G.R. No. 223290, November 07, 2016 disability benefits in the amount of US$60,000.
disability benefits in the amount of US$60,000.00, plus ten percent (10%) of the total
WOODROW B. CAMASO, Petitioner, v. TSM SHIPPING (PHILS), INC., UTKILEN,
AND/OR JONES TULOD, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Resolutions dated August 12,
20152 and March 4, 20163 of the Court of Appeals (CA) in CA-G.R. SP No. 141278-
UDK which dismissed petitioner Woodrow B. Camaso's (Camaso) petition for
certiorari before it for non-payment of the required docket
fees.chanroblesvirtuallawlibrary
The Facts
Camaso alleged that on July 15, 2014, he signed a contract of employment with
respondents TSM Shipping (Phils), Inc., Utkilen, artd Jones Tulod (respondents) to
work as a Second Mate on-board the vessel "M/V Golfstraum," for a period of six (6)
months and with basic monthly salary of US$1,178.00.4 On October 18, 2014, he
joined his vessel of assignment.5 Prior to said contract, Camaso claimed to have
been working for respondents for almost five (5) years and boarded eight (8) of their
vessels.6
Sometime in November 2013, Camaso complained of a noticeable obstruction in his
throat which he described as akin to a "fishbone coupled [with] coughing."7 By
February 2014, his situation worsened as he developed lymph nodules on his jawline,
prompting him to request for a medical check-up while in Amsterdam. As Camaso
was initially diagnosed with tonsillar cancer, he was recommended for medical
repatriation to undergo extensive treatment. Upon repatriation to the Philippines on
September 8, 2014, he reported at respondents' office and was referred to a certain
Dr. Nolasco of St. Luke's Medical Center for testing. After a series of tests, it was
confirmed that Camaso was indeed suffering from tonsillar cancer.8 Consequently,
he underwent eight (8) chemotherapy sessions and radiation therapy for 35 cycles
which were all paid for by respondents. He likewise received sickwage allowances
from the latter.9 Thereafter, respondents refused to shoulder Camaso's medical
expenses, thus, forcing the latter to pay for his treatment. Believing that his sickness
was work-related and that respondents remained silent on their obligation, Camaso
filed the instant complaint for disability benefits, sickwage allowance, reimbursement
of medical and hospital expenses, and other consequential damages before the
National Labor Relations Commission (NLRC), docketed as NLRC Case No. OFW
(M) 07-09270-14. After efforts for an amicable settlement between the parties failed,
they were ordered to file their respective position papers.10
The LA and NLRC Rulings
In a Decision11 dated November 28, 2014, the Labor Arbiter (LA) ruled in Camaso's
favor and, accordingly, ordered respondents to pay him his total and permanent
money claims as attorney's fees. However, the LA dismissed his other monetary
claims for lack of merit.12
On appeal, docketed as NLRC LAC No. (OFW-M) 01-000088-15,13 the NLRC
promulgated a Decision14 dated March 19, 2015 reversing the LA ruling and,
consequently, dismissed Camaso's complaint for lack of merit. Camaso moved for its
reconsideration, but was denied in a Resolution15 dated April 28, 2015. Aggrieved,
he filed a petition for certiorari before the CA.16
The CA Ruling
In a Resolution17 dated August 12, 2015, the CA dismissed Camaso's petition "for
non-payment of the required docketing fees as required under Section 3, Rule 46 of
the Revised Rules of Court."18
Dissatisfied, Camaso filed a Motion for Reconsideration19 dated August 29, 2015,
arguing, inter alia, that a check representing the payment of the required docket fees
was attached to a copy of his petition filed before the CA. He further claimed that upon
verification of his counsel's messenger, the Division Clerk of Court admitted that it
was simply overlooked.20
In a Resolution21 dated March 4, 2016, the CA denied Camaso's motion for lack of
merit. Citing the presumption of regularity of official duties, the CA gave credence to
the explanation of Myrna D. Almira, Officer-in-Charge of the CA Receiving Section,
that there was no cash, postal money order, or check attached to Camaso's petition
when it was originally filed before the CA. In any event, the CA held that assuming
that a check was indeed attached to the petition, such personal check, i.e., Metrobank
check dated July 6, 2015 under the personal account of a certain Pedro L. Linsangan,
is not a mode of payment sanctioned by the 2009 Internal Rules of the Court of
Appeals (2009 IRCA), which allows only payment in cash, postal money order,
certified, manager's or cashier's checks payable to the CA.22
Hence, this petition.chanroblesvirtuallawlibrary
The Issue Before the Court
The primordial issue for the Court's resolution is whether or not the CA correctly
dismissed Camaso's petition for certiorari before it for non-payment of docket
fees.chanroblesvirtuallawlibrary
The Court's Ruling
The petition is meritorious.
Section 3, Rule 46 of the Rules of Court provides that in original actions filed before
the CA, such as a petition for certiorari, the payment of the corresponding docket fees
is required, and that the failure to comply with the same shall be sufficient ground for
the dismissal of such action, viz.:chanRoblesvirtualLawlibrary
1
Section 3. Contents and filing of petition, effect of non-compliance with requirements.
- The petition shall contain the full names and actual addresses of all the petitioners
and respondents, a concise statement of the matters involved, the factual background
of the case, and the grounds relied upon for the relief prayed for.
In actions filed under Rule 65, the petition shall further indicate the material dates
showing when notice of the judgment or final order or resolution subject thereof was
received, when a motion for new trial or reconsideration, if any, was filed and when
notice of the denial thereof was received.
xxxx
The petitioner shall pay the corresponding docket and other lawful fees to the clerk of
court and deposit the amount of P500.00 for costs at the time of the filing of the
petition.
The failure of the petitioner to comply with any of the foregoing requirements shall be
sufficient ground for the dismissal of the petition. (Emphases and underscoring
supplied)
In Bibiana Farms & Mills, Inc. v. NLRC,23 the Court nevertheless explained that while
non-payment of docket fees may indeed render an original action dismissible, the rule
on payment of docket fees may be relaxed whenever the attending circumstances of
the case so warrant:chanRoblesvirtualLawlibrary
Under the foregoing rule, non-compliance with any of the requirements shall be a
sufficient ground for the dismissal of the petition. Corollarily, the rule is that a court
cannot acquire jurisdiction over the subject matter of a case, unless the docket fees
are paid. And where the filing of the initiatory pleading is not accompanied by payment
of the docket fees, the court may allow payment of the fee within a reasonable time
but in no case beyond the applicable prescriptive or reglementary period.
In several cases, however, the Court entertained certain exceptions due to the
peculiar circumstances attendant in these cases, which warrant a relaxation of the
rules on payment of docket fees. It was held in La Salette College v. Pilotin [463 Phil.
785 (2003)], that the strict application of the rule may be 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.
Thus, in Villamor v. [CA] [478 Phil. 728 (2004)], the Court sustained the decision of
the CA to reinstate the private respondents', appeal despite having paid the docket
fees almost one year after the notice of appeal was filed, finding that there is no
showing that the private respondents deliberately refused to pay the requisite fee
within the reglementary period and abandon their appeal. The Court also found that
it was imperative for the CA to review the ruling of the trial court to avoid a miscarriage
of justice. Thus, the Court concluded, "Under the circumstances obtaining in the case
at bar, we see no cogent reason to reverse the resolutions of the respondent court. It
is the policy of the court to encourage hearing of appeals on their merits. To resort to
technicalities which the petitioner capitalizes on in the instant petition would only tend
to frustrate rather than promote substantial justice."24 (Emphases and underscoring
supplied)
Verily, the failure to pay the required docket fees per se should not necessarily lead
to the dismissal of a case. It has long been settled that while the court acquires
jurisdiction over any case only upon the payment of the prescribed docket fees, its
non-payment at the time of filing of the initiatory pleading does not automatically
cause its dismissal provided that: (a) the fees are paid within a reasonable period;
and (b) there was no intention on the part of the claimant to defraud the
government.25cralawred
Here, it appears that when Camaso filed his certiorari petition through his counsel and
via mail, a Metrobank check dated July 6, 2015 under the account name of Pedro L.
Linsangan was attached thereto to serve as payment of docket fees.26 Although this
was not an authorized mode of payment under Section 6, Rule VIII27 of the 2009
IRCA, the attachment of such personal check shows that Camaso exerted earnest
efforts to pay the required docket fees. Clearly, this exhibits good faith and evinces
his intention not to defraud the government. In this relation, the assertion of the
Officer-in-Charge of the CA Receiving Section that there was no check attached to
Camaso's certiorari petition is clearly belied by the fact that when it was examined at
the Office of the Division Clerk of Court, the check was found to be still stapled
thereto.28
In light of the foregoing circumstances, the Court deems it appropriate to relax the
technical rules of procedure in the interest of substantial justice and, hence, remands
the instant case to the CA for the resolution of its substantial merits.29 Upon remand,
the CA is directed to order Camaso to pay the required docket fees within a
reasonable period of thirty (30) days from notice of such order.
WHEREFORE, the petition is GRANTED. The Resolutions dated August 12, 2015
and March 4, 2016 of the Court of Appeals (CA) in CA- G.R. SP No. 141278-UDK are
hereby SET ASIDE. Accordingly, the instant case is REMANDED to the CA for further
proceedings as discussed in this Decision.
SO ORDERED.ChanRoblesVirtualawlibrary
2
[ GR No. 195834, Nov 09, 2016 ]
GUILLERMO SALVADOR v. PATRICIA +
DECISION
BERSAMIN, J.:
Jurisdiction over a real action is determined based on the allegations in the complaint
of the assessed value of the property involved. The silence of the complaint on such
value is ground to dismiss the action for lack of jurisdiction because the trial court is
not given the basis for making the determination.
The Case
For review is the decision promulgated on June 25, 2010[1] and the resolution
promulgated on February 16, 2011 in CA-G.R. CV No. 86735,[2] whereby the Court
of Appeals (CA) dismissed the petitioners' complaint in Civil Case No. 96-81167,
thereby respectively reversing and setting aside the decision rendered on May 30,
2005 by the Regional Trial Court (RTC), Branch 32, in Manila,[3] and denying their
motion for reconsideration.
Antecedents
The CA adopted the summary by the RTC of the relevant factual and procedural
antecedents, as follows:
This is an action for injunction and quieting of title to determine who owns the property
occupied by the plaintiffs and intervenor, Ciriano C. Mijares.
Additionally, to prevent the defendant Patricia Inc., from evicting the plaintiffs from
their respective improvements along Juan Luna Street, plaintiffs applied for a
preliminary injunction in their Complaint pending the quieting of title on the merits.
The complaint was amended to include different branches of the Metropolitan Trial
Courts of Manila. A Complaint-in-Intervention was filed by the City of Manila as owner
of the land occupied by the plaintiffs. Another Complaint-in-Intervention by Ciriano
Mijares was also filed alleging that he was similarly situated as the other plaintiffs.
A preliminary injunction was granted and served on all the defendants.
Based on the allegations of the parties involved, the main issue to be resolved is
whether the improvements of the plaintiffs stand on land that belongs to Patricia Inc.,
or the City of Manila. Who owns the same? Is it covered by a Certificate of Title?
All parties agreed and admitted in evidence by stipulation as to the authenticity of the
following documents:
(1) Transfer Certificate of Title No. 44247 in the name of the City of Manila;
(2) Transfer Certificate of Title No. 35727 in the name of Patricia Inc.;
(3) Approved Plan PSD-38540; and
(4) Approved Subdivision Plan PCS-3290 for Ricardo Manotok.
The issue as to whether TCT 35727 should be cancelled as prayed for by the plaintiffs
and intervenor, Ciriano C. Mijares is laid to rest by agreement of the parties that this
particular document is genuine and duly executed. Nonetheless, the cancellation of a
Transfer Certificate of Title should be in a separate action before another forum.
Since the Transfer Certificates of Title of both Patricia Inc. and the City of Manila are
admitted as genuine, the question now is: Where are the boundaries based on the
description in the respective titles?[4]
To resolve the question about the boundaries of the properties of the City of Manila
and respondent Patricia, Inc., the RTC appointed, with the concurrence of the parties,
three geodetic engineers as commissioners, namely: Engr. Rosario Mercado, Engr.
Ernesto Pamular and Engr. Delfin Bumanlag.[5] These commissioners ultimately
submitted their reports.
On May 30, 2005, the RTC rendered judgment in favor of the petitioners and against
Patricia, Inc., permanently enjoining the latter from doing any act that would evict the
former from their respective premises, and from collecting any rentals from them. The
RTC deemed it more sound to side with two of the commissioners who had found that
the land belonged to the City of Manila, and disposed:
WHEREFORE, it is hereby ORDERED:
Defendant Patricia Inc. and other person/s claiming under it, are PERMANENTLY
ENJOINED to REFRAIN and DESIST from any act of EVICTION OR EJECTMENT
of the PLAINTIFFS in the premises they occupy;
Defendant Patricia Inc. STOP COLLECTING any rentals from the plaintiffs who may
seek reimbursement of previous payments in a separate action subject to the
ownership of the City of Manila and;
Attorney's fees of P10,000.00 to each plaintiff and intervenor, Ciriano Mijares;
P20,000.00 to the City of Manila. (emphasis ours)
No pronouncement as to costs.
SO ORDERED.[6]
Decision of the CA
On appeal, the CA, in CA-G.R. CV No. 86735, reversed the RTC's judgment,[7] and
dismissed the complaint. The CA declared that the petitioners were without the
necessary interest, either legal or equitable title, to maintain a suit for quieting of title;
castigated the RTC for acting like a mere rubber stamp of the majority of the
commissioners; opined that the RTC should have conducted hearings on the reports
of the commissioners; ruled as highly improper the adjudication of the boundary
dispute in an action for quieting of title; and decreed:
3
WHEREFORE, premises considered, We hereby REVERSE and SET ASIDE the
decision dated May 30, 2005 of the Regional Trial Court of Manila, Branch 32. Civil
Case No. 96-81167 is hereby DISMISSED for utter want of merit. Accordingly, the
questioned order enjoining Patricia and all other person/s acting on its stead (sic) to
refrain and desist from evicting or ejecting plaintiffs/appellees in Patricia's own land
and from collecting rentals is LIFTED effective immediately.
No costs.
SO ORDERED.[8]
The CA denied the motions for reconsideration of the petitioners and intervenor
Mijares through the assailed resolution of February 16, 2011.[9]
Hence, this appeal by the petitioners.
Issues
The petitioners maintain that the CA erred in dismissing the complaint, arguing that
the parties had openly raised and litigated the boundary issue in the RTC, and had
thereby amended the complaint to conform to the evidence pursuant to Section 5,
Rule 10 of the Rules of Court; that they had the sufficient interest to bring the suit for
quieting of title because they had built their improvements on the property; and that
the RTC correctly relied on the reports of the majority of the commissioners.
On its part, the City of Manila urges the Court to reinstate the decision of the RTC. It
reprises the grounds relied upon by the petitioners, particularly the application of
Section 5, Rule 10 of the Rules of Court.[10]
In response, Patricia, Inc. counters that the boundary dispute, which the allegations
of the complaint eventually boiled down to, was not proper in the action for quieting
of title under Rule 63, Rules of Court; and that Section 5, Rule 10 of the Rules of Court
did not apply to vest the authority to resolve the boundary dispute in the RTCC.[11]
In other words, did the CA err m dismissing the petitioners' complaint?
Ruling of the Court
The appeal lacks merit.
1.
Jurisdiction over a real action depends on
the assessed value of the property involved
as alleged in the complaint
The complaint was ostensibly for the separate causes of action for injunction and for
quieting of title. As such, the allegations that would support both causes of action
must be properly stated in the complaint. One of the important allegations would be
those vesting jurisdiction in the trial court.
The power of a court to hear and decide a controversy is called its jurisdiction, which
includes the power to determine whether or not it has the authority to hear and
determine the controversy presented, and the right to decide whether or not the
statement of facts that confer jurisdiction exists, as well as all other matters that arise
in the case legitimately before the court. Jurisdiction imports the power and authority
to declare the law, to expound or to apply the laws exclusive of the idea of the power
to make the laws, to hear and determine issues of law and of fact, the power to hear,
determine, and pronounce judgment on the issues before the court, and the power to
inquire into the facts, to apply the law, and to pronounce the judgment.[12]
But judicial power is to be distinguished from jurisdiction in that the former cannot
exist without the latter and must of necessity be exercised within the scope of the
latter, not beyond it.[13]
Jurisdiction is a matter of substantive law because it is conferred only by law, as
distinguished from venue, which is a purely procedural matter. The conferring law
may be the Constitution, or the statute organizing the court or tribunal, or the special
or general statute defining the jurisdiction of an existing court or tribunal, but it must
be in force at the time of the commencement of the action.[14] Jurisdiction cannot be
presumed or implied, but must appear clearly from the law or it will not be held to
exist,[15] but it may be conferred on a court or tribunal by necessary implication as
well as by express terms.[16] It cannot be conferred by the agreement of the
parties;[17] or by the court's acquiescence;[18] or by the erroneous belief of the court
that it had jurisdiction;[19] or by the waiver of objections;[20] or by the silence of the
parties.[21]
The three essential elements of jurisdiction are: one, that the court must have
cognizance of the class of cases to which the one to be adjudged belongs; two, that
the proper parties must be present; and, three, that the point decided must be, in
substance and effect, within the issue. The test for determining jurisdiction is ordinarily
the nature of the case as made by the complaint and the relief sought; and the primary
and essential nature of the suit, not its incidental character, determines the jurisdiction
of the court relative to it.[22]
Jurisdiction may be classified into original and appellate, the former being the power
to take judicial cognizance of a case instituted for judicial action for the first time under
conditions provided by law, and the latter being the authority of a court higher in rank
to re-examine the final order or judgment of a lower court that tried the case elevated
for judicial review. Considering that the two classes of jurisdiction are exclusive of
each other, one must be expressly conferred by law. One does not flow, nor is
inferred, from the other.[23]
Jurisdiction is to be distinguished from its exercise.[24] When there is jurisdiction over
the person and subject matter, the decision of all other questions arising in the case
is but an exercise of that jurisdiction.[25] Considering that jurisdiction over the subject
matter determines the power of a court or tribunal to hear and determine a particular
case, its existence does not depend upon the regularity of its exercise by the court or
tribunal.[26] The test of jurisdiction is whether or not the court or tribunal had the
power to enter on the inquiry, not whether or not its conclusions in the course thereof
4
were correct, for the power to decide necessarily carries with it the power to decide
wrongly as well as rightly. In a manner of speaking, the lack of the power to act at all
results in a judgment that is void; while the lack of the power to render an erroneous
decision results in a judgment that is valid until set aside.[27] That the decision is
erroneous does not divest the court or tribunal that rendered it of the jurisdiction
conferred by law to try the case.[28] Hence, if the court or tribunal has jurisdiction over
the civil action, whatever error may be attributed to it is simply one of judgment, not
of jurisdiction; appeal, not certiorari, lies to correct the error.[29]
The exclusive original jurisdiction of the RTC in civil cases is conferred and provided
for in Section 19 of Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980),
viz.:
Sec. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive
original jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary
estimation;
(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;
(3) In all actions in admiralty and maritime jurisdiction where he demand or claim
exceeds twenty thousand pesos (P20,000.00);
(4) In all matters of probate, both testate and intestate, where the gross value of the
estate exceeds twenty thousand pesos (P20,000.00);
(5) In all actions involving the contract of marriage and marital relations;
(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or
body exercising judicial or quasi-judicial functions;
(7) In all civil actions and special proceedings falling within the exclusive original
jurisdiction of a Juvenile and Domestic Relations Court and of the Courts of Agrarian
Relations as now provided by law; and
(8) In all other cases in which the demand, exclusive of interest and costs or the value
of the property in controversy, amounts to more than twenty thousand pesos
(P20,000.00).
For the purpose of determining jurisdiction, the trial court must interpret and apply the
law on jurisdiction in relation to the averments or allegations of ultimate facts in the
complaint regardless of whether or not the plaintiff is entitled to recover upon all or
some of the claims asserted therein.[30] Based on the foregoing provision of law,
therefore, the RTC had jurisdiction over the cause of action for injunction because it
was one in which the subject of the litigation was incapable of pecuniary estimation.
But the same was not true in the case of the cause of action for the quieting of title,
which had the nature of a real action — that is, an action that involves the issue of
ownership or possession of real property, or any interest in real property[31] — in
view of the expansion of the jurisdiction of the first level courts under Republic Act
No. 7691, which amended Section 33(3) of Batas Pambansa Blg. 129 effective on
April 15, 1994,[32] to now pertinently provide as follows:
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
(3) Exclusive original jurisdiction in all civil actions which involve title to, possession
of, real property, or any interest therein where the assessed value of the property or
interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil
actions in Metro Manila, where such assessed value does not exceeds (sic) Fifty
thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind,
attorneys fees, litigation expenses and costs: x x x
As such, the determination of which trial court had the exclusive original jurisdiction
over the real action is dependent on the assessed value of the property in dispute.
An action to quiet title is to be brought as a special civil action under Rule 63 of the
Rules of Court. Although Section 1 of Rule 63 specifies the forum to be "the
appropriate Regional Trial Court,"[33] the specification does not override the statutory
provision on jurisdiction. This the Court has pointed out in Malana v. Tappa,[34] to
wit:
To determine which court has jurisdiction over the actions identified in the second
paragraph of Section 1, Rule 63 of the Rules of Court, said provision must be read
together with those of the Judiciary Reorganization Act of 1980, as amended.
It is important to note that Section 1, Rule 63 of the Rules of Court does not
categorically require that an action to quiet title be filed before the RTC. It repeatedly
uses the word "may"- that an action for quieting of title "may be brought under [the]
Rule" on petitions for declaratory relief, and a person desiring to file a petition for
declaratory relief "may x x x bring an action in the appropriate Regional Trial Court."
The use of the word "may" in a statute denotes that the provision is merely permissive
and indicates a mere possibility, an opportunity or an option.
In contrast, the mandatory provision of the Judiciary Reorganization Act of 1980, as
amended, uses the word shall and explicitly requires the MTC to exercise exclusive
original jurisdiction over all civil actions which involve title to or possession of real
property where the assessed value does not exceed P20,000.00, thus:
xxxx
5
As found by the RTC, the assessed value of the subject property as stated in Tax
Declaration No. 02-48386 is only P410.00; therefore, petitioners Complaint involving
title to and possession of the said property is within the exclusive original jurisdiction
of the MTC, not the RTC.[35]
The complaint of the petitioners did not contain any averment of the assessed value
of the property. Such failure left the trial court bereft of any basis to determine which
court could validly take cognizance of the cause of action for quieting of title. Thus,
the RTC could not proceed with the case and render judgment for lack of jurisdiction.
Although neither the parties nor the lower courts raised jurisdiction of the trial court in
the proceedings, the issue did not simply vanish because the Court can hereby motu
proprio consider and resolve it now by virtue of jurisdiction being conferred only by
law, and could not be vested by any act or omission of any party.[36]
2.
The joinder of the action for injunction
and the action to quiet title
was disallowed by the Rules of Court
Another noticeable area of stumble for the petitioners related to their having joined
two causes of action, i.e., injunction and quieting of title, despite the first being an
ordinary suit and the latter a special civil action under Rule 63. Section 5, Rule 2 of
the Rules of Court disallowed the joinder, viz.:
Section 5. Joinder of causes of action. — A party may in one pleading assert, in the
alternative or otherwise, as many causes of action as he may have against an
opposing party, subject to the following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder of
parties;
(b) The joinder shall not include special civil actions or actions governed by special
rules;
(c) Where the causes of action arc between the same parties but pertain to different
venues or jurisdictions, the joinder may be allowed in the Regional Trial Court
provided one of the causes of action falls within the jurisdiction of said court and the
venue lies therein; and
(d) Where the claims in all the causes of action arc principally for recovery of money,
the aggregate amount claimed shall he the test of jurisdiction.
Consequently, the RTC should have severed the causes of action, either upon motion
or motu proprio, and tried them separately, assuming it had jurisdiction over both.
Such severance was pursuant to Section 6, Rule 2 of the Rules of Court, which
expressly provides:
Section 6. Misjoinder of causes of action. -- Misjoinder of causes of action is not a
ground for dismissal of an action. A misjoined cause of action may, on motion of a
party or on the initiative of the court, be severed and proceeded with separately. (n)
The refusal of the petitioners to accept the severance would have led to the dismissal
of the case conformably with the mandate of Section, Rule 17 of the Rules of Court,
to wit:
Section 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 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. (3a)
3.
The petitioners did not show that they were
real parties in interest to demand
either injunction or quieting of title
Even assuming that the RTC had jurisdiction over the cause of action for quieting of
title, the petitioners failed to allege and prove their interest to maintain the suit. Hence,
the dismissal of this cause of action was warranted.
An action to quiet title or remove the clouds over the title is a special civil action
governed by the second paragraph of Section 1, Rule 63 of the Rules of Court.
Specifically, an action for quieting of title is essentially a common law remedy
grounded on equity. The competent court is tasked to determine the respective rights
of the complainant and other claimants, not only to put things in their proper place, to
make the one who has no rights to said immovable respect and not disturb the other,
but also for the benefit of both, so that he who has the right would see every cloud of
doubt over the property dissipated, and he could afterwards without fear introduce the
improvements he may desire, to use, and even to abuse the property as he deems
best. But "for an action to quiet title to prosper, two indispensable requisites must
concur, namely: (1) the plaintiff or complainant has a legal or an equitable title to or
interest in the real property subject of the action; and (2) the deed, claim,
encumbrance, or proceeding claimed to be casting cloud on his title must be shown
to be in fact invalid or inoperative despite its prima facie appearance of validity or legal
efficacy.[37]
The first requisite is based on Article 477 of the Civil Code which requires that the
plaintiff must have legal or equitable title to, or interest in the real property which is
the subject matter of the action. Legal title denotes registered ownership, while
equitable title means beneficial ownership,[38] meaning a title derived through a valid
contract or relation, and based on recognized equitable principles; the right in the
party, to whom it belongs, to have the legal title transferred to him.[39]
To determine whether the petitioners as plaintiffs had the requisite interest to bring
the suit, a resort to the allegations of the complaint is necessary. In that regard, the
complaint pertinently alleged as follows:
6
THE CAUSE OF ACTION
5. Plaintiffs are occupants of a parcel of land situated at Juan Luna Street,
Gagalangin, Tondo (hereinafter "subject property");
6. Plaintiffs and their predecessor-in-interest have been in open and notorious
possession of the subject property for more than thirty (30) years;
7. Plaintiffs have constructed in good faith their houses and other improvements on
the subject property;
8. The subject property is declared an Area for Priority Development (APD) under
Presidential Decree No. 1967, as amended;
9. Defendant is claiming ownership of the subject property by virtue of Transfer
Certificate of Title (TCT) No. 35727 of the Registry of Deeds for the City of Manila. x
xx
10. Defendant's claim of ownership over the subject property is without any legal or
factual basis because, assuming but not conceding that the TCT No. 35727 covers
the subject property, the parcel of land covered by and embraced in TCT No. 35727
has already been sold and conveyed by defendant and, under the law, TCT No. 35727
should have been cancelled;
11. By virtue of TCT No. 35727, defendant is evicting, is about to evict or threatening
to evict the plaintiffs from the said parcel of land;
12. Because of the prior sales and conveyances, even assuming but not conceding
that the subject property is covered by and embraced in Transfer Certificate of title
No. 35727, defendant cannot lawfully evict the plaintiffs from the subject property
since it no longer owns the subject property;
13. Any attempted eviction of the plaintiffs from the subject property would be without
legal basis and consequently, would only be acts of harassment which are contrary
to morals, good customs and public policy and therefore, plaintiffs are entitled to
enjoin the defendant from further harassing them;
14. Plaintiffs recently discovered that the subject property is owned by the City of
Manila and covered by and embraced in Transfer Certificate of Title No. 44247, a
copy of which is attached hereto as Annex "B", of the Registry of Deeds for the City
of Manila;
15. TCT No. 35727 which is apparently valid and effective is in truth and in fact invalid,
ineffective, voidable or unenforceable, and constitutes a cloud on the rights and
interests of the plaintiffs over the subject property;
16. Plaintiffs are entitled to the removal of such cloud on their rights and interests over
the subject property;
17. Even assuming, but not admitting, that defendant owns the subject property, it
cannot evict the plaintiffs from the subject property because plaintiffs' right to possess
the subject property is protected by Presidential Decree No. 2016.
18. Even assuming, but not admitting, that defendant owns the subject property, it
cannot evict the plaintiffs from the subject property without reimbursing the plaintiffs
for the cost of the improvements made upon the subject property;
19. Because of defendant's unwarranted claim of ownership over the subject property
and its attempt to evict or disposses the plaintiffs from the subject property, plaintiffs
experienced mental anguish, serious anxiety, social humiliation, sleepless nights and
loss of appetite for which defendant should be ordered to pay each plaintiff the amount
of P20,000.00 as moral damages;
20. Because of defendant's unwarranted claim of ownership over the subject property
and its attempt to evict or disposses the plaintiffs from the subject property, plaintiffs
were constrained to litigate to protect their rights and interests, and hire services of a
lawyer, for which they should each be awarded the amount of P10,000.00.
21. The plaintiffs and the defendants are not required to undergo conciliation
proceeding before the Katarungan Pambarangay prior to the filing of this action.[40]
The petitioners did not claim ownership of the land itself, and did not show their
authority or other legal basis on which they had anchored their alleged lawful
occupation and superior possession of the property. On the contrary, they only
contended that their continued possession of the property had been for more than 30
years; that they had built their houses in good faith; and that the area had been
declared an Area for Priority Development (APD) under Presidential Decree No.
1967, as amended. Yet, none of such reasons validly clothed them with the necessary
interest to maintain the action for quieting of title. For one, the authenticity of the title
of the City of Manila and Patricia, Inc. was not disputed but was even admitted by
them during trial. As such, they could not expect to have any right in the property other
than that of occupants whose possession was only tolerated by the owners and
rightful possessors. This was because land covered by a Torrens title cannot b e
acquired by prescription or by adverse possession.[41] Moreover, they would not be
builders entitled to the protection of the Civil Code as builders in good faith. Worse for
them, as alleged in the respondent's comments,[42] which they did not deny, they
had been lessees of Patricia, Inc. Such circumstances indicated that they had no
claim to possession in good faith, their occupation not being in the concept of owners.
At this juncture, the Court observes that the fact that the area was declared an area
for priority development (APD) under Presidential Decree No. 1967, as amended, did
not provide sufficient interest to the petitioners. When an area is declared as an APD,
the occupants would enjoy the benefits provided for in Presidential Decree No. 1517
(Proclaiming Urban land Reform in the Philippines and Providing for the Implementing
Machinery Thereof). In Frilles v. Yambao,[43] the Court has summarized the salient
features of Presidential Decree No. 1517, thus:
P. D. No. 1517, which took effect on June 11, 1978, seeks to protect the rights of
bona-fide tenants in urban lands by prohibiting their ejectment therefrom under certain
7
conditions, and by according them preferential right to purchase the land occupied by
them. The law covers all urban and urbanizable lands which have been proclaimed
as urban land reform zones by the President of the Philippines. If a particular property
is within a declared Area for Priority Development and Urban Land Reform Zone, the
qualified lessee of the said property in that area can avail of the right of first refusal to
purchase the same in accordance with Section 6 of the same law. Only legitimate
tenants who have resided for ten years or more on specific parcels of land situated in
declared Urban Land Reform Zones or Urban Zones, and who have built their homes
thereon, have the right not to be dispossessed therefrom and the right of first refusal
to purchase the property under reasonable terms and conditions to be determined by
the appropriate government agency. [Bold emphasis supplied]
Presidential Decree No. 1517 only granted to the occupants of APDs the right of first
refusal, but such grant was true only if and when the owner of the property decided
to sell the property. Only then would the right of first refusal accrue. Consequently,
the right of first refusal remained contingent, and was for that reason insufficient to
vest any title, legal or equitable, in the petitioners.
Moreover, the CA's adverse judgment dismissing their complaint as far as the action
to quiet title was concerned was correct. The main requirement for the action to be
brought is that there is a deed, claim, encumbrance, or proceeding casting cloud on
the plaintiffs' title that is alleged and shown to be in fact invalid or inoperative despite
its prima facie appearance of validity or legal efficacy, the eliminates the existence of
the requirement. Their admission of the genuineness and authenticity of Patricia,
Inc.'s title negated the existence of such deed, instrument, encumbrance or
proceeding that was invalid, and thus the action must necessarily fail.
4.
The petitioners did not have
a cause of action for injunction
The petitioners did not also make out a case for injunction in their favor.
The nature of the remedy of injunction and the requirements for the issuance of the
injunctive writ have been expounded in Philippine Economic Zone Authority v.
Carantes,[44] as follows:
Injunction is a judicial writ, process or proceeding whereby a party is directed either
to do a particular act, in which case it is called a mandatory injunction or to refrain
from doing a particular act, in which case it is called a prohibitory injunction. As a main
action, injunction seeks to permanently enjoin the defendant through a final injunction
issued by the court and contained in the judgment. Section 9, Rule 58 of the 1997
Rules of Civil Procedure, as amended, provides,
SEC. 9. When final injunction granted. If after the trial of the action it appears that the
applicant is entitled to have the act or acts complained of permanently enjoined, the
court shall grant a final injunction perpetually restraining the party or person enjoined
from the commission or continuance of the act or acts or confirming the preliminary
mandatory injunction.
Two (2) requisites must concur for injunction to issue: (1) there must be a right to be
protected and (2) the acts against which the injunction is to be directed are violative
of said right. Particularly, in actions involving realty, preliminary injunction will lie only
after the plaintiff has fully established his title or right thereto by a proper action for
the purpose. [Emphasis Supplied]
Accordingly, the petitioners must prove the existence of a right to be protected. The
records show, however, that they did not have any right to be protected because they
had established only the existence of the boundary dispute between Patricia, Inc. and
the City of Manila. Any violation of the boundary by Patricia, Inc., if any, would give
rise to the right of action in favor of the City of Manila only. The dispute did not concern
the petitioners at all.
5.
Section 5, Rule 10 of the Rules of Court
did not save the day for the petitioners
The invocation of Section 5, Rule 10 of the Rules of Court in order to enable the
raising of the boundary dispute was unwarranted. First of all, a boundary dispute
should not be litigated in an action for the quieting of title due to the limited scope of
the action. The action for the quieting of title is a tool specifically used to remove of
any cloud upon, doubt, or unce1iainty affecting title to real property;[45] it should not
be used for any other purpose. And, secondly, the boundary dispute would essentially
seek to alter or modify either the Torrens title of the City of Manila or that of Patricia,
Inc., but any alteration or modification either way should be initiated only by direct
proceedings, not as an issue incidentally raised by the parties herein. To allow the
boundary dispute to be litigated in the action for quieting of title would violate Section
48[46] of the Property Registration Decree by virtue of its prohibition against collateral
attacks on Torrens titles. A collateral attack takes place when, in another action to
obtain a different relief, the certificate of title is assailed as an incident in said
action.[47] This is exactly what the petitioners sought to do herein, seeking to modify
or otherwise cancel Patricia, Inc.'s title.
WHEREFORE, the Court AFFIRMS the decision promulgated on June 25, 2010 by
the Court of Appeals in CA-G.R. CV No. 86735; and ORDERS the petitioners to pay
the costs of suit.
SO ORDERED.
8
[ G.R. No. L-19613, April 30, 1966 ]
ALFONSO G. LOPEZ, PLAINTIFF AND APPELLANT, VS. FILIPINAS COMPAÑIA
DE SEGUROS, DEFENDANT AND APPELLEE.
DECISION
REGALA, J.:
This is an appeal by the plaintiff-appellant, Alfonso G. Lopez, from an order of the
Court of First Instance of Manila, dated January 25, 1962, dismissing his complaint
against the defendant-appellee, Filipinas Compañia de Seguros.
Prior to April 22, 1959, the plaintiff applied with the defendant company for the
insurance of his property consisting of a Biederman truck tractor and a Winter Weils
trailer from loss or damage in the amount of P26,000.00 and P10,000.00,
respectively. In connection with the above application, the defendant company
inquired of the plaintiff the following:
"5. Has any company in respect of the insurance of any car or vehicle
(a) declined, cancelled or refused to renew your insurance?
(b) increased your premium on renewal?
To both questions, the plaintiff answered: "none," though the truth was at that time,
the American International Underwriters of the Philippines (AIU) had already declined
a similar application for insurance by the plaintiff in respect of the above-described
vehicles.
On April 22, 1959, the defendant-appellee issued to the plaintiff-appellant two
Commercial Vehicle Comprehensive Policies covering the above properties. On
August 30, 1959, while the said policies were in force, the aforementioned vehicles
figured in an accident at Bagabag, Nueva Vizcaya, resulting in the total loss of the
tractor and partial damage to the trailer. Accordingly, the plaintiff gave notice of the
same to the defendant company and made demand upon the latter for the payment
to him of P27,962.00, the total amount of damages resulting from the accident.
On April 28, 1960, the defendant-appellant rejected the above claim by reason of,
among others, the claimant's alleged "concealment of a material fact," namely: that
the insured property previously been declined insurance by another company.
In view of the rejection of his claim by the defendant company, the plaintiff-appellant
filed on May 27, 1960 with the Office of the Insurance Commissioner a complaint
against the said company. On June 7, 1960, the Assistant Insurance Commission er
requested the defendant company to give its side of the above complaint and,
thereafter, or on August 1, 1960, the said official "transmitted to the plaintiff, thru his
counsel, the 'self-explanatory letters' dated June 12, 1960 of the American
International Underwriters of the Philippines, Inc., and June 21, 1960 of the defendant,
which the said office had received from said parties in connection with plaintiff's
complaint, with the suggestion that in view of the reluctant attitude of plaintiff 'towards
the company's proposal for the matter to be settled thru arbitration, and considering
the informative facts disclosed' in the letter of the AIUPI, plaintiff should pursue his
case to the Court which has proper competence to resolve said matter."
On August 16, 1961, the plaintiff-appellant informed by letter the Office of the
Insurance Commissioner that he was willing to submit his claim to arbitration and, in
the premises, suggested that the Assistant Insurance Commissioner be designated
as the sole arbitrator of the same, On September 1, 1960, the Insurance
Commissioner informed the plaintiff-appellant of his willingness to act as the single
arbitrator, provided that both parties to the dispute manifest in writing their conformity
thereto and to abide by the arbitrator's award. The defendant-appellee, on the other
hand, informed the Insurance Commissioner on September 22, 1960 that it could not
consent to the above proposal since "the claim of the plaintiff cannot be resolved by
arbitration, as recourse to arbitration referred to in the policy contract, envisioned only
differences or disputes, 'with respect to the amount of the company's liability,' and not
to cases where the company does not admit its liability to the insured." With this
rejection, the plaintiff-appellant filed his complaint with the Court of First Instance of
Manila on September 19, 1961.
Against the above complaint, the defendant-appellee filed on September 29, 1961 a
motion to dismiss on the ground of prescription. The latter argued that the plaintiff's
claim had already prescribed since it was not filed within twelve months from its
rejection by the insurance company as stipulated under paragraph 9 of the General
Conditions of Commercial Vehicle Comprehensive Policy Nos. 5598 and 5599, to wit:
"If a claim be made and rejected and an action or suit be not commenced within twelve
months after such rejection or (in case of an arbitration taking place as provided
herein) within twelve months after the arbitrator, arbitrators, or umpire shall have
made their award then the claim shall for all purposes be deemed to have been
abandoned and shall not thereafter be recovered hereunder."
On January 25, 1962, the court a quo sustained the above motion and dismissed the
complaint. Thus, the instant appeal.
The principal issue raised in this appeal is simple: Was the complaint filed by the
plaintiff-appellant with the Office of the Insurance Commissioner on May 27, 1960 a
commencement of an "action or suit" within the meaning and intent of general
condition quoted above? If it was, then the plaintiff's complaint has not yet prescribed
since the complaint filed with the said office was made on May 27, 1960 or just about
a month after his claim was rejected by the defendant-appellee on April 28, 1960. On
the other hand, if the abovequoted condition refers alone to an "action or suit" filed
with a court of justice, as the Order appealed from urges and as the herein appellee
maintains, then, indeed, must the finding of prescription in this incident be upheld.
For, while the plaintiff's claim was rejected on April 28, 1960 by the insurance
company, the "action or suit" thereon with a court of justice was filed some 17 months
later, September 19, 1961.
We find for the appellee.
In 1 Moran 86 (1963 ed.), the following jurisprudence is expressed:
"Action is the act by which one sues another in a court of justice for the enforcement
or protection of a right, or the prevention or redress of a wrong. Special proceeding is
the act by which one seeks to establish the status or right of a party, or a particular
9
facto Hence, an action is distinguished from special proceeding in that the former is
a formal demand of a right by one against another, while the latter is but a petition for
a declaration of a status, right or fact." (Italics supplied).

The above distinction was laid down in connection with the definition of "action" in
Rule 2, Section 1 of the Rules of Court that:

"SEC. 1. Action defined. Action means an ordinary suit in a Court of Justice by which
one party prosecutes another for the enforcement or protection of a right, or the
prevention or redress of a wrong." (Italics supplied).

Also, in 1 Am. Jur. 407, as cited in Francisco, Civil Procedure, p. 91, a suit is defined
as:

"Suit is the prosecution or pursuit of some claim or demand in a court of justice, or

any proceeding in a court of justice in which a plaintiff pursues his remedy to recover
a right or claim." (Italics supplied)

Upon the authorities, therefore, it is settled that the terms "action" and "suit" are
synonymous. Moreover, it is clear that the determinative or operative fact which
converts a claim into an "action or suit" is the filing of the same with a "court of justice."
Filed elsewhere, as with some other body or office not a court of justice, the claim
may not properly be categorized under either term.

Apart from the foregoing, however, there is yet one other reason why the appellant's
recourse to the Office of the Insurance Commissioner could not have been an "action
or suit" which could have halted the running of the prescriptive period stipulated in the
insurance policies involved. An "action or suit" is essentially "for the enforcement or
protection of a right, or the prevention or redress of a wrong." (Rule 2, Sec. 1, Rules
of Court). There is nothing in the Insurance Law, Act No. 2427, as amended, nor in
any of its allied legislations, which empowers the Insurance Commissioner to
adjudicate on disputes relating to an insurance company's liability to an insured under
a policy issued by the former to the latter. The validity of an insured's claim under a
specific policy, its amount, and all such other matters as might involve the
interpretation and construction of the insurance policy, are issues which only a regular
court of justice may resolve and settle. Consequently, the complaint filed by the
appellant herein with the Office of the Insurance Commission oould not have been an
"action or suit."

The other assignments of error in the appellant's brief spring from or are
consequences of the latter's view that the claim be filed with the Office of the
Insurance Commissioner was an "action or suit" within the contemplation of
paragraph 9 of the general condition earlier quoted. With our ruling above, therefore,
the necessity to pass on them becomes inconsequential.

Wherefore, the order appealed from is hereby affirmed, with costs.

10
ANTONIO T. CHUA,
DECISION
Petitioner, QUISUMBING, J.:

G.R. No. 152808

For review on certiorari is the decision[1] dated November 28, 2001 of the Court of
Appeals and its resolution[2] of April 1, 2002 in CA-G.R. SP No. 62592. The assailed
decision and resolution dismissed the special civil action for certiorari against the
orders of August 9, 2000[3] and October 6, 2000[4] issued by Judge Lorifel Lacap
Pahimna in Civil Case No. 67736.

The pertinent facts, based on the records, are as follows:

- versus -
On December 28, 1999, respondent Total Office Products and Services, Inc.,
Present: (TOPROS) lodged a complaint for annulment of contracts of loan and real estate
mortgage against herein petitioner Antonio T. Chua before the Regional Trial Court
of Pasig City. The case was docketed as Civil Case No. 67736 and was raffled to the
sala of Judge Lorifel Lacap Pahimna.
Davide, Jr., C.J.,
The said suit sought to annul a loan contract allegedly extended by petitioner to
(Chairman), respondent TOPROS in the amount of ten million four hundred thousand pesos
(P10,400,000) and the accessory real estate mortgage contract covering two parcels
Quisumbing, of land situated in Quezon City as collateral.

Ynares-Santiago, It appeared on the face of the subject contracts that TOPROS was represented by its
president John Charles Chang, Jr. However, TOPROS alleged that the purported loan
Carpio, and and real estate mortgage contracts were fictitious, since it never authorized anybody,
not even its president, to enter into said transaction.
Azcuna, JJ.
On February 28, 2000, petitioner filed a motion to dismiss on the ground of improper
venue. He contended that the action filed by TOPROS affects title to or possession
of the parcels of land subject of the real estate mortgage. He argued that it should
thus have been filed in the Regional Trial Court of Quezon City where the encumbered
real properties are located, instead of Pasig City where the parties reside.
TOTAL OFFICE PRODUCTS AND SERVICES (TOPROS), INC.,
On August 9, 2000, Judge Pahimna issued an order denying the motion to dismiss.
Respondent. She reasoned that the action to annul the loan and mortgage contracts is a personal
action and thus, the venue was properly laid in the RTC of Pasig City where the parties
reside.

Promulgated: Petitioner moved for a reconsideration of the said order, which Judge Pahimna denied
in its order of October 6, 2000. Hence, petitioner filed with the Court of Appeals a
special civil action for certiorari alleging:

September 30, 2005
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
THE RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION IN
DISREGARDING THE RULING OF THE SUPREME COURT IN PASCUAL VS.
PASCUAL REGARDING THE RULE ON PROPER VENUE, AND CONSEQUENTLY
ADJUDGING TO BE A PERSONAL ACTION A CIVIL COMPLAINT FOR THE
ANNULMENT OF AN ALLEGEDLY FICTITIOUS CONTRACT.[5]

11

The Court of Appeals dismissed said petition in its decision dated November 28, 2001.
It held that the authorities relied upon by petitioner, namely Pascual v. Pascual[6] and
Banco Espaol-Filipino v. Palanca,[7] are inapplicable in the instant case. The
appellate court instead applied Hernandez v. Rural Bank of Lucena, Inc.[8] wherein
we ruled that an action for the cancellation of a real estate mortgage is a personal
action if the mortgagee has not foreclosed the mortgage and the mortgagor is in
possession of the premises, as neither the mortgagors title to nor possession of the
property is disputed.
Dissatisfied, petitioner filed a motion for reconsideration, which the Court of Appeals
denied for lack of merit in its resolution of April 1, 2002.
Undeterred, petitioner now comes to us on a petition for review raising the following
issues:
WHETHER AN ACTION TO ANNUL A LOAN AND MORTGAGE CONTRACT DULY
ALLEGED AS FICTITIOUS FOR BEING WITH ABSOLUTELY NO
CONSIDERATION IS A PERSONAL ACTION OR REAL ACTION?
WHETHER IN AN ACTION TO ANNUL A LOAN AND MORTGAGE CONTRACT
DULY ALLEGED AS FICTITIOUS FOR BEING WITH ABSOLUTELY NO
CONSIDERATION, THE PERSON ALLEGED TO HAVE [LACKED] AUTHORITY TO
ENTER INTO SAID CONTRACTS IS AN INDISPENSABLE PARTY?[9]
Petitioner contends that Hernandez should not be applied here because in the said
case: (1) venue was improperly laid at the outset; (2) the complaint recognized the
validity of the principal contract involved; and (3) the plaintiff sought to compel
acceptance by the defendant of plaintiffs payment of the latters mortgage debt. He
insists that the Pascual case should be applied instead. He invokes our
pronouncement in Pascual, to wit:
It appearing, however, that the sale is alleged to be fictitious, with absolutely no
consideration, it should be regarded as a non-existent, not merely null, contract. And
there being no contract between the deceased and the defendants, there is in truth
nothing to annul by action. The action brought cannot thus be for annulment of
contract, but is one for recovery of a fishpond, a real action that should be, as it has
been, brought in Pampanga, where the property is located.[10]
Petitioner likewise cites the Banco Espaol-Filipino case, thus:
Where the defendant in a mortgage foreclosure lives out of the Islands and refuses
to appear or otherwise submit himself to the authority of the court, the jurisdiction of
the latter is limited to the mortgaged property, with respect to which the jurisdiction of
the court is based upon the fact that the property is located within the district and that
the court, under the provisions of law applicable in such cases, is vested with the
power to subject the property to the obligation created by the mortgage. In such case
personal jurisdiction over the nonresident defendant is nonessential and in fact cannot
be acquired.[11]
Petitioner also alleges that John Charles Chang, Jr., the president of TOPROS, who
allegedly entered into the questioned loan and real estate mortgage contracts, is an
indispensable party who has not been properly impleaded.
TOPROS, however, maintains that the appellate court correctly sustained the lower
courts finding that the instant complaint for annulment of loan and real estate
mortgage contracts is a personal action. TOPROS points out that a complaint for the
declaration of nullity of a loan contract for lack of consent and consideration remains
a personal action even if the said action will necessarily affect the accessory real
estate mortgage.
TOPROS argues that Pascual is inapplicable because the subject contract therein
was a contract of sale of a parcel of land where title and possession were already
transferred to the defendant. TOPROS further contends that Banco Espaol-Filipino is
also inapplicable since the personal action filed therein was one which affected the
personal status of a nonresident defendant.
Considering the facts and the submission of the parties, we find the petition bereft of
merit.
Well-settled is the rule that an action to annul a contract of loan and its accessory real
estate mortgage is a personal action. In a personal action, the plaintiff seeks the
recovery of personal property, the enforcement of a contract or the recovery of
damages.[12] In contrast, in a real action, the plaintiff seeks the recovery of real
property, or, as indicated in Section 2 (a), Rule 4 of the then Rules of Court, a real
action is an action affecting title to real property or for the recovery of possession, or
for partition or condemnation of, or foreclosure of mortgage on, real property.[13]
In the Pascual case, relied upon by petitioner, the contract of sale of the fishpond was
assailed as fictitious for lack of consideration. We held that there being no contract to
begin with, there is nothing to annul. Hence, we deemed the action for annulment of
the said fictitious contract therein as one constituting a real action for the recovery of
the fishpond subject thereof.
We cannot, however, apply the foregoing doctrine to the instant case. Note that in
Pascual, title to and possession of the subject fishpond had already passed to the
vendee. There was, therefore, a need to recover the said fishpond. But in the instant
case, ownership of the parcels of land subject of the questioned real estate mortgage
was never transferred to petitioner, but remained with TOPROS. Thus, no real action
for the recovery of real property is involved. This being the case, TOPROS action for
annulment of the contracts of loan and real estate mortgage remains a personal
action.
Petitioners reliance on the Banco Espaol-Filipino case is likewise misplaced. That
case involved a foreclosure of real estate mortgage against a nonresident. We held
therein that jurisdiction is determined by the place where the real property is located
and that personal jurisdiction over the nonresident defendant is nonessential and, in
fact, cannot be acquired.
12
Needless to stress, the instant case bears no resemblance to the Banco Espaol-
Filipino case. In the first place, this is not an action involving foreclosure of real estate
mortgage. In the second place, none of the parties here is a nonresident. We find no
reason to apply here our ruling in Banco Espaol-Filipino.
The Court of Appeals finds that Hernandez v. Rural Bank of Lucena, Inc. provides the
proper precedent in this case. In Hernandez, appellants contended that the action of
the Hernandez spouses for the cancellation of the mortgage on their lots was a real
action affecting title to real property, which should have been filed in the place where
the mortgaged lots were situated. Rule 4, Section 2 (a), of the then Rules of Court,
was applied, to wit:
SEC. 2. Venue in Courts of First Instance. (a) Real actions. Actions affecting title to,
or for recovery of possession, or for partition or condemnation of, or foreclosure of
mortgage on, real property, shall be commenced and tried in the province where the
property or any part thereof lies.
The Court pointed out in the Hernandez case that with respect to mortgage, the rule
on real actions only mentions an action for foreclosure of a real estate mortgage. It
does not include an action for the cancellation of a real estate mortgage. Exclusio
unios est inclusio alterius. The latter thus falls under the catch-all provision on
personal actions under paragraph (b) of the above-cited section, to wit:
SEC. 2 (b) Personal actions. All other actions may be commenced and tried where
the defendant or any of the defendants resides or may be found, or where the plaintiff
or any of the plaintiffs resides, at the election of the plaintiff.
In the same vein, the action for annulment of a real estate mortgage in the present
case must fall under Section 2 of Rule 4, to wit:
SEC. 2. Venue of personal actions. All other actions may be commenced and tried
where the plaintiff or any of the principal plaintiffs resides, or where the defendant or
any of the principal defendants resides, or in the case of a non-resident defendant
where he may be found, at the election of the plaintiff.[14]
Thus, Pasig City, where the parties reside, is the proper venue of the action to nullify
the subject loan and real estate mortgage contracts. The Court of Appeals committed
no reversible error in upholding the orders of the Regional Trial Court denying
petitioners motion to dismiss the case on the ground of improper venue.
Anent the second issue, Section 7, Rule 3 of the Revised Rules of Court provides:
SEC. 7. Compulsory joinder of indispensable parties. Parties in interest without whom
no final determination can be had of an action shall be joined either as plaintiffs or
defendants. (Emphasis ours)
The presence of indispensable parties is necessary to vest the court with jurisdiction.
The absence of an indispensable party renders all subsequent actuations of the court
null and void, because of that courts want of authority to act, not only as to the absent
parties but even as to those present.[15] Thus, whenever it appears to the court in
the course of a proceeding that an indispensable party has not been joined, it is the
duty of the court to stop the trial and order the inclusion of such party.[16]
A person is not an indispensable party, however, if his interest in the controversy or
subject matter is separable from the interest of the other parties, so that it will not
necessarily be directly or injuriously affected by a decree which does complete justice
between them.[17]
Is John Charles Chang, Jr., the president of TOPROS who allegedly entered into the
disputed contracts of loan and real estate mortgage, an indispensable party in this
case?
We note that although it is Changs signature that appears on the assailed real estate
mortgage contract, his participation is limited to being a representative of TOPROS,
allegedly without authority. The document[18] which constitutes as the contract of real
estate mortgage clearly points to petitioner and TOPROS as the sole parties-in-
interest to the agreement as mortgagee and mortgagor therein, respectively. Any
rights or liabilities arising from the said contract would therefore bind only the
petitioner and TOPROS as principal parties. Chang, acting as mere representative of
TOPROS, acquires no rights whatsoever, nor does he incur any liabilities, arising from
the said contract between petitioner and TOPROS. Certainly, in our view, the only
indispensable parties to the mortgage contract are petitioner and TOPROS alone.
We thus hold that John Charles Chang, Jr., is not an indispensable party in Civil Case
No. 67736. This is without prejudice to any separate action TOPROS may institute
against Chang, Jr., in a proper proceeding.
WHEREFORE, the petition is DENIED. The assailed decision dated November 28,
2001 and resolution dated April 1, 2002 of the Court of Appeals upholding the Orders
of Judge Lorifel Lacap Pahimna are AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
13
[G.R. No. 126603. June 29, 1998]
ESTRELLITA J. TAMANO, petitioner, vs. HON. RODOLFO A. ORTIZ, Presiding
Judge, RTC-Br. 89, Quezon City, HAJA PUTRI ZORAYDA A. TAMANO, ADIB A.
TAMANO and the HON. COURT OF APPEALS, respondents.
DECISION
BELLOSILLO, J.:
This Petition for Review on Certiorari seeks to reverse and set aside the decision of
the Court of Appeals of 30 September 1996 in CA-G.R. SP. No. 39656 which affirmed
the decision of the Regional Trial Court-Br. 89, Quezon City, denying the motion to
dismiss as well as the motion for reconsideration filed by petitioner Estrellita J.
Tamano.
On 31 May 1958 Senator Mamintal Abdul Jabar Tamano (Tamano) married private
respondent Haja Putri Zorayda A. Tamano (Zorayda) in civil rites. Their marriage
supposedly remained valid and subsisting until his death on 18 May 1994. Prior to his
death, particularly on 2 June 1993, Tamano also married petitioner Estrellita J.
Tamano (Estrellita) in civil rites in Malabang, Lanao del Sur.
On 23 November 1994 private respondent Zorayda joined by her son Adib A. Tamano
(Adib) filed a Complaint for Declaration of Nullity of Marriage of Tamano and Estrellita
on the ground that it was bigamous. They contended that Tamano and Estrellita
misrepresented themselves as divorced and single, respectively, thus making the
entries in the marriage contract false and fraudulent.
Private respondents alleged that Tamano never divorced Zorayda and that Estrellita
was not single when she married Tamano as the decision annulling her previous
marriage with Romeo C. Llave never became final and executory for non-compliance
with publication requirements.
Estrellita filed a motion to dismiss alleging that the Regional Trial Court of Quezon
City was without jurisdiction over the subject and nature of the action. She alleged
that "only a party to the marriage" could file an action for annulment of marriage
against the other spouse,[1] hence, it was only Tamano who could file an action for
annulment of their marriage. Petitioner likewise contended that since Tamano and
Zorayda were both Muslims and married in Muslim rites the jurisdiction to hear and
try the instant case was vested in the sharia courts pursuant to Art. 155 of the Code
of Muslim Personal Laws.
The lower court denied the motion to dismiss and ruled that the instant case was
properly cognizable by the Regional Trial Court of Quezon City since Estrellita and
Tamano were married in accordance with the Civil Code and not exclusively in
accordance with PD No. 1083[2] or the Code of Muslim Personal laws. The motion
for reconsideration was likewise denied; hence, petitioner filed the instant petition with
this Court seeking to set aside the 18 July 1995 order of respondent presiding judge
of the RTC-Br. 89, Quezon City, denying petitioners motion to dismiss and the 22
August 1995 order denying reconsideration thereof.
In a Resolution dated 13 December 1995 we referred the case to the Court of Appeals
for consolidation with G.R. No. 118371. Zorayda and Adib A. Tamano however filed
a motion, which the Court of Appeals granted, to resolve the Complaint for Declaration
of Nullity of Marriage ahead of the other consolidated cases.
The Court of Appeals ruled that the instant case would fall under the exclusive
jurisdiction of sharia courts only when filed in places where there are sharia courts.
But in places where there are no sharia courts, like Quezon City, the instant case
could properly be filed before the Regional Trial Court.
Petitioner is now before us reiterating her earlier argument that it is the sharia court
and not the Regional Trial Court which has jurisdiction over the subject and nature of
the action.
Under The Judiciary Reorganization Act of 1980,[3] Regional Trial Courts have
jurisdiction over all actions involving the contract of marriage and marital relations.[4]
Personal actions, such as the instant complaint for declaration of nullity of marriage,
may be commenced and tried where the plaintiff or any of the principal plaintiffs
resides, or where the defendant or any of the principal defendants resides, at the
election of the plaintiff.[5] There should be no question by now that what determines
the nature of an action and correspondingly the court which has jurisdiction over it are
the allegations made by the plaintiff in this case.[6] In the complaint for declaration of
nullity of marriage filed by private respondents herein, it was alleged that Estrellita
and Tamano were married in accordance with the provisions of the Civil Code. Never
was it mentioned that Estrellita and Tamano were married under Muslim laws or PD
No. 1083. Interestingly, Estrellita never stated in her Motion to Dismiss that she and
Tamano were married under Muslim laws. That she was in fact married to Tamano
under Muslim laws was first mentioned only in her Motion for Reconsideration.
Nevertheless, the Regional Trial Court was not divested of jurisdiction to hear and try
the instant case despite the allegation in the Motion for Reconsideration that Estrellita
and Tamano were likewise married in Muslim rites. This is because a courts
jurisdiction cannot be made to depend upon defenses set up in the answer, in a
motion to dismiss, or in a motion for reconsideration, but only upon the allegations of
the complaint.[7] Jurisdiction over the subject matter of a case is determined from the
allegations of the complaint as the latter comprises a concise statement of the ultimate
facts constituting the plaintiffs causes of action.[8]
Petitioner argues that the sharia courts have jurisdiction over the instant suit pursuant
to Art. 13, Title II, PD No. 1083,[9] which provides -
Art. 13. Application. - (1) The provisions of this Title shall apply to marriage and
divorce wherein both parties are Muslims, or wherein only the male party is a Muslim
and the marriage is solemnized in accordance with Muslim law or this Code in any
part of the Philippines.
(2) In case of a marriage between a Muslim and a non-Muslim, solemnized not in
accordance with Muslim law or this Code, the Civil Code of the Philippines shall apply.
14
(3) Subject to the provisions of the preceding paragraphs, the essential requisites and
legal impediments to marriage, divorce, paternity and filiation, guardianship and
custody of minors, support and maintenance, claims for customary dower (mahr),
betrothal, breach of contract to marry, solemnization and registration of marriage and
divorce, rights and obligations between husband and wife, parental authority, and the
property relations between husband and wife shall be governed by this Code and
other applicable Muslim laws.

As alleged in the complaint, petitioner and Tamano were married in accordance with
the Civil Code. Hence, contrary to the position of petitioner, the Civil Code is
applicable in the instant case. Assuming that indeed petitioner and Tamano were
likewise married under Muslim laws, the same would still fall under the general original
jurisdiction of the Regional Trial Courts.

Article 13 of PD No. 1083 does not provide for a situation where the parties were
married both in civil and Muslim rites. Consequently, the sharia courts are not vested
with original and exclusive jurisdiction when it comes to marriages celebrated under
both civil and Muslim laws. Consequently, the Regional Trial Courts are not divested
of their general original jurisdiction under Sec. 19, par. (6) of BP Blg. 129 which
provides -

Sec. 19. Jurisdiction in Civil Cases. - Regional Trial Courts shall exercise exclusive
original jurisdiction: x x x (6) In all cases not within the exclusive jurisdiction of any
court, tribunal, person or body exercising judicial or quasi-judicial functions x x x x

WHEREFORE, the instant petition is DENIED. The decision of the Court of Appeals
sustaining the 18 July 1995 and 22 August 1995 orders of the Regional Trial Court -
Br. 89, Quezon City, denying the motion to dismiss and reconsideration thereof, is
AFFIRMED. Let the records of this case be immediately remanded to the court of
origin for further proceedings until terminated.

SO ORDERED.

15
[G.R. No. 132753. February 15, 1999]
MARIO SIASOCO, ANGELITA E. SIASOCO, MA. BELLA SIASOCO, ESTER
SIASOCO-LAMUG, MA. LOURDES SIASOCO LAMUG-BARRIOS, MA. RAMONA
SIASOCO LAMUG, MA. VICTORIA SIASOCO LAMUG-DOMINGUEZ, BELEN
SIASOCO-JOSE, RAFAEL SIASOCO JOSE, CYNTHIA SIASOCO JOSE,
CRISTINA SIASOCO JOSE, ROBERTO SIASOCO JOSE, CARIDAD SIASOCO
JOSE, RAMON SIASOCO JOSE, OSCAR SIASOCO, RUBEN SIASOCO, SALOME
SIASOCO-PAZ, MEDARDO PAZ SIASOCO, ROLANDO PAZ SIASOCO, JESUS
PAZ SIASOCO, NELLY STO. DOMINGO NARIO, MARY GRACE, STO. DOMINGO
NARIO and MARY ANNE STO. DOMINGO NARIO, petitioners, vs. COURT OF
APPEALS; HON. MARCELINO F. BAUTISTA, JR., Presiding Judge, Branch 215,
Regional Trial Court, Quezon City; and the IGLESIA NI CRISTO, respondents.
DECISION
PANGANIBAN, J.:
Notwithstanding the filing of a responsive pleading by one defendant, the complaint
may still be amended once, as a matter of right, by the plaintiff in respect to claims
against the non-answering defendant(s). The Court also reiterates that certiorari is
not the proper remedy to contest a lower courts final adjudication, since appeal is
available as a recourse.
Statement of the Case
Petitioners assail the February 25, 1998 Decision[1] of the Court of Appeals[2] in CA-
GR SP No. 45451, the dispositive portion of which reads:
WHEREFORE, [the] foregoing considered, the present petition for certiorari is hereby
DENIED for lack of merit. The Temporary Restraining Order issued by this Court on
December 17, 1997 is hereby lifted. Petitioners are given six (6) days from receipt of
this decision within which to file their answer. The motion for oral argument filed by
respondent is rendered moot. Respondent court is ordered to proceed and resolve
the case with deliberate speed.[3]
The foregoing disposition affirmed two Orders of the Regional Trial Court (RTC) of
Quezon City, Branch 215, dated August 11, 1997 and September 11, 1997 in Civil
Case No. Q-97-29960.[4] The first Order (1) admitted the Amended Complaint; (2)
dropped Defendant Carissa Homes Development and Properties, Inc. (hereafter
referred to as Carissa) from the Complaint; and (3) denied the Motion to Declare
Defendants Siasoco et al. (herein petitioners) in Default. The second Order denied
the Motion for Suspension filed by defendants and directed them to file their answer
to plaintiffs Amended Complaint.
Undaunted, petitioners seek recourse in this Court.[5]
The Facts
Petitioners were the registered owners of nine parcels of land located in Montalban,
Rizal. In December 1994, they began to offer the subject properties for sale.
Subsequently, Iglesia ni Cristo (INC) negotiated with the petitioners, but the parties
failed to agree on the terms of the purchase. More than a year later, both parties
revived their discussions. In a letter dated December 16, 1996, petitioners made a
final offer to the INC. The latters counsel sent a reply received by Petitioner Mario
Siasoco on December 24, 1996, stating that the offer was accepted, but that the INC
was not amenable to your proposal to an undervaluation of the total consideration. In
their letter dated January 8, 1997, petitioners claimed that the INC had not really
accepted the offer, adding that, prior to their receipt of the aforementioned reply on
December 24, 1996, they had already contracted with Carissa for the sale of the said
properties due to the absence of any response to their offer from INC.
Maintaining that a sale had been consummated, INC demanded that the
corresponding deed be executed in its favor. Petitioners refused. The ensuing events
were narrated by the Court of Appeals, as follows:
On January 14, 1997, private respondent filed a civil suit for [s]pecific [p]erformance
and [d]amages against petitioners and Carissa Homes and Development &
Properties, Inc. docketed as Civil Case No. Q-97-29960.
Petitioners filed therein a Motion to Dismiss on the ground of improper venue and lack
of capacity to sue.
Carissa Homes filed its answer to the complaint on February 24, 1997.
Pending resolution of petitioners Motion to Dismiss, private respondent negotiated
with Carissa Homes which culminated in the purchase of the subject properties of
Carissa Homes by private respondent.
On April 24, 1997, private respondent filed an [A]mended [C]omplaint, dropping
Carissa Homes as one of the defendants and changing the nature of the case to a
mere case for damages.
Petitioners filed a Motion to Strike Out Amended Complaint, contending that the
complaint cannot be amended without leave of court, since a responsive pleading has
been filed.
On August 11, 1997, the first assailed order denying petitioners Motion to Strike Out
Amended Complaint was rendered.
On August 31, 1997, petitioners filed a Motion for Suspension of Proceeding pending
the resolution [by] the respondent court of the Motion to Dismiss earlier filed.
On September 11, 1997, the second assailed order denying petitioners Motion to
Suspend Proceeding was rendered[;] the Order reads:
Filed also last September 1, 1997 [was] a Motion for Suspension by the defendant
Siasoco thru their counsel Atty. Clara Dumandang-Singh. Although the court could
not consider the motion filed because it violates the new rules on personal service, in
16
the interest of justice, the court will resolve the motion. In the resolution of this court
dated August 11, 1997, it state[d] that defendants [were being] given a period of five
(5) days within which to file [an] answer to the Amended Complaint. The defendants
here obviously refer to the defendants Mario Siasoco, et. al. In the Motion for
Suspension filed by the defendants Siasoco, et al., the latter insist on the court
resolving the motion to dismiss. As stated in the resolution, the motion to dismiss is
now moot and academic because of the Amended Complaint from Specific
Performance with Damages to just Damages. For this court to resolve the Motion to
Dismiss xxx the first complaint, would be an exercise in futility. The main complaint
now is damages and no longer Specific Performance with damages which [was]
actually what the Resolution dated August 11, 1997 [was] all about. Be that as it may,
the court gives defendants Siasoco, et al. fifteen (15) days from receipt of this Order
to file their respective Answers to the Amended Complaint, not from the receipt of the
resolution of the Motion to Dismiss which will not be forthcoming.
Ruling of the Court of Appeals
The Court of Appeals (CA) ruled that although private respondent could no longer
amend its original Complaint as a matter of right, it was not precluded from doing so
with leave of court. Thus, the CA concluded that the RTC had not acted with grave
abuse of discretion in admitting private respondents Amended Complaint.
Petitioners argued that the trial court where the original Complaint for specific
performance had been filed was not the proper venue. Debunking petitioners
argument, the CA explained that the RTC nevertheless had jurisdiction over the said
Complaint. The CA also held that the Amended Complaint did not substantially alter
private respondents cause of action, since petitioners were not being asked to answer
a legal obligation different from that stated in the original Complaint.
Assignment of Errors
In their Memorandum, petitioners submit, for the consideration of this Court, the
following issues:[6]
A.
Whether or not the respondent Court of Appeals gravely erred in holding that the
respondent Judges admission of INCs Amended Complaint was proper.
B.
Whether or not the respondent Court of Appeals gravely erred in affirming respondent
Judges denial of petitioners Motion for Suspension.
C.
Whether or not the respondent Court of Appeals gravely erred in refusing to hear
petitioners application for a temporary restraining order and writ of preliminary
injunction.
Simply stated, the question is: did the CA err in affirming the two Orders of the RTC
which had allowed the Amended Complaint?
The Courts Ruling
The petition is devoid of merit. We sustain the Court of Appeals, but for reasons
different from those given in the assailed Decision.
Preliminary Issue: Propriety of Certiorari
In their Petition and Memorandum, Mario Siasoco et al. emphasize that the instant
suit was commenced pursuant to Rule 65 of the 1997 Rules of Procedure and allege
that Respondent Court of Appeals committed grave abuse of discretion in issuing the
challenged Decision dated February 25, 1998 xxx. This is a procedural error. For the
writ of certiorari under Rule 65 to issue, the petitioner must show not only that the
lower court acted with grave abuse of discretion, but also that there is no appeal, or
any other plain, speedy, and adequate remedy in the ordinary course of law.[7] Since
the questioned CA Decision was a disposition on the merits, and since said Court has
no remaining issue to resolve, the proper remedy available to petitioners was a
petition for review under Rule 45, not Rule 65. Furthermore, as a general rule,
certiorari under Rule 65 cannot issue unless the lower court, through a motion for
reconsideration, has been given an opportunity to correct the imputed error.[8]
Although there are recognized exceptions to this rule, petitioners do not claim that
this case is one of them. For this procedural lapse, the instant petition should be
dismissed outright.
Nonetheless, inasmuch as the Petition was filed within the 15-day period provided
under Rule 45, and considering the importance of the issue raised and the fact that
private respondent did not question the propriety of the instant Petition, the Court
treated the action as a petition for review (not certiorari) under Rule 45 in order to
accord substantial justice to the parties. We will thus proceed to discuss the
substantive issue.
Main Issue: Admission of Amended Complaint
Petitioners argue that the lower courts erred in admitting the Amended Complaint.
Under the Rules, a party may amend his pleading once as a matter of right at any
time before a responsive pleading is served xxx.[9] When private respondent filed its
Amended Complaint, Carissa, the other party-defendant in the original Complaint,
had already filed its Answer. Because a responsive pleading had been submitted,
petitioners contend that private respondent should have first obtained leave of court
before filing its Amended Complaint. This it failed to do. In any event, such leave could
not have been granted, allegedly because the amendment had substantially altered
the cause of action.
This argument is not persuasive. It is clear that plaintiff (herein private respondent)
can amend its complaint once, as a matter of right, before a responsive pleading is
filed.[10] Contrary to the petitioners contention, the fact that Carissa had already filed
its Answer did not bar private respondent from amending its original Complaint once,
as a matter of right, against herein petitioners. Indeed, where some but not all the
17
defendants have answered, plaintiffs may amend their Complaint once, as a matter
of right, in respect to claims asserted solely against the non-answering defendants,
but not as to claims asserted against the other defendants.[11]
The rationale for the aforementioned rule is in Section 3, Rule 10 of the Rules of
Court, which provides that after a responsive pleading has been filed, an amendment
may be rejected when the defense is substantially altered.[12] Such amendment does
not only prejudice the rights of the defendant; it also delays the action. In the first
place, where a party has not yet filed a responsive pleading, there are no defenses
that can be altered. Furthermore, the Court has held that [a]mendments to pleadings
are generally favored and should be liberally allowed in furtherance of justice in order
that every case may so far as possible be determined on its real facts and in order to
speed the trial of cases or prevent the circuity of action and unnecessary expense,
unless there are circumstances such as inexcusable delay or the taking of the adverse
party by surprise or the like, which might justify a refusal of permission to amend.[13]
Finally, [w]e are not also persuaded by petitioners argument that venue should be
lodged in Bago City where the lot is situated. The complaint is one for specific
performance with damages. Private respondents do not claim ownership of the lot but
in fact [recognize the] title of defendants by annotating a notice of lis pendens. In one
case, a similar complaint for specific performance with damages involving real
property, was held to be a personal action, which may be filed in the proper court
where the party resides. Not being an action involving title to or ownership of real
property, venue, in this case, was not improperly laid before the RTC of Bacolod
City.[16]
WHEREFORE, the Petition is hereby DENIED. Costs against petitioners.
SO ORDERED.

In the present case, petitioners failed to prove that they were prejudiced by private
respondents Amended Complaint. True, Carissa had already filed its own Answer.
Petitioners, however, have not yet filed any. Moreover, they do not allege that their
defense is similar to that of Carissa. On the contrary, private respondents claims
against the latter and against petitioners are different. Against petitioners, whose offer
to sell the subject parcels of land had allegedly been accepted by private respondent,
the latter is suing for specific performance and damages for breach of contract.
Although private respondent could no longer amend, as a matter of right, its Complaint
against Carissa, it could do so against petitioners who, at the time, had not yet filed
an answer.

The amendment did not prejudice the petitioners or delay the action. Au contraire, it
simplified the case and tended to expedite its disposition. The Amended Complaint
became simply an action for damages, since the claims for specific performance and
declaration of nullity of the sale have been deleted.

RTC Had Jurisdiction

Petitioners also insist that the RTC of Quezon City did not have jurisdiction over the
original Complaint; hence, it did not have any authority to allow the amendment. They
maintain that the original action for specific performance involving parcels of land in
Montalban, Rizal should have been filed in the RTC of that area. Thus, they chide the
CA for allegedly misunderstanding the distinction between territorial jurisdiction and
venue, thereby erroneously holding that the RTC had jurisdiction over the original
Complaint, although the venue was improperly laid.

We disagree. True, an amendment cannot be allowed when the court has no

jurisdiction over the original Complaint and the purpose of the amendment is to confer
jurisdiction on the court.[14] In the present case, however, the RTC had jurisdiction
because the original Complaint involved specific performance with damages. In La
Tondea Distillers v. Ponferrada,[15] this Court ruled that a complaint for specific
performance with damages is a personal action and may be filed in the proper court
where any of the parties reside, viz.:

18
[G.R. No. 109656. November 21, 1996]
LA TONDEA DISTILLERS, INC., petitioner, vs. THE HON. JUDGE BERNARDO T.
PONFERRADA, JOAQUIN T. GOCHANGCO, ENRIQUE DY, QUINTIN DY, LITO
ONG, JERRY ONG and LUIS T. ONG, respondents.
DECISION
FRANCISCO, J.:
The undisputed facts are simplified as follows:
1. Several persons[1] (herein referred to as defendants) reneged on their contract to
sell to private respondents a parcel of land[2] located in Bago City;
2. This breach prompted private respondents to file on August 25, 1987 before the
Regional Trial Court (RTC) of Bacolod City an action for specific performance with
damages against defendants. A notice of lis pendens was annotated on the latters
title although the same was cancelled on November 9, 1988 upon defendants filing a
bond;
3. Pending the trial before the lower court on November, 1991, petitioner bought the
above lot from defendants. Aggrieved, private respondents amended their complaint
and impleaded petitioner as an additional defendant alleging that petitioner was not a
buyer in good faith;
4. Subsequently, petitioner filed a motion to dismiss the amended complaint on two
grounds: no cause of action and improper venue. In support of the first ground,
petitioner asserts that it is a buyer in good faith since the notice of lis pendens was
already cancelled when it bought the lot. As for the second ground, petitioner argued
that venue should be in Bago City where the lot is located and not in Bacolod City;
5. On October 1, 1992, petitioner received a resolution from the lower court denying
their motion as there was need for the parties to present evidence on the question of
good faith. Petitioners motion for reconsideration was also denied in a resolution they
received on January 20, 1993;
6. More than three (3) months later, or on April 21, 1993, petitioner went directly to
this Court via petition for certiorari under Rule 65 assailing the denial of its motions.
On November 24, 1993, the court gave due course to the petition and required the
parties to submit their memorandum.[3] After the parties submitted their respective
memoranda as directed, petitioner filed a manifestation alleging for the first time that
it sold the lot sometime in September, 1992 to Distileria Bago, Inc. a separate entity
with which the former has substantial stockholdings. Based on such admission,
private respondents moved to dismiss the instant petition, arguing that petitioner is
no longer a real party in interest, having sold the lot.
The issue posed herein involves the remedy of an aggrieved party when the lower
court denies his motion to dismiss.
However, the petition should be dismissed outright for being filed beyond the
reasonable period,[4] the same having been filed only after more than three months
from the time petitioner received a copy of the assailed RTC resolutions.
Even assuming that the petition was promptly filed, dismissal is still warranted on
account of the following reasons:
First, an order denying a motion to dismiss is only interlocutory which is neither
appealable until final judgment,[5] nor could it generally be assailed on certiorari.[6]
The remedy of the aggrieved party is to file an answer pursuant to Sec. 4, Rule 16,
and interpose as defenses, the objections raised in his motion to dismiss, proceed to
trial, and in case of an adverse decision, elevate the whole case by appeal in due
time.[7]
Second, the extraordinary remedy of certiorari can be availed of only if the denial of
the motion constitutes grave abuse of discretion.[8] In the case at bar, the lower court
did not abuse its discretion in deferring[9] action on the motion. Section 3 of Rule
16[10] sanctions deferment of hearing on the motion until the trial if the ground alleged
does not appear to be indubitable. Clearly respondent judge had doubts on the
allegation of petitioners good faith. This is a question of fact which necessitates
presentation of evidence and is certainly far from indubitable.[11] It is within the
discretion of the court to defer action if the ground alleged does not appear to be
indubitable[12] and that deferment is only deemed a provisional denial of the motion
to dismiss.[13]
Finally, We are not also persuaded by petitioners argument that venue should be
lodged in Bago City where the lot is situated.[14] The complaint is one for specific
performance with damages. Private respondents do not claim ownership of the lot but
in fact recognized title of defendants by annotating a notice of lis pendens. In one
case,[15] a similar complaint for specific performance with damages involving real
property, was held to be a personal action, which may be filed in the proper court
where the party resides. Not being an action involving title to or ownership of real
property, venue, in this case, was not improperly laid before the RTC of Bacolod City.
Counsel for the petitioner should have meticulously observed the procedural
guidelines established by the Rules of Court as well as by jurisprudence. We reiterate
that the extraordinary remedy of certiorari is not intended to be a tool to delay litigation
and must be resorted to only in cases of manifest grave abuse of discretion. The case
at bench does not call for such extraordinary remedy.
ACCORDINGLY, finding no grave abuse of discretion, the instant petition is
DISMISSED.
SO ORDERED.
19
G.R. No. L-21957 October 14, 1968
LAURO ADAMOS, ORO ADAMOS, DOMINGO ALMEDA, BENITA ALTO,
ADELAIDA BERNARDO, SIMPLICIO BELISARIO, BERNARDINO CUSTODIO,
AMADO DOMINGUEZ, GREGORIO SAN DIEGO, FELICISIMO G. FAUSTO,
ANGELA GATMAYTAN, BENITA ILAYA, LEONCIO LISING, MARGARITA V.
LISING, EMELING P. LAHOM, ROSALINA MAGNO, FELICIANO MlSERICORDIA,
AUREA MISERICORDIA, ANA PASCUAL, JOSE PADILLA, ABUNDO PORTO,
CARMEN REYTAS, LILY SANTOS, ELISA B. SISON, INES VITUG, FLORENTINA
VERGARA, now deceased, represented by her heirs Nicanor Vergara, Hilarion
Vergara, Miguel Vergara, Dolores Vergara and Margarita V. Lising, EMILIA
MENDOZA, CARIDAD B. SISON, ESTER M. SISON, AUGUSTO M. SISON, MARIA
M. DE SISON, alias MARIA DE LEON, ALEJANDRO SISON and CESAR M.
SISON, plaintiffs-appellants,
vs.
J. M. TUASON & CO., INC. and GREGORIO ARANETA, INC., defendants-
appellees.
Dominador G. Magno for plaintiffs-appelants.
Araneta, Mendoza & Papa and Sison & San Juan for defendants-appellees.
MAKALINTAL, J.:
This case is before us on regular appeal from the order of the Court of First Instance
of Manila dismissing the complaint in its civil case No. 53067.
The plaintiffs, numbering thirty-three (33) in all, instituted this action for "Specific
Performance and Damages," alleging four (4) causes of action against J.M. Tuason
& Co., Inc., and Gregorio Araneta, Inc., the latter in its capacity as managing partner
and attorney-in-fact of the former. In the first cause of action the complaint states that
the plaintiffs are in possession of certain residential lots situated in Matalahib and
Tatalon, Quezon City, having purchased the same sometime in 1949 from several
persons collectively designated as the Deudors; that said lots are all embraced and
included in a bigger parcel of land covered by a Torrens title in the name of J.M.
Tuason & Co., Inc.; that after 1949 the same lots claimed by herein plaintiffs became
the subject-matter of several civil cases in the Court of First Instance of Rizal (Quezon
City) between the Deudors and J. M. Tuason & Co., Inc.; that on March 16, 1953 the
parties in those cases entered into a compromise agreement, subsequently embodied
in the decision of the Court, under which the legitimate purchasers of lots from the
Deudors, named in a list attached to the said agreement, among them the plaintiffs,
"who are to continue and/or who are entitled to elect and have elected to buy their
respective lots, from the legal owners who are now the defendants (J.M. Tuason &
Co., Inc) shall be credited (the) sums already paid by them under their former
purchase contracts from their active predecessors-in-interest;" that it is likewise
provided in the compromise agreement that the so-called owners (J. M. Tuason &
Co., Inc), now the defendants, shall make new purchase contracts in favor of the
plaintiffs with respect to their respective lots acquired by them from the Deudors at
the current rate then existing at the time of the execution of the compromise
agreement; that the plaintiffs "are ... willing to buy their respective lots and/or elect to
continue to purchase the same from the defendants and also to sign new purchase
contracts, but the defendants without any legal justification whatsoever, deliberately
refused and failed and still refuse and fail to make new purchase contracts in favor of
the herein plaintiffs up to the present time, notwithstanding verbal and written
demands made by the plaintiffs to the defendants, and in spite of their written and
verbal commitments to plaintiffs."
The third and fourth causes of action, after incorporating by reference the allegations
in the first one, merely deal with the prices at which, according to the plaintiffs, the
defendants should sell the lots to them pursuant to the compromise agreement. The
fourth cause of action contains a claim for damages and attorney's fees.
The relief sought in the complaint, aside from the claim for damages and attorney's
fees, is for the defendants to be ordered "to make new purchase contracts in favor of
the plaintiffs on their respective lots at the current price ranging from P17.00 to P20.00
(per square meter) at the time of the execution of the compromise agreement."
J. M. Tuason & Co., Inc., and Gregorio Araneta, Inc. filed separate motions to dismiss,
both pleading improper venue and failure to state a cause of action, and the first
alleging, besides, extinctive prescription and misjoinder of parties. Over the plaintiffs'
opposition, the lower court granted the motion and dismissed the complaint on one
ground, namely, failure to state a cause of action. The material portions of the order
of dismissal read as follows:
... The compromise agreement upon which the plaintiffs based their complaint had
already been rescinded and set aside. After the rendition of the decision which was
based upon the compromise agreement, ... several incidents arose in connection with
the implementation thereof which led to the issuance of two orders by the Court of
First Instance of Rizal, Quezon City Branch, in Civil Cases Nos. Q-135, Q-139, Q-174
and Q-177.
In the first order which was dated February 28, 1957, said court directed those
referred collectively as the "Deudors" in the compromise agreement, to clear and
deliver the peaceful possession of the 30 "quiñones" to J. M. Tuason & Co., Inc., and
Gregorio Araneta, Inc., within a period of four (4) months from that date.
The "Deudors" moved for the reconsideration of said order while Gregorio Araneta,
Inc. filed a motion alleging that the former had not delivered the 30 "quiñones" despite
the expiration of four months fixed in the order of February 28, 1957 and praying that
the Sheriff of Quezon City be directed to place movant in possession of said parcel of
land except those portions which were in the possession of parties named individually
in said motion.
The Court of First Instance of Rizal, Quezon City Branch, denied the motion for
reconsideration of the "Deudors" and granted the motion of Gregorio Araneta, Inc.
dated August 16, 1957 in an order dated January 10, 1958, wherein it made the
following pronouncement:
"... There is no excuse, therefore, for the failure of the Deudors to deliver the
remaining 30 quiñones, 4 years and 8 months after the execution and approval of the
compromise agreement. The equitable, if not the legal, solution of the problem is the
20
setting aside of the compromise agreement of March 16, 1953, so far as it still remains
unimplemented or executory. The failure to deliver and the continued mushrooming
of houses in the area, despite the compromise, justify the release of J. M. Tuason &
Co., Inc. and Gregorio Araneta, Inc. from further obligations under the agreement of
March 16, 1953."
From the orders of February 28, 1957 and January 10, 1958, the "Deudors" appealed
to the Supreme Court, but on May 30, 1961 it affirmed them and held among others
the following:
"... In any event, said paragraph is but a faithful statement of the law pertinent to the
subject, inasmuch as the period of four (4) months, given to the Deudors, in said
decision, for the delivery of the land of 30 quiñones to which their right to collect
P614,925.74 was subject as a suspensive condition — constituted a resolutory
period. When the same expired with said suspensive condition still unfulfilled,
appellants' right to comply with it was extinguished, and the conditional obligation of
the appellees to pay said sum was terminated (Article 1193, Civil Code of the
Philippines). (Florencio Deudor, et al. vs. J. M. Tuason & Co., Inc., G.R. L-13768, May
30, 1961)"
Whatever doubt there could still be as to the effect of the ruling in the above-quoted
case on the compromise agreement of March 16, 1953, was dispelledby a
subsequent decision of the Supreme Court in "J. M. Tuason & Co., Inc., et al. vs.
Bienvenido Sanvictores", G.R. L-16886, promulgated on January 30, 1962 when it
stated that —
"It is also worthy of note that the compromise between Deudor and Tuason upon
which Sanvictores predicates his right to buy the lot he occupies, has been validly
rescinded and set aside, as recognized by this Court in its decision in G.R. No. L-
13768, Deudor vs. Tuason, promulgated on May 30, 1961."
WHEREFORE, the Court is of the opinion and so holds that the complaint states no
cause of action and by virtue thereof is hereby dismissed without pronouncement as
to costs.
The plaintiffs moved to reconsider, were turned down, and came up directly to this
Court on appeal.
It is a well-settled rule that in a motion to dismiss based on the ground that the
complaint fails to state a cause of action, the question submitted to the court for
determination is the sufficiency of the allegations in the complaint itself. Whether
those allegations are true or not is beside the point, for their truth is hypothetically
admitted by the motion. The issue rather is: admitting them to be true, may the court
render a valid judgment in accordance with the prayer in the complaint? Stated
otherwise, the insufficiency of the cause of action must appear on the face of the
complaint in order to sustain a dismissal on this ground. No extraneous matter may
be considered, nor facts not alleged, which would require evidence and therefore
must be raised as defenses and await the trial (Garcon vs. Redemptorist Fathers, L-
23510, May 30, 1966). So rigid is the norm prescribed that if the court should doubt
the truth of the facts averred it must not dismiss the complaint but require an answer
and proceed to hear the case on the merits (Republic Bank vs. Cuaderno, L-22399,
March 30, 1967).
In departing from this rule and taking cognizance of facts not alleged or referred to in
the complaint, specifically the so-called rescission of the compromise agreement on
which the plaintiffs' complaint is predicated, the lower court committed an error. The
alleged rescission, the extent of its effects on the different aspects of that agreement
and specifically on the present claims of the plaintiffs, are matters of defense which
should be properly raised in the answer. It is unsafe to lift the idea of "rescission" from
the context in which it was used in the two cases relied upon by the lower court and
apply it here without a previous inquiry into the facts to determine whether or not it is
indeed applicable.
In their brief the defendants as appellees insist on the other ground alleged by them
below in support of their motion to dismiss but not passed upon by the lower court,
namely, that venue was improperly laid. We do not agree with the defendants. All the
allegations as well as the prayer in the complaint show that this is not a real but a
personal action — to compel the defendants to execute the corresponding purchase
contracts in favor of the plaintiffs and to pay damages. The plaintiffs do not claim
ownership of the lots in question: they recognize the title of the defendant J. M.
Tuason & Co., Inc. They do not ask that possession be delivered to them, for they
allege to be in possession. The case cited by the defendants (Abao, et al. vs. J. M.
Tuason & Co., Inc., G.R. No. L-16796, Jan. 30, 1962) is therefore not in point. In that
case, as stated by this Court in its decision, the "plaintiffs' action is predicated on the
theory that they are 'occupants, landholders,' and 'most' of them 'owners by purchase'
of the residential lots in question; that, in consequence of the compromise agreement
adverted to above, between the Deudors and defendant corporations, the latter had
acknowledged the right and title of the Deudors in and to said lots; and hence, the
right and title of the plaintiffs, as successors-in-interest of the Deudors; that, by
entering into said agreement, defendant corporations had, also, waived their right to
invoke the indefeasibility of the Torrens title in favor of J. M. Tuason & Co., Inc.; and
that defendants have no right, therefore, to oust plaintiffs from the lots respectively
occupied by them and which they claim to be entitled to hold. Obviously, this action
affects, therefore, not only the possession of real property, but, also, the title thereto.
Accordingly, it should have been instituted in the Court of First Instance of the
Province of Rizal in which said property is situated (Section 3, Rule 5 of the Rules of
Court)."
WHEREFORE, the order appealed from is set aside, and the case is remanded for
further proceedings, with costs against the defendants-appellees in this instance.
21
[G.R. No. 146089. December 13, 2001]
VIRGINIA GOCHAN, LOUISE GOCHAN, LAPU-LAPU REAL ESTATE
CORPORATION, FELIX GOCHAN AND SONS REALTY CORPORATION,
MACTAN REALTY DEVELOPMENT CORPORATION, petitioners, vs.
MERCEDES GOCHAN, ALFREDO GOCHAN, ANGELINA GOCHAN-HERNAEZ,
MA. MERCED GOCHAN GOROSPE, CRISPO GOCHAN, JR., and MARLON
GOCHAN, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review seeking to set aside the decision of the Court of Appeals
dated September 10, 1999 in CA-G.R. SP No. 49084,[1] as well as its Resolution[2]
dated November 22, 2000, denying the Motion for Reconsideration.
Respondents were stockholders of the Felix Gochan and Sons Realty Corporation
and the Mactan Realty Development Corporation. Sometime in 1996, respondents
offered to sell their shares in the two corporations to the individual petitioners, the
heirs of the late Ambassador Esteban Gochan, for and in consideration of the sum of
P200,000,000.00. Petitioners accepted and paid the said amount to respondents.
Accordingly, respondents issued to petitioners the necessary Receipts.[3] In addition,
respondents executed their respective Release, Waiver and Quitclaim,[4] wherein
they undertook that they would not initiate any suit, action or complaint against
petitioners for whatever reason or purpose.
In turn, respondents, through Crispo Gochan, Jr., required individual petitioners to
execute a promissory note,[5] undertaking not to divulge the actual consideration they
paid for the shares of stock. For this purpose, Crispo Gochan, Jr. drafted a document
entitled promissory note in his own handwriting and had the same signed by Felix
Gochan, III, Louise Gochan and Esteban Gochan, Jr.
Unbeknown to petitioners, Crispo Gochan, Jr. inserted in the promissory note a
phrase that says, Said amount is in partial consideration of the sale.[6]
On April 3, 1998, respondents filed a complaint against petitioners for specific
performance and damages with the Regional Trial Court of Cebu City, Branch 11,
docketed as Civil Case No. CEB-21854. Respondents alleged that sometime in
November 1996, petitioner Louise Gochan, on behalf of all the petitioners, offered to
buy their shares of stock, consisting of 254 shares in the Felix Gochan and Sons
Realty Corporation and 1,624 shares of stock in the Mactan Realty Development
Corporation; and that they executed a Provisional Memorandum of Agreement,
wherein they enumerated the following as consideration for the sale:
1. Pesos: Two Hundred Million Pesos (P200M)
2. Two (2) hectares more or less of the fishpond in Gochan compound, Mabolo, Lot
4F-2-B
3. Lot 2, Block 9 with an area of 999 square meters in Gochan Compound, Mabolo,
Cebu
4. Three Thousand (3,000) square meters of Villas Magallanes in Mactan, Cebu
5. Lot 423 New Gem Building with an area of 605 square meters.[7]
Accordingly, respondents claimed that they are entitled to the conveyance of the
aforementioned properties, in addition to the amount of P200,000,000.00, which they
acknowledge to have received from petitioners. Further, respondents prayed for
moral damages of P15,000,000.00, exemplary damages of P2,000,000.00, attorneys
fees of P14,000,000.00, and litigation expenses of P2,000,000.00.
Petitioners filed their answer, raising the following affirmative defenses: (a) lack of
jurisdiction by the trial court for non-payment of the correct docket fees; (b)
unenforceability of the obligation to convey real properties due to lack of a written
memorandum thereof, pursuant to the Statute of Frauds; (c) extinguishment of the
obligation by payment; (d) waiver, abandonment and renunciation by respondent of
all their claims against petitioners; and (e) non-joinder of indispensable parties.
On August 7, 1998, petitioners filed with the trial court a motion for a preliminary
hearing on the affirmative defenses. In an Order dated August 11, 1998, the trial court
denied the motion, ruling as follows:
As the grant of said motion lies in the discretion of the court under Section 6 of Rule
16 of the 1997 Rules of Civil Procedure, this Court in the exercise of its discretion,
hereby denies the said motion because the matters sought to be preliminarily heard
do not appear to be tenable. For one, the statute of frauds does not apply in this case
because the contract which is the subject matter of this case is already an executed
contract. The statute of frauds applies only to executory contracts. According to Dr.
Arturo M. Tolentino, a leading authority in civil law, since the statute of frauds was
enacted for the purpose of preventing frauds, it should not be made the instrument to
further them. Thus, where one party has performed his obligation under a contract,
equity would agree that all evidence should be admitted to prove the alleged
agreement (PNB vs. Philippine Vegetable Oil Company, 49 Phil. 897). For another,
the contention of the defendants that the claims of the plaintiffs are already
extinguished by full payment thereof does not appear to be indubitable because the
plaintiffs denied under oath the due execution and genuineness of the receipts which
are attached as Annexes 1-A, 1-B and 1-C of defendants answer. This issue therefore
has to be determined on the basis of preponderance of evidence to be adduced by
both parties. Then, still for another, the contention that the complaint is defective
because it allegedly has failed to implead indispensable parties appears to be wanting
in merit because the parties to the memorandum of agreement adverted to in the
complaint are all parties in this case. Then the matter of payment of docketing and
filing fees is not a fatal issue in this case because the record shows that the plaintiffs
had paid at least P165,000.00 plus in the form of filing and docketing fees. Finally,
regarding exerting earnest efforts toward a compromise by the plaintiffs, the
defendants cannot say that there is an absence of an allegation to this effect in the
complaint because paragraph 11 of the complaint precisely states that before filing
this case, earnest efforts toward a compromise have been made.
22

Petitioners motion for reconsideration of the above Order was denied by the trial court
on September 11, 1998.
Petitioners thus filed a petition for certiorari with the Court of Appeals, docketed as
CA-G.R. SP No. 49084. On September 10, 1999, the Court of Appeals rendered the
appealed decision dismissing the petition on the ground that respondent court did not
commit grave abuse of discretion, tantamount to lack or in excess of jurisdiction in
denying the motion to hear the affirmative defenses.[8]
Again, petitioners filed a motion for reconsideration, but the same was denied by the
Court of Appeals in its assailed Resolution of November 22, 2000.[9]
Petitioners, thus, brought the present petition for review anchored on the following
grounds:
I.
THE COURT OF APPEALS COMMITTED GRAVE AND PALPABLE ERROR IN
FINDING THAT THE CORRECT DOCKET FEES HAVE BEEN PAID.
II.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN RULING THAT THE
PMOA WAS A PARTIALLY EXECUTED CONTRACT AND HENCE NOT COVERED
BY THE STATUTE OF FRAUDS.
III.
THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DECIDING THAT THE
CLAIMS OF PRIVATE RESPONDENTS HAVE NOT BEEN EXTINGUISHED BY
PAYMENT OR FULL SETTLEMENT DESPITE THE PRESENCE OF RECEIPTS
SIGNED BY THE PRIVATE RESPONDENTS SHOWING THE CONTRARY.
IV.
THE COURT OF APPEALS COMMITTED GRAVE ERROR IN RESOLVING THAT
FELIX GOCHAN III AND ESTEBAN GOCHAN, JR. ARE NOT INDISPENSABLE
PARTIES AND THEREFORE NEED NOT BE IMPLEADED AS PARTIES.[10]
Respondents filed their Comment,[11] arguing, in fine, that petitioners are guilty of
forum-shopping when they filed two petitions for certiorari with the Court of Appeals;
and that the Court of Appeals did not err in dismissing the petition for certiorari.
The instant petition has merit.
The rule is well-settled that the court acquires jurisdiction over any case only upon
the payment of the prescribed docket fees. In the case of Sun Insurance Office, Ltd.
(SIOL) v. Asuncion,[12] this Court held that it is not simply the filing of the complaint
or appropriate initiatory pleading, but the payment of the prescribed docket fee that
vests a trial court with jurisdiction over the subject matter or nature of the action.
Respondents maintain that they paid the correct docket fees in the amount of
P165,000.00 when they filed the complaint with the trial court. Petitioners, on the other
hand, contend that the complaint is in the nature of a real action which affects title to
real properties; hence, respondents should have alleged therein the value of the real
properties which shall be the basis for the assessment of the correct docket fees.
The Court of Appeals found that the complaint was one for specific performance and
incapable of pecuniary estimation. We do not agree.
It is necessary to determine the true nature of the complaint in order to resolve the
issue of whether or not respondents paid the correct amount of docket fees therefor.
In this jurisdiction, the dictum adhered to is that the nature of an action is determined
by the allegations in the body of the pleading or complaint itself, rather than by its title
or heading.[13] The caption of the complaint below was denominated as one for
specific performance and damages. The relief sought, however, is the conveyance or
transfer of real property, or ultimately, the execution of deeds of conveyance in their
favor of the real properties enumerated in the provisional memorandum of agreement.
Under these circumstances, the case below was actually a real action, affecting as it
does title to or possession of real property.
In the case of Hernandez v. Rural Bank of Lucena,[14] this Court held that a real
action is one where the plaintiff seeks the recovery of real property or, as indicated in
section 2(a) of Rule 4 (now Section 1, Rule 4 of the 1997 Rules of Civil Procedure), a
real action is an action affecting title to or recovery of possession of real property.
It has also been held that where a complaint is entitled as one for specific performance
but nonetheless prays for the issuance of a deed of sale for a parcel of land, its
primary objective and nature is one to recover the parcel of land itself and, thus, is
deemed a real action. In such a case, the action must be filed in the proper court
where the property is located:
In this Court, the appellant insists that her action is one for specific performance, and,
therefore, personal and transitory in nature.
This very issue was considered and decided by this Court in the case of Manuel B.
Ruiz vs. J.M. Tuason & Co., Inc. et al., L-18692, promulgated 31 January 1963. There
the Court, by unanimous vote of all the Justices, held as follows:
This contention has no merit. Although appellants complaint is entitled to be one for
specific performance, yet the fact that he asked that a deed of sale of a parcel of land
situated in Quezon City be issued in his favor and that a transfer certificate of title
covering said parcel of land be issued to him shows that the primary objective and
nature of the action is to recover the parcel of land itself because to execute in favor
of appellant the conveyance requested there is need to make a finding that he is the
owner of the land which in the last analysis resolves itself into an issue of ownership.
Hence, the action must be commenced in the province where the property is situated
pursuant to Section 3, Rule 5, of the Rules of Court, which provides that actions
23
affecting title to or recovery of possession of real property shall be commenced and
tried in the province where the property or any part thereof lies.[15]
In the case at bar, therefore, the complaint filed with the trial court was in the nature
of a real action, although ostensibly denominated as one for specific performance.
Consequently, the basis for determining the correct docket fees shall be the assessed
value of the property, or the estimated value thereof as alleged by the claimant. Rule
141, Section 7, of the Rules of Court, as amended by A.M. No. 00-2-01-SC, provides:
Section 7. Clerks of Regional Trial Courts. - x x x
(b) xxx
In a real action, the assessed value of the property, or if there is none, the estimated
value thereof shall be alleged by the claimant and shall be the basis in computing the
fees.
We are not unmindful of our pronouncement in the case of Sun Insurance,[16] to the
effect that in case the filing of the initiatory pleading is not accompanied by payment
of the docket fee, the court may allow payment of the fee within a reasonable time but
in no case beyond the applicable prescriptive period. However, the liberal
interpretation of the rules relating to the payment of docket fees as applied in the case
of Sun Insurance cannot apply to the instant case as respondents have never
demonstrated any willingness to abide by the rules and to pay the correct docket fees.
Instead, respondents have stubbornly insisted that the case they filed was one for
specific performance and damages and that they actually paid the correct docket fees
therefor at the time of the filing of the complaint. Thus, it was stated in the case of
Sun Insurance:[17]
The principle in Manchester could very well be applied in the present case. The
pattern and the intent to defraud the government of the docket fee due it is obvious
not only in the filing of the original complaint but also in the filing of the second
amended complaint.
However, in Manchester, petitioner did not pay any additional docket fee until the case
was decided by this Court on May 7, 1987. Thus, in Manchester, due to the fraud
committed on the government, this Court held that the court a quo did not acquire
jurisdiction over the case and that the amended complaint could not have been
admitted inasmuch as the original complaint was null and void.
In the present case, a more liberal interpretation of the rules is called for considering
that, unlike Manchester, private respondent demonstrated his willingness to abide by
the rules by paying the additional docket fees as required. The promulgation of the
decision in Manchester must have had that sobering influence on private respondent
who thus paid the additional docket fee as ordered by the respondent court. It
triggered his change of stance by manifesting his willingness to pay such additional
docket fee as may be ordered.
Respondents accuse petitioners of forum-shopping when they filed two petitions
before the Court of Appeals. Petitioners, on the other hand, contend that there was
no forum-shopping as there was no identity of issues or identity of reliefs sought in
the two petitions.
We agree with petitioners that they are not guilty of forum-shopping. The deplorable
practice of forum-shopping is resorted to by litigants who, for the purpose of obtaining
the same relief, resort to two different fora to increase his or her chances of obtaining
a favorable judgment in either one. In the case of Golangco v. Court of Appeals,[18]
we laid down the following test to determine whether there is forum-shopping:
Ultimately, what is truly important to consider in determining whether forum-shopping
exists or not is the vexation caused the courts and the parties-litigant by a person 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
the possibility of conflicting decisions being rendered by the different fora upon the
same issues.
In sum, two different orders were questioned, two distinct causes of action and issues
were raised, and two objectives were sought; thus, forum shopping cannot be said to
exist in the case at bar.
Likewise, we do not find that there is forum-shopping in the case at bar. The first
petition, docketed as CA-G.R. SP. No. 49084, which is now the subject of the instant
petition, involved the propriety of the affirmative defenses relied upon by petitioners
in Civil Case No. CEB-21854. The second petition, docketed as CA-G.R. SP No.
54985, raised the issue of whether or not public respondent Judge Dicdican was guilty
of manifest partiality warranting his inhibition from further hearing Civil Case No. CEB-
21854.
More importantly, the two petitions did not seek the same relief from the Court of
Appeals. In CA-G.R. SP. No. 49084, petitioners prayed, among others, for the
annulment of the orders of the trial court denying their motion for preliminary hearing
on the affirmative defenses in Civil Case No. CEB-21854. No such reliefs are involved
in the second petition, where petitioners merely prayed for the issuance of an order
enjoining public respondent Judge Dicdican from further trying the case and to assign
a new judge in his stead.
True, the trial court has the discretion to conduct a preliminary hearing on affirmative
defenses. In the case at bar, however, the trial court committed a grave abuse of its
discretion when it denied the motion for preliminary hearing. As we have discussed
above, some of these defenses, which petitioners invoked as grounds for the
dismissal of the action, appeared to be indubitable, contrary to the pronouncement of
the trial court. Indeed, the abuse of discretion it committed amounted to an evasion
of positive duty or virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law,[19] which would have warranted the extraordinary writ of
certiorari. Hence, the Court of Appeals erred when it dismissed the petition for
certiorari filed by petitioners.
WHEREFORE, in view of the foregoing, the instant petition is GRANTED. This case
is REMANDED to the Regional Trial Court of Cebu City, Branch 11, which is directed
24
to forthwith conduct the preliminary hearing on the affirmative defenses in Civil Case
No. CEB-21854.

SO ORDERED.

25
[G.R. No. 123215. February 2, 1999]
NATIONAL STEEL CORPORATION, petitioner, vs. COURT OF APPEALS, HON.
ARSENIO J. MAGPALE, and JOSE MA. P. JACINTO, respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision,[1] dated September 11, 1995,
of the Court of Appeals, which dismissed the special civil action for certiorari filed by
petitioner National Steel Corporation (NSC) to set aside the order, dated April 6, 1994,
of the Regional Trial Court, Branch LVII, City of Makati. In the said order, the trial
court denied the motion of petitioner NSC to dismiss the complaint for recovery of
personal property which private respondent Jose P. Jacinto had filed.
The facts are as follows:
Private respondent Jacinto was the former owner of record of 100 shares of stock of
the Manila Golf and Country Club (MGCC) now owned by and registered in the name
of petitioner NSC. On February 9, 1990, he filed a complaint[2] against the NSC,
alleging that
4. In or about 1970, for valuable considerations, Manila Golf and Country Club, Inc.
(MGCCI) issued its Stock Certificate No. 1361 to plaintiff representing 100 shares of
MGCCI.
5. From about 1972 up to the early part of February 1986, plaintiff was abroad and
could not return to the Philippines for reasons beyond his control.
6. When plaintiff returned to the Philippines in 1986, he discovered that Stock
Certificate No. 1361 had been cancelled and a replacement Stock Certificate had
been issued in the name of NSC.
7. The cancellation and transfer of plaintiffs Stock Certificate No. 1361 is void for the
reasons that: there was no meeting of minds, there was no specific contract between
plaintiff and NSC or any party covering the alleged transfer nor was there any
consideration for the same.
8. Despite repeated demands upon NSC to return and re-transfer plaintiffs 100 shares
in MGCCI formerly covered by said Stock Certificate No. 1361, NSC failed and
refused and still fails and refuses to comply with the same.
9. MGCCIs act in cancelling plaintiffs stock certificate No. 1361 and issuing a
replacement certificate in the name of NSC is without basis and illegal considering
that there was no valid document evidencing the assignment, sale or transfer by
plaintiff to NSC of MGCCI stock certificate No. 1361.
10. In consequence of NSC and MGCCIs illegal act in causing the cancellation and
transfer of plaintiffs Stock Certificate No. 1361 unto NSCs name:
10.1. Plaintiff suffered mental anguish for which an award of moral damages of P1
Million is proper;
10.2. Plaintiff was constrained to litigate and secure the services of counsel for a fee
of P100,000.00 and for which NSC and MGCCI should be held liable.
Based on the foregoing allegations, Jacinto prayed:
PRAYER
WHEREFORE, it is respectfully prayed that judgment be rendered:
1. Ordering NSC to execute a deed of assignment re-transferring unto plaintiff the
MGCCI certificate issued to the former in replacement of Stock Certificate No. 1361
and to surrender said Deed of Assignment, together with the MGCCI certificate issued
to NSC (in replacement of Stock Certificate No. 1361) for cancellation thereof and to
order MGCCI to cancel said stock certificate and issue a new one in the name of Jose
Ma. P. Jacinto;
2. If for any reason whatsoever NSC fails or refuses to execute the deed of
assignment and surrender NSCs replacement stock certificate, MGCCI be ordered
to:
2.1. Cancel in its stock and transfer book the stock certificate issued to NSC issued
in replacement of certificate No. 1361;
2.2. Issue a new stock certificate in the name of NSC or the stock certificate that might
have been issued in replacement thereof.
2.3. Declare as lost and of no force and effect the MGCCI stock certificate now
outstanding and registered in the name of NSC.
3. Ordering NSC and MGCCI to pay plaintiff, jointly and severally:
3.1. P1 Million as moral damages; and
3.2. P100,000.00 as attorneys fees.
Other reliefs are also prayed for.[3]
Petitioner NSC sought the dismissal of the complaint on the ground of prescription,
but its motion was denied by the trial court in an order, dated November 9, 1990.
Petitioner NSC brought a special civil action for certiorari in the Court of Appeals, but
again its petition was dismissed by the appellate court on August 30, 1991. Its attempt
to secure review in this Court failed as its petition was dismissed in a resolution, dated
March 18, 1992.
26
Petitioner NSC then filed its answer, after which trial was held. It thereafter filed a
motion[4] to dismiss the complaint against it on the ground of lack of jurisdiction. It
alleged:
Plaintiff paid docket and other fees totalling P4,040.00. The certification of Clerk of
Court Ma. Corazon Cecelia P. Cuba is attached as Annex A.
2. Under Sec. 7(a) of Rule 141, as amended by the Resolution of the Supreme Court
En Banc dated September 4, 1990, the docket fees for filing an action . . . . is P600
for the first P150,000.00 and P5.00 for each P1,000.00 in excess of P150,000.00.
3. The actual value of the MGCCI share certificate as of February, 1990, when the
complaint was filed, was P5,511,000.00.
A certification issued by the MGCCI attesting to the fair market value of a MGCCI
share is attached as Annex B.
4. This means that the correct docket fee for the filing of plaintiffs complaint is
approximately P26,805.00 and not P4,040.00 which is the amount plaintiff actually
paid.
....
6. The failure of plaintiff to pay the correct filing fees on February 13, 1990 meant that
this court did not acquire jurisdiction over plaintiffs action. Under the ruling of Sun
Insurance, and as explained below, the plaintiff cannot now pay the deficiency in the
filing fees because it is already beyond the applicable prescriptive or reglementary
period.
The trial court denied petitioners motion in an order, dated April 6, 1994. Hence, the
latter brought a special civil action for certiorari in the Court of Appeals, but its petition
was dismissed on September 11, 1995. The Court of Appeals ruled:
The principal relief, or prayer in private respondents complaint is specific, for the NSC
to execute a deed of assignment re-transferring unto plaintiff the MGCCI certificate x
x x in replacement of stock certificate No. 1861 x x x.
There is no allegation in the complaint of any quantified amount and/or of the actual
value of the stock certificate in question.
There is also no separate cause of action and/or prayer in the face of the complaint
that private respondent, even in the alternative, prayed that if the principal relief is
unavailing, that defendants be ordered to pay him the actual or equivalent value of
the stock certificate, hence there is even no reason or basis to move for a more
definite statement or for a bill of particulars of any matter which is not averred in the
complaint with sufficient definiteness or particularity to enable petitioner to properly
prepare for a more responsive pleading or to prepare for trial.
....
Perspicaciously, what should guide the office of the Clerk of Court, Regional Trial
Court, Makati, Metro Manila, in assessing the correct docket fees for the filing of the
complaint in Civil Case No. 90-4051, when it was filed on February 13, 1990, is what
is alleged and prayed for in the complaint. It would be uncalled for and baseless for
the clerk of court to consider at that point in time the supposed actual value of the
MGCCI share certificate as of February, 1990, x x x (in the amount of) P5,511,000.00,
and then and there assess an additional docket fee of P22,765.00 (P26,805.00 minus
P4,040.00), precisely because the said sum of P5,511,000.00 is not alleged in the
body of the complaint, and which is not also sought to be recovered in the action.
There can be no divergence of opinion from the allegations, designation and the
reliefs prayed for, as clearly and definitively spelled out in the face of the complaint,
that private respondents principal relief is for petitioner NSC to execute a deed of
assignment re-transferring unto plaintiff the MGCCI certificate issued to the former in
replacement of stock certificate No. 1861 x x x. And there also appears to be no hint
of any intention on the part of private respondent to mislead the clerk of court in
assessing the correct fees, or to evade the payment of the correct fees.
Hence, this petition raising the following assignment of errors:
Assignment of Errors
THE RESPONDENT COURT OF APPEALS ERRED IN CHARACTERIZING THE
NATURE OF PRIVATE RESPONDENTS ACTION AS ONE FOR SPECIFIC
PERFORMANCE AND NOT ONE FOR RECOVERY OF PROPERTY.
THE RESPONDENT COURT OF APPEALS ERRED IN REFUSING TO TAKE
COGNIZANCE OF THE TACAY [v. Regional Trial Court, 180 SCRA 433 (1989)] AND
BPI CREDIT [v. Court of Appeals, 204 SCRA 601 (1991)] RULINGS.
THE RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT THE
LOWER COURT FAILED TO ACQUIRE JURISDICTION OVER PRIVATE
RESPONDENTS COMPLAINT DUE TO NON-PAYMENT OF THE REQUIRED
FILING FEES.
Petitioner NSC correctly argues that the action in this case is for the recovery of
property rather than for specific performance and, hence, the docket fee should be
based on the value of the property sought to be recovered. It is similar to an action in
which petitioner seeks the execution of a deed of sale of a parcel of land in his favor.
Such action has been held to be for the recovery of the real property and not for
specific performance since his primary objective is to regain the ownership and
possession of the parcel of land. In Ruiz v. J.M. Tuason & Co., Inc., it was held:[5]
Appellant contends that the present action is transitory because it is one for specific
performance and its object is to compel J. M. Tuason & Co., Inc. to execute a final
deed of sale of the property in question in favor of appellant founded upon compliance
with the compromise agreement wherein said company recognized the sale made by
Florencio Deudor of said property in favor of Jose Dinglasan who, in the same
agreement, was recognized by the company as a purchaser who had already made
partial payment of the purchased price of the land.
27
 must, however, be considered a lien on the judgment which must be remitted to the
This contention has no merit. Although appellants complaint is entitled to be one for clerk of court of the court a quo upon the execution of the judgment.
specific performance, yet the fact that he asked that a deed of sale of a parcel of land
situated in Quezon City be issued in his favor and that a transfer certificate of title In the case at bar, petitioner NSC filed in 1990 a motion to dismiss but did not raise
covering said land be issued to him shows that the primary objective and nature of this point. Instead it based his motion on prescription. Upon the denial by the trial
the action is to recover the parcel of land itself because to execute in favor of appellant court of its motion to dismiss, it filed an answer, submitted its pre-trial brief, and
the conveyance requested there is need to make a finding that he is the owner of the participated in the proceedings before the trial court. It was only in 1993 more than
land which in the last analysis resolves itself into an issue of ownership. three years after filing its motion to dismiss that petitioner NSC again filed a motion to
dismiss the action on the ground of lack of jurisdiction. Clearly, petitioner is estopped
Similarly, if, as in this case, plaintiff, herein private respondent Jacinto, seeks the from raising this issue. Indeed, while the lack of jurisdiction of a court may be raised
execution in his favor of a deed of assignment of shares of stock, it follows that the at any stage of an action, nevertheless, the party raising such question may be
action is for the recovery of personal property, the main purpose of which is to regain estopped if he has actively taken part in the very proceedings which he questions and
the ownership and possession of the said shares of stock. he only objects to the courts jurisdiction because the judgment or the order
subsequently rendered is adverse to him.[10]
Accordingly, as petitioner NSC contends, private respondent Jacinto should pay
docket fees based on the value of the shares of stock and the amount of damages he WHEREFORE, the decision of the Court of Appeals, dated September 11, 1995, is
seeks to recover. Under Rule 141, 7(a) of the Rules of Court as it stood at the time of AFFIRMED. The deficiency in the payment of the docket fees shall be a lien on any
the filing of the complaint against petitioner, docket fees for ordinary civil actions judgment which may be rendered in favor of private respondent Jose P. Jacinto.
should be based on the total sum claimed, exclusive of interest, or the stated value of
the property in litigation.[6] Thus, the docket fees should be computed on the basis of SO ORDERED.
the value of the property and the amount of related damages claimed, exclusive of
interest. As we held in Tacay v. Regional Trial Court,[7] where the action involves real
property and a related claim for damages as well, the legal fees shall be assessed on
the basis of both (a) the value of the property and (b) the total amount of related
damages sought. The Court acquires jurisdiction over the action if the filing of the
initiatory pleading is accompanied by the payment of the requisite fees, or, if the fees
are not paid at the time of the filing of the pleading, as of the time of full payment of
the fees within such reasonable time as the court may grant, unless, of course,
prescription has set in in the meantime.

It does not follow, however, that the trial court should have dismissed the complaint
for failure of private respondent to pay the correct amount of docket fees. Although
the payment of the proper docket fees is a jurisdictional requirement, the trial court
may allow the plaintiff in an action to pay the same within a reasonable time before
the expiration of the applicable prescriptive or reglementary period.[8] If the plaintiff
fails to comply with this requirement, the defendant should timely raise the issue of
jurisdiction or else he would be considered in estoppel. In the latter case, the balance
between the appropriate docket fees and the amount actually paid by the plaintiff will
be considered a lien on any award he may obtain in his favor. Thus, in Pantranco
North Express, Inc. v. Court of Appeals, we held:[9]

The petitioner raised the issue regarding jurisdiction for the first time in its Brief filed
with the public respondent in CA-G.R. CV No. 26220 on 2 February 1991. After
vigorously participating in all stages of the case before the trial court and even
invoking the trial courts authority in order to ask for affirmative relief, the petitioner is
effectively barred by estoppel from challenging the trial courts jurisdiction. Although
the issue of jurisdiction may be raised at any stage of the proceedings as the same is
conferred by law, it is nonetheless settled that a party may be barred from raising it
on ground of laches or estoppel. The deficiency in the payment of the docket fees

28
G.R. No. L-14821 January 28, 1961
DOMINGO DE JESUS, in his capacity as Administrator of the Intestate Estate of
Florentina N. Vda. de Jesus, plaintiff-appellant,
vs.
RODRIGO COLOSO, defendant-appellee.
Salonga, Ordoñez, Gonzales & Associates for plaintiff-appellant.
Andres T. Velarde for defendant-appellee.
LABRADOR, J.:
This is an appeal from an order of the Court of First Instance of Bataan, Hon.
Ambrosio T. Dollete, presiding, dismissing the action instituted by the plaintiff-
appellant, on the ground that the venue of the action is improperly laid and that
another action between the parties involving the same issue is pending.
The complaint alleges that on February 12, 1955, defendant Rodrigo Coloso and the
plaintiff's intestate entered into a contract, whereby the latter authorized the former to
have exclusive right to manage a parcel of land containing an area of 315 hectares
located at Samal, Bataan, with the duty of paying the real estate taxes due thereon
(known as the Hacienda Nolasco), improving the irrigation system thereof, introducing
thereon permanent improvements consisting of the planting of fruit trees, clearing of
trees, cultivation of annual crops, rendering annual accounting of his administration,
and delivering to plaintiff-appellant one-half of all the produce from fruit trees and
annual crops, etc. The Agreement also contains a provision to the effect that
defendant shall have the right to the management and administration of the land for
a period of 10 years, extendible for another 10 years, as well as the right of option to
purchase the property within the first 10 years at the price of P60,000.00.
The present action was filed in the Court of First Instance of Bataan as Civil Case No.
2511 of that court. Alleging in the complaint that the defendant has failed to comply
with certain obligations in relation to the land, such as payment of taxes, introduction
of permanent improvement, etc. and claiming that such failure warrants a rescission
of the contract, the plaintiff prayed for the rescission of the contract, return of
possession of the land by defendant to the plaintiff intestate, and the payment to the
latter by the former of the sum of P50,000 by way of actual damages plus another
sum of P10,000 by way of attorney's fees and other expenses. The defendant filed
motion, on the ground that the motion to dismiss the a venue is improperly laid and
on the further ground that the case should have been filed as a compulsory
counterclaim in Civil Case No. 34243 of the Court of First Instance of Manila, entitled
"Rodrigo Coloso, plaintiff, versus Domingo de Jesus as administrator of the intestate
estate of the deceased of Doña Florentina N. Vda. de Jesus, et al." Attached to the
motion to dismiss is a copy of the complaint and the answer in said Civil Case No.
34243. The first ground for dismissal of the action is that the venue is improperly laid.
Defendant-appellee argues that the case at bar filed in the Court of First Instance of
Bataan is not a real action but a personal action, for the reason that appellant's main
purpose in filing the case is "to rescind the contract so that appellee may be deprived
of his option rights under the contract." This argument is not true to fact. In plaintiff-
appellant's complaint, it is alleged that defendant committed a breach of the contract,
so plaintiff prays that the contract be ordered rescinded and that defendant be ordered
"to return possession of the Hacienda Nolasco to plaintiff." So, the ultimate purpose
or end of the action is to recover possession of real property, not merely to rescind
the contract. It is alleged that the contract has been breached, a reason for which the
other party demands its rescission and the return of the property subject thereof. The
action, therefore, is an action for the recovery of the possession of land and in
accordance with Section 3 of Rule 5 of the Rules of Court, the action was properly
filed with the Court of First Instance of Bataan, where the property is situated.
The second ground for the dismissal of the action, which was also sustained by the
court a quo as a valid ground for dismissal, is the fact that defendant-appellee Rodrigo
Coloso had instituted another action in the Court of First Instance of Manila (Civil
Case No. 34243). Defendant-appellee herein, plaintiff in that case, claims to have the
absolute right to sell his title right and interest in the land its improvement's thereon,
but that plaintiff-appellant herein, defendant in that case, prevented him from
continuing with the final negotiations for the sale of his rights under the contract; that
in his action, Coloso seeks the enforcement of the agreement entered into between
him and the deceased owner, and that as a result of the action instituted by Coloso,
filed in the Court of First Instance of Manila on November 29, 1957, the action filed in
the Court of First Instance of Bataan should not be allowed to proceed. The motion to
dismiss on this ground of pendency of another action can not be granted for the
reason that the present action seeks recovery of the possession of the property, while
the other action instituted in the Court of First Instance of Manila seeks recovery of
damages for failure of defendant therein, plaintiff-appellant herein, to comply with the
terms of the agreement. It is true that the validity of the contract may be in issue in
either case, but there are other issues in the case at bar such as the breach of the
terms of the contract by the defendant-appellee and the consequent right of plaintiff
to the return of the possession of the land. In the case filed in the Court of First
Instance of Manila, the issue is whether defendant herein, plaintiff in that case, may
be entitled to recover damages arising from his failure to execute the deed of sale
over the land and his interference in the negotiations for the sale of said land. In the
case of Hongkong & Shanghai Banking Corporation v. Aldecoa, 30 Phil. 255, we held
that an action to annul a contract of mortgage is not a bar to another action to
foreclose the same contract of mortgage. Similarly the action for damages in the Court
of First Instance of Manila can not bar the present action in Bataan.
WHEREFORE, the order of the Court of First Instance of Bataan dismissing the
complaint is hereby reversed and the case is ordered remanded to that court for
further proceedings. With costs against defendant-appellee.
29
[G.R. No. 129184. February 28, 2001]
EMERGENCY LOAN PAWNSHOP INCORPORATED and DANILO R. NAPALA,
petitioners, vs. THE COURT OF APPEALS (Tenth Division) and TRADERS
ROYAL BANK, respondents.
DECISION
PARDO, J.:
May an appeal be taken from a decision of the Regional Trial Court denying a motion
to dismiss the complaint on the ground of improper venue? If not, will certiorari lie?
The case before the Court is a petition for review on certiorari assailing the decision
of the Court of Appeals,[1] granting respondents petition for certiorari and dismissing
the complaint below on the ground of improper venue.
On January 18, 1996, Traders Royal Bank (TRB for brevity) sold in favor of petitioner
Emergency Loan Pawnshop Incorporated (ELPI for brevity) a parcel of land located
at Km. 3 Asin, Baguio City for Five Hundred Thousand Pesos (P500,000.00).[2]
At the time of the sale, TRB misrepresented to ELPI that the subject property was a
vacant residential lot valued at P600.00 to P800.00 per square meters, with a usable
land area of 1,143.75 square meters (approximately 75% of the land area of 1,525
sq.m.) without any illegal occupants or squatters, when it truth the subject property
was dominantly a public road with only 140 square meters usable area.
ELPI, after having spent to fully ascertain the actual condition of the property,
demanded from TRB the rescission and cancellation of the sale of the property. TRB
refused, hence, on April 16, 1996, ELPI filed with the Regional Trial Court, Davao,
Branch 17, a complaint for annulment of sale and damages against TRB.[3]
On August 27, 1996, TRB filed a Motion to Dismiss[4] the complaint on the ground of
improper venue. On September 18, 1996 the trial court denied the motion to
dismiss.[5] On October 21, 1996, TRB filed a motion for reconsideration.[6] On
November 14, 1996, the trial court denied the motion.[7]
On January 15, 1997, TRB elevated the case to the Court of Appeals by petition for
certiorari and prohibition with preliminary injunction or temporary restraining order,
contending that the trial court committed a grave abuse of discretion in denying its
motion to dismiss the complaint on the ground of improper venue.[8]
After due proceedings, on March 11, 1997, the Court of Appeals promulgated its
decision, the dispositive portion of which reads:
WHEREFORE, finding merit in the petition, the Orders dated September 18,1996 and
November 14, 1996 are hereby ANNULED and SET ASIDE and Civil Case No.
24,317-96 is hereby DISMISSED on ground of improper venue.[9]
Hence, this petition.[10]
Petitioners seek to set aside the decision of the Court of Appeals alleging that:
1. The Court of Appeals erred in entertaining the petition for certiorari and prohibition,
for lack of jurisdiction;
2. The Court of Appeals erred in ruling that the Regional Trial Court erred in not
dismissing the complaint for improper venue.[11]
According to petitioners, the determination of whether the venue of an action was
improperly laid was a question of law, thus, the Court of Appeals had no jurisdiction
to entertain the petition for certiorari and prohibition, which involves pure questions of
law.
Petitioners further alleged that an order denying a motion to dismiss is interlocutory
in nature that can not be the subject of an appeal and can not be even reviewed by a
special civil action for certiorari.
We find the petition not meritorious.
The general rule is that the denial of a motion to dismiss a complaint is an interlocutory
order and, hence, cannot be appealed or questioned via a special civil action of
certiorari until a final judgment on the merits of the case is rendered.[12]
The remedy of the aggrieved party is to file an answer to the complaint and to
interpose as defenses the objections raised in his motion to dismiss, proceed to trial,
and in case of an adverse decision, to elevate the entire case by appeal in due course.
However, the rule is not ironclad. Under certain situations, recourse to certiorari or
mandamus is considered appropriate, that is, (a) when the trial court issued the order
without or in excess of jurisdiction; (b) where there is patent grave abuse of discretion
by the trial court; or, (c) appeal would not prove to be a speedy and adequate remedy
as when an appeal would not promptly relieve a defendant from the injurious effects
of the patently mistaken order maintaining the plaintiffs baseless action and
compelling the defendant needlessly to go through a protracted trial and clogging the
court dockets by another futile case."[13]
In the case at bar, we agree with the Court of Appeals that the trial court erred
grievously amounting to ousting itself of jurisdiction. The motion of respondent TRB
was well founded because venue was clearly improperly laid. The action in the
Regional Trial Court was for annulment of sale involving a parcel of land located at
Km. 3 Asin Road, Baguio City. The venue of such action is unquestionably within the
territorial jurisdiction of the proper court where the real property or part thereof lies.[14]
An action affecting title to real property, or for recovery of, or foreclosure of mortgage
on real property, shall be commenced and tried in the proper court having jurisdiction
over the area where the real property or any part thereof lies.[15]
Hence, the case at bar clearly falls within the exceptions to the rule. The Regional
Trial Court has committed a palpable and grievous error amounting to lack or excess
of jurisdiction in denying the motion to dismiss the complaint on the ground of
improper venue.
30
WHEREFORE, the Court denies the petition and affirms the decision of the Court of
Appeals in CA-G. R. SP No. 43095, in toto.

No costs.

SO ORDERED.

31
G.R. No. L-31095 June 18, 1976
JOSE M. HERNANDEZ, petitioner,
vs.
DEVELOPMENT BANK OF THE PHILIPPINES and COURT OF FIRST INSTANCE
OF BATANGAS, LIPA CITY BRANCH, respondents.
Tomas Yumol for petitioners.
Graciano V. Sebastian for respondent Development Bank of the Philippines.
MARTIN, J.:
This is a case which involves the question of proper venue in a real action.
Petitioner Jose M. Hernandez was an employee of private respondent Development
Bank of the Philippines in its Legal Department for twenty-one (21) years until his
retirement on February 28, 1966 due to illness. On August 12, 1964, in due
recognition of his unqualified service as Assistant Attorney in its Legal Department,
the private respondent awarded to the petitioner a lot, identified as Lot No. 15, Block
No. W-21, in the private respondent's Housing Project at No. 1 West Avenue, Quezon
City, containing an area of 810 square meters with a Type E house. On August 31,
1968, after the petitioner received from the private respondent's Housing Project
Committee a statement of account of the purchase price of the said lot and house in
the total amount of P21,034.56, payable on a monthly amortization of P153.32 for a
term of fifteen (15) years, he sent to the said Committee a Cashier's Check No. 77089
CC, dated -October 21, 1968, issued by the Philippine Banking Corporation in the
name of his wife in the sum of P21,500.00 to cover the cash and full payment of the
purchase price of the lot and house awarded to him. However, more than a week
thereafter, or on October 29, 1968, the Chief Accountant and Comptroller of the
private respondent returned to the petitioner ,the aforementioned check, informing
him that the private respondent, through its Committee on Organization, Personnel
and Facilities, had cancelled the award of the lot and house previously awarded to
him on the following grounds: (1) that he has already retired; (2) that he has only an
option to purchase said house and lot; (3) that there are a big number of employees
who have no houses or lots; (4) that he has been given his retirement gratuity; and
(5) that the awarding of the aforementioned house and lot to an employee of the
private respondent would better subserve the objective of its Housing Project.
Petitioner protested against the cancellation of the award of the house and lot in his
favor and demanded from private respondent the restoration of all his rights to said
award. However, private respondent refused.
On May 15, 1969 the petitioner filed a complaint in the Court of First Instance of
Batangas against the private respondent seeking the annulment of the cancellation
of the award of the lot and house in his favor and the restoration of all his rights
thereto. He contends that the cancellation of said award was unwarranted and illegal
for he has already become the owner of said house and lot by virtue of said award on
August 12, 1964 and has acquired a vested right thereto, which cannot be unilaterally
cancelled without his consent; that he. had requested the private respondent to
restore to him all his rights to said award but the latter refused and failed and still
refuses and fails to comply with said request.
Private respondent filed a motion to dismiss the complaint on the ground of improper
venue, contending that since the petitioner's action affects the title to a house and lot
situated in Quezon City, the same should have been commenced in the Court of First
Instance of Quezon City where the real property is located and not in the Court of
First Instance of Batangas where petitioner resides. On July 24, 1969, the respondent
Court sustained the motion to dismiss filed by private respondent on the ground of
improper venue.
Hence, the instant petition to review the order of respondent Court.
The only issue in this petition is whether the action of the petitioner was properly filed
in the Court of First Instance of Batangas. It is a well settled rule that venue of actions
or, more appropriately, the county where the action is triable 1 depends to a great
extent on the nature of the action to be filed, whether it is real or personal. 2 A real
action is one brought for the specific recovery of land, tenements, or hereditaments.
3 A personal action is one brought for the recovery of personal property, for the
enforcement of some contract or recovery of damages for its breach, or for the
recovery of damages for the commission of an injury to the person or property. 4
Under Section 2, Rule 4 of the Rules of Court, "actions affecting title to, or for recovery
of possession, or for partition, or condemnation of , or foreclosure of mortgage in real
property, shall be commenced and tried where the defendant or any of the defendants
resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the
election of the plaintiff".
A close scrutiny of the essence of the petitioner's complaint in the court a quo would
readily show that he seeks the annulment of the cancellation of the award of the
Quezon City lot and house in his favor originally given him by respondent DBP in
recognition of his twenty-one years of service in its Legal Department, in pursuance
of his contention that he had acquired a vested right to the award which cannot be
unilaterally cancelled by respondent without his consent.
The Court agrees that petitioner's action is not a real but a personal action. As
correctly insisted by petitioner, his action is one to declare null and void the
cancellation of the lot and house in his favor which does not involve title and
ownership over said properties but seeks to compel respondent to recognize that the
award is a valid and subsisting one which it cannot arbitrarily and unilaterally cancel
and accordingly to accept the proffered payment in full which it had rejected and
returned to petitioner.
Such an action is a personal action which may be properly brought by petitioner in his
residence, as held in the case of Adamus vs. J.M. Tuason & Co., Inc. 5 where this
Court speaking through former Chief Justice Querube C. Makalintal distinguished the
case from an earlier line of J.M. Tuaxon & Co., Inc. cases involving lot purchasers
from the Deudors 6, as follows:
... All the allegations as well as the prayer in the complaint show that this is not a real
but a personal action — to compel the defendants to execute the corresponding
32
purchase contracts in favor of the plaintiffs and to pay damages. The plaintiffs do not
claim ownership of the lots in question: they recognize the title of the defendant J.M.
Tuason & Co., Inc. They do not ask that possession be delivered to them, for they
allege to be in possession. The case cited by the defendants (Abao, et al. vs. J. M.
Tuason & Co., Inc. G.R. No. L-16796, Jan. 30, 1962) is therefore not in point. In that
case, as stated by this Court in its decision, the 'plaintiffs' action is predicated on the
theory that they are 'occupants, landholders,' and 'most' of them owners by purchase'
of the residential lots in question; that, in consequence of the compromise agreement
adverted to above, between the Deudors; and defendant corporations, the latter had
acknowledged the right and title of the Deudors in and to said lots; and hence, the
right and title of the plaintiffs, as successors-in-interest of the Deudors; that, by
entering into said agreement, defendant corporations had, also, waived their right to
invoke the indefeasibility of the Torrens title in favor of J. M. Tuason & Co., Inc.; and
that defendants have no right, therefore, to oust plaintiffs from the lots respectively
occupied by them and which they claim to be entitled to hold. Obviously, this action
affects, therefore, not only the possession of real property, but, also, the title thereto.
Accordingly, it should have been instituted in the Court of First Instance of the
Province of Rizal in which said property is situated (Section 3, Rule 5 of the Rules of
Court).

WHEREFORE, the order of dismissal appealed from is set aside and the case is
remanded for further proceedings and disposition on the merits. No costs.

33
G.R. No. L-17699 March 30, 1962 ground that the action was in personam, petitioner filed with the Court of Appeals a
petition, which was docketed as Civil Case CA-G.R. No. 28013-R, praying that said
DR. ANTONIO A. LIZARES, INC., petitioner, order be set aside and that a writ of prohibition be issued commanding respondent
vs. Hon. Hermogenes Caluag, as Judge of said Court, to desist from taking cognizance
HON. HERMOGENES CALUAG, as Judge of the Court of First Instance of of said Civil Case No. Q-5197. In due course, the Court of Appeals rendered a
Quezon City, decision on October 27, 1960, dismissing said petition. Hence, this appeal by
and FLAVIANO CACNIO, respondents. certiorari taken by petitioner herein.

Ramon C. Aquino for petitioner. The issue is whether or not the main case falls under section 3 of Rule 5 of the Rules
Paulino Carreon for respondents. of Court, reading:

CONCEPCION, J.: "Actions affecting title to, or for recovery of possession, or for partition or
condemnation of, or foreclosure of mortgage on, real property, shall be commenced
Appeal by certiorari from a decision of the Court of Appeals dismissing the petition of and tried in the province where the property or any part thereof lies."
Dr. Antonio A. Lizares & Co., Inc., for a writ of prohibition, with costs against said
petitioner. The Court of Appeals and the Court of First Instance of Rizal, Quezon City Branch,
held that Civil Case No. Q-5197 of the latter court is an action in personam, and that,
On or about June 14, 1960, Flaviano Cacnio instituted Civil Case No. Q-5197 of the as such, it does not fall within the purview of said section 3, and was properly instituted
Court of First Instance of Rizal, Quezon City Branch, against said petitioner. In his in the court of first instance of the province in which Cacnio, as plaintiff in said case,
complaint, Cacnio alleged that on April 20, 1955, he bought from petitioner, on resided, pursuant to section 1 of said rule 5.
installment, Lot 4, Block 1 of the Sinkang Subdivision in Bacolod City, making therefor
a downpayment of P1,206, the balance of P10,858 to be paid in ten (10) yearly We are unable to share such view. Although the immediate remedy sought by Cacnio
installments of P1,085.80 each, with interest thereon at the rate of 6% per annum; is to compel petitioner to accept the tender of payment allegedly made by the former,
that on March 25, 1960, Cacnio received from petitioner a letter demanding payment it is obvious that this relief is merely the first step to establish Cacnio's title to the real
of P7,324.69, representing arrears in the payment of installments up to April 20, 1960, property adverted to above. Moreover, Cacnio's complaint is a means resorted to by
plus "regular and overdue" interest, as well as "land taxes up to 70% of 1960"; that him in order that he could retain the possession of said property. In short, venue in
the sum then due from Cacnio by way of arrears amounted only to P5,824.69, he the main case was improperly laid and the Court of First Instance of Rizal, Quezon
having paid P1,500 to petitioner "sometime in 1958"; that in view of the City Branch, should have granted the motion to dismiss. 1äwphï1.ñët
aforementioned demand of petitioner, Cacnio sent thereto a check for P5,824.69,
dated May 26, 1960, drawn by one Antonino Bernardo in favor of said petitioner, in WHEREFORE, the decision appealed from is hereby reversed and another one shall
payment of the amount due from Cacnio by way of arrears; that "without legal and be entered directing respondent Judge to desist from taking further cognizance of
equitable grounds" therefor, petitioner returned said check and "refused the tender of Civil Case No. Q-5197 of said court, with costs against respondent Flaviano Cacnio.
payment" aforementioned; that by reason of said illegal act of petitioner, Cacnio is It is so ordered.
entitled to compensatory damages in the sum of P5,000, plus P2,000 by way of
attorney's fees, Cacnio having been constrained to engage the services of counsel
and bring the action; and that petitioner "is doing threatens, or is about to do, or is
procuring or suffering to be done some act in violation of" Cacnio's rights respecting
the subject of the action, viz. the repossession of the lot bought by" the latter, who,
accordingly, prayed that petitioner be ordered "to accept the payment being made"
by him (Cacnio) and to pay him P5,000 as compensatory damages and P2,000 as
attorney's fees, and that, upon the filing of a bond to be fixed by the court, a writ of
preliminary injunction enjoining petitioner and its agents or representatives from
repossessing the lot adverted to above be issued. Said writ of preliminary injunction
was issued on June 16, 1960.

On July 5, 1960, petitioner moved to dismiss the complaint upon the ground that
"venue is improperly laid," for the action affects the title to or possession of real
property located in Bacolod City, which was the subject matter of a contract, between
petitioner and Cacnio, made in said City. The motion having been denied by the Court
of First Instance of Rizal, Quezon City Branch, by an order of July 9, 1960, upon the

34
ANTONIO T. CHUA,
DECISION
Petitioner, QUISUMBING, J.:

G.R. No. 152808

For review on certiorari is the decision[1] dated November 28, 2001 of the Court of
Appeals and its resolution[2] of April 1, 2002 in CA-G.R. SP No. 62592. The assailed
decision and resolution dismissed the special civil action for certiorari against the
orders of August 9, 2000[3] and October 6, 2000[4] issued by Judge Lorifel Lacap
Pahimna in Civil Case No. 67736.

The pertinent facts, based on the records, are as follows:

- versus -
On December 28, 1999, respondent Total Office Products and Services, Inc.,
Present: (TOPROS) lodged a complaint for annulment of contracts of loan and real estate
mortgage against herein petitioner Antonio T. Chua before the Regional Trial Court
of Pasig City. The case was docketed as Civil Case No. 67736 and was raffled to the
sala of Judge Lorifel Lacap Pahimna.
Davide, Jr., C.J.,
The said suit sought to annul a loan contract allegedly extended by petitioner to
(Chairman), respondent TOPROS in the amount of ten million four hundred thousand pesos
(P10,400,000) and the accessory real estate mortgage contract covering two parcels
Quisumbing, of land situated in Quezon City as collateral.

Ynares-Santiago, It appeared on the face of the subject contracts that TOPROS was represented by its
president John Charles Chang, Jr. However, TOPROS alleged that the purported loan
Carpio, and and real estate mortgage contracts were fictitious, since it never authorized anybody,
not even its president, to enter into said transaction.
Azcuna, JJ.
On February 28, 2000, petitioner filed a motion to dismiss on the ground of improper
venue. He contended that the action filed by TOPROS affects title to or possession
of the parcels of land subject of the real estate mortgage. He argued that it should
thus have been filed in the Regional Trial Court of Quezon City where the encumbered
real properties are located, instead of Pasig City where the parties reside.
TOTAL OFFICE PRODUCTS AND SERVICES (TOPROS), INC.,
On August 9, 2000, Judge Pahimna issued an order denying the motion to dismiss.
Respondent. She reasoned that the action to annul the loan and mortgage contracts is a personal
action and thus, the venue was properly laid in the RTC of Pasig City where the parties
reside.

Promulgated: Petitioner moved for a reconsideration of the said order, which Judge Pahimna denied
in its order of October 6, 2000. Hence, petitioner filed with the Court of Appeals a
special civil action for certiorari alleging:

September 30, 2005
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
THE RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION IN
DISREGARDING THE RULING OF THE SUPREME COURT IN PASCUAL VS.
PASCUAL REGARDING THE RULE ON PROPER VENUE, AND CONSEQUENTLY
ADJUDGING TO BE A PERSONAL ACTION A CIVIL COMPLAINT FOR THE
ANNULMENT OF AN ALLEGEDLY FICTITIOUS CONTRACT.[5]

35

The Court of Appeals dismissed said petition in its decision dated November 28, 2001.
It held that the authorities relied upon by petitioner, namely Pascual v. Pascual[6] and
Banco Espaol-Filipino v. Palanca,[7] are inapplicable in the instant case. The
appellate court instead applied Hernandez v. Rural Bank of Lucena, Inc.[8] wherein
we ruled that an action for the cancellation of a real estate mortgage is a personal
action if the mortgagee has not foreclosed the mortgage and the mortgagor is in
possession of the premises, as neither the mortgagors title to nor possession of the
property is disputed.
Dissatisfied, petitioner filed a motion for reconsideration, which the Court of Appeals
denied for lack of merit in its resolution of April 1, 2002.
Undeterred, petitioner now comes to us on a petition for review raising the following
issues:
WHETHER AN ACTION TO ANNUL A LOAN AND MORTGAGE CONTRACT DULY
ALLEGED AS FICTITIOUS FOR BEING WITH ABSOLUTELY NO
CONSIDERATION IS A PERSONAL ACTION OR REAL ACTION?
WHETHER IN AN ACTION TO ANNUL A LOAN AND MORTGAGE CONTRACT
DULY ALLEGED AS FICTITIOUS FOR BEING WITH ABSOLUTELY NO
CONSIDERATION, THE PERSON ALLEGED TO HAVE [LACKED] AUTHORITY TO
ENTER INTO SAID CONTRACTS IS AN INDISPENSABLE PARTY?[9]
Petitioner contends that Hernandez should not be applied here because in the said
case: (1) venue was improperly laid at the outset; (2) the complaint recognized the
validity of the principal contract involved; and (3) the plaintiff sought to compel
acceptance by the defendant of plaintiffs payment of the latters mortgage debt. He
insists that the Pascual case should be applied instead. He invokes our
pronouncement in Pascual, to wit:
It appearing, however, that the sale is alleged to be fictitious, with absolutely no
consideration, it should be regarded as a non-existent, not merely null, contract. And
there being no contract between the deceased and the defendants, there is in truth
nothing to annul by action. The action brought cannot thus be for annulment of
contract, but is one for recovery of a fishpond, a real action that should be, as it has
been, brought in Pampanga, where the property is located.[10]
Petitioner likewise cites the Banco Espaol-Filipino case, thus:
Where the defendant in a mortgage foreclosure lives out of the Islands and refuses
to appear or otherwise submit himself to the authority of the court, the jurisdiction of
the latter is limited to the mortgaged property, with respect to which the jurisdiction of
the court is based upon the fact that the property is located within the district and that
the court, under the provisions of law applicable in such cases, is vested with the
power to subject the property to the obligation created by the mortgage. In such case
personal jurisdiction over the nonresident defendant is nonessential and in fact cannot
be acquired.[11]
Petitioner also alleges that John Charles Chang, Jr., the president of TOPROS, who
allegedly entered into the questioned loan and real estate mortgage contracts, is an
indispensable party who has not been properly impleaded.
TOPROS, however, maintains that the appellate court correctly sustained the lower
courts finding that the instant complaint for annulment of loan and real estate
mortgage contracts is a personal action. TOPROS points out that a complaint for the
declaration of nullity of a loan contract for lack of consent and consideration remains
a personal action even if the said action will necessarily affect the accessory real
estate mortgage.
TOPROS argues that Pascual is inapplicable because the subject contract therein
was a contract of sale of a parcel of land where title and possession were already
transferred to the defendant. TOPROS further contends that Banco Espaol-Filipino is
also inapplicable since the personal action filed therein was one which affected the
personal status of a nonresident defendant.
Considering the facts and the submission of the parties, we find the petition bereft of
merit.
Well-settled is the rule that an action to annul a contract of loan and its accessory real
estate mortgage is a personal action. In a personal action, the plaintiff seeks the
recovery of personal property, the enforcement of a contract or the recovery of
damages.[12] In contrast, in a real action, the plaintiff seeks the recovery of real
property, or, as indicated in Section 2 (a), Rule 4 of the then Rules of Court, a real
action is an action affecting title to real property or for the recovery of possession, or
for partition or condemnation of, or foreclosure of mortgage on, real property.[13]
In the Pascual case, relied upon by petitioner, the contract of sale of the fishpond was
assailed as fictitious for lack of consideration. We held that there being no contract to
begin with, there is nothing to annul. Hence, we deemed the action for annulment of
the said fictitious contract therein as one constituting a real action for the recovery of
the fishpond subject thereof.
We cannot, however, apply the foregoing doctrine to the instant case. Note that in
Pascual, title to and possession of the subject fishpond had already passed to the
vendee. There was, therefore, a need to recover the said fishpond. But in the instant
case, ownership of the parcels of land subject of the questioned real estate mortgage
was never transferred to petitioner, but remained with TOPROS. Thus, no real action
for the recovery of real property is involved. This being the case, TOPROS action for
annulment of the contracts of loan and real estate mortgage remains a personal
action.
Petitioners reliance on the Banco Espaol-Filipino case is likewise misplaced. That
case involved a foreclosure of real estate mortgage against a nonresident. We held
therein that jurisdiction is determined by the place where the real property is located
and that personal jurisdiction over the nonresident defendant is nonessential and, in
fact, cannot be acquired.
36
Needless to stress, the instant case bears no resemblance to the Banco Espaol-
Filipino case. In the first place, this is not an action involving foreclosure of real estate
mortgage. In the second place, none of the parties here is a nonresident. We find no
reason to apply here our ruling in Banco Espaol-Filipino.
The Court of Appeals finds that Hernandez v. Rural Bank of Lucena, Inc. provides the
proper precedent in this case. In Hernandez, appellants contended that the action of
the Hernandez spouses for the cancellation of the mortgage on their lots was a real
action affecting title to real property, which should have been filed in the place where
the mortgaged lots were situated. Rule 4, Section 2 (a), of the then Rules of Court,
was applied, to wit:
SEC. 2. Venue in Courts of First Instance. (a) Real actions. Actions affecting title to,
or for recovery of possession, or for partition or condemnation of, or foreclosure of
mortgage on, real property, shall be commenced and tried in the province where the
property or any part thereof lies.
The Court pointed out in the Hernandez case that with respect to mortgage, the rule
on real actions only mentions an action for foreclosure of a real estate mortgage. It
does not include an action for the cancellation of a real estate mortgage. Exclusio
unios est inclusio alterius. The latter thus falls under the catch-all provision on
personal actions under paragraph (b) of the above-cited section, to wit:
SEC. 2 (b) Personal actions. All other actions may be commenced and tried where
the defendant or any of the defendants resides or may be found, or where the plaintiff
or any of the plaintiffs resides, at the election of the plaintiff.
In the same vein, the action for annulment of a real estate mortgage in the present
case must fall under Section 2 of Rule 4, to wit:
SEC. 2. Venue of personal actions. All other actions may be commenced and tried
where the plaintiff or any of the principal plaintiffs resides, or where the defendant or
any of the principal defendants resides, or in the case of a non-resident defendant
where he may be found, at the election of the plaintiff.[14]
Thus, Pasig City, where the parties reside, is the proper venue of the action to nullify
the subject loan and real estate mortgage contracts. The Court of Appeals committed
no reversible error in upholding the orders of the Regional Trial Court denying
petitioners motion to dismiss the case on the ground of improper venue.
Anent the second issue, Section 7, Rule 3 of the Revised Rules of Court provides:
SEC. 7. Compulsory joinder of indispensable parties. Parties in interest without whom
no final determination can be had of an action shall be joined either as plaintiffs or
defendants. (Emphasis ours)
The presence of indispensable parties is necessary to vest the court with jurisdiction.
The absence of an indispensable party renders all subsequent actuations of the court
null and void, because of that courts want of authority to act, not only as to the absent
parties but even as to those present.[15] Thus, whenever it appears to the court in
the course of a proceeding that an indispensable party has not been joined, it is the
duty of the court to stop the trial and order the inclusion of such party.[16]
A person is not an indispensable party, however, if his interest in the controversy or
subject matter is separable from the interest of the other parties, so that it will not
necessarily be directly or injuriously affected by a decree which does complete justice
between them.[17]
Is John Charles Chang, Jr., the president of TOPROS who allegedly entered into the
disputed contracts of loan and real estate mortgage, an indispensable party in this
case?
We note that although it is Changs signature that appears on the assailed real estate
mortgage contract, his participation is limited to being a representative of TOPROS,
allegedly without authority. The document[18] which constitutes as the contract of real
estate mortgage clearly points to petitioner and TOPROS as the sole parties-in-
interest to the agreement as mortgagee and mortgagor therein, respectively. Any
rights or liabilities arising from the said contract would therefore bind only the
petitioner and TOPROS as principal parties. Chang, acting as mere representative of
TOPROS, acquires no rights whatsoever, nor does he incur any liabilities, arising from
the said contract between petitioner and TOPROS. Certainly, in our view, the only
indispensable parties to the mortgage contract are petitioner and TOPROS alone.
We thus hold that John Charles Chang, Jr., is not an indispensable party in Civil Case
No. 67736. This is without prejudice to any separate action TOPROS may institute
against Chang, Jr., in a proper proceeding.
WHEREFORE, the petition is DENIED. The assailed decision dated November 28,
2001 and resolution dated April 1, 2002 of the Court of Appeals upholding the Orders
of Judge Lorifel Lacap Pahimna are AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
37
[ GR No. L-14434, Apr 28, 1960 ]
EUSEBIO ESPINELI v. JUDGE AMADO S. SANTIAGO +
DECISION
107 Phil. 830
CONCEPCION, J.:
This is an original action for a writ of prohibition to restrain respondent, Hon. Amado
S. Santiago, as Judge of the Court of First Instance of Pangasinan, from taking
cognizance of Civil Case No. U-152 of said court.
It appears that on February 6, 1958, Magdalena Vda. de Ramirez, the main
respondent herein, instituted said civil case against the Magdalena Estate, Inc.
hereafter referred to as the corporation for the purpose of requiring the same to deliver
and surrender transfer certificate of title No. 6947, of the Office of the Register of
Deeds of Quezon City, covering Lot No. 34, Block No. I of Subdivision Plan PSD-
14422, situated in Cubao, Quezon City, and to recover damages and attorney's fees.
In her complaint, Mrs. Ramirez alleged that on April 6, 1936, her now deceased
husband, Vedasto Ramirez, and said corporation entered into a contract whereby the
latter promised, in consideration of a sum of money then paid by him, to sell the
aforementioned Lot No. 34, to Mr. Ramirez, at a given price payable on installments;
that Mr. Ramirez died on November 14, 1940, hut payment, of the full price of said
Lot No. 34 was completed by his widow, Mrs. Ramirez, on July 3, 1956; that she then
paid, also, the expenses for the issuance of a transfer certificate of title in her favor;
and that, despite repeated demands, the corporation refused to deliver to her the
certificate of title covering said lot.
On February 26, 1958, the corporation filed an answer alleging that its refusal to
deliver the certificate of title to Mrs. Ramirez was due to the adverse claim thereto of
petitioners herein, the spouses Eusebio Espineli and Anastacia Mojica, who had
similarly demanded delivery of said certificate of title, upon the ground that, by virtue
of a deed of absolute sale, executed, on December 23, 1946, by Rosita Ramirez and
Julio Ramirez as the alleged only children and sole heirs of the deceased Vedasto
Ramirez and one Maria Famendalan, alias Maria Posting, alias Faustina de Ramirez,
who died on July 17, 1945 said petitioners had acquired, for the sum of P1,000 by
them paid to Rosita and Julio Ramirez, their rights in and to said Lot No. 34; that,
since December 1946, the Espinelis, had been paying the corresponding monthly
installments, as the same fell due; and that they had thus paid the full price of said
lot.
denied the motion and required the Espinelis to file their answer, upon the theory that
said Case No. U-152 involved a personal action, not a real action, the main relief
therein sought being the delivery of the certificate of title to Lot No. 34. Hence the
present special civil action for a writ of prohibition against the aforementioned
respondent Judge and Mrs. Ramirez.
Section 3, Rule 5 of the Rules of Court provides:
"Real action Actions affecting title to, or for recovery of possession, or for partition or
condemnation of, or foreclosure of mortgage on, real property shall be commenced
and tried in the province where the property or any part thereof lies."
Under the facts set forth in the complaint and in the motion to intervene filed in said
Civil Case No. U-152, the issue therein is, who, as between Mrs. Ramirez, on the one
hand, and the Espinelis on the other, has a better right to the aforementioned Lot No.
34, which is situated in Quezon City. The main relief sought therein by Mrs. Ramirez
the delivery of the certificate of title covering said Lot is entirely dependent upon the
aforesaid issue. Thus, it is not possible for the Court of First Instance of Pangasinan
to decide the case, without passing upon the claim of the parties with respect to the
title and possession of said Lot No. 34, which claim shall be determined pursuant to
the above-quoted provision "in the province where" said "property or any part thereof
lies."
Wherefore, respondent Judge can not entertain the aforementioned case No. U-152
over the objection of petitioners herein, as intervenors therein, and, accordingly, the
writ of prohibition prayed for is hereby granted, with costs against respondent,
Magdalena F. Vda. de Ramirez.
It is so ordered.

In fact, on February 28, 1958, the Espinelis filed a motion, in said Civil Case No. U-
152, praying that they be allowed to intervene therein as party defendants, for the
reason that, on August 2, 1951, the corporation had, for a valuable consideration,
approved the above mentioned assignment in their favor of the rights of Mr. Ramirez
to the lot in question; that, thereafter, the Espinelis continued making payments on
account of the price of said lot, and, upon full satisfaction thereof, asked the
corporation that the corresponding certificate of title be issued in their name; and that
they have, accordingly, a clear legal interest in the matter in litigation, as against both
parties therein. This motion having been granted, the Espinelis filed a motion to
dismiss the complaint, upon the ground "that venue is improperly laid," the property
in dispute being located in Quezon City. By an order dated August 21, 1958, the court

38
G.R. No. L-48140 May 4, 1942 Instance of Pampanga. It appearing, however, that the sale is alleged to be fictitious,
with absolutely no consideration, it should be regarded as a non-existent, not merely
SINFOROSO PASCUAL, plaintiff-appellant, null, contract. (8 Manresa, Comentarios al Codigo Civil Español, 2nd ed., pp. 766-
vs. 770.) And there being no contract between the deceased and the defendants, there
PONCIANO S. PASCUAL, ET AL., defendants-appellees. is in truth nothing to annul by action. The action brought cannot thus be for annulment
of contract, but is one for recovery of a fishpond, a real action that should be, as it
Celedonio Bernardo for appellant. has been, brought in Pampanga, where the property is located (Rule 5, sec. 3, Rules
Ortega & Ortega for appellees. of Court.)

MORAN, J.:
On September 14, 1940, while the proceedings for the probate of the will of the
deceased Eduarda de los Santos were pending in the Court of First Instance of Rizal
plaintiff, Sinforoso Pascual, instituted in the Court of First Instance of Pampanga
against Ponciano S. Pascual and others, an action for the annulment of a contract of
sale of a fishpond situated in Lubao, Pampanga, supposedly executed without
consideration by said deceased in her lifetime in favor of the defendants. The
complaint alleges that plaintiff and defendants are all residents of Malabon, Rizal, and
are legitimate children of the testratix, Eduarda de los Santos. Defendants filed of a
motion to dismiss, alleging want of cause of action, limitation of action, wrong venue
and pendency of another action. The trial court granted the motion on the ground that
the action should have been brought by the executor or administrator of the estate
left by the deceased, and directed the plaintiff to amend his complaint within five days.
Plaintiff filed an amended complaint, the amendment consisting in that "el demandado
Miguel S. Pascual ha sido nombrado por el Juzgado de Primera Instancia de Rizal
albacea testamentario de los bienes de la finada Eduarda de los Santos. en el asunto
de la testamentaria de dicha finada." The trial court declaring that such amendment
did not cure the insufficiency of the complaint, dismissed the action. It is from this
order of dismissal that plaintiff interposed his appeal.
Appellees argue further that the action brought by the plaintiff is unnecessary, the
question involved therein being one that may properly be raised and decided in the
probate proceedings. The general rule is that questions as to title to property cannot
be passed upon in testate proceedings. (Bauermann vs. Casas, 10 Phil., 386; Devesa
vs. Arbes, 13 Phil., 273; Guzman vs. Anog, 37 Phil., 61; Lunsod vs. Ortega, 46 Phil.,
664; Adapon vs. Maralit, 40 Off. Gaz., 6th Sup., p. 84.) The court is, however, of the
opinion and so holds that, when as in the instant case, the parties interested are all
heirs of the deceased claiming title under him, the question as to whether the transfer
made by the latter to the former is or is not fictitious, may properly be brought by
motion in the testate or intestate proceedings on or before the distribution of the estate
among the heirs. This procedure is optional to the parties concerned who may choose
to bring a separate action as a matter of convenience in the preparation or
presentation of evidence, and accordingly, the action brought by the appellant is not
improper.
Order is reversed, and the case is remanded the trial court for further proceedings,
with costs against appellees.

Under Rule 86, section 1, of the new Rules of Court, actions for the recovery or
protection of the property or rights of the deceased for causes which survive may be
prosecuted or defended by his executor or administrator. Upon the commencement
of the testate or intestate proceedings the heirs have no standing in court in actions
of the above character, except when the executor or administrator is unwilling or fails
or refuses to act, in which event to heirs may act in his place. (Pomeroy on Code
Remedies, p. 158, 11 R C. L. p. 262; 21 Am. Jur., 940) Here, the fictitious sale is
alleged to have been made to the defendants, one of them, Miguel S. Pascual, being
the executor appointed by the probate court. Such executor naturally would not bring
an action against himself for recovery of the fishpond. His refusal to act may,
therefore, be implied. And this brings the case under the exception. It should be noted
that in the complaint the prayer is that the fishpond be delivered not to the plaintiff but
to the executor, thus indicating that the action is brought in behalf of the estate of the
deceased.

Appellees contend that there is here a wrong venue. They argue that an action for the
annulment of a contract of sale is a personal action which must be commenced at the
place of residence of either the plaintiff or the defendant, at the election of the plaintiff
(Rule 5, sec. 1, Rules of Court), and, in the instant case, both plaintiff and defendants
are residents of Malabon, Rizal, but the action was commenced in the Court of First

39
[G.R. No. 158407. January 17, 2005]
FILOMENA DOMAGAS, petitioner, vs. VIVIAN LAYNO JENSEN, respondent.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari, under Rule 45 of the Rules of Court, of the
Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No. 73995, which affirmed
the Decision[2] of the Regional Trial Court (RTC) of Dagupan City, Branch 44, in Civil
Case No. 2000-0244-D, which declared null and void the decision of the Municipal
Trial Court (MTC) of Calasiao, Pangasinan in Civil Case No. 879.[3]
The antecedent facts follow.
On February 19, 1999, petitioner Filomena Domagas filed a complaint for forcible
entry against respondent Vivian Jensen before the MTC of Calasiao, Pangasinan.
The petitioner alleged in her complaint that she was the registered owner of a parcel
of land covered by Original Certificate of Title (OCT) No. P-30980, situated in
Barangay Buenlag, Calasiao, Pangasinan, and with an area of 827 square meters.
On January 9, 1999 the respondent, by means of force, strategy and stealth, gained
entry into the petitioners property by excavating a portion thereof and thereafter
constructing a fence thereon. As such, the petitioner was deprived of a 68-square
meter portion of her property along the boundary line. The petitioner prayed that, after
due proceedings, judgment be rendered in her favor, thus:
3. And, after trial, judgment be rendered:
a) DECLARING the writ of Preliminary Mandatory Injunction and Writ of Preliminary
Injunction permanent;
b) ORDERING defendant, his representatives, agents and persons acting under her,
to vacate the portion of the property of the plaintiff occupied by them and to desist
from entering, excavating and constructing in the said property of the plaintiff
described in paragraph 2 hereof and/or from disturbing the peaceful ownership and
possession of the plaintiff over the said land, pending the final resolution of the instant
action;
c) ORDERING defendant to pay reasonable rental at FIVE THOUSAND (P5,000.00)
PESOS per month from January 9, 1999 up to the time she finally vacates and
removes all constructions made by her in the property of the plaintiff and up to the
time she finally restores the said property in the condition before her illegal entry,
excavation and construction in the property of the plaintiff;
d) ORDERING defendant to pay actual damages in the amount of TWENTY
THOUSAND (P20,000.00) PESOS; moral damages in the amount of TWENTY
THOUSAND (P20,000.00) PESOS; attorneys fees of THIRTY THOUSAND
(P30,000.00) PESOS in retainers fee and ONE THOUSAND FIVE HUNDRED
(P1,500.00) PESOS per court appearance fee; exemplary damages in the amount of
TWENTY THOUSAND (P20,000.00) PESOS, and, costs.
Plaintiff further prays for other reliefs and remedies just and equitable in the
premises.[4]
The case was docketed as Civil Case No. 879. The summons and the complaint were
not served on the respondent because the latter was apparently out of the country.
This was relayed to the Sheriff by her (the respondents) brother, Oscar Layno, who
was then in the respondents house at No. 572 Barangay Buenlag, Calasiao,
Pangasinan. The Sheriff left the summons and complaint with Oscar Layno, who
received the same.[5]
Nonetheless, on May 17, 1999, the court rendered judgment ordering the respondent
and all persons occupying the property for and in the latters behalf to vacate the
disputed area and to pay monthly rentals therefor, including actual damages,
attorneys fees, and exemplary damages. The fallo of the decision reads:
1) Ordering the defendant, her representatives, agents and persons acting under her,
to vacate the 68-square meters which she encroached upon;
2) Ordering the defendant to pay a monthly rental of P1,000.00 to the plaintiff;
3) To pay plaintiff actual damages of P20,000.00; attorneys fees of P15,000.00 and
exemplary damages in the amount of P20,000.00 plus the costs.
SO ORDERED.[6]
The respondent failed to appeal the decision. Consequently, a writ of execution was
issued on September 27, 1999.
On August 16, 2000, the respondent filed a complaint against the petitioner before
the RTC of Dagupan City for the annulment of the decision of the MTC in Civil Case
No. 879, on the ground that due to the Sheriffs failure to serve the complaint and
summons on her because she was in Oslo, Norway, the MTC never acquired
jurisdiction over her person. The respondent alleged therein that the service of the
complaint and summons through substituted service on her brother, Oscar Layno,
was improper because of the following: (a) when the complaint in Civil Case No. 879
was filed, she was not a resident of Barangay Buenlag, Calasiao, Pangasinan, but of
Oslo, Norway, and although she owned the house where Oscar Layno received the
summons and the complaint, she had then leased it to Eduardo Gonzales; (b) she
was in Oslo, Norway, at the time the summons and the complaint were served; (c)
her brother, Oscar Layno, was merely visiting her house in Barangay Buenlag and
was not a resident nor an occupant thereof when he received the complaint and
summons; and (d) Oscar Layno was never authorized to receive the summons and
the complaint for and in her behalf.[7]
The respondent further alleged that the MTC had no jurisdiction over the subject
matter of the complaint in Civil Case No. 879 because the petitioner, the plaintiff
therein, failed to show prior possession of the property. She further claimed that the
40
alleged forcible entry was simply based on the result of the survey conducted by
Geodetic Engineer Leonardo de Vera showing that the property of the respondent
encroached on that of the petitioner.
The respondent filed a Manifestation dated August 31, 2000, and appended thereto
the following: (a) a copy[8] of her passport showing that she left the country on
February 17, 1999; (b) a copy[9] of the Contract of Lease dated November 24, 1997,
executed by her and Eduardo D. Gonzales over her house for a period of three (3)
years or until November 24, 2000; (c) her affidavit[10] stating, inter alia, that she
owned the house at Barangay Buenlag, Calasiao, Pangasinan, which she leased to
Eduardo Gonzales; that she was married to Jarl Jensen, a citizen of Norway, on
August 23, 1987 and had resided in Norway with her husband since 1993; that she
arrived in the Philippines on December 31, 1998, but left on February 17, 1999; she
returned to the Philippines on July 30, 2000 and learned, only then, of the complaint
against her and the decision of the MTC in Civil Case No. 879; her brother Oscar
Layno was not a resident of the house at Barangay Buenlag; and that she never
received the complaint and summons in said case; (d) the affidavit[11] of Oscar Layno
declaring that sometime in April 1999, he was in the respondents house to collect
rentals from Eduardo Gonzales; that the Sheriff arrived and served him with a copy
of the summons and the complaint in Civil Case No. 879; and that he never informed
the respondent of his receipt of the said summons and complaint; (e) an affidavit[12]
of Eduardo Gonzales stating that he leased the house of the respondent and resided
thereat; the respondent was not a resident of the said house although he (Gonzales)
allowed the respondent to occupy a room therein whenever she returned to the
Philippines as a balikbayan; and that Oscar Layno was not residing therein but only
collected the rentals.
In her answer to the complaint, the petitioner alleged that the respondent was a
resident of Barangay Buenlag, Calasiao, Pangasinan and was the owner of the
subject premises where Oscar Layno was when the Sheriff served the summons and
complaint; that the service of the complaint and summons by substituted service on
the respondent, the defendant in Civil Case No. 879, was proper since her brother
Oscar Layno, a resident and registered voter of Barangay. Buenlag, Calasiao,
Pangasinan, received the complaint and summons for and in her behalf.
The petitioner appended the following to her answer: (a) a copy[13] of the Deed of
Absolute Sale executed by Jose Layno in her favor, dated August 26, 1992, showing
that the respondent was a resident of Barangay Buenlag, Calasiao, Pangasinan; (b)
a Real Estate Mortgage[14] executed by the respondent, dated February 9, 1999
showing that she was a resident of Barangay Buenlag, Calasiao, Pangasinan; (c) the
Joint Affidavit[15] of Vicenta Peralta and Orlando Macalanda, both residents of
Barangay Buenlag, Calasiao, Pangasinan, declaring that the respondent and her
brother Oscar Layno were their neighbors; that the respondent and her brother had
been residents of Barangay Buenlag since their childhood; that although the
respondent left the country on several occasions, she returned to the Philippines and
resided in her house at No. 572 located in the said barangay; and (d) the Voters
Registration Record[16] of Oscar Layno, approved on June 15, 1997.
After due proceedings, the trial court rendered a decision in favor of the respondent.
The dispositive portion reads:
WHEREFORE, judgment is rendered in favor of plaintiff Vivian Layno Jensen and
against defendant Filomena Domagas, as follows:
1. The Decision of the Municipal Trial Court of Calasiao, Pangasinan in Civil Case
No. 879, entitled Filomena Domagas versus Vivian Layno Jensen is declared null and
void, for lack of jurisdiction over the person of the plaintiff and the subject matter.
2. Defendant Filomena Domagas is ordered to pay plaintiff, the following:
a.) Actual damages, representing litigation expenses in the amount of P50,000.00;
b.) Attorneys fees in the amount of P50,000.00;
c.) Moral Damages in the amount of P50,000.00;
d.) Exemplary Damages in the amount of P50,000.00; and
e.) Costs of suit.
SO ORDERED.[17]
The trial court declared that there was no valid service of the complaint and summons
on the respondent, the defendant in Civil Case No. 879, considering that she left the
Philippines on February 17, 1999 for Oslo, Norway, and her brother Oscar Layno was
never authorized to receive the said complaint and summons for and in her behalf.
The petitioner appealed the decision to the CA which, on May 6, 2003, rendered
judgment affirming the appealed decision with modifications. The CA ruled that the
complaint in Civil Case No. 879 was one for ejectment, which is an action quasi in
rem. The appellate court ruled that since the defendant therein was temporarily out of
the country, the summons and the complaint should have been served via
extraterritorial service under Section 15 in relation to Section 16, Rule 14 of the Rules
of Court, which likewise requires prior leave of court. Considering that there was no
prior leave of court and none of the modes of service prescribed by the Rules of Court
was followed by the petitioner, the CA concluded that there was really no valid service
of summons and complaint upon the respondent, the defendant in Civil Case No. 879.
Hence, the present petition.
The petitioner assails the decision of the CA, alleging that the appellate court erred in
holding that the respondents complaint for ejectment is an action quasi in rem. The
petitioner insists that the complaint for forcible entry is an action in personam;
therefore, substituted service of the summons and complaint on the respondent, in
accordance with Section 7, Rule 14 of the Rules of Court, is valid. The petitioner,
likewise, asserts that Oscar Layno is a resident and a registered voter of Barangay
Buenlag, Calasiao, Pangasinan; hence, the service of the complaint and summons
on the respondent through him is valid.
41
The respondent, on the other hand, asserts that the action for forcible entry filed
against her was an action quasi in rem, and that the applicable provision of the Rules
of Court is Section 15 of Rule 14, which calls for extraterritorial service of summons.
The sole issue is whether or not there was a valid service of the summons and
complaint in Civil Case No. 879 on the respondent herein who was the defendant in
the said case. The resolution of the matter is anchored on the issue of whether or not
the action of the petitioner in the MTC against the respondent herein is an action in
personam or quasi in rem.
The ruling of the CA that the petitioners complaint for forcible entry of the petitioner
against the respondent in Civil Case No. 879 is an action quasi in rem, is erroneous.
The action of the petitioner for forcible entry is a real action and one in personam.
The settled rule is that the aim and object of an action determine its character.[18]
Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is
determined by its nature and purpose, and by these only.[19] A proceeding in
personam is a proceeding to enforce personal rights and obligations brought against
the person and is based on the jurisdiction of the person, although it may involve his
right to, or the exercise of ownership of, specific property, or seek to compel him to
control or dispose of it in accordance with the mandate of the court.[20] The purpose
of a proceeding in personam is to impose, through the judgment of a court, some
responsibility or liability directly upon the person of the defendant.[21] Of this
character are suits to compel a defendant to specifically perform some act or actions
to fasten a pecuniary liability on him.[22] An action in personam is said to be one
which has for its object a judgment against the person, as distinguished from a
judgment against the propriety to determine its state. It has been held that an action
in personam is a proceeding to enforce personal rights or obligations; such action is
brought against the person. As far as suits for injunctive relief are concerned, it is
well-settled that it is an injunctive act in personam.[23] In Combs v. Combs,[24] the
appellate court held that proceedings to enforce personal rights and obligations and
in which personal judgments are rendered adjusting the rights and obligations
between the affected parties is in personam. Actions for recovery of real property are
in personam.[25]
On the other hand, a proceeding quasi in rem is one brought against persons seeking
to subject the property of such persons to the discharge of the claims assailed.[26] In
an action quasi in rem, an individual is named as defendant and the purpose of the
proceeding is to subject his interests therein to the obligation or loan burdening the
property.[27] Actions quasi in rem deal with the status, ownership or liability of a
particular property but which are intended to operate on these questions only as
between the particular parties to the proceedings and not to ascertain or cut off the
rights or interests of all possible claimants. The judgments therein are binding only
upon the parties who joined in the action.[28]
Section 1, Rule 70 of the Rules of Court provides:
Section 1. Who may institute proceedings, and when. - Subject to the provisions of
the next succeeding section, a person deprived of the possession of any land or
building in force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee,
or other person against whom the possession of any land or building is unlawfully
withheld after the expiration or termination of the right to hold possession by virtue of
any contract, express or implied, or the legal representatives or assigns of any such
lessor, vendor, vendee, or other person, may, at any time within one (1) year after
such unlawful deprivation or withholding of possession, bring an action in the proper
Municipal Trial Court against the person or persons unlawfully withholding or
depriving of possession, or any person or persons claiming under them, for the
restitution of such possession, together with damages and costs.
Under Section 15, Rule 70 of the said Rule, the plaintiff may be granted a writ of
preliminary prohibition or mandatory injunction:
Sec. 15. Preliminary Injunction. The court may grant preliminary injunction, in
accordance with the provisions of Rule 58 hereof, to prevent the defendant from
committing further acts of dispossession against the plaintiff.
A possessor deprived of his possession through forcible entry or unlawful detainer
may, within five (5) days from the filing of the complaint, present a motion in the action
for forcible entry or unlawful detainer for the issuance of a writ of preliminary
mandatory injunction to restore him in his possession. The court shall decide the
motion within thirty (30) days from the filing thereof.
If, after due proceedings, the trial court finds for the plaintiff, it shall then render
judgment in his or her favor, thus:
Sec. 17. Judgment. If, after trial, the court finds that the allegations of the complaint
are true, it shall render judgment in favor of the plaintiff for the restitution of the
premises, the sum justly due as arrears of rent or as reasonable compensation for
the use and occupation of the premises, attorneys fees and costs. If it finds that said
allegations are not true, it shall render judgment for the defendant to recover his costs.
If a counterclaim is established, the court shall render judgment for the sum found in
arrears from either party and award costs as justice requires.
From the aforementioned provisions of the Rules of Court and by its very nature and
purpose, an action for unlawful detainer or forcible entry is a real action and in
personam because the plaintiff seeks to enforce a personal obligation or liability on
the defendant under Article 539 of the New Civil Code,[29] for the latter to vacate the
property subject of the action, restore physical possession thereof to the plaintiff, and
pay actual damages by way of reasonable compensation for his use or occupation of
the property.[30]
As gleaned from the averments of the petitioners complaint in the MTC, she sought a
writ of a preliminary injunction from the MTC and prayed that the said writ be made
permanent. Under its decision, the MTC ordered the defendant therein (the
respondent in this case), to vacate the property and pay a monthly rental of P1,000.00
to the plaintiff therein (the petitioner in this case).
On the issue of whether the respondent was validly served with the summons and
complaint by the Sheriff on April 5, 1999, the petitioner asserts that since her action
of forcible entry against the respondent in Civil Case No. 879 was in personam,
42
summons may be served on the respondent, by substituted service, through her
brother, Oscar Layno, in accordance with Section 7, Rule 14 of the Rules of Court.
The petitioner avers that Oscar Layno, a person of suitable age and discretion, was
residing in the house of the respondent on April 5, 1999. She avers that the fact that
the house was leased to and occupied by Eduardo Gonzales was of no moment.
Moreover, the Sheriff is presumed to have performed his duty of properly serving the
summons on the respondent by substituted service.
The contention of the petitioner has no merit.
In Asiavest Limited v. Court of Appeals,[31] the Court had the occasion to state:
In an action in personam, jurisdiction over the person of the defendant is necessary
for the court to validly try and decide the case. Jurisdiction over the person of a
resident defendant who does not voluntarily appear in court can be acquired by
personal service of summons as provided under Section 7, Rule 14 of the Rules of
Court. If he cannot be personally served with summons within a reasonable time,
substituted service may be made in accordance with Section 8 of said Rule. If he is
temporarily out of the country, any of the following modes of service may be resorted
to: (a) substituted service set forth in Section 8; (2) personal service outside the
country, with leave of court; (3) service by publication, also with leave of court; or (4)
any other manner the court may deem sufficient.[32]
Thus, any judgment of the court which has no jurisdiction over the person of the
defendant is null and void.[33]
In the present case, the records show that the respondent, before and after his
marriage to Jarl Jensen on August 23, 1987, remained a resident of Barangay
Buenlag, Calasiao, Pangasinan. This can be gleaned from the Deed of Absolute Sale
dated August 26, 1992 in which she declared that she was a resident of said
barangay. Moreover, in the Real Estate Mortgage Contract dated February 9, 1999,
ten days before the complaint in Civil Case No. 879 was filed, the petitioner
categorically stated that she was a Filipino and a resident of Barangay Buenlag,
Calasiao, Pangasinan. Considering that the respondent was in Oslo, Norway, having
left the Philippines on February 17, 1999, the summons and complaint in Civil Case
No. 879 may only be validly served on her through substituted service under Section
7, Rule 14 of the Rules of Court, which reads:
SEC. 7. Substituted service. If, for justifiable causes, the defendant cannot be served
within a reasonable time as provided in the preceding section, service may be effected
(a) by leaving copies of the summons at the defendants residence with some person
of suitable age and discretion then residing therein, or (b) by leaving the copies at
defendants office or regular place of business with some competent person in charge
thereof.
Strict compliance with the mode of service is required in order that the court may
acquire jurisdiction over the person of the defendant.[34] The statutory requirement
of substituted service must be followed faithfully and strictly and any substituted
service other than that authorized by the statute is rendered ineffective.[35] As the
Court held in Hamilton v. Levy:[36]
The pertinent facts and circumstances attendant to the service of summons must be
stated in the proof of service or Officers Return; otherwise, any substituted service
made in lieu of personal service cannot be upheld. This is necessary because
substituted service is in derogation of the usual method of service. It is a method
extraordinary in character and hence may be used only as prescribed and in the
circumstances authorized by statute. Here, no such explanation was made. Failure to
faithfully, strictly, and fully comply with the requirements of substituted service renders
said service ineffective.[37]
In Keister v. Narcereo,[38] the Court held that the term dwelling house or residence
are generally held to refer to the time of service; hence, it is not sufficient to leave the
summons at the formers dwelling house, residence or place of abode, as the case
may be. Dwelling house or residence refers to the place where the person named in
the summons is living at the time when the service is made, even though he may be
temporarily out of the country at the time. It is, thus, the service of the summons
intended for the defendant that must be left with the person of suitable age and
discretion residing in the house of the defendant. Compliance with the rules regarding
the service of summons is as much important as the issue of due process as of
jurisdiction.[39]
The Return of Service filed by Sheriff Eduardo J. Abulencia on the service of
summons reads:
Respectfully returned to the court of origin the herein summons and enclosures in the
above-entitled case, the undersigned caused the service on April 5, 1999.
Defendant Vivian Layno Jensen is out of the country as per information from her
brother Oscar Layno, however, copy of summons and enclosures was received by
her brother Oscar Layno on April 5, 1999 as evidenced by his signature appearing in
the original summons.
Calasiao, Pangasinan, April 6, 1999.
(Sgd.)
EDUARDO J. ABULENCIA
Junior Process Server[40]
As gleaned from the said return, there is no showing that as of April 5, 1999, the
house where the Sheriff found Oscar Layno was the latters residence or that of the
respondent herein. Neither is there any showing that the Sheriff tried to ascertain
where the residence of the respondent was on the said date. It turned out that the
occupant of the house was a lessor, Eduardo Gonzales, and that Oscar Layno was
in the premises only to collect the rentals from him. The service of the summons on a
person at a place where he was a visitor is not considered to have been left at the
residence or place or abode, where he has another place at which he ordinarily stays
and to which he intends to return.[41]
43
The Voters Registration Record of Oscar Layno dated June 15, 1997 wherein he
declared that he was a resident of No. 572 Barangay Buenlag, Calasiao, Pangasinan,
as well as the Joint Affidavit of Vicenta Peralta and Orlando Macasalda cannot prevail
over the Contract of Lease the respondent had executed in favor of Eduardo
Gonzales showing that the latter had resided and occupied the house of the
respondent as lessee since November 24, 1997, and the affidavit of Eduardo
Gonzales that Oscar Layno was not residing in the said house on April 5, 1999.

In sum, then, the respondent was not validly served with summons and the complaint
in Civil Case No. 879 on April 5, 1999, by substituted service. Hence, the MTC failed
to acquire jurisdiction over the person of the respondent; as such, the decision of the
MTC in Civil Case No. 879 is null and void.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. No
costs.

SO ORDERED.

44
[G.R. No. 147369. October 23, 2003]
Spouses PATRICK JOSE and RAFAELA JOSE, petitioners, vs. Spouses HELEN
BOYON and ROMEO BOYON, respondents.
DECISION
PANGANIBAN, J.:
In general, substituted service can be availed of only after a clear showing that
personal service of summons was not legally possible. Also, service by publication is
applicable in actions in rem and quasi in rem, but not in personal suits such as the
present one which is for specific performance.
The Case
Before the Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules
of Court, assailing the February 26, 2001 Decision[2] of the Court of Appeals (CA) in
CA-GR SP No. 60888. The dispositive portion of the CA Decision is worded as
follows:
WHEREFORE, on the basis of what prescinds, the assailed resolution and orders
issued by the public respondent are perforce ANNULLED and SET ASIDE. This
pronouncement is nonetheless rendered without prejudice to the refiling of the same
case by the private respondents with the court a quo.[3]
The Facts
The factual antecedents of the case are narrated by the CA in this wise:
On July 2, 1998, [petitioners] Patrick and Rafaela Jose lodged a complaint for specific
performance against [respondents] Helen and Romeo Boyon to compel them to
facilitate the transfer of ownership of a parcel of land subject of a controverted sale.
The action was lodged before the Regional Trial Court of Muntinlupa which is presided
by herein public respondent Judge N.C. Perello. On July 21, 1998, respondent judge,
through the acting Branch Clerk of Court of Branch 276 of the RTC of Muntinlupa City,
issued summons to the [respondents]. As per return of the summons, substituted
service was resorted to by the process server allegedly because efforts to serve the
summons personally to the [respondents] failed. On December 9, 1998, [petitioners]
filed before the trial court an Ex-parte Motion for Leave of Court to Effect Summons
by Publication. On December 28, 1998, public respondent issued an Order granting
the Ex-parte Motion for Leave of Court to Effect Summons by Publication. On July 30,
1999, the respondent judge, sans a written motion, issued an Order declaring herein
[respondents] in default for failure to file their respective answers. As a consequence
of the declaration of default, [petitioners] were allowed to submit their evidence ex-
parte. Ultimately, on December 7, 1999, respondent judge issued the assailed
resolution, the dispositive portion of which reads as follows:
x x x Therefore, Spouses Helen and Romeo Boyon are directed to execute the
necessary document with the effect of withdrawing the Affidavit of Loss they filed and
annotated with the Register of Deeds of Makati City so that title to the parcel of land
subject of the Deed of Absolute Sale in favor of the Plaintiffs be transferred in their
names. Thereafter the Register of Deeds of Makati City or Muntinlupa City may cancel
Transfer of Certificate of Title No. 149635 of the Defendants and issue another to
Plaintiff under the deed of sale, clean and free of any reported encumbrance.
Defendants are also directed to pay Plaintiffs actual expenses in the amount of
P20,000 and attorneys fees of P20,000 including costs of this suit.
xxxxxxxxx
On January 5, 2000, [respondent] Helen Boyon, who was then residing in the United
States of America, was surprised to learn from her sister Elizabeth Boyon, of the
resolution issued by the respondent court. On January 18, 2000, [respondents] filed
an Ad Cautelam motion questioning, among others, the validity of the service of
summons effected by the court a quo. On March 17, 2000, the public respondent
issued an Order denying the said motion on the basis of the defaulted [respondents]
supposed loss of standing in court. On March 29, 2000, the [respondents] once again
raised the issue of jurisdiction of the trial court via a motion for reconsideration. On
June 22, 2000, however, an Order was issued by the public respondent denying the
said motion. The [petitioners] moved for the execution of the controverted judgment
which the respondent judge ultimately granted.[4]
Thereafter, respondents filed before the CA a Petition for certiorari under Rule 65 of
the Revised Rules of Civil Procedure, questioning the jurisdiction of the regional trial
court (RTC).
Ruling of the Court of Appeals
The CA held that the trial court had no authority to issue the questioned Resolution
and Orders. According to the appellate court, the RTC never acquired jurisdiction over
respondents because of the invalid service of summons upon them. First, the sheriff
failed to comply with the requirements of substituted service of summons, because
he did not specify in the Return of Summons the prior efforts he had made to locate
them and the impossibility of promptly serving the summons upon them by personal
service. Second, the subsequent summons by publication was equally infirm,
because the Complaint was a suit for specific performance and therefore an action in
personam. Consequently, the Resolution and the Orders were null and void, since
the RTC had never acquired jurisdiction over respondents.
Hence, this Petition.[5]
Issues
In their Memorandum, petitioners raise the following issues for our consideration:
A. The Honorable Court of Appeals erred in not holding that the assailed Resolution
dated December 7, 1999 was already final and executory
45
B. The Honorable Court of Appeals erred in giving due course to the Petition for
Certiorari of private respondents despite the pendency of an appeal earlier filed
C. The Honorable Court erred in not holding that the Petition for Certiorari was time
barred
D. The Honorable Court of Appeals erred in holding that the proceedings in the lower
court are null and void due to invalid and defective service of summons and the court
did not acquire jurisdiction over the person of the respondents.[6]
In sum, the main issue revolves around the validity of the service of summons on
respondents.
The Courts Ruling
The Petition has no merit.
Main Issue:
Validity of the Service of Summons
Petitioners aver that the CA erred in ruling that the service of summons on
respondents was invalid. They submit that although the case filed before the trial court
was denominated as an action for specific performance, it was actually an action
quasi in rem, because it involved a piece of real property located in the Philippines.
They further argue that in actions quasi in rem involving ownership of a parcel of land,
it is sufficient that the trial court acquire jurisdiction over the res. Thus, the summons
by publication, which they effected subsequent to the substituted service of summons,
was allegedly sufficient.
On the other hand, respondents maintain that the proceedings in the trial court were
null and void because of the invalid and defective service of summons. According to
them, the Return of Summons issued by the process server of the RTC failed to state
that he had exerted earnest efforts to effect the service of summons. He allegedly
tried to serve it personally on them on July 22, 1998 at No. 32 Ariza Drive, Camella
Homes, Alabang. He, however, resorted to substituted service on that same day,
supposedly because he could not find respondents in the above address. They further
allege that the person to whom he gave the summons was not even a resident of that
address.
Respondents contend that when summons is served by substituted service, the return
must show that it was impossible to serve the summons personally, and that efforts
had been exerted toward that end. They add that noncompliance with the rule on
substituted service renders invalid all proceedings relative thereto.
As to the summons by publication subsequently effected by petitioners, respondents
argue that the case filed before the trial court was an action for specific performance
and, therefore, an action in personam. As such, the summons by publication was
insufficient to enable the trial court to acquire jurisdiction over the persons of
respondents.
Respondents conclude that even granting that the service of summons by publication
was permissible under the circumstances, it would still be defective and invalid
because of the failure of petitioners to observe the requirements of law, like an
Affidavit attesting that the latter deposited in the post office a copy of the summons
and of the order of publication, paid the postage, and sent the documents by
registered mail to the formers last known address.
We agree with respondents. In general, trial courts acquire jurisdiction over the person
of the defendant by the service of summons. Where the action is in personam and
the defendant is in the Philippines, such service may be done by personal or
substituted service, following the procedures laid out in Sections 6 and 7 of Rule 14
of the Revised Rules of Court, which read:
Section 6. Service in person on defendant. - Whenever practicable, the summons
shall be served by handing a copy thereof to the defendant in person, or, if he refuses
to receive and sign for it, by tendering it to him.
Section 7. Substituted service. - If, for justifiable causes, the defendant cannot be
served within a reasonable time as provided in the preceding section, service may be
effected (a) by leaving copies of the summons at the defendant's residence with some
person of suitable age and discretion then residing therein, or (b) by leaving the copies
at defendants office or regular place of business with some competent person in
charge thereof.
As can be gleaned from the above-quoted Sections, personal service of summons is
preferred to substituted service. Only if the former cannot be made promptly can the
process server resort to the latter. Moreover, the proof of service of summons must
(a) indicate the impossibility of service of summons within a reasonable time; (b)
specify the efforts exerted to locate the defendant; and (c) state that the summons
was served upon a person of sufficient age and discretion who is residing in the
address, or who is in charge of the office or regular place of business, of the
defendant.[7] It is likewise required that the pertinent facts proving these
circumstances be stated in the proof of service or in the officers return. The failure to
comply faithfully, strictly and fully with all the foregoing requirements of substituted
service renders the service of summons ineffective.[8]
Defective Personal
Service of Summons
In the instant case, it appears that the process server hastily and capriciously resorted
to substituted service of summons without actually exerting any genuine effort to
locate respondents. A review of the records[9] reveals that the only effort he exerted
was to go to No. 32 Ariza Drive, Camella Homes, Alabang on July 22, 1998, to try to
46
serve the summons personally on respondents. While the Return of Summons states
that efforts to do so were ineffectual and unavailing because Helen Boyon was in the
United States and Romeo Boyon was in Bicol, it did not mention exactly what efforts
-- if any -- were undertaken to find respondents. Furthermore, it did not specify where
or from whom the process server obtained the information on their whereabouts. The
pertinent portion of the Return of Summons is reproduced as follows:
That efforts to serve the said Summons personally upon defendants Sps. Helen and
Romeo Boyon were made but the same were ineffectual and unavailing for the reason
that defendant Helen Boyon is somewhere in the United States of America and
defendant Romeo Boyon is in Bicol thus substituted service was made in accordance
with Section 7, Rule 14, of the Revised Rules of Court.[10]
The Return of Summons shows that no effort was actually exerted and no positive
step taken by either the process server or petitioners to locate and serve the
summons personally on respondents. At best, the Return merely states the alleged
whereabouts of respondents without indicating that such information was verified from
a person who had knowledge thereof. Certainly, without specifying the details of the
attendant circumstances or of the efforts exerted to serve the summons, a general
statement that such efforts were made will not suffice for purposes of complying with
the rules of substituted service of summons.
Publication Improper
It must be noted that extraterritorial service of summons or summons by publication
applies only when the action is in rem or quasi in rem. The first is an action against
the thing itself instead of against the defendants person; in the latter, an individual is
named as defendant, and the purpose is to subject that individuals interest in a piece
of property to the obligation or loan burdening it.[15]
In the instant case, what was filed before the trial court was an action for specific
performance directed against respondents. While the suit incidentally involved a piece
of land, the ownership or possession thereof was not put in issue, since they did not
assert any interest or right over it. Moreover, this Court has consistently declared that
an action for specific performance is an action in personam.[16]
Having failed to serve the summons on respondents properly, the RTC did not validly
acquire jurisdiction over their persons. Consequently, due process demands that all
the proceedings conducted subsequent thereto should be deemed null and void.[17]
WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution
AFFIRMED. Costs against petitioners.

The necessity of stating in the process servers Return or Proof of Service the material SO ORDERED.
facts and circumstances sustaining the validity of substituted service was explained
by this Court in Hamilton v. Levy,[11] from which we quote:

x x x The pertinent facts and circumstances attendant to the service of summons must
be stated in the proof of service or Officers Return; otherwise, any substituted service
made in lieu of personal service cannot be upheld. This is necessary because
substituted service is in derogation of the usual method of service. It is a method
extraordinary in character and hence may be used only as prescribed and in the
circumstances authorized by statute. Here, no such explanation was made. Failure to
faithfully, strictly, and fully comply with the requirements of substituted service renders
said service ineffective.[12]

Moreover, the requirements of substituted service of summons and the effect of

noncompliance with the subsequent proceedings therefor were discussed in Madrigal
v. Court of Appeals[13] as follows:

In a long line of cases, this Court held that the impossibility of personal service
justifying availment of substituted service should be explained in the proof of service;
why efforts exerted towards personal service failed. The pertinent facts and
circumstances attendant to the service of summons must be stated in the proof of
service or Officers Return; otherwise, the substituted service cannot be upheld. It
bears stressing that since service of summons, especially for actions in personam, is
essential for the acquisition of jurisdiction over the person of the defendant, the resort
to a substituted service must be duly justified. Failure to do so would invalidate all
subsequent proceedings on jurisdictional grounds.[14]

Summons by

47
[G.R. No. 127692. March 10, 2004]
FORTUNATO GOMEZ and AURORA GOMEZ, petitioners, vs. COURT OF
APPEALS, ADOLFO TROCINO and MARIANO TROCINO, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of
Court assailing the decision[1] of the Court of Appeals dated September 30, 1996, in
CA-G.R. SP No. 40067, nullifying the decision and orders of the Regional Trial Court
of Cebu City (Branch 10) in Civil Case No. CEB-11103, for want of jurisdiction.
Civil Case No. CEB-11103 is an action for specific performance and/or rescission filed
by herein petitioners, spouses Fortunato and Aurora Gomez, against the heirs of
Jesus J. Trocino, Sr., which include herein respondents and their mother Caridad
Trocino.[2]
Filed on December 16, 1991, the complaint alleges: Some time in 1975, the spouses
Jesus and Caridad Trocino mortgaged two parcels of land covered by TCT Nos.
10616 and 31856 to Dr. Clarence Yujuico. The mortgage was subsequently
foreclosed and the properties sold at public auction on July 11, 1988, and before the
expiry of the redemption period, the spouses Trocino sold the property to petitioners
on December 12, 1989, who in turn, redeemed the same from Dr. Yujuico. The
spouses Trocino, however, refused to convey ownership of the properties to
petitioners, hence, the complaint.
On January 10, 1992, the trial courts Process Server served summons on
respondents, in the manner described in his Return of Service, to wit:
Respectfully returned to the Branch Clerk of Court, Regional Trial Court of Cebu,
Branch 10, the herein attached original summons issued in the above-entitled case
with the information that on January 8, 1992 summons and copies of the complaint
were served to the defendants Jacob, Jesus Jr., Adolfo, Mariano, Consolacion, Alice,
Racheal thru defendant Caridad Trocino at their given address at Maria Cristina
Extension (besides Sacred Heart School for Girls), Cebu City, evidence by her
signature found at the lower portion of the original summons.[3]
WHEREFORE I, respectfully return the original summons duly served to the court of
origin.
Cebu City, Philippines, January 10, 1992.
(signed)
DELFIN D. BARNIDO
RTC Process Server
On January 27, 1992, the defendants, through their counsel Atty. Expedito P. Bugarin,
filed their Answer. Defendant Caridad A. Trocino, respondents mother, verified said
pleading.[4]
After trial on the merits, the RTC rendered its decision on March 1993, with the
following disposition:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
plaintiffs and against the defendants.
The latter are hereby ordered to jointly and severally execute a Deed of Sale in favor
of the plaintiffs and to deliver the owners duplicate copies of TCT Nos. 10616 and
31856, covering the properties sold, to the plaintiffs within ten (10) days from the
finality of the judgment, after which plaintiffs shall pay in turn to the defendants the
balance of P2,000,000.00. Otherwise, the sale is rescinded and revoked and the
defendants are directed to return to the plaintiffs the amount of P500,000.00, with
interest of 12% per annum computed from December 6, 1989, until the full amount is
paid.
In addition thereto, defendants are to pay jointly and severally to the plaintiffs, the
amount of P50,000.00 as moral damages; P20,000.00 as exemplary damages;
P40,000.00 by way of attorneys fees; and P10,000.00 as litigation expenses.
SO ORDERED.[5]
Due to the defendants failure to deliver the owners duplicate of TCT Nos. 10616 and
31856, the RTC issued an order on August 29, 1995 declaring said titles null and void,
and ordering the Register of Deeds of Cebu City to issue new titles in the name of
herein petitioners.[6]
Thereafter, or on March 13, 1996, respondents Adolfo and Mariano Trocino filed with
the Court of Appeals, a petition for the annulment of the judgment rendered by the
RTC-Cebu (Branch 10) in Civil Case No. CEB-11103. Private respondents alleged
that the trial courts decision is null and void on the ground that it did not acquire
jurisdiction over their persons as they were not validly served with a copy of the
summons and the complaint. According to them, at the time summons was served on
them, Adolfo Trocino was already in Ohio, U.S.A., and has been residing there for 25
years, while Mariano Trocino was in Talibon, Bohol, and has been residing there since
1986. They also refuted the receipt of the summons by Caridad A. Trocino, and the
representation made by Atty. Bugarin in their behalf. Respondents also contended
that they have a meritorious defense.[7] Petitioners filed their Comment/Answer to
the petition.[8]
On September 30, 1996, the Court of Appeals issued the assailed Decision granting
the petition and annulling the decision of the RTC-Cebu (Branch 10). The decretal
portion of the decision reads:
WHEREFORE, the decision of the Regional Trial Court of Cebu City, Branch 10, in
Civil Case No. CEB-11103 as well as all Orders issued to implement the same are
hereby ANNULLED AND SET ASIDE. The Register of Deeds of Cebu City is hereby
48
ENJOINED from cancelling Transfer Certificates of Title Nos. 10616 and 31856. No
pronouncement as to costs.
SO ORDERED.[9]
Their motion for reconsideration having been denied by the Court of Appeals,
petitioners filed the present petition, setting forth the following assignment of errors:
I. THE COURT OF APPEALS ERRED IN FINDING LACK OF PRIOR KNOWLEDGE
ON THE PART OF RESPONDENTS TROCINO, REGARDING THE PROCEEDINGS
BEFORE THE RTC OF CEBU CITY AND IN NOT DISMISSING THE PETITION FOR
VIOLATION OF SUPREME COURT CIRCULAR 04-94.
II. THE COURT OF APPEALS ERRED IN DECLARING THE NEED FOR PERSONAL
AND/OR EXTRATERRITORIAL SERVICE OF SUMMONS, DESPITE THE NATURE
OF THE CAUSE OF ACTION BEING ONE IN REM.
III. THE COURT OF APPEALS ERRED IN ANNULLING THE JUDGMENT,
CAUSING FURTHER USELESS LITIGATION AND UNNECESSARY EXPENSE ON
PETITIONERS AND RESPONDENTS, ESPECIALLY SINCE RESPONDENTS
HAVE NOT SHOWN ANY VALID DEFENSE AS GROUND FOR REVERSAL OF
JUDGMENT OF THE RTC.
IV. THE COURT OF APPEALS ERRED IN RULING THAT ITS JUDGMENT IS
APPLICABLE IN FAVOR OF CARIDAD TROCINO.[10]
Summons is a writ by which the defendant is notified of the action brought against
him. Service of such writ is the means by which the court acquires jurisdiction over
his person.[11] Any judgment without such service in the absence of a valid waiver is
null and void.[12]
The resolution of the present petition hinges on the issue of whether or not summons
was effectively served on respondents. If in the affirmative, the trial court had validly
acquired jurisdiction over their persons and therefore its judgment is valid.
To resolve whether there was valid service of summons on respondents, the nature
of the action filed against them must first be determined. As the Court explained in
Asiavest Limited vs. Court of Appeals, it will be helpful to determine first whether the
action is in personam, in rem, or quasi in rem because the rules on service of
summons under Rule 14 of the Rules of Court of the Philippines apply according to
the nature of the action.[13]
In actions in personam, summons on the defendant must be served by handing a
copy thereof to the defendant in person, or, if he refuses to receive it, by tendering it
to him. This is specifically provided in Section 7, Rule 14 of the Rules of Court,[14]
which states:
SEC. 7. Personal service of summons.-- The summons shall be served by handing a
copy thereof to the defendant in person or, if he refuses to receive it, by tendering it
to him.
If efforts to find defendant personally makes prompt service impossible, substituted
service may be effected by leaving copies of the summons at the defendant's dwelling
house or residence with some person of suitable age and discretion then residing
therein, or by leaving the copies at the defendant's office or regular place of business
with some competent person in charge thereof.[15] In substituted service, it is
mandated that the fact of impossibility of personal service should be explained in the
proof of service.[16]
When the defendant in an action in personam is a non-resident who does not
voluntarily submit himself to the authority of the court, personal service of summons
within the State is essential to the acquisition of jurisdiction over his person. This
cannot be done if the defendant is not physically present in the country, and thus, the
court cannot acquire jurisdiction over his person and therefore cannot validly try and
decide the case against him.[17] An exception was accorded in Gemperle vs.
Schenker wherein service of summons through the non-residents wife, who was a
resident of the Philippines, was held valid, as the latter was his representative and
attorney-in-fact in a prior civil case filed by the non-resident, and the second case was
merely an offshoot of the first case.[18]
Meanwhile, in actions in rem or quasi in rem, jurisdiction over the person of the
defendant is not a prerequisite to confer jurisdiction on the court provided that the
court acquires jurisdiction over the res, although summons must be served upon the
defendant in order to satisfy the due process requirements.[19] Thus, where the
defendant is a non-resident who is not found in the Philippines, and (1) the action
affects the personal status of the plaintiff; (2) the action relates to, or the subject
matter of which is property in the Philippines in which the defendant has or claims a
lien or interest; (3) the action seeks the exclusion of the defendant from any interest
in the property located in the Philippines; or (4) the property of the defendant has
been attached in the Philippines, summons may be served extraterritorially by (a)
personal service out of the country, with leave of court; (b) publication, also with leave
of court; or (c) any other manner the court may deem sufficient.[20]
In the present case, petitioners cause of action in Civil Case No. CEB-11103 is
anchored on the claim that the spouses Jesus and Caridad Trocino reneged on their
obligation to convey ownership of the two parcels of land subject of their sale. Thus,
petitioners pray in their complaint that the spouses Trocino be ordered to execute the
appropriate deed of sale and that the titles be delivered to them (petitioners); or in the
alternative, that the sale be revoked and rescinded; and spouses Trocino ordered to
return to petitioners their down payment in the amount of P500,000.00 plus interests.
The action instituted by petitioners affect the parties alone, not the whole world.
Hence, it is an action in personam, i.e., any judgment therein is binding only upon the
parties properly impleaded.[21]
Contrary to petitioners belief, the complaint they filed for specific performance and/or
rescission is not an action in rem. While it is a real action because it affects title to or
possession of the two parcels of land covered by TCT Nos. 10616 and 31856, it does
not automatically follow that the action is already one in rem. In Hernandez vs. Rural
Bank of Lucena, Inc., the Court made the following distinction:
49
In a personal action, the plaintiff seeks the recovery of personal property, the
enforcement of a contract or the recovery of damages. In a real action, the plaintiff
seeks the recovery of real property, or, as indicated in section 2(a) of Rule 4, a real
action is an action affecting title to real property or for the recovery of possession, or
for partition or condemnation of, or foreclosure of a mortgage on, real property.
An action in personam is an action against a person on the basis of his personal
liability, while an action in rem is an action against the thing itself, instead of against
the person. Hence, a real action may at the same time be an action in personam and
not necessarily an action in rem.[22]
The objective sought in petitioners complaint was to establish a claim against
respondents for their alleged refusal to convey to them the title to the two parcels of
land that they inherited from their father, Jesus Trocino, who was one of the sellers of
the properties to petitioners. Hence, to repeat, Civil Case No. CEB-11103 is an action
in personam because it is an action against persons, namely, herein respondents, on
the basis of their personal liability. As such, personal service of summons upon the
defendants is essential in order for the court to acquire of jurisdiction over their
persons.[23]
A distinction, however, must be made with regard to service of summons on
respondents Adolfo Trocino and Mariano Trocino. Adolfo Trocino, as records show,
is already a resident of Ohio, U.S.A. for 25 years. Being a non-resident, the court
cannot acquire jurisdiction over his person and validly try and decide the case against
him.
On the other hand, Mariano Trocino has been in Talibon, Bohol since 1986. To validly
acquire jurisdiction over his person, summons must be served on him personally, or
through substituted service, upon showing of impossibility of personal service. Such
impossibility, and why efforts exerted towards personal service failed, should be
explained in the proof of service. The pertinent facts and circumstances attendant to
the service of summons must be stated in the proof of service or Officers Return.
Failure to do so would invalidate all subsequent proceedings on jurisdictional
grounds.[24]
In the present case, the process server served the summons and copies of the
complaint on respondents Jacob, Jesus, Jr., Adolfo, Mariano, Consolacion, Alice and
Racheal,[25] through their mother, Caridad Trocino.[26] The return did not contain
any particulars as to the impossibility of personal service on Mariano Trocino within a
reasonable time. Such improper service renders the same ineffective.
Due process of law requires personal service to support a personal judgment, and,
when the proceeding is strictly in personam brought to determine the personal rights
and obligations of the parties, personal service within the state or a voluntary
appearance in the case is essential to the acquisition of jurisdiction so as to constitute
compliance with the constitutional requirement of due process.[27]
Moreover, inasmuch as the sheriffs return failed to state the facts and circumstances
showing the impossibility of personal service of summons upon respondents within a
reasonable time, petitioners should have sought the issuance of an alias summons.
Under Section 5, Rule 14 of the Rules of Court, alias summons may be issued when
the original summons is returned without being served on any or all of the
defendants.[28] Petitioners, however, did not do so, and they should now bear the
consequences of their lack of diligence.
The fact that Atty. Expedito Bugarin represented all the respondents without any
exception does not transform the ineffective service of summons into a valid one. It
does not constitute a valid waiver or even a voluntary submission to the trial courts
jurisdiction. There was not even the slightest proof showing that respondents
authorized Atty. Bugarins appearance for and in their behalf. As found by the Court
of Appeals:
While Caridad Trocino may have engaged the services of Atty. Bugarin, it did not
necessarily mean that Atty. Bugarin also had the authority to represent the defendant
heirs. The records show that in all the pleadings which required verification, only
Caridad Trocino signed the same. There was never a single instance where
defendant heirs signed the pleading. The fact that a pleading is signed by one
defendant does not necessarily mean that it is binding on a co-defendant.
Furthermore, Caridad Trocino represented herself as the principal defendant in her
Motion to Withdraw Appeal. (Rollo, p. 80)
Since the defendant heirs are co-defendants, the trial court should have verified the
extent of Atty. Bugarins authority when petitioners failed to appear as early as the pre-
trial stage, where the parties are required to appear. The absence of the defendant
heirs should have prompted the trial court to inquire from the lawyer whether he was
also representing the other petitioners. As co-defendant and co-heirs over the
disputed properties, the defendant heirs had every right to be present during the trial.
Only Caridad Trocino appeared and testified on her own behalf. All the defenses
raised were her own, not the defendant heirs.[29]
Consequently, the judgment sought to be executed against respondents were
rendered without jurisdiction as there was neither a proper service of summons nor
was there any waiver or voluntary submission to the trial courts jurisdiction. Hence,
the same is void, with regard to private respondents except Caridad Trocino.
It must be pointed out that while it was the spouses Jesus and Caridad Trocino who
sold the properties to petitioners, their right to proceed against Jesus Trocino when
he died was passed on to his heirs, which includes respondents and Caridad Trocino.
Such transmission of right occurred by operation of law, more particularly by
succession, which is a mode of acquisition by virtue of which the property, rights and
obligations to the extent of the value of the inheritance of a person are transmitted.[30]
When the process server personally served the summons on Caridad Trocino, the
trial court validly acquired jurisdiction over her person alone. Hence, the trial courts
decision is valid and binding with regard to her, but only in proportion to Caridad
Trocinos share. As aptly stated by the Court of Appeals:
This Courts decision is therefore applicable to all the defendant heirs with the
exception of defendant Caridad Trocino considering that it was the latter who entered
into the alleged sale without the consent of her husband. She is therefore estopped
from questioning her own authority to enter into the questioned sale. Moreover,
50
Caridad Trocino was validly served with summons and was accorded due
process.[31]

WHEREFORE, the petition for review is DENIED. The decision of the Court of
Appeals in CA-G.R. SP No. 40067 is AFFIRMED.

Costs against petitioners.

SO ORDERED.

51
[G.R. No. 100643. August 14, 1992.]
ADEZ REALTY, INCORPORATED, Petitioner, v. HONORABLE COURT OF
APPEALS, THE PRESIDING JUDGE OF BRANCH 79, REGIONAL TRIAL COURT,
Morong, Rizal, THE PROVINCIAL SHERIFF OF RIZAL, Morong, Rizal, THE
REGISTER OF DEEDS, Quezon City, and AGUEDO EUGENIO, Respondents.
Benjamin M. Dacanay for Petitioner.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; JUDGMENT; FINAL UPON LAPSE OF
REGLEMENTARY PERIOD OF APPEAL AND NO APPEAL PERFECTED. —
Petitioner fails to refute the ruling of respondent appellate court that the issues
presented in the intent case had been previously raised before and decided upon the
Court of Appeals in CA-G.R. CV No. 21392, which decision became final and
executory, and in fact already entered in the judgment book by reason of petitioner’s
failure to seasonably file an appeal or a motion for reconsideration. This is fatal. It has
been repeatedly held that finality of judgment becomes a fact upon the lapse of the
reglementary period of appeal if no appeal is perfected. The decision therefore of the
Court of Appeals in CA-G.R. CV No. 21392 had attained finality, there being no appeal
nor motion for reconsideration interposed. Likewise, it is settled jurisprudence that
once a decision becomes final, the Court can no longer amend, modify, much less
set aside the same.
2. ID.; CIVIL PROCEDURE; LAND REGISTRATION PROCEEDING;
PROCEEDING IN REM; PERSONAL NOTICE NOT REQUIRED TO VEST
AUTHORITY TO COURT. — As early as 1910, in Grey Alba v. De la Cruz, We already
ruled that land registration proceedings are proceedings in rem, not in personam, and
therefore it is not necessary to give personal notice to the owners or claimants of the
land sought to be registered, in order to vest the courts with power or authority over
the res. Thus, while it may be true that no notice was sent by registered mail to
petitioner when the judicial reconstitution of title was sought, such failure, however,
did not amount to a jurisdictional defect.
3. ID.; ID.; ID.; ID.; PUBLICATION THEREOF, SUFFICIENT NOTICE TO
VEST COURT JURISDICTION. — In Register of Deeds of Malabon v. RTC, Malabon,
Metro Manila, Br. 170, We said that" [t]he purpose of the publication of the notice of
the petition for reconstitution in the Official Gazette is to apprise the whole world that
such a petition has been filed and that whoever is minded to oppose it for good cause
may do so within thirty (30) days before the date set by the court for hearing the
petition. It is the publication of such notice that brings in the whole world as a party in
the case and vests the court with jurisdiction to hear and decide it." Thus, notice of
hearing by proper publication in the Official Gazette is sufficient to clothe the court
with jurisdiction, and the mere fact that a person purporting to have a legitimate claim
in the property did not receive personal notice is not sufficient ground to invalidate the
proceedings.
4. ID.; ID.; CAUSE OF ACTION; CANNOT BE LITIGATED TWICE BY
VARYING FORMS OF ACTION. — Shorn of its finery, CA-G.R. SP No. 23773 merely
re-echoes the issues raised in CA-G.R. CV No. 21392 which as become res judicata.
Verily, petitioner’s action to annul the order of the trial court allowing reconstitution
duplicates its earlier motion to set aside the said order, which was granted but later
reversed by the appellate court — which reversal became final and executory due to
petitioner’s failure to file an appeal within the reglementary period. A party cannot, by
varying the form of action or adopting a different method of presenting his case,
escape the operation of the principle that one and the same cause of action shall not
be twice litigated.
5. LEGAL AND JUDICIAL ETHICS; RULE 10.02 OF CODE OF
PROFESSIONAL RESPONSIBILITY; VIOLATED WHEN LAWYER
MISREPRESENT CONTENTS OF DECISION. — However, the phrase "without
notice to the actual occupants of the property, Adez Realty, in the above quoted
second paragraph on page 3 of the Petition for Review, is not found in the decision
penned by Associate Justice Manuel C. Herrera for respondent Court of Appeals. It
now appears as part of a material statement of fact in the decision of the court a quo
when actually it is not. This to Us is a prima facie case of attempting to mislead [Rule
10.02, Canon 10, Chapter III, of the Code of Professional Responsibility provides that
a lawyer shall not knowingly misquote or misrepresent the contents of a paper, the
language or the argument of opposing counsel, or the text of a decision or authority,
or knowingly cite as law a provision already rendered inoperative by repeal or
amendment, or assert as in fact that which has not been proved] this Court, a serious
offense which constitutes willful disregard of a lawyer’s solemn duty to act at all times
in a manner consistent with truth.
RESOLUTION
BELLOSILLO, J.:
The petition filed on December 28, 1990, by Adez Realty Incorporated before the
Court of Appeals, docketed therein as CA-G.R. SP No. 23773, sought to annul the
order of the accused-appellant of Morong, Rizal, dated November 20, 1984, allowing
the reconstitution of Transfer Certificate of Title No. 12662. The petition likewise
sought to set aside in effect the decision of the Court of Appeals in CA-G.R. CV No.
21392 dated July 31, 1990.
On April 30, 1991, respondent Court of Appeals 1 dismissed the petition for lack of
merit. On June 26, 1991, petitioner’s Motion for Reconsideration was denied. The
respondent court, in dismissing the petition, said that: (a) the petition is a reiteration
of the issues raised before it 2 earlier in CA-G.R. CV No. 21392, promulgated July
31, 1990, and since no motion for reconsideration or appeal by certiorari with the
Supreme Court was filed, the same became final and executory, and consequently
entered in the judgment book on October 11, 1990; and, (b) the accused-appellant of
Morong, Rizal, had jurisdiction over the subject matter, the issue then being one of
52
venue and not of jurisdiction, which can be waived if not timely objected to in a motion
to dismiss, pursuant to Sec. 4, Rule 4, of the Rules of Court.
Hence, this petition for review under Rule 45 of the Rules of Court, where petitioner
raises four (4) issues which nevertheless may be simplified into the following: whether
the accused-appellant of Morong, Rizal, may acquire jurisdiction over reconstitution
proceedings involving real property situated in Quezon City, and whether publication
of the notice of the petition in two (2) successive issues of the Official Gazette and its
posting in the bulletin board of the accused-appellant of Morong, Rizal, is sufficient
compliance with Sec. 13 of R.A. No. 26.
Wittingly or unwittingly, petitioner fails to refute the ruling of respondent appellate
court that the issues presented in the intent case had been previously raised before
and decided upon the Court of Appeals in CA-G.R. CV No. 21392, which decision
became final and executory, and in fact already entered in the judgment book by
reason of petitioner’s failure to seasonably file an appeal or a motion for
reconsideration. This is fatal.
It has been repeatedly held that finality of judgment becomes a fact upon the lapse of
the reglementary period of appeal if no appeal is perfected. 3 The decision therefore
of the Court of Appeals in CA-G.R. CV No. 21392 had attained finality, there being no
appeal nor motion for reconsideration interposed. Likewise, it is settled jurisprudence
that once a decision becomes final, the Court can no longer amend, modify, much
less set aside the same. 4 In fact, in Dueñas v. Mandi, 5 We held that the "trial court
and the appellate court may have committed an error in the assignment or partition of
the eight parcels of land to the parties in this case, but considering that their
judgments are now final, the error, assuming that one was committed, can no longer
be amended or corrected." In Icao v. Apalisok, 6 We ruled that even the subsequent
discovery of an erroneous imposition of a penalty will not justify correction of the
judgment after it has become final. We have also declared that, subject to settled
exceptions, once a judgment becomes final, all the issues between the parties are
deemed resolved and laid to rest. 7 To allow the Court of amend or reverse a decision
which has attained finality will result in endless litigations. 8 Indeed, every litigation,
CA-G.R. CV No. 21392 included, must come to an end.
Moreover, petitioner already had the opportunity to set aside the questioned order of
the trial court when its Motion to Set Aside and/or Annul the Order of Reconstitution,
filed more than a year after the issuance of the questioned order, was granted by the
trial court, however erroneous may be the procedure pursued and the consequently
relief granted. Petitioner then simply failed to maintain vigilance over its perceived
rights when it did not file a timely appeal from the adverse decision of the appellate
court, thus allowing the said decision to become final.
Besides, as early as 1910, in Grey Alba v. De la Cruz, 9 We already ruled that land
registration proceedings are proceedings in rem, not in personam, and therefore it is
not necessary to give personal notice to the owners or claimants of the land sought
to be registered, in order to vest the courts with power or authority over the res. 10
Thus, while it may be true that no notice was sent by registered mail to petitioner
when the judicial reconstitution of title was sought, such failure, however, did not
amount to a jurisdictional defect. 11 In Register of Deeds of Malabon v. RTC,
Malabon, Metro Manila, Br. 170, 12 We said that" [t]he purpose of the publication of
the notice of the petition for reconstitution in the Official Gazette is to apprise the
whole world that such a petition has been filed and that whoever is minded to oppose
it for good cause may do so within thirty (30) days before the date set by the court for
hearing the petition. It is the publication of such notice that brings in the whole world
as a party in the case and vests the court with jurisdiction to hear and decide it." Thus,
notice of hearing by proper publication in the Official Gazette is sufficient to clothe the
court with jurisdiction, and the mere fact that a person purporting to have a legitimate
claim in the property did not receive personal notice is not sufficient ground to
invalidate the proceedings.
Shorn of its finery, CA-G.R. SP No. 23773 merely re-echoes the issues raised in CA-
G.R. CV No. 21392 which as become res judicata. Verily, petitioner’s action to annul
the order of the trial court allowing reconstitution duplicates its earlier motion to set
aside the said order, which was granted but later reversed by the appellate court —
which reversal became final and executory due to petitioner’s failure to file an appeal
within the reglementary period. A party cannot, by varying the form of action or
adopting a different method of presenting his case, escape the operation of the
principle that one and the same cause of action shall not be twice litigated. 13
Be that as it may, there appears to be no cogent reason to disturb, as to other matters,
the findings and conclusions of the Court of Appeals in its decision in CA-G.R. CV
No. 21392, promulgated July 31, 1990, the same having become final and executory.
Accordingly, We affirm the assailed decision promulgated April 30, 1992, and
resolution issued June 26, 1991, by respondent Court of Appeals.
Meanwhile, the Court adverts to the Petition for Review filed in behalf of petitioner
Adez Realty, Inc., by ATTY. BENJAMIN M. DACANAY. On pages 2-4 of the Petition,
counsel purports to quote, as he does, the questioned decision when he alleges —
"The facts of the case, as found by the Court of Appeals, are the following:chanrob1es
virtual 1aw library
x x x
‘After trial on the merits, the lower court rendered the questioned order dated
November 20, 1984, without notice to the actual occupants of the property, Adez
Realty, granting the applicant’s petition for reconstitution in the name of the deceased
Elias Eugenio’" (Italics supplied)
However, the phrase "without notice to the actual occupants of the property, Adez
Realty, in the above quoted second paragraph on page 3 of the Petition for Review,
is not found in the decision penned by Associate Justice Manuel C. Herrera for
respondent Court of Appeals. It now appears as part of a material statement of fact
in the decision of the court a quo when actually it is not. This to Us is a prima facie
case of attempting to mislead 14 this Court, a serious offense which constitutes willful
disregard of a lawyer’s solemn duty to act at all times in a manner consistent with
truth.
53
ACCORDINGLY, the challenged decision and resolution of respondent Court of
Appeals in CA-G.R. SP No. 23773 are AFFIRMED and the instant petition is
DISMISSED.

ATTY. BENJAMIN M. DACANAY is ordered to SHOW CAUSE within five (5) days
from notice why he should not be disciplinary dealt with for intercalating a material
fact in the judgment of the court a quo thereby altering and modifying its factual
findings with the apparent purpose of misleading this Court in order to obtain a
favorable judgment, and thus failing to live up to the standards expected of a member
of the Bar.

Costs against petitioner Adez Realty Incorporated.

SO ORDERED.

54
ROLANDO TING, The herein respondents, heirs of Diego Lirio, namely: Flora A. Lirio, Amelia L. Roska,
Aurora L. Abejo, Alicia L. Dunque, Adelaida L. David, Efren A. Lirio and Jocelyn
Petitioner, Anabelle L. Alcover, who were afforded the opportunity to file an opposition to
petitioners application by Branch 21 of the Cebu RTC, filed their Answer[2] calling
- versus - attention to the December 10, 1976 decision in LRC No. N-983 which had become
final and executory on January 29, 1977 and which, they argued, barred the filing of
HEIRS OF DIEGO LIRIO, namely: FLORA A. LIRIO, AMELIA L. ROSKA, AURORA petitioners application on the ground of res judicata.
L. ABEJO, ALICIA L. DUNQUE, ADELAIDA L. DAVID, EFREN A. LIRIO and
JOCELYN ANABELLE L. ALCOVER, After hearing the respective sides of the parties, Branch 21 of the Cebu RTC, on
motion of respondents, dismissed petitioners application on the ground of res
Respondents. judicata. [3]

G.R. No. 168913 Hence, the present petition for review on certiorari which raises the sole issue of
Present: whether the decision in LRC No. N-983 constitutes res judicata in LRC No. 1437-N.
QUISUMBING, J., Chairperson,
Petitioner argues that although the decision in LRC No. N-983 had become final and
CARPIO, executory on January 29, 1977, no decree of registration has been issued by the Land
Registration Authority (LRA);[4] it was only on July 26, 2003 that the extinct decision
CARPIO MORALES, belatedly surfaced as basis of respondents motion to dismiss LRC No. 1437-N;[5] and
as no action for revival of the said decision was filed by respondents after the lapse
TINGA, and of the ten-year prescriptive period, the cause of action in the dormant judgment
pass[d] into extinction.[6]
VELASCO, JR., JJ.
Promulgated: Petitioner thus concludes that an extinct judgment cannot be the basis of res
March 14, 2007 judicata.[7]

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

DECISION The petition fails.

CARPIO MORALES, J.:
Section 30 of Presidential Decree No. 1529 or the Property Registration Decree
provides:

In a Decision of December 10, 1976 in Land Registration Case (LRC) No. N-983, then
Judge Alfredo Marigomen of the then Court of First Instance of Cebu, Branch 7,
granted the application filed by the Spouses Diego Lirio and Flora Atienza for
registration of title to Lot No. 18281 (the lot) of the Cebu Cadastral 12 Extension, Plan
Rs-07-000787.
SEC. 30. When judgment becomes final; duty to cause issuance of decree. The
judgment rendered in a land registration proceeding becomes final upon the
expiration of thirty days[8] to be counted from the date of receipt of notice of the
judgment. An appeal may be taken from the judgment of the court as in ordinary civil
cases.

The decision in LRC No. N-983 became final and executory on January 29, 1977.
Judge Marigomen thereafter issued an order of November 10, 1982 directing the Land
Registration Commission to issue the corresponding decree of registration and the
certificate of title in favor of the spouses Lirio.
On February 12, 1997, Rolando Ting (petitioner) filed with the Regional Trial Court
(RTC) of Cebu an application for registration of title to the same lot. The application
was docketed as LRC No. 1437-N.[1]
After judgment has become final and executory, it shall devolve upon the court to
forthwith issue an order in accordance with Section 39 of this Decree to the
Commissioner for the issuance of the decree of registration and the corresponding
certificate of title in favor of the person adjudged entitled to registration. (Emphasis
supplied)

55
In a registration proceeding instituted for the registration of a private land, with or
without opposition, the judgment of the court confirming the title of the applicant or
oppositor, as the case may be, and ordering its registration in his name constitutes,
when final, res judicata against the whole world.[9] It becomes final when no appeal
within the reglementary period is taken from a judgment of confirmation and
registration.[10]
The land registration proceedings being in rem, the land registration courts approval
in LRC No. N-983 of spouses Diego Lirio and Flora Atienzas application for
registration of the lot settled its ownership, and is binding on the whole world including
petitioner.
Explaining his position that the December 10, 1976 Decision in LRC No. N-983 had
become extinct, petitioner advances that the LRA has not issued the decree of
registration, a certain Engr. Rafaela Belleza, Chief of the Survey Assistance Section,
Land Management Services, Department of Environment and Natural Resources
(DENR), Region 7, Cebu City having claimed that the survey of the Cebu Cadastral
Extension is erroneous and all resurvey within the Cebu Cadastral extension must
first be approved by the Land Management Services of
the DENR, Region 7, Cebu City before said resurvey may be used in court; and that
the spouses Lirio did not comply with the said requirement for they instead submitted
to the court a mere special work order.[11]
There is, however, no showing that the LRA credited the alleged claim of Engineer
Belleza and that it reported such claim to the land registration court for appropriate
action or reconsideration of the decision which was its duty.
Petitioners insist that the duty of the respondent land registration officials to issue the
decree is purely ministerial. It is ministerial in the sense that they act under the orders
of the court and the decree must be in conformity with the decision of the court and
with the data found in the record, and they have no discretion in the matter. However,
if they are in doubt upon any point in relation to the preparation and issuance of the
decree, it is their duty to refer the matter to the court. They act, in this respect, as
officials of the court and not as administrative officials, and their act is the act of the
court. They are specifically called upon to extend assistance to courts in ordinary and
cadastral land registration proceedings.[12] (Emphasis supplied)
As for petitioners claim that under Section 6, Rule 39 of the Rules of Court reading:
SEC. 6. Execution by motion or by independent action. A final and executory
judgment or order may be executed on motion within five (5) years from the date of
its entry. After the lapse of such time, and before it is barred by the statute of
limitations, a judgment may be enforced by action. The revived judgment may also
be enforced by motion within five (5) years from the date of its entry and thereafter by
action before it is barred by the statute of limitations[,] the December 10, 1976
decision became extinct in light of the failure of respondents and/or of their
predecessors-in-interest to execute the same within the prescriptive period, the same
does not lie.
Sta. Ana v. Menla, et al.[13] enunciates the raison detre why Section 6, Rule 39 does
not apply in land registration proceedings, viz:
THAT THE LOWER COURT ERRED IN ORDERING THAT THE DECISION
RENDERED IN THIS LAND REGISTRATION CASE ON NOVEMBER 28, 1931 OR
TWENTY SIX YEARS AGO, HAS NOT YET BECOME FINAL AND
UNENFORCEABLE.
We fail to understand the arguments of the appellant in support of the above
assignment, except in so far as it supports his theory that after a decision in a land
registration case has become final, it may not be enforced after the lapse of a period
of 10 years, except by another proceeding to enforce the judgment or decision.
Authority for this theory is the provision in the Rules of Court to the effect that
judgment may be enforced within 5 years by motion, and after five years but within
10 years, by an action (Sec. 6, Rule 39.) This provision of the Rules refers to civil
actions and is not applicable to special proceedings, such as a land registration case.
This is so because a party in a civil action must immediately enforce a judgment that
is secured as against the adverse party, and his failure to act to enforce the same
within a reasonable time as provided in the Rules makes the decision unenforceable
against the losing party. In special proceedings the purpose is to establish a status,
condition or fact; in land registration proceedings, the
ownership by a person of a parcel of land is sought to be established. After the
ownership has been proved and confirmed by judicial declaration, no further
proceeding to enforce said ownership is necessary, except when the adverse or
losing party had been in possession of the land and the winning party desires to oust
him therefrom.
Furthermore, there is no provision in the Land Registration Act similar to Sec. 6, Rule
39, regarding the execution of a judgment in a civil action, except the proceedings to
place the winner in possession by virtue of a writ of possession. The decision in a
land registration case, unless the adverse or losing party is in possession, becomes
final without any further action, upon the expiration of the period for perfecting an
appeal.
x x x x (Emphasis and underscoring supplied)
WHEREFORE, the petition is, in light of the foregoing discussions, DENIED.
Costs against petitioner, Rolando Ting.
SO ORDERED.
56
[G.R. No. 133698. April 4, 2001]
ANTONIO TALUSAN and CELIA TALUSAN, petitioners, vs. HERMINIGILDO*
TAYAG and JUAN HERNANDEZ, respondents.
DECISION
PANGANIBAN, J.:
For purposes of real property taxation, the registered owner of a property is deemed
the taxpayer and, hence, the only one entitled to a notice of tax delinquency and the
resultant proceedings relative to an auction sale. Petitioners, who allegedly acquired
the property through an unregistered deed of sale, are not entitled to such notice,
because they are not the registered owners. Moral lessons: real property buyers must
register their purchases as soon as possible and, equally important, they must pay
their taxes on time.
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
assailing the November 20, 1997 Decision[1] of the Court of Appeals (CA) in CA-GR
CV No. 41586. The dispositive portion of the challenged Decision is hereunder
reproduced as follows:
WHEREFORE, premises considered, the appealed decision (dated February 4, 1993)
of the Regional Trial Court (Branch 7) in Baguio City in Civil Case No. 1456-R is
hereby AFFIRMED, with costs against plaintiffs/appellants.
Also assailed is the April 27, 1998 CA Resolution[2]which denied petitioners Motion
for Reconsideration.
The questioned CA ruling affirmed the Decision[3] of Branch 7 of the Regional Trial
Court (RTC) of Baguio City in Civil Case No. 1456-R. The RTC, in turn, dismissed an
action for the annulment of the auction sale of a condominium unit, covered by
Condominium Certificate of Title No. 651 and located in Building IV, Europa
Condominium Villas, Baguio City.
The Facts
The CA summarized the antecedents of this case in this wise:[4]
On June 28, 1988, [herein petitioners] filed a complaint wherein they alleged, inter
alia, that:
--They bought the subject property covered by Condominium Certificate of Title No.
651, from its former owner, Elias Imperial, as evidenced by a Deed of Absolute Sale:
--On October 15, 1985, [herein Respondent] Juan D. Hernandez, x x x sued x x x in
his capacity as City Treasurer of Baguio City, wrote a letter to the former owner Elias
Imperial informing him that the above described property would be sold at public
auction on December 9, 1985, x x x to satisfy the delinquent real estate taxes,
penalties and cost of sale, and demanded payment of the sum of P4,039.80,
representing total taxes due and penalties thereon;
--Elias Imperial and his entire family emigrated to Australia in 1974. Elias Imperial
never authorized a certain Dante Origan x x x to receive any letter or mail matter for
and on his behalf;
--[Respondent] Hernandez sold the above-described property to [Respondent] Tayag
for P4,400.00 without any notice to the former owner thereof, [or] to [petitioners], and
without compliance with the provisions of PD No. 464, as evidenced by the Certificate
of Sale;
--A final bill of sale was later issued in favor of the [Respondent] Hermenegildo Tayag.
The assessed value alone of the said property is P37,310.00 and the fair market value
of the same is more than P300,000.00 and both [respondents] knew these;
--The bid price of P4,400 is so unconscionably low and shocking to the conscience,
thus, the sale for the alleged unpaid taxes in the sum of P4,039.79, including penalties
is null and void ab initio;
--[Petitioners] have been in actual possession of the Unit in question, since they
bought the same from its former owners, and their possession is open, public,
continuous, adverse and in the concept of owners, while [Respondent] Hermegildo
Tayag has never been in possession of the said property;
--[Petitioners] through intermediaries offered to pay to the [respondents] the sum of
P4,400 plus all interests and expenses which [they] might have incurred x x x but said
offer was rejected without any just [or] lawful cause.
There is a need to issue a writ of preliminary injunction to preserve the status quo.
They asked for: moral damages of not less than P50,000.00; exemplary damages of
not less than P20,000.00; attorneys fee of P30,000.00, plus appearance fee of
P2,000.00 for every appearance; and litigation expenses of not less than P5,000.00
to prosecute the case. (pages 3-8 of the Record)
On July 14, 1988, [Respondent] Hermenegildo Tayag filed his [A]nswer with
[C]ounterclaim (pages 28-32 of the Record), wherein he substantially denied the
allegations in the complaint and, at the same time, raised the following affirmative
defenses, among others:
--(T)he ownership of the Condominium unit registered under Condominium Certificate
of Title No. 651, Baguio City, has been consolidated in his name by virtue of the
decision of the Regional Trial Court of Baguio, Branch 6, on September 16, 1987 x x
x . The said decision has [become] final and executory as evidenced by the Certificate
of Finality issued on October 8, 1987;
--[Petitioners have] no cause of action against him, he being a buyer in good faith in
a regular and lawful public bidding in which any person is qualified to participate.
57

--The lower court has no jurisdiction over [petitioners] claim because the [petitioners]
pray for the annulment of the Certificate of the Sale and the Final Bill of Sale, which
was affirmed by virtue of the decision of the Regional Trial Court of Baguio, Branch
6, on September 16, 1987 x x x. The said decision has [become] final and executory
as evidenced by the Certificate of Finality issued on October 8, 1987;
--The public auction sale complied with the requirements of Presidential Decree No.
464 hence, the same is lawful and valid:
--[Respondent] Tayag is not bound by the alleged [D]eed of [S]ale in favor of the
[petitioners] by Elias [I]mperial, because it was not registered and recorded with the
Registry of Deeds of Baguio City.
[Respondent] Tayag then prayed for the award in his favor, of: moral damages of at
least P50,000.00; exemplary damages; attorneys fees in the sum of P10,000.00; and,
expenses of litigation.
[Respondent] Hernandez likewise filed an [A]nswer on July 18. 1988, wherein he
denied the material averments in the complaint and stated that no irregularity or
illegality was committed in the conduct of the proceedings with respect to the
delinquent real property of Elias Imperial and the actuations of the defendant herein
were all within the limits of his authority and in accordance with the provisions of the
law pertaining to delinquent real property, particularly, P.D. 464 otherwise known as
the Real Property Tax Code and therefore, no damages may be imputed against him.
He also claimed, by way of affirmative defenses, that:
--The complaint states no cause of action against the [respondent] herein:
--[Petitioners] have not complied with x x x Section 83 of P.D. No. 464 x x x thus, the
case cannot prosper;
--Granting that a Deed of Sale was actually issued in favor of the plaintiffs [because
of] the fact that it is unregistered, the same does not bind third persons including
defendant herein.
In their Complaint, petitioners alleged that on December 7, 1981, they had acquired
the condominium from Elias Imperial, the original registered owner, for P100,000. The
sale was purportedly evidenced by a Deed of Sale which, however, had not and
thenceforth never been registered with the Register of Deeds.
Petitioners also averred that on December 9, 1985, Baguio City Treasurer Juan
Hernandez sold the property at a public auction due to nonpayment of delinquent real
estate taxes thereon. The property was sold to Respondent Herminigildo Tayag for
P4,400 which represented the unpaid taxes.
Thus, petitioners filed a Complaint seeking the annulment of the auction sale. They
cited irregularities in the proceedings and noncompliance with statutory requirements.
Dismissing the Complaint, Branch 7 of the RTC of Baguio City cited the December
16, 1987 judgment of Branch 6 of the same court in LRC Adm. Case No.207-R. This
earlier Branch 6 Decision had consolidated ownership of the condominium unit in
favor of Respondent Tayag. The Branch 7 Decision also cited the May 31, 1988 Order
of Branch 5 of the same court which had granted a Petition for the Cancellation of
Condominium Certificate of Title No. 651 in the name of Elias Imperial and directed
the Register of Deeds to issue a new Certificate of Title in the name of Respondent
Tayag. According to the trial court, the Decision in LRC Adm. Case No. 207-R had
already upheld the legality of the questioned auction sale. Hence, to rule again on the
same issue would amount to passing upon a judgment made by a coequal court,
contrary to the principle of conclusiveness of judgment.
Ruling of the CA
The appellate court affirmed the trial courts ruling and ratiocination. The CA explained
that LRC Adm. Case No. 207-R had already ruled on the validity of the auction sale
of the subject condominium unit. It further sustained the validity of that sale, because
the city treasurer complied with the requirements of notice, publication and posting. It
added that [i]f [petitioners] never received the notices sent to Elias Imperial, then they
have only themselves to blame for failing to register the deed of sale between them
and the former owner x x x.
Rejecting petitioners contention that the purchase price was inadequate, the CA ruled
that such inadequacy could not nullify the auction sale. It likewise held that petitioners
had not established bad faith on the part of respondents in conducting the auction
sale. Finally, it agreed with the latters contention that the former were remiss in
causing the registration of the sale in their favor of the subject property and they
likewise did not fulfill their obligation to pay taxes. It [is] thus clear x x x they should
only have themselves to blame. Laws exist to be followed, failing in which the price
must be paid.
Hence, this recourse.[5]
The Issues
Petitioners assigned the following alleged errors for the consideration of this Court:[6]
I. FIRST ASSIGNMENT OF ERROR
The Honorable Court of Appeals grievously erred in failing to consider that the
petitioners were deprived of their right to due process in this case due to the gross
and inexcusable negligence of their former counsel who failed to inform them of the
decision in this case and protect their interest.
II. SECOND ASSIGNMENT OF ERROR
The Honorable Court of Appeals grievously erred in failing to nullify the auction sale
of the subject property of petitioners due to alleged tax delinquency when there was
no compliance with the mandatory requirement of Section 46 of P.D. 464 that such
notice of delinquency of the payment of the property tax should be published.
58

III. THIRD ASSIGNMENT OF ERROR
The Honorable Court of Appeals grievously erred in failing to consider the lack of
personal notice of the sale for public auction of the subject property to its owner which
nullifies the said proceeding.
IV. FOURTH ASSIGNMENT OF ERROR
The Honorable Court of Appeals grievously erred in holding that the decision of the
trial court in the petition for the consolidation of the title case filed by the private
respondent in LRC Admin. Case 207 is a bar to this proceeding.
V. FIFTH ASSIGNMENT OF ERROR
The Honorable Court of Appeals erred in not nullifying the auction sale of subject
property on equitable considerations.
We deem it appropriate to simplify the issues in this wise: (1) whether the RTC
Decision in LRC Adm. Case No. 207-R is a bar to this proceeding; and (2) whether
the auction sale of the subject condominium unit should be annulled on the grounds
of (a) non-publication of the notice of delinquency for the payment of property tax, (b)
lack of personal notice of the sale or public auction of the subject property and (c)
equitable considerations. As a preliminary matter, we shall also consider petitioners
submission that they were deprived of due process because of their counsels failure
to inform them immediately of the receipt of the CA Decision.
Preliminary Matter:
Negligence of Petitioners Former Counsel
Petitioners aver that their former counsel informed them of the CA Decision only on
February 5, 1998, more than two months after he had received a copy on December
3, 1997. According to petitioners, their former counsels negligence effectively
deprived them of their right to due process.
We disagree. Notwithstanding its late filing, their Motion for Reconsideration was
accepted and considered by the CA. Hence, this issue has become moot, a fact which
petitioners themselves admitted in their Memorandum: As a matter of fact, in the very
resolution of the Court of Appeals of April 27, 1998 (Annex C to Petition) denying the
motion for reconsideration, wherein the matter of inexcusable negligence of counsel
in not informing petitioners immediately of the decision of the court a quo, were among
the grounds thereof, it was held that the issues raised therein had already been
considered in the Decision of November 20, 1997. The Court of Appeals obviously
considered that the Motion for Reconsideration was validly filed by petitioners so that
the Court of Appeals favorably considered the plea of petitioners to be afforded due
process by acting on the Motion for Reconsideration. Otherwise, it could have just
denied said Motion for late filing or simply noted the same without action.[7]
Moreover, petitioners themselves declared in their Reply Memorandum[8] that this
matter is no longer in issue: At any rate this issue was raised in the Motion for
Reconsideration of the Decision of the appellate court and obviously it was favorably
considered as the said Court denied the merit of said Motion by stating that the issues
raised have already been treated in the Decision, instead of outrightly denying the
same for late filing. Hence, this is no longer in issue in this proceeding.[9]
First Issue:
Bar by Earlier Judgment
Petitioners contend that the Decision in LRC Adm. Case No. 207-R, rendered by the
Regional Trial Court of Baguio City (Branch 6), did not preclude the filing of a separate
action to annul the auction sale. Citing Tiongco v. Philippine Veterans Bank,[10] they
aver that this RTC Branch had no jurisdiction to rule on the validity of that sale. Hence,
its Decision in the LRC case cannot bar the present proceedings.
Petitioners reliance on Tiongco is misplaced, considering that its factual incidents are
different from those of the present controversy. In that case, the trial court was acting
on a Petition for the Surrender of Certificates of Title. In LRC Adm. Case No. 207-R,
the trial court was faced with a Petition for Consolidation of Ownership. It had
jurisdiction to rule on all matters necessary for the determination of the issue of
ownership, including the validity of the auction sale.
Indeed, this Court in several cases[11]has previously declared that a petition for the
surrender of the owners duplicate certificate involves contentious questions which
should be threshed out in an ordinary case, because the land registration court has
no jurisdiction to try them.
Presidential Decree (PD) 1529, however, intended to avoid a multiplicity of suits and
to promote the expeditious termination of cases. In more recent cases,[12] therefore,
the Court declared that this Decree had eliminated the distinction between general
jurisdiction vested in the regional trial court and the latters limited jurisdiction when
acting merely as a land registration court. Land registration courts, as such, can now
hear and decide even controversial and contentious cases, as well as those involving
substantial issues.[13]
Thus, petitioners err in contending that the RTC is, in a land registration case, barred
from ruling on the validity of the auction sale. That court now has the authority to act
not only on applications for original registration, but also on all petitions filed after the
original registration of title. Coupled with this authority is the power to hear and
determine all questions arising upon such applications or petitions.[14] Especially
where the issue of ownership is ineluctably tied up with the question of registration,
the land registration court commits no error in assuming jurisdiction.[15]
It is equally important to consider that a land registration courts decision ordering the
confirmation and the registration of title, being the result of a proceeding in rem, binds
the whole world.[16] Thus, the trial courts ruling consolidating the ownership and the
title of the property in the name of herein respondent is valid and binding not only on
petitioners, but also on everyone else who may have any claim thereon.
59

Second Issue:
Validity of the Auction sale
Petitioners contend that the auction sale was invalid, because several requisites
regarding notice and publication were not satisfied. We are not convinced.
It has been held that matters of notice and publication in tax sales are factual
questions that cannot be determined by this Court.[17] Moreover, a recourse under
Rule 45 of the Rules of Court, as in this case, generally precludes the determination
of factual issues. This Court will not, as a rule, inquire into the evidence relied upon
by the lower courts to support their findings.[18] In this case, the CA had already ruled
on the question of compliance with the requirements of notice and publication in this
wise:
In the case at bench, it cannot be denied that the requirements of notice, publication
and posting have been complied with by the public defendant prior to the auction sale
wherein the subject condominium unit was sold. x x x Ergo, there was nothing
irregular in the questioned public auction -- thus, the validity of the same must be
upheld in accordance with the aforementioned cases.[19]
The CA ruling notwithstanding, we shall proceed to discuss these factual issues in
order to assure petitioners of a complete adjudication of their case, and not a mere
disposition of procedural technicalities.
The Non-Publication of Notice of Real Property Tax Delinquency
Petitioners assert that the tax sale should be annulled because of noncompliance with
the requirement of publication prescribed in Section 65 of PD 464.
In this regard, we note that unlike land registration proceedings which are in rem,
cases involving an auction sale of land for the collection of delinquent taxes are in
personam. Thus, notice by publication, though sufficient in proceedings in rem, does
not as a rule satisfy the requirement of proceedings in personam.[20] As such, mere
publication of the notice of delinquency would not suffice, considering that the
procedure in tax sales is in personam. It was, therefore, still incumbent upon the city
treasurer to send the notice of tax delinquency directly to the taxpayer in order to
protect the interests of the latter.
In the present case, the notice of delinquency was sent by registered mail to the
permanent address of the registered owner in Manila. In that notice, the city treasurer
of Baguio City directed him to settle the charges immediately and to protect his
interest in the property. Under the circumstances, we hold that the notice sent by
registered mail adequately protected the rights of the taxpayer, who was the
registered owner of the condominium unit.
For purposes of the real property tax, the registered owner of the property is deemed
the taxpayer. Hence, only the registered owner is entitled to a notice of tax
delinquency and other proceedings relative to the tax sale. Not being registered
owners of the property, petitioners cannot claim to have been deprived of such notice.
In fact, they were not entitled to it.
Lack of Personal Notice of the Sale or of the Public Auction of the Subject Property
Petitioners also contend that the registered owner was not given personal notice of
the public auction. They cite Section 73 of PD 464, the pertinent portion of which is
reproduced hereunder:
x x x. Copy of the notices shall forthwith be sent either by registered mail or by
messenger, or through messenger, or through the barrio captain, to the delinquent
taxpayer, at the address shown in the tax rolls or property tax records of the
municipality or city where the property is located, or at his residence, if known to said
treasurer or barrio captain. x x x. (Underscoring supplied by petitioners in their
Memorandum)
According to petitioners, the notice of public auction should have been sent to the
address appearing in the tax roll or property records of the City of Baguio. That
address is Unit No. 5, Baden #4105, Europa Condominium Villas, Baguio City; not
the known address or residence of the registered owner at 145 Ermin Garcia Street,
Cubao, Quezon City. They contend that notice may be sent to the residence of the
taxpayer, only when the tax roll does not show any address of the property.
The above-cited provision, however, shows that the determination of the taxpayers
address to which the notice may be sent is the treasurers discretionary prerogative.
In this case, the city treasurer deemed it best to send the notice of public auction to
the residence of the taxpayer. The former validly exercised this option, inasmuch as
the address of the latter was known to him. Moreover, it was more practical and
favorable to the registered owner that the notice of delinquency be sent to his
permanent residence in Manila, because he was using the subject condominium unit
merely as a vacation house and not as a residence.
This Court in Pecson v. Court of Appeals[21] made a clear and categorical ruling on
the matter, when it declared as follows:
Under the said provisions of law, notices of the sale of the public auction may be sent
to the delinquent taxpayer, either (I) at the address as shown in the tax rolls or
property tax record cards of the municipality or city where the property is located or
(ii) at his residence, if known to such treasurer or barrio captain. (emphasis supplied)
To reiterate, for purposes of the collection of real property taxes, the registered owner
of the property is considered the taxpayer. Although petitioners have been in
possession of the subject premises by virtue of an unregistered deed of sale, such
transaction has no binding effect with respect to third persons who have no knowledge
of it.
The importance of registration and its binding effect is stated in Section 51 of the
Property Registration Decree or PD 1529, which reads:
60
Sec. 51. Conveyance and other dealings by registered owner. - An owner of
registered land may convey, mortgage, lease, charge or otherwise deal with the same
in accordance with existing laws. He may use such forms, deeds, mortgages, leases
or other voluntary instrument as are sufficient in law. But no deed, mortgage, lease or
other voluntary instrument, except a will purporting to convey or effect registered land,
shall take effect as a conveyance or bind the land, but shall operate only as a contract
between the parties and as evidence of authority to the Registry of Deeds to make
registration.

The act of registration shall be the operative act to convey or affect the land insofar
as third persons are concerned, and in all cases under this Decree, the registration
shall be made in the Office of the Register of Deeds for the province or the city where
the land lies.

Thus, insofar as third persons are concerned, it is the registration of the deed of sale
that can validly transfer or convey a persons interest in a property.[22] In the absence
of registration, the registered owner whose name appears on the certificate of title is
deemed the taxpayer to whom the notice of auction sale should be sent. Petitioners,
therefore, cannot claim to be taxpayers. For this reason, the annulment of the auction
sale may not be invoked successfully.

The Annulment of the Auction Sale on Equitable Considerations

As correctly pointed out by respondents, equitable considerations will not find

application, if the statutes or rules of procedure explicitly provide for the requisites
and standards by which the matters at bench can be resolved.

While it may be assumed that both petitioners and Respondent Tayag are innocent
purchasers of the subject property, it is a well-settled principle that between two
purchasers, the one who has registered the sale in ones favor has a preferred right
over the other whose title has not been registered, even if the latter is in actual
possession of the subject property.[23]

Likewise, we cannot help but point out the fact that petitioners brought this misfortune
upon themselves. They neither registered the Deed of Sale after its execution nor
moved for the consolidation of ownership of title to the property in their name. Worse,
they failed to pay the real property taxes due. Although they had been in possession
of the property since 1981, they did not take the necessary steps to protect and
legitimize their interest.

Indeed, petitioners suit is now barred by laches.[24] The law helps the vigilant, but
not those who sleep on their rights, for time is a means of obliterating actions. Verily,
time runs against the slothful and the contemners of their own rights.[25]

WHEREFORE, the Petition is hereby DENIED and the assailed Decision and
Resolution AFFIRMED. Costs against petitioners.

SO ORDERED.

61
[ GR No. 12767, Nov 16, 1918 ]
IN MATTER OF ESTATE OF EMIL H. JOHNSON +
DECISION
39 Phil. 156
STREET, J.:
On February 4, 1916, Emil H. Johnson, a native of Sweden and a naturalized citizen
of the United States, died in the city of Manila, leaving a will, dated September 9,
1915, by which he disposed of an estate, the value of which, as estimated by him,
was P231,800. This document is an holographic instrument, being written in the
testator's own handwriting, and is signed by himself and two witnesses only, instead
of three witnesses required by section 618 of the Code of Civil Procedure. This will,
therefore, was not executed in conformity with the provisions of law generally
applicable to wills executed by inhabitants of these Islands, and hence could not have
been proved under section 618.
On February 9, 1916, however, a petition was presented in the Court of First Instance
of the city of Manila for the probate of this will, on the ground that Johnson was at the
time of his death a citizen of the State of Illinois, United States of America; that the
will was duly executed in accordance with the laws of that State; and hence could
properly be probated here pursuant to section 636 of the Code of Civil Procedure.
This section reads as follows:
"Will made here by alien. A will made within the Philippine Islands by a citizen or
subject of another state or country, which is executed in accordance with the law of
the state or country of which he is a citizen or subject, and which might be proved and
allowed by the law of his own state or country, may be proved, allowed, and recorded
in the Philippine Islands, and shall have the same effect as if executed according to
the laws of these Islands."
The hearing on said application was set for March 6, 1916, and three weeks
publication of notice was ordered in the "Manila Daily Bulletin." Due publication was
made pursuant to this order of the court. On March 6, 1916, witnesses were examined
relative to the execution of the will; and upon March 16th thereafter the document was
declared to be legal and was admitted to probate. At the same time an order was
made nominating Victor Johnson and John T. Pickett as administrators of the estate,
with the will annexed. Shortly thereafter Pickett signified his desire not to serve, and
Victor Johnson was appointed sole administrator.
By the will in question the testator gives to his brother Victor one hundred shares of
the corporate stock in the Johnson-Pickett Rope Company; to his father and mother
in Sweden, the sum of P20,000; to his daughter Ebba Ingeborg, the sum of P5,000;
to his wife, Alexandra Ibañez, the sum of P75 per month, if she remains single; to
Simeona Ibañez, spinster, P65 per month, if she remains single. The rest of the
property is left to the testator's five children Mercedes, Encarnacion, Victor, Eleonor
and Alberto.
The biographical facts relative to the deceased necessary to an understanding of the
case are these: Emil H. Johnson was born in Sweden, May 25, 1877, from which
country he emigrated to the United States and lived in Chicago, Illinois, from 1893 to
1898. On May 9, 1898, at Chicago, he was married to Rosalie Ackeson, and
immediately thereafter embarked for the Philippine Islands as a soldier in the Army of
the United States. As a result of relations between Johnson and Rosalie Ackeson a
daughter, named Ebba Ingeborg, was born a few months after their marriage. This
child was christened in Chicago by a pastor of the Swedish Lutheran Church upon
October" 16, 1898.
After Johnson was discharged as a soldier from the service of the United States he
continued to live in the Philippine Islands, and on November 20, 1902, the wife,
Rosalie Johnson, was granted a decree of divorce from him in the Circuit Court of
Cook County, Illinois, on the ground of desertion. A little later Johnson appeared in
the United States on a visit and on January 10, 1903, procured a certificate of
naturalization at Chicago. From Chicago he appears to have gone to Sweden, where
a photograph, exhibited in evidence in this case, was taken in which he appeared in
a group with his father, mother, and the little daughter, Ebba Ingeborg, who was then
living with her grandparents in Sweden. When this visit was concluded, the deceased
returned to Manila, where he prospered in business and continued to live until his
death.
In this city he appears to have entered into marital relations with Alejandra Ibañez, by
whom he had three children, to wit, Mercedes, baptized May 31, 1903; Encarnacion,
baptized April 29, 1906; and Victor, baptized December 9, 1907. The other two
children mentioned in the will were borne to the deceased by Simeona Ibañez.
On June 12, 1916, or about three months after the will had been probated, the
attorneys for Ebba Ingeborg Johnson entered an appearance in her behalf and noted
an exception to the order admitting the will to probate. On October 31, 1916, the same
attorneys moved the court to vacate the order of March 16 and also various other
orders in the case. On February 20, 1917, this motion was denied, and from this action
of the trial court the present appeal has been perfected.
As will be discerned, the purpose of the proceeding on behalf of the petitioner is to
annul the decree of probate and put the estate into intestate administration, thus
preparing the way for the establishment of the claim of the petitioner as the sole
legitimate heir of her father.
The grounds upon which the petitioner seeks to avoid the probate are four in number
and may be stated, in the same sequence in which they are set forth in the petition,
as follows:
(1) Emil H. Johnson was a resident of the city of Manila and not a resident of the State
of Illinois at the time the will in question was executed;
(2) The will is invalid and inadequate to pass real and personal property in the State
of Illinois;
(3) The order admitting the will to probate was made without notice to the petitioner;
and
(4) The order in question was beyond the jurisdiction of the court.
62

It cannot of course be maintained that a court of first instance lacks essential
jurisdiction over the probate of wills. The fourth proposition above stated must,
accordingly, be interpreted in relation with the third and must be considered as a
corollary deduced from the latter. Moreover, both the third and fourth grounds stated
take precedence, by reason of their more fundamental implications, over the first two;
and a logical exposition of the contentions of the petitioner is expressed in the two
following propositions:
"(I) The order admitting the will to probate was beyond the jurisdiction of the court and
Void because made without notice to the petitioner;
"(II) The judgment from which the petitioner seeks relief should be set aside because
the testator was not a resident of the State of Illinois and the will was not in conformity
with the laws of that State."
In the discussion which is to follow we shall consider the problems arising in this case
in the order last above indicated. Upon the question, then, of the jurisdiction of the
court, it is apparent from an inspection of the record of the proceedings in the court
below that all the steps prescribed by law as prerequisites to the probate of a will were
complied with in every respect and that the probate was effected in external
conformity with all legal requirements. This much is unquestioned. It is, however,
pointed out in the argument submitted in behalf of the petitioner, that, at the time the
court made the order of publication, it was apprised of the fact that the petitioner lived
in the United States and that as daughter and heir she was necessarily interested in
the probate of the will. It is, therefore, insisted that the court should have appointed a
date for the probate of the will sufficiently far in the future to permit the petitioner to
be present either in person or by representation; and it is said that the failure of the
court thus to postpone the probate of the will constitutes an infringement of that
provision of the Philippine Bill which declares that property shall not be taken without
due process of law.
On this point we are of the opinion that the proceedings for the probate of the will
were regular and that the publication was sufficient to give the court jurisdiction to
entertain the proceeding and to allow the will to be probated.
As was said in the case of In re Davis (136 Cal., 590, 596), "the proceeding as to the
probate of a will is essentially one in rem, and in the very nature of things the state is
allowed a wide latitude in determining the character of the constructive notice to be
given to the world in a proceeding where it has absolute possession of the res. It
would be an exceptional case where a court would declare a statute void, as depriving
a party of his property without due process of law, the proceeding being strictly in rem,
and the res within the state, upon the ground that the constructive notice prescribed
by the statute was unreasonably short."
In that case the petitioner had been domiciled in the Hawaiian Islands at the time of
the testator's death; and it was impossible, in view of the distance and means of
communication then existing, for the petitioner to appear and oppose the probate on
the day set for the hearing in California. It was nevertheless held that publication in
the manner prescribed by statute constituted due process of law. (See Estate of
Davis, 151 Cal., 318; Tracy vs. Muir, 151 Cal., 363.)
In the Davis case (136 Cal., 590) the court commented upon the act that, under the
laws of California, the petitioner had a full year within which she might have instituted
a proceeding to contest the will; and this was stated as one of the reasons for holding
that publication in the manner provided by statute was sufficient. The same
circumstance was commented upon in O'Callaghan vs. O'Brien (199 U. S., 89),
decided in the Supreme Court of the United States. This case arose under the laws
of the State of Washington, and it was alleged that a will had been there probated
without the notice of application for probate having been given as required by law. It
was insisted that this was an infringement of the Fourteenth Amendment of the
Constitution of the United States. This contention was, however, rejected and it was
held that the statutory right to contest the will within a year was a complete refutation
of the argument founded on the idea of a violation of the due process provision.
The laws of these Islands, in contrast with the laws in force in perhaps all of the States
of the American Union, contain no special provision, other than that allowing an
appeal in the probate proceedings, under which relief of any sort can be obtained
from an order of a court of first instance improperly allowing or disallowing a will. We
do, however, have a provision of a general nature authorizing a court under certain
circumstances to set aside any judgment, order, or other proceeding whatever. This
provision is found in section 113 of the Code of Civil Procedure, which reads as
follows:
"Upon such terms as may be just the court may relieve a party or his legal
representative from a judgment, ordeor other proceeding taken against him through
his mis take, inadvertence, surprise or excusable neglect; Provided, That application
therefor be made within a reasonable time, but in no case exceeding six months after
such judgment, order, or proceeding was taken."
The use of the word "judgment, order or other proceeding" in this section indicates an
intention on the part of the Legislature to give a wide latitude to the remedy here
provided, and in our opinion its operation is not to be restricted to judgments or orders
entered in ordinary contentious litigation where a plaintiff impleads a defendant and
brings him into court by personal service of process. In other words the utility of the
provision is not limited to actions proper but extends to all sorts of judicial
proceedings.
In the second section of the Code of Civil Procedure it is declared that the provisions
of this Code shall be liberally construed to promote its object and to assist the parties
in obtaining speedy justice. We think that the intention thus exhibited should be
applied in the interpretation of section 113; and we hold that the word "party," used in
this section, means any person having an interest in the subject matter of the
proceeding who is in a position to be concluded by the judgment, order, or other
proceeding taken.
The petitioner, therefore, in this case could have applied, under the section cited, at
any time within six months from March 16, 1916, and upon showing that she had been
precluded from appearing in the probate proceedings by conditions over which she
63
had no control and that the order admitting the will to probate had been erroneously
entered upon insufficient proof or upon a supposed state of facts contrary to the truth,
the court would have been authorized to set the probate aside and grant a rehearing.
It is no doubt true that six months was, under the circumstances, a very short period
of time within which to expect the petitioner to appear and be prepared to contest the
probate with the proof which she might have desired to collect from remote countries.
Nevertheless, although the time allowed for the making of such application was
inconveniently short, the remedy existed; and the possibility of its use is proved in this
case by the circumstance that on June 12, 1916, she in fact here appeared in court
by her attorneys and excepted to the order admitting the will to probate.
It results that, in conformity with the doctrine announced in the Davis case, above
cited, the proceedings in the court below were conducted in such manner as to
constitute due process of law. The law supplied a remedy by which the petitioner
might have gotten a hearing and have obtained relief from the order by which she is
supposed to have been injured; and though the period within which the application
should have been made was short, the remedy was both possible and practicable.
From what has been said it follows that the order of March 16, 1916, admitting the will
of Emil H. Johnson to probate cannot be declared null and void merely because the
petitioner was unavoidably prevented from appearing at the Original hearing upon the
matter of the probate of the will in question. Whether the result would have been the
same if our system of procedure had contained no such provision as that expressed
in section 113 is a matter which we need not here consider.
Intimately connected with the question of the jurisdiction of the court, is another matter
which may be properly discussed at this juncture. This relates to the interpretation to
be placed upon section 636 of the Code of Civil Procedure. The position is taken by
the appellant that this section is applicable only to wills of aliens; and in this
connection attention is directed to the fact that the epigraph of this section speaks
only of the will made here by an alien and to the further fact that the word "state" in
the body of the section is not capitalized. From this it is argued that section 636 is not
applicable to the will of a citizen of the United States residing in these Islands.
We consider these suggestions of little weight and are of the opinion that, by the most
reasonable interpretation of the language used in the statute, the words "another state
or country" include the United States and the States of the American Union, and that
the operation of the statute is not limited to wills of aliens. It is a rule of hermeneutics
that punctuation and capitalization are aids of low degree in interpreting the language
of a statute and can never control against the intelligible meaning of the written words.
Furthermore, the epigraph, or heading, of a section, being nothing more than a
convenient index to the contents of the provision, cannot have the effect of limiting
the operative words contained in the body of the text. It results that if Emil H. Johnson
was at the time of his death a citizen of the United States and of the State of Illinois,
his will was provable under this section in the courts of the Philippine Islands, provided
the instrument was so executed as to be admissible to probate under the laws of the
State of Illinois.
We are thus brought to consider the second principal proposition stated at the outset
of this discussion, which raises the question whether the order of probate can be set
aside in this proceeding on the other ground stated in the petition, namely, that the
testator was not a resident of the State of Illinois and that the will was not made in
conformity with the laws of that State.
The order of the Court of First Instance admitting the will to probate recites, among
other things:
"That upon the date when the will in question was executed Emil H. Johnson was a
citizen of the United States, naturalized in the State of Illinois, County of Cook, and
that the will in question was executed in conformity with the dispositions of the law of
the State of Illinois,"
We consider this equivalent to a finding that upon the date of the execution of the will
the testator was a citizen of the State of Illinois and that the will was executed in
conformity with the laws of that State. Upon the last point the finding is express; and
in our opinion the statement that the testator was a citizen of the United States,
naturalized in the State of Illinois, should be taken to imply that he was a citizen of the
State of Illinois, as well as of the United States.
The naturalization laws of the United States require, as a condition precedent to the
granting of the certificate of naturalization, that the applicant should have resided at
least five years in the United States and for one year within the State or territory where
the court granting the naturalization papers is held; and in the absence of clear proof
to the contrary it should be presumed that a person naturalized in a court of a certain
State thereby becomes a citizen of that State as well as of the United States.
In this connection it should be remembered that the Fourteenth Amendment to the
Constitution of the United States declares, in its opening words, that all persons
naturalized in the United States, and subject to the jurisdiction thereof, are citizens of
the United States and of the State wherein they reside.
It is noteworthy that the petition by which it is sought to annul the probate of this will
does not assert that the testator was not a citizen of Illinois at the date when the will
was executed. The most that is said on this point is he was "never a resident of the
State of Illinois after the year 1898, but became and was a resident of the city of
Manila," etc. But residence in the Philippine Islands is compatible with citizenship in
Illinois; and it must be considered that the allegations of the petition on this point are,
considered in their bearing as an attempt to refute citizenship in Illinois, wholly
insufficient.
As the Court of First Instance found that the testator was a citizen of the State of
Illinois and that the will was executed in conformity with the laws of that State, the will
was necessarily and properly admitted to probate. And how is it possible to evade the
effect of these findings ?
In section 625 of the Code of Civil Procedure it is declared that "the allowance by the
court of a will of real or personal property shall be conclusive as to its due execution."
The due execution of a will involves conditions relating to a number of matters, such
as the age and mental capacity of the testator, the signing of the document by the
64
testator, or by someone in his behalf, and the acknowledgment of the instrument by
him in the presence of the required number of witnesses who affix their signatures to
the will to attest the act. The proof of all these requisites is involved in the probate;
and as to each and all of them the probate is conclusive. (Castañeda vs. Alemany, 3
Phil. Rep., 426; Pimentel vs. Palanca, 5 Phil. Rep., 436; Chiong Joc-Soy vs. Vaño, 8
Phil. Rep., 119; Sanchez vs. Pascual, 11 Phil. Rep., 395; Montafiano vs. Suesa, 14
Phil. Rep., 676.)
Our reported cases do not contain the slightest intimation that a will which has been
probated according to law, and without fraud, can be annulled, in any other
proceeding whatever, on account of any supposed irregularity or defect in the
execution of the will or on account of any error in the action of the court upon the proof
adduced before it. This court has never been called upon to decide whether, in case
the probate of a will should be procured by fraud, relief could be granted in some other
proceeding; and no such question is now presented. But it is readily seen that if fraud
were alleged, this would introduce an entirely different factor in the case. In Austria
vs. Ventenilla (21 Phil. Rep., 180, 184), it was suggested but not decided that relief
might be granted in case the probate of a will were procured by fraud.
The circumstance that the judgment of the trial court recites that the will was executed
in conformity with the law of Illinois and also, in effect, that the testator was a citizen
of that State places the judgment upon an unassailable basis so far as any supposed
error apparent upon the face of the judgment is concerned. It is, however, probable
that even if the judgment had not contained these recitals, there would have been a
presumption from the admission of the will to probate as the will of a citizen of Illinois
that the facts were as recited in the order of probate.
As was said by this court in the case of Banco Español-Filipino vs. Palanca (37 Phil.
Rep., 921), "There is no principle of law better settled than that after jurisdiction has
once been acquired, every act of a court of general jurisdiction shall be presumed to
have been rightly done. This rule is applied to every judgment or decree rendered in
the various stages of the proceedings from their initiation to their completion
(Voorhees vs. United States Bank, 10 Pet., 314; 35 U. S., 449); and if the record is
silent with respect to any fact which must have been established before the court
could have rightly acted, it will be presumed that such fact was properly brought to its
knowledge."
The Court of First Instance is a court of original and general jurisdiction; and there is
no difference in its faculties in this respect whether exercised in matters of probate or
exerted in ordinary contentious litigation. The trial court therefore necessarily had the
power to determine the facts upon which the propriety of admitting the will to probate
depended; and the recital of those facts in the judgment was probably not essential
to its validity. No express ruling is, however, necessary on this point.
What has been said effectually disposes of the petition considered in its aspect as an
attack upon the order of probate for error apparent on the face of the record. But the
petitioner seeks to have the judgment reviewed, it being asserted that the findings of
the trial court especially on the question of the citizenship of the testator are not
supported by the evidence. It needs but a moment's reflection, however, to show that
in such a proceeding as this it is not possible to reverse the original order on the
ground that the findings of the trial court are unsupported by the proof adduced before
that court. The only proceeding in which a review of the evidence can be secured is
by appeal, and the case is not before us upon appeal from the original order admitting
the will to probate. The present proceedings by petition to set aside the order of
probate, and the appeal herein is from the order denying this relief. It is obvious that
on appeal from an order refusing to vacate a judgment it is not possible to review the
evidence upon which the original judgment was based. To permit this would operate
unduly to protract the right of appeal.
However, for the purpose of arriving at a just conception of the case from the point of
view of the petitioner, we propose to examine the evidence submitted upon the
original hearing, in connection with the allegations of the petition, in order to see, first,
whether the evidence submitted to the trial court was sufficient to justify its findings,
and, secondly, whether the petition contains any matter which would justify the court
in setting the judgment, aside. In this connection we shall for a moment ignore the
circumstance that the petition was filed after the expiration of the six months allowed
by section 113 of the Code of Civil Procedure.
The principal controversy is over the citizenship of the testator. The evidence adduced
upon this point in the trial court consists of the certificate of naturalization granted
upon January 10, 1903, in the Circuit Court of Cook County, Illinois, in connection
with certain biographical facts contained in the oral evidence. The certificate of
naturalization supplies incontrovertible proof that upon the date stated the testator
became a citizen of the United States, and inferentially also a citizen of said State. In
the testimony submitted to the trial court it appears that, when Johnson first came to
the United States as a boy, he took up his abode in the State of Illinois and there
remained until he came as a soldier in the United States Army to the Philippine
Islands. Although he remained in these Islands for sometime after receiving his
discharge, no evidence was adduced showing that at the time he returned to the
United States, in the autumn of 1902, he had then abandoned Illinois as the State of
his permanent domicile; and on the contrary the certificate of naturalization itself
recites that at that time he 'claimed to be a resident of Illinois.
Now, if upon January 10, 1903, the testator became a citizen of the United States and
of the State of Illinois, how has he lost the character of citizen with respect to either
of these jurisdictions? There is no law in force by virtue of which any person of foreign
nativity can become a naturalized citizen of the Philippine Islands; and it was,
therefore, impossible for the testator, even if he had so desired, to expatriate himself
from the United States and change his political status from a citizen of the United
States to a citizen of these Islands. This being true, it is to be presumed that he
retained his citizenship in the State of Illinois along with his status as a citizen of the
United States. It would be novel doctrine to Americans living in the Philippine Islands
to be told that by living here they lose their citizenship in the State of their
naturalization or nativity.
We are not unmindful of the fact that when a citizen of one State leaves it and takes
up his abode in another State with no intention of. returning, he immediately acquires
citizenship in the State of his new domicile. This is in accordance with that provision
of the Fourteenth Amendment to the Constitution of the United states which says that
every citizen of the United States is a citizen of the State wherein he resides. The
65
effect of this provision necessarily is that a person transferring his domicile from one
State to another loses his citizenship in the State of his original abode upon acquiring
citizenship in the State of his new abode. The acquisition of the new State citizenship
extinguishes the old. That situation, in our opinion, has no analogy to that which arises
when a citizen of an American State conies to reside in the Philippine Islands. Here
he cannot acquire a new citizenship; nor by the mere change of domicile does he lose
that which he brought with him.
The proof adduced before the trial court must therefore be taken as showing that, at
the time the will was executed, the testator was, as stated in the order of probate, a
citizen of the State of Illinois. This, in connection with the circumstance that the
petition does not even so much as deny such citizenship but only asserts that the
testator was a resident of the Philippine Islands, demonstrates the impossibility of
setting the probate aside for lack of the necessary citizenship on the part of the
testator. As already observed, the allegation of the petition on this point is wholly
insufficient to justify any relief whatever.
Upon the other point as to whether the will was executed in conformity with the
statutes of the State of Illinois we note that it does not affirmatively appear from the
transcription of the testimony adduced in the trial court that any witness was examined
with reference to the law of Illinois on the subject of the execution of will. The trial
judge no doubt was satisfied that the will was properly executed by examining section
1874 of the Revised Statutes of Illinois, as exhibited in volume 3 of Starr & Curtis's
Annotated Illinois Statutes, 2nd ed., p. 426; and he may have assumed that he could
take judicial notice of the laws of Illinois under section 275 of the Code of Civil
Procedure. If so, he was in our opinion mistaken. That section authorizes the courts
here to take judicial notice, among other things, of the acts of the legislative
department of the United States. These words clearly have reference to Acts of the
Congress of the United States; and we would hesitate to hold that our courts can,
under this provision, take judicial notice of the multifarious laws of the vari6us
American States. Nor do we think that any such authority can be derived from the
broader language, used in the same section, where it is said that our courts may take
judicial notice of matters of public knowledge "similar" to those therein enumerated.
The proper rule we think is Hto require proof of the statutes of the States of the
American Union whenever their provisions are determinative of the issues in any
action litigated in the Philippine courts.
Nevertheless, even supposing that the trial court may have erred in taking judicial
notice of the law of Illinois on the point in question, such error is not now available to
the petitioner, first, because the petition does not state any fact from which it would
appear that the law of Illinois is different from what the court found, and, secondly,
because the assignment of error and argument for the appellant in this court raises
no question based on such supposed error. Though the trial court may have acted
upon pure conjecture as to the law prevailing in the State of Illinois, its judgment could
not be set aside, even upon application made within six months under section 113 of
the Code of Civil Procedure, unless it should be made to appear affirmatively that the
conjecture was wrong. The petitioner, it is true, states in general terms that the will in
question is invalid and inadequate to pass real and personal property in the State of
Illinois, but this is merely a conclusion of law. The affidavits by which the petition is
accompanied contain no reference to the subject, and we are cited to no authority in
the appellant's brief which might tend to raise a doubt as to the correctness of the
conclusion o,f the trial court. It is very clear, therefore, that this point cannot be urged
as of serious moment.
But it is insisted in the brief for the appellant that the will in question was not properly
admissible to probate because it contains provisions which cannot be given effect
consistently with the laws of the Philippine Islands; and it is suggested that as the
petitioner is a legitimate heir of the testator she cannot be deprived of the legitime to
which she is entitled under the law governing testamentary successions in these
Islands. Upon this point it is sufficient to say that the probate of the will does not affect
the intrinsic validity of its provisions, the decree of probate being conclusive only as
regards the due execution of the will. (Code of Civil Procedure, secs. 625, 614;
Sahagun vs. De Gorostiza, 7 Phil. Rep., 347, 349; Chiong Joc-Soy vs. Vaño, 8 Phil.
Rep., 119, 121; Limjuco vs. Ganara, 11 Phil. Rep., 393, 395.)
If, therefore, upon the distribution of this estate, it should appear that any legacy given
by the will or other disposition made therein is contrary to the law applicable in such
case, the will must necessarily yield upon that point and the law must prevail.
Nevertheless, it should not be forgotten that the intrinsic validity of the provisions of
this will must be determined by the law of Illinois arid not, as the appellant apparently
assumes, by the general provisions here applicable in such matters; for in the second
paragraph of article 10 of the Civil Code it is declared that "legal and testamentary
successions, with regard to the order of succession, as well as to the amount of the
successional rights and to the intrinsic validity of their provisions, shall be regulated
by the laws of the nation of the person whose succession is in question, whatever
may be the nature of the property and the country where it may be situate."
From what has been said, it is, we think, manifest that the petition submitted to the
court below on October 31, 1916, was entirely insufficient to warrant the setting aside
of the order probating the will in question, whether said petition be considered as an
attack on the validity of the decree for error apparent, or whether it be considered as
an application for a rehearing based upon the new evidence submitted in the affidavits
which accompany the petition. And in this latter aspect the petition is subject to the
further fatal defect that it was not presented within the time allowed by law.
It follows that the trial court committed no error in denying the relief sought. The order
appealed from is accordingly affirmed with costs. So ordered.
66
[G.R. No. 150656. April 29, 2003]
MARGARITA ROMUALDEZ-LICAROS, petitioner, vs. ABELARDO B. LICAROS,
respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review on certiorari[1] to annul the Decision[2] dated 9 August
2001 of the Court of Appeals in CA-G.R. SP No. 58487, as well as the Resolution
dated 23 October 2001 denying the motion for reconsideration. The Court of Appeals
dismissed the petition to annul the following decisions[3] rendered by Branch 143 of
the Regional Trial Court of Makati:
(1) The Decision dated 27 December 1990[4] granting the dissolution of the conjugal
partnership of gains of the spouses Abelardo B. Licaros and Margarita Romualdez-
Licaros;
(2) The Decision dated 8 November 1991[5] declaring the marriage between the same
spouses null and void.
The Facts
The antecedent facts as found by the Court of Appeals are as follows:
x x x Abelardo Licaros (Abelardo, for short) and Margarita Romualdez-Licaros
(Margarita, hereafter) were lawfully married on December 15, 1968. Out of this marital
union were born Maria Concepcion and Abelardo, Jr. Ironically, marital differences,
squabbles and irreconcilable conflicts transpired between the spouses, such that
sometime in 1979, they agreed to separate from bed and board.
In 1982, Margarita left for the United States and there, to settle down with her two (2)
children. In the United States, on April 26, 1989, Margarita applied for divorce before
the Superior Court of California, County of San Mateo (Annex 1, Rejoinder, pp. 164-
165) where she manifested that she does not desire counseling at that time
(Quotation, p. 166, Rollo). On August 6, 1990, Margarita was granted the decree of
divorce (Annex 2, Answer, p. 108, Rollo) together with a distribution of properties
between her and Abelardo (pp. 167-168, Rollo).
Not long after, on August 17, 1990, Abelardo and Margarita executed an Agreement
of Separation of Properties (pp. 60-64, Rollo). This was followed-up by a petition filed
on August 21, 1990 before the Regional Trial Court of Makati for the dissolution of the
conjugal partnership of gains of the spouses and for the approval of the agreement of
separation of their properties. This was docketed as Special Proceeding No. 2551.
On December 27, 1990, a decision was issued granting the petition and approving
the separation of property agreement.
For his part, on June 24, 1991, Abelardo commenced Civil Case No. 91-1757, for the
declaration of nullity of his marriage with Margarita, based on psychological incapacity
under the New Family Code. As Margarita was then residing at 96 Mulberry Lane,
Atherton, California, U.S.A., Abelardo initially moved that summons be served
through the International Express Courier Service. The court a quo denied the motion.
Instead, it ordered that summons be served by publication in a newspaper of general
circulation once a week for three (3) consecutive weeks, at the same time furnishing
respondent a copy of the order, as well as the corresponding summons and a copy
of the petition at the given address in the United States through the Department of
Foreign Affairs, all at the expense of Abelardo. Respondent was given sixty (60) days
after publication to file a responsive pleading.
On July 15, 1991, Process Server, Maximo B. Dela Rosa, submitted his Officers
Return quoted hereunder:
OFFICERS RETURN
THIS IS TO CERTIFY that on July 3, 1991, I have served a copy of summons and
complaint with annexes together with order dated June 28, 1991 issued by the Court
in the above-entitled case upon defendant Margarita Romualdez-Licaros c/o DFA.
(sent by Mail) thru Pat G. Martines receiving Clerk of Department of Foreign Affairs a
person authorized to receive this kind of process who acknowledged the receipt
thereof at ADB Bldg., Roxas Blvd., Pasay City, Metro Manila. (p. 40, Rollo)
As required by law, the case was referred to Trial Prosecutor Bruselas, Jr. to find out
any possible collusion between the parties in the case. Thereafter, with the negative
report of collusion, Abelardo was allowed to present his evidence ex-parte. On
November 8, 1991, the Decision (Annex A, Petition) was handed down in Civil Case
No. 91-1757 declaring the marriage between Abelardo and Margarita null and void.
Almost nine (9) years later, on April 28, 2000, the petition at bench was commenced
when Margarita received a letter dated November 18, 1991 from a certain Atty. Angelo
Q. Valencia informing her that she no longer has the right to use the family name
Licaros inasmuch as her marriage to Abelardo had already been judicially dissolved
by the Regional Trial Court of Makati on November 8, 1991. Asseverating to have
immediately made some verifications and finding the information given to be true,
petitioner commenced the instant petition on the following grounds:
(A) THERE WAS EXTRINSIC FRAUD IN THE PREPARATION AND FILING BY
ABELARDO OF THE PETITION FOR DISSOLUTION OF THE CONJUGAL
PARTNERSHIP OF GAINS AND ITS ANNEX, THE AGREEMENT OF SEPARATION
OF PROPERTIES.
(B) THE TRIAL COURT LACKED JURISDICTION TO HEAR AND DECIDE THE
PETITION FOR DECLARATION OF NULLITY OF MARRIAGE.[6]
The Ruling of the Court of Appeals
The Court of Appeals debunked the claim of Margarita that there was extrinsic fraud
in the preparation and filing by Abelardo of the Petition for Dissolution of Conjugal
67
Partnership of Gains and its annex, the Agreement of Separation of Properties. The
Court of Appeals stated:
x x x, the extrinsic fraud alluded to consists of Abelardo coercing Margarita into
signing the petition to dissolve their conjugal partnership of gains together with the
agreement of separation of properties, by threatening to cut-off all financial and
material support of their children then still studying in the United States; that petitioner
had no hand directly or indirectly in the preparation of the petition and agreement of
separation of properties; that petitioner never met the counsel for the petitioner, nor
the notary public who notarized the deed; and, petitioner never received any notice of
the pendency of the petition nor a copy of the decision.
Antithetically, a meticulous perusal of the controversial petition (Annex B-1) and the
agreement of separation of properties (pp. 60-64, Rollo) readily shows that the same
were signed by the petitioner on the proper space after the prayer and on the portion
for the verification of the petition. The same is true with the agreement of separation
of properties. What is striking to note is that on August 6, 1990, Margarita appeared
before Amado P. Cortez, Consul of the Republic of the Philippines at the San
Francisco, California, United States Consulate Office, to affirm and acknowledge
before said official that she executed the agreement of separation of properties of her
own free will and deed, after being informed of the contents thereof. And yet, there is
no showing that Abelardo was with her at the Philippine Consulate Office in confirming
the separation of property agreement. Moreover, on page 2 of the same agreement,
it is specifically stated that such property separation document shall be subject to
approval later on by the proper court of competent jurisdiction. The clear import of this
is that the agreement must have to be submitted before the proper court for approval,
which explains and confirms petitioners signature on the petition filed in court.
In main, We see no indication nor showing of coercion or fraud from these facts, which
could very well be considered as extrinsic or collateral fraud to justify a petition under
Rule 47. From all indications, the pretended coerced documents were rather freely
and voluntarily executed by the parties therein knowing fully well the imports thereof.
This conclusion finds more weight if We consider the fact that the separation of
property was fully implemented and enforced, when apparently both parties
correspondingly received the properties respectively assigned to each of them under
the said document.[7]
The Court of Appeals also rejected Margaritas claim that the trial court lacked
jurisdiction to hear and decide the Petition for Declaration of Nullity of Marriage for
improper service of summons on her. The case involves the marital status of the
parties, which is an action in rem or quasi in rem. The Court of Appeals ruled that in
such an action the purpose of service of summons is not to vest the trial court with
jurisdiction over the person of the defendant, but only to comply with due process.
The Court of Appeals concluded that any irregularity in the service of summons
involves due process which does not destroy the trial courts jurisdiction over the res
which is the parties marital status. Neither does such irregularity invalidate the
judgment rendered in the case. Thus, the Court of Appeals dismissed the petition for
annulment of judgment, stating that:
At bar, the case involves the personal (marital) status of the plaintiff and the
defendant. This status is the res over which the Philippine court has acquired
jurisdiction. This is also the kind of action which the Supreme Court had ruled that
service of summons may be served extraterritorially under Section 15 (formerly
Section 17) of Rule 14 and where such service of summons is not for the purpose of
vesting the trial court with jurisdiction over the person of the defendant but only for
the purpose of complying with the requirements of fair play and due process. A fortiori,
the court a quo had properly acquired jurisdiction over the person of herein petitioner-
defendant when summons was served by publication and a copy of the summons,
the complaint with annexes, together with the Order of June 28, 1991, was served to
the defendant through the Department of Foreign Affairs by registered mail and duly
received by said office to top it all. Such mode was upon instruction and lawful order
of the court and could even be treated as any other manner the court may deem
sufficient.[8]
Hence, the instant petition.
The Issues
The issues raised by Margarita are restated as follows:
I. Whether Margarita was validly served with summons in the case for declaration of
nullity of her marriage with Abelardo;
II. Whether there was extrinsic fraud in the preparation and filing by Abelardo of the
Petition for Dissolution of the Conjugal Partnership of Gains and its annex, the
Agreement of Separation of Properties.
The Courts Ruling
The petition is bereft of merit.
First Issue: Validity of the Service of Summons on Margarita
Margarita insists that the trial court never acquired jurisdiction over her person in the
petition for declaration of nullity of marriage since she was never validly served with
summons. Neither did she appear in court to submit voluntarily to its jurisdiction.
On the other hand, Abelardo argues that jurisdiction over the person of a non-resident
defendant in an action in rem or quasi in rem is not necessary. The trial and appellate
courts made a clear factual finding that there was proper summons by publication
effected through the Department of Foreign Affairs as directed by the trial court. Thus,
the trial court acquired jurisdiction to render the decision declaring the marriage a
nullity.
Summons is a writ by which the defendant is notified of the action brought against
him. Service of such writ is the means by which the court acquires jurisdiction over
his person.[9]
68
As a rule, when the defendant does not reside and is not found in the Philippines,
Philippine courts cannot try any case against him because of the impossibility of
acquiring jurisdiction over his person unless he voluntarily appears in court. But when
the case is one of actions in rem or quasi in rem enumerated in Section 15,[10] Rule
14 of the Rules of Court, Philippine courts have jurisdiction to hear and decide the
case. In such instances, Philippine courts have jurisdiction over the res, and
jurisdiction over the person of the non-resident defendant is not essential.[11]
Actions in personam[12] and actions in rem or quasi in rem differ in that actions in
personam are directed against specific persons and seek personal judgments. On the
other hand, actions in rem or quasi in rem are directed against the thing or property
or status of a person and seek judgments with respect thereto as against the whole
world.[13]
At the time Abelardo filed the petition for nullity of the marriage in 1991, Margarita was
residing in the United States. She left the Philippines in 1982 together with her two
children. The trial court considered Margarita a non-resident defendant who is not
found in the Philippines. Since the petition affects the personal status of the plaintiff,
the trial court authorized extraterritorial service of summons under Section 15, Rule
14 of the Rules of Court. The term personal status includes family relations,
particularly the relations between husband and wife.[14]
Under Section 15 of Rule 14, a defendant who is a non-resident and is not found in
the country may be served with summons by extraterritorial service in four instances:
(1) when the action affects the personal status of the plaintiff; (2) when the action
relates to, or the subject of which is property within the Philippines, in which the
defendant has or claims a lien or interest, actual or contingent; (3) when the relief
demanded consists, wholly or in part, in excluding the defendant from any interest in
property located in the Philippines; or (4) when the property of the defendant has been
attached within the Philippines.
In these instances, extraterritorial service of summons may be effected under any of
three modes: (1) by personal service out of the country, with leave of court; (2) by
publication and sending a copy of the summons and order of the court by registered
mail to the defendants last known address, also with leave of court; or (3) by any other
means the judge may consider sufficient.
Applying the foregoing rule, the trial court required extraterritorial service of summons
to be effected on Margarita in the following manner:
x x x, service of Summons by way of publication in a newspaper of general circulation
once a week for three (3) consecutive weeks, at the same time, furnishing respondent
copy of this Order as well as the corresponding Summons and copy of the petition at
her given address at No. 96 Mulberry Lane, Atherton, California, U.S.A., thru the
Department of Foreign Affairs, all at the expense of petitioner.[15] (Emphasis ours)
The trial courts prescribed mode of extraterritorial service does not fall under the first
or second mode specified in Section 15 of Rule 14, but under the third mode. This
refers to any other means that the judge may consider sufficient.
The Process Servers Return of 15 July 1991 shows that the summons addressed to
Margarita together with the complaint and its annexes were sent by mail to the
Department of Foreign Affairs with acknowledgment of receipt. The Process Servers
certificate of service of summons is prima facie evidence of the facts as set out in the
certificate.[16] Before proceeding to declare the marriage between Margarita and
Abelardo null and void, the trial court stated in its Decision dated 8 November 1991
that compliance with the jurisdictional requirements hav(e) (sic) been duly
established. We hold that delivery to the Department of Foreign Affairs was sufficient
compliance with the rule. After all, this is exactly what the trial court required and
considered as sufficient to effect service of summons under the third mode of
extraterritorial service pursuant to Section 15 of Rule 14.
Second Issue: Validity of the Judgment Dissolving the
Conjugal Partnership of Gains
Margarita claims that Abelardo coerced her into signing the Petition for Dissolution of
the Conjugal Partnership of Gains (Petition) and its annex, the Agreement of
Separation of Properties (Agreement). Abelardo allegedly threatened to cut off all
financial and material support to their children if Margarita did not sign the documents.
The trial court did not find anything amiss in the Petition and Agreement that Abelardo
filed, and thus the trial court approved the same. The Court of Appeals noted that a
meticulous perusal of the Petition and Agreement readily shows that Margarita signed
the same on the proper space after the prayer and on the portion for the verification
of the petition. The Court of Appeals observed further that on 6 August 1990,
Margarita appeared before Consul Amado Cortez in the Philippine Consulate Office
in San Francisco, California, to affirm that she executed the Agreement of her own
free will. There was no showing that Abelardo was at that time with her at the
Philippine Consulate Office. Abelardo secured judicial approval of the Agreement as
specifically required in the Agreement.
The Court is bound by the factual findings of the trial and appellate courts that the
parties freely and voluntarily executed the documents and that there is no showing of
coercion or fraud. As a rule, in an appeal by certiorari under Rule 45, the Court does
not pass upon questions of fact as the factual findings of the trial and appellate courts
are binding on the Court. The Court is not a trier of facts. The Court will not examine
the evidence introduced by the parties below to determine if the trial and appellate
courts correctly assessed and evaluated the evidence on record.[17]
The due and regular execution of an instrument acknowledged before an officer
authorized to administer oaths cannot be overthrown by bare allegations of coercion
but only by clear and convincing proof.[18] A person acknowledging an instrument
before an officer authorized to administer oaths acknowledges that he freely and
voluntarily executed the instrument, giving rise to a prima facie presumption of such
fact.
In the instant case, Margarita acknowledged the Agreement before Consul Cortez.
The certificate of acknowledgment signed by Consul Cortez states that Margarita
personally appeared before him and acknowledged before me that SHE executed the
69
same of her own free will and deed.[19] Thus, there is a prima facie presumption that
Margarita freely and voluntarily executed the Agreement. Margarita has failed to rebut
this prima facie presumption with clear and convincing proof of coercion on the part
of Abelardo.

A document acknowledged before a notary public is prima facie evidence of the due
and regular execution of the document.[20] A notarized document has in its favor the
presumption of regularity in its execution, and to contradict the same, there must be
evidence that is clear, convincing and more than merely preponderant.[21]

WHEREFORE, the Decision of the Court of Appeals in CA-G.R. SP No. 58487

dismissing the petition to annul judgment is AFFIRMED.

SO ORDERED.

70
[ GR No. 11390, Mar 26, 1918 ]
EL BANCO ESPAÑOL FILIPINO v. VICENTE PALANCA +
DECISION
37 Phil. 921
STREET, J.:
This action was instituted upon March 31, 1908, by "El Banco Español-Filipino" to
foreclose a mortgage upon various parcels of real property situated in the city of
Manila. The mortgage in question is dated June 16, 1906, and was executed by the
original defendant herein, Engracio Palanca Tanquinyeng y Limquingco, as security
for a debt owing by him to the bank. Upon March 31, 1906, the debt amounted to
P218,294.10 and was drawing interest at the rate of 8 per centum per annum, payable
at the end of each quarter. It appears that the parties to this mortgage at that time
estimated the value of the property in question at P292,558, which was about P75,000
in excess of the indebtedness. After the execution of this instrument by the mortgagor,
he returned to China, which appears to have been his native country; and he there
died, upon January 29, 1910, without again returning to the Philippine Islands.
As the defendant was a nonresident at the time of the institution of the present action,
it was necessary for the plaintiff in the foreclosure proceeding to give notice to the
defendant by publication pursuant to section 399 of the Code of Civil Procedure. An
order for publication was accordingly obtained from the court, and publication was
made in due form in a newspaper of the city of Manila. At the same time that the order
of the court was entered directing that publication should be made in a newspaper,
the court further directed that the clerk of the court should deposit in the post office in
a stamped envelope a copy of the summons and complaint directed to the defendant
at his last place of residence, to wit, the city of Amoy, in the Empire of China. This
order was made pursuant to the following provision contained in section 399 of the
Code of Civil Procedure:
"In case of publication, where the residence of a nonresident or absent defendant is
known, the judge must direct a copy of the summons and complaint to be forthwith,
deposited by the clerk in the post-office, postage prepaid, directed to the person to
be served, at his place of residence."
Whether the clerk complied with this order, does not affirmatively appear. There is,
however, among the papers pertaining to this case, an affidavit, dated April 4, 1908,
signed by Bernardo Chan y Garcia, an employee of the attorneys for the bank,
showing that upon that date he had deposited in the Manila post-office a registered
letter, addressed to Engracio Palanca Tanquinyeng, at Manila, containing copies of
the complaint, the plaintiff's affidavit, the summons, and the order of the court directing
publication as aforesaid. It appears from the postmaster's receipt that Bernardo
probably used an envelope obtained from the clerk's office, as the receipt purports to
show that the letter emanated from said office.
The cause proceeded in usual course in the Court of First Instance; and the defendant
not having appeared, judgment was, upon July 2, 1908, taken against him by default.
Upon July 3, 1908, a decision was rendered in favor of the plaintiff. In this decision it
was recited that publication had been properly made in a periodical, but nothing was
said about notice having been given by mail. The court, upon this occasion, found
that the indebtedness of the defendant amounted to P249,355.32, with interest from
March 31, 1908. Accordingly it was ordered that the defendant should, on or before
July 6, 1908, deliver said amount to the clerk of the court to be applied to the
satisfaction of the judgment, and it was declared that in case of the failure of the
defendant to satisfy the judgment within such period, the mortgage property located
in the city of Manila should be exposed to public sale. The payment contemplated in
said order was never made; and upon July 8, 1908, the court ordered the sale of the
property. The sale took place upon July 30, 1908, and the property was bought in by
the bank for the sum of P110,200. Upon August 7, 1908, this sale was confirmed by
the court.
About seven years after the confirmation of this sale, or to be precise, upon June 25,
1915, a motion was made in this cause by Vicente Palanca, as administrator of the
estate of the original defendant, Engracio Palanca Tanquinyeng y Limquingco,
wherein the applicant requested the court to set aside the order of default of July 2,
1908, and the judgment rendered upon July 3, 1908, and to vacate all the proceedings
subsequent thereto. The basis of this application, as set forth in the motion itself, was
that the order of default and the judgment rendered thereon were void because the
court had never acquired jurisdiction over the defendant or over the subject of the
action.
At the hearing in the court below the application to vacate the judgment was denied,
and from this action of the court Vicente Palanca, as administrator of the estate of the
original defendant, has appealed. No other feature of the case is here under
consideration than such as is related to the action of the court upon said motion.
The case presents several questions of importance, which will be discussed in what
appears to be the sequence of most convenient development. In the first part of this
opinion we shall, for the purpose of argument, assume that the clerk of the Court of
First Instance did not obey the order of the court in the matter of mailing the papers
which he was directed to send to the defendant in Amoy; and in this connection we
shall consider, first, whether the court acquired the necessary jurisdiction to enable it
to proceed with the foreclosure of the mortgage and, secondly, whether those
proceedings were conducted in such manner as to constitute due process of law.
The word "jurisdiction," as applied to the faculty of exercising judicial power, is used
in several different, though related, senses since it may have reference (1) to the
authority of the court to entertain a particular kind of action or to administer a particular
kind of relief, or it may refer to the power of the court over the parties, or (2) over the
property which is the subject to the litigation.
The sovereign authority which organizes a court determines the nature and extent of
its powers in general and thus fixes its competency or jurisdiction with reference to
the actions which it may entertain and the relief it may grant.
Jurisdiction over the person is acquired by the voluntary appearance of a party in
court and his submission to its authority, or it is acquired by the coercive power of
legal process exerted over the person.
71
Jurisdiction over the property which is the subject of litigation may result either from
a seizure of the property under legal process, whereby it is brought into the actual
custody of the law, or it may result from the institution of legal proceedings wherein,
under special provisions of law, the power of the court over the property is recognized
and made effective. In the latter case the property, though at all times within the
potential power of the court, may never be taken into actual custody at all. An
illustration of the jurisdiction acquired by actual seizure is found in attachment
proceedings, where the property is seized at the beginning of the action, or some
subsequent stage of its progress, and held to abide the final event of the litigation. An
illustration of what we term potential jurisdiction over the res, is found in the
proceeding to register the title of land under our system for the registration of land.
Here the court, without taking actual physical control over the property assumes, at
the instance of some person claiming to be owner, to exercise a jurisdiction in rem
over the property and to adjudicate the title in favor of the petitioner against all the
world.
In the terminology of American law the action to foreclose a mortgage is said to be a
proceeding quasi in rem, by which is expressed, the idea that while it is not strictly
speaking an action in rem yet it partakes of that nature and is substantially such. The
expression "action in rem" is, in its narrow application, used only with reference to
certain proceedings in courts of admiralty wherein the property alone is treated as
responsible for the claim or obligation upon which the proceedings are based. The
action quasi in rem differs from the true action in rem in the circumstance that in the
former an individual is named as defendant, and the purpose of the proceeding is to
subject his interest therein to the obligation or lien burdening the property. All
proceedings having for their sole object the sale or other disposition of the property
of the defendant, whether by attachment, foreclosure, or other form of remedy, are in
a general way thus designated. The judgment entered in these proceedings is
conclusive only between the parties.
In speaking of the proceeding to foreclose a mortgage the author of a well-known
treatise, has said:
"Though nominally against persons, such suits are to vindicate liens; they proceed
upon seizure; they treat property as primarily indebted; and, with the qualification
above-mentioned, they are substantially property actions. In the civil law, they are
styled hypothecary actions, and their sole object is the enforcement of the lien against
the res; in the common law, they would be different if chancery did not treat the
conditional conveyance as a mere hypothecation, and the creditor's right as an
equitable lien; so, in both, the suit is a real action so far. as it is against property, and
seeks the judicial recognition of a property debt, and an order for the sale of the res."
(Waples, Proceedings In Rem. sec. 607.)
It is true that in proceedings of this character, if the defendant for whom publication is
made appears, the action becomes as to him a personal action and is conducted as
such. This, however, does not affect the proposition that where the defendant fails to
appear the action is quasi in rem; and it should therefore be considered with reference
to the principles governing actions in rem.
There is an instructive analogy between the foreclosure proceeding and an action of
attachment, concerning which the Supreme Court of the United States has used the
following language:
"If the defendant appears, the cause becomes mainly a suit in personam, with the
added incident, that the property attached remains liable, under the control of the
court, to answer to any demand which may be established against the defendant by
the final judgment of the court. But, if there is no appearance of the defendant, and
no service of process on him, the case becomes, in its essential nature, a proceeding
in rem, the only effect of which is to subject the property attached to the payment of
the demand which the court may find to be due to the plaintiff." (Cooper vs. Reynolds,
10 Wall., 308.)
In an ordinary attachment proceeding, if the defendant is not personally served, the
preliminary seizure is to be considered necessary in order to confer jurisdiction upon
the court. In this case the lien on the property is acquired by the seizure; and the
purpose of the proceedings is to subject the property to that lien. If a lien already
exists, whether created by mortgage, contract, or statute, the preliminary seizure is
not necessary; and the court proceeds to enforce such lien in the manner provided
by law precisely as though the property had been seized upon attachment. (Roller vs.
Holly, 176 U. S.( 398, 405; 44 L. ed., 520.) It results that the mere circumstance that
in an attachment the property may be seized at the inception of the proceedings, while
in the foreclosure suit it is not taken into legal custody until the time comes for the
sale, does not materially affect the fundamental principle involved in both cases,
which is that the court is here exercising a jurisdiction over the property in a
proceeding directed essentially in rem.
Passing now to a consideration of the jurisdiction of the Court of First Instance in a
mortgage foreclosure, it is evident that the court derives its authority to entertain the
action primarily from the statutes organizing the court. The jurisdiction of the court, in
this most general sense, over the cause of action is obvious and requires no
comment. Jurisdiction over the person of the defendant, if acquired at all in such an
action, is obtained by the voluntary submission of the defendant or by the personal
service of process upon him within the territory where the process is valid. If, however,
the defendant is a nonresident and, remaining beyond the range of the personal
process of the court," refuses to come in voluntarily, the court never acquires
jurisdiction over the person at all. Here the property itself is in fact the sole thing which
is impleaded and is the responsible object which is the subject of the exercise of
judicial power. It follows that the jurisdiction of the court in such case is based
exclusively on the power which, under the law, it possesses over the property; and
any discussion relative to the jurisdiction of the court over the person of the defendant
is entirely apart from the case. The jurisdiction of the court over the property,
considered as the exclusive object of such an action, is evidently based upon the
following conditions and considerations, namely: (1) that the property is located within
the district; (2) that the purpose of the litigation is to subject the property by sale to an
obligation fixed upon it by the mortgage; and (3) that the court at a proper stage of
the proceedings takes the property into its custody, if necessary, and exposes it to
sale for the purpose of satisfying the mortgage debt. An obvious corollary is that no
other relief can be granted in this proceeding than such as can be enforced against
the property.
72
We may then, from what has been stated, formulate the following propositions relative
to the foreclosure proceeding against the property of a nonresident mortgagor who
fails to come in and submit himself personally to the jurisdiction of the court: (I) That
the jurisdiction of the court is derived from the power which it possesses over the
property; (II) that jurisdiction over the person is not acquired and is nonessential; (III)
that the relief granted by the court must be limited to such as can be enforced against
the property itself.
It is important that the bearing of these propositions be clearly apprehended, for there
are many expressions in the American reports from which it might be inferred that the
court acquires personal jurisdiction over the person of the defendant by publication
and notice; but such is not the case. In truth the proposition that jurisdiction over the
person of a nonresident cannot be acquired by publication and notice was never
clearly understood even in the American courts until after the decision had been
rendered by the Supreme Court of the United States in the leading case of Pennoyer
vs. Neff (95 U. S., 714; 24 L. ed., 565). In the light of that decision, and of other
decisions which have subsequently been rendered in that and other courts, the
proposition that jurisdiction over the person cannot be thus acquired by publication
and notice is no longer open to question; and it is now fully established that a personal
judgment upon constructive or substituted service against a nonresident who does
not appear is wholly invalid. This .doctrine applies to all kinds of constructive or
substituted process, including service by publication and personal service outside of
the jurisdiction in which the judgment is rendered; and the only exception seems to
be found in the case where the nonresident defendant has expressly or impliedly
consented to the mode of service. (Note to Raher vs. Raher, 35 L.R.A. [N.S.], 292;
see also 50 L.R.A., 585; 35 L. R. A., [N.S.] 312.)
The idea upon which the decision in Pennoyer vs. Neff (supra) proceeds is that the
process from the tribunals of one State cannot run into other States or countries and
that due process of law requires that the defendant shall be brought under the power
of the court by service of process within the State, or by his voluntary appearance, in
order to authorize the court to pass upon the question of his personal liability. The
doctrine established by the Supreme Court of the United States on this point, being
based upon the constitutional conception of due process of law, is binding upon the
courts of the Philippine Islands. Involved in this decision is the principle that in
proceedings in rem or quasi in rem against a nonresident who is not served personally
within the state, and who does not appear, the relief must be confined to the res, and
the court cannot lawfully render a personal judgment against him. (Dewey vs. Des
Moines, 173 U.S., 193; 43 L. ed., 665; Heidritter vs. Elizabeth Oil Cloth Co., 112 U.S.,
294; 28 L. ed., 729.) Therefore in an action to foreclose a mortgage against a
nonresident, upon whom service has been effected exclusively by publication, no
personal judgment for the deficiency can be entered. (Latta vs. Tutton, 122 CaL, 279;
Blumberg vs. Birch, 99 Cal., 416.)
It is suggested in the brief of the appellant that the judgment entered in the court below
offends against the principle just stated and that this judgment is void because the
court in fact entered a personal judgment against the absent debtor for "the full
amount of the indebtedness secured by the mortgage. We do not so interpret the
judgment.
In a foreclosure proceeding against a nonresident owner it is necessary for the court,
as in all cases of foreclosure, to ascertain the amount due, as prescribed in section
256 of the Code of Civil Procedure, and to make an order requiring the defendant to
pay the money into court. This step is a necessary precursor of the order of sale. In
the present case the judgment which was entered contains the following words:
"Because it is declared that the said defendant Engracio Palanca Tanquinyeng y
Limquingco, is indebted in the amount of P249,355.32, plus the interest, to the 'Banco
Español-Filipino' * * * therefore said defendant is ordered to deliver the above amount
etc., etc."
This is not the language of a personal judgment. Instead it is clearly intended merely
as a compliance with the requirement that the amount due shall be ascertained and
that the defendant shall be required to pay it. As a further evidence of this it may be
observed that according to the Code of Civil Procedure a personal judgment against
the debtor for the deficiency is not to be rendered until after the property has been
sold and the proceeds applied to the mortgage debt (sec. 260).
The conclusion upon this phase of the case is that whatever may be the effect in other
respects of the failure of the clerk of the Court of First Instance to mail the proper
papers to the defendant in Amoy, China, such irregularity could in no wise impair or
defeat the jurisdiction of the court, for in our opinion that jurisdiction rests upon a basis
much more secure than would be supplied by any form of notice that could be given
to a resident of a foreign country.
Before leaving this branch of the case, we wish to observe that we are fully aware
that many reported cases can be cited in which it is assumed that the question of the
sufficiency of publication or notice in a case of this kind is a question affecting the
jurisdiction of the court, and the court is sometimes said to acquire jurisdiction by
virtue of the publication. This phraseology was undoubtedly originally adopted by the
court because of the analogy between service by publication and personal service of
process upon the defendant; and, as has already been suggested, prior to the
decision of Pennoyer vs. Neff (supra) the difference between the legal effects of the
two forms of service was obscure. It is accordingly not surprising that the modes of
expression which had already been moulded into legal tradition before that case was
decided have been brought down to the present day. But it is clear that the legal
principle here involved is not effected by the peculiar language in which the courts
have expounded their ideas.
We now proceed to a discussion of the question whether the supposed irregularity in
the proceedings was of such gravity as to amount to a denial of that "due process of
law" which was secured by the Act of Congress in force in these Islands at the time
this mortgage was foreclosed. (Act of July 1, 1902, sec. 5.) In dealing with questions
involving the application of the constitutional provisions relating to due process of law
the Supreme Court of the United States has refrained from attempting to define with
precision the meaning of that expression, the reason being that the idea expressed
therein is applicable under so many diverse conditions as to make any attempt at
precise definition hazardous and unprofitable. As applied to a judicial proceeding,
however, it may be laid down with certainty that the requirement of due process is
73
satisfied if the following conditions are present, namely; (1) There must be a court or
tribunal clothed with judicial power to hear and determine the matter before it; (2)
jurisdiction must be lawfully acquired over the person of the defendant or over the
property which is the subject of the proceeding; (3) the defendant must be given an
opportunity to be heard; and (4) judgment must be rendered upon lawful hearing.
Passing at once to the requisite that the defendant shall have an opportunity to be
heard, we observe that in a foreclosure case some notification of the proceedings to
the nonresident owner, prescribing the time within which appearance must be made,
is everywhere recognized as essential. To answer this necessity the statutes
generally provide for publication, and usually in addition thereto, for the mailing of
notice to the defendant, if his residence is known. Though commonly called
constructive, or substituted service, such notification does not constitute a service of
process in any true sense. It is merely a means provided by law whereby the owner
may be admonished that his property is the subject of judicial proceedings and that it
is incumbent upon him to take such steps as he sees fit to protect it. In speaking of
notice of this character a distinguished master of constitutional law has used the
following language:
"* * * if the owners are named in the proceedings, and personal notice is provided for,
it is rather from tenderness to their interests, and in order to make sure that the
opportunity for a hearing shall not be lost to them, than from any necessity that the
case shall assume that form." (Cooley on Taxation [2d. ed.], 527, quoted in Leigh vs.
Green, 193 U.S., 79, 80.)
It will be observed that this mode of notification does not involve any absolute
assurance that the absent owner shall thereby receive actual notice. The periodical
containing the publication may never in fact come to his hands, and the chances that
he should discover the notice may often be very slight. Even where notice is sent by
mail the probability of his receiving it, though much increased, is dependent upon the
correctness of the address to which it is forwarded as well as upon the regularity and
security of the mail service. It will be noted, furthermore, that the provision of our law
relative to the mailing of notice does not absolutely require the mailing of notice
unconditionally and in every event, but only in the case where the defendant's
residence is known. In the light of all these facts, it is evident that actual notice to the
defendant in cases of this kind is not, under the law, to be considered absolutely
necessary.
The idea upon which the law proceeds in recognizing the efficacy of a means of
notification which may fall short of actual notice is apparently this: Property is always
assumed to be in the possession of its owner, in person or by agent; and he may be
safely held, under certain conditions, to be affected with knowledge that proceedings
have been instituted for its condemnation and sale.
"It is the duty of the owner of real estate, who is a nonresident, to take measures that
in some way he shall be represented when his property is called into requisition, and
if he fails to do this, and fails to get notice by the ordinary publications which have
usually been required in such cases, it is his misfortune, and he must abide the
consequences." (6 R.C.L., sec. 445 [p. 450]).
It has been well said by an American court:
"If property of a nonresident cannot be reached by legal process upon constructive
notice, then our statutes were passed in vain, and are mere empty legislative
declarations, without either force, or meaning; for if the person is not within the
jurisdiction of the court, no personal judgment can be rendered, and if the judgment
cannot operate upon the property, then no effective judgment at all can be rendered,
so that the result would be that the courts would be powerless to assist a citizen
against a nonresident Such a result would be a deplorable one." (Quarl vs. Abbett,
102 Ind., 233; 52 Am. Rep., 662, 667.)
It is, of course, universally recognized that the statutory provisions relative to
publication or other form of notice against a nonresident owner should be complied
with; and in respect to the publication of notice in the newspaper it may be stated that
strict compliance with the requirements of the law has been held to be essential. In
Guaranty Trust etc. Co. vs. Green Cove etc., Railroad Co. (139 U. S., 137, 138), it
was held that where newspaper publication was made for 19 weeks, when the statute
required 20, the publication was insufficient.
With respect to the provisions of our own statute, relative to the sending of notice by
mail, the requirement is that the judge shall direct that the notice be deposited in the
mail by the clerk of the court, and it is not in terms declared that the notice must be
deposited in the mail. We consider this to be of some significance; and it seems to us
that, having due regard to the principles upon which the giving of such notice is
required, the absent owner of the mortgaged property must, so far as the due process
of law is concerned, take the risk incident to the possible failure of the clerk to perform
his duty, somewhat as he takes the risk that the mail clerk or the mail carrier might
possibly lose or destroy the parcel or envelope containing the notice before it should
reach its destination and be delivered to him; This idea seems to be strengthened by
the consideration that in placing upon the clerk the duty of sending notice by mail, the
performance of that act is put effectually beyond the control of the plaintiff in the
litigation. At any rate it is obvious that so much of section 399 of the Code of Civil
Procedure as relates to the sending of notice by mail was complied with when the
court made the order. The question as to what may be the consequences of the failure
of the record to show the proof of compliance with that requirement will be discussed
by us further on.
The observations which have lust been made lead to the conclusion that the failure
of the clerk to mail the notice, if in fact he did so fail in his duty, is not such an
irregularity as amounts to a denial of due process of law; and hence in our opinion
that irregularity, if proved, would not avoid the judgment in this case. Notice was given
by publication in a newspaper and this is the only form of notice which the law
unconditionally requires. This in our opinion is all that was absolutely necessary to
sustain the proceedings.
It will be observed that in considering the effect of this irregularity, it makes a
difference whether it be viewed as a question involving jurisdiction or as a question
involving due process of law. In the matter of jurisdiction there can be no distinction
between the much and the little. The court either has jurisdiction or it has not; and if
the requirement as to the mailing of notice should be considered as a step antecedent
74
to the acquiring of jurisdiction, there could be no escape from the conclusion that the
failure to take that step was fatal to the validity of the judgment. In the application of
the idea of due process of law, on the other hand, it is clearly unnecessary to be so
rigorous. The jurisdiction being once established, all that due process of law thereafter
requires is an opportunity for the defendant to be heard; and as publication was duly
made in the newspaper, it would seem highly unreasonable to hold that the failure to
mail the notice was fatal. We think that in applying the requirement of due process of
law, it is permissible to reflect upon the purposes of the provision which is supposed
to have been violated and the principle underlying the exercise of. judicial power in
these proceedings. Judged in the light of these conceptions, we think that the
provision of the Act of Congress declaring that no person shall be deprived of his
property without due process of law has not been infringed.
In the progress of this discussion we have stated the two conclusions; (1) that the
failure of the clerk to send the notice to the defendant by mail did not destroy the
jurisdiction of the court and (2) that such irregularity did not infringe the requirement
of due process of law. As a consequence of these conclusions the irregularity in
question is in some measure shorn of its potency. It is still necessary, however, to
consider its effects considered as a simple irregularity of procedure; and it would be
idle to pretend that even in this aspect the irregularity is not grave enough. From this
point of view, however, it is obvious that any motion to vacate the judgment on the
ground of the irregularity in question must fail unless "it shows that the defendant was
prejudiced by that irregularity. The least, therefore, that can be required of the
proponent of such a motion is to show that he had a good defense against the action
to foreclose the mortgage. Nothing of the kind is, however, shown either in the motion
or in the affidavit which accompanies the motion.
An application to open or vacate a judgment because of an irregularity or defect in
the proceedings is usually required to be supported by an affidavit showing the
grounds on which the relief is sought, and in addition to this showing also a
meritorious defense to the action. It is held that a general statement that a party has
a good defense to the action is insufficient. The necessary facts must be averred. Of
course if a judgment is void upon its face a showing of the existence of a meritorious
defense is not necessary. (10 R.C.L., 718.)
The lapse of time is also a circumstance deeply affecting this aspect of the case. In
this connection we quote the following passage from an encyclopaedic treatise now
in course of publication:
"Where, however, the judgment is not void on its face, and may therefore be enforced
if permitted to stand on the record, courts in many instances refuse to exercise their
quasi equitable powers to vacate a judgment after the lapse of the term at which it
was entered, except in clear cases, to promote the ends of justice, and where it
appears that the party making the application is himself without fault and has acted in
good faith and with ordinary diligence. Laches on the part of the applicant, if
unexplained, is deemed sufficient ground for refusing the relief to which he might
otherwise be entitled. Something is due to the finality of judgments, and acquiescence
or unnecessary delay is fatal to motions of this character, since courts are always
reluctant to interfere with judgments, and especially where they have been executed
or satisfied. The moving party has the burden of showing diligence, and unless it is
shown affirmatively the court will not ordinarily exercise its discretion in his favor." (15
R.C.L., 694, 695.)
It is stated in the affidavit that the defendant, Engracio Palanca Tanquinyeng y
Limquingco, died January 29, 1910. The mortgage under which the property was sold
was executed far back in 1906; and the proceedings in the foreclosure were closed
by the order of court confirming the sale dated August 7, 1908. It passes the rational
bounds of human credulity to suppose that a man who had placed a mortgage upon
property worth nearly P300,000 and had then gone away from the scene of his life
activities to end his days in the city of Amoy, China, should have long remained in
ignorance of the fact that the mortgage had been foreclosed and the property sold,
even supposing that he had no knowledge of those proceedings while they were being
conducted. It is more in keeping with the ordinary course of things that he should have
acquired information as to what was transpiring in his affairs at Manila; and upon the
basis of this rational assumption we are authorized, in the absence of proof to the
contrary, to presume that he did have, or soon acquired, information as to the sale of
his property.
The Code of Civil Procedure, indeed, expressly declares that there is a presumption
that things have happened according to the ordinary habits of life (sec. 334 [26]) ; and
we cannot conceive of a situation more appropriate than this for applying the
presumption thus defined by the lawgiver. In support of this presumption, as applied
to the present case, it is permissible to consider the probability that the defendant
may have received actual notice of these proceedings from the unofficial notice
addressed to him in Manila which was mailed by an employee of the bank's attorneys.
Adopting almost the exact words used by the Supreme Court of the United States in
Grannis vs. Ordean (234 U. S., 385; 58 L. ed., 1363), we may say that in view of the
well-known skill of postal officials and employees in making proper delivery of letters
defectively addressed, we think the presumption is clear and strong that this notice
reached the defendant, there being no proof that it was ever returned by the postal
officials as undelivered. And if it was delivered in Manila, instead of being forwarded
to Amoy, China, there is a probability that the recipient was a person sufficiently
interested in his affairs to send it or communicate its contents to him.
Of course if the jurisdiction of the court or the sufficiency of the process of law
depended upon the mailing of the notice by the clerk, the reflections in which we are
now indulging would be idle and frivolous; but the considerations mentioned are
introduced in order to show the propriety of applying to this situation the legal
presumption to which allusion has been made. Upon that presumption, supported by
the circumstances of this case, we do not hesitate to found the conclusion that the
defendant voluntarily abandoned all thought of saving his property from the obligation
which he had placed upon it; that knowledge of the proceedings should be imputed
to him; and that he acquiesced in the consequences of those proceedings after they
had been accomplished. Under these circumstances it is clear that the merit of this
motion is, as we have already stated, adversely affected in a high degree by the delay
in asking for relief. Nor is it an adequate reply to say that the proponent of this motion
is an administrator who only qualified a few months before this motion was made. No
disability on the part of the defendant himself existed from the time when the
foreclosure was effected until his death; and we believe that the delay in the
appointment of the administrator and institution of this action is a circumstance which
75
is imputable to the parties in interest whoever they may have been. Of course if the
minor heirs had instituted an action in their own right to recover the property, it would
have been different.
It is, however, argued that the defendant has suffered prejudice by reason of the fact
that the bank became the purchaser of the property at the forclosure sale for a price
greatly below that which had been agreed upon in the mortgage as the upset price of
the property. In this connection, it appears that in article nine of the mortgage which
was the subject of this foreclosure, as amended by the notarial document of July
19,1206, the parties to this mortgage made a stipulation to the effect that the value
therein placed upon the mortgaged properties should serve as a basis of sale in case
the debt should remain unpaid and the bank should proceed to a foreclosure. The
upset price stated in that stipulation for all the parcels involved in this foreclosure was
P286,000. It is said in behalf of the appellant that when the bank bought in the property
for the sum of P110,200 it violated that stipulation.
It has been held hy this court that a clause in a mortgage providing for a tipo, or upset
price, does not prevent a foreclosure, nor affect the validity of a sale made in the
foreclosure proceedings. (Yangco vs. Cruz Herrera and Wy Piaco 11 Phil. Rep., 402;
Banco-Español Filipino vs. Donaldson, Sim & Co., 5 Phil. Rep., 418.) In both the
cases here cited the property was purchased at the foreclosure sale, not by the
creditor or mortgagee, but by a third party. Whether the same rule should be applied
in a case where the mortgagee himself becomes the purchaser has apparently not
been decided by this court in any reported decision, and this question need not here
be considered, since it is evident that if any liability was incurred by the bank by
purchasing for a price below that fixed in the stipulation, its liability was a personal
liability derived from the contract of mortgage; and as we have already demonstrated
such a liability could not be the subject of adjudication in an action where the court
had no jurisdiction over the person of the defendant. If the plaintiff bank became liable
to account for the difference between the upset price and the price at which it bought
in the property, that liability remains unaffected by the disposition which the court
made of this case; and the fact that the bank may have violated such an obligation
can in no wise affect the validity of the judgment entered in the Court of First Instance.
In connection with the entire failure of the motion to show either a meritorious defense
to the action or that the defendant had suffered any prejudice of which the law can
take notice, we may be permitted to add that in our opinion a motion of this kind, which
proposes to unsettle judicial proceedings long ago closed, can not be considered with
favor, unless based upon grounds which appeal to the conscience of the court. Public
policy requires that judicial proceedings be upheld. The maxim here applicable is non
quieta movere. As was once said by Judge Brewer, afterwards a member of the
Supreme Court of the United States:
"Public policy requires that judicial proceedings be upheld, and that titles obtained in
those proceedings be safe from the ruthless hand of collateral attack. If technical
defects are adjudged potent to destroy such titles, a judicial sale will never realize the
value of the property, for no prudent man will risk his money in bidding for and buying
that title which he has reason to fear may years thereafter be swept away through
some occult and not readily discoverable defect." (Martin vs. Pond, 30 Fed., 15.)
In the case where that language was used an attempt was made to annul certain
foreclosure proceedings on the ground that the affidavit upon which the order of
publication was based erroneously stated that the absent party was a resident of. a
certain town in the State of Kansas, when he was in fact residing in another State. It
was held that this mistake did not affect the validity of the proceedings.
In the preceding discussion we have assumed that the clerk failed to send the notice
by post as required by the order of the court. We now proceed, to consider whether
this is a proper assumption; and the proposition which we propose to establish is that
there is a legal presumption that the clerk performed his duty as the ministerial officer
of the court, which presumption is not overcome by any other facts appearing in the
cause.
In subsection 14 of section 334 of the Code of Civil Procedure it is declared that there
is a presumption "that official duty has been regularly performed;" and in subsection
18 it is declared that there is a presumption "that the ordinary course of business has
been followed." These presumptions are of course in no sense novelties, as they
express ideas which have always been recognized. Omnia praesumuntur rite et
solemniter esse acta donec probetur in contrarium. There is therefore clearly a legal
presumption that the clerk performed his duty about mailing this notice; and we think
that strong considerations of policy require that this presumption should be allowed
to operate with full force under the circumstances of this case. A party to an action
has no control over the clerk of the court; and has no right to meddle unduly with the
business of the clerk in the performance of his duties. Having no control over this
officer, the litigant must depend upon the court to see that the duties imposed on the
clerk are performed.
Other considerations no less potent contribute to strengthen the conclusion just
stated. There is no principle of law better settled than that after jurisdiction has once
been acquired, every act of a court of general jurisdiction shall be presumed to have
been rightly done. This rule is applied to every judgment or decree rendered in the
various stages of the proceedings from their initiation to their completion (Voorhees
vs. United States Bank, 10 Pet., 314; 35 U. S., 449); and if the record is silent with
respect to any fact which must have been established before the court could have
rightly acted, it will be presumed that such fact was properly brought to its knowledge.
(The Lessee of Grignon vs. Astor, 2 How., 319; 11 L. ed., 283.)
"In making the order of sale [of the real state of a decedent] the court are presumed
to have adjudged every question necessary to justify such order or decree, viz: The
death of the owners; that the petitioners were his administrators; that the personal
estate was insufficient to pay the debts of the deceased; that the private acts of
Assembly, as to the manner of sale, were within the constitutional power of the
Legislature, and that all the provisions of the law as to notices which are directory to
the administrators have been complied with. * * * The court is not bound to enter upon
the record the evidence on which any fact was decided." (Florentine vs. Barton, 2
Wall., 210; 17 L. ed., 785.) Especially does all this apply after long lapse of time.
Applegate vs. Lexington and Carter County Mining Co. (117 U.S., 255) contains an
instructive discussion in a case. analogous to that which is now before us. It there
appeared that in order to foreclose a mortgage in the State of Kentucky against a
76
nonresident debtor it was necessary that publication should be made in a newspaper
for a specified period of time, also that the order requiring the defendant to appear
should be posted at the front door of the court house and be published on some
Sunday, immediately after divine service, in such church as the court should direct.
In a certain action judgment had been entered against a nonresident, after publication
in pursuance of these provisions. Many years later the validity of the proceedings was
called in question in another action. It was proved from the files of an ancient
periodical that publication had been made in its columns as required by law; but no
proof was offered to show the publication of the order at the church, or the posting of
it at the front door of the court-house. It was insisted by one of the parties that the
judgment of the court was void for lack of jurisdiction. But the Supreme Court of the
United States said."
"The court which made the decree * * * was a court of general jurisdiction. Therefore
every presumption not inconsistent with the record is to be indulged in favor of its
jurisdiction. * * * It is to be presumed that the court before making its decree took care
to see that its order for constructive service, on which its right to make the decree
depended, had been obeyed."
It is true that in this case the former judgment was the subject of collateral, or indirect
attack, while in the case at bar the motion to vacate the judgment is a direct
proceeding for relief against it. The same general presumption, however, is indulged
in favor of the judgment of a court of general jurisdiction, whether it is the subject of
direct or indirect attack, the only difference being that in case of indirect attack the
judgment is conclusively presumed to be valid unless the record affirmatively shows
it to be void, while in case of direct attack the presumption in favor of its validity may
in certain cases be overcome by proof extrinsic to the record.
The presumption that the clerk performed his duty and that the court made its decree
with knowledge that the requirements of law had been complied with appear to be
amply sufficient to support the conclusion that the notice was sent by the clerk as
required by the order. It is true that there ought to be found among the papers on file
in this cause an affidavit, as required by section 400 of the Code of Civil Procedure,
showing that the order was in fact so sent by the clerk; and no such affidavit appears.
The record is therefore silent where it ought to speak. But the very purpose of the law
in recognizing these presumptions is to enable the court to sustain a prior judgment
in the face of such an omission. If we were to hold that the judgment in this case is
void because the proper affidavit is not present in the file of papers which we call the
record, the result would be that in the future every title in the Islands resting upon a
judgment like that now before us would depend, for its continued security, upon the
presence of such affidavit among the papers and would be liable at any moment to
be destroyed by the disappearance of that piece of paper. We think that no court, with
a proper regard for the security of judicial proceedings and for the interests which
have by law been confided to the courts, would incline to favor such a conclusion. In
our opinion the proper course in a case of this kind is to hold that the legal presumption
that the clerk performed his duty still maintains notwithstanding the absence from the
record of the proper proof of that fact.
In this connection it is important to bear in mind that under the practice prevailing in
the Philippine Islands the word "record" is used in a loose and broad sense, as
indicating the collective mass of papers which contain the history of all the successive
steps taken in a case and which are finally deposited in the archives of the clerk's
office as a memorial of the litigation. It is a matter of general information that no
judgment roll, or book of final record, is commonly kept in our courts for the purpose
of recording the pleadings and principal proceedings in actions which have been
terminated; and in particular, no such record is kept in the Court of First Instance of
the city of Manila. There is, indeed, a section of the Code of Civil Procedure which
directs that such a book of final record shall be kept; but this provision has, as a matter
of common knowledge, been generally ignored. The result is that in the present case
we do not have the assistance of the recitals of such a record to enable us to pass
upon the validity of this judgment and as already stated the question must be
determined by examining the papers contained in the entire file.
But it is insisted by counsel for this motion that the affidavit of Bernardo Chan y Garcia
showing that upon April 4, 1908, he sent a notification through the mail addressed to
the defendant at Manila, Philippine Islands, should be accepted as affirmative proof
that the clerk of the court failed in his duty and that, instead of himself sending the
requisite notice through the mail, he relied upon Bernardo to send it for him. We do
not think that this is by any means a necessary inference. Of course if it had
affirmatively appeared that the clerk himself had attempted to comply with this order
and had directed the notification to Manila when he should have directed it to Amoy,
this would be conclusive that he had failed to comply with the exact terms of the order;
but such is not this case. That the clerk of the attorneys for the plaintiff erroneously
sent a notification to the defendant at a mistaken address affords in our opinion very
slight basis for supposing that the clerk may not have sent notice to the right address.
There is undoubtedly good authority to support the position that when the record
states the evidence or makes an averment with reference to a jurisdictional fact, it will
not be presumed that there was other or different evidence respecting the fact, or that
the fact was otherwise than as stated. If, to give an illustration, it appears from the
return of the officer that the summons was served at a particular place or in a particular
manner, it will not be presumed that service was also made at another place or in a
different manner; or if it appears that service was made upon a person other than the
defendant, it will not be presumed, in the silence of the record, that it was made upon
the defendant also (Galpin vs. Page, 18 Wall., 350, 366; Settlemier vs. Sullivan, 97
U. S., 444, 449). While we believe that these propositions are entirely correct as
applied to the case where the person making the return is the officer who is by law
required to make the return, we do not think that it is properly applicable where, as in
the present case, the affidavit was made by a person who, so far as the provisions of
law are concerned, was a mere intermeddler.
The last question of importance which we propose to consider is whether a motion in
the cause is admissible as a proceeding to obtain relief in such a case as this. If the
motion prevails the judgment of July 2, 1908, and all subsequent proceedings will be
set aside, and the litigation will be renewed, proceeding again from the date
mentioned as if the progress of the action had not been interrupted. The proponent of
the motion does not ask the favor of being permitted to interpose a defense. His
purpose is merely to annul the effective judgment of the court, to the end that the
litigation may again resume its regular course.
77
There is only one section of the Code of Civil Procedure which expressly recognizes
the authority of a Court of First Instance to set aside a final judgment and permit a
renewal of the litigation in the same cause. This is as follows:
"Sec. 113. Upon such term as may be just the court may relieve a party or his legal
representative from a judgment, order, or other proceeding taken against him through
his mistake, inadvertence, surprise, or excusable neglect; Provided, That application
therefor be made within a reasonable time, but in no case exceeding six months after
such judgment, order, or proceeding was taken."
An additional remedy by petition to the Supreme Court is supplied by section 513 of
the same Code. The first paragraph of this section, in so far as pertinent to this
discussion, provides as follows:
"When a judgment is rendered by a Court of First Instance upon default, and a party
thereto is unjustly deprived of a hearing by fraud, accident, mistake or excusable
negligence, and the Court of First Instance which rendered the judgment has finally
adjourned so that no adequate remedy exists in that court, the party so deprived of a
hearing may present his petition to the Supreme Court within sixty days after he first
learns of the rendition of such judgment, and not thereafter, setting forth the facts and
praying to have judgment set aside. * * * "
It is evident that the proceeding contemplated in this section is intended to supplement
the remedy provided by section 113; and we believe the conclusion irresistible that
there is no other means recognized by law whereby a defeated party can, by a
proceeding in the same cause, procure a judgment to be set aside, with a view to the
renewal of the litigation.
The Code of Civil Procedure purports to be a complete system of practice in civil
causes, and it contains provisions describing with much fulness the various steps to
be taken in the conduct of such proceedings. To this end it defines with precision the
method of beginning, conducting, and concluding the civil action of whatever species;
and by section 795 of the same Code it is declared that the procedure in all civil action
shall be in accordance with the provisions of this Code. We are therefore of the
opinion that the remedies prescribed in sections 113 and 513 are exclusive of all
others, so far as relates to the opening and continuation of a litigation which has been
once concluded.
The motion in the present case does not conform to the requirements of either of
these provisions; and the consequence is that in our opinion the action of the Court
of First Instance in dismissing the motion was proper.
If the question were admittedly one relating merely to an irregularity of procedure, we
cannot suppose that this proceeding would have taken the form of a motion in the
cause, since it is clear that, if based on such an error, the motion came too late for
relief in the Court of First Instance. But as we have already seen, the motion attacks
the judgment of the court as void for want of jurisdiction over the defendant. The idea
underlying the motion therefore is that inasmuch as the judgment is a nullity it can be
attacked in any way and at any time. If the judgment were in fact void upon its face,
that is, if it were shown to be a nullity by virtue of its own recitals, there might possibly
be something in this. Where a judgment or judicial order is void in this sense it may
be said to be a lawless thing, which can be treated as an outlaw and slain at sight, or
ignored wherever and whenever it exhibits its head.
But the judgment in question is not void in any such sense. It is entirely regular in
form, and the alleged defect is one which is not apparent upon its face. It follows that
even if the judgment could be shown to be void for want of jurisdiction, or for lack of
due process of law, the party aggrieved thereby is bound to resort to some appropriate
proceeding to obtain relief. Under accepted principles of law and practice, long
recognized in American courts, a proper remedy in such case, after the time for
appeal or review has passed, is for the aggrieved party to bring an action to enjoin
the judgment, if not already carried into effect; or if the property has already been
disposed of he may institute suit to recover it. In every situation of this character an
appropriate remedy is at hand; and if property has been taken without due process,
the law concedes due process to recover it. We accordingly hold that, assuming the
judgment to have been void as alleged by the proponent of this motion, the proper
remedy was by an original proceeding and not by motion in the cause. As we have
already seen our Code of Civil Procedure defines the conditions under which relief
against a judgment may be obtained by motion; and we think it would only be
productive of confusion for this court to recognize such a proceeding as proper under
conditions different from those defined by law. Upon the point of procedure here
involved, we refer to the case of People vs. Harrison (84 Cal., 607) wherein it was
held that a motion will not lie to vacate a judgment after the lapse of the time limited
by statute if the judgment is not void on its face; and in all cases, after the lapse of
such time, when an attempt is made to vacate the judgment by a proceeding in court
for that purpose an action regularly brought is preferable, and should be required. It
will be noted that section 113 of the Code of Civil Procedure was taken verbatim from
the California Code (sec. 473).
The conclusions stated in this opinion indicate that the judgment appealed from is
without error, and the same is accordingly affirmed, with costs. So ordered.
78
[G.R. No. 108538. January 22, 1996]
LOURDES A. VALMONTE and ALFREDO D. VALMONTE, petitioners, vs. THE
HONORABLE COURT OF APPEALS, THIRD DIVISION and ROSITA DIMALANTA,
respondents.
DECISION
MENDOZA, J.:
Petitioner Lourdes A. Valmonte is a foreign resident. The question is whether in an
action for partition filed against her and her husband, who is also her attorney,
summons intended for her may be served on her husband, who has a law office in
the Philippines. The Regional Trial Court of Manila, Branch 48, said no and refused
to declare Lourdes A. Valmonte in default, but the Court of Appeals said yes. Hence
this petition for review on certiorari.
The facts of the case are as follows:
Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband and wife. They
are both residents of 90222 Carkeek Drive South Seattle, Washington, U.S.A.
Petitioner Alfredo D. Valmonte, who is a member of the Philippine bar, however,
practices his profession in the Philippines, commuting for this purpose between his
residence in the state of Washington and Manila, where he holds office at S-304
Gedisco Centre, 1564 A. Mabini, Ermita, Manila.
On March 9, 1992, private respondent Rosita Dimalanta, who is the sister of petitioner
Lourdes A. Valmonte, filed a complaint for partition of real property and accounting of
rentals against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte before the
Regional Trial Court of Manila, Branch 48. The subject of the action is a three-door
apartment located in Paco, Manila.
In her Complaint, private respondent alleged:
The plaintiff is of legal age, a widow and is at present a resident of 14823 Conway
Road, Chesterfield, Missouri, U.S.A., while the defendants are spouses, of legal age
and at present residents of 90222 Carkeek Drive, South Seattle, Washington, U.S.A.,
but, for purposes of this complaint may be served with summons at Gedisco Center,
Unit 304, 1564 A. Mabini St., Ermita, Manila where defendant Alfredo D. Valmonte as
defendant Lourdes Arreola Valmontes spouse holds office and where he can be
found.
Apparently, the foregoing averments were made on the basis of a letter previously
sent by petitioner Lourdes A. Valmonte to private respondents counsel
in which, in regard to the partition of the property in question, she referred private
respondents counsel to her husband as the party to whom all communications
intended for her should be sent. The letter reads:
July 4, 1991
Dear Atty. Balgos:
This is in response to your letter, dated 20 June 1991, which I received on 3 July
1991. Please address all communications to my lawyer, Atty. Alfredo D. Valmonte,
whose address, telephone and fax numbers appear below.
c/o Prime Marine
Gedisco Center, Unit 304
1564 A. Mabini, Ermita
Metro Manila
Telephone: 521-1736
Fax: 21-2095
Service of summons was then made upon petitioner Alfredo D. Valmonte, who at the
time, was at his office in Manila. Petitioner Alfredo D. Valmonte accepted the
summons, insofar as he was concerned, but refused to accept the summons for his
wife, Lourdes A. Valmonte, on the ground that he was not authorized to accept the
process on her behalf. Accordingly the process server left without leaving a copy of
the summons and complaint for petitioner Lourdes A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim.
Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this reason
private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte
entered a special appearance in behalf of his wife and opposed the private
respondents motion.
In its Order dated July 3, 1992, the trial court, denied private respondents motion to
declare petitioner Lourdes A. Valmonte in default. A motion for reconsideration was
similarly denied on September 23, 1992. Whereupon, private respondent filed a
petition for certiorari, prohibition and mandamus with the Court of Appeals.
On December 29, 1992, the Court of Appeals rendered a decision granting the petition
and declaring Lourdes A. Valmonte in default. A copy of the appellate courts decision
was received by petitioner Alfredo D. Valmonte on January 15, 1993 at his Manila
office and on January 21, 1993 in Seattle, Washington. Hence, this petition.
The issue at bar is whether in light of the facts set forth above, petitioner Lourdes A.
Valmonte was validly served with summons. In holding that she had been, the Court
of Appeals stated:[1]
[I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally directed the
aforementioned counsel of Dimalanta to address all communications (evidently
referring to her controversy with her sister Mrs. Dimalanta over the Paco property,
now the subject of the instant case) to her lawyer who happens also to be her
79
husband. Such directive was made without any qualification just as was her
choice/designation of her husband Atty. Valmonte as her lawyer likewise made
without any qualification or reservation. Any disclaimer therefore on the part of Atty.
Valmonte as to his being his wifes attorney (at least with regard to the dispute vis-a-
vis [sic] the Paco property) would appear to be feeble or trifling, if not incredible.
This view is bolstered by Atty. Valmontes subsequent alleged special appearance
made on behalf of his wife. Whereas Mrs. Valmonte had manifestly authorized her
husband to serve as her lawyer relative to her dispute with her sister over the Paco
property and to receive all communications regarding the same and subsequently to
appear on her behalf by way of a so-called special appearance, she would
nonetheless now insist that the same husband would nonetheless had absolutely no
authority to receive summons on her behalf. In effect, she is asserting that
representation by her lawyer (who is also her husband) as far as the Paco property
controversy is concerned, should only be made by him when such representation
would be favorable to her but not otherwise. It would obviously be inequitable for this
Court to allow private respondent Lourdes A. Valmonte to hold that her husband has
the authority to represent her when an advantage is to be obtained by her and to deny
such authority when it would turn out to be her disadvantage. If this be allowed, Our
Rules of Court, instead of being an instrument to promote justice would be made use
of to thwart or frustrate the same.
xxx xxx xxx
Turning to another point, it would not do for Us to overlook the fact that the disputed
summons was served not upon just an ordinary lawyer of private respondent Lourdes
A. Valmonte, but upon her lawyer husband. But that is not all, the same
lawyer/husband happens to be also her co-defendant in the instant case which
involves real property which, according to her lawyer/husband/ co-defendant, belongs
to the conjugal partnership of the defendants (the spouses Valmonte). It is highly
inconceivable and certainly it would be contrary to human nature for the
lawyer/husband/co-defendant to keep to himself the fact that they (the spouses
Valmonte) had been sued with regard to a property which he claims to be conjugal.
Parenthetically, there is nothing in the records of the case before Us regarding any
manifestation by private respondent Lourdes A. Valmonte about her lack of
knowledge about the case instituted against her and her lawyer/husband/co-
defendant by her sister Rosita.
PREMISES CONSIDERED, the instant petition for certiorari, prohibition and
mandamus is given due course. This Court hereby Resolves to nullify the orders of
the court a quo dated July 3, 1992 and September 23, 1992 and further declares
private respondent Lourdes Arreola Valmonte as having been properly served with
summons.
Petitioners assail the aforequoted decision, alleging that the Court of Appeals erred
(1) in refusing to apply the provisions of Rule 14, 17 of the Revised Rules of Court
and applying instead Rule 14, 8 when the fact is that petitioner Lourdes A. Valmonte
is a nonresident defendant; and (2) because even if Rule 14, 8 is the applicable
provision, there was no valid substituted service as there was no strict compliance
with the requirement by leaving a copy of the summons and complaint with petitioner
Alfredo D. Valmonte. Private respondent, upon the other hand, asserts that petitioners
are invoking a technicality and that strict adherence to the rules would only result in a
useless ceremony.
We hold that there was no valid service of process on Lourdes A. Valmonte.
To provide perspective, it will be helpful to determine first the nature of the action filed
against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte by private
respondent, whether it is an action in personam, in rem or quasi in rem. This is
because the rules on service of summons embodied in Rule 14 apply according to
whether an action is one or the other of these actions.
In an action in personam, personal service of summons or, if this is not possible and
he cannot be personally served, substituted service, as provided in Rule 14, 7-8[2] is
essential for the acquisition by the court of jurisdiction over the person of a defendant
who does not voluntarily submit himself to the authority of the court.[3] If defendant
cannot be served with summons because he is temporarily abroad, but otherwise he
is a Philippine resident, service of summons may, by leave of court, be made by
publication.[4] Otherwise stated, a resident defendant in an action in personam, who
cannot be personally served with summons, may be summoned either by means of
substituted service in accordance with Rule 14, 8 or by publication as provided in 17
and 18 of the same Rule.[5]
In all of these cases, it should be noted, defendant must be a resident of the
Philippines, otherwise an action in personam cannot be brought because jurisdiction
over his person is essential to make a binding decision.
On the other hand, if the action is in rem or quasi in rem, jurisdiction over the person
of the defendant is not essential for giving the court jurisdiction so long as the court
acquires jurisdiction over the res. If the defendant is a nonresident and he is not found
in the country, summons may be served extraterritorially in accordance with Rule 14,
17, which provides:
17. Extraterritorial service. - When the defendant does not reside and is not found in
the Philippines and the action affects the personal status of the plaintiff or relates to,
or the subject of which is, property within the Philippines, in which the defendant has
or claims a lien or interest, actual or contingent, or in which the relief demanded
consists, wholly or in part, in excluding the defendant from any interest therein, or the
property of the defendant has been attached within the Philippines, service may, by
leave of court, be effected out of the Philippines by personal service as under Section
7; or by publication in a newspaper of general circulation in such places and for such
time as the court may order, in which case a copy of the summons and order of the
court shall be sent by registered mail to the last known address of the defendant, or
in any other manner the court may deem sufficient. Any order granting such leave
shall specify a reasonable time, which shall not be less than sixty (60) days after
notice, within which the defendant must answer.
In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is
that it has jurisdiction over the res, i.e. the personal status of the plaintiff who is
domiciled in the Philippines or the property litigated or attached. Service of summons
80
in the manner provided in 17 is not for the purpose of vesting it with jurisdiction but
for complying with the requirements of fair play or due process, so that he will be
informed of the pendency of the action against him and the possibility that property in
the Philippines belonging to him or in which he has an interest may be subjected to a
judgment in favor of the plaintiff and he can thereby take steps to protect his interest
if he is so minded.[6]
Applying the foregoing rules to the case at bar, private respondents action, which is
for partition and accounting under Rule 69, is in the nature of an action quasi in rem.
Such an action is essentially for the purpose of affecting the defendants interest in a
specific property and not to render a judgment against him. As explained in the
leading case of Banco Espaol Filipino v. Palanca :[7]
[An action quasi in rem is] an action which while not strictly speaking an action in rem
partakes of that nature and is substantially such. . . . The action quasi in rem differs
from the true action in rem in the circumstance that in the former an individual is
named as defendant and the purpose of the proceeding is to subject his interest
therein to the obligation or lien burdening the property. All proceedings having for their
sole object the sale or other disposition of the property of the defendant, whether by
attachment, foreclosure, or other form of remedy, are in a general way thus
designated. The judgment entered in these proceedings is conclusive only between
the parties.
As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines,
service of summons on her must be in accordance with Rule 14, 17. Such service, to
be effective outside the Philippines, must be made either (1) by personal service; (2)
by publication in a newspaper of general circulation in such places and for such time
as the court may order, in which case a copy of the summons and order of the court
should be sent by registered mail to the last known address of the defendant; or (3)
in any other manner which the court may deem sufficient.
Since in the case at bar, the service of summons upon petitioner Lourdes A. Valmonte
was not done by means of any of the first two modes, the question is whether the
service on her attorney, petitioner Alfredo D. Valmonte, can be justified under the third
mode, namely, in any . . . manner the court may deem sufficient.
We hold it cannot. This mode of service, like the first two, must be made outside the
Philippines, such as through the Philippine Embassy in the foreign country where the
defendant resides.[8] Moreover, there are several reasons why the service of
summons on Atty. Alfredo D. Valmonte cannot be considered a valid service of
summons on petitioner Lourdes A. Valmonte. In the first place, service of summons
on petitioner Alfredo D. Valmonte was not made upon the order of the court as
required by Rule 14, 17 and certainly was not a mode deemed sufficient by the court
which in fact refused to consider the service to be valid and on that basis declare
petitioner Lourdes A. Valmonte in default for her failure to file an answer.
In the second place, service in the attempted manner on petitioner was not made
upon prior leave of the trial court as required also in Rule 14, 17. As provided in 19,
such leave must be applied for by motion in writing, supported by affidavit of the
plaintiff or some person on his behalf and setting forth the grounds for the application.
Finally, and most importantly, because there was no order granting such leave,
petitioner Lourdes A. Valmonte was not given ample time to file her Answer which,
according to the rules, shall be not less than sixty (60) days after notice. It must be
noted that the period to file an Answer in an action against a resident defendant differs
from the period given in an action filed against a nonresident defendant who is not
found in the Philippines. In the former, the period is fifteen (15) days from service of
summons, while in the latter, it is at least sixty (60) days from notice.
Strict compliance with these requirements alone can assure observance of due
process. That is why in one case,[9] although the Court considered publication in the
Philippines of the summons (against the contention that it should be made in the
foreign state where defendant was residing) sufficient, nonetheless the service was
considered insufficient because no copy of the summons was sent to the last known
correct address in the Philippines.
Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA 458,462-463
(1975), in which it was held that service of summons upon the defendants husband
was binding on her. But the ruling in that case is justified because summons were
served upon defendants husband in their conjugal home in Cebu City and the wife
was only temporarily absent, having gone to Dumaguete City for a vacation. The
action was for collection of a sum of money. In accordance with Rule 14, 8, substituted
service could be made on any person of sufficient discretion in the dwelling place of
the defendant, and certainly defendants husband, who was there, was competent to
receive the summons on her behalf. In any event, it appears that defendant in that
case submitted to the jurisdiction of the court by instructing her husband to move for
the dissolution of the writ of attachment issued in that case.
On the other hand, in the case of Gemperle v. Schenker,[10] it was held that service
on the wife of a nonresident defendant was found sufficient because the defendant
had appointed his wife as his attorney-in-fact. It was held that although defendant
Paul Schenker was a Swiss citizen and resident of Switzerland, service of summons
upon his wife Helen Schenker who was in the Philippines was sufficient because she
was her husbands representative and attorney-in-fact in a civil case, which he had
earlier filed against William Gemperle. In fact Gemperles action was for damages
arising from allegedly derogatory statements contained in the complaint filed in the
first case. As this Court said, i]n other words, Mrs. Schenker had authority to sue, and
had actually sued, on behalf of her husband, so that she was, also, empowered to
represent him in suits filed against him, particularly in a case, like the one at bar,
which is a consequence of the action brought by her on his behalf.[11] Indeed, if
instead of filing an independent action Gemperle filed a counterclaim in the action
brought by Mr. Schenker against him, there would have been no doubt that the trial
court could have acquired jurisdiction over Mr. Schenker through his agent and
attorney-in-fact, Mrs. Schenker.
In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint her
husband as her attorney-in-fact. Although she wrote private respondent s attorney
that all communications intended for her should be addressed to her husband who is
also her lawyer at the latters address in Manila, no power of attorney to receive
summons for her can be inferred therefrom. In fact the letter was written seven months
81
before the filing of this case below, and it appears that it was written in connection
with the negotiations between her and her sister, respondent Rosita Dimalanta,
concerning the partition of the property in question. As is usual in negotiations of this
kind, the exchange of correspondence was carried on by counsel for the parties. But
the authority given to petitioners husband in these negotiations certainly cannot be
construed as also including an authority to represent her in any litigation.

For the foregoing reasons, we hold that there was no valid service on petitioner
Lourdes A. Valmonte in this case.

WHEREFORE, the decision appealed from is REVERSED and the orders dated July
3, 1992 and September 23, 1992 of the Regional Trial Court of Manila, Branch 48 are
REINSTATED.

SO ORDERED.

82
G.R. No. 78328 June 3, 1991
CARMELITA PELAEZ SAHAGUN, petitioner,
vs.
COURT OF APPEALS, JUDGE JOB B. MADAYAG, in his capacity as Presiding
Judge of Branch 145, Regional Trial Court of Makati, and FILINVEST CREDIT
CORPORATION, respondents.
Ven V. Paculan for petitioner.
Labaguis, Loyola, Angara & Associates for private respondents.
REGALADO, J.:
The case at bar commenced on June 25, 1982 when Civil Case No. 465561 was filed
in the defunct Court of First Instance of Rizal, Branch XXIV,2 by private respondent
Filinvest Credit Corporation (hereinafter, Filinvest) against petitioner's spouse, Abel
(alias Abelardo) Sahagun, manager of Rallye Motor Co., Inc. (Rallye, for brevity). It
was alleged that Abel Sahagun made it appear that his company had sold a motor
vehicle to one Ernesto Salazar who issued a promissory note for the price and
executed as security for the payment of the note a chattel mortgage on the motor
vehicle in favor of Rallye. Subsequently, Rallye, through said Abel Sahagun.,
assigned the note and the chattel mortgage to Filinvest for valuable consideration.
When the note matured, Salazar failed to pay the value thereof to the assignee,
respondent Filinvest, compelling it to sue. However, Filinvest discovered later that the
mortgaged car had not been delivered to Salazar by Sahagun.3
After Filinvest brought suit against Abel Sahagun, a writ of attachment was issued
and subsequently levied on the house and lot4 registered in his name, located at No.
16 Mangga Chupoy St., Pilar Village Subdivision, Las Piñas, Metro Manila. Petitioner
and her children have been residing continuously in that house since then and up to
now and she claims that house as her own, having allegedly paid for it with her own
earnings.
On June 2, 1983, the trial court issued an order denying private respondent's motion
to declare defendant Abel Sahagun in default but directed it to "'take steps to effect
service of the summons and complaint upon defendant, who is out of this country and
his whereabouts in the United States of America is unknown, as per information from
his wife contained in her motion for intervention, pursuant to Sec. 17, Rule 14, Rules
of Court.5 However, on June 23, 1983, the trial court dismissed without prejudice the
complaint of Filinvest for its failure to serve summons extra-territorially upon
defendant Abel Sahagun despite the aforesaid order.6
Filinvest filed a motion for reconsideration,7 dated June 23, 1983, praying that the
order of June 2, 1983 be reconsidered and set aside and that defendant Abel
Sahagun be declared in default. It also prayed that the order granting petitioner's
motion for leave to intervene be denied, and that said motion be expunged from the
records.
On July 7, 1983, the trial court issued an order granting petitioner time to file a
complaint in intervention and denying reconsideration of the denial of private
respondent's motion to declare defendant Abel Sahagun in default.8
Petitioner Carmelita Sahagun, intervened9 on July 27, 1983, questioning the
jurisdiction of the trial court. However, for failure to appear at the pre-trial conference
held on November 25, 1983, she was declared "in default." Abel Sahagun was also
declared in default for failing to answer the complaint.10 Subsequently, on February
20, 1984 the court a quo rendered judgment against Abel Sahagun, with the following
decretal portion:
WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendant
Abel Sahagun, ordering the latter to pay the former the sum of NINETY-SEVEN
THOUSAND SIXTY-SIX PESOS AND FIFTY-NINE CENTAVOS (P97,066.59),
Philippine Currency, with interest at the rate of 14% per annum from July 27, 1977
until fully paid; the sum equivalent to 25% of the principal obligation due as and for
liquidated damages; the further sum equivalent to 25% of the obligation due as and
for attorney's fees; and to pay the costs of this suit.
SO ORDERED.11
Thereupon, petitioner Carmelita Sahagun, elevated the case to the then Intermediate
Appellate Court in AC-G.R. SP No. 05044 which, in a decision12 promulgated on
February 27, 1985, granted her petition for certiorari with prohibition and set aside the
trial court's aforesaid decision and the order, dated November 28, 1984, granting
execution. The appellate court, ruled that petitioner was deprived of the opportunity
to present evidence in support of her complaint in intervention, including evidence to
support her claim that since 1970 she and her husband had been living separately.
In turn, Filinvest filed with the Court in G.R. No. 70357 a petition for review of the
Intermediate Appellate Court's decision, but said petition was denied in our resolution
of July 8, 1985.13
On September 26, 1985, Filinvest filed a motion for leave to serve summons by
publication on defendant Abel Sahagun. The court below granted the motion, stating
in its order dated November 15, 1985, as follows:
. . . pursuant to Sec. 17, Rule 14 of the Revised Rules of Court, let service of the
summons upon defendant Abel (Abelardo) Sahagun be effected out of the Philippines
by publication in a newspaper of general circulation in the Philippines, to which this
matter may be assigned after due raffle in accordance with existing law, for three
successive days; and said defendant is hereby ordered to file his answer in Court
within a reasonable time, which shall not be less than sixty (60) days after notice.
The Clerk of Court is hereby directed to send copies of the summons and tills Order
by registered mail with registry return card to the last known address of said
defendant. No. 16 Mangga Chupoy Street, Pilar Village Subdivision, Las Piñas, Metro
Manila.
83
Plaintiff is hereby ordered to implead Rallye Motors Co., Inc. as co-defendant, within
one (1) month from notice hereof
SO ORDERED.14
On December 11, 1985, Filinvest filed an amended complaint for the same sum of
money against Abel Sahagun, this time impleading Carmelita Pelaez Sahagun and
Rallye as additional defendants.15
On January 10, 1986, the respondent trial court issued an order admitting the
amended complaint and directing service of summons and the amended complaint
upon defendant Abel Sahagun at a different address at his last known address — "at
1228-A Antipolo Street, Makati, Metro Manila."16
Afterwards, summons was supposedly served on Abel Sahagun through publication
in the Manila Evening Post on March 7, 14, and 21, 1986, according to the affidavit of
publication of its president,17 with a confusing entry in the notice of order18 that his
last known address was at "No. 16 Mangga Chupoy, Pilar Village Subdivision, Las
Piñas, Metro Manila" and to which address said notice was directed, thus clearly
contradicting the address stated in the January 10, 1986 order of the trial court, which
was "No. 1228-A Antipolo Street, Makati, Metro Manila."
On March 11, 1986, petitioner filed her answer to the amended complaint.19 Since
no answer was filed by the two other defendants Abel Sahagun and Rallye, Filinvest
filed an omnibus motion20 on June 26, 1986 that they be declared in default.
On July 18, 1986, Judge Job Madayag of Branch 145, Regional Trial Court of Makati,
issued an order granting in part the omnibus motion of Filinvest dated June 26, 1986,
and denying it in part.21 Apparently, since only defendants Abel and Carmelita
Sahagun were allegedly served with summons, the former through publication and
the latter by personal service as in fact she had filed her answer, only defendant Abel
Sahagun was declared in default for failure to file his answer. Defendant Rallye, on
the other hand, was not declared in default because summons had not been served
upon it.
Petitioner went on certiorari to the Court of Appeals, in a petition docketed as CA-
G.R. SP No. 09909, assailing as grave abuse of discretion the declaration of default
of defendant Abel Sahagun. On February 6, 1987, respondent Court of Appeals
promulgated a decision dismissing the petition, and on April 22, 1987, it denied the
subsequent motion for reconsideration for lack of merit.22 Hence, the present
recourse.
Petitioner assails the appellate court's decision and resolution, raising the basic issue
as to whether or not respondent trial court acquired jurisdiction over defendant
Abelardo Sahagun, by the publication of summons in the Manila Evening Post
(Annexes "G" and "G-1" thereof), so as to empower it to declare him in default for
failure to file his answer (Annex "H" thereof).23
There is no question that the facts of the present case warrant extraterritorial service
of summons as authorized by Section 17, Rule 14 of the Rules of Court. Admittedly,
one of the defendants, Abel Sahagun, has left the Philippines and has been residing
somewhere in the United States. Per the certification of the Commission on
Immigration and Deportation dated July 22, 1983, Abel Sahagun left on April 23,
197824 hence he was a nonresident defendant at the time private respondent brought
suit in the court below. Also, since the suit involves real property wherein said
defendant ostensibly has an interest and which property has in fact been attached at
the instance of private respondent, the court a quo correctly ordered service of
summons on said defendant out of the Philippines, adopting for such service one of
the modes authorized by the aforecited provision of the Rules, that is, "by publication
in a newspaper of general circulation in such places and for such time as the court
may order."
It was posited during the deliberations on this case that such publication of summons
in a local newspaper, as sanctioned by the trial court, was wrong and that the
publication should have been made in a newspaper published in the state and county
of the United States where Abel Sahagun now allegedly resides. Such publication in
a foreign newspaper, it is claimed, would most likely give notice to the person to be
served, although it is also conceded that such condition has not been incorporated in
Section 17 of Rule 14. We believe, however, that such a sweepimg doctrine would
virtually unsettle a long standing interpretation of the aforesaid rule on extraterritorial
service of summons by publication, as well as its implementation sanctioned by the
practice followed in this jurisdiction.1âwphi1
True it is that there is no specific proscription against resorting to publication of
summons in a foreign publication circulating in the place where the defendant resides.
To illustrate, in Tolaram Menghra vs. Bulchand Tarachand, et al.25 it is reported that
the summons therein was served by publication in the territory of Hawaii where the
defendant resided. However, as early as the case of El Banco Español-Filipino vs.
Palanca, etc.26 where the defendant mortgagor had returned to the City of Amoy,
China and was residing therein when the foreclosure suit was instituted against him,
the lower court ordered the publication of summons in a newspaper in the City of
Manila, and the service of a copy thereof to the last known address of defendant in
accordance with the provisions of Sections 398 and 399 of the Code of Civil
Procedure, which provisions have been reproduced in the aforestated Section 17,
Rule 14 of the 1964 Rules of Court.
While what was involved in the aforesaid case was a foreclosure proceeding and the
present case is based on the attachment of defendant's property here, the difference
is inconsequential. In both cases, the actions are quasi in rem27 since, in the
language of El Banco Español-Filipino, there is an instructive analogy between
foreclosure and attachment proceedings. In both instances, summons by publication
is allowed and the rationale for that is explained in said case thus:
Passing at once to the requisite that the defendant shall have an opportunity to be
heard, we observe that in a foreclosure, case some notification of the proceedings to
the non-resident owner, prescribing the time within which appearance must be made,
is everywhere recognized as essential. To answer this necessity the statutes
generally provide for publication, and usually in addition thereto, for the mailing of
notice to the defendant, if his residence is known. Though commonly called
constructive, or substituted service, such notification does not constitute a service of
84
process in any true sense. It is merely a means provided by law whereby the owner
may be admonished that his property is the subject of judicial proceedings and that it
is incumbent upon him to take such steps as he sees fit to protect it. . . .
xxx xxx xxx
It will be observed that this mode of notification does not involve any absolute
assurance that the absent owner shall thereby receive actual notice. The periodical
containing the publication may never come to his hands, and the chances that he
should discover the notice may often be very slight. Even where notice is sent by mail
the probability of his receiving it, though much increased, is dependent upon the
correctness of the address to which it is forwarded as well as upon the regularity and
security of the mail service. It will be noted, furthermore, that the provision of our law
relative to the mailing of notice does not absolutely require the mailing of notice
unconditionally and in every event, but only in the case where the defendant's
residence is known. In the light of all these facts, it is evident that actual notice to the
defendant in cases of this kind is not, under the law, to be considered absolutely
necessary.
In De Midgely vs. Ferandos, etc., et al.,28 we adverted to the disquisition in Perkins
vs. Dizon, etc., et al.29 in this wise:
This Court clarified that in a quasi in rem action jurisdiction over the person of a
nonresident defendant is not essential. The service of summons by publication is
required "merely to satisfy the constitutional requirement of due process". The
judgment of the court in the case would settle the title to the shares of stock and to
that extent it partakes of the nature of a judgment in rem. Consequently, the lower
court had jurisdiction to try the case even if it had not acquired jurisdiction over the
person of Idonah Slade Perkins. The judgment would be confined to the res. No
personal judgment could be rendered against the non-resident.
What further compounds the difficulty in the proposed requirement for foreign
publication of the summons in the case at bar is the fact that it does not appear in
what state or county of the United States the defendant Abel Sahagun presently
resides. Necessarily, if the trial court should be required to resort to publication in a
foreign newspaper it must have at hand not only the name and availability of such
newspaper or periodical but also the laws and rules governing the publication of
judicial processes and notices in said place. Here, we only have a defendant in the
United States to contend with, but we can very well anticipate the plethora of problems
that would arise if the same question on nonresident defendants is replicated in the
other countries of the world. In this jurisdiction, at least, we have the corresponding
regulatory guidelines in Presidential Decree No. 1079.
In fine. while there is no prohibition against availing of a foreign newspaper in
extraterritorial service of summons, neither should such publication in a local
newspaper of general circulation be altogether interdicted since, after all, the rule
specifically authorizes the same to be made in such places and for such time as the
court concerned may order. If it is felt that adjective policy would be better served by
denying such discretion to the trial court, then the corresponding amendment of the
present rule would be indicated but subject to empirical proof of the necessity for and
the wisdom of such a change.
Accordingly, for the nonce, the matter should continue to be addressed to the sound
discretion of the trial court in each particular case since it has the facts before it, and
we should interfere only in the exercise of our corrective power over an error or abuse
in its actuations in a specific case. Undeniably, some controversies may present
factual features which would justify resort to local publication of summons. There is
the possibility of debtors escaping the jurisdiction of our courts through the simple
expedient of seeking a foreign refuge, probably with their subsequent whereabouts
unknown or unascertainable. For that matter, it is on that very rationale that summons
by publication is authorized whenever the address of a defendant is unknown and
cannot be ascertained by diligent even if he is in the Philippines.
We repeat, service of summons on a nonresident defendant who is not found in the
country is required, not for purposes of physically acquiring jurisdiction over his
person but simply in pursuance of the requirements of fair play, so that he may be
informed of the pendency of the action against him and the possibility that property in
the Philippines belonging to him or in which he has an interest may be subjected to a
judgment in favor of a resident, and that he may thereby be accorded an opportunity
to defend in the action, if he be so minded. The only relief that may be granted in such
an action against such a nonresident defendant, who does not choose to submit
himself to the jurisdiction of the Philippine court, is limited to the res.
However, despite our holding that publication in the Philippines is sufficient, the
service of summons in this case is still defective, there being no showing that copies
of the summons and the amended complaint were duly served at the defendant's last
known correct address by registered mail, as a complement to the publication30 and
in compliance with the order of the lower court dated January 10, 1986,31 as
hereinbefore noted. The failure to strictly comply correctly with the requirements of
the rules regarding the mailing of copies of the summons and the order for its
publication is a fatal defect in the service of summons.32 As held by to Court:
It is the duty of the court to require the fullest compliance with all the requirements of
the statute permitting service by publication. Where service is obtained by publication,
the entire proceeding should be closely scrutinized by the courts and a strict
compliance with every condition of law should be exacted. Otherwise great abuses
may occur, and the rights of persons and property may be made to depend upon the
elastic conscience of interested parties rather than enlightened judgment of the court
or judge.33
The foregoing notwithstanding, we are not inclined to order the dismissal of the case
below for non-compliance by private respondent of the trial court's order of January
10, 1986. The attachment of property registered in the name of defendant Abel
Sahagun justifies summons by publication and, although that ownership appears to
be disputed and should precisely be a priority concern of the trial court to resolve,
nonetheless a prima facie justification for extraterritorial service of summons on said
nonresident defendant clearly exists. The erroneous transmission of copies of the
summons and the complaint to what appears as an incorrect last known address of
said defendant is a matter which the trial court can more readily ascertain and remedy.
85
It also bears mention that even if said nonresident defendant should ultimately be
declared in default, his interest can be duly represented by the non-defaulting
defendant since a common cause of action appears to be involved, which fact may
be more adequately determined at the trial, and the success of the latter in the suit
shall inure to the benefit of the former.34

WHEREFORE, the petition is GRANTED and the decision, dated February 6, 1987,
and the resolution, dated April 22, 1987, of respondent Court of Appeals are SET
ASIDE. The case is, however, REMANDED to the lower court for proper extra-
territorial service of summons to defendant Abel Sahagun in accordance with the
provisions of Section 17, Rule 14 of the Rules of Court consonant with our above
pronouncements, and for appropriate proceedings in accordance with our
observations in tills decision and the courses of action indicated therein.

SO ORDERED.

86
G.R. No. 161417 February 8, 2007 bank. The respondent bank was allowed to present its evidence ex parte before the
Branch Clerk of Court who was then appointed by the court as Commissioner.
MA. TERESA CHAVES BIACO, Petitioner,
vs. Arturo Toring, the branch manager of the respondent bank, testified that the spouses
PHILIPPINE COUNTRYSIDE RURAL BANK, Respondent. Biaco had been obtaining loans from the bank since 1996 to 1998. The loans for the
years 1996-1997 had already been paid by the spouses Biaco, leaving behind a
DECISION balance of ₱1,260,304.33 representing the 1998 loans. The amount being claimed is
inclusive of interests, penalties and service charges as agreed upon by the parties.
TINGA, J.: The appraisal value of the land subject of the mortgage is only ₱150,000.00 as
reported by the Assessor’s Office.
Petitioner, Ma. Teresa Chaves Biaco, seeks a review of the Decision1 of the Court of
Appeals in CA-G.R. No. 67489 dated August 27, 2003, which denied her petition for Based on the report of the Commissioner, the respondent judge ordered as follows:
annulment of judgment, and the Resolution2 dated December 15, 2003 which denied
her motion for reconsideration. WHEREFORE, judgment is hereby rendered ordering defendants spouses
ERNESTO R. BIACO and MA. THERESA [CHAVES] BIACO to pay plaintiff bank
The facts as succinctly stated by the Court of Appeals are as follows: within a period of not less than ninety (90) days nor more than one hundred (100)
days from receipt of this decision the loan of ONE MILLION TWO HUNDRED SIXTY
Ernesto Biaco is the husband of petitioner Ma. Teresa Chaves Biaco. While employed THOUSAND THREE HUNDRED FOUR PESOS and THIRTY THREE CENTAVOS
in the Philippine Countryside Rural Bank (PCRB) as branch manager, Ernesto (₱1,260,304.33) plus litigation expenses in the amount of SEVEN THOUSAND SIX
obtained several loans from the respondent bank as evidenced by the following HUNDRED FORTY PESOS (₱7,640.00) and attorney’s fees in the amount of TWO
promissory notes: HUNDRED FIFTY TWO THOUSAND THIRTY PESOS and FORTY THREE
CENTAVOS (₱252,030.43) and cost of this suit.
Feb. 17, 1998 ₱ 65,000.00
Mar. 18, 1998 30,000.00 In case of non-payment within the period, the Sheriff of this Court is ordered to sell at
May 6, 1998 60,000.00 public auction the mortgaged Lot, a parcel of registered land (Lot 35802, Cad. 237
May 20, 1998 350,000.00 {Lot No. 12388-B, Csd-10-002342-D}), located at Gasi, Laguindingan, Misamis
July 30, 1998 155,000.00 Oriental and covered by TCT No. P-14423 to satisfy the mortgage debt, and the
Sept. 8, 1998 40,000.00 surplus if there be any should be delivered to the defendants spouses ERNESTO and
Sept. 8, 1998 120,000.00 MA. THERESA [CHAVES] BIACO. In the event however[,] that the proceeds of the
As security for the payment of the said loans, Ernesto executed a real estate auction sale of the mortgage[d] property is not enough to pay the outstanding
mortgage in favor of the bank covering the parcel of land described in Original obligation, the defendants are ordered to pay any deficiency of the judgment as their
Certificate of Title (OCT) No. P-14423. The real estate mortgages bore the signatures personal liability.
of the spouses Biaco.
SO ORDERED.
When Ernesto failed to settle the above-mentioned loans on its due date, respondent
bank through counsel sent him a written demand on September 28, 1999. The amount On July 12, 2000, the sheriff personally served the above-mentioned judgment to
due as of September 30, 1999 had already reached ONE MILLION EIGHTY Ernesto Biaco at his office at Export and Industry Bank. The spouses Biaco did not
THOUSAND SIX HUNDRED SEVENTY SIX AND FIFTY CENTAVOS appeal from the adverse decision of the trial court. On October 13, 2000, the
(₱1,080,676.50). respondent bank filed an ex parte motion for execution to direct the sheriff to sell the
mortgaged lot at public auction. The respondent bank alleged that the order of the
The written demand, however, proved futile. court requiring the spouses Biaco to pay within a period of 90 days had passed, thus
making it necessary to sell the mortgaged lot at public auction, as previously
On February 22, 2000, respondent bank filed a complaint for foreclosure of mortgage mentioned in the order of the court. The motion for execution was granted by the trial
against the spouses Ernesto and Teresa Biaco before the RTC of Misamis Oriental. court per Order dated October 20, 2000.
Summons was served to the spouses Biaco through Ernesto at his office (Export and
Industry Bank) located at Jofelmor Bldg., Mortola Street, Cagayan de Oro City. On October 31, 2000, the sheriff served a copy of the writ of execution to the spouses
Biaco at their residence in #92 9th Street, Nazareth, Cagayan de Oro City. The writ
Ernesto received the summons but for unknown reasons, he failed to file an answer. of execution was personally received by Ernesto. By virtue of the writ of execution
Hence, the spouses Biaco were declared in default upon motion of the respondent issued by the trial court, the mortgaged property was sold at public auction in favor of

87
the respondent bank in the amount of ONE HUNDRED FIFTY THOUSAND PESOS
(₱150,000.00).
The amount of the property sold at public auction being insufficient to cover the full
amount of the obligation, the respondent bank filed an "ex parte motion for judgment"
praying for the issuance of a writ of execution against the other properties of the
spouses Biaco for the full settlement of the remaining obligation. Granting the motion,
the court ordered that a writ of execution be issued against the spouses Biaco to
enforce and satisfy the judgment of the court for the balance of ONE MILLION THREE
HUNDRED SIXTY NINE THOUSAND NINE HUNDRED SEVENTY FOUR PESOS
AND SEVENTY CENTAVOS (₱1,369,974.70).
The sheriff executed two (2) notices of levy against properties registered under the
name of petitioner Ma. Teresa Chaves Biaco. However, the notices of levy were
denied registration because Ma. Teresa had already sold the two (2) properties to her
daughters on April 11, 2001.3
Petitioner sought the annulment of the Regional Trial Court decision contending that
extrinsic fraud prevented her from participating in the judicial foreclosure proceedings.
According to her, she came to know about the judgment in the case only after the
lapse of more than six (6) months after its finality. She claimed that extrinsic fraud
was perpetrated against her because the bank failed to verify the authenticity of her
signature on the real estate mortgage and did not inquire into the reason for the
absence of her signature on the promissory notes. She moreover asserted that the
trial court failed to acquire jurisdiction because summons were served on her through
her husband without any explanation as to why personal service could not be made.
The Court of Appeals considered the two circumstances that kept petitioner in the
dark about the judicial foreclosure proceedings: (1) the failure of the sheriff to
personally serve summons on petitioner; and (2) petitioner’s husband’s concealment
of his knowledge of the foreclosure proceedings. On the validity of the service of
summons, the appellate court ruled that judicial foreclosure proceedings are actions
quasi in rem. As such, jurisdiction over the person of the defendant is not essential
as long as the court acquires jurisdiction over the res. Noting that the spouses Biaco
were not opposing parties in the case, the Court of Appeals further ruled that the fraud
committed by one against the other cannot be considered extrinsic fraud.
Her motion for reconsideration having been denied, petitioner filed the instant Petition
for Review,4 asserting that even if the action is quasi in rem, personal service of
summons is essential in order to afford her due process. The substituted service
made by the sheriff at her husband’s office cannot be deemed proper service absent
any explanation that efforts had been made to personally serve summons upon her
but that such efforts failed. Petitioner contends that extrinsic fraud was perpetrated
not so much by her husband, who did not inform her of the judicial foreclosure
proceedings, but by the sheriff who allegedly connived with her husband to just leave
a copy of the summons intended for her at the latter’s office.
Petitioner further argues that the deficiency judgment is a personal judgment which
should be deemed void for lack of jurisdiction over her person.
Respondent PCRB filed its Comment,5 essentially reiterating the appellate court’s
ruling. Respondent avers that service of summons upon the defendant is not
necessary in actions quasi in rem it being sufficient that the court acquire jurisdiction
over the res. As regards the alleged conspiracy between petitioner’s husband and the
sheriff, respondent counters that this is a new argument which cannot be raised for
the first time in the instant petition.
We required the parties to file their respective memoranda in the Resolution6 dated
August 18, 2004. Accordingly, petitioner filed her Memorandum7 dated October 10,
2004, while respondent filed its Memorandum for Respondent8 dated September 9,
2004.
Annulment of judgment is a recourse equitable in character, allowed only in
exceptional cases as where there is no available or other adequate remedy.
Jurisprudence and Sec. 2, Rule 47 of the 1997 Rules of Civil Procedure (Rules of
Court) provide that judgments may be annulled only on grounds of extrinsic fraud and
lack of jurisdiction or denial of due process.9
Petitioner asserts that extrinsic fraud consisted in her husband’s concealment of the
loans which he obtained from respondent PCRB; the filing of the complaint for judicial
foreclosure of mortgage; service of summons; rendition of judgment by default; and
all other proceedings which took place until the writ of garnishment was served.10
Extrinsic fraud exists when there is a fraudulent act committed by the prevailing party
outside of the trial of the case, whereby the defeated party was prevented from
presenting fully his side of the case by fraud or deception practiced on him by the
prevailing party.11 Extrinsic fraud is present where the unsuccessful party had been
prevented from exhibiting fully his case, by fraud or deception practiced on him by his
opponent, as by keeping him away from court, a false promise of a compromise; or
where the defendant never had knowledge of the suit, being kept in ignorance by the
acts of the plaintiff; or where an attorney fraudulently or without authority assumes to
represent a party and connives at his defeat; or where the attorney regularly employed
corruptly sells out his client’s interest to the other side. The overriding consideration
is that the fraudulent scheme of the prevailing litigant prevented a party from having
his day in court.12
With these considerations, the appellate court acted well in ruling that there was no
fraud perpetrated by respondent bank upon petitioner, noting that the spouses Biaco
were co-defendants in the case and shared the same interest. Whatever fact or
circumstance concealed by the husband from the wife cannot be attributed to
respondent bank.
Moreover, petitioner’s allegation that her signature on the promissory notes was
forged does not evince extrinsic fraud. It is well-settled that the use of forged
instruments during trial is not extrinsic fraud because such evidence does not
preclude the participation of any party in the proceedings.13
The question of whether the trial court has jurisdiction depends on the nature of the
action, i.e., whether the action is in personam, in rem, or quasi in rem. The rules on
88
service of summons under Rule 14 of the Rules of Court likewise apply according to
the nature of the action.
An action in personam is an action against a person on the basis of his personal
liability. An action in rem is an action against the thing itself instead of against the
person. An action quasi in rem is one wherein an individual is named as defendant
and the purpose of the proceeding is to subject his interest therein to the obligation
or lien burdening the property.14
In an action in personam, jurisdiction over the person of the defendant is necessary
for the court to validly try and decide the case. In a proceeding in rem or quasi in rem,
jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction
on the court provided that the court acquires jurisdiction over the res. Jurisdiction over
the res is acquired either (1) by the seizure of the property under legal process,
whereby it is brought into actual custody of the law; or (2) as a result of the institution
of legal proceedings, in which the power of the court is recognized and made
effective.15
Nonetheless, summons must be served upon the defendant not for the purpose of
vesting the court with jurisdiction but merely for satisfying the due process
requirements.16
A resident defendant who does not voluntarily appear in court, such as petitioner in
this case, must be personally served with summons as provided under Sec. 6, Rule
14 of the Rules of Court. If she cannot be personally served with summons within a
reasonable time, substituted service may be effected (1) by leaving copies of the
summons at the defendant’s residence with some person of suitable age and
discretion then residing therein, or (2) by leaving the copies at defendant’s office or
regular place of business with some competent person in charge thereof in
accordance with Sec. 7, Rule 14 of the Rules of Court.
In this case, the judicial foreclosure proceeding instituted by respondent PCRB
undoubtedly vested the trial court with jurisdiction over the res. A judicial foreclosure
proceeding is an action quasi in rem. As such, jurisdiction over the person of petitioner
is not required, it being sufficient that the trial court is vested with jurisdiction over the
subject matter.
There is a dimension to this case though that needs to be delved into. Petitioner avers
that she was not personally served summons. Instead, summons was served to her
through her husband at his office without any explanation as to why the particular
surrogate service was resorted to. The Sheriff’s Return of Service dated March 21,
2000 states:
xxxx
That on March 16, 2000, the undersigned served the copies of Summons, complaint
and its annexes to the defendants Sps. Ernesto R. & Ma. Teresa Ch. Biaco thru
Ernesto R. Biaco[,] defendant of the above-entitled case at his office EXPORT &
INDUSTRY BANK, Jofelmore Bldg.[,] Mortola St., Cagayan de Oro City and he
acknowledged receipt thereof as evidenced with his signature appearing on the
original copy of the Summons.17 [Emphasis supplied]
Without ruling on petitioner’s allegation that her husband and the sheriff connived to
prevent summons from being served upon her personally, we can see that petitioner
was denied due process and was not able to participate in the judicial foreclosure
proceedings as a consequence. The violation of petitioner’s constitutional right to due
process arising from want of valid service of summons on her warrants the annulment
of the judgment of the trial court.
There is more, the trial court granted respondent PCRB’s ex-parte motion for
deficiency judgment and ordered the issuance of a writ of execution against the
spouses Biaco to satisfy the remaining balance of the award. In short, the trial court
went beyond its jurisdiction over the res and rendered a personal judgment against
the spouses Biaco. This cannot be countenanced.1awphil.net
In Sahagun v. Court of Appeals,18 suit was brought against a non-resident defendant,
Abelardo Sahagun, and a writ of attachment was issued and subsequently levied on
a house and lot registered in his name. Claiming ownership of the house, his wife,
Carmelita Sahagun, filed a motion to intervene. For failure of plaintiff to serve
summons extraterritorially upon Abelardo, the complaint was dismissed without
prejudice.
Subsequently, plaintiff filed a motion for leave to serve summons by publication upon
Abelardo. The trial court granted the motion. Plaintiff later filed an amended complaint
against Abelardo, this time impleading Carmelita and Rallye as additional defendants.
Summons was served on Abelardo through publication in the Manila Evening Post.
Abelardo failed to file an answer and was declared in default. Carmelita went on
certiorari to the Court of Appeals assailing as grave abuse of discretion the declaration
of default of Abelardo. The Court of Appeals dismissed the petition and denied
reconsideration.
In her petition with this Court, Carmelita raised the issue of whether the trial court
acquired jurisdiction over her husband, a non-resident defendant, by the publication
of summons in a newspaper of general circulation in the Philippines. The Court
sustained the correctness of extrajudicial service of summons by publication in such
newspaper.
The Court explained, citing El Banco Español-Filipino v. Palanca,19 that foreclosure
and attachment proceedings are both actions quasi in rem. As such, jurisdiction over
the person of the (non-resident) defendant is not essential. Service of summons on a
non-resident defendant who is not found in the country is required, not for purposes
of physically acquiring jurisdiction over his person but simply in pursuance of the
requirements of fair play, so that he may be informed of the pendency of the action
against him and the possibility that property belonging to him or in which he has an
interest may be subjected to a judgment in favor of a resident, and that he may thereby
be accorded an opportunity to defend in the action, should he be so minded.
Significantly, the Court went on to rule, citing De Midgely v. Ferandos, et. al.20 and
Perkins v. Dizon, et al.21 that in a proceeding in rem or quasi in rem, the only relief
89
that may be granted by the court against a defendant over whose person it has not
acquired jurisdiction either by valid service of summons or by voluntary submission to
its jurisdiction, is limited to the res.

Similarly, in this case, while the trial court acquired jurisdiction over the res, its
jurisdiction is limited to a rendition of judgment on the res. It cannot extend its
jurisdiction beyond the res and issue a judgment enforcing petitioner’s personal
liability. In doing so without first having acquired jurisdiction over the person of
petitioner, as it did, the trial court violated her constitutional right to due process,
warranting the annulment of the judgment rendered in the case.

WHEREFORE, the instant petition is GRANTED. The Decision dated August 27,
2003 and the Resolution dated December 15, 2003 of the Court of Appeals in CA-
G.R. SP No. 67489 are SET ASIDE. The Judgment dated July 11, 2000 and Order
dated February 9, 2001 of the Regional Trial Court of Cagayan de Oro City, Branch
20, are likewise SET ASIDE.

SO ORDERED.

90
[G.R. No. 128803. September 25, 1998]
ASIAVEST LIMITED, petitioner, vs. THE COURT OF APPEALS AND ANTONIO
HERAS, respondents.
DECISION
DAVIDE, JR., J.:
In issue is the enforceability in the Philippines of a foreign judgment. The antecedents
are summarized in the 24 August 1990 Decision[1] of Branch 107 of the Regional
Trial Court of Quezon City in Civil Case No. Q-52452; thus:
The plaintiff Asiavest Limited filed a complaint on December 3, 1987 against the
defendant Antonio Heras praying that said defendant be ordered to pay to the plaintiff
the amounts awarded by the Hong Kong Court Judgment dated December 28, 1984
and amended on April 13, 1987, to wit:
1) US$1,810,265.40 or its equivalent in Hong Kong currency at the time of payment
with legal interest from December 28, 1984 until fully paid;
2) interest on the sum of US$1,500.00 at 9.875% per annum from October 31, 1984
to December 28, 1984; and
3) HK$905.00 at fixed cost in the action; and
4) at least $80,000.00 representing attorneys fees, litigation expenses and cost, with
interest thereon from the date of the judgment until fully paid.
On March 3, 1988, the defendant filed a Motion to Dismiss. However, before the court
could resolve the said motion, a fire which partially razed the Quezon City Hall
Building on June 11, 1988 totally destroyed the office of this Court, together with all
its records, equipment and properties. On July 26, 1988, the plaintiff, through counsel
filed a Motion for Reconstitution of Case Records. The Court, after allowing the
defendant to react thereto, granted the said Motion and admitted the annexes
attached thereto as the reconstituted records of this case per Order dated September
6, 1988. Thereafter, the Motion to Dismiss, the resolution of which had been deferred,
was denied by the Court in its Order of October 4, 1988.
On October 19, 1988, defendant filed his Answer. The case was then set for pre-trial
conference. At the conference, the parties could not arrive at any settlement.
However, they agreed on the following stipulations of facts:
1) The defendant admits the existence of the judgment dated December 28, 1984 as
well as its amendment dated April 13, 1987, but not necessarily the authenticity or
validity thereof;
2) The plaintiff is not doing business and is not licensed to do business in the
Philippines;
3) The residence of defendant, Antonio Heras, is New Manila, Quezon City.
The only issue for this Court to determine is, whether or not the judgment of the Hong
Kong Court has been repelled by evidence of want of jurisdiction, want of notice to
the party, collusion, fraud or clear mistake of law or fact, such as to overcome the
presumption established in Section 50, Rule 39 of the Rules of Court in favor of
foreign judgments.
In view of the admission by the defendant of the existence of the aforementioned
judgment (Pls. See Stipulations of Facts in the Order dated January 5, 1989 as
amended by the Order of January 18, 1989), as well as the legal presumption in favor
of the plaintiff as provided for in paragraph (b), Sec. 50, (Ibid.), the plaintiff presented
only documentary evidence to show rendition, existence, and authentication of such
judgment by the proper officials concerned (Pls. See Exhibits A thru B, with their
submarkings). In addition, the plaintiff presented testimonial and documentary
evidence to show its entitlement to attorneys fees and other expenses of litigation.
On the other hand, the defendant presented two witnesses, namely, Fortunata dela
Vega and Russel Warren Lousich.
The gist of Ms. dela Vegas testimony is to the effect that no writ of summons or copy
of a statement of claim of Asiavest Limited was ever served in the office of the
Navegante Shipping Agency Limited and/or for Mr. Antonio Heras, and that no service
of the writ of summons was either served on the defendant at his residence in New
Manila, Quezon City. Her knowledge is based on the fact that she was the personal
secretary of Mr. Heras during his JD Transit days up to the latter part of 1972 when
he shifted or diversified to shipping business in Hong Kong; that she was in-charge of
all his letters and correspondence, business commitments, undertakings,
conferences and appointments, until October 1984 when Mr. Heras left Hong Kong
for good; that she was also the Officer-in-Charge or Office Manager of Navegante
Shipping Agency LTD, a Hong Kong registered and based company acting as ships
agent, up to and until the company closed shop sometime in the first quarter of 1985,
when shipping business collapsed worldwide; that the said company held office at 34-
35 Connaught Road, Central Hong Kong and later transferred to Caxton House at
Duddel Street, Hong Kong, until the company closed shop in 1985; and that she was
certain of such facts because she held office at Caxton House up to the first quarter
of 1985.
Mr. Lousich was presented as an expert on the laws of Hong Kong, and as a
representative of the law office of the defendants counsel who made a verification of
the record of the case filed by the plaintiff in Hong Kong against the defendant, as
well as the procedure in serving Court processes in Hong Kong.
In his affidavit (Exh. 2) which constitutes his direct testimony, the said witness stated
that:
The defendant was sued on the basis of his personal guarantee of the obligations of
Compania Hermanos de Navegacion S.A. There is no record that a writ of summons
was served on the person of the defendant in Hong Kong, or that any such attempt at
service was made. Likewise, there is no record that a copy of the judgment of the
91
High Court was furnished or served on the defendant; anyway, it is not a legal
requirement to do so under Hong Kong laws;
a) The writ of summons or claim can be served by the solicitor (lawyer) of the claimant
or plaintiff. In Hong Kong there are no Court personnel who serve writs of summons
and/or most other processes.
b) If the writ of summons or claim (or complaint) is not contested, the claimant or the
plaintiff is not required to present proof of his claim or complaint nor present evidence
under oath of the claim in order to obtain a Judgment.
c) There is no legal requirement that such a Judgment or decision rendered by the
Court in Hong Kong [to] make a recitation of the facts or the law upon which the claim
is based.
d) There is no necessity to furnish the defendant with a copy of the Judgment or
decision rendered against him.
e) In an action based on a guarantee, there is no established legal requirement or
obligation under Hong Kong laws that the creditor must first bring proceedings against
the principal debtor. The creditor can immediately go against the guarantor.
On cross examination, Mr. Lousich stated that before he was commissioned by the
law firm of the defendants counsel as an expert witness and to verify the records of
the Hong Kong case, he had been acting as counsel for the defendant in a number
of commercial matters; that there was an application for service of summons upon
the defendant outside the jurisdiction of Hong Kong; that there was an order of the
Court authorizing service upon Heras outside of Hong Kong, particularly in Manila or
any other place in the Philippines (p. 9, TSN, 2/14/90); that there must be adequate
proof of service of summons, otherwise the Hong Kong Court will refuse to render
judgment (p. 10, ibid); that the mere fact that the Hong Kong Court rendered
judgment, it can be presumed that there was service of summons; that in this case, it
is not just a presumption because there was an affidavit stating that service was
effected in [sic] a particular man here in Manila; that such affidavit was filed by one
Jose R. Fernandez of the firm Sycip Salazar on the 21st of December 1984, and
stated in essence that on Friday, the 23rd of November 1984 he served the 4th
defendant at No. 6 First Street, Quezon City by leaving it at that address with Mr.
Dionisio Lopez, the son-in-law of the 4th defendant the copy of the writ and Mr. Lopez
informed me and I barely believed that he would bring the said writ to the attention of
the 4th defendant (pp. 11-12, ibid.); that upon filing of that affidavit, the Court was
asked and granted judgment against the 4th defendant; and that if the summons or
claim is not contested, the claimant of the plaintiff is not required to present proof of
his claim or complaint or present evidence under oath of the claim in order to obtain
judgment; and that such judgment can be enforced in the same manner as a judgment
rendered after full hearing.
The trial court held that since the Hong Kong court judgment had been duly proved,
it is a presumptive evidence of a right as between the parties; hence, the party
impugning it had the burden to prove want of jurisdiction over his person. HERAS
failed to discharge that burden. He did not testify to state categorically and under oath
that he never received summons. Even his own witness Lousich admitted that HERAS
was served with summons in his Quezon City residence. As to De la Vegas testimony
regarding non-service of summons, the same was hearsay and had no probative
value.
As to HERAS contention that the Hong Kong court judgment violated the Constitution
and the procedural laws of the Philippines because it contained no statements of the
facts and the law on which it was based, the trial court ruled that since the issue
related to procedural matters, the law of the forum, i.e., Hong Kong laws, should
govern. As testified by the expert witness Lousich, such legalities were not required
under Hong Kong laws. The trial court also debunked HERAS contention that the
principle of excussion under Article 2058 of the Civil Code of the Philippines was
violated. It declared that matters of substance are subject to the law of the place
where the transaction occurred; in this case, Hong Kong laws must govern.
The trial court concluded that the Hong Kong court judgment should be recognized
and given effect in this jurisdiction for failure of HERAS to overcome the legal
presumption in favor of the foreign judgment. It then decreed; thus:
WHEREFORE, judgment is hereby rendered ordering defendant to pay to the plaintiff
the following sums or their equivalents in Philippine currency at the time of payment:
US$1,810,265.40 plus interest on the sum of US$1,500,000.00 at 9.875% per annum
from October 31, 1984 to December 28, 1984, and HK$905 as fixed cost, with legal
interests on the aggregate amount from December 28, 1984, and to pay attorneys
fees in the sum of P80,000.00.
ASIAVEST moved for the reconsideration of the decision. It sought an award of
judicial costs and an increase in attorneys fees in the amount of US$19,346.45 with
interest until full payment of the said obligations. On the other hand, HERAS no longer
opposed the motion and instead appealed the decision to the Court of Appeals, which
docketed the appeal as CA-G.R. CV No. 29513.
In its order[2] November 1990, the trial court granted ASIAVESTs motion for
reconsideration by increasing the award of attorneys fees to US$19,345.65 OR ITS
EQUIVALENT IN PHILIPPINE CURRENCY, AND TO PAY THE COSTS OF THIS
SUIT, provided that ASIAVEST would pay the corresponding filing fees for the
increase. ASIAVEST appealed the order requiring prior payment of filing fees.
However, it later withdrew its appeal and paid the additional filing fees.
On 3 April 1997, the Court of Appeals rendered its decision[3] reversing the decision
of the trial court and dismissing ASIAVESTs complaint without prejudice. It
underscored the fact that a foreign judgment does not of itself have any extraterritorial
application. For it to be given effect, the foreign tribunal should have acquired
jurisdiction over the person and the subject matter. If such tribunal has not acquired
jurisdiction, its judgment is void.
The Court of Appeals agreed with the trial court that matters of remedy and procedure
such as those relating to service of summons upon the defendant are governed by
the lex fori, which was, in this case, the law of Hong Kong. Relative thereto, it gave
weight to Lousichs testimony that under the Hong Kong law, the substituted service
92
of summons upon HERAS effected in the Philippines by the clerk of Sycip Salazar
Hernandez & Gatmaitan firm would be valid provided that it was done in accordance
with Philippine laws. It then stressed that where the action is in personam and the
defendant is in the Philippines, the summons should be personally served on the
defendant pursuant to Section 7, Rule 14 of the Rules of Court.[4] Substituted service
may only be availed of where the defendant cannot be promptly served in person, the
fact of impossibility of personal service should be explained in the proof of service. It
also found as persuasive HERAS argument that instead of directly using the clerk of
the Sycip Salazar Hernandez & Gatmaitan law office, who was not authorized by the
judge of the court issuing the summons, ASIAVEST should have asked for leave of
the local courts to have the foreign summons served by the sheriff or other court
officer of the place where service was to be made, or for special reasons by any
person authorized by the judge.
The Court of Appeals agreed with HERAS that notice sent outside the state to a non-
resident is unavailing to give jurisdiction in an action against him personally for money
recovery. Summons should have been personally served on HERAS in Hong Kong,
for, as claimed by ASIAVEST, HERAS was physically present in Hong Kong for nearly
14 years. Since there was not even an attempt to serve summons on HERAS in Hong
Kong, the Hong Kong Supreme Court did not acquire jurisdiction over HERAS.
Nonetheless, it did not totally foreclose the claim of ASIAVEST; thus:
While We are not fully convinced that [HERAS] has a meritorious defense against
[ASIAVESTs] claims or that [HERAS] ought to be absolved of any liability,
nevertheless, in view of the foregoing discussion, there is a need to deviate from the
findings of the lower court in the interest of justice and fair play. This, however, is
without prejudice to whatever action [ASIAVEST] might deem proper in order to
enforce its claims against [HERAS].
Finally, the Court of Appeals also agreed with HERAS that it was necessary that
evidence supporting the validity of the foreign judgment be submitted, and that our
courts are not bound to give effect to foreign judgments which contravene our laws
and the principle of sound morality and public policy.
ASIAVEST forthwith filed the instant petition alleging that the Court of Appeals erred
in ruling that
I.
IT WAS NECESSARY FOR [ASIAVEST] TO PRESENT EVIDENCE SUPPORTING
THE VALIDITY OF THE JUDGMENT;
II.
THE SERVICE OF SUMMONS ON [HERAS] WAS DEFECTIVE UNDER
PHILIPPINE LAW;
III.
SUMMONS SHOULD HAVE BEEN PERSONALLY SERVED ON HERAS IN HONG
KONG;
IV.
THE HONG KONG SUMMONS SHOULD HAVE BEEN SERVED WITH LEAVE OF
PHILIPPINE COURTS;
V.
THE FOREIGN JUDGMENT CONTRAVENES PHILIPPINE LAWS, THE
PRINCIPLES OF SOUND MORALITY, AND THE PUBLIC POLICY OF THE
PHILIPPINES.
Being interrelated, we shall take up together the assigned errors.
Under paragraph (b) of Section 50, Rule 39 of the Rules of Court,[5] which was the
governing law at the time this case was decided by the trial court and respondent
Court of Appeals, a foreign judgment against a person rendered by a court having
jurisdiction to pronounce the judgment is presumptive evidence of a right as between
the parties and their successors in interest by the subsequent title. However, the
judgment may be repelled by evidence of want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.
Also, Section 3(n) of Rule 131 of the New Rules of Evidence provides that in the
absence of proof to the contrary, a court, or judge acting as such, whether in the
Philippines or elsewhere, is presumed to have acted in the lawful exercise of
jurisdiction.
Hence, once the authenticity of the foreign judgment is proved, the burden to repel it
on grounds provided for in paragraph (b) of Section 50, Rule 39 of the Rules of Court
is on the party challenging the foreign judgment -- HERAS in this case.
At the pre-trial conference, HERAS admitted the existence of the Hong Kong
judgment. On the other hand, ASIAVEST presented evidence to prove rendition,
existence, and authentication of the judgment by the proper officials. The judgment is
thus presumed to be valid and binding in the country from which it comes, until the
contrary is shown.[6] Consequently, the first ground relied upon by ASIAVEST has
merit. The presumption of validity accorded foreign judgment would be rendered
meaningless were the party seeking to enforce it be required to first establish its
validity.
The main argument raised against the Hong Kong judgment is that the Hong Kong
Supreme Court did not acquire jurisdiction over the person of HERAS. This involves
the issue of whether summons was properly and validly served on HERAS. It is settled
that matters of remedy and procedure such as those relating to the service of process
upon the defendant are governed by the lex fori or the law of the forum,[7] i.e., the
law of Hong Kong in this case. HERAS insisted that according to his witness Mr.
Lousich, who was presented as an expert on Hong Kong laws, there was no valid
service of summons on him.
93

In his counter-affidavit,[8] which served as his direct testimony per agreement of the
parties,[9] Lousich declared that the record of the Hong Kong case failed to show that
a writ of summons was served upon HERAS in Hong Kong or that any such attempt
was made. Neither did the record show that a copy of the judgment of the court was
served on HERAS. He stated further that under Hong Kong laws (a) a writ of
summons could be served by the solicitor of the claimant or plaintiff; and (b) where
the said writ or claim was not contested, the claimant or plaintiff was not required to
present proof under oath in order to obtain judgment.
On cross-examination by counsel for ASIAVEST, Lousich testified that the Hong Kong
court authorized service of summons on HERAS outside of its jurisdiction, particularly
in the Philippines. He admitted also the existence of an affidavit of one Jose R.
Fernandez of the Sycip Salazar Hernandez & Gatmaitan law firm stating that he
(Fernandez) served summons on HERAS on 13 November 1984 at No. 6, 1st St.,
Quezon City, by leaving a copy with HERASs son-in-law Dionisio Lopez.[10] On
redirect examination, Lousich declared that such service of summons would be valid
under Hong Kong laws provided that it was in accordance with Philippine laws.[11]
We note that there was no objection on the part of ASIAVEST on the qualification of
Mr. Lousich as an expert on the Hong Kong law. Under Sections 24 and 25, Rule 132
of the New Rules of Evidence, the record of public documents of a sovereign
authority, tribunal, official body, or public officer may be proved by (1) an official
publication thereof or (2) a copy attested by the officer having the legal custody
thereof, which must be accompanied, if the record is not kept in the Philippines, with
a certificate that such officer has the custody. The certificate may be issued by a
secretary of the embassy or legation, consul general, consul, vice consul, or consular
agent, or any officer in the foreign service of the Philippines stationed in the foreign
country in which the record is kept, and authenticated by the seal of his office. The
attestation must state, in substance, that the copy is a correct copy of the original, or
a specific part thereof, as the case may be, and must be under the official seal of the
attesting officer.
Nevertheless, the testimony of an expert witness may be allowed to prove a foreign
law. An authority[12] on private international law thus noted:
Although it is desirable that foreign law be proved in accordance with the above rule,
however, the Supreme Court held in the case of Willamette Iron and Steel Works v.
Muzzal,[13] that Section 41, Rule 123 (Section 25, Rule 132 of the Revised Rules of
Court) does not exclude the presentation of other competent evidence to prove the
existence of a foreign law. In that case, the Supreme Court considered the testimony
under oath of an attorney-at-law of San Francisco, California, who quoted verbatim a
section of California Civil Code and who stated that the same was in force at the time
the obligations were contracted, as sufficient evidence to establish the existence of
said law. Accordingly, in line with this view, the Supreme Court in the Collector of
Internal Revenue v. Fisher et al.,[14] upheld the Tax Court in considering the pertinent
law of California as proved by the respondents witness. In that case, the counsel for
respondent testified that as an active member of the California Bar since 1951, he is
familiar with the revenue and taxation laws of the State of California. When asked by
the lower court to state the pertinent California law as regards exemption of intangible
personal properties, the witness cited Article 4, Sec. 13851 (a) & (b) of the California
Internal and Revenue Code as published in Derrings California Code, a publication of
Bancroft-Whitney Co., Inc. And as part of his testimony, a full quotation of the cited
section was offered in evidence by respondents. Likewise, in several naturalization
cases, it was held by the Court that evidence of the law of a foreign country on
reciprocity regarding the acquisition of citizenship, although not meeting the
prescribed rule of practice, may be allowed and used as basis for favorable action, if,
in the light of all the circumstances, the Court is satisfied of the authenticity of the
written proof offered.[15] Thus, in a number of decisions, mere authentication of the
Chinese Naturalization Law by the Chinese Consulate General of Manila was held to
be competent proof of that law.[16]
There is, however, nothing in the testimony of Mr. Lousich that touched on the specific
law of Hong Kong in respect of service of summons either in actions in rem or in
personam, and where the defendant is either a resident or nonresident of Hong Kong.
In view of the absence of proof of the Hong Kong law on this particular issue, the
presumption of identity or similarity or the so-called processual presumption shall
come into play. It will thus be presumed that the Hong Kong law on the matter is
similar to the Philippine law.[17]
As stated in Valmonte vs. Court of Appeals,[18] it will be helpful to determine first
whether the action is in personam, in rem, or quasi in rem because the rules on
service of summons under Rule 14 of the Rules of Court of the Philippines apply
according to the nature of the action.
An action in personam is an action against a person on the basis of his personal
liability. An action in rem is an action against the thing itself instead of against the
person.[19] An action quasi in rem is one wherein an individual is named as defendant
and the purpose of the proceeding is to subject his interest therein to the obligation
or lien burdening the property.[20]
In an action in personam, jurisdiction over the person of the defendant is necessary
for the court to validly try and decide the case. Jurisdiction over the person of a
resident defendant who does not voluntarily appear in court can be acquired by
personal service of summons as provided under Section 7, Rule 14 of the Rules of
Court. If he cannot be personally served with summons within a reasonable time,
substituted service may be made in accordance with Section 8 of said Rule. If he is
temporarily out of the country, any of the following modes of service may be resorted
to: (1) substituted service set forth in Section 8;[21] (2) personal service outside the
country, with leave of court; (3) service by publication, also with leave of court;[22] or
(4) any other manner the court may deem sufficient.[23]
However, in an action in personam wherein the defendant is a non-resident who does
not voluntarily submit himself to the authority of the court, personal service of
summons within the state is essential to the acquisition of jurisdiction over her
person.[24] This method of service is possible if such defendant is physically present
in the country. If he is not found therein, the court cannot acquire jurisdiction over his
person and therefore cannot validly try and decide the case against him.[25] An
exception was laid down in Gemperle v. Schenker[26] wherein a non-resident was
served with summons through his wife, who was a resident of the Philippines and who
94
was his representative and attorney-in-fact in a prior civil case filed by him; moreover,
the second case was a mere offshoot of the first case.
On the other hand, in a proceeding in rem or quasi in rem, jurisdiction over the person
of the defendant is not a prerequisite to confer jurisdiction on the court provided that
the court acquires jurisdiction over the res. Nonetheless, summons must be served
upon the defendant not for the purpose of vesting the court with jurisdiction but merely
for satisfying the due process requirements.[27] Thus, where the defendant is a non-
resident who is not found in the Philippines and (1) the action affects the personal
status of the plaintiff; (2) the action relates to, or the subject matter of which is property
in the Philippines in which the defendant has or claims a lien or interest; (3) the action
seeks the exclusion of the defendant from any interest in the property located in the
Philippines; or (4) the property of the defendant has been attached in the Philippines
-- service of summons may be effected by (a) personal service out of the country, with
leave of court; (b) publication, also with leave of court; or (c) any other manner the
court may deem sufficient.[28]
In the case at bar, the action filed in Hong Kong against HERAS was in personam,
since it was based on his personal guarantee of the obligation of the principal debtor.
Before we can apply the foregoing rules, we must determine first whether HERAS
was a resident of Hong Kong.
Fortunata de la Vega, HERASs personal secretary in Hong Kong since 1972 until
1985,[29] testified that HERAS was the President and part owner of a shipping
company in Hong Kong during all those times that she served as his secretary. He
had in his employ a staff of twelve.[30] He had business commitments, undertakings,
conferences, and appointments until October 1984 when [he] left Hong Kong for
good.[31] HERASs other witness, Russel Warren Lousich, testified that he had acted
as counsel for HERAS for a number of commercial matters.[32] ASIAVEST then infers
that HERAS was a resident of Hong Kong because he maintained a business there.
It must be noted that in his Motion to Dismiss,[33] as well as in his Answer[34] to
ASIAVESTs complaint for the enforcement of the Hong Kong court judgment, HERAS
maintained that the Hong Kong court did not have jurisdiction over him because the
fundamental rule is that jurisdiction in personam over non-resident defendants, so as
to sustain a money judgment, must be based upon personal service of summons
within the state which renders the judgment.[35]
For its part, ASIAVEST, in its Opposition to the Motion to Dismiss[36] contended: The
question of Hong Kong courts want of jurisdiction is therefore a triable issue if it is to
be pleaded by the defendant to repel the foreign judgment. Facts showing
jurisdictional lack (e.g. that the Hong Kong suit was in personam, that defendant was
not a resident of Hong Kong when the suit was filed or that he did not voluntarily
submit to the Hong Kong courts jurisdiction) should be alleged and proved by the
defendant.[37]
In his Reply (to the Opposition to Motion to Dismiss),[38] HERAS argued that the lack
of jurisdiction over his person was corroborated by ASIAVESTs allegation in the
complaint that he has his residence at No. 6, 1st St., New Manila, Quezon City,
Philippines. He then concluded that such judicial admission amounted to evidence
that he was and is not a resident of Hong Kong.
Significantly, in the pre-trial conference, the parties came up with stipulations of facts,
among which was that the residence of defendant, Antonio Heras, is New Manila,
Quezon City.[39]
We note that the residence of HERAS insofar as the action for the enforcement of the
Hong Kong court judgment is concerned, was never in issue. He never challenged
the service of summons on him through a security guard in his Quezon City residence
and through a lawyer in his office in that city. In his Motion to Dismiss, he did not
question the jurisdiction of the Philippine court over his person on the ground of invalid
service of summons. What was in issue was his residence as far as the Hong Kong
suit was concerned. We therefore conclude that the stipulated fact that HERAS is a
resident of New Manila, Quezon City, Philippines refers to his residence at the time
jurisdiction over his person was being sought by the Hong Kong court. With that
stipulation of fact, ASIAVEST cannot now claim that HERAS was a resident of Hong
Kong at the time.
Accordingly, since HERAS was not a resident of Hong Kong and the action against
him was, indisputably, one in personam, summons should have been personally
served on him in Hong Kong. The extraterritorial service in the Philippines was
therefore invalid and did not confer on the Hong Kong court jurisdiction over his
person. It follows that the Hong Kong court judgment cannot be given force and effect
here in the Philippines for having been rendered without jurisdiction.
Even assuming that HERAS was formerly a resident of Hong Kong, he was no longer
so in November 1984 when the extraterritorial service of summons was attempted to
be made on him. As declared by his secretary, which statement was not disputed by
ASIAVEST, HERAS left Hong Kong in October 1984 for good.[40] His absence in
Hong Kong must have been the reason why summons was not served on him therein;
thus, ASIAVEST was constrained to apply for leave to effect service in the Philippines,
and upon obtaining a favorable action on the matter, it commissioned the Sycip
Salazar Hernandez & Gatmaitan law firm to serve the summons here in the
Philippines.
In Brown v. Brown,[41] the defendant was previously a resident of the Philippines.
Several days after a criminal action for concubinage was filed against him, he
abandoned the Philippines. Later, a proceeding quasi in rem was instituted against
him. Summons in the latter case was served on the defendants attorney-in-fact at the
latters address. The Court held that under the facts of the case, it could not be said
that the defendant was still a resident of the Philippines because he ha[d] escaped to
his country and [was] therefore an absentee in the Philippines. As such, he should
have been summoned in the same manner as one who does not reside and is not
found in the Philippines.
Similarly, HERAS, who was also an absentee, should have been served with
summons in the same manner as a non-resident not found in Hong Kong. Section 17,
Rule 14 of the Rules of Court providing for extraterritorial service will not apply
because the suit against him was in personam. Neither can we apply Section 18,
95
which allows extraterritorial service on a resident defendant who is temporarily absent
from the country, because even if HERAS be considered as a resident of Hong Kong,
the undisputed fact remains that he left Hong Kong not only temporarily but for good.

IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered DENYING the

petition in this case and AFFIRMING the assailed judgment of the Court of Appeals
in CA-G.R. CV No. 29513.

No costs.

SO ORDERED.

96
[ GR No. L-13141, May 22, 1959 ]
VICENTA PANTALEON v. HONORATO ASUNCION +
DECISION
105 Phil. 761
CONCEPCION, J.:
This is an appeal, taken by defendant Honorato Asunsion from an order denying a
petition for relief from an order declaring him in default and a judgment by default.
On June 12, 1953, plaintiff, Vicenta Pantaleon, instituted this action, in the Court of
First Instance of Nueva Ecija, to recover, from said Asuncion, the sum of P2,000.00,
with interest thereon, in addition to attorney's fees. The summons originally issued
was returned by the sheriff of Nueva Ecija unserved, with the statement that,
according to reliable information, Asuncion was residing in B-24 Tala Estate,
Caloocan, Rizal. An alias summons was issued, therefore, for service in the place
last mentioned.
However, the provincial sheriff of Rizal returned it unserved, with the information
that Asuncion had left the Tala Estate since February 18, 1952, and that diligent
efforts to locate him proved to no avail. On plaintiff's motion, the court ordered, on
March 9, 1955, that defendant be summoned by publication, and the summons was
published on March 21 and 28, and April 4, 1955, in the "Examiner", said to be a
newspaper of general circulation in Nueva Ecija. Having failed to appear or answer
the complaint within the period stated in the summons, defendant was, by an order
dated July 12, 1955, declared in default. Subsequently, or on September 8, 1955,
after a hearing held in the absence of the defendant and without notice to him, the
court rendered judgment for the plaintiff and against said defendant, for the sum
of P2,300.00, with interest thereon at the legal rate, from October 28, 1948, and
costs.
About forty-six (46) days later, or on October 24, 1955, the defendant filed a petition
for relief from said order of July 12, 1955, and from said judgment, dated September
8, 1955, upon the ground of mistake and excusable negligence. Annexed to said
petition were defendant's affidavit and his verified answer. In the affidavit, Asuncion
stated that, on September 26, 1955, at 34 Pitimine Street, San Francisco del Monte
Quezon City, which is his residence, he received notice of a registered letter at the
Post Office in San Jose, Nueva Ecija, his old family residence; that he proceeded
immediately to the latter municipality to claim said letter, which he received on
September 28, 1955; that the letter contained copy of said order of July 12, 1955, and
of the judgment of September 8, 1955, much to his surprise, for he had not been
summoned or notified of the hearing of this case; that had copy of the summons
and of the order for its publication been sent to him by mail, as provided in Rule 7,
section 21, of the Rules of Court said summons and order would have reached him,
"as the judgment herein had"; and that his failure to appear before the court is
excusable it being due to the mistake of the authorities concerned in not complying
with the provisions of said section.
Upon denial of said petition for relief, defendant perfected his present appeal, which
is predicated upon the theory that the aforementioned summons by publication had
not been made in conformity with the Rules of Court. More specifically, defendant
maintains that copy of the summons and of the order for the publication thereof were
not deposited "in the post office, postage prepaid, directed to the defendant by
ordinary mail to his last known address", in violation of Rule 7, section 21, of the
Rules of Court, and that, had this provision been complied with, said summons and
order of publication would have reached him, as had the decision appealed from.
Said section 21 reads:
"If the service has been made by publication, service may be proved by the affidavit
of the printer, his foreman or principal clerk, or of the editor, business or advertising
manager, to which affidavit a copy of the publication shall be attached, and by an
affidavit showing the deposit of a copy of the summons and order for publication in
the post office, postage prepaid, directed to the defendant by ordinary mail to his last
known address** (Italics supplied.)
Plaintiff alleges, however, that the provision applicable to the case at bar is not this
section 21, but section 16, of Rule 7, of the Rules of Court, which provides:
"Whenever the defendant is designated as an unknown owner, or the like, or
whenever the address of a defendant is unknown and cannot be ascertained by
diligent inquiry, service may, by leave of court, be effect upon him by publication in
such places and for such times as the court may order."
It is, moreover, urged by the plaintiff that the requirement, in Said section 21, of an
affidavit showing that copy of the summons and of the order for its publication had
been sent by mail to defendant's last known address, refers to the extraterritorial
service of summons, provided for in section 17 of said Rule 7, pursuant to which:
"When the defendant does not reside and is not found in the Philippines and the
action affects the personal status of the plaintiff or relates to, or the subject of which
is, property within the Philippines, in which the defendant has or claims a lien or
interest, actual or contingent, or in which the relief demanded consists, wholly or in
part, in excluding the defendant from any interest therein, or the property of the
defendant has been attached within the Philippines, service may, by leave of court,
be effected out of the Philippines by personal service as under section 7; or by
registered mail; or by publication in such places and for such time as the court may
order, in which case a copy of the summons and order of the court shall be sent by
ordinary mail to the last known address of the defendant; or in any other manner
the court may deem sufficient. Any order granting such leave shall specify a
reasonable time, which shall not be less than sixty (60) days after notice, within
which the defendant must answer."
Said section 21, however, is unqualified. It prescribes the "proof of service by
publication", regardless of whether the defendant is a resident of the Philippines or
not. Section 16 must be read in relation to section 21, which complements it. Then,
too, we conceive of no reason, and plaintiff has suggested none, why copy of the
summons and of the order for its publication should be mailed to non-resident
defendants, but not to resident defendants. We can not even say that defendant
herein, who, according to the return of the Sheriff of Nueva Ecija, was reportedly
residing in Rizal where he, in fact (San Francisco del Monte and Quezon City used
to be part of Rizal), was residing could reasonably be expected to read the
summons published in a newspaper said to be a general circulation in Nueva Ecija.
Considering that strict compliance with the terms of the statute is necessary to
confer jurisdiction through service by publication (Bachrach Garage and Taxi Co. vs.
Hotchkiss and Co., 34 Phil., 506; Banco Espanol-Filipino vs. Palanca, 37 Phil.,
97
921; Mills vs. Smiley, 9 Idaho 317, 325, 76 Pac. 785; Charles vs. Marrow, 99 10.00
Mo. 638; Sunderland, Cases on Procedure, Annotated, Trial Practice,'p. 51), the by money order
conclusion is inescapable that the lower court had no authority whatsoever to Issue 8230
the order of July 12, 1955, declaring the defendant in default and to render the July 11, 1949
decision of September 8, 1955, and that both are null and void ab initio. 10.00
by money order
Apart from the foregoing, it is a well-settled principle of Constitutional Law that, in 8595
an action strictly in personam, like the one at bar, personal service of summons, August 10, 1949
within the forum, is essential to the acquisition of jurisdiction over the person of the 10.00
defendant, who does not voluntarily submit himself to the authority of the court. In by money order
other words, summons by publication cannot consistently with the due process 8943
clause in the Bill of Rights confer upon the court jurisdiction over said defendant. September 1949
"Due process of law requires personal service to support a personal judgment, and, 10.00
when the proceeding is strictly in personam brought to determine the personal rights paid personally
and obligations of the parties, personal service within the state or a voluntary October 1949
appearance in the case is essential to the acquisition of jurisdiction so as to constitute 10.00
compliance with the constitutional requirement of due process. * * * paid personally
November 14, 1949
"Although a state legislature has more control over the form of service on its own 10.00
residents than nonresidents, it has been held that in actions in personam * * * by money order
service by publication on resident defendants, who are personally within the state and 9776
can be found therein is not 'due process of law', and a statute allowing it is December 13, 1949
unconstitutional" (16A CJ.S., pp. 786, 789; Italics ours.) 10.00
Lastly, from the viewpoint of substantial justice and equity, we are of the opinion by money order
that defendant's petition for relief should have been granted. To begin with, it 10076
was filed well within the periods provided in the Rules of Court. Secondly, and, this January 10, 1950
is more important, defendant's verified answer, which was attached to said petition, 10.00
contains allegations which, if true, constitute a good defense. Thus, for instance, by money order
in paragraph (2) of the "special denials" therein, he alleged: 10445
"That it is not true that he failed to pay the said indebtedness of his said wife, as February 9, 1950
alleged in paragraph 3 of the complaint, for as a matter of fact, plaintiff and defendant 10.00
agreed upon a settlement of the said indebtedness of the latter's deceased wife on by money order
December 5, 1948, whereby defendant was allowed to pay it out of his monthly salary 10731
by installment of P10.00 monthly beginning January, 1949, and in accordance March 10, 1950
therewith, defendant paid unto plaintiff the following sums: 10.00
by money order
Instalment for January February, 1948 1149
April 10, 1950
March 1949 10.00
P 30.00 by money order
paid personally 11387
April 2, 1949 May 11, 1950
10.00 10.00
by money order by money order
7483 11990
May 11, 1949 June 12, 1950
10.00 10.00
by money order by money order
7921 61055
June 10, 1949 July 11, 1950

98
10.00
by money order August 1951
58850 10.00
August 11, 1950 paid personally
10.00
by money order September 1951
59293 10.00
September 6, 1950 paid personally
10.00
by money order November 1951
59618 10.00
October 10, 1950 paid personally
10.00
by money order December 1951
60008 10.00
November 8, 1950 paid personally
10.00
by money order September 1952
60369 30.00
December 1950 paid personally
10.00
paid personally December 1952
20.00
January 2, 1951 paid personally
10.00
paid personally January 1953
10.00
February 10, 1951 paid personally
10.00
paid personally February 1953
10.00
March 12, 1951 paid personally
10.00
paid personally March 1953
10.00
April 1951 paid personally
10.00
paid personally April 1953
10.00
May 1951 paid personally
10.00
paid personally May 1953
10.00
June 1951
10.00 Total paid P460.00"
paid personally The specification of the dates of payment, of the amounts paid each time, of the
manner in which each payment was made, and of the number of the money orders
July 1951 in which eighteen (18) payments had been effected, constitutes a strong indication
10.00 of the probable veracity of said allegation, fully justifying the grant of an opportunity
paid personally to prove the same.

99
Wherefore, said order of July 12, 1955, and the aforementioned decision of
September 8, 1955, are hereby set aside and annulled, and let the record of this
case be remanded to the lower court for further proceedings, with costs against
plaintiff-appellee. It is so ordered.

100
[G.R. No. L-32170. March 31, 1971.]
CITIZENS’ SURETY & INSURANCE COMPANY, INC., Petitioner, v. HON. JUDGE
A. MELENCIO-HERRERA, SANTIAGO DACANAY, and JOSEFINA DACANAY,
Respondents.
Dayos, Tesoro & Gloria, Jr. for Petitioner.
Respondent Judge for and in his own behalf.
SYLLABUS
1. REMEDIAL LAW; JURISDICTION; ACTION IN PERSONAM; PERSONAL
SERVICE OF SUMMONS REQUIRED. — We agree with respondent Judge that the
action of plaintiff petitioner, being in personam, the Court could not validly acquire
jurisdiction on a non-appearing defendant, absent a personal service of summons
within the forum. We have explicitly so ruled in Pantaleon v. Asuncion, 105 Phil. 765,
pointing out without such personal service, any judgment on a non-appearing
defendant would be violative of due process. In the aforecited case this Court, through
Justice Roberto Concepcion, now Chief Justice, ruled as follows: . . . "It is a well-
settled principle of Constitutional Law that, in an action strictly in personam, like the
one at bar, personal service of summons, within the forum, is essential to the
acquisition of jurisdiction over the person of the defendant, who does not voluntary
submit himself to the authority of the court. In other words, summons by publication
cannot — consistently with the due process clause in the Bill of Rights — confer upon
the court jurisdiction over said defendants.’Due process of law requires personal
service to support a personal judgment, and, when the proceeding is strictly in
personam brought to determine the personal rights and obligations of the parties,
personal service within the state or a voluntary appearance in the case is essential to
the acquisition of jurisdiction so as to constitute compliance with the constitutional
requirement of due process. . . .’Although a state legislature has more control over
the form of service on its own residents than nonresidents, it has been held that in
actions in personam . . . service by publication on resident defendants who are
personally within the state and can be found therein is not "due process of law," and
statute allowing it is unconstitutional.’ (16A C.J.S., pp. 786, 789; Emphasis our)"
2. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CREDITORS; REMEDY
AGAINST ABSCONDING DEBTORS. — The proper recourse for a creditor in the
same situation as petitioner is to locate properties, real or personal, of the resident
defendant debtor with unknown address and cause them to be attached under Rule
57, Sec. l(f), in which case, the enactment converts the action into a proceeding in
rem or quasi in rem and the summons by publication may then accordingly be deemed
valid and effective But because debtors who abscond and conceal themselves are
also quite adept at concealing their properties, the dismissal of the case below by
respondent Judge should be set aside and the case held pending in the court’s
archives, until petitioner as plaintiff succeed in determining the whereabouts of the
defendants’ person or properties and causes valid summons to be served personally
or by publication as the case may be. In this manner, the tolling of the period of
prescription for as long as the debtor remains in hiding would properly be a matter of
court record, and he can not emerge after a sufficient lapse of time from the dismissal
of the case to profit from his own misdeed and claim prescription of his just debt.
DECISION
REYES, J.B.L., J.:
Petitioner Citizens’ Surety & Insurance Company, Inc. seeks review of an order of
respondent Judge in Civil Case No. 77134 of the Court of First Instance of Manila,
Branch XVII, entitled "Citizens’ Surety & Insurance Co., Inc. v. Santiago Dacanay and
Josefina Dacanay," dismissing the complaint for lack of proper service of summons
upon defendants.
The record is to the effect that petitioner had filed its complaint in the Court below,
alleging that at request of defendant Santiago Dacanay, the plaintiff Surety Company
had issued its Surety Bonds Nos. 4942 and 4944, the first, in favor of Gregorio Fajardo
to guarantee payment of a P5,000-promissory note executed by said Dacanay, and
the second, in favor of Manufacturers Bank & Trust Co., to guarantee payment of
another promissory note in like amount; that in consideration of said bonds, Santiago
and Josefina Dacanay executed Indemnity Agreements, binding themselves jointly
and severally to indemnify plaintiff for any losses, costs and expenses which it might
sustain in connection with the issuance of the bonds aforesaid, with interest at 12%
per annum; that as additional security, the Dacanays mortgaged to plaintiff a parcel
of land in Baguio City, covered by Certificate of Title No. T-8116, the mortgage having
been duly recorded; that the promissory notes were not paid .and as a result, plaintiff
Surety was compelled to pay P5,000.00 to Gregorio Fajardo and P4,081.69 to the
Manufacturers’ Bank; that the Dacanays failed to reimburse the Surety for such
payments, whereupon the Surety caused the extrajudicial foreclosure of the mortgage
to pay its claim of P12,941.69 representing its payments, interest and stipulated
liquidated damages: that at the foreclosure sale, the land mortgaged was sold to
plaintiff, as highest bidder, for the sum of P2,000.00 — leaving an unsatisfied balance
of P10,491.69, that plaintiff sought to recover from defendants Dacanay, plus 10%
thereof as attorneys’ fees, and the costs.
At petitioner’s request, respondent Judge caused summons to be made by publication
in the newspaper Philippines Herald. But despite the publication and deposit of a
prepaid copy of the complaint at the Manila post office, defendants did not appear
within the period of 60 days from last publication, as required by the summons.
Plaintiff then asked that defendants be declared in default; but :instead, the Judge, by
order of May 16, 1970, asked it to show cause why the action should not be dismissed,
the suit being in personam and defendants not having appeared. Then, on May 29,
1970, respondent Judge dismissed the case, despite plaintiff Surety’s argument that
the summons by publication was sufficient and valid under section 16 of Rule 14 of
the Revised Rules of Court.
101
We agree with respondent Judge that the action of plaintiff petitioner, being in
personam, the Court could not validly acquire jurisdiction on a non-appearing
defendant, absent a personal service of summons within the forum. We have explicitly
so ruled in Pantaleon v. Asunción, 105 Phil. 765, pointing out without such personal
service, any judgment on a non-appearing defendant would be violative of due
process. In the aforecited case this Court, through Justice Roberto Concepción, now
Chief Justice, ruled as follows:jgc:chanrobles.com.ph

"Apart from the foregoing, it is well-settled principle of Constitutional Law that, in an

action strictly in personam, like the one at bar, personal service of summons, within
the forum. is essential to the acquisition of jurisdiction over the person of the
defendant, who does not voluntarily submit himself to the authority of the court. In
other words, summons by publication cannot — consistently with the due process
clause in the Bill of Rights — confer upon the court jurisdiction over said defendants.

‘Due process of law requires personal service to support a personal judgment, and.
when the proceeding is strictly in personam brought to determine the personal rights
and obligations of the parties, personal service within the state or a voluntary
appearance in the case is essential to the acquisition of jurisdiction so as to constitute
compliance with the constitutional requirement of due process. . . .

‘Although a state legislature has more control over the form of service on its own
residents than nonresidents, it has been held that in actions in personam . . . service
by publication on resident defendants, who are personally within the state and can be
found therein is not "due process of law," and a statute allowing it is unconstitutional.’
(16A C.J.S., pp. 786, 789; Emphasis ours.)"

The proper recourse for a creditor in the same situation as petitioner is to locate
properties, real or personal, of the resident defendant debtor with unknown address
and cause them to be attached under Rule 57, section 1(f), in which case, the
attachment converts the action into a proceeding in rem or quasi in rem and the
summons by publication may then accordingly be deemed valid and effective.

But because debtors who abscond and conceal themselves are also quite adept at
concealing their properties, the dismissal of the case below by respondent Judge
should be set aside and the case held pending in the court’s archives, until petitioner
as plaintiff succeeds in determining the whereabouts of the defendants’ person or
properties and causes valid summons to be served personally or by publication as
the case may be. In this manner, the tolling of the period of prescription for as long as
the debtor remains in hiding would properly be a matter of court records and he can
not emerge after a sufficient lapse of time from the dismissal of the case to profit from
his own misdeed and claim prescription of his just debt.

WHEREFORE, the order of dismissal of the case issued by the Court below is hereby
set aside, and in the interest of justice, the proceedings are ordered suspended, to
be held pending until the plaintiff petitioner succeeds in ascertaining the whereabouts
of the defendants and/or locating properties of the same, to enable proper summons
to be issued conformably to this Opinion. No costs.

102
[ GR No. L-54242, Nov 25, 1983 ]
MAGDALENA ESTATE v. RENE NIETO +
DECISION
211 Phil. 101
RELOVA, J.:
Appeal from the judgment of the then Court of First Instance of Rizal in Quezon City,
ordering defendants-appellants Rene Nieto and Helen Garcia to pay plaintiff-
appellee:
"1) the sum of P11,999.00, with interest thereon at the rate of 7% per annum,
beginning April 21, 1970, the date of the letter of demand, until the same shall have
been fully paid;
"2) the sum of P2,000.00 as and for attorney's fees; and
"3) the costs of the suit." (p. 41, Record on Appeal)
The facts which led to the above judgment are summarized by the trial court as
follows:
"The evidence shows that the defendants herein bought from the plaintiff a parcel of
land located at New Manila Subdivision, Quezon City. Even if defendants had not fully
paid the consideration for the said lot, by special arrangement with the plaintiff, the
former were able to have the title to said lot transferred in their names. They had
made partial payments only and the balance of their account in the amount of
P12,000.00 was secured by a promissory note which they executed on November 3,
1960, under the following terms and conditions to wit: (a) the defendants shall pay
plaintiff the sum of P12,000.00, with interest thereon at the rate of 7% per annum,
said amount to be payable without demand in consecutive monthly installments of not
less than P500.00 per month, beginning December 3, 1960, and on the third day of
each month thereafter, until fully paid; (b) in case of failure to pay any monthly
installment due, the total obligation, or the balance thereof, shall automatically
become due and immediately payable; (c) that the plaintiff shall have the right to
enforce payment of the obligation, together with the corresponding interest, including
attorney's fees and the costs of suit in case of litigation to enforce collection of the
said obligation (Exhibit 'C'). Out of the aforesaid amount of P12,000.00, defendants
paid only P100.00 in two installments of P50.00 each. The first payment was made
on January 29, 1963 and the second payment was made on March 14, 1963, leaving
a balance of P11,999.90, exclusive of interests. Plaintiff wrote defendants a letter of
demand calling the attention of the latter about the installments in arrears under the
terms and conditions of the promissory notes; but in spite of the said letter,
de-fendants did not comply with their obli-gation. Plaintiff referred the matter to its
legal counsel, who, in turn, sent defendants a letter of demand dated April 21, 1970
which letter was received by the defendants (Exhibits 'D', 'D-1' & 'D-2'). Despite
receipt of said letter, defendants did not comply and even failed to make a reply.
Plaintiff presented further a statement of account stating therein that the amount still
owing to it, inclusive of interest up to September 19, 1972 is P21,876.44; P11,999.00,
the amount of the principal and P9,976.44 the amount of interest from November 3,
1960 up to September 19, 1972 (Exhibit 'E')." (pp. 33-34, Rollo)
There was an ex-parte reception of evidence because the defendants-appellants had
been declared in default, plaintiff having complied with the court's order allowing
service of summons and copy of the complaint upon the defendants-appellants
through publication of the same in a newspaper of general circulation (Daily Mirror),
pursuant to Section 16, Rule 14 of the Rules of Court.
Plaintiff claims that summons could not be served personally upon the defendants
because they concealed themselves to avoid service upon them; and, that when the
sheriff went to the Jai-Alai Corporation of the Philippines at Cebu City where
defendant-appellant Rene Nieto holds office, as manager, he could not be found
thereat but, when the decision was served at the same address, the defendants-
appellants were able to receive it.
In this appeal, defendants-appellants contend that the lower court erred: (1) in
allowing service of summons by publication, and consequently, the trial court did not
acquire jurisdiction over the defendants-appellants, and the decision is therefore void;
(2) in granting relief to plaintiff-appellee when its cause of action is barred by laches;
(3) in lifting its orders dismissing the complaint for failure to prosecute; and (4) in
granting interests from November 3, 1960.
There is merit in this appeal. It is true that in Fontanilla vs. Dominguez, 73 Phil. 579,
it was held that service of summons by publication is proper in all actions without
distinction, provided the defendant is residing in the Philippines but his identity is
unknown or his address cannot be ascertained. However, in a later case, Pantaleon
vs. Asuncion, 105 Phil. 765, the Court, speaking through then Justice Roberto
Concepcion, ruled that "it is a well-settled principle of Constitutional Law that, in an
action strictly in personam, like the one at bar, personal service of summons, within
the forum, is essential to the acquisition of jurisdiction over the person of the
defendant, who does not voluntarily submit himself to the authority of the court. In
other words, summons by publication cannot - consistently with the due process
clause in the Bill of Rights - confer upon the court jurisdiction over said defendant."
And, quoting 16A C.J.S., pp. 786, 789, as follows: "Due process of law requires
personal service to support a personal judgment, and, when the proceeding is strictly
in personam brought to determine the personal rights and obligations of the parties,
personal service within the state or a voluntary appearance in the case is essential to
the acquisition of jurisdiction so as to constitute compliance with the constitutional
requirement of due process. * * * Although a state legislature has more control over
the form of service on its own residents than nonresidents, it has been held that in
actions in personam * * * service by publication on resident defendants, who are
personally within the state and can be found therein is not 'due process of law', and a
statute allowing it is unconstitutional."
The action of herein plaintiff-appellee, being in personam, the doctrine laid down in
Pantaleon vs. Asuncion (supra) finds application. And, the latest expression of such
a doctrine comes from Justice J. B. L. Reyes in the case of Citizens' Surety and
Insurance Company, Inc. vs. Melencio-Herrera, 38 SCRA 369, in these words: "x x x
the Court could not validly acquire jurisdiction on a non-appearing defendant, absent
a personal service of summons within the forum. x x x The proper recourse for a
creditor in the same situation as petitioner is to locate properties, real or personal, of
the resident defendant debtor with unknown address and cause them to be attached
under Rule 57, Section 1(f), in which case, the attachment converts the action into a
103
proceeding in rem or quasi in rem and the summons by publication may then
accordingly be deemed valid and effective."

Inasmuch as in the case at bar the lower court did not acquire jurisdiction over the
person of the defendants--appellants, We find it unnecessary to discuss the other
assigned errors raised by them.

WHEREFORE, the decision, dated October 5, 1972 of the court a quo, is hereby SET
ASIDE and the case is remanded to the trial court for proper service of summons and
trial.

SO ORDERED.

104
G.R. No. 82811 October 18, 1988
CONSOLIDATED PLYWOOD INDUSTRIES, INC., petitioner,
vs.
HON. AUGUSTO B. BREVA and MINDANAO HEMP EXPORT CORPORATION,
respondents.
NARVASA, J.:
Not infrequently, appeals are resolved on grounds not precisely assigned as error
which upon review are however seen to be more decisive than those actually raise
and argued. This appeal is one such instance. The dismissal of the petitioner's action,
decreed in the appealed Decision of the Trial Court, must be upheld, not for the
reason therein stated, but on quite a different ground.
The case involves the claim of one of two co-owners for reimbursement from the other
of expenses incurred for the repair and preservation of the common property. Based
oh the petitioner's pleadings and the intendment of its proofs, as well as the findings
of the appealed Decision, the factual background is hereunder set forth.
The property in question consists of a parcel of land measuring 5,263 square meters,
with a warehouse and office building standing thereon, covered by Transfer
Certificate of Title No. 11679 of the Registry of Deeds of Davao City. One of the
registered co-owners is the petitioner, Consolidated Plywood Industries, Inc.
(hereafter simply referred to as CPII); it had purchased an undivided one-half (1/2)
portion of the property from the Consolidated Bank & Trust Company which, in turn,
had acquired that share at a foreclosure sale. The other registered co-owner is the
Mindanao Hemp Export Corporation (hereafter MHEC).
After having acquired its undivided half share, CPII occupied the property, using the
warehouse to store its products and the nearby building to quarter its personnel. It
also employed guards to secure the premises. 1 In July 1984, it made repairs and
improvements on the property, as follows: replacement of the dilapidated G.I. sheet
roofing; construction of a new perimeter defense; putting of earth filling on the
driveway to keep out flood waters and installation of a steel gate.
For the repairs, improvements and guard fees CPII allegedly spent P239,837.21, one-
half of which, with interests, it sought to recover from MHEC. When extra-judicial
demands produced no results, it filed suit for collection against MHEC in the Regional
Trial Court of Davao City. 2
Summons was issued to MHEC whose address was stated in the complaint to be at
413 Jaboneros St., Binondo, Manila. It went unserved for the reason, stated in the
return of the Sheriff of Manila, that "... Mindanao Hemp Export Corp. is no longer
doing business at said address (and) (n)obody around the place knows the present
whereabouts of said defendant. 3 The Trial Court sought to ascertain the defendant's
whereabouts from the Securities and Exchange Commission, but that office simply
furnished the same address: 413 Jaboneros St., Binondo, Manila as the latest
address of that corporation in its records. 4 Service at that address having already
been attempted and failed, CPII moved for, and the Trial Court ordered on April
28,1987, service of summons by publication. 5 Publication was effected in the
newspaper, Philippine Daily Inquirer, on May 18 and 15,1987 and June 1, 1987. 6
Copy of the alias summons was also sent by registered mail addressed to MHEC at
413 Jaboneros Street, Binondo, Manila. 7 No answer being filed within the sixty-day
period after last publication prescribed in the alias summons, MHEC was declared in
defaults 8 and CPII thereafter presented its evidence ex parte. The Trial Court also
conducted an ocular inspection and found that CPII was using the entire warehouse
as well as the office building standing on the property. 9
On March 29, 1988, the Trial Court rendered judgment which, while finding that CPII
had in fact incurred expenses in the amount of P161,951.70 (instead of the claimed
P239,837.21), denied said plaintiff reimbursement of one-half of that amount and
instead dismissed the complaint "for lack of merit," ruling that:
... It is very apparent that the plaintiff made the necessary repairs on the warehouse
and fence and put the earth fills on the land so that it could use the property, and in
fact it has been using the property after said repairs and earth filling in July 1984 xxx
without paying any rentals to the defendant for the use of its 50% undivided portion
thereof In the conservative estimate of the Court d property can easily fetch a monthly
rental of P20,000.00 and, if sold, can realize several millions of pesos.
Considering that the plaintiff is the one using the entire property exclusively without
any rentals, the Court believes that it has no right to compel the defendant to
reimburse it for half of the cost of said necessary repairs on the warehouse and fence
and earth filling on the land. 10
Quite evidently, it was the Trial Court's view, 11 based on Article 500 of the Civil Code
(to the effect that upon partition of common property the co-owners are bound to
render mutual accounting for "benefits received and reimbursements for expenses
made") that a co-owner cannot put the property to his sole use and benefit gratis
without the express agreement of the other co-owners.
CPII has applied directly to this Court for a reversal of said judgment, arguing in the
main that a co-owner has the right to use the whole of the property owned in common
without obligation for rentals and, hand-in- hand with such right of use, the right to
reimbursement from the other co-owners of their proportionate share in necessary
expenses incurred by him for the preservation of the property. Petitioner argues
further that it is entitled to attorney's fees and expenses of litigation, having been
compelled to sue because of MHEC's failure to fulfill reportorial requirements of the
Securities and Exchange Commission had rendered extrajudicial collection well-nigh
impossible.
That MHEC may no longer be found at 413 Jaboneros St., Binondo, Manila, is made
more apparent by the fact that the copy of this Court's resolution of May 2, 1988
requiring its comment on CPII's petition, which was sent by registered mail to said
address, was returned unclaimed after three notices. 12 While from the foregoing it
may appear that resolution of the appeal is a simple and straightforward matter of
applying law and precedent to the facts established by the evidence, such a result is
precluded by the circumstance that due to a failure to effect proper service of
105
summons on MHEC, the Trial Court never acquired jurisdiction over the person of
said defendant and therefore could not lawfully render valid judgment thereon.

Petitioner's suit is for the collection of a sum of money- personal action, as

distinguished from a real action, i.e., one "... affecting title to, or for recovery of
possession of, or for partition or condemnation of, or foreclosure of mortgage on, real
property. 13 It is, too, an action strictly in personam, as to which, in a line of cases
starting with Pantaleon vs. Asuncion, 14 this Court laid down and consistently hewed
to the rule that ... personal service of summons within the forum, is essential to the
acquisition of jurisdiction over the person of the defendant, who does not voluntarily
submit himself to the authority of the court. In other words, summons by publication
cannot consistently with the due process clause in the Bill of Rights confer upon the
Court jurisdiction over said defendant," and that "... (t)he proper recourse for a creditor
in the same situation as petitioner is to locate properties, real or personal, of the
resident defendant debtor with unknown address and cause them to be attached
under Rule 57, section 1(f) in which case, the attachment converts the action into a
proceeding in rem or quasi in rem and the summons by publication may then
accordingly be deemed valid and effective." 15

Accordingly, and service of summons by publication here not having been preceeded
by attachment of property of MHEC, it did not confer on the Trial Court jurisdiction
over the person of said defendant, and it is on this score that petitioner's action must
be, as it is hereby, DISMISSED.

In view of the peculiar circumstances of this case, it is hereby directed that in the not
unlikely event that the petitioner pursue its claim for reimbursement against its co-
owner by filing a second action therefor, efforts be exerted, prior to effecting service
of summons by publication, to cause personal service on respondent corporation on
its president, manager, secretary, cashier, agent or any of its directors, at such of their
individual addresses as may become known to the petitioner from an examination of
the records of the Securities and Exchange Commission or such others as may be or
become otherwise available, failure of this latter mode of service being hereby made
a condition precedent to summons by publication.

SO ORDERED.

106
[ G.R. No. 170943, September 23, 2008 ]
PEDRO T. SANTOS, JR., PETITIONER, VS. PNOC EXPLORATION
CORPORATION, RESPONDENT.
DECISION
CORONA, J.:
This is a petition for review[1] of the September 22, 2005 decision[2] and December
29, 2005 resolution[3] of the Court of Appeals in CA-G.R. SP No. 82482.
On December 23, 2002, respondent PNOC Exploration Corporation filed a complaint
for a sum of money against petitioner Pedro T. Santos, Jr. in the Regional Trial Court
of Pasig City, Branch 167. The complaint, docketed as Civil Case No. 69262, sought
to collect the amount of P698,502.10 representing petitioner's unpaid balance of the
car loan[4] advanced to him by respondent when he was still a member of its board
of directors.
Personal service of summons to petitioner failed because he could not be located in
his last known address despite earnest efforts to do so. Subsequently, on
respondent's motion, the trial court allowed service of summons by publication.
Respondent caused the publication of the summons in Remate, a newspaper of
general circulation in the Philippines, on May 20, 2003. Thereafter, respondent
submitted the affidavit of publication of the advertising manager of Remate[5] and an
affidavit of service of respondent's employee[6] to the effect that he sent a copy of the
summons by registered mail to petitioner's last known address.
When petitioner failed to file his answer within the prescribed period, respondent
moved that the case be set for the reception of its evidence ex parte. The trial court
granted the motion in an order dated September 11, 2003.
Respondent proceeded with the ex parte presentation and formal offer of its evidence.
Thereafter, the case was deemed submitted for decision on October 15, 2003.
On October 28, 2003, petitioner filed an "Omnibus Motion for Reconsideration and to
Admit Attached Answer." He sought reconsideration of the September 11, 2003 order,
alleging that the affidavit of service submitted by respondent failed to comply with
Section 19, Rule 14 of the Rules of Court as it was not executed by the clerk of court.
He also claimed that he was denied due process as he was not notified of the
September 11, 2003 order. He prayed that respondent's evidence ex parte be stricken
off the records and that his answer be admitted.
Respondent naturally opposed the motion. It insisted that it complied with the rules
on service by publication. Moreover, pursuant to the September 11, 2003 order,
petitioner was already deemed in default for failure to file an answer within the
prescribed period.
In an order dated February 6, 2004, the trial court denied petitioner's motion for
reconsideration of the September 11, 2003 order. It held that the rules did not require
the affidavit of complementary service by registered mail to be executed by the clerk
of court. It also ruled that due process was observed as a copy of the September 11,
2003 order was actually mailed to petitioner at his last known address. It also denied
the motion to admit petitioner's answer because the same was filed way beyond the
reglementary period.
Aggrieved, petitioner assailed the September 11, 2003 and February 6, 2004 orders
of the trial court in the Court of Appeals via a petition for certiorari. He contended that
the orders were issued with grave abuse of discretion. He imputed the following errors
to the trial court: taking cognizance of the case despite lack of jurisdiction due to
improper service of summons; failing to furnish him with copies of its orders and
processes, particularly the September 11, 2003 order, and upholding technicality over
equity and justice.
During the pendency of the petition in the Court of Appeals, the trial court rendered
its decision in Civil Case No. 69262. It ordered petitioner to pay P698,502.10 plus
legal interest and costs of suit.[7]
Meanwhile, on September 22, 2005, the Court of Appeals rendered its decision[8]
sustaining the September 11, 2003 and February 6, 2004 orders of the trial court and
dismissing the petition. It denied reconsideration.[9] Thus, this petition.
Petitioner essentially reiterates the grounds he raised in the Court of Appeals, namely,
lack of jurisdiction over his person due to improper service of summons, failure of the
trial court to furnish him with copies of its orders and processes including the
September 11, 2003 order and preference for technicality rather than justice and
equity. In particular, he claims that the rule on service by publication under Section
14, Rule 14 of the Rules of Court applies only to actions in rem, not actions in
personam like a complaint for a sum of money. He also contends that the affidavit of
service of a copy of the summons should have been prepared by the clerk of court,
not respondent's messenger.
The petition lacks merit.
ProprietyOf
Service By Publication
Section 14, Rule 14 (on Summons) of the Rules of Court provides:
SEC. 14. Service upon defendant whose identity or whereabouts are unknown. - In
any action where the defendant is designated as an unknown owner, or the like, or
whenever his whereabouts are unknown and cannot be ascertained by diligent
inquiry, service may, by leave of court, be effected upon him by publication in a
newspaper of general circulation and in such places and for such times as the court
may order. (emphasis supplied)
Since petitioner could not be personally served with summons despite diligent efforts
to locate his whereabouts, respondent sought and was granted leave of court to effect
service of summons upon him by publication in a newspaper of general circulation.
Thus, petitioner was properly served with summons by publication.
Petitioner invokes the distinction between an action in rem and an action in personam
and claims that substituted service may be availed of only in an action in rem.
107
Petitioner is wrong. The in rem/in personam distinction was significant under the old
rule because it was silent as to the kind of action to which the rule was applicable.[10]
Because of this silence, the Court limited the application of the old rule to in rem
actions only.[11]
This has been changed. The present rule expressly states that it applies "[i]n any
action where the defendant is designated as an unknown owner, or the like, or
whenever his whereabouts are unknown and cannot be ascertained by diligent
inquiry." Thus, it now applies to any action, whether in personam, in rem or quasi in
rem.[12]
Regarding the matter of the affidavit of service, the relevant portion of Section 19,[13]
Rule 14 of the Rules of Court simply speaks of the following:
... an affidavit showing the deposit of a copy of the summons and order for publication
in the post office, postage prepaid, directed to the defendant by registered mail to his
last known address.
Service of summons by publication is proved by the affidavit of the printer, his foreman
or principal clerk, or of the editor, business or advertising manager of the newspaper
which published the summons. The service of summons by publication is
complemented by service of summons by registered mail to the defendant's last
known address. This complementary service is evidenced by an affidavit "showing
the deposit of a copy of the summons and order for publication in the post office,
postage prepaid, directed to the defendant by registered mail to his last known
address."
The rules, however, do not require that the affidavit of complementary service be
executed by the clerk of court. While the trial court ordinarily does the mailing of
copies of its orders and processes, the duty to make the complementary service by
registered mail is imposed on the party who resorts to service by publication.
Moreover, even assuming that the service of summons was defective, the trial court
acquired jurisdiction over the person of petitioner by his own voluntary appearance in
the action against him. In this connection, Section 20, Rule 14 of the Rules of Court
states:
SEC. 20. Voluntary appearance. - The defendant's voluntary appearance in the action
shall be equivalent to service of summons. The inclusion in a motion to dismiss of
other grounds aside from lack of jurisdiction over the person of the defendant shall
not be deemed a voluntary appearance. (emphasis supplied)
Petitioner voluntarily appeared in the action when he filed the "Omnibus Motion for
Reconsideration and to Admit Attached Answer."[14] This was equivalent to service
of summons and vested the trial court with jurisdiction over the person of petitioner.
EntitlementTo
Notice Of Proceedings
The trial court allowed respondent to present its evidence ex parte on account of
petitioner's failure to file his answer within the prescribed period. Petitioner assails
this action on the part of the trial court as well as the said court's failure to furnish him
with copies of orders and processes issued in the course of the proceedings.
The effects of a defendant's failure to file an answer within the time allowed therefor
are governed by Sections 3 and 4, Rule 9 (on Effect of Failure to Plead) of the Rules
of Court:
SEC. 3. Default; declaration of. - If the defending party fails to answer within the time
allowed therefor, the court shall, upon motion of the claiming party with notice to the
defending party, and proof of such failure, declare the defending party in default.
Thereupon, the court shall proceed to render judgment granting the claimant such
relief as his pleading may warrant, unless the court in its discretion requires the
claimant to submit evidence. Such reception of evidence may be delegated to the
clerk of court.
SEC. 4. Effect of order of default. - A party in default shall be entitled to notice of
subsequent proceedings but not to take part in the trial. (emphasis supplied)
If the defendant fails to file his answer on time, he may be declared in default upon
motion of the plaintiff with notice to the said defendant. In case he is declared in
default, the court shall proceed to render judgment granting the plaintiff such relief as
his pleading may warrant, unless the court in its discretion requires the plaintiff to
submit evidence. The defaulting defendant may not take part in the trial but shall be
entitled to notice of subsequent proceedings.
In this case, even petitioner himself does not dispute that he failed to file his answer
on time. That was in fact why he had to file an "Omnibus Motion for Reconsideration
and to Admit Attached Answer." But respondent moved only for the ex parte
presentation of evidence, not for the declaration of petitioner in default. In its February
6, 2004 order, the trial court stated:
The disputed Order of September 11, 2003 allowing the presentation of evidence ex-
parte precisely ordered that "despite and notwithstanding service of summons by
publication, no answer has been filed with the Court within the required period and/or
forthcoming.["] Effectively[,] that was a finding that the defendant [that is, herein
petitioner] was in default for failure to file an answer or any responsive pleading within
the period fixed in the publication as precisely the defendant [could not] be found and
for which reason, service of summons by publication was ordered. It is simply illogical
to notify the defendant of the Order of September 11, 2003 simply on account of the
reality that he was no longer residing and/or found on his last known address and his
whereabouts unknown - thus the publication of the summons. In other words, it was
reasonable to expect that the defendant will not receive any notice or order in his last
known address. Hence, [it was] impractical to send any notice or order to him.
Nonetheless, the record[s] will bear out that a copy of the order of September 11,
2003 was mailed to the defendant at his last known address but it was not claimed.
(emphasis supplied)
As is readily apparent, the September 11, 2003 order did not limit itself to permitting
respondent to present its evidence ex parte but in effect issued an order of default.
But the trial court could not validly do that as an order of default can be made only
upon motion of the claiming party.[15] Since no motion to declare petitioner in default
was filed, no default order should have been issued.
To pursue the matter to its logical conclusion, if a party declared in default is entitled
to notice of subsequent proceedings, all the more should a party who has not been
declared in default be entitled to such notice. But what happens if the residence or
whereabouts of the defending party is not known or he cannot be located? In such a
108
case, there is obviously no way notice can be sent to him and the notice requirement
cannot apply to him. The law does not require that the impossible be done.[16] Nemo
tenetur ad impossibile. The law obliges no one to perform an impossibility.[17] Laws
and rules must be interpreted in a way that they are in accordance with logic, common
sense, reason and practicality.[18]

Hence, even if petitioner was not validly declared in default, he could not reasonably
demand that copies of orders and processes be furnished him. Be that as it may, a
copy of the September 11, 2003 order was nonetheless still mailed to petitioner at his
last known address but it was unclaimed.

CorrectnessOf
Non-Admission Of Answer

Petitioner failed to file his answer within the required period. Indeed, he would not
have moved for the admission of his answer had he filed it on time. Considering that
the answer was belatedly filed, the trial court did not abuse its discretion in denying
its admission.

Petitioner's plea for equity must fail in the face of the clear and express language of
the rules of procedure and of the September 11, 2003 order regarding the period for
filing the answer. Equity is available only in the absence of law, not as its
replacement.[19] Equity may be applied only in the absence of rules of procedure,
never in contravention thereof.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioner.

SO ORDERED

109
[G.R. NO. 172595 : April 10, 2008]
BIENVENIDO EJERCITO and JOSE MARTINEZ, Petitioners, v. M.R. VARGAS
CONSTRUCTION, BRION, MARCIAL R. VARGAS, Sole Owner, RENATO
AGARAO**, Respondents.
DECISION
TINGA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, assailing the Court of Appeals' Decision1 and Resolution2 in CA-G.R. SP
No. 89001. The appellate court's decision dismissed the petition for certiorari, which
sought to set aside the Order3 dated 08 November 2004 issued by Hon. Marie
Christine Jacob, Presiding Judge of the Regional Trial Court (RTC) of Quezon City,
Branch 100. The appellate court's resolution denied petitioners' motion for
reconsideration of the decision.
As culled from the records, the following factual antecedents appear:
On 5 March 2004, the City Government of Quezon City, represented by Mayor
Feliciano Belmonte, Jr., entered into a construction contract4 with M.R. Vargas
Construction, represented by Marcial Vargas in his capacity as general manager of
the said business enterprise, for the improvement and concreting of Panay Avenue.5
Pursuant to the contract, the business enterprise commenced its clearing operations
by removing the structures and uprooting the trees along the thoroughfare. Its
foreman, Renato Agarao, supervised the clearing operations.6
Claiming that the clearing operations lacked the necessary permit and prior
consultation, petitioners Bienvenido Ejercito and Jose Martinez, as well as a certain
Oscar Baria, brought the matter to the attention of the barangay authorities, Mayor
Belmonte, Senator Ma. Ana Consuelo A.S. Madrigal, the Department of Environment
and Natural Resources and the Philippine Coconut Authority.7
The efforts of petitioners proved unsuccessful. Hence, on 10 September 2004, they
filed a petition for injunction before the Quezon City RTC. The petition named "M.R.
Vargas Construction Co., represented by herein Marcial R. Vargas and Renato
Agarao," as respondent.8
The Petition,9 docketed as Civil Case No. Q-04-53687, indicated that "Respondent
M.R. Vargas Construction, is an entity, with office address at the 4th Floor, President
Tower, Timog Avenue corner Scout Ybardaloza [sic] St., Quezon City, represented
herein by its President Marcial Vargas and its construction foreman Renato Agarao,
where they may be served with summons and other court processes."10
The petition was accompanied with an application for a temporary restraining order
(TRO) and a writ of preliminary injunction.11 Thus, the Office of the Clerk of Court
forthwith issued summons and notice of raffle on 10 September 2004.12 Upon service
of the processes on the aforementioned address, they were returned unserved on the
ground that respondent enterprise was unknown thereat.13
The petition was subsequently raffled to the sala of Judge Jacob, before which
petitioners' application for a temporary restraining order was heard on 15 September
2004.14 On the same day, when Agarao was also present in court, Judge Jacob
issued a TRO directing respondent enterprise to desist from cutting, damaging or
transferring the trees found along Panay Avenue.15
On 23 September 2004, the Mangoba Tan Agus Law Offices filed a special
appearance on behalf of respondent enterprise and moved for the dismissal of the
petition as well as the quashal of the temporary restraining order on the ground of
lack of jurisdiction over respondent enterprise. The motion also assailed the raffle of
the case for having been conducted in violation of Section 4, Rule 58 of the Rules of
Court; the issuance of the TRO without requiring the posting of a bond; the failure to
implead the Government of Quezon City despite its being the real party-in-interest;
and petitioners' application for the injunctive writ which was allegedly grossly defective
in form and substance.16
The motion to dismiss the petition and to quash the TRO was heard on 24 September
2004.17 Before the hearing, a court interpreter showed to respondent enterprise's
counsel a copy of the summons and of the notice of raffle in which appear a signature
at the bottom of each copy, apparently indicating the receipt of the summons.18 On
the mistaken belief that the summons was received by respondent enterprise, at the
hearing of the motion, its counsel withdrew two of the grounds stated in the motion,
to wit, lack of jurisdiction and irregularity in the raffle of the case.19
At the hearing of petitioners' application for a writ of preliminary injunction on 1
October 2004, the counsel for respondent enterprise manifested that he was adopting
the arguments in the motion to quash the TRO.20 On 6 October 2004, the RTC issued
an Order granting petitioners' application for a writ of preliminary injunction.21
On 7 October 2004, counsel for respondent enterprise filed a manifestation with
urgent omnibus motion to nullify the proceedings and to cite petitioners and the
process server in contempt of court.22 He argued that respondent enterprise failed to
receive the summons, alleging that it was herein petitioner Jose Martinez who signed
as recipient thereof as well as of the notice of raffle that was served on 10 September
2004.23
On 18 October 2004, the writ of preliminary injunction was issued. Subsequently,
petitioners filed a motion for ocular inspection and another motion praying that
respondent enterprise be ordered to
restore the structures damaged by its clearing operations.24
On 8 November 2004, the RTC issued the assailed Order,25 nullifying the
proceedings thus far conducted in the case.26 Petitioners sought reconsideration, but
the motion was denied in an Order dated 20 December 2004.27
Thus, petitioners filed a petition for certiorari before the Court of Appeals assailing the
8 November 2004 Order issued by Judge Jacob.28 This time, aside from Judge Jacob
and the enterprise "M.R. Vargas Construction" itself, the petition also named Marcial
110
R. Vargas and Renato Agarao, the enterprise's owner and foreman, respectively, as
individual respondents. The separate addresses of said respondents were also
indicated in the initial part of the petition.
It was argued in the petition that Judge Jacob committed grave abuse of direction in
nullifying the proceedings on the ground of lack of jurisdiction in view of Agarao's
presence at the hearing on petitioners' application for TRO, in failing to act on
petitioners' pending motions and in directing instead the issuance of new summons
on respondent enterprise.29
On 10 October 2005, the Court of Appeals rendered the assailed Decision dismissing
the petition for certiorari for lack of merit.30 In its Order dated 28 April 2006, the Court
of Appeals denied petitioners' motion for reconsideration.
Hence, the instant petition attributes the following errors to the Court of Appeals:
I.
THE COURT OF APPEALS ERRED IN RULING THAT THE REGIONAL TRIAL
COURT DID NOT OBTAIN JURISDICTION OVER THE RESPONDENTS, DEPSITE
THE RECEIPT OF COURT PROCESSES AND VOLUNTARY APPEARANCE
BEFORE THE COURTS.
II.
THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE WITHDRAWAL
BY PRIVATE RESPONDENTS OF THE GROUND OF ABSENCE OF
JURISDICTION OVER ITS PERSON CONSTITUTED A WAIVER OF SUCH
OBJECTION31
The instant petition which similarly impleads the enterprise, M.R. Vargas
Construction, Marcial R. Vargas and Renato Agarao as respondents'raises two
issues, namely: (1) whether the trial court acquired jurisdiction over respondent
enterprise and (2) whether the defense of lack of jurisdiction had been waived.
Jurisdiction over the defendant is acquired either upon a valid service of summons or
the defendant's voluntary appearance in court. When the defendant does not
voluntarily submit to the court's jurisdiction or when there is no valid service of
summons, any judgment of the court, which has no jurisdiction over the person of the
defendant is null and void. In an action strictly in personam, personal service on the
defendant is the preferred mode of service, that is, by handing a copy of the summons
to the defendant in person.32
Citing the jurisdictional implications of the failure of service of summons, the Court of
Appeals concluded that no grave abuse of discretion was committed by Judge Jacob
in nullifying the proceedings thus far conducted in the case based on the finding that
the summons had not been served on respondent enterprise and that Agarao, despite
being present at the 15 September 2004 hearing, was not authorized to represent
respondent enterprise in said hearing.
Petitioners take exception. They argue that the trial court acquired jurisdiction over
respondent enterprise, an entity without juridical personality, through the appearance
of its foreman, Agarao, at the 15 September 2004 hearing on the TRO application.
Petitioners theorize that the voluntary appearance of Agarao in said hearing was
equivalent to service of summons binding upon respondent enterprise, following by
analogy, Section 8, Rule 1433 which allows the service of summons on any of the
defendants associated to an entity without juridical personality. Furthermore, they
contend that the receipt by a certain Rona Adol of the court processes was binding
upon respondent enterprise because the latter did not deny the authority of Adol to
receive communications on its behalf.
Petitioners' argument is untenable.
At the outset, it is worthy to note that both the Court of Appeals and the trial court
found that summons was not served on respondent enterprise. The Officer's Return
stated essentially that the server failed to serve the summons on respondent
enterprise because it could not be found at the address alleged in the petition. This
factual finding, especially when affirmed by the appellate court, is conclusive upon
this Court and should not be disturbed because this Court is not a trier of facts.
A sole proprietorship does not possess a juridical personality separate and distinct
from the personality of the owner of the enterprise. The law does not vest a separate
legal personality on the sole proprietorship or empower it to file or defend an action
in court.34 Only natural or juridical persons or entities authorized by law may be
parties to a civil action and every action must be prosecuted and defended in the
name of the real parties-in-interest.35
The records show that respondent enterprise, M.R. Vargas Construction Co., is a sole
proprietorship and, therefore, an entity without juridical personality. Clearly, the real
party-in-interest is Marcial R. Vargas who is the owner of the enterprise. Thus, the
petition for injunction should have impleaded him as the party respondent either
simply by mention of his name or by denominating him as doing business under the
name and style of "M.R. Vargas Construction Co." It was erroneous to refer to him,
as the petition did in both its caption and body, as representing the enterprise.
Petitioners apparently realized this procedural lapse when in the petition for certiorari
filed before the Court of Appeals and in the instant petition, M.R. Vargas Construction,
Marcial R. Vargas and Renato Agaro were separately named as individual
respondents.
Since respondent enterprise is only a sole proprietorship, an entity without juridical
personality, the suit for injunction may be instituted only against its owner, Marcial
Vargas. Accordingly summons should have been served on Vargas himself, following
Rule 14, Sections 636 and 737 of the Rules of Court on personal service and
substituted service. In the instant case, no service of summons, whether personal or
substituted, was effected on Vargas. It is well-established that summons upon a
respondent or a defendant must be served by handing a copy thereof to him in person
or, if he refuses to receive it, by tendering it to him. Personal service of summons
most effectively ensures that the notice desired under the constitutional requirement
of due process is accomplished. If however efforts to find him personally would make
prompt service impossible, service may be completed by substituted service, i.e., by
111
leaving copies of the summons at his dwelling house or residence with some person
of suitable age and discretion then residing therein or by leaving the copies at his
office or regular place of business with some competent person in charge thereof.38
The modes of service of summons should be strictly followed in order that the court
may acquire jurisdiction over the respondents, and failure to strictly comply with the
requirements of the rules regarding the order of its publication is a fatal defect in the
service of summons. It cannot be overemphasized that the statutory requirements on
service of summons, whether personally, by substituted service or by publication,
must be followed strictly, faithfully and fully, and any mode of service other than that
prescribed by the statute is considered ineffective.39
Agarao was not a party respondent in the injunction case before the trial court.
Certainly, he is not a real party-in-interest against whom the injunction suit may be
brought, absent any showing that he is also an owner or he acts as an agent of
respondent enterprise. Agarao is only a foreman, bereft of any authority to defend the
suit on behalf of respondent enterprise. As earlier mentioned, the suit against an entity
without juridical personality like respondent enterprise may be instituted only by or
against its owner. Impleading Agarao as a party-respondent in the suit for injunction
would have no legal consequence. In any event, the petition for injunction described
Agarao only as a representative of M.R. Vargas Construction Co., which is a mere
inconsequentiality considering that only Vargas, as its sole owner, is authorized by
the Rules of Court to defend the suit on behalf of the enterprise.
as recipient of the summons. Noteworthy is the fact that when the counsel first
appeared in court his appearance was "special" in character and was only for the
purpose of questioning the court's jurisdiction over Vargas, considering that the latter
never received the summons. However, the counsel was shown a copy of the
summons where a signature appears at the bottom which led him to believe that the
summons was actually received by Vargas when in fact it was petitioner Martinez
himself who affixed his signature as recipient thereof. When the counsel discovered
his mistake, he lost no time pleading that the proceedings be nullified and that
petitioners and the process server be cited for contempt of court. Both the trial and
appellate courts concluded that the improvident withdrawal of the defense of lack of
jurisdiction was an innocuous error, proceeding on the undeniable fact that the
summons was not properly served on Vargas. Thus, the Court of Appeals did not
commit a reversible error when it affirmed the trial court's nullification of the
proceedings for lack of jurisdiction.
WHEREFORE, the instant petition for certiorari is DENIED. The Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 89001 are AFFIRMED in toto.
Costs against petitioners.
The temporary restraining order issued in this case is DISSOLVED.
SO ORDERED.

Despite Agarao's not being a party-respondent, petitioners nevertheless confuse his

presence or attendance at the hearing on the application for TRO with the notion of
voluntary appearance, which interpretation has a legal nuance as far as jurisdiction is
concerned. While it is true that an appearance in whatever form, without explicitly
objecting to the jurisdiction of the court over the person, is a submission to the
jurisdiction of the court over the person, the appearance must constitute a positive act
on the part of the litigant manifesting an intention to submit to the court's jurisdiction.40
Thus, in the instances where the Court upheld the jurisdiction of the trial court over
the person of the defendant, the parties showed the intention to participate or be
bound by the proceedings through the filing of a motion, a plea or an answer.41

Neither is the service of the notice of hearing on the application for a TRO on a certain
Rona Adol binding on respondent enterprise. The records show that Rona Adol
received the notice of hearing on behalf of an entity named JCB. More importantly,
for purposes of acquiring jurisdiction over the person of the defendant, the Rules
require the service of summons and not of any other court processes.

Petitioners also contend that respondent enterprise waived the defense of lack of
jurisdiction when its counsel actively demanded positive action on the omnibus
motion. The argument is implausible.

It should be noted that when the defendant's appearance is made precisely to object
to the jurisdiction of the court over his person, it cannot be considered as appearance
in court.42 Such was the purpose of the omnibus motion, as counsel for respondent
enterprise precisely manifested therein that he erroneously believed that Vargas
himself had received the summons when in fact it was petitioner Martinez who signed

112
G.R. No. 155635 November 7, 2008
MARIA REBECCA MAKAPUGAY BAYOT, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and VICENTE MADRIGAL BAYOT,
respondents.
x-------------------------------------------x
G.R. No. 163979 November 7, 2008
MARIA REBECCA MAKAPUGAY BAYOT, petitioner,
vs.
VICENTE MADRIGAL BAYOT, respondent.
DECISION
VELASCO, JR., J.:
The Case
Before us are these two petitions interposed by petitioner Maria Rebecca Makapugay
Bayot impugning certain issuances handed out by the Court of Appeals (CA) in CA-
G.R. SP No. 68187.
In the first, a petition for certiorari1 under Rule 65 and docketed as G.R. No. 155635,
Rebecca assails and seeks to nullify the April 30, 2002 Resolution2 of the CA, as
reiterated in another Resolution of September 2, 2002,3 granting a writ of preliminary
injunction in favor of private respondent Vicente Madrigal Bayot staving off the trial
court's grant of support pendente lite to Rebecca.
The second, a petition for review under Rule 45,4 docketed G.R. No. 163979, assails
the March 25, 2004 Decision5 of the CA, (1) dismissing Civil Case No. 01-094, a suit
for declaration of absolute nullity of marriage with application for support commenced
by Rebecca against Vicente before the Regional Trial Court (RTC) in Muntinlupa City;
and (2) setting aside certain orders and a resolution issued by the RTC in the said
case.
Per its Resolution of August 11, 2004, the Court ordered the consolidation of both
cases.
The Facts
Vicente and Rebecca were married on April 20, 1979 in Sanctuario de San Jose,
Greenhills, Mandaluyong City. On its face, the Marriage Certificate6 identified
Rebecca, then 26 years old, to be an American citizen7 born in Agaña, Guam, USA
to Cesar Tanchiong Makapugay, American, and Helen Corn Makapugay, American.
On November 27, 1982 in San Francisco, California, Rebecca gave birth to Marie
Josephine Alexandra or Alix. From then on, Vicente and Rebecca's marital
relationship seemed to have soured as the latter, sometime in 1996, initiated divorce
proceedings in the Dominican Republic. Before the Court of the First Instance of the
Judicial District of Santo Domingo, Rebecca personally appeared, while Vicente was
duly represented by counsel. On February 22, 1996, the Dominican court issued Civil
Decree No. 362/96,8 ordering the dissolution of the couple's marriage and "leaving
them to remarry after completing the legal requirements," but giving them joint
custody and guardianship over Alix. Over a year later, the same court would issue
Civil Decree No. 406/97,9 settling the couple's property relations pursuant to an
Agreement10 they executed on December 14, 1996. Said agreement specifically
stated that the "conjugal property which they acquired during their marriage consist[s]
only of the real property and all the improvements and personal properties therein
contained at 502 Acacia Avenue, Alabang, Muntinlupa."11
Meanwhile, on March 14, 1996, or less than a month from the issuance of Civil Decree
No. 362/96, Rebecca filed with the Makati City RTC a petition12 dated January 26,
1996, with attachments, for declaration of nullity of marriage, docketed as Civil Case
No. 96-378. Rebecca, however, later moved13 and secured approval14 of the motion
to withdraw the petition.
On May 29, 1996, Rebecca executed an Affidavit of Acknowledgment15 stating under
oath that she is an American citizen; that, since 1993, she and Vicente have been
living separately; and that she is carrying a child not of Vicente.
On March 21, 2001, Rebecca filed another petition, this time before the Muntinlupa
City RTC, for declaration of absolute nullity of marriage16 on the ground of Vicente's
alleged psychological incapacity. Docketed as Civil Case No. 01-094 and entitled as
Maria Rebecca Makapugay Bayot v. Vicente Madrigal Bayot, the petition was
eventually raffled to Branch 256 of the court. In it, Rebecca also sought the dissolution
of the conjugal partnership of gains with application for support pendente lite for her
and Alix. Rebecca also prayed that Vicente be ordered to pay a permanent monthly
support for their daughter Alix in the amount of PhP 220,000.
On June 8, 2001, Vicente filed a Motion to Dismiss17 on, inter alia, the grounds of
lack of cause of action and that the petition is barred by the prior judgment of divorce.
Earlier, on June 5, 2001, Rebecca filed and moved for the allowance of her application
for support pendente lite.
To the motion to dismiss, Rebecca interposed an opposition, insisting on her Filipino
citizenship, as affirmed by the Department of Justice (DOJ), and that, therefore, there
is no valid divorce to speak of.
Meanwhile, Vicente, who had in the interim contracted another marriage, and
Rebecca commenced several criminal complaints against each other. Specifically,
Vicente filed adultery and perjury complaints against Rebecca. Rebecca, on the other
hand, charged Vicente with bigamy and concubinage.
Ruling of the RTC on the Motion to Dismiss
and Motion for Support Pendente Lite
113
On August 8, 2001, the RTC issued an Order18 denying Vicente's motion to dismiss
Civil Case No. 01-094 and granting Rebecca's application for support pendente lite,
disposing as follows:
Wherefore, premises considered, the Motion to Dismiss filed by the respondent is
DENIED. Petitioner's Application in Support of the Motion for Support Pendente Lite
is hereby GRANTED. Respondent is hereby ordered to remit the amount of TWO
HUNDRED AND TWENTY THOUSAND PESOS (Php 220,000.00) a month to
Petitioner as support for the duration of the proceedings relative to the instant Petition.
SO ORDERED.19
The RTC declared, among other things, that the divorce judgment invoked by Vicente
as bar to the petition for declaration of absolute nullity of marriage is a matter of
defense best taken up during actual trial. As to the grant of support pendente lite, the
trial court held that a mere allegation of adultery against Rebecca does not operate
to preclude her from receiving legal support.
Following the denial20 of his motion for reconsideration of the above August 8, 2001
RTC order, Vicente went to the CA on a petition for certiorari, with a prayer for the
issuance of a temporary restraining order (TRO) and/or writ of preliminary
injunction.21 His petition was docketed as CA-G.R. SP No. 68187.
Grant of Writ of Preliminary Injunction by the CA
On January 9, 2002, the CA issued the desired TRO.22 On April 30, 2002, the
appellate court granted, via a Resolution, the issuance of a writ of preliminary
injunction, the decretal portion of which reads:
IN VIEW OF ALL THE FOREGOING, pending final resolution of the petition at bar,
let the Writ of Preliminary Injunction be ISSUED in this case, enjoining the respondent
court from implementing the assailed Omnibus Order dated August 8, 2001 and the
Order dated November 20, 2001, and from conducting further proceedings in Civil
Case No. 01-094, upon the posting of an injunction bond in the amount of
P250,000.00.
SO ORDERED.23
Rebecca moved24 but was denied reconsideration of the aforementioned April 30,
2002 resolution. In the meantime, on May 20, 2002, the preliminary injunctive writ25
was issued. Rebecca also moved for reconsideration of this issuance, but the CA, by
Resolution dated September 2, 2002, denied her motion.
The adverted CA resolutions of April 30, 2002 and September 2, 2002 are presently
being assailed in Rebecca's petition for certiorari, docketed under G.R. No. 155635.
Ruling of the CA
Pending resolution of G.R. No. 155635, the CA, by a Decision dated March 25, 2004,
effectively dismissed Civil Case No. 01-094, and set aside incidental orders the RTC
issued in relation to the case. The fallo of the presently assailed CA Decision reads:
IN VIEW OF THE FOREGOING, the petition is GRANTED. The Omnibus Order dated
August 8, 2001 and the Order dated November 20, 2001 are REVERSED and SET
ASIDE and a new one entered DISMISSING Civil Case No. 01-094, for failure to state
a cause of action. No pronouncement as to costs.
SO ORDERED.26
To the CA, the RTC ought to have granted Vicente's motion to dismiss on the basis
of the following premises:
(1) As held in China Road and Bridge Corporation v. Court of Appeals, the
hypothetical-admission rule applies in determining whether a complaint or petition
states a cause of action.27 Applying said rule in the light of the essential elements of
a cause of action,28 Rebecca had no cause of action against Vicente for declaration
of nullity of marriage.
(2) Rebecca no longer had a legal right in this jurisdiction to have her marriage with
Vicente declared void, the union having previously been dissolved on February 22,
1996 by the foreign divorce decree she personally secured as an American citizen.
Pursuant to the second paragraph of Article 26 of the Family Code, such divorce
restored Vicente's capacity to contract another marriage.
(3) Rebecca's contention about the nullity of a divorce, she being a Filipino citizen at
the time the foreign divorce decree was rendered, was dubious. Her allegation as to
her alleged Filipino citizenship was also doubtful as it was not shown that her father,
at the time of her birth, was still a Filipino citizen. The Certification of Birth of Rebecca
issued by the Government of Guam also did not indicate the nationality of her father.
(4) Rebecca was estopped from denying her American citizenship, having professed
to have that nationality status and having made representations to that effect during
momentous events of her life, such as: (a) during her marriage; (b) when she applied
for divorce; and (c) when she applied for and eventually secured an American
passport on January 18, 1995, or a little over a year before she initiated the first but
later withdrawn petition for nullity of her marriage (Civil Case No. 96-378) on March
14, 1996.
(5) Assuming that she had dual citizenship, being born of a purportedly Filipino father
in Guam, USA which follows the jus soli principle, Rebecca's representation and
assertion about being an American citizen when she secured her foreign divorce
precluded her from denying her citizenship and impugning the validity of the divorce.
Rebecca seasonably filed a motion for reconsideration of the above Decision, but this
recourse was denied in the equally assailed June 4, 2004 Resolution.29 Hence,
Rebecca's Petition for Review on Certiorari under Rule 45, docketed under G.R. No.
163979.
114
The Issues
In G.R. No. 155635, Rebecca raises four (4) assignments of errors as grounds for the
allowance of her petition, all of which converged on the proposition that the CA erred
in enjoining the implementation of the RTC's orders which would have entitled her to
support pending final resolution of Civil Case No. 01-094.
In G.R. No. 163979, Rebecca urges the reversal of the assailed CA decision
submitting as follows:
I There can be no serious dispute that Rebecca, at the time she applied for and
THE COURT OF APPEALS GRAVELY ERRED IN NOT MENTIONING AND NOT
TAKING INTO CONSIDERATION IN ITS APPRECIATION OF THE FACTS THE
FACT OF PETITIONER'S FILIPINO CITIZENSHIP AS CATEGORICALLY STATED
AND ALLEGED IN HER PETITION BEFORE THE COURT A QUO.
II
THE COURT OF APPEALS GRAVELY ERRED IN RELYING ONLY ON ANNEXES
TO THE PETITION IN RESOLVING THE MATTERS BROUGHT BEFORE IT.
III
THE COURT OF APPEALS GRAVELY ERRED IN FAILING TO CONSIDER THAT
RESPONDENT IS ESTOPPED FROM CLAIMING THAT HIS MARRIAGE TO
PETITIONER HAD ALREADY BEEN DISSOLVED BY VIRTUE OF HIS
SUBSEQUENT AND CONCURRENT ACTS.
IV
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THERE WAS
ABUSE OF DISCRETION ON THE PART OF THE TRIAL COURT, MUCH LESS A
GRAVE ABUSE.30
We shall first address the petition in G.R. No. 163979, its outcome being
determinative of the success or failure of the petition in G.R. No. 155635.
Three legal premises need to be underscored at the outset. First, a divorce obtained
abroad by an alien married to a Philippine national may be recognized in the
Philippines, provided the decree of divorce is valid according to the national law of
the foreigner.31 Second, the reckoning point is not the citizenship of the divorcing
parties at birth or at the time of marriage, but their citizenship at the time a valid
divorce is obtained abroad. And third, an absolute divorce secured by a Filipino
married to another Filipino is contrary to our concept of public policy and morality and
shall not be recognized in this jurisdiction.32
Given the foregoing perspective, the determinative issue tendered in G.R. No.
155635, i.e., the propriety of the granting of the motion to dismiss by the appellate
court, resolves itself into the questions of: first, whether petitioner Rebecca was a
Filipino citizen at the time the divorce judgment was rendered in the Dominican
Republic on February 22, 1996; and second, whether the judgment of divorce is valid
and, if so, what are its consequent legal effects?
The Court's Ruling
The petition is bereft of merit.
Rebecca an American Citizen in the Purview of This Case
obtained her divorce from Vicente, was an American citizen and remains to be one,
absent proof of an effective repudiation of such citizenship. The following are
compelling circumstances indicative of her American citizenship: (1) she was born in
Agaña, Guam, USA; (2) the principle of jus soli is followed in this American territory
granting American citizenship to those who are born there; and (3) she was, and may
still be, a holder of an American passport.33
And as aptly found by the CA, Rebecca had consistently professed, asserted, and
represented herself as an American citizen, particularly: (1) during her marriage as
shown in the marriage certificate; (2) in the birth certificate of Alix; and (3) when she
secured the divorce from the Dominican Republic. Mention may be made of the
Affidavit of Acknowledgment34 in which she stated being an American citizen.
It is true that Rebecca had been issued by the Bureau of Immigration (Bureau) of
Identification (ID) Certificate No. RC 9778 and a Philippine Passport. On its face, ID
Certificate No. RC 9778 would tend to show that she has indeed been recognized as
a Filipino citizen. It cannot be over-emphasized, however, that such recognition was
given only on June 8, 2000 upon the affirmation by the Secretary of Justice of
Rebecca's recognition pursuant to the Order of Recognition issued by Bureau
Associate Commissioner Edgar L. Mendoza.
For clarity, we reproduce in full the contents of ID Certificate No. RC 9778:
To Whom It May Concern:
This is to certify that *MARIA REBECCA MAKAPUGAY BAYOT* whose photograph
and thumbprints are affixed hereto and partially covered by the seal of this Office, and
whose other particulars are as follows:
Place of Birth: Guam, USA Date of Birth: March 5, 1953
Sex: female Civil Status: married Color of Hair: brown
Color of Eyes: brown Distinguishing marks on face: none
was - r e c o g n i z e d - as a citizen of the Philippines as per pursuant to Article IV,
Section 1, Paragraph 3 of the 1935 Constitution per order of Recognition JBL 95-213
signed by Associate Commissioner Jose B. Lopez dated October 6, 1995, and duly
115
affirmed by Secretary of Justice Artemio G. Tuquero in his 1st Indorsement dated
June 8, 2000.
Issued for identification purposes only. NOT VALID for travel purposes.
Given under my hand and seal this 11th day of October, 1995
(SGD) EDGAR L. MENDOZA
ASSO. COMMISSIONER
Official Receipt No. 5939988
issued at Manila
dated Oct. 10, 1995 for P 2,000
From the text of ID Certificate No. RC 9778, the following material facts and dates
may be deduced: (1) Bureau Associate Commissioner Jose B. Lopez issued the
Order of Recognition on October 6, 1995; (2) the 1st Indorsement of Secretary of
Justice Artemio G. Tuquero affirming Rebecca's recognition as a Filipino citizen was
issued on June 8, 2000 or almost five years from the date of the order of recognition;
and (3) ID Certificate No. RC 9778 was purportedly issued on October 11, 1995 after
the payment of the PhP 2,000 fee on October 10, 1995 per OR No. 5939988.
What begs the question is, however, how the above certificate could have been
issued by the Bureau on October 11, 1995 when the Secretary of Justice issued the
required affirmation only on June 8, 2000. No explanation was given for this patent
aberration. There seems to be no error with the date of the issuance of the 1st
Indorsement by Secretary of Justice Tuquero as this Court takes judicial notice that
he was the Secretary of Justice from February 16, 2000 to January 22, 2001. There
is, thus, a strong valid reason to conclude that the certificate in question must be
spurious.
Under extant immigration rules, applications for recognition of Filipino citizenship
require the affirmation by the DOJ of the Order of Recognition issued by the Bureau.
Under Executive Order No. 292, also known as the 1987 Administrative Code,
specifically in its Title III, Chapter 1, Sec. 3(6), it is the DOJ which is tasked to "provide
immigration and naturalization regulatory services and implement the laws governing
citizenship and the admission and stay of aliens." Thus, the confirmation by the DOJ
of any Order of Recognition for Filipino citizenship issued by the Bureau is required.
Pertinently, Bureau Law Instruction No. RBR-99-00235 on Recognition as a Filipino
Citizen clearly provides:
The Bureau [of Immigration] through its Records Section shall automatically furnish
the Department of Justice an official copy of its Order of Recognition within 72 days
from its date of approval by the way of indorsement for confirmation of the Order by
the Secretary of Justice pursuant to Executive Order No. 292. No Identification
Certificate shall be issued before the date of confirmation by the Secretary of Justice
and any Identification Certificate issued by the Bureau pursuant to an Order of
Recognition shall prominently indicate thereon the date of confirmation by the
Secretary of Justice. (Emphasis ours.)
Not lost on the Court is the acquisition by Rebecca of her Philippine passport only on
June 13, 2000, or five days after then Secretary of Justice Tuquero issued the 1st
Indorsement confirming the order of recognition. It may be too much to attribute to
coincidence this unusual sequence of close events which, to us, clearly suggests that
prior to said affirmation or confirmation, Rebecca was not yet recognized as a Filipino
citizen. The same sequence would also imply that ID Certificate No. RC 9778 could
not have been issued in 1995, as Bureau Law Instruction No. RBR-99-002 mandates
that no identification certificate shall be issued before the date of confirmation by the
Secretary of Justice. Logically, therefore, the affirmation or confirmation of Rebecca's
recognition as a Filipino citizen through the 1st Indorsement issued only on June 8,
2000 by Secretary of Justice Tuquero corresponds to the eventual issuance of
Rebecca's passport a few days later, or on June 13, 2000 to be exact.
When Divorce Was Granted Rebecca, She Was not a
Filipino Citizen and Was not Yet Recognized as One
The Court can assume hypothetically that Rebecca is now a Filipino citizen. But from
the foregoing disquisition, it is indubitable that Rebecca did not have that status of, or
at least was not yet recognized as, a Filipino citizen when she secured the February
22, 1996 judgment of divorce from the Dominican Republic.
The Court notes and at this juncture wishes to point out that Rebecca voluntarily
withdrew her original petition for declaration of nullity (Civil Case No. 96-378 of the
Makati City RTC) obviously because she could not show proof of her alleged Filipino
citizenship then. In fact, a perusal of that petition shows that, while bearing the date
January 26, 1996, it was only filed with the RTC on March 14, 1996 or less than a
month after Rebecca secured, on February 22, 1996, the foreign divorce decree in
question. Consequently, there was no mention about said divorce in the petition.
Significantly, the only documents appended as annexes to said original petition were:
the Vicente-Rebecca Marriage Contract (Annex "A") and Birth Certificate of Alix
(Annex "B"). If indeed ID Certificate No. RC 9778 from the Bureau was truly issued
on October 11, 1995, is it not but logical to expect that this piece of document be
appended to form part of the petition, the question of her citizenship being crucial to
her case?
As may be noted, the petition for declaration of absolute nullity of marriage under Civil
Case No. 01-094, like the withdrawn first petition, also did not have the ID Certificate
from the Bureau as attachment. What were attached consisted of the following
material documents: Marriage Contract (Annex "A") and Divorce Decree. It was only
through her Opposition (To Respondent's Motion to Dismiss dated 31 May 2001)36
did Rebecca attach as Annex "C" ID Certificate No. RC 9778.
At any rate, the CA was correct in holding that the RTC had sufficient basis to dismiss
the petition for declaration of absolute nullity of marriage as said petition, taken
together with Vicente's motion to dismiss and Rebecca's opposition to motion, with
their respective attachments, clearly made out a case of lack of cause of action, which
we will expound later.
Validity of Divorce Decree
116
Going to the second core issue, we find Civil Decree Nos. 362/96 and 406/97 valid.
First, at the time of the divorce, as above elucidated, Rebecca was still to be
recognized, assuming for argument that she was in fact later recognized, as a Filipino
citizen, but represented herself in public documents as an American citizen. At the
very least, she chose, before, during, and shortly after her divorce, her American
citizenship to govern her marital relationship. Second, she secured personally said
divorce as an American citizen, as is evident in the text of the Civil Decrees, which
pertinently declared:
IN THIS ACTION FOR DIVORCE in which the parties expressly submit to the
jurisdiction of this court, by reason of the existing incompatibility of temperaments x x
x. The parties MARIA REBECCA M. BAYOT, of United States nationality, 42 years of
age, married, domiciled and residing at 502 Acacia Ave., Ayala Alabang, Muntin Lupa,
Philippines, x x x, who personally appeared before this court, accompanied by DR.
JUAN ESTEBAN OLIVERO, attorney, x x x and VICENTE MADRIGAL BAYOT, of
Philippine nationality, of 43 years of age, married and domiciled and residing at 502
Acacia Ave., Ayala Alabang, Muntin Lupa, Filipino, appeared before this court
represented by DR. ALEJANDRO TORRENS, attorney, x x x, revalidated by special
power of attorney given the 19th of February of 1996, signed before the Notary Public
Enrico L. Espanol of the City of Manila, duly legalized and authorizing him to subscribe
all the acts concerning this case.37 (Emphasis ours.)
Third, being an American citizen, Rebecca was bound by the national laws of the
United States of America, a country which allows divorce. Fourth, the property
relations of Vicente and Rebecca were properly adjudicated through their
Agreement38 executed on December 14, 1996 after Civil Decree No. 362/96 was
rendered on February 22, 1996, and duly affirmed by Civil Decree No. 406/97 issued
on March 4, 1997. Veritably, the foreign divorce secured by Rebecca was valid.
To be sure, the Court has taken stock of the holding in Garcia v. Recio that a foreign
divorce can be recognized here, provided the divorce decree is proven as a fact and
as valid under the national law of the alien spouse.39 Be this as it may, the fact that
Rebecca was clearly an American citizen when she secured the divorce and that
divorce is recognized and allowed in any of the States of the Union,40 the
presentation of a copy of foreign divorce decree duly authenticated by the foreign
court issuing said decree is, as here, sufficient.
It bears to stress that the existence of the divorce decree has not been denied, but in
fact admitted by both parties. And neither did they impeach the jurisdiction of the
divorce court nor challenge the validity of its proceedings on the ground of collusion,
fraud, or clear mistake of fact or law, albeit both appeared to have the opportunity to
do so. The same holds true with respect to the decree of partition of their conjugal
property. As this Court explained in Roehr v. Rodriguez:
Before our courts can give the effect of res judicata to a foreign judgment [of divorce]
x x x, it must be shown that the parties opposed to the judgment had been given
ample opportunity to do so on grounds allowed under Rule 39, Section 50 of the Rules
of Court (now Rule 39, Section 48, 1997 Rules of Civil Procedure), to wit:
SEC. 50. Effect of foreign judgments.--The effect of a judgment of a tribunal of a
foreign country, having jurisdiction to pronounce the judgment is as follows:
(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the
title to the thing;
(b) In case of a judgment against a person, the judgment is presumptive evidence of
a right as between the parties and their successors in interest by a subsequent title;
but the judgment may be repelled by evidence of a want of jurisdiction, want of notice
to the party, collusion, fraud, or clear mistake of law or fact.
It is essential that there should be an opportunity to challenge the foreign judgment,
in order for the court in this jurisdiction to properly determine its efficacy. In this
jurisdiction, our Rules of Court clearly provide that with respect to actions in
personam, as distinguished from actions in rem, a foreign judgment |merely
constitutes prima facie evidence of the justness of the claim of a party and, as such,
is subject to proof to the contrary.41
As the records show, Rebecca, assisted by counsel, personally secured the foreign
divorce while Vicente was duly represented by his counsel, a certain Dr. Alejandro
Torrens, in said proceedings. As things stand, the foreign divorce decrees rendered
and issued by the Dominican Republic court are valid and, consequently, bind both
Rebecca and Vicente.
Finally, the fact that Rebecca may have been duly recognized as a Filipino citizen by
force of the June 8, 2000 affirmation by Secretary of Justice Tuquero of the October
6, 1995 Bureau Order of Recognition will not, standing alone, work to nullify or
invalidate the foreign divorce secured by Rebecca as an American citizen on February
22, 1996. For as we stressed at the outset, in determining whether or not a divorce
secured abroad would come within the pale of the country's policy against absolute
divorce, the reckoning point is the citizenship of the parties at the time a valid divorce
is obtained.42
Legal Effects of the Valid Divorce
Given the validity and efficacy of divorce secured by Rebecca, the same shall be
given a res judicata effect in this jurisdiction. As an obvious result of the divorce
decree obtained, the marital vinculum between Rebecca and Vicente is considered
severed; they are both freed from the bond of matrimony. In plain language, Vicente
and Rebecca are no longer husband and wife to each other. As the divorce court
formally pronounced: "[T]hat the marriage between MARIA REBECCA M. BAYOT
and VICENTE MADRIGAL BAYOT is hereby dissolved x x x leaving them free to
remarry after completing the legal requirements."43
Consequent to the dissolution of the marriage, Vicente could no longer be subject to
a husband's obligation under the Civil Code. He cannot, for instance, be obliged to
live with, observe respect and fidelity, and render support to Rebecca.44
117
The divorce decree in question also brings into play the second paragraph of Art. 26
of the Family Code, providing as follows:
Art. 26. x x x x
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and
a divorce is thereafter validly obtained abroad by the alien spouse capacitating him
or her to remarry, the Filipino spouse shall likewise have capacity to remarry under
Philippine law. (As amended by E.O. 227)
In Republic v. Orbecido III, we spelled out the twin elements for the applicability of the
second paragraph of Art. 26, thus:
x x x [W]e state the twin elements for the application of Paragraph 2 of Article 26 as
follows:
1. There is a valid marriage that has been celebrated between a Filipino citizen and
a foreigner; and
2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to
remarry.
The reckoning point is not the citizenship of the parties at the time of the celebration
of the marriage, but their citizenship at the time a valid divorce is obtained abroad by
the alien spouse capacitating the latter to remarry.45
Both elements obtain in the instant case. We need not belabor further the fact of
marriage of Vicente and Rebecca, their citizenship when they wed, and their
professed citizenship during the valid divorce proceedings.
Not to be overlooked of course is the fact that Civil Decree No. 406/97 and the
Agreement executed on December 14, 1996 bind both Rebecca and Vicente as
regards their property relations. The Agreement provided that the ex-couple's
conjugal property consisted only their family home, thus:
9. That the parties stipulate that the conjugal property which they acquired during their
marriage consists only of the real property and all the improvements and personal
properties therein contained at 502 Acacia Avenue, Ayala Alabang, Muntinlupa,
covered by TCT No. 168301 dated Feb. 7, 1990 issued by the Register of Deeds of
Makati, Metro Manila registered in the name of Vicente M. Bayot, married to Rebecca
M. Bayot, x x x.46 (Emphasis ours.)
This property settlement embodied in the Agreement was affirmed by the divorce
court which, per its second divorce decree, Civil Decree No. 406/97 dated March 4,
1997, ordered that, "THIRD: That the agreement entered into between the parties
dated 14th day of December 1996 in Makati City, Philippines shall survive in this
Judgment of divorce by reference but not merged and that the parties are hereby
ordered and directed to comply with each and every provision of said agreement."47
Rebecca has not repudiated the property settlement contained in the Agreement. She
is thus estopped by her representation before the divorce court from asserting that
her and Vicente's conjugal property was not limited to their family home in Ayala
Alabang.48
No Cause of Action in the Petition for Nullity of Marriage
Upon the foregoing disquisitions, it is abundantly clear to the Court that Rebecca
lacks, under the premises, cause of action. Philippine Bank of Communications v.
Trazo explains the concept and elements of a cause of action, thus:
A cause of action is an act or omission of one party in violation of the legal right of the
other. A motion to dismiss based on lack of cause of action hypothetically admits the
truth of the allegations in the complaint. The allegations in a complaint are sufficient
to constitute a cause of action against the defendants if, hypothetically admitting the
facts alleged, the court can render a valid judgment upon the same in accordance
with the prayer therein. A cause of action exists if the following elements are present,
namely: (1) a right in favor of the plaintiff by whatever means and under whatever law
it arises or is created; (2) an obligation on the part of the named defendant to respect
or not to violate such right; and (3) an act or omission on the part of such defendant
violative of the right of the plaintiff or constituting a breach of the obligation of the
defendant to the plaintiff for which the latter may maintain an action for recovery of
damages.49
One thing is clear from a perusal of Rebecca's underlying petition before the RTC,
Vicente's motion to dismiss and Rebecca's opposition thereof, with the documentary
evidence attached therein: The petitioner lacks a cause of action for declaration of
nullity of marriage, a suit which presupposes the existence of a marriage.
To sustain a motion to dismiss for lack of cause of action, the movant must show that
the claim for relief does not exist rather than that a claim has been defectively stated
or is ambiguous, indefinite, or uncertain.50 With the valid foreign divorce secured by
Rebecca, there is no more marital tie binding her to Vicente. There is in fine no more
marriage to be dissolved or nullified.
The Court to be sure does not lose sight of the legal obligation of Vicente and Rebecca
to support the needs of their daughter, Alix. The records do not clearly show how he
had discharged his duty, albeit Rebecca alleged that the support given had been
insufficient. At any rate, we do note that Alix, having been born on November 27,
1982, reached the majority age on November 27, 2000, or four months before her
mother initiated her petition for declaration of nullity. She would now be 26 years old.
Hence, the issue of back support, which allegedly had been partly shouldered by
Rebecca, is best litigated in a separate civil action for reimbursement. In this way, the
actual figure for the support of Alix can be proved as well as the earning capacity of
both Vicente and Rebecca. The trial court can thus determine what Vicente owes, if
any, considering that support includes provisions until the child concerned shall have
finished her education.
Upon the foregoing considerations, the Court no longer need to delve into the issue
tendered in G.R. No. 155635, that is, Rebecca's right to support pendente lite. As it
118
were, her entitlement to that kind of support hinges on the tenability of her petition
under Civil Case No. 01-094 for declaration of nullity of marriage. The dismissal of
Civil Case No. 01-094 by the CA veritably removed any legal anchorage for, and
effectively mooted, the claim for support pendente lite.

WHEREFORE, the petition for certiorari in G.R. No. 155635 is hereby DISMISSED
on the ground of mootness, while the petition for review in G.R. No. 163979 is hereby
DENIED for lack of merit. Accordingly, the March 25, 2004 Decision and June 4, 2004
Resolution of the CA in CA-G.R. SP No. 68187 are hereby AFFIRMED. Costs against
petitioner.

SO ORDERED.

119
G.R. No. 159578 February 18, 2009
ROGELIA DACLAG and ADELINO DACLAG (deceased), substituted by RODEL
M. DACLAG, and ADRIAN M. DACLAG, Petitioners,
vs.
ELINO MACAHILIG, ADELA MACAHILIG, CONRADO MACAHILIG, LORENZA
HABER and BENITA DEL ROSARIO, Respondents.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
Before us is petitioners' Motion for Reconsideration of our Decision dated July 28,
2008 where we affirmed the Decision dated October 17, 2001 and the Resolution
dated August 7, 2003 of the Court of Appeals (CA) in CA-G.R. CV No. 48498.
Records show that while the land was registered in the name of petitioner Rogelia in
1984, respondents’ complaint for reconveyance was filed in 1991, which was within
the 10-year prescriptive period.
We ruled that since petitioners bought the property when it was still an unregistered
land, the defense of having purchased the property in good faith is unavailing. We
affirmed the Regional Trial Court (RTC) in finding that petitioners should pay
respondents their corresponding share in the produce of the subject land from the
time they were deprived thereof until the possession is restored to them.
In their Motion for Reconsideration, petitioners contend that the 10-year period for
reconveyance is applicable if the action is based on an implied or a constructive trust;
that since respondents' action for reconveyance was based on fraud, the action must
be filed within four years from the discovery of the fraud, citing Gerona v. De
Guzman,1 which was reiterated in Balbin v. Medalla.2
We do not agree.
In Caro v. Court of Appeals,3 we have explicitly held that "the prescriptive period for
the reconveyance of fraudulently registered real property is 10 years reckoned from
the date of the issuance of the certificate of title x x x."4
However, notwithstanding petitioners' unmeritorious argument, the Court deems it
necessary to make certain clarifications. We have earlier ruled that respondents'
action for reconveyance had not prescribed, since it was filed within the 10-year
prescriptive period.
However, a review of the factual antecedents of the case shows that respondents'
action for reconveyance was not even subject to prescription.
The deed of sale executed by Maxima in favor of petitioners was null and void, since
Maxima was not the owner of the land she sold to petitioners, and the one-half
northern portion of such land was owned by respondents. Being an absolute nullity,
the deed is subject to attack anytime, in accordance with Article 1410 of the Civil Code
that an action to declare the inexistence of a void contract does not prescribe.
Likewise, we have consistently ruled that when there is a showing of such illegality,
the property registered is deemed to be simply held in trust for the real owner by the
person in whose name it is registered, and the former then has the right to sue for the
reconveyance of the property.5 An action for reconveyance based on a void contract
is imprescriptible.6 As long as the land wrongfully registered under the Torrens
system is still in the name of the person who caused such registration, an action in
personam will lie to compel him to reconvey the property to the real owner.7 In this
case, title to the property is in the name of petitioner Rogelia; thus, the trial court
correctly ordered the reconveyance of the subject land to respondents.
Petitioners next contend that they are possessors in good faith, thus, the award of
damages should not have been imposed. They further contend that under Article 544,
a possessor in good faith is entitled to the fruits received before the possession is
legally interrupted; thus, if indeed petitioners are jointly and severally liable to
respondents for the produce of the subject land, the liability should be reckoned only
for 1991 and not 1984.
We find partial merit in this argument.
Article 528 of the Civil Code provides that possession acquired in good faith does not
lose this character, except in a case and from the moment facts exist which show that
the possessor is not unaware that he possesses the thing improperly or wrongfully.
Possession in good faith ceases from the moment defects in the title are made known
to the possessors, by extraneous evidence or by suit for recovery of the
property by the true owner. Whatever may be the cause or the fact from which it can
be deduced that the possessor has knowledge of the defects of his title or mode of
acquisition, it must be considered sufficient to show bad faith.8 Such interruption
takes place upon service of summons.9lawphil.net
Article 544 of the same Code provides that a possessor in good faith is entitled to the
fruits only so long as his possession is not legally interrupted. Records show that
petitioners received a summons together with respondents' complaint on August 5,
1991;10 thus, petitioners' good faith ceased on the day they received the summons.
Consequently, petitioners should pay respondents 10 cavans of palay per annum
beginning August 5, 1991 instead of 1984.
Finally, petitioner would like this Court to look into the finding of the RTC that "since
Maxima died in October 1993, whatever charges and claims petitioners may recover
from her expired with her"; and that the proper person to be held liable for damages
to be awarded to respondents should be Maxima Divison or her estate, since she
misrepresented herself to be the true owner of the subject land.
We are not persuaded.
Notably, petitioners never raised this issue in their appellants' brief or in their motion
for reconsideration filed before the CA. In fact, they never raised this matter before us
when they filed their petition for review. Thus, petitioners cannot raise the same in
this motion for reconsideration without offending the basic rules of fair play, justice
120
and due process, specially since Maxima was not substituted at all by her heirs after
the promulgation of the RTC Decision.

WHEREFORE, petitioners’ Motion for Reconsideration is PARTLY GRANTED. The

Decision of the Court of Appeals dated July 28, 2008 is MODIFIED only with respect
to prescription as discussed in the text of herein Resolution, and the dispositive
portion of the Decision is MODIFIED to the effect that petitioners are ordered to pay
respondents 10 cavans of palay per annum beginning August 5, 1991 instead of 1984.

SO ORDERED.

121
ZENAIDA ACOSTA, EDUARDO ACOSTA, ARNOLD ACOSTA, DELIA ACOSTA,
SPS. TEODULO MACHADO AND AURORA ORENZA, SPS. ROLDAN PALARCA
AND PACITA PANGILINAN, SPS. FROMENCIO JONATAS AND LUCENA M.
MARIANO, SPS. MARCIAL IGLESIA AND VIRGINIA LAPURGA, ATTY.-IN-FACT
FELINO MACARAEG, SPS. MANUEL MANGROBANG AND VALERIANA SOTIO,
SPS. VIRGINIA DELA ROSA AND ROMEO DELA ROSA, SPS. PACIFICO SOTIO
AND LOLITA SORIANO, JUAN DALINOC (DECEASED), REPRESENTED BY
DAUGHTER CONSUELO DALINOC, SPS. MARIANO TORIO AND MAXIMA
MACARAEG, REPRESENTED BY LEGAL HEIRS TORIBIA TORIO AND MAYUMI
MACARAEG, TEOFILO MOLINA AND AVELINO DIZON,
Petitioners,
- versus -
TRINIDAD SALAZAR AND ANICETA SALAZAR,
Respondents.
G.R. No. 161034
Present:
YNARES-SANTIAGO, J.,
Chairperson,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA, and
PERALTA, JJ.
Promulgated:
June 30, 2009
x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
This is a petition for review on certiorari assailing the July 25, 2003 Decision[1] of the
Court of Appeals (CA) as well as its November 25, 2003 Resolution[2] in CA-G.R. CV
No. 70161, which reversed and set aside the December 20, 2000 Decision[3] of the
Regional Trial Court (RTC), Branch 64, Tarlac City in Civil Case No. 7256. Said RTC
decision dismissed the complaint for quieting of title filed by herein respondents
Trinidad Salazar and Aniceta Salazar against petitioners.
Below are the facts.
On November 19, 1985, respondents Trinidad and Aniceta Salazar (hereinafter,
Salazars), filed a petition for the cancellation of the entries annotated at the back of
Original Certificate of Title (OCT) No. 40287 registered in the names of spouses Juan
Soriano and Vicenta Macaraeg, who died without issue.[4] The Salazars claim that
two of the entries Entry Nos. 19756 and 20102 annotated at the back of the aforesaid
title are void since no consolidation of rights appear in the Registry of Deeds (RD) of
Tarlac to support the entries; and that Transfer Certificate of Title (TCT) No. 9297,
which supposedly cancelled OCT No. 40287, is non-existent according to a
certification issued by the RD.[5] On October 21, 1986, RTC Branch 63 of Tarlac
resolved to grant the petition and ordered the cancellation of Entry No. 20102.[6] No
respondent was impleaded in the said petition.
Subsequently, the Salazars filed an urgent motion praying for the issuance of an order
to direct the RD of Tarlac to recall all titles issued under Entry Nos. 19756 and 20102
and to cancel all the tax declarations issued based thereon. The motion was granted
in an Order issued on November 7, 1986.[7]
On November 20, 1986, the Salazars filed a second urgent motion praying that the
owners of the affected property be ordered to appear before the court to show cause
why their titles should not be cancelled.[8]
On October 20, 1987, the Salazars filed a new motion praying that the RD of Tarlac
be ordered to comply with the courts order issued on November 7, 1986. The RD,
however, explained that to comply with the said court order would remove the basis
for the issuance of TCT No. 9297 which title had, in turn, been cancelled by many
other transfer certificates of title and would indubitably result in the deprivation of the
right to due process of the registered owners thereof.[9] On this basis, the RTC denied
the motion and advised the Salazars to elevate the matter en consulta to the Land
Registration Commission (now Land Registration Authority or LRA). After the
Salazars moved for reconsideration, the RTC directed the RD of Tarlac to comply with
the October 21, 1986 and November 7, 1986 orders. Threatened with contempt, the
RD elevated the matter en consulta to the National Land Titles and Deeds
Registration Administration, which, in turn, issued a resolution directing the RD to
comply with the RTCs orders.[10] On March 7, 1989, OCT No. 40287 was
reconstituted and TCT No. 219121 was issued in the names of the Salazars, sans
Entry Nos. 19756 and 20102.
It was at this stage of the proceedings that herein petitioners together with other
subsequent purchasers for value of the disputed property twenty-seven (27)
titleholders in all[11] filed their formal written comment dated April 17, 1989.[12] In
their comment, the oppositors contended, among others, that they had acquired their
titles in good faith and for value, and that the lower court, acting as a land registration
court, had no jurisdiction over issues of ownership.[13]
On September 14, 1989, the said court, apparently realizing its mistake, issued an
Order, stating thus:
Upon motion of Atty. Alcantara and without objection on the part of Atty. Molina and
Atty. Lamorena, all the incidents in this case are hereby withdrawn without prejudice
to the filing of an appropriate action in a proper forum.
SO ORDERED.[14]
This prompted the Salazars to file a complaint for quieting of title impleading herein
petitioners as well as other individuals who claim to have purchased the said property
from the heirs of Juan Soriano. The case was docketed as Civil Case No. 7256 before
122
Branch 64 of the RTC of Tarlac.[15] The complaint alleged that TCT No. 219121 was
issued in the names of the Salazars without Entry Nos. 19756 and 20102 at the back
of said title, but the previous TCTs issued by the RD of Tarlac as well as the tax
declarations existing in the Assessors Office have not been cancelled and revoked
by the said government agencies to the detriment and prejudice of the complainants
(herein respondents). They also alleged that Pcs-395, from which Lot Nos. 702-A to
702-V were taken, is non-existent and, thus, the court should cause the cancellation
and revocation of spurious and null and void titles and tax declarations.[16]
Defendants filed three separate answers. Defendants Raymundo Macaraeg, Martha
Estacio (both deceased), Adelaida Macaraeg, Lucio Macaraeg, represented by
Eufracia Macaraeg Baluyot as attorney-in-fact, Gregorio Baluyut and Eligia Obcena
(hereinafter, Macaraegs) maintained that the November 7, 1986 order of the RTC is
null and void because the court did not acquire jurisdiction over the case. They also
argued that TCT No. 219121 issued in the name of the Salazars is void and that the
case for quieting of title is not a direct, but a collateral, attack against a property
covered by a Torrens certificate.[17]
Defendants, now herein petitioners, for their part, maintained that the Plan of
Consolidation Subdivision Survey Pcs-396 had been an existing consolidation-
subdivision survey plan annotated on OCT No. 40287 under Entry No. 20102 dated
February 17, 1950 from which TCT No. 9297 was issued covering Lot Nos. 702-A to
702-V, inclusive, in the names of the heirs of Juan Soriano. They argued that TCT
No. 219121 issued in the name of the Salazars is spurious and null and void from the
beginning since it was acquired pursuant to an illegal order issued by the court.[18]
By way of special and affirmative defenses, they also alleged, among others, (1) that
the Salazars were not among the heirs of the late Juan Soriano, not within the fifth
civil degree of consanguinity, and hence, they have no right to inherit; (2) that TCT
No. 219121 constitutes a cloud upon the Torrens title of herein petitioners, and should
therefore be cancelled and revoked; (3) that assuming, without admitting, that the
Salazars have any right over the lots in question their right to enforce such action had
already prescribed by laches or had been barred by prescription since more than forty
(40) years had lapsed since the heirs of Juan Soriano had registered the lots in
question under TCT No. 9297 on February 17, 1950; and (4) that petitioners and/or
their predecessors-in-interest acquired the lots in question in good faith and for value
from the registered owners thereof.[19]
Defendant spouses Francisco Jonatas and Lucena M. Mariano and spouses Manuel
Mangrobang and Valeriana Sotio filed their answers practically raising the same
defenses.[20]
Meanwhile, on July 29, 1991, petitioners, together with the Macaraegs and Jonatas,
et al., filed before the CA a petition for annulment of judgment[21] rendered by RTC
Branch 63 of Tarlac, Tarlac. The case, docketed as CA-G.R. SP No. 25643, was,
however, dismissed on the ground of litis pendencia.[22]
On December 20, 2000, Branch 64 of the RTC of Tarlac dismissed the complaint for
quieting of title. The trial court faulted the Salazars for failure to present proof that
they are heirs of the late Juan Soriano.[23] It also declared TCT No. 219121 issued
in the name of the Salazars as null and void, and affirmed TCT No. 9297 as well as
all certificates of title derived therefrom.[24]
Unsatisfied, the Salazars appealed to the CA,[25] which ruled in their favor.
According to the CA, it was erroneous for Branch 64 of the RTC of Tarlac to reverse
and declare as null and void the decision of Branch 63, which is a court of equal rank.
Such issue should have been properly ventilated in an action for annulment of final
judgment. Consequently, the orders issued by RTC Branch 63, had become final and
executory, hence, covered by res judicata.[26]
The CA also struck down the arguments raised by the appellees that the orders of
RTC Branch 63 are null and void for lack of proper notice. It ratiocinated that the
proceeding is a land registration proceeding, which is an action in rem. This being so,
personal notice to the owners or claimants of the land sought to be registered is not
necessary in order to vest the court with jurisdiction over the res and over the
parties.[27]
A motion for reconsideration[28] was filed, but the same was denied.[29] Hence, this
petition.
Pivotal to the resolution of this case is the determination of the validity of the action
taken by the Salazars in Branch 63 of the RTC of Tarlac.
We rule for petitioners.
It is true that the registration of land under the Torrens system is a proceeding in rem
and not in personam. Such a proceeding in rem, dealing with a tangible res, may be
instituted and carried to judgment without personal service upon the claimants within
the state or notice by mail to those outside of it. Jurisdiction is acquired by virtue of
the power of the court over the res. Such a proceeding would be impossible were this
not so, for it would hardly do to make a distinction between constitutional rights of
claimants who were known and those who were not known to the plaintiff, when the
proceeding is to bar all.[30]
Interestingly, however, the proceedings instituted by the Salazars both in Branch 63
of the RTC of Tarlac for the cancellation of entries in OCT No. 40287 and later in
Branch 64 of the RTC of Tarlac for quieting of title can hardly be classified as actions
in rem. The petition for cancellation of entries annotated at the back of OCT No. 40287
ought to have been directed against specific persons: namely, the heirs of Juan
Soriano as appearing in Entry No. 20102 and, indubitably, against their successors-
in-interest who have acquired different portions of the property over the years
because it is in the nature of an action quasi in rem. Accordingly, the Salazars should
have impleaded as party defendants the heirs of Juan Soriano and/or Vicenta
Macaraeg as well as those claiming ownership over the property under their names
because they are indispensable parties. This was not done in this case.[31] Since no
indispensable party was ever impleaded by the Salazars in their petition for
cancellation of entry filed before Branch 63 of the RTC of Tarlac, herein petitioners
123
are not bound by the dispositions of the said court.[32] Consequently, the judgment
or order of the said court never even acquired finality.
Apparently realizing their mistake, the Salazars later on filed an action for quieting of
title, also an action quasi in rem, albeit this time before Branch 64 of the RTC of Tarlac.
Because the Salazars miserably failed to prove the basis for their claim, the RTC
dismissed the complaint.[33] In fact, the RTC was bold enough to have pronounced
thus:
Who are the heirs of Juan Soriano who caused the consolidation and in whose favor
TCT No. 9297 was issued? Certainly, they are not the plaintiffs. If the plaintiffs claim
that they are the only heirs, they should file a case against those who executed the
consolidation in whose favor [E]ntry [N]o. 20102 was made.
x x x In its order dated February 24, 2000, this Court ruled that it is necessary that
plaintiffs should prove that they are the heirs of Juan Soriano, the registered owners
as indicated in OCT No. 40287 of (sic) Vicenta Macaraeg, the late spouse. Despite
the cue, the plaintiffs opted not to present evidence on how they became the heirs of
Juan Soriano or Vicenta Macaraeg. There being [no] evidence presented to prove
that plaintiffs are the heirs of the late Juan Soriano and Vicenta Macaraeg, they had
no right and cause of action to prosecute this case.[34]
Needless to say, the failure of the Salazars to implead indispensable party defendants
in the petition for cancellation of entries in OCT No. 40287 should have been a ground
for the RTC to dismiss, or at least suspend, the proceedings of the case.[35] Yet,
although the action proceeded, any judgment or order issued by the court thereon is
still null and void for want of authority on the part of the court to act with respect to the
parties never impleaded in the action.[36] Thus, the orders issued by said court dated
October 21, 1986 and November 7, 1986 never acquired finality.[37] Quod ab initio
non valet, in tractu temporis non convalescit.[38]
may arise subsequent thereto.[42] Once a title is registered under the Torrens system,
the owner may rest secure, without the necessity of waiting in the portals of the courts
or sitting in the mirador su casa to avoid the possibility of losing his land.[43] Rarely
will the court allow another person to attack the validity and indefeasibility of a Torrens
certificate, unless there is compelling reason to do so and only upon a direct action
filed in court proceeded in accordance with law.[44]
Finally, this Court also takes note of the fact that for more than 30 years from the time
Entry No. 20102 was annotated at the back of OCT No. 40287 on February 17, 1950
until the time of the filing of the ex parte petition for cancellation of entries on the said
certificate of title on November 19, 1985 the Salazars remained deafeningly quiet and
never made any move to question the issue of ownership over the said land before
the proper forum. They also failed to ventilate their claim during the intestate
proceeding filed by the heirs of Juan Soriano sometime in 1939. Likewise, they
miserably failed to stop the transfer of portions of the property to petitioners who, for
themselves, were able to secure TCTs in their own names. All of these would lead to
the inevitable conclusion that if there is any validity to the claim of the Salazars over
the said property although such issue is not the subject of the present case the same
had already prescribed[45] or, at the very least, had become stale due to laches.
WHEREFORE, the petition is GRANTED. The assailed July 25, 2003 Decision of the
Court of Appeals including its November 25, 2003 Resolution are hereby SET ASIDE.
Accordingly, the December 20, 2000 Decision rendered by Branch 64 of the Regional
Trial Court of Tarlac City, Tarlac is REINSTATED. Costs against respondents.
SO ORDERED.

Paraphrasing by analogy this Courts ruling in Metropolitan Waterworks & Sewerage

System v. Sison,[39] a void order is not entitled to the respect accorded to a valid
order. It may be entirely disregarded or declared inoperative by any tribunal in which
effect is sought to be given to it. It has no legal or binding effect or efficacy for any
purpose or at any place and thus cannot affect, impair or create rights. It is not entitled
to enforcement and is, ordinarily, no protection to those who seek to enforce the
same. Accordingly, all proceedings founded on the void court order are themselves
regarded as invalid, and the situation is the same as it would be if there was no order
issued by the court. It leaves the party litigants in the same position they were in
before the trial.[40] A void order, like any void judgment, may be said to be a lawless
thing which can be treated as an outlaw and slain at sight.[41]

More crucial is the fact that both parties in this case are dealing with property
registered under the Torrens system. To allow any individual, such as the Salazars in
this case, to impugn the validity of a Torrens certificate of title by the simple
expediency of filing an ex parte petition for cancellation of entries would inevitably
erode the very reason why the Torrens system was adopted in this country, which is
to quiet title to land and to put a stop forever to any question on the legality of the title,
except claims that were noted, at the time of registration, in the certificate, or which

124
G.R. No. 172172 February 24, 2009
SPS. ERNESTO V. YU and ELSIE ONG YU, Petitioners,
vs.
BALTAZAR N. PACLEB, (Substituted by ANTONIETA S PACLEB, LORNA
PACLEB-GUERRERO, FLORENCIO C. PACLEB, and MYRLA C. PACLEB),
Respondents.
DECISION
PUNO, C.J.:
Before the Court is a Petition filed under Rule 45 of the Rules of Court assailing: (i)
the Decision1 dated August 31, 2005 of the Court of Appeals in CA-G.R. CV No.
78629 setting aside the Decision2 dated December 27, 2002 of the Regional Trial
Court in Civil Case No. 1325-96; and (ii) the Resolution3 dated April 3, 2006 of the
Court of Appeals denying reconsideration of the said decision.
The facts are well established.
Respondent Baltazar N. Pacleb and his late first wife, Angelita Chan, are the
registered owners of an 18,000-square meter parcel of land in Barrio Langcaan,
Dasmariñas, Cavite, covered by Transfer Certificate of Title (TCT) No. T-1183754
(Langcaan Property).
In 1992, the Langcaan Property became the subject of three (3) documents purporting
to transfer its ownership. On February 27, 1992, a Deed of Absolute Sale5 was
entered into between Spouses Baltazar N. Pacleb and Angelita Chan and Rebecca
Del Rosario. On May 7, 1992, a Deed of Absolute Sale6 was entered into between
Rebecca Del Rosario and Ruperto L. Javier (Javier). On November 10, 1992, a
Contract to Sell7 was entered into between Javier and petitioner spouses Ernesto V.
Yu and Elsie Ong Yu. In their contract, petitioner spouses Yu agreed to pay Javier a
total consideration of ₱900,000. Six hundred thousand pesos (₱600,000) (consisting
of ₱200,000 as previous payment and ₱400,000 to be paid upon execution of the
contract) was acknowledged as received by Javier and ₱300,000 remained as
balance. Javier undertook to deliver possession of the Langcaan Property and to sign
a deed of absolute sale within thirty (30) days from execution of the contract.
All the aforementioned sales were not registered.
On April 23, 1993, petitioner spouses Yu filed with the Regional Trial Court of Imus,
Cavite, a Complaint8 for specific performance and damages against Javier, docketed
as Civil Case No. 741-93, to compel the latter to deliver to them ownership and
possession, as well as title to the Langcaan Property. In their Complaint, they alleged
that Javier represented to them that the Langcaan Property was not tenanted.
However, after they already paid ₱200,000 as initial payment and entered into an
Agreement dated September 11, 1992 for the sale of the Langcaan Property, they
discovered it was tenanted by Ramon C. Pacleb (Ramon).9 Petitioner spouses
demanded the cancellation of their agreement and the return of their initial payment.
Thereafter, petitioner spouses and Javier verified from Ramon if he was willing to
vacate the property and the latter was agreeable. Javier then promised to make
arrangements with Ramon to vacate the property and to pay the latter his disturbance
compensation. Hence, they proceeded to enter into a Contract to Sell canceling the
Agreement mentioned. However, Javier failed to comply with his obligations.
Javier did not appear in the proceedings and was declared in default. On September
8, 1994, the trial court rendered a Decision,10 the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered for the plaintiff and against the
defendant based on the sale of subject parcel of land to the former who is entitled
thereby to the ownership and possession thereof from the said defendant who is
further directed to pay damages of Thirty Thousand Pesos (₱30,000.00) including
attorney’s fees and expenses incurred by the plaintiff in this case as a consequence.
The defendant is further directed to deliver the certificate of title of the land to the
plaintiff who is entitled to it as transferee and new owner thereof upon payment by the
plaintiff of his balance of the purchase price in the sum of Three Hundred Thousand
Pesos (₱300,000.00) with legal interest from date.
SO ORDERED.
The said Decision and its Certificate of Finality11 were annotated on TCT No. T-
118375 as Entry No. 2676-7512 and Entry No. 2677-75,13 respectively.
On March 10, 1995, petitioner spouses and Ramon and the latter’s wife, Corazon
Bodino, executed a "Kusangloob na Pagsasauli ng Lupang Sakahan at
Pagpapahayag ng Pagtalikod sa Karapatan."14 Under the said agreement, petitioner
spouses paid Ramon the amount of ₱500,000 in exchange for the waiver of his
tenancy rights over the Langcaan Property.
On October 12, 1995, respondent filed a Complaint15 for annulment of deed of sale
and other documents arising from it, docketed as Civil Case No. 1199-95. He alleged
that the deed of sale purportedly executed between him and his late first wife and
Rebecca Del Rosario was spurious as their signatures thereon were forgeries.
Respondent moved to have summons served upon Rebecca Del Rosario by
publication since the latter’s address could not be found. The trial court, however,
denied his motion.16 Respondent then moved to dismiss the case, and the trial court
granted the motion in its Order17 dated April 11, 1996, dismissing the case without
prejudice.
Meanwhile, on November 23, 1995, petitioner spouses filed an action for forcible entry
against respondent with the Municipal Trial Court (MTC). They alleged that they had
prior physical possession of the Langcaan Property through their trustee, Ramon,
until the latter was ousted by respondent in September 1995. The MTC ruled in favor
of petitioner spouses, which decision was affirmed by the Regional Trial Court.18
However, the Court of Appeals set aside the decisions of the lower courts and found
that it was respondent who had prior physical possession of the property as shown
by his payment of real estate taxes thereon.19
On May 29, 1996, respondent filed the instant case for removal of cloud from title with
damages to cancel Entry No. 2676-75 and Entry No. 2677-75, the annotated Decision
125
in Civil Case No. 741-93 and its Certificate of Finality, from the title of the Langcaan
Property.20 Respondent alleged that the deed of sale between him and his late first
wife and Rebecca Del Rosario, who is not known to them, could not have been
possibly executed on February 27, 1992, the date appearing thereon. He alleged that
on said date, he was residing in the United States21 and his late first wife, Angelita
Chan, died twenty (20) years ago.221avvphi1
On May 28, 1997, during the pendency of the instant case before the trial court,
respondent died without having testified on the merits of his case. Hence, he was
substituted by his surviving spouse, Antonieta S. Pacleb, and Lorna Pacleb-Guerrero,
Florencio C. Pacleb and Myrla C. Pacleb representing the children with the first
wife.23
On December 27, 2002, the trial court dismissed respondent’s case and held that
petitioner spouses are purchasers in good faith.24 The trial court ratiocinated that the
dismissal of respondent’s complaint for annulment of the successive sales at his
instance "sealed the regularity of the purchase"25 by petitioner spouses and that he
"in effect admits that the said sale…was valid and in order."26 Further, the trial court
held that the Decision in Civil Case No. 741-93 on petitioner spouses’ action for
specific performance against Javier is already final and can no longer be altered.
Accordingly, the trial court ordered the cancellation of TCT No. T-118375 in the name
of respondent and the issuance of a new title in the name of petitioner spouses. The
trial court also ordered the heirs of respondent and all persons claiming under them
to surrender possession of the Langcaan Property to petitioner spouses.
On appeal by respondent, the Court of Appeals reversed and set aside the decision
of the trial court.27 The Court of Appeals ruled that petitioner spouses are not
purchasers in good faith and that the Decision in Civil Case No. 741-93 did not
transfer ownership of the Langcaan Property to them. Accordingly, the appellate court
ordered the cancellation of the annotation of the Decision in Civil Case No. 741-93 on
the title of the Langcaan Property. The Court of Appeals denied reconsideration of
said decision.28
Hence, this Petition.
Two issues are involved in the instant petition. The first is whether petitioner spouses
are innocent purchasers for value and in good faith. The second is whether ownership
over the Langcaan Property was properly vested in petitioner spouses by virtue of the
Decision in Civil Case No. 741-93.
Petitioner spouses argue that they are purchasers in good faith. Further, they contend
that the Court of Appeals erred in finding that: "Ramon told him [Ernesto V. Yu] that
the property is owned by his father, Baltazar, and that he is the mere caretaker
thereof"29 since Ramon clarified that his father was the former owner of the Langcaan
Property. In support of their stance, they cite the following testimony of petitioner
Ernesto V. Yu:
Atty. Abalos: Mr. Witness, you testified during the direct that you acquired the subject
property from one Ruperto Javier, when for the first time have you come to know Mr.
Ruperto Javier?
A: I first came to know him in the year 1992 when he was accompanied by Mr.
Kalagayan. He showed me some papers to the office.
Q: Do you know the exact date Mr. Witness?
A: I forgot the exact date, ma’am.
Q: More or less can you estimate what month?
A: Sometime in February or March 1992.
Q: When you said that the subject property was offered to you for sale, what did you
do Mr. Witness, in preparation for a transaction?
A: I asked my lawyer Atty. Florencio Paredes to check and verify the Deed of Sale.
Q: And after Atty. Florencio Paredes verified the document you decided to buy the
property?
A: No, ma’am. We visited the place.
Q: When was that?
A: I could not remember the exact date but I visited the place and I met the son,
Ramon Pacleb. I went there in order to verify if the property is existing. When I verified
that the property is existing Mr. Javier visited me again to follow-up what decision I
have but I told him that I will wait for my lawyer’s advi[c]e.
Q: Mr. Witness, what particular instruction did you give to your lawyer?
A: To verify the title and the documents.
Court: Documents for the title?
A: Yes, Your Honor.
Atty. Abalos: When you were able to get the title in whose name the title was
registered?
A: It was registered in the name of the older Pacleb.
Court: By the way Mr. Witness, when you said you met Ramon Pacleb the son of the
owner of the property, was he residing there or he was (sic) just went there? When
you visited the property did you find him to be residing in that property?
A: No, Your Honor.
Atty. Abalos: You mean to say Mr. Witness, you just met Mr. Ramon Pacleb in the
place at the time you went there?
126

A: No, ma’am. He went to my office with Mr. Kalagayan. He was introduced to me at
the Kelly Hardware. I do not know Mr. Ruperto Javier. He told me that there is a
property that [is] tenanted and occupied by the son Ramon Pacleb after that I went
with them to visit the place. On (sic) there he introduced me [to] Mr. Ramon Pacleb
the caretaker of the property and I told them that I will still look at the property and he
gave me some documents and that (sic) documents I gave it to my lawyer for
verification.
Q: You said that Mr. Ruperto Javier went to your office with Mr. Kalagayan, so the
first time you visited the property you did not see Mr. Ramon Pacleb there?
A: No, ma’am. When I went there I met Ramon Pacleb the caretaker and he was the
one who showed the place to us.
Q: Mr. Witness, since you visited the place you were able to see the allege[d]
caretaker Mr. Ramon Pacleb, did you ask him regarding the property or the
whereabouts of the registered owner, did you ask him?
A: When Ruperto introduced me to Mr. Ramon Pacleb he told me that he is the son
of the owner and he is the caretaker and his father is in the States. He showed me
the place, I verified and I saw the monuments and I told him I will come back to check
the papers and if it is okay I will bring with me the surveyor.
Q: Could you estimate Mr. Witness, more or less what was the month when you were
able to talk to Mr. Ramon Pacleb?
A: I am not sure but it was morning of February.
Q: So it was in February, Mr. Witness?
A: I am not sure if February or March.
Q: But definitely…
A: Before I purchased the property I checked the property.
Q: But that was definitely after Mr. Ruperto offered to you for sale the subject
property?
xxx
Atty. Abalos: Okay, Mr. Witness, you said that you talked to Mr. Ramon Pacleb and
he told you that his father is the owner of the property?
A: He told me that property is their former property and it was owned by them. Now,
he is the tenant of the property.30 (Emphasis ours)
Petitioner spouses conclude that based on their personal inspection of the property
and the representations of the registered tenant thereon, they had no reason to doubt
the validity of the deeds of absolute sale since these were duly notarized.
Consequently, the alleged forgery of Angelita Chan’s signature is of no moment since
they had no notice of any claim or interest of some other person in the property despite
their diligent inquiry.
We find petitioner spouses’ contentions without merit.
At the outset, we note that in petitioner Ernesto V. Yu’s testimony, he stated that he
inspected the Langcaan Property and talked with the tenant, Ramon, before he
purchased the same. However, in his Complaint for specific performance and
damages which he filed against Javier, he alleged that it was only after he had entered
into an Agreement for the sale of the property and his initial payment of ₱200,000 that
he discovered that the property was indeed being tenanted by Ramon who lives in
the said farm, viz.:
8. Sometime on September 11, 1992, defendant came again to the Office of plaintiff
reiterating his offer to sell said Lot No. 6853-D, containing an area of 18,000 square
meters, at ₱75.00 per square meters (sic). Defendant manifested to the plaintiff that
if his offer is acceptable to the plaintiff, he binds and obligates himself to pay the
capital gains of previous transactions with the BIR and register subject Lot No. 6853-
D in his name (defendant). On these conditions, plaintiff accepted the offer and made
[the] initial payment of Two Hundred Thousand Pesos (₱200,000.00) to defendant by
issuance and delivery of plaintiff’s personal check.
9. Sometime on September 11, 1992, plaintiff and defendant signed an AGREEMENT
on the sale of Lot No. 6853-D of the subdivision plan (LRC) Psd-282604, containing
an area of 18,000 square meters, more or less, located at Bo. Langcaan, Municipality
of Dasmarinas, Province of Cavite, at a selling price of ₱75.00 per square meter. A
xerox copy of this AGREEMENT signed by the parties thereto is hereto attached and
marked as ANNEX "D" of this complaint.
10. Thereafter, however, plaintiff and defendant, with their surveyor discovered that
subject Lot No. 6853-D offered for sale to the plaintiff is indeed being tenanted by one
RAMON PACLEB who lives in the said farm.
11. In view of the foregoing developments, plaintiff informed defendant that he wanted
the Agreement be cancelled and for the defendant to return the sum of TWO
HUNDRED THOUSAND PESOS (₱200,000.00).31 (Emphasis supplied)
This inconsistency casts grave doubt as to whether petitioner spouses personally
inspected the property before purchasing it.
More importantly, however, several facts should have put petitioner spouses on
inquiry as to the alleged rights of their vendor, Javier, over the Langcaan Property.
First, it should be noted that the property remains to be registered in the name of
respondent despite the two (2) Deeds of Absolute Sale32 purporting to transfer the
Langcaan Property from respondent and his late first wife, Angelita Chan, to Rebecca
Del Rosario then from the latter to Javier. Both deeds were not even annotated in the
title of the Langcaan Property.
127

Second, a perusal of the two deeds of absolute sale reveals that they were executed
only about two (2) months apart and that they contain identical provisions.
Third, it is undisputed that the Langcaan Property is in the possession of Ramon, the
son of the registered owner. Regardless of the representations given by the latter,
this bare fact alone should have made petitioner spouses suspicious as to the veracity
of the alleged title of their vendor. Moreover, as noted by the Court of Appeals,
petitioner spouses could have easily verified the true status of the Langcaan Property
from Ramon’s wife, since the latter is their relative, as averred in paragraph 13 of their
Answer in Civil Case No. 1199-95.33 The case law is well settled, viz.:
The law protects to a greater degree a purchaser who buys from the registered owner
himself. Corollarily, it requires a higher degree of prudence from one who buys from
a person who is not the registered owner, although the land object of the transaction
is registered. While one who buys from the registered owner does not need to look
behind the certificate of title, one who buys from one who is not the registered owner
is expected to examine not only the certificate of title but all factual circumstances
necessary for him to determine if there are any flaws in the title of the transferor, or in
his capacity to transfer the land.
This Court has consistently applied the stricter rule when it comes to deciding the
issue of good faith of one who buys from one who is not the registered owner, but
who exhibits a certificate of title.34 (Emphasis supplied)
Finally, as correctly pointed out by the Court of Appeals, the dismissal of Civil Case
No. 1199-95 (the action to annul the successive sales of the property) cannot serve
to validate the sale to petitioner spouses since the dismissal was ordered because
Rebecca Del Rosario and Javier could no longer be found. Indeed, the dismissal was
without prejudice.
Based on the foregoing, therefore, petitioner spouses cannot be considered as
innocent purchasers in good faith.
We now go to the second issue.
Petitioner spouses argue that the decision of the Regional Trial Court in Civil Case
No. 741-93 as to the rightful owner of the Langcaan Property is conclusive and binding
upon respondent even if the latter was not a party thereto since it involved the
question of possession and ownership of real property, and is thus not merely an
action in personam but an action quasi in rem.
In Domagas v. Jensen,35 we distinguished between actions in personam and actions
quasi in rem.
The settled rule is that the aim and object of an action determine its character.
Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is
determined by its nature and purpose, and by these only. A proceeding in personam
is a proceeding to enforce personal rights and obligations brought against the person
and is based on the jurisdiction of the person, although it may involve his right to, or
the exercise of ownership of, specific property, or seek to compel him to control or
dispose of it in accordance with the mandate of the court. The purpose of a
proceeding in personam is to impose, through the judgment of a court, some
responsibility or liability directly upon the person of the defendant. Of this character
are suits to compel a defendant to specifically perform some act or actions to fasten
a pecuniary liability on him. An action in personam is said to be one which has for its
object a judgment against the person, as distinguished from a judgment against the
propriety (sic) to determine its state. It has been held that an action in personam is a
proceeding to enforce personal rights or obligations; such action is brought against
the person.
xxx
On the other hand, a proceeding quasi in rem is one brought against persons seeking
to subject the property of such persons to the discharge of the claims assailed. In an
action quasi in rem, an individual is named as defendant and the purpose of the
proceeding is to subject his interests therein to the obligation or loan burdening the
property. Actions quasi in rem deal with the status, ownership or liability of a particular
property but which are intended to operate on these questions only as between the
particular parties to the proceedings and not to ascertain or cut off the rights or
interests of all possible claimants. The judgments therein are binding only upon the
parties who joined in the action.
Civil Case No. 741-93 is an action for specific performance and damages filed by
petitioner spouses against Javier to compel performance of the latter’s undertakings
under their Contract to Sell. As correctly held by the Court of Appeals, its object is to
compel Javier to accept the full payment of the purchase price, and to execute a deed
of absolute sale over the Langcaan Property in their favor. The obligations of Javier
under the contract to sell attach to him alone, and do not burden the Langcaan
Property.36
We have held in an unbroken string of cases that an action for specific performance
is an action in personam.37 In Cabutihan v. Landcenter Construction and
Development Corporation,38 we ruled that an action for specific performance praying
for the execution of a deed of sale in connection with an undertaking in a contract,
such as the contract to sell, in this instance, is an action in personam.
Being a judgment in personam, Civil Case No. 741-93 is binding only upon the parties
properly impleaded therein and duly heard or given an opportunity to be heard.39
Therefore, it cannot bind respondent since he was not a party therein. Neither can
respondent be considered as privy thereto since his signature and that of his late first
wife, Angelita Chan, were forged in the deed of sale.
All told, we affirm the ruling of the Court of Appeals finding that, as between
respondent and petitioner spouses, respondent has a better right over the Langcaan
Property as the true owner thereof.
IN VIEW WHEREOF, the petition is DENIED. The decision of the Court of Appeals is
affirmed. Costs against petitioners.
SO ORDERED.
128
EVA FLOYD and RODOLFO CALIXTRO, in July 1984 through stealth and strategy. The Nisperoses claimed ownership and
prior possession of the land by succession, alleging that their father, Igmedio
Petitioners, Nisperos, occupied and tilled it from 1950 to 1982.

G.R. No. 169047 On February 10, 1986, the Municipal Trial Court in Cities of Olongapo City dismissed
the ejectment complaint. On appeal however, the Olongapo City RTC on January 20,
1987 reversed the dismissal of the complaint and ordered Abarnas to remove any
Present: improvements introduced on the land and surrender possession thereof to the
Nisperoses.[4]
- versus -
On July 8, 1987, the Court of Appeals affirmed the Olongapo City RTCs Decision.[5]
QUISUMBING, J., Chairperson, When the appellate courts decision attained finality, the Olongapo City RTC issued
an Alias Writ of Execution[6] on April 3, 1991 and an Alias Writ of Special
CARPIO MORALES, Demolition[7] on April 4, 1991. A Notice to Vacate[8] was likewise issued on April 23,
1991.
TINGA,
In June 1991, when respondents Sheriffs Benjamin Gonzales and Atilano Nanquil
VELASCO, JR., and went to the subject land to implement the writs, they found that petitioners and Fe
Ongsotto were also occupying the property. To prevent the demolition, petitioners and
BRION, JJ. Ongsotto filed a complaint[9] for injunction, SP. Civil Action No. 234-0-91, before the
RTC of Olongapo City.
BENJAMIN GONZALES, ATILANO NANQUIL, LINDA NISPEROS, LILIAN
NISPEROS, SALVADOR NISPEROS & VIRGILIO CONSTANTINO, On February 5, 1992, the RTC of Olongapo City issued a Writ of Preliminary
Injunction.[10] It observed that petitioners do not appear to be mere trespassers,
Respondents. squatters or Abarnas agents; and that the respondent sheriffs exceeded their
authority granted by the writs of execution and demolition, considering that they were
Promulgated: only directed against Abarnas.[11]
November 3, 2008
The complaint was transferred to the RTC of San Fernando City by virtue of Supreme
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x Court A.M. No. 00-11-523-RTC, following a judicial audit.

DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse the Decision[1] dated July 12,
2005 of the Court of Appeals in CA-G.R. CV No. 81618. Said Decision affirmed with
modification the Decision[2] of the Regional Trial Court (RTC), Branch 45, San
Fernando City, Pampanga in SP. Civil Action No. 234-0-91, dismissing the complaint
for injunction which sought to prevent the demolition of petitioners houses built on the
land claimed by respondents Linda Nisperos, Lilian Nisperos and Salvador Nisperos.
The facts, as culled from the records, are as follows.
Petitioners Eva Floyd and Rodolfo Calixtro are occupants of a lot in Jolo Street,
Tabacuhan Road, Sta. Rita, Olongapo City. Floyd started occupying the said lot in
1986 while Calixtro started doing so in 1988. The lot forms part of a 1,337.50-square
meter property which was the subject of a complaint[3] for forcible entry filed by
respondents Lilian Nisperos, Linda Nisperos and Salvador Nisperos, through their
attorney-in-fact Virgilio Constantino, against Clemente Abarnas. The complaint, filed
on September 25, 1984, charged Abarnas of constructing a house on the subject land
On August 8, 2003, the RTC of San Fernando City, dismissed the injunction
complaint. It considered petitioners as occupants in bad faith and squatters on the
lots, making the judgment in the ejectment case binding on them. The court
recognized the Nisperoses prior possession and claim over the lots which started in
1950 with their father, Igmedio. The RTC noted that Floyd and Calixtro admitted that
they started occupying the premises only in 1986 and 1988, respectively. It also
concluded that petitioners impliedly admitted that the lots are part of the Nisperoses
property because instead of claiming the opposite, they attempted to prove that they
had a better right thereto. It also ordered petitioners to pay private respondents moral
damages and attorneys fees.[12]
Petitioners and Ongsotto, separately, appealed the judgment in the injunction case
before the Court of Appeals.
On July 12, 2005, the appellate court ruled against petitioners, thus:
WHEREFORE, upon the premises, the appealed Decision is AFFIRMED with the
MODIFICATION that the awards of moral damages and attorneys fees are
DELETED.

129

SO ORDERED.[13]
The Court of Appeals held that petitioners have not shown a clear and unmistakable
right to be protected, and found that they occupied the land during the pendency of
the ejectment case, thereby taking advantage of such conflict.[14]
On August 22, 2005, Ongsotto, alone, filed a Motion for Reconsideration.[15] On
September 21, 2005, Floyd and Calixtro filed the instant petition.[16] On February 15,
2006, the Court of Appeals deferred ruling on Ongsottos motion in view of this
petition.[17]
Before us, petitioners raise the following assignment of errors:
I.
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION
IN CIVIL CASE NO. 234-0-91 HOLDING THAT THE PETITIONERS ARE BOUND
BY THE DECISION IN CIVIL CASE NO. 139-0-86 ALTHOUGH THEY WERE NOT
IMPLEADED AS PARTY DEFENDANTS THEREIN.
II.
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
PETITIONERS ARE NOT ENTITLED TO A WRIT OF INJUNCTION ALTHOUGH
THE PROPERTY THEY ARE IN POSSESSION OF IS OWNED AND TITLED IN THE
NAME OF ANOTHER PERSON.
III.
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE LAND
SUBJECT OF CIVIL CASE NO. 139-0-86 INCLUDES THE LOTS BEING OCCUPIED
AND POSSESSED BY THE PETITIONERS.[18]
Simply stated, the issues are as follows: Are petitioners bound by the decision in the
ejectment case? Are they entitled to an injunctive writ to prevent the demolition of
their houses? Who has a better right of possession over the land where their houses
are erected?
Petitioners aver that only Abarnas was ordered by the Olongapo City RTC to
surrender possession of the land and remove any construction thereon, and that they
are not trespassers, squatters, or Abarnas relatives, successors-in-interest, or privies.
They further contend that judgments in ejectment cases are in personam. Thus, even
assuming that they are occupying the premises subject of the ejectment case, the
judgment cannot be enforced against them as they were not made parties to it.
Petitioners likewise point to several pieces of documentary evidence which allegedly
show that the Nisperoses are not the true owners of the lots on which the houses
sought to be demolished stand, since said lots are registered in the name of one
Rodrigo C. Domingo, Jr. They further argue that there is no factual basis for the
appellate courts finding that they impliedly admitted that the lots they are occupying
form part of the property claimed by the Nisperoses.[19]
The Nisperoses on the other hand state that petitioners were not impleaded as
defendants in the ejectment case as the latter were not yet on the premises or hid
themselves during the pendency of the case until the time the latter were served with
a notice to vacate on December 21, 1988. They claim that petitioners connived with
Abarnas and his wife Angelina, and insist that petitioners are privies of the Abarnases.
They accuse petitioners of bad faith in applying for a Miscellaneous Sales Application
and for belatedly securing other documents, which were self-serving. Lastly, they aver
that the genuineness of the documents presented by petitioners and the ownership
of the lots mentioned in it can only be determined in a full-blown trial.[20]
An ejectment suit is an action in personam wherein judgment is binding only upon
parties properly impleaded and given an opportunity to be heard.[21] Petitioners were
not made party-defendants by the Nisperoses. Hence, they can be bound by said
judgment in the ejectment suit, even if they were not impleaded as defendants, only
if they are shown to be (a) trespassers, squatters or agents of the defendant
fraudulently occupying the property to frustrate the judgment; (b) guests or other
occupants of the premises with the permission of the defendant; (c) transferees
pendente lite; (d) sub-lessees; (e) co-lessees; or (f) members of the family, relatives
and other privies of the defendant.[22] In such cases, court hearing is a must to
determine the character of such possession. If the execution court finds that they are
mere successors-in-interest, guests, or agents of the defendant, the order of
execution shall be enforced against them.[23]
In the forcible entry case, petitioners had not been given their day in court to present
their side to prove their alleged bona fide possession. Neither was a court hearing
held to prove that they are mere successors-in-interest, guests, or agents of
defendant Abarnas when the ejectment judgment was sought to be enforced against
them. Thus, they cannot be bound by the decision in the ejectment case.
We now go to the second issue.
A writ of preliminary injunction may only be issued upon a clear showing that there
exists a right to be protected and that the action sought to be enjoined is violative of
that right.[24] From the foregoing discussion, it is clear that petitioners have a right to
be protected against the summary demolition of their houses. Hence, the RTC
correctly issued a writ of preliminary injunction. However, whether the injunction
should be made permanent is another matter.
The determination as to whether petitioners are entitled to a permanent injunction
rests on the issue of who between petitioners and respondents have a better right of
possession over the land on which the houses sought to be demolished stand.
It is relevant to point out that in the pre-trial conference before the Olongapo City RTC
the parties agreed on the following issues for resolution:
(1) Whether or not the plaintiffs were mere trespassers in the property in
question or do they have title over the premises in question.
130

(2) Whether or not the plaintiffs can be ejected or their house demolished
erected on the land in question inasmuch as they are not parties in the case of Linda
Nisperos, et al. versus Rodolfo Calixtro and Fe Ongsotto, Civil Case No. 139-0-86.
(3) Whether or not the spaces which plaintiffs houses are erected are owned
by plaintiffs.[25]
Clearly, apart from the matter of enjoining the execution against petitioners of the
judgment in Civil Case No. 139-0-86, the issue of who between the petitioners and
respondents are entitled to possession of, as a consequence of title over, the land
where the formers houses are erected was also squarely raised and fully tried before
the lower courts. During trial, petitioners fully ventilated their claim / right to
possession of the subject land. Sec. 5, Rule 10 of the Rules of Court states that [w]hen
issues not raised by the pleadings are tried with the express or implied consent of the
parties, they shall be treated in all respects as if they had been raised in the pleadings.
Under the circumstances, it is just and proper to resolve the issue of possession over
the subject land. To rule otherwise and require respondents to file another case for
ejectment, or institute supplemental proceedings in Civil Case No. 139-0-86, against
petitioners would not be in accord with justice and would only entail more unnecessary
expenses and contribute to the clogged court dockets.
Both the RTC and the Court of Appeals categorically found that respondents have the
better right to possession of the land. The RTC ruled that [petitioners] claim of
possession that started in 1988 must yield to that of the Nisperoses who trace their
possession of the property to that of their predecessor-in-interest, their father Igmedio
who began occupying the property in 1950.[26] The Court of Appeals, for its part,
ruled that:
[Petitioner] Floyd occupied the property only in 1986; [petitioner] Calixtro occupied
the property in 1988 while admitting that the property was owned by I. Hauseco Subd.
Appellant Ongsotto likewise occupied the property in 1988 and expressed that she
derived her alleged title from a waiver and quitclaim executed by Angelina Abarnas,
the wife of Clemente Abarnas, defendant in the ejectment case. Thus, she is
considered as the latters successor-in-interest, bound by the judgment in the
ejectment case which is conclusive between the parties and their successors-in-
interest. The MSAs [Miscellaneous Sales Applications] and unapproved survey plans
presented by Floyd and Ongsotto are self-serving and of little evidentiary value.
In sum, the [petitioners] have not proved a clear and unmistakable right to the
possession of the property. On the other hand, Nisperos better right was established
by final judgment in Civil Case No. 139-0-86.[27]
We find no cogent reason to overturn the consistent findings of both the RTC and the
Court of Appeals that, as against petitioners, the Nisperoses are entitled to
possession of the subject land where the petitioners houses are erected. Applicable
to the instant case, which is an offshoot of an ejectment case and which also in part
partakes of an ejectment case, is the following pronouncement of the Court on the
matter of ejectment and possession in Pajuyo v. Court of Appeals:[28]
The only question that the courts must resolve in ejectment proceedings iswho is
entitled to the physical possession of the premises, that is, to the possession de facto
and not to the possession de jure. It does not even matter if a partys title to the
property is questionable, or when both parties intruded into public land and their
applications to own the land have yet to be approved by the proper government
agency. Regardless of the actual condition of the title to the property, the party in
peaceable quiet possession shall not be thrown out by a strong hand, violence or
terror. Neither is the unlawful withholding of property allowed. Courts will always
uphold respect for prior possession.
Thus, a party who can prove prior possession can recover such possession even
against the owner himself. Whatever may be the character of his possession, if he
has in his favor prior possession in time, he has the security that entitles him to remain
on the property until a person with a better right lawfully ejects him. To repeat, the
only issue that the court has to settle in an ejectment suit is the right to physical
possession.[29]
Petitioners Floyd and Calixtro, in SP. Civil Action No. 234-0-91 admitted having
possessed the subject land only in 1986 and 1988 respectively. These cannot prevail
over the Nisperoses possession through their father Igmedio that started in 1950.
Since the Nisperoses have proven prior possession in time, they indeed have a better
right to the possession of the land. Hence, petitioners must relinquish possession of
the land to the Nisperoses and accordingly remove their houses which are built on
the subject land.
WHEREFORE, the Decision dated July 12, 2005 of the Court of Appeals in CA-G.R.
CV No. 81618 is AFFIRMED with MODIFICATION. Petitioners are ORDERED to
SURRENDER to the respondents Linda, Lilian and Salvador Nisperos the possession
of the land in dispute and REMOVE the improvements that they introduced thereon.
Costs against petitioners.
SO ORDERED.
131
[G.R. No. 122269. September 30, 1999]
REPUBLIC OF THE PHILIPPINES, represented by the SECRETARY OF
AGRICULTURE, petitioner, vs. THE HON. COURT OF APPEALS, HON.
VIVENCIO A. BANTUGAN, Presiding Judge of the Regional Trial Court, Branch
55, Alaminos, Pangasinan, and HEIRS OF ZENAIDA BUSTRIA-TIGNO,
represented by CAMILO TIGNO, respondents.
DECISION
MENDOZA, J.:
For review is the decision[1] of the Court of Appeals, dated October 4, 1995, in CA-
G.R. SP No. 34013, dismissing a petition filed by the Republic of the Philippines for
the annulment of the decision of the Regional Trial Court of Alaminos, Pangasinan,
which declared private respondents to be the absolute owners of a piece of land in
Barangay Malacapas, Dasol, Pangasinan. The government, as petitioner, prays that
the aforesaid decision of the trial court, rendered in Civil Case No. A-1759, be
annulled.
The facts are stated in the following portion of the decision of the Court of Appeals:
Sometime in 1957, one Matias Bustamante filed with the then CFI of Pangasinan an
application for registration under Act No. 496, as amended, of a tract of land
containing an area of 880,000 square meters, more or less, situated in Barangay
Malacapas, Dasol, Pangasinan.
Both the Director of Forestry and the Director of Fisheries filed oppositions to the
aforecited application, alleging among others, that said parcel of land, with the
exception of 97,525 square meters, is a part of the Timber Land Block A Land
Classification Project 44, which is converted into fish ponds. Isidro Bustria [private
respondents predecessor-in-interest] and Julian Bustria, also opposed the said
application for land registration, alleging that they have in the year 1943 occupied in
good faith their respective portions having a total area of fifty (50) hectares, more or
less x x x converted their respective portions into fish ponds x x x and actually
possessed and occupied their respective portions x x x exclusively against all
persons, except the Director of Forestry & Director of Fishery. After trial, the lower
court rendered a Decision in favor of applicant Bustamante.
On appeal to this Honorable Court, docketed as CA-G.R. No. 30058-R, it was found
that 783,275 square meters of the land applied for were accretions added to applicant
Bustamantes riceland of 9.7525 hectares, and that said accretion was caused by the
sea on the southward portion of said riceland. This Honorable Court then ruled:
This being so, the said accretion belongs not to the riparian owner but the State. All
lands thrown up by the sea and formed upon the shores, belong to the national
domain and are for public use, in accordance with the provisions of the Law on Waters
of August 3, 1866 (Insular Government vs. Aldecoa, 19 Phil. 505) (p. 20, Decision,
November 16, 1967).
Thus, modifying the judgment of the lower court, this Honorable Court rendered a
Decision on November 16, 1967, disposing:
IN VIEW OF ALL THE FOREGOING, the appealed decision is hereby modified so
that only 9.7525 of the land applied for is hereby adjudicated and ordered to be
registered in the name of the applicant, the remaining area being hereby declared
land of the public domain belonging to the Republic of the Philippines, without
prejudice to whatever rights oppositors Isidro Bustria and Julian Bustria may have
acquired over portions of the area thus declared as land of the public domain, with
costs against applicant.
SO ORDERED.
When brought up on certiorari to the Supreme Court, the foregoing Judgment was
affirmed in toto in the Resolution in G.R. No. L-18605 dated February 29, 1968.
It is relevant to state at this point that the parcel of land that is presently the subject
of the dispute in the instant case, Lot No. 7764, CAD 624-D (Portion) [Psu-155696,
Lot 3 (Portion)], forms part of the above-mentioned parcel of land declared by this
Honorable Court as belonging to the public domain, classified/zonified land available
for fishpond development, per L.C. Map No. 3175, approved on June 24, 1984, under
administrative Order No. 4-1829 (Annex D, Petition). The subject lot contains an area
of 49,999 square meters, more or less. This lot has been leased to Mr. Porfirio Morado
by the [Republic of the Philippines], represented by the Secretary of Agriculture, for a
period of twenty-five (25) years, or up to December 31, 2013, under Fishpond Lease
Agreement No. 5132, dated August 17, 1989 (Annex E, Petition).
On July 6, 1988, however, the late Zenaida Bustria [daughter of Isidro Bustria] filed a
complaint against Porfirio Morado in the Regional Trial Court of Alaminos,
Pangasinan, Branch 55, for ownership and possession over the lot in question
[docketed as Civil Case No. A-1759]. Herein petitioner, the Republic of the
Philippines, was not made a party to that suit.
In her complaint, Zenaida Bustria claimed absolute ownership and quiet and peaceful
possession of several lots under PSU-155696 surveyed in the name of her father,
Isidro Bustria. She further asserted that said Porfirio Morado maliciously applied for a
fishpond permit with the Bureau of Fisheries and Aquatic Resources over Lot 3
thereof (the subject lot), well-knowing that said lot had always been occupied,
possessed and worked by her and her predecessors-in-interest.
Porfirio Morado denied the allegations in the complaint, claiming that the lot in
question is part of the public domain which he developed and converted into a
fishpond. Due, however, to Porfirio Morados and his counsels failure to appear at the
pre-trial and subsequent court hearings, the trial court subsequently declared Porfirio
Morado as in default.
On December 17, 1991, respondent Judge rendered a decision, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered:
132

(a) Declaring the plaintiff as the exclusive and absolute owner of the land in question
stated in paragraph 4 of the Complaint and entitled to the exclusive and quiet
possession of the said land; and
(b) Ordering the defendant to pay the plaintiff the amount of P15,000.00 as attorneys
fees and the sum of P500.00 per day of hearing of the counsel, plus costs.
(Annex A, Petition)
On January 23, 1992, Porfirio Morado filed a Petition for Relief from Judgment which
was denied on July 21, 1992 for lack of merit.
On July 8, 1992, a writ of execution was issued, and it was implemented by Sheriffs
Manuel O. de Asis and Sheriff Cesar A. Gines. Spouses Porfirio Morado and Juliana
Morado thereafter filed with this Honorable Court a Petition for Certiorari with Writ of
Preliminary Injuction, docketed as CA-G.R. No. 28932. In a Resolution dated
December 11, 1992, the Petition was denied for lack of merit. The related Motion for
Reconsideration was denied in the Resolution dated February 18, 1993. (Rollo, pp.
107-112) (Underscoring omitted)[2]
April 19, 1994, petitioner, invoking 9 of B.P. Blg. 129,[3] filed with the Court of Appeals
a petition for the annulment of the trial courts decision, dated December 17, 1991.
Petitioner alleged that the land in question is within the classified/zonified alienable
and disposable land for fishpond development, per L.C. Map No. 3175 approved on
June 24, 1984, under Administrative Order No. 4-1829 and that since the land formed
part of the public domain, the Bureau of Fisheries and Aquatic Resources (BFAR) has
jurisdiction over its disposition in accordance with P.D. No. 704, 4.
On October 4, 1995 the Court of Appeals rendered a decision dismissing the
petition.[4]
Hence, this petition for review.
The judgment rendered in a case may be annulled on any of the following grounds:
(a) the judgment is void for want of jurisdiction or for lack of due process of law; or (b)
it was obtained through extrinsic fraud.[5] The question in this case is whether the
decision of the Regional Trial Court is void on any of these grounds. The preliminary
question, however, is whether the government can bring such action even though it
was not a party to the action in which the decision sought to be annulled was
rendered.
We shall deal with these questions in inverse order.
First, is the question whether petitioner has personality to bring the action below. To
begin with, an action to recover a parcel of land is in personam. As such, it is binding
only between the parties thereto, as this Court explained in Ching v. Court of
Appeals,[6] viz:
An action to redeem, or to recover title to or possession of, real property is not an
action in rem or an action against the whole world, like a land registration proceeding
or the probate of a will; it is an action in personam, so much so that a judgment therein
is binding only upon the parties properly impleaded and duly heard or given an
opportunity to be heard. Actions in personam and actions in rem differ in that the
former are directed against specific persons and seek personal judgments, while the
latter are directed against the thing or property or status of a person and seek
judgments with respect thereto as against the whole world. An action to recover a
parcel of land is a real action but it is an action in personam, for it binds a particular
individual only although it concerns the right to a tangible thing.
The appellate court, holding that the proceedings before the trial court were in
personam, ruled that since petitioner was not a party to Civil Case No. A-1759, it is
not a real party-in-interest and, therefore, has no personality to bring the action for
annulment of the judgment rendered in that case. The appellate court said:
Private respondents are correct. Civil Case No. A-1759 was purely for Ownership and
Possession. The decision sought to be annulled is solely between the private
respondents [the Bustrias] and Porfirio Morado (Rollo, p. 142). Petitioner Republic
was not a party in the case and is not bound by the judgment rendered therein.
It is settled, a real party-in-interest is one who stands to be benefited or injured by the
judgment in the suit (Salonga vs. Warner Barnes & Co., Ltd., 88 Phil. 128; University
of the Philippines Board of Regents vs. Ligot-Telan, 227 SCRA 342; Tampingco vs.
Intermediate Appellate Court, 207 SCRA 652; Republic vs. Sandiganbayan, 203
SCRA 310; Travelwide Associated Sales, Inc. vs. Court of appeals, 199 SCRA 205).
Petitioner Republic not being a party, and the judgment not being in rem, it does not
stand to be benefited or injured by the judgment sought. Petitioner Republic can on
its own, and even without resorting to this petition for annulment of judgment, institute
the proper action to assert its claim that the subject lot is a land forming part of the
public domain (Rollo, p. 145). It need not seek the annulment of the subject judgment,
in Civil Case No. A-1759 in which it was not a party and involves merely a question
of ownership and possession between plaintiffs Zenaida B. Bustria and defendant
Porfirio Morado and which decision is not binding on it, to be able to assert its claim
or interest in the property. It is clear for this reason that petitioner is not a real party-
in-interest (Section 2, Rule 3, Revised rules of Court).[7]
The appellate court is in error. In Islamic Dawah Council of the Phils. v. Court of
Appeals,[8] this Court held that a party claiming ownership of a parcel of land which
is the subject of foreclosure proceedings has a sufficient interest to bring an action for
annulment of the judgment rendered in the foreclosure proceedings even though it
was not a party in such proceedings. It was held:
[A] person need not be a party to the judgment sought to be annulled. What is
essential is that he can prove his allegation that the judgment was obtained by the
use of fraud and collusion and he would be adversely affected thereby.
In this present case it is true that the heirs of Araneta are not parties to the foreclosure
case. Neither are they principally nor secondarily bound by the judgment rendered
133
therein. However, in their petition filed with the Court of Appeals they alleged fraud
and connivance perpetuated by and between the Da Silvas and the Council as would
adversely affect them. This allegation, if fully substantiated by preponderance of
evidence, could be the basis for the annulment of Civil Case No. Q-43476.[9]
This ruling was reiterated in Top Management Programs Corp. v. Court of
Appeals.[10]
The next question is whether the Regional Trial Court had jurisdiction to declare the
land in question to belong to private respondent. The government asserts that the lot
is within the classified/zonified alienable and disposable land for fishpond
development, hence, it is part of the public domain;[11] that under P.D. No. 704, 4,
jurisdiction over its disposition is vested in the BFAR; that unlike agricultural land,
public lands which are declared suitable for fishpond purposes may only be disposed
of by way of license, concession, or lease; and that possession thereof, no matter
how long, cannot ripen into private ownership.[12]
to make a disposition of inalienable public land. If, as claimed, Porfirio Morado
secured a fishpond permit through fraud and misrepresentation, private respondents
sole recourse, if any, is to secure the annulment of the same before the BFAR and
apply for a new one in their favor, provided that they are qualified therefor. What they
did, however, was not only to bring their action in the wrong forum but to ask to be
declared owners of the land in dispute.
WHEREFORE, the petition is GRANTED and the decision of the Court of Appeals,
Ninth Division, in CA-G.R. SP No. 34013, dated October 4, 1995, is REVERSED AND
SET ASIDE. The decision of Regional Trial Court of Alaminos, Pangasinan, Branch
55, in Civil Case No. A-1759 is hereby declared NULL AND VOID.
SO ORDERED.

On the other hand, private respondents do not deny that Isidro Bustria, to whom they
trace their ownership, previously filed a fishpond application with the BFAR over the
disputed land.[13] Neither do they deny that the disputed land formed part of the
public domain. They insist, however, that P.D. No. 704 applies only to lands suitable
for fishpond purposes while the land in dispute is already a fully developed fishpond.
They assert ownership of the subject lot through open and continuous possession of
their predecessor-in-interest since the Second World War.[14]

We agree with petitioner. The State clearly stands to be adversely affected by the trial
courts disposition of inalienable public land.

The land involved in this case was classified as public land suitable for fishpond
development.[15] In controversies involving the disposition of public land, the burden
of overcoming the presumption of state ownership of lands of the public domain lies
upon the private claimant.[16] Private respondents have not discharged this burden.

The fact that the land in dispute was transformed into a fully developed fishpond does
not mean that it has lost its character as one declared suitable for fishpond purposes
under the decree. By applying for a fishpond permit with BFAR, Isidro Bautista
admitted the character of the land as one suitable for fishpond development since the
disposition of such lands is vested in the BFAR. Consequently, private respondents,
as his successors-in-interests, are estopped from claiming otherwise.

It is settled under the Public Land Law[17] that alienable public land held by a
possessor, personally or through his predecessor-in-interest, openly, continuously,
and exclusively for 30 years is ipso jure converted to private property by the mere
lapse of time.[18] However, only public lands classified as agricultural[19] are
alienable. Lands declared for fishery purposes are not alienable[20] and their
possession, no matter how long continued, cannot ripen into ownership.

Since the disposition of lands declared suitable for fishpond purposes fall within the
jurisdiction of the BFAR, in accordance with P.D. No 704, 4,[21] the trial courts
decision, dated December 17, 1991, is null and void. The trial court has no jurisdiction

134
G.R. No. 160280 March 13, 2009
SOFIA ANIOSA SALANDANAN, Petitioner,
vs.
SPOUSES MA. ISABEL and BAYANI MENDEZ, Respondents.*
DECISION
AUSTRIA-MARTINEZ, J.:
This refers to the Petition for Review on Certiorari of the June 27, 2003 Decision1 of
the Court of Appeals (CA) and its September 3, 2003 Resolution2 in CA-G.R. SP No.
76336 denying the petition for clarification and intervention filed by Sofia Aniosa
Salandanan (petitioner) and affirming in toto the March 6, 2003 Decision of the
Regional Trial Court (RTC) of Manila, Branch 30 in Civil Case No. 02-104406 which
affirmed the August 9, 2002 Decision of the Metropolitan Trial Court (MeTC) of Manila,
Branch 15 in Civil Case No. 172530 ordering Delfin Fernandez3 and Carmen
Fernandez (Spouses Fernandez) and all persons claiming rights under them to
vacate and surrender possession of a house and lot located at 1881 Antipolo St.,
corner Vision St., Sta. Cruz, Manila (subject lot) to Spouses Bayani Mendez and Ma.
Isabel S. Mendez (respondents) and to pay the latter monthly rental of ₱5,000.00 from
January 29, 2002 until they vacate the property and ₱15,000.00 as attorney’s fees.
The case stemmed from a complaint for ejectment instituted by respondents against
Spouses Fernandez before the MeTC on April 18, 2002.
In their Complaint,4 respondents alleged that they are the owners of the subject
property as evidenced by Transfer Certificate of Title No. 246767 of the Registry of
Deeds of Manila; that they became the owners thereof by virtue of a deed of donation;
that Spouses Fernandez and their families were occupying the subject property for
free through the generosity of respondent Isabel’s father; that a letter of demand to
vacate the subject property was sent to Spouses Fernandez but they refused to
vacate the same; that respondents brought the matter to the Barangay Lupon for
possible settlement but the same failed.
In their Answer,5 Spouses Fernandez denied the allegations of the complaint and
averred that Spouses Pablo and Sofia Salandanan (Spouses Salandanan) are the
registered owners of the subject property and the improvements therein; that
respondent Isabel is not a daughter of Spouses Salandanan; that Delfin Fernandez
(Delfin) is the nearest of kin of Pablo Salandanan being the nephew of the latter; that
Delfin has continuously occupied the said property since time immemorial with the
permission of Spouses Salandanan; that they did not receive any notice to vacate the
subject property either from respondents or their counsel.
Further, Spouses Fernandez claimed that respondents were able to transfer the
subject property to their name through fraud; that sometime in November 1999,
respondents went to the house of Spouses Salandanan in Dasmariñas, Cavite and
asked the latter to sign a special power of attorney; that the supposed special power
of attorney was in fact a deed of donation wherein Spouses Salandanan was alleged
to have donated in favor of respondents the subject property; that said deed of
donation was simulated and fictitious and that by virtue of the alleged deed of
donation, respondent Isabel was able to transfer the title of the subject property in her
name; that in fact, the subject property is the subject of a separate case filed on July
31, 2001 before the RTC of Manila docketed as Civil Case No. 011014876 for
annulment, revocation and reconveyance of title. By way of counterclaim, Spouses
Fernandez prayed for moral damages and attorney’s fees.
On August 9, 2002 the MeTC rendered its decision in favor of respondents and
against Spouses Fernandez, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
defendants, ordering the latter and all persons claiming rights under them to
peacefully vacate the premises and surrender possession thereof to the plaintiffs and
for the defendants to pay plaintiffs: 1) ₱5,000.00 a month beginning January 29, 2002
(when the demand letter was received by defendants by registered mail) until they
finally vacate the premises and 2) the amount of ₱15,000.00 as and for attorney’s
fees.
The counterclaim of the defendants is dismissed for lack of merit.
SO ORDERED.7
Dissatisfied, Spouses Fernandez appealed to the RTC. Respondents then filed a
Motion for Execution Pending Appeal with the RTC. On December 9, 2002, the RTC
issued an Order directing the issuance of a writ of execution to place respondents in
possession of the disputed property on the ground that Spouses Fernandez failed to
periodically deposit the monthly rentals as they fell due. The Writ of Execution was
issued on January 10, 2003. The Spouses Fernandez moved for reconsideration of
the Order for issuance of the writ of execution, but the same was denied.
Thus, on February 20, 2003, the sheriff went to the subject premises to implement
the writ of execution but found the place padlocked. The sheriff also found the
petitioner, an old woman, all alone inside the house. Taking pity on the old woman,
the sheriff was unable to implement the writ. On the same day, respondents filed an
Urgent Motion to Break Open, alleging that Spouses Fernandez fetched petitioner
earlier that day from her residence in Dasmariñas, Cavite and purposely placed her
inside the subject premises so the old woman could plead for mercy from the
executing sheriff.
On March 6, 2003, the RTC promulgated its Decision affirming the decision of the
MeTC of Manila,8 and on April 8, 2003, the RTC also issued an Order authorizing the
sheriff "to employ the necessary force to enable him to enter the subject premises
and place the plaintiffs-appellees in actual possession thereof."9
Meanwhile, on April 4, 2003, Spouses Fernandez filed before the CA a petition for
review with prayer for a temporary restraining order seeking to stay the immediate
execution pending appeal.10 In a Resolution dated April 15, 2003, the CA granted
the prayer for a Temporary Restraining Order.
135
On June 27, 2003, the CA rendered its Decision affirming in toto the decision of the
RTC and ordered Spouses Fernandez and all persons claiming rights under them
including petitioner to vacate the premises, ruling thus:
Verily, the only issue to be resolved in the present ejectment case is who between
petitioners [Spouses Fernandez] and respondents has the better right to possess the
disputed premises. The issue as to who between Sofia Aniosa Salandanan and
respondents is the real owner of subject premises could be properly threshed out in
a separate proceedings, which in this case is already pending resolution in another
court.
Interestingly, nowhere in any pleadings of petitioners submitted below could We find
any allegations to the effect that their possession of the disputed premises sprung
from their claim of ownership over the same nor, at the very least, that they are in
possession of any document that would support their entitlement to enjoy the disputed
premises.
As between respondents' Torrens Title to the premises juxtaposed that of petitioners'
barren claim of ownership and absence of any document showing that they are
entitled to possess the same, the choice is not difficult. Simply put, petitioners plainly
have no basis to insist that they have a better right to possess the premises over
respondents who have a Torrens Title over the same. Hence, the MTC, as well as the
RTC, correctly ordered petitioners to vacate the premises since respondents have a
better right to possess the same by virtue of the latter's Torrens Title.111avvphi1
The dispositive portion of the CA Decision reads as follows:
WHEREFORE, the instant appeal is DISMISSED for lack of merit. The assailed
Decision, dated 06 March 2003, of Hon. Judge Lucia Peña Purugganan of the
Regional Trial Court of Manila, Brach 50, affirming on appeal the Decision of the
Metropolitan Trial Court of Manila (MTC for brevity), Branch 15, is hereby AFFIRMED
in toto. Accordingly, the Temporary Restraining Order is hereby LIFTED. As a legal
consequence, petitioners and all persons claiming rights under them, including Sofia
Aniosa Salandanan, are hereby ORDERED to vacate the premises immediately upon
receipt hereof. Costs against petitioners.
SO ORDERED.12 (Emphasis supplied)
On July 29, 2003, Spouses Fernandez filed their motion for reconsideration.13
On even date, Sofia Salandanan (petitioner) filed a Motion for Clarification and
Intervention14 and attached a Motion for Reconsideration.15 In her motion for
clarification and intervention, she alleged that she and her deceased spouse are the
real owners of the subject property; that she was not a party to the case for ejectment
and did not receive any notice therefrom; and that by virtue of the said decision, she
was about to be evicted from her property without having participated in the entire
process of the ejectment proceeding.
Petitioner further claims that sometime in 1999, respondents went to their house and
showed certain papers purportedly copies of a special power of attorney but which
turned out to be a deed of donation involving the subject property; that by virtue of the
said donation, respondents were able to register the subject properties in their name
and were issued Transfer Certificate of Title No. 246767; that on July 31, 2001,
Spouses Salandanan with the assistance of Delfin, filed a civil case before the RTC
of Manila for Revocation/Annulment of the said title and Reconveyance; and that
consequently, petitioner was forced to intervene in order to protect her interests over
the subject property. Petitioner prayed for (1) clarification of the CA’s decision asking
whether the said decision applies to her as a relative of Spouses Fernandez claiming
right under them or as possessor of the subject property in her right as owner of the
subject property; (2) that she be allowed to intervene in the appeal; and (3) that the
attached motion for reconsideration be admitted.
In a Resolution dated September 3, 2003, the CA denied the motion for
reconsideration filed by Spouses Fernandez and petitioner’s motion for clarification
and intervention, for lack of merit,16 thus:
We have carefully perused petitioner’s Motion and find the arguments raised therein
a mere rehash, if not a repetition, of the arguments raised in their petition, which have
already been thoroughly discussed and passed upon in our Decision.
Anent the movant Sofia Salandanan’s Motion for Clarification and Intervention, We
hereby deny the same on the ground that it is belatedly filed by virtue of the rendition
of Our Decision on June 27, 2003.
Section 2, Rule 19 of 1997 Rules of Civil Procedure expressly provides:
Section 2. Time to Intervene. – The motion to intervene may be filed at any time before
rendition of judgment by the trial court. x x x
Moreover, it is undisputed that on 31 July 2001, movant Sofia Salandanan
represented by petitioner has already instituted a Civil Case for Revocation/
Annulment of T.C.T. 246767 and Reconveyance before the Regional Trial Court of
Manila, Branch 50 and docketed as Civil Case No. 01101487. As such We find
movant’s motion to be wanting of merit as her rights are already fully protected in said
separate proceeding.
WHEREFORE, the Motion for Reconsideration and Motion for Clarification and
Intervention are hereby DENIED for lack of merit.
SO ORDERED.17
Hence, herein petition anchored on the following assignment of errors:
1. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT INCLUDED
PETITIONER IN ITS ADVERSE JUDGMENT IN VIOLATION OF THE LATTER’S
CONSTITUTIONAL RIGHT TO DUE PROCESS DESPITE THE FACT THAT
PETITIONER WAS NOT PRIVY TO THE INSTANT CASE AND DOES NOT DERIVE
HER RIGHT TO STAY IN THE CONTESTED PROPERTY FROM THE SPOUSES
DELFIN AND CARMEN FERNANDEZ.
136

2. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DENIED THE
MOTION FOR INTERVENTION BY PETITIONER DESPITE THE FACT IT WAS
ONLY BY VIRTUE OF ITS DECISION DATED JUNE 27, 2003 THAT PETITIONER
WAS INCLUDED IN THE EJECTMENT PROCEEDINGS, AND THE EARLIEST
OPPURTUNE TIME WHEN PETITIONER COULD HAVE INTERVENED WAS
AFTER THE COURT OF APPEALS RULED AGAINST HER.
3. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DID NOT TAKE
INTO ACCOUNT THE ISSUE OF OWNERSHIP IN RESOLVING THE ISSUE OF
WHO HAS BETTER POSSESSION.
4. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DID NOT
SUSPEND THE CASE DESPITE THE EQUITABLE CIRCUMSTANCES PRESENT
IN THE CASE AT BAR IN THE LIGHT OF THE AMAGAN VS. MARAMAG CASE.18
Petitioner contends that the CA committed grave abuse of discretion when it included
petitioner in its decision despite the fact that she is not a party in the ejectment case,
thus, violating her right to due process; and considering that the court did not acquire
jurisdiction over her person, she cannot be bound by the Decision of the CA.
Petitioner also asserts that the CA committed grave abuse of discretion amounting to
lack or excess of jurisdiction when it denied petitioner’s motion for clarification and
intervention. According to her, she was constrained to file a motion for clarification
and intervention because the CA included her in its decision in spite of the fact that
she was not impleaded as a party to the unlawful detainer case.
Petitioner ascribes grave abuse of discretion when the CA failed to resolve the issue
of ownership in order to determine the party who has the better right to possess the
subject property. She asserts that the CA should have suspended the unlawful
detainer case since the ownership of the subject property is in issue.
Finally, petitioner maintains that she is the owner of the property by virtue of Transfer
Certificate of Title No. 9937 issued on October 2, 1947 by the Register of Deeds of
Manila. Hence, as the owner of the subject property, she has all the right to use, the
right to allow others to use and the right to exclude others from using the same.
Petitioner further claims that respondents were able to transfer the title of the subject
property in their name through manipulation wherein respondents asked her and her
deceased husband to sign a special power of attorney but later turned out to be a
deed of donation. As a matter of fact, upon learning of the said transfer, petitioner
filed before the RTC of Manila a case for annulment and/or revocation of the title.
We find the petition unmeritorious.
Let us first tackle the issue of whether petitioner should have been allowed to
intervene even after the CA had promulgated its Decision.
Sections 1 and 2 of Rule 19 of the Rules of Court provide:
Section 1. Who may intervene. – A person who has a legal interest in the matter in
litigation, or in the success of either of the parties, or an interest against both, or is so
situated as to be adversely affected by a distribution or other disposition of property
in the custody of the court or of an officer thereof may, with leave of court, be allowed
to intervene in the action. The court shall consider whether or not the intervention will
unduly delay or prejudice the adjudication of the rights of the original parties, and
whether or not the intervenor’s rights may be fully protected in a separate proceeding.
Section 2. Time to intervene. – The motion to intervene may be filed at any time before
rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be
attached to the motion and served on the original parties.
As a rule, intervention is allowed at any time before rendition of judgment by the trial
court. After the lapse of this period, it will not be warranted anymore because
intervention is not an independent action but is ancillary and supplemental to an
existing litigation.19 The permissive tenor of the provision on intervention shows the
intention of the Rules to give to the court the full measure of discretion in permitting
or disallowing the same,20 but under Section 1, Rule 19 of the Rules of Court, the
courts are nevertheless mandated to consider several factors in determining whether
or not to allow intervention. The factors that should be reckoned are whether
intervention will unduly delay or prejudice the adjudication of the rights of the original
parties and whether the intervenor’s rights may be fully protected in a separate
proceeding.
Keeping these factors in mind, the courts have to give much consideration to the fact
that actions for ejectment are designed to summarily restore physical possession to
one who has been illegally deprived of such possession.21 It is primarily a quieting
process intended to provide an expeditious manner for protecting possession or right
to possession without involvement of the title.22 In Five Star Marketing Co., Inc. v.
Booc,23 the Court elucidated the purpose of actions for ejectment in this wise:
Forcible entry and unlawful detainer cases are summary proceedings designed to
provide for an expeditious means of protecting actual possession or the right to the
possession of the property involved. It does not admit of a delay in the determination
thereof. It is a "time procedure" designed to remedy the situation. Stated in another
way, the avowed objective of actions for forcible entry and unlawful detainer, which
have purposely been made summary in nature, is to provide a peaceful, speedy and
expeditious means of preventing an alleged illegal possessor of property from unjustly
continuing his possession for a long time, thereby ensuring the maintenance of peace
and order in the community; otherwise, the party illegally deprived of possession
might feel the despair of long waiting and decide as a measure of self-protection to
take the law into his hands and seize the same by force and violence. And since the
law discourages continued wrangling over possession of property for it involves
perturbation of social order which must be restored as promptly as possible,
technicalities or details of procedure which may cause unnecessary delays should
accordingly and carefully be avoided.24 (Emphasis supplied)
Thus, as stated above, ejectment cases must be resolved with great dispatch.
137

Moreover, petitioner's intervention in the ejectment case would not result in a
complete adjudication of her rights. The issue raised by petitioner is mainly that of
ownership, claiming that the property in dispute was registered and titled in the name
of respondents through the use of fraud. Such issue cannot even be properly threshed
out in an action for ejectment, as Section 18, Rule 70 provides that "[t]he judgment
rendered in an action for forcible entry or detainer shall be conclusive with respect to
the possession only and shall in no wise bind the title or affect the ownership of the
land or building. x x x" In Malison v. Court of Appeals,25 the Court held thus:
Verily, in ejectment cases, the word "possession" means nothing more than actual
physical possession, not legal possession, in the sense contemplated in civil law. The
only issue in such cases is who is entitled to the physical or material possession of
the property involved, independently of any claim of ownership set forth by any of the
party-litigants. It does not even matter if the party's title to the property is
questionable.26 (Emphasis supplied)
Hence, a just and complete determination of petitioner's rights could actually be had
in the action for annulment, revocation and reconveyance of title that she had
previously filed, not in the instant action for ejectment.
It is likewise for this reason that petitioner is not an indispensable party in the instant
case. The records bear out that the disputed property is in the possession of Spouses
Fernandez. Even petitioner does not allege that she was in the possession of subject
premises prior to or during the commencement of the ejectment proceedings. Since
her claim of ownership cannot be properly adjudicated in said action, she is, therefore,
not an indispensable party therein.
It is also misleading for petitioner to say that the earliest opportune time when
petitioner could have intervened was after the CA ordered her to vacate the subject
property in its Decision dated June 27, 2003. As early as when the sheriff attempted
to implement the writ of execution pending appeal issued by the RTC, when she
pleaded not to be evicted from the subject premises, she already became aware that
the RTC had ordered to place respondents in possession of the subject property
pending appeal with the RTC. That would have been the proper time for her to
intervene if she truly believed that her interests would be best protected by being a
party to the ejectment case.
Verily, allowing petitioner's intervention at this late stage of the ejectment proceedings
would only cause undue delay without affording petitioner the relief sought since the
issue of ownership cannot be determined with finality in the unlawful detainer case.
There is also no merit to petitioner's argument that it was grave abuse of discretion
for the CA to include her in its Decision because she is not a party to the ejectment
case, and neither is she claiming right to possession under the Spouses Fernandez,
but as its alleged rightful owner.
Note that the MeTC, RTC, and the CA unanimously found that the disputed property
is presently registered under the Torrens System in the name of respondents. The
lower courts then concluded that respondents presented the best proof to establish
the right to possess the same. It should be borne in mind that unless the case falls
under one of the recognized exceptions, to wit:
(1) when the findings are grounded entirely on speculation, surmises or conjectures;
(2) when the inference made is manifestly mistaken, absurd or impossible; (3) when
there is grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in
making its findings the Court of Appeals went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee; (7)
when the findings are contrary to the trial court; (8) when the findings are conclusions
without citation of specific evidence on which they are based; (9) when the facts set
forth in the petition as well as in the petitioner’s main and reply briefs are not disputed
by the respondent; (10) when the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on record; and (11) when the
Court of Appeals manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, would justify a different conclusion.27
factual findings of the trial court are conclusive on the parties and not reviewable by
this Court, more so when the CA affirms the factual findings of the trial court.28 This
case does not fall under any of the exceptions, thus, the factual finding of the lower
courts, that the new registered owners of the subject premises are respondents, must
be respected and upheld by this Court.
In Malison, the Court emphasized that when property is registered under the Torrens
system, the registered owner's title to the property is presumed legal and cannot be
collaterally attacked, especially in a mere action for unlawful detainer.29 In this
particular action where petitioner's alleged ownership cannot be established, coupled
with the presumption that respondents' title to the property is legal, then the lower
courts are correct in ruling that respondents are the ones entitled to possession of the
subject premises.
Petitioner's ownership not having been fully established in this case, she cannot,
therefore, claim that the lower court's decision divesting the Spouses Fernandez of
possession should not apply to her. In Stilgrove v. Sabas,30 the Court held that:
A judgment directing a party to deliver possession of a property to another is in
personam. x x x Any judgment therein is binding only upon the parties properly
impleaded and duly heard or given an opportunity to be heard. However, this rule
admits of the exception, such that even a non-party may be bound by the judgment
in an ejectment suit where he is any of the following: (a) trespasser, squatter or agent
of the defendant fraudulently occupying the property to frustrate the judgment; (b)
guest or occupant of the premises with the permission of the defendant; (c) transferee
pendente lite; (d) sublessee; (e) co-lessee; or (f) member of the family, relative or
privy of the defendant.31 (Emphasis supplied)
Of particular significance is the fact that in Spouses Fernandez's Answer, they never
alleged that petitioner was in actual possession of the disputed property. In fact, in
said Answer, they stated that it was Delfin Fernandez, Jr. who has continuously
occupied the premises since time immemorial and that petitioner resides in her house
in Dasmariñas, Cavite. Likewise worthy of note is the fact that the Spouses Fernandez
138
never refuted in their Opposition to Amended Motion to Break Open the allegation of
respondents that petitioner was merely fetched by the Spouses Fernandez from her
residence in Dasmariñas, Cavite on the day (February 20, 2003) that the sheriff was
to implement the writ of execution, and placed her inside the subject premises so the
old woman could plead for mercy from the executing sheriff. In the petition for review
dated April 3, 2003 filed with the CA, Spouses Fernandez admitted that it was only
after the RTC issued its Order dated February 10, 2003, denying the motion for
reconsideration of the Order for issuance of the writ of execution, that petitioner took
possession of the subject premises.32

Taking the foregoing into account, it is clear that petitioner, even though a non-party,
is bound by the judgment because aside from being a relative of or privy to Spouses
Fernandez, she is also acting as their agent when she occupied the property after the
RTC ordered execution pending appeal in order to frustrate the judgment.

WHEREFORE, the petition for review on certiorari is DENIED. The assailed Decision
of the Court of Appeals dated June 27, 2003 affirming the decision of the Regional
Trial Court and its Resolution dated September 3, 2003 in CA-G.R. SP No. 76336,
denying the petition for clarification and intervention filed by Sofia Aniosa Salandanan,
are AFFIRMED.

Cost against petitioner.

SO ORDERED.

139
[G.R. No. 133000. October 2, 2001]
PATRICIA NATCHER, petitioner, vs. HON. COURT OF APPEALS AND THE
HEIRS OF GRACIANO DEL ROSARIO LETICIA DEL ROSARIO, EMILIA DEL
ROSARIO-MANANGAN, ROSALINDA FUENTES LLANA, RODOLFO FUENTES,
ALBERTO FUENTES, EVELYN DEL ROSARIO, and EDUARDO DEL ROSARIO,
respondents.
DECISION
BUENA, J.:
May a Regional Trial Court, acting as a court of general jurisdiction in an action for
reconveyance and annulment of title with damages, adjudicate matters relating to the
settlement of the estate of a deceased person particularly in questions as to
advancement of property made by the decedent to any of the heirs?
Sought to be reversed in this petition for review on certiorari under Rule 45 is the
decision[1] of public respondent Court of Appeals, the decretal portion of which
declares:
Wherefore in view of the foregoing considerations, judgment appealed from is
reversed and set aside and another one entered annulling the Deed of Sale executed
by Graciano Del Rosario in favor of defendant-appellee Patricia Natcher, and ordering
the Register of Deeds to Cancel TCT No. 186059 and reinstate TCT No. 107443
without prejudice to the filing of a special proceeding for the settlement of the estate
of Graciano Del Rosario in a proper court. No costs.
So ordered.
Spouses Graciano del Rosario and Graciana Esguerra were registered owners of a
parcel of land with an area of 9,322 square meters located in Manila and covered by
Transfer Certificate of Title No. 11889. Upon the death of Graciana in 1951, Graciano,
together with his six children, namely: Bayani, Ricardo, Rafael, Leticia, Emiliana and
Nieves, entered into an extrajudicial settlement of Gracianas estate on 09 February
1954 adjudicating and dividing among themselves the real property subject of TCT
No. 11889. Under the agreement, Graciano received 8/14 share while each of the six
children received 1/14 share of the said property. Accordingly, TCT No. 11889 was
cancelled, and in lieu thereof, TCT No. 35980 was issued in the name of Graciano
and the six children.
Further, on 09 February 1954, said heirs executed and forged an Agreement of
Consolidation-Subdivision of Real Property with Waiver of Rights where they
subdivided among themselves the parcel of land covered by TCT No. 35980 into
several lots. Graciano then donated to his children, share and share alike, a portion
of his interest in the land amounting to 4,849.38 square meters leaving only 447.60
square meters registered under Gracianos name, as covered by TCT No. 35988.
Subsequently, the land subject of TCT No. 35988 was further subdivided into two
separate lots where the first lot with a land area of 80.90 square meters was registered
under TCT No. 107442 and the second lot with a land area of 396.70 square meters
was registered under TCT No. 107443. Eventually, Graciano sold the first lot[2] to a
third person but retained ownership over the second lot.[3]
On 20 March 1980, Graciano married herein petitioner Patricia Natcher. During their
marriage, Graciano sold the land covered by TCT No. 107443 to his wife Patricia as
a result of which TCT No. 186059[4] was issued in the latters name. On 07 October
1985, Graciano died leaving his second wife Patricia and his six children by his first
marriage, as heirs.
In a complaint[5] filed in Civil Case No. 71075 before the Regional Trial Court of
Manila, Branch 55, herein private respondents alleged that upon Gracianos death,
petitioner Natcher, through the employment of fraud, misrepresentation and forgery,
acquired TCT No. 107443, by making it appear that Graciano executed a Deed of
Sale dated 25 June 1987[6] in favor of herein petitioner resulting in the cancellation
of TCT No. 107443 and the issuance of TCT No. 186059 in the name of Patricia
Natcher. Similarly, herein private respondents alleged in said complaint that as a
consequence of such fraudulent sale, their legitimes have been impaired.
In her answer[7] dated 19 August 1994, herein petitioner Natcher averred that she
was legally married to Graciano on 20 March 1980 and thus, under the law, she was
likewise considered a compulsory heir of the latter. Petitioner further alleged that
during Gracianos lifetime, Graciano already distributed, in advance, properties to his
children, hence, herein private respondents may not anymore claim against
Gracianos estate or against herein petitioners property.
After trial, the Regional Trial Court of Manila, Branch 55, rendered a decision dated
26 January 1996 holding:[8]
1) The deed of sale executed by the late Graciano del Rosario in favor of Patricia
Natcher is prohibited by law and thus a complete nullity. There being no evidence that
a separation of property was agreed upon in the marriage settlements or that there
has been decreed a judicial separation of property between them, the spouses are
prohibited from entering (into) a contract of sale;
2) The deed of sale cannot be likewise regarded as a valid donation as it was equally
prohibited by law under Article 133 of the New Civil Code;
3) Although the deed of sale cannot be regarded as such or as a donation, it may
however be regarded as an extension of advance inheritance of Patricia Natcher
being a compulsory heir of the deceased.
On appeal, the Court of Appeals reversed and set aside the lower courts decision
ratiocinating, inter alia:
It is the probate court that has exclusive jurisdiction to make a just and legal
distribution of the estate. The court a quo, trying an ordinary action for
reconveyance/annulment of title, went beyond its jurisdiction when it performed the
acts proper only in a special proceeding for the settlement of estate of a deceased
person. XXX
140
X X X Thus the court a quo erred in regarding the subject property as an advance
inheritance. What the court should have done was merely to rule on the validity of
(the) sale and leave the issue on advancement to be resolved in a separate
proceeding instituted for that purpose. X X X
Aggrieved, herein petitioner seeks refuge under our protective mantle through the
expediency of Rule 45 of the Rules of Court and assails the appellate courts decision
for being contrary to law and the facts of the case.
We concur with the Court of Appeals and find no merit in the instant petition.
Section 3, Rule 1 of the 1997 Rules of Civil Procedure defines civil action and special
proceedings, in this wise:
X X X a) A civil action is one by which a party sues another for the enforcement or
protection of a right, or the prevention or redress of a wrong.
A civil action may either be ordinary or special. Both are governed by the rules for
ordinary civil actions, subject to specific rules prescribed for a special civil action.
XXX
c) A special proceeding is a remedy by which a party seeks to establish a status, a
right or a particular fact.
As could be gleaned from the foregoing, there lies a marked distinction between an
action and a special proceeding. An action is a formal demand of ones right in a court
of justice in the manner prescribed by the court or by the law. It is the method of
applying legal remedies according to definite established rules. The term special
proceeding may be defined as an application or proceeding to establish the status or
right of a party, or a particular fact. Usually, in special proceedings, no formal
pleadings are required unless the statute expressly so provides. In special
proceedings, the remedy is granted generally upon an application or motion.[9]
Citing American Jurisprudence, a noted authority in Remedial Law expounds further:
It may accordingly be stated generally that actions include those proceedings which
are instituted and prosecuted according to the ordinary rules and provisions relating
to actions at law or suits in equity, and that special proceedings include those
proceedings which are not ordinary in this sense, but is instituted and prosecuted
according to some special mode as in the case of proceedings commenced without
summons and prosecuted without regular pleadings, which are characteristics of
ordinary actions. X X X A special proceeding must therefore be in the nature of a
distinct and independent proceeding for particular relief, such as may be instituted
independently of a pending action, by petition or motion upon notice.[10]
Applying these principles, an action for reconveyance and annulment of title with
damages is a civil action, whereas matters relating to settlement of the estate of a
deceased person such as advancement of property made by the decedent, partake
of the nature of a special proceeding, which concomitantly requires the application of
specific rules as provided for in the Rules of Court.
Clearly, matters which involve settlement and distribution of the estate of the decedent
fall within the exclusive province of the probate court in the exercise of its limited
jurisdiction.
Thus, under Section 2, Rule 90 of the Rules of Court, questions as to advancement
made or alleged to have been made by the deceased to any heir may be heard and
determined by the court having jurisdiction of the estate proceedings; and the final
order of the court thereon shall be binding on the person raising the questions and on
the heir.
While it may be true that the Rules used the word may, it is nevertheless clear that
the same provision[11] contemplates a probate court when it speaks of the court
having jurisdiction of the estate proceedings.
Corollarily, the Regional Trial Court in the instant case, acting in its general
jurisdiction, is devoid of authority to render an adjudication and resolve the issue of
advancement of the real property in favor of herein petitioner Natcher, inasmuch as
Civil Case No. 71075 for reconveyance and annulment of title with damages is not, to
our mind, the proper vehicle to thresh out said question. Moreover, under the present
circumstances, the RTC of Manila, Branch 55 was not properly constituted as a
probate court so as to validly pass upon the question of advancement made by the
decedent Graciano Del Rosario to his wife, herein petitioner Natcher.
At this point, the appellate courts disquisition is elucidating:
Before a court can make a partition and distribution of the estate of a deceased, it
must first settle the estate in a special proceeding instituted for the purpose. In the
case at hand, the court a quo determined the respective legitimes of the plaintiffs-
appellants and assigned the subject property owned by the estate of the deceased to
defendant-appellee without observing the proper proceedings provided (for) by the
Rules of Court. From the aforecited discussions, it is clear that trial courts trying an
ordinary action cannot resolve to perform acts pertaining to a special proceeding
because it is subject to specific prescribed rules. Thus, the court a quo erred in
regarding the subject property as an advance inheritance.[12]
In resolving the case at bench, this Court is not unaware of our pronouncement in
Coca vs. Borromeo[13] and Mendoza vs. Teh[14] that whether a particular matter
should be resolved by the Regional Trial Court (then Court of First Instance) in the
exercise of its general jurisdiction or its limited probate jurisdiction is not a
jurisdictional issue but a mere question of procedure. In essence, it is a procedural
question involving a mode of practice which may be waived.[15]
Notwithstanding, we do not see any waiver on the part of herein private respondents
inasmuch as the six children of the decedent even assailed the authority of the trial
court, acting in its general jurisdiction, to rule on this specific issue of advancement
made by the decedent to petitioner.
141
Analogously, in a train of decisions, this Court has consistently enunciated the long
standing principle that although generally, a probate court may not decide a question
of title or ownership, yet if the interested parties are all heirs, or the question is one of
collation or advancement, or the parties consent to the assumption of jurisdiction by
the probate court and the rights of third parties are not impaired, then the probate
court is competent to decide the question of ownership.[16]

Similarly in Mendoza vs. Teh, we had occasion to hold:

In the present suit, no settlement of estate is involved, but merely an allegation

seeking appointment as estate administratrix which does not necessarily involve
settlement of estate that would have invited the exercise of the limited jurisdiction of
a probate court.[17] (emphasis supplied)

Of equal importance is that before any conclusion about the legal share due to a
compulsory heir may be reached, it is necessary that certain steps be taken first.[18]
The net estate of the decedent must be ascertained, by deducting all payable
obligations and charges from the value of the property owned by the deceased at the
time of his death; then, all donations subject to collation would be added to it. With
the partible estate thus determined, the legitime of the compulsory heir or heirs can
be established; and only thereafter can it be ascertained whether or not a donation
had prejudiced the legitimes.[19]

A perusal of the records, specifically the antecedents and proceedings in the present
case, reveals that the trial court failed to observe established rules of procedure
governing the settlement of the estate of Graciano Del Rosario. This Court sees no
cogent reason to sanction the non-observance of these well-entrenched rules and
hereby holds that under the prevailing circumstances, a probate court, in the exercise
of its limited jurisdiction, is indeed the best forum to ventilate and adjudge the issue
of advancement as well as other related matters involving the settlement of Graciano
Del Rosarios estate.

WHEREFORE, premises considered, the assailed decision of the Court of Appeals is

hereby AFFIRMED and the instant petition is DISMISSED for lack of merit.

SO ORDERED.

142
[G.R. No. 124320. March 2, 1999.]
HEIRS OF GUIDO YAPTINCHAY AND ISABEL YAPTINCHAY, NAMELY: LETICIA
ENCISO-GADINGAN, EMILIO ENCISO, AURORA ENCISO, AND NORBERTO
ENCISO, REPRESENTED BY LETICIA ENCISO-GADINGAN, ATTORNEY-IN-
FACT, Petitioners, v. HON. ROY S. DEL ROSARIO, PRESIDING JUDGE, RTC,
BRANCH 21, IMUS, CAVITE; THE REGISTER OF DEEDS FOR TRECE MARTIRES
CITY, GEORGE T. CHUA, SPS. ALFONSO NG AND ANNABELLE CHUA, SPS.
ROSENDO L. DY AND DIANA DY, SPS. ALEXANDER NG AND CRISTINA NG,
SPS. SAMUEL MADRID AND BELEN MADRID, SPS. JOSE MADRID AND
BERNARDA MADRID, SPS. DAVID MADRID AND VIOLETA MADRID,
JONATHAN NG, SPS. VICTORIANO CHAN, JR. AND CARMELITA CHAN, SPS.
MARIETES C. LEE AND GREGORIE W.C. LEE, JACINTO C. NG, JR., SPS.
ADELAIDO S. DE GUZMAN AND ROSITA C. DE GUZMAN, SPS. RICARDO G.
ONG AND JULIE LIMIT, SPS. MISAEL ADELAIDA P. SOLIMAN AND FERDINAND
SOLIMAN, SPS. MYLENE T. LIM AND ARTHUR LIM, EVELYN K. CHUA, GOLDEN
BAY REALTY AND DEVELOPMENT CORPORATION, Respondents.
DECISION
PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court assailing
the Orders dated October 25, 1995 and February 23, 1996, respectively, of Branch
21 of the Regional Trial Court in Imus, Cavite ("RTC").
The facts that matter are, as follows:chanrob1es virtual 1aw library
Petitioners claim that they are the legal heirs of the late Guido and Isabel Yaptinchay,
the owners-claimants of Lot No. 1131 with an area of 520,638 and Lot No. 1132 with
an area of 36,235 square meters, more or less situated in Bancal, Carmona, Cavite.
On March 17, 1994, petitioners executed an Extra-Judicial Settlement of the estate of
the deceased Guido and Isabel Yaptinchay.
On August 26, 1994, petitioners discovered that a portion, if not all, of the aforesaid
properties were titled in the name of respondent Golden Bay Realty and Development
Corporation ("Golden Bay") under Transfer Certificate of Title Nos. ("TCT") 225254
and 225255. With the discovery of what happened to subject parcels of land,
petitioners filed a complaint for ANNULMENT and/or DECLARATIONS OF NULLITY
OF TCT NO. 493363, 493364, 193665, 493366, 493367; and its Derivatives; As
Alternative Reconveyance of Realty WITH A PRAYER FOR A WRIT OF
PRELIMINARY INJUNCTION and/or RESTRAINING ORDER WITH DAMAGES,
docketed as RTC BCV-94-127 before Branch 21 of the Regional Trial Court in Imus,
Cavite.
Upon learning that "Golden Bay" sold portions of the parcels of land in question,
petitioners filed with the "RTC" an Amended Complaint to implead new and additional
defendants and to mention the TCTs to be annulled. But the respondent court
dismissed the Amended Complaint.chanrobles virtual lawlibrary
Petitioners moved for reconsideration of the Order dismissing the Amended
Complaint. The motion was granted by the RTC in an Order 1 dated July 7, 1995,
which further allowed the herein petitioners to file a Second Amended Complaint, 2
which they promptly did.
On August 12, 1995, the private respondents presented a Motion to Dismiss 3 on the
grounds that the complaint failed to state a cause of action, that plaintiffs did not have
a right of action, that they have not established their status as heirs, that the land
being claimed is different from that of the defendants, and that plaintiffs’ claim was
barred by laches. The said Motion to Dismiss was granted by the respondent court in
its Order 4 dated October 25, 1995, holding that petitioners "have not shown any proof
or even a semblance of it — except the allegations that they are the legal heirs of the
above-named Yaptinchays — that they have been declared the legal heirs of the
deceased couple."cralaw virtua1aw library
Petitioners interposed a Motion for Reconsideration 5 but to no avail. The same was
denied by the RTC in its Order 6 of February 23, 1996.
Undaunted, petitioners have come before this Court to seek relief from respondent
court’s Orders under attack.
Petitioners contend that the respondent court acted with grave abuse of discretion in
ruling that the issue of heirship should first be determined before trial of the case could
proceed. It is petitioners submission that the respondent court should have proceeded
with the trial and simultaneously resolved the issue of heirship in the same
case.chanroblesvirtualawlibrary
The petition is not impressed with merit.
To begin with, petitioners’ Petition for Certiorari before this Court is an improper
recourse. Their proper remedy should have been an appeal. An order of dismissal,
be it right or wrong, is a final order, which is subject to appeal and not a proper subject
of certiorari 7 . Where appeal is available as a remedy certiorari will not lie 8 .
Neither did the respondent court commit grave abuse of discretion in issuing the
questioned Order dismissing the Second Amended Complaint of petitioners, as it
aptly ratiocinated and ruled:jgc:chanrobles.com.ph
"But the plaintiffs who claimed to be the legal heirs of the said Guido and Isabel
Yaptinchay have not shown any proof or even a semblance of it — except the
allegations that they are the legal heirs of the aforementioned Yaptinchays — that
they have been declared the legal heirs of the deceased couple. Now, the
determination of who are the legal heirs of the deceased couple must be made in the
proper special proceedings in court, and not in an ordinary suit for reconveyance of
property. This must take precedence over the action for reconveyance (Elena C.
143
Monzon, et. al., v. Angelita Taligato, CA-G-R No. 33355, August 12, 1992)."cralaw
virtua1aw library

In Litam, etc., et. al. v. Rivera 9 , this court opined that the declaration of heirship must
be made in an administration preceding, and not in an independent civil action. This
doctrine was reiterated in Solivio v. Court of Appeals 10 where the court
held:chanroblesvirtuallawlibrary:red

"In Litam, Et. Al. v. Rivera, 100 Phil. 364, where despite the pendency of the special
proceedings for the settlement of the intestate estate of the deceased Rafael Litam,
the plaintiffs-appellants filed a civil action in which they claimed that they were the
children by a previous marriage of the deceased to a Chinese woman, hence, entitled
to inherit his one-half share of the conjugal properties acquired during his marriage to
Marcosa Rivera, the trial court in the civil case declared that the plaintiffs-appellants
were not children of the deceased, that the properties in question were paraphernal
properties of his wife, Marcosa Rivera, and that the latter was his only heir. On appeal
to this Court, we ruled that ‘such declarations (that Marcosa Rivera was the only heir
of the decedent) is improper, in Civil Case No. 2071, it being within the exclusive
competence of the court in Special Proceedings No. 1537, in which it is not as yet, in
issue, and, will not be, ordinarily, in issue until the presentation of the project of
partition.’ (p. 378)."cralaw virtua1aw library

The trial court cannot make a declaration of heirship in the civil action for the reason
that such a declaration can only be made in a special proceeding. Under Section 3,
Rule 1 of the 1997 Revised Rules of Court, a civil action is defined as "one by which
a party sues another for the enforcement or protection of a right, or the prevention or
redress of a wrong" while a special proceeding is "a remedy by which a party seeks
to establish a status, a right, or a particular fact." It is then decisively clear that the
declaration of heirship can be made only in a special proceeding inasmuch as the
petitioners here are seeking the establishment of a status or
right.chanroblesvirtuallawlibrary

We therefore hold that the respondent court did the right thing in dismissing the
Second Amended Complaint, which stated no cause of action. In Travel Wide
Associated Sales (Phils.), Inc. v. Court of Appeals, 11 it was ruled
that:jgc:chanrobles.com.ph

". . . if the suit is not brought in the name of or against the real party in interest, a
motion to dismiss may be filed on the ground that the complaint states no cause of
action."cralaw virtua1aw library

WHEREFORE, for lack of merit, the Petition under consideration is hereby

DISMISSED. No pronouncement as to costs.chanroblesvirtual|awlibrary

SO ORDERED.

144
[G.R. No. 129242. January 16, 2001]
PILAR S. VDA. DE MANALO, ANTONIO S. MANALO, ORLANDO S. MANALO,
and ISABELITA MANALO, petitioners, vs. HON. COURT OF APPEALS, HON.
REGIONAL TRIAL COURT OF MANILA (BRANCH 35), PURITA S. JAYME,
MILAGROS M. TERRE, BELEN M. ORILLANO, ROSALINA M. ACUIN, ROMEO S.
MANALO, ROBERTO S. MANALO, AMALIA MANALO and IMELDA MANALO,
respondents.
DECISION
DE LEON, JR., J.:
This is a petition for review on certiorari filed by petitioners Pilar S. Vda. De Manalo,
et. al., seeking to annul the Resolution[1] of the Court of Appeals[2] affirming the
Orders[3] of the Regional Trial Court and the Resolution[4]which denied petitioners
motion for reconsideration.
The antecedent facts[5] are as follows:
Troadio Manalo, a resident of 1966 Maria Clara Street, Sampaloc, Manila died
intestate on February 14, 1992. He was survived by his wife, Pilar S. Manalo, and his
eleven (11) children, namely: Purita M. Jayme, Antonio Manalo, Milagros M. Terre,
Belen M. Orillano, Isabelita Manalo, Rosalina M. Acuin, Romeo Manalo, Roberto
Manalo, Amalia Manalo, Orlando Manalo, and Imelda Manalo, who are all of legal
age.
At the time of his death on February 14, 1992, Troadio Manalo left several real
properties located in Manila and in the province of Tarlac including a business under
the name and style Manalos Machine Shop with offices at No. 19 Calavite Street, La
Loma, Quezon City and at No. 45 Gen. Tinio Street, Arty Subdivision, Valenzuela,
Metro Manila.
On November 26, 1992, herein respondents, who are eight (8) of the surviving
children of the late Troadio Manalo, namely: Purita, Milagros, Belen, Rosalina,
Romeo, Roberto, Amalia, and Imelda filed a petition[6] with the respondent Regional
Trial Court of Manila[7] for the judicial settlement of the estate of their late father,
Troadio Manalo, and for the appointment of their brother, Romeo Manalo, as
administrator thereof.
On December 15, 1992, the trial court issued an order setting the said petition for
hearing on February 11, 1993 and directing the publication of the order for three (3)
consecutive weeks in a newspaper of general circulation in Metro Manila, and further
directing service by registered mail of the said order upon the heirs named in the
petition at their respective addresses mentioned therein.
On February 11, 1993, the date set for hearing of the petition, the trial court issued
an order declaring the whole world in default, except the government, and set the
reception of evidence of the petitioners therein on March 16, 1993. However, this
order of general default was set aside by the trial court upon motion of herein
petitioners (oppositors therein) namely: Pilar S. Vda. De Manalo, Antonio, Isabelita
and Orlando who were granted ten (10) days within which to file their opposition to
the petition.
Several pleadings were subsequently filed by herein petitioners, through counsel,
culminating in the filing of an Omnibus Motion[8] on July 23, 1993 seeking: (1) to set
aside and reconsider the Order of the trial court dated July 9, 1993 which denied the
motion for additional extension of time to file opposition; (2) to set for preliminary
hearing their affirmative defenses as grounds for dismissal of the case; (3) to declare
that the trial court did not acquire jurisdiction over the persons of the oppositors; and
(4) for the immediate inhibition of the presiding judge.
On July 30, 1993, the trial court issued an order[9] which resolved, thus:
A. To admit the so-called Opposition filed by counsel for the oppositors on July 20,
1993, only for the purpose of considering the merits thereof;
B. To deny the prayer of the oppositors for a preliminary hearing of their affirmative
defenses as ground for the dismissal of this proceeding, said affirmative defenses
being irrelevant and immaterial to the purpose and issue of the present proceeding;
C. To declare that this court has acquired jurisdiction over the persons of the
oppositors;
D. To deny the motion of the oppositors for the inhibition of this Presiding Judge;
E. To set the application of Romeo Manalo for appointment as regular administrator
in the intestate estate of the deceased Troadio Manalo for hearing on September 9,
1993 at 2:00 oclock in the afternoon.
Herein petitioners filed a petition for certiorari under Rule 65 of the Rules of Court with
the Court of Appeals, docketed as CA-G.R. SP. No. 39851, after their motion for
reconsideration of the Order dated July 30, 1993 was denied by the trial court in its
Order[10] dated September 15, 1993. In their petition for certiorari with the appellate
court, they contend that: (1) the venue was improperly laid in SP. PROC. No. 92-
63626; (2) the trial court did not acquire jurisdiction over their persons; (3) the share
of the surviving spouse was included in the intestate proceedings; (4) there was
absence of earnest efforts toward compromise among members of the same family;
and (5) no certification of non-forum shopping was attached to the petition.
Finding the contentions untenable, the Court of Appeals dismissed the petition for
certiorari in its Resolution[11] promulgated on September 30, 1996. On May 6, 1997
the motion for reconsideration of the said resolution was likewise dismissed.[12]
The only issue raised by herein petitioners in the instant petition for review is whether
or not the respondent Court of Appeals erred in upholding the questioned orders of
the respondent trial court which denied their motion for the outright dismissal of the
petition for judicial settlement of estate despite the failure of the petitioners therein to
aver that earnest efforts toward a compromise involving members of the same family
have been made prior to the filing of the petition but that the same have failed.
145

Herein petitioners claim that the petition in SP. PROC No. 92-63626 is actually an
ordinary civil action involving members of the same family. They point out that it
contains certain averments which, according to them, are indicative of its adversarial
nature, to wit:
xxx
Par. 7. One of the surviving sons, ANTONIO MANALO, since the death of his father,
TROADIO MANALO, had not made any settlement, judicial or extra-judicial of the
properties of the deceased father, TROADIO MANALO.
Par. 8. xxx the said surviving son continued to manage and control the properties
aforementioned, without proper accounting, to his own benefit and advantage xxx.
xxx
Par. 12. That said ANTONIO MANALO is managing and controlling the estate of the
deceased TROADIO MANALO to his own advantage and to the damage and
prejudice of the herein petitioners and their co-heirs xxx.
xxx
Par. 14. For the protection of their rights and interests, petitioners were compelled to
bring this suit and were forced to litigate and incur expenses and will continue to incur
expenses of not less than, P250,000.00 and engaged the services of herein counsel
committing to pay P200,000.00 as and for attorneys fees plus honorarium of
P2,500.00 per appearance in court xxx.[13]
Consequently, according to herein petitioners, the same should be dismissed under
Rule 16, Section 1(j) of the Revised Rules of Court which provides that a motion to
dismiss a complaint may be filed on the ground that a condition precedent for filing
the claim has not been complied with, that is, that the petitioners therein failed to aver
in the petition in SP. PROC. No. 92-63626, that earnest efforts toward a compromise
have been made involving members of the same family prior to the filing of the petition
pursuant to Article 222[14] of the Civil Code of the Philippines.
The instant petition is not impressed with merit.
It is a fundamental rule that, in the determination of the nature of an action or
proceeding, the averments[15] and the character of the relief sought[16] in the
complaint, or petition, as in the case at bar, shall be controlling. A careful scrutiny of
the Petition for Issuance of Letters of Administration, Settlement and Distribution of
Estate in SP. PROC. No. 92-63626 belies herein petitioners claim that the same is in
the nature of an ordinary civil action. The said petition contains sufficient jurisdictional
facts required in a petition for the settlement of estate of a deceased person such as
the fact of death of the late Troadio Manalo on February 14, 1992, as well as his
residence in the City of Manila at the time of his said death. The fact of death of the
decedent and of his residence within the country are foundation facts upon which all
the subsequent proceedings in the administration of the estate rest.[17] The petition
in SP. PROC. No. 92-63626 also contains an enumeration of the names of his legal
heirs including a tentative list of the properties left by the deceased which are sought
to be settled in the probate proceedings. In addition, the reliefs prayed for in the said
petition leave no room for doubt as regard the intention of the petitioners therein
(private respondents herein) to seek judicial settlement of the estate of their deceased
father, Troadio Manalo, to wit:
PRAYER
WHEREFORE, premises considered, it is respectfully prayed for of this Honorable
Court:
(a) That after due hearing, letters of administration be issued to petitioner ROMEO
MANALO for the administration of the estate of the deceased TORADIO MANALO
upon the giving of a bond in such reasonable sum that this Honorable Court may fix.
(b) That after all the properties of the deceased TROADIO MANALO have been
inventoried and expenses and just debts, if any, have been paid and the legal heirs
of the deceased fully determined, that the said estate of TROADIO MANALO be
settled and distributed among the legal heirs all in accordance with law.
c) That the litigation expenses o these proceedings in the amount of P250,000.00 and
attorneys fees in the amount of P300,000.00 plus honorarium of P2,500.00 per
appearance in court in the hearing and trial of this case and costs of suit be taxed
solely against ANTONIO MANALO.[18]
Concededly, the petition in SP. PROC. No. 92-63626 contains certain averments
which may be typical of an ordinary civil action. Herein petitioners, as oppositors
therein, took advantage of the said defect in the petition and filed their so-called
Opposition thereto which, as observed by the trial court, is actually an Answer
containing admissions and denials, special and affirmative defenses and compulsory
counterclaims for actual, moral and exemplary damages, plus attorney's fees and
costs[19] in an apparent effort to make out a case of an ordinary civil action an
ultimately seek its dismissal under Rule 16, Section 1(j) of the Rules of Court vis--vis,
Article 222 of the Civil Code.
It is our view that herein petitioners may not be allowed to defeat the purpose of the
essentially valid petition for the settlement of the estate of the late Troadio Manalo by
raising matters that are irrelevant and immaterial to the said petition. It must be
emphasized that the trial court, sitting, as a probate court, has limited and special
jurisdiction[20] and cannot hear and dispose of collateral matters and issues which
may be properly threshed out only in an ordinary civil action. In addition, the rule has
always been to the effect that the jurisdiction of a court, as well as the concomitant
nature of an action, is determined by the averments in the complaint and not by the
defenses contained in the answer. If it were otherwise, it would not be too difficult to
have a case either thrown out of court or its proceedings unduly delayed by simple
strategem.[21] So it should be in the instant petition for settlement of estate.
Herein petitioners argue that even if the petition in SP. PROC. No. 92-63626 were to
be considered as a special proceeding for the settlement of estate of a deceased
146
person, Rule 16, Section 1(j) of the Rules of Court vis-a-vis Article 222 of the Civil SO ORDERED.
Code of the Philippines would nevertheless apply as a ground for the dismissal of the
same by virtue of Rule 1, Section 2 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 and proceeding.
Petitioners contend that the term proceeding is so broad that it must necessarily
include special proceedings.

The argument is misplaced. Herein petitioners may not validly take refuge under the
provisions of Rule 1, Section 2, of the Rules of Court to justify the invocation of Article
222 of the Civil Code of the Philippines for the dismissal of the petition for settlement
of the estate of the deceased Troadio Manalo inasmuch as the latter provision is clear
enough, to wit:

Art. 222. No suit shall be filed or maintained between members of the same family
unless it should appear that earnest efforts toward a compromise have been made,
but that the same have failed, subject to the limitations in Article 2035 (underscoring
supplied).[22]

The above-quoted provision of the law is applicable only to ordinary civil actions. This
is clear from the term suit that it refers to an action by one person or persons against
another or others in a court of justice in which the plaintiff pursues the remedy which
the law affords him for the redress of an injury or the enforcement of a right, whether
at law or in equity.[23] A civil action is thus an action filed in a court of justice, whereby
a party sues another for the enforcement of a right, or the prevention or redress of a
wrong.[24] Besides, an excerpt from the Report of the Code Commission
unmistakably reveals the intention of the Code Commission to make that legal
provision applicable only to civil actions which are essentially adversarial and involve
members of the same family, thus:

It is difficult to imagine a sadder and more tragic spectacle than a litigation between
members of the same family. It is necessary that every effort should be made toward
a compromise before a litigation is allowed to breed hate and passion in the family. It
is known that lawsuit between close relatives generates deeper bitterness than
strangers.[25]

It must be emphasized that the oppositors (herein petitioners) are not being sued in
SP. PROC. No. 92-63626 for any cause of action as in fact no defendant was
impleaded therein. The Petition for Issuance of Letters of Administration, Settlement
and Distribution of Estate in SP. PROC. No. 92-63626 is a special proceeding and,
as such, it is a remedy whereby the petitioners therein seek to establish a status, a
right, or a particular fact.[26] The petitioners therein (private respondents herein)
merely seek to establish the fact of death of their father and subsequently to be duly
recognized as among the heirs of the said deceased so that they can validly exercise
their right to participate in the settlement and liquidation of the estate of the decedent
consistent with the limited and special jurisdiction of the probate court.

WHEREFORE, the petition in the above-entitled case, is DENIED for lack of merit.
Costs against petitioners.

147
[G.R. No. 163604. May 6, 2005]
REPUBLIC OF THE PHILIPPINES, petitioner, vs. THE HON. COURT OF
APPEALS (Twentieth Division), HON. PRESIDING JUDGE FORTUNITO L.
MADRONA, RTC-BR. 35 and APOLINARIA MALINAO JOMOC, respondents.
DECISION
CARPIO-MORALES, J.:
In In the Matter of Declaration of Presumptive Death of Absentee Spouse Clemente
P. Jomoc, Apolinaria Malinao Jomoc, petitioner, the Ormoc City, Regional Trial Court,
Branch 35, by Order of September 29, 1999,[1] granted the petition on the basis of
the Commissioners Report[2] and accordingly declared the absentee spouse, who
had left his petitioner-wife nine years earlier, presumptively dead.
In granting the petition, the trial judge, Judge Fortunito L. Madrona, cited Article 41,
par. 2 of the Family Code. Said article provides that for the purpose of contracting a
valid subsequent marriage during the subsistence of a previous marriage where the
prior spouse had been absent for four consecutive years, the spouse present must
institute summary proceedings for the declaration of presumptive death of the
absentee spouse, without prejudice to the effect of the reappearance of the absent
spouse.
The Republic, through the Office of the Solicitor General, sought to appeal the trial
courts order by filing a Notice of Appeal.[3]
By Order of November 22, 1999s,[4] the trial court, noting that no record of appeal
was filed and served as required by and pursuant to Sec. 2(a), Rule 41 of the 1997
Rules of Civil Procedure, the present case being a special proceeding, disapproved
the Notice of Appeal.
The Republics Motion for Reconsideration of the trial courts order of disapproval
having been denied by Order of January 13, 2000,[5] it filed a Petition for Certiorari[6]
before the Court of Appeals, it contending that the declaration of presumptive death
of a person under Article 41 of the Family Code is not a special proceeding or a case
of multiple or separate appeals requiring a record on appeal.
By Decision of May 5, 2004,[7] the Court of Appeals denied the Republics petition on
procedural and substantive grounds in this wise:
At the outset, it must be stressed that the petition is not sufficient in form. It failed to
attach to its petition a certified true copy of the assailed Order dated January 13, 2000
[denying its Motion for Reconsideration of the November 22, 1999 Order disapproving
its Notice of Appeal]. Moreover, the petition questioned the [trial courts] Order dated
August 15, 1999, which declared Clemente Jomoc presumptively dead, likewise for
having been issued with grave abuse of discretion amounting to lack of jurisdiction,
yet, not even a copy could be found in the records. On this score alone, the petition
should have been dismissed outright in accordance with Sec. 3, Rule 46 of the Rules
of Court.
However, despite the procedural lapses, the Court resolves to delve deeper into the
substantive issue of the validity/nullity of the assailed order.
The principal issue in this case is whether a petition for declaration of the presumptive
death of a person is in the nature of a special proceeding. If it is, the period to appeal
is 30 days and the party appealing must, in addition to a notice of appeal, file with the
trial court a record on appeal to perfect its appeal. Otherwise, if the petition is an
ordinary action, the period to appeal is 15 days from notice or decision or final order
appealed from and the appeal is perfected by filing a notice of appeal (Section 3, Rule
41, Rules of Court).
As defined in Section 3(a), Rule 1 of the Rules of Court, a civil action is one by which
a party sues another for the enforcement or protection of a right, or the prevention of
redress of a wrong while a special proceeding under Section 3(c) of the same rule is
defined as a remedy by which a party seeks to establish a status, a right or a particular
fact (Heirs of Yaptinchay, et al. v. Del Rosario, et al., G.R. No. 124320, March 2,
1999).
Considering the aforementioned distinction, this Court finds that the instant petition is
in the nature of a special proceeding and not an ordinary action. The petition merely
seeks for a declaration by the trial court of the presumptive death of absentee spouse
Clemente Jomoc. It does not seek the enforcement or protection of a right or the
prevention or redress of a wrong. Neither does it involve a demand of right or a cause
of action that can be enforced against any person.
On the basis of the foregoing discussion, the subject Order dated January 13, 2000
denying OSGs Motion for Reconsideration of the Order dated November 22, 1999
disapproving its Notice of Appeal was correctly issued. The instant petition, being in
the nature of a special proceeding, OSG should have filed, in addition to its Notice of
Appeal, a record on appeal in accordance with Section 19 of the Interim Rules and
Guidelines to Implement BP Blg. 129 and Section 2(a), Rule 41 of the Rules of Court
. . . (Emphasis and underscoring supplied)
The Republic (petitioner) insists that the declaration of presumptive death under
Article 41 of the Family Code is not a special proceeding involving multiple or separate
appeals where a record on appeal shall be filed and served in like manner.
Petitioner cites Rule 109 of the Revised Rules of Court which enumerates the cases
wherein multiple appeals are allowed and a record on appeal is required for an appeal
to be perfected. The petition for the declaration of presumptive death of an absent
spouse not being included in the enumeration, petitioner contends that a mere notice
of appeal suffices.
By Resolution of December 15, 2004,[8] this Court, noting that copy of the September
27, 2004 Resolution[9] requiring respondent to file her comment on the petition was
returned unserved with postmasters notation Party refused, Resolved to consider that
copy deemed served upon her.
148
The pertinent provisions on the General Provisions on Special Proceedings, Part II of x x x (Emphasis and underscoring supplied)
the Revised Rules of Court entitled SPECIAL PROCEEDINGS, read:
Upon the other hand, Article 41 of the Family Code, upon which the trial court
RULE 72 anchored its grant of the petition for the declaration of presumptive death of the absent
spouse, provides:
SUBJECT MATTER AND APPLICABILITY
Art. 41. A marriage contracted by any person during the subsistence of a previous
OF GENERAL RULES marriage shall be null and void, unless before the celebration of the subsequent
marriage, the prior spouses had been absent for four consecutive years and the
Section 1. Subject matter of special proceedings. Rules of special proceedings are spouse present had a well-founded belief that the absent spouses was already dead.
provided for in the following: In case of disappearance where there is danger of death under the circumstances set
forth in the provisions of Article 391 of the Civil Code, an absence of only two years
(a) Settlement of estate of deceased persons; shall be sufficient.

(b) Escheat; For the purpose pf contracting the subsequent marriage under the preceding
paragraph, the spouses present must institute a summary proceeding as provided in
(c) Guardianship and custody of children; this Code for the declaration of presumptive death of the absentee, without prejudice
to the effect of a reappearance of the absent spouse. (Emphasis and underscoring
(d) Trustees; supplied)

(e) Adoption; Rule 41, Section 2 of the Revised Rules of Court, on Modes of Appeal, invoked by
the trial court in disapproving petitioners Notice of Appeal, provides:
(f) Rescission and revocation of adoption;
Sec. 2. Modes of appeal. -
(g) Hospitalization of insane persons;
(a) Ordinary appeal. - The appeal to the Court of Appeals in cases decided by the
(h) Habeas corpus; Regional Trial Court in the exercise of its original jurisdiction shall be taken by filing a
notice of appeal with the court which rendered the judgment or final order appealed
(i) Change of name; from and serving a copy thereof upon the adverse party. No record on appeal shall
be required except in special proceedings and other cases of multiple or separate
(j) Voluntary dissolution of corporations; appeals where the law or these Rules so require. In such cases, the record on appeal
shall be filed and served in like manner. (Emphasis and underscoring supplied)
(k) Judicial approval of voluntary recognition of minor natural children;
xxx
(l) Constitution of family home;
By the trial courts citation of Article 41 of the Family Code, it is gathered that the
(m) Declaration of absence and death; petition of Apolinaria Jomoc to have her absent spouse declared presumptively dead
had for its purpose her desire to contract a valid subsequent marriage. Ergo, the
(n) Cancellation or correction of entries in the civil registry. petition for that purpose is a summary proceeding, following above-quoted Art. 41,
paragraph 2 of the Family Code.
Sec. 2. Applicability of rules of civil actions. In the absence of special provisions, the
rules provided for in ordinary actions shall be, as far as practicable, applicable in Since Title XI of the Family Code, entitled SUMMARY JUDICIAL PROCEEDING IN
special proceedings. (Underscoring supplied) THE FAMILY LAW, contains the following provision, inter alia:

The pertinent provision of the Civil Code on presumption of death provides: xxx

Art. 390. After an absence of seven years, it being unknown whether or not the Art. 238. Unless modified by the Supreme Court, the procedural rules in this Title shall
absentee still lives, he shall be presumed dead for all purposes, except for those of apply in all cases provided for in this Codes requiring summary court proceedings.
succession. Such cases shall be decided in an expeditious manner without regard to technical
rules. (Emphasis and underscoring supplied)

149
x x x,

there is no doubt that the petition of Apolinaria Jomoc required, and is, therefore, a
summary proceeding under the Family Code, not a special proceeding under the
Revised Rules of Court appeal for which calls for the filing of a Record on Appeal. It
being a summary ordinary proceeding, the filing of a Notice of Appeal from the trial
courts order sufficed.

That the Family Code provision on repeal, Art. 254, provides as follows:

Art. 254. Titles III, IV, V, VI, VII, VIII, IX, XI and XV of Book I of Republic Act No. 386,
otherwise known as the Civil Code of the Philippines, as amended, and Articles 17,
18, 19, 27, 28, 29, 30, 31, 39, 40, 41 and 42 of Presidential Decree No. 603, otherwise
known as the Child and Youth Welfare Code, as amended, and all laws, decrees,
executive orders, proclamations rules and regulations, or parts thereof, inconsistent
therewith are hereby repealed, (Emphasis and underscoring supplied),

seals the case in petitioners favor.

Finally, on the alleged procedural flaw in petitioners petition before the appellate court.
Petitioners failure to attach to his petition before the appellate court a copy of the trial
courts order denying its motion for reconsideration of the disapproval of its Notice of
Appeal is not necessarily fatal, for the rules of procedure are not to be applied in a
technical sense. Given the issue raised before it by petitioner, what the appellate court
should have done was to direct petitioner to comply with the rule.

As for petitioners failure to submit copy of the trial courts order granting the petition
for declaration of presumptive death, contrary to the appellate courts observation that
petitioner was also assailing it, petitioners 8-page petition[10] filed in said court does
not so reflect, it merely having assailed the order disapproving the Notice of Appeal.

WHEREFORE, the assailed May 5, 2004 Decision of the Court of Appeals is hereby
REVERSED and SET ASIDE. Let the case be REMANDED to it for appropriate action
in light of the foregoing discussion.

SO ORDERED.

150
VIRGINIO VILLAMOR, G.R. No. 169865 (COMELEC) in EAC No. A-11-2004 as well as the Order of the COMELEC En Banc
Petitioner, dated August 5, 2005. The assailed resolution affirmed the Order[2] dated July 23,
Present: 2004 of the Regional Trial Court of Danao City, Branch 25 in Case No. EP-2004-02
which reconsidered its Order[3] dated June 24, 2004 dismissing the election protest
filed by respondent Amytis De Dios-Batao.
Panganiban, C.J.,

Puno, The antecedent facts are as follows:

Quisumbing, On May 13, 2004, petitioner Virginio Villamor was proclaimed as mayor of Carmen,
Cebu, by the Municipal Board of Canvassers (MBC) in the elections held on May 10,
Ynares-Santiago, 2004 over his opponent, respondent Amytis De Dios-Batao. On May 17, 2004,
respondent filed a petition to annul the proclamation of petitioner alleging as grounds
Sandoval-Gutierrez, the illegal composition of the MBC and its proceedings. The case was docketed as
SPC No. 04-083 and raffled to the COMELEC Second Division.[4]
- versus - Carpio,
Subsequently, or on May 24, 2004, respondent filed an election protest with the
Austria-Martinez, Regional Trial Court of Danao City which was docketed as Case No. EP-2004-02 and
raffled to Branch 25 thereof. Petitioner filed his Answer to the Petition with Counter
Corona, Protest on June 7, 2004.[5] However, in its Order[6] dated June 24, 2004, the trial
court dismissed the election protest for lack of jurisdiction because it was filed one-
Carpio-Morales, day late.

Callejo, Sr., Under Section 3, Rule 35 of the COMELEC Rules of Procedure, an election protest
should be filed within 10 days from the date of proclamation of the results of the
Azcuna, election. Since petitioner was proclaimed on May 13, 2004, respondent had until May
23, 2004 to file an election protest. However, respondent filed the same only on May
Tinga, 24, 2004, thus, it was dismissed by the trial court in an Order dated June 24, 2004.[7]

Chico-Nazario, A Motion for Reconsideration was filed by the respondent which was granted by the
trial court in an Order dated July 23, 2004 because it found that the election protest
Garcia, and was actually filed on time. Since the last day to file the protest fell on May 23, 2004
which was a Sunday, thus, under Section 1, Rule 22 of the Rules of Court, the time
Velasco, Jr., JJ. should not run until the next working day which was May 24, 2004. Section 5, Rule
135 of the Rules of Court gives the courts inherent power to amend and control its
COMMISSION ON ELECTIONS processes and orders to conform with law and justice.[8]

and AMYTIS* DE DIOS-BATAO, Promulgated: Petitioner appealed the Order granting respondents motion for reconsideration to the
COMELEC and was docketed as EAC No. A-11-2004 and was raffled to its Second
Respondents. Division. In the assailed Resolution dated April 11, 2005, the Second Division of the
COMELEC dismissed the appeal for lack of merit. On August 5, 2005, the COMELEC
July 21, 2006 En Banc denied petitioners motion for reconsideration.

x ---------------------------------------------------------------------------------------- x In the meantime, the Second Division of the COMELEC issued on May 9, 2005 a
DECISION Resolution[9] in SPC No. 04-083 which is the petition to annul the proclamation of
YNARES-SANTIAGO, J.: petitioner, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, the Petition To Declare Null And Void
This petition for certiorari under Rule 65 of the Rules of Court seeks to annul the April Proclamation dated 17 May 2004 filed by petitioners Amythis De Dios Batao, et al., is
11, 2005 Resolution[1] of the Second Division of the Commission on Elections hereby DISMISSED for lack of merit. SO ORDERED.[10]

151
Hence, this petition raising the following issues:
1. MAY A REGULAR COURT, IN AN ELECTION PROTEST, ACT ON A MOTION
FOR RECONSIDERATION FROM AN ORDER OF DISMISSAL OF THE ELECTION
PROTEST CONSIDERING THAT A MOTION FOR RECONSIDERATION IS A
PROHIBITED PLEADING?
2. MAY A REGULAR COURT ADMIT AN ELECTION PROTEST PREMATURELY
CONSIDERING THAT THE PROTESTANT HAS STILL A PENDING PETITION FOR
PRE-PROCLAMATION CONTROVERSY IN THE ANNULMENT OF THE
PROCLAMATION OF THE PROTESTEE IN THE COMELEC AND IF IT DOES SO,
MAY THE PERIOD FOR THE FILING OF THE COUNTER-PROTEST BE COUNTED
FROM THE RECEIPT OF THE RESOLUTION OF THE COMELEC DENYING THE
PETITION FOR THE ANNULMENT OF THE PROCLAMATION?[11]
The core issues for resolution are as follows: (1) whether the trial court can act on a
motion for reconsideration in an election protest; and (2) whether the trial court
prematurely admitted respondents election protest pending a pre-proclamation
controversy.
We shall first discuss the second issue. As a general rule, the proper remedy after
the proclamation of the winning candidate for the position contested would be to file
a regular election protest or a petition for quo warranto.[12] The filing of an election
protest or a petition for quo warranto precludes the subsequent filing of a pre-
proclamation controversy or amounts to the abandonment of one earlier filed, thus
depriving the COMELEC of the authority to inquire into and pass upon the title of the
protestee or the validity of his proclamation.[13] The reason is that once the
competent tribunal has acquired jurisdiction of an election protest or a petition for quo
warranto, all questions relative thereto will have to be decided in the case itself and
not in another proceeding. This procedure will prevent confusion and conflict of
authority.[14]
Moreover, not all actions seeking the annulment of proclamation suspend the running
of the period for filing an election protest or a petition for quo warranto.[15] For it is
not the relief prayed for which distinguishes actions under 248[16] from an election
protest or quo warranto proceedings, but the grounds on which they are based.[17]
In the case at bar, respondents petition to annul the proclamation rested mainly on
the alleged illegal composition of the municipal board of canvassers[18] and its
proceedings which is an issue that may be properly raised in a pre-proclamation
controversy.[19] Under paragraph (b) of Section 5 of Rule 27 of the COMELEC Rules
of Procedure, if the petition involves the illegal composition of the board of
canvassers, it must be filed immediately when the board begins to act as such, or at
the time of the appointment of the member whose capacity to sit as such is objected
to if it comes after the canvassing of the board, or immediately at the point where the
proceedings are or begin to be illegal. Thus, we held in Laodenio v. Commission on
Elections[20] that when the issue involves the illegal composition of the Board, the
same cannot be questioned after the proclamation of the winner, to wit:
Although Sec. 17 of R.A. 7166 and Sec. 5 par. (a)(1) (not Sec. 4 as erroneously cited
by petitioner), of Rule 27 of the COMELEC Rules of Procedure also allow filing of a
petition directly with respondent COMELEC when the issue involves the illegal
composition of the Board, Sec. 5, par. (b), of the same Rule requires that it must be
filed immediately when the Board begins to act as such, or at the time of the
appointment of the member whose capacity to sit as such is objected to if it comes
after the canvassing of the Board, or immediately at the point where the proceedings
are or begin to be illegal. In the present case, the petition was filed five (5) days after
respondent Longcop had been proclaimed by the Board. At any rate, the real issue
appears to be not what it appears to petitioner whether he can still dispute the
composition of the Board after having actively participated in the proceedings therein.
In this regard, we sustain respondent COMELEC.[21]
In the instant case, respondents petition to annul petitioners proclamation based on
the alleged illegal composition of the board of canvassers is a pre-proclamation
controversy which should have been filed prior to petitioners proclamation. However,
respondent filed the petition on May 17, 2004 only or four days after petitioners
proclamation. As such, the filing of the petition to annul the proclamation of petitioner
did not suspend the running of the reglementary period within which to file an election
protest and inevitably, it did not suspend the latters period to file an Answer with
Counter Protest. Accordingly, the subsequent filing of the election protest on May 24,
2004 by respondent amounted to the abandonment of the pre-proclamation
controversy earlier filed.
Anent the first issue, petitioner asserts that a motion for reconsideration of the
election protest filed by respondent was a prohibited pleading thus its filing did not toll
the running of the period to appeal. Consequently, when the latter failed to appeal
within five days from the June 24, 2004 Order of the trial court, the dismissal of the
election protest became final.
On the other hand, respondent alleges that a motion for reconsideration is not a
prohibited pleading and claims that even if the motion was not filed, the trial court
could reinstate the petition motu proprio before the said order became final.
We agree with petitioner.
Under Section 256 of the Omnibus Election Code (OEC),[22] the trial court cannot
entertain a motion for reconsideration of its decision in an election contest affecting
municipal officers filed by the aggrieved party. However, the latter may appeal to the
Intermediate Appellate Court (now COMELEC) within five days after the receipt of a
copy of the decision. Likewise, Section 19, Rule 35 of the COMELEC Rules of
Procedure implementing the abovementioned Section 256 provides:
Sec. 19. Promulgation and Finality of Decision. The decision of the Court shall be
promulgated on a date set by it of which due notice must be given the parties. It shall
become final five (5) days after its promulgation. No motion for reconsideration shall
be entertained. (Emphasis supplied)
152
Respondent received a copy of the Order dismissing the election protest for lack of
jurisdiction on June 25, 2004. Thus, respondent had until June 30, 2004 within which
to file an appeal with the COMELEC but failed to do so. Instead, respondent filed a
motion for reconsideration which is a prohibited pleading. As such, it did not toll the
running of the prescriptive period.

In Veloria v. Commission on Elections,[23] a case involving candidates for municipal

mayor, vice-mayor, and members of the Sangguniang Bayan of Manaoag,
Pangasinan, where instead of perfecting an appeal within five days as provided by
law, petitioners filed a motion for reconsideration, we held that:

The COMELEC, therefore, correctly ruled that the motion for reconsideration filed by
the petitioners in the trial court on March 20, 1990 did not suspend the period to
appeal since a motion for reconsideration is prohibited under Section 256 of the
Omnibus Election Code.

Since the right to appeal is not a natural right nor is it a part of due process, for it is
merely a statutory privilege that must be exercised in the manner and according to
procedures laid down by law, x x x and its timely perfection within the statutory period
is mandatory and jurisdictional x x x, Judge Abasolo gravely abused his discretion
when he gave due course to the petitioners tardy appeal from his predecessors x x x
resoluti(o)n x x x dismissing the petitioners election protest. Said resolution had
become final and unappealable.[24]

The rules in ordinary civil procedure do not apply in election cases except by analogy
or in a suppletory character and whenever practicable and convenient.[25] Section
256 of the Omnibus Election Code and Section 19, Rule 35 of the COMELEC Rules
of Procedure clearly state that no motion for reconsideration should be entertained.
Thus, there is no room to apply the rules of ordinary civil procedure suppletorily. Nor
can resort be made by the trial court to Section 5(g)[26] of Rule 135 of the Rules of
Court to sustain its actions. The trial court did not conform to law and justice when it
granted the motion for reconsideration which is a prohibited pleading.

WHEREFORE, in light of the foregoing, the petition is GRANTED. The Resolution

dated April 11, 2005 of the COMELEC Second Division and the Order dated August
5, 2005 of the COMELEC En Banc in EAC No. A-11-2004 which affirmed the Order
dated July 23, 2004 of the Regional Trial Court of Danao City, Branch 25 in Case No.
EP-2004-02 granting the motion for reconsideration of respondent Amytis De Dios-
Batao, are ANNULLED and SET ASIDE. The Order dated June 24, 2004 of the
Regional Trial Court dismissing respondents election protest for lack of jurisdiction is
REINSTATED.

SO ORDERED.

153
G.R. No. 179999 March 17, 2009
ANSON TRADE CENTER, INC., ANSON EMPORIUM CORPORATION and TEDDY
KENG SE CHEN, Petitioners,
vs.
PACIFIC BANKING CORPORATION, Represented by Its Liquidator, the
President of the Philippine Deposit Insurance Corporation, Respondent.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari1 under Rule 45 of the Revised Rules
of Court filed by petitioners Anson Trade Center, Inc., (ATCI), Anson Emporium
Corporation (AEC), and Teddy Keng Se Chen (Chen), seeking the reversal and the
setting aside of the Decision2 dated 31 May 2007 and Resolution3 dated 16 October
2007 of the Court of Appeals in CA-G.R. SP No. 93734. In its assailed Decision, the
Court of Appeals annulled the Order4 dated 10 October 2005 of the Regional Trial
Court (RTC) of Manila, Branch 52, dismissing Civil Case No. 01-102198 for failure of
respondent Pacific Banking Corporation (PBC)5 to appear during the pre-trial. In its
assailed Resolution, the Court of Appeals refused to reconsider its earlier Decision.
The following are the undisputed facts:
Petitioners ATCI and AEC are corporations engaged in retail and/or wholesale
general merchandising.6 Petitioner Chen is the Vice Head of said commercial entities.
Respondent is a closed banking institution undergoing liquidation by the Philippine
Deposit Insurance Corporation (PDIC).
On different dates, petitioner ATCI obtained several loans7 from respondent,
amounting to ₱4,350,000.00. On 26 October 1984, petitioner AEC also received the
amount of ₱1,000,000.00 as a loan from respondent. As security for the said loan
obligations, petitioner Chen, with the late Keng Giok,8 executed, on behalf of
petitioners ATCI and AEC, two Continuing Suretyship Agreements on 16 September
1981 and 1 March 1982. The Continuing Suretyship Agreements provided that, as
security for any and all the indebtedness or obligation of petitioners ATCI and AEC,
the respondent had the right to retain a lien upon any and all moneys or other
properties and/or the proceeds thereof in the name or for the account or credit of
petitioners ATCI and AEC deposited or left with respondent. Subsequently, petitioners
defaulted in the payment of their loans. Respondent made several demands for
payment upon petitioners, to no avail.
This prompted respondent to file before the RTC a collection case against petitioners,
docketed as Civil Case No. 01-102198.
On 14 January 2002, petitioner Chen, instead of filing an Answer to the Complaint of
respondent in Civil Case No. 01-102198, filed a Motion to Dismiss. Petitioners ATCI
and AEC, together with the Estate of Keng Giok, also jointly filed a Motion to Dismiss.
Respondent filed its Comment/Opposition to the Motions to Dismiss Civil Case No.
01-102198, to which petitioners Chen, ATCI, and AEC, with the Estate of Keng Giok,
filed their Replies. Due to the inaction of the RTC on the Motions to Dismiss,
respondent filed Motions to Resolve on 14 January 2003 and on 29 October 2003. In
an Order dated 4 November 2004, the RTC denied the Motions to Dismiss but granted
the prayer to drop Keng Giok as defendant since he was long dead prior to the
institution of Civil Case No. 01-102198.
After petitioners filed their joint Answer to the Complaint, a pre-trial conference was
set by the RTC on 4 April 2005. All the parties were present at the scheduled pre-trial
where the RTC first explored the possibility of an amicable settlement among the
parties by referring the case to the Philippine Mediation Center for arbitration. The
arbitration proceedings were, however, unsuccessful. Thus, the case was referred
back to the RTC for a full-blown trial.
In order to simplify the issues to be threshed out in the trial, another pre-trial
conference was scheduled by the RTC on 10 October 2005, which respondent failed
to attend.
Petitioners moved for the dismissal of Civil Case No. 01-102198 on the ground of the
non-appearance of respondent at the pre-trial of 10 October 2005, which was granted,
without prejudice, by the RTC in an Order issued on even date. Respondent filed with
the RTC a Motion for Reconsideration of the court’s order of dismissal, in which
respondent prayed for the relaxation of the rule on non-appearance in the pre-trial,
citing excusable negligence on its part and in the interest of justice and equity. The
RTC denied the Motion for Reconsideration of respondent in another Order dated 17
January 2006.
The above precipitated respondent to file with the Court of Appeals a Petition for
Certiorari under Rule 65 of the Revised Rules of Court, which was docketed as CA-
G.R. SP No. 93734. Respondent prayed for the reversal of the RTC Orders dated 10
October 2005 and 17 January 2006, arguing that the RTC committed grave abuse of
discretion amounting to lack or excess of jurisdiction when it dismissed Civil Case No.
01-102198 due to the non-appearance of respondent at the pre-trial held on 10
October 2005. Respondent asserted that its absence was not deliberate or
intentional. Its liquidator, PDIC, was undergoing a reorganization resulting in, among
other things, the trimming down of the departments handling litigation work from four
to one; and the lack of manpower to handle more than 400 banks ordered closed by
the Monetary Board. Respondent pleaded for the relaxation of the rules to avert
irreparable damage to it.
The Court of Appeals rendered a Decision on 31 May 2007, granting the Petition of
respondent and reversing the assailed RTC Orders which dismissed Civil Case No.
01-102198. According to the appellate court, the RTC lost sight of the fact that even
the Rules of Court mandate a liberal construction of the rules and the pleadings in
order to effect substantial justice; and that overriding all the foregoing technical
considerations is the trend in the rulings of the court to afford every party-litigant the
amplest opportunity for the proper and just determination of his cause, freed from the
constraints of technicalities.9
In a Resolution dated 16 October 2007, the Court of Appeals refused to reconsider
its earlier Decision.
154

Petitioners now come before us via this instant Petition for Review on Certiorari
raising the following issues:
I trial shall be cause for dismissal of the action. However, every rule is not without an
WHETHER OR NOT THE REVERSAL OF THE TRIAL COURT’S ORDER DATED
OCTOBER 10, 2005 DISMISSING [herein respondent]’S COMPLAINT FOR ITS
FAILURE TO APPEAR AT THE PRE-TRIAL WAS IN ACCORDANCE WITH THE
1997 RULES ON CIVIL PROCEDURE AND APPLICABLE JURISPRUDENCE.
II
WHETHER OR NOT THE TRIAL COURT ABUSED ITS DISCRETION IN
DISMISSING RESPONDENT’S COMPLAINT BECAUSE OF ITS NON-
APPEARANCE AT PRE-TRIAL.10
At the core of this controversy is a question of procedure.
The petitioners, on one hand, argue that the appearance of the parties during pre-trial
is mandatory, and the absence of respondent therefrom constitutes a serious
procedural blunder that merits the dismissal of its case.
On the other hand, respondent claims that the Rules must be relaxed if it will cause
irreparable damage to a party-litigant and to promote the ends of justice. Respondent
urges us to brush aside technicalities and to excuse its non-appearance during the
pre-trial conference.
We find the Petition unmeritorious.
Pre-trial, by definition, is a procedural device intended to clarify and limit the basic
issues raised by the parties11 and to take the trial of cases out of the realm of surprise
and maneuvering.12 It is an answer to the clarion call for the speedy disposition of
cases. Hailed as the most important procedural innovation in Anglo-Saxon justice in
the nineteenth century,13 it thus paves the way for a less cluttered trial and resolution
of the case.14
Pertinent provisions of Rule 18 of the Revised Rules of Court on Pre-Trial read:
SEC. 4. Appearance of parties. – It shall be the duty of the parties and their counsel
to appear at the pre-trial. The non-appearance of a party may be excused only if a
valid cause is shown therefor or if a representative shall appear in his behalf fully
authorized in writing to enter into an amicable settlement, to submit to alternative
modes of dispute resolution, and to enter into stipulations or admissions of facts and
of documents.
SEC. 5. Effect of failure to appear. – The failure of the plaintiff to appear when so
required pursuant to the next preceding section shall be cause for dismissal of the
action. The dismissal shall be with prejudice, unless otherwise ordered by the court.
A similar failure on the part of the defendant shall be cause to allow the plaintiff to
present his evidence ex parte and the court to render judgment on the basis thereof.
Pursuant to the afore-quoted provisions, non-appearance by the plaintiff in the pre-
exception. In fact, Section 4, Rule 18 of the Revised Rules of Court explicitly provides
that the non-appearance of a party may be excused if a valid cause is shown therefor.
We find such a valid cause extant in the case at bar.
There is no question that herein respondent received notice of the pre-trial conference
scheduled on 10 October 2005, but it failed to attend the same. Such non-appearance
notwithstanding, the Court Of Appeals annulled the 10 October 2005 Order of the
RTC dismissing Civil Case No. 01-102198 after finding that respondent did not
intentionally snub the pre-trial conference. There is no reason for us to disturb such
finding.
The Monetary Board ordered the closure of respondent by reason of insolvency on 5
July 1985, and it has since been represented by its liquidator PDIC in all its
undertakings. Still in the course of the liquidation of respondent, its liquidator PDIC
was reorganized in the late 2004 to early 2005. The four departments in the PDIC
handling litigation were reduced to one, with the new Litigation Department having
only four in-house counsels who assumed thousands of cases arising from the
closure by the Monetary Board of more than 400 banks. It is understandable how the
notice for the pre-trial conference in Civil Case No. 01-102198 scheduled on 10
October 2005 could be lost or overlooked, as the PDIC was still coping and adjusting
with the changes resulting from its reorganization.
It is important to note that the respondent was not remiss in its duties to prosecute its
case. Except for the lone instance of the pre-trial conference on 10 October 2005,
respondent promptly and religiously attended the hearings set by the RTC. In fact, it
appears on the records that a pre-trial conference in Civil Case No. 01-102198 was
first held on 4 April 2005, during which respondent was present. When the RTC did
not immediately act on the Motions to Dismiss of petitioners, it was respondent which
filed two Motions to Resolve. The actuations of respondent reveal its interest in
prosecuting the case, instead of any intention to delay the proceedings.
In Bank of the Philippine Islands v. Court of Appeals,15 we ruled that in the absence
of a pattern or scheme to delay the disposition of the case or a wanton failure to
observe the mandatory requirement of the rules, courts should decide to dispense
rather than wield their authority to dismiss.
If Civil Case No. 01-102198 is allowed to proceed to trial, it will not clog the dockets
of the RTC or run counter to the purposes for holding a pre- trial. Inconsiderate
dismissals, even without prejudice, do not constitute a panacea or a solution to the
congestion of court dockets; while they lend a deceptive aura of efficiency to records
of individual judges, they merely postpone the ultimate reckoning between the parties.
In the absence of clear lack of merit or intention to delay, justice is better served by a
brief continuance, trial on the merits, and final disposition of cases before the court.16
155
Moreover, respondent is already insolvent and undergoing liquidation. It instituted
Civil Case No. 01-102198 precisely to recover from petitioners the unpaid loans. Even
if the dismissal of Civil Case No. 01-102198 by the RTC was without prejudice, the
re-filing of the case would be injurious to respondent. Respondent already paid
₱344,878.23 as docket fees for Civil Case No. 01-102198 and with the dismissal of
said case, the amount would be forfeited. Respondent would have to pay docket fees
once more when it re-files its Complaint, a substantial amount considering that
respondent is already financially shaped. As the Court of Appeals noted, for
respondent to again pay docket fees for the re-filing of its Complaint against
petitioners would truly be detrimental to the creditors of respondent.

Given the foregoing, the Court of Appeals did not err in pronouncing that the RTC
committed grave abuse of discretion when it dismissed Civil Case No. 01-102198 for
the failure of respondent to attend the pre-trial conference on 10 October 2005. As
the appellate court so astutely stated:

In refusing to resuscitate Civil Case No. 01-102 198 despite a showing that there was
an excusable ground for the [herein respondent]’s absence during the pre-trial, the
respondent judge manifested a dire fixation towards procedural perfection. Indeed,
the extraordinary writ of certiorari would lie when a trier’s obsession with the stringent
tenets of technicality would occasion an injustice against a party litigant.

Litigation is not a game of technicality, in which one more deeply schooled and skilled
in the subtle art of movement and position entraps and destroys the other. It is rather
a contest in which each contending party fully and fairly lays before the court the facts
in issue and then, brushing aside as wholly trivial and indecisive all imperfection of
forms and technicalities of procedure, asks that justice be done upon the merits.
Lawsuits, 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.17

As we have stressed emphatically on previous occasions, the rules of procedure may

not be misused and abused as instruments for the denial of substantial justice. Here
is another demonstrative instance of how some members of the bar, availing
themselves of their proficiency in invoking the letter of the rules without regard to their
real spirit and intent, succeed in inducing courts to act contrary to the dictates of
justice and equity, and, in some instances, to wittingly or unwittingly abet unfair
advantage by ironically camouflaging their actuations as earnest efforts to satisfy the
public clamor for speedy disposition of litigations, forgetting all the while that the plain
injunction of Section 2 of Rule 1 is that the "rules shall be liberally construed in order
to promote their object and to assist the parties in obtaining" not only "speedy" but
more imperatively, "just ... and inexpensive determination of every action and
proceeding."18

WHEREFORE, premises considered, the instant Petition for Review on Certiorari is

hereby DENIED. The Decision dated 31 May 2007 and Resolution dated 16 October
2007 of the Court of Appeals are AFFIRMED. Costs against the petitioners.

SO ORDERED.

156
G.R. No. 146611 February 6, 2007
TANCREDO REDEÑA, Petitioner,
vs.
HON. COURT OF APPEALS and LEOCADIO REDEÑA, Respondents.
DECISION
GARCIA, J.:
In this special civil action for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure, petitioner Tancredo Redeña (Tancredo, hereafter) seeks the annulment
and setting aside of the Resolution1 dated April 28, 2000 of the Court of Appeals in
CA-G.R. CV No. 59641, as reiterated in its Resolution2 of November 16, 2000,
denying the petitioner’s motion for reconsideration.
The present controversy sprung from an action for partition filed by petitioner
Tancredo against his older half-brother, herein private respondent Leocadio Redeña
(Leocadio, for brevity) before the then Court of First Instance (now Regional Trial
Court [RTC]) of San Pablo City, Laguna, and thereat docketed as Civil Case No. S-
241 which was subsequently inherited by Branch 33 of the RTC, Siniloan, Laguna.
The basic complaint for partition alleges that plaintiff Tancredo and defendant
Leocadio are both sons of one Maximo Redeña: Tancredo, by Maximo’s marriage to
Magdalena Fernandez, and Leocadio, by Maximo’s previous marriage to
Emerenciana Redeña. The complaint further alleged that the parties’ common father,
Maximo, left several pieces of realty, to wit: a residential lot at M. Calim Street, Famy,
Laguna; a riceland at Poroza, Famy, Laguna; and another parcel of land at Maate,
also in Famy, Laguna.
In a decision3 dated August 20, 1997, the trial court, based on the evidence
presented, confined the partition to only the property actually pertaining to the estate
of the parties’ deceased father and co-owned by them, namely, the parcel of land at
Maate, and accordingly rendered judgment as follows:
WHEREFORE, premises considered, judgment is hereby rendered ordering the
defendant [now respondent Leocadio] to partition only the property located at Maate,
Famy, Laguna after plaintiff’s [Tancredo’s] reimbursement of the expenses incurred
by the defendant in relation to the said lot. However, partition cannot be effected with
regard to properties located at M. Calim Street, Famy, Laguna and the property
located at Poroza, Famy, Laguna, as the same belong to the defendant. No
pronouncement as to costs.
SO ORDERED. (Words in brackets supplied)
On December 11, 1997, petitioner filed with the trial court a Notice of Appeal.4 The
court gave due course to the notice and directed the elevation of the records of the
case to the CA whereat petitioner’s appeal was docketed as CA-G.R.CV No. 59641.
On September 28, 1998, the CA issued a resolution directing petitioner, as appellant,
to file his appellant’s brief. Evidently, the period for filing the brief was even extended
by the CA.
On March 9, 1999, there being no appellant’s brief filed within the extended period,
the CA issued a resolution5 considering the appeal abandoned and accordingly
dismissing the same. The dismissal resolution reads:
For failure of plaintiff-appellant [now petitioner] to file the required brief within the
extended period, the instant appeal is hereby considered ABANDONED and
accordingly DISMISSED, pursuant to Section 1(e), Rule 50, 1997 Rules of Civil
Procedure.
On November 8, 1999 or eight (8) months after the CA issued the above resolution,
petitioner filed a motion for reconsideration6 thereof. In a resolution7 of November
25, 1999, the CA denied the motion.
Then, on December 28, 1999, in the same CA-G.R. CV No. 59641, petitioner filed a
Petition for Relief8 bearing date December 27, 1999, anchored on Section 2,9 Rule
38 of the 1997 Rules of Civil Procedure. In that pleading, petitioner prays the CA to
set aside its dismissal resolution of March 9, 1999, supra, reinstate his appeal and
grant him a fresh period of forty-five (45) days from notice within which to file his
appellant’s brief.
In the herein assailed Resolution10 dated April 28, 2000, the CA denied the
aforementioned Petition for Relief, thus:
WHEREFORE, the petition for relief dated 27 December 1999 is hereby DENIED.
SO ORDERED.
Explains the CA in said resolution:
Petition for relief is not among the remedies available in the Court of Appeals. In fact,
authorities in remedial law (noted authors Regalado, Herrera, and Feria) are one in
their commentaries that these petitions are filed with the trial courts. Not one of them
has advanced an opinion or comment that this equitable relief can be obtained in the
Court of Appeals. Under Rule 47, an annulment of judgment or final orders and
resolutions may be filed before this court based on the ground of extrinsic fraud which
seems to be the premise of the petition. Perhaps it is worth looking into by the
petitioner if the factual basis of the present petition for relief may qualify as an extrinsic
fraud, under Rule 47.
Petitioner’s motion for reconsideration of the above-mentioned resolution was
likewise denied by the CA in its equally challenged Resolution11 of November 16,
2000, wherein the appellate court further wrote:
Under the 1964 Rules of Court, there was only one court where a petition for relief
may be filed – the Court of First Instance, now the Regional Trial Court. Section 1
thereof governs a petition to Court of First Instance for relief from judgment of inferior
157
court while Section 2 thereof governs petition to Court of First Instance for relief from
judgment or other proceeding thereof. The 1997 Rules of Civil Procedure has altered
the said precept. Now, it must be filed before the Municipal Trial Courts or
Metropolitan Trial Courts for judgments or final orders or other proceedings taken in
said courts, and in the same case. And for judgment, order, or other proceedings in
the Regional Trial Court, it must be filed in the same Regional Trial Court which
rendered the judgment or final order, or other proceedings taken and in the same
case. In other words, under the present rule, such a petition may be filed in the same
court which rendered the judgment or final order, or proceedings taken and in the
same case. This is in accordance with uniform procedure rule for Municipal and
Regional Trial Courts.
The above construction to limit the term "any court" to Municipal Trial Court and
Regional Trial Court – and not to include the Court of Appeals – finds support in
Section 7 of the Rules which states:
Sec. 7. Procedure where the denial of an appeal is set aside. – Where the denial of
an appeal is set aside, the lower court shall be required to give due course to the
appeal and to elevate the record of the appealed case as if a timely and proper appeal
had been made.
Significantly, there is no specific provision in both the 1964 and 1997 Rules of Court
making the petition under Rule 38, applicable in the Court of Appeals. The procedure
in the Court of Appeals from Rule 44 to Rule 55 with the exception of Rule 45 which
pertains to the Supreme Court, identifies the remedies available before said court
such as annulment of judgment or final orders and resolution (Rule 47); motion for
reconsideration (Rule 52); and, new trial, (Rule 53). Nowhere is petition for relief under
Rule 38 mentioned.
But even as the CA stood firm on its stand that a petition for relief from denial of
appeal is not among the remedies available before the CA itself, the appellate court,
in the same Resolution of November 16, 2000, left the final determination of the
question to this Court, thus:
Parenthetically, the main question presented herein is novel in that there is yet no
definite and definitive jurisprudence from the Supreme Court. Perhaps, the case will
clarify this gray area in our adjective law for guidance of the Bench and Bar. The issue
should be elevated to that Tribunal.
Presently, petitioner is now before this Court via the instant recourse on his
submission that the CA committed grave abuse of discretion when it -
I than the Constitution.13 1awphi1.net
XXX RULED THAT A PETITION FOR RELIEF IS NOT AN AVAILABLE REMEDY IN
THE COURT OF APPEALS.
II
XXX REFUSED TO GRANT THE PETITION DESPITE A CLEAR SHOWING THAT
(A) PETITIONER, BY REASON OF FRAUD AND MISTAKE, WAS PREVENTED
FROM PROSECUTING HIS APPEAL, AND (B) PETITIONER HAS A GOOD AND
SUBSTANTIAL CAUSE OF ACTION AGAINST PRIVATE RESPONDENT.
We DISMISS.
In Hagonoy Market Vendor Association v. Municipality of Hagonoy, Bulacan, G.R. No.
137621, February 6, 2002, then Associate Justice, now Chief Justice Reynato S.
Puno, reminded us that ̶
Laws are of two (2) kinds: substantive and procedural. Substantive laws, insofar as
their provisions are unambiguous, are rigorously applied to resolve legal issues on
the merits. In contrast, courts generally frown upon an uncompromising application of
procedural laws so as not to subvert substantial justice. Nonetheless, it is not totally
uncommon for courts to decide cases based on a rigid application of the so-called
technical rules of procedure as these rules exist for the orderly administration of
justice.
From the petition, it is clear that this Court is called upon to relax the application of
procedural rules, or suspend them altogether, in favor of petitioner’s substantial rights.
There is no doubt as to the power of this Court to do that. In a fairly recent case, we
reiterated:
The Court has often stressed that 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.12
The Rules itself expressly states in Section 2 of Rule 1 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 and proceeding. Courts,
therefore, not only have the power but the duty to construe and apply technical rules
liberally in favor of substantive law and substantial justice. Furthermore, this Court,
unlike courts below, has the power not only to liberally construe the rules, but also to
suspend them, in favor of substantive law or substantial rights. Such power inherently
belongs to this Court, which is expressly vested with rule-making power by no less
It is equally settled, however, that this Court’s power to liberally construe and even to
suspend the rules, presupposes the existence of substantial rights in favor of which,
the strict application of technical rules must concede. The facts are borne out by the
records pertaining to petitioner’s purported undivided share in the property at M. Calim
Street, Famy, Laguna, and the property in Poroza clearly showed that these two
properties had been subject of an agreement (Exh. "1") whereby petitioner recognized
158
respondent’s rights to said properties. This fact binds this Court, there being nothing
on record with the trial court as to the herein alleged fraud against the petitioner. Upon
thorough deliberation of the supposed substantial rights claimed by the petitioner with
the court below, the Court finds no cogent basis to favorably rule on the merits of the
appeal even if it may be given due course which is indispensable to justify this Court
in considering this case as an exception to the rules.
The present case will have to be decided in accordance with existing rules of
procedure. We apply the settled principle that petition for relief under Rule 38 of the
Rules of Court is of equitable character, allowed only in exceptional cases as when
there is no other available or adequate remedy.14 Hence, a petition for relief may not
be availed of where a party has another adequate remedy available to him, which is
either a motion for new trial or appeal from the adverse decision of the lower court,
and he is not prevented from filing such motion or taking the appeal. The rule is that
relief will not be granted to a party who seeks to be relieved from the effect of the
judgment when the loss of the remedy at law is due to his own negligence, or a
mistaken mode of procedure; otherwise, the petition for relief will be tantamount to
reviving the right of appeal which has already been lost either because of inexcusable
negligence or due to a mistake in the mode of procedure taken by counsel.15
Under Section 2 of Rule 38, supra, of the Rules of Court, a party prevented from
taking an appeal from a judgment or final order of a court by reason of fraud, accident,
mistake or excusable negligence, may file in the same court and in the same case a
petition for relief praying that his appeal be given due course. This presupposes, of
course, that no appeal was taken precisely because of any of the aforestated reasons
which prevented him from appealing his case. Hence, a petition for relief under Rule
38 cannot be availed of in the CA, the latter being a court of appellate jurisdiction. For
sure, under the present Rules, petitions for relief from a judgment, final order or other
proceeding rendered or taken should be filed in and resolved by the court in the same
case from which the petition arose. Thus, petition for relief from a judgment, final order
or proceeding involved in a case tried by a municipal trial court shall be filed in and
decided by the same court in the same case, just like the procedure followed in the
present Regional Trial Court.16
Here, the record shows that petitioner in fact filed a Notice of Appeal with the trial
court, which the latter granted in its order of December 11, 1997 and ordered the
elevation of the records to the CA. In turn, the CA, in its resolution of September 28,
1998, required the petitioner, thru his former counsel, Atty. Geminiano Almeda, to file
his appellant’s brief. But petitioner failed to comply. Consequently, in its resolution of
March 9, 1999, the CA considered the appellant’s appeal as ABANDONED and
DISMISSED the same.
Additionally, after the dismissal of his appeal, petitioner filed with the CA a motion for
reconsideration of the dismissal resolution. Unfortunately, however, the motion was
filed very much late on November 8, 1999. Expectedly, in its resolution17 of
November 25, 1999, the CA denied the motion for reconsideration, to wit:
The last day to file a motion for reconsideration was on 06 April 1999 and as of 18
October 1999 no such motion was ever filed; in fact on 19 October 1999 the court
resolved that an entry of judgment may now be issued. The motion for
reconsideration, however, pleas for leniency on account of his former lawyer’s
inefficiency and negligence in that he failed to appeal the case. This is not well taken.
His former lawyer’s lack of fidelity and devotion to his client in the discharge of his
duty of perfecting the appeal on time without demonstrating fraud, accident, mistake
or excusable negligence cannot be a basis for judicial relief. The client has to bear
the adverse consequences of the inexcusable mistake or negligence of his counsel
or of the latter’s employee and may not be heard to complain that the result of the
litigation might have been different had he proceeded differently (Inocando v.
Inocando, 100 Phil. 266)
WHEREFORE, the motion is hereby DENIED.
Petitioner presents himself as a mere farmer seeking the Court’s leniency to the point
of disregarding the rules on reglementary period for filing pleadings. But he fails to
point out any circumstance which might lead the Court to conclude that his station in
life had in any way placed his half-brother in a more advantageous position. As we
see it, petitioner failed to show diligence in pursuing his cause. His condition as a
farmer, by itself alone, does not excuse or exempt him from being vigilant on his right.
He cannot lay the blame solely on his former lawyer. It is settled that clients are bound
by the mistakes, negligence and omission of their counsel.18 While, exceptionally, a
client may be excused from the failure of his counsel, the circumstances obtaining in
this case do not convince the Court to take exception.
In seeking exemption from the above rule, petitioner claims that he will suffer
deprivation of property without due process of law on account of the gross negligence
of his previous counsel. To him, the negligence of his former counsel was so gross
that it practically resulted to fraud because he was allegedly placed under the
impression that the counsel had prepared and filed his appellant’s brief. He thus prays
the Court reverse the CA and remand the main case to the court of origin for new trial.
Admittedly, this Court has relaxed the rule on the binding effect of counsel’s
negligence and allowed a litigant another chance to present his case (1) where the
reckless or gross negligence of counsel deprives the client of due process of law; (2)
when application of the rule will result in outright deprivation of the client’s liberty or
property; or (3) where the interests of justice so require.19 None of these exceptions
obtains here.
For a claim of counsel’s gross negligence to prosper, nothing short of clear
abandonment of the client’s cause must be shown. Here, petitioner’s counsel failed
to file the appellant’s brief. While this omission can plausibly qualify as simple
negligence, it does not amount to gross negligence to justify the annulment of the
proceedings below.
In Legarda v. Court of Appeals,20 where the Court initially held that the counsel’s
failure to file pleadings at the trial court and later on appeal amounted to gross
negligence, the Court, on motion of the respondent therein, granted reconsideration
and applied the general rule binding the litigant to her counsel’s negligence. In said
case, the Court noted that the proceedings which led to the filing of the petition "were
not attended by any irregularity." The same observation squarely applies here.
159
To recapitulate, petitioner is not entitled to relief under Rule 38, Section 2 of the Rules
of Court. He was not prevented from filing his notice of appeal by fraud, accident,
mistake or excusable negligence, as in fact he filed one. The relief afforded by Rule
38 will not be granted to a party who seeks to be relieved from the effects of the
judgment when the loss of the remedy of law was due to his own negligence, or a
mistaken mode of procedure for that matter; otherwise, the petition for relief will be
tantamount to reviving the right of appeal which has already been lost, either because
of inexcusable negligence or due to a mistake of procedure by counsel.21 The Rules
allow a petition for relief only when there is no other available remedy, and not when
litigants, like the petitioner, lose a remedy by negligence.

On a final note, the extraordinary writ of certiorari may be issued only where it is
clearly shown that there is patent and gross abuse of discretion as to amount to an
evasion of positive duty or to 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.22 The Court finds no such
abuse of discretion in this case.

WHEREFORE, the instant petition is DISMISSED and the assailed resolutions of the
CA are AFFIRMED.

No pronouncement as to costs.

SO ORDERED.

160
[G.R. NO. 144024 : July 27, 2006]
PEDRO TAGABI and DEMETRIO TABANIAG, Petitioners, v. MARGARITO
TANQUE, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court which seeks to set aside the Resolutions of the Court of Appeals (CA) dated
April 17, 20001 and June 16, 20002 dismissing herein petitioners' appeal docketed
as CA-G.R. CV No. 58697, and denying petitioners' Motion for Reconsideration,
respectively.
The facts, as found by the trial court are as follows:
Plaintiff Margarito Tanque is the son of Anastasio Tanque who, during his lifetime,
owned and possessed a parcel of land with an area of 47,443 square meters, more
or less, situated at Barangay Jolason, Tubungan, Iloilo. Upon the death of his father
on December 16, 1966, plaintiff took over the ownership and possession of the said
land and declared the same in his name for taxation purposes. He has, since then,
paid the real property taxes on the land until the present time.
The same parcel of land was the subject of a civil case for recovery of ownership filed
sometime in 1968 by plaintiff against Genaro Tablatin, et al. docketed as Civil Case
No. 7551 of the Court of First Instance of Iloilo, which was decided on February 8,
1974 (Exh. "K") in favor of herein plaintiff and which decision, on appeal by the losing
party, was affirmed by the Court of Appeals on February 2, 1979 (Exh. "K"). The
decision of the Court of Appeals attained finality on March 4, 1979 (Exh. "M").
When the lands in Tubungan, Iloilo were cadastrally surveyed by the Bureau of Lands
in 1982, plaintiff's parcel of land was surveyed and identified as Cadastral Lot 2104
with an area of 4.7433 hectares. On February 24, 1986, Original Certificate of Title
No. F-31883 was issued to plaintiff based on Free Patent No. 17553 obtained from
the Bureau of Lands (Exh. "D").
Sometime in 1988, defendant Pedro Tagabi asserted ownership over a portion of
Cadastral Lot 2104 with an area of 654 square meters, claiming that the same forms
part of Cadastral Lot 2097 which is owned by him. Without the knowledge and consent
of plaintiff, defendant Tagabi had the said portion entered into by his co-defendant,
Demetrio Tabaniag, who planted the same with palay and corn.
Plaintiff then went to the Bureau of Lands and asked that Cadastral Lot 2104 be
relocated to determine whether a portion was encroached upon by the defendant.
Accordingly, relocation survey was made by Geodetic Engineer Ernesto Ciriaco in the
presence of both plaintiff and defendants and, thereafter, a sketch, Exhibit "O", was
prepared and issued by the said Geodetic Engineer. It was found out that, indeed, a
portion with an area of 654 square meters within lot 2104 was encroached upon by
the defendants. The matter was then referred by plaintiff to the barangay officials
concerned for conciliation. But no settlement was reached (Exhs. "P"; "P-1"). Hence,
plaintiff filed the present action in court to recover possession of the disputed portion,
plus damages.3
On May 26, 1997, the Regional Trial Court (RTC) of Iloilo City, Branch 26, rendered
a Decision with the following dispositive portion:
WHEREFORE, judgment is hereby rendered declaring plaintiff the lawful owner of the
property in question and ordering the defendants to vacate and deliver possession of
the same to plaintiff and to pay plaintiff, jointly and severally, (1) the sum of P1,850.00
representing the produce of the land annually from the time of filing of the complaint
on September 29, 1992 until possession is delivered to plaintiff; (2) the sum of
P5,600.00 representing expenses for the relocation survey; (3) attorney's fees in the
sum of P8,000.00; plus (4) costs of this suit.
SO ORDERED.4
Aggrieved by the judgment of the trial court, defendants Pedro Tagabi and Demetrio
Tabaniag (petitioners) filed an appeal with the CA.
On February 26, 2000, plaintiff-appellee Margarito Tanque (respondent) filed a Motion
to Dismiss on grounds that the appellants' brief was filed beyond the period allowed
by the CA and that the said brief was not accompanied by a written explanation why
it was not filed personally in violation of Section 11, Rule 13 of the Rules of Court.5
Petitioners filed their Comment on the Motion to Dismiss contending that the delay of
one day in the filing of their appellants' brief does not automatically cause the
dismissal of the appeal. Petitioners further contend that since there was no allegation
of any prejudice on the part of the appellee which may have been caused by the delay
and since the issues raised are substantial enough to merit consideration by the
appellate court, the liberal interpretation of the rules is justified. On the matter of lack
of explanation why the appellants' brief was not filed personally with the CA,
petitioners aver that the practicability of the filing is self-explanatory considering that
the law office of their counsel is in Iloilo City while the CA is in Manila; and that the
court may take judicial notice of the distance between these two places and, hence,
the impracticability of personal filing.6
In his Reply to petitioners' Comment, respondent asserted that a correct interpretation
of the provisions of Section 1, Rule 50 of the Rules of Court would show that it is
mandatory on the part of the CA to dismiss an appeal if any of the grounds provided
therein exists; that even a delay of one day is a sufficient ground for dismissing the
appeal. Respondent claimed that the requirement of a written explanation in cases
where briefs and other pleadings are not filed or served personally is mandatory, and
non-compliance therewith will result in the dismissal of an appeal. Respondent
brought to the appellate court's attention the fact that petitioners' Comment on the
Motion to Dismiss is not also accompanied by a written explanation why it was not
filed with the CA personally. This, respondent contends, is evidence of petitioners'
deliberate violation of the Rules.7
161
On April 17, 2000, the CA issued the presently assailed Resolution whereby, in the
exercise of its judicial discretion, it admitted herein petitioners' brief for appellants
despite having been filed one day late but granted respondent's Motion to Dismiss for
failure to comply with Section 11, Rule 138 of the Rules of Court and ordered that
petitioners' brief be expunged from the records of the case.9 Petitioners filed a Motion
for Reconsideration but the same was denied by the CA in a Resolution issued on
June 16, 2000.10
Hence, the present petition raising the sole issue, to wit:
The petitioners submit that when the Court of Appeals dismissed the appeal of the
petitioners on the ground that there was no explanation why the said brief was filed
by registered mail and not by personal service in strictest compliance with Section 11,
Rule 13 of the 1997 Rules of Civil Procedure, the Court of Appeals acted not in accord
with the said provisions and with the cited decision of the Supreme Court.11
Petitioners argue that the dismissal by the CA of herein petitioners' appeal on the
ground of failure to strictly comply with the provisions of Section 11, Rule 13 of the
Rules of Court is not in accord with the policy of liberal construction of the said Rules
as provided in Section 6, Rule 1 thereof. Petitioners submit that a strict interpretation
of the above-cited provisions of the Rules of Court will obstruct rather than serve the
broader interests of justice. Moreover, petitioners assert that the CA can take judicial
notice of the distance between the CA office in Manila and the law office of counsel
for petitioners in Iloilo City; and that said distance renders personal filing
impracticable. Petitioners also contend that a mere perusal of their brief already filed
with the CA shows merit in their appeal and that its dismissal would prejudice the
substantial rights of herein petitioners.
In his Comment, respondent reiterates his contention that the requirements provided
under Section 11, Rule 13 of the Rules of Court are mandatory. Moreover, respondent
contends that the said Rule does not provide for any exception that would justify non-
compliance therewith.
The Court finds the petition without merit on technical and substantive grounds.
On technical grounds, Section 11, Rule 13 of the Rules of Court provides that
personal service of petitions and other pleadings is the general rule, while a resort to
other modes of service and filing is the exception.12 Where recourse is made to the
exception, a written explanation why the service and the filing were not done
personally is indispensable, even when such explanation by its nature is acceptable
and manifest.13 Where no explanation is offered to justify the resort to other modes,
the discretionary power of the court to expunge the pleading becomes mandatory.14
Thus, the CA did not err when it granted respondent's Motion to Dismiss and ordered
that petitioners' brief be expunged from the records in view of the latter's failure to
present a written explanation why they did not personally file their appeal brief with
the CA.
Citing Kowloon House/Willy Ng v. Court of Appeals,15 this Court reiterated the
following pronouncements in United Pulp and Paper Co., Inc. v. United Pulp and
Paper Chapter-Federation of Free Workers:16
[R]ules of procedure exist for a purpose, and to disregard such rules in the guise of
liberal construction would be to defeat such purpose. Procedural rules are not to be
disdained as mere technicalities. They may not be ignored to suit the convenience of
a party. Adjective law ensures the effective enforcement of substantive rights through
the orderly and speedy administration of justice. Rules are not intended to hamper
litigants or complicate litigation. But they help provide for a vital system of justice
where suitors may be heard in the correct form and manner, at the prescribed time in
a peaceful though adversarial confrontation before a judge whose authority litigants
acknowledge. Public order and our system of justice are well served by a
conscientious observance of the rules of procedure, particularly by government
officials and agencies.17
Procedural rules are not to be belittled or dismissed simply because their non-
observance may have resulted in prejudice to a party's substantive rights.18 Like all
rules, they are required to be followed except only for the most persuasive of reasons
when they may be relaxed to relieve a litigant of an injustice not commensurate with
the degree of his thoughtlessness in not complying with the procedure prescribed.19
In the present case, the CA already extended to petitioners the benefit of a liberal
construction of the Rules of Court by not dismissing their appeal on the ground that
their appellants' brief was belatedly filed by one day. What cannot be ignored,
however, are petitioners' successive violations of the Rule requiring explanation why
they did not personally file their brief with the CA. The first violation was committed
when they filed their appellants' brief and the second violation was incurred when they
filed their Comment on respondent's Motion to Dismiss. Petitioners cannot feign
ignorance of such Rule because they are represented by counsel. Moreover, they
were already informed of such lapse through the Motion to Dismiss filed by herein
respondent.
In explaining the importance of faithful compliance with procedural rules, this Court
held in Land Bank of the Philippines v. Natividad20 that:
[P]rocedural rules are designed to facilitate the adjudication of cases. Courts and
litigants alike are enjoined to abide strictly by the rules. While in certain instances, the
Court allows a relaxation in the application of the rules, there is no intention to forge
a weapon for erring litigants to violate the rules with impunity. The liberal interpretation
and application of rules apply only in proper cases of demonstrable merit and under
justifiable causes and circumstances. While it is true that 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.
Party litigants and their counsel are well advised to abide by, rather than flaunt,
procedural rules for these rules illumine the path of the law and rationalize the pursuit
of justice.21
The right to appeal is a statutory right and the party who seeks to avail of the same
must comply with the requirements of the Rules.22 Failing to do so, the right to appeal
is lost, more so, as in this case, where petitioners violated the same Rule not only
once but twice. The utter disregard of the rules made by petitioners cannot justly be
rationalized by harking on the policy of liberal construction and substantial
162
compliance.23 Concomitant to a liberal application of the rules of procedure should
be an effort on the part of the party invoking liberality not only to explain and justify
his failure to abide by the rules but also to avoid committing the same mistake in the
future. Hence, petitioners' repeated failure to comply with the provisions of Section
11, Rule 13 is enough basis to dismiss the present petition.
However, to write finis to the present controversy, the Court shall dwell on the merits
of the case in the interest of substantial justice and in consonance with the time-
honored principle that cases should be decided only after giving all parties the chance
to argue their causes and defenses.24
Even on substantive grounds, the Court still finds the present petition without merit.
The Court is not persuaded by petitioners' contention in their appeal brief filed with
the CA that they are not bound by the report filed by the court-appointed
commissioner showing that the questioned area of 654 square meters is inside
Cadastral Lot 2104. The Court finds no cogent reason to deviate from the trial court's
ruling, to wit:
As may be gleaned from the report submitted by the Commissioner, the 654-square-
meter-portion in dispute falls within Cadastral Lot 2104 of the Cadastral Survey of
Tubungan, Iloilo. Since Lot 2104 is owned by plaintiff in whose name the same is
registered under Original Certificate of Title No. F-31883, the conclusion is inevitable
that plaintiff has a better right to the portion in dispute.
Defendants objected to the findings and report of the Commissioner contending that
the "resurvey should have been made on the basis of the previous survey not on the
Cadastral Survey". (Written Objection dated April 29, 1993, page 89, Records).
Defendants' objection is woefully untenable.
Note that the Order dated February 5, 1993 was issued at the instance of both parties
and this Order categorically states that the relocation survey should be made to
ascertain whether the disputed portion is "within Cadastral Lot 2097 or 2104 of the
Cadastral Survey of Tubungan, Iloilo". Since the lots to be relocated are cadastral
lots, it is but logical and proper that the relocation survey should be conducted on the
basis of the data gathered during the cadastral survey.
According to Geodetic Engineer Filomeno Dano, both plaintiff and defendant Tagabi,
were present during the relocation survey and both were fully aware of and, in fact,
agreed to the use by the Commissioner of the cadastral records and the available
data pertinent to the cadastral survey of the two lots. In fact, both parties helped the
Commissioner and pointed to the disputed portion using the available cadastral
records relative to the two cadastral lots.
In any case, it is quite clear from the text of the Order dated February 5, 1993
appointing the Commissioner that the parties agreed to abide by the results of the
relocation survey which results, according to the same Order, "shall be made the
basis of resolving the dispute between them". It is now too late in the day, so to speak,
for the defendants to back out from such commitment that they had made.
Having agreed to abide by the results of the relocation survey, defendants are now
estopped from questioning the same. In Bulacan v. Torcino, the Supreme Court held:
"The Torcinos try to impugn the results of the relocation survey. We agree with the
appellee that the appellants are now estopped on this issue because they themselves
prayed in the stipulation of facts that the findings of the geodetic engineer would be
the basis for the decision of the Court of First Instance. We see no error, much less
any grave abuse of discretion, in the lower court's findings that the house of the
Torcinos encroached on the lot of Victoriano Bulacan" (134 SCRA 252; 259).
Defendants are thus bound by the results of the relocation survey conducted by
Geodetic Engineer Filomeno Dano, Chief of the Technical Services, DENR, Region
VI, Iloilo City.25
Petitioners argue that the commissioner's report stating that the disputed property is
within Cadastral Lot 2104 is not enough since there is nothing in the said report which
categorically states that the subject property is not inside Cadastral Lot 2097. The
Court finds this reasoning specious. Since the contested property has been declared
to be within Cadastral Lot 2104, it necessarily follows that it is not within Cadastral
Lot 2097. Thus, there is no longer any need to declare that the same property is not
located within Cadastral Lot 2097. Any statement or declaration to that effect is
superfluous.
The Court, likewise, does not agree with petitioners' argument that it was erroneous
for the lower court to consider their defense that respondent's title over Cadastral Lot
2104 was illegally obtained as a collateral attack on the said title.
Settled is the rule that a certificate of title cannot be subject to collateral attack and
can be altered, modified, or cancelled only in a direct proceeding in accordance with
law.26 In Mallilin, Jr. v. Castillo27, the Court held that an action is considered as an
attack on a title when the object of the action or proceeding is to nullify the title, and
thus challenge the judgment pursuant to which the title was decreed. The attack is
direct when the object of an action or proceeding is to annul, or set aside such
judgment, or enjoin its enforcement.28 On the other hand, the attack is indirect or
collateral when, in an action to obtain a different relief, an attack on the judgment is
nevertheless made as an incident thereof.29 In the present case, the attack on
respondent's title is definitely merely collateral as the relief being sought by
respondent in his action was recovery of ownership and possession. Petitioners'
attack on the validity of respondent's certificate of title was merely raised as a defense
in their Answer filed with the trial court.
However, considering the undisputed fact that respondent had been convicted by final
and executory judgment of the crime of falsification of public document used by him
to support his application for free patent30 on which basis the certificate of title was
issued in his favor, it behooves the Court to modify the trial court's decision to the
effect that its finding in Civil Case No. 20636 is without prejudice to the filing of the
proper action for cancellation or annulment of title in the proper court.
WHEREFORE, the petition is DENIED. However, the Decision dated May 26, 1997
of the Regional Trial Court, Iloilo City, Branch 26 in Civil Case No. 20636 is MODIFIED
163
to the effect that it is without prejudice to the filing of cancellation or annulment of title
in the proper court.

No costs.

SO ORDERED.

164
G.R. No. 164375 October 12, 2006
RODOLFO PAREDES, TITO ALAGO AND AGRIPINO BAYBAY, SR., petitioners,
vs.
ERNESTO VERANO and COSME HINUNANGAN, respondent.
DECISION
TINGA, J.:
The central issue in this case is whether the absence of the counsel for defendants
at the pre-trial, with all defendants themselves present, is a ground to declare
defendants in default and to authorize plaintiffs to present evidence ex parte.
The relevant facts are uncomplicated.
The protracted legal battle between the parties began with a complaint for the
establishment of a right of way filed by petitioners herein as plaintiffs against
respondents as defendants.1 The complaint, docketed as Civil Case No. 2767 of the
Regional Trial Court (RTC) of Maasin City, Southern Leyte, Branch 24, culminated in
a judgment by compromise dated 26 April 1994.2 In the Compromise Agreement,
respondent Cosme Hinunangan granted a two (2) meter-wide right of way in favor of
petitioners in consideration of the amount of P6,000.00 which petitioners agreed to
pay.3
Alleging that petitioners had blocked the passage way in violation of the Compromise
Agreement, on 28 September 1999, respondents filed a complaint for specific
performance with damages against petitioners. It was docketed as Civil Case No. R-
3111 also of the RTC of Maasin City, Southern Leyte, Branch 24.4
In their answer, petitioners denied having violated the Compromise Agreement. They
alleged that like them, respondents were not actual residents of Barangay Tagnipa
where the "road right of way" was established and that respondent Cosme
Hinunangan had already sold his only remaining lot in the vicinity to petitioner Rodolfo
Paderes.5
Subsequent to the answer, petitioners filed a motion to dismiss on the ground of lack
of cause of action.6 The trial court, presided by Judge Bethany G. Kapili, denied the
motion to dismiss.7 Petitioners elevated the order of denial to the Court of Appeals
and thereafter to this Court, both to no avail.8
Petitioners asked Judge Kapili to inhibit himself from the case. The judge denied the
motion.9
Pre-trial was initially set for 24 April 2003, but this was reset to 3 June 2003 on motion
of respondents' counsel. But the pre-trial set on 3 June 2003 did not push through
either because none of the parties appeared.
So, pre-trial was reset to 11 November 2003. Petitioner Baybay's counsel moved to
reset it to another date on account of a conflicting hearing. However, petitioner
Baybay, who is the father of the counsel for petitioners, was present in court along
with the other defendants, when the case was called on 11 November 2003. The RTC
was informed then of a proposed settlement between the parties, although
respondent Baybay qualified his reaction by telling the court
that he would first have to inform his lawyer and the co-defendants of the said
proposal. The RTC then commented unfavorably on the absence of petitioners'
counsel, expressing disappointment towards his attitude, even making note of the fact
that not once had the counsel appeared before the RTC, even though the case had
already reached the Supreme Court over the denial of the motion to dismiss.10 At the
same time, the RTC acceded and reset the pre-trial for 23 January 2004.11
Shortly before the new pre-trial date, counsel for petitioners filed a Manifestation of
Willingness to Settle With Request for Cancellation dated 5 January 2004.12 Apart
from manifesting his willingness to settle the complaint, petitioners' counsel through
the Manifestation suggested to the opposing counsel that he be informed of the terms
of the proposed settlement. Correspondingly, petitioners' counsel requested the
cancellation of the 23 January 2004 hearing.
However, the hearing did push through on 23 January 2004. The private respondents
and their counsel were present. So were petitioners Baybay and Paderes, and co-
defendant Alago, but not their counsel.
An order of even date formalized what had transpired during the hearing. The RTC
allowed respondents to present their evidence ex parte, "for failure of the defendants[']
counsel to appear before [the RTC]".13 Petitioners filed a motion for reconsideration,
but this was denied by the RTC.14
Thus, petitioners filed a petition for certiorari with the Court of Appeals, assailing the
orders of the RTC. However, on 28 April 2004, the Court of Appeals dismissed the
petition outright,15 for failure to attach duplicate original copies of the annexes to the
petition other than the RTC Orders dated 23 January 2004 and 17 February 2004
(attaching photocopies instead), as well as for failure to submit such other pleadings
relevant and pertinent to the petition. Petitioners filed a Motion for Reconsideration
with Motion to Admit Additional Exhibits, adverting to the documents previously
missing from the petition but attached to the motion.
On 13 July 2004, the Court of Appeals issued a Resolution denying the motion for
reconsideration. In doing so, the Court of Appeals resolved the petition on its merits,
as it ruled that "even with the submission by petitioners of the required pleadings and
documents, the instant petition must nevertheless fail."16 The appellate court quoted
extensively from the transcripts of the hearings of 11 November 2003 and 23 January
2004. It conceded that under Section 5, Rule 18 of the 1997 Rules of Civil Procedure,
it is the failure of the defendant, and not defendant's counsel, to appear at the pre-
trial that would serve cause to allow plaintiff to present evidence ex parte.
Nevertheless, the Court of Appeals noted that petitioner Baybay had made it clear
that he would never enter into any amicable settlement without the advice of his
counsel. Thus, the Court of Appeals concluded that Judge Kapili's "hands were tied,"
165
explaining, thus: "He was held hostage by the blatant display of arrogance exhibited
by petitioner's counsel in assiduously failing to appear before the trial court. Were he
to close his eyes to the reprehensible scheme of Atty. Baybay in delaying the
disposition of the main case, the resulting impassé would only strain further the
meager resources of the court and prejudice the rights of private respondents."17
The Court of Appeals then cited Sps. Ampeloquio, Sr. v. Court of Appeals,18 wherein
the Court held that if every error committed by the trial court were to be a proper object
of review by certiorari, then trial would never come to an end and the appellate court
dockets would be clogged with petitions challenging every interlocutory order of the
trial court. It concluded that the acts of Judge Kapili did not constitute grave abuse of
discretion equivalent to lack of jurisdiction.
Finally, the trial court admonished petitioners' counsel to "bear in mind that as an
officer of the court, he is tasked to observe the rules of procedure, not to unduly delay
a case and defeat the ends of justice but to promote respect for the law and legal
processes."19
We reverse the trial court and the Court of Appeals.
A preliminary observation. The Court of Appeals had initially dismissed the petition
lodged by petitioners on account of their failure to attach several relevant pleadings,
citing Section 3, Rule 46 of the 1997 Rules of Civil Procedure. Before this Court,
petitioners devote some effort in arguing that the Court of Appeals erred in dismissing
the petition on that procedural ground, while respondents in their comment similarly
undertook to defend the appellate court's action on that point. We do not doubt that
under Section 3, Rule 46 of the 1997 Rules of Civil Procedure, the Court of Appeals
has sufficient discretion to dismiss the petition for failure of petitioner to comply with
the requirements enumerated in the section, including "such material portions of the
record as are referred to [in the petition], and other documents relevant or pertinent
thereto."20 At the same time, "[d]ismissal of appeals purely on technical grounds is
frowned upon and the rules of procedure ought not to be applied in a very rigid,
technical sense, for they are adopted to help secure, not override, substantial justice,
and thereby defeat their very aims."21 Thus, the Court has not hesitated to view
Section 3 of Rule 46 with a liberal outlook, ruling for example that it was not necessary
to attach certified true copies of such material portions of the record as referred to
therein.22
The situation in this case bears similarity to that which transpired in Cortez-Estrada
v. Heirs of Samut.23 Therein, the petitioner had failed to attach material documents
to her petition before the Court of Appeals. The Court of Appeals held the petition was
dismissible for such procedural infirmities, yet it nonetheless proceeded to rule
against the petitioner on the merits. The Supreme Court agreed with the appellate
court that the petition was procedurally infirm, yet found partial merit in its arguments
and consequently granted partial relief in favor of the petitioner. In this case, the Court
of Appeals, in resolving the motion for reconsideration, proceeded to make a
judgment on the merits. Similarly, this Court finds ample basis to review the decision
of the trial court as affirmed by the appellate court, notwithstanding the procedural
flaw that originally accompanied the petition—a flaw which petitioners did seek to
remedy when they belatedly attached the relevant documents to their motion for
reconsideration.
Ultimately, there are important reasons to consider the case on the merits. This case
affords the Court the opportunity to clarify the authority granted to a trial judge in
relation to pre-trial proceedings.
The order of the RTC allowing respondents to present evidence ex parte was
undoubtedly to the detriment of petitioners. Since the RTC would only consider the
evidence presented by respondents, and not that of petitioners, the order strikes at
the heart of the case, disallowing as it does any meaningful defense petitioners could
have posed. A judgment of default against a defendant who failed to attend pre-trial,
or even any defendant who failed to file an answer, implies a waiver only of their right
to be heard and to present evidence to support their allegations but not all their other
rights.24
The Constitution guarantees that no person shall be deprived of property without due
process of law. One manner by which due process is assured is through the faithful
adherence to the procedural rules that govern the behavior of the party-litigants. The
Rules of Court do sanction, on several instances, penalties for violation of the Rules
that causes the termination of an action without a ruling on the merits, or bars one
party from litigating the same while permitting the other to do so. We noted earlier that
Section 3, Rule 46 authorizes the dismissal of an original petition before the Court of
Appeals for failure to append material portions of the record. Pursuant to Section 5,
Rule 17, the failure of the plaintiff to appear on the date of the presentation of his/her
evidence in chief on the complaint is ground for the court to dismiss the complaint,
without prejudice to the right of the defendant to prosecute the counterclaim in the
same or in a separate action. And under Section 5, Rule 18, the failure of the plaintiff
or defendant to appear during pre-trial authorizes the court to either dismiss the
complaint, if the plaintiff were absent; or to allow the plaintiff to present evidence ex
parte, if the defendant were absent.
The operation of the above-cited provisions may defeat the cause of action or the
defense of the party who violated the procedural rule. Yet it could not be said that any
resultant adverse judgment would contravene the due process clause, as the parties
are presumed to have known the governing rules and the consequences for the
violation of such rules. In contrast, the same presumption could not attach if a party
were condemned to the same outcome even if the party did not violate a prescribed
rule of procedure. Any ruling that disposes of an action or precludes a party from
presenting evidence in support or against thereof must have basis in law,25 and any
ruling so intentioned without legal basis is deemed as issued with grave abuse of
discretion.26 In the end, a person who is condemned to suffer loss of property without
justifying legal basis is denied due process of law.
Simply put, nothing in the Rules of Court authorizes a trial judge to allow the plaintiff
to present evidence ex parte on account of the absence during pre-trial of the counsel
for defendant.
Sections 4 and 5 of Rule 18 warrant examination:
166
SEC. 4. Appearance of Parties. – It shall be the duty of the parties and their counsel
to appear at the pre-trial. The non-appearance of a party may be excused only if a
valid cause is shown therefor or if a representative shall appear in his behalf fully
authorized in writing to enter into an amicable settlement, to submit to alternative
modes of dispute resolution, and to enter into stipulations or admissions of facts and
of documents.
SEC. 5. Effect of failure to appear. – The failure of the plaintiff to appear when so
required pursuant to the next preceding section shall be cause for dismissal of the
action. The dismissal shall be with prejudice, unless otherwise ordered by the court.
A similar failure on the part of the defendant shall be cause to allow the plaintiff to
present his evidence ex parte and the court to render judgment on the basis thereof.
Section 4 imposes the duty on litigating parties and their respective counsel during
pre-trial. The provision also provides for the instances where the non-appearance of
a party may be excused. Nothing, however, in Section 4 provides for a sanction
should the parties or their respective counsel be absent during pre-trial. Instead, the
penalty is provided for in Section 5. Notably, what Section 5 penalizes is the failure to
appear of either the plaintiff or the defendant, and not their respective counsel.
Indeed, the Court has not hesitated to affirm the dismissals of complaints or the
allowance of plaintiffs to present evidence ex parte on account of the absence of a
party during pre-trial. In United Coconut Planters Bank v. Magpayo,27 the complaint
was dismissed because although the counsel for complainant was present during the
pre-trial hearing, the Court affirmed such dismissal on account of said counsel's
failure to present any special power of attorney authorizing him to represent the
complainant during pre-trial.28 In Jonathan Landoil International Co. v.
Mangudadatu,29 the defendant and its counsel failed to appear during pre-trial, and
the complainants were allowed to present evidence ex parte. After an adverse
decision was rendered against the defendant, it filed a motion for new trial in which it
cited the illness of defendant's counsel as the reason for his non-appearance during
pre-trial. While the Court acknowledged that such argument was not a proper ground
for a motion for new trial, it also noted that the appearance of the defendant during
pre-trial was also mandatory, and that the defendant failed to justify its own absence
during pre-trial.30
There are two cases which, at first blush, may seem to affirm the action of the RTC.
In the disbarment case of Miwa v. Medina,31 a lawyer was suspended from the
practice for one (1) month for, among others, failing to appear during pre-trial, thus
leading to the declaration of his client, the defendant, in default. At the same time, the
Court in Miwa did take the defendant herself to task for also failing to appear during
pre-trial, observing that "the failure of a party to appear at pre-trial, given its mandatory
character, may cause her to be non-suited or considered as in default."32
In Social Security System v. Chaves,33 the Social Security System (SSS) itself was
named as the defendant in a complaint filed with the RTC of Cagayan de Oro City.
The pre-trial brief was filed by the acting assistant branch manager of the SSS in
Cagayan de Oro City, who happened to be a lawyer and who also entered his
appearance as counsel for the SSS. However, said lawyer was not present during
pre-trial, and the SSS was declared in default and the complainants allowed to
present their evidence ex parte. The Court affirmed such order of default, noting other
procedural violations on the part of SSS, such as the fact that the motion for
reconsideration to lift the order of default lacked verification, notice of hearing and
affidavit of merit.
Notwithstanding, the Court is not convinced that SSS is ample precedent to affirm an
order of default where even though the defendant was present during pre-trial,
defendant's counsel failed to appear for the same hearing. The Court in SSS did not
make any categorical declaration to this effect. Moreover, it can be observed that in
SSS, the counsel himself, the acting assistant branch manager of the SSS, would
have been in addition, the representative of the SSS itself, a juridical person which
can only make an appearance during pre-trial through a natural person as its duly
authorized representative. The Court of Appeals decision upheld in SSS, cited
extensively in our decision therein, expressly affirmed the order of default on the
ground that "it is the discretion of the trial judge to declare a party-defendant as in
default for failure to appear at a pre-trial conference." However, in SSS, neither the
Court of Appeals nor this Court expressly laid relevance to the fact that the counsel
himself, as opposed to the defendant, had not attended the pre-trial.
Upon the other hand, Africa v. Intermediate Appellate Court34 illuminates the proper
standard within which to view the instant petition. It appeared therein that on the day
of the pre-trial, counsel for the defendant (therein petitioner) had arrived ten minutes
after the case was called. Within that ten-minute span, the trial court had issued an
order in open court declaring the defendant in default and authorizing the plaintiff to
present its evidence ex parte. A mere two days later, the trial court rendered judgment
in favor of plaintiff. The Court reversed the trial court, holding that the order of default
was issued with grave abuse of discretion. The reasoning of the Court was grounded
primarily on the doctrinal rule that frowned against "the injudicious and often
impetuous issuance of default orders,"35 which led in that case to "a deni[al of the
defendant's] basic right to be heard, even after his counsel had promptly explained
the reason for his tardiness at the pre-trial."36
Still, it would not be proper to consider Africa as the governing precedent herein,
influential as it may be to our disposition. It was not clear from the narration in Africa
whether the defendant himself was absent during the pre-trial, a circumstance which
is determinative to this petition. Moreover, the Court's tone in Africa indicated that it
was animated by a liberal philosophy towards the procedural rule, implying that the
trial court's reversed action was nonetheless adherent to the strict letter of the rule.
Whether or not the trial court in Africa acted conformably with the rules depends upon
the presence or absence of the defendant therein during pre-trial. It can no longer be
discerned whether the Court so ruled in Africa notwithstanding the presence or
absence of the defendant therein. It would be disingenuous though to assume, as a
means of applying that case as precedent herein, that the defendant was actually
present during the pre-trial in Africa.
Hence, we pronounce that the absence of counsel for defendants at pre-trial does not
ipso facto authorize the judge to declare the defendant as in default and order the
presentation of evidence ex parte. It bears stressing that nothing in the Rules of Court
sanctions the presentation of evidence ex parte upon instances when counsel for
defendant is absent during pre-trial. The Rules do not countenance stringent
167
construction at the expense of justice and equity.37 As the Court has previously
enunciated:
We cannot look with favor on a course of action which would place the administration
of justice in a straightjacket for then the result would be a poor kind of justice if there
would be justice at all. Verily, judicial orders, such as the one subject of this petition,
are issued to be obeyed, nonetheless a non-compliance is to be dealt with as the
circumstances attending the case may warrant. What should guide judicial action is
the principle that a party-litigant is to be given the fullest opportunity to establish the
merits of his complaint or defense rather than for him to lose life, liberty or properties
on technicalities.38
against lawyers for unprofessional conduct.45 A show cause order to counsel would
have been the more cautious and reasonable course of action to take under the
circumstances then prevailing. In failing to do so, the trial court impetuously deprived
petitioners of the opportunity to meaningfully present an effective defense and to
adequately adduce evidence in support of their contentions.
WHEREFORE, the instant petition is hereby GRANTED and the resolutions of the
Court of Appeals affirming the Orders of the Regional Trial Court in Civil Case No. R-
3111 dated 23 January 2004 and 17 February 2004 are REVERSED. No costs.
SO ORDERED.

Due process dictates that petitioners be deprived of their right to be heard and to
present evidence to support their allegations if, and only if, there exists sufficient basis
in fact and in law to do so.39 There being a manifest lack of such basis in this case,
petitioners would be unjustly denied of the opportunity to fully defend themselves
should the Court affirm the questioned orders which were evidently issued by the RTC
with grave abuse of discretion. The better and certainly more prudent course of action
in every judicial proceeding is to hear both sides and decide on the merits rather than
dispose of a case on technicalities.40

While counsel is somewhat to blame for his non-attendance at pre-trial, incidentally

the operative act which gave birth to the controversy at bar, it would be most unfair to
penalize petitioners for what may be the deficiency of their lawyer when the
consequent penalty has no basis in law. Particularly mitigating in the instant case is
the fact that the counsel for private respondents intimated, at an earlier hearing, a
possibility of an amicable settlement to the case. Then, counsel for petitioners
submitted a manifestation41 requesting therein that the parties be given ample time
to respectively discuss their proposals and counter-proposals and that the hearing for
23 January 2004 be moved to a later date as may be agreed upon by the parties for
submission of their possible compromise agreement. It may well have been that
counsel for petitioners labored under the false understanding that a compromise
agreement was an imminent possibility. The Court nonetheless notes that counsel
was remiss in assuming that his motion to reset the scheduled hearing would
necessarily be granted by the court a quo.

Be that as it may, there is no clear demonstration that the acts of the counsel of
petitioners were intended to perpetuate delay in the litigation of the case. Assuming
arguendo that the trial court correctly construed the actions of the counsel of
petitioners to be dilatory, it cannot be said that the court was powerless and virtually
without recourse but to order the ex parte presentation of evidence by therein
plaintiffs. We are in some sympathy with the judge who was obviously aggrieved that
the case was dragging on for an undue length of time. But even so, there were other
remedies available to the court.

Among the inherent powers of the courts expressly recognized by the Rules include
the authority to enforce order in proceedings before it,42 to compel obedience to its
judgments, orders and processes,43 and to amend and control its process and orders
so as to make them conformable to law and justice.44 Moreover, the Code of Judicial
Conduct empowers the courts to judiciously take or initiate disciplinary measures

168
G.R. No. 154243 December 22, 2007
DEPUTY DIRECTOR GENERAL ROBERTO LASTIMOSO, ACTING CHIEF
PHILIPPINE NATIONAL POLICE (PNP), DIRECTORATE FOR PERSONNEL AND
RECORDS MANAGEMENT (DPRM), INSPECTOR GENERAL, P/CHIEF SUPT.
RAMSEY OCAMPO and P/SUPT. ELMER REJANO, petitioners,
vs.
P/SENIOR INSPECTOR JOSE J. ASAYO, respondent.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
Before the Court is respondent’s Motion for Reconsideration of the Decision
promulgated on March 6, 2007. In said Decision, the Court granted the petition,
holding that the Philippine National Police (PNP) Chief had jurisdiction to take
cognizance of the civilian complaint against respondent and that the latter was
accorded due process during the summary hearing.
Respondent argues that the decision should be reconsidered for the following
reasons:
1. The summary proceeding was null and void because no hearing was conducted;
and
2. The evidence presented at the summary hearing does not prove that respondent
is guilty of the charges against him.
Respondent insists that the summary hearing officer did not conduct any hearing at
all but only relied on the affidavits and pleadings submitted to him, without
propounding further questions to complainant's witnesses, or calling in other
witnesses such as PO2 Villarama. It should, however, be borne in mind that the fact
that there was no full-blown trial before the summary hearing officer does not
invalidate said proceedings. In Samalio v. Court of Appeals,1 the Court reiterated the
time-honored principle that:
Due process in an administrative context does not require trial-type proceedings
similar to those in courts of justice. Where opportunity to be heard either through oral
arguments or through pleadings is accorded, there is no denial of procedural due
process. A formal or trial-type hearing is not at all times and in all instances essential.
The requirements are satisfied where the parties are afforded fair and reasonable
opportunity to explain their side of the controversy at hand. The standard of due
process that must be met in administrative tribunals allows a certain degree of latitude
as long as fairness is not ignored. In other words, it is not legally objectionable for
being violative of due process for an administrative agency to resolve a case based
solely on position papers, affidavits or documentary evidence submitted by the parties
as affidavits of witnesses may take the place of their direct testimony.2 (Emphasis
supplied)
The first issue presented by respondent must, therefore, be struck down.
To resolve the second issue, respondent would have the Court re-calibrate the weight
of evidence presented before the summary hearing officer, arguing that said evidence
is insufficient to prove respondent's guilt of the charges against him.
However, it must be emphasized that the action commenced by respondent before
the Regional Trial Court is one for certiorari under Rule 65 of the Rules of Court and
as held in People v. Court of Appeals,3 where the issue or question involved affects
the wisdom or legal soundness of the decision – not the jurisdiction of the court to
render said decision – the same is beyond the province of a special civil action for
certiorari.
Yet, respondent-movant's arguments and the fact that the administrative case against
respondent was filed way back in 1997, convinced the Court to suspend the rules of
procedure.
The general rule is that the filing of a petition for certiorari does not toll the running of
the period to appeal.4
However, Section 1, Rule 1 of the Rules of Court provides that the Rules shall be
liberally construed in order to promote their objective of securing a just, speedy and
inexpensive disposition of every action and proceeding. In Ginete v. Court of
Appeals5 and Sanchez v. Court of Appeals,6 the Court saw it proper to suspend rules
of procedure in order to promote substantial justice where matters of life, liberty, honor
or property, among other instances, are at stake.
The present case clearly involves the honor of a police officer who has rendered years
of service to the country.
In addition, it is also understandable why respondent immediately resorted to the
remedy of certiorari instead of pursuing his motion for reconsideration of the PNP
Chief’s decision as an appeal before the National Appellate Board (NAB). It was quite
easy to get confused as to which body had jurisdiction over his case. The complaint
filed against respondent could fall under both Sections 41 and 42 of Republic Act
(R.A.) No. 6975 or the Department of the Interior and Local Government Act of 1990.
Section 41 states that citizens' complaints should be brought before the People's Law
Enforcement Board (PLEB), while Section 42 states that it is the PNP Chief who has
authority to immediately remove or dismiss a PNP member who is guilty of conduct
unbecoming a police officer.
It was only in Quiambao v. Court of Appeals,7 promulgated in 2005 or after
respondent had already filed the petition for certiorari with the trial court, when the
Court resolved the issue of which body has jurisdiction over cases that fall under both
Sections 41 and 42 of R.A. No. 6975. The Court held that the PLEB and the PNP
Chief and regional directors have concurrent jurisdiction over administrative cases
filed against members of the PNP which may warrant dismissal from service, but once
a complaint is filed with the PNP Chief or regional directors, said authorities shall
acquire exclusive original jurisdiction over the case.
169
With the foregoing peculiar circumstances in this case, respondent should not be
deprived of the opportunity to fully ventilate his arguments against the factual findings
of the PNP Chief. He may file an appeal before the NAB, pursuant to Section 45, R.A.
No. 6925. It is a settled jurisprudence that in administrative proceedings, technical
rules of procedure and evidence are not strictly applied.8 In Land Bank of the
Philippines v. Celada,9 the Court stressed thus:

After all, technical rules of procedure are not ends in themselves but are primarily
devised to help in the proper and expedient dispensation of justice. In appropriate
cases, therefore, the rules may be construed liberally in order to meet and advance
the cause of substantial justice.10

Thus, the opportunity to pursue an appeal before the NAB should be deemed
available to respondent in the higher interest of substantial justice.

WHEREFORE, respondent's Motion for Reconsideration is partly GRANTED. The

Decision of the Court dated March 6, 2007 is MODIFIED such that respondent is
hereby allowed to file his appeal with the National Appellate Board within ten (10)
days from finality of herein Resolution.

SO ORDERED.

170
[G.R. No. 128646. March 14, 2003]
CRISELDA F. JOSE, petitioner, vs. HON. COURT OF APPEALS and DANILO
OMEGA, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition erroneously entitled as a Petition for Review on Certiorari which
should be a petition for certiorari under Rule 65 of the Rules of Court.
The factual background of the case is as follows:
On November 14, 1994, the Regional Trial Court of Cebu City (Branch 22) rendered
a decision in Civil Case No. CEO-15709, entitled Danilo Omega, Plaintiff, versus,
Criselda F. Jose, Defendant., the dispositive portion of which reads as follows:
WHEREFORE, based on the evidence thus presented, this Court finds for the plaintiff.
Judgment is hereby rendered declaring the March 3, 1981 marriage between plaintiff
Danilo Omega and Criselda F. Jose, null and void ab initio. Custody over the three
children Joselyn, Danilo, Jr. and Jordan, all surnamed Omega shall be entrusted to
plaintiff Danilo Omega.
Furnish the Local Civil Registrar of Manila with a copy of this judgment. No costs.
SO ORDERED.[1]
The ground for declaring the marriage null and void is psychological incapacity on the
part of defendant Criselda under Article 36 of the Family Code of the Philippines.
During the trial, the counsel on record of defendant Criselda was Atty. Margarito D.
Yap of the Cebu City District Office of the Public Attorneys Office (PAO). However,
defendant Criselda filed a Notice of Appeal, dated December 7, 1994, on her own,
without the assistance of Atty. Yap.[2]
The Judicial Records Division (JRD) of the Court of Appeals sent a notice to pay
docket fee, dated August 3, 1995 to Atty. Yap which was received by him.[3] On
October 24, 1995, the appellate court, through the Former Sixteenth Division,[4]
promulgated a Resolution which reads as follows:
For failure of the defendant-appellant to pay the docketing fee in this case within the
reglementary period which expired on August 25, 1995, despite receipt by his counsel
on August 10, 1995 of this Courts notice dated August 3, 1995, this appeal is hereby
DISMISSED pursuant to Section 1(d), Rule 50 of the Rules of Court.
SO ORDERED.[5]
On May 9, 1996, the Division Clerk of Court issued the Entry of Judgment certifying
that the above-quoted Resolution had become final and executory as of December 1,
1995.[6] It is indicated at the bottom of said Entry of Judgment that Atty. Yap and the
Special and Appealed Cases Division of the PAO were sent copies of the Entry of
Judgment.
On May 13, 1996, the appellate court received a letter of even date from defendant-
appellant Criselda addressed to the Clerk of Court of the Court of Appeals inquiring
about the status of her appeal and claiming that she has not received any notice from
the appellate court.[7]
The appellate court noted the explanation of the clerk in the Civil Cases Section of
the Judicial Records Division (JRD) of said court that Atty. Yap was sent the notice to
pay docket fee because Criselda had sent a copy of her Notice of Appeal to Atty. Yap
and that per the records of the case, Atty. Yap was earlier sent a copy of the formal
offer of exhibits and duly received in his behalf, he filed the comments and objections
to the exhibits for the plaintiff; he appeared at the hearings conducted by the trial
court.[8]
On October 28, 1996, Criselda through counsel filed a Motion for Leave of Court to
File Omnibus Motions/Motion to Reinstate Appeal.[9] On December 16, 1996, the
Court of Appeals issued the following Resolution:
Considering that the Resolution dismissing this appeal has become final on
December 1, 1995 and an Entry of Judgment has in fact been made on May 9, 1996,
the Motion for Leave of Court to File Omnibus Motions/Motion to Reinstate Appeal
and the Omnibus Motions/Motion to Reinstate Appeal are hereby denied.
SO ORDERED.[10]
Criseldas motion for reconsideration was denied by the Court of Appeals.
Hence, the present petition on the following ground:
The public respondent Honorable Court of Appeals committed grave error in denying
the petitioners Motion for Leave of Court to file Omnibus Motions/Motion to Reinstate
Appeal and the Omnibus Motions/Motion to Reinstate Appeal which if not corrected,
would deprive petitioner of her constitutional right to due process and injustice would
be done to her.[11]
on which basis, petitioner Criselda raises the following issues:
I.
WHETHER OR NOT THE PETITIONER WHO APPEALED HER CASE BY HERSELF
WITHOUT COUNSEL WAS VALIDLY SERVED WITH NOTICE TO PAY THE
DOCKETING FEE AND NOTICE OF THE RESOLUTION DISMISSING HER
APPEAL FOR FAILURE TO PAY THE DOCKETING FEE.
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN
DENYING THE PETITIONERS MOTION FOR LEAVE OF COURT TO FILE
171
OMNIBUS MOTIONS/MOTION TO REINSTATE APPEAL AND THE OMNIBUS
MOTIONS/MOTION TO REINSTATE APPEAL.[12]
After private respondent filed his Comment, parties filed their respective Memoranda
in compliance with the Resolution of the Court dated December 14, 1998.
We find the petition devoid of merit.
Based on the records, it appears that the PAO, through Atty. Victor C. Laborte and
Atty. Yap, represented petitioner during the trial of the case. Although petitioner
herself personally filed the Notice of Appeal, the fact remains that Atty. Yap or the
PAO has not filed any formal notice of withdrawal of appearance in the trial court.
Therefore, insofar as the appellate court is concerned, Atty. Yap is the counsel of
record. As such, the appellate court did not commit any grave abuse of discretion in
denying petitioners motion for leave of court to file omnibus motions or motion to
reinstate appeal.
Section 22, Rule 138 of the Rules of Court, provides:
Section 22. Attorney who appears in lower court presumed to represent client on
appeal. An attorney who appears de parte in a case before a lower court shall be
presumed to continue representing his client on appeal, unless he files a formal
petition withdrawing his appearance in the appellate court.
Payment of the docket and other legal fees within the prescribed period is both
mandatory and jurisdictional, and failure of the appellant to conform with the rules on
appeal renders the judgment final and executory.[13]
Indeed, the Court, in some instances, had allowed liberal construction of the Rules of
Court with respect to the rules on the manner and periods for perfecting appeals on
equitable consideration.[14] In Buenaflor vs. Court of Appeals, the Court has
enunciated the following:
The established rule is that the payment in full of the docket fees within the prescribed
period is mandatory. Nevertheless, this rule must be qualified, to wit: First, the failure
to pay appellate court docket fee within the reglementary period allows only
discretionary dismissal, not automatic dismissal, of the appeal; Second, such power
should be used in the exercise of the Courts sound discretion in accordance with the
tenets of justice and fair play and with great deal of circumspection considering all
attendant circumstances.
Admittedly, this Court has 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 justice and in the exercise of the Courts equity jurisdiction. This is
based on the rule of liberality in the interpretation of the Rules to achieve substantial
justice. It may be recalled that the general rule is that the Rules of Court are rules of
procedure and whenever called for they should be so construed as to give effect
rather than defeat their essence.
Section 6, Rule 1 of the 1997 Rules of Civil Procedure provides:
SEC. 6. Construction These Rules shall be liberally construed in order to promote
their objective of securing a just, speedy and inexpensive disposition of every action
and proceeding.
Rules of procedures are intended to promote, not to defeat, substantial justice and,
therefore, they should not be applied in a very rigid and technical sense. The
exception is that, while the Rules are liberally construed, the provisions with respect
to the rules on the manner and periods for perfecting appeals are strictly applied. As
an exception to the exception, these rules have sometimes been relaxed on equitable
considerations. Also, in some cases the Supreme Court has given due course to an
appeal perfected out of time where a stringent application of the rules would have
denied it, but only when to do so would serve the demands of substantial justice, and
in the exercise of equity jurisdiction of the Supreme Court.
The underlying consideration in this petition is that the act of dismissing the notice of
appeal, if done in excess of the trial courts jurisdiction, amounts to an undue denial of
the petitioners right to appeal. The importance and real purpose of the remedy of
appeal has been emphasized in Castro v. Court of Appeals where this Court ruled
that an appeal is an essential part of our judicial system and trial courts are advised
to proceed with caution so as not to deprive a party of the right to appeal 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 of
technicalities.[15]
However, the Court finds no cogent reason to be liberal in the present case for the
following reasons:
Petitioners counsel, Atty. Margarito Yap of the PAO was properly sent by the appellate
court a notice to pay the docket fees. Atty. Yap or the PAO did not file any formal
withdrawal of appearance and therefore, for all intents and purposes, the appellate
court correctly sent the notice to Atty. Yap. It is settled that clients are bound by the
mistakes, negligence and omission of their counsel.[16]
Moreover, under Section 21, Rule 138 of the Rules of Court, an attorney is presumed
to be properly authorized to represent any cause in which he appears. Under Section
22 of the same Rule, an attorney who appears de parte in a case before a lower court
shall be presumed to continue representing his client on appeal, unless he files a
formal petition withdrawing his appearance in the appellate court.
Petitioner failed to pursue her appeal for almost two years. She herself filed the notice
of appeal on December 4, 1994 but thought of inquiring from the Court of Appeals
about her appeal only on May 13, 1996 (or after the lapse of one year and five months)
as to the status of her appeal.
Petitioner failed to show that her appeal is extremely meritorious that to deprive her
of an appeal would unduly affect her substantial rights.
In other words, petitioner failed to show any compelling reason to warrant the
issuance of the writ of certiorari. The Court of Appeals committed no grave abuse of
172
discretion in denying petitioners Motion for Leave of Court to File Omnibus
Motions/Motion to Reinstate Appeal. Its Resolution dated October 24, 1995
dismissing petitioners appeal had become final and executory as of December 1,
1995.

WHEREFORE, the petition is DENIED for lack of merit. Costs against petitioner.

SO ORDERED.

173
G.R. No. 175399 October 27, 2009
OPHELIA L. TUATIS, Petitioner,
vs.
SPOUSES ELISEO ESCOL and VISMINDA ESCOL; HONORABLE COURT OF
APPEALS, 22nd DIVISION, CAGAYAN DE ORO CITY; REGIONAL TRIAL COURT,
BRANCH 11, SINDANGAN, ZAMBOANGA DEL NORTE; and THE SHERIFF OF
RTC, BRANCH 11, SINDANGAN, ZAMBOANGA DEL NORTE, Respondents.
DECISION
CHICO-NAZARIO, J.:
This Petition for Certiorari and Mandamus1 under Rule 65 of the Rules of Court seeks
the annulment of the following Resolutions of the Court of Appeals in CA-G.R. SP No.
00737-MIN: (a) Resolution2 dated 10 February 2006 dismissing the Petition for
Certiorari, Prohibition and Mandamus with Prayer for the Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction of herein petitioner Ophelia L.
Tuatis (Tuatis); (b) Resolution3 dated 25 July 2006 denying Tuatis’ Motion for
Reconsideration of the Resolution dated 10 February 2006; and (c) Resolution4 dated
9 October 2006 denying Tuatis’ Motion for Leave to File a Second Motion for
Reconsideration. The instant Petition further prays for the annulment of the Order5
dated 26 September 2005 of the Regional Trial Court (RTC) of Sindangan,
Zamboanga del Norte, Branch 11, in Civil Case No. S-618, ordering the Sheriff to
immediately serve the Writ of Execution issued on 7 March 2002.
The dispute arose from the following factual and procedural antecedents:
On 18 June 1996, Tuatis filed a Complaint for Specific Performance with Damages6
against herein respondent Visminda Escol (Visminda) before the RTC, docketed as
Civil Case No. S-618.
Tuatis alleged in her Complaint that sometime in November 1989, Visminda, as seller,
and Tuatis, as buyer, entered into a Deed of Sale of a Part of a Registered Land by
Installment7 (Deed of Sale by Installment). The subject matter of said Deed was a
piece of real property situated in Poblacion, Sindangan, Zamboanga del Norte and
more particularly described as "[a] part of a registered land being known as Lot No.
251, Pls-66 covered under OCT [Original Certificate of Title] No. P-5421; x x x with
an area of THREE HUNDRED (300) square meters, more or less" (subject property).
The significant portions of the Deed of Sale by Installment stated:
That for and in consideration of the sum of TEN THOUSAND PESOS (₱10,000.00),
Philippine currency, the SELLER [Visminda8] hereby SELLS to the BUYER [Tuatis],
the above-described parcel of land under the following terms and conditions:
1. That the BUYER [Tuatis] shall pay to the SELLER [Visminda] the amount of THREE
THOUSAND PESOS (₱3,000.00), as downpayment;
2. That the BUYER [Tuatis] shall pay to the SELLER [Visminda] the amount of FOUR
THOUSAND PESOS (₱4,000.00), on or before December 31, 1989;
3. That the remaining balance of THREE THOUSAND PESOS (₱3,000.00) shall be
paid by the BUYER [Tuatis] to the SELLER [Visminda] on or before January 31, 1990;
4. That failure of the BUYER [Tuatis] to pay the remaining balance within the period
of three months from the period stipulated above, then the BUYER [Tuatis] shall return
the land subject of this contract to the SELLER [Visminda] and the SELLER
[Visminda] [shall] likewise return all the amount paid by the BUYER [Tuatis].9
Tuatis claimed that of the entire purchase price of ₱10,000.00, she had paid Visminda
₱3,000.00 as downpayment. The exact date of said payment was not, however,
specified. Subsequently, Tuatis paid ₱3,000.00 as installment on 19 December 1989,
and another ₱1,000.00 installment on 17 February 1990. Tuatis averred that she paid
Visminda the remaining ₱3,000.00 on 27 February 1990 in the presence of Eric Selda
(Eric), a clerk in the law office of one Atty. Alanixon Selda. In support of this averment,
Tuatis attached to her Complaint a certification10 executed by Eric on 27 May 1996.
In the meantime, Tuatis already took possession of the subject property and
constructed a residential building thereon.
In 1996, Tuatis requested Visminda to sign a prepared absolute deed of sale covering
the subject property, but the latter refused, contending that the purchase price had
not yet been fully paid. The parties tried to amicably settle the case before the Lupon
Barangay, to no avail.11
Tuatis contended that Visminda failed and refused to sign the absolute deed of sale
without any valid reason. Thus, Tuatis prayed that the RTC order Visminda to do all
acts for the consummation of the contract sale, sign the absolute deed of sale and
pay damages, as well as attorney’s fees.
In her Answer,12 Visminda countered that, except for the ₱3,000.00 downpayment
and ₱1,000.00 installment paid by Tuatis on 19 December 1989 and 17 February
1990,13 respectively, Tuatis made no other payment to Visminda. Despite repeated
verbal demands, Tuatis failed to comply with the conditions that she and Visminda
agreed upon in the Deed of Sale by Installment for the payment of the balance of the
purchase price for the subject property. Visminda asked that the RTC dismiss Tuatis’
Complaint, or in the alternative, order Tuatis to return the subject property to Visminda
after Visminda’s reimbursement of the ₱4,000.00 she had received from Tuatis.
After trial, the RTC rendered a Decision14 on 29 April 1999 in Civil Case No. S-618
in Visminda’s favor. The RTC concluded:
Under the facts and circumstances, the evidence for [Tuatis] has not established by
satisfactory proof as to (sic) her compliance with the terms and conditions setforth
(sic) in [the Deed of Sale by Installment] x x x.
xxxx
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In contracts to sell, where ownership is retained by the seller and is not to pass until
the full payment, such payment, as we said, is a positive suspensive condition, the
failure of which is not a breach, casual or serious, but simply an event that prevented
the obligation of the vendor to convey title from acquiring binding force x x x.
xxxx
As the contract x x x is clear and unmistakable and the terms employed therein have
not been shown to belie or otherwise fail to express the true intention of the parties,
and that the deed has not been assailed on the ground of mutual mistake which would
require its reformation, [the] same should be given its full force and effect.
EVIDENCE (sic) at hand points of no full payment of the price, hence No. 4 of the
stipulation applies[,] which provides:
"That failure (sic) of the Buyer [Tuatis] to pay the remaining balance within the period
of three months from the period stipulated above, then the Buyer [Tuatis] shall return
the land subject of this Contract to the Seller [Visminda] and the Seller [Visminda]
[shall] likewise return all the (sic) amount paid by the Buyer [Tuatis]."
This stipulation is the law between the [Buyer] and [Seller], and should be complied
with in good faith x x x.
[Tuatis] constructed the building x x x in bad faith for, (sic) she had knowledge of the
fact that the Seller [Visminda] is still the absolute owner of the subject land. There
was bad faith also on the part of [Visminda] in accordance with the express provisions
of Article 454 [of the New Civil Code]15 since [she] allowed [Tuatis] to construct the
building x x x without any opposition on [her] part and so occupy it. The rights of the
parties must, therefore, be determined as if they both had acted in bad faith. Their
rights in such cases are governed by Article 448 of the New Civil Code of the
Philippines.16
The RTC decreed the dismissal of Tuatis’ Complaint for lack of merit, the return by
Tuatis of physical possession of the subject property to Visminda, and the return by
Visminda of the ₱4,000.00 she received from Tuatis.
Tuatis filed an appeal with the Court of Appeals, docketed as CA-G.R. CV No. 65037.
In a Resolution17 dated 29 August 2000, however, the appellate court dismissed the
appeal for failure of Tuatis to serve and file her appellant’s brief within the second
extended period for the same. An Entry of Judgment18 was made in CA-G.R. CV No.
65037 on 29 September 2000, as a result of which, the appealed RTC Decision dated
29 April 1999 in Civil Case No. S-618 became final and executory.
Visminda filed a Motion for Issuance of a Writ of Execution19 before the RTC on 14
January 2002. The RTC granted Visminda’s Motion in a Resolution dated 21 February
2002, and issued the Writ of Execution20 on 7 March 2002.
Tuatis thereafter filed before the RTC on 22 April 2002 a Motion to Exercise Right
under Article 448 of the Civil Code of the Philippines.21 Tuatis moved that the RTC
issue an order allowing her to buy the subject property from Visminda. While Tuatis
indeed had the obligation to pay the price of the subject property, she opined that
such should not be imposed if the value of the said property was considerably more
than the value of the building constructed thereon by Tuatis. Tuatis alleged that the
building she constructed was valued at ₱502,073.00,22 but the market value of the
entire piece of land measuring 4.0144 hectares, of which the subject property
measuring 300 square meters formed a part, was only about ₱27,000.00.23 Tuatis
maintained that she then had the right to choose between being indemnified for the
value of her residential building or buying from Visminda the parcel of land subject of
the case. Tuatis stated that she was opting to exercise the second option.
On 20 December 2004, Visminda deposited the amount of ₱4,000.00 to the office of
the Clerk of Court of the RTC, pursuant to the Decision of the trial court dated 29 April
1999.24
In the intervening time, the Writ of Execution issued on 7 March 2002 was yet to be
served or implemented by the Sheriff. This prompted Visminda to write a letter to the
Office of the Court Administrator (OCA) to complain about the said delay. The OCA
endorsed the letter to the RTC.
On 26 September 2005, the RTC issued an Order25 directing the Sheriff to
immediately serve or enforce the Writ of Execution previously issued in Civil Case
No. S-618, and to make a report and/or return on the action taken thereon within a
period of fifteen (15) days from receipt of the order.
On 10 October 2005, Tuatis filed before the RTC a Motion for Reconsideration26 of
the Order dated 26 September 2005, praying that the same be set aside in view of
the pendency of her previous Motion to Exercise Right under Article 448 of the Civil
Code of the Philippines. However, before the RTC could rule upon Tuatis’ Motion for
Reconsideration, the Sheriff enforced the Writ of Execution on 27 October 2005 and
submitted his Return to the RTC on 2 November 2005, reporting that the subject writ
was fully satisfied.
Tuatis immediately filed with the Court of Appeals a Petition for Certiorari, Prohibition
and Mandamus with Prayer for the Issuance of a Temporary Restraining Order and/or
Writ of Preliminary Injunction,27 which was docketed as CA-G.R. No. 00737-MIN.
Tuatis sought in said Petition the annulment of the RTC Order dated 26 September
2005, as well as the issuance of an order commanding the RTC and the Sheriff to
desist from undertaking any further proceedings in Civil Case No. S-618, and an order
directing the RTC to determine the rights of the parties under Article 448 of the Civil
Code.
In a Resolution28 dated 10 February 2006, the Court of Appeals dismissed outright
Tuatis’ Petition for failure to completely pay the required docket fees, to attach a
certified true or authenticated copy of the assailed RTC Order dated 26 September
2005, and to indicate the place of issue of her counsel’s IBP and PTR Official
Receipts.
Tuatis filed a Motion for Reconsideration29 of the Resolution dated 10 February 2006,
but said Motion was denied by the appellate court in another Resolution dated 25 July
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2006 on the ground that Tuatis had not taken any action to rectify the infirmities of her
Petition.
Tuatis subsequently filed a Motion for Leave to File a Second Motion for
Reconsideration,30 but it was similarly denied by the Court of Appeals in a Resolution
dated 9 October 2006, as Section 2, Rule 5231 of the Rules of Court proscribes the
filing of a second motion for reconsideration.
Hence, Tuatis filed the instant Petition, principally arguing that Article 448 of the Civil
Code must be applied to the situation between her and Visminda.
According to Tuatis, grave abuse of discretion, amounting to lack or excess of their
jurisdiction, was committed by the RTC in issuing the Order dated 26 September
2005, and by the Sheriff in enforcing the Writ of Execution on 27 October 2005. Tuatis
insists that the Motion for Reconsideration of the Order dated 26 September 2005
that she filed on 10 October 2005 legally prevented the execution of the RTC Decision
dated 29 April 1999, since the rights of the parties to the case had yet to be
determined pursuant to Article 448 of the Civil Code.32 Tuatis reiterates that the
building she constructed is valued at ₱502,073.00, per assessment of the Municipal
Assessor of Sindangan, Zamboanga del Norte; while the entire piece of land, which
includes the subject property, has a market value of only about ₱27,000.00, based
on Tax Declaration No. 12464 issued in the year 2000.33 Such being the case, Tuatis
posits that she is entitled to buy the land at a price to be determined by the Court or,
alternatively, she is willing to sell her house to Visminda in the amount of
₱502,073.00.
In addition, Tuatis attributes grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the Court of Appeals for dismissing outright her Petition for
Certiorari, Prohibition and Mandamus with Prayer for the Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction, and subsequently denying her
Motion for Reconsideration and Motion for Leave to File a Second Motion for
Reconsideration.
The Court grants the present Petition but for reasons other than those proffered by
Tuatis.
Procedural deficiencies of Tuatis’ Petition before the Court of Appeals
It is true that Tuatis committed several procedural faux pas that would have, ordinarily,
warranted the dismissal of her Petition in CA-G.R. No. 00737-MIN before the Court
of Appeals.
In its Resolution dated 10 February 2006, the Court of Appeals dismissed outright the
Petition for Certiorari, Prohibition and Mandamus with Prayer for the Issuance of a
Temporary Restraining Order and/or Writ of Preliminary Injunction filed by Tuatis for
failure to comply with the following requirements for such a petition: (a) to completely
pay the required docket fees, (b) to attach a certified true or authenticated copy of the
assailed RTC Order dated 26 September 2005, and (c) to indicate the place of issue
of her counsel’s IBP and PTR Official Receipts.
Section 3, Rule 46 of the Rules of Court lays down the requirements for original cases
filed before the Court of Appeals and the effect of non-compliance therewith, relevant
portions of which are reproduced below:
SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. –
x x x.
xxxx
It shall be filed in seven (7) clearly legible copies together with proof of service thereof
on the respondent with the original copy intended for the court indicated as such by
the petitioner, and shall be accompanied by a clearly legible duplicate original or
certified true copy of the judgment, order, resolution, or ruling subject thereof, such
material portions of the record as are referred to therein, and other documents
relevant or pertinent thereto. The certification shall be accomplished by the proper
clerk of court or by his duly authorized representative, or by the proper officer of the
court, tribunal, agency or office involved or by his duly authorized representative. The
other requisite number of copies of the petition shall be accompanied by clearly legible
plain copies of all documents attached to the original.
xxxx
The petitioner shall pay the corresponding docket and other lawful fees to the clerk of
court and deposit the amount of P500.00 for costs at the time of the filing of the
petition.
The failure of the petitioner to comply with any of the foregoing requirements shall be
sufficient ground for the dismissal of the petition. (Emphases ours.)
The sound reason behind the policy of the Court in requiring the attachment to the
petition for certiorari, prohibition, mandamus, or quo warranto of a clearly legible
duplicate original or certified true copy of the assailed judgment or order, is to ensure
that the said copy submitted for review is a faithful reproduction of the original, so that
the reviewing court would have a definitive basis in its determination of whether the
court, body, or tribunal which rendered the assailed judgment or order committed
grave abuse of discretion.34 Also, the Court has consistently held that payment of
docket fees within the prescribed period is jurisdictional and is necessary for the
perfection of an appeal.35
Indeed, the last paragraph of Section 3, Rule 46 states that non-compliance with any
of the requirements stated therein shall constitute sufficient ground for the dismissal
of the petition. However, the Court, in several cases,36 also declared that said
provision must not be taken to mean that the petition shall be automatically dismissed
in every instance of non-compliance. The power conferred upon the Court of Appeals
to dismiss an appeal, or even an original action, as in this case, is discretionary and
not merely ministerial. With that affirmation comes the caution that such 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.37
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It must be borne in mind that the rules of procedure are intended to promote, rather
than frustrate, the ends of justice, and while the swift unclogging of court dockets is a
laudable objective, it, nevertheless, must not be met at the expense of substantial
justice. Technical and procedural rules are intended to help secure, not suppress, the
cause of justice; and a deviation from the rigid enforcement of the rules may be
allowed to attain that prime objective for, after all, the dispensation of justice is the
core reason for the existence of courts.38
Hence, technicalities must be avoided. The law abhors technicalities that impede the
cause of justice. The court's primary duty is to render or dispense justice. A litigation
is not a game of technicalities. Lawsuits, 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.
Litigations must be decided on their merits and not on technicality. 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. 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. 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.39
In this case, the Court finds that the Court of Appeals committed grave abuse of
discretion in focusing on the procedural deficiencies of Tuatis’ Petition and completely
turning a blind eye to the merits of the same. The peculiar circumstances of the
present case and the interest of substantial justice justify the setting aside, pro hac
vice, of the procedural defects of Tuatis’ Petition in CA-G.R. No. 00737-MIN.
Perusal of the RTC Decision dated 29 April 1999
The RTC, in the body of its Decision dated 29 April 1999 in Civil Case No. S-618,
found that Tuatis breached the conditions stipulated in the Deed of Sale by Installment
between her and Visminda; but since both Tuatis and Visminda were guilty of bad
faith, "[t]heir rights in such cases are governed by Article 448 of the New Civil Code
of the Philippines."40
Article 448 of the Civil Code, referred to by the RTC, provides:
ART. 448. The owner of the land on which anything has been built, sown or planted
in good faith, shall have the right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for in Articles 546 and 548, or to
oblige the one who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the building or trees. In such case,
he shall pay reasonable rent, if the owner of the land does not choose to appropriate
the building or trees after proper indemnity. The parties shall agree upon the terms of
the lease and in case of disagreement, the court shall fix the terms thereof.
(Emphases supplied.)
According to the aforequoted provision, the landowner can choose between
appropriating the building by paying the proper indemnity for the same, as provided
for in Articles 54641 and 54842 of the Civil Code; or obliging the builder to pay the
price of the land, unless its value is considerably more than that of the structures, in
which case the builder in good faith shall pay reasonable rent.43
The Court notes, however, that the RTC, in the dispositive portion of its 29 April 1999
Decision, which exactly reads –
WHEREFORE, premises studiedly considered, judgment is hereby rendered as
follows:
(1) DISMISSING the Complaint for lack of merit;
(2) ORDERING [Tuatis] to return the physical possession of the land in question to
[Visminda]; and,
(3) ORDERING [Visminda] to return the ₱4,000.00 she received as evidenced by
Exhibit "B" and Exhibit "C" 44 to [Tuatis].45
utterly failed to make an adjudication on the rights of Tuatis and Visminda under
Article 448 of the Civil Code. It would seem that the decretal part of said RTC
judgment was limited to implementing the following paragraph in the Deed of Sale by
Installment:
4. That failure of the BUYER [Tuatis] to pay the remaining balance within the period
of three months from the period stipulated above, then the BUYER [Tuatis] shall return
the land subject of this contract to the SELLER [Visminda] and the SELLER
[Visminda] [shall] likewise return all the amount paid by the BUYER [Tuatis].46
without considering the effects of Article 448 of the Civil Code.
It was this apparent incompleteness of the fallo of the RTC Decision dated 29 April
1999 that resulted in the present controversy, and that this Court is compelled to
address for a just and complete settlement of the rights of the parties herein.
Finality of the RTC Decision dated 19 April 1999
The Court has not lost sight of the fact that the RTC Decision dated 29 April 1999 in
Civil Case No. S-618 already became final and executory in view of the dismissal by
the appellate court of Tuatis’ appeal in CA-G.R. CV No. 650307 and the entry of
judgment made on 29 September 2000.
Nothing is more settled in law than that when a final judgment is executory, it thereby
becomes immutable and unalterable. The judgment may no longer be modified in any
respect, even if the modification is meant to correct what is perceived to be an
erroneous conclusion of fact or law, and regardless of whether the modification is
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attempted to be made by the court rendering it or by the highest Court of the land.
The doctrine is founded on considerations of public policy and sound practice that, at
the risk of occasional errors, judgments must become final at some definite point in
time. The only recognized exceptions are the corrections of clerical errors or the
making of the so-called nunc pro tunc entries, in which case there is no prejudice to
any party, and, of course, where the judgment is void.47
Equally well-settled is the rule that the operative part in every decision is the
dispositive portion or the fallo, and where there is conflict between the fallo and the
body of the decision, the fallo controls. This rule rests on the theory that the fallo is
the final order, while the opinion in the body is merely a statement, ordering nothing.48
Jurisprudence also provides, however, that where there is an ambiguity caused by an
omission or a mistake in the dispositive portion of the decision, the Court may clarify
such an ambiguity by an amendment even after the judgment has become final. In
doing so, the Court may resort to the pleadings filed by the parties and the findings of
fact and the conclusions of law expressed in the text or body of the decision.49
Therefore, even after the RTC Decision dated 29 April 1999 had already become final
and executory, this Court cannot be precluded from making the necessary
amendment thereof, so that the fallo will conform to the body of the said decision.
If the Court does not act upon the instant Petition, Tuatis loses ownership over the
building she constructed, and in which she has been residing, allegedly worth
₱502,073.00, without any recompense therefor whatsoever; while Visminda, by
returning Tuatis’ previous payments totaling ₱4,000.00, not just recovers the subject
property, but gains the entire building without paying indemnity for the same. Hence,
the decision of the Court to give due course to the Petition at bar, despite the finality
of the RTC Decision dated 29 April 1999, should not be viewed as a denigration of
the doctrine of immutability of final judgments, but a recognition of the equally
sacrosanct doctrine that a person should not be allowed to profit or enrich himself
inequitably at another's expense.
Furthermore, the Court emphasizes that it is not even changing or reversing any of
the findings of fact and law of the RTC in its Decision dated 29 April 1999. This Court
is still bound by said RTC judgment insofar as it found that Tuatis failed to fully pay
for the price of the subject property; but since both Tuatis and Visminda were in bad
faith, Article 448 of the Civil Code would govern their rights. The Court herein is simply
clarifying or completing the obviously deficient decretal portion of the decision, so that
said portion could effectively order the implementation of the actual ruling of the RTC,
as clearly laid down in the rationale of the same decision.
Applying Article 448 and other related provisions of the Civil Code
Taking into consideration the provisions of the Deed of Sale by Installment and Article
448 of the Civil Code, Visminda has the following options:
Under the first option, Visminda may appropriate for herself the building on the subject
property after indemnifying Tuatis for the necessary50 and useful expenses51 the
latter incurred for said building, as provided in Article 546 of the Civil Code.
It is worthy to mention that in Pecson v. Court of Appeals,52 the Court pronounced
that the amount to be refunded to the builder under Article 546 of the Civil Code should
be the current market value of the improvement, thus:
The objective of Article 546 of the Civil Code is to administer justice between the
parties involved. In this regard, this Court had long ago stated in Rivera vs. Roman
Catholic Archbishop of Manila [40 Phil. 717 (1920)] that the said provision was
formulated in trying to adjust the rights of the owner and possessor in good faith of a
piece of land, to administer complete justice to both of them in such a way as neither
one nor the other may enrich himself of that which does not belong to him. Guided by
this precept, it is therefore the current market value of the improvements which should
be made the basis of reimbursement. A contrary ruling would unjustly enrich the
private respondents who would otherwise be allowed to acquire a highly valued
income-yielding four-unit apartment building for a measly amount. Consequently, the
parties should therefore be allowed to adduce evidence on the present market value
of the apartment building upon which the trial court should base its finding as to the
amount of reimbursement to be paid by the landowner. (Emphasis ours.)
Until Visminda appropriately indemnifies Tuatis for the building constructed by the
latter, Tuatis may retain possession of the building and the subject property.
Under the second option, Visminda may choose not to appropriate the building and,
instead, oblige Tuatis to pay the present or current fair value of the land.53 The
₱10,000.00 price of the subject property, as stated in the Deed of Sale on Installment
executed in November 1989, shall no longer apply, since Visminda will be obliging
Tuatis to pay for the price of the land in the exercise of Visminda’s rights under Article
448 of the Civil Code, and not under the said Deed. Tuatis’ obligation will then be
statutory, and not contractual, arising only when Visminda has chosen her option
under Article 448 of the Civil Code.1avvphi1
Still under the second option, if the present or current value of the land, the subject
property herein, turns out to be considerably more than that of the building built
thereon, Tuatis cannot be obliged to pay for the subject property, but she must pay
Visminda reasonable rent for the same. Visminda and Tuatis must agree on the terms
of the lease; otherwise, the court will fix the terms.
Necessarily, the RTC should conduct additional proceedings before ordering the
execution of the judgment in Civil Case No. S-618. Initially, the RTC should determine
which of the aforementioned options Visminda will choose. Subsequently, the RTC
should ascertain: (a) under the first option, the amount of indemnification Visminda
must pay Tuatis; or (b) under the second option, the value of the subject property vis-
à-vis that of the building, and depending thereon, the price of, or the reasonable rent
for, the subject property, which Tuatis must pay Visminda.
The Court highlights that the options under Article 448 are available to Visminda, as
the owner of the subject property. There is no basis for Tuatis’ demand that, since the
value of the building she constructed is considerably higher than the subject property,
she may choose between buying the subject property from Visminda and selling the
building to Visminda for ₱502,073.00. Again, the choice of options is for Visminda,
not Tuatis, to make. And, depending on Visminda’s choice, Tuatis’ rights as a builder
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under Article 448 are limited to the following: (a) under the first option, a right to retain essential to the proper application of Article 448 of the Civil Code, and (b) respondent
the building and subject property until Visminda pays proper indemnity; and (b) under Visminda Escol’s choice of option under the same provision; and
the second option, a right not to be obliged to pay for the price of the subject property,
if it is considerably higher than the value of the building, in which case, she can only (4) Further DIRECTS the Regional Trial Court of Sindangan, Zamboanga del Norte,
be obliged to pay reasonable rent for the same. Branch 11, to undertake the implementation of respondent Visminda Escol’s choice
of option under Article 448 of the Civil Code, as soon as possible.
The rule that the choice under Article 448 of the Civil Code belongs to the owner of
the land is in accord with the principle of accession, i.e., that the accessory follows No costs.
the principal and not the other way around. Even as the option lies with the landowner,
the grant to him, nevertheless, is preclusive.54 The landowner cannot refuse to SO ORDERED.
exercise either option and compel instead the owner of the building to remove it from
the land.55

The raison d’etre for this provision has been enunciated thus: Where the builder,
planter or sower has acted in good faith, a conflict of rights arises between the owners,
and it becomes necessary to protect the owner of the improvements without causing
injustice to the owner of the land. In view of the impracticability of creating a state of
forced co-ownership, the law has provided a just solution by giving the owner of the
land the option to acquire the improvements after payment of the proper indemnity,
or to oblige the builder or planter to pay for the land and the sower the proper rent.
He cannot refuse to exercise either option. It is the owner of the land who is authorized
to exercise the option, because his right is older, and because, by the principle of
accession, he is entitled to the ownership of the accessory thing.56

Visminda’s Motion for Issuance of Writ of Execution cannot be deemed as an

expression of her choice to recover possession of the subject property under the first
option, since the options under Article 448 of the Civil Code and their respective
consequences were also not clearly presented to her by the 19 April 1999 Decision
of the RTC. She must then be given the opportunity to make a choice between the
options available to her after being duly informed herein of her rights and obligations
under both.

As a final note, the directives given by the Court to the trial court in Depra v. Dumlao57
may prove useful as guidelines to the RTC herein in ensuring that the additional
proceedings for the final settlement of the rights of the parties under Article 448 of the
Civil Code shall be conducted as thoroughly and promptly as possible.

WHEREFORE, premises considered, the Court:

(1) GRANTS the instant Petition;

(2) ANNULS AND SETS ASIDE (a) the Resolution dated 21 February 2002 of the
Regional Trial Court of Sindangan, Zamboanga del Norte, Branch 11, ordering the
issuance of a writ for the execution of the Decision dated 19 April 1999 of the said
trial court in Civil Case No. S-618; (b) the Writ of Execution issued on 7 March 2002;
and (c) the actions undertaken by the Sheriff to enforce the said Writ of Execution;

(3) DIRECTS the Regional Trial Court of Sindangan, Zamboanga del Norte, Branch
11, to conduct further proceedings to determine with deliberate dispatch: (a) the facts

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