Cabuyao Cadastral Map of the Bureau of
Lands approved on December 8, 1975 shows that Lot 1 Plan II-2719 was intended as a school site for Banay-banay, Cabuyao, Laguna. The
municipal council of Cabuyao, in a resolution dated February 17, 1995, resolved to inform all concerned that the land in question is intended
as a school site.[14]

57
 But then again, what militates against the grant of the instant petition is petitioners lack of legal standing to raise a legal
question. Legal standing denotes a personal and substantial interest in the case such that the party has sustained or will sustain direct injury
as a result of the act that is being challenged. The term interest means material interest as distinguished from a mere incidental interest. [15]

Petitioners claim of ownership of the litigated property is based on the Deed of Sale with Mortgage[16] dated August 25,
1975 executed between him and Jose B. Carpena, one of the heirs of Juanita Carpena. Yet extant evidence indicate that petitioner divested
himself of any interest over the disputed property and with it, his legal standing to institute the instant petition, when he agreed in September
1978 to apply the payments already made for the sale of the subject property as payment for the property covered by Tax Declaration No.
5367. This was confirmed by Carpena in his May 15, 1996 affidavit whereby the affiant declared that no consideration has ever been given
to him (Jose Carpena) for the purchase of said Lot 3484 since petitioner withdrew the amount of P54,495.00 and applied the same to another
lot covered by Tax Declaration No. 5367.[17]The evidentiary weight of the September 1978 agreement cannot be overturned by the
uncorroborated assertion by the petitioner that the sale of the subject property did in fact push through in accordance with the August 25,
1975 agreement.

The declarations of Carpena are consistent with the August 25, 1975 Deed of Sale with Mortgage whereby it was stipulated that the
buyer (herein petitioner) may exercise the option to ask for reimbursement in the event an adverse claim is instituted by a third party. It is
simply preposterous for petitioner to now impugn the Carpena affidavit since he himself tacitly recognized, in his own affidavit of August 26,
1975, the statements found therein.

A land already decreed and registered in an ordinary registration proceedings cannot again be the subject of adjudication. Decree
No. 4244 has long become final and incontrovertible. Accordingly, the lower courts should have upheld the dominical rights of the respondent
municipality, being the prior registrant, over Lot No. 3484 by affirming the validity of Decree No. 4244 and nullifying Decree No. N-216115 as
well as Original Certificate of Title No. 0-2099 issued in the name of petitioner Herce.

WHEREFORE, the petition is DENIED. The validity of Decree No. 4244 issued on March 3, 1911 in favor of respondent Municipality
of Cabuyo, Laguna is AFFIRMED, whereas Decree No. N-216115 and Original Certificate of Title No. 0-2099, issued in the name of petitioner
Herce, are declared NULL and VOID.

SO ORDERED.

8. Lorbes vs. Court of Appeals 351 SCRA 716 , February 15, 2001

THIRD DIVISION

[G.R. No. 139884. February 15, 2001]

SPOUSES OCTAVIO and EPIFANIA LORBES, petitioners, vs. COURT OF APPEALS, RICARDO DELOS REYES and JOSEFINA CRUZ, respondents.

DECISION
GONZAGA-REYES, J.:

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

58
 Petitioners were the registered owners of a 225-square meter parcel of land located in Antipolo, Rizal covered by Transfer Certificate
of Title No. 165009. Sometime in August 1991, petitioners mortgaged this property to Florencio and Nestor Carlos in the amount of
P150,000.00.
About a year later, the mortgage obligation had increased to P500,000.00 and fearing foreclosure of the property, petitioners asked
their son-in-law, herein private respondent Ricardo delos Reyes, for help in redeeming their property. Private respondent delos Reyes agreed
to redeem the property but because he allegedly had no money then for the purpose he solicited the assistance of private respondent Josefina
Cruz, a family friend of the delos Reyeses and an employee of the Land Bank of the Philippines.
It was agreed that petitioners will sign a deed of sale conveying the mortgaged property in favor of private respondent Cruz and
thereafter, Cruz will apply for a housing loan with Land Bank, using the subject property as collateral. It was further agreed that out of the
proceeds of the loan, P500,000.00 will be paid to the Carloses as mortgagees, and any such balance will be applied by petitioners for capital
gains tax, expenses for the cancellation of the mortgage to the Carloses, transfer of title to Josefina Cruz, and registration of a mortgage in
favor of Land Bank.[1] Moreover, the monthly amortization on the housing loan which was supposed to be deducted from the salary of private
respondent Cruz will be reimbursed by private respondent delos Reyes.
On September 29, 1992, the Land Bank issued a letter of guarantee in favor of the Carloses, informing them that Cruzs loan had been
approved. On October 22, 1992, Transfer Certificate of Title No. 165009 was cancelled and Transfer Certificate of Title No. 229891 in the
name of Josefina Cruz was issued in lieu thereof.[2] On November 25, 1992, the mortgage was discharged.
Sometime in 1993, petitioners notified private respondent delos Reyes that they were ready to redeem the property but the offer was
refused. Aggrieved, petitioners filed on July 22, 1994 a complaint for reformation of instrument and damages with the RTC of Antipolo, Rizal,
docketed as Civil Case No. 94-3296.
In the complaint, petitioners claimed that the deed was merely a formality to meet the requirements of the bank for the housing loan,
and that the real intention of the parties in securing the loan was to apply the proceeds thereof for the payment of the mortgage
obligation.[3] They alleged that the deed of sale did not reflect the true intention of the parties, and that the transaction was not an absolute
sale but an equitable mortgage, considering that the price of the sale was inadequate considering the market value of the subject property
and because they continued paying the real estate taxes thereto even after the execution of the said deed of sale. Petitioners averred that
they did not see any reason why private respondents would retract from their original agreement other than that they (petitioners) and the
members of their family resigned en masse from the Mahal Namin Organization, of which private respondent delos Reyes was the president
and chairman of the board of directors, and private respondent Cruz was the treasurer. In the same complaint, they demanded moral
damages, exemplary damages, and attorneys fees.
On July 29, 1996, the trial court issued a temporary restraining order enjoining private respondents from ejecting petitioners from the
premises of the disputed property; this was soon replaced by a writ of preliminary injunction.
Summons and a copy of the complaint were served upon private respondents on August 1, 1994. Private respondents filed their answer
beyond the reglamentary period, or only on September 1, 1994.Thus, on September 5, 1994, petitioners filed a motion to declare private
respondents in default, which the trial court granted in an order dated September 16, 1994. On September 30 of the same year, petitioners
presented their evidence ex parte before the trial court. The principal witness presented was petitioner Octavio Lorbes, whose testimony
was corroborated by his son, Atty. Salvador Lorbes.
On October 12, 1994, private respondents filed a motion to lift order of default and to strike out evidence presented ex parte, which
the court denied in an order dated October 26, 1994.
On June 20, 1995, the trial court rendered judgment in favor of petitioners, upon finding that: (1) the Deed of Absolute Sale dated
October 21, 1992 did not reflect the true intention of the parties, and (2) the transaction entered into between petitioners and Cruz was not
an absolute sale but an equitable mortgage, considering that the price stated in the Deed of Absolute Sale was insufficient compared to the
value of the property, petitioners are still in possession of the property, and petitioners had continued to pay the real estate taxes thereon
after the execution of the said deed of sale. As explained by the trial court in its decision:

The foregoing uncontroverted facts clearly show that the transaction entered into between the plaintiffs and the defendants is not an
absolute sale but merely an equitable mortgage as the sale was executed in order to secure a loan from a certain bank to save the property
from the danger of foreclosure and to use it as collateral thereof for bank loan purposes and that the same does not reflect the real
intention of the parties in executing the said Deed of Sale. The court notes that at the time the transaction and the Deed of Absolute Sale
was executed by the plaintiffs sometime in 1992, the prevailing market value of the lot alone was P400,000.00 per square meter such that
the lot alone consisting of 255 square meters, excluding the house and improvements thereon would already cost more than a million
pesos already hence, the consideration of P600,000.00 in the said Deed of Sale is considerably insufficient compared to the value of the
property. Further, the plaintiffs are still in possession of the subject property and had been paying the realty taxes thereon even after the
execution of the sale and the transfer of the title from the plaintiffs to defendant Josephine Cruz which clearly evinces the true badge of the
transaction which occurred between the plaintiffs and defendants as that of an equitable mortgage and not an absolute sale and that the

59
plaintiffs were only compelled to enter into the said transaction of sale with the defendants as the former were in extreme need of money
in order to redeem their only conjugal property and to save it from being foreclosed for non-payment of the mortgage obligation and that it
was never the intention of the plaintiffs to sell the property to the defendants, as it was their agreement that plaintiffs can redeem the
property or any member of the family thereof, when they become financially stable. [4]

The dispositive portion of the trial courts decision thus provides:

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

1. To reconvey the subject property to the plaintiffs upon payment of the price stipulated in the contract of sale;
2. To pay plaintiffs the sum of P50,000.00 as moral damages;
3. To pay plaintiffs the sum of P50,000.00 as and by way of attorneys fees plus P1,000.00 per court appearance;
4. To pay the costs of suit.

SO ORDERED.[5]

The Court of Appeals reversed the above decision, finding that private respondents were denied due process by the refusal of the trial
court to lift the order of default against them, and that the transaction between petitioners and Cruz was one of absolute sale, not of equitable
mortgage. It also held the RTC decision to be constitutionally infirm for its failure to clearly and distinctly state the facts and the law on which
it is based.
The Court of Appeals held that the reformation of the Deed of Absolute Sale in the instant case is improper because there is no showing
that such instrument failed to express the true intention of the parties by reason of mistake, fraud, inequitable conduct, or accident in the
execution thereof.[6] To the Court of Appeals, the transaction was unmistakably a contract of sale, as evidenced by the numerous supporting
documents thereto, such as the Contract to Sell dated June 1992, Affidavit of Waiver/Assignment dated August 14, 1992, Receipt of Partial
Advance Payment dated September 9, 1992, and Transfer Certificate of Title No. 229891 issued in the name of private respondent Cruz. Going
over the indicators giving rise to a presumption of equitable mortgage cited in the decision of the RTC, the Court of Appeals held: (1)
inadequacy of price is material only in a sale with right to repurchase, which is not the case with herein petitioners and Cruz; moreover, the
estimate of the market value of the property came only from the bare testimony of petitioner Octavio Lorbes, (2) petitioners remaining in
possession of the property resulted only from their refusal to vacate the same despite the lawful demands of private respondent Cruz, and
(3) there was no documentary evidence that petitioners continued paying the taxes on the disputed property after the execution of the Deed
of Absolute Sale.
In its decision, the Court of Appeals also pointed out that under the usual arrangement of pacto de retro the vendor of the property is
a debtor of the vendee, and the property is used as security for his obligation. In the instant case, the mortgage creditors (the Carloses) are
third persons to the Deed of Absolute Sale.
This petition raises three issues before the Court: (1) whether respondent court erred in ruling that the Deed of Absolute Sale dated
October 21, 1992 was an equitable mortgage, (2) whether respondent court erred in ruling that by declaring private respondents in default
they were denied due process of law, and (3) whether respondent court erred in ruling that the trial courts decision violates the constitutional
requirement that it should clearly and distinctly state the facts and the law on which it is based.[7]
We shall first deal with the second and third issues, these being preliminary matters.
Well-settled is the rule that courts should be liberal in setting aside orders of default for judgments of default are frowned upon, unless
in cases where it clearly appears that the reopening of the case is intended for delay. [8] The issuance of orders of default should be the
exception rather than the rule, to be allowed only in clear cases of obstinate refusal by the defendant to comply with the orders of the trial
court.[9]
Under the factual milieu of this case, the RTC was indeed remiss in denying private respondents motion to lift the order of default and
to strike out the evidence presented by petitioners ex parte, especially considering that an answer was filed, though out of time. We thus
sustain the holding of the Court of Appeals that the default order of the RTC was immoderate and in violation of private respondents due
process rights. However, we do not think that the violation was of a degree as to justify a remand of the proceedings to the trial court, first,
because such relief was not prayed for by private respondents, and second, because the affirmative defenses and evidence that private
respondents would have presented before the RTC were capably ventilated before respondent court, and were taken into account by the
latter in reviewing the correctness of the evaluation of petitioners evidence by the RTC and ultimately, in reversing the decision of the
RTC. This is evident from the discussions in the decision of the Court of Appeals, which cited with approval a number of private respondents
arguments and evidence, including the documents annexed to their opposition to the issuance of a writ of preliminary injunction filed with
60
the RTC.[10] To emphasize, the reversal of respondent court was not simply on due process grounds but on the merits, going into the issue of
whether the transaction was one of equitable mortgage or of sale, and so we find that we can properly take cognizance of the substantive
issue in this case, while of course bearing in mind the inordinate manner by which the RTC issued its default order.
As regards the third issue, we reverse for being unfounded the holding of the Court of Appeals since the RTC decision, some parts of
which we even reproduced in our earlier discussions, clearly complied with the constitutional requirement to state clearly and distinctly the
facts and the law on which it was based.
Thus, the one issue essential to the resolution of this case is the nature of the transaction between petitioners and private respondent
Cruz concerning the subject parcel of land. Did the parties intend for the contested Deed of Absolute Sale to be a bona fide and absolute
conveyance of the property, or merely an equitable mortgage?
On the outset, it must be emphasized that there is no conclusive test to determine whether a deed absolute on its face is really a simple
loan accommodation secured by a mortgage.[11] The decisive factor in evaluating such agreement is the intention of the parties, as shown not
necessarily by the terminology used in the contract but by all the surrounding circumstances, such as the relative situation of the parties at
that time, the attitude, acts, conduct, declarations of the parties, the negotiations between them leading to the deed, and generally, all
pertinent facts having a tendency to fix and determine the real nature of their design and understanding. As such, documentary and parol
evidence may be submitted and admitted to prove the intention of the parties. [12]
The conditions which give way to a presumption of equitable mortgage, as set out in Article 1602 of the Civil Code, apply with equal
force to a contract purporting to be one of absolute sale.[13]Moreover, the presence of even one of the circumstances laid out in Article 1602,
and not a concurrence of the circumstances therein enumerated, suffices to construe a contract of sale to be one of equitable
mortgage.[14] This is simply in consonance with the rule that the law favors the least transmission of property rights. [15]
Thus, under Article 1602 of the Civil Code, a contract shall be presumed to be an equitable mortgage when --- (a) the price of a sale with
right to repurchase is unusually inadequate; (b) the vendor remains in possession as lessee or otherwise; (c) upon or after the expiration of
the right of repurchase another instrument extending the period of redemption or granting a new period is executed; (d) the purchaser
retains for himself a part of the purchase price; (e) the vendor binds himself to pay the taxes on the thing sold; and, (f) in any other case
where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the
performance of any other obligation.
Applying the foregoing considerations to the instant case, the Court finds that the true intention between the parties for executing the
Deed of Absolute Sale was not to convey ownership of the property in question but merely to secure the housing loan of Cruz, in which
petitioners had a direct interest since the proceeds thereof were to be immediately applied to their outstanding mortgage obligation to the
Carloses.
It is not disputed that before the execution of the Deed of Absolute Sale petitioners mortgage obligation to the Carloses was nearing
maturity and they were in dire need of money to meet the same.Hence, they asked for the help of their son-in-law delos Reyes who in turn
requested Cruz to take out a housing loan with Land Bank. Since collateral is a standard requirement of banks in giving out loans, it was made
to appear that the subject property was sold to Cruz so she can declare the same as collateral for the housing loan. This was simply in line
with the basic requirement in our laws that the mortgagor be the absolute owner of the property sought to be mortgaged.[16] Consistent with
their agreement, as soon as the housing loan was approved, the full amount of the proceeds were immediately turned over to petitioners,
who promptly paid P500,000.00 therefrom to the Carloses in full satisfaction of their mortgage obligation. The balance was spent by
petitioners in transferring title to the property to Cruz and registering the new mortgage with Land Bank.
Understandably, the Deed of Absolute Sale and its supporting documents do not reflect the true arrangement between the parties as
to how the loan proceeds are to be actually applied because it was not the intention of the parties for these documents to do so. The sole
purpose for preparing these documents was to satisfy Land Bank that the requirement of collateral relative to Cruzs application for a housing
loan was met.
Were we to accept, as respondent court had, that the loan that Cruz took out with Land Bank was indeed a housing loan, then it is
rather curious that Cruz kept none of the loan proceeds but allowed for the bulk thereof to be immediately applied to the payment of
petitioners outstanding mortgage obligation. It also strains credulity that petitioners, who were exhausting all means to save their sole
conjugal real property from being foreclosed by the Carloses, would concurrently part with the same in favor of Cruz.
Such urgent prospect of foreclosure helps to explain why petitioners would subscribe to an agreement like the Deed of Absolute Sale
in the herein case, which on its face represents their unconditional relinquishment of ownership over their property. Passing upon previous
similar situations the Court has declared that while it was true that plaintiffs were aware of the contents of the contracts, the preponderance
of the evidence showed however that they signed knowing that said contracts did not express their real intention, and if they did so
notwithstanding this, it was due to the urgent necessity of obtaining funds. Necessitous men are not, truly speaking, free men; but to answer
a present emergency, will submit to any terms that the crafty may impose upon them. [17]

61
 The facts further bear out that petitioners remained in possession of the disputed property after the execution of the Deed of Absolute
Sale and the transfer of registered title to Cruz in October 1992. Cruz made no demand on petitioners to vacate the subject premises until
March 19, 1994;[18] interestingly, this was two days after petitioners signified their intention to redeem the property by paying the full amount
of P600,000.00.[19] On this basis, the finding of respondent court that petitioners remained in possession of the property only because they
refused to vacate on Cruzs demand is not accurate because the records reflect that no such demand was made until more than a year since
the purported sale of the property.
Copies of realty tax receipts attached to the record also show that petitioners continued paying for the taxes on the property for the
period 1992 to 1994,[20] or after the property was supposed to have been sold to Cruz.
From the above, the Court is satisfied that enough of the circumstances set out in Article 1602 of the Civil Code are attendant in the
instant case, as to show that the true arrangement between petitioners and private respondent Cruz was an equitable mortgage.
That a transfer certificate of title was issued in favor of private respondent Cruz also does not import conclusive evidence of ownership
or that the agreement between the parties was one of sale. As was stated in Oronce vs. Court of Appeals,[21] citing Macapinlac vs. Gutierrez
Repide[22]

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

Before we fully set aside this issue, it will be recalled that the instant petition originated as a complaint for reformation filed before the
RTC of Antipolo, Rizal. The Court of Appeals found petitioners action for reformation unmeritorious because there was no showing that the
failure of the deed of sale to express the parties true intention was because of mistake, fraud, inequitable conduct, or accident.[23]Indeed,
under the facts of the present case, reformation may not be proper for failure to fully meet the requisites in Article 1359 of the Civil Code,
and because as the evidence eventually bore out the contested Deed of Absolute Sale was not intended to reflect the true agreement
between the parties but was merely to comply with the collateral requirements of Land Bank. However, the fact that the complaint filed by
petitioners before the trial court was categorized to be one for reformation of instrument should not preclude the Court from passing upon
the issue of whether the transaction was in fact an equitable mortgage as the same has been squarely raised in the complaint and had been
the subject of arguments and evidence of the parties. Thus we have held that it is not the caption of the pleading but the allegations therein
that determine the nature of the action, and the Court shall grant relief warranted by the allegations and the proof even if no such relief is
prayed for.[24]
Finally, on the award of damages. Considering the due process flaws that attended the default judgment of the RTC, and applying the
rule adopted by this Court that in instances where no actual damages are adjudicated the awards for moral and exemplary damages may be
reduced,[25] we reduce the award for moral damages in the instant case from P50,000.00 to P30,000.00. At the same time, we sustain the
award of attorneys fees in the amount of P50,000.00, it being clear that petitioners were compelled to incur expenses and undergo the rigors
of litigation to recover their property.
WHEREFORE, the decision of the Court of Appeals is REVERSED and SET ASIDE. The decision of the Regional Trial Court of Antipolo, Rizal
is REINSTATED, with the MODIFICATION that the award of moral damages is reduced to P30,000.00, and in all other respects AFFIRMED. Costs
against private respondents.
SO ORDERED.
Melo (Chairman), Vitug, Panganiban, and Sandoval-Gutierrez, JJ., concur.

9. Dayrit vs. Philippine Bank of Communications 386 SCRA 117 , August 01, 2002

SECOND DIVISION

[G.R. No. 140316. August 1, 2002]

JEFFREY DAYRIT, petitioner, vs. PHILIPPINE BANK OF COMMUNICATIONS, respondent.

62
 RESOLUTION
QUISUMBING, J.:

This petition for review seeks the reversal of the decision[1] of the Court of Appeals dated July 2, 1999 in CA-G.R. CV No. 53374, dismissing
petitioners appeal and affirming the writ of possession issued by the Regional Trial Court of Quezon City, Branch 94, in L.R.C. Case No. Q-6570
(94). It likewise seeks to annul the resolution[2] denying petitioners motion for reconsideration.
The facts of this case, as culled from the records, are as follows:
Petitioner Jeffrey Dayrit and his wife Marina Valencia Dayrit obtained a P15 million loan from respondent Philippine Bank of
Communications and posted as collateral their house and lot covered by TCT Nos. RT 14505 (364674) PR 9723 and RT 14504 (364675) PR
9724 in White Plains, Quezon City. They failed to pay the obligation. Respondent bank foreclosed the mortgage, sold the property at public
auction where the bank itself was the highest bidder, and eventually was issued a certificate of sale. Upon the lapse of the period to redeem
in May 1993, respondent moved to consolidate the titles. TCT Nos. 94179 and 04180 were thereafter issued in respondent banks name.
As the Dayrits refused to turn over the possession of the property to respondent, it filed a petition for the issuance of a writ of possession
with the Regional Trial Court of Quezon City. At the first hearing the Dayrits, through counsel, appeared and manifested their desire to pay
the obligation. However, they failed to appear during the subsequent hearings. Consequently, the trial court allowed respondent to present
its evidence ex parte.
On August 10, 1995, the trial court rendered its decision, disposing as follows:

WHEREFORE, premises considered, let a writ of possession be issued in favor of the petitioner against spouses Jeffrey Dayrit and Marina
Valencia Dayrit.

SO ORDERED.[3]

The Dayrits received a copy of the decision on September 15, 1995. Thirty-two days after or on October 17, 1995, they moved for
reconsideration of the decision on the ground that they did not receive the notices for the hearing on the merits of the case, the resolutions
allowing respondent to present its evidence ex-parte, and the decision itself. The trial court denied the motion. The Dayrits appealed before
the Court of Appeals which on July 2, 1999, promulgated its decision decreeing, thus:

WHEREFORE, the instant appeal is hereby DISMISSED for being filed late and for lack of merit. The writ of possession issued in the Decision
in LRC Case No. Q-6570 (94) dated August 10, 1995 is hereby AFFIRMED.

SO ORDERED.[4]

In dismissing the appeal, the appellate court held that Section 8 (a) of the Interim Rules [5] fixes the period to appeal to fifteen (15) days
from receipt of notice of the decision. The petitioner filed the appeal beyond the said period, or thirty-two (32) days after such receipt. The
appellate court also said that the petition filed in the trial court was not the proper action that the Dayrits could take in order to question the
mortgage contract. Citing Vaca vs. Court of Appeals,[6] the appellate court stated that the legality of a mortgage contract cannot be questioned
in a petition for the issuance of a writ of possession because the latter is purely a ministerial act of the trial court after title on the property
is consolidated in the mortgagee.
Hence, this instant petition alleging that the Court of Appeals erred in holding that:
I. ...AN EX PARTE PRESENTATION OF EVIDENCE IS ALLOWED TO OBTAIN POSSESSION OF A PROPERTY FORECLOSED EXTRA-
JUDICIALLY AFTER THE PERIOD TO REDEEM THE SAME HAD LAPSED;
II. ...THE ISSUANCE OF THE WRIT OF POSSESSION IS A MINISTERIAL DUTY ON THE PART OF THE COURT A QUO;
III. ...THE DECISION OF THE COURT A QUO ACQUIRED THE CHARACTER OF FINALITY WHEN THE MOTION TO RECONSIDER THE
SAME WAS FILED WITH THE COURT A QUOTHIRTY-TWO DAYS AFTER RECEIPT THEREOF.[7]
The main issue for our resolution is whether or not petitioner was denied due process of law. To resolve this issue, we must also inquire
whether ex-parte presentation of evidence by respondent was proper; whether the trial court had the ministerial duty to issue a writ of
possession; and whether petitioners appeal was belatedly filed.
Petitioner argues that he was denied due process of law when the trial court allowed respondent bank to present evidence ex parte in
LRC Case No. Q 6570 (94) and rendered judgment thereon. He contends that there is no law allowing the issuance of the writ of possession ex-
parte after the lapse of the redemption period. Petitioner also claims that the period to appeal from the decision of the trial court had not
63
yet prescribed when he appealed to the Court of Appeals. For he states that neither he nor his counsel received a copy of the decision, and
he learned of it only through a lawyer-friend. Petitioner adds that, even assuming he received a notice of the decision, his counsel did
not. Thus, he concludes the reckoning date for the 15-day period to appeal remains uncertain.
Respondent counters in its motion to dismiss, treated here as a comment to the petition, that petitioner only raises factual issues, in
violation of Section 1, Rule 45 of the Revised Rules of Court.[8] It contends that the petitioners action is intended only to delay the issuance of
the writ of possession in favor of respondent.
Petitioner insists that after the hearing on January 12, 1995, he was not notified of subsequent hearings. In one of these hearings,
respondent was allowed to present evidence ex parte.Petitioner adds that he did not receive the order dated March 9, 1995. In said order of
the trial court, after the respondents presentation and offer of evidence, it deemed the case submitted for decision. The failure of the court
to properly notify him rendered the proceedings null and void, concludes the petitioner, for failure to accord him due process.
Considering the record of this case, we note that before hearing on January 12, 1995, petitioner through counsel had actively
participated in the case. In more than one occasion, petitioner had asked for postponement of hearings. Thus, it could not be denied that
petitioner knew about the pendency of the proceedings in court. However, he failed to appear in court on January 12, 1995. Records clearly
show, moreover, that the trial court furnished him a copy of the order resetting the hearing from January 12, 1995 to February 16, 1995.[9] He
also received, on record, the order resetting the case from February 16 to March 9, 1995. [10] Likewise, he was furnished the order which
deemed the case submitted for decision.[11] All these show that he was afforded proper notices of the courts proceedings. He also had ample
opportunity to be heard through counsel. The records do not support his claim that he was denied due process. What the fundamental law
prohibits is total absence of opportunity to be heard. When a party has been afforded opportunity to present his side, he cannot feign denial
of due process.[12]
Petitioner also assails the lower court for issuing the writ of possession on the basis of an ex-parte presentation of evidence by
respondent. Principally, petitioner argues that he was not notified of the date of the hearing when respondent was supposed to present its
evidence. But after going over the records, we find that petitioner has only himself to blame for failing to attend the said hearing. His neglect
to show up in court is not the fault of the trial court who had no recourse but to permit respondent to present its evidence ex-parte. The
records show that petitioner was notified of the date of hearing on March 9, 1995, when respondent bank presented its evidence.[13]
On the matter of the writ of possession, time and again, we have ruled that its issuance is a ministerial function. In Ong vs. Court of
Appeals,[14] we said:

In several cases,[15] the Court has ruled that the issuance of a writ of possession is a ministerial function. The order for a writ of
possession issues as a matter of course upon the filing of the proper motion and the approval of the corresponding bond. The judge issuing
the order following these express provisions of law cannot be charged with having acted without jurisdiction or with grave abuse of
discretion.[16]Therefore, the issuance of the writ of possession being ministerial in character, the implementation of such writ by the sheriff
is likewise ministerial.

Petitioner blandly but jesuitically asserts that the period to appeal the trial courts decision granting the writ of possession had not yet
lapsed since neither he nor his counsel received a copy of said decision. True, Section 3, Rule 41 of the Revised Rules of Court provides that
appeal should be taken within fifteen (15) days from notice of the judgment or final order appealed from.[17] But petitioners claim rings hollow
and false. On record, the registry return card for petitioners copy of the trial courts decision shows that petitioner received a copy of the
decision on September 15, 1995.[18] But as the Court of Appeals found, petitioner allowed thirty-two (32) days from receipt of notice of
Decision dated August 10, 1995 to lapse before he filed a motion for reconsideration.[19] Petitioner lamely suggests that, assuming he received
a copy of the decision, still he was not properly notified. Since he was represented by a counsel, he contends that it was the latter who should
have been served the notice and the decision. Records show that from the start of the case, however, notices had always been served on
petitioner and his spouse. He did not protest this manner of service during the pendency of proceedings before the trial court nor in his
motion for reconsideration. At this late hour, it is our view that petitioner is now estopped from raising this issue for his failure to do so
earlier.[20]
Patently, the subsequent appeal taken by petitioner after denial of the motion for reconsideration by the trial court, is already beyond
the 15-day reglementary period allowed for appeal.Worst, the decision of the lower court had long become final and executory at the time
petitioner filed his motion for reconsideration. Thus, we find no reversible error committed by the appellate court in dismissing his belated
appeal.
In sum, we hold that certain procedural rules must remain inviolable, like those setting the periods for perfecting an appeal or filing a
petition for review. For it is doctrinally entrenched that the right to appeal is a statutory right and one who seeks to avail of that right must
comply with the pertinent statute or rules.[21] The perfection of an appeal in the manner and within the period permitted by law is not only
mandatory but also jurisdictional. The failure to seasonably perfect the appeal to a higher court renders the judgment of the lower court final
and executory. Just as a losing party has the right to file an appeal within the prescribed period, the winning party also has thereafter the
correlative right to enjoy the finality of the decision in the case.[22]

64
 WHEREFORE, the petition is DENIED for lack of merit, and the assailed decision and resolution of the Court of Appeals in CA-G.R. CV No.
53374, are AFFIRMED.
Costs against petitioner.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, and Corona, JJ., concur.

10. Videogram Regulatory Board vs. Court of Appeals 265 SCRA 50 , November 28, 1996

THIRD DIVISION

[G.R. No. 106564. November 28, 1996]

VIDEOGRAM REGULATORY BOARD, petitioner, vs. COURT OF APPEALS, Hon. B.A. ADEFUIN-DE LA CRUZ, in her capacity as Presiding Judge
of the Kalookan RTC, Branch 122, and EDWARD L. UNITE, respondents.

DECISION
PANGANIBAN, J.:

Under the Rules of Court, a party has fifteen (15) days only within which to file a petition for review against an unfavorable decision of
the trial court. In actual practice, parties are normally allowed extensions to time to file such petitions. The issue in this case is: May the Court
of Appeals be faulted with grave abuse of discretion for denying the admission of such petition for review which was filed within the thirty-
day period requested in petitioners motion for extension but beyond the fifteen-day period actually granted by said Court?
This petition for certiorari, prohibition and mandamus under Rule 65 of the Revised Rules of Court impugns the Resolutions of June 29,
1992 and July 29, 1992 of the public respondent Court of Appeals [1] in CA-G.R. CR No. 12951, entitled People of the Philippines vs. Hon. B.A.
Adefuin-De La Cruz, in his (sic) capacity as Presiding Judge of the Kalookan Regional Trial Court, Branch 122, and Edward L. Unite for allegedly
having been issued in grave abuse of discretion.

The Facts

Upon application made by officers of petitioner Videogram Regulatory Board, the Metropolitan Trial Court (MTC) of Kalookan City,
Branch 49, issued on August 29, 1990 Search Warrant No. 4-90 against private respondent Edward L. Unite for violation of Section 6 of P.D.
1987,[2] the law creating the Videogram Regulatory Board and penalizing illegal reproductions of videograms.[3]
Private respondent filed a Motion to Quash Search Warrant and to Recover Seized Articles dated October 13, 1990,[4] which petitioner,
represented by the Office of the Solicitor General (OSG), opposed.[5]
Not unexpectedly, the MTC of Kalookan City in an Order dated December 26, 1990 denied[6] said Motion to Quash. Thus, an appeal was
lodged before the Regional Trial Court ofKalookan City, Branch 122.
The RTC, after vacillating on whether to entertain the appeal or dismiss it for being improper under the circumstances, finally treated it
as a petition for certiorari, and in its decision[7]dated April 24, 1992, declared as null and void the said search warrant issued by the MTC.
Thereafter, petitioner filed with respondent Court of Appeals a Motion for Extension of Time of Thirty (30) days from May 20, 1992 or
until June 19, 1992 within which to file a petition for review.
However, in its Resolution dated May 27, 1992, respondent Court granted the petitioner a non-extendible period of fifteen (15) days
only, counted from May 20, 1992 or until June 4, 1992, within which to file the petition for review. The OSG allegedly received a copy of said
Resolution on June 8, 1992,[8] or four days after the lapse of the granted extension.
On June 19, 1992, the OSG filed a Motion to Admit, alleging that it was physically impossible to comply with the deadline of June 4,
1992 since it received a copy of the resolution only on June 8, 1992.
65
 In its assailed Resolution promulgated on June 29, 1992, respondent Court denied the Motion to Admit, and denied due course to the
petition for review, holding that:[9]
Considering that the rule is mandatory and jurisdictional and the case at bar does not appear to be exceptionally meritorious,
the Court RESOLVED to DENY the Motion To Admit.
Accordingly, the Petition For Review is DENIED DUE COURSE.
The OSG filed a Motion for Reconsideration, which was denied by respondent Court thru its now questioned second Resolution
promulgated on July 29, 1992, thus:[10]
x x x the Court RESOLVED to DENY the instant Motion there being no compelling nor cogent reason to modify or reverse Our
ruling of 29 June 1992.
Additionally, movant had no right to assume that the thirty-day extension period would be granted as prayed for.
Hence, this petition.

The Issues

Petitioner avers that respondent Court acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack of
jurisdiction in denying its motion to admit its petition because:
I. The order giving petitioner a fifteen day inextendible period to file petition for review was received by petitioner when the
fifteen day period had already expired.
II. The respondent Court of Appeals ignored the well-settled rule that rules of procedure should not be applied in a very rigid,
technical sense.[11]
In essence, petitioner alleges that respondent Court required it to comply with an impossible condition, in that public respondent
granted the prayed-for extension for fifteen (15) days only, or up to June 4, 1992, but the Resolution embodying such extension was received
by petitioner only on June 8, 1992, after the expiration of the period granted.
Petitioner also pleads that the Office of the Solicitor General is saddled with a tremendous workload. It thus prays for a liberal
interpretation of the rules as the petition is impressed with public interest.[12]

The Courts Ruling

We are unpersuaded. There are certain procedural rules that must remain inviolable, like those setting the periods for perfecting an
appeal or filing a petition for review, for it is doctrinally entrenched that the right to appeal is a statutory right and one who seeks to avail of
that right must comply with the statute or rules.[13] The rules, particularly the requirements for perfecting an appeal within the reglementary
period specified in the law, must be strictly followed as they are considered indispensable interdictions against needless delays and for orderly
discharge of judicial business.[14] Furthermore, the perfection of an appeal in the manner and within the period permitted by law is not only
mandatory but also jurisdictional and the failure to perfect the appeal renders the judgment of the court final and executory. [15] Just as a
losing party has the right to file an appeal within the prescribed period, the winning party also has the correlative right to enjoy the finality
of the resolution of his/her case.
These periods are carefully guarded and lawyers are well-advised to keep track of their applications. After all, a denial of a petition for
being time-barred is a decision on the merits.

Period of and Requisites for Extension of Time

for Filing Petition for Review

As early as August 26, 1986, in the case of Lacsamana vs. Second Special Cases Division of the Intermediate Appellate Court,[16] this Court
had already put a stop to and set a policy on overly long extensions of time. The Court said:

66
 Beginning one month after the promulgation of this Decision, an extension of only fifteen days for filling a petition for review
may be granted by the Court of Appeals, save in exceptionally meritorious cases.
The motion for extension of time must be filed and the corresponding docket fee paid within the reglementary period of
appeal.
x x x x x x x x x.
Accordingly, the Court of Appeals promulgated its Rules[17] which took effect on August 18, 1988, thus:
Rule 6, Section 3. Petitions for Review. -- Within the period to appeal, the petitioner shall file a verified petition xxx. Upon
proper motion presented before the expiration of the original reglementary period, the Court may grant a non extendible
additional period of fifteen (15) days save in exceptionally meritorious cases within which to file the petition for review;
Provided, however, that should there be no petition filed within the extended period, the case shall be dismissed. A petition
filed after the period shall be denied due course outright. x x x.
Of these two guides, the Solicitor General could not feign ignorance. He knew or ought to have known that, pursuant to the above rule,
his motion for extension of time of thirty (30) days could be granted for only fifteen (15) days. There simply was no basis for assuming that
the requested 30-day extension would be granted.
The later case of Liboro vs. Court of Appeals[18] explicitly upheld the generally non-extendible nature of the fifteen (15) days extension,
thus:
But the extension nonetheless should be limited only to fifteen (15) days, save in exceptionally meritorious cases where the
Court of Appeals may grant a longer period, as similarly provided in Lacsamana. Generally then, a non-extendible period of
fifteen (15) days may be granted unless there are compelling reasons which may warrant the allowance of a longer period. x x x
Thus, respondent Court cannot be faulted for granting petitioner only fifteen days extension, even if it prayed for thirty. Certainly, we
can not attribute grave abuse of discretion to said Court for merely following its own internal rules which have been granted imprimatur by
this Court.

Lack of Notice?

We have consistently held that allowance or denial of a motion for extension of time is addressed to the sound discretion of the court,
and such discretion vested in the courts must be exercised wisely and prudently, and never capriciously, with a view to substantial justice.[19]
But, once granted, the extension of time starts from the end of the original reglementary period. It begins to run whether or not the
movant/grantee has knowledge of such action of the granting court. Notice in this instance is unimportant as, in the first place, lawyers should
never presume that their motions for extension or postponement would be granted. It behooves them to follow up on their motions, for the
mere filing of the same is not enough. They must check with the division clerks of court for the action on their motions, considering that time
may run out on them as it did in this case.
The OSG persists in pressing this Court to take judicial notice of its very heavy caseload, which in its estimation constitutes sufficient
justification for the delay. However, it cannot be gainsaid that, with ordinary diligence and foresight, the Solicitor General and his staff could
have readily found a way to comply with the deadline.
The warning in Roxas is pertinent to the case at bar where it states:[20]
x x x Let this serve as (a) warning among members of the Philippine bar who take their own sweet time with their cases if not
purposely delay its progress for no cogent reason. It does no credit to their standing in the profession. More so when they do
not file the required brief or pleading until their motion is acted upon. Not only should they not presume that their motion for
extension of time will be granted by the court(,) much less should they except that the extension that may be granted shall be
counted from notice. They should file their briefs or pleadings within the extended period requested. Failing in this, they have
only themselves to blame if their appeal or case is dismissed.

Appeal For Liberality

Petitioner insists that the challenged Resolutions must be overturned, in light of the fact that petitioner is tasked with regulating the
video industry pursuant to P.D. 1987, and that its petition is meritorious, being highly impressed with public interest in view of the unfair

67
competition against the local movie industry posed by rampant film piracy, as well as the erosion of the viewing publics moral fiber due to
unclassified and unreviewed videotapes of films with pornographic and violent sequences. [21] Petitioner thus prays that we apply a liberal
interpretation of the rules to its petition.
We reject such argument. While we recognize the laudable role and difficult task of petitioner, they do not make the case exceptionally
meritorious as to warrant the liberal application of the rules. The reasoning employed is untenable. The issue that petitioner tried to bring
before respondent Court was the propriety of the quashal of the search warrant. It has nothing to do with petitioners purpose and task
because these do not show how the RTC of Kalookan City erred in quashing the aforementioned search warrant.
And, while we understand the OSGs predicament, its oft-repeated excuse of being saddled with a huge caseload, which is resorted to
almost everytime it applies for extensions of time for appeal and filing of comments/replies/briefs, has already lost its flavor, if not gone stale
entirely. Certainly, by this time the OSG must have already developed a system for keeping track of all its deadlines and monitoring the
progress of work being done on the cases it is handling. After all, government service really entails hard work and perennial, unceasing
pressure to meet deadlines. Most assuredly, this is not a ground for the liberal interpretation of the rules. Only in exceptionally
meritorious cases should the rules be relaxed. Such has not been shown to be the situation in this case.
WHEREFORE, premises considered, the instant petition is DISMISSED.
SO ORDERED.
Narvasa, C.J. (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.

11. Aguam vs. Court of Appeals 332 SCRA 784 , May 31, 2000

FIRST DIVISION

[G.R. No. 137672. May 31, 2000]

PAZ REYES AGUAM, petitioner, vs. COURT OF APPEALS and BONIFACIO RONSAYRO, respondents.

DECISION

PARDO, J.:

The case is an appeal via certiorari seeking to set aside the resolution of the Court of Appeals[1] dismissing petitioner's appeal because
petitioner's motion for extension to file appellant's brief was filed late by nine (9) days due to counsel's mistake in counting the period for
filing the same. The court also denied petitioners motion for reconsideration.[2]

The facts are as follows:

On January 8, 1998, the Regional Trial Court, Pasig City, in an action for sum of money and damages arising from malicious mischief filed by
petitioner Paz Reyes Aguam against respondent Bonifacio Ronsayro,[3] rendered decision, the dispositive portion of which reads as follows:

"WHEREFORE, in view of the foregoing, judgment is rendered in favor of the defendant dismissing the complaint and
ordering the plaintiff to pay the defendant the following:

a) P595,500.00 representing the share of the defendant from the lot plaintiff sold, plus legal interest until the amount is
paid from date of demand;

b) The amount of P100,000.00 as moral damages;

c) P50,000.00 as and for attorneys fees; and,

d) Cost of suit."[4]

68
In due time, petitioner filed an appeal to the Court of Appeals.[5]

On September 25, 1998, the Court Appeals, through the Clerk of Court, issued a notice addressed to Atty. Carlos G. Nery, Jr., petitioner's
counsel, requiring her as plaintiff-appellant to file within forty-five (45) days from receipt an appellant's brief, furnishing a copy of the
notice to Atty. Eladio P. Samson, respondent's counsel.[6]

The notice was sent by registered mail to petitioner's counsel, Atty. Carlos G. Nery at the latter's address of record, 26 Masbate St., West
Ave., 1100 Quezon City.[7] The notice was received by an office clerk of a realty firm with which Atty. Nery was sharing office. She was not
an employee of petitioner's counsel and she did not note down the date of receipt. [8]

On November 25, 1998, petitioner filed with the Court of Appeals a motion for extension of time to file appellant's brief, asking for ninety
(90) days from the expiry date within which to do so.[9]

On December 11, 1998, the Court of Appeals denied the motion for extension and accordingly dismissed the appeal for failure of the
appellant to file brief within the reglementary period.[10]

On December 14, 1998, petitioner filed with the Court of Appeals her appellant's brief.[11] On December 22, 1998, petitioner filed with the
Court of Appeals a motion for reconsideration of the denial and to admit appellant's brief.[12]

On January 21, 1999, respondent filed an opposition to the motion for reconsideration. [13]

On February 23, 1999, the Court of Appeals denied petitioner's motion for reconsideration. [14]

Hence, this appeal.[15]

The issue raised is whether or not the Court of Appeals acted with grave abuse of discretion in dismissing petitioner's appeal because of the
late filing of appellant's brief due to counsel's mistake in the counting of the reglementary period from notice to file appellant's brief.

Technically, the Court of Appeals may dismiss an appeal for failure to file appellant's brief on time. [16] However, the dismissal
is directory, not mandatory.[17] It is not the ministerial duty of the court to dismiss the appeal. "The failure of an appellant to file his brief
within the time prescribed does not have the effect of dismissing the appeal automatically."[18] The court has discretion to dismiss or not to
dismiss an appellants appeal. It is a power conferred on the court, not a duty. [19] The "discretion must be a sound one, to be exercised in
accordance with the tenets of justice and fair play, having in mind the circumstances obtaining in each case."[20] Technicalities, however,
must be avoided. The law abhors technicalities that impede the cause of justice. The court's primary duty is to render or dispense
justice.[21] "A litigation is not a game of technicalities."[22] "Law suits, unlike duels, are not to be won by a rapier's thrust. Technicality, when
it deserts its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from
courts."[23] Litigations must be decided on their merits and not on technicality.[24] Every party litigant must be afforded the amplest
opportunity for the proper and just determination of his cause, free from the unacceptable plea of technicalities. [25]Thus, dismissal of
appeals purely on technical grounds is frowned upon where the policy of the court is to encourage hearings of appeals on their merits and
the rules of procedure ought not to be applied in a very rigid, technical sense; rules of procedure are used only to help secure, not override
substantial justice.[26] It is a far better and more prudent course of action for the court to excuse a technical lapse and afford the parties a
review of the case on appeal to attain the ends of justice rather than dispose of the case on technicality and cause a grave injustice to the
parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice.

In the case before us, the notice to file appellant's brief was given to counsel of petitioner. The rules require the notice to file brief to be
given to the party appellant.[27] The reason is that after taking an appeal, the party may change attorney for purposes of the appeal. Hence,
the notice must be given to the party appellant. Thus, there was here a technical violation committed by the clerk of the appellate court
that ought not to prejudice the appellant.

Moreover, the notice was sent by registered mail. This is, of course, permitted in the rules. [28] However, the mail matter must be received
by the addressee or his duly authorized representative Service of papers which includes every written notice on a person who was not a
clerk, employee or one in charge of the attorneys office, is invalid.[29] Here, the notice was received by an employee of a realty firm with
which the counsel was sharing office. She was not an employee of petitioner's counsel. He was a solo practitioner.

In the higher interest of justice, considering that the delay in filing a motion for extension to file appellant's brief was only for nine (9) days,
and normally, the Court of Appeals would routinely grant such extension, and the appellant's brief was actually filed within the period
sought, the better course of action for the Court of Appeals was to admit appellant's brief.
69
Lapses in the literal observance of a rule of procedure will be overlooked when they arose from an honest mistake, when they have not
prejudiced the adverse party.[30] The Court can overlook the late filing of the motion for extension, if strict compliance with the rules would
mean sacrificing justice to technicality.[31]

Consequently, we find that the Court of Appeals gravely abused its discretion in denying petitioners motion for extension of time to file
appellants brief, and in dismissing the appeal.

WHEREFORE, the Court hereby REVERSES and SETS ASIDE the resolutions of the Court of Appeals dismissing the appeal. The Court remands
the case to the Court of Appeals for further proceedings, and disposition of the appeal on its merits.

No costs.

SO ORDERED.

Puno, and Kapunan, JJ., concur.

Davide, Jr., C.J., (Chairman), on official leave.

Ynares-Santiago, J., no part.

12. Siguenza vs. Court of Appeals 137 SCRA 570 , July 16, 1985

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-44050 July 16, 1985

CARMEN SIGUENZA and HELENA SIGUENZA, petitioners,

vs.
HON. COURT OF APPEALS and SPOUSES PEDRO QUIMBO and LEONADIZA QUIMBO, respondents.

Jose Batiguin and Pedro T. Abella for petitioner.

Hilario G. Davide, Jr. for private respondents.

GUTIERREZ, JR., J.:

This is a petition to review the decision of the Court of Appeals, now Intermediate Appellate Court, which denied the petition for certiorari
and mandamus for lack of merit and its resolutions denying the two motions for reconsideration which were subsequently filed.

Apart from the background issue of an allegedly excessive award of damages facing the lower courts, there was the question of whether or
not the petitioners' appeal was perfected on time.

The private respondents, spouses Pedro and Leonadiza Quimbo filed a complaint before the Court of First Instance of Cebu against
petitioners Carmen and Helena Siguenza together with Bert Osmeña and Associates for breach of contract and payment of damages.

The complaint alleged that the petitioners entered into a contract with the spouses Quimbo for the sale of two lots purportedly owned by
Carmen and Helena Siguenza, and which were Identified as Lot Nos. 1 and 2, Block 1, Phase II of the Clarita Village; that the said lots were

70
to be paid in the total amount of P15,200.00 of which the amount of P3,040.00 was to be paid upon the execution of the contract of sale
and the balance of P12,160.00 to be paid in monthly installments and that subsequently, however, the spouses Quimbo discovered that as
early as 1969, the petitioners had already sold and conveyed the same lots to Irenea D. Maningo and that both are now covered by Transfer
Certificates of Titles Nos. T-48546 and T-48547 in the name of the latter. The complaint further alleged that because of this double sale, the
spouses Quimbo demanded from the petitioners the return of their downpayment but the latter refused and that as a consequence of the.
deceit and mis-representation employed upon them by said petitioners, the spouses were also prevented from constructing their house
worth P100,000.00 on the lots which if constructed at the present would cost them three hundred (300%) percent more than the original
amount.

In their answer, petitioners admitted the sale of the lots to the spouses but argued that they had nothing to do with the sale as the one
responsible was Bert Osmeña and Associates. Petitioners also alleged that the impleading of Carmen Siguenza as a party defendant had no
basis because the lots n dispute were originally registered only in the name of Helena Siguenza.

The other defendant, Bert Osmeña and Associates admitted the sale of the lots to Irenea Maningo but countered that such sale was only
for the purpose of enabling the latter to obtain a loan from the Government Service and Insurance System. Since the loan did not
materialize. the whole transaction collapsed and during the process of reverting the lots back to the subdivision, the spouses Quimbo
showed interest and deposited money for the lots although they were fully aware of the status of the said lots. Bert Osmeña and Associates
also alleged that after the downpayment no further installments were paid by the spouses. On March 31, 1975. the trial court rendered
judgment in favor of the spouses Quimbo, the dispositive portion of which reads:

WHEREFORE, based on all the foregoing considerations, judgment is hereby rendered in favor of the plaintiffs and
against the defendants ordering the latter:

To pay, jointly and severally, the plaintiffs P3,040.00, with interest at the legal rate from June 2, 1971 until the same shall
have been fully paid; P100,000.00 as compensation for the pecuniary loss plaintiffs suffered for failure to construct their
residential house; P5,610.00 as reimbursement for the rentals plaintiffs paid from January 1972 to September 6, 1974;
P50,000.00 as moral damages, P25,000.00 as exemplary damages; P5,000.00 as attorney's fees; and the costs.

On April 14, 1975, the petitioners received a copy of the decision. On April 29, 1975, they filed their motion for reconsideration and on May
14, 1975, they filed another motion captioned as "Amended Motion for Reconsideration and/or New Trial." In this latter motion, the
petitioners made an enumeration of the findings and conclusions of the lower court which were allegedly not supported by evidence. The
petitioners also attached a "Deed of Partition" dated February 25, 1969 for the purpose of showing that petitioner Carmen Siguenza had no
more right over the disputed lots at the time of the sale to the spouses Quimbo, and therefore, should not have been made a party
defendant in the complaint.

On May 20, 1975, the trial court issued an order denying both the original and amended motions for reconsideration on the ground that
the same were "pro forma based as it is on a forgotten evidence a so-called deed of partition supposedly executed in 1969, which was not
introduced by defendants Carmen and Helena Siguenza; ..."

The petitioners received the copy of the above order on May 27, 1975. On the same day, they filed their notice of appeal, appeal bond, and
motion for extension of time to file the record on appeal.

On May 29, 1975, the spouses Quimbo filed a motion for execution of judgment against the petitioners on the ground that the judgment
had become final and executory for failure of the petitioners to perfect their appeal on time. The spouses alleged that since the petitioners'
motion for reconsideration was pro forma for not having been accompanied by an affidavit of merit and verification, said motion did not
stop the running of the period to perfect the appeal.

On June 30, 1975, the trial court issued the writ of execution prayed for by the spouses Quimbo on the grounds that the motions filed by
the petitioners were pro forma as they were based on forgotten evidence, i.e., the deed of partition, and that said motions were not
supported by affidavits of merit thus making them fatally defective. The trial court likewise disapproved the petitioners' notice of appeal,
appeal bond, and motion for extension to file a record on appeal for having become academic.

On appeal, the Court of Appeals affirmed the trial court's decision. It ruled that:

Even granting, however, that the amended motion for reconsideration and/or new trial is not pro forma, and was filed
on time on May 14, 1975, or on the last day of the 30-day period from receipt by petitioners on April 14, 1975 of the
decision, petitioners had to perfect their appeal, i.e., to file the notice of appeal, appeal bond and record on appeal on or
71
 before May 28, 1975, the last day following their receipt on May 27, 1975 of the order denying their amended motion
for reconsideration and/or new trial (Sec. 3, second paragraph, Rule 41, Rules of Court). It is true that petitioners filed
their notice of appeal, appeal bond and motion for extension of 20 days within which to file their record on appeal but
the period of 20 days as prayed for in their motion for extension would expire on June 16, 1975. Adding, therefore, the
remaining one day from May 27 to May 28, 1975, petitioners would have filed their record on appeal on June 17, 1975.
But since their record on appeal, thru their manifestation, was filed only on June 30, 1975 or 13 days after June 17, 1975,
the same was filed out of time. Again, while it may be true that petitioners filed on June 26, 1975 a manifestation praying
that they be allowed to adopt their record on appeal filed by the other defendant therein, Bert Osmeña & Associates,
Inc., said manifestation was likewise filed out of time.

On these facts alone, it is needless to pass upon whether or not respondent Court committed an error in holding the
motions for reconsideration and/or new trial as pro forma, or in not acting upon the motion for extension to file record
on appeal for the reason that we have here considered as granted the extension of 20 days to petitioner but despite this
period, their record on appeal was filed out of time. Besides, petitioners have no right to presume that their motion
would be granted. Neither can respondent Court be compelled by mandamus to approve the appeal when the same was
not perfected within the reglementary period.

In this petition, the petitioners maintain that the appellate court committed grave abuse of discretion in holding that they have lost right to
appeal.

We agree.

In the case of Castro v. Court of Appeals (132 SCRA 782), we stressed the importance and real purpose of the remedy of appeal and ruled:

An appeal is an essential part of our judicial system, We have advised the courts to proceed with caution so as not to
deprive a party of the right to appeal (National Waterworks and Sewerage Authority v. Municipality of Libmanan, 97
SCRA 138) and instructed that every party-litigant should be afforded the amplest opportunity for the proper and just
disposition of his cause, freed from the constraints 4 technicalities (A-One Feeds, Inc. v. Court of Appeals, 100 SCRA 590).

The rules of procedure are not to be applied in a very rigid and technical sense. The rules of procedure are used only to
help secure not override substantial justice. (Gregorio v. Court of Appeals (72 SCRA 'L20). Therefore, we ruled in Republic
v. Court of Appeals (83 SCRA 453) that a six-day delay in the perfection of the appeal does not warrant its dismissal.And
again in Ramos v.Bagasao (96 SCRA 395), this Court held that the delay of four (4) days in filing a notice of appeal and a
motion for extension of time to file a record on appeal can be excused on the basis of equity.

We should emphasize, however, that we have allowed the filing of an appeal in some cases where a stringent application of the rules would
have denied it, only when to do so would serve the demands of substantial justice and in the exercise cf our equity jurisdiction.

In the case at bar, the petitioners' delay in filing their record on appeal should not be strictly construed as to deprive them of the right to
appeal especially since on its face the appeal appears to be impressed with merit.

In the interest of justice and the speedy disposition of cases, we have also deemed it proper to decide this case on the merits as a remand
to the lower court for approval of the appeal, its subsequent elevation to the appellate court and probably, another resort to this Court
would only entail undue burden on the parties and needless delays only to obtain the same judgment that could very well be laid down
through this petition. Furthermore, we have already promulgated a resolution in the related case of Bert Osmeña & Associates v. Court of
Appeals (G.R. No. 56545, January 28, 1983, 120 SCRA 395), ordering the petitioners' co-defendants, Bert Osmeña and Associates, to pay the
respondents the appropriate amounts due them. A prompt disposition of this present petition would, therefore, enable the private
respondents to collect from the petitioners whatever amounts Bert Osmeña and Associates have not yet paid to fully satisfy the liability
adjudged against the latter which may be rightly demanded from herein petitioners but not duplicated as this would be unjust enrichment
on the part of the respondents.

Resolving now the merits of the case, we find that the orders of the trial court ordering the petitioners to pay the private respondents
P100,000.00 for compensatory damages is patently erroneous because no proof whatsoever was presented or could be presented by the
private respondents to show that they had actually suffered pecuniary loss in that amount. In fact, the whole amount of P100,000.00 had
no basis at all except the respondents' mere allegation that they, absent the malice, bad faith, and unlawful and deceitful acts of the
petitioners, "could have then constructed a residential house worth P100,000.00; that the same residential house cannot now be
constructed at that amount, but very likely at more than three hundred percent more; such difference constitutes an actual damage on the

72
part of the plaintiffs (respondents) which are directly logically and naturally caused by the aforesaid acts of defendants (petitioners) for
which said defendants are liable."

In the case of Sy v. Court of Appeals (131 SCRA 127), we ruled that an alleged loss of income is not recoverable for being speculative as no
receipt or any kind of evidence on the matter was presented to prove it. Likewise, in the case of Seavan Carrier, Inc. v. GTI Sportswear Corp.
(132 SCRA 314-315), quoting G.A. Machineries, Inc. v. Yaptinchay (126 SCRA 87), we ruled that for damages under Article 2200 of the Civil
Code to be recovered, the best evidence obtainable by the injured party must be presented; and thus, "the bare assertion of the
respondent that he lost about P54,000.00 and the accompanying documentary evidence presented to prove the amount lost are
inadequate if not speculative."

In the present case, the respondents were not able to prove any actual losses suffered as a result of the petitioners' wrongful acts because
they have not even started the construction of their house on the disputed lots. Any alleged pecuniary loss which they claim to have
suffered because of the delay in the commencement of construction is purely speculative and cannot be the basis of compensatory
damages as provided by law.

As regards the awards of P50,000.00 moral damages and P25,000.00 exemplary damages, we hold that such awards are far too excessive
compared to the actual losses sustained by the respondents. They are without bases considering that the spouses had only paid a
downpayment in the amount of P3,040.00 and had not yet occupied the property nor introduced improvements thereon at the time they
discovered the fraud perpetrated against them by the petitioners.

In the case of San Andres v. Court of Appeals (116 SCRA 81), we ruled:

While, indeed, the amount of moral damages is a matter left largely to the sound discretion of a Court, (Art. 2216, Civil
Code) we find that the sums of P30,000.00 and P5,000.00 awarded herein as moral damages and attorney's fees,
respectively, by the Court of Appeals, are excessive and should be reduced to more reasonable amounts, considering the
attendant facts and circumstances. Moral damages, though incapable of pecuniary estimation, are in the category of an
award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrong doer.
(Malonzo v. Galang, 109 Phil, 16, 20-21, cited in Enervida v. de la Torre, 55 SCRA 339).

The records will show that the injury suffered by the respondents was not serious or gross and, therefore, out of proportion to the amount
of damages generously awarded by the trial court, and subsequently affirmed by the appellate court. We note that a total of P 188,650-00
in damages was awarded in a case involving a downpayment of P3,040.00 on a full purchase price of Pl5,200.00 payable in installments.

We thus, hold that the petitioners are liable for the amount of P3,040.00, representing the downpayment made by the private respondents
on the lots in dispute, with legal interest from March 25, 1974; and for the amounts of P10,000.00 moral damages, P5,000.00 exemplary
damages, and another P5,000.00 as attorney's fees, respectively. Petitioners, however, are not liable for compensatory damages. (See Bert
Osmeña and Associates v. Court of Appeals, supra).

WHEREFORE, the decision appealed from is hereby MODIFIED. The petitioners Carmen and Helena Siguenza are ordered to pay the private
respondents the amounts of P3,040.00 with legal interest from March 25, 1974; P10,000.00 as moral damages; P5,000.00 as exemplary
damages and P5,000.00 as attorney's fees. To avoid duplication of payments resulting in unjust enrichment, the payment of the aforesaid
amounts shall be subject to whatever payments the private respondents may have already received in satisfaction of the same liability by
virtue of the earlier judgment rendered in G.R. No. L-56545.

SO ORDERED.

Teehankee (Chairman), Melencio-Herrera, Plana, Relova, De la Fuente and Alampay, JJ., concur.

13. Malayang Kapisanan ng mga Manggagawa sa Associated Anglo American Tobacco Corp. vs. Associated Anglo American
Tobacco Corp. 546 SCRA 124 , February 18, 2008

Republic of the Philippines

Supreme Court

Manila

73
 THIRD DIVISION

MALAYANG KAPISANAN NG MGA G.R. No. 156613

MANGGAGAWA SA ASSOCIATED

ANGLO AMERICAN TOBACCO

CORPORATION (MAKAMANGGA-

GAWA), JAIME BERMUDEZ, ET AL.,

Petitioners,

Present:

YNARES-SANTIAGO, J.,

Chairperson,

- versus - AUSTRIA-MARTINEZ,

CHICO-NAZARIO,

NACHURA, and

REYES, JJ.

ASSOCIATED ANGLO AMERICAN

TOBACCO CORPORATION AND/OR

FLORENTE DY, ALICIA LIM and

ALEX DY, Promulgated:

Respondents.* * February 18, 2008

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

AUSTRIA-MARTINEZ, J.:

This resolves the Petition for Certiorari under Rule 65 of the Rules of Court which seeks the nullification of the Resolution[1] of the Court
of Appeals (CA) dated June 5, 2002 dismissing the petition for certiorari filed by Malayang Kapisanan ng mga Manggagawa sa Associated

74
Anglo American Tobacco Corporation (the Union) for failure to comply with Sections 4 and 5, Rule 7 of the 1997 Rules of Civil Procedure;
and the Resolution dated October 29, 2002,[2] denying the motion for reconsideration.

The undisputed facts are as follows.

Respondent Associated Anglo American Tobacco Corporation (ANGLO) and the Union entered into a Collective Bargaining Agreement
(CBA) on September 12, 1996. On April 2, 1998, the parties signed a Memorandum of Agreement providing for a moratorium on the
negotiations on the forthcoming CBA between them. In December 1998, ANGLO and the Union convened to discuss wage increases for
the year 1999. Due to a breakdown in the negotiations, the Union filed a Notice of Strike with the National Conciliation and Mediation
Board on February 8, 1999.

On March 7, 1999 the Union staged a strike. Thereafter, on April 12, 1999, ANGLO announced the closure or cessation of its business
operations and applied for a Notice of Closure with the Department of Labor and Employment due to serious business losses.

On April 22, 1999, ANGLO and the Union executed another Memorandum of Agreement providing for the referral of their dispute to an
accredited Voluntary Arbitrator (VA).On May 3, 1999, the VA issued a decision finding the closure legal and awarding financial assistance
to the workers and on May 5, 1999, the parties executed before the VA a document entitled Mechanics of Releasing of Goods/Manner
of Payments to implement compliance with the decision of the VA. Immediately thereafter, the strike was lifted and except for 44
members of the Union who are individual petitioners in the present petition, the other striking employees executed Affidavits of Quitclaim
and Release in favor of ANGLO.

On May 13, 1999, the aforementioned 44 members of the Union questioned the award of the VA before the CA, docketed as CA-G.R. SP
No. 52734, alleging grave abuse of discretion on the part of the VA. Said petition was dismissed by the CA. The CA decision was then
elevated to this Court via a petition for review, docketed as G.R. No. 144574, but in a Resolution dated November 20, 2000, said petition
was dismissed. The motion for reconsideration of said Resolution was denied.

Even while said case questioning the award of the VA was pending before the CA, herein individual petitioners, who are the very same
persons who filed the case with the CA, also filed several complaints with the National Labor Relations Commission (NLRC) Labor
Arbiter. Said complaints were then consolidated and on May 9, 2000, the Labor Arbiter issued a Decision dismissing the complaints for
lack of merit. Petitioners appealed to the NLRC but said appellate body affirmed the dismissal of petitioners' complaints. Their motion for
reconsideration before the NLRC was likewise denied.

On April 9, 2002, petitioners filed their petition for certiorari before the CA, docketed as CA-G.R. SP No. 69807. The CA then issued on June
5, 2002 the herein assailed Resolution dismissing the petition on the ground that only one of the petitioners executed the
Verification/Certification of Non-Forum Shopping without submitting proof that she is authorized to represent the other
petitioners. Petitioners moved for reconsideration of the dismissal but the same was denied.

Hence, the present petition for certiorari on the following grounds:

I.

PUBLIC RESPONDENT COURT OF APPEALS (THIRD DIVISION) GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK
OR IN EXCESS OF JURISDICTION IN DISMISSING THE PETITION FOR CERTIORARI SOLELY ON THE GROUND THAT THE
PETITION WAS SIGNED BY FLAVIANA BERLIN WHO IS AMONG THE REAL AND PRINCIPAL PARTIES IN INTEREST IN THE
INSTANT CASE.

75
 II.

PUBLIC RESPONDENT COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN DISMISSING THE PETITION FOR
CERTIORARI AND MAY HAVE OVERLOOKED THE SETTLED DOCTRINE ON THE RIGID APPLICATION OF TECHNICAL
RULES.[3]

The petition is without merit.

It is true that under justifiable circumstances, the Court has relaxed the rule requiring all petitioners to affix their signature to the
certification on non-forum shopping.Recently, the Court has deemed it proper to relax said rule by considering the signature of only one
among numerous petitioners as substantial compliance in cases where all petitioners share a common interest and invoke a common
cause of action or defense.[4] In the present case, petitioners do share a common cause of action, that of illegal dismissal.

However, a petition for certiorari under Rule 65 of the Rules of Court may be resorted to only if there is no appeal, or any plain, speedy,
and adequate remedy in the ordinary course of law.[5]

In Macawiag v. Balindog,[6] the Court emphasized this principle, thus:

The well-settled rule is that certiorari is not available where the aggrieved partys remedy of appeal is plain, speedy and
adequate in the ordinary course, the reason being that certioraricannot co-exist with an appeal or any other adequate
remedy. The existence and availability of the right to appeal are antithetical to the availment of the special civil action
for certiorari. These two remedies are mutually exclusive. Consequently, when petitioner filed her petition in this
Court, the decision of the Sharia District Court was already final and executory.
In view of the foregoing, as much as we want to review the merits of the petition, we are constrained by the procedural
lapse which this Court cannot ignore. When a decision becomes final and executory, the court loses jurisdiction over
the case and not even an appellate court would have the power to review a judgment that has acquired
finality. Otherwise, there would be no end to litigation and would set to naught the main role of courts of justice which
is to assist in the enforcement of the rule of law and the maintenance of peace and order by settling justiciable
controversies with finality. x x x
Admittedly, in accordance with the liberal spirit pervading the Rules of Court and in the interest of justice, this Court
has the discretion to treat a petition for certiorari as having been filed under Rule 45, but not when the petition is filed
well beyond the reglementary period for filing a petition for review and without offering any reason therefor.
The Court ruled in Sebastian v. Morales that:

Under Rule 1, Section 6 of the 1997 Rules of Civil Procedure, liberal construction of the rules
is the controlling principle to effect substantial justice. Thus, litigations should, as much as
possible, be decided on their merits and not on technicalities. This does not mean, however,
that procedural rules are to be ignored or disdained at will to suit the convenience of a
party. Procedural law has its own rationale in the orderly administration of justice, namely, to
ensure the effective enforcement of substantive rights by providing for a system that obviates
arbitrariness, caprice, despotism, or whimsicality in the settlement of disputes. Hence, it is a
mistake to suppose that substantive law and procedural law are contradictory to each other,
or as often suggested, that enforcement of procedural rules should never be permitted if it
would result in prejudice to the substantive rights of the litigants.

Litigation is not a game of technicalities, but every case must be prosecuted in accordance
with the prescribed procedure so that issues may be properly presented and justly resolved.
Hence, rules of procedure must be faithfully followed except only when for persuasive
reasons, they may be relaxed to relieve a litigant of an injustice not commensurate with his
failure to comply with the prescribed procedure. Concomitant to a liberal application of the

76
 rules of procedure should be an effort on the part of the party invoking liberality to explain his
failure to abide by the rules.

The fact that petitioner used the Rule 65 modality as a substitute for a lost appeal is made plain by the following:
First. While the petition was filed within the 60-day period for filing a petition for certiorari, it was nevertheless filed
beyond the 15-day period for filing a petition for review. x x x [7]
In the present case, petitioners could have appealed to this Court by filing a petition for review on certiorari under Rule 45. No such petition
was filed within the reglementary period, thus, the CA Decision became final and executory.

Neither did petitioners convince the Court of the substantial merits of the action or complaint filed with the NLRC. The Labor Arbiter dismissed
their complaint on the ground of litis pendentia and/or forum shopping. This finding was affirmed in toto by the NLRC. In their petition and
Memorandum submitted to this Court, petitioners never discussed why they believe both the Labor Arbiter and the NLRC erred in finding
them guilty of forum shopping.

Clearly, just like in Macawiag, this petition is merely a substitute for a lost appeal and should be dismissed.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

14. Heirs of the Late Ruben Reinoso, Sr. vs. Court of Appeals 654 SCRA 1 , July 18, 2011

THIRD DIVISION

THE HEIRS OF THE LATE RUBEN REINOSO, SR., G.R. No. 116121
represented by Ruben Reinoso Jr.,

Petitioners,
Present:

CARPIO,* J.
- versus -
VELASCO, JR., Chairperson,

PERALTA,

ABAD, and

MENDOZA, JJ.
COURT OF APPEALS, PONCIANO TAPALES, JOSE
GUBALLA, and FILWRITERS GUARANTY ASSURANCE
CORPORATION,* *

Respondent.

77
 Promulgated:

July 18, 2011

x -------------------------------------------------------------------------------------x

DECISION

MENDOZA, J.:

Before the Court is a petition for review assailing the May 20, 1994 Decision [1] and June 30, 1994 Resolution[2] of the Court of
Appeals (CA), in CA-G.R. CV No. 19395, which set aside the March 22, 1988 Decision of the Regional Trial Court, Branch 8, Manila (RTC) for
non-payment of docket fees. The dispositive portion of the CA decision reads:
IN VIEW OF ALL THE FOREGOING, the decision appealed from is SET ASIDE and REVERSED and the complaint in
this case is ordered DISMISSED.

No costs pronouncement.

SO ORDERED.

The complaint for damages arose from the collision of a passenger jeepney and a truck at around 7:00 oclock in the evening of June 14,
1979 along E. Rodriguez Avenue, Quezon City. As a result, a passenger of the jeepney, Ruben Reinoso, Sr. (Reinoso), was killed. The
passenger jeepney was owned by Ponciano Tapales (Tapales) and driven by Alejandro Santos (Santos), while the truck was owned by Jose
Guballa (Guballa) and driven by Mariano Geronimo (Geronimo).

On November 7, 1979, the heirs of Reinoso (petitioners) filed a complaint for damages against Tapales and Guballa. In turn, Guballa
filed a third party complaint against Filwriters Guaranty Assurance Corporation (FGAC) under Policy Number OV-09527.

On March 22, 1988, the RTC rendered a decision in favor of the petitioners and against Guballa. The decision in part, reads:

In favor of herein plaintiffs and against defendant Jose Guballa:

1. For the death of Ruben Reinoso, Sr. ₱30,000.00 Or a total of ₱250,000.00

For damages to property:
2. Loss of earnings (monthly income at the time of 120,000.00
death (₱2,000.00 Court used ₱1,000.00 only per In favor of defendant Ponciano
month (or ₱12,000.00 only per year) & victim then Tapales and against defendant Jose
being 55 at death had ten (10) years life expectancy Guballa:

3. Actual
1. Mortuary, Medical
damages for & funeral
repair expenses
is already and allto
awarded 15,000.00
incidental expenses in the Ponciano
defendant-cross-claimant wake in serving those
Tapales who9,
by Br. or a total of ₱44,000.00
condoled..
RTC-Malolos, Bulacan (Vide: Exh. 1-G-Tapales); hence,
4. Moralrecover
cannot damages ..
twice. 50,000.00 Under the 3rd party complaint against
2. Compensatory damages (earnings at ₱150.00 per ₱9,000.00 3rd party defendant Filwriters
5. Exemplary damages 25,000.00
day) and for two (2) months jeepney stayed at the Guaranty Assurance Corporation, the
repair shop. Court hereby renders judgment in
6. Litigation expenses . 15,000.00
3. Moral damages ... 10,000.00 favor of said 3rd party plaintiff by way
7. Attorneys fees 25,000.00 of 3rd party liability under policy No.
4. Exemplary damages . 10,000.00 OV-09527 in the amount of
5. Attorneys fees 15,000.00 ₱50,000.00 undertaking plus
₱10,000.00 as and for attorneys fees.

78
 For all the foregoing, it is the well considered view of the Court that plaintiffs, defendant Ponciano Tapales and 3 rd Party
plaintiff Jose Guballa established their claims as specified above, respectively. Totality of evidence preponderance in their
favor.

JUDGMENT

WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:

In favor of plaintiffs for the death of Ruben Reinoso, Sr.₱250,000.00;

In favor of defendant Ponciano Tapales due to damage of his passenger jeepney.₱44,000.00;

In favor of defendant Jose Guballa under Policy No. OV-09527....₱60,000.00;

All the specified accounts with 6% legal rate of interest per annum from date of complaint until fully paid
(Reformina vs. Tomol, 139 SCRA 260; and finally;

Costs of suit.

SO ORDERED.[3]

On appeal, the CA, in its Decision dated May 20, 1994, set aside and reversed the RTC decision and dismissed the complaint on the ground
of non-payment of docket fees pursuant to the doctrine laid down in Manchester v. CA.[4] In addition, the CA ruled that since prescription
had set in, petitioners could no longer pay the required docket fees. [5]

Petitioners filed a motion for reconsideration of the CA decision but it was denied in a resolution dated June 30, 1994.[6] Hence, this appeal,
anchored on the following

GROUNDS:

A. The Court of Appeals MISAPPLIED THE RULING of the Supreme Court in the case of Manchester Corporation vs. Court
of Appeals to this case.

B. The issue on the specification of the damages appearing in the prayer of the Complaint was NEVER PLACED IN ISSUE
BY ANY OF THE PARTIES IN THE COURT OF ORIGIN (REGIONAL TRIAL COURT) NOR IN THE COURT OF APPEALS.

C. The issues of the case revolve around the more substantial issue as to the negligence of the private respondents and
their culpability to petitioners.[7]
The petitioners argue that the ruling in Manchester should not have been applied retroactively in this case, since it was filed prior
to the promulgation of the Manchesterdecision in 1987. They plead that though this Court stated that failure to state the correct amount of
damages would lead to the dismissal of the complaint, said doctrine should be applied prospectively.

Moreover, the petitioners assert that at the time of the filing of the complaint in 1979, they were not certain of the amount of damages they
were entitled to, because the amount of the lost income would still be finally determined in the course of the trial of the case. They claim
that the jurisdiction of the trial court remains even if there was failure to pay the correct filing fee as long as the correct amount would be
paid subsequently.

Finally, the petitioners stress that the alleged defect was never put in issue either in the RTC or in the CA.

The Court finds merit in the petition.

The rule is that payment in full of the docket fees within the prescribed period is mandatory. [8] In Manchester v. Court of Appeals,[9] it was
held that a court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. The strict application of this rule
was, however, relaxed two (2) years after in the case of Sun Insurance Office, Ltd. v. Asuncion,[10] wherein the Court decreed that where the
initiatory pleading is not accompanied by the payment of the docket fee, the court may allow payment of the fee within a reasonable period
of time, but in no case beyond the applicable prescriptive or reglementary period. This ruling was made on the premise that the plaintiff had
demonstrated his willingness to abide by the rules by paying the additional docket fees required. [11] Thus, in the more recent case of United

79
Overseas Bank v. Ros,[12] the Court explained that where the party does not deliberately intend to defraud the court in payment of docket
fees, and manifests its willingness to abide by the rules by paying additional docket fees when required by the court, the liberal doctrine
enunciated in Sun Insurance Office, Ltd., and not the strict regulations set in Manchester, will apply. It has been on record that the Court, in
several instances, allowed the relaxation of the rule on non-payment of docket fees in order to afford the parties the opportunity to fully
ventilate their cases on the merits. In the case of La Salette College v. Pilotin,[13] the Court stated:

Notwithstanding the mandatory nature of the requirement of payment of appellate docket fees, we also recognize that
its strict application is qualified by the following: first, failure to pay those fees within the reglementary period allows only
discretionary, not automatic, dismissal; second, such power should be used by the court in conjunction with its exercise
of sound discretion in accordance with the tenets of justice and fair play, as well as with a great deal of circumspection in
consideration of all attendant circumstances.[14]

While there is a crying need to unclog court dockets on the one hand, there is, on the other, a greater demand for resolving genuine
disputes fairly and equitably,[15] for it is far better to dispose of a case on the merit which is a primordial end, rather than on a technicality
that may result in injustice.

In this case, it cannot be denied that the case was litigated before the RTC and said trial court had already rendered a decision. While
it was at that level, the matter of non-payment of docket fees was never an issue. It was only the CA which motu propio dismissed the case
for said reason.
Considering the foregoing, there is a need to suspend the strict application of the rules so that the petitioners would be able to fully
and finally prosecute their claim on the merits at the appellate level rather than fail to secure justice on a technicality, for, indeed, the general
objective of procedure is to facilitate the application of justice to the rival claims of contending parties, bearing always in mind that procedure
is not to hinder but to promote the administration of justice.[16]

The Court also takes into account the fact that the case was filed before the Manchester ruling came out. Even if said ruling could
be applied retroactively, liberality should be accorded to the petitioners in view of the recency then of the ruling. Leniency because of recency
was applied to the cases of Far Eastern Shipping Company v. Court of Appeals[17] and Spouses Jimmy and Patri Chan v. RTC of Zamboanga.[18] In
the case of Mactan Cebu International Airport Authority v. Mangubat (Mactan),[19] it was stated that the intent of the Court is clear to afford
litigants full opportunity to comply with the new rules and to temper enforcement of sanctions in view of the recency of the changes
introduced by the new rules. In Mactan, the Office of the Solicitor General (OSG) also failed to pay the correct docket fees on time.

We held in another case:

x x x It bears stressing that the rules of procedure are merely tools designed to facilitate the attainment of
justice. They were conceived and promulgated to effectively aid the court in the dispensation of justice. Courts are
not slaves to or robots of technical rules, shorn of judicial discretion. In rendering justice, courts have always been,
as they ought to be, conscientiously guided by the norm that, on the balance, technicalities take a backseat against
substantive rights, and not the other way around. Thus, if the application of the Rules would tend to frustrate rather
than promote justice, it is always within the power of the Court to suspend the Rules, or except a particular case from
its operation.[20]

The petitioners, however, are liable for the difference between the actual fees paid and the correct payable docket fees to be
assessed by the clerk of court which shall constitute a lien on the judgment pursuant to Section 2 of Rule 141 which provides:
SEC. 2. Fees in lien. Where the court in its final judgment awards a claim not alleged, or a relief different
from, or more than that claimed in the pleading, the party concerned shall pay the additional fees which shall
constitute a lien on the judgment in satisfaction of said lien. The clerk of court shall assess and collect the
corresponding fees.

As the Court has taken the position that it would be grossly unjust if petitioners claim would be dismissed on a strict application of
the Manchester doctrine, the appropriate action, under ordinary circumstances, would be for the Court to remand the case to the CA.
Considering, however, that the case at bench has been pending for more than 30 years and the records thereof are already before this Court,
a remand of the case to the CA would only unnecessarily prolong its resolution. In the higher interest of substantial justice and to spare the
parties from further delay, the Court will resolve the case on the merits.

The facts are beyond dispute. Reinoso, the jeepney passenger, died as a result of the collision of a jeepney and a truck on June 14,
1979 at around 7:00 oclock in the evening along E. Rodriguez Avenue, Quezon City. It was established that the primary cause of the injury or

80
damage was the negligence of the truck driver who was driving it at a very fast pace. Based on the sketch and spot report of the police
authorities and the narration of the jeepney driver and his passengers, the collision was brought about because the truck driver suddenly
swerved to, and encroached on, the left side portion of the road in an attempt to avoid a wooden barricade, hitting the passenger jeepney as
a consequence. The analysis of the RTC appears in its decision as follows:
Perusal and careful analysis of evidence adduced as well as proper consideration of all the circumstances and
factors bearing on the issue as to who is responsible for the instant vehicular mishap convince and persuade this Court
that preponderance of proof is in favor of plaintiffs and defendant Ponciano Tapales. The greater mass of evidence spread
on the records and its influence support plaintiffs plaint including that of defendant Tapales.
The Land Transportation and Traffic Rule (R.A. No. 4136), reads as follows:

Sec. 37. Driving on right side of highway. Unless a different course of action is required in the interest
of the safety and the security of life, person or property, or because of unreasonable difficulty of operation in
compliance therewith, every person operating a motor vehicle or an animal drawn vehicle on highway shall pass
to the right when meeting persons or vehicles coming toward him, and to the left when overtaking persons or
vehicles going the same direction, and when turning to the left in going from one highway to another, every
vehicle shall be conducted to the right of the center of the intersection of the highway.
Having in mind the foregoing provision of law, this Court is convinced of the veracity of the version of the
passenger jeepney driver Alejandro Santos, (plaintiffs and Tapales witness) that while running on lane No. 4 westward
bound towards Ortigas Avenue at between 30-40 kms. per hour (63-64 tsn, Jan. 6, 1984) the sand & gravel truck from the
opposite direction driven by Mariano Geronimo, the headlights of which the former had seen while still at a distance of
about 30-40 meters from the wooden barricade astride lanes 1 and 2, upon reaching said wooden block suddenly swerved
to the left into lanes 3 and 4 at high speed napakabilis po ng dating ng truck. (29 tsn, Sept. 26, 1985) in the process hitting
them (Jeepney passenger) at the left side up to where the reserve tire was in an oblique manner pahilis (57 tsn, Sept. 26,
1985). The jeepney after it was bumped by the truck due to the strong impact was thrown resting on its right side while
the left side was on top of the Bangketa (side walk). The passengers of the jeepney and its driver were injured including
two passengers who died. The left side of the jeepney suffered considerable damage as seen in the picture (Exhs. 4 & 5-
Tapales, pages 331-332, records) taken while at the repair shop.
The Court is convinced of the narration of Santos to the effect that the gravel & sand truck was running in high
speed on the good portion of E. Rodriguez Avenue (lane 1 & 2) before the wooden barricade and (having in mind that it
had just delivered its load at the Corinthian Gardens) so that when suddenly confronted with the wooden obstaclebefore
it had to avoid the same in a manner of a reflex reaction or knee-jerk response by forthwith swerving to his left into the
right lanes (lanes 3 & 4). At the time of the bumping, the jeepney was running on its right lane No. 4 and even during the
moments before said bumping, moving at moderate speed thereon since lane No. 3 was then somewhat rough because
being repaired also according to Mondalia who has no reason to prevaricate being herself one of those seriously injured.
The narration of Santos and Mondalia are convincing and consistent in depicting the true facts of the case untainted by
vacillation and therefore, worthy to be relied upon. Their story is forfeited and confirmed by the sketch drawn by the
investigating officer Pfc. F. Amaba, Traffic Division, NPD, Quezon City who rushed to the scene of the mishap (Vide:
Resolution of Asst fiscal Elizabeth B. Reyes marked as Exhs. 7, 7-A, 7-B-Tapales, pp. 166-168, records; the Certified Copy
found on pages 598-600, ibid, with the attached police sketch of Pfc. Amaba, marked as Exh. 8-Tapales on page 169, ibid;
certified copy of which is on page 594, ibid) indicating the fact that the bumping indeed occurred at lane No. 4 and showing
how the gavel & sand truck is positioned in relation to the jeepney. The said police sketch having been made right after
the accident is a piece of evidence worthy to be relied upon showing the true facts of the bumping-occurrence. The rule
that official duty had been performed (Sec.5(m), R-131, and also Sec. 38, R-a30, Rev. Rules of Court) there being no
evidence adduced and made of record to the contrary is that said circumstance involving the two vehicles had been the
result of an official investigation and must be taken as true by this Court.[21]

While ending up on the opposite lane is not conclusive proof of fault in automobile collisions, [22] the position of the two vehicles, as
depicted in the sketch of the police officers, clearly shows that it was the truck that hit the jeepney. The evidentiary records disclosed that
the truck was speeding along E. Rodriguez, heading towards Santolan Street, while the passenger jeepney was coming from the opposite
direction. When the truck reached a certain point near the Meralco Post No. J9-450, the front portion of the truck hit the left middle side
portion of the passenger jeepney, causing damage to both vehicles and injuries to the driver and passengers of the jeepney. The truck driver
should have been more careful, because, at that time, a portion of E. Rodriguez Avenue was under repair and a wooden barricade was placed
in the middle thereof.

The Court likewise sustains the finding of the RTC that the truck owner, Guballa, failed to rebut the presumption of negligence in
the hiring and supervision of his employee. Article 2176, in relation to Article 2180 of the Civil Code, provides:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties,
is called a quasi-delict and is governed by the provisions of this Chapter.
81
 xxxx

Art. 2180. The obligation imposed by Art. 2176 is demandable not only for ones own acts or omissions but also
for those of persons for whom one is responsible.
xxxx

Employers shall be liable for the damage caused by their employees and household helpers acting within the
scope of their assigned tasks even though the former are not engaged in any business or industry.
xxxx

The responsibility treated of in this article shall cease when the persons herein mentioned prove that they
observed all the diligence of a good father of a family to prevent damage.

Whenever an employees negligence causes damage or injury to another, there instantly arises a presumption juris tantum that the employer
failed to exercise diligentissimi patris families in the selection or supervision of his employee.[23] Thus, in the selection of prospective
employees, employers are required to examine them as to their qualification, experience and service record. With respect to the supervision
of employees, employers must formulate standard operating procedures, monitor their implementation, and impose disciplinary measures
for breaches thereof. These facts must be shown by concrete proof, including documentary evidence. [24] Thus, the RTC committed no error
in finding that the evidence presented by respondent Guballa was wanting. It ruled:

x x x. As expected, defendant Jose Guballa, attempted to overthrow this presumption of negligence by showing
that he had exercised the due diligence required of him by seeing to it that the driver must check the vital parts of the
vehicle he is assigned to before he leaves the compound like the oil, water, brakes, gasoline, horn (9 tsn, July 17, 1986);
and that Geronimo had been driving for him sometime in 1976 until the collision in litigation came about (5-6 tsn, ibid);
that whenever his trucks gets out of the compound to make deliveries, it is always accompanied with two (2) helpers (16-
17 tsn, ibid). This was all which he considered as selection and supervision in compliance with the law to free himself from
any responsibility. This Court then cannot consider the foregoing as equivalent to an exercise of all the care of a good
father of a family in the selection and supervision of his driver Mariano Geronimo.[25]

WHEREFORE, the petition is GRANTED. The May 20, 1994 Decision and June 30, 1994 Resolution of the Court of Appeals
are REVERSED and SET ASIDE and the March 22, 1988 Decision of the Regional Trial Court, Branch 8, Manila, is REINSTATED.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

15. GOVERNMENT SERVICE INSURANCE SYSTEM vs NATIONAL LABOR RELATIONS COMMISSION (NLRC), G.R. No. 180045,
November 17, 2010

Republic of the Philippines

Supreme Court
Manila

SECOND DIVISION

82
 GOVERNMENT SERVICE INSURANCE SYSTEM, G.R. No. 180045

Petitioner,
Present:
- versus -

CARPIO, J.,

Chairperson,
NATIONAL LABOR RELATIONS COMMISSION (NLRC),
DIONISIO BANLASAN, ALFREDO T. TAFALLA, NACHURA,
TELESFORO D. RUBIA, ROGELIO A. ALVAREZ,
DOMINADOR A. ESCOBAL, and ROSAURO PANIS, PERALTA,

Respondents. ABAD, and

MENDOZA, JJ.

Promulgated:

November 17, 2010

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to reverse and set aside the Decision [1] and the
Resolution[2] of the Court of Appeals (CA) dated September 7, 2006 and September 27, 2007, respectively, in CA-G.R. SP No. 50450.

The facts of the case are as follows:

Respondents Dionisio Banlasan, Alfredo T. Tafalla, Telesforo D. Rubia, Rogelio A. Alvarez, Dominador A. Escobal, and Rosauro Panis were
employed as security guards by DNL Security Agency (DNL Security). By virtue of the service contract entered into by DNL Security and
petitioner Government Service Insurance System on May 1, 1978, respondents were assigned to petitioners Tacloban City office, each
receiving a monthly income of P1,400.00. Sometime in July 1989, petitioner voluntarily increased respondents monthly salary to P3,000.00.[3]

In February 1993, DNL Security informed respondents that its service contract with petitioner was terminated. This notwithstanding, DNL
Security instructed respondents to continue reporting for work to petitioner. Respondents worked as instructed until April 20, 1993, but
without receiving their wages; after which, they were terminated from employment.[4]

On June 15, 1995, respondents filed with the National Labor Relations Commission (NLRC), Regional Arbitration Branch No. VIII, Tacloban City,
a complaint against DNL Security and petitioner for illegal dismissal, separation pay, salary differential, 13 th month pay, and payment of
unpaid salary.

83
On September 30, 1997, Labor Arbiter (LA) Benjamin S. Guimoc rendered a decision [5] against DNL Security and petitioner, the dispositive
portion of which reads:

WHEREFORE, judgment is hereby rendered in this manner[,] to wit:

1. Finding no illegal dismissal of complainants;

2. Ordering respondent DNL Security Agency only to pay complainants the amount of P176,130.00
representing separation pay; the amount of P42,666.40 representing wages of complainants from February
1993 to April 20, 1993;

3. Ordering as joint and solidary liability by the respondents DNL Security Agency and GSIS the amount
of P48,385.87 representing salary differential[;] the amount of P55,564.92 as 13th month pay; all in the
aggregate sum of THREE HUNDRED TWENTY-TWO THOUSAND SEVEN HUNDRED FORTY-SEVEN & 19/100
(P322,747.19) to be paid by both or either of the said respondent within ten (10) days from receipt of this
decision and to be deposited with the cashier of this office for proper disposition.

SO ORDERED.[6]

The LA found that respondents were not illegally terminated from employment because the employment of security guards is dependent on
the service contract between the security agency and its client. However, considering that respondents had been out of work for a long
period, and consonant with the principle of social justice, the LA awarded respondents with separation pay equivalent to one (1) month salary
for every year of service, to be paid by DNL Security. Because DNL Security instructed respondents to continue working for petitioner from
February 1993 to April 20, 1993, DNL Security was also made to pay respondents wages for the period. The LA further granted respondents
claim of salary differential, as they were paid wages below the minimum wage, as well as 13 th month pay. For these monetary awards,
petitioner was made solidarily liable with DNL Security, as the indirect employer of respondents.[7]

DNL Security filed a motion for reconsideration, while petitioner appealed to the NLRC.[8]

In a resolution[9] dated December 9, 1997, the NLRC treated DNL Securitys motion for reconsideration as an appeal, but dismissed the same,
as it was not legally perfected. It likewise dismissed petitioners appeal, having been filed beyond the reglementary period.

Undaunted, petitioner filed a petition for certiorari under Rule 65 of the Rules of Court before the CA. On September 7, 2006, the CA rendered
the assailed Decision[10]affirming the NLRC ruling. Petitioners motion for reconsideration was denied by the CA on September 27, 2007.

Hence, the present petition raising the following errors:

The Court of Appeals committed a reversible error in finding that the public respondent NLRC did not commit grave
abuse of discretion amounting to lack or excess of jurisdiction in dismissing the appeal of the petitioner GSIS, considering
that:

1. The Court of Appeals disregarded the facts and circumstances evidencing the timeliness of the petitioner GSIS
appeal before the NLRC and sacrificed substantial justice in the altar of dubious technicalities; and
84
 2. The Court of Appeals misapplied the law and mistakenly affirmed the public respondent NLRCs decision that the
petitioner GSIS is jointly and severally liable with DNL Security Agency for payment of the unsubstantiated amounts of
Salary Differentials and the 13th Month Pay to the private respondent security guards.[11]

Petitioner insists that its appeal before the NLRC was filed on time, having been filed through registered mail on October 27, 1997,
as evidenced by Registry Receipt No. 34581 countersigned by the postmaster. It adds that, even assuming that the appeal was indeed filed
one day late, the NLRC should not have strictly applied the Rules in order to effect substantial justice. Petitioner also claims that although the
body of the LA decision made DNL Security solely liable for respondents wages from February 1993 to April 20, 1993, and for their separation
pay, the dispositive portion thereof made petitioner solidarily liable for said awards. Petitioner further questions the award of monetary
benefits for lack of evidence to substantiate said claims. Lastly, petitioner argues that the enforcement of the decision is impossible,
considering that petitioners charter unequivocally exempts it from execution. [12]

We partly grant the petition.

The resolution of the petition before us involves the appreciation and determination of factual matters, mainly on the issue of whether
petitioners appeal was seasonably filed before the NLRC.

Timeliness of an appeal is a factual issue. It requires a review or evaluation of the evidence which would show when the appeal was actually
mailed to and received by the NLRC.[13] In this case, to prove that it mailed the notice of appeal and appeal memorandum on October 27,
1997, instead of October 28, 1997, as shown by the stamped date on the envelope, petitioner presented Registry Receipt No. 34581 bearing
the earlier date.

Under Section 3, Rule 13 of the Rules of Court, where the filing of pleadings, appearances, motions, notices, orders, judgments, and all other
papers with the court/tribunal is made by registered mail, the date of mailing, as shown by the post office stamp on the envelope or the
registry receipt, shall be considered as the date of filing.[14]

Thus, the date of filing is determinable from two sources: from the post office stamp on the envelope or from the registry receipt, either of
which may suffice to prove the timeliness of the filing of the pleadings. If the date stamped on one is earlier than the other, the former may
be accepted as the date of filing. This presupposes, however, that the envelope or registry receipt and the dates appearing thereon are duly
authenticated before the tribunal where they are presented.[15]

In any case, even if the appeal was filed one day late, the same should have been entertained by the NLRC. Indeed, the appeal must
be perfected within the statutory or reglementary period. This is not only mandatory, but also jurisdictional. Failure to perfect the appeal on
time renders the assailed decision final and executory and deprives the appellate court or body of the legal authority to alter the final
judgment, much less entertain the appeal. However, this Court has, time and again, ruled that, in exceptional cases, a belated appeal may be
given due course if greater injustice will be visited upon the party should the appeal be denied. The Court has allowed this extraordinary
measure even at the expense of sacrificing order and efficiency if only to serve the greater principles of substantial justice and equity.[16]

Technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. We
have consistently held that technical rules are not binding in labor cases and are not to be applied strictly if the result would be detrimental
to the working man.[17]

The Court notes, however, that while the CA affirmed the dismissal by the NLRC of petitioners appeal for being filed out of time, it
nonetheless delved into the merits of the case. This notwithstanding, we do not entirely agree with the appellate courts conclusion
affirming in toto the LA decision.

85
 In this case, the LAs discussion of the issues appears to be in conflict with his final conclusion. This would have required a measure
of clarification. But instead of looking into the errors allegedly committed by the LA, the NLRC dismissed the appeal on a mere technicality.
The CA likewise failed to correct the apparent mistake in the LA decision. Thus, we are constrained to review the merits of the case.

We need not discuss DNL Securitys responsibility as respondents direct employer because DNL Securitys failure to interpose an
appeal from the LA decision has resulted in the finality of the LA decision. The only issue that we should resolve is the matter of petitioners
liability as indirect employer.

The fact that there is no actual and direct employer-employee relationship between petitioner and respondents does not absolve
the former from liability for the latters monetary claims. When petitioner contracted DNL Securitys services, petitioner became an indirect
employer of respondents, pursuant to Article 107 of the Labor Code, which reads:

ART. 107. Indirect employer. The provisions of the immediately preceding Article shall likewise apply to any
person, partnership, association or corporation which, not being an employer, contracts with an independent contractor
for the performance of any work, task, job or project.

After DNL Security failed to pay respondents the correct wages and other monetary benefits, petitioner, as principal, became jointly
and severally liable, as provided in Articles 106 and 109 of the Labor Code, which state:

ART. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for the
performance of the formers work, the employees of the contractor and of the latters subcontractor, if any, shall be paid
in accordance with the provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this
Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly
employed by him. x x x.

xxxx

ART. 109. Solidary liability. The provisions of existing laws to the contrary notwithstanding, every employer or
indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this
Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct
employers.

This statutory scheme is designed to give the workers ample protection, consonant with labor and social justice provisions of the
1987 Constitution.[18]

This Courts pronouncement in Rosewood Processing, Inc. v. NLRC[19] is noteworthy:

86
 The joint and several liability of the employer or principal was enacted to ensure compliance with the provisions
of the Code, principally those on statutory minimum wage. The contractor or subcontractor is made liable by virtue of his
or her status as a direct employer, and the principal as the indirect employer of the contractors employees. This liability
facilitates, if not guarantees, payment of the workers compensation, thus, giving the workers ample protection as
mandated by the 1987 Constitution. This is not unduly burdensome to the employer. Should the indirect employer be
constrained to pay the workers, it can recover whatever amount it had paid in accordance with the terms of the service
contract between itself and the contractor.[20]

Petitioners liability covers the payment of respondents salary differential and 13th month pay during the time they worked for
petitioner. In addition, petitioner is solidarily liable with DNL Security for respondents unpaid wages from February 1993 until April 20, 1993.
While it is true that respondents continued working for petitioner after the expiration of their contract, based on the instruction of DNL
Security, petitioner did not object to such assignment and allowed respondents to render service. Thus, petitioner impliedly approved the
extension of respondents services. Accordingly, petitioner is bound by the provisions of the Labor Code on indirect employment. Petitioner
cannot be allowed to deny its obligation to respondents after it had benefited from their services. So long as the work, task, job, or project
has been performed for petitioners benefit or on its behalf, the liability accrues for such services. [21] The principal is made liable to its indirect
employees because, after all, it can protect itself from irresponsible contractors by withholding payment of such sums that are due the
employees and by paying the employees directly, or by requiring a bond from the contractor or subcontractor for this purpose. [22]

Petitioners liability, however, cannot extend to the payment of separation pay. An order to pay separation pay is invested with a
punitive character, such that an indirect employer should not be made liable without a finding that it had conspired in the illegal dismissal of
the employees.[23]

It should be understood, though, that the solidary liability of petitioner does not preclude the application of Article 1217 of the Civil
Code on the right of reimbursement from its co-debtor, viz.:[24]

Art. 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary
debtors offer to pay, the creditor may choose which offer to accept.

He who made the payment may claim from his co-debtors only the share which corresponds to each, with the
interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening
period may be demanded.

When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying
the obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each.

Lastly, we do not agree with petitioner that the enforcement of the decision is impossible because its charter unequivocally exempts
it from execution. As held in Government Service Insurance System v. Regional Trial Court of Pasig City, Branch 71,[25] citing Rubia v. GSIS: [26]

The processual exemption of the GSIS funds and properties under Section 39 of the GSIS Charter, in our view,
should be read consistently with its avowed principal purpose: to maintain actuarial solvency of the GSIS in the protection
of assets which are to be used to finance the retirement, disability and life insurance benefits of its members. Clearly, the
exemption should be limited to the purposes and objects covered. Any interpretation that would give it an expansive
construction to exempt all GSIS assets from legal processes absolutely would be unwarranted.

Furthermore, the declared policy of the State in Section 39 of the GSIS Charter granting GSIS an exemption from
tax, lien, attachment, levy, execution, and other legal processes should be read together with the grant of power to the
GSIS to invest its excess funds under Section 36 of the same Act. Under Section 36, the GSIS is granted the ancillary power
87
 to invest in business and other ventures for the benefit of the employees, by using its excess funds for investment
purposes. In the exercise of such function and power, the GSIS is allowed to assume a character similar to a private
corporation. Thus, it may sue and be sued, as also, explicitly granted by its charter x x x. [27]

To be sure, petitioners charter should not be used to evade its liabilities to its employees, even to its indirect employees, as mandated by the
Labor Code.

WHEREFORE, premises considered, the Court of Appeals Decision and Resolution dated September 7, 2006 and September 27,
2007, respectively, in CA-G.R. SP No. 50450, are AFFIRMED with MODIFICATION. Petitioner Government Service Insurance System is declared
solidarily liable with DNL Security to PAY respondents their wage differentials, thirteenth month pay, and unpaid wages from February 1993
to April 20, 1993, but is EXONERATED from the payment of respondents separation pay.

SO ORDERED.

16. Barangay Dasmariñas vs. Creative Play Corner School 640 SCRA 294, January 24, 2011

Republic of the Philippines

Supreme Court

Manila

FIRST DIVISION

BARANGAY DASMARIAS thru G.R. No. 169942

BARANGAY CAPTAIN MA.

ENCARNACION R. LEGASPI,

Petitioner,

Present:

- versus-

CORONA, C. J., Chairperson,

CREATIVE PLAY CORNER VELASCO, JR.,

SCHOOL, DR. AMADO J. LEONARDO-DE CASTRO,

PIAMONTE, REGINA DEL CASTILLO, and

PIAMONTE TAMBUNTING, PEREZ, JJ.

CELINE CONCEPCION

LEBRON and CECILE CUNA

COLINA, Promulgated:

Respondents. January 24, 2011

x-------------------------------------------------------------------x

88
 DECISION

DEL CASTILLO, J.:

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

This Petition for Review on Certiorari assails the Resolution[2] dated July 21, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 89723 denying
petitioners Second Motion for Extension of Time to File Petition for Review and consequently dismissing the Petition for Review for having been filed beyond
the period allowed by the Rules of Court. Likewise assailed is the Resolution[3] dated September 29, 2005 denying the Motion for Reconsideration thereto.

Factual Antecedents

On June 28, 2004, petitioner Barangay Dasmarias thru Ma. Encarnacion R. Legaspi (Legaspi) filed a Complaint-Affidavit[4] before the Office of the Prosecutor
of Makati docketed as I.S. No. 04-F-10389, charging respondent Creative Play Corner School (CPC) and its alleged owners, respondents Dr. Amado J. Piamonte
(Piamonte), Regina Piamonte Tambunting (Tambunting), Celine Concepcion Lebron (Lebron) and Cecille Cuna Colina (Colina) with Falsification and Use of
Falsified Documents. Petitioner alleged that respondents falsified and used the BarangayClearance and Official Receipt purportedly issued in the name of
CPC by the Office of the Barangay Captain of Dasmarias Village, Makati City of which Lepaspi was Barangay Captain.

In their Counter-Affidavit,[5] Lebron and Colina denied having falsified the subject documents. They averred that petitioner's assertion that they
were owners of CPC is a mere allegation without proof. They also pointed out that the complaint neither shows any operative act committed by any of the
respondents in perpetrating the crime charged nor identified who among them actually committed it. They thus insisted that no probable cause exists to
warrant their indictment for the offense charged. For their part, Tambunting and Piamonte in their respective Counter-Affidavits[6] affirmed the arguments
made by Lebron and Colina. In addition, Tambunting alleged that the subject documents were not received by any relevant office while Piamonte claimed
that he had no participation whatsoever in the operation of CPC. Both of them averred that petitioner was not able to discharge its burden of presenting
sufficient evidence to support the belief that they committed the crime charged.

Ruling of the Prosecutor

In a Resolution[7] dated September 29, 2004, Assistant City Prosecutor Carolina Esguerra-Ochoa (Prosecutor Ochoa) recommended the dismissal
of the case because of failure to establish probable cause. Prosecutor Ochoa noted the absence of any finding from pertinent police laboratory tests and/or
law enforcement agency confirming that the subject documents were indeed falsified, forged or tampered or if so, that respondents were the ones who
falsified, forged or tampered the same. Prosecutor Ochoa concluded that petitioner failed to show any cause which would engender the belief that
respondents are probably guilty of the offense charged.

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

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

Ruling of the Department of Justice

89
Petitioner refuted the prosecutors finding of lack of probable cause. It claimed that since it was Legaspi's signature which was forged, she was in the best
position to attest to the fact of falsification and therefore her affidavit speaks volumes. Petitioner likewise argued that the documents attached to the
complaint, i.e. sample format of Barangay Clearances legitimately issued by the Office of the Barangay Captain showing Legaspi's signature and Certifications
regarding the allegation of tampered official receipt, were sufficient to support a finding of probable cause. After all, a finding of probable cause does not
mean conviction; it simply manifests that there is sufficient evidence to procure a conviction. It is enough that it is believed that the act complained of
constitutes the offense charged. Thus, petitioner sought for the reversal and setting aside of the Resolution of the Prosecution Office and prayed for the
issuance of an order directing it to cause the filing of the corresponding criminal information against respondents.

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

The DOJ, though, after finding that no error which would justify the reversal of the assailed resolution was committed by Prosecutor Ochoa and that the
petition was filed late, dismissed the Petition for Review through a Resolution[8] dated February 21, 2005. Petitioner filed a Motion for
Reconsideration[9] thereto but same was also denied in a Resolution[10] dated April 25, 2005.

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

Ruling of the Court of Appeals

But before petitioner was able to file its petition, it first sought for an extension of time[11] of 15 days from May 13, 2005[12] or until May 28, 2005
within which to file the same due to counsels heavy workload. The CA granted the extension in a Resolution[13] dated May 23, 2005. Subsequently, petitioner
asked for another extension[14] of five days from May 28, 2005 until June 2, 2005 for the same reason given in its first motion for extension. However,
petitioner filed the petition by mail only on June 7, 2005.[15] Because of these, the CA issued the following assailed Resolution of July 21, 2005:

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

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

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

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

SO ORDERED.[16]

90
Petitioner filed a Motion for Reconsideration[17] explaining therein that aside from the first and second motions for extension, it also filed a Final Motion for
Additional Time to File Petition for Review[18] asking for another five days from June 2, 2005 or until June 7, 2005 within which to file the petition. This new
request for extension was allegedly on account of a sudden death in the family of the handling lawyer, Atty. Maria Katrina Bote-Veguillas (Atty. Bote-
Veguillas). Thus, petitioner argued that when the petition was filed on June 7, 2005, it was still within the period of extension prayed for in said final motion
for extension. At any rate, petitioner prayed that the CA set aside rules of technicalities as it claimed that the slight delay in the filing of the petition did not
after all result to the prejudice of respondents. More importantly, it believed that the merits of the case justify the relaxation of technical rules.

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

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

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

Issues

Petitioner advances the following grounds:

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

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

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

Petitioners Arguments

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

Moreover, petitioner avers that even if the petition was filed 10 days beyond the extended period, respondents have not been prejudiced in any way by such
delay as they were free and not detained. Petitioner also posits that since it received the CAs resolution denying its Second Motion for Extension on July 27,
2005 or after it has filed the Petition for Review and paid the corresponding docket fees, such belated filing of the petition has already become moot and the
more equitable action of the CA should have been to admit the petition.
91
Lastly, petitioner believes that there is probable cause for the charge of falsification and use of falsified documents against respondents and that it was able
to discharge its burden of establishing the same.

Respondents Arguments

Respondents find no error on the part of the CA in denying petitioners Second Motion for Extension and in dismissing the petition. They cited Cosmo
Entertainment Management, Inc. v. La Ville Commercial Corporation[24] wherein this Court held that pressure of work on equally important cases is not a
compelling reason to merit an extension of time. Besides, even assuming that petitioners Second Motion for Extension was granted, respondents point out
that the petition was nevertheless filed beyond the period requested. With respect to petitioner's Final Motion for Extension, the CA has already adequately
explained the reasons why it cannot consider the same.
Moreover, respondents call this Courts attention to petitioners repeated transgression of technical rules: first, before the DOJ where it belatedly filed thereat
its petition for review and again, before the CA. To respondents, petitioner's utter disregard of the rules should not be countenanced and hence the Court
must not excuse it from complying therewith.

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

We deny the petition.

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

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

From the above, it is clear that the CA, after it has already allowed petitioner an extension of 15 days within which to file a petition for review, may
only grant a further extension when presented with the most compelling reason but same is limited only to a period of 15 days. Thus, when the CA denied
petitioners Second Motion for Extension of five days, it was merely following the abovementioned provision of the rules after it found the reason for the
second extension as not compelling. And, considering that the CA has already sufficiently explained how it was able to arrive at the conclusion that there is
no compelling reason for such second extension, we deem it unnecessary to repeat the same especially since we are in total agreement with the ratiocination
of the CA.

As to petitioners invocation of liberal application of the rules, we cannot heed the same. It is true that litigation is not a game of technicalities and that the
rules of procedure should not be strictly followed in the interest of substantial justice. However, it does not mean that the Rules of Court may be ignored at
will. It bears emphasizing that procedural rules should not be belittled or dismissed simply because their non-observance may have resulted in prejudice to a
partys substantial rights. Like all rules, they are required to be followed except only for the most persuasive of reasons.[25]

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

Also, we cannot subscribe to petitioners argument that considering that no prejudice was caused to respondents by the belated filing of the petition as the
latter were free and not detained hence, the CA should have just disregarded such belated filing. Likewise, the filing of the petition and payment of the
92
corresponding docket fees prior to petitioners receipt of the CAs resolution denying its Second Motion for Extension does not, contrary to petitioners position,
render such belated filing moot. If such would be the case, the delay in the delivery of court resolutions caused by the limitations of postal service would serve
as a convenient cover up for a pleading or a motions belated filing. This would be contrary to the aim of procedural rules which is to secure an effective and
expeditious administration of justice.

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

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

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

17. Purok Bagong Silang Association, Inc. vs. Yuipco 489 SCRA 382 , May 04, 2006

FIRST DIVISION

PUROK BAGONG SILANG G.R. No. 135092

ASSOCIATION, INC.,
Petitioner,
Present:
- versus - PANGANIBAN, C.J., Chairperson,
YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
HON. EVANGELINE S. CALLEJO, SR., and
YUIPCO, in her capacity as CHICO-NAZARIO, JJ.
Presiding Judge, Regional Trial
Court, Branch 29, Surigao City,
LYDIA KAIMO, VICTORIA
KAIMO, NOEMI KAIMO,
CARLOS KAIMO, HENEDINA
KAIMO-BRINGAS, ROGELIO
KAIMO, VENECIO KAIMO,
FLORIDA KAIMO-CLEREGO,
DEGRACIA KAIMO, and Promulgated:
JOSE NOLAN KAIMO,
Respondents. May 4, 2006

x--------------------------------------------------x

DECISION

CALLEJO, SR., J.:

Before the Court is a Petition for Prohibition under Rule 65 of the Rules of Court with prayer for the issuance of a writ of preliminary injunction
and temporary restraining order to enjoin Judge Evangeline S. Yuipco, Regional Trial Court (RTC), Branch 29, from enforcing the writ of
demolition she issued in Civil Case No. 3203.
93
 The antecedents are as follows:

Lydia, Victoria, Noemi, Carlos, Rogelio, Venecio, Degracia and Jose Nolan, all surnamed Kaimo, and their siblings, Henedina Kaimo
Bringas and Florida Kaimo Clerego, were the co-owners of three parcels of land located in Kaskag, Surigao City, covered by Transfer Certificate
of Title (TCT) Nos. T-4283, 4284 and 4285. However, about 400 private individuals constructed their houses and other improvements on the
property. In 1982, the occupants formed an association known as the Purok Bagong Silang Association, Inc. (PBSAI).

The Kaimos filed a Complaint in the RTC of Surigao City for the recovery of possession of real property, damages and attorneys fees
against 64 occupants.[1] The case was docketed as Civil Case No. 3203.

In their answer to the complaint, most of the defendants declared that the subject property was classified as timberland and, as such, part
of the public domain; thus, the plaintiffs had no cause of action against them. Seven other defendants alleged in their answer that they had
stopped paying rentals to plaintiffs at P10.00 a month when they discovered that the property was timberland.

After due proceedings, the trial court rendered judgment on August 15, 1985 in favor of the plaintiffs. The fallo of the decision reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against the defendants, and the Court hereby
condemns and orders:

(1). The defendants, as well as their agents, representatives and [assignees-in-interest], to vacate immediately from the
parcels of land in question, and to restore the peaceful possession thereof to the plaintiffs;

(2). The defendants to pay plaintiffs in solidum P15,000.00 as reimbursement of litigation expenses and another sum
of P10,000.00 as reimbursement for attorneys fees, as well as moral damages in the sum of P30,000.00;

(3). Defendants Eduardo Cuizon, Dionie Gersano, Emel Jamero, Eladia Marapao, Manuel Mustajo, Victor Tubal, Carlos Ausa
and Ruben Babatayon (each of them) to pay plaintiffs monthly rental of P10.00 from January 1979 until they shall vacate
and turn over the area in question to the plaintiffs.

In the execution of the judgment herein by ousting the defendants from the parcels of land in question, the plaintiffs shall
and must relocate the above three (3) parcels of land by a license (sic) geodetic engineer so that only those defendants
who are found occupying and within the area of the three (3) parcels of land in question as relocated shall be ordered
ousted therefrom and the defendants or those who are found to be occupying portions outside the boundaries of the
above-described parcels of land should not be molested.

Consequently, the defendants counterclaim is, as it is, hereby DISMISSED, with costs against them.

SO ORDERED.[2]

The defendants did not appeal the decision. Consequently, it became final and executory. On motion of the plaintiffs, the court issued an
Order for the issuance of the writ.[3]Some of the defendants personal properties were levied upon, but the latter refused to remove their
houses and improvements on the property and vacate the same despite demands. On motion of the plaintiffs, the court issued an Alias Writ
94
of Execution. The Deputy Sheriff failed to cause the eviction of the defendants. The plaintiffs filed a Motion before the trial court for a special
order authorizing the Deputy Sheriff to demolish the houses and other improvements on the property. [4] The court granted the motion and
issued a Special Order on June 22, 1995,[5] directing the eviction, not only of the defendants, but also those occupying and squatting on the
property.

As gleaned from the reports of the four deputy sheriffs, the defendants refused to remove their houses and vacate the property
despite their receipt of copies of the courts Special Order. This time, the plaintiffs filed a Motion dated January 18, 1996, praying that the
court issue an order for the demolition of the houses and improvements of the defendants on the subject property. [6]

During the hearing, the parties agreed that the three parcels of land would be relocated by a geodetic engineer to be appointed by
the court. On March 6, 1996, the trial court issued an Order appointing Engineer Honorato Bisnar to conduct a relocation survey of the
property, and to submit his report thereon, thus:

1. To relocate the three (3) parcels of land subject-matter of this case and determine which houses are within the
said property;

2. To submit his report immediately after the completion of the relocation survey for approval by this Court;

3. To allow Sheriffs Samuel Basco, Juan Gonzaga and Bonifacio Betito to be present during the relocation of the
property.[7]

The Engineer complied, and submitted his report on September 12, 1996. The trial court approved the same, there being no
opposition thereto from any of the parties. [8]However, the defendants still refused to demolish their houses and improvements on the
property.

Meanwhile, the PBSAI and the defendants in Civil Case No. 3203, as petitioners, filed a petition for certiorari with this Court wherein
they raised the following issues:

1. Whether the execution of the decision dated August 15, 1985 of the lower court can be done by a mere motion or by
an independent civil action;

2. Whether or not Plaintiffs must relocate the three (3) parcels of land by a licensed geodetic engineer so that only those
defendants who are found occupying and within the area of the three (3) parcels of land in question as relocated shall be
ordered ousted therefrom and the defendants or those who are found to be occupying portions outside the boundaries
of the three (3) parcels of land in question shall not be molested; and,

3. Whether defendants are covered by Executive Order No. 82, as modified by Memorandum Order No. 68 dated January
22, 1987 of the President of the Philippines, and by PCUP Circular No. 1, Series of 1987, pursuant to PCUP Resolution No.
2 87 [dated] July 6, 1987.[9]

95
The case was docketed as G.R. No. 121262. However, the Court resolved to dismiss the petition for failure of petitioners to comply with
Revised Circular No. 1-88 and to submit a verified statement of their receipt of the RTCs Order dated June 22, 1995.[10] The resolution of the
Court became final and executory after the denial of the petitioners motion for reconsideration.[11]

On motion of the plaintiffs, the trial court issued an Order on May 15, 1998 in Civil Case No. 3203 for the issuance of a writ of demolition of
all the buildings, houses, structures or improvements found inside the properties of the plaintiffs, without indicating that such house or
improvement should belong to the defendants. The dispositive portion of the Order reads:

WHEREFORE, the judgment in this case being final and executory and for failure of the defendants to comply with the
Special Order dated June 22, 1995, let a Writ of Demolition be issued for the demolition of all buildings, houses, structures
or improvements found within or inside Lot Nos. 474-B-2-C-6-D-5, 474-B-2-C-6-D-6, and 474-B-2-C-6-D-2, covered by TCT
Nos. 4283, 4284 and 4285.

SO ORDERED.[12]

On May 25, 1998, the trial court issued a Writ of Demolition ordering the Ex-Officio Sheriff to demolish all the improvements, buildings,
houses and structures erected by the defendants found within or inside Lot Nos. 474-B-2-C-6-D-5, 474-B-2-C-6-D-6 and 474-B-2-C-6-D-2
covered by TCT Nos. 4283, 4284 and 4285, belonging to plaintiffs.[13]The Ex-Officio Sheriff prepared and signed a Notice of Demolition to the
defendants stating that all buildings, structures, houses and improvements on the subject property would be demolished between 9:00 a.m.
to 4:00 p.m. on June 15, 1998:

Please take notice that[,] by virtue of the Court Order dated May 15, 1998 issued by the Honorable Evangeline S. Yuipco,
Judge of the Regional Trial Court, Branch 29, Surigao City in the above-entitled case, the undersigned Ex-Officio Sheriff of
Surigao del Norte, Surigao City, thru her legal deputies, on the 15th day of June 1998, between 9:00 A.M. to 4:00 P.M. and
soon thereafter shall proceed to BAGONG SILANG, Surigao City, then and there to DEMOLISH all buildings, houses,
structures or improvements found within or inside Lot Nos. 474-B-2-C-6-D-5[;] TCT Nos. 4283, 4284 and 4285, and to place
Lydia Kaimo, et al. (plaintiffs) in possession of the lots in question.

It is requested that all of you be present in the said lot on the date and hours above-stated.[14]

However, the Deputy Sheriff served copies of said notice not only on the defendants but also on 309 [15] other individuals (who were
not defendants in Civil Case No. 3203) whose houses stood on the plaintiffs property. The Ex-Officio Sheriff informed the trial court of the
service of the copies of the Notice of Demolition in a Progress Report on June 5, 1998.[16]

This prompted eight of the defendants below, namely, Eduardo Cuizon, Dionie Gersano, Emel Jamero, Eladio Marapao, Manuel Mustajo,
Victor Tubal, Carlos Ausa and Ruben Babatayon, to file a Petition for Certiorari in the Court of Appeals (CA) docketed as CA-G.R. No.
48121. They raised the following issues in their petition:

1. Whether the respondent Judge has acted with grave abuse of discretion and in excess of her jurisdiction amounting to
lack thereof when she issued the questioned Order dated May 15, 1998without any findings made by Engr. Honorato
Bisnar regarding the occupancy within the three (3) parcels of lands in issue by the Defendants as relocated for the
enforcement or execution of the Decision dated August 15, 1985.

96
 2. Whether the Decision dated August 15, 1985 which became final and executory on August 28, 1994 can be executed by
a mere motion.

3. Whether the execution of the writ of demolition dated May 25, 1998 contravenes Section 28 of R.A. No. 7279.[17]

The appellate court issued a Temporary Restraining Order on July 1, 1998 enjoining the enforcement of the writ of demolition.[18]

The Deputy Sheriff tried to implement on two occasions the Writ of Demolition issued by the trial court to no avail. On July 1, 1998,
the Deputy Sheriff, this time accompanied by 50 members of the PNP Reserve Unit, some Geodetic Engineers and laborers, tried to implement
the writ. However, the residents, armed with steel bars, sticks, and other deadly weapons blocked the way of the sheriff and his
escorts. Again, the Deputy Sheriff failed to implement the Writ of Demolition because he was shown a copy of the temporary restraining
order issued by the CA in CA-G.R. No. 48121. The Deputy Sheriff opted to stop altogether the demolition of the houses and structures in the
plaintiffs property.

The PBSAI approved a Resolution authorizing the filing of a petition before this Court or any court or administrative body in behalf
of its 309 members whose houses and structures the Deputy Sheriff earlier threatened to demolish.

On August 24, 1998, the PBSAI filed a Petition for Prohibition in this Court against the plaintiffs in Civil Case No. 3203 and the
Presiding Judge in said case, as the respondents. It alleged therein that it was an association of homeowners and settlers, occupants of
portions of the property of the
private respondents. It claimed that the respondent Judge acted with grave abuse of discretion amounting to excess or lack of jurisdiction
when she issued the May 15, 1998 Order, and Writ of Demolition dated May 25, 1998 ordering the demolition of the houses and structures
of 309 of its members who were not defendants in Civil Case No. 3203.

The petitioner also alleged that not being a party to Civil Case No. 3203, it cannot appeal from the said questioned Order dated May 15, 1998
of the respondent Judge, and that it had no plain, speedy and adequate remedy therefrom in the ordinary course of law except through the
filing of the petition.[19]

Petitioner prayed that:

WHEREFORE, premises considered, it is most respectfully prayed that the instant Petition be given due course and that
pending determination of the merits of this Petition, a writ of preliminary injunction or a temporary restraining order be
issued against RESPONDENT JUDGE restraining her from further proceedings in the premises, and after due deliberation
of the issues involved herein, a Writ of Prohibition be issued commanding the RESPONDENT JUDGE to desist absolutely
from further proceeding with the implementation of its questioned Order dated May 15, 1998 and its Writ of Demolition
dated May 25, 1998 against the houses, structures or improvements owned by the members of PETITIONER Association
who are not parties to Civil Case No. 3203, with costs.

PETITIONER Association further pray for such other relief or remedy that may be deem[ed] just and equitable in the
premises.[20]

In their Comment on the petition, the private respondents averred that: (1) the 65 defendants in Civil Case No. 3203, not the petitioner, are
the real parties-in-interest to assail the May 15, 1998 Order and May 25, 1998 Writ of Demolition of the respondent Judge; (2) eight of the
defendants below, who were the petitioners in CA-G.R. No. 48121, are guilty of forum-shopping; (3) the service of the copies of the notice of
demolition on persons who were not the defendants below was of no consequence because, as stated in the decision of the court and the

97
notice of demolition issued in Civil
Case No. 3203, only the houses and improvements of the defendants below found in the properties of the plaintiffs were to be demolished
by the Deputy Sheriff.

The threshold issues for resolution are: (1) whether the petitioner is the real party-in-interest in this case; (2) whether the petition filed in
this Court is appropriate; and (3) whether the respondent Judge committed a grave abuse of discretion amounting to excess or lack of
jurisdiction in issuing the May 25, 1998 Writ of Demolition.

The petition is dismissed.

On the first issue, the rule is that all actions must be prosecuted and defended by the real parties-in-interest and in the name of the real
party-in-interest.[21] The party whose legal right has been invaded or infringed or who sustained an injury is the only one who can maintain
the action;[22] or the party who stands to be benefited or injured by the judgment in the suit. He must appear to be the present owner of the
right sought to be enforced.[23] An association has the legal personality to represent its members and the outcome of the case will affect their
vital interests.[24] Thus, in Executive Secretary v. Court of Appeals,[25] the Court ruled that the modern view is that an association has standing
to complain an injury to its members. This view focuses the legal identity of an association with that of its members. An association has
standing to file suit for its members despite its lack of direct interest if its members are affected by the action; similarly, an organization has
standing to assert the concern of its constituents.

We, however, note that petitioner sought relief from this Court for a writ of prohibition under Rule 65 of the Rules of Court. Where the
issuance of an extraordinary writ is also within the competence of the CA or the RTC, it is in either of these courts that the specific action for
the issuance of such writ must be proscribed unless special and important laws are clearly and specifically set forth in the petition. The reason
for this is that the Court is a court of last resort and must so remain if it is to satisfactorily perform the functions assigned to it by the
Constitution and immemorial tradition. It cannot and should not be burdened with the task of deciding cases in the first instance. Its original
jurisdiction to issue extraordinary writs should be exercised only where absolutely necessary or where serious and important reasons exist
therefor.[26]

Petitioner has not alleged, in its petition, any special and important reasons why it sought relief from this Court for a writ of prohibition before
seeking relief in the respondent court or the CA.

On the third issue, petitioner failed to establish that the respondent Judge committed grave abuse of her discretion in issuing the May 25,
1998 Writ of Demolition. Under the decision of the respondent Judge, the defendants therein were directed to be evicted from the property
of the respondents and ordered to return possession of the property to the latter. The respondent Judge neither ordered the eviction of any
other person occupying the property of the respondents other than the defendants, nor ordered the Ex-Officio Sheriff to demolish the houses
or structures of any person other than the defendants. Thus, the dispositive portion of the writ reads:

NOW THEREFORE, we command you to demolish the improvements, buildings, houses, and structures erected by the
defendants found within or inside Lot Nos. 474-B-2-C-6-D-5, 474-B-2-C-6-D-6, and 474-B-2-C-6-D-2 covered by TCT Nos.
4283, 4284, and 4285, belonging to the plaintiffs located at Bagong Silang, Barangay Washington, Surigao City.

This Writ shall be returned by you to this Court, within ten (10) days from the date of receipt hereof, together with your
proceedings indorsed hereon.[27]

What precipitated the complaint of the petitioners 309 members who were not the defendants in Civil Case No. 3203 was the Notice
of Demolition issued by the Ex-Officio Sheriff, copies of which were served on all 309 members who were not parties in Civil Case No. 3203. It
declared that the houses and improvements of the defendants, as well as the houses and structures of persons occupying and/or squatting
in the property of the respondents, would be demolished. The Notice of Demolition of the Ex-Officio Sheriff was based on the June 22,
1995 Order of the respondent Judge which reads:

98
 WHEREFORE, and for being meritorious, the aforesaid motion is hereby GRANTED. As a consequence thereof, a
Special Order is issued ordering each of the defendants, their agents, or representatives or other persons acting in their
behalf or occupying or squatting on subject properties, to demolish or remove their respective improvements themselves
not later than sixty (60) days from receipt of this Special Order.

Serve a copy of this order to each of the defendants and their counsel Atty. Villaluz and to be enforced by the
Sheriffs Juan Gonzaga, Samuel Basco, and Bonifacio Betito of this Court.The setting of his opposition on June 30 is
cancelled.

SO ORDERED. (Underscoring supplied)[28]

As worded, the order of the respondent Judge deviated from her decision that only the defendants would be evicted from the
property. Clearly, the June 22, 1995 Order of the respondent Judge and the Notice of Demolition of the Ex-Officio Sheriff cannot be enforced
against the 309 members of the petitioner who were not parties in Civil Case No. 3203 because only the parties in said case are bound by the
decision and the concomitant orders therein. Strangers to the case are not bound by the decision in Civil Case No. 3203 or the proceedings
taken therein.[29]

Thus, the 309 members of the petitioner who were not parties in Civil Case No. 3203 but whose houses and structures were threatened to
be demolished by the Ex-Officio Sheriff had the right to complain and seek
relief from the Ex-Officio Provincial Sheriff, from respondent court, or from the CA.

Section 2, Rule 65 of the Rules of Court provides:

Sec. 2. Petition for prohibition. When the proceedings of any tribunal, corporation, board, officer or person, whether
exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of its or his jurisdiction, and there is no appeal or any other plain, speedy,
and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent to desist from
further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice
may require.

A writ of prohibition is an extraordinary writ. It may be issued only in the absence of a plain, speedy and adequate remedy in the
ordinary course of law. Indeed, in Esquivel v. Hon. Ombudsman,[30] this Court ruled that:

x x x [A] writ of prohibition will not be issued against an inferior court unless the attention of the court whose
proceedings are sought to be stayed has been called to the alleged lack or excess of jurisdiction. The foundation of this rule
is the respect and consideration due to the lower court and the expediency of preventing unnecessary litigation; it cannot
be presumed that the lower court would not properly rule on a jurisdictional objection if it were property presented to it. x
x x[31] (citations omitted)

The petitioner and/or its 309 members who were not parties in Civil Case No. 3203 had a speedy, adequate, and plain remedy in
the course of law. They had the right to request the Ex-Officio Provincial Sheriff to refrain from causing the demolition of their houses and
improvements on the subject property since they were not the defendants in Civil Case No. 3203. They even failed to file a Motion Ex
Abundante Cautelam before the respondent Judge for her to amend the May 25, 1998 Writ of Demolition so as to exclude therefrom their
houses and improvements. They could have filed a petition for certiorari against the respondents with the CA for the nullification of the May

99
25, 1998 Writ of Demolition and for prohibition to enjoin the private respondents from implementing said Writ since they were not the
defendants in Civil Case No. 3203.

Moreover, there was no urgency for the petitioner or its 309 members to file their petition in this Court considering that, earlier, on
July 1, 1998, the CA had already issued a temporary restraining order in CA-G.R. No. 48121, on the basis of which the Ex-Officio Sheriff stopped
implementing the May 25, 1998 Writ of Demolition issued by the respondent Judge.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED on procedural grounds and for lack of merit. Costs against petitioner.

SO ORDERED.

18. Lim vs. Vianzon 497 SCRA 482 , August 03, 2006

THIRD DIVISION
CARMELITA V. LIM and G.R. No. 137187

VICARVILLE REALTY and

DEVELOPMENT CORPORATION, Present:

Petitioners,

QUISUMBING, J.,

Chairperson,

CARPIO,

- versus - CARPIO MORALES,

TINGA, and

VELASCO, JR., JJ.

HON. BENJAMIN T. VIANZON

in his capacity as the Presiding Promulgated:

Judge of Branch 1 of the Regional

Trial Court of Bataan and VALENTIN August 3, 2006

GARCIA and CONCEPCION GARCIA,

Respondents.

x--------------------------------------------------------------------------x

DECISION

TINGA, J.:

100
Before us is a Petition[1] for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure filed by Carmelita V. Lim (Lim) and Vicarville Realty
and Development Corporation (Vicarville), assailing the Orders[2] dated 3 September 1998 and 13 November 1998 issued by public
respondent Benjamin T. Vianzon of Regional Trial Court (RTC) of Balanga, Bataan, Branch 1 in Civil Case No. 6779, entitled Sps. Valentin and
Concepcion Garcia v. Carmelita V. Lim and Vicarville Realty and Development Corporation. The assailed orders allegedly denied perfunctorily
petitioners Motion to Dismiss dated 23 June 1998 and Motion for Reconsideration dated 25 September 1998, respectively.

The antecedents follow.

On 21 November 1997, petitioner Lim filed a Complaint Affidavit[3] before the Office of the Provincial Prosecutor of Balanga, Bataan, docketed
as I.S. No. 97-984, against Valentin Garcia (Garcia) for Falsification and Perjury. Lim alleged that Garcia willfully and deliberately asserted a
falsehood in an affidavit he had submitted to the Register of Deeds of Balanga, Bataan. In said affidavit, Garcia allegedly stated falsely that
he had lost his owners duplicate copy of Transfer Certificate of Title (TCT) No. 107535 after entrusting the same to his agent for purposes of
selling the property covered by the title. [4]

On 2 February 1998, Garcia filed before the Office of the Provincial Prosecutor a separate Affidavit/Complaint and Counter-Affidavit[5] against
petitioner Lim, Villamon Fernandez and Corazon Rueda for Falsification of Public Document and Use of Falsified Document, docketed as I.S.
No. 98-095.[6]

On 20 February 1998, the Office of the Provincial Prosecutor of Bataan consolidated the complaints in I.S. No. 97-984 and I.S. No. 98-
095.[7] And on 17 March 1998, the Provincial Prosecutor issued a Joint Resolution[8] recommending the filing of criminal charges against Garcia
and dismissing the charges filed by the latter against petitioner Lim, Fernandez and Rueda.[9] The dispositive portion of the Joint Resolution
reads as follows:

WHEREFORE, premises considered, it is recommended that an information for Violation of Article 183 of the Revised Penal
Code be filed against Valentin Garcia, and the dismissal of the charge of Falsification also against Valentin Garcia. And
accordingly, the counter charges of Valentin Garcia against Carmelita Lim, Corazon Rueda, and Villamon Fernandez are
hereby dismissed.

SO RESOLVED.[10]

On 29 April 1998, Garcia and his wife Concepcion Garcia (private respondents) filed a Complaint[11] before RTC of Balanga, Bataan, Branch 1
for Delivery of The Owners Duplicate Certificate of Title and Damages involving the same TCT subject of the criminal case. Private respondents
principally prayed for the annulment of the alleged Deed of Sale which petitioners claim to be the basis for their custody of the TCT.[12] The
case was docketed as Civil Case No. 6779.[13]

Attached to private respondents Complaint is a Certification and Verification[14] Garcia had executed which reads in part:

xxxx

That he is one of the plaintiffs in the foregoing Complaint;

101
 That he has caused the preparation of the said Complaint the allegations of which he has read and found to be true and
correct;

That except for the criminal actions which are pending before the Office of the Provincial Prosecutor of Bataan, he has not
heretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency
and, to the best of his knowledge, no such other action or claim is pending therein;

That if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that
fact within five (5) days therefrom to this Honorable Court x x x x[15]

Thereafter, Garcia filed before the Office of the Provincial Prosecutor a Petition for Suspension of Criminal Action Based Upon The Pendency
of A Prejudicial Question.[16]Garcia prayed that the criminal action before said office be suspended pending the resolution of Civil Case No.
6779. This petition was later denied by the Office of the Provincial Prosecutor on 13 October 1998.[17]

On 24 June 1998, the petitioners filed before the RTC of Balanga, Bataan, Branch 1 a Motion to Dismiss raising the following grounds: a)
private respondents violated the rule against forum-shopping in that they failed to state in the Verification and Certification attached to the
Complaint that there is an earlier case filed by petitioners (sic) against them (sic) not only involving the same issues but also the same set of
facts; and b) the claim set forth in private respondents Complaint had been extinguished by the previous sale of the property to the
petitioners.[18]

Public respondent then issued the assailed Order[19] dated 3 September 1998 denying the petitioners Motion to Dismiss in this wise:

Finding the Motion to Dismiss filed by the defendants and the grounds relied upon to be unmeritorious, the same is
DENIED.

WHEREFORE, the Motion to Dismiss is hereby DENIED for the lack of merit.

SO ORDERED.[20]

Petitioners filed their Motion for Reconsideration on 25 September 1998 which public respondent likewise denied in an Order[21] dated 13
November 1998. A portion of said Order reads as follows:

xxxx

That the courts order dated September 3, 1998 is a mere interlocutory order and not a final judgment or decision where
there is a need for the court to state clearly the facts and the law relied upon by it;
102
 That as correctly pointed out by the plaintiffs counsel, for forum shopping to be present, both actions must raise identical
causes of action, subject matter and issues and there can be no forum-shopping in the instant civil case because as a civil
action, it has a different cause of action from a criminal action instituted by the defendants; [22]

Meanwhile, on 13 October 1998, an Information was filed by the Provincial Prosecutor against Garcia before the Municipal Trial Court of
Balanga, Bataan, Branch 1 for Violation of Article 183 of the Revised Penal Code. The case is entitled People of the Philippines v. Valentin
Garcia, docketed as Criminal Case No. 7266.[23]

In their Memorandum[24] dated 29 June 2002, petitioners allege that public respondent gravely abused his discretion when he denied the
motion to dismiss per his Order dated 3 September 1998, without stating therein clearly and distinctly the reasons therefor. Petitioners also
assert that the private respondents violated the rule against forum-shopping for failing to state that they had previously filed a case involving
the same facts, issues and parties and that there is an earlier criminal case filed by petitioner Lim against respondent Garcia also involving
the same issues and facts. Petitioners likewise state that the claim set forth in private respondents Complaint has been extinguished by the
previous sale of the property to them.[25]

In their Memorandum[26] dated 30 November 2001, private respondents point out that petitioners failed to attach the pleadings and
documents required by Section 1, Rule 65 of the 1997 Rules of Civil Procedure. They enumerated the pleadings or documents, copies of which
petitioners failed to attach or incorporate, to wit: (a) Motion to Dismiss dated 23 June 1998; (b) Opposition to the Motion to Dismiss dated
13 July 1998; (c) Reply dated 27 July 1998; (d) Rejoinder dated 31 August 1998; (e) Motion for Reconsideration dated 25 September 1998;
and (f) Opposition dated 26 October 1998.[27] Citing Santiago, Jr. v. Bautista,[28] private respondents maintain that such failure is fatal to
petitioners cause.[29]

Moreover, private respondents maintain that they are not guilty of forum-shopping because the cause of action of the civil action they
instituted is different from that of a criminal action.[30]

We dismiss the petition.

On the procedural aspect, we find that petitioners disregarded the doctrine of judicial hierarchy which we enjoin litigants and lawyers to
strictly observe. The Courts original jurisdiction to issue writs of certiorari, as in the case at bar, prohibition, mandamus, quo warranto, habeas
corpus and injunction is shared by this Court with the Regional Trial Courts and the Court of Appeals. A direct invocation of the Supreme
Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and
specifically set out in the petition. This is an established policy necessary to avoid inordinate demands upon the Courts time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to preclude the further clogging of the Courts docket.[31]

In the instant petition, petitioners failed to show any compelling reason why they filed it before us instead of the Court of Appeals. For this
reason, among others, the petition must fail. We recall our ruling in Vergara, Sr. v. Suelto,[32] thus:

The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions
assigned to it by the fundamental charter and immemorial tradition. It cannot and should not be burdened with the task
of dealing with causes in the first instance. Its original jurisdiction to issue the so-called extraordinary writs should be
exercised only where absolutely necessary or where serious and important reasons exist therefor. Hence, that jurisdiction
should generally be exercised relative to actions or proceedings before the Court of Appeals, or before constitutional or
other tribunals, bodies or agencies whose acts for some reason or another, are not controllable by the Court of Appeals.
Where the issuance of an extraordinary writ is also within the competence of the Court of Appeals or a Regional Trial Court,
it is in either of these courts that the specific action for the writs procurement must be presented. This is and should
continue to be the policy in this regard, a policy that courts and lawyers must strictly observe. [33]

103
Moreover, the instant petition is procedurally flawed as it is not accompanied by copies of relevant pleadings mandated by the second
paragraph of Section 1, Rule 65 of the 1997 Rules of Civil Procedure. Said provision reads as follows:

SECTION 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or quasi-judicial functions has
acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such
incidental reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies
of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as
provided in the third paragraph of Section 3, Rule 46. (Emphasis supplied.)

Specifically, as pointed out by respondents, the instant petition is not accompanied by copies of the Motion to Dismiss and Motion for
Reconsideration that petitioners filed with the trial court. These are documents important for the Courts appraisal, evaluation and judicious
disposition of the case. Failing to fully apprise the Court of the relevant details of the case, we find this egregious error a sufficient cause for
the dismissal of the instant petition. As held in Santiago, Jr. v Bautista,[34] to wit:

x x x the lower courts holding that appellants failure to accompany his petition with a copy of the judgment or order subject
thereof together with copies of all pleadings and documents relevant and pertinent thereto is fatal to his cause is
supported not only by the provision of that Rule but by precedents as well. [35]

A party who seeks to avail of the extraordinary remedy of certiorari must observe the rules laid down by law, and non-observance of the said
rules may not be brushed aside as mere technicality.[36]

In any case, even on the substantive aspect, the petition fails to persuade us. While we agree with petitioners lament that the Order dated 3
September 1998 is defective as it did not state clearly and distinctly the reasons for the denial of petitioners Motion to Dismiss, it is
noteworthy, however, that public respondent corrected his error in the Order dated 13 November 1998 denying petitioners motion for
reconsideration. There is no objection to a judge correcting or altogether altering his case disposition on a motion for reconsideration, it
being the purpose of such recourse to provide the court an opportunity to cleanse itself of an error unwittingly committed, or, with like effect,
to allow the aggrieved party the chance to convince the court that its ruling is erroneous. A motion for reconsideration before resort to
certiorari is required precisely to afford the public respondent an opportunity to correct any actual or fancied error attributed to it by way of
re-examination of the legal and factual aspects of the case. [37]

Parenthetically, assuming that the two orders were erroneous, such error would merely be deemed as an error of judgment that cannot be
remedied by certiorari. As long as the public respondent acted with jurisdiction, any error committed by him or it in the exercise thereof will
amount to nothing more than an error of judgment which may be reviewed or corrected only by appeal. All errors committed in the exercise
of such jurisdiction are merely errors of judgment. Certiorari under Rule 65 is a remedy designed for the correction of errors of jurisdiction
and not errors of judgment. Petitioners rights can be more appropriately addressed in an appeal. [38]

Significantly, even if we accord merit to petitioners contention that public respondent denied their Motion to Dismiss perfunctorily, it does
not follow that the motion to dismiss should have been granted or that the conclusion should be that public respondent had acted with grave
abuse of discretion.

104
The Motion to Dismiss, as earlier noted, is predicated on two grounds, namely: breach of the forum-shopping rule and extinguishment of the
cause of action by the previous sale of the property involved to them.

Forum-shopping exists when the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in
another. Litis pendentia requires the concurrence of the following requisites: (1) identity of parties, or at least such parties as those
representing the same interests in both actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same
facts; and (3) identity with respect to the two preceding particulars in the two cases, such that any judgment that may be rendered in the
pending case, regardless of which party is successful would amount to res adjudicata in the other case.[39]

What is pivotal in determining whether forum-shopping exists or not is the vexation caused the courts and parties-litigants by a party who
asks different courts and/or administrative agencies to rule on the same or related causes and/or grant the same or substantially the same
reliefs, in the process creating possibility of conflicting decisions being rendered by the different courts and/or administrative agencies upon
the same issues.[40]

On this issue, we hold that private respondents were not mandated to disclose the status of the criminal cases. This is so because, as asserted
by private respondents, there is no identity of the causes of action, issues and reliefs prayed for in the criminal cases and the civil case.
The subject matter in I.S. No. 97-984 is whether

criminal actions for Falsification and Perjury should be instituted against Garcia. The principal issue in I.S. No. 98-095 is similarly whether a
criminal complaint for Falsification and Use of A Falsified Document should be filed against Carmelita Lim, Villamon Fernandez and Corazon
Rueda. The principal issue raised in Civil Case No. 6779 is the validity of the alleged Deed of Sale which petitioners claim to be the basis for
their custody of the subject transfer certificate of title.

Anent the contention that private respondents complaint has been extinguished by their sale of the property to the petitioners, this is a
matter best threshed out through a full-blown trial.

In sum, the viability of the instant petitions is irreversibly neutered by the procedural deficiencies thereof and the absence of grave abuse of
discretion on public respondents part.

WHEREFORE, the petition is DISMISSED Costs against petitioners.

SO ORDERED.

19. Springfield Development Corporation, Inc. vs. Presiding Judge, RTC, Misamis Oriental, Br. 40, Cagayan de Oro City 514 SCRA
326 , February 06, 2007

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. NO. 142628 February 6, 2007

105
SPRINGFIELD DEVELOPMENT CORPORATION, INC. and HEIRS OF PETRA CAPISTRANO PIIT, Petitioners,
vs.
HONORABLE PRESIDING JUDGE OF REGIONAL TRIAL COURT OF MISAMIS ORIENTAL, BRANCH 40, CAGAYAN DE ORO CITY, DEPARTMENT
OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB), DAR REGION X DIRECTOR, ROSALIO GAMULO, FORTUNATO TELEN, EMERITA
OLANGO, THERESA MONTUERTO, DOMINGO H. CLAPERO, JOEL U. LIM, JENEMAIR U. POLLEY, FIDELA U. POLLEY, JESUS BATUTAY,
NICANOR UCAB, EMERIA U. LIM, EMILITO CLAPERO, ANTONINA RIAS, AURILLIO ROMULO, ERWIN P. CLAPERO, EVELITO CULANGO,
VILMA/CRUISINE ALONG, EFREN EMATA, GREGORIO CABARIBAN, and SABINA CANTORANA, Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court. The principal issue presented for resolution is
whether the Regional Trial Court (RTC) has jurisdiction to annul final judgment of the Department of Agrarian Reform Adjudication Board
(DARAB).

The antecedent facts:

Petra Capistrano Piit previously owned Lot No. 2291 located in Cagayan de Oro City which measured 123,408 square meters under Transfer
Certificate of Title No. T-62623. Springfield Development Corporation, Inc. (Springfield) bought Lot No. 2291-C with an area of 68,732
square meters, and Lot No. 2291-D with an area of 49,778 square meters.1 Springfield developed these properties into a subdivision project
called Mega Heights Subdivision.2

On May 4, 1990, the Department of Agrarian Reform (DAR), through its Municipal Agrarian Reform Officer, issued a Notice of
Coverage,3 placing the property under the coverage of Republic Act (R.A.) No. 6657 or the Comprehensive Agrarian Reform Law of 1988.
There being an opposition from the heirs of Petra Piit, the case was docketed as DARAB Case No. X-305. On August 27, 1991, DARAB
Provincial Adjudicator Abeto A. Salcedo, Jr. rendered a decision declaring the nature of the property as residential and not suitable for
agriculture.4 The Regional Director filed a notice of appeal, which the Provincial Adjudicator disallowed for being pro forma and
frivolous.5 The decision became final and executory6 and Springfield proceeded to develop the property.7

The DAR Regional Director then filed a petition for relief from judgment of the DARAB Decision, docketed as DARAB Case No. 0555. In its
Decision dated October 5, 1995, the DARAB granted the petition and gave due course to the Notice of Coverage. It also directed the
Municipal Agrarian Reform Office to proceed with the documentation, acquisition, and distribution of the property to the true and lawful
beneficiaries.8

The DARAB also issued an Order dated May 22, 1997, ordering the heirs of Piit and Springfield to pay the farmer-beneficiaries the amount
of Twelve Million, Three Hundred Forty Thousand, Eight Hundred Pesos (₱12,340,800.00), corresponding to the value of the property since
the property has already been developed into a subdivision.

On June 13, 1997, Springfield and the heirs of Piit (petitioners) filed with the RTC of Cagayan de Oro City, Branch 40, a petition for
annulment of the DARAB Decision dated October 5, 1995 and all its subsequent proceedings. Petitioners contend that the DARAB decision
was rendered without affording petitioners any notice and hearing.9

On motion filed by the farmer-beneficiaries, the RTC issued an Order dated June 25, 1997, dismissing the case for lack of jurisdiction. 10

On July 2, 1997, petitioners filed with the Court of Appeals (CA) a special civil action for certiorari, mandamus, and prohibition with prayer
for the issuance of writ of preliminary injunction and/or temporary restraining order, docketed as CA-G.R. SP No. 44563.11 Petitioners
alleged that the RTC committed grave abuse of discretion when it ruled that the annulment of judgment filed before it is actually an action
for certiorari in a different color. According to petitioners, what it sought before the RTC is an annulment of the DARAB Decision and not
certiorari, as the DARAB Decision is void ab initio for having been rendered without due process of law. 12

In the assailed Decision13 dated July 16, 1998, the CA dismissed the petition for lack of merit, ruling that the RTC does not have jurisdiction
to annul the DARAB Decision because it is a co-equal body.14

However, on January 12, 1999, the CA ordered the elevation of the DARAB records before it, declaring that it "overlooked the fact that
petitioners likewise applied for a writ of prohibition against the enforcement of the DARAB decision which they claim to be patently
void."15 Forwarded to the CA were the records of the original case filed with the DARAB-Region X, and it appearing that the petition for
106
relief from judgment and its pertinent records were forwarded to the DARAB Central Office, the CA issued another Resolution on December
20, 1999,16 requiring the DARAB Central Office to forward the records of the case. But after receipt of the records, the CA simply denied
petitioners' motion for reconsideration per Resolution 17 dated February 23, 2000 without specifically resolving the issues raised concerning
the prayer for a writ of prohibition.

Hence, the present petition on the following grounds:

THE COURT OF APPEALS COMMITTED A CLEAR ERROR OF LAW IN APPLYING THE PRINCIPLE OF JUDICIAL STABILITY TO JUSTIFY ITS
CONCLUSION DIVESTING THE REGIONAL TRIAL COURT OF ITS JURISDICTION VESTED BY LAW OVER CASES WHERE THE EXCLUSIVE
JURISDICTION WAS NOT EXPRESSLY GRANTED TO ANY OTHER COURTS [SIC] OR TRIBUNAL, IN EFFECT, MODIFYING THE
APPLICABLE LAW ON THE MATTER.

II

THE COURT OF APPEALS IRREGULARLY DISMISSED PETITIONERS' MOTION FOR RECONSIDERATION AFTER IT HAD RESOLVED TO
ENTERTAIN PETITIONERS' PETITION FOR PROHIBITION AND TO REVIEW THE DARAB PROCEEDINGS, THEREBY DEPARTING FROM
THE USUAL COURSE OF JUDICIAL PROCEEDINGS.

III

THE HONORABLE SUPREME COURT, BEING THE HIGHEST TEMPLE OF RIGHTS, AND TO AVOID SERIOUS MISCARRIAGE OF JUSTICE
AND NEEDLESS DELAYS, IS MOST RESPECTFULLY URGED TO TAKE COGNIZANCE OF THE PETITION FILED IN CA-G.R. SP No. 44563 IN
THE EXERCISE OF ITS CONCURRENT JURISDICTION, AS IF THE PETITION WAS ORIGINALLY LODGED BEFORE IT.18

Petitioners argue that under Batas Pambansa (B.P.) Blg. 129, there is no provision that vests with the CA jurisdiction over actions for
annulment of DARAB judgments. Petitioners, however, contend that the RTC may take cognizance of the annulment case since Section 19
of B.P. Blg. 129 vests the RTC with general jurisdiction and an action for annulment is covered under such general jurisdiction. According to
petitioners, "this is but a logical consequence of the fact that no other courts were expressly given the jurisdiction over such
actions."19 Petitioners further argue that the CA was in error when it summarily ignored their application for a writ of prohibition, as it was
necessary to restrain the DARAB from enforcing its void decision; and even if the DARAB decision was valid, the writ of prohibition could
have enjoined the execution of the DARAB decision since there have been changes which will make the execution unjust and inequitable.

In their Joint-Comments, the farmer-beneficiaries and the DARAB (respondents) refute petitioners' allegation that they were not afforded
due process in the DARAB proceedings, stating that petitioners were impleaded as a party thereto, and in fact, they attended some of the
hearings although their counsel was absent. Respondents also adopt the CA's ruling that the RTC is not vested with any jurisdiction to annul
the DARAB decision.

As stated at the outset, the main issue in this case is whether the RTC has jurisdiction to annul a final judgment of the DARAB.

Note must be made that the petition for annulment of the DARAB decision was filed with the RTC on June 13, 1997, before the advent of
the 1997 Rules of Civil Procedure, which took effect on July 1, 1997. Thus, the applicable law is B.P. Blg. 129 or the Judiciary Reorganization
Act of 1980, enacted on August 10, 1981.

It is also worthy of note that before the effectivity of B.P. Blg. 129, a court of first instance has the authority to annul a final and executory
judgment rendered by another court of first instance or by another branch of the same court. This was the Court's ruling in Dulap v. Court
of Appeals.20 Yet, in subsequent cases,21 the Court held that the better policy, as a matter of comity or courteous interaction between
courts of first instance and the branches thereof, is for the annulment cases to be tried by the same court or branch which heard the main
action.

The foregoing doctrines were modified in Ngo Bun Tiong v. Sayo,22 where the Court expressed that pursuant to the policy of judicial
stability, the doctrine of non-interference between concurrent and coordinate courts should be regarded as highly important in the
administration of justice whereby the judgment of a court of competent jurisdiction may not be opened, modified or vacated by any court
of concurrent jurisdiction.

107
With the introduction of B.P. Blg. 129,23 the rule on annulment of judgments was specifically provided in Section 9(2), which vested in the
then Intermediate Appellate Court (now the CA) the exclusive original jurisdiction over actions for annulment of judgments of RTCs. Sec.
9(3) of B.P. Blg. 129 also vested the CA with "exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or
awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of sub-paragraph (1) of the
third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948." As provided in paragraph 16 of
the Interim Rules and Guidelines implementing B.P. Blg. 129, the quasi-judicial bodies whose decisions are exclusively appealable to the CA
are those, which under the law, R.A. No. 5434,24 or its enabling acts, are specifically appealable to the CA.

Significantly, B.P. Blg. 129 does not specifically provide for any power of the RTC to annul judgments of quasi-judicial bodies. However, in BF
Northwest Homeowners Association, Inc. v. Intermediate Appellate Court,25 the Court ruled that the RTCs have jurisdiction over actions for
annulment of the decisions of the National Water Resources Council, which is a quasi-judicial body ranked with inferior courts, pursuant to
its original jurisdiction to issue writs of certiorari, prohibition, and mandamus, under Sec. 21(1) of B.P. Blg. 129, in relation to acts or
omissions of an inferior court. This led to the conclusion that despite the absence of any provision in B.P. Blg. 129, the RTC had the power
to entertain petitions for annulment of judgments of inferior courts and administrative or quasi-judicial bodies of equal ranking. This is
also in harmony with the "pre-B.P. Blg. 129" rulings of the Court recognizing the power of a trial court (court of first instance) to annul final
judgments.26 Hence, while it is true, as petitioners contend, that the RTC had the authority to annul final judgments, such authority
pertained only to final judgments rendered by inferior courts and quasi-judicial bodies of equal ranking with such inferior courts.

The foregoing statements beg the next question, i.e., whether the DARAB is a quasi-judicial body with the rank of an inferior court such
that the RTC may take cognizance of an action for the annulments of its judgments. The answer is no.

The DARAB is a quasi-judicial body created by Executive Order Nos. 229 and 129-A. R.A. No. 6657 delineated its adjudicatory powers and
functions. The DARAB Revised Rules of Procedure adopted on December 26, 1988 27specifically provides for the manner of judicial review of
its decisions, orders, rulings, or awards. Rule XIV, Section 1 states:

SECTION 1. Certiorari to the Court of Appeals. Any decision, order, award or ruling by the Board or its Adjudicators on any agrarian dispute
or on any matter pertaining to the application, implementation, enforcement or interpretation of agrarian reform laws or rules and
regulations promulgated thereunder, may be brought within fifteen (15) days from receipt of a copy thereof, to the Court of Appeals by
certiorari, except as provided in the next succeeding section. Notwithstanding an appeal to the Court of Appeals the decision of the Board
or Adjudicator appealed from, shall be immediately executory.

Further, the prevailing 1997 Rules of Civil Procedure, as amended, expressly provides for an appeal from the DARAB decisions to the CA. 28

The rule is that where legislation provides for an appeal from decisions of certain administrative bodies to the CA, it means that such bodies
are co-equal with the RTC, in terms of rank and stature, and logically, beyond the control of the latter. 29

Given that DARAB decisions are appealable to the CA, the inevitable conclusion is that the DARAB is a co-equal body with the RTC and its
decisions are beyond the RTC's control. The CA was therefore correct in sustaining the RTC's dismissal of the petition for annulment of the
DARAB Decision dated October 5, 1995, as the RTC does not have any jurisdiction to entertain the same.

This brings to fore the issue of whether the petition for annulment of the DARAB judgment could be brought to the CA. As previously noted,
Section 9(2) of B.P. Blg. 129 vested in the CA the exclusive original jurisdiction over actions for annulment of judgments, but only those
rendered by the RTCs. It does not expressly give the CA the power to annul judgments of quasi-judicial bodies. Thus, in Elcee Farms, Inc. v.
Semillano,30 the Court affirmed the ruling of the CA that it has no jurisdiction to entertain a petition for annulment of a final and executory
judgment of the NLRC, citing Section 9 of B.P. Blg. 129, as amended, which only vests in the CA "exclusive jurisdiction over actions for
annulment of judgments of Regional Trial Courts." This was reiterated in Galang v. Court of Appeals,31where the Court ruled that that the
CA is without jurisdiction to entertain a petition for annulment of judgment of a final decision of the Securities and Exchange Commission.

Recent rulings on similar cases involving annulments of judgments of quasi-judicial bodies are also quite instructive on this matter.

In Cole v. Court of Appeals,32 involving an annulment of the judgment of the HLURB Arbiter and the Office of the President (OP), filed with
the CA, the Court stated that, "(U)nder Rule 47 of the Rules of Court, the remedy of annulment of judgment is confined to decisions of the
Regional Trial Court on the ground of extrinsic fraud and lack of jurisdiction x x x." The Court further ruled, viz.:

Although the grounds set forth in the petition for annulment of judgment are fraud and lack of jurisdiction, said petition cannot prosper for
the simple reason that the decision sought to be annulled was not rendered by the Regional Trial Court but by an administrative agency
108
(HLU Arbiter and Office of the President), hence, not within the jurisdiction of the Court of Appeals. There is no such remedy as
annulment of judgment of the HLURB or the Office of the President. Assuming arguendo that the annulment petition can be treated as a
petition for review under Rule 43 of the 1997 Rules of Civil Procedure, the same should have been dismissed by the Court of Appeals,
because no error of judgment was imputed to the HLURB and the Office of the President. Fraud and lack of jurisdiction are beyond the
province of petitions under Rule 43 of the Rules of Court, as it covers only errors of judgment. A petition for annulment of judgment is an
initiatory remedy, hence no error of judgment can be the subject thereof. Besides, the Arbiter and the Office of the President indisputably
have jurisdiction over the cases brought before them in line with our ruling in Francisco Sycip, Jr. vs. Court of Appeals, promulgated on
March 17, 2000, where the aggrieved townhouse buyers may seek protection from the HLURB under Presidential Decree No. 957,
otherwise known as "Subdivision and Condominium Buyers' Protective Decree."33 (Emphasis supplied)

In Macalalag v. Ombudsman,34 the Court ruled that Rule 47 of the 1997 Rules of Civil Procedure on annulment of judgments or final orders
and resolutions covers "annulment by the Court of Appeals of judgments or final orders and resolutions in civil actions of Regional Trial
Courts for which the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies could no longer be availed of
through no fault of the petitioner." Thus, the Court concluded that judgments or final orders and resolutions of the Ombudsman in
administrative cases cannot be annulled by the CA, more so, since The Ombudsman Act specifically deals with the remedy of an aggrieved
party from orders, directives and decisions of the Ombudsman in administrative disciplinary cases only, and the right to appeal is not to be
considered granted to parties aggrieved by orders and decisions of the Ombudsman in criminal or non-administrative cases.

While these cases involve annulments of judgments under the 1997 Rules of Civil Procedure, as amended, still, they still find application in
the present case, as the provisions of B.P. Blg. 129 and the 1997 Rules of Civil Procedure, as amended, on annulment of judgments are
identical.

Consequently, the silence of B.P. Blg. 129 on the jurisdiction of the CA to annul judgments or final orders and resolutions of quasi-judicial
bodies like the DARAB indicates its lack of such authority.

Further, petitioners are also asking the Court to take cognizance of their prayer for the issuance of a writ of prohibition, which they claim
was not acted upon by the CA, citing the Court's action in Fortich v. Corona 35 where the Court took cognizance of the petition previously
filed with the CA due to compelling reasons. The Court is not persuaded to do so.

Fortich involved a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned by the Norberto Quisumbing, Sr. Management and
Development Corporation (NQSRMDC), which was leased as a pineapple plantation to Del Monte Philippines, Inc. for a period of 10 years.
During the existence of the lease, the DAR placed the entire 144-hectare property under compulsory acquisition and assessed the land
value at ₱2.38 million. When the NQSRMDC/BAIDA (Bukidnon Agro-Industrial Development Association) filed an application for conversion
due to the passage of Resolution No. 6 by the Provincial Development Council of Bukidnon and Ordinance No. 24 by the Sangguniang Bayan
of Sumilao, Bukidnon, reclassifying the area from agricultural to industrial/institutional, the same was disapproved by the DAR Secretary
and instead, the property was placed under the compulsory coverage of Comprehensive Agrarian Reform Program for distribution to all
qualified beneficiaries. This prompted Governor Carlos O. Fortich of Bukidnon to file an appeal with the OP, while NQSRMDC filed with the
CA a petition for certiorari, and prohibition with preliminary injunction.

The OP then issued a Decision dated March 29, 1996 reversing the DAR Secretary's decision and approving the application for conversion.
Executive Secretary Ruben D. Torres denied the DAR's motion for reconsideration for having been filed beyond the reglementary period of
15 days, and it was also declared that the OP Decision dated March 29, 1996 had already become final and executory.

Because of this, the farmer-beneficiaries staged a hunger strike on October 9, 1997, protesting the OP's decision. In order to resolve the
strike, the OP issued a so-called "Win/Win" resolution on November 7, 1997, modifying the decision in that NQSRMDC's application for
conversion is approved only with respect to the approximately 44-hectare portion of the land adjacent to the highway, as recommended by
the Department of Agriculture, while the remaining approximately 100 hectares traversed by an irrigation canal and found to be suitable
for agriculture shall be distributed to qualified farmer-beneficiaries.1awphi1.net

A petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court36 was then filed with the Court, which was contested by
the Office of the Solicitor General on the ground that the proper remedy should have been to file a petition for review directly with the CA
in accordance with Rule 43 of the Revised Rules of Court.

In resolving the issue, the Court recognized the rule that the Supreme Court, CA and RTC have original concurrent jurisdiction to issue a writ
of certiorari, prohibition, and mandamus. However, due to compelling reasons and in the interest of speedy justice, the Court resolved to
take primary jurisdiction over the petition in the interest of speedy justice, after which the Court nullified the act of the OP in re-opening

109
the case and substantially modifying its March 29, 1996 Decision which had already become final and executory, as it was in gross disregard
of the rules and basic legal precept that accord finality to administrative determinations.

It must be stressed at this point that the Court, as a rule, will not entertain direct resort to it unless the redress desired cannot be obtained
in the appropriate courts, and exceptional and compelling circumstances, such as cases of national interest and of serious implications,
justify the availment of the extraordinary remedy of writ of certiorari, prohibition, or mandamus calling for the exercise of its primary
jurisdiction.37 The Court finds no compelling circumstances in this case to warrant a relaxation of the foregoing rule. The Fortich case is not
analogous with the present case such that the Court is not bound to abandon all rules, take primary jurisdiction, and resolve the merits of
petitioners' application for a writ of prohibition.

In the present case, the assailed DARAB Decision dated October 5, 1995 granting the petition for relief from judgment and giving due
course to the Notice of Coverage was made pursuant to a petition for relief from judgment filed by the DAR, albeit petitioners are
contesting the validity of the proceedings held thereon. On the other hand, in Fortich, the OP's "Win/Win" resolution dated November 7,
1997 was made motu proprio, as a result of the hunger strike staged by the farmer-beneficiaries.

Further, the OP's "Win/Win" Resolution dated November 7, 1997 in the Fortich case is a patently void judgment since it was evident that
there was already an existing final and executory OP Decision dated March 29, 1996. In this case, the assailed DARAB Decision dated
October 5, 1995 appears to be regular on its face, and for its alleged nullity to be resolved, the Court must delve into the records of the case
in order to determine the validity of petitioners' argument of lack of due process, absent notice and hearing.

Moreover, the principle of hierarchy of courts applies generally to cases involving factual questions. As it is not a trier of facts, the Court
cannot entertain cases involving factual issues.38 The question of whether the DARAB Decision dated October 5, 1995 is null and void and
enforceable against petitioners for having been rendered without affording petitioners due process is a factual question which requires a
review of the records of this case for it to be judiciously resolved.

The Court notes that the CA, indeed, failed to resolve petitioners' prayer for the issuance of the writ of prohibition, which, significantly,
focuses on the alleged nullity of the DARAB Decision dated October 5, 1995. On this score, the CA found that the application for the
issuance of the writ of prohibition was actually a collateral attack on the validity of the DARAB decision. But, a final and executory judgment
may be set aside in three ways;39 and a collateral attack, whereby in an action to obtain a different relief, an attack on the judgment is
nevertheless made as an incident thereof,40 is one of these. This tenet is based upon a court's inherent authority to expunge void acts from
its records.41 Despite recognizing the need to resolve petitioners' application for the writ of prohibition in its Resolution dated January 12,
1999, the CA nonetheless summarily denied petitioners' motion for reconsideration in its Resolution dated February 23, 2000, 42 leaving the
matter hanging and unresolved.

At first, the Court considered resolving the merits of petitioners' motion for reconsideration concerning their application for a writ of
prohibition against enforcing the DARAB Decision dated October 5, 1995. Thus, in a Resolution dated June 5, 2006, the Court directed the
CA to transmit the records of DARAB Case No. 0555, which was previously required by the CA to be forwarded to it per Resolution dated
December 20, 1999.43 However, as of even date, the CA has not complied with the Court's Resolution. Withal, upon re-examination of the
issues involved in this case, the Court deems it more judicious to remand this case to the CA for immediate resolution of petitioners' motion
for reconsideration, re: their application for the writ of prohibition.

Moreover, the radical conflict in the findings of the Provincial Adjudicator and the DARAB as regards the nature of the subject property
necessitates a review of the present case. In this regard, the CA is in a better position to fully adjudicate the case for it can delve into the
records to determine the probative value of the evidence supporting the findings of the Provincial Adjudicator and of the DARAB. In
addition, the CA is empowered by its internal rules to require parties to submit additional documents, as it may find necessary to promote
the ends of substantial justice, and further order the transmittal of the proper records for it to fully adjudicate the case. After all, it is an
avowed policy of the courts that cases should be determined on the merits, after full opportunity to all parties for ventilation of their
causes and defenses, rather than on technicality or some procedural imperfections. In that way, the ends of justice would be served
better.44

WHEREFORE, the petition is PARTLY GRANTED. This case is REMANDED to the Court of Appeals which is DIRECTED to resolve petitioners'
prayer for the issuance of the writ of prohibition in their Motion for Reconsideration.

Upon finality of this Decision, let the records be remanded forthwith to the Court of Appeals.

No pronouncement as to costs.

110
SO ORDERED.

20. Lapulapu Development and Housing Corp. vs. Group Management Corporation 388 SCRA 493 , September 09, 2002

THIRD DIVISION

[G.R. No. 141407. September 9, 2002]

LAPULAPU DEVELOPMENT AND HOUSING CORPORATION, petitioner, vs. GROUP MANAGEMENT CORPORATION, respondent.

DECISION
PANGANIBAN, J.:

Having the same power and prerogatives, courts of coequal and coordinate jurisdiction cannot interfere with each others orders and
judgments. The ultimate test to determine the existence of forum shopping is the vexation caused the courts and the litigants by the repeated
invocation of substantially the same facts, issues and reliefs, thereby unnecessarily clogging court dockets and creating the possibility of
conflicting rulings and decisions.

The Case

Before us is a Petition for Review on Certiorari under Rule 45, seeking the annulment of the April 30, 1999 Decision and the December
29, 1999 Resolution of the Court of Appeals (CA).[1] The assailed Decision disposed as follows:

WHEREFORE, the petition being partly meritorious, the Court hereby resolves as follows:

1. To AFFIRM the Orders of May 28, 1998 and August 4, 1998, in Civil Case No. 2203-L insofar as they set aside the order holding
respondent Register of Deeds guilty of indirect contempt of court and to NULLIFY said orders insofar as they set aside the directives
contained in paragraphs (a), (b), and (c) of the order dated November 28, 1997;

2. To DECLARE without FORCE and EFFECT insofar as petitioner Group Management Corporation is concerned, the decision in Civil Case No.
R-82-3429 as well as the orders and writs issued for its execution and enforcement; and

3. To ENJOIN respondent Lapulapu Development and Housing Corporation, along with its agents and representatives and/or persons/public
officials/employees acting in its interest, specifically respondent Regional Trial Court of Manila, Branch 38, and respondent Register of
Deeds of Lapulapu City, from obstructing, interfering with or in any manner delaying the implementation/execution/enforcement by the
Lapulapu City RTC of its order and writ of execution in Civil Case No. 2203-L.

4. For lack of sufficient basis, the charge of contempt of court against respondent Lapulapu Development and Housing Corporation and the
public respondents is hereby DISMISSED.[2]

The assailed Resolution denied petitioners Motion for Partial Reconsideration. [3]

The Facts

The procedural and factual antecedents of this case are summarized by the CA in this wise:

111
LLDHC, formerly known as the B. Sunga Corporation, was the registered owner of seventy-eight (78) lots, with an aggregate area of 423,117
square meters, located at Barrio Marigondon, Lapu-lapu City.

On February 4, 1974, LLDHC entered into a Project and Loan Agreement with GSIS, whereby the latter undertook to extend a loan of P25
million to be used by LLDHC in developing, subdividing and selling to GSIS members, its property at Marigondon, Lapu-lapu City. To
implement the Agreement, GSIS extended to LLDHC an ad interim medium term loan of P2,500,000.00 of which P710,400.00 was
released. To secure payment of the loan, LLDHC executed a real estate mortgage over its 78 lots at Marigondon, Lapulapu City in favor of
GSIS.

LLDHC having failed to develop the property and defaulted in the payment of its loan, GSIS foreclosed the mortgage. And, being the lone
bidder in the public auction sale, GSIS acquired the mortgaged lots.After the lapse of the redemption period, GSIS consolidated its
ownership over the mortgaged lots and the corresponding transfer certificates of title were issued in its name.

On February 26, 1980, GSIS, as new owner, executed a Deed of Conditional Sale covering its Marigondon lots in favor of GMC.

On April 23, 1980, LLDHC filed a complaint for Annulment of Foreclosure with Writ of Mandatory Injunction against GSIS. Originally
docketed as Civil Case No. 131332 of the Regional Trial Court of Manila, the complaint (re-docketed as Civil Case No. R-82-3429) was
assigned to Branch 38 thereof.

On November 3, 1989, GMC filed a complaint for Specific Performance with Damages against GSIS, docketed as Civil Case No. 2203-L of the
Regional Trial Court of Lapu-Lapu City. The complaint seeks to compel GSIS to execute a Final Deed of Sale in favor of GMC covering the
Marigondon lots, the purchase price thereof having been paid in full by GMC to GSIS.

Allowed to intervene in Civil Case No. 2203-L, LLDHC filed a Motion to Dismiss the complaint for specific performance. Said motion having
been denied by the Lapu-Lapu City RTC, LLDHC filed its Answer in Intervention and thereafter participated in the proceedings as intervenor.

On February 24, 1992, after a full-blown trial, a decision was rendered in Civil Case No. 2203-L, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered ordering defendant to:

1. Execute the final deed of absolute sale and deliver the seventy-eight (78) certificates of title covering said seventy-eight (78) parcels of
land to the plaintiff:

2. Pay plaintiff actual damages, plus attorneys fees and expenses of litigation, in the amount of P285,638.88 and P100,000.00 exemplary
damages;

3. dismissing in toto intervenors complaint-in-intervention for lack of evidence of legal standing and legal interest in the suit, as well as
failure to substantiate any cause of action against either plaintiff or defendant.

SO ORDERED.

LLDHC, as intervenor, and GSIS as defendant, filed their respective Notices of Appeals on March 11, 1992 and March 20, 1992. However, on
December 6, 1993, their appeals were dismissed by the Lapu-Lapu City RTC.

On May 10, 1994, a decision was rendered in Civil Case No. R-82-3429 of the Manila RTC, Branch 38, the decretal portion of which reads:

WHEREFORE, judgment is hereby rendered:

1. ANNULLING the foreclosure by the defendant GSIS of the mortgage over the seventy-eight (78) parcels of land here involved:

2. CANCELLING the consolidated certificates of titles issued in the name of GSIS and directing the Register of Deeds of Lapu-Lapu City to
issue new certificates of titles over those seventy-eight (78) parcels of land in the name of the plaintiff, in exactly the same condition as
they were before the foreclosure;

3. ORDERING the plaintiff to pay the GSIS the amount of P9,200,000.00 with interest thereon at the rate of twelve (12%) percent per
annum commencing from October 12, 1989 until fully paid; and
112
4. ORDERING defendant GSIS to execute a properly registrable release of discharge of mortgage over the parcels of land here involved after
full payment of such amount by the plaintiff.

All claims and counterclaims by the parties as against each other are hereby dismissed.

No pronouncement as to costs.

SO ORDERED.

On July 27, 1994, LLDHC filed a Complaint with this Court, docketed as CA-G.R. SP No. 34696, seeking the annulment of the decision in Civil
Case No. 2203-L.

In a decision dated December 29, 1994, this Court dismissed the complaint for annulment of judgment, on the following ground:

In fine, there being no showing from the allegations of the petition that the respondent court is without jurisdiction over the subject matter
and of the parties in Civil Case No. 2309 [2203-L], petitioner has no cause of action for the annulment of judgment. The complaint must
allege ultimate facts for the annulment of the decision (Avendana v. Bautista, 142 SCRA 39). We find none in this case.

On January 28, 1995, no appeal having been taken by LLHDC, the decision of this Court in CA-G.R. SP No. 34696 became final and executory,
and entry of judgment was made on August 18, 1995.

On February 2, 1995, LLDHC filed a petition for certiorari with the Supreme Court, docketed as G.R. No. 118633. Like the complaint in CA-
G.R. SP No. 34696, the petition also seeks the annulment of the February 24, 1992 decision in Civil Case No. 2203-L.

In its Resolution, dated September 6, 1996, the Supreme Court dismissed LLDHCs petition, in G.R. No. 118633, stating inter alia, thus:

In a last ditch attempt to annul the February 24, 1992 Decision of the respondent court, this petition was brought before us on February 2,
1995.

Dismissal of this petition is inevitable.

The instant petition which is captioned, For: Certiorari With Preliminary Injunction, is actually another Petition for Annulment of Judgment
of the February 24, 1992 Decision of the respondent Regional Trial Court of Lapu-lapu City, Branch 27 in Civil Case No. 2203-L. A close
perusal of this petition as well as the Petition for Annulment of Judgment brought by the petitioner before the Court of Appeals in CA-G.R.
No. SP 34696 reveals that the instant petition is a mere reproduction of the petition/complaint filed before the appellate tribunal for
annulment of judgment. Paragraphs two (2) to eighteen (18) of this petition were copied verbatim from the Petition for Annulment of
Judgment earlier filed in the court a quo, except for the designation of the parties thereto, i.e., plaintiff was changed to petitioner,
defendant to respondent. In fact, even the prayer in this petition is the same prayer in the Petition for Annulment of Judgment dismissed by
the Court of Appeals, to wit:

1. That Restraining Order/Writ of Preliminary Injunction issue commanding the Respondent to cease and desist from enforcing the
judgment of Respondent Judge Teodoro K. Risos in Civil Case No. 2203-L dated February 24, 1992 and all orders and processes pertaining to
his decision in the said case.

2. Annulling the decision of defendant Judge Teodoro K. Risos of RTC of Cebu, Branch 27, in Civil Case No. 2203-L.

3. Granting Petitioner such other relief as law and justice may warrant in this case.

Under Section 9(2) of Batas Pambansa Blg. 129, otherwise known as The Judiciary Reorganization Act of 1980, it is the Court of Appeals
(then the Intermediate Appellate Court), and not this Court, which has jurisdiction to annul judgments of Regional Trial Courts, viz:

SEC. 9. Jurisdiction -- The Intermediate Appellate Court shall exercise:

xxxxxxxxx

113
(2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and

xxxxxxxxx

Thus, this Court apparently has no jurisdiction to entertain a petition which is evidently another petition to annul the February 24, 1992
Decision of the respondent Branch 27, Regional Trial Court of Lapu-lapu City, it appearing that jurisdiction thereto properly pertains to the
Court of Appeals. Such a petition was brought before the appellate court, but due to petitioners failure to nullify Judge Risos Decision in
said forum, LLDHC, apparently at a loss as to what legal remedy to take, brought the instant petition under the guise of a petition for
certiorari under Rule 65 seeking once again to annul the judgment of Branch 27.

Instead of filing this petition for certiorari under Rule 65, which is essentially another Petition to Annul Judgment, petitioner LLDHC should
have filed a timely Petition for Review under Rule 45 of the Revised Rules of Court of the decision of the Court of Appeals, dated December
29, 1994, dismissing the Petition for Annulment of Judgment filed by the petitioner LLDHC before the court a quo. But, this is all academic
now. The appellate courts decision had become final and executory on January 28, 1995.

Nevertheless, it is worthwhile to mention that this petition, which is truly for annulment of judgment, cannot prosper on its merits. [I]t has
been settled that a judgment can be annulled only on two (2) grounds: (a) that the judgment is void for want of jurisdiction or lack of due
process of law; or (b) that it has been obtained by fraud.

Neither of these grounds obtain in the case at bench. x x x.

It cannot likewise be successfully argued that there was lack of due process in the proceedings before Branch 27 of the RTC of
Lapulapu. Petitioner had ample participation in Civil Case No. 2203-L as intervenor, as it in fact filed a Motion to Dismiss said case on
December 7, 1989 which was, however, denied by respondent Judge. Thereafter, a full-blown trial was held which culminated in the subject
decision sought to be annulled by the petitioner.

In the same manner, the February 24, 1992 decision of respondent court cannot be assailed on the ground of fraud. In order for fraud to
serve as a basis for the annulment of judgment, it must be extrinsic or collateral in character, otherwise there would be no end to
litigations. Extrinsic fraud refers to any fraudulent act of the prevailing party which is committed outside of the trial of the case, whereby
the defeated party [petitioner herein] has been prevented from exhibiting fully his side of the case, by fraud or deception practiced on him
by his opponent. This type of fraud is decidedly absent in the case at bench. Petitioner has not pointed to any act of the prevailing party
(Group Management Corporation) preventing it (petitioner) from fully ventilating its case as intervenor in Civil Case No. 2203-L. If ever the
petitioners complaint-in-intervention did not prosper in said case, it was because the lower court after due hearing, did not find the
intervenors case meritorious, and not because petitioner was unduly deprived of its day in court. Thus, having been unable to prove that
extrinsic fraud vitiated the orders in question, there lies no cause of action for annulment of said orders.

LLDHC sought a reconsideration of the above resolution but its motion was denied with finality by the Supreme Court on November 18,
1996.

Consequently, on November 28, 1996, the Lapu-Lapu City RTC, through Presiding Judge Teodoro K. Risos, issued an order directing the
execution of the judgment in Civil Case No. 2203-L, pursuant to which the corresponding writ of execution was issued on December 17,
1996.

LLDHC and GSIS filed their respective motions to stay execution, dated December 12, 1996 and January 9, 1997, both of which were denied
by Judge Risos in his Order dated February 19, 1997.

On July 21, 1997, on motion of GMC, Judge Risos issued an Order, the dispositive portion of which reads:

WHEREFORE, the defendant GSIS having refused to implement the Order of this Court dated December 17, 1996 the Court in accordance
with Rule 39. Sec. 10-a of the 1997 Rules of Procedure, hereby directs the Register of Deeds of Lapu-lapu City to cancel the Transfer
Certificate of Titles of the properties involved in this case and to issue new ones in the name of the plaintiff and to deliver the same to the
latter within ten (10) days after this Order shall have become final.

SO ORDERED.

114
On August 1, 1997, respondent Judge Barias issued a writ of execution in Civil Case No. R-82-3429. Parenthetically, the judgment in said
case was affirmed with modification by this Court in its Decision of December 27, 1996, in CA-G.R. CV No. 49117.

On August 7, 1997, Sheriff-Incharge Regio B. Ruefa, RTC-Manila, sent a letter to the Register of Deeds of Lapu-Lapu City, ordering him to
cancel the consolidated certificate of title issued in the name of GSIS and to issue new certificates of title over subject lots in the name of
LLDHC.

On August 21, 1997, a writ of possession was issued commanding Sheriff Ruefa to cause GSIS and all persons claiming rights under it to
vacate the lots in question and to place LLDHC in peaceful possession thereof. The corresponding Sheriffs Notice to Vacate, addressed to
GSIS, was served on August 22, 1997.

On October 23, 1997, Judge Risos, acting on various incidents relative to the execution of the judgments in Civil Case No. R-82-3429 and
Civil Case No. 2203-L, issued an Order reiterating the order and writ of execution dated November 28, 1996, and December 21, 1996, as
well as the order dated July 21, 1997, directing the Register of Deeds of Lapu-Lapu City to effect the transfer of the titles to subject lots in
favor of GMC, declaring any and all acts done by the Register of Deeds of Lapu-Lapu City null and void starting with surreptitious issuance of
new titles in the name of LLDHC, and, in the interim, enjoining the Register of Deeds of Lapu-Lapu City from recording and/or registering
any transfer, disposition, or transaction regarding said lots, which may be executed by LLDHC and/or GSIS.

Judge Risos held in abeyance all contempt proceedings against the Register of Deeds of Lapu-Lapu City to allow him to forge (sic) himself of
the contemptuous act charged by the plaintiff.

On November 13, 1997, respondent Judge Barias issued an order, the dispositive portion of which, reads:

WHEREFORE, the Group Management Corporation (GMC) is hereby given ten (10) days from notice hereof within which to remove all its
structures erected therein, equipment, machineries and other materials from the plantiffs properties while Jeselito (Rene) Cenabre,
Gualberto Dao, Gines Lamparaga, all security guards of the 537 Security Agency assigned therein and persons associated with them are
hereby directed to vacate the premises in controversy also within ten (10) days from notice hereof.

Failure to do so as directed, an Order of Demolition shall be issued to be implemented by the Deputy Sheriff of this Court authorizing him to
break open any closure with the assistance of police or military authorities if necessary.

Let this Order be served personally by the Deputy Sheriff of the Regional Trial Court of Lapu-Lapu City and the latter to submit the
corresponding Sheriffs Return therefor.

SO ORDERED.

Acting on GMCs Omnibus Motion dated October 29, 1997, and the Manifestation/Explanation, dated October 30, 1997, of respondent
Register of Deeds, Judge Risos issued an Order dated November 28, 1997, the decretal portion of which reads:

a) Intervenor Lapu-lapu Development and Housing Corporation (LLDHC) is hereby ordered to show cause in writing within ten (10) days
from receipt hereof why it should not be declared in contempt of this Court:

b) Let a writ of preliminary prohibitory injunction issue to restrain immediately all persons acting on orders or by authority of intervenor
LLDHC from carrying out any and all acts in defiance of this Courts final and executory judgment, orders and writ of execution aforesaid,
specifically acts such as, but not limited to, the demolition of structures erected by plaintiff upon the properties subject matter of this
litigation and the removal of plaintiffs machinery, equipment and supplies thereon, as well as the ouster therefrom of plaintiffs duly
authorized representatives, personnel and security guards;

c) Further, let a writ of preliminary mandatory injunction immediately issue to direct the ouster of intervenor LLDHC; its agents,
representatives and all persons acting on order or by authority of intervenor, as well as the demolition of structures erected by intervenor
upon the properties subject matter of this litigation;

d) Finally, the Register of Deeds of Lapu-Lapu City is hereby declared in contempt of this Court, and his immediate detention and
confinement at the City Jail of Lapu-lapu City is directed as long as he persists in his interference, disobedience and obstruction of justice by
not complying with the directives of this Court dated October 23, 1997 specifically directing the Register of Deeds of Lapu-lapu City to
effect the transfer of the titles of the properties subject of this case in favor of the plaintiffs, declaring any and all acts done by the Register

115
of Deeds of Lapu-lapu City NULL AND VOID star[t]ing with the surreptitious issuance of the new certificates of title in the name of Lapu-lapu
Development and Housing Corporation, contrary to the Decision of this Court dated February 24, 1992, its Order and Writ of Execution as
well as its Order dated July 21, 1997, and if respondent Register of Deeds refuses to comply with the order of this Court transferring the
titles of the land in question to the plaintiff after ten (10) days from receipt of this Order.

e) The Office of the City Sheriff is hereby directed to implement compliance with paragraphs (b), (c) and (d) above, particularly the
detention and confinement of Atty. Dioscoro Y. Sanchez, Jr., Register of Deeds, Lapu-lapu City, if he continues to refuse to transfer the titles
of the land in dispute after ten (10) days from receipt of this order, authorizing him for these purposes to secure the assistance of the Office
of the Chief of Police of Lapu-lapu City, who is likewise directed to provide a sufficient number of his men in the service to fully
and faithfully carry out these orders, including the detention and confinement aforesaid, until further orders from this Court.

SO ORDERED.

Accordingly, on December 4, 1997, the corresponding writ of preliminary prohibitory injunction was issued.

Meanwhile, LLDHC came to this Court on a petition for certiorari with preliminary injunction (docketed as CA-G.R. SP No. 44052), praying
that respondents (GMC and Judge Risos) cease and desist from proceeding with the execution of the decision in Civil Case No. 2203-L dated
February 24, 1992, on the theory that the decision of the RTC of NCJR in Civil Case No. 31323 (renumbered R-82-3429) entitled LLDHC,
plaintiff, versus GSIS, defendant, for Annulment of Foreclosure and Mandatory Injunction, is a supervening event which makes it mandatory
for Respondent Judge Risos to stop execution of the judgment in Civil Case No. 2203-L entitled GMC, plaintiff, versus GSIS, defendant, for
Specific Performance. In denying due course to said petition, this Court ratiocinated, thus:

The validity of the decision of the respondent judge in Civil Case No. 2303-L has thus been brought both before this Court and to the
Supreme Court by the petitioner. In both instances the respondent judge has been upheld. The instant petition is petitioners latest attempt
to resist the implementation or execution of that decision using as a shield a decision of a Regional Trial Court in the National Capital
Region.We are not prepared to allow it. The applicable rule and jurisprudence are clear. The prevailing party is entitled as a matter of right
to a writ of execution, and the issuance thereof is a ministerial duty compellable by mandamus. We do not believe that there exists in this
instance a supervening event which would justify a deviation from this rule.

Meanwhile, in Civil Case No. 2203-L, respondent Register of Deeds and intervenor LLDHC, through separate motions, sought a
reconsideration of Judge Risos orders dated November 28, 1997 and December 22, 1997.

On May 27, 1998, respondent Judge Fernandez, who succeeded Judge Risos as Presiding Judge of the Lapu-Lapu City RTC (Branch 27),
issued an Order the dispositive portion of which reads:

PREMISES CONSIDERED, the two instant motions of the Register of Deeds of Lapu-Lapu City Atty. Sanchez, Jr. and the intervenor LLDHC are
hereby granted and the order of this Court dated November 28, 1997 is hereby set aside. Accordingly, the order dated December 22, 1997
is likewise recalled.

GMC sought a reconsideration of said order. Its motion for reconsideration was, however, denied by respondent Judge Fernandez in his
Order of August 4, 1998.[4]

Ruling of the Court of Appeals

The CA affirmed the Orders of the Regional Trial Court (RTC) of Lapulapu City in Civil Case No. 2203-L freeing the Register of Deeds from
indirect contempt of court. It also declared without force and effect the Decision of the Regional Trial Court (RTC) of Manila in Civil Case No.
R-82-3429, as well as the Orders and Writs issued for the execution and enforcement of that Decision. The CA enjoined petitioner, its agents
and representatives, the RTC of Manila and the Register of Deeds of Lapulapu City from obstructing or interfering with the implementation
of the Order issued by the Lapu-lapu RTC in Civil Case No. 2203-L.
Hence, this Petition.[5]

The Issues

116
 In its Memorandum, petitioner urges the Court to resolve the following questions:

1. Whether the final and fully implemented decision of the Manila RTC could be declared and rendered ineffectual and nugatory by the
judgment of the Lapu-Lapu City RTC.

2. Whether the herein petitioner and/or the private respondent are guilty of forum shopping.

3. Whether the refusal of Justices Verzola and Tuquero to voluntarily inhibit or disqualify them from acting on the present case is proper
and justifiable.[6]

The Courts Ruling

The Petition has no merit.

First Issue:
Valid and Binding Decision

In its Memorandum, petitioner argues that the Decision of the Manila RTC is superior to that of the Lapulapu RTC and must therefore
prevail. It alleges that the former was executed and fully implemented as early as September 15, 1997, but that the latter is yet to attain
finality.
We do not agree. The records of the case clearly show that the Lapulapu Decision has become final and executory and is thus valid and
binding upon the parties. Obviously, petitioner is again trying another backdoor attempt to annul the final and executory Decision of the
Lapulapu RTC.
First, it was petitioner that filed on March 11, 1992 a Notice of Appeal contesting the Lapulapu RTC Judgment in Civil Case No. 2203-L
rendered on February 24, 1992. The Notice was however rejected by the said RTC for being frivolous and dilatory. Since petitioner had done
nothing thereafter, the Decision clearly became final and executory.
However, upon receipt of the Manila RTC Decision, petitioner found a new tool to evade the already final Lapulapu Decision by seeking
the annulment of the latter in a Petition with the CA. However, the appellate court dismissed the action, because petitioner had been unable
to prove any of the grounds for annulment; namely lack of jurisdiction or extrinsic fraud.Because no appeal had been taken by petitioner, the
ruling of the CA also became final and executory.
Second, the Supreme Court likewise recognized the finality of the CA Decision when it threw out LLDHCs Petition for Certiorari in GR
No. 118633. This Court ruled thus:

Instead of filing this petition for certiorari under Rule 65, which is essentially another Petition to Annul Judgment, petitioner LLDHC should
have filed a timely Petition for Review under Rule 45 of the Revised Rules of Court of the decision of the Court of Appeals, dated December
29, 1994, dismissing the Petition for Annulment of Judgment filed by the petitioner LLDHC before the court a quo. But this is all academic
now. The appellate courts decision had become final and executory on January 28, 1995.[7] (Emphasis ours)

Jurisprudence mandates that when a decision becomes final and executory, it becomes valid and binding upon the parties and their
successors in interest.[8] Such decision or order can no longer be disturbed or reopened no matter how erroneous it may have
been.[9] Petitioners failure to file an appeal within the reglementary period renders the judgment final and executory. The perfection of an
appeal in the manner and within the period prescribed by law is mandatory. Failure to conform to the rules regarding appeal will render the
judgment final and executory and, hence, unappealable.[10] Therefore, since the Lapulapu Decision has become final and executory, its
execution has become mandatory and ministerial on the part of the judge.
The CA correctly ruled that the Lapulapu Judgment is binding upon petitioner which, by its own motion, participated as an intervenor.
In fact, the latter filed an Answer in Intervention and thereafter actively took part in the trial. Thus, having had an opportunity to be heard
and to seek a reconsideration of the action or ruling it complained of, it cannot claim that it was denied due process of law. What the law
prohibits is the absolute absence of the opportunity to be heard. Jurisprudence teaches that a party cannot feign denial of due process if it
has been afforded the opportunity to present its side.[11]

117
 Petitioner likewise claims that Private Respondent GMC cannot escape the adverse effects of the final and executory judgment of the
Manila RTC.
Again, we do not agree. A trial court has no power to stop an act that has been authorized by another trial court of equal rank. As
correctly stated by the CA, the Decision rendered by the Manila RTC -- while final and executory -- cannot bind herein private respondent,
which was not a party to the case before the said RTC. A personal judgment is binding only upon the parties, their agents, representatives
and successors in interest.
Third, petitioner grievously errs in insisting that the judgment of the Manila RTC nullified that of the Lapulapu RTC. As already adverted
to earlier, courts of coequal and coordinate jurisdiction may not interfere with or pass upon each others orders or processes, since they have
the same power and jurisdiction.[12] Except in extreme situations authorized by law, they are proscribed from doing so. [13]

Second Issue:
Forum Shopping

Petitioner contends that its Complaint for the annulment of the mortgage foreclosure had been filed in the Manila RTC almost ten years
prior to GMCs Complaint for specific performance and damages in the Lapulapu RTC. Thus, petitioner asserts that it cannot be liable for forum
shopping.
There is forum shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by
appeal or certiorari) from another.[14] In Gatmaytan v. CA,[15] the petitioner therein repeatedly availed itself of several judicial remedies in
different courts, simultaneously or successively. All those remedies were substantially founded on the same transactions and the same
essential facts and circumstances; and all raised substantially the same issues either pending in, or already resolved adversely by, some other
court. This Court held that therein petitioner was trying to increase his chances of obtaining a favorable decision by filing multiple suits in
several courts. Hence, he was found guilty of forum shopping.
In the present case, after the Lapulapu RTC had rendered its Decision in favor of private respondent, petitioner filed several petitions
before this Court and the CA essentially seeking the annulment thereof. True, petitioner had filed its Complaint in the Manila RTC before
private respondent filed its own suit in the Lapulapu RTC. Records, however, show that private respondent learned of the Manila case only
when petitioner filed its Motion for Intervention in the Lapulapu RTC. When GMC filed its own Motion to Intervene in the Manila RTC, it was
promptly rebuffed by the judge therein. On the other hand, petitioner was able to present its side and to participate fully in the proceedings
before the Lapulapu RTC.
On July 27, 1994, almost two years after the dismissal of its appeal by the Lapulapu RTC, petitioner filed in the CA a suit for the annulment
of that RTC judgment. On December 29, 1994, this suit was rejected by the CA in a Decision which became final and executory on January 28,
1995, after no appeal was taken by petitioner. However, this action did not stop petitioner. On February 2, 1995, it filed with this Court
another Petition deceptively cloaked as certiorari, but which in reality sought the annulment of the Lapulapu Decision. This Court dismissed
the Petition on September 6, 1996. Petitioners Motion for Reconsideration was denied with finality on November 18, 1996.
On November 28, 1996, Judge Risos of the Lapulapu RTC directed the execution of the judgment in the case filed before it. The Motion
to Stay Execution filed by petitioner was denied on February 19, 1997. Undaunted, it filed in this Court another Petition for Certiorari,
Prohibition and Mandamus. On September 21, 1998, we referred the Petition to the CA for appropriate action. This new Petition again
essentially sought to annul the final and executory Decision rendered by the Lapulapu RTC. Needless to say, the new suit was
unsuccessful. Still, this rejection did not stop petitioner. It brought before this Court the present Petition for Review on Certiorari alleging the
same facts and circumstances and raising the same issues already decided by this Court in GR No. 118633.[16]
First Philippine International Bank v. CA[17] stresses that what is truly important to consider in determining whether forum shopping
exists is the vexation caused the courts and the parties-litigants by one who asks different courts and/or administrative agencies to rule on
the same or related facts and causes and/or to grant the same or substantially the same relief, in the process creating the possibility of
conflicting rulings and decisions.
Petitioner in the present case sued twice before the CA and thrice before this Court, alleging substantially the same facts and
circumstances, raising essentially the same issues, and praying for almost identical reliefs for the annulment of the Decision rendered by the
Lapulapu RTC. This insidious practice of repeatedly bringing essentially the same action -- albeit disguised in various nomenclatures -- before
different courts at different times is forum shopping no less. Because of petitioners actions, the execution of the Lapulapu Decision has been
needlessly delayed and several courts vexed.

Third Issue:

118
 Voluntary Inhibition

Petitioner claims that Justices Artemio G. Tuquero and Eubolo G. Verzola gravely abused their discretion in refusing to voluntarily inhibit
or disqualify themselves from acting on the case at bar while it was pending in the CA. They allegedly participated in the Judgment rejecting
its Petition for Certiorari, docketed as CA-GR SP No. 44052, assailing the February 24, 1992 Execution Order issued by the Lapulapu RTC.
Again, petitioner is clutching at straws. As a general rule, judges are mandated to hear and decide cases, unless legally
disqualified.[18] However, they may voluntarily recuse themselves on the ground of bias or prejudice,[19] expression of opinions that may show
partiality,[20] personal knowledge of the case,[21] or distant affinity or former association with one of the parties or the latters counsel. [22]
Justices Tuquero and Verzola acted within the bounds of duty when they took part in the deliberation of the assailed Decision. By
alleging that the appellate magistrates should disqualify themselves because of their past participation in CA-GR No. 44052, petitioner merely
calls attention to the repetitive nature of its pleadings and petitions. If indeed the assailed Decision involves a totally different matter from
that disposed of in CA-GR No. 44052, then petitioner should have no reason to worry about the impartiality of the said justices.
Without the written consent of all parties in interest, the law bars justices from reviewing rulings or decisions rendered by them as
lower court judges.[23] This situation does not exist in the case at bar.
WHEREFORE, the Petition is DISMISSED, and the assailed Decision AFFIRMED. Treble costs against petitioner.
SO ORDERED.
Puno, (Chairman), Corona, and Carpio-Morales, JJ., concur.
Sandoval-Gutierrez, J., on leave.

21. Suico Industrial Corporation vs. Court of Appeals 301 SCRA 212 , January 20, 1999

FIRST DIVISION

[G.R. No. 123050. January 20, 1999]

SUICO INDUSTRIAL CORPORATION, SPS. ESMERALDO and ELIZABETH SUICO, petitioners, vs. COURT OF APPEALS and PDCP DEVELOPMENT
BANK, INC., respondents.

DECISION
MARTINEZ, J.:

On January 19, 1987, petitioner Suico Industrial Corporation, represented by Esmeraldo Suico, its President, secured a loan
of P2,500,000.00 payable in five (5) years, from respondent Private Development Corporation of the Philippines (now PDCP Bank). As security
thereof, petitioner spouses mortgaged their two (2) real estate properties situated at Mandaue City, Cebu covered by Transfer Certificate of
Title (TCT) Nos. 18324 and 23116. Sometime in 1991, petitioners obtained a second loan of P2,000,000.00 payable in five (5) years, and
secured it with the same real properties, which was granted by respondent PDCP Bank.
For failure to pay the balance of the loan amounting to P3,900,000.00 as of 1993, respondent PDCP Bank caused the extrajudicial
foreclosure of the real estate mortgage. It was adjudge as the highest bidder and a Certificate of Sale dated February 29, 1993 was duly issued
by the Sheriff of Mandaue in its favor. Petitioner failed to redeem the said properties. After expiration of the one (1)-year redemption period,
ownership over the properties were consolidated and TCT Nos. 34988 and 34987 were correspondingly issued in the name of respondent
PDCP Bank.
On November 16, 1994, respondent PDCP Bank filed with the Regional Trial Court (RTC of Mandaue City, Branch 28 an Ex parte Motion
for the Issuance of Writ of Possession [1] which was granted in an Order dated December 8, 1994.[2] On December 15, 1994, a writ of
possession[3] was thereafter issued. However, the writ could not be enforced because on December 9, 1994, petitioners filed a Complaint for
Specific Performance, Injunction and Damages (with Prayer for Restraining Order) [4] before the RTC of Mandaue City, Branch 56 seeking to
enjoin respondent PDCP Bank from selling the mortgaged properties and from taking physical possession over the same during the pendency
of the case.

119
 On January 17, 1995, RTC Branch 56 issued an Order[5] granting the injunction sought for by petitioners (therein plaintiffs). It likewise
deferred resolution of the motion to dismiss petitioners complaint filed by respondent PDCP Bank (therein defendant). Pertinent portions of
the order state that:

During the hearing on Plaintiffs application for preliminary injunction, Plaintiffs presented Esmeraldo Suico who testified that per
arrangement with a certain Mae Siy and Fajardo , former officers of Defendant bank, Plaintiffs were supposed to intentionally default in
their payments and eventually consolidate title in Defendant. In exchange Defendant was supposed to allow a repurchase of the property
by Plaintiffs or their recommendee at Five Million Pesos (P5,000,000.00).

Also presented was Raul Perez, Asset Clerk of the Assessors Office of Mandaue City, who testified that it was indeed herein Plaintiffs-
spouses who facilitated the transfer of the lots to Defendant whose two representatives, even showed up to inquire if Plaintiffs had been at
Perez office.

After careful consideration of the evidence so far submitted, this Court convinced that there indeed was an arrangement between herein
Plaintiffs and Defendant as adverted to by Plaintiffs. This conviction by the Court however will naturally be influenced by whatever
evidence the parties will present in the course of the trial of this case.

The Court also realizes that a denial of the prayer for preliminary injunction will result in irreparable damage to Plaintiffs as a consequence
of the dislocation of their family and business and possible loss of the properties under litigation should Defendant decide to dispose of the
same.

On the other hand, maintenance of status quo thru injunction will hardly prejudice the Defendant bank in whose name the properties have
been already titled. Furthermore, Defendants interest will be amply protected not only by the injunction bond which the Court will issue
but also because the passage of time will certainly enhance the value of the properties.

Foregoing considered, the Court in the interest of justice and equity, hereby GRANTS the injunction prayed for and accordingly orders the
Defendant, its representatives and assigns (enjoined) from disposing of the properties covered by Transfer Certificate of Title Nos. 18324
and 23116 including improvements found therein or taking physical possession of the same until further orders from this Court.

Bond is hereby fixed at Fifty Thousand Pesos (P50,000.00).

Resolution of Defendants Motion to Dismiss is deferred pending further reception of evidence.

SO ORDERED.[6]

On January 18, 1995, RTC Branch 56 issued the Writ of Preliminary Injunction, providing therein:

Whereas, on December 13, 1994, the Regional Trial Court, Branch 28 of Mandaue City, issued a Restraining Order in the above-entitled
case, enjoining the defendant PDCP Bank, its attorneys, agents or its duly authorized officer or persons acting for and in their behalf from
selling the mortgaged properties described in the complaint to persons not recommended by plaintiffs and from taking physical possession
over the same pending resolution of the prayer for issuance of permanent injunction.

"Whereas, after hearing, this Court on January 17, 1995, issued an Order expanding the restraining order dated December 13, 1994, issued
by RTC Branch 28 into an order for the issuance of a writ of preliminary injunction, upon plaintiffs posting of a bond in the amount
of P50,000.00 conditioned for the payment of damages which the defendant may suffer by reason of the issuance of the injunction.

Whereas, the bond as required was duly filed and approved by the Court on January 18, 1995.

Whereas, you Private Development Corporation of the Philippines now known as PDCP Bank, your representatives and assigns are hereby
ordered not to dispose of the properties covered by transfer Certificate of Title Nos. 18324 and 23116 including improvements found
therein or to take physical possession of the same until further orders from this Court.[7]

The Motion for Reconsideration (of the Order dated January 17, 1995) and the Motion to Dismiss (petitioners complaint) both filed by
respondent PDCP Bank were denied by RTC Branch 56 in an Order dated June 21, 1995.[8]
In its petition for certiorari and mandamus with prayer for a writ of preliminary prohibitory injunction filed with the Court of Appeals
on June 26, 1995, respondent PDCP Bank prayed that the Order dated January 17, 1995 granting the writ of preliminary injunction be set
120
aside, declared void and without any further force and effect. It likewise prayed that the sheriff of Mandaue City be ordered to implement
the writ of possession.
On August 28, 1995, respondent Court of Appeals rendered the challenged decision [9] which ruled that RTC Branch 56 exceeded its
jurisdiction when it issued the writ of injunction against the enforcement of the writ of possession granted by RTC Branch 28. It ratiocinated
in this wise:

In a Petition for Certiorari, the court must confine itself to the issue of whether or not the respondent court lacked or exceeded its
jurisdiction or committed grave abuse of discretion (San Pedro vs. Court of Appeals, 235 SCRA 145). Here, the respondent Regional Trial
Court exceeded its jurisdiction when it issued the writ of injunction complained of.

Well-settled is the rule that no court has the power to interfere by injunction with the judgments or orders of another court of concurrent
jurisdiction having the power to grant the relief sought by injunction. x x x (Rafael Aquino, Sr., et al v. Judge Julito B. Valenciano, et al., A.M.
No. Mtj-93-746, December 27, 1994, 239 SCRA 428; Prudential Bank v. Gapultos, No. L-41835, 19 January 1990, 181 SCRA 159; Darwin v.
Tokonaga, G.R. No. 54177, 27 May 1991, 197 SCRA 442; Santos v. Bayhon, G.R. No. 88643, 23 July 1991, 199 SCRA 525).

Here, the respondent court issued an injunction against the enforcement of the writ of possession granted by the Regional Trial Court,
Branch 28. This cannot be done. It was the ministerial duty of the trial court to grant such writ of possession.

Said the Supreme Court:

x x x With more reason, a purchaser can demand a writ of possession after the expiration of the redemption period. Thus, in F. David
Enterprises vs. Insular Bank of Asia & America, we held:

It is settled the buyer in a foreclosure sale becomes the absolute owner of the property purchased if it is not redeemed during the period of
one year after the registration of sale. As such, he is entitled to the possession of the property and can demand it at any time following the
consolidation of ownership in his name and the issuance to him of a new transfer certificate of title. The buyer can in fact demand
possession of the land even during the redemption period except that he has to post a bond in accordance with Section 7 of Act 3135 as
amended. No such bond is required after the redemption period if the property is not redeemed. Possession of the land then becoming an
absolute right of the purchaser as confirmed owner. Upon proper application and proof of title, the issuance of the writ of possession
becomes a ministerial duty of the court. (Aurora Gonzales Vda. de Zaballero, et al, v. Hon. Court of Appeals, et al., G.R. No. 106958,
February 9, 1994, 229 SCRA 810; F. David Enterprises vs. Insular Bank of Asia & America, 184 SCRA 294)

Much as We sympathize with private respondents, it was clearly petitioners right to ask for the writ and to acquire possession of subject
properties and it is improper for the respondent court to stay implementation of said writ.

As to the other reasons advanced by petitioner, as stressed by private respondents, the same are questions of fact better left for
respondent courts determination, at this stage of the litigation below.

WHEREFORE, the petition is hereby GRANTED; and the questioned Order of January 17, 1995 is SET ASIDE. Costs against private
respondents.

SO ORDERED.[10]

The motion for reconsideration having been denied in a Resolution dated December 12, 1995[11] petitioners filed this
instant certiorari petition praying that the writ of preliminary injunction issued by RTC Branch 56 be upheld so that a trial on the merits of
the case may ensue.
The focal point of inquiry is whether or not RTC Branch 56 can enjoin the enforcement of the writ of possession issued by RTC Branch
28.
Petitioners alleged in their complaint for specific performance, injunction and damages filed before RTC Branch 56 that they had agreed
on a plan with respondent PDCP Bank to intentionally default in their payments so that a foreclosure of mortgage can be effected and title
to the parcels of land would eventually be consolidated in the name of respondent PDCP Bank. Thereafter, respondent PDCP Bank was
supposed to allow them to purchase the properties for P5,000,000.00 thru the latters recommended buyer. The recommendees of petitioners
were rejected by respondent PDCP Bank. The selling price thereof was increased thereby preventing petitioners from redeeming the
properties. In this regard, petitioners sought to enjoin the respondents PDCP Bank from selling the said mortgaged properties to persons not
recommended by petitioners and from taking physical possession thereof during the pendency of the case.

121
 Thus, petitioners now seek to uphold the propriety of the writ of injunction issued by the RTC Branch 56 enjoining the enforcement of
the writ of possession granted by RTC Branch 28.
The petition does not deserve merit.
First. RTC Branch 56 acted with grave abuse of discretion for having issued the writ of injunction which prevented the implementation
of the writ of possession issued by RTC Branch 28. The issuance of the writ of injunction was not proper in the absence of any legal right on
the part of petitioners to enjoin the enforcement of the writ of possession in favor of respondent PDCP Bank.
We espoused in Arcega v. Court of Appeals[12] that:

For the issuance of the writ of preliminary injunction to be proper, it must be shown that the invasion of the right sought to be protected is
material and substantial, that the right of complainant is clear and unmistakable and there is an urgent and paramount necessity for the
writ to prevent serious damage.[13]

"In the absence of a clear legal right, the issuance of the injunctive writ constitute grave abuse of discretion. [14] Injunction is not designed to
protect contingent or future rights, Where the complainants right or title is doubtful or disputed, injunction is not proper. [15] The possibility
of irreparable damage without proof of actual existing right is no ground for an injunction.[16]

When petitioners failed to pay the balance of the loan and thereafter failed to redeem the properties, title to the property had already
been transferred to respondent PDCP Bank. Respondent PDCP Banks right to possess the property is clear and is based on its right of
ownership as a purchaser of the properties in the foreclosure sale to whom title has been conveyed.[17] Under Section 7 of Act No. 3135 and
Section 35 of Rule 39, the purchaser in a foreclosure sale is entitled to possession of the property. [18] Respondent PDCP Bank has a better
right to possess the subject property because of its title over the same.[19]
Furthermore, petitioners undertook a procedural misstep when it filed a suit for specific performance, injunction and damages before
the RTC Branch 56 instead of a petition to set aside the sale and cancellation of the writ of possession as provided under Section 8 of Act
3135:

"Sec. 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty days after the purchaser was given
possession, petition that the sale be set aside and the writ of possession cancelled, specifying the damages suffered by him, because the
mortgage was not violated or the sale was not made in accordance with the provisions hereof, and the court shall take cognizance of this
petition in accordance with the summary procedure provided for in section one hundred and twelve of Act Number Four Hundred and
ninety six; and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person
who obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen of Act
Numbered Four hundred and ninety-six; but the order of possession shall continue in effect during the pendency of the appeal. [20]

Second. Indeed, it is the ministerial duty of the trial court to grant such writ of possession.
In Sulit v. Court of Appeals,[21] the rule was applied in this manner:

No discretion appears to be left to the Court. Any question regarding the regularity and validity of the sale, as well as the consequent
cancellation of the writ is to be determined in a subsequent proceeding as outlined in Section 8, and it cannot be raised as a justification for
opposing the issuance of the writ of possession since, under the Act, the proceeding for this is ex parte.[22] Such recourse is available of the
mortgagee, who effects the extrajudicial foreclosure of the mortgage, even before the expiration of the period of redemption provided by
law and the Rules of Court.[23]

This is stated also in A.G. Development Corporation v. Court of Appeals:[24]

A writ of possession is generally understood to be an order whereby the sheriff is commanded to place a person in possession of a real or
personal property,[25] such as when a property is extrajudicially foreclosed.[26] In this regard, the issuance of a writ of possession to a
purchaser in an extrajudicial foreclosure is merely a ministerial function.[27] As such, the Court neither exercises its official discretion nor
judgment.[28]

Third. The statute books are replete with jurisprudence to the effect that trial courts have no power to interfere by injunction with the
orders or judgments issued by another court of concurrent or coordinate jurisdiction.[29] In this regard, RTC Branch 56 therefore has no power
nor authority to nullify or enjoin the enforcement of the writ of possession issued by RTC Branch 28.
WHEREFORE, the petition is DENIED. The Decision dated August 28, 1995 and the Resolution dated December 12, 1995 of respondent
Court of Appeals are hereby AFFIRMED. Costs against petitioners.
122
 SO ORDERED.
Davide, Jr., C.J., (Chairman), Melo, Kapunan, and Pardo, JJ., concur.

22. People vs. Romualdez 587 SCRA 123 , April 29, 2009

EN BANC

PEOPLE OF THE PHILIPPINES, G.R. No. 166510

Petitioner,

Present:

PUNO, C.J.,

QUISUMBING,

- versus - YNARES-SANTIAGO,

CARPIO,

AUSTRIA-MARTINEZ,

CORONA,

CARPIO MORALES,

TINGA,

BENJAMIN KOKOY ROMUALDEZ, CHICO-NAZARIO,

and SANDIGANBAYAN, VELASCO, JR.,

Respondent. NACHURA,

LEONARDO DE CASTRO,

BRION,

PERALTA, and

BERSAMIN, JJ.

Promulgated:

April 29, 2009

x--------------------------------------------------------------------------- x

RESOLUTION

TINGA, J.:

The relevant antecedent facts are stated in the Decision of the Court dated 23 July 2008[1]. We reproduce them, to wit:

123
 The Office of the Ombudsman (Ombudsman) charged Romualdez before the Sandiganbayan with violation of
Section 3 (e) of Republic Act No. 3019 (R.A. 3019), as amended, otherwise known as the Anti-Graft and Corrupt Practices
Act. The Information reads:

That on or about and during the period from 1976 to February 1986 or sometime prior or subsequent
thereto, in the City of Manila, Philippines, and within the jurisdiction of this Honorable Court, accused Benjamin
"Kokoy" Romualdez, a public officer being then the Provincial Governor of the Province of Leyte, while in the
performance of his official function, committing the offense in relation to his Office, did then and there willfully,
unlawfully and criminally with evident bad faith, cause undue injury to the Government in the following manner:
accused public officer being then the elected Provincial Governor of Leyte and without abandoning said position,
and using his influence with his brother-in-law, then President Ferdinand E. Marcos, had himself appointed and/or
assigned as Ambassador to foreign countries, particularly the People's Republic of China (Peking), Kingdom of Saudi
Arabia (Jeddah), and United States of America (Washington D.C.), knowing fully well that such appointment and/or
assignment is in violation of the existing laws as the Office of the Ambassador or Chief of Mission is incompatible
with his position as Governor of the Province of Leyte, thereby enabling himself to collect dual compensation from
both the Department of Foreign Affairs and the Provincial Government of Leyte in the amount of Two Hundred
Seventy-six Thousand Nine Hundred Eleven Dollars and 56/100 (US $276,911.56), US Currency or its equivalent
amount of Five Million Eight Hundred Six Thousand Seven Hundred Nine Pesos and 50/100 (P5,806,709.50) and
Two Hundred Ninety-three Thousand Three Hundred Forty-eight Pesos and 86/100 (P293,348.86) both Philippine
Currencies, respectively, to the damage and prejudice of the Government in the aforementioned amount of
P5,806,709.50.

CONTRARY TO LAW.

Romualdez moved to quash the information on two grounds, namely: (1) that the facts alleged in the information
do not constitute the offense with which the accused was charged; and (2) that the criminal action or liability has been
extinguished by prescription. He argued that the acts imputed against him do not constitute an offense because: (a) the
cited provision of the law applies only to public officers charged with the grant of licenses, permits, or other concessions,
and the act charged receiving dual compensation is absolutely irrelevant and unrelated to the act of granting licenses,
permits, or other concessions; and (b) there can be no damage and prejudice to the Government considering that he
actually rendered services for the dual positions of Provincial Governor of Leyte and Ambassador to foreign countries.

To support his prescription argument, Romualdez posited that the 15-year prescription under Section 11 of R.A.
3019 had lapsed since the preliminary investigation of the case for an offense committed on or about and during the period
from 1976 to February 1986 commenced only in May 2001 after a Division of the Sandiganbayan referred the matter to the
Office of the Ombudsman. He argued that there was no interruption of the prescriptive period for the offense because the
proceedings undertaken under the 1987 complaint filed with the Presidential Commission on Good Government (PCGG)
were null and void pursuant to the Supreme Court's ruling in Cojuangco, Jr. v. PCGG and Cruz, Jr. [sic]. He likewise argued
that the Revised Penal Code provision that prescription does not run when the offender is absent from the Philippines
should not apply to his case, as he was charged with an offense not covered by the Revised Penal Code; the law on the
prescription of offenses punished under special laws (Republic Act No. 3326) does not contain any rule similar to that found
in the Revised Penal Code.

The People opposed the motion to quash on the argument that Romualdez is misleading the court in asserting
that Section 3 (e) of R.A. 3019 does not apply to him when Section 2 (b) of the law states that corrupt practices may be
committed by public officers who include "elective and appointive officials and employees, permanent or temporary,
whether in the classified or unclassified or exempt service receiving compensation, even nominal, from the government."
On the issue of prescription, the People argued that Section 15, Article XI of the Constitution provides that the right of the
State to recover properties unlawfully acquired by public officials or employees, from them or from their nominees or
transferees, shall not be barred by prescription, laches or estoppel, and that prescription is a matter of technicality to which
no one has a vested right. Romualdez filed a Reply to this Opposition.

124
 The Sandiganbayan granted Romualdez' motion to quash in the first Resolution assailed in this petition. The
Sandiganbayan stated:

We find that the allegation of damage and prejudice to the Government in the amount of P5,806,709.50
representing the accused's compensation is without basis, absent a showing that the accused did not actually
render services for his two concurrent positions as Provincial Governor of the Province of Leyte and as Ambassador
to the People's Republic of China, Kingdom of Saudi Arabia, and United States of America. The accused alleges in
the subject Motion that he actually rendered services to the government. To receive compensation for actual
services rendered would not come within the ambit of improper or illegal use of funds or properties of the
government; nor would it constitute unjust enrichment tantamount to the damage and prejudice of the
government.

Jurisprudence has established what "evident bad faith" and "gross negligence" entail, thus:

In order to be held guilty of violating Section 3 (e), R.A. No. 3019, the act of the accused that
caused undue injury must have been done with evident bad faith or with gross inexcusable negligence.
But bad faith per se is not enough for one to be held liable under the law, the "bad faith" must be
"evident".

xxx xxx xxx

. . . . "Gross negligence" is characterized by the want of even slight care, acting or omitting to act in a
willful or omitting to act in a willful or intentional manner displaying a conscious indifference to
consequences as far as other persons may be affected. (Emphasis supplied)

The accused may have been inefficient as a public officer by virtue of his holding of two
concurrent positions, but such inefficiency is not enough to hold him criminally liable under the
Information charged against him, given the elements of the crime and the standards set by the Supreme
Court quoted above. At most, any liability arising from the holding of both positions by the accused may
be administrative in nature.

xxx xxx xxx

However, as discussed above, the Information does not sufficiently aver how the act of receiving
dual compensation resulted to undue injury to the government so as to make the accused liable for
violation of Section 3 (e) of R.A. No. 3019.

The Sandiganbayan found no merit in Romualdez' prescription argument.

The People moved to reconsider this Resolution, citing "reversible errors" that the Sandiganbayan committed in
its ruling. Romualdez opposed the People's motion, but also moved for a partial reconsideration of the Resolution's ruling
on prescription. The People opposed Romualdez' motion for partial reconsideration.

125
 Thereafter, the Sandiganbayan denied via the second assailed Resolution the People's motion for reconsideration
under the following terms

The Court held in its Resolution of June 22, 2004, and so maintains and sustains, that assuming the
averments of the foregoing information are hypothetically admitted by the accused, it would not constitute the
offense of violation of Section 3 (e) of R.A. 3019 as the elements of (a) causing undue injury to any party, including
the government, by giving unwarranted benefits, advantage or preference to such parties, and (b) that the public
officer acted with manifest partiality, evident bad faith or gross inexcusable negligence, are wanting.

As it is, a perusal of the information shows that pertinently, accused is being charged for: (a) having
himself appointed as ambassador to various posts while serving as governor of the Province of Leyte and (b) for
collecting dual compensation for said positions. As to the first, the Court finds that accused cannot be held
criminally liable, whether or not he had himself appointed to the position of the ambassador while concurrently
holding the position of provincial governor, because the act of appointment is something that can only be imputed
to the appointing authority.

Even assuming that the appointee influenced the appointing authority, the appointee only makes a
passive participation by entering into the appointment, unless it is alleged that he acted in conspiracy with his
appointing authority, which, however, is not so claimed by the prosecution in the instant case. Thus, even if the
accused's appointment was contrary to law or the constitution, it is the appointing authority that should be
responsible therefor because it is the latter who is the doer of the alleged wrongful act. In fact, under the rules on
payment of compensation, the appointing authority responsible for such unlawful employment shall be personally
liable for the pay that would have accrued had the appointment been lawful. As it is, the appointing authority
herein, then President Ferdinand E. Marcos has been laid to rest, so it would be incongruous and illogical to hold
his appointee, herein accused, liable for the appointment.

Further, the allegation in the information that the accused collected compensation in the amounts of
Five Million Eight Hundred Six Thousand Seven Hundred Nine Pesos and 50/100 (P5,806,709.50) and Two Hundred
Ninety-three Thousand Three Hundred Forty Eight Pesos and 86/100 (P293,348.86) cannot sustain the theory of
the prosecution that the accused caused damage and prejudice to the government, in the absence of any
contention that receipt of such was tantamount to giving unwarranted benefits, advantage or preference to any
party and to acting with manifest partiality, evident bad faith or gross inexcusable negligence. Besides receiving
compensation is an incident of actual services rendered, hence it cannot be construed as injury or damage to the
government.

It likewise found no merit in Romualdez' motion for partial reconsideration.[2]

Petitioner filed a Petition for Certiorari under Rule 65, imputing grave abuse of discretion on the part of the Sandiganbayan in quashing the
subject information. Private respondent responded with a Motion to Dismiss with Comment Ad Cautelam, wherein he argued that the proper
remedy to an order granting a motion to quash a criminal information is by way of appeal under Rule 45 since such order is a final order and
not merely interlocutory. Private respondent likewise raised before this Court his argument that the criminal action or liability had already
been extinguished by prescription, which argument was debunked by the Sandiganbayan.

The Court granted the petition in its 23 July 2008 Decision. While the Court acknowledged that the mode for review of a final ruling of the
Sandiganbayan was by way of a Rule 45 petition, it nonetheless allowed the Rule 65 petition of petitioners, acceding that such remedy was
available on the claim that grave abuse of discretion amounting to lack or excess of jurisdiction had been properly and substantially alleged.
The Decision then proceeded to determine that the quashal of the information was indeed attended with grave abuse of discretion, the
information having sufficiently alleged the elements of Section 3(e) of Rep. Act No. 3019, the offense with which private respondent was
charged. The Decision concluded that the Sandiganbayan had committed grave abuse of discretion by premising its quashal of the information
on considerations that either not appropriate in evaluating a motion to quash; are evidentiary details not required to be stated in an

126
Information; are matters of defense that have no place in an Information; or are statements amounting to rulings on the merits that a court
cannot issue before trial.

Private respondent filed a Motion for Reconsideration, placing renewed focus on his argument that the criminal charge against him had been
extinguished on account of prescription. In a Minute Resolution dated 9 September 2008, the Court denied the Motion for Reconsideration.
On the argument of prescription, the Resolution stated:

We did not rule on the issue of prescription because the Sandiganbayan's ruling on this point was not the subject
of the People's petition for certiorari. While the private respondent asserted in his Motion to Dismiss Ad Cautelam filed
with us that prescription had set in, he did not file his own petition to assail this aspect of the Sandiganbayan ruling, he is
deemed to have accepted it; he cannot now assert that in the People's petitionthat sought the nullification of the
Sandiganbayan ruling on some other ground, we should pass upon the issue of prescription he raised in his motion.

Hence this second motion for reconsideration, which reiterates the argument that the charges against private respondent have
already prescribed. The Court required the parties to submit their respective memoranda on whether or not prescription lies in favor of
respondent.

The matter of prescription is front and foremost before us. It has been raised that following our ruling in Romualdez v. Marcelo,[3] the
criminal charges against private respondent have been extinguished by prescription. The Court agrees and accordingly grants the instant
motion.

Private respondent was charged with violations of Rep. Act No. 3019, or the Anti-Graft and Corrupt Practices Act, committed on or
about and during the period from 1976 to February 1986. However, the subject criminal cases were filed with the Sandiganbayan only on 5
November 2001, following a preliminary investigation that commenced only on 4 June 2001. The time span that elapsed from the alleged
commission of the offense up to the filing of the subject cases is clearly beyond the fifteen (15) year prescriptive period provided under
Section 11 of Rep. Act No. 3019.[4]

Admittedly, the Presidential Commission on Good Government (PCGG) had attempted to file similar criminal cases against private respondent
on 22 February 1989. However, said cases were quashed based on prevailing jurisprudence that informations filed by the PCGG and not the
Office of the Special Prosecutor/Office of the Ombudsman are null and void for lack of authority on the part of the PCGG to file the same.
This made it necessary for the Office of the Ombudsman as the competent office to conduct the required preliminary investigation to enable
the filing of the present charges.

The initial filing of the complaint in 1989 or the preliminary investigation by the PCGG that preceded it could not have interrupted the fifteen
(15)-year prescription period under Rep. Act No. 3019. As held in Cruz, Jr. v. Sandiganbayan,[5] the investigatory power of the PCGG extended
only to alleged ill-gotten wealth cases, absent previous authority from the President for the PCGG to investigate such graft and corruption
cases involving the Marcos cronies. Accordingly, the preliminary investigation conducted by the PCGG leading to the filing of the first
information is void ab initio, and thus could not be considered as having tolled the fifteen (15)-year prescriptive period, notwithstanding the
general rule that the commencement of preliminary investigation tolls the prescriptive period. After all, a void ab initio proceeding such as
the first preliminary investigation by the PCGG could not be accorded any legal effect by this Court.

The rule is that for criminal violations of Rep. Act No. 3019, the prescriptive period is tolled only when the Office of the Ombudsman receives
a complaint or otherwise initiates its investigation.[6] As such preliminary investigation was commenced more than fifteen (15) years after the
imputed acts were committed, the offense had already prescribed as of such time.

Further, the flaw was so fatal that the information could not have been cured or resurrected by mere amendment, as a new
preliminary investigation had to be undertaken, and evidence had again to be adduced before a new information could be filed. The rule may
127
well be that the amendment of a criminal complaint retroacts to the time of the filing of the original complaint. Yet such rule will not apply
when the original information is void ab initio, thus incurable by amendment.

The situation herein differs from that in the recent case of SEC v. Interport,[7] where the Court had occasion to reexamine the
principles governing the prescription of offenses punishable under special laws. Therein, the Court found that the investigative proceedings
conducted by the Securities and Exchange Commission had tolled the prescriptive period for violations of the Revised Securities Act, even if
no subsequent criminal cases were instituted within the prescriptive period. The basic difference lies in the fact that no taint of invalidity had
attached to the authority of the SEC to conduct such investigation, whereas the preliminary investigation conducted herein by the PCGG is
simply void ab initio for want of authority.

Indeed the Court in 2006 had the opportunity to favorably rule on the same issue of prescription on similar premises raised by the
same respondent. In Romualdez v. Marcelo[8], as in this case, the original preliminary investigation was conducted by the PCGG, which then
acted as complainant in the complaint filed with the Sandiganbayan. Given that it had been settled that such investigation and information
filed by the PCGG was null and void, the Court proceeded to rule that [i]n contemplation of the law, no proceedings exist that could have
merited the suspension of the prescriptive periods. As explained by Justice Ynares-Santiago:

Besides, the only proceeding that could interrupt the running of prescription is that which is filed or initiated by
the offended party before the appropriate body or office. Thus, in the case of People v. Maravilla, this Court ruled that the
filing of the complaint with the municipal mayor for purposes of preliminary investigation had the effect of suspending the
period of prescription. Similarly, in the case of Llenes v. Dicdican, this Court held that the filing of a complaint against a
public officer with the Ombudsman tolled the running of the period of prescription.

In the case at bar, however, the complaint was filed with the wrong body, the PCGG. Thus, the same could not have
interrupted the running of the prescriptive periods.[9]

Clearly, following stare decisis, private respondents claim of prescription has merit, similar in premises as it is to the situation in Marcelo.
Unfortunately, such argument had not received serious consideration from this Court. The Sandiganbayan had apparently rejected the claim
of prescription, but instead quashed the information on a different ground relating to the elements of the offense. It was on that point which
the Court, in its 23 July 2008 Decision, understandably focused. However, given the reality that the arguments raised after the promulgation
of the Decision have highlighted the matter of prescription as well as the precedent set in Marcelo, the earlier quashal of the information is,
ultimately, the correct result still.

It would be specious to fault private respondent for failing to challenge the Sandiganbayans pronouncement that prescription had
not arisen in his favor. The Sandiganbayan quashed the information against respondent, the very same relief he had sought as he invoked
the prescription argument. Why would the private respondent challenge such ruling favorable to him on motion for reconsideration or in a
separate petition before a higher court? Imagine, for example, that the People did not anymore challenge the Sandiganbayan rulings
anymore. The dissent implies that respondent in that instance should nonetheless appeal the Sandiganbayans rulings because it ruled
differently on the issue of prescription. No lawyer would conceivably give such advise to his client. Had respondent indeed challenged the
Sandiganbayans ruling on that point, what enforceable relief could he have obtained other than that already granted by the Anti-Graft Court?

Our 2004 ruling in Romualdez v. Sandiganbayan[10] cannot be cited against the position of private respondents. The Sandiganbayan in that
case denied the Motion to Quash filed based on prescription, and so it was incumbent on petitioner therein to file an appropriate remedial
action to reverse that ruling and cause the quashal of the information. Herein, even as the Sandiganbayan disagreed with the prescription
argument, it nonetheless granted the Motion to Quash, and it would be ridiculous for the petitioner to object to such action.

Notably, private respondent had already raised the issue of prescription in the very first responsive pleading he filed before the Court the
Motion to Dismiss with Comment Ad Cautelam[11] dated 14 April 2005. The claim that private respondent should be deemed as having

128
accepted the Sandiganbayans ruling on prescription would have been on firmer ground had private respondent remained silent on that point
at the first opportunity he had before the Court.

The fact that prescription lies in favor of private respondent posed an additional burden on the petitioner, which had opted to file a Rule 65
petition for certiorari instead of the normal recourse to a Rule 45. Prescription would have been considered in favor of private respondent
whether this matter was raised before us in a Rule 45 or a Rule 65 petition. Yet the bar for petitioner is markedly higher under Rule 65 than
under Rule 45, and its option to resort to Rule 65 instead in the end appears needlessly burdensome for its part, a burden not helped by the
fact that prescription avails in favor of private respondent.

WHEREFORE, the Second Motion for Reconsideration is GRANTED. The Decision dated 23 July 2008 and the Resolution dated 9 September
2008 in the instant case are REVERSED and SET ASIDE. The Petition is HEREBY DISMISSED. No pronouncements as to costs.

23. Astorga vs. People 437 SCRA 152, August 20, 2004

SPECIAL FIRST DIVISION

BENITO ASTORGA, G.R. No. 154130

Petitioner,
Present:

Davide, Jr., C.J. (Chairman),

- versus - Ynares-Santiago,
Carpio, and
Azcuna, JJ.

PEOPLE OF THE PHILIPPINES, Promulgated:

Respondent.
August 20, 2004

x ---------------------------------------------------------------------------------------- x

RESOLUTION

YNARES-SANTIAGO, J.:

On October 1, 2003, we rendered a Decision in this case affirming petitioners conviction by the Sandiganbayan of the crime of Arbitrary
Detention. Petitioner now seeks a reconsideration of our Decision.

The facts are briefly restated as follows:

Private offended parties Elpidio Simon, Moises de la Cruz, Wenefredo Maniscan, Renato Militante and Crisanto Pelias are members of the
Regional Special Operations Group (RSOG) of the Department of Environment and Natural Resources, Tacloban City. On September 1, 1997,
they, together with SPO3 Andres B. Cinco, Jr. and SPO1 Rufo Capoquian of the Philippine National Police Regional Intelligence Group, were
sent to the Island of Daram, Western Samar to conduct intelligence operations on possible illegal logging activities. At around 4:30-5:00 p.m.,
the team found two boats measuring 18 meters in length and 5 meters in breadth being constructed at Barangay Locob-Locob. There they
met petitioner Benito Astorga, the Mayor of Daram, who turned out to be the owner of the boats. A heated altercation ensued between
petitioner and the DENR team.Petitioner called for reinforcements and, moments later, a boat bearing ten armed men, some wearing
fatigues, arrived at the scene. The DENR team was then brought to petitioners house in Daram, where they had dinner and drinks. The team
left at 2:00 a.m.

On the basis of the foregoing facts, petitioner was charged with and convicted of Arbitrary Detention by the Sandiganbayan in Criminal Case
No. 24986. On petition for review, we rendered judgment as follows:

129
 WHEREFORE, in view of the foregoing, the petition is hereby DENIED. The Decision of the Sandiganbayan in Criminal Case
No., dated July 5, 2001 finding petitioner BENITO ASTORGA guilty beyond reasonable doubt of the crime of Arbitrary
Detention and sentencing him to suffer the indeterminate penalty of four (4) months of arresto mayor, as minimum, to
one (1) year and eight (8) months of prision correccional, as maximum, is AFFIRMED in toto.

Costs de oficio.

SO ORDERED.

Petitioner filed a Motion for Reconsideration, which was denied with finality on January 12, 2004. [1] Petitioner then filed an Urgent Motion
for Leave to File Second Motion for Reconsideration [2] with attached Motion for Reconsideration,[3] wherein he makes the following
submissions:

1. THE ARMED MEN WERE NOT SUMMONED BY PETITIONER FOR THE PURPOSE OF DETAINING THE PRIVATE OFFENDED
PARTIES;

2. THERE IS NO EVIDENCE THAT THE SUPPOSED VICTIMS INSISTED ON LEAVING THE PLACE WHERE THEY WERE SUPPOSED
TO BE DETAINED;

3. THE SUPPOSED VICTIMS THEMSELVES HAVE DECLARED THE INNOCENCE OF THE PETITIONER;

4. CRIMINAL INTENT ON THE PART OF THE ACCUSED IS CLEARLY WANTING IN THE INSTANT CASE. [4]

Subsequently, petitioner filed a Supplement to the Second Motion for Reconsideration.[5]

The prosecution was required to comment on petitioners second Motion for Reconsideration and the Supplement thereto.

We find the grounds raised by the second Motion for Reconsideration well-taken.[6]

While a second motion for reconsideration is, as a general rule, a prohibited pleading, it is within the sound discretion of the Court to admit
the same, provided it is filed with prior leave whenever substantive justice may be better served thereby.

The rules of procedure are merely tools designed to facilitate the attainment of justice. They were conceived and
promulgated to effectively aid the court in the dispensation of justice.Courts are not slaves to or robots of technical rules,
shorn of judicial discretion. In rendering justice, courts have always been, as they ought to be, conscientiously guided by
the norm that on the balance, technicalities take a backseat against substantive rights, and not the other way around. Thus,
if the application of the Rules would tend to frustrate rather than promote justice, it is always within our power to suspend
the rules, or except a particular case from its operation.[7]

The elements of the crime of Arbitrary Detention are:

1. That the offender is a public officer or employee.

2. That he detains a person.
3. That the detention is without legal grounds.[8]

The determinative factor in Arbitrary Detention, in the absence of actual physical restraint, is fear. After a careful review of the evidence on
record, we find no proof that petitioner instilled fear in the minds of the private offended parties.

Indeed, we fail to discern any element of fear from the narration of SPO1 Rufo Capoquian, the police officer who escorted the DENR Team
during their mission. On the contrary, what appears is that petitioner, being then a municipal mayor, merely extended his hospitality and
entertained the DENR Team in his house. SPO1 Capoquian testified thus:

ATTY. JUMAMIL:

q After Bagacay you arrived in what barangay in Daram?

130
 a We were on our way to Barangay Sta. Rita in Daram but on our way we saw a boat being constructed there so we
proceeded to Barangay Lucodlucod (sic).

q And you arrived at 5:00 oclock?

a Yes sir.

q And you left at 2:00 oclock in the morning of September 2?

a Yes sir.

q And you ate dinner between 5:00 oclock to 2:00 oclock in the morning of September 2, is that correct?

a Yes sir. Mayor Astorga told us let us have dinner.

q And Mayor Astorga brought you to a house where you had dinner?

a Yes sir.

q And of course you also partook of wine?

a I know they had wine but with respect to us we had no wine sir.

xxx xxx xxx

AJ NARIO:

q While you were taking your dinner from 7 to 8:00 oclock Mayor Astorga was with you having dinner?

a Yes Your Honor.

q You did not hear the conversation between the Mayor and the foresters, the complainants here?

a I could not hear anything important because they were just laughing.

xxx xxx xxx

AJ PALATTAO:

q And then according to you there was laughter what was the cause of this laughter?

a Probably they were talking of something humorous.[9]

The testimonial evidence likewise shows that there was no actual restraint imposed on the private offended parties. SPO1 Capoquian in fact
testified that they were free to leave the house and roam around the barangay. Furthermore, he admitted that it was raining at that
time. Hence, it is possible that petitioner prevented the team from leaving the island because it was unsafe for them to travel by boat.

ATTY. JUMAMIL:

q It was raining at that time, is that correct?

a Yes sir it was raining.

q And the weather was not good for motorized travel at that particular time that you were in Lucoblucob, Daram?

a I know it is raining but I could not say that you could not travel.

q What was the condition of the sea at that time when you were in Lucoblucob?

a The sea was good in fact we did not get wet and there were no waves at that time.

131
 q But it was raining the whole day?

a It was not raining at the day but after we ate in the evening it rained.

q It was raining hard in fact after 8:00 p.m. up to 1:00 oclock in the morning is that correct?

a A little bit hard I dont know when the rain stopped, sir.

q It is possible that it rain.. the rain stopped at 1:00 oclock in the morning of September 2?

a I dont remember sir.

xxx xxx xxx

AJ PALATTAO:

q Were you told not to go away from the place?

a No Your Honor.

q Up to what point did you reach when you were allegedly prevented to go somewhere?

a They did not say anything sir.

q Where did you go after that?

a Just down until it rained.

q If you want to go, let us say, you want to leave that place, on your part, was there somebody prevented you to go to
another place?

a I dont know Your Honor.

q But on your part can you just leave that place or somebody will prevent you to go somewhere else?

a What I felt I will not be able to leave because we were already told not to leave the barangay.

q In other words, you can go places in that barangay but you are not supposed to leave that barangay, is this Barangay
Daram?

a Barangay Lucoblucob, Your Honor.

q On your part according to you you can go places if you want although in your impression you cannot leave the
barangay. How about the other companions like Mr. Simon, Cruz and Maniscan, can they leave the place?

a No Your Honor.

q Why are you very positive that in your case you can leave but in the case of those I have enumerated they cannot, why?

a If only in that barangay we can leave, Your Honor.[10]

Mr. Elpidio Simon, one of the private offended parties, took the witness stand on August 16, 2000 but did not complete his testimony-in-
chief due to lack of material time. His testimony only covered preliminary matters and did not touch on the circumstances of the alleged
detention.[11]

On August 23, 2000, all the private offended parties, namely, Elpidio E. Simon, Moises de la Cruz, Renato Militante, Crisanto Pelias and
Wenefredo Maniscan, executed a Joint Affidavit of Desistance stating, in pertinent part:

132
 xxx xxx xxx;

6. That what transpired may have been caused by human limitation aggravated by the exhaustion of the team in scouring
the shores of the small islands of Samar for several days. Mayor Benito Astorga may have also been confronted
with the same predicament, hence our confrontation resulted to a heated argument and the eventual
misunderstanding;

7. Considering that he is the local Chief Executive of the Municipality of Daram, Samar our respect for him prevailed when
he ordered us to take dinner with him and other local residents thereat, so we capitulated whose invitation was
misinterpreted by us;

8. That thereafter, a natural and spontaneous conversation between the team and the group of Mayor Astorga during the
dinner and we were eventually allowed to leave Daram, Samar;

9. That upon our return to our respective official stations we reported the incident to our supervisors who required us to
submit our affidavit;

10. That at present our differences had already been reconciled and both parties had already express apologies and are
personally no longer interested to pursue the case against the Mayor, hence, this affidavit of desistance;

xxx xxx xxx.[12]

Thereafter, the private offended parties did not appear anymore in court to testify. This notwithstanding, the Sandiganbayan convicted
petitioner of the crime of Arbitrary Detention on the basis of the testimonies of SPO1 Capoquian and SPO3 Cinco, the police escorts of the
DENR Team.

The quoted portions of SPO1 Capoquians testimony negate the element of detention. More importantly, fear is a state of mind and is
necessarily subjective.[13] Addressed to the mind of the victim, its presence cannot be tested by any hard-and-fast rule but must instead be
viewed in the light of the perception and judgment of the victim at the time of the crime. [14] As such, SPO1 Capoquian and SPO3 Cinco, not
being victims, were not competent to testify on whether or not fear existed in the minds of the private offended parties herein. It was thus
error for the Sandiganbayan to have relied on their testimonies in convicting petitioner.

Verily, the circumstances brought out by SPO1 Capoquian created a reasonable doubt as to whether petitioner detained the DENR Team
against their consent. The events that transpired are, to be sure, capable to two interpretations. While it may support the proposition that
the private offended parties were taken to petitioners house and prevented from leaving until 2:00 a.m. the next morning, it is equally
plausible, if not more so, that petitioner extended his hospitality and served dinner and drinks to the team at his house. He could have advised
them to stay on the island inasmuch as sea travel was rendered unsafe by the heavy rains. He ate together with the private offended parties
and even laughed with them while conversing over dinner. This scenario is inconsistent with a hostile confrontation between the
parties. Moreover, considering that the Mayor also served alcoholic drinks, it is not at all unusual that his guests left the house at 2:00 a.m.
the following morning.

In all criminal prosecutions, the accused shall be presumed innocent until the contrary is proved. [15] He is entitled to an acquittal unless his
guilt is shown beyond reasonable doubt. Proof beyond reasonable doubt does not mean such a degree of proof as, excluding possibility of
error, produces absolute certainty. Moral certainty only is required, or that degree of proof which produces conviction in an unprejudiced
mind.[16]

As held in several cases, when the guilt of the accused has not been proven with moral certainty, the presumption of innocence of the accused
must be sustained and his exoneration be granted as a matter of right. For the prosecutions evidence must stand or fall on its own merit and
cannot be allowed to draw strength from the weakness of the evidence for the defense. [17] Furthermore, where the evidence for the
prosecution is concededly weak, even if the evidence for defense is also weak, the accused must be duly accorded the benefit of the doubt
in view of the constitutional presumption of innocence that an accused enjoys. When the circumstances are capable of two or more
inferences, as in this case, one of which is consistent with the presumption of innocence while the other is compatible with guilt, the
presumption of innocence must prevail and the court must acquit. It is better to acquit a guilty man than to convict an innocent man.[18]

WHEREFORE, in view of the foregoing, the Decision dated October 1, 2003 is RECONSIDERED and SET ASIDE. The appealed judgment of the
Sandiganbayan in Criminal Case No. 24986 is REVERSED. Petitioner Benito Astorga is ACQUITTED of the crime of Arbitrary Detention on the
ground of reasonable doubt.

No pronouncement as to costs.

133
SO ORDERED.

24. Manotok IV vs. Heirs of Homer L. Barque 574 SCRA 468 , December 18, 2008

EN BANC

SEVERINO M. MANOTOK IV, G.R. Nos. 162335 &

FROILAN M. MANOTOK, 162605

FERNANDO M. MANOTOK III, MA.

MAMERTA M. MANOTOK, PATRICIA

L. TIONGSON, PACITA L. GO, Present:

ROBERTO LAPERAL III, MICHAEL

MARSHALL V. MANOTOK, MARY

ANN MANOTOK, FELISA MYLENE PUNO, C.J.,

V. MANOTOK, IGNACIO MANOTOK, QUISUMBING,

JR., MILAGROS V. MANOTOK, YNARES-SANTIAGO,

SEVERINO MANOTOK III, ROSA CARPIO,

R. MANOTOK, MIGUEL A.B. SISON, AUSTRIA-MARTINEZ,

GEORGE M. BOCANEGRA, MA. CORONA,

CRISTINA E. SISON, PHILIPP L. CARPIO MORALES,

MANOTOK, JOSE CLEMENTE L. AZCUNA,

MANOTOK, RAMON SEVERINO TINGA,

L. MANOTOK, THELMA R. CHICO-NAZARIO,

MANOTOK, JOSE MARIA VELASCO, JR.,

MANOTOK, JESUS JUDE NACHURA,

MANOTOK, JR., and MA. THERESA REYES,

L. MANOTOK, represented by their LEONARDO DE CASTRO, and

Attorney-in-fact, Rosa R. Manotok, BRION, JJ.

Petitioners,

- versus -

HEIRS OF HOMER L. BARQUE, Promulgated:

Represented by TERESITA BARQUE
HERNANDEZ,
Respondents. December 18, 2008
134
x--------------------------------------------------------------------------- x

RESOLUTION

TINGA, J.:

The perceived advantages of the Torrens system of registration of land titles have helped stabilize land ownership in the Philippines.
Its underlying principle is security with facility in dealing with land.[1] Its fundamental purpose is to quiet title to land, to perpetually enjoin
any question in the legality of the title,[2] hence, the titles issued under the system are indefeasible. Yet the Torrens system is imperfect in
that it remains susceptible to fraud, either in the original registration proceedings or in subsequent transactions. [3]

These petitions feature apparently fraudulent practices relating to the attempts at registration of the subject property. Necessarily,
they call for the correct application of entrenched principles in land registration. At the same time, they afford this Court the opportunity to
again defend the Torrens system against unscrupulous elements who use its formalities to actualize the theft of property, and to exert judicial
might in ensuring that fraud does not prevail in the end.

These petitions were referred to the Court en banc by the Special First Division which had initially ruled on them, most comprehensively in a
Decision dated 12 December 2005.[4] They were accepted by the Court en banc in a Resolution dated 26 July 2006. Subsequently, the parties
presented their various contentions before the Court in an oral argument held on 24 July 2007, followed by the submission of their respective
memoranda. While the cases were under consideration of the Court en banc, the participation of the Office of the Solicitor General was
required,[5] and a set of new parties was allowed leave to intervene.[6]

The antecedent facts are stated in full in our 2005 Decision, but are summarized herein for convenience.

On 11 June 1988, a fire gutted portions of the Quezon City Hall, immolating, among others, records stored in the Office of the
Register of Deeds of Quezon City. That fire has attained notoriety due to the numerous certificates of title on file with that office, which were
destroyed as a consequence. The resulting effects of that blaze on specific property registration controversies have been dealt with by the
Court in a number of cases since then.[7] These petitions are perhaps the most heated, if not the most contentious of those cases thus far.

Respondents Heirs of Homer Barque (the Barques) filed a petition [8] with the Land Registration Authority (LRA) for administrative
reconstitution of the original of Transfer Certificate of Title (TCT) No. 210177 (the Barque title) issued in the name of Homer Barque. They
alleged that the Barque title was among the records destroyed by the 1988 fire. In support of their petition, the Barques submitted copies of
the alleged owners duplicate of the Barque title, real estate tax receipts, tax declarations and a Plan FLS 3168-D covering the property.

Learning of the Barques petition, Severino M. Manotok IV, et al. (the Manotoks) filed their opposition thereto. The Manotoks
claimed that the lot covered by the Barque title formed part of the land covered by their reconstituted title TCT No. RT-22481 [372302] (the
Manotok title) in the name of Severino Manotok, et. al. They further alleged that the Barque title was spurious.

135
A brief description of the property involved is in order. Both the Barques and the Manotoks titles advert to land belonging to Lot No. 823 of
the Piedad Estate situated in the then Municipality of Caloocan, Province of Rizal. The Barque title actually involves two parcels of land as
part of Lot No. 823 of the Piedad Estate, with an aggregate area of 342,945 square meters, while the Manotok title concerns only one parcel
of land, but with a similar area of 342,945 square meters.

On 30 June 1997, Atty. Benjamin M. Bustos, as reconstituting officer of the LRA, denied [9] the petition for reconstitution of the
Barque title, declaring that:

xxx

1. Lots 823-A and 823-B, Fls-3168-D, containing areas of 171,473 Sq. Mtrs. and 171,472 Sq. Mtrs., respectively, covered by
TCT No. 210177, appear to duplicate Lot 823 Piedad Estate, containing an area of 342,945 Sq. Mtrs., covered by TCT No.
372302 registered in the name of Severino M. Manotok, et. al., reconstituted under Adm. Reconstitution No. Q-213
dated February 01, 1991;

2. The submitted plan Fls-3168-D is a spurious document as categorically stated by Engr. Privadi J.G. Dalire, Chief, Geodetic
Surveys Division, Land Management Bureau, in his letter dated February 19, 1997.

xxx

The Barques motion for reconsideration was denied by Atty. Bustos in an Order[10] dated 10 February 1998; hence, the Barques
appealed to the LRA.

The LRA reversed Atty. Bustos on appeal. It ruled that the reconstituting officer should not have required the submission of
documents other than the owners duplicate certificate of title as basis for denying the petition and should have confined himself to the
owners duplicate certificate of title. The LRA further found anomalies in the Manotoks title. It observed that:

Based on the documents presented, petitioners have established by clear and convincing evidence that TCT NO.
210177 was, at the time of the destruction thereof, valid, genuine, authentic and effective. Petitioners duly presented the
original of the owners duplicate copy of TCT No. 210177 .... The logbook of the Register of Deeds of Quezon City lists TCT
No. 210177 as among the titles lost .... The Register of Deeds of Quezon City himself acknowledged the existence and
authenticity of TCT No. 210177 when he issued a certification to the effect that TCT No. 210177 was one of the titles
destroyed and not salvaged from the fire that gutted the Quezon City Hall on 11 June 1988 ....

It is likewise noteworthy that the technical description and boundaries of the lot reflected in TCT No. 210177
absolutely conform to the technical description and boundaries of Lot 823 Piedad Estate ... as indicated in the B. L. Form
No. 28-37-R dated 11-8-94 and B. L. Form No. 31-10 duly issued by the Bureau of Lands ....

136
 It therefore becomes evident that the existence, validity, authenticity and effectivity of TCT No. 210177 was
established indubitably and irrefutably by the petitioners. Under such circumstances, the reconstitution thereof should
be given due course and the same is mandatory.

It would be necessary to underscore that the certified copy of Plan FLS 3168 D was duly issued by the office of
Engr. Ernesto Erive, Chief, Surveys Division LMS-DENR-NCR whose office is the lawful repository of survey plans for lots
situated within the National Capital Region including the property in question. Said plan was duly signed by the custodian
thereof, Carmelito Soriano, Chief Technical Records and Statistics Section, DENR-NCR. Said plan is likewise duly supported
by Republic of the Philippines Official Receipt No. 2513818 Q dated 9-23-96 .... Engr. Erive in his letter dated 28 November
1996 addressed to Atty. Bustos confirmed that a microfilm copy of Plan FLS 3168D is on file in the Technical Records and
Statistics Section of his office. Engr. Dalire, in his letter dated 2 January 1997 addressed to Atty. Bustos even confirmed
the existence and authenticity of said plan.

The claim of Engr. Dalire in his letter dated 19 February 1997 that his office has no records or information about
Plan FLS 3168-D is belied by the certified copy of the computer print-out duly issued by the Bureau of Lands indicating
therein that FLS 3168D is duly entered into the microfilm records of the Bureau of Lands and has been assigned Accession
Number 410436 appearing on Page 79, Preliminary Report No. 1, List of Locator Cards and Box Number 0400 and said
computer print-out is duly supported by an Offical Receipt .

The said Plan FLS 3168D is indeed authentic and valid coming as it does from the legal repository and duly signed
by the custodian thereof. The documentary evidence presented is much too overwhelming to be simply brushed aside
and be defeated by the fabricated statements and concoctions made by Engr. Dalire in his 19 February 1997 letter.

Notwithstanding its conclusion that the Manotok title was fraudulently reconstituted, the LRA noted that only the Regional Trial
Court (RTC) could cancel the Manotok title as a Torrens title. It thus ruled,[11] that:

WHEREFORE, in view of the foregoing, it is hereby ordered that reconstitution of TCT No. 210177 in the name of
Homer L. Barque, Sr. shall be given due course after cancellation of TCT No. RT-22481 (372302) in the name of Manotoks
upon order of a court of competent jurisdiction.

SO ORDERED.

The Manotoks filed a motion for reconsideration, which was opposed by the Barques with a prayer that the reconstitution be
ordered immediately. The LRA denied[12] the Manotoks motion for reconsideration and the Barques prayer for immediate reconstitution.

Both the Manotoks and the Barques appealed the LRA decision to the Court of Appeals (CA). The Barques petition for review[13] was
docketed as CA-G.R. SP No. 66700, while the Manotoks petition for

review[14] was docketed as CA-G.R. SP No. 66642. The Barques prayed that the LRA be directed to immediately reconstitute the Barque title
without being subjected to the condition that the Manotok title should first be cancelled by a court of competent jurisdiction. On the other
hand, the Manotoks argued in their own petition that the LRA erred in imputing that the Manotok title was spurious and fake.

137
 Meanwhile, in CA-G.R. SP No. 66700, Felicitas Manahan filed a motion for leave to intervene. [15] She sought the dismissal of the
cases in CA-G.R. SP No. 66700 and CA-G.R. SP No. 66642 and claimed ownership over the subject property.

On 13 September 2002, the Second Division of the Court of Appeals rendered a Decision [16] in CA-G.R. SP No. 66700, denying the
Barques petition and affirming the LRA Resolution. The Barques filed a motion for reconsideration. [17] Subsequently, the Special Division of
Five of the Former Second Division rendered an Amended Decision [18] dated 7 November 2003 wherein it held that:

WHEREFORE, our decision dated 13 September 2002 is hereby reconsidered. Accordingly, the Register of Deeds
of Quezon City is hereby directed to cancel TCT No. RT-22481 of private respondents and the LRA is hereby directed to
reconstitute forthwith petitioners valid, genuine and existing Certificate of Title No. T-210177.[19]

The Manotoks filed a motion for the reconsideration of the amended decision in CA-G.R. SP No. 66700, but this was denied.[20]

On the other hand, as to the Manotoks petition, CA-G.R. SP No. 66642, the Third Division of the Court of Appeals rendered a
Decision[21] on 29 October 2003 which affirmed the resolution of the LRA.[22] The appellate court held that the LRA correctly deferred in giving
due course to the Barques petition for reconstitution, since there was as yet no final judgment upholding or annulling the Barque title. The
Barques filed a motion for reconsideration of this ruling.[23] As had occurred with the Barques petition, the Third Division of the Court of
Appeals granted the Barques motion for reconsideration and on 24 February 2004, promulgated its Amended Decision [24] wherein it held
that:

WHEREFORE, the Motion for Reconsideration is hereby GRANTED. The Decision of this Court dated 29 October 2003 is
RECONSIDERED and a new one is entered ordering the Register of Deeds of Quezon City to cancel petitioners TCT No. RT-
22481 and directing the LRA to reconstitute forthwith respondents TCT No. T-210177.

Aggrieved with the twin decisions of the Court of Appeals in CA-G.R. SP No. 66700 and CA-G.R. SP No. 66642, both ordering the
cancellation of the Manotok title, the Manotoks filed separate petitions for review before this Court docketed as G.R. No. 162605 and G.R.
No. 162335, respectively. On 2 August 2004, the Court ordered the consolidation of G.R. No. 162605 with G.R. No. 162335.[25]

On 12 December 2005, the Courts First Division rendered its Decision[26] affirming the two decisions of the Court of Appeals.[27] The
Manotoks filed a motion for reconsideration, which the Courts First Division denied in a Resolution dated 19 April 2006.[28] Thereafter, the
Manotoks filed a Motion for Leave to File a Second Motion for Reconsideration, with their Motion for Reconsideration attached. The Court
denied the same in a Resolution dated 19 June 2006, and the Court further ordered that entry of judgment be made.[29] Thus on 2 May 2006,
entry of judgment was made in the Book of Entries of Judgment.[30]

138
 The Barques filed multiple motions with the Courts First Division concerning the execution of the judgment, including a Motion for
Issuance of Writ of Possession or For Execution.[31] In response, the Manotoks filed an Urgent Motion to Refer Motion for Possession to the
Supreme Court En Banc (with prayer to set motion for oral argument). In a Resolution dated 19 July 2006, the Special First Division referred
these cases to the Court en banc, and on 26 July 2006, the Court en banc promulgated a Resolution accepting the cases.[32]

On 7 September 2006, Felicitas Manahan and Rosendo Manahan filed a motion to intervene, to which was attached their petition
in intervention.[33] Movants alleged that the property subject of the petition in G.R. No. 162335 and G.R. No. 162605 was owned by them.
They claimed that their predecessor-in-interest, Vicente Manahan, was issued Sales Certificate No. 511 which covered lot 823 of the Piedad
Estate. Moreover, they attached to their petition the findings of the National Bureau of Investigation (NBI) that the documents of the
Manotoks were not as old as they were purported to be. [34] The Director of the Legal Division of the Land Management Bureau (LMB)
recommended to the Director of the LMB that:

steps be taken in the proper court for the cancellation of TCT No. RT-22481(372302) and all its derivative titles so that the
land covered may be reverted to the State.[35]

Ultimately, the Court found it necessary to involve the Office of the Solicitor General (OSG) in these cases, directing the OSG to file
its Comment. The OSG filed its Comment on 04 April 2007. Oral arguments were eventually held on 24 July 2007.

After the oral arguments, the Court required the parties, the intervenors, and the Solicitor General to submit their respective
memoranda.

As can be gleaned from the foregoing statement of facts, these petitions are attended by a few procedural unorthodoxies, such as, for
example, the Court en bancs move on the Special First Divisions referral for reevaluation of these petitions when an entry of judgment had
already been made in favor of the Barques. Yet the prevailing consensus within the Court en banc was to proceed with the reevaluation of
these cases on a pro hac vice basis. There are good reasons for the Court to act in such rare manner in these cases. Most urgently, the Court
had felt that the previous rulings by the First Division and the Special First Division warranted either affirmation or modification by the Court
acting en banc.

It is a constitutional principle that no doctrine or principle of law laid down by the [C]ourt in a decision rendered en banc or in
division may be modified or reversed except by the court sitting en banc. It has been argued that the 2005 Decision of the First Division is
inconsistent with precedents of the Court, and leaving that decision alone without the imprimatur of the Court en banc would lead to undue
confusion within the bar and bench, with lawyers, academics and judges quibbling over whether the earlier ruling of the Division constitutes
the current standard with respect to administrative reconstitution of titles. Our land registration system is too vital to be stymied by such
esoteric wrangling, and the administrators and courts which implement that system do not deserve needless hassle.

The Office of the Solicitor General correctly pointed out that this Court before had sanctioned the recall entries of judgment.[36] The power
to suspend or even disregard rules of procedure can be so pervasive and compelling as to alter even that which this Court itself has already
declared to be final.[37] The militating concern for the Court en banc in accepting these cases is not so much the particular fate of the parties,
but the stability of the Torrens system of registration by ensuring clarity of jurisprudence on the field.

139
It is beyond contention, even by the parties, that since the Court en banc resolved to accept these petitions in 2006, we have effectively been
reviewing the 12 December 2005Decision of the Courts First Division, as well as the Resolutions dated 19 April and 19 June 2006 of that same
Division. This Resolution is the result of that review. As earlier stated, we have opted to do so on a pro hac vice basis to lend much needed
jurisprudential clarity as only the Court en banc can constitutionally provide.

II

In the context of an administrative reconstitution proceeding before the LRA, the Barques have sought that the LRA exercise the
power to cancel the Manotok title and forthwith cause the reconstitution of their own title. The LRA refused to do so, although it did rule
that the Manotok title was spurious and thus subject to cancellation through the proper judicial proceeding. Upon appellate review of that
LRA decision, the Court of Appeals initially upheld the LRAs position, but ultimately, upon motion for reconsideration, directed the
cancellation of the Manotok title and the reconstitution of the Barque title.

Our succeeding discussion centers on the ordered mechanism for the cancellation of Torrens titles in the Philippines.

To recall, both assailed Amended Decisions of the Court of Appeals notably directed the cancellation of the Manotok title even as it mandated
the reconstitution of the Barque title. The obvious question is whether the Court of Appeals was empowered to direct the annulment of the
Manotok title through the petitions raised before it by the Barques and the Manotoks. It could not.

Section 48 of Presidential Decree No. 1529, also known as the Property Registration Decree, provides that [a] certificate of title shall not be
subject to collateral attack [and] cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.[38] Clearly,
the cancellation of the Manotok title cannot arise incidentally from the administrative proceeding for reconstitution of the Barque title even
if the evidence from that proceeding revealed the Manotok title as fake. Nor could it have emerged incidentally in the appellate review of
the LRAs administrative proceeding.

There is no doubt that the Court of Appeals does not have original jurisdiction to annul Torrens titles or to otherwise adjudicate questions
over ownership of property. Its exclusive original jurisdiction is determined by law, particularly by Batas Pambansa (B.P. 129). Section 9 of
that law restricts the exclusive original jurisdiction of the Court of Appeals to special civil actions and to actions for annulment of judgments
of the regional trial court.[39] Still, the Court of Appeals did acquire jurisdiction over the Barques and the Manotoks petitions, albeit in the
exercise of its exclusive appellate jurisdiction[40] over the ruling of the LRA, also pursuant to Section 9 of B.P. Blg. 129, as amended. Thus, for
the appellate court to be able to direct the cancellation of a Torrens title in the course of reviewing a decision of the LRA, the LRA itself must
have statutory authority to cancel a Torrens title in the first place.

Note that the Office of the Solicitor General, which acts as counsel for the government and its agencies including the LRA, refutes the
contention that the LRA has jurisdiction to cancel the Manotok title, much less jurisdiction to rule on the validity of a certificate of title. It
invokes the exclusive original jurisdiction of the RTC under Paragraph 2, Section 19 of B.P. Blg. 129, conferring jurisdiction on the RTC over all
civil actions which involve the title to or possession of real property, or any interest therein x x x. That the RTC has exclusive original jurisdiction
over actions seeking the cancellation of title to real property is so cardinal in our remedial law that it is reflected in hundreds if not thousands
of examples in jurisprudence.

Nonetheless, we may inquire whether, notwithstanding the statutory delineation of exclusive original jurisdiction of the RTC, there is
statutory basis for the LRA to exercise jurisdiction over the cancellation of Torrens titles. If there is, we can perhaps assess such law separately
from B.P. Blg. 129.

140
 Section 6 of P.D. No. 1529 enumerates the general functions of the Land Registration Commissioner, as follows:

SEC. 6. General Functions

(1) The Commissioner of Land Registration shall have the following functions:

(a) Issue decrees of registration pursuant to final judgments of the courts in land registration proceedings and cause
the issuance by the Registers of Deeds of the corresponding certificates of title;

(b) Exercise supervision and control over all Registers of Deeds and other personnel of the Commission;

(c) Resolve cases elevated en consulta by, or on appeal from decision of, Registers of Deeds;

(d) Exercise executive supervision over all clerks of court and personnel of the Court of First Instance throughout
the Philippines with respect to the discharge of their duties and functions in relation to the registration
of lands;

(e) Implement all orders, decisions, and decrees promulgated relative to the registration of lands and issue, subject
to the approval of the Secretary of Justice, all needful rules and regulations therefor;

(f) Verify and approve subdivision, consolidation, and consolidation-subdivision survey plans of properties titled
under Act No. 496 except those covered by P.D. No. 957.

Nowhere in the aforecited provision is it stated that the LRA has the power to cancel titles. Indeed, the Barques are unable to point
to any basis in law that confirms the power of the LRA to effect such cancellation, even under Republic Act (R.A.) No. 26 as amended by Rep.
Act No. 6732, which authorizes the administrative reconstitution of titles in limited cases. In fact, as we shall see shortly such laws take great
care to ensure that a petition for administrative reconstitution of title will not disturb existing Torrenstitles.

It is thus clear that neither the Court of Appeals nor the LRA had jurisdiction to cancel the Manotok title. The next matter of inquiry is whether
the LRA had acted correctly in ordering, conditional as it may have been, the administrative reconstitution of the Barque title.

Under Rep. Act No. 26 as amended by Rep. Act No. 6732, administrative reconstitution of titles is permitted where the certificates of titles
have been lost due to flood, fire and other force majeure. The petitioner in such a case is required to execute an affidavit, containing the
following averments:

(1) That no deed or other instrument affecting the property had been presented for registration, or, if there be any, the
nature thereof, the date of its presentation, as well as the names of the parties, and whether the registration of such deed
or instrument is still pending accomplishment;
(2) That the owner's duplicate certificate or co-owner's duplicate is in due form without any apparent intentional alterations
or erasures;
(3) That the certificate of title is not the subject of litigation or investigation, administrative or judicial, regarding its
genuineness or due execution or issuance;
(4) That the certificate of title was in full force and effect at the time it was lost or destroyed;
(5) That the certificate of title is covered by a tax declaration regularly issued by the Assessor's Office; and
(6) That real estate taxes have been fully paid up to at least two (2) years prior to the filing of the petition for
reconstitution.[41]

Section 19 of Rep. Act No. 26, as amended by Rep. Act No. 6732, further provides:
141
 Sec. 19. If the certificate of title considered lost or destroyed, and subsequently found or recovered, is not in the
name of the same person in whose favor the reconstituted certificate of title has been issued, the Register of Deeds or the
party concerned should bring the matter to the attention of the proper regional trial court, which, after due notice and
hearing, shall order the cancellation of the reconstituted certificate of title and render, with respect to the memoranda of
new liens and encumbrances, if any, made in the reconstituted certificate of title, after its reconstitution, such judgment
as justice and equity may require: Provided, however, That if the reconstituted certificate of title has been cancelled by
virtue of any deed or instrument, whether voluntary or involuntary, or by an order of the court, and a new certificate of
title has been issued, the procedure prescribed above, with respect to the memorandum of new liens and encumbrances
made on the reconstituted certificate of title, after its reconstitution, shall be followed with respect to the new certificate
of title, and to such new liens and encumbrances, if any, as may have been on the latter, after the issuance thereof. [42]

Rep. Act No. 6732 itself also states:

Section 11. A reconstituted title obtained by means of fraud, deceit or other machination is void ab initio as against
the party obtaining the same and all persons having knowledge thereof.

Section 12. Any person who by means of fraud, deceit or other machination obtains or attempts to obtain a
reconstituted title shall be subject to criminal prosecution and, upon conviction, shall be liable for imprisonment for a period
of not less than two years but not exceeding five years or the payment of a fine of not less than Twenty thousand pesos but
not exceeding Two hundred thousand pesos or both at the discretion of the court.
Any public officer or employee who knowingly approves or assists in securing a decision allowing reconstitution in
favor of any person not entitled thereto shall be subject to criminal prosecution and, upon conviction, shall be liable for
imprisonment of not less than five years but not exceeding ten years or payment of a fine of not less than Fifty thousand
pesos but not exceeding One hundred thousand pesos or both at the discretion of the court and perpetual disqualification
from holding public office.[43]

These provisions indubitably establish that the administrative reconstitution of Torrens titles is intended for non-controversial cases, or
especially where the subject property is not covered by an existing title in favor of a person other than the applicant. Such an implication is
consonant with the rule that the reconstitution proceedings are not the venue for confirmation or adjudication of title, but merely a means
by which a previously adjudicated title whose original has been lost or destroyed may be reissued to its owner.[44]

The Solicitor General pertinently cites the rule in Alabang Development Corporation v. Valenzuela,[45] which we held that [t]he courts simply
have no jurisdiction over petitions by such third parties for reconstitution of allegedly lost or destroyed titles over lands that are already
covered by duly issued subsisting titles in the names of their duly registered owners.[46] That such doctrine was established for cases of judicial
reconstitution does not bar its application to cases of administrative reconstitution. None of the provisions pertaining to administrative
reconstitution in Rep. Act No. 26 or 6732 extraordinarily empowers the LRA to exercise jurisdiction over a petition for reconstitution, where
the property is already covered by a Torrens title. After all, the LRA in such case is powerless to void the previous title or to diminish its legal
effect. Even assuming that the previously issued title is obviously fraudulent or attended by flaws and as such cannot be countenanced by the
legal system, the corrective recourse lies with the courts, and not with the LRA.

If a petition for administrative reconstitution is filed with the LRA, and it appears from the official records that the subject property is already
covered by an existing Torrens title in the name of another person, there is nothing further the LRA can do but to dismiss the petition. The
dismissal of such petition is subject to judicial review, but the only relevant inquiry in such appellate proceeding is on whether or not there is
a previously existing title covering that property. Neither the LRA nor the Court of Appeals at that point may inquire into the validity of the
title or the competing claims over the property. The only remedy is an action before the RTC for the cancellation of the existing title, whether
by the competing claimant or by the OSG on behalf of the Republic.

III

142
 The 2005 Decision placed heavy reliance on Ortigas & Company Limited Partnership v. Velasco,[47] where in the course of reviewing
an action for judicial reconstitution of title, the Court opted not to remand the reconstitution case filed by Molina to the court of origin in
order to permit the appeals of Ortigas and the Solicitor General, which had been improvidently disallowed by the trial court. Instead, owing
to the fatal infirmities of Molinas cause of action, the Court itself nullified the reconstituted titles issued by the trial court. Ortigas had been
cited by the Court of Appeals and also by the 2005 Decision, in ruling on the Barques petition.

The unusual shortcut that occurred in Ortigas had become necessary because in that case the trial court had denied or stricken out
the notices of appeal respectively filed by Ortigas and the Solicitor General from the order for reconstitution of Molinas titles. Had these
notices of appeal been allowed, the Court of Appeals would have then reviewed the trial courts decision on appeal, with the ultimately correct
resolution which was the annulment of Molinas titles. Ortigas was forced to institute a special civil action of certiorari and mandamus with
this Court, praying for either of these alternative resultsthe more prudent recourse of directing the trial court to act on the notices of appeal
and to forward the case records to the Court of Appeals, or the more immediate remedy of bypassing the appellate process and the Court
itself by directly annulling Molinas titles.

The Court of Appeals herein could not have equated its annulment of the Manotok title with that undertaken by the Court
in Ortigas since, unlike in Ortigas, the Court of Appeals was not endowed with the proper appellate jurisdiction to annul the Manotok title. As
earlier pointed out, since the LRA had no original jurisdiction to cancel the Manotok title, it follows that the Court of Appeals had no
jurisdictional competence to extend the same relief, even while reviewing the LRAs ruling. Clearly, Ortigas cannot be applied as a binding
precedent to these cases. The fundamental jurisdictional defects that attended the actions of both Divisions of the Court of Appeals have
effectively diminished Ortigas as a persuasive authority.

IV

The 2005 Decision accepted the findings of the LRA and the Court of Appeals that the Manotok title was spurious and accordingly
sanctioned its cancellation, even though no direct attack on the title had been initiated before a trial court. That the 2005 Decision erred in
that regard is a necessary consequence following our earlier explanation of why the mere existence of the Manotok title necessarily barred
the LRA from inquiring into the validity of that title.

Moreover, it would have been pointless for the LRA or the Court of Appeals to have ruled definitively on the validity of the Barques
claim to title. After all, since neither the LRA nor the Court of Appeals could cause the cancellation of the Manotok title, any declaration that
the Barque claim was valid would be inutile and inoperable. Still, in order to effectively review and reverse the assailed rulings, it would be
best for this Court to test the premises under which the LRA and the Court of Appeals had concluded that the Barques had a valid claim to
title. The available record before the Court is comprehensive enough to allow us to engage in that task.

The Barque title, or TCT No. 210177, under which the Barques assert title to Lot 823 of the Piedad Estate, states that it was transferred from
TCT No. 13900.[48] The Barques assert that they bought the subject property from a certain Setosta. Thus, it could be deduced that TCT No.
13900 should have been registered under the name of Setosta. However, it was not. TCT No. 13900 was registered under the name of Manotok
Realty, Inc.[49] This detracts from the Barques claim that the Manotoks do not have title to the property, as in fact the Barque title was a
transfer from a title registered under the name of the Manotoks. The Barques have failed to explain the anomaly.

The Barques hinge their claim on a purported subdivision plan, FLS-3168-D, made in favor of Setosta. However, based on the records, it
appears that there is a conflict as to its actual existence in the files of the government. Revelatory is the exchange of correspondence between
the LMB and the LRA. The LMB did not have any copy of FLS-3168-D in the EDP listing,[50] nor did the LMB have a record of the
plan.[51] However, a microfilm copy of FLS-3168-D was on file in the Technical Records and Statistical Section of the Department of
Environment and Natural Resources Capital Region (DENR-NCR).[52] The copy with the Technical Records and Statistical Section, which bore
the stamp of the LMB, was denied by the LMB as having emanated from its office. [53]

143
 Further, the letter dated 2 January 1997 from the LMB stated that the copy of FLS-3168-D as verified from its microfilm file was the
same as the copy sent by the Technical Records and Statistics Section of the National Capital Region Lands Management Sector. [54] The LMB,
however, denied issuing such letter and stated that it was a forged document.[55] To amplify the forged nature of the document, the LMB sent
a detailed explanation to prove that it did not come from its office.[56] In a letter to the administrator of the LRA, the hearing officer concluded
that it is evident that there is an attempt to mislead us into favorable action by submitting forged documents, hence it is recommended that
this case [be] referred to the PARAC for investigation and filing of charges against perpetrators as envisioned by this office under your
administration.[57]

There are significant differences between the technical description of Lot 823 of the Piedad Estate as stated in FLS-3168-D, the
subdivision plan relied on by the Barques, and the technical description provided by the DENR. [58] The DENR-confirmed technical description
reads:

Bounded on the E., along line-2 by Payatas Estate; on the SE., by Tuazon Estate; along line 3-4 by Lot 824; along
line 4-5 by Lot 818; and on the N., along line 5-1 by Lot 822, all of Piedad Estate.[59]

However, if we examine the subdivision plan, there are critical changes with respect to the boundaries named therein. In effect, the
boundaries as described in the subdivision plan would read:

Bounded on the E., along line-2 by Diez Francisco; on the SE., by Diez Francisco; along line 3-4 by Lot 824; along
line 4-5 by Lot 826; and on the N., along line 5-1 by Lot 822, all of Piedad Estate.[60]

The Barques offered no credible explanation for the discrepancy between the subdivision plan it relies on and the DENR record. They also do
not contradict the finding of the National Archives that there is no copy in its files of the deed of sale allegedly executed between Setosta
and Barque.[61]

Lastly, in the 1st indorsement issued by the Land Projection Section of the LRA dated 23 August 2006, that Section stated that upon
examination it was found out that the land as described in the Barque title when plotted thru its tie line falls outside Quezon City. This is
material, since Lot 823 of the Piedad Estate is within the boundaries of Quezon City.[62] A similar finding was made by the Land Management
Bureau (LMB). It attested that the line or directional azimuth of Lot No. 823 per the Barque title locates it at 5,889 meters away from point 1
of Lot No. 823 of the Piedad Estate.[63]

These discrepancies highlight the error of the LRA and the Court of Appeals in acknowledging the right of the Barques to seek reconstitution
of their purported Barque title. Even assuming that the petition for reconstitution should not have been dismissed due to the Manotok title,
it is apparent that the Barques claim of ownership is exceedingly weak.

In the course of fully reevaluating these cases, the Court could not turn a blind eye on the evidence and points raised against the Manotok
title. The apparent flaws in the Manotoks claim are considerable and disturbing enough. The Court, as the ultimate citadel of justice and
legitimacy, is a guardian of the integrity of the land registration system of the Philippines. We will be derelict in our duty if we remain silent
on the apparent defects of the Manotok title, reflective as they are of a scourge this Court is dedicated to eliminate.

Many of these flaws have especially emerged through the petition-for-intervention of Felicitas and Rosendo Manahan, whom we
have allowed to intervene in these cases. The Manahans had filed a petition with the OSG seeking that it initiate cancellation/reversion
144
proceedings against the Manotok title. That petition was referred by the OSG to the LMB of the DENR, which duly investigated the claim of
the Manahans. The Chief of the Legal Division of the LMB recommended that the appropriate proceedings be taken in the proper court for
the cancellation of the Manotok title, through a Memorandum dated 17 April 2000.[64]

Around the same time, the LMB referred to the DENR Undersecretary for Legal Affairs Roseller S. dela Pea a query on whether a
deed of conveyance could be issued to Felicitas Manahan. The DENR Undersecretary, in answering that query through a Memorandum dated
6 July 2000, pointed out that the titles of the Manotoks could not have been derived from OCT No. 614, the mother title of Lot 823 of the
Piedad Estate.[65] The chain of transfers leading from OCT No. 614 to the Manotok title was a TCT No. 22813, purportedly issued by the Office
of the Register of Deeds for the Province of Rizal. The copy of said TCT No. 22813 submitted to the Court is truncated in the upper half, to
the point that it is not visually discernible what year the same was issued. More crucially, a certification was issued by the Register of Deeds
of Rizal dated 7 January 2000 stating thus:

After a thorough verification from the files of this Office, it appears that the documents leading to the issuance of TCT No.
22813, Blk. T-92 cannot be found from the files of this Office.[66]

These findings were twice verified with due diligence and reconfirmed by the DENR, according to Undersecretary Dela Pea.[67]

The DENR also requested the assistance of the National Bureau of Investigation (NBI) in conducting the said investigation. The NBI examined
various sales certificates and assignment of sales certificates in the names of the purported predecessors-in-interest of the Manotoks Regina
Geronimo, Modesto Zacarias, and Felicisimo Villanuevacertificates that were all dated prior to 1930. In its Chemistry Report No. C-99-152
dated 10 June 1999, the Forensic Chemistry Division of the NBI concluded that the said documents could not be as old as it (sic) purports to
be.[68]

According to the Manahans, the LMB did eventually forward to the Office of the Register of Deeds of Quezon City a Deed of Conveyance for
registration and mandatory issuance of title to Felicitas Manahan as grantee, pursuant to Section 122 of the Land Registration Act. The
registration of said Deed of Conveyance was referred to the Administrator of the Land Registration Authority en consulta in 2001.

Also on record[69] is an Investigation Report on Lot No. 823 of the Piedad Estate dated 5 July 1989, authored by Evelyn C. dela Rosa, Land
Investigator of the Community Environment and Natural Resources Office (CENRO), NCR-North Sector and addressed to the CENRO
Officer, North CENRO. It was narrated therein that Lot No. 823 had actually been in the possession of a Valentin Manahan beginning in 1908.
In 1939, Valentin Manahan applied for the purchase of the land, and he was issued Sales Certificate No. 511. The Investigation Report stated:

Records show that the Sale Certificate No. 511 covering Lot 823, Piedad Estate, was issued to Valentin Manahan as
purchaser and transferred to Hilaria de Guzman Manahan as (Assignee) and sold to Felicitas Manahan by way of Deed of
Absolute Sale dated August 23, 1974. Based on my research at the Land Management Bureau (LMB), Central Office, it
appears that original claimant of lot 823 was Valentin Manahan.[70]

All told, these apparent problems with the Manotoks claim dissuade us from being simply content in reflexively dismissing the administrative
petition for reconstitution filed by the Barques. Indeed, we have to take further action.

VI

The most formidable impediment to the Court reacting to the problems apparent in the Manotok title is the fact that we are not engaged in
the review of an original action for the cancellation of such title. If, as in Ortigas, the validity of the questionable title were now properly at
145
issue, the Court would without hesitancy rule on such question. Because it is not, the matter of how next to proceed warrants more
deliberation.

The conservative approach would be to still affirm the continuing validity of the Manotok title until the proper case for its cancellation is filed
with the regional trial court. Within that context, it would also be a plausible recourse for us is to direct the Solicitor General to duly investigate
the circumstances behind the transmission of Lot No. 823, formerly a Friar Land, to private persons. Thereafter, the Solicitor General can file
the appropriate proceedings for cancellation if warranted. However, it is already apparent, following the evaluation of these cases, that there
is evidenceunrefuted thus farindicating that the Manotoks claim to title is just as flawed as that of the Barques.

Can the Court declare the Manotok title void? In the 2002 decision in Alonso v. Cebu Country Club,[71] the subject property therein had
originally formed part of the Banilad Friar Lands. Cebu Country Club had undertaken the administrative reconstitution of the title to the
property, leading Alonso to file a complaint for nullification of such title in order to vindicate his own claims to the property. Alonsos complaint
was dismissed by the trial court and the Court of Appeals. While the case was pending with this Court, the Solicitor General was required to
comment on the validity of Cebu Country Clubs administratively reconstituted title. Ultimately, the Court concluded that Cebu Country Club
had not been able to establish a clear title over the contested estate, and in the dispositive portion of its decision declared that Lot No. 727
D-2 of the Banilad Friar Lands Estate covered by Original Certificate of Title Nos. 251, 232, and 253 legally belongs to the Government of the
Philippines.

The following year, the Court, acting on the motions for reconsideration in Alonso,[72] extensively discussed why it had taken that
extraordinary step even though the Republic of the Philippines, through the Solicitor General, had not participated or intervened in that case
before the lower courts.

It must be borne in mind that the disputed property is part of the "Friar Lands" over which the Government holds
title and are not public lands but private or patrimonial property of the Government and can be alienated only upon proper
compliance with the requirements of Act No. 1120 or the Friar Lands Act.

xxx

It was thus primordial for the respondent to prove its acquisition of its title by clear and convincing evidence in
view of the nature of the land. In fact, it is essential for both respondent and petitioners to establish that it had become
private property. Both parties failed to do so. As we have held earlier, petitioners have not succeeded to prove their claim
of ownership over the subject property.

xxx

Neither may the rewards of prescription be successfully invoked by respondent, as it is an iron-clad dictum that
prescription can never lie against the Government. Since respondent failed to present the paper trail of the property's
conversion to private property, the lengthy possession and occupation of the disputed land by respondent cannot be
counted in its favor, as the subject property being a friar land, remained part of the patrimonial property of the
Government. Possession of patrimonial property of the Government, whether spanning decades or centuries, can not ipso
facto ripen into ownership. Moreover, the rule that statutes of limitation do not run against the State, unless therein
expressly provided, is founded on "the great principle of public policy, applicable to all governments alike, which forbids
that the public interests should be prejudiced by the negligence of the officers or agents to whose care they are confided."

xxx

146
 Finally, our declaration that Lot 727-D-2 of the Banilad Friar Lands Estate legally belongs to the Government does
not amount to reversion without due process of law insofar as both parties are concerned. The disputed property is
a Friar Land and both parties failed to show that it had ceased to belong to the patrimonial property of the State or that it
had become private property.[73]

The Alonso approach especially appeals to us because, as in this case, the subject property therein was a Friar Land which under the Friar
Lands Law (Act No. 1120) may be disposed of by the Government only under that law. Thus, there is greater concern on the part of this Court
to secure its proper transmission to private hands, if at all.

At the same time, the Court recognizes that there is not yet any sufficient evidence for us to warrant the annulment of the Manotok title. All
that the record indicates thus far is evidence not yet refuted by clear and convincing proof that the Manotoks claim to title is flawed. To arrive
at an ultimate determination, the formal reception of evidence is in order. This Court is not a trier of fact or otherwise structurally capacitated
to receive and evaluate evidence de novo. However, the Court of Appeals is sufficiently able to undertake such function.

The remand of cases pending with this Court to the Court of Appeals for reception of further evidence is not a novel idea. It has been
undertaken before in Republic v. Court of Appeals[74] and more recently in our 2007 Resolution in Manotok v. Court of Appeals.[75] Our
following explanation in Manotok equally applies to this case:

Under Section 6 of Rule 46, which is applicable to original cases for certiorari, the Court may, whenever necessary
to resolve factual issues, delegate the reception of the evidence on such issues to any of its members or to an appropriate
court, agency or office. 80 The delegate need not be the body that rendered the assailed decision.

The Court of Appeals generally has the authority to review findings of fact. Its conclusions as to findings of fact
are generally accorded great respect by this Court. It is a body that is fully capacitated and has a surfeit of experience in
appreciating factual matters, including documentary evidence.

In fact, the Court had actually resorted to referring a factual matter pending before it to the Court of Appeals. In Republic
v. Court of Appeals, this Court commissioned the former Thirteenth Division of the Court of Appeals to hear and receive
evidence on the controversy, more particularly to determine "the actual area reclaimed by the Republic Real Estate
Corporation, and the areas of the Cultural Center Complex which are 'open spaces' and/or areas reserved for certain
purposes,' determining in the process the validity of such postulates and the respective measurements of the areas referred
to." The Court of Appeals therein received the evidence of the parties and rendered a "Commissioner's Report" shortly
thereafter. Thus, resort to the Court of Appeals is not a deviant procedure.

The provisions of Rule 32 should also be considered as governing the grant of authority to the Court of Appeals to receive
evidence in the present case. Under Section 2, Rule 32 of the Rules of Court, a court may, motu proprio, direct a reference
to a commissioner when a question of fact, other than upon the pleadings, arises upon motion or otherwise, in any stage
of a case, or for carrying a judgment or order into effect. The order of reference can be limited exclusively to receive and
147
 report evidence only, and the commissioner may likewise rule upon the admissibility of evidence. The commissioner is
likewise mandated to submit a report in writing to the court upon the matters submitted to him by the order of reference.
In Republic, the commissioner's report formed the basis of the final adjudication by the Court on the matter. The same
result can obtain herein.[76]

The primary focus for the Court of Appeals, as an agent of this Court, in receiving and evaluating evidence should be whether the Manotoks
can trace their claim of title to a valid alienation by the Government of Lot No. 823 of the Piedad Estate, which was a Friar

Land. On that evidence, this Court may ultimately decide whether annulment of the Manotok title is warranted, similar to the annulment of
the Cebu Country Club title in Alonso. At the same time, the Court recognizes that the respective claims to title by other parties such as the
Barques and the Manahans, and the evidence they may submit on their behalf, may have an impact on the correct determination of the
status of the Manotok title. It would thus be prudent, in assuring the accurate evaluation of the question, to allow said parties, along with
the OSG, to participate in the proceedings before the Court of Appeals. If the final evidence on record definitively reveals the proper claimant
to the subject property, the Court would take such fact into consideration as it adjudicates final relief.

For the purposes above-stated, the Court of Appeals is tasked to hear and receive evidence, conclude the proceedings and submit to this
Court a report on its findings and recommended conclusions within three (3) months from notice of this Resolution.

To assist the Court of Appeals in its evaluation of the factual record, the Office of the Solicitor General is directed to secure all the
pertinent relevant records from the Land Management Bureau and the

Department of Environment and Natural Resources and submit the same to the Court of Appeals.

WHEREFORE, the Decision dated 12 June 2005, and the Resolutions dated 19 April and 19 June 2006 of the Courts First Division are hereby
SET ASIDE, and the Entry of Judgment recorded on 2 May 2006 is RECALLED. The Amended Decision dated 24 February 2004 in CA-G.R. SP
No. 66642, the Amended Decision dated 7 November 2003and the Resolution dated 12 March 2004 in CA-G.R. SP No. 66700, and the
Resolutions of the Land Registration Authority dated 24 June 1998 and 14 June 1998 in Admin. Recons. No. Q-547-A[97] are all REVERSED
and SET ASIDE.

The instant cases are hereby REMANDED to the Court of Appeals for further proceedings in accordance with this Resolution. The Court of
Appeals is directed to raffle these remanded cases immediately upon receipt of this Resolution.

This Resolution is immediately executory.

148